On October 8, 2024, Vice President Harris proposed expanding Medicare to provide home health care to help families struggling with the costs of long-term care. If passed, it would be the first major expansion of Medicare since the Medicare Modernization Act of 2003, which added prescription drug benefits to the program.
Vice President Harris is proposing creating a new home health benefit for Medicare-eligible people. Under the proposal, Medicare recipients would be eligible for new benefits if they are unable to perform activities of daily living such as bathing or eating, or if they have a severe cognitive impairment such as Alzheimer's disease. Although the proposal has not been fully fleshed out, the benefit “recognizes that the vast majority of older adults who require long-term care can live at home with an average of 20 hours or less of care per week.” , approximately 20 hours a week. The new benefits include cost-sharing requirements that vary by income. The proposal notes that similar home care proposals are estimated to cost about $40 billion annually, before considering potential savings from reduced use of hospital and nursing home care. I am.
Additionally, the proposal would expand Medicare coverage to include vision and hearing and eliminate the practice known as “estate recovery,” in which Medicaid recovers the cost of home health care from the sale of a deceased person's home and real estate (discussed below). ). The proposal would expand the Medicare Drug Bargaining provisions of the Inflation Control Act to cover the additional costs of the new benefits. Expand discounts offered by pharmaceutical companies on certain branded drugs. Strengthening requirements for pharmacy benefit managers related to price transparency and competition. and by implementing international tax reform.
KFF estimates that 14.7 million Medicare beneficiaries (23% of local residents) could qualify for the new Medicare home care benefit. This estimate is based on eligibility criteria used in similar proposals: two or more limitations in activities of daily living and/or severe cognitive impairment. The number of people eligible for this benefit may increase or decrease depending on how eligibility criteria is defined, and not everyone eligible for the program will have access to the new benefit. This estimate is based on an analysis of the 2022 Medicare Current Beneficiary Survey and excludes beneficiaries residing in nursing homes and other long-term facilities (see Methodology).
Former President Trump supports “home-based care for the elderly,'' but has not made any concrete proposals. Former President Trump has proposed “putting resources back into home-based elder care” to address disincentives that contribute to labor shortages and support unpaid family caregivers through tax credits. It's unclear whether President Trump's proposal would apply to people with disabilities who rely on home care, whether it would make changes to Medicare or Medicaid, or how it would align with proposed broader cuts to the Medicaid program. While Vice President Harris' fact sheet focuses on older adults, this proposal would expand Medicare coverage to include both adults age 65 and older and younger adults with disabilities, including Medicare beneficiaries with disabilities. This suggests that people also qualify for the new benefits.
Under current law, Medicare coverage of home health care is quite limited. Medicare covers home health aide services for people who are “homebound” and need skilled services on a part-time or intermittent basis, such as nursing or physical therapy. Because skilled care is required, Medicare does not cover home care for many people who require ongoing assistance due to limitations in activities of daily living or cognitive impairment, but they also require skilled services. plug.
Medicaid pays for two-thirds of home health spending in the United States, but its coverage rules are complex and coverage is limited to people with limited financial means. Most Medicaid home care services are provided at state option, and optional services can result in variable benefits available. About 700,000 people are on waiting lists for home care because the number of people seeking services exceeds the number of people the state can serve.
People who require home care and other long-term care services often pay large out-of-pocket costs (see Figure 1). These costs often exceed the median income of Medicare beneficiaries (approximately $36,000 per beneficiary in 2023) and exceed median savings ($103,800 per beneficiary in 2023). It may run out quickly. More than half of people who have used long-term care or paid for a loved one's care have reduced their spending on food, clothing, or basic household items as a result of these costs, according to a KFF poll. reported the need to do so.
Vice President Harris' proposal would also expand Medicare to include vision and hearing. Under current law, traditional Medicare does not cover prescription eyeglasses (glasses/contacts) or hearing aids, which can be prohibitively expensive for people living on a fixed income. Hearing and vision difficulties are relatively common among Medicare beneficiaries, with nearly half (44%) of beneficiaries reporting hearing difficulties and more than one-third (35%) reporting hearing difficulties in 2019. Reported difficulty with vision. Hearing and vision benefits provided by Medicare are typically limited. Advantage plans, but the scope, value, and provider network of these benefits vary widely from plan to plan. Traditional Medicare beneficiaries may receive some hearing and vision benefits if they also have additional coverage under Medicaid, employer- or union-sponsored retiree health benefits, or other types of insurance. It may be available.
In addition to changes to Medicare, Vice President Harris has proposed eliminating the practice of Medicaid recouping the cost of home health care from the sale of a deceased person's home or property. Under the Medicaid Estate Recovery System, states are required to recover the costs of long-term care and related hospital and prescription drug services for Medicaid enrollees age 55 and older, as well as for other services and populations. There are options for collection. Harris' proposal proposes working with Congress to end Medicaid estate collections or, if Congress fails to act, to take administrative action to expand the circumstances under which families are exempt.
The practice of estate recovery has been criticized for several reasons, including that it is imposed primarily on individuals with limited income, provides little revenue, and is applied very unevenly across states. Democrats have recently proposed eliminating estate recovery, while Republicans have recently proposed amending the rules to prohibit it under certain circumstances.
Nearly every provision of Vice President Harris' proposal would require changes to the law. Without Congressional action, the new administration would not be able to create and fund new Medicare benefits for home health care, vision, and hearing. Generate savings by enacting changes to the Medicare prescribing provisions of the Inflation Control Act. Eliminate Medicaid estate recovery. Or create new taxes. Both Democrats and Republicans have proposed bills to reduce the number of people waiting for Medicaid home health care and address Medicaid estate recovery issues, making this area more open to compromise. This suggests that there is a possibility. There is also bipartisan interest in strengthening oversight and transparency of pharmacy benefit managers (PBMs).
Many policy details will need to be worked out as the proposal moves through Congress. For example, in addition to providing more details on how to fully fund the benefit expansion, lawmakers face questions about how eligibility for new benefits will be determined. Probably. Who can receive compensation to provide new benefits? and how the new benefits interact with existing Medicare benefits and supplemental coverage provided through Medicaid or private insurance. Lawmakers are also likely to discuss how to support care workers, improve wages and address continuing labor shortages in the home care industry. The answers to these and other questions will affect the number of people saved and the cost.
The proposal includes new requirements that could be enacted without new legislation, including stronger requirements for pharmacy benefit managers related to price transparency and competition and expanding the circumstances under which families can qualify for Medicaid estate recovery exemptions. There are a few changes included.
method
This analysis uses the Centers for Medicare and Medicaid Services' Medicare Current Beneficiary Survey (MCBS) 2022 survey file (the most recent year available) to identify Medicare patients who may be eligible for proposed home care. Obtain data on number and percentage of beneficiaries. advantage. The analysis assumed that Medicare beneficiaries with two or more limitations in activities of daily living (ADL) or cognitive impairment were eligible. The MCBS is a nationally representative survey of Medicare beneficiaries.
This analysis is limited to community-dwelling Medicare beneficiaries and excludes beneficiaries residing in long-term care facilities and other residential facilities such as skilled nursing facilities and assisted living facilities.
For Medicare beneficiaries in the community, cognitive impairment is defined as at least one positive response to:
A physical, mental, or emotional condition that makes it extremely difficult to concentrate, remember, or make decisions. Have had trouble concentrating more than half the days or most days for the past two weeks.
Medicare beneficiaries in the community receive suggested home health care if they report difficulty performing two or more of the following ADLs due to physical, mental, emotional, or memory problems: Eligibility for benefits was defined as: bathing or showering, using a bed or chair in and out of bed, getting dressed, eating, using the toilet (including standing and sitting), or walking. At the time of the study, these problems may have been temporary or chronic.
