Pitfalls To Privately Run Long-Term Care Programs

While there has been plenty of attention paid to the Affordable Care Act, another change in the way we deliver and pay for health care is underway without much fanfare. But it too may bring with it a number of concerns.

Old couples Care in the home

California is among at least 26 states that are introducing mandatory programs that put billions of public dollars into privately managed long-term care plans. The idea is to keep people in their homes longer and come up with alternatives to nursing homes.

Companies running the programs are promising profits for investors and savings for taxpayers.

But an article in the New York Times suggests there may be hidden pitfalls in the new programs.

It details a program in Tennessee which has been touted as a model. The article says the increasing costs of care plus the need to return profits to investors is squeezing the care being given. In many cases, care was denied.

In past years, severely debilitated people were put into nursing homes with the costs shared by the state and federal government under the Medicaid program. The new program gives such patients the choice of staying in their homes with daily help and then go to a nursing home only when absolutely necessary. Medicaid pays a fixed amount to a private insurance company to cover and coordinate the care.

The government saves money because the amount it pays is less than what it would have paid to a nursing home and the private company makes money because the amount it spends on the patient is less than it is being paid by the government.

In the case cited in the article, a patient was summarily denied care by the insurer once he developed dementia. He was no longer deemed eligible for nursing home care under Medicaid because the rules for admission were tightened up as part of the new program.

The Medi-Cal program in California is on the verge of changing. It’s important to revisit and review your existing planning for long term care.