McKnight's September 16, 2024
Most of long-term care’s problems boil down to heavy dependency on low Medicaid reimbursement rates. The program paid 61% of total U.S. LTC spending in 2022 at about 70% of private-pay rates. Economists explain that government price fixing causes market disruptions. Set prices too low, and shortages occur.
Providers are forced to compensate by compromising on services. Most complaints about questionable LTC quality, high cost, inadequate staffing, caregiver shortages, too much nursing home and too little home care, all the big challenges would improve or disappear entirely if Medicaid paid market rates.
How did Medicaid come to dominate America’s LTC service delivery and financing system, often paying less than the cost of providing the care? Its enactment in 1965...
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