Centering Equity in Long-Term Services and Supports
A Primer on Financing Models
The American long-term services and supports (LTSS) system perpetuates existing racial, gender, age, and ability inequities.
Older adults and people with disabilities are forced to impoverish themselves to qualify for the Medicaid LTSS coverage they need. Direct care workers make poverty-level wages that prevent them from earning a living. And family caregivers often must sacrifice their own financial security and health in order to care for their loved ones. The devaluation of these populations within our LTSS system prevents the growth of generational wealth—a primary source of wealth in the U.S.1—and has long-term negative effects on the health and happiness of LTSS consumers, direct care workers, and family caregivers.
Policymakers must explore financing models that create a more equitable LTSS system while meeting the political realities of their environments—whether the model is implemented at a state or federal level. Four models include:
PRIVATE LTSS INSURANCE: Private insurance companies provide coverage to individuals who pay premiums. This model tends to exclude lower-income individuals who cannot afford the premiums.
SAFETY NET: The government provides LTSS coverage to individuals who fall below a certain income and asset level (as is done through the Medicaid program). This model can force those of moderate means who would not otherwise qualify to impoverish themselves to meet qualification thresholds.
SOCIAL INSURANCE: Individuals contribute taxes toward a government-run program through which they can access benefits as needed. While this model can work well for older adults who have had time to pay into the program, it does not always meet the needs of younger people with disabilities.
UNIVERSAL COVERAGE: The government provides LTSS coverage to all who need it. Generally financed through general revenues and taxes, this model is the most expensive to maintain but also tends to be the most equitable.
While each model has its pros and cons, policymakers must center equity considerations when choosing one. No matter which model is used, a more equitable financing system is essential to support the millions of Americans who rely upon this system.