During an appearance on The View earlier this month, Vice President Kamala Harris unveiled a new plan to expand home care for elderly and disabled Americans through Medicare. While Harris’ campaign did not provide a budget, similar proposals have been estimated to cost about $40 billion per year. Harris says that her plan would be funded by redirecting wasteful Medicare spending, but experts warn that it would create further inefficiencies in the system and cost taxpayers billions.
Harris marketed the plan as a “historic new Medicare at Home benefit” meant to ease the stress on those she calls the “sandwich generation,” referring to millennials caught in between having to care for both their aging parents and their children.
According to the plan’s fact sheet, home care would be covered either completely or partially on a “sliding scale for cost-sharing” for higher-income seniors. Medicaid already covers more than half of long-term care services in the U.S. for low-income Americans with minimal cost sharing. With Medicare already in financial decline, adding a new benefits package would send the program into further disarray.
The price tag of the program would be covered by expanding “Medicare drug negotiations,” more coverage for “certain brand-name drugs,” a crackdown on “pharmaceutical benefit managers (PBMs)” to increase transparency, and implementing “international tax reform” to disincentivize companies from shipping jobs overseas.
Creating a universal in-home care program would disproportionately favor the wealthy by forcing poorer families to foot the bill for in-home care. With a “free” program, Americans would also be disincentivized from saving for future care, which would hurt long-term savings rates in the U.S., according to Mark J. Warshawsky, a senior fellow at the American Enterprise Institute.
Michael F. Cannon, director of health policy studies at the Cato Institute, notes, “Even if Congress were to enact her proposal, her plan to free up that wasteful spending is unlikely to work for the same reason that wasteful spending came to exist in the first place.” For example, the plan does not include any suggestion for lowering current benefits for anyone.
Rather than doubling down on inefficient programs, the government should get out of the way. Removing barriers to immigration would be one way “to make home-care services more universal,” Cannon tells Reason. While almost 40 percent of home aides are immigrants, the Harris plan does not include proposals to increase relevant visas or ease licensing burdens.
In addition to making immigration easier, Cannon proposes “deregulating housing,” which would lower the cost of housing for many older Americans, and converting “Medicare into a Social Security-like cash-transfer program.” This would allow seniors to prioritize their spending on home care instead of other health insurance benefits that are much less valuable for their costs. These solutions, according to Cannon, would defer funds from inefficient health care programs to consumers, rather than enlarging those same programs.
Long-term health care is expensive. Harris’ plan to grow the federal bureaucracy will increase costs for taxpayers and fail to deliver the quality of care that older Americans need.
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