Nursing home care.--Medicaid now pays for about 60 percent of the nation's total nursing home bill or about $2.1 billion. Medicaid is the only way most older Americans can receive the nursing home care they need. But Medicaid is only available to indigents. This means that most seniors must pay for nursing home care on their own as long as they have any assets of consequence and an income over $2,000 (to make matters worse such "means tests” for eligibility differ from state to state). This practice compounds the welfare stigma associated with Medicaid and perpetuates the negative images of nursing homes as "repositories of the unwanted."

III. SUGGESTIONS FOR REFORM

The American Association of Retired Persons, National Retired Teachers Association, and other senior citizen groups are unanimous that long-term care should be provided to all older Americans and not just to the poor. They are unanimous that Medicare should be the vehicle for extended long-term care coverage. Recognition of this fact was the most favorable aspect of Title II of the Kennedy-Mills bill. S. 3286. The goal can be accomplished as follows:

1. Liberalize the definition of Medicare's nursing home coverage beyond "skilled nursing".

2. Include intermediate care as a covered service.

3. Liberalize the home health benefit beyond "skilled nursing" by removing the word "skilled" or authorizing coverage for other levels of nursing, i.e., "non-skilled" or "preventative".

4. Dav care should be authorized as an optional substitute for some or all of the authorizeri home health visits presently offered.

5. Preferably, coinsurance amounts should be eliminated, but if thes are retained, then they should be tied to whatever catastrophic coverage is provided. For example, when a long-term care patient reached $1,000 in coinsurance or deductible amounts, the circuit would break and catastrophic protections should apply.

6. Funding should be from general revenues rather than further increases in regressive Social Security payroll taxes.

7. A residual Medicaid program would absorb premiums for the poor as well as providing the remaining 4 mandatory services: physician's care, X-ray and lab services, hospital care and mental health care, as well as other voluntary services.

8. There should be some tie-in with the Areawide Agencies on Aging authorized under the Older Americans Act, which have been given the various areas of our states. Perhaps senior citizens centers could be established as screening centers in which the medical and social needs of the elderly could be assessed and then matched with medical services under agencies participating in Medicare or with services under Title III of the Older Americans Act.

IV. COST

A. Home health care

The Urban Institute projected that 1.4 million elderly needed home health services. The cost of providing these services in the first year through an expanded Medicare program is $300 million, an estimate provided by the Social Security Administration and reinforced through the following projections:

In 1972, the U.S. spent $24 million for home health under the Medicaid program, whose definition is more liberal than the Medicare definition. These services were provided to about 113,000 people, or precisely $213 per recipient. Multiplying $213 by 1.4 billion yields an estimate of about $298 million. B. Nursing home care

About $3.7 billion is presently being spent for nursing home care which breaks down as follows:

From Medicaid.---
From private paying patients.-
From Medicare.--

Billions

$2.1 1.4 .2

Total

3. 7 Assuming that the Federal government would pay what is presently paid by private paying patients (which would not be so if coinsurance were imposed), the cost to the taxpayer would be $1.4 billion. Added to that would be the cost of meeting the unmet need, or 600,000 elderly now in the community who need care. While most actuaries are cautious with cost projections for nursing home care, the above analysis provides a reasonable estimate. In 1972, the U.S. spent $1,470,939,166 for nursing home care under the Medicaid program for 562,330 beneficiaries or an average of $2.615 per individual. The estimated cost then of meeting the needs of 600.000 new beneficiaries would be $1,569,000,000, rounded off to $1.6 billion. C. Total cost

Assuming a cost of $1.6 billion to provide nursing home care for 600,000 needy aged who are going without the care they require, and, $1.4 billion cost in relieving private paying patients, the total cost to the taxpayer would be $3 billion. The cost of an expanded Medicare home health program would be roughly $300 million.

In short, for $3.3 billion Congress could make long-term care a right for all Americans, not just the poor; it would provide nursing home coverage for 600,000 new patients and the broad spectrum of home health services to 1.4 million more. This compares favorably with the $5.3 billion estimate in S. 2513, which proposes the “Federalization" of Medicaid (but locks the states in at their current level of expenditure) and covers few if any new beneficiaries.

It is my hope that these thoughts will be useful to you in your deliberations and that any bill reported out of your Committee will provide some relief to the urgent needs of Americans who suffer the compound burdens of illness and advanced age. With best wishes. Sincerely,

FRANK E. Moss, Chairman, Subcommittee on Long-Term Care.

APPENDIX 10

TABLE 2.-NATIONAL HEALTH EXPENDITURES, BY TYPE OF EXPENDI.

TURE AND SOURCE OF FUNDS, FISCAL YEARS 1972–73 THROUGH 1973–74

(in millions)

COMMITTEE ON THE JUDICIARY

93d Congress, 18t Session

JAMES 0. EASTLAND, Mississippi, Chairman JOHN L. MCCLELLAN, Arkansas

ROMAN L. HRUSKA, Nebraska SAM J. ERVIN, JR., North Carolina

HIRAM L. FONG, Hawaii PHILIP A. HART, Michigan

HUGH SCOTT, Pennsylvania EDWARD M. KENNEDY, Massachusetts STROM THURMOND, South Carolina BIRCH BAYH, Indiana

MARLOW W. COOK, Kentucky QUENTIN N. BURDICK, North Dakota CHARLES MCC. MATHIAS, JR., Maryland ROBERT C. BYRD, West Virginia

EDWARD J. GURNEY, Florida JOHN V. TUNNBY, California

SUBCOMMITTEE ON CONSTITUTIONAL AMENDMENTS

BIRCH BAYH, Indiana, Chairman QUENTIN N. BURDICK, North Dakota HIRAM L. FONG, Hawaii ROBERT C. BYRD, West Virginia

ROMAN L. HRUSKA, Nebraska
JOHN V. TUNNEY, California

STROM THURMOND, Soutb Carolina
QUENTIN N. BURDICK, North Dakota MARLOW W. COOK, Kentucky
JOHN V. TUNNEY, California

HUGH SCOTT, Pennsylvania