Question

Medicare is an area that often gets overlooked and is seen as a burden financially. Discuss alternatives to ease the drain on Medicare resources.

Answer 1

Medicaid, the largest single payer, currently finances 35 per cent of the institutional care and home health services for eligible adults who cannot pay the full cost themselves. Although Medicaid also offers home and community-based services and a variety of nonmedical and social supports designed to keep people with disabilities in the community, most of the program’s spending on the aged and disabled is for institutional care.

Medicaid provides a fairly comprehensive package of services, but individuals must meet strict income and asset tests to qualify for coverage. Eligibility rules are complex and vary by state, but nursing home residents must generally surrender all of their assets.

Medicaid beneficiaries with community-dwelling spouses are able to shield additional income. By requiring beneficiaries to turn nearly all of their savings over to the state, Medicaid discourages people from putting aside money to cover future long-term care costs.

Medicare covers the first 100 days in a certified skilled nursing facility after hospitalizations and provides limited home health benefits, including medically necessary skilled nursing care, physical therapy, speech-language services, and occupational therapy for homebound beneficiaries.

Given the limitations of public benefits, seniors and their families bear much of the cost. At $45 billion, out-of-pocket spending accounted for about one-third of all long-term care spending for older Americans in 2004. This number would be even higher if family members about 34 million in 2004 were not supplying much of the care for free. This responsibility usually falls to adult children: daughters and daughters-in-law account for about 36 per cent of unpaid caregivers to all older Americans, and sons and sons-in-law account for another 16 per cent. Nearly three-quarters of unmarried, older care recipients, most of whom are widowed, receive some assistance from their children.

Medicare is the other major federal program that finances long-term care, but it does so only under certain conditions. Medicare covers the first 100 days in a certified skilled nursing facility after hospitalizations and provides limited home health benefits, including medically necessary skilled nursing care, physical therapy, speech-language services, and occupational therapy for homebound beneficiaries.

Medicare expansions of this kind, however, would have to be properly funded through higher taxes. We also need better support for family caregivers. Additional funding for the National Family Caregiver Support Program, which offers information, counselling, and respite, and for Medicaid’s home- and community-based services would benefit many overwhelmed caregivers. The best solution would be to set aside money now, either publicly or privately or both, to cover these large, looming costs, reducing the financial and physical burden on the next generation of frail older Americans and those who care for them.