Posted 5/31/05 Module 4: Public Financing of Long-Term Care Services

2 Medicare’s Coverage of Long-Term Care (LTC) Medicare’s nursing home benefit is limited to post-acute care Medicare’s home health benefit is limited to the need for skilled nursing care on an intermittent basis, or for specific therapies (e.g., physical or speech therapy)

3 Medicare’s Skilled Nursing Facility (SNF) Benefit Medicare’s SNF benefit provides nursing home coverage in very limited circumstances: – Physician has decided that beneficiary needs daily skilled care – Only after a hospital stay of at least three days for same post-acute condition – Must be provided in a Medicare-certified nursing facility

4 Medicare’s SNF Benefit Medicare’s SNF benefit pays a portion of skilled nursing home care for up to 100 days: – 0 to 20 days - Medicare pays 100 percent – 21 to 100 days - Beneficiary pays a daily co- payment and Medicare pays the balance – 100+ days – no Medicare coverage Care continuously evaluated as “medically necessary” Average Medicare-covered stay is about 21 days.

5 Medicare’s Home Health Care Benefit Beneficiary must require skilled care on a part- time basis Home health aide services sometimes covered (part-time) when nursing care is also provided Other covered services include physical, speech and occupational therapy services, medical social services, certain medical supplies, and durable medical equipment (DME)

6 Medicare’s Home Health Care Benefit Medicare’s Home Health benefit does not cover: – 24-hour care – Meals delivered to the home – Homemaker services (e.g., shopping, cleaning, and laundry) – Non-skilled personal care services

7 Medicare’s Home Health Benefit Medicare pays the full cost of covered home health visits if: – Physician certifies that home care is medically necessary – Beneficiary is “homebound” (unable to move outside the home without assistance) – Care is provided by a Medicare-certified home health agency

8 Medicare Supplemental Insurance Only pays Medicare co-pays and deductibles Does not cover additional nursing home days or home health visits not covered by Medicare Medicare Plus+Choice and other Medicare plans generally waive (or reduce) Medicare deductible and co-payment requirements for their members

9 Medicaid’s Coverage of LTC Joint Federal/State program States have considerable discretion regarding eligibility requirements and benefits, within broad federal guidelines Designed to provide LTC coverage for persons who lack the financial resources to pay for their own care Medicaid is the primary public financing source for LTC

10 Medicaid Eligibility Criteria Medicaid eligibility is complicated, and each state is different Financial eligibility criteria apply to both income and resources For non-married persons, applicants are generally limited to no more than $2,000 in countable resources Medicaid spousal impoverishment rules have greatly enhanced financial protections for community spouses

11 Medicaid: Treatment of the Home Primary residence is generally excluded as a countable resource, as long as the Medicaid beneficiary intends to return home States, however, may place liens on homes and recover costs from the beneficiary’s estate after death Surviving spouses have a right to stay in the home for as long as they live, as do other family caregivers

12 Other Medicaid Rules Transfer of Assets – Applies penalties to person who transfers assets with the sole purpose of becoming eligible for Medicaid Estate Recovery – Recovers costs for LTC services from the estate of the deceased recipient – Repayments can be waived under certain conditions of hardship

13 Medicaid Nursing Home Coverage Functional criteria for nursing home coverage are set by each state Many persons enter nursing homes as private pay and “spend down” resources to Medicaid Once on Medicaid, beneficiaries must contribute all income above the state personal needs allowance to the cost of care

14 Medicaid Nursing Home Coverage (continued) At any one time, about 60% of all nursing home residents are receiving Medicaid States spent $46.5 billion for nursing home care in FY 2002 Sources: Medical Expenditure Panel Survey (MEPS) and Medstat Analyses of CMS 64 Data.

15 Medicaid Coverage of Home Care Medicaid programs cover non-skilled home care either: – Under the regular state Medicaid plan, or – Under the Medicaid Home and Community-Based Care Waiver (HCBS) Program Regular state plan services (e.g., personal care) must be provided equally to all Medicaid beneficiaries HCBS waiver services can be targeted to designated populations, geographic areas and/or LTC settings

16 Medicaid Coverage of Home Care (continued) HCBS waivers can only be provided to persons who meet functional eligibility criteria for nursing home care HCBS waivers cover a wide range of community-based services that are not covered under regular Medicaid States are expanding HCBS waiver programs as an alternative to nursing home care

17 Other Public LTC Financing Options Older Americans Act Programs – Administered by the AOA/DHHS, 56 State Units on Aging, 655 Area Agencies on Aging, 244 Tribal Organizations and 29,000 Community Service Providers – Provides a broad range of community- based services, including home delivered and congregate meals to persons over the age of 60 – Not means-tested

18 Other Public LTC Programs Veterans’ Administration (VA) – Provides LTC coverage for service-related disabilities or for certain eligible veterans and/or their spouses – VA owns and operates its own network of nursing homes

19 Some New LTC Financing Options Programs of All-Inclusive Care for the Elderly (PACE) programs integrate Medicare and Medicaid in one managed care plan Some Medicaid programs cover LTC services under a managed care model – Arizona Long-Term Care System (ALTCS) – Minnesota Senior Health Options (MSHO) – Wisconsin Family Care – Texas Star+Plus Cash and Counseling Demonstration provides “voucher” to Medicaid beneficiaries who purchase their own LTC services