A Sword Hangs Over Us : There’s No Relief Yet From Burden of Long-Term Health Care

Congress is about to vote on a measure to limit out-of-pocket expenses for hospitals and doctors--the so-called “acute catastrophic” costs. Nonetheless, like Hercules in his struggle against Hydra, Congress faces a monster with more than one head. Providing for catastrophic acute-care costs still leaves American families facing the more common catastrophe of outlays for long-term, chronic illness.

For five out of six older Americans long-term care, not acute care, is the crippling expense--$8 out of every $10 of catastrophic health costs are spent outside the hospital, usually in a nursing home. Even a middle-income family’s financial resources will be drained by nursing-home costs that average more than $22,000 a year. Millions of Americans, particularly middle-age women, find their physical and emotional resources stretched to their limits when they assume the task of caring for an aged parent. The measure that Congress is about to vote on would do nothing to address these problems. What we lack, and what we need, is a comprehensive solution to the crisis of long-term-care cost that covers a full range of services from nursing home to home care.

There is a demographic urgency--a rapidly graying nation--that warrants priority on the congressional agenda. So far Congress has pretended that the urgency is elsewhere.

Part of the aversion to facing the problem is the enormous cost of doing something about it. Acute catastrophic coverage alone, as envisioned under current legislation, would cost $4 billion annually. Coverage for chronic care, it is estimated, would amount to $40 billion. Given the expense, Congress is unlikely to tackle the job of reform without the strong and sustained advocacy of the American people. And so far most Americans simply aren’t speaking up.

Too many Americans go to bed at night under a false security blanket--a fundamental misunderstanding of just how little protection current options provide. A case in point is a recent survey by the American Assn. of Retired Persons in which 79% of those polled believed that Medicare would cover an extended stay in a nursing home; 50% believed that their private insurance policies would cover such costs. The fact is that only 2% of the $40 billion spent by Americans last year on long-term care was paid by Medicare. Private insurance covered an additional 1%.

A comprehensive program, as I define it, may not make it to the drawing boards during this session of Congress. It may require the political clout of a plank in the 1988 presidential platforms to set the wheels in motion. But we need a policy and a program.

As I see it, such an approach must be based on three key elements:

First, it must bolster the American family’s ability to do what it has been doing so well--caring for the chronically ill at home. We can start strengthening the home health benefits that are now available under Medicare. We can also relieve some of the financial burden of care for the lowest-income families through a tax credit, similar to the credit that is available for child care.

Second, we must strongly encourage the expansion of private insurance coverage. Private insurers, frankly, have approached long-term coverage with the enthusiasm of a claustrophobic entering a crowded elevator. One route for expansion is to require that all employers make group long-term-care benefits available to employees.

Third, since it is unlikely or impossible that private insurance will solve the problem and since most Americans are not going to be able to absorb the enormous cost of coverage on their own, we will also need a strong public program. Whether we expand Medicare or create a new long-term-care program, a comprehensive solution will be expensive. Even limiting coverage to long-term illness that extends beyond a one- to two-year-period would cost billions. Financing the multibillion-dollar cost of long-term protection assumes a public commitment to some broad-based revenue source. Options include raising the payroll tax, taxing estates and increasing the excise tax on cigarettes.

The agenda that is outlined here is not a comprehensive solution to the threat of nursing-home and other long-term-care costs. But it creates a meaningful framework for beginning the process. To remove the Damocles sword of chronic-care costs and to keep an aging America from being an anxious America will require not only the concern of members of Congress but also the collective support of business and community groups and an informed and activated public.