Policy Update

Elder Care Shifts to Home-Based Options

A recent Wall Street Journal article examined how, for the past 40 years, "federal funding decisions have been tilted toward putting people in nursing homes," but have recently changed, "driven both by cost and longer life spans," according to the article. Historically, nearly 90 percent of Medicaid's long-term care expenditures have gone to institutional care (Source: AARP). But last year, a study of about 530,000 Medicaid beneficiaries conducted by researchers at the University of California, San Francisco found that, on average, those who received home care rather than institutional care cost Medicaid $15,000 less.

Legislators are taking notice. Under a new law that will take effect next year, states will be able to spend Medicaid funds for home and community care for elderly beneficiaries. Family caregivers know that such action is long overdue. "We have asked people where they want to grow old. They say they want to stay where they are, in their own homes," said Elizabeth Clemmer, associate director of the AARP Public Policy Institute. Read More

Adult Day Care Services Demonstration Program for Medicare Beneficiaries

The Centers for Medicare & Medicaid Services recently announced a new three-year demonstration program for medical adult day care services for Medicare beneficiaries. Up to 15,000 beneficiaries may participate at any one time, and home health agencies in five as-yet undetermined states, possibly including California, will be paid 95 percent of the home health payment rate. Beneficiaries will not be charged out of pocket for the services (Currently, Medicare beneficiaries do pay this kind of expense out of pocket.)

"This demonstration will allow Medicare to assess whether providing medical adult day care services as part of the home health benefit will improve patient outcomes and increase patient satisfaction," said CMS Administrator Mark B. McClellan, M.D., Ph.D. For family caregivers, who often use these services for much-needed respite, it's a step in the right direction. Read More

Senators Introduce Legislation to Waive Medicare Part D Enrollment Penalty

A bipartisan group of U.S. Senators recently introduced a bill to waive the Medicare Part D late enrollment penalty. The first sign-up period ended May 15, and under the current policy, those who did not sign up would be charged a 1 percent increase in premiums for each month of delayed enrollment. The move, which is opposed by the White House, is designed to encourage more beneficiaries to sign up during the next enrollment period, beginning November 15.

Senate Finance Committee Chair Chuck Grassley (R-Iowa), who is the primary sponsor of the bill, said, "We can help more seniors choose to sign up by waiving the enrollment penalty. It stands to reason that it takes time for people to learn about benefits available to them. The more participants in Medicare Part D, the better for both the program's strength and seniors' quality of life." Medicare Part D continues to spark controversy in Washington, with the Bush Administration and many Republicans heralding the new program as a success, while the Democrats brand it a failure. Read More

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