Medicare Beneficiaries with Physical/Cognitive Impairments and Nursing Home Placement

here.Last month the Commonwealth Fund published an issue brief about the correlation between Medicare beneficiaries with Physical and/or cognitive impariments and the connection to Medicaid and nursing home placements. With all the talk about changes to Medicare and Medicaid, this is a timely topic (but it always is timely), Risks for Nursing Home Placement and Medicaid Entry Among Older Medicare Beneficiaries with Physical or Cognitive Impairment. Here is the abstract:

Issue: More than half of individuals who age into Medicare will experience physical and/or cognitive impairment (PCI) at some point that hinders independent living and requires long-term services and supports. As a result of Medicare’s limits on covered services, Medicare beneficiaries with PCI experience financial burdens and reduced ability to live independently. Goal: Describe the characteristics and health spending of Medicare beneficiaries with PCI and estimate the likelihood of Medicaid entry and long-term nursing home placement. Methods: The Health and Retirement Study 1998–2012 is used to estimate long-term nursing home placement, as well as Medicaid entry. The Medicare Current Beneficiary Survey 2012 provides information on health care spending and utilization. Key findings and conclusions: Almost two-thirds of community-dwelling Medicare beneficiaries with PCI have three or more chronic conditions. More than one-third of those with PCI have incomes less than 200 percent of the federal poverty level but are not covered by Medicaid; almost half spend 10 percent or more of their incomes out-of-pocket on health care. Nineteen percent of individuals with PCI and high out-of-pocket costs entered Medicaid over 14 years, compared to 10 percent without PCI and low out-of-pocket costs.

The brief offers background, data and analysis. For expediency, I’ve included the conclusion here. I recommend you read the entire brief.

This analysis finds that:

• A third of older adults have PCI in a given year; more than half of adults who age into Medicare will experience PCI over the remainder of their lifetimes. While the majority of older adults with PCI live in the community, they are at high risk for costly, long-term nursing home placement.
• Individuals with PCI often have multiple chronic conditions, resulting in high Medicare expenses and out-of-pocket spending. Those with high out-of-pocket spending as a proportion of income as well as PCI were at greater risk for spending down their resources and entering into Medicaid over a 14-year period, compared to those with PCI but without high out-of-pocket spending.
• The risk for Medicaid entry was greater for those at lower income levels at the beginning of the 14-year period. However, 14 percent of the highest-income group at baseline with high out-of-pocket spending and PCI entered Medicaid by the end of the follow-up period.

Improving financing for home and community-based care would help many beneficiaries with PCI continue to live independently and support families in helping them obtain the care they prefer. Our current health care system, which covers costly institutional services but not social support in the home, distorts the way Americans receive care as they age and die. After people with serious impairment become impoverished and qualify for Medicaid, they are covered for long-term nursing facility care. However, personal care services at home that might have prevented them from needing to turn to Medicaid or enter a nursing home are not covered by Medicare.

Intervening early to prevent nursing home placement and Medicaid enrollment may produce offsetting savings in Medicare and Medicaid. An accompanying brief describes two innovative approaches to providing long-term services and support benefits: a voluntary, supplemental benefit for home and community-based services for Medicare beneficiaries; and an expansion of the Medicaid Community First Choice program for people with incomes up to 200 percent of poverty. Both options show promise of maintaining independent living longer and avoiding costly long-term institutionalization and exhaustion of resources that result in Medicaid enrollment.

(citations omitted).

The brief is also available as a pdf here.