Health Insurance

The Growing Need for Better Home Health Care

The Growing Need for Better Home Health Care

Despite its failure, the recent appearance of Maine’s 'universal home care' referendum highlights a growing need for improved in-home and personal health care services. Moreover, Medicare Advantage plans will be able to cover a variety of in-home care services for the first time in 2019.
Midsection of nurse using tablet pc in hospital
Midsection of nurse using tablet pc in hospital Source: Getty Images

This past midterm election, the state of Maine voted "no" to a referendum that would've launched a first-of-its-kind, state-managed program for providing free home care services to disabled and senior residents in need of long-term care. In this "universal home care" program, funding would've been achieved through the addition of a 3.8% income tax on state residents earning more than $128,400 a year.

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The program also planned to improve the pay, training and overall working conditions of home care workers, an occupation that is expected to surge over the next decade in proportion with the nation's fast-aging population. The program would have not only been a boon for home care workers but also would have covered an estimated 27,000 Maine residents who need long-term care. Despite its failure, the recent appearance of Maine's universal home-care referendum highlights our growing need for an improved home health-care system.

What's driving the demand for better home care?

The map on the left shows which states have the greatest share of senior residents, and the map on the right shows which states spend the most on long-term care per senior resident, both compared to the national average.

States with the highest long-term care costs per senior

An estimated 10,000 baby boomers retire every day, and the country's growing share of senior citizens is expected to double health-care costs by 2020 from the increased demand for long-term care and support services. Federal and state-funded Medicaid covers the majority of long-term care expenses. In 2017, $118B of Medicaid funds were spent on long-term care services nationwide, with disabled and senior residents comprising the largest share of beneficiaries.

On average, states dedicated roughly $2.4B of their annual Medicaid spending on long-term care costs. Maine's proposal comes as no surprise, since the state has the second-largest share of senior residents, age 65 and older, in the U.S., only second to Florida. Long-term care costs per senior are also high for Maine, at $3.5K per senior. However, Alaska, Connecticut and North Dakota's long-term care costs are much higher. These three states individually spend more than double the average cost of long-term care per senior, despite their lower proportions of older Americans compared to states like Maine and Florida.

With the nation projected to have more adults above the age of 65 than children by 2035, for the first time in U.S. history, a universal home-care plan sounds like a step in the right direction. However, the plan was not without its flaws, which led to its denial. One interesting argument that opponents made against the plan was that the tax hike would incentivize high-income workers to leave the state, which would, unfortunately, include skilled health-care professionals.

Top 10 professions who would fund 'universal home care'

Using data from the Bureau of Labor Statistics, we looked at who most of the funding for state-run home care would come from by applying a version of Maine's Universal Home Care Plan to all states, i.e., an additional 3.8% income tax on workers making greater than $130,000 a year in each state.

The Top 10 Professional Groups Who Would Fund 'Universal Home Care'

General and operations managers comprise the largest share of high-income taxpayers; however, the next largest professional group subject to a tax hike would be physicians and surgeons. Higher taxes on skilled health-care professionals was a definite concern raised during debates over Maine's referendum. In fact, when looking at Maine's state-specific professionals, physicians and surgeons account for the largest professional group who would have funded the program at roughly 21% of the workers who would incur a tax hike.

Support from health insurance increasing, but slowly

Beginning in 2019, Medicare Advantage plans will be allowed to cover in-home care services, providing additional financial assistance to seniors who need personalized care. However, relatively few plans will offer these supplemental benefits next year — approximately 2% will cover in-home support and personal-care services and one-third will cover caregiver support services. Experts believe these benefits could gain a lot more traction with insurers over the next two to three years or so.