Improving Long-Term Care in Wisconsin
November 19, 2014
Wisconsin's population is aging quickly -- while the amount of 85-year-olds in the United States will grow by 2 percent annually over the next few years, it will grow by more than 3 percent annually in Wisconsin. As a result, explains Senior Fellow Pam Villarreal in a report for the National Center for Policy Analysis and the MacIver Institute, more Wisconsinites will need long-term care, and the state will have to find ways to fund it.
Already, 80,000 Wisconsin residents are receiving long-term care in some form, and 15 percent of Wisconsin residents over the age of 65 are in a nursing home -- two percentage points higher than the national average of 13 percent. This is a significant issue for the state, because the federal/state Medicaid program spends a significant amount of money funding long-term care services. Villarreal explains that while just 7 percent of Wisconsin Medicaid enrollees were receiving long-term care services, 40 percent of state Medicaid expenditures were spent on long-term care.
With Wisconsin's growing elderly population, the state has taken several steps to reduce long-term care costs while offering residents options outside of typical nursing home care, such as encouraging the purchase of long-term care insurance and creating programs that allow residents to use Medicaid funds for home care. Villarreal offers a few more suggestions:
- Currently, the federal government sets limits on home values in order for a person to qualify for Medicaid, which states can increase as they see fit. Villarreal encourages the federal government to allow states to set their own home equity limits or do away with them altogether.
- Wisconsin has a public-private partnership program that encourages the purchase of long-term care insurance and was meant to help low-income residents. In reality, it has been used by higher income households. Villarreal suggests doing away with the program and instead providing those who purchase long-term care insurance with a tax credit.
- Currently, federal law requires states to recover assets from a deceased person if it is cost effective to do so in order to repay Medicaid costs. However, asset recovery tends to be very small. Villarreal instead suggests allowing Medicaid to require reverse mortgages (which allow homeowners to borrow against their home equity) in order to pay for long-term care.
- Home-based care is significantly less expensive than institutional care. Villarreal encourages the state to increase home care opportunities for Wisconsin residents.
If Wisconsin takes steps to tackle long-term care costs, it could serve as a model for other states, says Villarreal.
Source: Pamela Villarreal, "Improving Long-Term Care in Wisconsin," National Center for Policy Analysis and the MacIver Institute, November 19, 2014.
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