The American Jobs Plan And The American Rescue Plan: The Biden Administration Bets Big On Home And Community-Based Services – Food, Drugs, Healthcare, Life Sciences | #healthcare | #elderly | #seniors
Late last month, the Biden Administration announced the second
installment of its recovery plan, dubbed the “American Jobs Plan” (the
“Plan”). The Plan’s $2.3 trillion price tag includes
$400 billion to revamp and reinvest in Medicaid’s home and
community-based services (“HCBS”) over the next eight (8)
years – representing over 17% of the Plan’s budget.
Biden’s HCBS strategy aims to provide more solutions to help
the overburdened healthcare system serve America’s aging and
other special-needs populations through increased funding for
The Plan Aims to Support Independent Living and Foster the
Medicaid is the federal-state
health program for 72 million children and adults in low-income
households. Currently, Medicaid offers two types of long-term care:
HCBS and institutional care (e.g., nursing homes). However, states
have discretion as to whether to offer HCBS in addition to
institutional care, which has led to significant gaps in services
across state lines and excess demand. Across 41 states, nearly
820,000 people are on waiting lists for Medicaid HCBS with an
average wait of 39 months.1 Though 57% of Medicaid’s
long-term care budget goes to HCBS, half of states still spend
twice as much on institutional care as they do on HCBS.2
HCBS allow aging and other special-needs populations to live
independently. Services are broad and often include visits from
healthcare providers, assistance with daily tasks, case management,
etc. The need and demand for this genre of care is expected to
explode as America’s aging population expands to 74 million in
Expanding access to HCBS will help alleviate the 53 million
family members providing care to vulnerable seniors and people with
disabilities. This care often takes a significant emotional and
financial toll on the caregivers-including, on average, 24 hours of
additional work per week and $7,000 in out-of-pocket costs.3
Beyond a simple check to support the delivery of HCBS, the Plan
aims to bolster what the Administration calls the “care
infrastructure” – i.e., the more than 790,000 workers
providing HCBS who are often women, immigrants and people of color.
On average, these workers earn only $12 an hour, and nearly
one-third do not receive employer-backed health insurance.4
Without intervention, these low wages will make it difficult to
recruit more caregivers as demand for HCBS increases. The Plan
promises to increase pay and benefits for the workers providing
these valued services. Further, Biden hopes to reauthorize a
Medicaid program that helps transition people out of nursing homes
and back into their communities.
The Administration’s effort aligns with many Americans’
belief that aging adults should be able to remain in their homes. The
Administration also contends that doing so is less expensive than
Congress Needs to Fill in the Details.
Thus far, the Plan lacks specific provisions and has yet to be
memorialized in a bill. Moreover, the Plan will likely face a
lengthy political battle, which will surely highlight the
atypically quick passage of the American Rescue Plan, which
included $12.7 billion for HCBS through Medicaid.
Despite a dearth of detail, the skeleton of the Plan reveals its
greatest limitation: Medicaid’s strict eligibility guidelines.
Americans often will not qualify unless they have only $2,000 or less in total assets,
limiting the program’s ability to help lower-to-upper middle
class individuals and families.
The Plan Has Been Met With Industry Praise.
Nonetheless, industry response has been largely positive. The
American Association of Family Physicians commended the Plan for its
“critical investments necessary to further strengthen our
nation’s health care system and address underlying social
determinants of health that contribute to health inequities.”
Moreover, the President of the National Association for Home Care
& Hospice, William A. Dombi, praised the Plan as a
“monumental advance” in the “effort to provide full
access to health care outside of an institution.” While the
response was generally positive, the American Health Care
Association and National Center for Assisted Living (AHCA/NCAL),
which represents nursing homes, argued that institutions also
need financial help in order to serve the rapidly aging population.
Though AHCA/NCAL applauded investments in HCBS, it emphasized that
the average age of a nursing home resident is 85, and most have
multiple underlying health conditions that require a high level of
specialized care that in-home care is often unable to provide.
We will continue to monitor the evolution of the American Jobs
Plan and its impacts on the healthcare industry. Stay tuned!
“Medicaid Home and Community-Based
Services Enrollment and Spending,” by Molly O’Malley
Watts, MaryBeth Musumeci, and Priya Chidambaram, Kaiser Family
Foundation (February 2020).
“Family Caregiving Costs
Study,” by Chuck Rainville, Laura Skufca, and Laura
Mehegan, American Association of Retired Persons (November
“U.S. Home Care Workers: Key
Facts” PHI (2019).
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