Supporting Older Adults

According to Pew Research, the number of Americans aged 100 and older is expected to quadruple over the next three decades. Late this past year, Jimmy Carter, the 39th president of the United States, died at the age of 100 after being under hospice care for nearly two years. While “living to 100” may seem extraordinary, it is a scenario that is becoming more common for Americans. The demand for care and caregivers will likely increase substantially in the coming decades, continuing to put a strain on the caregiver workforce and families.

The demographics of aging are already straining public program budgets like Medicare and Medicaid. Without solutions to reduce the cost of care for these programs, there will likely be a significant financial impact on many families. Some programs have taken collaborative long-term care funding approaches, using integrated care designs, to potentially help keep older adults healthier and lessen the overall demand for care.

Recent industry studies and initiatives have addressed the need to find cost effective ways to provide care solutions for aging adults. These approaches can individually make a small impact, but when looked at together, they point towards a powerful need and opportunity to provide the collaborative coverage and care older adults seek.

The Caregiver Workforce

One such collaborative program has launched in a small town in rural North Dakota. The “Aging in Community” pilot program helps overcome the lack of providers with a network of community support that tries to help residents affordably age at home and delay the need to relocate to a larger town or city. An article supported by the Pulitzer Center on Crisis Reporting cites the Rural Health Information Hub’s findings that only six out of 53 counties in North Dakota have enough healthcare workers. Today, there exists a significant caregiver workforce shortage that could benefit from similar collaborative and creative solutions. Furthermore, the family caregiving crisis, where dependence on family members for care without the necessary supports and training, continues to grow.

Medicaid Home and Community Supports

Recently published data provided by the Centers for Medicare & Medicaid Services (CMS) found that “far more people” received Home and Community Based Services (HCBS) than institutional services in 2021. In addition, it has been reported that Medicaid Long-Term Services and Supports (LTSS) expenditures for HCBS also accounted for a higher proportion of LTSS spending than institutional services in 2021. States used a combination of programs and State Plan options to deliver LTSS, with State Plan home health services being the most common among HCBS users, Section 1915(c) waiver program services being the largest HCBS expense category, and nursing facilities accounting for most institutional services and expenses.

Furthermore, there were fewer users of LTSS services through fee-for-service (FFS) than managed care programs in 2021, although a majority of the LTSS expenses remain FFS. The types of services, populations covered and delivery models vary by state due to their chosen Medicaid program structures. As determined by Mathematica, HCBS use by Medicaid LTSS beneficiaries ranges from 58% (Kentucky) to 99% (Oregon).

Many states have made efforts to reduce costs while providing services and outcomes for their Medicaid LTSS populations. All states should enable access to the least restrictive and highly supportive care settings. Care management approaches, which require strong choice and quality measures, provide support for beneficiaries and their families while potentially lowering the cost to state Medicaid programs.

Long-Term Care Insurers and Integrated Care

The emergence of Managed Long-Term Services and Supports (MLTSS) programs is one of many reasons why care is now provided in HCBS settings a majority of the time. MLTSS programs leverage Medicaid insurers to utilize clinical care coordination tools to navigate care across providers and with family and community support. Increasingly, states are using MLTSS and other programs as “a strategy for expanding home- and community-based services, promoting community inclusion, ensuring quality, and increasing efficiency.”¹

Whether older adults in need of care are dual eligible or are receiving support from long-term care insurance products, they and their families need and prefer the strong support that clinical care coordination and navigation services can provide.

Integrated Care Supports

A long-term care insurer recently released its 2024 Consumer Study. The survey of 1,000 respondents found that consumers will start to plan once they are aware of and understand their LTC risks and needs. More than half of respondents cite the expense of medical and other supports while a third reference other competing financial priorities for a lack of planning for their LTC needs. Furthermore, a majority expect to receive their care in their own or a loved one’s home.

While the barriers to planning and purchasing insurance are real, they may be alleviated with affordable solutions that encourage consumers to plan at an earlier age. Integrated care approaches can potentially provide affordable solutions and also support the insured long before care needs may arise.

Home Care Benefit and Medicare

While proposals have been made to add a home care benefit to Medicare, this has historically been deemed a “budget buster.” Proposed design options included using claim assessments with the standard activities of daily living to attain uniformity, providing care using formal home care agencies, and using the anticipated Medicaid savings to offset program costs.

An income-and-asset-based cost-sharing approach was offered in this recent proposal, with cases where incomes up to 150% of the poverty level and assets up to $30,000 would not have a contribution for HCBS needs. Above these limits, the cost-sharing would increase to defray program costs. Medicare benefits have historically not been based on income or asset levels, although cost-sharing approaches are applied to Medicare Part D premiums for incomes in excess of a specific amount per person.

Reports show the challenges Medicaid has faced to “align with the system that manages their care and pays their providers.” That same challenge exists in the fee-for-service Medicare space. However, as described above, MLTSS plans do address this with the dual-eligible populations. The opportunity to add HCBS to the Medicare program may help many families with first-dollar coverage; however, truly integrating that care could help provide the support they require while achieving the goal of reducing overall costs.

State LTSS Proposals Seek to Integrate Care Supports

Integrated care approaches are just as relevant and beneficial for Long-Term Care insurance policyholders. Recently, a Minnesota Department of Human Services research study recommended a Medicare LTC Companion Product. This public-private coordinated approach would integrate acute care and long-term care services so that older adults could have support across their care needs. The solution brings HCBS into the overall Medicare solution-set while allowing for older adults, especially those in the middle-income bracket, to enhance their care planning and funding based on their own specific financial needs.  Furthermore, the approach allows for universal coverage of older adults. When care needs extend for longer periods, care can continue within similarly structured Medicare/Medicaid MLTSS plans. Finally, this approach could complement a much-needed insurance market aimed at middle-income older adults enhanced with employer and state-based collaborative solutions.

Possible Employer Roles

Employers can play a role in supporting employees and their families with their long-term care needs. This includes both the risks and expenses of the employee’s own needs as well as when or if the employee becomes a caregiver for their family members. These opportunities come from collaborative state-based programs to support caregiving and employer-offered access to financial products which enables employees to plan for this potential expense before and within retirement. Here are four examples:

1. Paid Family Medical Leave (PFML) programs have been implemented in 12 states and the District of Columbia, with an additional seven states considering proposals.
2. During the recent election, the Washington Cares program (WA Cares) survived a ballot challenge and continues to collect premiums. One goal of the program is to enable insurers to supplement coverage in addition to WA Cares, including employer-offered insurance products. The framework for these Supplemental Long-Term Care Insurance products was recently passed and signed into law by the governor. The interest in employer-offered solutions is evident, as seen in the significant increase in the purchase of employer-based LTC solutions in Washington prior to the WA Cares launch.
3. The WISH Act, a program proposed by Congressman Tom Suozzi of New York, also has an opportunity for employers to help encourage the purchase of long-term care solutions. (The WISH Act, formally the “Well-Being Insurance for Seniors to be at Home Act,’’ was introduced to the House of Representatives on Feb. 11, 2025.) Earlier versions of the proposed program included a sharing of the costs between employees and employers. Not only does the program itself demonstrate where individuals need to take responsibility for their care, but it would also give an opportunity for employers to offer long-term care funding options that address the waiting period before WISH program benefits begin.
4. Worksite-based life with LTC products continued to expand in recent years. In 2023, sales of worksite life solutions with an LTC rider attached were more than half of such sales. Furthermore, worksite life sales have increased at a Compound Annual Growth Rate (CAGR) of 7.3% since 2019, reports show.

More than two decades ago, a robust long-term care insurance market existed with plenty of carriers, brokers and employee benefit specialists participating. Other than worksite life and LTC, that has essentially disappeared. I believe affordable worksite programs that leverage integrated care solutions should be part of the approach to meeting the needs of the majority of older adults.

In Conclusion

The recent articles and research highlighted above point out opportunities to alleviate the strain presented by demographic trends and caregiver shortages. The populations with the most needs are growing, the care provider workforce crisis is escalating, and the costs to public programs and families are overwhelming. Here are three things that may help:

1. Policymakers and insurance carriers must work together to identify and implement collaborative public/private insurance programs that integrate acute and long-term care.
2. Whether through public programs or LTC insurance policies, older adults should be given access to all types of care, including informal caregiver support, alternative HCBS approaches, and care navigation services.
3. Insurance products with integrated care solutions should be considered essential for providing affordable and supportive coverage for middle-income populations.

Opportunities to support middle-income adults are at our doorstep. Integrated approaches meet the financial needs and provide support for older adults and their families. I believe it’s prime time to consider such collaboration solutions in long-term care.

Statements of fact and opinions expressed herein are those of the individual authors and are not necessarily those of the Society of Actuaries or the respective authors’ employers.

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