[Congressional Record Volume 155, Number 30 (Friday, February 13, 2009)]
[Senate]
[Pages S2323-S2325]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KERRY (for himself and Mr. Grassley):
  S. 434. A bill to amend title XIX of the Social Security Act to 
improve the State plan amendment option for providing home and 
community-based services under the Medicaid program, and for other 
purposes; to the Committee on Finance.
  Mr. KERRY. Mr. President, every day millions of Americans are faced 
with significant challenges when it comes to meeting their own personal 
needs or caring for a loved one who needs substantial support. Many 
elderly Americans and individuals of all ages with disabilities need 
long-term services and supports, such as assistance with dressing, 
bathing, preparing meals, and managing chronic conditions. They prefer 
to live and work in their community, and it is time that the Federal 
Government and states act as better partners to provide improved access 
to home and community-based long-term care services, HCBS.
  The Medicaid program, administered by the States but jointly financed 
with the Federal Government, is our nation's largest payer for long-
term care services. Medicaid spends about $100 billion per year on 
long-term services. Despite recognizing that per person spending is 
much lower in community settings, and that people generally prefer 
community services, Medicaid still spends 61 percent of its long-term 
services spending in institutional settings. This disparity is due, in 
large part, to a strong access and payment bias in the program for 
institutional care.
  Where Medicaid does offer HCBS, it is often in short supply, with 
more than 280,000 Medicaid beneficiaries on waiting lists for HCBS 
waiver services. Further, eligibility for HCBS waiver services requires 
beneficiaries to already have a very significant level of disability 
before gaining access, and they must meet a level of functional need 
that qualifies them for a nursing home. This not only contributes to 
the unmet needs of those in the community but it also prevents states 
from providing services that can help prevent beneficiaries from one 
day requiring high-cost institutional care. While institutionalized 
care may be an appropriate choice for some, it should be just that: a 
choice that individuals and families are allowed to make about the most 
appropriate setting for their own care.
  The result of Medicaid's ``institutional bias'' is that, according to 
the Georgetown Health Policy Institute, ``one in five persons living in 
the community with a need for assistance from others has unmet needs, 
endangering their health and demeaning their quality of life.'' This is 
simply unacceptable.
  The lack of long-term care options available to families has a 
significant impact on their lives. Many of my constituents are 
affected, as are countless Americans across the country. Take the 
parents living in Newton who continue to wait for their physically 
disabled daughter, Julia, to have the opportunity to live 
independently. Julia is a young adult and instead of starting out on 
her own, she must watch as her peers move away and begin their 
independent lives--something she yearns to do as well. Growing up, 
Julia was able to attend Newton schools and keep a similar schedule to 
other children in the community but now has limited social interaction, 
as there is no other option but to live at home with her parents. 
Julia's parents are her full time caregivers and would like to see her 
able to live in an environment more conducive to both her needs and 
their own. Community-based care or home-based care in an apartment she 
could share with a roommate are options Julia and her parents would 
mutually benefit from. As the opportunities for the future grow for her 
peers, Julia's options continue to shrink because housing and home-
based supports for adults with disabilities are limited at best. I have 
heard many stories similar to that of Julia, which emphasizes the 
urgency in which HCBS is needed. In addition to individual lives being 
put on hold, entire families must deal with the consequences of 
inadequate services available to their family members.

  Access to HCBS affects individuals in all stages of life, including 
Americans dealing with conditions such as Alzheimer's. Take Ann Bowers 
and Jay Sweatman for example. Without access to HCBS services, Jay, who 
suffers from early onset Alzheimer's, was forced to first move into 
assisted living and then a nursing home. By the time Jay was approved 
for HCBS it was too late and he was no longer able to live 
independently. Ann had worked tirelessly to coordinate her husband's 
care and get additional HCBS support but the process was so difficult 
that by the time help came, it was simply too late. This is just one 
case of many where early HCBS intervention would have not only saved 
time, money, and stress for family members, but would have made a 
significant impact on the quality of life and personal independence for 
Jay and Ann.
  Today I am introducing, with my colleague from the Finance Committee, 
Senator Grassley, the Empowered at Home Act, a bill that increases 
access to home and community-based services by giving states new tools 
and incentives to make these services more available to those in need. 
It has four basic parts.
  First, it will improve the Medicaid HCBS State Plan Amendment Option 
by giving states more flexibility in determining eligibility for which 
services they can offer under the program, which will create greater 
options for individuals in need of long-term supports. In return we ask 
that states no longer cap enrollment and that services be offered 
throughout the entire state.
  Second, the bill ensures that the same spousal impoverishment 
protections offered for new nursing home beneficiaries will be in place 
for those opting for home and community-based services. In addition, 
low-income recipients of home and community-based services will be able 
to keep more of their assets when they become eligible for Medicaid, 
allowing them to stay in their community as long as possible.
  Third, the Empowered at Home Act addresses the financial needs of 
spouses and family members caring for a loved one by offering tax-
related provisions to support family caregivers and promotes the 
purchase of meaningful private long-term care insurance.
  Finally, the bill seeks to improve the overall quality of home and 
community-based services available by providing grants for states to 
invest in organizations and systems that can help to ensure a 
sufficient supply of high quality workers, promote health, and 
transform home and community-based care to be more consumer-centered.
  I want to say a word about the Community Choice Act, legislation 
long-championed by Senator Harkin that would make HCBS a mandatory 
benefit in Medicaid. I am a strong supporter

[[Page S2324]]

and co-sponsor of this landmark legislation, and look forward to 
working for its enactment as soon as possible. The legislation I am 
introducing today seeks to supplement--not supplant--the Community 
Choice Act by increasing access to HCBS for those who are disabled but 
not at a sufficient level of need to qualify for nursing home services. 
These two complimentary bills will finally make HCBS a right while 
vastly improving HCBS availability to vulnerable citizens of varying 
levels of disability.
  I would also like to thank a number of organizations who have been 
integral to the development of the Empowered at Home Act and who have 
endorsed it today, including the National Council on Aging, the 
American Association of Retired Persons, AARP, the Arc of the United 
States, United Cerebral Palsy, the American Association of Homes and 
Services for the Aging, the Alzheimer's Association, the National 
Association of Area Agencies on Aging, the American Geriatrics Society, 
ANCOR, the Trust for America's Health, and SEIU.
  Improving access to a range of long-term care services for the 
elderly and Americans of all ages with disabilities is an issue that 
must not stray from our Nation's health care priorities. I believe this 
legislation can move forward in a bi-partisan manner to dramatically 
improve access to high-quality home and community-based care for the 
millions of Americans who are not receiving the significant supports 
and services they need.
  Mr. GRASSLEY. Mr. President, I am pleased to join my colleague 
Senator Kerry today to re-introduce the Empowered at Home Act for the 
111th Congress. This bill is a continuation of efforts that I undertook 
in 2005 and again in 2008 to improve access to home and community based 
services for those needing long-term care. This is an important piece 
of legislation that continues our efforts to make cost-effective home 
and community based care options more available to those who need it.
  In 2005, I introduced the Improving Long-term Care Choices Act with 
Senator Bayh. That legislation set forth a series of proposals aimed at 
improving the accessibility of long-term care insurance and promoting 
awareness about the protection that long-term care insurance can offer. 
It also sought to broaden the availability of the types of long-term 
care services such as home and community-based care, which many people 
prefer to institutional care.
  The year 2005 ended up being a very important year for health policy 
as it relates to Americans who need extensive care. In the Deficit 
Reduction Act of 2005, Congress passed into law the Family Opportunity 
Act, the Money Follows the Person initiative, and many critical pieces 
of the Improving Long-term Care Choices Act. With the bill I am re-
introducing today with Senator Kerry, I hope to set us on the path to 
completing the work we started in 2005 and continued in 2008.
  Making our long-term care system more efficient is a critical goal as 
we consider the future of health care. There are more than 35 million 
Americans, roughly 12 percent of the U.S. population, over the age of 
65. This number is expected to increase dramatically over the next few 
decades as the baby boomers age and life expectancy increases. 
According to the U.S. Administration on Aging, by the year 2030, there 
will be more than 70 million elderly persons in the United States. As 
the U.S. population ages, more and more Americans will require long-
term care services.
  The need for long-term care will also be affected by the number of 
individuals under the age of 65 who may require a lifetime of care. 
Currently, almost half of all Americans who need long-term care 
services are individuals with disabilities under the age of 65. This 
number includes over 5 million working-age adults and approximately 
400,000 children.
  Long-term care for elderly and disabled individuals, including care 
at home and in nursing homes, represents almost 40 percent of Medicaid 
expenditures. Contrary to general assumptions, it is Medicaid, not 
Medicare that pays for the largest portion of long-term care for the 
elderly. Over 65 percent of Medicaid long-term care expenditures 
support elderly and disabled individuals in nursing facilities and 
institutions. Although most people who need long-term care prefer to 
remain at home, Medicaid spending for long-term care remains heavily 
weighted toward institutional care.
  Section 6086 of the Deficit Reduction Act of 2005, DRA, P.L. 109-171, 
was based on the Improving Long-term Care Choices Act. The DRA 
provision authorized a new optional benefit under Medicaid that allows 
states to extend home and community-based services to Medicaid 
beneficiaries under the section 1915(i) Home and Community-Based 
Services State Option. Under this authority, states can offer Medicaid-
covered home and community-based services under a state's Medicaid plan 
without obtaining a section 1915(c) home and community-based waiver. 
Eligibility for these section 1915(i) services may be extended only to 
Medicaid beneficiaries already enrolled in the program whose income 
does not exceed 150 percent of the Federal poverty level.
  To date, only one State, my own state of Iowa, has sought to take 
advantage of the provision authorized through the DRA. While we had 
hoped far more states would participate, we know that the relatively 
low income cap, 150 percent, in the DRA provision creates an 
administrative complexity that has not made the option appealing for 
states.
  The bill we are re-introducing today mirrors the one we introduced in 
2008 during the 110th Congress. In this bill, the income eligibility 
standard would be raised for access to covered services under section 
1915(i) to persons who qualify for Medicaid because their income does 
not exceed a specified level established by the state up to 300 percent 
of the maximum Supplemental Security Income, SSI, payment applicable to 
a person living at home. This will significantly increase the number of 
people eligible for these services. States will be able to align their 
institutional and home and community-based care income eligibility 
levels.
  The bill would also establish two new optional eligibility pathways 
into Medicaid. These groups would be eligible for section 1915(i) home 
and community-based services as well as services offered under a 
state's broader Medicaid program. Under this bill, states with an 
approved 1915(k) state plan amendment would have the option to extend 
Medicaid eligibility to individuals: who are not otherwise eligible for 
medical assistance; whose income does not exceed 300 percent of the 
supplemental security income benefit rate; and who would satisfy state-
established needs-based criteria based upon a state's determination 
that the provision of home and community-based services would 
reasonably be expected to prevent, delay, or decrease the need for 
institutionalized care. Under this new eligibility pathway, states 
could choose to either limit Medicaid benefits to those home and 
community-based services offered under section 1915(k) or allow 
eligibles to access services available under a state's broader Medicaid 
program in addition to the 1915(k) benefits. These changes will give 
the states the option of exploring the use of an interventional use of 
home and community-based services. If states have the flexibility to 
provide the benefit as contemplated in the bill, they can try to delay 
the need for institutional care and keep people in their homes longer.
  As the number of Americans reaching retirement age grows 
proportionally larger, ultimately the number of Americans needing more 
extensive care will grow. Many of these Americans will look to Medicaid 
for assistance. States need more tools to provide numerous options to 
people in need so that they can stay in their own homes as long as 
possible.
  The cost of providing long-term care in an institutional setting is 
far more expensive care than providing care in the home. States will 
benefit from having options before them that allow them to keep people 
appropriately in home settings longer. The more States learn how to use 
those tools, the more States and ultimately the Federal taxpayer will 
benefit from reduced costs for institutional care.
  I am also pleased that this bill will include key provisions from S. 
2337, the Long-Term Care Affordability and Security Act of 2007. The 
bill includes important tax provisions that I introduced in previous 
Congresses as well,

[[Page S2325]]

the Improving Long-term Care Choices Act of 2005, introduced in the 
109th Congress.
  Research shows that the elderly population will nearly double by 
2030. By 2050, the population of those aged 85 and older will have 
grown by more than 300 percent. Research also shows that the average 
age at which individuals need long-term care services, such as home 
health care or a private room at a nursing home, is 75. Currently, the 
average annual cost for a private room at a nursing home is more than 
$75,000. This cost is expected to be in excess of $140,000 by 2030.
  Based on these facts, we can see that our nation needs to prepare its 
citizens for the challenges they may face in old-age. One way to 
prepare for these challenges is by encouraging more Americans to obtain 
long-term care insurance coverage. To date, only 10 percent of seniors 
have long-term care insurance policies, and only 7 percent of all 
private-sector employees are offered long-term care insurance as a 
voluntary benefit.
  Under current law, employees may pay for certain health-related 
benefits, which may include health insurance premiums, co-pays, and 
disability or life insurance, on a pre-tax basis under cafeteria plans 
and flexible spending arrangements, FSAs. Essentially, an employee may 
elect to reduce his or her annual salary to pay for these benefits, and 
the employee doesn't pay taxes on the amounts used to pay these costs. 
Employees, however, are explicitly prohibited from paying for the cost 
of long-term care insurance coverage tax-free.
  Our bill would allow employers, for the first time, to offer 
qualified long-term care insurance to employees under FSAs and 
cafeteria plans. This means employees would be permitted to pay for 
qualified long-term care insurance premiums on a tax-free basis. This 
would make it easier for employees to purchase long-term care 
insurance, which many find unaffordable. This should also encourage 
younger individuals to purchase long-term care insurance. The younger 
the person is at the time the long-care insurance contract is 
purchased, the lower the insurance premium.
  Our bill also allows an individual taxpayer to deduct the cost of 
their long-term care insurance policy. In other words, the individual 
can reduce their gross income by the premiums that they pay for a long-
term care policy, and therefore, pay less in taxes. This tax benefit 
for long-term care insurance should encourage more individuals to 
purchase these policies. It certainly makes a policy more affordable, 
especially for younger individuals. This would allow a middle-aged 
taxpayer to start planning for the future now.
  Finally a provision that is included in our bill that I am really 
pleased with is one that provides a tax credit to long-term caregivers. 
Long-term caregivers could include the taxpayer him- or herself. 
Senator Kerry and I recognize that these taxpayers--who have long-term 
care needs, yet are taking care of themselves--should be provided extra 
assistance. Also, taxpayers taking care of a family member with long-
term care needs would also be eligible for the tax credit. These 
taxpayers should be given a helping hand. As our population continues 
to age, the least that we can do is provide a tax benefit for these 
struggling individuals.
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