Commission on Long-Term Care

Report to Congress

September 18, 2013

Pre-Publication Version
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COMMISSIONERS

Bruce Chernof, Chair

Mark Warshawsky, Vice Chair

Javaid Anwar

Judith Brachman

Laphonza Butler

Henry Claypool

Judith Feder

Stephen Guillard

Chris Jacobs

Neil Pruitt

Carol Raphael

Lynnae Ruttledge

Judith Stein

Grace-Marie Turner

George Vradenburg

STAFF

G. Lawrence Atkins, Staff Director

Christine Bishop 

Pamela Mazerski

Elizabeth Blair

Dennis Kodner
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September 18, 2013

Honorable Barack Obama Honorable Harry Reid

President of the United States Majority Leader

1600 Pennsylvania Avenue NW United States Senate

Washington, DC 20500 Washington, DC 20510

Honorable John Boehner Honorable Mitch McConnell

Speaker of the House of Representatives Minority Leader

United States Capitol United States Senate

Washington, DC 20515 Washington, DC 20510

Honorable Nancy Pelosi

Minority Leader

House of Representatives

Washington, DC 20515

Dear President Obama, Speaker Boehner, Leader Pelosi, Senator Reid and Senator McConnell:

We write to you as the Chair and Vice Chair of the Commission on Long-Term Care to transmit to you 

the Commission’s Final Report, as required by Section 643 of the American Taxpayer Relief Act of 2012 

(P.L. 112-240). After a near 100 day working period, the Commission approved this Final Report, by a 

vote of 9-to-6, on September 12, 2013.

The Commission was formally instituted on June 10, 2013 with the selection of Chair and Vice Chair. 

Over a three-month period, we held four public hearings, solicited substantial stakeholder and general 

public comment, and met as a Commission in nine working sessions to prepare a plan for addressing our 

nation’s challenges with delivering and financing long-term services and supports (LTSS). We heard 

about major innovations in the organization and delivery of LTSS, emerging knowledge, training, and 

assistive technologies to revolutionize caregiving by families and direct care workers, and various 

approaches to enable individuals and families to insure and finance LTSS.

The issues of service delivery, workforce, and financing LTSS have challenged policymakers for decades. 

Most individuals who need LTSS receive this assistance from a family caregiver. Those who need paid 

LTSS in a nursing home or in their own home must negotiate a complex, patchwork of expensive 

services. Most individuals and their families do not have the personal financial resources needed to pay 

for an extended period of assistance and many end up on Medicaid. As a result, the federal and state 

governments today pay for 62 percent of paid LTSS -- over $130 billion a year. The need for LTSS and 

the cost to governments will grow dramatically over the next two decades with population aging, 

increasing the burden on already underfunded government health care programs. Preparing to meet 

the LTSS needs of the population and ensuring adequate financial resources will take time. The process 

should begin now. 
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The Commission sought to address the challenges of delivering and financing LTSS for both older and 

younger people with significant cognitive or physical functional limitations. Working on a bipartisan 

basis, the Commission adopted 28 specific public policy recommendations in service delivery, workforce, 

and financing that set a strong path forward for transforming systems of care to best meet people’s 

needs while appreciating today’s fiscal realities. The Commission prepared a vision of a fiscallysustainable and effective service delivery system built around concepts of person- and family-centered 

care, with integration of LTSS and medical care, a uniform assessment tool in support of the care plan, 

consumer and caregiver access to information, family caregiver engagement and support, caregiver 

training, caregiver involvement in care planning and care coordination, and outcomes-focused care 

management. The Commission also envisioned a comprehensive financing model balancing public and 

private financing to insure catastrophic expenses, encourage savings and insurance for more immediate 

LTSS costs, and provide a strong safety net for those without resources. Although developing a full 

financing recommendation with broad Commission agreement was not possible given the time and 

analytic resources available, the Commission presents two approaches for your consideration on how to 

substantially improve LTSS financing utilizing the strength of both the public and private sectors. 

This report provides a solid foundation from which Congress and federal agencies can now initiate a 

more extensive and deliberative effort to build a momentum towards confronting and preparing for our 

LTSS challenge. The Commission recommends further steps to expand the national dialogue and to 

move forward on the development and implementation of a better, more comprehensive LTSS system. 

We are honored to serve in a leadership capacity for this Commission and grateful to have worked with 

such a distinguished and talented group of fellow Commissioners and staff. Despite constraints, 

Commissioners worked diligently and constructively and were able to find much common ground in a 

time when agreement of this magnitude can be difficult to achieve. We request your highest attention 

to this Report and urge you to take action in order to maintain momentum toward creating a LTSS 

system that will meet the needs of all Americans with functional or cognitive needs now and in coming 

generations.

Sincerely,

Bruce Chernof, M.D. Mark Warshawsky, Ph.D.

Chair Vice Chair
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INTRODUCTION

The Commission on Long-Term Care was established under Section 643 of American Taxpayer 

Relief Act of 2012 (P.L. 112-240), signed into law January 2, 2013. The Commission was 

established with 15 members. Three members each were appointed by the President of the 

United States, the majority leader of the Senate, the minority leader of the Senate, the Speaker 

of the House of Representatives, and the minority leader of the House of Representatives. The 

Commission elected Dr. Bruce Chernof as its Chair and Dr. Mark Warshawsky as its Vice-Chair.

The statute directed the Commission to: "...develop a plan for the establishment, 

implementation, and financing of a comprehensive, coordinated, and high-quality system that 

ensures the availability of long-term services and supports for individuals in need of such 

services and supports, including elderly individuals, individuals with substantial cognitive or 

functional limitations, other individuals who require assistance to perform activities of daily 

living, and individuals desiring to plan for future long-term care needs."

The statute further directed the Commission within 6 months of the appointment of 

Commissioners (by September 12, 2013) to: “...vote on a comprehensive and detailed report 

based on the long-term care plan... [described above]... that contains any recommendations or 

proposals for legislative or administrative action as the Commission deems appropriate, 

including proposed legislative language to carry out the recommendations or proposals.”

The Commission convened its first meeting on June 27, 2013. It held four public hearings with 

testimony for 34 witnesses. It solicited extensive comments from the general public. It met in 

9 executive sessions. The Commission met on September 12, 2013 and voted, by a vote of 9 to 

6, in favor of putting this Final Report forward as the broad agreement of the Commission.

On the question: “Should the report be put forward as the broad agreement of the 

Commission?” the vote was:

• Yeas: Chernof, Warshawsky, Anwar, Brachman, Guillard, Pruitt, Raphael, Turner, and 

Vradenburg

• Nays: Butler, Claypool, Feder, Jacobs, Ruttledge, and Stein
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CHAPTER 1

A CALL TO ACTION

Over 12 million Americans of all ages with functional impairments today rely on personal 

assistance and other long-term services and supports (LTSS) in their home and community or in 

an institution to perform daily activities to maintain their quality of living and, when possible, 

their independence. Most of them receive services and supports from dedicated caregivers 

that enable them to cope with their cognitive or physical limitations with dignity. The services 

and supports they receive are provided by family or friends who provide unpaid assistance out 

of love and commitment and by paid caregivers who have chosen to earn their living in an 

intensely personal caring profession. 

LTSS are essential but costly for individuals with cognitive and functional limitations and their 

families. Family caregivers sacrifice other family and work responsibilities and bear a financial 

and emotional burden that can be overwhelming. Paid services and supports are expensive, 

and when received over an extended period of time, can be financially catastrophic. Individuals 

and families rarely have sufficient resources (either savings or private insurance) to pay for an 

extended period of LTSS. Medicaid provides a critical safety net those with few resources or 

who have exhausted nearly all of their resources paying for care. More than half of the cost of 

LTSS today is financed by the federal and state governments through the Medicaid program. 

LTSS have improved substantially in recent decades. Yet problems remain for individuals and 

families who need care, notwithstanding the commitment and dedication of thousands of paid 

and family caregivers providing loving and quality services. Paid services and supports are 

highly fragmented and difficult for individuals and family caregivers to access lacking the focus 

and coordination across agencies and providers necessary to ensure the best outcomes for the 

person and family, and are provided in ways that can be expensive and inefficient. The need 

for LTSS and the costs of paid LTSS must be addressed in the context of the financial pressures 

for many American families and the fiscal challenges, including population aging and high 

health care costs, which face our Nation.

A dramatic projected increase in the need for LTSS in coming decades will confront significant 

constraints in the resources available to provide LTSS. Aging Baby Boomers will grow the 

numbers of older Americans with physical and cognitive limitations. At the same time, fewer 

family caregivers combined with more limited personal financial resources to pay for caregiving 

due to declines in savings rates, retirement asset accumulation, and private insurance purchase, 

will place increasing pressure on the Medicaid program and the federal and state budgets that 
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fund it. Governments will have to balance growing LTSS needs with education, public health 

and safety, and other priorities. 

New approaches are needed to bring LTSS care integration, technology, and innovative 

workforce strategies together to reduce the overall cost of achieving better health and wellbeing outcomes for individuals and their families. Many persons living with disabilities are able 

and want to participate in the workforce. Changes are needed to support them so they can 

receive the LTSS they need for full workforce participation. Creative financing efforts are 

needed to affordably insure the risk of needing LTSS and encourage higher levels of savings. 

Finally, a more accessible and sustainable Medicaid is needed to assure its continued role in 

guaranteeing the availability of LTSS for individuals and families with few resources to provide 

for themselves.

Now is the time to put these new approaches and efforts in place if the coming generations of 

Americans will have access to the array of LTSS needed to remain independent themselves or to 

assure the safety and well-being of a loved one with substantial physical or cognitive 

limitations. The need is great. The time to act is now. 
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CHAPTER 2

SPECIFIC CHALLENGES TO PROVIDING LTSS

Over 12 million Americans and their families are confronted with long-term functional and 

cognitive limitations and face the challenge of arranging and financing or providing the 

necessary assistance with performing daily activities. This chapter defines long-term services 

and supports (LTSS) and describes specific structure and process challenges that create these 

problems for American families as experienced in three key domains – service delivery, 

workforce, and financing. 

What are Long-Term Services and Supports?

• Long-term services and supports (LTSS) are defined as assistance with activities of daily 

living (ADLs, including bathing, dressing, eating, transferring, walking1) and instrumental 

activities of daily living (IADLs, including meal preparation, money management, house 

cleaning, medication management, transportation2

) to people who cannot perform these 

activities on their own due to a physical, cognitive, developmental, or chronic health 

condition that is expected to continue for an extended period of time, typically 90 days or 

more. 

• LTSS include such things as human assistance, supervision, cueing and standby assistance, 

assistive technologies, workplace supports, and care and service coordination for people 

who live in their own homes, community residential settings, or institutional settings. 

• LTSS are a distinct set of services from health care services, although they may include 

health-related services. LTSS are a critical element of support and service for persons who 

are receiving health care services for severe chronic health conditions or disabilities that 

contribute to their functional limitations. 

• LTSS include both paid assistance and assistance provided by family members and other 

unpaid caregivers.3

 

 1 The index of ADLs was developed by Katz, see S. Katz, et al. Progress in the development of the index of ADL. The 

Gerontologist, 10:20-30, 1970. 2 The index of IADLs was developed by Lawton and Brody, see M. Lawton and E. Brody. Assessment of older people: Selfmaintaining and instrumental activities of daily living.” Gerontologist, 9:179-186, 1969. 3 Adapted from Reinhard S, Kassner E, Houser A, Mollica R. Raising Expectations: A State Scorecard on Long-Term Services and 

Supports for Older Adults, People with Physical Disabilities, and Family Caregivers. 2011; 

http://www.longtermscorecard.org/~/media/Microsite/Files/AARP_Reinhard_Realizing_Exp_LTSS_Scorecard_REPORT_WEB_v3

.pdf. Accessed August 26, 2013.
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Who Has Functional Limitations

• The 12 million Americans who rely on LTSS are a diverse group in terms of age, the 

condition causing functional incapacity, and place of residence. People who rely on LTSS 

are almost equally split between adults who are age 65 and older (56 percent) and adults 

under 65 (44 percent). Adults are 96 percent of the total population who rely on LTSS.4

 

• Responding to LTSS needs is often contingent on an individual’s stage of life and 

circumstances.

o Children under the age of 18 are a small percentage of the total population requiring 

LTSS, but can have substantial needs that will last a lifetime. For the most part, their 

care is provided by their families. Their functional limitations primarily result from 

medical impairments that occur at birth or infancy. Their impairments are equally split 

between physical and intellectual/developmental disabilities (I/DD) with a significant 

number experiencing mental health disorders5.

o The top ranking conditions for working age adults with functional limitations between 

the ages of 18 – 44 who need LTSS include intellectual disabilities, paralysis and nervous 

system disorders, back problems and mental health disorders. 

o The majority of those needing LTSS in the 45 to 64 age group have adult onset 

disabilities, primarily consisting of physical disabilities with a significant number of those 

also suffering from mental health disabilities.

o About half of the physical functional impairments associated with LTSS needs of older 

adults have onset after age 65 (90 percent after age 18) and are caused primarily by 

arthritis, heart condition and diabetes. Dementia and stroke, however, are both major 

causes of impairment, especially for the 22 percent of older adults needing LTSS who do 

not have physical impairments. Cognitive impairment is a complicating comorbidity for 

many other LTSS users.6 Alzheimer’s disease, the most common form of dementia, 

accounting for 60-80 percent of dementia cases, almost always results in a need for 

 4 S. Kaye. Non-Elderly People Needing Long-Term Services & Supports: Who are they? What services to they get? What 

services do they need? Testimony to the Commission on Long-Term Care. July 17, 2013. 5 H. Stephen Kaye, Non-Elderly Needing Long-Term Services & Supports: Who are They? What Services Do They Get? What 

Services Do They Need?. Testimony to the Commission on Long-Term Care. July 17, 2013 (The data presented is based on 

Kaye’s analysis of data from the 2012 National Health Interview Survey & 2010 Census and represents those who use LTSS in 

community settings)

6 S. Kaye. Testimony to the Commission on Long-Term Care. July 17, 2013.
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long-term care.

7

 One in 8 Americans over the age of 65 has Alzheimer’s, and the 

disease affects 42.5 percent of Americans over the age 85.8

• These different populations have different needs that can be met with similar services and 

supports, but are often provided in different settings or care systems. For the older 

population, ability to work is not a factor in eligibility for assistance. For working-age 

persons with functional limitations, eligibility for income support and related health 

benefits is typically based on the inability to work.9 The need for LTSS, however, is related 

to functional impairment, which may exist in a context in which the individual is unable to 

work or in which assistance is needed to maintain employment. Many adults with 

functional limitations are able to work with personal assistance, workplace supports, and

other LTSS.

• The shift of the population receiving paid LTSS from institutional to home- and communitybased care (“de-institutionalization”) has had the greatest impact on care for the under 65 

population in need of LTSS. Among Medicaid beneficiaries, nearly 80 percent of the under65 LTSS population is using community-based services, compared to less than half of the 

older adult LTSS population.10 Non-elderly adult LTSS users are also likely to depend 

entirely on their families for care – less than a third use paid help compared to over half of 

the older adult LTSS users.11 

• The population with intellectual and developmental disabilities (I/DD) has been particularly 

affected by policy decisions to close large public and private institutions and shift to 

community-based care, in part in response to litigation.12 

• There are racial and ethnic disparities in the need for and the use of LTSS. Older black and 

Hispanic individuals have higher rates of functional impairment than whites.13 Nursing 

home use has declined markedly among older whites, but has increased over time among 

 7 Alzheimer’s Association (2013). 2013 Facts and Figures. Alzheimer’s Association. Retrieved from 

http://www.alz.org/downloads/facts_figures_2013.pdf. 8 Alzheimer’s Study Group (2009). A National Alzheimer’s Strategic Plan.

9 While age 65 is typically the dividing line between work-related disability and aging since eligibility for income security 

benefits and related Medicare and Medicaid is typically based on inability to work before age 65 and retirement after age 65,

the division at age 65 is not a bright line – functional impairment that impedes work can be a factor for workers and potential 

workers at any age. 

10 D. Rowland. Testimony to the Commission on Long-Term Care. August 1, 2013. 11 S. Kaye. Testimony to the Commission on Long-Term Care. July 17, 2013. 12 D. Braddock. Testimony to the Commission on Long-Term Care. July 17, 2013. 13 Congressional Budget Office. (2013). Rising Demand for Long-Term Services and Supports for Elderly People. Washington, DC: 

Congressional Budget Office. 
11

older blacks and now exceeds the usage rate among whites.14 Growth in nursing home use 

has been especially rapid among older Hispanics and Asians in recent years, albeit from a 

very low rate.15 Researchers have found many reasons for racial and ethnic disparities, 

including stronger reliance on or preference for family-provided informal care, disparities in 

area resources, and differences in economic status.16 Black residents remain more likely to 

live in nursing homes that have deficiencies in care.17

• The number of people needing LTSS is expected to grow in the next few decades as the 

baby-boom generation ages, although trends in age-adjusted rates of disability now appear 

to be holding steady after a period of improvement for older populations.18 The number of 

individuals with Alzheimer’s and other dementias will increase as the number of elderly 

people increases. By 2050, the annual number of new cases of Alzheimer’s is projected to 

more than double.19

The Critical Role of Family Caregiving

• Most people who receive LTSS in the home rely on family caregiving. A “family caregiver” 

may be a relative, partner, friend, or neighbor who has a significant relation with, and 

provides assistance for, a person who has functional limitations. 

• Family caregivers are a major part of the care delivery system, providing the majority of 

LTSS and often coordinate paid LTSS and health care. Many caregivers also contribute 

direct financial support to individuals with daily functional needs to remain in their homes 

and remain as independent as possible. On a typical day in 2009, 42 million family 

caregivers nationwide were providing care to an adult with LTSS needs, with women being 

the vast majority of unpaid caregivers.20

 14 Ness J., Ahmed, A. Aronow, W.S. (2004). Demographics and payment characteristics of nursing home residents in the United 

States: A 23 year trend. Journals of Gerontology, 59A (11):1213-1217.

National Center for Health Statistics. (2009). National Nursing Home Survey: 2004 Overview. Washington, DC. 15 Z. Feng, M. Fennell, D. Tyler, M. Clark, V. Mor.(2011). Growth of racial and ethnic minorities in US nursing homes driven by 

demographics and possible disparities in options. Health Affairs, 30, 1358-1365. 16 Murtaugh, C.M., Kemper, P., & Spillman, B.C. (1990). The risk of nursing home use in later life. Medical Care, 28, 952-962. 17 Smith, D.B., Feng, Z., Fennel, M.L., Zinn, J.S., & Mor,V. (2007).Separate and unequal: Racial segregation and disparities in 

quality across U.S. nursing homes. Health Affairs, 18 Kaye, H.S. (2013). Disability rates for working-age adults and for the elderly have stabilized, but trends for each mean 

different results for costs. Health Aff (Millwood), 32, 127-134; Freedman, V. A., B. C. Spillman, P. M. Andreski, J. C. Cornman, E. 

M. Crimmins, et al. (2013). "Trends in late-life activity limitations in the United States: an update from five national surveys." 

Demography 50(2): 661-671. 19 Alzheimer’s Association, “Alzheimer’s disease facts and figures”(2013). 20 An estimated 62 million family caregivers provided care at some time during the year in 2009. L. Feinberg. Populations in 

Need of LTSS and Service Delivery Issues. Testimony to the Commission on Long-Term Care. July 17, 2013.
12

• The value of family caregiving exceeds the total value of all paid LTSS. Family caregiving was 

estimated to be worth $450 billion in 200921 as compared to $211 billion in spending on all 

paid caregiving in 2011.22 In addition, the cost to U.S. businesses from lost productivity 

from family caregiver employees (from reduced hours, replacement of employees, 

absenteeism, and other factors) was estimated at $34 billion dollars in 2004.23

• Families typically expect to and prefer to care for a loved one with a chronic illness or 

disability. In surveys, most Americans say they would feel obligated to care for a parent 

who needed assistance.24 However, many family caregivers have no alternative to 

providing care themselves due to the expense of paid care. Families with children in need 

of LTSS typically prefer to care for their children, but are likely to need support with 

complex care needs. Adults under age 65 with functional impairments are more likely to 

rely exclusively on family caregiving than older adults.25 

• Caregiving often places a financial, physical, and emotional hardship on the caregivers. 

Frequently caregivers have little advance knowledge or training in the activities they have to 

perform, have little access to information and support they need to help navigate the 

fragmented health and LTSS systems, and have no opportunity to arrange other support 

when they are unable to provide care.26

• Caring for an individual with cognitive limitations can pose a particular challenge. 

Approximately 15.4 million people provide care to individuals with Alzheimer’s and other 

dementias.27 Caregivers of individuals with Alzheimer’s and other dementias spend more 

years caregiving on average than family caregivers providing care to individuals without 

dementia, and are also more likely to report assisting their loved ones with at least one ADL, 

compared with caregivers of older adults in general. Moreover, caregivers of individuals 

with Alzheimer’s report high levels of physical and emotional stress due to caregiving, and 

are more likely to suffer from depression than caregivers of older adults in general.

 21 L. Feinberg, S. Reinhard, A. Houser, R. Choula. Valuing the Invaluable: 2011 Update: The Growing Contributions and Costs of 

Family Caregiving. 2011; http://assets.aarp.org/rgcenter/ppi/ltc/i51- caregiving.pdf. 22 National Health Policy Forum. National Spending for Long-Term Services and Supports (LTSS), 2011. February 1, 2013 23 L. Feinberg, S. Reinhard, A. Houser, R. Choula. Valuing the Invaluable: 2011 Update: The Growing Contributions and Costs of 

Family Caregiving. 2011; http://assets.aarp.org/rgcenter/ppi/ltc/i51- caregiving.pdf. 24 Pew Research Center. Social and Demographic Trends: The Decline of Marriage and the Rise of New Families. November 18, 

2010.

25 Two thirds of older adults with disabilities who receive care at home are cared for only by family members, while 26% receive 

both care from family members and paid help. Only 9% use paid help alone. [P. Doty. 2010]. Non-elderly adults with disabilities 

rely even more heavily on family caregiving -- only 24% of the non-elderly population who lived alone used paid help in 2010. 

[S. Kaye. 2013].

26 Feinberg op. cit. 27 Alzheimer’s Association (2013). 2013 Alzheimer’s Disease Facts and Figures. Chicago, IL: Alzheimer’s Association. 
13

• The nature of family caregiving is changing as more individuals are discharged early from 

acute settings with increasingly complex medical care needs to be met in the home. The 

increasing complexity of post-acute care is making care more challenging for family 

caregivers who are capably providing LTSS for a loved one, but often do not have training in 

the medical/nursing tasks they need to perform in the wake of an acute care episode. 28 

• While families will likely continue to be the primary support for individuals with LTSS needs, 

declining birth rates over the last 50 years means there will be fewer family members 

available in the near future to provide hands-on support compared to the number of baby 

boomers who are providing care for an aging relative today. A recent AARP study projected 

a dramatic decline over the next 20 years in the caregiver support ratio: from 7 potential 

caregivers for every person in the high-risk years of 80-plus in 2010 to 4 for every person 

80-plus in 2030.29

• The challenges family caregivers face, in the context of a likely decline in the future in the 

availability of family caregivers, threatens to increase the use of paid care, the burden on 

private financial resources, and the stress on publicly financed programs. 

How Paid LTSS is Provided - Delivery System Challenges

• Individuals with substantial functional and cognitive needs struggle to participate in 

everyday activities of living, live safely and well at home or in the residence of choice, and 

to enjoy many aspects of daily life. Various services, ranging from personal care assistance, 

adaptive technologies, environmental modifications, and residential communities exist to 

address these difficulties.30 

• However this potential network of providers to deliver support is complex, multifaceted, 

specialized, isolated from other service providers, and confusing to the average consumer. 

Few providers in this network evaluate a person’s overall situation in order to arrange for 

the right combination of services based on one’s actual needs. Instead, access to services is 

often organized in relationship to their funding streams, governed by a mix of federal, state, 

 28 S. Reinhard, C. Levine and S. Samis (2012). Home Alone: Family Caregivers Providing Complex Chronic Care. AARP Public 

Policy Institute and United Hospital Fund. http://www.aarp.org/content/dam/aarp/research/public_policy_institute/health/

home-alone-family-caregivers-providing-complex-chronic-care-rev-AARP-ppi-health.pdf 29 D. Redfoot, L. Feinberg, and A. Houser. The Aging of the Baby Boom and the Growing Care Gap: A Look at Future Declines in 

the Availability of Family Caregivers. AARP Public Policy Institute. August 2013. 

http://www.aarp.org/content/dam/aarp/research/public_policy_institute/ltc/2013/baby-boom-and-the-growing-care-gapinsight-AARP-ppi-ltc.pdf 30Gitlin, L.N., Szanton, S.L., & DuGoff, E.H. (2011). The SCAN Foundation CLASS Technical Assistance Brief No.1: Supporting 

Individuals with Disability Across the Lifespan at Home: Social Services, Technologies, and the Built Environment. Retrieved 

from http://www.thescanfoundation.org/sites/default/files/TSF_CLASS_TA_No1_Supporting_ Individuals_At_Home_FINAL.pdf.
14

and local rules and procedures. Separate agencies may have unique eligibility rules, intake 

and assessment processes.

• When the need for LTSS arises in the wake of a medical event – a hospitalization for an 

accident or illness, or a transition from a post-acute stay to long-term care – the planning 

and organization of LTSS for an individual is often handled separately from the health care 

planning, and there are few incentives for health care providers to integrate LTSS with 

medical care planning or service delivery. Patients may be discharged to a nursing home or 

their own home for post-acute. When individuals need LTSS, frequently they and their 

families must find and arrange for LTSS on their own, sometimes on short notice when the 

need arises from a medical event or a change in the individual’s functional capacity. 

Families responding on short notice rarely have the opportunity to make solid LTSS 

arrangements that will enable a safe living environment. When a fragile care system fails, 

individuals may experience a longer-than-needed hospital stay, an interim discharge to a 

nursing facility, and/or an unwarranted re-hospitalization.

• When people have to arrange paid LTSS, the fragmented system is difficult for the individual 

and family caregiver to access and negotiate. Currently, there is no comprehensive 

approach to care coordination for these individuals and caregivers. As a result services and 

supports may not be provided in the most appropriate setting by the most appropriate 

provider, the individual’s needs and preferences may not be met, and their caregivers may 

experience substantial stress trying to arrange for or provide care. This fragmented, 

provider- and setting-centered approach (as opposed to a person-centered approach) 

results in service and supports needs that go unmet, putting individuals at risk for injuries 

and/or adverse health consequences requiring medical attention. 

• Persons with functional limitations do not always have a choice of the LTSS they need in the 

least restrictive environment appropriate for their level of functioning.31 The 1999 Supreme 

Court decision in Olmstead 32required states to make reasonable accommodation to enable 

persons with disabilities to receive services in the most integrated setting appropriate to 

their needs. Since then, federal and state spending has shifted from primarily supporting 

institutional care to a more balanced mix of institutional and non-institutional care. Several 

initiatives have been funded aimed at increasing access for individuals with functional 

limitations to a choice of LTSS that can provide assistance with daily living toward the goal 

of maintaining their independence, self-determination, and dignity. 

 31 S. Kaye. Testimony to the Commission on Long-Term Care, July 17, 2013. 32 Olmstead v. L.C. 527 U.S. 581 (1999)
15

• The Olmstead decision resulted in substantial Medicaid funding and state waiver authority 

to increase access to home- and community-based services (HCBS). Medicaid spending for 

HCBS has increased substantially both in amount and as a proportion of all Medicaid LTSS 

spending since 1997. The Bush Administration’s New Freedom Initiative in 2001 and the 

Obama Administration’s Community Living Initiative in 2009 included implementation of 

Aging and Disability Resource Centers (ADRCs) as a way to meet the intent of Olmstead. 

The ADRCs are intended to serve as single points of entry into the LTSS system for older 

adults, people with disabilities, families and others to make efficient use of care options, 

and maximize available services. 

• However, results are inconsistent across the country, with state-by-state variations in 

eligibility and services provided through public sources and severe constraints on the 

availability of service in some states. There are significant access limits on many LTSS. 

Many states cap enrollment in HCBS, and some maintain waiting lists. An estimated 

500,000 people are currently on state HCBS waiting lists of one kind or another.33 Publiclyfunded programs do not cover many services that are needed to remain independent (e.g., 

technology, home modifications, family supports). In addition, public funding is available to 

provide services and supports for people with disabilities who are not able to work but is 

not generally available to support persons with functional limitations who can and will work 

with assistance.

• There are a number of promising initiatives aimed at integrating LTSS with acute and postacute care to develop a continuum of care that is person- and family-centered rather than 

centered on the setting or funding source. New organization and payment initiatives have 

the potential to align financial incentives of health care organizations to focus on and take 

accountability for health outcomes. Several states are pioneering comprehensive LTSS 

initiatives to combine assessment, information, counseling, care management, and other 

services to empower persons with functional limitations to choose settings and services 

that best meet their needs. Most of these initiatives are pilot and small scale projects, 

reaching only a small part of the range of services and supports, consumers, and geographic 

areas in the U.S.

o The Program of All-inclusive Care for the Elderly (PACE), a well-known forerunner of 

many of today’s community-based models of integrated care for dual beneficiaries, is an 

excellent case in point with respect to the challenges involved in bringing successful 

 33 S. Kaye. Testimony to the Commission on Long-Term Care, July 17, 2013.
16

programs to scale. Initiated in 1990, PACE now serves over 25,000 enrollees nationally. 

A single model of financing and organizing care cannot serve the entire population in 

need. As of 1999, there are approximately 3 million elderly in the United States who 

met the eligibility criteria for PACE: community-based, nursing home-certifiable, and 

dually eligible, who could benefit from PACE or other integrated service options.34 

o The Centers for Medicare and Medicaid Services (CMS) Medicare-Medicaid Coordination 

Office Financial Alignment Demonstration will test capitated and managed fee-forservice models on a large-scale basis for dually-eligible beneficiaries in which primary, 

acute and behavioral health services are covered in addition to LTSS. Eight states 

(Massachusetts, Washington, Ohio, Illinois, California, New York, Virginia, and 

Minnesota (through an alternative model)) were recently selected to begin full 

implementation of their demonstrations.35

o Several States, including Minnesota and Washington, are pioneering the development 

of innovative, ‘high-functioning’ LTSS systems which bring together easy-to-access 

information, assessment, counseling, care management, nursing home pre-admission 

and transition services and a wide array of home- and community-based and managed 

care options.36

o Participant-directed or consumer-directed services are increasingly being offered under 

Medicaid home care waivers.37 Under these programs, older adults and persons with 

disability are approved for a certain number of hours according to their needs. They are 

then able to recruit, hire and train their own personal care attendants to provide 

services; programs may also offer an agency option; and, in many states, family 

members may take these jobs. Personal direction has proved very popular with care 

 34 Bodenheimer T. Long-Term Care for Frail Elderly People—The On Lok Model. New England Journal of Medicine. 1999; 

341(17):1324–8. 35 M. Bella. What Would Strengthen Medicaid LTSS? Testimony to the Commission on Long-Term Care. August 1, 2013.; CMS 

MMCO Financial Alignment Initiative. Retrieved from http://www.cms.gov/Medicare-Medicaid-Coordination/Medicare-andMedicaid-Coordination/Medicare-Medicaid-CoordinationOffice/FinancialModelstoSupportStatesEffortsinCareCoordination.html

36 L. Colman. Statement on Service Delivery and Provider Innovation and Issues. Testimony to the Commission on Long-Term 

Care. August 20, 2013.

37 O’Keeffe, J., P. Saucier, B. Jackson, R. Cooper, E. McKenney, S. Crisp, et al. (2010). Understanding Medicaid Home and 

Community Services: A Primer. Assistant Secretary for Planning and Evaluation, U. S. Health and Human Services. 

http://aspe.hhs.gov/daltcp/reports/2010/primer10.pdf

Newcomer, R., T. Kang and J. Faucett (2011). "Consumer-directed personal care: comparing aged and non-aged adult recipient 

health-related outcomes among those with paid family versus non-relative providers." Home Health Care Serv Q 30(4): 178-

197.

Caldwell, J. and T. Heller (2007). "Longitudinal outcomes of a consumer-directed program supporting adults with 

developmental disabilities and their families." Intellect Dev Disabil 45(3): 161-173.
17

recipients, who feel more in control of their care.38 To facilitate the individual 

employment of direct care workers, Medicaid programs set up fiscal intermediaries to 

process paychecks and file payroll taxes.39 

Who Provides Paid LTSS: Workforce Challenges

• The workforce providing paid LTSS is a critical link in the availability and quality of services. 

It is a mix of professionals and direct care workers who are found in a number of settings, 

such as nursing homes, institutions for individuals with intellectual and developmental 

disabilities, and in home- and community-based settings. 

• The professional workforce includes physicians, nursing home and assisted living 

administrators, registered nurses (RNs), licensed practical and vocational nurses 

(LVN/LPNs),40 physical and occupational therapists, and social workers.41 However, nurses 

provide the majority of professional long-term care. RNs tend to hold supervisory roles in 

nursing homes and home health agencies, while LPNs provide direct patient care, including 

tasks such as medication administration and taking vital signs.42

• Direct care workers include nursing aides and orderlies, home health aides, and personal 

care and home care aides. Nursing aides and orderlies work primarily in nursing homes and 

assisted living facilities, and perform both paramedical tasks and assistance with ADLs. 

Home health aides perform tasks similar to those of nursing aides, but in the home and 

community. Personal care attendants, also called personal care aides and home care 

workers, generally provide social supports and assistance with ADLS to individuals in their 

homes.43

• The professional workforce specifically trained to meet the LTSS needs of the older adult 

population will not be adequate to meet the future needs for LTSS. There were only 7,356 

board-certified geriatricians in the United States in 2012, and 44 there is only about 1 

 38 Wiener, J. M., W. L. Anderson and G. Khatutsky (2007). "Are consumer-directed home care beneficiaries satisfied? Evidence 

from Washington state." Gerontologist 47(6): 763-774. 39 Scherzer, T., A. Wong and R. Newcomer (2007). "Financial management services in consumer-directed programs." Home 

Health Care Serv Q 26(1): 29-42. 40 Institute for the Future of Aging Services (2007). The Long-term Care Workforce: Can the Crisis Be Fixed? Retrieved from 

http://www.leadingage.org/uploadedFiles/Content/About/Center_for_Applied_Research/Center_for_Applied_Research_Initiat

ives/LTC_Workforce_Commission_Report.pdf 

41 Eldercare Workforce Alliance. Geriatrics Workforce Shortage: A Looming Crisis for Our Families. Washington, DC: Eldercare 

Workforce Alliance. 42 Institute for the Future of Aging Services. 43 PHI (2011). Facts 3: Who Are Direct Care Workers? Bronx, NY: PHI. 44 The American Geriatrics Society. (2012). Projected Future Need for Geriatricians. 
18

geriatric psychiatrist for every 11,000 older adults. If current rates continue, there will only 

be 1 for every 20,000 older persons by 2030. In addition, less than 4 percent of social 

workers specialize in aging, despite the fact that 75% report working with older adults.45

Nurses who provide a significant amount of care for older adults have high rates of turnover 

in nursing homes.46

• The direct care workforce provides between 70 and 80 percent of paid long-term personal 

assistance.47 Due to the aging of the population and the rebalancing towards home and 

community-based services, demand for direct care workers is set to increase by 48 percent 

over the next decade, adding 1.6 million positions.48 The anticipated increase in the 

demand for workers could lead to a shortage of experienced workers.49 Retention is also an 

issue. While some workers have stable job tenure, others have low job and industry 

attachment. Studies of turnover have found rates of 44-46 percent for home care workers, 

49 percent for certified nurse assistants (CNAs) in nursing homes, and 26 percent among 

CNAs in assisted living facilities.50 CNAs have a 49 percent retention rate in nursing homes, 

and a 78 percent retention rate in assisted living facilities. Agencies have reported difficulty 

attracting and retaining qualified workers,51 which may affect the quality of care that 

individuals with LTSS needs receive. 

• Factors that contribute to the difficulty in attracting and retaining experienced direct care 

workers are the low levels of compensation, lack of benefits, and limited opportunities for 

advancement that are associated with the skill levels required for the job.52 In addition, 

compensation has not increased for these jobs over the last decade.53 Compensation is 

generally higher for direct care workers in nursing homes than in home and communitybased settings. However, nursing home positions also exhibit high turnover, due not only to 

low compensation, but also to high caseloads and supervisory style. For example, nursing 

 45 T Lustig. Testimony to the Commission on Long-Term Care. August 20, 2013. 46 American Health Care Association (2011). 2011 Staffing Survey Report. Washington, DC: American Health Care Association. 47 PHI (2012). Facts 3: America’s Direct Care Workforce. Bronx, NY: PHI. 48 National Center for Health Workforce Analysis, 2004 49 Institute of Medicine (2008). Retooling for an Aging America. 50 Seavey, D. & A. Marquand (2011); American Health Care Association (2011). 2010 AHCA Survey: Nursing Facility Staffing 

Survey 2010. American Health Care Association; Hewitt, A. and C. Larson. (2007). The Direct Support Workforce in Community 

Supports to Individuals with Developmental Disabilities: Issues, Implications, and Promising Practices. Mental Retardation and 

Developmental Disabilitiy Research Reviews 13 (7):178-187. National Center for Assisted Living (2012). Findings from the NCAL 

2011 Assisted Living Staff Vacancy, Retention, and Turnover Survey. 

50 Institute of Medicine (2008). Retooling for an Aging America. 51 American Health Care Association (2011).Nursing Facility Staffing Survey 2010; National Center for Assisted Living (2012). 

Findings from the NCAL 2011 Assisted Living Staff Vacancy, Retention, and Turnover Survey. 

52 Seavey, D., & A. Marquand (2011). Many home care workers are exempt from the Fair Labor Standards Act and are not 

guaranteed the minimum wage or compensation for overtime

53 PHI. (2011). State Chart Book on Wages for Personal Care Aides 2000-2010. Retrieved from 

http://www.pascenter.org/documents/PCA_Wage_Chart_Book_2000_2010.pdf
19

aides are more likely to stay with their positions if they feel valued and respected.54

Demographic changes will also affect the supply of direct care workers. The growth of the 

labor pool of women aged 25 to 54, from which direct care workers are primarily drawn, is 

not expected to keep pace with the demand for workers.55

• With the increase in HCBS, it is likely that workers will tend to serve consumers with more 

complex needs with less supervision. At the same time, nursing home residents are 

projected to become increasingly elderly and frail.56 Experts are concerned that direct care 

workers serving consumers with increasingly complex care needs do not receive adequate 

training.57 At the federal level, there is currently no minimum training requirement for 

personal care attendants. Home Health Aides and CNAs who work at Medicare-certified 

agencies are both required to have 75 hours of which 16 must be clinically supervised. In 

2008, the Institute of Medicine recommended raising this requirement to at least 120 hours 

of training, but most states have not adopted this standard.58 The training requirements for 

consumer-directed personal care aides are even more minimal.59 In addition to leaving 

workers unprepared for the tasks they might face at work, lack of training or career 

pathways also makes it difficult for workers to advance.60 Training has also been shown to 

reduce turnover and increase job satisfaction among direct care workers.61

• High turnover and workforce shortages have an impact on care quality. Though there is 

little data about the effect of worker turnover in home- and community-based settings, 

studies in nursing homes have shown that higher turnover is associated with poor quality of 

care as measured by use of restraints, pressure ulcers, psychoactive drug use, and 

certification survey quality of care deficiencies.62

 54 Seavey & Marquand, 2011; Mickus, M., C.C. Luz, and A. Hogan. (2004). Voices from the Front: Recruitment and Retention of 

Direct Care Workers in Long-Term Care across Michigan. Michigan State University. 55 Seavey, D. and A. Marquand, 2011 56 Dawson, 2007. Recruitment and Retention of Paraprofessionals. PHI. 57 Institute of Medicine. (2008) Retooling for an Aging America. Institute of Medicine. 58 IOM, 2008; A. Marquand (2013). Personal Care Aide Training Requirements. PHI. Retrieved from 

http://www.phinational.org/research-reports/personal-care-aide-training-requirements-summary-state-findings. 59 Seavey & Marquand, 2011 60 Testimony of Carol Regan. Hearing on Population in Need of LTSS and Service Delivery Issues. July 17th, 2013. 61 Dawson, 2007.Recruitment and Retention of Paraprofessionals. Paraprofessional Health Institute. 62 Seavey & Marquand, 2011; Castle, N.G., Engberg, E., Anderson, R.A., & Meng, A., (2007). Job satisfaction of nursing aides in 

nursing homes: Intent to leave and turnover. Gerontologist, 47:193-204. 
20

Paying for LTSS: Financing Challenges

• Paid LTSS are labor-intensive and can be costly due to the duration of care.63 Traditionally, 

LTSS has been the responsibility of family caregivers. But when paid services are needed, 

most Americans are not effectively prepared to shoulder the cost, whether services are 

needed due to a disability with onset at birth, during working years, or in old age. 

• Individual needs for LTSS for those aged less than 65 vary widely due to the diverse nature 

of the conditions being addressed. Individuals with a permanent condition may face LTSS 

costs that have a long duration that can be costly. Children and pre-65 adults and their 

families are unlikely to have access to long-term care insurance, due to their condition and 

the limitations of insurance that would cover these expenses, and are unlikely to have 

accumulated substantial assets. A high percentage of them will rely on Medicaid to finance 

care when they need paid care. The population with functional impairments due to 

intellectual and developmental disabilities are most dependent on Medicaid funding – 77 

percent of the funding for I/DD services and supports comes from the Medicaid program,64

compared to 61 percent of the LTSS funding for the total non-elderly adult population and 

22 percent of the LTSS funding for the elderly population.65

• Working-age adults with disabilities who continue to work have extra expenses associated 

with disability such as personal assistance, mobility devices, and assistive technology, 

among others. These supports are necessary for employment but require more resources 

to achieve the same outcomes as their nondisabled counterparts. Medicaid is the only 

program that provides LTSS for individuals with disabilities. But Medicaid is a means-tested 

program and is available only to those with very limited income and assets. Those receiving 

Medicaid benefits face a dilemma in considering work: if they work successfully, their 

income would likely disqualify them from receiving Medicaid coverage of the LTSS they 

 63 For persons that need LTSS and their families, the cost of paid assistance can be substantial. According to the Genworth’s 

2013 Cost of Long-Term Care Survey, the median private pay daily rate in a nursing home is $207 for a shared room and $280 

for a private room, though prices vary widely depending upon location and provider. According to the 2012 Eljay Survey of 

State Nursing Home payment rates across the United States, Medicaid programs pay an average rate of $178 per day ($7.42/hr) 

for 24-hour nursing services in a nursing home. For assisted living facilities, the average daily rate is approximately $117/day or 

less than $5.00/hour. Meanwhile, the median hourly prices of homemaker and home health services were $18 and $19 an 

hour, respectively - although individuals accessing home care use services on a limited number of hours per day compared to 

facility-based care. [From Genworth (2013). 2013 Cost of Care Survey: Home Care Providers, Adult Day Health Care Facilities, 

Assisted Living Facilities and Nursing Homes. Retrieved from 

https://www.genworth.com/dam/Americas/US/PDFs/Consumer/corporate/130568_032213_Cost%20of%20Care_Final_nonsec

ure.pdf and Eljay, LLC (2012). A Report on Shortfalls in Medicaid Funding for Nursing Center Care. Retrieved from 

http://www.ahcancal.org/research_data/funding/Documents/2012%20Report%20on%20Shortfalls%20in%20Medicaid%20Fun

ding%20for%20Nursing%20Home%20Care.pdf] 64 D. Braddock. 2013. 65 S. Kaye. 2013.
21

need to work, yet they may not earn enough to pay for the services on their own. The 

implicit tax on working overwhelms earned income, even from high-paying jobs. Insurance 

can only work for this population if risks are broadly pooled and this is difficult in today’s 

private markets. 

• Older adults who need paid services, may need them for varying lengths of time, depending 

on nature and onset of the condition and their life expectancy. Functional impairment is 

not an inevitable consequence of aging, and many older adults reach the end of their lives 

without experiencing a long spell of disability. A person turning 65 has a 20 percent chance 

of experiencing more than 5 years of ADL and IADL impairment requiring help from family 

or paid care in his or her remaining lifetime; but also has a 31 percent chance of dying 

without any serious long-term care need; and faces a 17 percent chance that needs will last 

less than a year. 66

• Under current spending patterns, the expected value of all paid LTSS for people turning 65 

in 2005 was $47,000, but the distribution of expenditures is highly skewed. Sixteen percent 

of the cohort could expect to use paid care valued at $100,000 or more over the course of 

their remaining years, and 12 percent could be expected incur expenditures between 

$25,000 and $100,000. Forty-two percent of that cohort could expect no LTSS expenditures 

at all, either due to lack of need or exclusive reliance on informal care.67

• These varying amounts of paid LTSS are funded through a mix of sources with individuals 

and their families relying first on personal resources, including savings and private longterm care insurance when available, and then on multiple, uncoordinated public sources all 

with unique requirements, most notably Medicaid, a means-tested federal-state program. 

Each source of funding has constraints, and their interaction leads to further problems. The 

issues for each funding resource are different for younger persons with disabilities and 

older adults. 

Personal Savings

• Individual income and assets are the first source for paid LTSS. However, many older adult 

households lack sufficient financial assets to provide for their LTSS. The inadequacy of 

many Americans’ retirement wealth is well known: working aged individuals and families, 

 66 Kemper, P., Komisar, H.L., & Alecxih, L. (2005/2006). Long-term care over an uncertain future: What can current retirees 

expect? Inquiry, 42, 335-350.] 67 Kemper, P., Komisar, H.L., & Alecxih, L. (2005/2006). Long-term care over an uncertain future: What can current retirees 

expect? Inquiry, 42, 335-350. Costs are in 2005 dollars. 
22

facing competing and more immediate demands for spending or with few resources to save, 

do not save enough for retirement, let alone LTSS needs. Later, need for paid LTSS adds a 

further burden on retirement assets that are already strained. In 2005, only one in three 

older adults had non-housing financial assets equal to the yearly cost of nursing home care 

($70,000).68 The proportion was even lower (16 percent) for the subgroup that were more 

likely to require nursing home care due to age, family status or disability held enough 

wealth to cover a year of care.69 About 46 percent of older adult households have less than 

$10,000 in non-housing assets.70 Given the unpredictability and catastrophic nature of 

extensive LTSS needs, relying on savings to finance these services is unlikely to be effective.

• Americans do not generally plan for future LTSS needs as they approach retirement. Sixtyfive percent of Americans age 40 and up say they have done little or no planning even for 

ongoing living expenses in their older years -- barely more than half know where to go for 

information on long-term care.71 Three in 10 Americans age 40 and older say growing older 

is something they “just don’t want to think about,” a sentiment especially expressed by 

those who worry about burdening their families, worry about being alone in their later 

years, lack confidence that they know where to turn to find information on the issue, and 

feel they lack the financial resources to pay for long-term care costs. Those who do not 

want to think about aging are less likely to plan for it. However, people who feel they know 

where to get information on aging issues are more apt than others to have prepared for 

these needs. Experience also matters: Planning is significantly higher among the 53 percent 

of Americans age 40 and older who have themselves provided LTSS assistance to another 

person. 

• Experience to date suggests that for generations retiring in the next few decades, there will 

be large numbers of older adults who will not have sufficient income and assets built up 

over working years to enable them to pay for a lengthy period of LTSS on their own. 

 68 Feder J, Komisar H. The Importance of Federal Financing to the Nation's Long-Term Care Safety Net. (2012) p. 3

69 Feder J, Komisar H. The Importance of Federal Financing to the Nation's Long-Term Care Safety Net. (2012) p. 3 70 James M. Poterba, Steven F. Venti, David A. Wise, “Were They Prepared for Retirement? Financial Status at Advanced Ages in 

the HRS and AHEAD Cohorts, NBER Working Paper No. 17824 (February 2012)

71 Associated Press-NORC Center for Public Affairs Research (April 2013). Long-Term Care Poll: Perceptions, and Attitudes 

among Americans 40 or Older. http://www.thescanfoundation.org/associated-press-norc-center-public-affairs-research-longterm-care-poll-perceptions-and-attitudes; Langer Research Associates (August 2013). Pathways to Progress in Planning for 

Long-Term Care. http://www.thescanfoundation.org/sites/thescanfoundation.org/files/langer-ltcpoll-analysis-8-15-13.pdf
23

Insurance

• Given the skewed incidence of functional impairments for older adults, with some people 

needing large amounts of services for a long duration and some needing none, it would 

seem that LTSS should be an appropriate area for insurance solutions. 

• Private health insurance typically does not cover non-medical expenses beyond short-term, 

rehabilitation-oriented care. Likewise, Medicare, which provides universal coverage for 

people receiving Social Security Disability Insurance benefits (after a two-year waiting 

period) and for persons over age 65, does not cover long-term services and supports. 

• While private long-term care insurance products have been sold for more than 30 years, 

any potential for them to serve a large percentage of the population has not been realized. 

Private long-term care insurance policies currently play a minor role in financing LTSS – only 

10 percent of the potential market of Americans age 50 and above is currently insured.72

New issuance of policies has declined in recent years, and a significant number of insurers 

have left the private LTCI market and closed blocks of policies due to low interest rates that 

have affected the products’ financial performance, and unexpectedly low forfeiture rates 

among other reasons.73 Many policies that are in force have recently experienced 

substantial premium increases.74 

• Issues on the demand and supply sides of the long-term care insurance (LTCI) market are 

responsible for the low penetration of private LTCI. The potential to benefit from Medicaid 

coverage deters (“crowds out”) some people from purchasing LTCI, although analysts 

disagree on the significance of this effect.75 Features of the products, the insurance market, 

and some regulatory requirements limit the value and attractiveness of private LTCI, 

 72 Brown, J.R. and A Finkelstein (2004). Supply or Demand: Why is the Market for Long-Term Care Insurance So Small? National 

Bureau of Economic Research. Retrieved from http://www.nber.org/papers/w10782.

73 M. Cohen. Testimony to the Commission on Long-Term Care. August 20, 2013. 74 CalPers LTCI (a California State Employee group insurance) raised premiums 22 percent in 2009 and recently announced 

another 85 percent increase in premiums. [R. Frank, et al, 2013][L. Kent, 2013].

75 In the Commissions August 20 public hearing, J. Brown testified that given crowd-out, all but the highest 10 to 35 percent of 

the wealth distribution would be rational not to buy private LTCI. [J. Brown. Testimony to the Commission on Long-Term Care. 

August, 20, 2013]. Brown also noted that a separate study comparing showed that states with more generous Medicaid 

eligibility had lower rates of private LTCI coverage. [Brown, J.R., Coe, N.E., & Finkelstein, A. (2007). Medicaid Crowd-Out of 

Private Long-Term Care Insurance Demand: Evidence from the Health and Retirement Survey. In J.M. Poterba (ed.), Tax Policy 

and the Economy (1-31). Cambridge, MA: MIT Press.] 

D. Grabowski testified that crowd-out is logical and likely at low asset levels (bottom tercile), but not at middle and upper asset 

levels -- citing buyer/non-buyer data that shows a big uptake in private insurance between $50,000 and $100,000 in assets. 

Grabowski also noted that even with Brown and Finkelstein estimates of crowd-out, 40 percent of the population would still be 

candidates for private LTCI. [D. Grabowski. Testimony to the Commission on Long-Term Care. August 20, 2013].
24

including: underwriting standards that prevent many individuals from qualifying, high 

monthly premiums, policy forfeiture rules, limits on benefits, and a lack of public 

understanding and confidence in the private LTCI products.76 

• Innovation with LTCI product designs has shown some promise of attracting more 

consumers. One approach – the Partnership for Long-Term Care – is an arrangement 

between states and private insurers that enables purchasers of LTCI to retain larger amounts 

of assets and still qualify for Medicaid after they have used their long-term care policy. The 

Partnership expanded after the Deficit Reduction Act of 2005 expanded eligibility to all 

states and enabled policyholders to change states and retain the policy. Forty-five states 

now offer Partnership plans. The number of policies, though still only 10 percent of LTCI 

policies, grew in recent years.77 Surveys have shown that almost half of those surveyed 

would purchase LTCI if their state had a Partnership program, although most knew little 

about the program and were unaware that their state offered those plans.78 

• Another promising approach is combination products that combine life insurance or 

annuities with long-term care insurance. Products like the Life Care Annuity can combine 

risks in ways that can make premiums more affordable and deliver more value to the 

consumer. The combination of the life annuity with long-term care insurance enables the 

insurers to issue the product with less underwriting.79

• The potential for savings and private insurance purchase to meet financing needs for LTSS 

has been limited by the proportion of the population with sufficient lifetime earnings and 

asset accumulation to pay for LTSS or to afford insurance purchase. New options and 

incentives making it practical for people to save or purchase insurance at lower levels of 

income could expand this market, enabling more people to prepare for their own LTSS 

needs.

 76 Assistant Secretary for Planning and Evaluation (2012). Long-Term Care Insurance: ASPE Research Brief. Assistant Secretary 

for Planning and Evaluation, U.S. Department of Health and Human Services. Retrieved from 

http://aspe.hhs.gov/daltcp/reports/2012/ltcinsRB.shtml#note26.

77 CBO, 2013. Exhibit 20. 78 America’s Health Insurance Plans (2012). Who Buys Long-Term Care Insurance in 2010-2011? America’s Health Insurance 

Plans. Retrieved from http://www.ahip.org/Issues/Long-Term-Care-Insurance.aspx. 79 M. Warshawsky. The Life Care Annuity: A proposal for an insurance product innovation to simultaneously improve financing 

and benefit provision for long-term care and to insure the risk of outliving assets in retirement. 

Working Paper No. 2. Long-Term Care Financing Project, Health Policy Institute, Georgetown University. June 2007.

Murtaugh, C.M., Spillman, B.C., & Warshawsky, M. (2001). In sickness and in health: An annuity approach to financing long-term 

care and retirement income. The Journal of Risk and Insurance, 68 (2), 225-254. 

Brown, J., & Warshawsky, M. (2013). The life care annuity: A new empirical examination of an insurance innovation that 

addresses problems in the markets for life annuities and long-term care insurance. Journal of Risk and Insurance, 80 (3), 677-

704.
25

Medicaid

• When individuals and families have exhausted their personal resources and can no longer 

shoulder LTSS costs on their own, they have to depend upon Medicaid for help. Individuals 

can become eligible for Medicaid if they are eligible for Supplemental Security Income due 

to low incomes and assets, or as a result of spending down their incomes and assets on 

medical and LTSS expenses. Eligibility for Medicaid and the array of benefits provided vary 

substantially by state. 

• Those with sufficient work histories may qualify for Social Security Disability Insurance (and 

Medicare after a two-year waiting period) and may be dually eligible for Medicare and 

Medicaid by virtue of having low incomes.80 About 15 percent of Medicaid enrollees are 

dually eligible and about a third of these are under age 65 adults with disabilities. Twothirds of Medicaid enrollees using LTSS are dual beneficiaries.81

• State Medicaid programs pay for the specific LTSS services specified by each state plan for 

people who meet the income and assets tests particular to their state. Nursing home 

services must be offered, but other LTSS services are optional. Depending on these 

thresholds, older adults with low income and assets are likely to have been eligible for 

Medicaid before they experience LTSS needs. But some people become eligible for 

Medicaid due to their spending on paid LTSS: they “spend down” to Medicaid eligibility by 

spending nearly all their income and assets on services. Because nearly all income must be 

spent before Medicaid begins to pay, rules protect some income and assets for communityresident spouses. In addition, there are asset exclusions that enable a Medicaid recipient to 

retain working assets of substantial value. For example, the value of the family home is 

protected during the lifetime of the Medicaid recipient and spouse.82 

 80 About 15 percent of Medicaid enrollees are dually eligible and about a third of these are pre-65 adults with disabilities. More 

than two-thirds of Medicaid expenditures for LTSS in 2007 were for dually eligible enrollees. (KFF Fact Sheet, 2011]. 81 Kaiser Family Foundation. Medicaid’s Long-Term Care Users: Spending Patterns Across Institutional and Community-based 

Settings. October2011. http://kaiserfamilyfoundation.files.wordpress.com/2013/01/7576-02.pdf. page 3 82 Medicaid eligibility is complicated and varies substantially from state-to-state. For states that base eligibility on the federal 

SSI coverage requirements, in 2013 recipients must have monthly income below $710 for an individual ($1,066 for a couple), 

about 75 percent of the federal poverty level (FPL). States may extend Medicaid coverage to individuals in a nursing home or 

other institution with incomes up to 300 percent of FPL. Under SSI program rules, Medicaid recipients may also have 

countable assets of no more than $2,000 for an individual (no more than $3,000 for a couple). Medicaid allows the recipient to 

exclude the value of the primary residence (up to $536,000 in 2013, although states can allow up to $802,000 in 2013) as well 

as a car and personal and household items and burial funds and term life insurance, and, in many states, qualified retirement 

assets in distribution status, from countable assets. States may use more restrictive income and asset rules, and there are some 

states with less restrictive rules. (K. Colello, Congressional Research Service, Testimony before the Commission on Long-Term 

Care, June 27, 2013). Medicaid estate recovery program allows states to recoup private assets when a beneficiary dies in order 

to recover Medicaid expenditures on that person’s behalf. The amount of recovery through this program has been relatively 
26

• Some have suggested that individuals with high lifetime incomes may transfer assets to 

become Medicaid-eligible instead of planning for LTSS risk, and thus subvert Medicaid’s 

purpose of serving the poor. However, a Government Accountability Office (GAO) study 

examining the impact of tightened asset transfer provisions enacted in the Deficit Reduction 

Act of 2005 found that most older adults gaining Medicaid eligibility have very limited 

incomes, and that asset transfers were both rare and generally modest in size, both before 

and after the new provisions.83 There are competing views concerning the extent to which 

individuals can plan within current Medicaid rules to retain assets while achieving Medicaid 

eligibility.84

• Medicaid is the single largest payer for paid long-term services and supports. Today, 

Medicaid pays for 62 percent of paid LTSS while more than 22 percent is paid out-of-pocket, 

and other private payers pay for only 12 percent. In 2011, total spending for LTSS 

expenditures from all sources was $211 billion of which Medicaid expenditures for $131 

billion.85 About half of Medicaid LTSS spending pays for services for persons aged less than 

65. 

• State Medicaid spending overall is putting pressure on state budgets now and is likely to 

overwhelm both state and federal budgets in the coming decades. However, only 30 

percent of Medicaid spending is for LTSS; about half of this pays for nursing home services 

and the remainder pays for services provided in home and community settings.86 A small 

percentage of Medicaid enrollees (6.4 percent) use LTSS, although this group (half aged and 

 

small, but varies among states. (Julie Stone, CRS Report for Congress, Medicaid Coverage for Long-Term Care: Eligibility, Assets 

Transfers, and Estate Recovery, January 2008). 83 U.S. Government Accountability Office, Medicaid Transfers of Assets by Elderly Individuals to Obtain Long-Term Care 

Coverage. GAO-05-968 (Washington, DC: U.S. Government Accountability Office, September 2005). 84 K. Colello, Congressional Research Service, Testimony before the Commission on Long-Term Care, June 27, 2013. The CRS 

testimony provided an extensive discussion of asset transfer and estate recovery rules and state variation in rules and 

compliance. E. O'Brien. (2013). Interaction of Insurance, Private Resources, and Medicaid: Assessing the Evidence. Testimony 

before Commission on Long Term Care. August 1. http://www.ltccommission.senate.gov/Ellen%20O%27Brien%20PP.pdf; 

Stone, J. (2008). Medicaid Coverage for Long-Term Care: Eligibility, Asset Transfers, and Estate Recovery. RL33593. January 31. 

http://www.aging.senate.gov/crs/medicaid18.pdf; Stone, J. (2011). Medicaid Eligibility for Persons Age 65+ and Individuals 

with Disabilities: 2009 State Profiles. Congressional Research Service. Report,R41899. June 28. 

http://www.pascenter.org/documents/medicaid_eligibility.pdf85 National Health Policy Forum. National Spending for LongTerm Services and Supports (LTSS), 2011. February, 2013. Available data underestimates the amount of out-of-pocket (OOP) 

spending for LTSS because existing surveys do not capture all OOP spending on LTSS (for example, OOP spending for assisted 

living is not reported, although it may be substantial). 85 National Health Policy Forum. National Spending for Long-Term Services and Supports (LTSS), 2011. February, 2013. 

Available data underestimates the amount of out-of-pocket (OOP) spending for LTSS because existing surveys do not capture all 

OOP spending on LTSS (for example, OOP spending for assisted living is not reported, although it may be substantial). 86 In addition, 4 percent pays for mental health services and intermediate care facilities for persons with intellectual disabilities. 

Kaiser Family Foundation. Medicaid and its Role in State/Federal Budgets & Health Reform. April 2013. 

http://kaiserfamilyfoundation.files.wordpress.com/2013/04/8162-03.pdf. Figure 18.
27

half disabled) account for nearly half (45.4 percent) of total Medicaid spending (counting 

both medical and LTSS expenses). 

• Medicaid LTSS spending has grown, but no faster than Medicaid’s growth overall – about 5 

percent a year since 2005. As a result, LTSS has remained a fairly constant share of total 

Medicaid spending.87 On a per enrollee basis, Medicaid LTSS spending has grown only 0.1 

percent a year since 2007.88 Within total LTSS spending, however, spending on noninstitutional services has grown substantially (from a third in 2005 to nearly half of total 

LTSS spending today) while spending on institutional services has remained fairly flat. 

• Growing Medicaid spending competes with education and other state spending priorities. 

Moreover, the contraction of state tax revenues during the recent recession has put even 

more pressure on states to manage these costs. State spending on Medicaid accounted for 

16.7 percent of all state general fund expenditures on average in 2011, roughly half the 

share that went to elementary and secondary education, consistent with its share over the 

preceding half decade. However, recently Medicaid’s share of state budgets has been 

growing – from 14.8 percent in 2010 to a predicted 19.6 percent in 2012.89

• Total Medicaid spending is predicted to grow substantially over the next decade and put 

increasing pressure on federal and state budgets. The Congressional Budget Office (CBO)

projects Federal Medicaid spending growth of 8 percent per year, rising from 1.7 of GNP 

today to 3.6 percent in 2037.90 Much of this spending growth is expected to come from the 

addition of a population of previously uninsured adults and not from growing LTSS costs. 

CBO projects a 5.5 percent annual growth for LTSS spending in Medicaid, lower than the 8 

percent annual growth rate CBO projects for Medicaid overall.91 

• In response to growing budget constraints, almost every state has initiated Medicaid cost 

containment efforts. Over the last two years, almost all of Medicaid changes have focused 

on reductions in provider payments, with relatively few states initiating changes directly 

affecting LTSS users. Nevertheless, state budget pressures have influenced state decisions 

to seek Medicaid waivers to gain greater flexibility in eligibility and benefits to ensure 

appropriate targeting and limit overall spending. In LTSS, Medicaid waivers have enabled 

 87 S. Eiken, et al. Medicaid Expenditures for Long-Term Services and Supports: 2011 Update. Thomson Reuters. October 2011. 88 Kaiser Family Foundation. How Much Will Medicaid Cost in the Future and Why: A Look at Federal Projections. August 2013. 

Figure 8.

89 Kaiser Family Foundation. Medicaid and its Role in State/Federal Budgets & Health Reform. April 2013. 

http://kaiserfamilyfoundation.files.wordpress.com/2013/04/8162-03.pdf. Figure 32. 90 Congressional Budget Office. The 2012 Long-Term Budget Outlook. June 2012. P. 58. The projections as a share of GNP are 

for the combination of federal spending for Medicaid, CHIP, and tax credits for health insurance purchase under the ACA.

91 Congressional Budget Office. Rising Demand for Long-Term Services and Supports for Elderly People. June 2013. Exhibit 16.
28

states to implement HCBS for recipients who would otherwise qualify for institutional care, 

and to limit eligibility or cap slots for the services. 

• States are increasingly turning to contracts for LTSS with Medicaid managed care 

organizations as a means of containing LTSS costs and increasing coordination of services. 

In 2012, sixteen states were pursuing this strategy for at least a portion of their LTSS 

recipients, and a survey found that 11 additional states were planning to introduce this 

approach.92 The programs are starting modestly, with only 389,000 enrolled by the end of 

2012.93 A number of the duals demonstration projects also use a contracted managed 

approach.

 92 Saucier, P., B. Burwell, A. Halperin and H. Butera (2013). Consumer Choices and Continuity of Care in Managed Long-Term 

Services and Supports: Emerging Practices and Lessons. AARP. 2013-07. July.

Cheek, M., M. Roherty, L. Finnan, E. G. Cho, J. Walls, K. Gifford, et al. (2012). On the Verge: The Transformation of Long-Term 

Services and Supports. AARP Public Policy Institute. 

http://www.aarp.org/content/dam/aarp/research/public_policy_institute/ltc/2012/On-the-Verge-The-Transformation-of-LongTerm-Services-and-Supports-Report-AARP-ppi-ltc.pdf 93 Saucier, P., J. Kasten, B. Burwell and L. Gold (2012). The Growth of Managed Long-Term Services and Supports (MLTSS) 

Programs: A 2012 Update. Prepared for the Centers for Medicare & Medicaid Services (CMS), Disabled and Elderly Health 

Programs Group under Contract #: HHSM-500-2005-00025I, Task Order No. 0002. July. <http://www.medicaid.gov/MedicaidCHIP-Program-Information/By-Topics/Delivery-Systems/Downloads/MLTSSP_White_paper_combined.pdf>
29

CHAPTER 3

RECOMMENDATIONS

PART ONE – SERVICE DELIVERY

VISION: A more responsive, integrated, person-centered, and fiscally sustainable LTSS delivery 

system that ensures people can access quality services in settings they choose. 

Issue: Over 12 million Americans of all ages with functional impairments today receive longterm services and supports (LTSS) in their home and community or in an institution to assist 

them in performing daily activities of living. Family caregivers are the primary providers of 

these services and supports, but many individuals and their families rely on paid services for all 

or a part of their care. Many individuals and families pay for LTSS themselves or rely in part on 

coverage under private long-term care insurance they have purchased. Nearly a third of those 

receiving LTSS, however, rely on coverage under Medicaid. Medicaid, and the systems and 

providers it funds along with Medicare, are essential components of the network of services 

and supports for Americans with functional limitations. LTSS have improved substantially in 

recent decades and today most people with cognitive or functional limitations receive services 

and supports from dedicated caregivers and assistive technologies. 

The process of accessing and navigating services, however, can be a tremendous challenge. 

People with cognitive and functional limitations today receive LTSS using a patchwork of family 

caregiving and publicly- and privately-funded assistance. The organization and delivery of 

services and supports is typically defined in terms of providers, settings, and funding streams 

rather than the needs of the person receiving assistance. Individuals and families in need of 

LTSS often lack a choice of services and supports that can meet their needs in the least 

restrictive setting. 

The fragmentation and lack of coordination of the LTSS delivery system is due in part to the 

misalignment of benefit structures, conflicting rules, and separate funding streams of Medicare, 

Medicaid and other public and private programs. The lack of coordination is further 

compounded by an array of agencies, professionals and paraprofessionals that do not work 

together in an integrated, person- and family-centered way. In addition to access problems and 

the lack of consumer choice in the current system, individuals with cognitive and functional 

limitations and their family caregivers also experience disjointed care often disconnected from 

health care, housing, transportation and social services needed to support person- and familycentered LTSS. 
30

LTSS are essential but costly for individuals with cognitive and functional limitations and their 

families. The array of confusing and poorly coordinated health care and LTSS creates a greater 

cost on individuals with cognitive or functional limitations, their families, and taxpayers than it 

should. Paying for needed LTSS is challenging for families facing severe financial pressures and 

for federal and state governments facing fiscal constraints and a growing need in the future for 

LTSS as the population ages and overall health care expenditures rise. 

The current system of LTSS cannot meet the needs of a growing population in a time of severe 

fiscal constraints. Improvements in LTSS need to be developed with an appreciation for the 

economic challenges today and in the future and should include changes in the organization 

and payment for services and the application of new technologies can help can improve health 

outcomes and lower the overall costs of LTSS and health-related services in the future.

Principles: The Commission believes that the LTSS delivery system should be organized to 

provide:

• A comprehensive array of person- and family-centered, high-quality, financiallysustainable medical and social services and supports that meet the heterogeneous 

needs, preferences and values of individuals with cognitive and functional 

limitations.

• Easy-to-access information and assistance for persons with cognitive and functional 

limitations and their caregivers to navigate the delivery system.

• Choice of settings and providers, the active involvement of individuals and family 

caregivers in making care decisions, and the delivery of services and supports that 

meet individuals’ needs in the least restrictive setting consistent with the their 

preferences.

• Integration of LTSS with medical and health-related care, including effective 

management of transitions between one type or level of care and another.

• Affordable, more efficient, coordinated health care and LTSS that aligns payment to 

reward providers for outcomes, quality of care and quality of life.
31

COMMISSION RECOMMENDATIONS

REBALANCING – A BALANCED ARRAY OF LTSS

Recommendation: Promote services for persons with functional limitations in the least 

restrictive setting appropriate to their needs – building a system, including Medicaid, with 

options for people who would prefer to live in the community. 

Problem:

• While states are mandated to cover nursing home and other institutional care, home 

and community-based services (HCBS) are an option funded only through a 

hodgepodge of waivers and state plan amendments.

• States primarily use Medicaid waivers to provide home- and community-based 

services (HCBS) to recipients who would otherwise require institutional care. State 

variation in eligibility, services, limitations and caps results in very different levels of 

access to HCBS in different states. There are over 300 waivers providing for HCBS 

today. States have used waivers to limit access to the Medicaid services or impose 

enrollment caps and waive some income and asset rules and still retain the federal 

match. Many individuals who would otherwise qualify for HCBS are currently on 

state waiting lists services or do not have access to services. The amount of service 

available to an individual once eligible for HCBS is also capped in terms of hours and 

state expenditures. 

Detailed Recommendation:

• The Commission recommends that Congress incentivize state provision of care and 

services to enable individuals to live in the most integrated setting based on a 

person-centered process that is informed by an objective assessment of need. 

o CMS should ensure that evolving systems of care prioritize access to HCBS, 

based on individuals’ needs, values, and preferences.

o Ensure individuals and their family caregivers have access to information on 

choices of LTSS services to enable them to make informed choices between 

institutional and HCBS services. 

o Reduce Medicaid waiver complexity by streamlining the HCBS provisions of 

the Medicaid statute and having CMS provide technical assistance to the 

states in order to encourage rebalancing efforts. 

o Commission a study of the potential for savings across acute care and LTSS 

resulting from expanded access to HCBS for targeted populations due to 

more successful transitions from acute and post-acute care to community 
32

and home-based care, and fewer unnecessary institutional admissions and 

readmissions.
33

CARE INTEGRATION

Recommendation 1: Establish a single point of contact for LTSS on the care team.

Problem:

• Persons with cognitive and functional limitations and their families faced with a care 

transition – from an episode of acute care to an institutional stay or services in their 

home or in a home or community-based setting -- often find it difficult to identify 

and obtain access to the right services in the right settings and to navigate the 

confusing maze of requirements, agencies and providers. 

• Arrangements made for post-transition care may not be well coordinated with the 

medical care plan or sufficient to reduce the need for follow-on medical care or 

hospital readmission. 

• A single point of contact – a personal navigator, case manager or care coordinator –

for the individual with cognitive and functional limitations and primary caregiver can 

address issues that arise with their LTSS needs. A medical professional who serves 

as the single point of contact with the medical care team alone is not sufficient for 

LTSS needs that are typically met through a separate care system not coordinated 

with the activities of the medical team. 

Detailed Recommendation:

• The Commission recommends that certification and accreditation bodies adopt a 

standard for incorporating a LTSS single point of contact for persons with LTSS needs 

that is coordinated with or an integral part of the medical care team. 

Recommendation 2: Align incentives to improve the integration of LTSS with health care

services in a person- and family-centered approach.

Problem:

• LTSS has traditionally been provided in a fragmented, uncoordinated system of care 

provided by disparate agencies, each with its own funding, rules and processes, and 

which are separate from the health care system. 

• Particularly for the two-thirds of persons receiving Medicaid LTSS benefits who are 

also Medicare beneficiaries (“dual eligibles”), the separate funding and provider silos 

have interfered with the coordinated care for an individual across the continuum of 

care.
34

• Successful integrated models that provide comprehensive, person-centered services 

across an array of settings (e.g., Program of All-inclusive Care of the Elderly (PACE)) 

have been small scale and have not been widely adopted.

• Demonstrations to test models to integrate care across the settings (e.g., CMS’s 

Duals Demonstrations) and pioneering state efforts to develop innovative, highfunctioning statewide LTSS systems (e.g., Minnesota and Washington), including 

projects to improve transitions from the hospital to home and community-based 

services, will only serve a small population in the short term. 

Detailed Recommendations:

• The Commission recommends that CMS, the states, consumers, and the provider 

community work together to devise creative strategies to encourage a more rapid 

and widespread adoption of successful evidence-based person- and family-centered 

integrated care pilots. 

• The Commission recommends that CMS’s Accountable Care Organization (ACO) 

initiative and physician payment reforms focus on the whole range of LTSS needs of 

individuals and explore ways in the next round of experiments to expand the scope 

of the ACO’s and new physician payment models to include coordination with LTSS 

providers. 

Recommendation 3: Use technology more effectively to mobilize and integrate community 

resources and to share information among providers, individuals and family caregivers across 

settings of care

Problem:

• Activity underway now to develop the platform for electronic health records (EHRs) 

does not currently incorporate the LTSS components of care in a way that would 

enable all care providers to have access to a unified care plan. LTSS are not included 

in “meaningful use” requirements and incentive programs that are shaping the 

contents of EHRs. Some states have begun to incorporate LTSS in state-level Health 

Information Exchanges (HIE) that enable providers to exchange health records for 

purposes of providing coordinated services. 

• A variety of tele-health applications are already in use in LTSS and the related health 

care system. Others are under development. Emerging evidence shows that 

technology enabled-LTSS has the potential to increase team efficiency and 

effectiveness, enhance care coordination, promote quality of life, and improve 

outcomes such as reducing hospital admissions/readmissions and preventable 
35

injuries, such as falls. The biggest challenge has been to finance technology 

solutions in the context of relatively low-cost LTSS.

Detailed Recommendations:

• The Commission supports development by CMS and the Office of the National 

Coordinator for Health Information Technology (ONC) of an integrated HIT platform 

that would include LTSS (including incorporation of LTSS in Health Information 

Exchanges (HIEs), and recommends providing public resources necessary to support 

and accelerate the pace of this work. 

• The Commission supports efforts to incorporate LTSS care plans in Electronic Health 

Records (EHR) to enable providers to utilize a standardized care plan document as 

consumers with LTSS needs move among settings of acute care and LTSS 

• Family caregivers should be identified in the individual’s EHR, especially when they 

are a part of the care plan. With the individual’s permission, family caregivers 

should have access to such records as key members of care teams. 

• The Commission supports efforts to innovate, test, and develop viable economic 

strategies for applying tele-health technologies to the LTSS system. 

Recommendation 4: Create livable communities building on models that can improve 

access to services and health care-LTSS coordination.

Problem:

• Persons with LTSS needs require demand-responsive modes of transportation, 

accessible housing options, access to participate in employment, social and civic 

activities, as well as access to homecare services, clinics and wellness programs.

• Few persons with LTSS needs today have access to livable communities 

(communities or neighborhoods that facilitate aging-in-place, personal 

independence, meaningful social engagement, and optimum health and well-being 

through approaches that share or arrange LTSS for people of all ages with functional 

limitations) 

• The growing movement across America to create livable communities by mobilizing 

local residents, government, business and health care providers from the “ground 

up” to design and develop better places to grow old is still small scale. Successful 

models exist that are not replicated widely, including grassroots programs like the 

Village model, programs sponsored by charitable organizations or a combination of 

government and private-sector support like NORC-Supportive Services Program, 
36

Age-Friendly Communities; and commercial ventures by non-profit or religious 

organizations, like Continuing Care at Home

Detailed Recommendations:

• The Commission recommends efforts to stimulate voluntary community efforts to 

create and sustain livable communities and aging-in-place support programs by 

establishing a national clearinghouse on successful practices, encouraging new 

model incubators that would provide small start-up funds and technical assistance, 

and undertaking further research and evaluation activities. 
37

UNIFORM ASSESSMENT

Recommendation: Completion of a simpler and more usable standard assessment mechanism 

across care settings (acute, post-acute, and LTSS).

Problem:

• A tool to assess cognitive and functional capacity and LTSS needs is an essential 

component of effective care planning that ensures that services provided align well 

with an individual’s needs, values, and preferences. A common or standard 

assessment tool across programs and services enables better alignment and 

coordination of care provided to the same individual from multiple programs and 

funding sources, and helps ensure consistent evaluation of need and provide data 

for evaluation of program performance and quality of care. However, the use of 

uniform assessment tools is rare within and across LTSS and health care providers.

• There is a wide array of tools for evaluating cognitive and functional capacity and 

LTSS needs (e.g., MDS, OASIS, MDS-Home Care). Yet, a CMS demonstration project 

to develop a single tool for Medicare post-acute patients did not result in 

implementation of the unified instrument across settings. 

• Several assessment tools have been developed and used by various states for LTSS 

to determine eligibility, plan services and supports, and/or monitor quality. More 

than half of all states use a standard assessment tool for at least some portion of 

their LTSS populations, but these have not been adopted broadly for assessing HCBS 

need. Minnesota is creating a uniform, web-based assessment tool, to be 

implemented in June 2014, which is a comprehensive, person-centered, planning 

support tool that will be used for individuals of all ages, and with all types of 

disabilities (physical, cognitive, intellectual or other mental impairments) or other 

LTSS needs. The Minnesota uniform assessment tool also assesses the needs of 

family caregivers through direct questions directed at the caregivers themselves.

• There is currently no single national assessment tool that applies across settings, 

services and the full range of LTSS populations.

Detailed Recommendation: 

• The Commission recommends the development and implementation of a 

standardized assessment tool that can produce a single care plan across care 

settings for an individual with cognitive or functional limitations. The standardized 

tool would inform consumers of LTSS choices and be responsive to the needs of 

older adults and all categories of individuals with disabilities in need of LTSS. The 

tool should:
38

o Be used to inform LTSS choices by presenting service options based on 

individual’s needs, goals, values, and preferences (not to close off LTSS 

options)

o Be responsive to the needs of different populations (e.g., cognitive, 

intellectual, behavioral health, etc.)

o Include the role of all providers and the needs of the family or other 

caregiver identified by the individual. Identify the caregiver in the uniform 

assessment and assess the caregiver’s needs for training in the full care 

demands they are expected to perform.
39

CONSUMER ACCESS/ASSISTANCE

Recommendation 1: Expand the “No Wrong Door” approach to provide enhanced options 

counseling for individuals to navigate LTSS; and provide the support needed to make this 

approach effective nationally.

Problem:

• Consumers have difficulty navigating the complex and confusing array of LTSS 

administered by multiple private and public agencies with complex and sometimes 

conflicting rules and regulations. 

“No Wrong Door” is a proven approach that assists consumers in identifying and 

qualifying for the appropriate services no matter where they enter the system --

typically involving the cooperation of multiple agencies and organizations. It 

includes options counseling to assist families make decisions about appropriate longterm care choices. There is considerable variation across the country in the quality 

and level of services provided by ADRCs, and a lack of funding needed to improve 

their performance. CMS and the Administration for Community Living (ACL) 

developed extensive criteria and outcome measures for “fully functioning” ADRCs, 

and report that 80% of ADRCs have achieved more than half of the outcome 

measures. This indicates that many consumers are not served by fully functioning 

ADRCS, and are limited in services they receive. 

Detailed Recommendation:

• The Commissions recommends the expansion of the ongoing Enhanced ADRC 

Options Counseling Program, using states that are being funded now as national 

models, and relying on ACL and CMS to ensure best practices are disseminated to 

other states, and that other states receive support to expand their Options 

Counseling programs. 

Recommendation 2: Provide information and assistance to consumers and family caregivers in 

advance of transition from one setting to the next (for example, acute care patients at 

admission not just at discharge).

Problem:

• Care transitions, such as a discharge from hospital or nursing facility, are often 

difficult and confusing for individuals with LTSS needs and their families. Individuals 
40

need access to information and assistance in exploring choices of possible support 

options in advance of discharge and at all hours. Inadequately prepared and 

supported transitions can result in unnecessary hospital admissions, readmissions, 

or institutionalization.

Detailed Recommendation: 

• The Commission recommends the appropriate accrediting bodies review hospital 

policy on discharge planning and care transitions to ensure that discharge planning 

and risk assessment of the receiving setting occur at the beginning of an initial 

hospitalization or other precipitating event. Sources of information need to be 

developed that can provide timely (including after-hours) independent information 

in advance of discharge. 

Recommendation 3: Improve access to information technology that can improve consumer and 

caregiver access to information

Problem: 

• Technological innovations can improve access to information and resources for older 

adults and individuals with disabilities.

• An example of the application of information technology is Minnesota’s Senior

LinkAge Line which provides information on Medicare, medications, LTSS, home care 

services, meal delivery, caregiver planning, and a host of other resources. 

Detailed Recommendation: 

• The Commission recommends that the ACL should establish a clearinghouse on 

information technology, and should support efforts to improve awareness and 

availability of such technologies for consumers and family caregivers. 
41

QUALITY

Recommendation: Improve focus on quality across settings of LTSS – with particular attention 

to home and community-based services.

Problem:

• Nursing homes have been the primary focus of multi-faceted efforts to measure and 

improve quality for decades. Quality assessment and improvement efforts in nursing 

homes have not been translated to LTSS provided in home and community-based 

and other settings. Measurement of quality and appropriateness of services is 

important where recipients are dispersed and professional oversight is intermittent. 

• Quality measurement is challenging for home- and community based services. Risk 

adjustment is a necessary component if measures are to be accepted and used as 

the basis for improvement efforts. HCBS measures should focus on outcomes, 

processes, utilization, and consumer and family experience.

• Efforts are currently underway to develop quality measures for home and 

community based services. CMS has developed a set of quality domains and 

specified desired outcomes. The Measure Applications Partnership, convened by 

the National Quality Forum, is working to certify measures for the state duals 

demonstrations. 

 Of special interest are measures focusing on consumer experience 

as an outcome.

Detailed Recommendation:

• The Commission recommends increasing resources and accelerating the time frame 

for activities currently underway to:

o develop quality measurement tools for use in home and community-based 

settings; 

o develop appropriate procedures and mechanisms for applying quality 

measures to ensure quality and appropriateness of services in these settings; 

and

o develop measures on family experience of care, especially when caring for 

people with Alzheimer’s disease or other cognitive or intellectual disabilities.

• The Commission recommends working with states to establish a system to publish 

quality measures that will be understandable to consumers, develop payment 

incentives and value-based purchasing of services based on quality after testing in 

pilot projects, and develop provider accreditation and certification based on quality.
42

PAYMENT REFORM

Recommendation: Advocate for new models of public payment that pay for post-acute and 

long-term services and supports on the basis of the service rather than the setting.

Problem:

• Historically, Medicare has paid for post-acute care based on phases of a beneficiary’s 

illness as defined by a specific site of service, rather than on the characteristics or 

care needs of the beneficiary. Payments for the same consumer and services vary 

considerably across post-acute care settings.

• Providing “site-neutral” Medicare payment on the basis of the service provided 

across post-acute, and LTSS settings would reduce incentives for serving individuals 

in more costly settings and could reduce Medicare (and possibly Medicaid) overall 

spending, realizing savings that could support HCBS and other LTSS. 

Detailed Recommendation: 

• The Commission recommends that necessary regulatory or legislative changes be 

made to adjust Medicare payment rates for post-acute services; and to test 

person- and family-centered payment models to include LTSS that would:

o Pay providers based on the service provided to the consumer rather than site of 

care (while allowing for separation of the room and board components and 

capital adjustment for facility-based care);

o Ensure beneficiaries are served where necessary care is available and provided. 

Settings that provide for highly specialized rehabilitation needs should be 

exempted and paid in a way that recognizes their special value. 

o Enable persons with cognitive or functional limitations to be served in the most 

cost-effective setting that can adequately deliver the most appropriate care. 
43

PART TWO – WORKFORCE

VISION: An LTSS system that is able to support family caregivers and attract and retain a 

competent, adequately-sized workforce capable of providing high quality, person- and familycentered services and supports to individuals across all LTSS settings. 

Issue: Family caregivers today provide the majority of LTSS. Those who take on this unpaid role 

risk the stress, physical strain, competing demands, and financial hardship of caregiving, and 

thus are vulnerable themselves. Due to declining birthrates that will result in fewer family 

caregivers than in years past, there could be greater reliance on fewer family caregivers and the 

availability and quality of paid caregivers will become increasingly important. 

Direct care workers, whether working in residential settings or in a person’s home, are often 

most familiar with the individual and his or her service needs, and are best able to provide 

services and supports in a person-centered way. Individuals with high levels of disability and 

complex health conditions increasingly receive LTSS in home and community-based settings, 

increasing the skill demands both for family caregivers and paid workers. 

Many home care workers are employed by home care agencies, and many others are employed 

directly by individuals and their families, as personal care attendants under a Medicaid 

consumer-directed services program or as private household employees. Rarely do any of these 

workers receive adequate training to meet the demands of providing LTSS in a home setting, 

resulting in high rates of injury and high rates of turnover, reducing continuity of service. Low 

wages and few, if any, benefits with little opportunity for advancement compound make it 

more difficult to retain a trained workforce. Growth of the older adult population and 

increasing integration of medical services with LTSS for all populations with cognitive or 

functional limitations will require more professional and direct care workers in LTSS settings, 

care planning, and participation in teams providing direct care.

Efforts to improve the availability and quality of paid and unpaid caregivers need to be framed 

in the context of the fiscal and economic pressures facing this country and the challenge of 

ensuring access to quality health care and LTSS for an aging population. 

Principles: The Commission believes that should follow the following principles:

• Family caregivers should be identified and assessed for their needs, especially when 

care plans are dependent on them, and they should receive the support they need to 

continue providing care to their loved ones. 
44

• Paid direct care positions should hold the possibility of advancement and job 

satisfaction through career ladders and lattices.

• Competency evaluation should ensure that front-line care workers have the knowledge 

and skills they need to meet the assigned needs of the individuals in their care. 

• The LTSS system should utilize both paid and family caregivers to their fullest potential 

by including them as integral members of care teams. 

• Workforce policies should be designed to increase quality of care and retention of direct 

care workers.

• Sufficient numbers of health and social service professionals should be available to 

provide services connected with LTSS.

• Teams coordinating care for individuals with LTSS needs should include professionals 

who can address LTSS needs of individuals with functional limitations, and are able to 

incorporate LTSS into the care planning for the individual.
45

COMMISSION RECOMMENDATIONS

FAMILY CAREGIVING

Recommendation 1: Maintain and strengthen a person- and family-centered LTSS system with 

both the person with cognitive or functional limitations and the family caregiver (spouse or 

partner, child or grandchild, parent, sibling, or other unpaid assistant) as a focus for services 

and supports. Include family caregivers and their needs in assessment and care planning 

processes. 

Problem:

• Person and family-centered care includes the individual with LTSS needs and his or 

her family at the center of the care team, and takes into consideration the 

individual’s needs, preferences, cultural traditions, family situation, and values. 

• Because family caregivers currently provide the majority of LTSS for individuals with 

disabilities, it is important that they be included in care planning and on the care 

team. Providers and professional caregivers can help ensure that family caregivers 

have the supports they need to continue caring for their loved one. 

• Family caregivers are expected to perform complex medical/nursing tasks with little 

to no training and support from professionals.

• While there is a growing awareness that family caregivers need to be central in the 

care planning process, person- and family-centered care is practiced only to a limited 

degree. 

• CMS, the Veterans Administration (VA), and ACL have identified a number of 

evidence-based transition interventions, many of which specifically include family 

caregivers in the intervention.

Detailed Recommendation:

• The Commission recommends that Congress require the Department of Health and 

Human Services (HHS) to develop a national strategy to support family caregivers, 

similar in scope to the national strategy developed to address Alzheimer’s disease.

• The Commission recommends that CMS require assessment of family caregivers’ 

needs and inclusion of family caregiver needs in a care plan or discharge plan that is 

dependent on them.

• The Commission recommends that CMS work with the VA and states to scale-up 

successful, evidence-based, person- and family-centered care and transition

programs that effectively support individual’s decision making and family caregivers.
46

Recommendation 2: Include family caregivers in patients’ records and as a member of the care 

team

Problem: 

• Family caregivers already play an important role in the LTSS and medical care of 

their loved ones, serving as “de facto” care coordinators, and frequently performing 

nursing-level tasks such as medication management and wound care with little 

training. 

• Many family caregivers of individuals with chronic conditions who play this role 

report feeling anxiety that they will make a mistake with medications, and that 

interacting with so many professionals and medical suppliers adds to their stress.

• Family caregivers providing wound care and managing medications for their care 

recipients reported that clearer instruction and training would make performing 

these tasks easier. These responses indicate that family caregivers should be 

offered appropriate training, be more integrated into care teams, and that 

communication between LTSS and medical professionals and family caregivers needs 

to be clearer. 

• There is little information currently about the degree to which family caregivers are 

included as members of the care team, though advising bodies such as the Institute 

of Medicine have advocated for caregiver inclusion in care teams for some time, and 

the Office of the National Coordinator recently recommended that care team 

members, including family caregivers, should be listed on patients’ medical records. 

Detailed Recommendation:

• The Commission recommends that HHS and national accrediting bodies identify 

mechanisms that will encourage providers to integrate family caregivers into care 

teams and decision making. 

Recommendation 3: Ensure family caregivers have access to relevant information through 

technology

Problem:

• It is important that caregivers have access to all the information that they need to 

provide care, in addition to being listed on medical records. 

• Development of caregiving technology has increased rapidly. Applications now 

allow users to track physiological conditions and symptoms/chronic disease 
47

management (blood glucose, blood pressure) and if individuals are pursuing their 

regular daily activities or if they may have fallen. New tools facilitate 

communication with health care and LTSS providers. Smart phone apps assist in a 

variety of caregiving functions. Assistive technologies increase mobility, the ability 

of individuals to accomplish daily tasks, and can improve communication.

• Research indicates that barriers remain for caregivers attempting to use health 

information technology to assist in caregiving. Mobile health applications do not yet 

support cognitive symptoms or brain health detection. Caregivers perceive cost of 

technology as a barrier to use, including the cost of assistive technologies. The 

general lack of awareness of these technologies is another barrier to more 

widespread use. 

Detailed Recommendation:

• The Commission recommends that HHS create a resource to disseminate 

information regarding new caregiving technologies and best practices for family 

caregivers and provide local information about what is available to address their 

specific needs. 

Recommendation 4: Encourage caregiver interventions, including respite options, and 

integration with volunteer efforts. 

Problem:

• Respite care is the most commonly requested form of caregiver assistance, but 

respite must be addressed in the context of other forms of assistance provided by 

states including information/assistance, education, and training and other caregiver 

support services.

• A number of federally-funded programs provide a limited amount of funding to 

states to provide caregiver support – including respite care. These include the 

National Family Caregiver Support Program, the Lifespan Respite Care Act and the 

Alzheimer’s disease Supportive Services Program. The VA provides caregiver 

training systems for family caregivers of veterans. The resources provided by these 

programs are inadequate to meet the needs of all of these populations.

• Although researchers speculate that investing in respite care can result in cost 

savings by preventing caregiver burnout and the institutionalization of individuals 

who could have continued to receive care at home, most research to date shows 

mixed results in terms of impact on caregivers, delay of institutionalization, and cost 

effectiveness.
48

Detailed Recommendation:

• The Commission recommends further efforts to study caregiver interventions 

including respite care as part of a comprehensive approach to caregiver support, for 

their effectiveness in sustaining family caregiving and limiting the costs of most 

expensive institutional care.

• The Commission encourages an expansion of caregiver interventions based on 

evidence of their benefit, including volunteer efforts through a “caregiver corps” or 

modification of senior corps. 
49

PAID WORKFORCE

Recommendation 1: Revise scope of practice to broaden opportunities for professional and 

direct care workers with demonstrated competency.

Problem: 

• Studies have well documented the shortage of both professional and direct care 

workers for the care needs of older adults and persons with disabilities today and in 

the future.

o Experts believe that expanding the roles of trained direct care workers, may 

help compensate for the shortage in the professional workforce by allowing 

care to be provided more efficiently. This would permit taking full advantage 

of the capabilities of available workers, and would give professional workers 

more time to perform tasks for which only they are qualified. 

o For example, allowing nurses to delegate to appropriately-trained direct care 

workers under their supervision tasks typically performed by nurses, such as 

administration of oral medications or injections, may result in more positive 

experiences for consumers.

• In addition, allowing direct care workers greater flexibility, respect and responsibility 

has been shown to increase job satisfaction, which could have positive effects on 

retention of the workforce.

• One recent study of a pilot delegation demonstration in nursing homes found that 

all stakeholders, but particularly consumers, reported positive experiences with 

delegation. 

Detailed Recommendation:

• The Commission recommends that states permit nurses to delegate and supervise 

certain tasks to direct care workers with sufficient training and demonstrated 

competency to perform them, particularly in home and community-based settings 

that do not have regularly scheduled registered nurses, subject to sufficient 

consumer protections.

Recommendation 2: Recommend that the federal government work with states to enable 

national criminal background checks for all members of the LTSS workforce.

Problem:

• No Medicaid program mandates criminal background check screening for all 

workers, although CMS does require states to report on their background check 
50

activities, if they choose to perform them. In addition, most states require criminal 

background checks on some LTSS workers, but there is significant variation in which 

workers are covered and which convictions preclude employment. 

• Six states exclude family caregivers in consumer-directed programs from criminal 

background check requirements for workers providing services in the home. 

• States can access multiple databases for background checks, including, National FBI 

checks, state and county criminal records, state adult protective and child protective 

service registries, and sex offender registries, among others.

• However, the data systems available have many limitations, and states’ ability to 

access data from other states is limited. In addition, a number of databases exist 

within each state, and they are often not integrated.

Detailed Recommendation:

• The Commission recommends that Congress direct the Department of Justice to 

examine barriers to sharing inter-state criminal background data for health care 

workers and accelerate efforts to develop solutions. 
51

DIRECT CARE WORKFORCE

Recommendation 1: Create meaningful career ladders and lattices for direct care workers that 

result in access to career advancement opportunities and improved compensation.

Problem: 

• Direct care worker positions are often viewed as low-wage, entry-level jobs with 

little to no opportunity for advancement. Establishing career ladders and lattices can 

increase the desirability of these positions, and improve job retention. [A lattice 

refers to a structure that allows workers to move laterally along a career path by 

developing specialized skill sets. A ladder, in contrast, allows workers to move 

upward by earning new credentials that build on prior experience]. 

• A number of efforts have been made at the state and federal level to develop career 

ladders and lattices for direct care workers.

o Extended Care Career Ladder Initiative (ECCLI) in Massachusetts: a 

competitive multi-round grant program available to nursing homes and 

home health agencies to develop career ladders and other training programs 

for nursing aides and home health aides that reported increased retention. 

o The Personal Care and Home Care Aide State Training (PHCAST) 

demonstrations administered by the Heath Resources and Services 

Administration – focused on the development of new training programs and 

curriculum centered on core competencies. Some states that have 

participated have incorporated career ladders and lattices into their training 

programs. 

o CMS has also made efforts to identify core competencies among direct care 

workers across LTSS settings. These core competencies can be used to 

develop training programs, as well as career lattices and ladders. 

Detailed Recommendation:

• The Commission recommends that, based upon the upcoming PHCAST 

evaluation, efforts should be made to identify best practices, and expand this 

program into other states, including successful career lattices and ladders.

Recommendation 2: Integrate direct care workers into care teams. 

Problem:
52

• Direct care workers have a significant role in consumers’ day-to-day lives and are 

often involved in health care activities (e.g., medication management, monitoring 

health status). Not giving direct care workers a significant role in interdisciplinary 

care teams limits the information available to the team on day-to-day care delivery 

and adherence and reduces the ability to coordinate with in-home assistance. 

• Giving direct care workers integral roles in care teams has positive effects on 

consumer outcomes.

• A number of prominent care models, such as PACE or the Green House model, 

include personal care workers in their interdisciplinary teams. 

Detailed Recommendation:

• The Commission recommends that CMS identify mechanisms to encourage 

providers to integrate direct care workers into care teams. 

Recommendation 3: Recommend that the appropriate federal agency collect detailed data on 

the LTSS workforce.

Problem: 

• Currently, there is a dearth of data on the direct care workforce. Although a number 

of states report worker shortages and high rates of turnover, they have little data 

available to assess the magnitude of the problem, and therefore find it difficult to 

address. 

• A number of states are collecting data already, but none collect data across all 

settings in which workers work, and there is significant variation in which data they 

collect. 

• Because states may use different terminology and use different means for classifying 

workers, data across states is not comparable. 

• All states are required by OBRA 1987 to have CNA registries, but these datasets are 

designed to track certification processes and do not include adequate data about 

hours worked, wages, turnover rates and workforce shortages. 

• A recent CMS report on the subject suggested that states begin to collect data on 

the number of full and part time workers, turnover rates, vacancy rates, average 

hourly wages, and status of benefits for workers. 

• Another challenge is that turnover is difficult to measure, and studies frequently use 

different methods to measure it, limiting the comparability of turnover data across 

studies. 

Detailed Recommendation: 
53

• The Commission recommends that the appropriate agency (e.g., CMS, Health 

Resources and Services Administration, Bureau of Labor Statistics) initiate a process 

to collect detailed data on the direct care workforce and launch comprehensive data 

collection efforts. 

Recommendation 4: Encourage states to improve standards and establish a certification 

process for home-care workers.

Problem: 

• Minimum training standards have been established by Federal regulation for nursing 

home certified nursing assistants (CNAs) and home health aides (HHAs). To meet 

Conditions for Participation in Medicare or Medicaid, workers holding these positions in 

skilled nursing homes or home health agencies respectively must meet these standards. 

Some states have established higher training standards. No Federal standards for 

training apply to home care workers providing Medicaid services. 

• Currently, about a quarter of states either have state-sponsored curriculum for personal 

care attendants or require certification, but certification appears to be much more 

widespread for workers in institutional settings.

• The PHCAST demonstration requires that states develop certifications for trained and 

newly credentialed workers. The states involved in the demonstration differ in their 

approach to certification. While some have allowed the training organization to issue 

the certification directly, others plan to integrate the certification process into a statewide process establishing a formal registry of direct care workers. 

• The National Direct Service Resource Center within CMS has been developing core 

competency standards that apply to direct care workers across the care spectrum. 

Recommendation:

• The Commission recommends that CMS explore the development of national 

training standards for direct care workers based on the outcome of the PHCAST 

demonstration in conjunction with CMS’s effort to develop core competency 

standards or other model standards and certifications being developed by States. 

Following the approach taken with CNAs and HHAs in Medicare, CMS should explore 

ways for Medicaid to encourage states to apply training standards that at least meet 

minimum national standards. 
54

PART THREE – FINANCE

VISION: A sustainable balance of public and private financing for long-term services and 

supports (LTSS) that enables individuals with functional limitations to remain in the workforce 

or in appropriate care settings of their choice. One that 1) provides the tools and protections to 

enable Americans to comprehend and better prepare for the financial risk of needing LTSS; and 

2) ensures that individuals with limited financial resources or for whom the cost of their care 

exceeds their financial resources have access to needed high-quality services and supports. 

Issue: Americans are not adequately prepared for the magnitude of LTSS costs they could face 

as a result of their own aging or an extended period of physical or cognitive impairment. Nor 

are Americans, as taxpayers, ready to support the public cost of LTSS that will be exacerbated in 

coming decades by a growing aging and disability population, increased costs of care, and other 

factors. 

Medicaid today finances 62 percent of all paid LTSS. Private savings and private long-term care 

insurance covers roughly a third of these costs. The looming retirement of tens of millions of 

baby boomers who have not acquired long-term care insurance or accumulated sufficient 

assets for potential long-term care needs, coupled with a decline in the availability of family 

caregivers, threatens to increase the reliance on Medicaid, to be financed by future taxpayers. 

Expanded market penetration of private LTC insurance has been limited by the cost of coverage 

and medical underwriting, and is further hampered today by insurers reassessing the market 

due to unforeseen demographic and investment conditions. In addition, most people are 

unaware of the risks they bear for future LTSS needs, often falsely believing that Medicare or 

private health insurance will cover those costs. Finally, many workers today are not saving 

enough to maintain their standard of living in retirement, independent of any LTSS needs they 

may face. This lack of saving for future LTSS needs reflects not only more immediate competing 

concerns for today’s workers but also a general difficulty in retirement saving.

To achieve a balance of public and private financing for LTSS and to assure that public resources 

continue to be available for those with the greatest need, more private resources must be 

accumulated to finance LTSS for a growing future population of individuals with cognitive and 

functional limitations. Without robust financial capacity from private LTC insurance and 

personal savings, Medicaid becomes the payer of last resort for the catastrophic LTSS costs of 

people who exhaust their resources paying for care. 

Medicaid is a critical safety net program, but it is not designed to meet the LTSS needs of a 

diverse population. Its eligibility rules enable people who have earnings or other resources to 
55

qualify for LTSS, but only after spending down nearly all of their income and assets they need to 

remain independent. Younger workers with disabilities who need LTSS to enable them to work, 

often fall in the gap between making too much to qualify for Medicaid and too little to pay their 

LTSS costs. The tremendous state-by-state variability of Medicaid eligibility and benefits makes 

qualifying for benefits an uncertain exercise with uneven results across the country. Lack of 

clarity about public, private-sector, and individual responsibilities in financing LTSS adds to the 

uncertainty about the responsibilities of individuals and their families for supporting their LTSS 

resource needs.

Principles: Public policy toward the financing of LTSS must reflect a comprehensive and 

balanced approach to public and private responsibility. It must encourage and enable 

individuals to prepare adequately to finance their own needs while providing a strong safety 

net for those whose simply cannot do so. 

An effective, publicly-funded safety net is essential for those with limited lifetime resources, 

including those whose physical, intellectual, or cognitive disabilities originate early in life. 

Medicaid must be improved to better provide needed LTSS to enable people to have more 

choice of person- and family-centered services that meet their needs, and promote 

opportunities for persons with disabilities to engage in meaningful work.

Although for most people the risk of needing a protracted period of LTSS is an insurable risk, 

this risk is not widely insured today. People who exhaust their resources end up using public 

support for costs that could have been insured either publicly or privately. Insuring these most 

devastating costs through catastrophic insurance would make clearer to individuals what they 

have to cover through savings and insurance. Policy interventions that provide or enable 

catastrophic insurance might well encourage Americans with modest financial resources to 

strengthen preparation for their LTSS needs through a more robust private insurance and 

personal savings. In turn, public policy changes to make long-term care insurance (LTCI) 

products more affordable and attractive, including allowing more variety in the structure of 

policies, would encourage private LTCI purchase.

The Commission considered very different approaches regarding the mechanisms needed to 

make this vision possible. The Commission did not agree on a financing approach, and, 

therefore, makes no recommendation. The Commission is instead offering two different 

approaches presented by members of the Commission (below) to illustrate ways the Congress 

could achieve a restructuring of LTSS financing. In doing so, we seek to achieve a better 

balance of public and private resources, improve financial protection from the risk of LTSS 
56

expenses in coming decades, and better prepare those in future generations who can prepare 

for the potential expenses of LTSS. 

Regardless of the policy approach adopted, the Commission believes Americans are more likely 

to adequately prepare if they have a clearer understanding of the risk of needing LTSS, the 

interrelated public and private mechanisms for financing that risk, and access to reliable and 

affordable tools they need to do so. 
57

ALTERNATIVE APPROACHES

Approach A: Strengthen LTSS financing through private options for financial protection

Problem:

• Governments are facing serious budget constraints that threaten funding for existing 

health care, disability, and retirement programs. We cannot assure the safety net 

will hold for the most vulnerable who must rely on public programs if we also 

publicly finance care for millions of Americans who could prepare now for their 

needs in future years. 

• Private long-term care insurance (LTCI) could play a more substantial role in LTSS 

financing, but changes are needed to boost participation, including new incentives, 

more flexibility so insurers can offer greater variety in the structure of policies and 

make coverage more affordable, and educational campaigns to explain future risks 

and options for financial planning. 

• Creative solutions are needed to bring together new partnerships, new incentives, 

and innovative programs for those who can prepare now for their own long-term 

care needs to make sure the public safety net is there for those most in need. 

Private savings and a diverse choice of products are critical components of the LTSS 

financing solution.

Proposal:

• Provide new market incentives: Fewer people are purchasing long-term care 

insurance policies today, and fewer companies are offering the policies. The high 

cost of policies is a primary deterrent. A lack of understanding about the risks of not 

having financial protection and the lack of incentives to purchase coverage also 

contribute to limited uptake of LTCI. 

o Provide a tax preference for long-term care policies through retirement and 

health accounts. Allowing withdrawals from existing 401k, IRA, or Section 125 

accounts to pay LTCI premiums or distributions would have minimal tax 

implications. The tax costs of incentivizing broader participation would be more 

than offset over time as those with private coverage draw on private rather than 

public resources to finance their care.

o Support new forms of combination policies such as a “life care annuity” which 

combines a life annuity insurance policy with long-term care insurance. A 

change in tax law to allow investment and distribution in the LTCI portion 

through tax-advantaged retirement accounts would encourage creation and 
58

uptake of these policies. The combination policy reduces adverse selection in 

the immediate life annuity portion, resulting in lower premiums, and allows for 

considerable relaxation in underwriting standards for the long-term care portion 

of the policy.

o Support Long Term Care Partnership Programs that currently operate in most 

states. These public-private partnerships allow residents to purchase long-term 

care insurance and still qualify for Medicaid if and when their insurance is 

exhausted without depleting all of their assets. The program combines the 

benefits of private insurance with the backing and safety net of the government. 

o Allow a Medicaid Carve Out: Individuals would have the option (when claiming 

Social Security retirement) of receiving a portion of the expected actuarial 

present value of Medicaid benefits, adjusted down by income, as a subsidy to 

purchase permanent long-term care insurance, including through combination 

policies. In exchange, they would give up the right to future Medicaid LTC 

services. 

o Provide protection for catastrophic LTC costs. Create a financing mechanism for 

the catastrophic “tail” of costs (the small number of long-durational, high-cost 

LTSS) not now covered by private LTCI. This would combine a safety net for truly 

catastrophic costs, through private or public reinsurance, with private 

responsibility (savings, family care, and private LTCI). 

o Remove regulatory burdens and barriers: Regulatory inflexibility has hampered 

the ability of carriers to respond to rapid and large changes in the economy and 

to provide affordable and attractive products to consumers. 

o Allow flexibility in pricing and product design: Rapid and sustained drops in 

interest rates induced by unusual Federal Reserve monetary policies have 

challenged LTCI carriers expecting a more traditional return on investment. 

Private LTCI carriers need greater flexibility in structuring policies, including 

policies with varied benefit structures (e.g., longer elimination periods) and 

benefit time periods, to continue to meet consumer needs for affordable 

policies.

o Allow LTCI policy portability: Allow policy portability through such mechanisms 

as multi-state compacts, possibly developed in consultation with the National 

Association of Insurance Commissioners. 

o Minimize Medicaid Crowd-out: The structure of federal health care programs, 

particularly Medicaid, discourages individuals from taking responsibility for their 

future long-term care needs. Medicaid resources need to be more carefully 

targeted to those individuals the program was intended to serve – the needy and

the poor.
59

o Strengthen Medicaid eligibility requirements for middle-income Americans: 

Consider retirement assets and a larger portion of home values for those 

applying for Medicaid. 

o Strengthen asset recovery: Ensure states meet their responsibility to oversee 

and enforce asset recovery to prevent middle- and upper-middle income seniors 

from hiding assets to gain eligibility for Medicaid.

o Use reverse mortgages: Use reverse mortgages to enable seniors to use the 

value of their home equity to fund long-term care services, including while 

remaining in their homes. Enable retirees to pre-qualify so funds would be 

available when needed. 

• Education:

o Establish an ongoing awareness campaign: Educate the public about the 

limitations of Medicare and Medicaid in funding LTSS and the options and 

incentives for private financial protection.

Approach B: Strengthen LTSS Financing through Social Insurance

Problem:

• The LTSS crisis is a societal problem that requires a societal solution. The need for 

LTSS is an unpredictable, catastrophic risk for people under and over age 65. 

Responsible individuals and families cannot plan for exigencies such as illness, 

accident, or advanced age that create LTSS needs or pay for services when those 

needs arise. 

• America does not have a LTSS financing system that provides a comprehensive, 

coordinated, reliable structure for people in need of long-term care, it has an area of 

disparate public and private payment mechanisms. 

• Currently, the only way to finance care over the long term is to either qualify for 

Medicaid or have enough resources to purchase long-term care insurance and/or 

self-insure. Neither Medicaid nor private insurance is certain meet an individual’s 

LTSS financing needs. Medicare is a social insurance program, but it only covers 

post-acute care and does not cover children and individuals who have not worked 

sufficiently to qualify.

• A social insurance approach provides a public financing mechanism that spreads risk 

broadly, sharing the costs between the government, participants, and /or employers 

and employees. Since everyone is at risk, everyone contributes in order to benefit 

should a long-term functional need arise. Mandatory participation makes the risk 

pool viable.
60

• Insuring a portion of the risk for everyone through social insurance allows those who 

have resources to assume responsibility for the uninsured portion through personal 

savings, private insurance, or other mechanisms. 

Proposals – Two Possible Social Insurance Models

1. Create A Comprehensive Medicare Benefit For LTSS

• Include a comprehensive LTSS benefit in Medicare Part A that would be 

triggered, like the hospice benefit, when an individual is certified to meet certain 

qualifying criteria. 

• Qualification for the LTSS benefit would be based on a physician certification 

that the individual requires assistance with at least two activities of daily living, 

has needed such assistance for 90 days, and is likely to continue to need the 

services. Individuals could equally qualify based on certified on-going and 

continued cognitive or mental health issues such that independence is 

impossible or contraindicated. 

• The LTSS benefit would be financed through a combination of an increase to the 

current Medicare payroll tax and the creation of a Part A premium.

• Qualifying individuals would be eligible for reasonable and necessary LTSS 

services that would include: Skilled nursing facility care or daily skilled care; 

home health care without the need for a skilled service; Personal Care Attendant 

services; care management and coordination; Adult Day Center services; respite 

care options to support family or other volunteer caregiver; outpatient 

therapies; other reasonable and necessary services.

• Since not all people with LTSS needs are eligible for Medicare, consideration 

should be given to including those who meet the agreed upon benefit criteria, 

but would otherwise not be part of the Medicare program. In the alternative, 

other social insurance funding should be developed to meet these individuals’ 

needs.

2. Create A Basic LTSS Benefit, Within Medicare Or A New Public Program 

• This approach would create a more limited benefit, either within Medicare or as 

a new public program, to insure only catastrophic risk and making clear the 

“hole” that people able to prepare in advance should plan to fill, through private 

resources.

• People assessed as meeting a specified threshold of functional impairment 

would qualify for benefits after a waiting period. The length of the waiting period 

(shorter for people with lower incomes and becoming longer at higher incomes) 
61

would be established at or near retirement age and tied to Social Securityreported income, averaged over a number of years. For younger people who 

become impaired, the formula relating waiting periods to income would be 

appropriately adjusted to reflect the lesser accumulation of resources at younger 

ages. 

• To make the benefit available to currently people currently in need of assistance, 

an alternative to the proposed waiting period would be necessary, since private 

insurance to fill it may be unavailable or prohibitively expensive and people may 

lack the means to otherwise protect themselves. A broadly inclusive benefit 

would therefore replace the waiting period with an income/asset-related 

deductible for people who, at the time the new benefit is established, have 

significant disabilities or are age 75 or older.

• Benefits under this arrangement would be specified as a dollar-amount per day, 

vary with level of impairment and be applicable to the full range of LTSS services. 

Individuals could opt for a service rather than a cash benefit.

• Benefits could be financed through a combination of Medicaid savings (federal 

only or federal and state) and a surcharge on the income tax (higher for people 

currently near or at retirement age).

Neither of these social insurance models eliminates the private part of the publicprivate LTSS partnership. On the contrary, they mitigate risks and create a clear and 

manageable role for private insurance. To support supplementary or gap-filling, new 

regulations are needed for the private long-term care insurance market to, at a 

minimum:

• Standardize and limit the types of policies insurers can offer, as in the Medigap

market, in order to facilitate comparison and competition.

• Create an electronic market and provide information and direct assistance to 

consumers, in order to facilitate comparison shopping and educated choices. 

• Create effective consumer protections to ensure people receive fair value and 

promised benefits.

• Create easily accessible, meaningful appeals to those who are denied coverage or 

other rights afforded by their social or private insurance.

Social insurance would not cover all service needs or eliminate the need for personal 

financial contributions of family care, or eliminate the need for an adequate public 

safety net — whether within it or through a continued (albeit much smaller) 

Medicaid program.
62

COMMISSION RECOMMENDATIONS

MEDICAID IMPROVEMENT

 

Recommendation 1: Create a demonstration project to provide workers with disability 

coverage for the LTSS they need to remain employed.

Problem:

• Individuals with disabilities often need personal assistance, mobility devices, 

assistive technology, or other LTSS in order to work and live independently. The cost 

of these supports greatly reduces the net benefits of paid employment and can be a 

barrier to a person with disabilities entering or remaining in the labor force. 

• Workers with disabilities may or may not have access to health insurance through 

their employment. For those that do, employer-provided health insurance rarely 

covers the cost of LTSS.

• Medicaid provides LTSS to individuals with disabilities based on eligibility for the 

Supplemental Security Income (SSI) disability program. The SSI income limits 

prevent a worker with a substantial disability from qualifying for Medicaid if they 

earning more than roughly 250 percent of the federal poverty level. 

• Consequently, those receiving SSI benefits face a dilemma in trying to work: if they 

work successfully, their income would likely disqualify them from receiving Medicaid 

LTSS, yet they may not be earning enough to pay for the services entirely on their 

own.

Detailed Recommendation:

• The Commission recommends that Congress authorize a demonstration project 

(under section 1115 of the Social Security Act) to test the feasibility of providing LTSS 

to those who work despite having a significant disability. The project would:

o Target workers with a severe disability (that meets or equals Social Security’s 

medical listings) but whose income from work precludes SSI or SSDI eligibility

o Provide LTSS that can wrap around employer-provided health benefits

o Include worker cost sharing that would be graded with amount of income

Recommendation 2: Assist the states to achieve greater uniformity of eligibility and benefits in 

State Medicaid Buy-In programs for LTSS for workers with significant disabilities.
63

Problem: 

• Working-age adults with disabilities who need LTSS, such as personal assistance, 

mobility devices, or assistive technology, to enter or remain in the workforce do not 

have health insurance that will cover the LTSS.

• The Medicaid Buy-In program was created to enable working adults with disabilities 

whose income and assets would otherwise make them ineligible for Medicaid 

coverage to pay premiums to “buy into” Medicaid for its LTSS coverage. 

• The two federal laws creating the Medicaid Buy-In (the Balanced Budget Act and the 

Ticket to Work and Work Incentives Improvement Act) impose different rules 

around issues such as income limits, premiums, and the treatment of employment 

interruptions; and State programs vary in how they apply these rules.

• Disabled workers are limited in their mobility to pursue job opportunities by the risk 

of losing their Medicaid coverage for their LTSS expenses if they move to another 

state.

Detailed Recommendation: 

• CMS should assist states in developing a more uniform Medicaid Buy-In program 

that would allow individuals with significant disabilities to remain attached to the 

labor market and optimize employment opportunities, including those that may 

require moving to another state.
64

MEDICARE IMPROVEMENT

Recommendation 1: Eliminate the 3-day hospital stay requirement for SNF coverage

Problem:

• Medicare covers acute hospital and limited post-acute care. It does not cover longterm services and supports. Medicare will pay for skilled nursing facility care only 

after a prior hospitalization lasting at least three days. Medicare then pays the full 

cost of the nursing home stay for the first 20 days and a portion of the cost after for 

up to 100 days total. 

• The 3-day prior hospitalization requirement was implemented shortly after

Medicare’s enactment. The 3-day requirement along with the cap on nursing home 

days is intended to limit the use of Medicare in funding skilled nursing care. 

Congress eliminated the three-day rule in 1989 in a law that was later rescinded, 

leaving the rule intact. 

• With declining hospital lengths of stay, many inpatient stays that require post-acute 

skilled nursing may not qualify for coverage. Also, in recent years, hospitals have 

been holding increasing numbers of patients in “observation status,” rather than 

admitting them as inpatients. Recently, CMS has been allowing hospitals to 

retroactively re-code inpatient stays as “observation status.” 

• Without the three-day inpatient stay, patients who should be transferred for a short 

post-acute stay in a skilled nursing facility cannot get coverage for the stay unless 

they are also eligible for Medicaid. Failure to transfer patients who need 

rehabilitation in a skilled nursing facility may increase unnecessary hospital 

readmissions.

Detailed Recommendation:

• The Commission recommends enactment of legislation to eliminate the requirement 

of a prior 3-day inpatient stay in a skilled nursing facility.

• The Commission recommends that CMS count stays in observation status toward 

the meeting the prior 3-day hospitalization requirement for SNF coverage, until such 

time as the statute is changed to remove the requirement.

Recommendation 2: Reconsider the requirement for receiving home health services under 

Medicare that the individual be “homebound.”
65

Problem:

• Medicare requires that an individual be “homebound,” need intermittent skilled 

nursing care, and be under a physician’s plan of care to qualify for home health and 

therapy services.

• An individual is considered “homebound” if he or she cannot leave home without 

“considerable and taxing effort,” which includes requiring the aid of supportive 

devices, the use of special transportation, the assistance of another person, or has a 

medical condition for which leaving the home is contraindicated.

• An individual can leave the home without assistance without being disqualified for 

services if the absence is for:

o medical or therapeutic and psychosocial treatment, or

o a non-medical purpose that is “infrequent or short in duration,” such as 

attending a religious service, trip to a hairdresser, special family event, or 

walk around the block. 

• For Medicare beneficiaries who could use the Medicare home health benefit to 

meet their long-term needs, the limitation to certain short and infrequent trips 

imposes a difficult lifestyle burden. Beneficiaries who could leave their home if they 

obtain home care are either trapped in their homes or have to find an alternative 

way to meet their care needs.

Detailed Recommendation:

• The Commission recommends that CMS revise the homebound requirement to 

ensure it does not create inappropriate barriers to care and to assess the cost 

implications of doing so.
66

SAVINGS

Recommendation: Allow individuals and families with significant disabilities to access the 

educational savings program to also assist in saving for a current or future LTSS need. 

Problem:

• Section 529 of the Internal Revenue Code allows families to set aside funds for 

future college expenses in an education savings account operated by a state or 

educational institution; allowing the principal to grow tax-deferred and exempting 

distributions for college costs from tax. 

• Parents of children with disabilities want their children to have access to higher 

education, have a pathway to a meaningful career, and save for the future so that 

they can live independently. Adults with disabilities also want to accumulate assets 

so that they too can live independently.

• An expansion of IRC section 529 would allow individuals with disabilities or their 

families to set funds aside in a tax-advantaged savings account, up to $100,000, so 

that funds could be withdrawn to cover costs of health care, employment support, 

housing, transportation, the purchase of technology, and education. 

Detailed Recommendation: 

• The Commission recommends that Congress amend Section 529 of the IRS code to 

allow individuals and families with significant disabilities living with LTSS needs who 

are not receiving assistance from the Medicaid program to have access to an 

established program designed to assist individuals and families save for an 

educational need to also save for a current or future LTSS need.
67

CHAPTER 4 

ADVANCING AN AGENDA

ON LONG-TERM SERVICES AND SUPPORTS

Recommendation 1: Create a subsequent national advisory committee to continue this work 

and consider the Commission’s recommendations and potential financing frameworks as a 

starting point for its own assessments and recommendations.

Problem:

• The breadth and depth of issues encompassing long-term services and supports, the 

magnitude of its impact on American families now and in the future, as well as its cost 

implications on private and public resources all dictate the need for a sustained national 

dialogue on the subject. 

• While the constitution of this dialogue could take several forms, several reasons listed 

below necessitate, in our view, the creation of a longer-tenured national committee that 

includes both governmental and private sector stakeholders along with consumer and 

family caregiver representatives and LTSS service recipients:

o The need for designing, executing and financing LTSS is of major continuing 

importance to the health and quality of life of millions of Americans today and tens 

of millions of Americans in the future. An effort to find substantial consensus on 

these elements will require sustained focus, conversation and additional analysis.

o There is dynamic change in our country's health care payment and delivery systems, 

technology, health and supportive service structures, behaviors and performance, 

and demographics requiring ongoing evaluation of the models being tested at the 

local, state, and federal levels for those that can be taken to scale.

o The costs to and burdens on Americans – both as individuals and taxpayers – for 

LTSS for the large and growing population of those with functional and cognitive 

impairments needing such services will place increasing stress on American families 

and the nation’s fiscal health.

o Increasing the availability and quality of paid caregivers is critical to meeting the 

needs of this growing population as is the strengthening of mechanisms to support 

family caregivers who will remain a mainstay support for many if not most of those 

with LTSS needs. Ongoing evaluation and promotion of new technologies and best 

practices in the monitoring of LTSS service needs and delivery as well as training of 

unpaid and paid caregivers will be necessary.
68

o The ability to integrate LTSS into our rapidly-changing health and supportive services 

environment in light of the capacities for both human and technological capital 

requires persistent and consistent engagement by Executive and Legislative branch 

officials as well as leaders in the health and supportive service sectors and 

representatives of consumers, caregivers and those with LTSS needs.

• The current Commission on Long-Term Care, working within its budget, operational 

structure, and statutorily-defined timelines, deliberated on many of these items in its 

less than 100-day working period. Chapter Three includes a series of recommendations 

and potential financing frameworks that begin to address these issues. Having said that, 

this Commission recognizes that its work is not the end of the road for the consideration 

of all of the issues implicated by the needs and demands for a more responsive and 

better financed LTSS system. 

Detailed Recommendation:

• The Commission recommends that a subsequent national advisory committee be 

created to continue this work and consider the Commission’s recommendations and 

potential financing frameworks as a starting point for its own assessments and 

recommendations. This advisory committee should be positioned and composed so it 

can effectively engage with and appropriately leverage the existing federal knowledge 

and resources that exist on this topic, which operate within and across several 

departments (i.e., HHS (including the Social Security Administration), Education, Labor, 

Veterans Affairs, Transportation, Justice, and Treasury). The advisory committee should 

also have receive analytic support from and coordinate with the congressional advisory 

bodies on Medicare and Medicaid (i.e., Medicare Payment Advisory Commission and 

Medicaid and CHIP Payment and Access Commission) as well as the key congressional 

and Administration budgetary and accounting bodies (i.e., CBO, Office of Management 

and Budget, and GAO).

• The charge of this new committee should be to assess, report on an ongoing basis, and, 

where appropriate, recommend actions to achieve the following results: 

o Service Delivery: Create a more responsive, integrated, person-centered, and 

fiscally sustainable LTSS delivery system that ensures people can access quality 

services based on their needs, values, and preferences.

o Finance: Ensure provision of a sustainable and integrated range of public and 

private financing mechanisms to meet the needs of people with functional and 

cognitive impairments
69

o Workforce: Attract and retain a competent, adequately sized, and sustainable 

workforce capable of providing high quality, person-centered support to people 

across a variety of settings.

o Caregiving: Provide information and services needed to maintain the physical 

and emotional health, safety and financial stability of American families seeking 

to provide LTSS to their family members and friends.

o Education: Develop an effective educational program about the availability of 

public and private financing of long-term care.

Recommendation 2: Convene the White House Conference on Aging to include LTSS

• The Commission recommends convening the White House Conference on Aging in 2015 

in coordination with the National Disability Council to allow for the participation of 

states and other constituents in the continued focus on LTSS improvements.
70

APPENDIX A: COMMISSIONER IDEAS
71

Commission on Long-Term Care

A. FINANCING IDEAS

Multi-faceted

1. Reconfiguring LTSS financing to share responsibility and enhance protection

Goal: To build a financing framework that a) provides meaningful protection against the 

risk of costly long-term care; b) is, to the extent possible, pre-funded by future users; 

and c) includes significant personal responsibility, an effective insurance market, and a 

strong safety net. 

Premises:

• The need for expensive, extensive LTSS is an unpredictable, catastrophic risk that, 

like similar risks, can be most efficiently, effectively met through insurance.

• Private insurers faces enormous difficulties in addressing this risk and, even with 

supportive public policy interventions and possible expansions (short of required 

purchase), can reach only a modest share of the population.

• A limited public insurance program can establish a financing framework that 

encourages the purchase of private insurance. 

• Given responsible limits to public as well as private insurance, a public safety net will 

always be essential to assure access to adequate care for people with inadequate 

resources.

Proposal:

A. Establish a basic public LTSS benefit available to people assessed as meeting a 

specified threshold of functional impairment after a waiting period of up to x years. 

The length of the waiting period (shorter for people with lower incomes and 

becoming longer at higher incomes) would be established at or near retirement age 

and tied to Social Security-reported income, averaged over a number of years. For 

younger people who become impaired, the formula relating waiting periods to 

income would be appropriately adjusted to reflect the lesser accumulation of 

resources at younger ages. Benefits would be specified as a dollar-amount per day, 

vary with level of impairment and be applicable to the full range of LTSS services. 

Individuals could opt for a service rather than a cash benefit. With this type of 

benefit, people would know throughout their working years the risk or “hole” they 

should plan to fill (or the protection they might want to supplement) from personal 

resources or private insurance, should they become impaired.

The benefit could be financed through a combination of Medicaid savings (federal 

only or federal and state) and a surcharge on the income tax (higher for people 

currently near or at retirement age). 

B. To supplement public coverage, create an effective private insurance market (for 

background and rationale see Richard Frank, Mark Cohen and Neale Mahoney 

http://www.thescanfoundation.org/sites/thescanfoundation.org/files/tsf_ltcfinancing_private-options_frank_3-20-13.pdf) 
72

1) Standardize and limit the types of policies insurers can offer, as in the 

Medigap market, in order to facilitate comparison and competition.

2) Create an electronic market and provide information and direct assistance to 

consumers, in order to facilitate comparison shopping and educated choices. 

3) Require that alongside current level premium products, insurers offer people 

under age 65 products that index premiums and benefits in time blocks and 

apply “term pricing” (i.e. charge an annual premium covering the expected 

claim costs for a specified “term”, say of 1-5 years, rather than for a 

lifetime—in order to engage younger people in the purchase of long-term 

care insurance, provide them lower premiums reflect their own disability 

risks.

4) Established reinsurance arrangements, financed by private insurers, that 

establish parameters for risk management and mitigate risks to individual 

companies

C. To address current LTSS inadequacies and inequities across states as well as the 

unequal burdens of aging, strengthen the Medicaid safety net with enhanced federal 

financing, (for background and rationale see Judy Feder and Harriet Komisar, 

http://www.thescanfoundation.org/sites/thescanfoundation.org/files/Georgetown_

Importance_Federal_Financing_LTC_2.pdf)

1) Gradually increase federal financing for Medicaid long-term care benefits 

from existing match percentages to 100 percent. 

2) Define a nationally-uniform benefit (imbedded in a mandatory personal care 

benefit and including an increase in the personal needs allowance), to vary 

with an individual’s level of impairment, as determined by a standardized 

assessment process. Provide federal match at current rates to states 

choosing to supplement the federal benefit.

3) Set federal payment rates to providers, adjusted for geographic variation in 

input costs.

4) Finance the new benefit in part with state contributions (as in Medicare Part 

D)—set initially to reflect their current long-term care spending (up to a 

maximum) and indexed to reflect inflation and economic growth ; the index 

would hold states “harmless” for increased demand associated with the 

aging of the population.

Moving forward:

The framework presented here is by no means a substitute for a variety of other 

policy changes we have discussed—including policies affecting younger people with 

disabilities, informal caregivers and the direct care workforce, care delivery, 

prevention, community initiatives, and existing Medicare and Medicaid payment, 

quality, assessment or other policies. Rather, it offers an over-arching financing 

strategy that can accommodate those improvements—the “comprehensive” part of 

the strategy in our mandate. 

Further as a framework it is an outline, not a full proposal. Clearly it requires more 

detail, refinement, and analysis to move forward. Some of that can occur with the 

help of commission members and staff; but its full development will require post-
73

commission work—as is likely also true for other proposals. As we’ve discussed, a 

call for that work should be part of this and other recommendations.

Finally—although I’ve written this proposal in a way that, I hope, facilitates 

understanding of its intent and architecture, my recommendation is that the timing 

its implementation (and likely its legislation), start with step 3. 

• The highest priority should go to preservation and enhancement of the 

safety net for people who are most disadvantaged, which is currently at risk.

• Adoption of a long-term strategy for long-term care financing will be a longterm struggle, to which we should not hold this population hostage.

2. Create a voluntary Medicaid carve-out program using adequate and permanent 

private LTCI policies: Motivation: Theoretical and empirical evidence point to a 

significant crowd-out effect from Medicaid significantly reducing the role of private LTCI 

in financing LTSS. This effect increases government expenditures now and increasingly 

in the future, providing public insurance to many households in the middle-class and 

upper-middle-class income strata who could otherwise afford and would be interested 

in private insurance coverage. Moreover, because it is the inevitable nature of 

government entitlement programs to have more static and restrictive designs (owing to 

bureaucratic and legislative rigidities and budget constraints), the crowd-out effect 

causes a limit to the utilization of existing and future innovative and flexible designs 

found in private LTCI, for example, equal access to home care as to institutional care. 

Finally, there does seem to be some public resentment to the spend-down rules in 

Medicaid as well as some public confusion about what Medicare and Medicaid cover in 

the LTSS area (leading to a lack of long-range personal financial planning), all of which 

would be obviated by more widespread use of private LTCI. 

Proposal: A fraction (initially 75 percent, declining gradually over time) of the expected 

actuarial present value of Medicaid benefits by income level would be provided as a 

subsidy from the government (federal and state equally) to individuals at the point in 

time claiming Social Security retirement benefits to purchase adequate permanent 

private long-term care insurance, including through combination policies. The standards 

for adequacy would include benefit levels sufficient to pay for average costs of home 

and institutional care in the current region of residence, lifetime benefits, and exclusion 

periods no greater than a year. “Permanent” means that the LTCI would have to be 

structured so that no lapses were allowed, such as through single-premium LTCI, the life 

care annuity, or similar products. Consistent with current law, the subsidy would 

decline as individual income (measured by the Social Security AIME) increased so that it 

would be large at the lowest income levels and would be eliminated at the very top of 

the income bands. It is anticipated that financial planning software packages and 

financial planner advice would quickly recognize this major change in public policy and 

lead to the incremental expected lump-sum cost of LTCI at retirement to be included in 

household retirement planning and the setting of savings goals, likely causing a boost in 

lifetime savings rates. Finally, the resulting increase in total (public and private) 
74

resources from this proposal would put upward pressure on LTSS worker compensation 

and demand for enhanced qualifications. 

3. Financing -- Create a comprehensive, understandable, and affordable LTSS financing 

system with both public and private components that work together effectively to 

enable individuals to plan for their LTSS needs. 

Such a system would include the following components:

o A public insurance program to broadly spread risk and help individuals pay for 

LTSS;

o Expansion of private savings incentives and access to workplace savings options;

o Reforms and improvements in the private long-term care insurance market 

including: 

• Providing greater standardization of private long-term care insurance 

policies while promoting innovations that benefit consumers; 

• Strengthening and updating consumer protections for tax-qualified 

policies;

• Improving consumer information about these products; and 

• Examining opportunities to make the selection of long-term care 

insurance available when consumers make decisions about insurance or 

other benefits.

o Information, educational resources, and/or tools for individuals to help them 

understand different financing options and make the choices that are best for 

them and their families.

Private Savings

4. Increase substantially the amount of long term care insurance /private 

savings/personal investments available to fund LTSS. The populations needing LTSS is 

now using, and will in the future require, increasingly large amounts of federal and state 

funds at a time when the budgets of those governmental entities need to constrain 

rather than escalate their expenditures (see William Hoagland testimony 6-27-13). The 

projected expenditures are unsustainable, and can only be counteracted by immediate 

and prolonged efforts to change the LTSS funding system. On an individual level, it is 

vital that the public anticipate its potential future need for LTSS by purchasing long term 

care insurance or by employing other financial savings vehicles. On a macro level, it is 

crucial to safeguard public budgets by ensuring that non-public dollars are available for 

injection into the LTSS funding stream. 

Reasonable people can disagree as to whether the sources of personal funds should be 

long term care insurance, annuities, pensions, personal savings, HSA’s, retirement 

accounts or some combination thereof, but federal regulations restricting the use of all 

these resources for funding LTSS should be relaxed or eliminated (see Lane Kent 8-1-13 

testimony). Subsidies for the purchase of ltci, if retained, should be re-directed to

middle income and middle age population, as agents selling ltci indicate that persons 
75

with income in the $40,000 - $50,000 range are good starter prospects. Educational 

campaigns should be introduced to create public awareness of the need to plan ahead 

for personal or family disability needs. As witnesses have testified, products and their 

marketing should be improved, including encouraging employers to offer family ltci. 

AARP data shows that U.S. businesses lose up to $33.6 billion per year in productivity 

from full-time caregiving employees, and were found to be paying about 8 percent more 

for the health care of employees with eldercare responsibilities.

5. Amend Section 529 of the IRS code as called for in the Achieving a Better Life 

Experience Act of 2013 (ABLE Act; S. 313, H.R. 647) to address the unique needs of 

families with individuals with disabilities, particularly those waiting for Medicaid 

home and community based services: Across the country, an estimated 400,000 

individuals are on waiting lists to receive long-term services and supports (LTSS); many 

of whom are children who will require these supports over their lifetime.94 The ABLE 

Act will allow families of these children an opportunity to save for their 

needs. Currently, families are providing the bulk of their LTSS needs that in many cases 

comes at a significant cost to their ability to maintain and improve their economic 

circumstances, especially for the middle class.95 AARP estimates that the economic 

impact of family caregiving for members with significant disabilities at $350 to $450 

million per year. The ABLE Act encourages work, savings, and asset development for 

families and individuals with disabilities that reduces dependence on scarce public 

benefits.

The ABLE Act allows families to set funds aside in a tax-advantaged savings account 

(ABLE accounts) that allows the funds to be withdrawn to cover qualified disability 

expenses such as healthcare, employment support, housing, transportation, assistive 

technology and education. ABLE Accounts would amend and follow the existing Section 

529 of the Internal Revenue Code for Qualified Tuition Programs so that they would be 

consistent with all the requirements and regulations of a traditional 529 qualified tuition 

program: they are easy to open and available in any state, and families can make the 

same annual contributions and enjoy the same tax-free treatment as under 529 

accounts.96 In this respect, ABLE accounts mirror a familiar and popular financial 

mechanism for many families.

 94 Of 3.5 million families with a member with a severe and chronic disability expected to last a lifetime, only 13% are 

supported by the states’ public agency services (Braddock, Presentation to AIDD, February, 2013)

95 In a national survey conducted by the Arc of the United States, 82% of families reported that their overall economic 

security is challenged. 73% reported not having adequate savings for retirement, which puts aging parents in particularly 

vulnerable situations. (Still in the Shadows with Their Futures Uncertain, Arc of the US, June 2011). According to Braddock 

(2013, above) there are 853,000 persons with developmental disabilities/intellectual disabilities (DD/ID) living at home 

with caregivers over the age of 65 years.

96 Income earned grows tax- free, withdrawals for qualified disability expenses are tax-free; there are rollover provisions 

to traditional 529 accounts, or other family members ABLE or 529 Accounts; and the same reporting requirements apply 

as to a traditional 529. 
76

The ABLE Act has broad bicameral and bipartisan support: S.313 was introduced by Sen. 

Robert Casey (D-PA) with 36 bipartisan cosponsors with 27 Democrats and 9 

Republicans, and H.R. 647 was introduced by Rep. Ander Crenshaw (R-FL-4) has 223 

bipartisan cosponsors with 113 Democrats and 110 Republicans. 

6. Perform a well-designed analysis of private sources of funding for long-term care 

supports and services and encourage implementation to provide private capital support 

for long-term care.

a. Insurance products

i. Encourage the development of simplified hybrid type products (Life Care 

Annuity type approach)

ii. Assess and expand if possible the conversion of life insurance policies to 

long-term care benefit plans

iii. Support/standardize LTC programs as components or options of 

Medicare Advantage

b. Alternative Funding Sources/Incentives

i. Allow tax exempt and penalty free distributions from qualified retirement 

plans to fund costs, programs or premiums designed to provide long term 

care.

ii. Lift or remove Health Savings Account contribution cap;

iii. Provide 529 type programs for long-term care;

1. Possible support from payroll deductions

iv. Develop insurance programs that insure for a limited front-end part of 

service delivery in order to enable more efficient and controlled use of 

public dollars.

Private LTC Insurance

7. Education -- Educational campaigns are needed to increase take-up of private longterm care insurance: Surveys show that few people know they are at risk; they don’t 

know that Medicare does not cover long-term care expenses and that people must be 

poor or divest themselves of their assets to qualify for Medicaid. Medicare, Medicaid, 

and Social Security are projected to consume half of all federal spending a decade from 

now. There is simply no money for new public programs to fill the gap between the 

millions of people needing care and the few prepared today to finance that care. 

Educating the public about these realities is crucial, as is providing options and 

incentives for them to purchase affordable, portable, reliable insurance.

8. Education and Other Initiatives.

• Education campaign to clarify guidance on what the public programs 

(Medicare/Medicaid) provide and encourage early planning for retirement and LTSS 

needs.

• Clarify FDA regulations to encourage the development of assistive care technology. 
77

• Encourage small business investment through SBIR, STTR and SBA to develop 

assistive technology.

• Recommend to Office of the National Coordinator for Health Information 

Technology to provide, as part of implementing "meaningful use" Stage 3 standards, 

an optional place for recording care plans in the electronic health record.

9. There is a strong need to encourage the development of personal and family capacity -

- through private insurance, savings and otherwise -- for their retirement and LTSS 

expenses.

A. Long-Term Care Insurance

• As is the case with Medigap insurance, establish federal standards to 

standardize and simplify the types of policies insurers can offer in order to 

facilitate comparison and competition.

• HHS, in cooperation with the states, creates an electronic market and 

provides information and direct assistance to consumers in order to facilitate 

comparison shopping and educated choices. 

• Relieve state regulations on high-deductible long-term care insurance 

products, thereby providing for catastrophic insurance coverage and for 

clarity to families about the amount they need to save for LTSS deductibles 

or provide for in their Medigap policies.

• Working with the states, HHS calls for the establishment of reinsurance 

arrangements, financed by private insurers that establish parameters for risk 

management and mitigate risks to individual companies.

• Allow above-the-line tax deductions for long-term care insurance premiums. 

• Exclude value of long-term insurance policies or payments from Medicaid 

eligibility requirements.

B. Private Savings

• Allow tax exempt, penalty free withdrawal from qualified retirement funds to 

fund LTC insurance or LTSS expenses. 

401K

402B

IRA

Roth IRA

• Amend Section 125 plans (cafeteria) to include LTC insurance. 

• Lift or remove Health Savings Account (HSA) contribution cap. 

• Amend IRC to establish tax exempt ABLE accounts to assist an individual and 

families with an actual or anticipated disability in building an account to pay 

for qualified disability expenses, including long-term care insurance 

premiums. (See, e.g. Introduced as S. 313, H.R. 647)
78

10. Create new federal regulations allowing the private insurance sector (i.e., health, longterm care, disability, and/or life) to create a new generation of simple, easy-tounderstand, affordable, and standardized insurance products targeted for purchase by 

working individuals. These products should be marketed through employers and could 

be offered as a supplemental benefit at the employer’s discretion. These products 

should also be backed by state/regional reinsurance pools to ensure greater 

affordability.

11. Protect consumers from inappropriate denials of coverage from any public or private 

LTSS financing system.

a. Develop enforceable national consumer protections for all private long-term care 

insurance models.

b. Provide consumer-friendly, meaningful appeals in all public and private financing 

systems.

12. Allow the life care annuity to be used as an investment in tax-advantaged retirement 

accounts: Motivation: The life care annuity is a combination insurance product 

innovation that reduces adverse selection in its immediate life annuity portion, resulting 

in lower premiums, and would allow for a considerable relaxation of underwriting 

standards for its long-term care insurance portion. Common purchase of this product 

would accommodate the delayed purchase of LTCI until closer to retirement, reducing 

various pricing risks on the insurer, while at same time providing permanent coverage 

(that is, not subject to the risk of lapses) to the insured. Under current law, it is not 

allowed to be used as an investment or distribution mechanism in employer-sponsored 

retirement plans or in retirement accounts such as IRAs, unless taken as a taxable 

distribution. 

Proposal: Allowing the life care annuity to be used as an investment in tax-advantaged 

retirement accounts would essentially give the LTCI portion tax-favored status 

equivalent to the tax deductibility of premiums. But in the form of the life care annuity, 

it would be tied to other desirable public policy goals – permanent LTCI coverage, and 

improvement in the efficiency of life annuity markets. Technical tax requirements 

governing retirement assets such as minimum distribution requirements and incidental

benefit rules would be waived for the LTCI portion of the life care annuity. 

13. Lighten regulatory burdens on private LTCI: Motivation: A significant part of the 

current difficulties for writers of LTCI lies in the regulatory inflexibilities of the product 

to respond to rapid and large changes in the macroeconomic environment, especially 

with regards to interest and inflation rates. In particular, the recent rapid and sustained 

drops in interest rates induced by unusual Federal Reserve monetary policies, as well as 

the drop in inflation rates caused by the Great Recession, have made LTCI unprofitable 

to writers (because it was priced assuming much higher investment returns) and 

expensive to consumers (because the requirement for automatic annual 5% increases in 

benefits in tax-qualified LTCI implicitly assumes a more inflationary environment). 
79

Proposal: For sufficiently large changes in the macroeconomic environment, allow (in 

the upward direction) and require (in the downward direction) writers of LTCI to change 

automatically the pricing of existing outstanding LTCI policies on an actuarially fair basis; 

the same would apply to the requirement for inflation adjustment in benefits. The 

“sufficiently large” nature of the macroeconomic changes would be determined by the 

National Association of Insurance Commissioners on a uniform national basis. All other 

desired pricing and product changes arising from other sources of actuarial experience, 

such as claims and lapses, and so on, which are generally more specific to the business 

judgement and actuarial skill of the insurer, would continue to be governed by current 

state laws requiring specific state commissioner approvals of pricing and product 

changes. 

14. Regulatory Reform for LTCI: Currently, long-term care insurance products often suffer 

from a lack of portability. For instance, an individual who purchases an LTC insurance 

policy while living and working in New York, and subsequently moves to Florida upon 

retirement, may find difficulty accessing benefits after moving to a new state. This lack 

of portability discourages take-up of private LTC policies, increasing the burden on 

public programs in the process.

One possible solution to this problem could involve the formation of multi-state 

compacts to ensure portability of LTC policies for all states participating in the compact. 

The National Association of Insurance Commissioners (NAIC) could help to develop such 

a system, which would allow states themselves to suggest the best possible solutions, 

rather than having a top-down model imposed by Washington. To the extent that 

federal policy-makers wish to support the NAIC endeavor, a gain-sharing 

demonstration—in which any potential reductions in public expenditures arising from 

the compact are shared with the states participating in it—would both encourage states 

to participate and promote a new regulatory framework designed to alleviate the 

burdens on the public purse.

15. Tax Incentives: As was noted in testimony at the most recent commission hearing, the 

federal government provides significant tax incentives to encourage participation in 

both health care and retirement programs. Incentives for employer-provided health 

insurance and for contributions to pension and 401(k) plans represent some of the 

largest incentives in the tax code. Yet the incentives to purchase private long-term care 

insurance are small by comparison, particularly given that private insurance can 

alleviate the financial burdens placed on Medicare and Medicaid as the Baby Boomers 

retire.

The obvious solution to this problem would involve equalizing the tax treatment of 

health insurance and long-term care insurance, by allowing LTC insurance premiums to 

be paid through a Section 125 cafeteria plan. Other similar solutions would allow for 

tax-and-penalty-free distributions from retirement savings accounts like IRAs and 
80

401(k)s, and the use of LTC policies in life care annuities without triggering taxable 

distributions.

Equalizing the tax treatment between health and long-term care insurance would 

effectively provide a 30-40% discount on current LTC premiums. Moreover, by 

encouraging broader take-up of private policies, such incentives could reduce both 

adverse selection and administrative loading—thereby lowering premiums further.

Secondarily, equalizing the tax treatment of health insurance and long-term care 

insurance could encourage the introduction of hybrid health/long-term care insurance 

products—a solution presented by one of our panelists last week. In the absence of 

equal treatment for both products, the tax complexities presented by hybrid policies 

could serve as a major disincentive to their widespread adoption.

16. Tax incentives: All levels of government are facing serious budget constraints that 

threaten funding for existing health care, disability, and retirement programs. To assure 

that the safety net is secure for the most vulnerable in our society, we need to provide 

new incentives for those who can prepare now to take responsibility for their own longterm care needs. However, sales of individual long-term care insurance policies have 

been declining for a decade, and fewer and fewer companies are selling the policies. 

The share of the market represented by people aged 40-69 in middle- and lower-income 

categories is declining. We need new incentives, new partnerships, and innovative 

programs to address these challenges.

Recommendation: Equalize the tax treatment of health insurance and long-term care 

insurance. As a first step, this could include allowing employees to use pre-tax dollars 

through Section 125 “cafeteria” plans and/or through Flexible Spending Accounts to 

purchase long-term care insurance. States could also provide tax credits, as Minnesota 

has done with its $100 a year credit for those who enroll in long-term care insurance. 

Changing the tax treatment of long-term care insurance would incentivize creation of a 

more robust market for these products. Witness Jason Brown described an integrated 

insurance product consisting of a life annuity policy combined with long-term care 

insurance, offering evidence that this could be a stable market even if the product were 

purchased at or near retirement. Our Vice Chair, Mark Warshawsky, has produced a 

detailed plan describing this innovative solution, “The Life Care Annuity: A Proposal for 

an Insurance Product Innovation to Simultaneously Improve Financing and Benefit 

Provision for Long-Term Care and to Insure the Risk of Outliving Assets in Retirement.” 

This is not a solution for everyone but for those who can afford to begin planning for 

their own future needs. Adding new incentives for people to purchase private insurance 

protection and reduce the disincentives for people to begin preparing for their own 

needs will mean the public safety net will be stronger for the most vulnerable who have 

no other alternatives and must rely on public support to finance their care. We 

received public testimony from Rebecca Underwood, parent/guardian/advocate for 
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Aaron Underwood, to explain so very clearly how important it is to make sure the 

resources are available for those with the most critical needs.

17. Site-Neutral Payments should produce notable savings; a portion of the savings would 

be tax rebates for LTSS and a portion would be used as subsidies for low income 

individuals: As discussed above, many believe that a site-neutral payment system 

would produce savings and achieve better outcomes for patients. In an effort to 

improve quality of care and generate cost-saving concepts, a new patient-focused 

payment model would be developed that would reduce spending on post-acute care 

while facilitating movement toward a more rational system for PAC payment and 

delivery. This model would focus on the needs of the patients, rather than the setting of 

care with the potential to reduce federal spending approximately $15-20 billion over the 

10-year budget window. 

The savings from such an initiative could be used to create tax rebates for LTSS use, or 

purchase of an LTSS private financing option, such as Private LTSS Insurance. 

Additionally, a portion of such savings could be used to create a subsidy program for 

those with low income to purchase private LTSS options. 

Medicare Eligibility and Benefits

18. Create new regulations and accountability standards for a new generation of 

Medicare Advantage/Special Needs Plans and/or Medigap coverage that would cover 

specified long-term care services as an optional supplemental benefit. To ensure proper 

evaluation of the financing models needed to sustain these new models, require 

updating the CMS Hierarchical Condition Categories to better reflect the clinical and 

functional profile of high-risk, high-utilizing beneficiaries.

19. Make the most of Medicare – the one national program we have now by removing 

current barriers to Medicare coverage for people with long-term and chronic 

conditions:

1. Redefine the homebound requirement for Medicare home health coverage so that 

people who cannot obtain the services they need outside the home can obtain them 

at home. 

a) Currently the homebound definition restricts some people from getting care at 

home although they cannot consistently leave home to obtain the services they 

need.

b) Do NOT add a cap or co-insurance to the Medicare home health benefit

i. Proposals are being considered to limit home care, which would further 

exacerbate the already limited ability of people to obtain home and 

community-based services. 

ii. The savings estimate, at $730 million / ten years for the co-pay, does not 

warrant this further limitation on home care.
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2. Remove the 3-day hospital stay requirement for skilled nursing facility (SNF) 

coverage so people without the need for an acute inpatient hospital stay can at least 

get some Medicare nursing facility coverage.

i. Absent removing the 3-day requirement, eliminate hospital “observation 

status,” or count all days spent in the hospital as “inpatient” for purposes 

of qualifying for subsequent SNF stays.

3. Eliminate the 24-month Medicare eligibility waiting period for people who qualify 

for Social Security Disability Insurance (SSDI).

4. Ensure the Jimmo v. Sebelius settlement is effectively implemented, to eliminate the 

“improvement standard” requirement for determining Medicare coverage, and 

ensuring coverage is also available for skilled services to maintain an individual’s 

condition or slow deterioration.

20. Add a new Long Term Services and Support (LTSS) benefit to Medicare: The LTSS 

benefit would be triggered when an individual is certified to be dependent in two or 

more activities of daily living and/or has cognitive or mental health issues such that 

independence is contraindicated. In such cases the individual would be eligible for:

a. Skilled nursing facility coverage for up to 150 days per calendar year;

i. Without the need for a 3-day hospital stay;i

ii. Without the need for daily skilled care (custodial care alone would be 

covered).

b. Home health coverage, including coverage for home health aide services, 

without the need for a skilled service;

c. Personal Care Attendant;

d. Care management and coordination;

e. Adult Day Center; 

f. Respite care to support family or other volunteer caregiver;

g. Outpatient therapy without an annual cap;

h. Other reasonable and necessary services.

Note: The CLASS Act experience demonstrates that any such LTSS benefit must be 

mandatory in order to be financially viable. 

• Various options are possible, but a new Medicare LTSS benefit should not add to 

the complexity of Medicare and should not diminish the stability of the current 

program. 

• Consider adding the LTSS benefit to Medicare Part A, with a defined % increase 

to current Part A payroll tax to pay for it. This additional may even strengthen 

Medicare Part A, which is mandatory for those with Medicare. 

Medicaid Eligibility and Benefits

21. Create a national Medicaid buy-in (MBI) program for workers with significant 

disabilities up to 250% of FPL: Medicaid is the only affordable option to access longterm services and supports for millions of people with significant disabilities. Standard 

health insurance policies do not offer coverage for the long-term services and supports 
83

(LTSS) required for individuals with disabilities to live in the community. And, although 

private long-term care insurance coverage does exist, it is not a realistic option for 

working age individuals with disabilities. To help provide access to affordable LTSS to 

working people with disabilities, Congress gave states an option to let working 

individuals with disabilities continue to receive LTSS through the Medicaid program 

when their income or resources exceed Medicaid’s normal limits through an option 

known as the Medicaid Buy In, or MBI, programs. States can implement MBI programs 

under two different authorities: the Balanced Budget Act of 1997 or the Ticket to Work 

& Work Incentives Improvement Act of 1999. Forty-six states currently have MBI 

programs and more than 200,000 workers with disabilities are currently working and 

receiving needed LTSS as result of this option. The different authorities impose different 

requirements states must follow in creating MBI programs: 

Although MBI programs offer opportunities for people with disabilities who work to 

continue to receive LTSS, the variation in state programs and some design flaws limit the 

effectiveness of these programs to support working individuals with disabilities – forcing 

people to not take promotions to remain within income or resource limits, making it 

difficult, if not impossible to relocate for a better position, and making people less likely 

to work because of not being able to get back onto regular Medicaid if their work 

attempt fails. 

The program would have no upper age limit, with a standard definition of work, grace 

periods for unemployment that recognizes the episodic nature of many disabilities, 

allows people to save for current and future needs and retirement, and disregards 

resources accumulated during MBI participation for access to Medicaid if a person can 

no longer work. Here are some specifics: 

• Income limits vary from a low of 80% of FPL to unlimited income

• Resource limits vary from a low of regular Medicaid limits ($2000 for an individual) 

up to unlimited resources 

Balanced Budget Act Ticket to Work 

Age limits None 16-64

Income Limits Up to 250% of FPL None 

Resource Limits Up to state Up to state 

Premiums Based on sliding scale – no 

upper limit 

Premiums and cost sharing 

based on income 

Definition of work States cannot define work States cannot define work 

Grace period for employment Limited Not allowed 
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• No grace period for participation 

• No pathway back to regular Medicaid if a person accumulated resources while 

participating in MBI

• Uncertainty regarding eligibility for Medicaid at age 65

22. Pilot a program for workers with significant disabilities whose earnings exceed 250% 

FPL and need LTSS to remain employed without support from the Social Security 

income assistance programs: US Disability Support Systems Fail People With

Disabilities: The United States has made significant strides in changing the expectations 

of and attitudes toward people with disabilities. The passage of landmark civil rights 

legislation in the Americans with Disabilities Act (ADA) in 1990 contributed to this 

evolution of attitudes and creation of opportunities. Court decisions, such as the 

Supreme Court decision in the historic Olmstead case, have also called for the full 

integration of individuals with disabilities in society. And while many doors have been 

opened, the lack of pathways to access needed services and supports that allow people 

with significant disabilities to live and work independently while achieving even a 

modest level of economic security has hindered the progress that might otherwise have 

been made. 

Individuals with Disabilities Face Unique Challenges: People with significant disabilities 

who require supports and services to work often face a catch-22. Currently, Medicaid is 

the only option available that provides access to the services and supports needed to 

get and keep a job. Private long-term care insurance is not an option for a variety of 

reasons, including; denial of coverage outright, cost-prohibitive premiums if able to get 

coverage, services and supports not available in a work setting, and/or short timeframe 

of authorized benefits. Self-financing the services and supports is out of the question for 

all but the highest earners and makes people with disabilities less economically 

competitive than their non-disabled peers. And although many working people have 

access to private health insurance, and more will gain it through the Affordable Care 

Act, private health insurance does not cover at all or inadequately covers many needed 

services and supports. 

Medicaid, While Vital, Doesn’t Work for Many Working People with Disabilities:

Although Medicaid is the only game in town, it is also an imperfect solution. Medicaid is 

intended to provide health care and related long-term services and supports to 

individuals with limited income (both earned and unearned) and resources. Medicaid 

work incentives allow working people with disabilities to continue their participation in 

the Medicaid program while allowing them to increase their earnings up to a set limit 

(usually 250% of FPL) and, in some very limited cases, save for emergency expenses or 

life goals. These work incentives include, but not limited to, the Medicaid Buy-In 

programs and the 1619(b) program97. However, as Medicaid was designed to provide 

 97 MBI programs allow people to work and save and maintain access to Medicaid while paying co-pays based on income. 

Most states have MBI programs but income and resource limits vary significantly. 1619(b) programs allow people to 
85

health care to low income individuals with no other access to insurance coverage, its 

structure and eligibility rules make it difficult to impossible for working individuals with 

significant disabilities to achieve the things associated with a middle class lifestyle for a 

number of reasons. 

• Upper limits on income and resources for program eligibility are often the drivers of 

career decisions rather than opportunities. 

• Variations in state Medicaid programs (e.g. income and resource limits for MBI 

participation, income limits for eligibility, types of waivers and whether slots are 

available, and the package of services and supports available) make relocating for a 

better opportunity difficult, if not impossible. 

• SSI/Medicaid’s resource limits (e.g. a person can have no more than $2000 in assets 

for an individual or $3000 for a couple to be Medicaid eligible) are often problematic 

making it impossible for people with disabilities who work to save for emergencies 

and retirement, let alone save to purchase a home or start a business. 

• People with significant disabilities often have extraordinary support needs that make 

it difficult, if not impossible, to get those needs met outside of public programs. 

• People with disabilities often find themselves in the unenviable position of turning 

down jobs or promotions to maintain access to these vital services and supports. The 

US must provide people with disabilities a pathway to access service and supports 

that allows them to earn to their potential, save for their futures, achieve a 

middleclass life style, and achieve the vision of the ADA. 

Proposal: A pilot program that provides access to the services and supports needed by 

employed individuals with significant disabilities (meet SSA definition of disability absent 

the inability to work assessment) combined with a waiver of rules that prevent people 

with disabilities to earn income and accumulate assets without jeopardizing access to 

services and supports. This program is designed to wrap-around health insurance 

products (offered by employer or through the state Marketplaces) and modeled on the 

1619(b) program, specific program design elements include: 

• Eligibility: To be eligible to receive wrap-around services and supports through this 

program, a person would have to be a working individual with a disability defined 

as: 

• Meeting or equaling the Social Security disability listings or qualify for quick 

disability determination/compassionate allowances for eligibility for the 

Social Security disability programs 

• Be working, defined as earnings at or above 250% FPL 

• Pay applicable cost sharing based on income, employment–related disability 

expenses, as well as level of services needed.

• Wraparound Package: The program would offer access to services and supports 

that people with disabilities need to become and stay employed, fill coverage gaps 

 

maintain Medicaid access while working but do not change resource limits. Every state participates in 1619(b) but 

income limits vary significantly. 
86

between what is offered by health care insurance products and the unique health 

care needs of individuals with significant disabilities. Services and supports package 

available through the program would include: personal attendant care, assistive 

technology, and other services and supports. 

23. Tighten Medicaid eligibility for people age 62 and older by considering assets currently 

excluded from eligibility tests as countable and by removing opportunities for gaming 

program rules. -- Motivation: Given severe state and federal government budget 

constraints and the concomitant tendency for the government to cut Medicaid 

reimbursements to providers, thereby harming quality, public resources need to be 

focused on providing care to the needy and poor, not the upper-middle-class and the 

well-to-do households to enable them to leave large bequests. 

Proposals: Limit the home equity exemption to $50,000 (this would redirect many 

households to use reverse mortgages to fund LTSS and discourage the game of investing 

otherwise countable assets in exempt homes). Extend the look-back period for real 

estate to ten years, as is administratively easy to accomplish. Outlaw Medicaid-friendly 

fixed period annuities and Miller trusts, currently used as eligibility gaming devices. 

Include retirement assets (401(k) accounts, IRAs, etc.) in countable assets unless they 

are being distributed as an immediate straight life (not fixed period) annuity, whereby 

they would be included as countable income. Include premiums being paid for life 

insurance as countable income. Any assets that are exempted and not divested should 

be available for estate recovery by the states, which activity needs to be aggressively 

overseen and enforced by the federal government

B. SERVICE DELIVERY IDEAS

Strengthen Medicaid

1. Medicaid -- Strengthen and maintain Medicaid as a safety net that effectively targets and 

utilizes resources, leverages technology, encourages innovation, rewards quality, and 

honors consumers’ choice of and access to the services and supports they need in the 

setting of their preference by: 

o Requiring coverage of HCBS for eligible individuals, just as for institutional care; 

• In the short term, providing financial incentives to build state and local capacity 

to make the transition to HCBS as the primary LTSS system;1

o Enabling consumers and their spouses to stay in their homes and communities by 

increasing the Medicaid asset test1 and indexing it to inflation and by making permanent 

spousal impoverishment protections for HCBS, consistent with such protections for the 

spouses of nursing home residents;

o Urging states that choose to implement Medicaid managed LTSS to use these programs 

to balance resources so more beneficiaries and their families can receive HCBS;
87

o Requiring states that use Medicaid managed LTSS to provide important consumer 

protections including: promoting consumer choices, creating adequate networks to 

assure access to services, administering strong oversight to assure quality, and 

measuring outcomes such as consumer experience; and

o Offering consumers the option of self-direction, including allowing for the payment of 

family caregivers to provide services, as in the successful Cash and Counseling 

Demonstration; 

o Provide incentives for innovative, high quality residential settings, including those 

licensed as nursing homes like Green Houses and those licensed as assisted living or 

other models of housing and services.

Rebalance LTSS

2. Eliminate the institutional bias in Medicaid LTSS. Barrier and regulation free selection and 

choice of location to receive LTSS would allow substantial numbers of Medicaid eligible 

clients to remain at or to return to home at lower cost than living in institutional facilities. 

In her 8-1-13 testimony, Patti Killingsworth goes further by recommending that HCBS be the 

default selection. Killingsworth also suggests mandating individual cost neutrality as 

another mechanism for creating economies in the program. While critics express concern 

about the “woodwork effect”, a number of studies would indicate otherwise. More 

evidence-based programming is also important. Insufficient effort has been devoted to 

research that would demonstrate the most care and cost effective LTSS needed to allow 

someone to remain safely at home. 

In relation to person-centered care, the rigidity of Medicaid regulations often hinders or 

obstructs the selection and delivery of the most appropriate care for individual clients and 

their informal caregivers. Consideration should be given to review of regulations and 

statutes that thwart the goal of providing proper care. The Older Americans Act (OAA) 

offers the type of flexibility that should be used as a model for providing services. It is 

attuned with individual and local needs, brings community resources into the system, and 

administratively is far less costly than Medicaid. 

3. Rebalance Medicaid Long-Term Services and Supports (LTSS)

The vast majority of Medicaid beneficiaries of any age who require LTSS prefer to receive 

those services in their own home or in a community-based setting instead of living in an 

institution – known as home and community based services (HCBS). As a whole, the United 

States still over-relies on the institutional side of LTSS. Despite the increase from 2.1 to 3.2 

million HCBS users since 2000, states still only spend 36.8% of their LTSS budgets on HCBS 

for aging and physical disability populations. The range varies widely with the highest 

performing state spending 62% on HCBS and the lowest 10%. Only 7 states spend more 

than 50% on HCBS (AARP 2011 Scorecard).

Nursing home utilization also varies widely across the states, with 838 persons per 100,000 

of state population occupying NF beds in the highest state to 84 in the lowest.
88

On the Developmental Disability side, only Mississippi spends less than 50% on HCBS. But of 

4.9 million persons with developmental disabilities nationwide, 4.1 million live with their 

families, of which it is estimated that 25% of the caregivers or parents are over age 60. And 

many persons with developmental disabilities languish on long waiting lists (two-thirds of 

511,174 individuals that 38 states report on HCBS waiting lists (from the Kaiser 2012 data 

update).

Currently many state Medicaid programs are consumed by exploring ways to expand health 

care to low-income populations or to more efficiently serve already covered populations. 

The capacity of these agencies to simultaneously overhaul and maximize the efficiency of 

their LTSS systems is under considerable strain. Partly for this reason, many states are 

looking to managed care organizations to administer their Medicaid LTSS systems.

Proposal: This proposal would create a single HCBS state plan authority which unifies and 

bundles the best features of the options described above, and would make permanent the 

enhanced match incentives in the Money Follows the Person (MFP) program and the 

Balancing Incentive Program (BIP). The key features would include:

• States can set needs-based functional eligibility less stringent than the institutional 

level of care (LOC)

• Allows states to include any or all Medicaid eligibility groups with income standards 

up to 300% of SSI, with strategies incorporated to ensure the lowest income 

individuals receive coverage first

• Allows states to craft multiple programs or consolidate multiple programs across 

disability or other target groups, in a manner that adheres to applicable laws (ADA, 

etc.)

• Payments for HCBS services are 6% higher than the regular match rate subject to 

Secretarial approval using criteria reflective of autonomy, choice and applicable 

rules related to HCBS characteristics. The Secretary will determine the specific HCBS 

services, settings and attributes that will be eligible for the enhanced FFP, including 

time periods for review of enhanced FMAP eligibility. 

• Institutional services are held at the regular match rate

• Makes permanent the MFP feature of full FFP for HCBS costs for one year after 

relocation from a nursing home, hospital, ICF/DD or PRTF where a person has 

resided for more than 90 days and includes features of both MFP and the “K” to pay 

for certain start-up costs

• Adds Partial Residential Treatment facilities (PRTF) as an allowable alternative for 

LOC determinations

• As a state plan option, states must serve all eligible individuals, however a state may 

negotiate enrollment growth targets tied to specific rebalancing benchmarks that 

permanently decrease the state’s institutional footprint. 

• Allows a time-limited differential match for buy down of vacant institutional beds 

taken off line 
89

• Allows a state under this authority to create health homes to coordinate care for a 

sub-set of eligible individuals who are receiving HCBS services and have two or more 

chronic conditions, and the state can receive 90% FMAP for up to eight quarters as 

defined in the Affordable Care Act

• Includes opportunities for easy linkage to tools for integration, such as health homes 

and managed care authorities, setting forth uniform expectations yet streamlined 

authority linkage quality and reporting structures

• Will create the possibility for a medically needy income level for community based 

services

The single state HCBS authority would also have uniform requirements including:

• Meets HCBS settings requirements

• Needs assessments include core elements for all populations but also address 

specific populations using valid and reliable population-specific assessments

• Person-centered planning requirements for all participants

• No Wrong Door for all intake and eligibility

• Requires a mitigation plan for potential conflicts of interests in the delivery of case 

management

• Participant direction, including hiring and firing authority over personal care staff 

and access to an individual budget must be an available option Specified quality 

measures

The provision will also “clean up” the statute to remove the various provisions (driftwood) 

to definitively provide a sleek option. However states may still elect to utilize the 1915(c) 

authority to fund HCBS services tied to an institutional level of care, subject to the periodic 

review by the Secretary to ensure that the services offered therein comport with 

established standards for HCBS.

4. Removing the Institutional Bias: Medicaid’s bias towards institutional, as opposed to 

home-and community-based care, stems in part from its original design, and in part from 

budgetary strictures that have impeded the road to reform in the years since. Traditionally, 

the Congressional Budget Office has stated that expanding HCBS could cost more money 

than it saves—largely due to a potential “woodwork effect” caused when family caregivers 

utilize expanded access to Medicaid’s HCBS services.

However, testimony last week provided several potential ways to alleviate the budgetary 

impact of any “woodwork effect” as a result of a transition from institutional care to HCBS. 

Specifically, Tennessee’s recommendations to make institutional care an optional benefit; 

mandate cost-neutrality for HCBS; require beneficiaries to “opt-in” to institutional care; and 

require enrollment in HCBS first prior to placement in an institution all would tilt the bias 

away from institutional and towards community-based care. These reforms could also 

provide “scoreable” budgetary savings that would reduce any increased spending from a 

potential “woodwork effect”—a critical consideration, given the current fiscal climate.
90

As one panel noted last week, removing the institutional bias in Medicaid cannot be 

achieved overnight. However, the recommendations provided could represent important 

ways to provide better care to more beneficiaries, at the same or lower cost—a true “winwin” solution.

5. Rebalance Medicaid so that institutional bias is removed, and people who qualify for 

Medicaid can obtain necessary LTSS in the least restrictive setting that meets their needs.

6. Remove “institutional bias”: Payment policies in current programs for LTSS make it more 

difficult for people to get care in alternative settings, including receiving care at home or 

other residential settings. We have heard testimony from witnesses describing the 

possibilities of new technologies and delivery systems that can improve care and save 

unnecessary spending. Allowing greater access to HCBC is the obvious solution, but it must 

be structured in such a way that it doesn’t create a woodwork effect. Marilyn Moon in her 

testimony suggested replacing the three-day hospitalization requirement for eligibility for 

skilled nursing care with “a more needs-based approach...Specific criteria concerning the 

need for SNF care should be the determining factor, not an arbitrary rule.” Witness Patti 

Killingsworth suggested an “opt-in” approach to institutional care and that enrollment in 

HCBC be required before placement in an institution – a kind of “step therapy” for nursing 

care.

7. Rebalance the current national health care system, oriented toward acute care and safety 

net programs, to increase Home and Community Based Care: Doing so will require three 

changes: (1) alter the design of Medicaid to focus on home and community based and 

eliminate its ‘institutional bias’ and at the same time achieve greater consistency across the 

States in their approach to HCBS, (2) provide greater flexibility to the States in the 

administration of their Medicaid programs subject to clear Federal performance and quality 

standards, supporting States with the technical and administrative support needed to reorient their programs to include more home and community based elements, and (3) 

introducing into Medicare a care-coordinated, caregiver-centric support program to 

strengthen the capacity of American families to support home and community based care.

A. Medicaid

• Require states to offer community and home based care option with determination 

to be made on basis of functional impairment.

• Provide consistent information on availability of services, both institutional as well 

as home and community based, regardless of your point of entry into care and 

require the use of a universal assessment tool to evaluate need and placement. 

• Decouple eligibility for HCBS from a determination of nursing home eligibility.

• Consolidate and simplify waivers to states with performance-based requirements 

and gain-sharing.

• Provide states with technical and administrative support to encourage move to 

HCBS and to build the needed community infrastructure to support HCBS.
91

• Develop standard quality measures for both home as well as institutional LTC 

facilities. 

B. Medicare

• Provide a new caregiver-support benefit for Medicare eligibles with functional 

impairments in order to support more HCBS. (Need to determine basis of eligibility 

and cost.)

• Replace three day prior hospitalization requirement with a need assessment based 

approach designed to encourage post-acute HCBS. 

• Require and reimburse physicians as part of annual wellness visit to prepare a care 

plan for each beneficiary. (Researching recent regulation to determine if necessary.)

• Direct the ONC to work with the Agency for Health Research and Quality and 

Centers for Medicare and Medicaid Services in plan standardizing some elements of 

the care planning process, the care plan documentation, the continuity of care plans 

across settings of care, and the evaluation of the performance of care plans.

Care Integration/Care Management – Duals

8. System Transformation and Care Coordination -- Create a more responsive, efficient and 

integrated LTSS delivery system that ensures that people can access quality services in 

settings that they choose by: 

o Establishing a more effective system to measure and reward quality, including:

• Developing and implementing better measures of quality of life and care that are 

tested and validated across settings (especially in HCBS) by a consensus body; 

• Rewarding quality care based on validated measures that have been tested by 

pilot projects in various settings; and

• Establishing systems to publicly report quality and cost that will be 

understandable to consumers as they compare providers and plans and make 

decisions about services. 

o Using technology more effectively to mobilize and integrate community resources and 

to share information among providers, individuals, and family caregivers across settings, 

in order to:

• Promote more effective integration with health care services, including 

extension of “meaningful use” incentives to LTSS providers as that becomes 

feasible;

• Improve person-centered data collection to support the delivery of person-and 

family-centered care across settings and through transitions;

• Permit real-time monitoring and timely interventions to address quality 

problems; and

• Support greater independence by mobilizing and coordinating local community 

services such as transportation, shopping, and home maintenance services.

o Align the incentives to improve the integration of health care and LTSS services in a 

person-centered approach rather than one tied to specific settings by:
92

• Broadening the Center for Medicare and Medicaid Innovation’s work to include 

more focus on the integration of LTSS with health care services;

• Reforming payment systems to promote systems transformation; 

• Including better data sharing between Medicare and Medicaid; and

• Supporting partnerships among health care, post-acute, and LTSS providers.

o Creating livable communities that build on housing and services models to improve 

health care and LTSS coordination, and expand local initiatives, such as Villages, that 

coordinate community services to enable people with disabilities to live more 

independently.

o Establishing a clear point of contact so that individuals and their family caregivers know 

who they can turn to when they need assistance, especially in transitions across 

settings.

o Incentivizing states to test and develop models that could potentially inform federal 

policy

9. Medicare payment/delivery reform innovation to target people needing long-term 

services and support1

Premise: 

• The 15% of Medicare beneficiaries with chronic conditions and functional 

impairments account for about a third of Medicare spending.

• Fewer than half of these beneficiaries are Medicaid beneficiaries (dual eligibles).

• The federal government finances 80 percent of Medicare and Medicaid spending 

on dual eligibles, predominantly through Medicare.

• The federal government has a responsibility to promote better integrated care 

through Medicare, rather than shift responsibility to Medicaid.

Proposal:

The Centers for Medicare and Medicaid Services should use their authority to launch a 

Medicare payment and delivery reform pilot to promote provider initiatives that: 1) focus 

on people who need long-term services and supports, 2) coordinate services across the 

continuum to address long-term services and supports needs along with medical needs, and 

3) work, in general, for all Medicare beneficiaries with long-term care needs, regardless of 

income or Medicaid eligibility. Such pilots would include: monthly payments per enrolled

patient to participating providers sufficient to support coordinators and other currently 

uncovered care management services; shared savings with providers who satisfy quality 

standards; provider accountability for savings sufficient to offset care coordination 

expenses; and shared savings with states that participate and invest in delivery 

improvement for dual eligibles.

10. Further national and state efforts to fully integrate Medicare and Medicaid financing and 

service delivery for those who are dually eligible in order to improve person-centered 
93

outcomes while lowering costs. In particular, CMS should continue to focus on two goals: a) 

development and implementation of quality measures and service monitoring across the 

entire continuum of care including HCBS, and b) upholding strong consumer protections 

such as transparent three-way contracts, state and health plan readiness reviews, 

ombudsman programs, and mechanisms for seamless transitions and continuity of care.

11. Improvement in the Quality of Care for Dual Eligibles. A number of witnesses spoke to the 

need for better management and integration of care among providers, payers and patients. 

Among other problems, they noted the difficulties in maneuvering the publicly funded 

system, the fragmented relationship of dual eligibles to their health and LTSS funders, the 

difficulties in transitions between care settings, the complications in establishing provider 

relationships, and the struggles in determining appropriate patient care. Clearly the system 

needs major work to develop better client supports, improve care coordination, remove 

redundancies and gaps in the system, prevent unnecessary hospitalization and nursing 

home placement, and preserve funds. States are adopting a variety of models for dual 

eligible clients. While bringing about both economies and improved quality of care, these 

programs allow for differences in state environments. Additionally, innovations that 

provide greater fungibility of resources, such as in Tennessee and Rhode Island, should be 

reviewed for replicability, quality of care, and overall cost. A much needed overhaul in 

service can result in a far more efficient cost effective system 

Please note, as stated above, additions to publicly funded LTSS need to be expenditure 

neutral. 

12. Care Coordination: The recent expansion of Medicaid managed care for dual-eligible 

populations needing LTSS reflects the belief of many states that managed care options can 

provide better coordination than the traditional state-run Medicaid model. Unfortunately, 

however, states looking to innovate in this sphere often face additional burdens imposed by 

Washington.

Freeing states from these federal requirements could expand the utilization of Medicaid 

managed care options, particularly for dual-eligible beneficiaries. Solutions in this vein 

would include allowing states to utilize one Medicaid managed care organization in a given 

region if that region’s population is too limited to support two organizations. Another 

possible reform could give states the option to incentivize beneficiaries who participate in 

healthy behaviors and disease prevention activities, or to offer additional services for those 

beneficiaries choosing high-value or managed care plans. These types of reforms would 

increase participation in coordinated care models, encouraging activities that lead to 

improved quality of care and thus reduced health expenditures.

13. Coordinated care: A recent study in the Medicare and Medicaid Research Review found 

that a “bundled hospital payment system that covers both acute and post-acute care can 

create financial incentives in the Medicare fee-for-service system to foster care 

coordination, improving the current disorganized system of post-acute care.” Witness 

Barbara Gage stressed the need for eliminating care silos and suggested that ACOs establish 

programs to target high-risk populations and to then provide follow-up care through 
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community-based organizations.

The silo- and rule-driven approach to care delivery interferes with quality patient care and is 

a terrible waste of resources. We received public comment from, Carol Marshall, a health 

care consultant in Fort Worth, Texas, explaining the extraordinarily rigid rules involving 

payment policy for physical, occupational, and speech therapy that create stress for both 

medical professionals and patients, blocking the ability of practitioners to provide patientcentered care. Witness Patti Killingsworth also recommending realigning “incentives in the 

Medicare program to support delivery of Medicare and Medicaid LTSS in the most 

integrated setting possible,” and she offered specific solutions to achieve that goal.

14. Develop a national care management system based on the Georgia Source Program: 

Georgia maintains a program called Service Options Using Resources in a Community 

Environment, or SOURCE. The SOURCE program is unique to Georgia. It is a State Plan 

enhanced primary care case management program that serves frail elderly and disabled 

beneficiaries to improve the health outcomes of persons with chronic health conditions, by 

linking primary medical care with home and community-based services.

SOURCE links primary medical care and case management with approved long-term health 

services in a person’s home or community to prevent hospital and nursing home care. All 

SOURCE clients must be eligible for Medicaid and meet nursing home level of care. SOURCE 

serves aged, blind and disabled Georgians who are eligible for Supplemental Security 

Income/Medicaid (SSI). An assessment helps to determine how much care a participant 

needs. An individual care path is designed based on the need for medical monitoring and 

assistance with functional tasks. Family members and other informal caregivers as well as 

staff from support agencies participate in care paths. In addition to core services, SOURCE 

offers personal support services, assisted living services, extended home health, home 

delivered meals, adult day health care, emergency response services and 24-hour medical 

access to a case manager and primary care physician.

The proposal would take the original SOURCE model one step further and create a SOURCE 

Patient Centered Health Home Model (PCHH). The PCHH model would include the 

following additions:

• Expand SOURCE covered services to include some or all of the following: 

a) Skilled Nursing Facility (SNF)

b) Home Health

c) Hospice

d) Physician

e) Pharmacy

The PCHH model also includes six innovative elements to achieve the goals outlined above. 

These are:

• Care management which includes those receiving Skilled Nursing Facility care
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• Varying levels of care management based upon Resource Utilization Groups (RUGS) 

and case mix indices (CMI’s) to reduce care gaps that can occur between levels of 

acuity and different service settings 

• A no wrong door access

• An information technology solution to permit to support data sharing in real time 

across the network and more closely link a comprehensive post-acute spectrum of 

care and services

• Acute care partners in data sharing agreements

• The utilization of CMS’s - or some other – Continuity Assessment Record and 

Evaluation (CARE) unified patient assessment tool vs. site-specific assessment tools.

All provider services across the spectrum would also be required to use the assessment tool 

and be compatible with the others. Care would be coordinated by a Care Manager who is 

paid on per member per month basis to manage care. Requirements include 24 hour 

telephonic availability, monthly telephonic care conferences, in person quarterly care 

conferences with the patient in the care setting, and in person care conferences with the 

patient and the physician. Attached please find a more detailed paper on the concept.

Improve Care in Residential Settings

15. Better Provision of Care in Residential Settings. Long term care is a residence issue as much 

as it is a service delivery issue. Just as care for dual eligibles is complex and inefficient, the 

historic separation of the streams of funding for housing and care delivery has impeded the 

most effective use of public moneys. Traditionally publicly financed housing and disability 

care providers worked separately, with little acknowledgment that they were serving the 

same clients, often in the same places. More recently some efforts at recognition of 

common clients have been instituted in public housing. A more current initiative is the 

provision of services, including employment initiatives, within HUD Section 811 supportive 

housing for younger persons with disabilities. By law, Sec. 811 projects must establish a 

relationship with the state Medicaid agency to utilize appropriated funds. Consideration 

should be given to a similar requirement for Section 202 supportive housing for the elderly. 

For residents receiving Medicaid LTSS, this mandate would ensure closer coordination 

between the care providers and the not-for-profits who are the primary sponsors of this 

type of housing. With both 811 and 202 rent subsidized programs, comprehensive 

management of service delivery within a single housing structure can create efficiencies and 

produce better quality less costly care. Studies of model programs in these housing projects 

will be important in demonstrating their value.

De-institutionalization of low income persons from nursing homes to less costly community 

settings and prevention of their entrance into nursing facilities are vital to providing greater 

personal independence simultaneously with lower outlays. To the extent that Sec. 811, Sec. 

202 and public housing have vacancies, they are a good resource, along with the use of 

Money Follows the Person dollars. Use of Assisted Living Waiver slots can also be helpful 

where obtainable. However, many communities lack sufficient availability of rent 

subsidized units that can also provide coordinated care. Killingsworth, along with other 
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state Medicaid policy directors, proposes utilizing FFP for limited room and board 

supplement as a cost neutral or cost savings use of Medicaid dollars. Consideration of a 

waiver to permit its use, along with research of its value, would be useful. A question also 

arises about premature nursing home placement based on housing finances. Richard 

Johnson’s 8-1-13 testimony indicates that those using nursing homes under Medicaid have 

housing wealth of $69,000 and other finances of $34,000. Those in nursing homes without 

Medicaid support own homes worth $155,000, and other finances totaling $289,000. It 

would be worthwhile to research the extent to which the Medicaid recipients go into 

nursing homes because of their inability to maintain their residences safely, while those at 

higher incomes but with the same care needs remain at home.

Creative collaborative use of public and private dollars may also assist provision of housing 

and care. Currently in Ohio, a not-for-profit entity is working with the state to use Medicaid 

savings to help finance the capital costs of converting 75 units in an affordable independent 

living building to assisted living. This organization also has co-located primary care 

practitioners at many of its sites to supply preventive care and avoid hospitalization and 

nursing home placement, and has placed an adult day care program within a new tax credit 

affordable project. In Portland a not-for-profit has purchased four rent subsidy buildings, 

with plans to incorporate care, to the residents, including mental health and addiction 

services. 

Public entities working with not-for-profits make sense. In addition to sponsoring 

affordable housing projects, not-for-profits often offer units to rent subsidy vouchers 

holders within their market rate housing. The philanthropic contributions of those affiliated 

with the eleemosynary institutions frequently help finance supports of low income 

residents. 

In addition to improving living and care arrangements for low income persons with 

disabilities in subsidized housing, localities should be planning for the likelihood that greater 

numbers of elderly and other persons with disabilities at all income levels will remain in 

their own homes and communities. One initiative, identification of Naturally Occurring 

Retirement Communities (NORCs), allows for more efficient provision of services within a 

neighborhood or apartment building. NORCs can be either publicly or personally funded. 

Many other initiatives require no public funds. Cities should encourage planned unit 

developments and master planned communities at higher densities, with shops, medical 

facilities and amenities within easy access of those with physical disabilities or lacking 

personal transportation. Zoning laws should allow free standing “mother-in-law” units to 

be constructed in conjunction with single family homes. Other initiatives include Urban 

Villages, a grass-roots aging-in-place movement of neighbors and volunteers, who pay a fee 

to receive coordination of supportive and other services. The nexus of housing and 

supportive service has largely been overlooked. While this outlook appears to be changing, 

much needs to be done to promote care quality within defined residential settings for all 

income levels.
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Encourage State Innovation

16. State Innovation Recommendation: The Commission Report should recognize that states 

have an important role to play as laboratories of democracy in creating LTSS solutions and 

programs that move beyond the public safety net of Medicaid or public subsidies for private 

insurance products. States already administer much of the LTSS in this country through 

Medicaid. Those with advanced systems are in a position to innovate and build off of 

existing strengths, and those innovations can then serve as models for future federal 

solutions. 

To this end, the Commission should not only encourage state and local experimentation in 

LTSS, but should recommend that HHS set aside grant funding for state and local agencies 

to develop and implement LTSS innovations, perhaps through the CMS Innovation Center,1

that will ultimately remove some of the financial strain off of the Medicaid system. States 

could open up registries and infrastructure on a FFS basis to connect workers and those in 

need, advise on the array community based options through case management, the AAA’s 

and ADRC’s to expanded populations, and develop state-based funding and delivery models 

outside of Medicaid in order to provide an affordable and accountable means of access to 

services especially for the middle and lower income populations, similar to what has been 

proposed and is currently being explored in Hawaii.1

17. Expand CMMI demonstration authority and funding to test models of care that fully 

connect home- and community-based services and their associated workforce with 

medical care for people with chronic health conditions and functional limitations. An 

example could include incorporating the following four key components into Accountable 

Care Organizations: a) comprehensive health and functional assessment; b) creation and 

execution of a personalized plan of care that includes a flexible range of benefits including 

long-term services and supports; c) a multidisciplinary care team tailored to the individual’s 

needs; and d) active involvement of family caregivers including assessing their needs and 

competencies.

18. Flexibility for the states: The diversity of the states is a challenge when trying to develop a 

top-down solution, but it can be an asset that can be harnessed to deliver better, more 

affordable, patient-centered care. 

States have demonstrated their ability to develop creative solutions. Witness Gary 

Alexander said that the requirement in Medicaid for multiple waiver requests create 

inefficiencies and poorer outcomes. He described his experience with the demonstration 

global waiver in Rhode Island that allows the state to rebalance Medicaid long-term care 

and increase access to home and community based services, ensure access to medical 

homes providing coordinated care, promote accountability, and improve quality. The best 

recommendation he offered: “Have the federal government set broad parameters but 

encourage bottom-up solutions.” 

Witness Patti Killingsworth recommended payment for limited room and board 
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supplements in a community-based residential alternative setting, particularly for lowerincome recipients. These kinds of innovations are best managed by states that can develop 

programs more quickly and that have a unique understanding of the resources available and 

the needs of their citizens. 

Other states, such as Pennsylvania, have had demonstrated success with an approach that 

integrates the medical home concept into a residential Continuing Care Retirement 

Community setting. This comprehensive approach allows physicians, advance practice 

nurses, and other professionals to coordinate each resident’s care needs. Today’s program 

silos and regulatory structures make this sought-after comprehensive system of care the 

exception rather than the norm.

19. Expand Medicaid Waiver Programs

a. Similar to the Rhode Island experience;

b. Mandate that providers produce demonstrable outcomes;

20. Financial Flexibility in Medicaid: Testimony on the Rhode Island global compact waiver 

last week demonstrated the impact that providing greater flexibility to states can achieve in 

reducing Medicaid expenses. The Lewin Group’s December 2011 study of the state’s 

program found that the waiver resulted in at least $50 million in Medicaid savings—this in a 

small state—while increasing the access and quality of care provided to beneficiaries. And 

as the testimony noted, savings to the Medicaid program have continued in fiscal years 

2012 and 2013.

The Rhode Island success story should pave the way for further reforms that provide states 

additional flexibility in exchange for demonstrated reductions in spending. Whether in the 

form of a block grant, or per capita caps on beneficiary expenditures, states could use new 

flexibility from Washington to introduce reforms that will improve care while reducing 

costs—thus improving the fiscal outlook for state and federal governments alike.

Critics of this approach express concern that any caps on expenditures will result in loss of 

coverage, access, or both for vulnerable beneficiaries. However, Rhode Island’s waiver has 

resulted in three straight years of expenditure growth below CPI inflation, GDP growth, and 

national Medicaid spending—this even as the state’s Medicaid caseload increased. These 

results strongly suggest that if given the proper flexibility, states can implement policies that

slow the growth of spending—or reduce it outright on a per capita basis—not by harming 

the quality of care, but by improving it.

Improve Consumer Access and Assistance

21. Options for Helping Americans Meet Their LTSS Needs: Provide enhanced options 

counseling to help individuals better navigate LTSS in a “One-Stop-Shop/No Wrong Door 

(NWD)” way to avoid unnecessary institutionalization, promoting access to home and 

community-based services (HCBS) and prevent Medicaid spend-down. This should be 

modeled after the “Enhanced Aging and Disability Resource Centers (ADRCs) Options 
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Counseling Program” initiative released by HHS in 2012. States should be able to access 

enhanced administrative Medicaid match to build this necessary infrastructure. 

Nearly 10 million Americans of all ages need some form of long-term services and supports 

(LTSS), and about 70% of the people now turning 65 will need LTSS at some point during 

their life. Yet, when consumers experience a need for LTSS – or want to plan ahead for their 

LTSS - they are often confronted with a complex and bewildering maze of public and private 

programs administered by a wide variety of agencies and organizations operating under 

different, sometimes conflicting, sometimes duplicative, rules, regulations and 

administrative procedures. Compounding this situation, people often confront the need for 

long-term support amidst a crisis, such as an unexpected injury, a hospital admission, or the 

collapse of a fragile unpaid caregiver support network. Under these circumstances, 

individuals and their families have little time to explore the many options that might be 

available, which may result in the unnecessary use of nursing facility and other expensive 

forms of LTSS. The fragmentation in our LTSS makes it difficult not only for our citizens to 

make informed decisions, but it also makes it challenging to ensure that our public 

expenditures on LTSS are deployed in the most cost-effective manner possible.

States develop Aging and Disability Resource Centers (ADRCs) programs – also known as 

One-Stop-Shop/No Wrong Door programs – to make it easier for consumers to learn about 

and access their LTSS options. The ADRCs program was based on best practices some states 

had developed to create “visible and trusted” sources of information, one-on-one 

counseling, and streamlined access to available LTSS options.

The importance of having an access program serve people of all income levels, not just 

those who qualify for Medicaid, since the vast majority of people who need LTSS are not 

Medicaid eligible but can be at high-risk of “spending down” to Medicaid.

Improve Program Efficiency

22. Require Medicare to audit and penalize hospitals who are abusing observer status: 

Motivation: There has been a rapid increase in the use by hospitals of observer status 

instead of admitting patients. This change is quite likely caused by a desire by hospitals to 

avoid the many cost control and quality enhancing mechanisms employed by Medicare. 

The result for many patients, however, is the loss of eligibility to Medicare coverage of 

skilled nursing care, which only arises after three consecutive days of admitted hospital 

care. 

Proposal: Medicare should embark on a program to rigorously audit and penalize hospitals 

who are abusing observer status, which could be indicated, for example, by a significant 

percentage increase in patients who stay longer than eighteen hours, or receive significant 

surgical and other procedures, and so on, but are not admitted. The structure of incentives 

facing hospitals, such as third-party shared payment audits, should also be reviewed. 
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Reform Payment 

23. Site-Neutral Payments Currently, the Medicare system reimburses each type of postacute care (PAC) provider according to different payment methodologies. Existing payment 

policies focus on phases of a patient’s illness defined by a specific service site, rather than 

on the characteristics or care needs of the patient. As a result, patients with similar clinical 

profiles may be treated in different settings at different costs to Medicare. This payment 

system fails to encourage collaboration and coordination across multiple sites of care and 

provides few incentives that reward efficient care delivery. Such misalignment has been 

understood and acknowledged for some time. 

The U.S. Department of Health and Human Services, Congressional legislation (e.g., the 

Deficit Reduction Act), and the Medicare Payment Advisory Commission (MedPAC) have all 

examined such an approach. Most recently, MedPAC established criteria for selecting 

potential services related to the mix of sites used, patient severity, similarity of service 

definitions, and frequency of an associated emergency department visit (which raises the 

service costs). This year MedPAC began an examination of how Medicare could equalize 

payments for similar patients treated in long-term care hospitals (LTCHs) and acute care 

hospitals. In his remarks to Congress in 2013, the MedPAC Executive Director indicated that 

equal payments for similar PAC services would build on MedPAC’s work examining 

Medicare’s payments for select ambulatory services. 

MedPAC has recommended and discussed many changes to PAC that would increase the 

value of Medicare’s purchases and improve the coordination of care patients receive. These 

include site-neutral payments which would create more equity across providers in different 

sectors. MedPAC believes that such a change could be implemented in the near-term and 

would serve as building blocks for broader payment reforms such as bundled payments and 

Accountable Care Organizations (ACOs). 

24. Move current programs to value care and accountability versus fee for service or 

procedure driven systems

a. Improve the quality of care through the development of standards based on patient 

outcomes

b. Provide incentives for quality driven outcomes and coordination of care

25. Improve efficiency in current entitlement programs

c. Rationalize payment systems and base them on objective uniform patient 

assessment versus site of care;

i. Reduce barriers to access that foster duplicative and unnecessary care such 

as the three-day stay requirement;

d. Control access to Medicaid to ensure that the program is a definitive needs-based 

system;

i. Tighten rules for eligibility for Medicaid and for SSI and SSDI
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Develop Uniform Assessment

26. Develop a common uniform assessment under the guise of an independent crossdisciplinary team that's separate from CMS: In order for a provider to deliver the best 

possible care across settings, and maximize continuity of care, not only do the LTSS and PAC 

providers need to use the same assessment tools but they must also be used in hospitals. 

When hospitals use different assessment tools, not only is it difficult to track a patient’s 

condition as he or she moves in and out of the hospital; but communication between 

settings to understand the patient’s needs and assess their condition is also compromised. 

As a result, the patient is less likely to receive appropriate care than when standard 

common clinical metrics are used. 

Neither the assessment tools currently in use nor the Continuity and Record Evaluation 

(CARE) tool are perfect, however, the use of standard clinical metrics across settings is 

extremely important both to patient care and to evaluation of quality across settings. 

Therefore, it is preferable to have a standard metric in place that is not quite perfect rather 

than to have multiple “near perfect” different clinical metrics that do not allow for effective 

integration of care delivery across settings.

In order to develop comparable measures across different providers, information needs to 

be collected in identical ways (e.g. use the same assessment tool); otherwise it is not 

possible to develop quality measures that can accurately compare different providers. For 

example, if one provider uses 5 questions to assess ADLs on a 5 point scale and another 

uses 4 questions to assess ADLs on a 4 point scale; it is extremely difficult if not impossible 

to develop one quality measure to comparably assess both providers. Similarly, even if both 

providers used the same number of questions and same rating scale, if one provider 

collected the information at admission and again every 4 weeks, and another collected it at 

admission and discharge only, developing a quality measure to assess improvement over 

time between the two providers is impossible. Therefore, collecting data using the same 

tool and following the same information collection methodology is essential to continuity of 

care. 

27. Allocate current research funding to support innovation in long-term care

a. HIT Standards

b. Telehealth

c. Expansion of Uniform Patient Assessment

Improve Quality

28. All fines collected from regulatory issues would be utilized to reward the top 10% of 

providers that have the highest discharge rate of dual eligible patients back into the 

community following a post-acute stay: Federal Civil Monetary Penalties (CMPs) and 

State CMPs/fines are imposed by the regulatory agencies that license skilled nursing 
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facilities if a facility does not comply with regulatory standards. States are limited under 

federal law in how they may use federal CMPs. They can use federal CMPs to:

• Maintain the operations of a facility, pending correction of deficiencies or closure;

• Assist in receiverships and relocation of residents;

• Reimburse residents for personal funds lost; and

• Fund other projects that benefit facility residents.

State CMPs/fines are not subject to these restrictions; their use is dictated by each state’s 

laws. Under this concept, a fifth option would be created. States or the federal 

government would create a Quality Fund targeted to providers with the highest discharge 

rate to the community. Quality Fund could be aimed at people who utilize post-acute care 

and do not require a rehospitalization. 

29. Provide quality long term services and supports for older people and people with 

disabilities in all settings.

i. Develop publically defined standards of care, throughout all long term care settings, 

that are enforced through a public regulatory structure. (In addition to market-based 

quality measures).

j. Develop enforceable quality measures through an objective regulatory system. 

k. Ensure sufficient numbers of properly trained staff are present at all times in 

institutional settings

i. There is a high cost of poor care – improving the quality of care provided will 

improve health outcomes and overall savings when avoidable conditions and 

injuries are prevented 

C. WORKFORCE IDEAS

Family Caregivers

1. Informal Caregiver support: An AARP study estimated that at any one given point in time in 

2009 about 42.1 million family caregivers in the United States provided care with ADLs 

and/or IADLs to adults with disabilities, and about 61.6 million were providing care at some 

time during that year. Yet these informal caregivers are themselves at risk from stress, 

physical strain, competing demands, and the financial effect of caregiving on their jobs and 

out-of-pocket expenses. Without their willingness to support family members, the 

dependency on public payment options would increase markedly. 

We can ill afford the loss or diminution of this voluntary help-force. Rather, we should 

buttress it through assistance that will support informal caregivers: 1) Professional 

assessment of family caregivers to identify the information they need during transitions, 

and the skills and techniques they require at home to perform complex medical procedures 

and tasks such as lifting and bathing. 2) Provision of locally adapted phone aps to provide 

portable guides to community resources, web based technical instructions for nursing and 
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medical care in the home, and caregiver support sites. 3) Reduction in caregiver isolation 

through institution of a trained Caregiver Corps (see Dr. Joanne Lynn’s 7-17-13 testimony), 

which could be integrated into the Corporation for National and Community Service. For all 

supports, it is important to use evidence-based practices to ensure the most effective use of 

resources.

Please note: My recommendations for any changes to Medicaid LTSS assume expenditure 

neutrality within public sector spending. The degree of expansion of any LTSS would 

depend on the amount of savings that could be produced in another area, in this instance 

through savings associated with broader access to HCBS and through the work of informal 

caregivers preventing hospitalization and delaying entrance into a nursing home. Because 

the Commission will not have time to do fiscal analyses, any new or expanded services will 

require further study to verify costs and savings. 

2. Family Caregiving: Family caregivers, including relatives, friends, partners and neighbors, 

are the backbone of long-term services and supports in this country – they provided an 

estimated $450 billion in unpaid contributions in 2009 – more than total Medicaid spending 

that year. We must take the following steps to help support family caregivers caring for 

loved ones of all ages.

Develop and implement a national strategy to recognize and bolster families in their 

caregiving roles. The strategy should identify specific actions that government, 

communities, providers, employers, and others can take. The strategy should address the 

following areas: 

o The unit of service in all health and LTSS settings should be redefined to include both 

individuals with disabilities and their family caregivers, with the person and the family 

caregiver (as appropriate) treated as integral parts of interdisciplinary services teams. 

o The assessment and care planning process (including care transitions and coordination) 

must be person- and family-centered, not only identifying functional disabilities but also 

focusing on meeting personal goals for living as independently as possible.

o All family caregivers should have access to relevant information, educational resources, 

referral services, training opportunities, and professionals supports;

o When family caregivers agree to provide care and the care plan or discharge plan is 

dependent on them: 

• their needs should be assessed along with the person receiving services, 

• they should be included in health information systems that list family caregivers, 

their contact information, and their involvement in implementing care plans, and 

• they should receive training (including on medical/nursing tasks), equipment, 

and support needed to carry out their roles.1

o Respite options should be available to family caregivers, and employers should amend 

workplace policies to support caregiving by employees; and

o The financial security of family caregivers should be addressed so that they are not 

required to make enormous financial sacrifices to provide support to loved ones.
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3. Develop and implement a national strategy to recognize and bolster families in their care 

giving roles. As was the case with NAPA, the strategy should identify the specific actions 

that each agency of the federal government can take to promote great adoption. 

- Promote greater adoption of person-and family-centered care in all health 

and LTSS settings, with the person and the family caregiver (as appropriate) 

at the center of care teams.

- Assessment and service planning (including care transitions and 

coordination), involving care recipients and family caregivers.

- Training (including on medical/nursing tasks) and other supports.

- Information, education, referral.

- Respite options.

- Financial security.

- Workplace policies and supports.

- Building supportive communities including offering Social Impact Bonds that 

integrate services for transportation, housing, etc. 

Increase appropriations for Geriatric Education Centers to enhance the dementia care 

capabilities of primary and secondary health care workforce.

Professional Workforce

4. All federally funded LTSS programs should be required to have a detailed plan for 

workforce recruitment, retention and development as a requirement to continue to 

receive public funds: Federal agencies should be directed to fund programs that improve 

working conditions and build career ladders. This includes directing CMS to fund and collect 

best practices on expanded home care worker role pilots, and to evaluate and expand 

Value-Based Purchasing Demonstrations that reward nursing home staffing, and implement 

an RN and nursing home staffing mix that meets patient needs and prevents poor outcomes 

and avoidable hospitalizations.

5. HHS should undertake a number of initiatives to ensure a more stable direct care 

workforce.

a) Institute systematic methods for, setting, rebasing, or updating payment rates for 

Medicaid home and community-based services create greater parity of wages and 

benefits across long term care settings.

b) Continue the development of national training standards for home care workers not 

covered by current federal requirements, and have this serve as the minimum standard 

for training.1

c) Align government payment policies to create parity for reimbursing training costs across 

all direct-care occupations and provider types. 

d) Require states to collect workforce data including data on wages, benefits, hours, job 

vacancies and turnover rates.
105

6. Creation of a National Program to Attract Individuals to Direct Care Jobs: We propose 

that the Corporation for National and Community Service develop a program called Direct 

Care Corp, modeled on its SeniorCorp Companion program, to provide direct care services 

to individuals in need of LTSS. SeniorCorp currently runs a companion program that 

matches senior companions for 15 to 40 hours per week with two to four adult clients that 

live independently in their own homes.1 Under the Direct Care Corp model, individuals of all 

ages who enroll to become direct care workers would receive pre-service orientation, free 

training and certification, health insurance, and an hourly wage. As an incentive to 

participate in the program, if individuals agree to serve for a specified amount of time (2-4 

years) in that direct care position they would be eligible for a Health Professions 

Opportunity Grant (HPOG) 1 to receive fully subsidized training for the health care 

profession of their choice. HPOG provides education and training to TANF recipients and 

other low-income individuals for occupations in the health care field that pay well and are 

expected to either experience labor shortages or be in high demand. HPOG Funds may be 

used for participant supportive services, including financial aid, child care, and case 

management.

7. Workforce -- Recruit, train, and retain a stable, well-prepared, and high quality workforce 

invested in LTSS by:

o Revising scope of practice standards to permit services to be provided by workers 

commensurate with a demonstration of competency:

• Advanced practice registered nurses should be permitted to expand their 

practices commensurate with their training and competence.

• Laws should permit the delegation of more services by direct care workers under 

the supervision of appropriate licensed personnel in home and communitybased settings.

o Requiring training in developing effective relationships as well as core competencies for 

direct care workers to meet the full needs of the LTSS population, including diverse 

populations and those with dementia and behavioral health issues.

o Ensuring that direct care workers are integrated into interdisciplinary teams and 

encouraging worker participation in decisions related to resident care.

o Promoting career development for direct workers through effective mentoring and 

providing career ladder opportunities in specialty areas, such as rehabilitation, dementia 

care, end-of-life care, and behavioral health.

o Requiring nationwide criminal background checks prior to LTSS employment, except for 

certain individuals hired through self-directed programs. 

8. Ensure adequate numbers of quality LTSS caregivers are available and retained for 

community-based and facility care.

a. Pay living wages to caregivers in all settings

b. Establish a national Caregivers Work Force Advisory Panel to develop innovative 

and effective means of recruiting and maintaining a quality direct care workforce

c. Establish minimum federal training standards for personal care aides based on 

current state efforts
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D. Follow-On

1. Recommendation for Mechanisms to Move Forward at the National Level: This 

Commission is severely limited by the timeframe and resources allotted to it by Congress. 

While there is broad consensus among the Commissioners that LTSS in this country as it 

currently operates is not sufficient for current or future needs in this country, it is beyond 

the realistic scope of this body to propose a meaningful and comprehensive solution within 

the Commission’s existing framework. Perhaps one of the most meaningful 

recommendations we can make is to propose a means for this work to continue in a 

meaningful and ongoing manner once the Commission has concluded. We recommend that 

Congress create a bi-partisan LTSS reform task force, with appointed members from the 

Senate, House of Representatives, and the Secretary of Health and Human Services. The 

task force’s charge should be similar to that of this Commission, and should use the 

Commission’s work as a jumping off point for its own. Ultimately the Task Force will draft a 

full report, make recommendations, and propose legislation to be voted on by Congress. 

Additionally, the Office of Disability, Aging and Long-Term Care at the Office of the Assistant 

Secretary for Planning and Evaluation (ASPE),1 should be charged with researching best 

practices and innovations at the state and local levels in LTSS around workforce, housing, 

access to services, LTSS education and public awareness, family caregiver support, and 

service delivery models to both inform the work of the Task force, and develop policy 

recommendations that can be pursued within HHS. 

Additionally, the Commission should recommend that legislation be passed authorizing the 

White House Conference on Aging in 2015, and to have a focus on long-term services and 

supports. Decennial White House Conferences on Aging are now embedded in our national 

history. Past White House Conferences on Aging, first held in 1961 and again in 1971, 1981, 

1995, and 2005 have been catalysts for aging policies and significant national programs such 

as Medicare, Medicaid and the Older Americans Act.1 The conference has traditionally been 

a source of innovative solutions, and an opportunity delegates across the country, political 

backgrounds and professional experiences, and would be extremely valuable in the further 

development of policy work on long-term services and supports. 

2. Develop a new standing Commission or similar national-level governmental body to 

address issues of the financing and delivery of long-term care services. This Commission 

should be housed within the Department of Health and Human Services and work in concert 

with existing governmental bodies that relate to long-term care financing and delivery 

including the Governmental Accountability Office, MedPAC, MACPAC, the Advisory Council 

on Alzheimer's Research, Care, and Services, and others
107

3. The need for persistent and sustained attention to the design, development and execution 

of a national LTSS plan requires the creation and support of a Long Term Support and 

Services Commission with Executive and Legislative Branch and Private Sector Members.
108

APPENDIX B: PUBLIC COMMENTS
109

PUBLIC COMMENT

• Karen Agron Flattery

• Darby Anderson, Addus HealthCare, Inc., Senior Vice President

• Mark Athon, Kansas Neurological Institute Parent and Guardian Group, President

• Alex Bardakh, MPP, AMDA, Senior Manager, Public Policy

• Libby Baxley, Sheridan, Arkansas

• Alexandra Bennewith, MPA, United Spinal Association, Vice President, Government 

Relations

• Rachel Brainard, Broydrick & Associates, Research Associate 

• Sarah Burger, RN, MPH, FAAN, The Coalition of Geriatric Nursing Organizations, 

Coalition Coordinator

• Doug Burr, Health Care Navigator, LLC, SVP of Finance Reimbursement & Gov't Relations

• Joe Caldwell, Ph.D., National Council on Aging,Director of Long-Term Services and 

Supports Policy

• Harris T. Capps, Major, USAF, Retired, Advocate for Intellectually Disabled Persons

• Roberta Carlin, MS, J.D., American Association on Health and Disability, Executive 

Director

• Kyra Clements, Golden Age Technology

• Robb Cohen, Consultant to MHPA

• Caitlin Connolly, Eldercare Workforce Alliance

• Amy Cotton, GNP-BC, FNGNA, FAA, National Gerontological Nursing Association, 

President

• Bruce Cowan, Sacramento, CA

• Mary Kay Cowen, Marrero, LA 

• Jennifer Dexter, Easter Seals, Assistant Vice President, Government Relations

• Kim Dion, Westminster, CO

• Sherrie Dornberger, RN, CDP, GDCN, FACDONA, NADONA Executive Director

• Leni and David Engels, Hollywood, FL

• Gail Fanjoy, KFI, Executive Director

• Cheryl Felak, RN, BSN, Because We Care, Beyond Inclusion

• Maureen Fitzgerald, The Arc Sarah Meeks, MSW, Lutheran Services in America Disability 

Network, Director of Public Policy and Advocacy 

• Paul E. Forte, Long Term Care Partners, LLC, Chief Executive Officer

• Loren M. Freeman, Provider of LTC Services, Guardian, Consumer

• Lex Frieden, National Advisory Board on Improving Health Care Services for Seniors and 

People with Disabilities, Convener

• David Gallagher 

• Mary Gann, Little Rock, AR 

• Laura Gargano, MPA, RN

• Dan Gaylin, NORC at the University of Chicago, Acting President
110

• Susan Goodman, National Down Syndrome Congress, Director, Governmental Affairs

• Fay Gordon, National Senior Citizens Law Center

• David A. Gould, United Hospital Fund, Senior Vice President for Program

• Richard Grimes, Assisted Living Federation of America, President & CEO

• David Hansell, KPMG LLP, Global Head, Human & Social Service Center for Excellence 

• Mary M. Harroun, MS, LNHA, Geriatric Psychologist

• Dr. Linda Heard, Hot Springs, AR

• Jeff Hill

• Tamie Hopp, VOR, Director of Government Relations & Advocacy

• Julie M. Huso, VOR, Executive Director

• Terry Johnson, Little Rock, AR

• Paula Jorisch

• Kate Josephson, Advance CLASS

• Bob Kafka, Institute for Disability Access, Co-Director

• Joan Kelley,KNI Parent Guardian Group, Vice-President

• Lois Sheaffer Kramer, CTRS; LNHA, Marklund, Director of Government Relations and 

Community Support

• Rob Kramer, MPA, Alzheimer's Association, Associate Director, Federal Affairs

• Gary Langer, Langer Research Associates

• Sheryl A Larson, ICI at University of MN, Senior Research Associate

• Sharon Levine, The Arc of New Jersey, Director of Governmental Affairs

• Bethany Lilly, The Bazelon Center for Mental Health Law, Policy Attorney 

• James A. Lomastro PhD, Larchmeadow Associates 

• Joanne Lynn, Altarum

• Jerry and Eleanor March, Conway, Arkansas

• Andrea Maresca, National Association of Medicaid Directors, Director of Federal Policy 

and Strategy 

• Carol Marshall, Healthcare Consultant; Fort Worth Texas

• Stephanie Mensh, Caregiver of Stroke Survivor, Paul Berger, Falls Church, VA

• Suzanne Mintz, Family Caregiver Advocacy, Founder

• Anne Montgomery, Altarum, Senior Policy Analyst 

• Tracey Moorhead, Visiting Nurse Associations of America, President & CEO

• Sam Morgante, Genworth Financial, Government Relations

• John O'Leary, O'Leary Marketing Associates, President

• Chris Orestis, Life Care Funding

• Paraquad, INC., St. Louis, MO

• Rachel Patterson, MPA, Association of University Centers on Disabilities (AUCD), Policy 

Analyst

• Susan Payne, Parent Association for the Retarded of Texas, President

• Donald Putnam, Lexington, KY

• Romeo Raabe LUTCF, LTCP, The Long-Term Care Guy
111

• Lyle T. Romer, PhD, Total Living Concept, Executive Director

• Jeff Rosen, National Council on Disability (NCD), Chairman

• E. Clarke Ross, D.P.A., American Association on Health and Disability, Public Policy 

Director

• Leo V. Sarkissian, The Arc of Massachusetts, Executive Director

• Marva Serotkin, The Boston Home, President and CEO

• Robin Shaffert, Caring Across Generations, Policy Director

• Phyllis Shelton, LTC Consultants, President

• Carole Sherman, Little Rock, AK

• Mary R. Sive, Montclair NJ

• Congresswoman Louise Slaughter, United States House of Representatives 

• Eric Sokol, Alzheimer's Foundation of America, VP, Public Policy

• Jeffrey L. Strully, Jay Nolan Community Services, CEO

• William Tapp, Elsevier, VP 

• Morris J. Tenenbaum, Kings Harbor Multicare Center, Principle

• Libby Terry, Omnicare Inc., Director of Gov't Policy 

• Debbie Toth, Rehabilitation Services of Northern California, Chief Executive Officer

• Barbara Trader, TASH, Executive Director

• Rebecca Underwood Parent/guardian/advocate for Aaron Underwood 

• Peter G. Wacht, CAE, National Academy of Elder Law Attorneys, Executive Director

• Laura E. Weidner, National MS Society, Director Federal Government Relations

• Kimberly Williams, LMSW, National Coalition on Mental Health and Aging, Chair

• Marybeth Williams, Consumer Voice

• Sue and Mike Yacovissi, Shreveport, LA

• Bob Yee, FSA, MAAA, Towers Watson, Senior Consultant
112

APPENDIX C: HEARINGS AND MEETINGS
113

PUBLIC HEARINGS

Thursday, June 27th at 2:00 pm EDT 

Rayburn House Office Building, Room 2322

"The Current System for Providing Long-Term Services and Supports."

Witnesses:

Anne Tumlinson, Senior Vice President, Avalere Health

Kirsten Colello, Specialist in Health and Aging Policy, Congressional Research Service

G. William Hoagland, Senior Vice President, Bipartisan Policy Center

Marc Cohen, Chief Research and Development Officer, LifePlans, Inc.

Wednesday, July 17, 2013 at 1:30 pm EDT

Dirksen Senate Office Building Room 50

“Populations in Need of LTSS and Service Delivery Issues." 

Panel 1: Diversity of LTSS Demand: Subpopulations and Their LTSS Needs

David Braddock, Ph.D., Executive Director, Coleman Institute for Cognitive 

Disabilities

H. Stephen Kaye, Ph.D., Assoc. Professor, University of California at San Francisco

Kevin Martone, Executive Director, Technology Assistance Collaborative

Robyn Stone, Ph.D. Executive Director, LeadingAge Center for Applied Research

Panel 2: Meeting LTSS Needs: Coordination of Care and Workforce Issues

Randall S. Brown, Ph.D., Vice-President and Director Health Research, 

Mathematica

Josephina Carbonell, Senior Vice-President, Independent Living Systems, LLC

Lynn Feinberg, Senior Strategic Policy Advisor, AARP Public Policy Institute

Joanne Lynn, M.D., Director, Altarum Center for Elder Care and Advanced Illness

Carol Regan, Government Affairs Director, Paraprofessional Healthcare Institute

Thursday, August 1, 2013 beginning at 8:30 am EDT

Dirksen Senate Office Building Room 562

"Strengthening Publicly and Privately Funded Long-Term Services and Supports." 
114

Panel 1: Strengthening Medicaid LTSS

Diane Rowland, MACPAC

Patti Killingsworth, TennCare

Gary Alexander, formerly Rhode Island Office of Health and Human Services

Melanie Bella, CMS, Medicare-Medicaid Coordination Office

Panel 2: Strengthening Medicare for LTSS

Joseph Antos, American Enterprise Institute

Barbara Gage, Brookings Institute

Marilyn Moon, American Institute for Research

Panel 3: Strengthening Private Long-Term Care Insurance

David Grabowski, Harvard Medical School

Lane Kent, formerly Univita

Jason Brown, US Treasury

Bonnie Burns, California Health Advocates

Panel 4: Interaction of Insurance, Private Resources, and Medicaid

Eric French, Federal Reserve Bank of Chicago

Jeffrey Brown, University of Illinois

Rich Johnson, Urban Institute

Ellen O'Brien, formerly MACPAC

Tuesday, August 20, 2013 from 1:00 pm to 5:00 pm 

Dirksen Senate Office Building Room 562

"Addressing LTSS Service Delivery and Workforce Issues." 

Panel 1: Service Delivery and Provider Innovation and Issues 1:00 to 3:00 pm

Eric Berger, CEO, Partnership for Quality Home Healthcare 

Lisa Alecxih, SVP and Director, Lewin Center for Aging & Disability Policy 

Loren Colman, Assistant Commissioner, MN Department of Human Services, 

Continuing Care Administration

Laura Taylor, Director of the Caregiver Support Program, Department of 

Veterans Affairs 

Panel 2: Workforce Innovation and Issues 3:00 to 5:00 pm

Tracy Lustig, D.P.M., M.P.H., Sr. Program Officer, Institute of Medicine
115

Suzanne Mintz, Founder, Family Caregiver Advocacy

Charissa Raynor, Executive Director, SEIU Healthcare NW Training Partnership 

and Health Benefits Trust

Charlene Harrington, PhD, Professor Emeritus of Sociology and Nursing, 

University of California at San Francisco

Wednesday, September 18, 2013 at 2:00 pm to 4:00 pm

Dirksen Senate Office Building Room 106

Public Meeting to Release the Final Report

EXECUTIVE SESSIONS

Thursday, June 27th at 8:30am to 12:45pm 

Social Security Advisory Board, 400 Virginia Avenue, SW Suite 625

Monday, July 8, 2013 at 4pm to 6pm 

Teleconference 

Wednesday, July 17, 2013 at 8:30am to 12:30pm 

SVC 202/203 (Capitol Visitors Center) 

Thursday, August 1, 2013 at 8:30am to 5:30pm

Dirksen Senate Office Building Room 562

Monday, August 19, 2013 at 8:30am to 5:00pm

Dirksen Senate Office Building Room 562

Tuesday, August 20, 2013 at 8:30am to 5:00pm

Dirksen Senate Office Building Room 562

Thursday, August 29, 2013 at 8:30am to 5:00pm

Russell Senate Office Building Room 485

Monday, September 09, 2013 at 4:00pm to 6:00pm

Teleconference

Thursday, September 12, 2013 at 8:30am to 5:00pm

Russell Senate Office Building Room 485