Long-Term Care Reforms Should Begin With Paid Home Care Providers

Building Back Better

Long-term care needs are high in the United States and are expected to grow. Yet, universal coverage of long-term care did not occur with health care reform in 2010.[1] Federal reform in recent years has focused instead on a national strategy for unpaid family caregivers and more substantial support for them. President-elect Joe Biden has announced support for family caregivers that transcends past attempts to financially support them, such as national tax credits of $5,000. Importantly, the incoming administration proposes support of caregivers across the lifespan: from those caring for children with health needs to caregivers of older adults living with disabilities. Additionally, the administration proposes extending paid family leave, and mechanisms to identify caregivers when a loved one is hospitalized (fashioned after the Caregiver Advise, Record, Enable (CARE) Act that exists in four-fifths of all states[2]).

Supporting family caregivers so they do not have to quit their jobs makes sense for the quality of care they provide, for their own economic security in advanced age (where women in particular, are much more likely to retire too early and fall into poverty), and for the tax revenue base and economy more broadly. Caregivers who leave the labor force prematurely reduce tax revenues.[3]  Even if caregivers plan to return to work following a caregiving episode, few actually return.[3] Caregiving also entails wage penalties for female caregivers that are not justified by commensurate losses in worker productivity.[4] Thus, private employer efforts to normalize caregiving and support caregivers who want to remain working are also needed.

However, while bolstering supports to the nearly 20% of adults or 53 million people engaged in family caregiving is politically appealing, it does not address the need to support the formal care workforce that enables people with long-term care needs to obtain care in the setting they prefertheir homes.

Over the past decade, Medicaid substantially invested in home care over nursing home care, but even today too much is being spent on institutional care. Furthermore, rebalancing long-term care spending toward home-based care places greater demand on informal caregivers,[5] especially low-income caregivers,[6] such that without an increase in access to formal home care provision, informal caregivers will need to fill this role.  Informal care is not the preference of most adults who need assistance; the majority prefer home care from paid professional providers,[7] and support and companionship from their adult children and family.[8]

The Biden administration says it will “partner with health care workers and accelerate the testing and deployment of innovative solutions that improve quality of care and increase wages for low-wage health care workers,” but there is not much detail on how these partnerships will operate.

Here are three direct steps that can be taken immediately to address structural problems in the formal home care workforce:

  • Permanently extend universal paid sick leave for direct care workers in home health and nursing homes. Many workers do not have or are exempted from these rights, even with recent stimulus and pandemic law changes extending paid leave temporarily.
  • Require all Medicaid and/or Medicare certified providers to pay their long-term care workers a minimum of $18 per hour. This might not cover all workers immediately, but it could place pressure on private care wages and could be accompanied by enhanced training and certifications to recognize the diverse roles played by aides.[9]
  • Expand the scope of practice for nurse practitioners and physician assistants to meet shortages, especially in rural areas. The Centers for Medicare and Medicaid Services (CMS) could accelerate these changes at the state level, and pipeline shortages could be addressed by retraining unemployed adults through community college and college programs to work in the field.

In addition, here are three indirect steps that could improve long-term care worker conditions and pay:

  • Invest in Medicare post-acute care at home and hospital at-home models, and increase allowable visits per day. Current home health benefits are insufficient to provide high quality recovery at home compared to in skilled nursing facilities.
  • Expand Medicaid in all states. Recent evidence indicates that expansion increases use of home and community-based services for adults newly receiving coverage (e.g., low-income adults ages 50-64).[10]  Increased access to Medicaid will increase the need for home care workers and could increase wages. The Biden administration’s plan to offer premium-free access to a public option plan also will have beneficial effects.[11]
  • Enhance the role of public health through safeguards and upstream preventive home visits. Home visits can assess safety in the home and address care needs when they emerge. Home-based primary care for veterans with impairment improved patient-centered outcomes while reducing hospitalizations and total health care costs.[12]  Preventive home visits could be an important component of Medicaid managed care and Medicare Advantage plan offerings.[13] By adding a home visit benefit to Medicare reimbursement, there would be added incentive to create upstream partnerships between acute care and long-term care, thus reducing fragmentation between these sectors.

Long-term care workforce challenges affect a predominantly voiceless group of US workersrecent immigrants, women of color, women with little education, and women who have substantial informal caregiving duties in addition to their paid care work.  Nearly two-thirds of nursing home workers now provide unpaid caregiving to at least one and often two different individuals in and outside their homes.[14] Supporting them with a living wage and benefits will enable older adults and other adults living with disabilities to remain in the care setting they prefertheir homesand more importantly, will improve the well-being of the more than two million home care workers in the United States.[15]



[1] Dawson WD, Cutler J. Addressing long-term services and supports reform via Medicare. Yes, Medicare, that post-acute care program. Journal of Aging & Social Policy. 2020;32(2):108-124.
[2] Eli M. Cahan, Terry Fulmer, Nirav R. Shah. Protecting healthcare’s family caregivers amidst the COVID-19 pandemic. Health Affairs Blog. April 24, 2020. DOI: 10.1377/hblog20200421.666035
[3] Van Houtven CH, Coe NB, Skira MM. The effect of informal care on work and wages. J Health Econ. 2013;32(1):240-252.
[4] Coe NB, Kolodziej I, Van Houtven CH. Does informal care impact work intensity and productivity? 2021. Working Paper, Unpublished.
[5] Konetzka RT. The hidden costs of rebalancing long-term care. Health Serv Res. 2014;49(3):771-777.
[6] Anastos-Wallen R, Werner RM, Chatterjee P. Prevalence of informal caregiving in states participating in the US Patient Protection and Affordable Care Act Balancing Incentive Program, 2011-2018. JAMA Network Open. 2020;3(12):e2025833-e2025833.
[7] Brown JR, Goda GS, McGarry K. Long-term care insurance demand limited by beliefs about needs, concerns about insurers, and care available from family. Health Aff (Millwood). 2012;31(6):1294-1302.
[8] Sperber NR, Voils CI, Coe NB, Konetzka RT, Boles J, Van Houtven CH. How Can Adult Children Influence Parents’ Long-Term Care Insurance Purchase Decisions? The Gerontologist. 2017;57(2):292-299.
[9] Reckrey J, Tsui E, Morrison S, et al. Beyond functional support: the range of health-related tasks performed in the home by paid caregivers in New York. Health Affairs. 2019;38(6):927-933.
[10] Van Houtven CH, McGarry BE, Jutkowitz E, Grabowski DC. Association of Medicaid expansion under the Patient Protection and Affordable Care Act with use of long-term Care. JAMA Netw Open. 2020;3(10):e2018728.
[11] Toussaint J, Halvorson G, Kotlikoff L, et al. How the Biden administration can make a public option work. Harvard Business Review. November 25, 2020. https://hbr.org/2020/11/how-the-biden-administration-can-make-a-public-option-work.
[12] Edes T, Kinosian B, Vuckovic NH, Olivia Nichols L, Mary Becker M, Hossain M. Better Access, Quality, and Cost for Clinically Complex Veterans with Home-Based Primary Care. Journal of the American Geriatrics Society. 2014;62(10):1954-1961.
[13] ATI Advisory L-TQAaA. Meeting Medicare Beneficiary Needs During COVID-19: Using Medicare Advantage Supplemental Benefits to Respond to the Pandemic. LTQA and ATI Advisory;2020.
[14] Van Houtven CH, DePasquale N, Coe NB. Essential Long-Term Care Workers Commonly Hold Second Jobs and Double- or Triple-Duty Caregiving Roles. Journal of the American Geriatrics Society. 2020;68(8):1657-1660.
[15] Spetz J, Stone RI, Chapman SA, Bryant N. Home And Community-Based Workforce For Patients With Serious Illness Requires Support To Meet Growing Needs. Health Affairs. 2019;38(6):902-909.

Van Houtven CH, Dawson WD. Long-Term Care Reforms Should Begin With Paid Home Care Providers. Milbank Quarterly Opinion. January 13, 2021. https://doi.org/10.1599/mqop.2021.0113