Home and Community-Based Services (HCBS) waivers, available through state Medicaid programs offer individuals home health care and, in some states, additional benefits such as personal care, nursing home stays, or adult daycare. The number of waivers available is capped by the individual states based on services offered, workforce availability, and funding. Because this coverage is limited, most states have had waiting lists for the past several years, totaling about 700,000 individuals each year. While Medicaid expansion in some states has successfully increased the number of elderly adults and people with disabilities accessing coverage, these waiting lists indicate the current strain on state Medicaid programs and the need for additional options.

Additional Medicaid expansion could help ease some of the stress around receiving care, but this can be a challenge given workforce shortages in the long-term care and caregiving spaces, as well as availability of additional funding.

The private sector has an important role to play in easing some of the challenges to accessibility. Today, private insurance makes up just 10% of HCBS spending in the U.S. Private long-term care and hybrid life insurance coverage can be costly, and these plans don’t typically guarantee premiums, so lower and middle-income Americans may struggle to afford the plans and face additional risks of affordability with rising premiums. Lower cost, indemnity insurance solutions can be great coverage options that offer individuals more choice in their care and flexibility in timing for receiving necessary care. Cash benefits can be used to offset costs and ease the financial and emotional burdens often involved with extended care needs.

These shorter-term plans cover less home care but can be a good supplement especially for those looking to fill gaps in existing state or federally funded coverage. Unfortunately,  many state Departments of Insurance do not currently allow for short-term home health plans. Considering both affordability and regulatory limitations for coverage options, the private and public sector must likely work together to both allow more varied products in the market, and to develop a wider range of coverage options.

With additional private insurance offerings for middle-income individuals, fewer Americans will have to turn to Medicaid spenddown in retirement, a process which can be complicated and typically depletes any available savings significantly. More products available at lower costs with flexible coverage amounts are a great way to offer middle-income Americans another option in affording the costs of extended care while reducing the current strain on state Medicaid programs.

Products such as GTL Life Select and Home Care Secure are examples of lower cost coverage options for extended care needs, and such products are a great addition to financial planning conversations about affording home care later in life.