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Filling a Health-Care Gap

January 10, 1988

Encouraged by major grants from a foundation, four states--soon to be six--are studying the feasibility of providing long-term health-care insurance to fill one of two major gaps in the American health-care system.

California is not among them simply because there has been no leadership, no initiative--one might almost say no interest--on the part of Gov. George Deukmejian. A prerequisite for the grants was a demonstration on the part of a state of a commitment to and progress toward the development of insurance for long-term care.

The Robert Wood Johnson Foundation is financing this imaginative and important program with grants of up to $400,000 to each state selected for participation in the program. The first two grants went to Massachusetts and Connecticut, judged by experts to be far ahead of all other states in addressing this grievous problem. Two additional grants were announced at the end of the year for Indiana and Wisconsin. New York and New Jersey are expected to receive grants soon. The foundation has set aside funding for two additional states, but none have yet qualified.

In addition, the foundation is considering a trend-setting grant to the Huntington Memorial Hospital in Pasadena to permit its innovative Senior Care Network to study the feasibility of a life-care program that would seek to maintain participants within their own homes. It would follow the outline of a plan, already being tested under another Robert Wood Johnson grant in Philadelphia, focusing on home care--which many health-care professionals recognize as both more compassionate and more economical than institutional care.

These initiatives are particularly welcome at a time when the federal government is paralyzed by its preoccupation with budget deficits.

There are two huge gaps in health-care protection: the absence of health insurance of any sort for at least 30 million persons under the age of 65, and the extremely limited access to insurance for long-term care for the 38 million who are 65 and older.

Long-term care is a problem that is national in scope. Under Medicare, the basic health-insurance program for those 65 and older, there is virtually no coverage for long-term care in nursing homes. The only general program covering long-term nursing-home care is Medicaid, called Medi-Cal in California, which is the basic health-insurance program with joint state and federal support for low-income families. As a result, hundreds of older Americans each year, confronted with the high cost of nursing-home care, are forced to exhaust their life savings as they spend down to become eligible for Medicaid protection. A federal survey in 1986 found that there were 1.4 million elderly being sustained in nursing homes at an average cost of $22,000 a year.

About 70 commercial insurance companies are offering policies for long-term care, and an estimated 425,000 Americans have signed up. That is scarcely 1% of the 65-and-older population. These policies are so costly that only middle- and upper-income persons can consider the protection. Despite the high cost, most of the policies offer less than complete protection, requiring substantial co-payments and including strict limits on the time spent in a nursing home. Furthermore, many applicants find themselves rejected because of prior health problems.

The state studies that are being funded under the $3.2-million Robert Wood Johnson Foundation research program are focusing on public-private partnerships that would rely on private insurance policies, subsidized by the state for low-income families and for particular high-cost cases. Both nursing-home care and home care will be studied with a view to providing a range of coordinated services.

The three-year-old Senior Care Network at the Huntington Memorial Hospital already is offering some of those services, using a professional staff to coordinate a variety of community services for more than 500 persons in their homes. The net-work is seeking the study grant to explore the creation of life care at home--a program that would ensure its members full services as required through their remaining years. In contrast with residential life-care programs, however, the emphasis would be on maintaining the person in his or her home, although nursing-home care would be available as needed. Preliminary estimates of health-care experts suggest that the cost for this sort of program might be one-tenth that of an institutional life-care program.

Officials of the Department of Health and Human Services in Washington have shied away from initiatives for long-term care because of the emphasis on budget balancing. Some members of Congress are proposing action to establish a national program. We think that a national program, made available to all Medicare subscribers, would be by far the most effective and efficient way to provide this basic protection. But until that can be accomplished, the farsighted states that are leading the way will be models for a national program. For that the nation can be grateful.

It is disappointing that California, among the richest of the states, is not among those that are giving leadership. That may be remedied in the days ahead as Assemblyman Lloyd G. Connelly (D-Sacramento) completes an extensive study of a possible ballot initiative to provide sales-tax funding to fill some gaps in the state's health care that the executive branch has neglected.

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