2011-2013 Long Term Care Sustainability Plan
Under a broad definition of need for long term care,
about 11 million individuals or 3 percent of our total population
requires long term care. The majority of long term care, supports, and
services is provided on an unpaid basis by family members and friends.
It has been estimated that only 23 percent of individuals in need of
long term care use paid caregivers.1 Spending for long term care,
supports, and services has fallen disproportionately on the Medicaid
program. Nationally, Medicaid is the largest single source of payment
for long term care, accounting for 42 percent of total spending,
followed by Medicare (25 percent), out-of-pocket spending (22 percent),
and private insurance and other sources (11 percent).2
In Wisconsin, Medicaid provides long term care,
supports, and services for over 75,000 individuals on average each
month. In total, we project long term care, supports, and services
expenditures will exceed $2.8 billion dollars this year which represents
about 40% of the total Medicaid budget.
More than 43,000 individuals are enrolled in a managed
care arrangement, principally through a Family Care managed care
organization but also through PACE, Partnership, or IRIS at a cost of
more than $1.3 billion. Medicaid pays for care in nursing home or other
institutional setting for more than 17,400 individuals each month at a
total cost of $973 million. Our legacy waivers, Community Integration
Program (CIP), Community Options Program (COP), and the Children’s
waiver serve nearly 11,000 individuals, totaling $289 million. Medicaid
will also pay approximately $224 million for personal care and home
health services on a fee-for-service basis on behalf of an additional
5,000 individuals per month.
The average enrollee in Family Care costs less than the
average enrollee in the legacy CIP and COP waivers or IRIS. The average
Family Care enrollee had costs of $3,188 per month while IRIS enrollees
averaged $4,159 and CIP and COP enrollees averaged $3,761. What this
means is that Family Care offers the potential, if its cost
effectiveness and fiscal condition can be further improved, to meet the
future long term care needs of the state’s residents in the coming
years. By 2035, Wisconsin’s population over age 65 will double. It is
essential that we make our long term care programs as cost-effective as
possible to meet this growing demand in the coming years.
A year ago, Wisconsin faced a significant decline in
federal matching funds for Medicaid. Governor Walker and the Legislature
committed $1.2 billion in new state funds to Medicaid during the current
biennium to help meet those fiscal challenges. But even with those
additional funds, population growth and changing demographics will
increase demand leaving the long term care programs at risk.
Analysis by both the Legislative Audit Bureau (Full
Report,
Report Highlights)
and the Department point to several important
issues and findings to helping the program become financially
sustainable:
- The Department’s process for setting capitation rates for MCOs
had to be improved, to better reflect the acuity mix for the
consumers served by each MCO and improve the MCO solvency.
- A significant portion (over a third) of Family Care costs are
spent for services to individuals in assisted living or alternative
residential settings. Costs for these persons are 2 to 3 times
higher than for those living in their own homes. While assisted
living is the most appropriate setting for some individuals, helping
people remain in their homes is key to improving the cost
effectiveness of our long term care programs. Plus, most people have
a strong preference to live in their own home, among family and
friends.
- A survey of waitlist individuals conducted by ADRCs indicates
that 75% of individuals have been waiting less than one year, and
50% for less than six months. About half reported needing assistance
with housekeeping, meal preparation, or non-medical transportation.
In addition, about half indicated they were managing on the waitlist
with help from family and friends.
- The survey identified that a majority of people, who are in need
of long term supports, 81 percent, are currently living in their own
home, an apartment of with family. Only 13 percent live in an
assisted living facility or nursing facility.
- We have also learned that most people who are in need of long term
supports indicate that they would like to receive the supports they
need in the same setting in which they currently reside.
This is also consistent with the types of support that people
indicate that they need in order to meet their long term care needs:
Top Three Areas of Support Needed
| Type of Support |
%/Frequency |
| Laundry or chore services |
30% |
| Personal care services (bathing, dressing, eating,
toileting, grooming) |
28% |
| Transportation |
18% |
Over the last year, the Department has been engaged in conversations
with consumers, family members, advocates, Managed Care Organizations (MCOs),
Aging and Disability Resource Centers (ADRCs), providers, tribes, and
other experts about how to improve the program. Building on the audit
report’s finding and our own review, the Department has assembled a
package of reforms and savings measures that will help make the program
sustainable on an ongoing basis in the future while keeping consistent
with the interests of current and future program participants.
Reforms by Focus Area:
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1 H. Stephen Kaye, Charlene Harrington, and Mitchell P. LaPlante,
“Long-Term Care: Who Gets It, Who Provides It, Who Pays, and How Much?,
Health Affairs, January 2010, Vol. 29, No.1
2 Terence Ng, Charlene Harrington, and Martin Kitchener, “Medicare and
Medicaid in Long-Term Care,” Health Affairs, January 2010, Vol. 29, No.1
Last Revised: January 24, 2012 |
