Nearly 80% of Americans over 65 will need long-term care services to address their health or personal care needs. With annual costs averaging $120,000, many Americans will not be able to afford adequate support without Medicaid. Older adults will often "spend down" their assets to qualify for limited Medicaid-funded support—and as a result are pushed into poverty. A new review from Pamela Herd, the Ford School's Carol Kakalec Kohn Professor of Social Policy, analyzes long-term care on long-term care policy approaches and their impact on access , and provides insights for state lawmakers hoping to help elderly residents.
Medicaid's funding model currently steers patients towards institutional care rather than home-based or community-based (HCB) care. Despite their unpopularity, long-term care institutions like nursing homes have higher budgets and enrollment capacity, making them easier to access than their less-funded and -resourced HCB counterparts. Combined with billions of dollars in federal spending cuts and the administrative burden associated with navigating Medicaid, many Americans may struggle to access and utilize HCBs. In some states, Herd found that individuals waited up to 17 years to access HCB services.
Despite these concerns, Herd believes the future of HCB programs is bright. Medicaid home care services have been on the rise since the 1980s. Spending has also grown: In 2023, 64% of Medicaid's total long-term care spending was directed to HCB programs as compared to under 10% in the 1980s.
Even more promising, Herd noted, is Washington Cares: a new, universal social insurance program overseen by the Long-Term Services and Supports Trust Commission to help residents access long-term care. Operating under a funding structure similar to Social Security, the program is financed by a wage tax (0.58%) applied to most working residents across the state. Washington Cares allows eligible workers to access an indexed $36,500 lifetime benefit, which can be used for both institutional and home-based care services. The first round of payments began in July 2026.
Similar social insurance programs launched in European and Asian nations have proved financially and politically resilient, increasing access to care and reducing eligibility obstacles for beneficiaries. If successful, Herd said, Washington Cares could represent a major shift in how the U.S. approaches HCBs.
"As the population ages and care needs grow more urgent, the United States faces a critical choice—cling to a piecemeal, confusing, and impoverishing long-term care system or embrace universalism to ensure meaningful access to needed community-based long-term care supports," she said.
