Sunday, April 18, 2021

Biden Takes On Sagging Safety Net With Plan to Fix Long-Term Care

President Biden’s infrastructure plan includes a plan to bolster long-term care programs for older adults, a decision ridiculed by some politicians as a unnecessary addition to a plan centered around infrastructure. The plan is a part of his $2 billion American Jobs Plan and will include additions to Medicaid, which is the program that pays for a lot of these programs, and is targeted more at home care and adult day care facilities rather than nursing homes. 


As  our current nation’s population ages into elder care programs, there will be an increased demand for those services in an undersupported industry - many elder care workers work for just $12 an hour, a wage less than janitors, telemarketers, and food processing workers, and many live in poverty. Raising wages could potentially be a solution to overwhelming demand.


This does not solve the existing problems with adult care programs in the U.S., however, like long wait times. Experts recommend that the two issues of wages and lowering wait lists be balanced. 


In recent years, Medicaid has been changed to make home and community based care optional in its plans, and end-of-life care has become too risky for insurers and too expensive for most Americans. Medicaid has become an inconvenient source of funding for these programs, as nearly half of adults will need end-of-life care in the near future. 


Relation to Econ: This section of Biden’s infrastructure bill seems excessive but is actually a good investment in oncoming demand for a service, albeit in a very inconvenient way.


Questions:
1. Is the investment in end-of-life care a smart decision for the infrastructure bill? Explain.

2. How should the government amend the issues with Medicaid as an insurance plan?


3 comments:

Anonymous said...

I originally found it interesting that Biden's bill would target elderly care-workers outside of nursing homes. I understand now that none nursing home workers do not have access to the same employment benefits. I think that Biden's investment in the elderly care workers is not a super smart decision. I think that it will have some benefits but a massive wide scale impact. It is not working to create more jobs for Americans, instead it is just support current jobs.

Anonymous said...

I wonder how this relates to supply and demand graphs. Currently, I believe that the wages of such elderly care workers (~ $12 per hour) seem to be a binding price floor which is leading many employees in telehealth and other markets to struggle with low standards of living and high unemployment (which could be causing the long wait times and such). Biden's plan would probably decrease the input price for suppliers (through funding). Therefore, the supply curve would shift to the right. This would increase worker's benefits and wages in these markets, thus overall helping the American population. However, given that the market is more complex, I'm unsure how much Biden's plan would help such workers and in what ways specifically.

Danny Rose said...

This does seem to be a difficult issue, as adult day care facilities and home care probably don’t function the same as nursing homes. Adult day care has less reach in their services than nursing homes (also less regulation, employee benefits because of this), and home care is by definition a private entity that seems very hard to regulate and predictably impact by the government. Here, it seems there are the obvious tradeoffs as seen with the debate over minimum wage. If we raise these caretakers wages, then the waitlist time would increase as less people can afford them. However, they might be higher quality and more focused on their care (if they don’t have to work another job, have a difficult time living themselves). Biden’s plan might subsidize or completely fund these programs to replace the apparently ineffective Medicaid funding. If so, this could prove very costly to taxpayers and those workers who are shut out from jobs, but also increase quality of care in many instances. As it relates to the infrastructure bill, it does seem to be not a perfect comparison, as infrastructure certainly provides jobs for new initiatives while this bill seeks to improve quality of existing jobs/services while endangering some jobs/services as well. Murky tradeoffs. It does seem that changing Medicaid would be more effective than introducing a whole new program (what if this program turned people off of nursing homes for a more effective and affordable option of home care/at-home care?). Perhaps include Medicaid-based subsidies but continue making this type of care optional, so workers aren’t pressed into low-wage jobs where their services are demanded. In general it seems like a difficult problem where issues of supply/demand will need to be addressed while considering the public good of late health care.