DECEMBER 23, 1996 VOLUME 4, NUMBER 25
National policy considerations regarding long-term care of the elderly and disabled are beginning to be noticed by business and political leaders. When the business-oriented Wall Street Journalwrites about the issue, conservative politicians and policy makers can not be far behind.
In a December 11, 1996, article titled Families of Elders Have a Lot Riding On Budget Debates, the Journal recognizes the profound effect Congressional action can have on the quality of life for elders and their caregivers. Of particular interest is the analysis of the recent Kassebaum-Kennedy law criminalizing some gifts by those facing long-term care expenses (see Elder Law Issues, August 19, 1996). The Journal article refers to the new law as the “throw-Granny-in-jail” law.
Although Medicaid now pays for approximately half of all formal long-term care for seniors and the disabled, the Journal article points out a more profound statistic: as much as 80% of long-term care is provided directly by family members. Nearly all of that care is provided in the home, where Medicaid is the least likely to be considered as a possible substitute.
Government involvement in long-term care has focused primarily on nursing home placement. In the past five years, however, the government’s role has begun to shift. While Medicaid provided $3.4 billion in home care services in 1990, by 1995 the figure had tripled (to $10.33 billion). At the same time, Medicare (which has traditionally provided more home care services than Medicaid, but still has focused on institutional care) increased its home care benefits from $3.66 billion to $14.90 billion, a four-fold increase.
Now Congress is seeking ways to cut the federal budget, and particularly the federal-state commitment to Medicaid care. The “throw-Granny-in-jail” law is an early attempt to restrict payments for long-term care (though some discussion is being undertaken in Congress about repealing the new law altogether). Any significant change in government benefits is likely to have a devastating effect on the ability of families to provide some care to their aging seniors. As theJournal article points out, it could also lead to the paradox of increasing nursing home costs as the family members providing 80% of care find themselves unable to make their care plans work.
1997 Medicare Figures
Beginning with the Social Security checks due January 3, 1997, Medicare premium deductions will increase to $43.80 per month (up from $42.50 per month in 1996). Since the new year also brings a 2.9% increase in the Social Security benefit, most people will still see a larger total check.
Other Medicare figures will also change beginning with the new year. The initial hospitalization deductible increases from $736 (1996) to $760 (1997). Coinsurance (the amount which Medicare beneficiaries must pay for their 61st through 90th days in the hospital) will increase from $184/day (1996) to $190/day (1997). “Lifetime reserve” days will have a copayment increase from $368 (1996) to $380 (1997).
Skilled nursing care copayments will also increase, from $92/day (1996) to $95/day (1997). Since Medicare has no deductible or copayment from the first twenty days of skilled nursing care, however, the copayment amount only applies to the 21st through 100th day of nursing home placement.
Medicare HMO participants will not be affected by the new copayments and deductibles. HMO programs are permitted to charge less than Medicare copayments and deductibles, and most (in the Tucson area, at least) charge only a single per-visit copayment. Similarly, Medicare beneficiaries with Medigap coverage will not be directly affected by the increases.