Subsidy being considered for long-term health care Elderly, disabled to be beneficiaries

February 21, 1993|By New York Times News Service

WASHINGTON -- The Clinton administration is considering a new government-subsidized program to provide long-term care to people with chronic illnesses or disabilities.

Elderly people have long sought federal help with the cost of long-term care, one of their biggest health expenses.

Confidential work papers from the President's Task Force on National Health Care Reform show that a major goal of the "new long-term care program" is to shift spending from nursing homes to "community-based services" that provide medical care and other types of assistance to people living in their own homes.

The planning is still in the early stages. No decisions have been made, and the cost of the new program has not been calculated. The elderly are the biggest users of long-term care, but the work papers show that the administration sees a need for such services among people of all ages.

"Whom do we plan to cover in this initiative?" asks the working group on long-term care, one of two dozen groups operating under the supervision of first lady Hillary Rodham Clinton.

"Disabled elderly. Physically disabled non-elderly. Mentally retarded, developmentally disabled." In addition, the working group says the "target population" includes people with AIDS.

The memorandum does not mention the 4 million people with Alzheimer's disease. But the working group is well aware of their needs because a vice president of the Alzheimer's Association, Steven R. McConnell, briefly served on the staff of the task force.

Mrs. Clinton's task force is considering potentially costly new benefits at the same time President Clinton is asking Congress to trim $62 billion from the projected growth of Medicare and Medicaid over the next five years.

The working group on long-term care evidently wants to encourage people to buy private insurance to cover the costs of such care, but it also assumes that there will be new federal costs. Though the work papers make no estimate of those costs, they show that the task force is considering new taxes to finance the new program, including estate taxes and payroll taxes.

Other options include general revenues, private insurance and personal savings, perhaps with new tax breaks for people who establish accounts earmarked for long-term care. The taxes would be above and beyond those proposed by Mr. Clinton during the past week: $251 billion over five years from higher individual and corporate taxes.

On Friday, Budget Director Leon E. Panetta said the administration probably would seek higher taxes on cigarettes and alcoholic beverages to help pay for the president's health plan.

Sen. John C. Danforth of Missouri, a moderate Republican, said it would be "extremely difficult" for Congress to pass new taxes for health care on top of those sought for deficit reduction.

Mr. Clinton has said he will submit his health plan to Congress by May 1. Lawmakers from both parties say the nation must control health costs before it can guarantee access to care for 35 million people without insurance, as Mr. Clinton has promised to do.

The work papers of the task force confirm that the administration is considering imposing "interim cost controls" on the health care industry, which accounts for one-seventh of the nation's economy, during the transition to a new health system.

The documents show that the task force is considering these options: a "freeze on health-care prices," controls on drug prices and federal limits on doctors' fees, hospital charges and private health insurance premiums. Again, no decisions have been made.

In the presidential campaign, Mr. Clinton had said: "No Americans should have to impoverish themselves to qualify for long-term health care," and he promised to expand long-term care.

As a model, Mr. Clinton cited an Arkansas program known as Elder Choices. This program, he said, "gives the elderly the right to take money previously available only for nursing home care and spend it instead on home health care, personal care, transportation to senior centers, nurses' services or attendance at an adult day care center."

Medicaid, the federal-state program for low-income people, covers 65 percent of the nation's 1.5 million nursing home residents. Many of these people were once in middle-income families, but to qualify for Medicaid they impoverished themselves, either by spending all their money for a nursing home or by giving away their assets.

More than 2.4 million people have bought insurance against the high cost of nursing home care, which averages more than $30,000 a year per person.

Medicaid is widely seen as a welfare program. Medicare is considered a form of social insurance because it is financed mainly through premiums and payroll taxes and is available to elderly and disabled people regardless of their income.

Medicare already covers hospital care and doctors' services.

In his budget last week, Mr. Clinton proposed eliminating a part of the Medicaid law that guarantees payment for "personal care services" to certain disabled people living at home. He said the change would save $5.8 billion over five years.

Elma L. Holder, director of the National Citizens' Coalition for Nursing Home Reform, said this proposal was "quite inconsistent with Clinton's campaign statements emphasizing his support for home and community-based care."

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