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Wisconsin Department of Health Services

2011-2013 Long-Term Care Sustainability Plan

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.

Pie Chart

  • 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.

Bar Chart

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