There is a significant debate about prescription drug coverage for the elderly. It figured prominently in the Presidential race with both candidates promising to implement a plan if elected.

While prescription drug coverage is clearly the front burner issue, it is but one part of a larger question: how to finance care for an ever-increasing number of frail elders.

The National Academy of Elder Law Attorneys (NAELA) has weighed in on the issue with a White Paper on Reforming the Delivery, Accessibility and Financing of Long-Term care in the United States.

The report states the existing long-term care system lacks many, if not most, of the features that the system should have: "Perhaps the greatest failing of the current system is the focus of available resources on care in the most acute and expensive setting, the nursing home. This focus has resulted in the wholly inadequate development and support of long-term care in other settings, including people's own homes and less restrictive residential settings such as assisted living facilities and board and care homes. This focus minimizes personal independence and maximizes cost. The limited long-term care services which do exist outside of nursing homes are under-funded, riddled with gaps in essential services, and virtually bereft of quality assurance."

Although long-term care is a problem that affects all economic strata in the United States, NAELA states financing long-term care is a uniquely middle class problem. The very wealthy have the resources to pay for it; the poor have Medicaid.

Long-term care is expensive. According to the U.S. Census Bureau, the average cost of a stay in a nursing facility is $51,000 a year ($140/day), and the average length of stay is 2.3 years. This cost can be $73,000 a year ($200/day) or more in large urban areas.

As many families are shocked to learn, neither private health insurance nor Medicare covers the costs of most long-term care services. According to the Health Care Financing Administration (HCFA), in 1996 only about 11% of nursing home revenues were derived from Medicare and Medicare Supplemental Insurance. As a consequence, persons requiring long-term care must pay for this care from their own savings until they are sufficiently impoverished to qualify for Medicaid.

Residents' income and savings pay for thirty-seven percent of nursing home expenditures. Persons requiring facility-based long-term care must spend down their assets to $2,000. The high cost of nursing home care has resulted in over 50% of those persons who enter a nursing home paying privately for services until their resources are exhausted; they then rely on the federal-state Medicaid program for care.

In 1997 alone, Medicaid spent $56.1 billion on long-term care, including $32.5 billion for nursing home services and $10 billion for intermediate care facility expenses for the mentally retarded. Medicaid thus has become the primary payer for long-term care in our country, causing a tremendous strain on federal and state budgets.

The Paper makes two good points in its introduction. First, long term care is not just nursing home care. "Long-term care refers to a wide range of medical and personal services needed by individuals who have lost some capacity of caring for themselves due to functional limitations or chronic health conditions. These services include: skilled nursing care, sub-acute care, respite care, rehabilitation and assistance with activities of daily living such as transferring, bathing, dressing, toileting, meal preparation and housekeeping. These services can be provided in a variety of settings including nursing facilities, assisted living facilities, adult day care facilities, congregate living facilities, continuing care retirement communities, or one's own home."

Secondly, they make the point that the current system of financing medical care favors acute care and disfavors chronic care and is thus disease discriminatory. Most Americans with chronic illnesses impoverish themselves paying for their care, at which point Medicaid pays for their care. For example, Medicare covers bypass surgery. However, Alzheimer's disease is not covered under Medicare and an Alzheimer's victim must become destitute before receiving Medicaid coverage.

NAELA recommends that the Medicare program be expanded to become the primary provider of long-term care based on level of disability (physical, mental, cognitive). They state it should be financed through the current system with increases in the payroll tax and premiums and through dedication of receipts from the Federal Estate and Gift Tax.

Highlights of NAELA's proposal include the following:

1. A commitment to a guaranteed defined benefit for all Medicare beneficiaries.
2. A recognition of the growing number of elders who are living longer with chronic conditions.
   
3. A commitment to adequately fund care for chronic and long term conditions.
4. An emphasis on the need to support a continuum of care, including long term care provided in various settings.
   
5. An honest recognition of the serious gaps in current public and private approaches to financing long term care.
   
6. A fair and equitable structure for beneficiary contributions with lifetime out-of-pocket payment limits (which recognizes gaps in coverage, the role of co-payments and deductibles, and provides special consideration for low-income persons).

While one may take issue with some of NAELA's recommendations, no one can take issue that this is a growing problem in search of a solution.

A full copy of the report may be found on NAELA's web site: http://www.naela.org. For further information on NAELA, call 1-520-881-4005.