Proposal would create long-term care benefit for Medicare beneficiaries

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Rep. Frank Pallone (D-NJ) unveiled a bill on Wednesday that would create a new long-term care benefit for Medicare beneficiaries, who could use it to pay for support — regardless of income or living arrangements.

Speaking at a roundtable of aging and disability advocates gathered at an adult day program, Pallone called the draft legislation a conversation starter. Past legislative efforts have struggled to gain traction among lawmakers, and this one is liable to be no different, despite the urgency of the situation.

"The growing need for long-term care is one of the greatest threats to retirement security for American seniors, and the adult children who care for them,” Pallone said in a press release. “It's time to expand Medicare to include a long-term care benefit so that millions of seniors and individuals with disabilities no longer have to face financial ruin before they get assistance.”

The Medicare Long-Term Care Services and Supports Act would establish a public benefit within Medicare. Currently, Medicare covers only very limited long-term care and support for seniors until a senior depleted his or her resources and qualifies for Medicaid.

Pallone's office said a senior will spend an average of $140,000 in out-of-pocket costs on long-term care, with more than 15% of them spending more than $250,000.

“We firmly believe that the nation's current methods for financing LTSS are unsustainable, irrational, and unfair for individuals and families,” said Katie Smith Sloan, president and CEO of LeadingAge. “It is estimated that about half of all older adults will lose the ability to care for themselves during their lifetimes, and will need help with everyday activities. We commend Representative Pallone for proposing a new Medicare long-term care benefit that addresses this critical issue.”

Pallone's proposal includes:

  • A standard cash benefit within Medicare for anyone who is eligible for Medicare and those under the age of 65 who meet certain disability thresholds
  • A self-directed benefit that could be used towards all LTSS, including nursing home care, adult day programs, home health aide services, personal care services, transportation, and assistance provided by a family caregiver  
  • Incentives for people to seek care at home, the setting where most people want to be
  • Relief for caregivers

Smith Sloane said LeadingAge supports a “more rational financing system to ensure access to quality LTSS and to reduce the burden on caregivers.”

Pallone is seeking comments from stakeholders at ECDem.Comments@mail.house.gov through June 15.