Paying for Health and Long-Term Care

Growing evidence demonstrates that certain approaches to financing and paying for chronic care coordination for patients are effective not only for improving patient well-being but can also reduce health care spending. However, chronic care approaches should vary for different patient populations and can be carried out effectively by diverse organizations and professionals reflecting the heterogeneity of health care delivery throughout the US. The Report considers the different populations in need of care coordination, summarizes current evidence of effectiveness, describes the various entities that can serve as focal points for coordinating care, and details the possible financing and payment options that can support these approaches.

Because a small fraction of individuals account for a large share of total health expenditures, insurers gain more by excluding high-cost people from coverage than by efficiently managing the care of enrollees. The incentives for insurers to avoid high-cost and high-risk enrollees affect not only the likelihood of health insurance coverage for the high-risk population, but also the cost and accessibility of coverage overall in the small-group and nongroup private health insurance markets. This paper identifies public policies that might address these problems in private health insurance markets more effectively and delineates the advantages and disadvantages of each.

Although Medicare covers nearly all Americans age 65 and older, premiums, cost shares, and holes in the benefit package raise concerns about seniors' ability to pay for their health care. This brief, based on newly released data, shows that Medicare Part D, introduced in 2006 to cover prescription drugs, helped reduce out-of-pocket costs. The majority of older adults devoted less than one-eighth of their incomes to health care in 2006. However, nearly half of low-income seniors spent more than 20 percent of their 2006 incomes on health care. Medical costs for seniors should figure into the health-reform debate.

About two-thirds of those over 65 will need some long-term care before they die. Howard Gleckman looks at a key question at the heart of the debate over long-term care insurance: how much will premiums cost?

More than 10 million Americans require long-term care supports and services. Yet the system for delivering and paying for this assistance is deeply flawed. While most of the frail elderly and those with disabilities prefer assistance at home, many must live in nursing homes to receive Medicaid benefits, care coordination for those with multiple chronic illnesses is poor, and the system for financing care impoverishes many middle-income families. The national health reform debate allows policymakers to reconsider long-term care as well. This paper assesses proposals to restructure the delivery and financing of long-term care services.