Nonprofit Proposes Medicare Homecare Benefit for Older Americans

WASHINGTON—A recent white paper published by the Brookings Institution, a nonprofit public policy organization based in Washington, D.C., suggested a new approach to reimagining the path for older Americans to age in place. The paper specifically proposes a new homecare benefit under Medicare for beneficiaries with significant functional impairments who require long-term supports and services (LTSS).

“One in five community-dwelling individuals over age 65 in the U.S. is unable to carry out one or more of their ‘Activities of Daily Living [ADL],’ including bathing, dressing, eating and toileting,” the paper said. “For those over age 85, the segment of the population that is growing fastest, that ratio rises to nearly 40%. This pattern of growing needs as individuals age is going to result in a large rise in the need for long-term supports and services (LTSS) in the coming decades … The U.S. is ill-prepared to meet this growing demand along several dimensions.” 

Brookings proposed creating a universal homecare benefit that would largely (but not fully) replace state-by-state Medicaid HCBS programs with a universal Medicare benefit. As with the current program, individuals would qualify based on functional status criteria measured using indicators of functional impairments, such as ADL limitations. But unlike Medicaid, the benefit would be universal for those who meet this standard. Beneficiaries would pay income-related coinsurance for home care, which would be organized through one or more managed care contractors operating under a budget.

The proposed benefit would include the following services.

• Home health includes nursing services, home health aide assistance and some assistive equipment and technologies. These would be distinct from the services and durable medical equipment that are part of the Medicare acute and post-acute coverage.
• Personal care services involve the provision of assistance to individuals experiencing functional impairments in conducting activities of daily living, such as eating and bathing. Personal care services can also focus on instrumental activities of daily living (IADLs) that promote independence. IADLs include activities such as housework, laundry and meal preparation.
• Homemaker services include housework such as meal preparation, typically provided by a trained homemaker aide.
• Adult day services include regularly scheduled day programs that are aimed at meeting both health and social service needs.
• Care coordination consists of services to aid in accessing needed benefits and services across settings and sectors.
• Transportation includes transportation for non-medical functions and services such as adult day services.

The financing for this program would come from four sources: individual contributions, reduced federal spending on home and community-based services (HCBS), recaptured revenues from state savings on HCBS and dedicated financing.

The paper said that for those who qualify and are covered only by Medicaid, a level playing field between homecare and nursing homecare requires an entitlement to homecare benefits. As a result, states should be required to cover HCBS for all qualifying individuals, without waiting lists. The federal government should issue baseline standards for such an entitlement. These standards could naturally follow those used for the new universal Medicare home care benefit.

To read the full white paper, click here.