Could America’s long-term care crisis intensify under Trump policy?

Industry professionals are underscoring the need for states to tackle a looming long-term care crisis in the face of public funding cuts and tariff-driven economic uncertainty.

“I think the current administration is demonstrating that they will pull back on any publicly funded programs… I feel like any type of publicly funded program that is going to require additional state tax dollars or support is going to be on a state-by-state basis, but there’s not going to be any federal incentive pushing into those under the current administration. It doesn’t seem aligned for their policies currently,” Brandy Burch, CEO, benefitbay, said.

She pointed to the Affordable Care Act as an example. The government is reportedly considering reductions in coverage, although Medicaid is the largest payer of LTC services. Individual states will have to bear that burden, she said, potentially causing strain on the already understaffed healthcare system.

“I think that states are going to have a crisis on their hands trying to manage it, and we definitely don’t want to see a vision of individuals landing in our emergency rooms… It’s just going to be a downstream effect of not planning properly at the state level,” Burch said.

“States have begun to recognize the impact that large numbers of aging people are going to have on their state Medicaid program, and so it has become more urgent at the state level than it is at the federal level,” Bonnie Burns, training and policy specialist, California Health Advocates, added.

Significant economic impact

Burch underscored that long-term care has a significant financial impact on families, and especially those in the “sandwich generation” who are raising children while simultaneously having to provide care for older parents or relatives.

Both Burch and Burns said the reality for many Americans is that their net worth “quickly evaporates” due to costs associated with LTC, such as care facilities or LTCI premiums.

“Personally, my husband and his parents are in a long-term care facility with a mother facing an Alzheimer’s dementia diagnosis and a father who’s in a wheelchair at this point. The assets have been completely depleted, and now it becomes a burden on the family,” Burch said.

Burns likewise noted that she has seen three of her daughters experience this challenge already with their respective husbands’ family members.

“Middle-income people are going to be the hardest hit by this, and they already are because they have limited resources to deal with financing this kind of care,” she said.

While Burch acknowledged that state-based programs, such as Washington’s WA Cares, “do offer some hope,” they can be limited.

“The alternative programs, the Medicaid programs, they’re just not great facilities to be leaving your loved ones at. So, I’m super passionate about this and I think people realize — when this comes to their family, the financial devastation that it can have — to try to provide a good outcome for your parents,” she said.

Urgent need for planning

Burch noted that one of the challenges with LTC and a contributing factor to the looming long-term care crisis is a lack of adequate planning.

“I think it’s really urgent for individuals to be considering what is the long-term care plan,” she said. “I don’t think people talk about it unless their family has had to face it, and that’s really important.”

She said this is crucial for people to protect personal assets they’ve worked hard for and “not lose every single thing just for three years in a facility and then to land in a Medicaid-based facility that’s not taking great care of them.”

“I hate to say that a Medicaid facility is not going to take great care of them. I just think that, unfortunately, it’s a budget crisis as well on that side where you have nursing shortages and everything’s a supply and demand issue right now,” Burch said.

“That’s what happens to middle-income people. They have a little bit of assets, they spend it as long as they have it, and when they don’t have it, they end up in Medicaid across this country and every state,” Burns said.

Looking at options

Aside from publicly funded LTC options, Burch suggested there could be solutions from the private sector to help mitigate the long-term care crisis, such as:

• Investment in LTC facilities by way of combined whole life insurance and LTC policies in sliding scales that have investment dollars
• Individual coverage health reimbursement arrangements that allow employers to have more personal choice on investing benefit dollars and spending voluntary dollars through a pre-taxation product
• Tax incentives for saving and planning long-term care

“I think, as a benefit innovator, I’m always thinking about ways you can offer voluntary benefits that matter to people, but also try to encourage private investment dollars into these areas,” Burch said. “Boomers are the largest generation, and this is the generation that is going to need these long-term care facilities. The shortage is now and we need to be talking about it.”

Benefitbay is an employee benefit technology platform founded in 2013 and based out of Kansas City, MO. It facilitates quoting, enrollment, administration and fintech aspects for insurance agents and their clients, with a focus on allowing personal choice.

California Health Advocates is a non-profit organization dedicated to Medicaid advocacy and education in California.

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