February 11-17, 2019
By Nan Selz
Recently, the AARP Public Policy Institute published a report on Medicaid, a program that is crucial to the delivery of both healthcare and long-term services and support in the United States. Long term services and support (LTSS) include basic life functions (such as eating, dressing and bathing) that allow recipients to remain in their own homes and out of institutions.
Almost 70 million Americans with limited income and resources depend on the Medicaid program. Recipients include both children and adults with disabilities and low-income older adults. As of FY 2016, more than half of Medicaid LTSS funds paid for keeping people in nursing facilities although studies have consistently shown that people prefer to remain in their own homes, and the cost of institutional care is approximately three times that of home and community-based care.
While the public perception is that Medicaid is just for poor people, the study found that one of the greatest risks to retirement security is the cost of long-term services and support. Neither Medicare nor private health insurance pays for these services, so Medicaid becomes the only resource for middle-class Americans who need help as they age. To be sure, one can only receive Medicaid support once one has depleted one’s assets, but that happens frequently because these services are too expensive for most families to afford for any length of time.
For example, in 2017, nursing home services cost approximately $97,452 per year, or 231 percent of the median income of an adult age 65 and older. And although home care is considerably less expensive, it too is not affordable over the long run for the average older adult. At 30 hours of care per week, a licensed home health aide costs an average of $33,540 annually, or 80 percent of that median income.
Medicaid is a vital safety net and lifeline to millions of people with limited income and resources. Medicaid funds could serve more recipients and (serve them at home where they want to be) if states would increase the share of Medicaid LTSS funds devoted to home and community-based services.
Meanwhile, family caregivers actually provide most of the help needed by those who qualify for Medicaid but are not receiving it. In 2013, the value of family caregiving was $470 billion, exceeding $449 billion spent by Medicaid that year.
To access the entire AARP Public Policy Report on Medicaid, go to https://www.aarp.org/ppi/info-2018/myths-about-the-medicaid-program.html