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New Deloitte Report: Medicaid Long-Term Care is Ticking Time Bomb

Washington, D.C., June 21, 2010 — Without bold action, state governments’ obligation to their Long-Term Care (LTC) Medicaid enrollees may have the potential to debilitate government effectiveness, according to a new report by Deloitte’s Center for Health Solutions. The report, “Medicaid Long-term Care: The Ticking Time Bomb,” cites the immense pressures on state budgets, the fact that Medicaid is the nation’s primary source of long-term care services and the lack of any short-term relief expected from federal health care reform.

The Deloitte report underscores the severity of the situation by noting that if current trends in long-term care spending continue, Medicaid budgets as a percentage of state operating budgets will almost double by the year 2030 – some reaching levels close to 40 percent. In certain states, expenditures for long-term care account for about half of this trend.

“Medicaid long-term care is one of state government’s most urgent health care challenges. Failure to innovate with medical and administrative best practices is likely to result in runaway costs, poor quality care and challenging fiscal budget holes for states,” said Bob Campbell, vice chairman and leader of Deloitte’s state government practice. “Taxpayers and the millions of people who depend on Medicaid long-term care should understand that this is a critical issue that demands immediate attention.”

“There is currently no coordinated, comprehensive system of the provision and financing for long-term care services in the United States,” said Paul Keckley, Ph. D. and executive director of the Deloitte Center for Health Solutions. “States are left to fend for themselves, and they will have to find ways to meet the demands of the health care reform bill with decreasing resources. It is a tough landscape, but with urgent, thoughtful attention and deliberate action, state leaders can meet the challenge.”

Deloitte’s report suggests that Medicaid be viewed within the larger context of health care reform, state health care spending priorities and the complexity of health care expenditures.

The Medicaid Long-term Care:The Ticking Time Bomb report addresses the following topics:

  • Medicaid expenditures for long-term care, in both institutional and community-based settings.
  • How health care reform’s mandate for increased access will exacerbate Medicaid’s expenditure trend.
  • The potential state budget effects of the impending long-term care services demand brought about by increasing Medicaid enrollments.
  • Examples that model the effect of the aging population’s demographic bulge on Medicaid enrollment and the potential increase in Medicaid eligibility due to legislative mandates associated with health care reform.

According to the Deloitte report, some states are actively engaged in initiatives to control long-term care expenditures while maintaining and/or increasing quality, but challenges exist regarding the allocation of resources. New public-private partnerships are currently being considered that could better align services with the needs of the Medicaid population.

The Deloitte study is available via: www.deloitte.com/us/LTCinMedicaid. For more information about Deloitte’s State Government sector, please visit: www.deloitte.com/us/stategovernment.

About Deloitte
As used in this document, “Deloitte” means Deloitte LLP and Deloitte Services LP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

Contacts

Name:
Tourang Nazari
Company:
Deloitte Services LP
Job Title:
Public Relations Manager
Phone:
+1 703 251 1681
Email
tnazari@deloitte.com

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