Healthcare Finance Policy in the US: Challenges of Long-Term Care

Healthcare Finance Policy in the United States
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The Nursing Home Reform Act significantly supported the government’s capacity to implement standards, make inspections, and enforce nursing home quality measures. The legislation integrated Medicaid and Medicare standards, prompted the need for comprehensive evaluation of residents, created minimal thresholds for licensed nursing professionals, and demanded inspections tailored to augment care outcomes. Despite the substantial progress, residential care facilities and nursing homes are recording burgeoning care quality problems. Long-term care solutions face a wide range of challenges related to a lack of information about their financing, which leads to coverage disparities. There is a need for policy measures to address the issues undermining long-term care solutions in the United States (U.S.) This paper evaluates issues related to long-term care financing and challenges and offers improvement recommendations to augment the health outcomes of older adults.
Definition of Long-term Care
Long-term care (also called long-term services and supports) delineates a continuum of social and health services tailored to help persons needing support with “activities of daily living,” such as eating and walking. This is different from post-acute care, which offers similar services but on a short-term basis following hospitalization (Upadhyay & Weiner, 2019). Long-term care can also be conceptualized as the assistance or services provided to individuals with physical frailty, disability, or cognitive challenges for extended timescales, thus requiring permanent nursing care or support with self-care activities. It includes many services delivered in diverse settings, including long-term care facilities, residential homes for older adults, homes, assisted-care homes, nursing homes, and within the community (Barreira et al., 2023).
Long-term Care Payment Models and Adequacy
The current mechanism for reimbursing for long-term care significantly relies on unpaid (informal) caregivers, who are themselves medically and socioeconomically vulnerable. Formal long-term care is primarily reimbursed via Medicaid, constituting over half of the federal expenditure in 2018, as shown in figure 1 below. Nevertheless, Medicaid coverage is inadequate because it is only available to persons that have exhausted their economic resources. Also, Medicare does not recognize long-term care needs, with a significant share of post-acute care being constrained to below 100 days. Long-term care can also be reimbursed using private insurance. However, the long-term care insurance market remains limited and contracting, covering only a few citizens at a relatively high cost. Out-of-pocket spending also caters to form care. It should be noted that the average hourly cost for a home-based nurse is $22, and the average yearly cost of over $100,000 for a nursing home private room (Upadhyay & Weiner, 2019). This implies that most people do not have enough resources to self-fund their long-term care needs. Moreover, these costs are not covered under the Medicare plan, implying that people quickly exhaust their savings when seeking long-term care (Butler, 2022).
Figure 1: Long-term care spending by payer (Watts et al., 2020).
Social and Financial Differences
Significant social and financial differences exist in aging in place compared to aging within a nursing home. Aging in place is associated with positive perspectives about exercising one’s independence and autonomy within a community that provides access to services and social connections (Ratnayake et al., 2022). It takes significant investment and time for the government to create social services infrastructure within nursing homes, as was the ...