What a novel concept!
Just kidding! It’s really not.
Since the Taxpayer Relief Act of 2012 removed the Class Act from the Patient Protection and Affordable Care Act (Obamacare), several think tanks working on how to fund long-term care for aging baby boomers have all recommended the solution is a combination of public and private funding.
Prior to 1997, Medicare paid for long-term care on a fee-for-service basis. That means that whatever the physician prescribed, Medicare covered.
The rules changed with the passage of the Balance Budget Act of 1997. Implementation of the current Medicare coverage of custodial care became effective in July of 1998. For details on what Original Medicare, Medicare supplemental insurance and Medicare Advantage plans currently cover, check out our blog, “Does Medicare Pay For Long-Term Care?”
Just one of the public funding strategies
Discussed for years is including custodial care as a Medicare benefit. In an April 27, 2018 memo to Medicare Advantage insurers, Kathryn Coleman, director of the CMS Medicare Drug & Health Plan Contract Administration Group, outlined a number of services the insurers may cover beginning in 2019.
The potential benefit inclusions stem from the interpretation of what is a supplemental benefit. Potential benefits include: adult day care, in home assistance with activities of daily living, transportation to medical appointments, home safety modifications and more.
In a subsequent hearing of a House Ways & Means subcommittee, the issue of including custodial benefits as part of Original Medicare was discussed.
Our view…
Any information that helps educate consumers about the risk of needing long-term care and the expense is welcomed news.
All think tanks working on the issue of funding long-term care have agreed upon one factor. We will need a combination of public and private funding. Neither can go it alone.
If Medicare does augment coverage to include custodial care, it will not eliminate the need for long-term care expense planning or long-term care insurance.
But it may lead to a better informed population, encourage consumers to have a plan for care and to explore long-term care insurance as a funding strategy.