Fix needed now: America’s long-term care financing system is broken

Nonprofit providers of aging services have been warning for decades that America’s system for financing long-term care is dangerously broken. The dedicated professionals serving older adults in nursing homes, home health agencies, hospice programs, and senior living communities have toiled side-by-side with families across the country to cobble together care and services for parents, friends, and neighbors—connecting the tattered pieces of our patchwork long-term care system in an effort to ensure dignity, comfort and independence as the needs of our loved ones change. 

The New York Times KFF Health News’ series “Dying Broke” aptly illustrates the impact of the United States’ insufficient approach to financing of long-term services and supports. It’s an important and unflinching look at how our country is failing us. 

With the nation’s rapidly aging population, it’s inevitable that older adults and families living in every state and congressional district will have firsthand experience of these failures. The question is: Will our leaders finally care enough to take action?

If the past is prologue, the answer is a terrifying “no.” My organization, on behalf of mission-driven care providers, has offered new ideas to solve the long-term care financing crisis, and has supported multiple attempts at federal legislation—including the CLASS Act, at one time part of the Affordable Care Act; the WISH Act, the Medicare Long-Term Care Services and Supports Act of 2018 and other efforts dating back to the 1980s. Sadly, progress has been elusive.

Until that changes, the American long-term care financing system will continue to fail older adults by offering no protection against the severe economic consequences of needing care and services, particularly over long periods. 

The Times/KFF Health News series captures the painful impact on consumers—and they are not suffering alone. Insufficient support for providers is forcing more and more of our nonprofit members to take extreme measures to make ends meet, including reducing services and being forced to close or sell.

For example, residents recently held a bake sale to help raise funds for one struggling Rhode Island nursing home, but the $2,000 raised can’t match the needs. The organization’s expenses to deliver quality care have increased by close to 35 percent, while Rhode Island’s reimbursement to providers has gone up about 8 percent. “[We’re] losing $100,000 a month… The math doesn’t work,” says Linn Health & Rehabilitation CEO Richard Gamache. The cost of caring for a Medicaid-eligible resident is $411 per day, and Linn Health & Rehabilitation gets on average $255 per day, per Medicaid resident.

In 2022, Brethren Retirement Community, Greenville, Ohio, stopped offering home care under the state’s Medicaid PASSPORT services. “Our mission has always been to provide quality reliable service,” says Kara Allread, senior vice president & chief administrative officer. “This became increasingly difficult due to the effects of the lingering pandemic, the nationwide staffing crisis, and inflation impacting our costs for products and services.” Though Ohio has since increased home care payment rates, those new rates have yet to take effect. “It’s heartbreaking to turn anyone away, but in a small town like ours, that means hardship for people that we live, work and worship beside,” Allread added.

If the lack of federal government support continues, the impact will be felt acutely by each and every one of us. The United States is far behind Britain, France, Canada, Germany, Sweden and Japan in its commitment to covering costs of long-term care for the 73 million of us who will turn 65 over the next seven years. This should not be so when we spend more per capita on health care than other wealthy country. 

We can do better. A comprehensive and equitable long-term care financing system would make all the difference. The longer lives that many Americans will enjoy offers enormous potential for our nation. We must seize this opportunity and ensure that potential isn’t squelched by an oppressive and unfair long-term care financing system. The solutions are complicated—but smart approaches abound. 

The variable is political will. 

Elected officials must take heed of the 83 percent of Americans who say policy makers have failed older adults and the people who care for them by ignoring and underfunding America’s aging services for decades, according to 3W Insights survey research conducted in summer 2021. The gaps and shortcomings of our government’s long-term care financing system have created unnecessary hardship and struggle for too many families who cannot afford the care they need.

Older adults, families and care providers demand that elected officials at every level prioritize the well-being of our nation’s older adults. In that same study, 92 percent of Democrats, 80 percent of Republicans and 84 percent of Independents say “the government must make a bigger investment in services and care for seniors.” 

I urge our leaders to listen to the voices of their constituents, and join us in creating solutions. All of our futures depend on it. 

Katie Smith Sloan is president and CEO of LeadingAge, the association of nonprofit providers of aging services, headquartered in Washington, D.C.