Public-private solution to protection against the cost of long-term care.

The demographics of our population and our current reliance on Medicaid with a means test that no one likes suggest the need for revising our financing of long-term care. Given that persons with Alzheimer's disease and related dementias are a substantial proportion of those needing long-term care, support for research to cure or control these problems should be part of a strategy for addressing the problem of long-term care. However, even if substantial progress is made there is still a need for revising our method of financing long-term care. However, other pressing societal needs, such as reducing the 2 trillion dollar federal debt, addressing the needs of the growing number of children in poverty, and caring for the more than 30 million uninsured Americans, limit the role of the federal government in financing long-term care. A proposal to provide coverage for those with functional disabilities or cognitive impairment who need chronic home care and for the initial portion of nursing home stays within a social insurance program is outlined. More extensive coverage for nursing home stays would be provided for those with community-dwelling spouses. Major financing would be provided through either a payroll tax or by a federal income tax for all age groups with supplementation from estate taxes or capital gains taxes at death. Improvement of benefits in the Medicaid program and an important role for private insurance in protecting the estates of those who become permanent nursing home residents are also suggested.