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The Drawbacks to Privately Run Long-Term Care

A healthcare adjustment is underway in many states: a strong effort to slow down the increasing Medicaid cost of long-term care as people live longer and survive more disabling conditions.

At least 26 states, including New York, are implementing mandatory programs that put billions of dollars in privately managed long-term care plans, in the hopes that people will be able to stay in their homes longer, expanding alternatives to nursing homes.

So far the efforts have been successful, servicing a quarter more people with inexpensive home and community services. However, a closer look at Tennessee, one of the states implementing these programs, reveals hidden drawbacks of the system. The system comes under the pressures of cost containment and profit motive. In many cases, care was denied after needs grew costlier, including care that people would have received under the old system.

Gordon Bonnyman, former director of the Tennessee Justice Center says that too high a price is being paid by incapacitated people denied care when they need it most. The new program gives the disabled an alterative to nursing homes. They are able to stay home with daily help, and go to a nursing home later if necessary. Medicaid pays a fixed monthly sum to an insurance company to cover and coordinate future care. However, if the elderly individual develops a serious health issue such as dementia, the state and the insurer may deny their application for nursing home placement and they may eventually lose their home care as well. Thousands of applicants have been deemed not disabled enough for Medicaid to pay for any nursing home care as a result of these tighter rules.

The recent change drastically raised the disability threshold required to be accepted into a nursing home, or to get equivalent care at home. State officials say that this is the only way to double the proportion of Medicaid recipients served outside nursing home.

Proper planning is essential to making sure that your loved one receives the long-term health care he or she needs and that the family’s assets are protected in order to see that the continuation of care is provided for as long as necessary. Before making a move for your elderly loved one, schedule a meeting with an experienced Finkelstein & Partners elder law attorney to discuss the options and make the decision that’s best for your family member. 

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