Proposed Medicare Change Would Create Long-Term Care Benefit

A federal lawmaker on Wednesday rolled out a plan to provide a long-term care benefit as part of Medicare, citing the aging U.S. population and skyrocketing costs.

Rep. Frank Pallone, a New Jersey Democrat, unveiled the Medicare Long-Term Care Services and Supports (LTSS) Act, a discussion draft of a bill that would expand Medicare coverage for skilled nursing, home health, and other services.

“The growing need for long-term care is one of the greatest threats to retirement security for American seniors, and the adult children who care for them,” Pallone said in a statement announcing the plan. “It’s time to expand Medicare to include a long-term care benefit so that millions of seniors and individual with disabilities no longer have to face financial ruin before they get assistance.”


The draft bill calls for the creation of cash-based “Qualified Individual Long-Term Care Benefit Accounts,” which Medicare beneficiaries could use to pay for any long-term care of their choosing — including a stay at a skilled nursing facility, the use of home aides, or respite care.

As currently structured, the benefit would incentivize the use of home health services — “the setting where most people want to be, and with family support” — though Pallone’s statement emphasized that nursing homes are still part of the equation.

Pallone framed the legislation as both an improvement of the Medicare system and a way to ease the strain on Medicaid, the largest payor for skilled nursing services; in general, Medicare only covers skilled nursing care after a hospital stay and only for a limited time. Many recipients of long-term care end up spending down their savings and then relying on Medicaid, initially developed for low-income Americans and those with disabilities, to cover the cost.


LeadingAge, a nationwide trade group for non-profit long-term care providers, applauded Pallone’s proposal.

“We firmly believe that the nation’s current methods for financing LTSS are unsustainable, irrational, and unfair for individuals and families,” LeadingAge President Katie Smith Sloan said in a statement. “We commend Rep. Pallone for proposing a new Medicare long-term care benefit that addresses this critical issue.”

Written by Alex Spanko

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