Long-Term Services and Supports Reform

Publication Date

Jan 16, 2025

While the likelihood of needing any long-term services and supports (LTSS) is roughly a coin flip, the cost if one needs assistance for a long period of time can be catastrophic. For example, about one-in-five Americans turning age 65 today will have long-term care costs exceeding $200,000. For older persons with few resources, Medicaid will pay for most of the costs, while those with more resources will pay a greater share of the costs out-of-pocket. This project describes and compares three reform proposals designed to address the need for, and costs of, LTSS: the Washington State Long-Term Care Trust Act, the Well-Being Insurance for Seniors to be at Home (WISH) Act, and the Medicare Long-Term Care Services and Supports Act. Major program features are compared and the tradeoffs across features from the perspective of consumers, program costs, and administration are discussed. Actuarial modeling of the WISH Act and alternatives are undertaken to determine costs and the impact of variations in key assumptions. The baseline cost of the WISH Act is 2.2% of taxable payroll. The cost of alternatives ranges from 0.4% to 0.6% of taxable payroll for limited front-end designs, and from 0.9% to 1.4% for back-end approaches, including one providing a $10,000 cash benefit in addition to catastrophic coverage.

This research was conducted under contract #HHSP233201500039I between HHS/ASPE’s Office of Behavioral Health, Disability, and Aging Policy (BHDAP) and Research Triangle Institute (RTI). RTI subcontracted with Milliman Inc. for actuarial analysis. Additional research in this area is available at the ASPE Long-Term Services & Supports/Long-Term Care page.

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