Medicaid Long-Term Services and Supports (LTSS): Proposal to Increase Support for Caregivers

Published October 1, 2020

Last month, in the run-up to the Democratic National Convention, Vice President Joe Biden announced the 21st Century Caregiving and Education Workforce plan. The plan would eliminate waiting periods for Medicaid recipients to receive home-based services and increase support for individuals who care for the elderly and disabled. The campaign predicted the plan would cost $775 billion over 10 years.

A key element is a $450 billion effort to facilitate delivery of healthcare services in community settings, as opposed to acute care hospitals for an estimated 800,000 individuals on waiting lists to receive home- and community-based services.

What are LTSS and who needs them?

The types of services that the plan focuses on are generally referred to as “long-term services and supports,” or LTSS. These include most services required by individuals with limitations in their physical functioning as well as those with chronic illnesses. There is a particular emphasis on assistance with activities of daily living (ADLs) such as dressing, bathing, and eating. An estimated three million Americans use Medicaid-funded LTSS in both long-term care facilities as well as at home and in community-based settings. LTSS patients span all age groups, and include those with cognitive or psychiatric challenges. About half of Medicaid recipients of LTSS are 65 years old or older.

In recent years, community-based LTSS accounted for about half of total LTSS spending. In 2016, federal and state spending on Medicaid for LTSS was $167 billion, or about 30% of total Medicaid spending. The 21st Century Caregiving and Education Workforce plan could substantially increase the ratio of care in communities vs. long-term care facilities.

The Evolution of LTSS

Upon the inception of Medicaid and Medicare in 1965, states provided LTSS only in long-term care facilities. In these facilities, individuals received medical services as well as assistance with ADLs. Thus, from its beginning, LTSS showed bias toward institutions, as opposed to the community or the home. In subsequent years, there has been a gradual shift of these services away from hospitals and institutions and toward communities and homes with support for caregivers. Many of these changes have resulted from policy changes and legislation such as the 21st Century Cures Act.

LTSS and Managed Care

In mid-2020, twenty-four states provided at least some LTSS benefits via managed care plans. Managed care organizations have pre-determined dollar amounts per member per month (i.e., capitation). Currently, just under 2 million individuals receive LTSS via Medicaid managed care plans.

What Impact Might this Program Have?

Since 1965, there has been significant transformation in programs; however, these changes have often taken the form of partial fixes of deficiencies occasioned by local circumstances in particular states. The ultimate goal of 21st Century Caregiving and Education Workforce plan is to streamline LTSS using holistic, intentionally designed approaches. Doing so would reduce the inefficiencies in the program that have been accumulating for over 40 years. The plan would also accelerate the trend toward the increased provision of home-based services that has been gaining momentum in recent years, while steering clear of some of the more ambitious proposals that advanced during the primary season. The trend toward community- and home-based care is unlikely to reverse course. The challenge is to shepherd the required resources in ways that maximize outcomes at reasonable costs and to support caregivers.