These days, efforts to reform our broken system of long-term care are being led by the states. To support and build on those programs, the National Academy of Social Insurance (NASI) released an ambitious agenda for structuring and financing programs to help families support their loved ones. The NASI framework, called Universal Family Care, goes far beyond long-term care financing. It contemplates a lifetime of holistic supports, beginning with early child care and education, paid family and medical leave, and long-term services and supports (LTSS)—all funded through a single social insurance fund.
I’ll focus on two of the legs of that stool, family leave and LTSS financing. The NASI report does not propose a specific comprehensive plan. Rather it constructs a broad framework and then describes options for building-out a detailed plan. For example, it compares the pros and cons of various public long-term care insurance programs, then it describes the possible funding mechanisms of such proposals.
The NASI report was written with the assistance of 30 outside experts. Full disclosure: I served on its LTSS study panel. The project was funded by the Ford Foundation and an advocacy group called Caring Across Generations.
Because NASI as an organization that focuses on social insurance, the report contemplates a state-based model where these ambitious supports are funded with public dollars. In this social insurance design, all workers (and sometimes their employers) contribute to a program and all are eligible to receive benefits without regard to their income. This is the model upon which Medicare Part A and Social Security are built in the US, and which nearly all developed countries in the world use for their public long-term care insurance programs. It is different from Medicaid, which is available only to those who have low-incomes.
To some degree, NASI is building on existing state work.
Washington State and Minnesota have enacted or proposed LTSS financing solutions, though they are very different from one another. Voters in Maine considered, but rejected, a publicly-funded home-care program. Illinois and Michigan are taking early steps to develop their own public programs. California may follow suit.
Similarly, a handful of states, including New York and California, have adopted paid family leave. Ideas for national public LTC insurance and family leave programs are bouncing around Washington, DC. But for now most of the action is in the states.
Critically, NASI acknowledges the need to fully fund these programs with additional tax dollars. A primary element of the NASI plan is long-term financial stability, a key to winning future bipartisan support.
What would its ideas cost? NASI estimates a modest universal package of early child care and education, family leave, and LTSS would require an annual contribution (aka tax increase) of every worker averaging about $80-a-month.
NASI’s social insurance program that provides basic support for families from birth to death is extraordinarily ambitious. But, curiously, when it comes to long-term services and supports, NASI’s focus is rather conventional. As a result, the group lost a chance to be more cutting-edge.
Make no mistake, universality is an important feature. It avoids the difficult problem of adverse selection where those who buy insurance are most likely to need it, a phenomenon that drives up prices for all buyers. It also eliminates underwriting, which makes private insurance inaccessible for many.
These are big, important changes. But by sticking with the stand-alone long-term care insurance model, NASI misses an opportunity to encourage states to think about a second, parallel track of long-term care financing reform. That idea: a fully integrated health and long-term care insurance model. Instead, the report doesn’t move the ball much beyond ideas that surfaced three years ago or more.
People with chronic disease and functional or cognitive impairment desperately need to have their care fully coordinated. Separate insurance could, at additional cost, provide care managers to help stitch together the many pieces of medical care and supports and services. But that is an awkward compromise that, based on limited experience, does not work very well.
In reality, health care and long-term care don’t fit together naturally—even less so when they are funded by separate insurance. NASI acknowledges this problem but in only a few paragraphs of a nearly-300-page report.
This is especially surprising in a model designed for states since nearly all states already provide integrated medical and long-term care for Medicaid beneficiaries. And several, including Massachusetts and Minnesota, already have adopted very successful Medicare programs that combine medical care with supports and services.
Reimagining the safety net
NASI deserves praise for reimagining the social safety net as a holistic, lifetime benefit. It acknowledges, in ways that most government programs do not, the complex reality of people’s lives. Often, families are caring for young children, aging parents, and other relatives with disabilities at the same time.