HB 4674: Michigan Long Term Care Study
Why HB 4674? Why long-term care? According to a 2013 US Census, Michigan is tied with only one other state for having the most counties with a median age over 50 and is generally getting older as a whole at a faster rate than many other states. The Census Bureau listed Michigan as the 10th oldest state nationwide with the age group of 65 to 74 growing the fastest. As this aging trend continues, individuals and families will face difficult choices about long-term care.
Those in Michigan needing long-term care have a few, often limiting ways to access and pay for care including Medicaid, Medicare, long-term care insurance, and paying for care out of their own resources. Because of high premiums, very few Americans have long-term care insurance. Nationally, only about 9 million long-term care insurance policies were in effect in 2005 and that number has dropped drastically in the last decade. Additionally, 17% of the state’s aging population is living at or below the poverty line, higher than the national average putting a further strain on people’s ability to afford care.
We know that most people prefer to receive long-term care at home; however, Michigan spends the majority of the state’s Medicaid funds on institutional care. According to Genworth’s 2015 report, the cost of nursing home care, about $99,000, for Michigan is higher than the national average and much more expensive than the cost of in-home care.
As Michigan’s population ages rapidly, the careforce needed to meet the demand is inadequately prepared. Many people needing care rely heavily on working family members. Michigan has over one million informal caregivers who perform over one billion hours of caregiving annually, a value of more than $14 billion 1
The economic impacts of our outdated care systems are cause for alarm. The financial stress of caregiving often causes changes in employment such as cutting back hours or, at times, complete loss of employment. In addition to losing money because of the inability to retain workers, businesses also suffer from the loss of productivity when family caregivers have to make these challenging choices.
According to SEMCOG, residents over the age of 65 are expected to make up about 24% of the region’s population by 2040. Improving access to long-term care based on need rather than age, income, or cause of disability is key as Michigan confronts the realities of its state. A statewide study researching new ways to share the responsibility of providing care for all in a way that reduces risk and shares cost, particularly for those who do not qualify for Medicaid or
1 The State of the States in Family Caregiver Support: A 50-State Study. State Profile: Michigan. San Francisco, CA: Family Caregiver Alliance (November, 2004). Available online at http://www.caregiver.org/caregiver/jsp/home.jsp
Medicare, is vital as Michigan prepares to meet the needs of its aging population and people with disabilities. Additionally, studying the workforce, both family and direct-care workers, particularly as it pertains to providing care in rural areas, is a necessary part of creating a real plan to address our state’s changing demographics.
HB 4674 offers an opportunity to do a rigorous needs assessment of long term care in Michigan and provide an actuarial analysis of potential solutions.
What does HB 4674 do? HB 4674 calls for a study that will assess the current landscape of long-term care needs including:
● What private and public services exist;
● What the costs for current services are;
● Who is accessing them and who is not;
● What are the challenges to accessing care, including the gaps in services;
● The impact that care has on the care workforce and family caregivers.
HB 4674 goes beyond researching the current landscape and actually explores real solutions.
The primary goal of this bill is to assess the cost and impact of three main proposals:
● A long-term care benefit for all Michiganders;
● A public-private risk-sharing insurance program that reimburses insurers;
● A long-term care benefit for those who do not qualify for Medicaid.
This bill will result in public hearings and a report that identifies the expected costs, benefits, and participation rates for each proposal. Additionally, this bill calls for a plan to recruit and retain the necessary workforce for the care we all need.
How much does this study cost? Other states that have done this study include Hawai’i and Washington with costs ranging from $250,000 to $400,000 respectively.