Biden's $400 Billion Bet on Caring for Older and Disabled Americans at Home

April 8, 2021

Photo by licensed under CC BY-ND 2.0

President Biden wants to spend $400 billion to help older and disabled Americans be cared for at home as part of his $2 trillion infrastructure proposal, a huge investment in an often neglected part of the health care system.

Listen to the full episode, read the transcript below or scroll down for more information.

If you want more deep dives into health policy research, check out our Research Corner and subscribe to our weekly newsletter.

Dan Gorenstein: Fresh off his $1.9 trillion COVID relief package, President Joe Biden is back with a $2 trillion plan for infrastructure.

President Joe Biden: It’s a once-in-a generation investment in America, unlike anything we’ve seen or done since we built the Interstate Highway System and the Space Race decades ago.

DG: On top of money for planes, trains and automobiles, it also includes $400 billion — 20% of the entire plan — for something that rarely gets much attention.

Howard Gleckman: President Biden is proposing to do more for long-term care recipients than any president has since Lyndon Johnson and the creation of Medicaid in 1965. 

DG: Today, President Biden bets big on helping older and disabled Americans get more care at home.

From the studio at the Leonard Davis Institute at the University of Pennsylvania, I’m Dan Gorenstein, and this is Tradeoffs.

HG: Like so many people who focus on this issue, I was drawn to it by a personal experience.

DG: Howard Gleckman is a senior fellow at the Urban Institute where he studies long-term care, a topic he got interested in about 20 years ago.

HG: My father-in-law got really sick and then shortly after that, my own father got really sick. And as a result of that, I was forced to learn about long-term care issues. And I discovered two things. One of them is it’s really hard to learn about. And the other thing is, once you do learn about it, it is an incredible mess.

DG: Let’s start simply, Howard. Who does our long-term health care system serve? 

HG: There are probably 13 million people in the United States who require a sufficient level of long term supports and services. Many of those 60 percent of them are older than 65. The other 40 percent are younger people with disabilities. And they need a very wide range of care. Some of them may need simply enough services to help them get started in the morning, help them get to bed at night. Other people may need somebody 24/7 to keep an eye on them because they’re a high fall risk, for example.   

DG: So that’s who is served. Now the president wants to pour $400 billion into long-term care, a clear sign that the system has its share of issues. 

50,000 foot view, Howard. What are the problems? 

HG: So there are multiple problems. The first one is people can’t afford the care. To live in a nursing home now costs between $100,000-$130,000 a year. Even if you have a home care aide, that now costs about $25 an hour. Another problem with this program is it is very difficult for anyone who is trying to receive both health care services and long term services to put all that together. I may need transportation, I may need home delivered meals, I may need a personal care aide My family caregiver may need respite care. They may need training. How do I do all that? This is an incredibly complex system and there’s no way really to put it all together. So it’s complex. It is insufficient. And it is incredibly expensive, other than that, it’s a great system.

DG: That “great system” is expected to be put under even more strain as Baby Boomers continue to age.

According to U.S. Census Bureau estimates, people over 65 will outnumber kids by 2034. 

And, the number of people over 85 is expected to nearly double.

DG: So, Howard, what exactly is President Biden proposing in his so-called American Jobs Plan? 

HG: What President Biden is proposing to do is spend $400 billion over eight years or about $50 billion a year to expand Medicaid home and community based services. He doesn’t say anything in this proposal about how he’d do it. But what you should know about this is Medicaid is required to provide long-term supports and services to people who are very sick and people who are very poor. But they’re only required to provide those services in a nursing home. Of the 700,000 Medicaid recipients who are living in a nursing home, probably 200,000 of them don’t have to be there. But they’re there because that’s where Medicaid is paying. 

DG: Every state Medicaid program does cover some help for people choosing to get long-term care at home — things like meal delivery, help getting showered and dressed.

But Howard says quality can vary a lot, and the waiting list for those services can run 2-3 years in some states.

HG: And because you have to be very sick before you can even get on the waiting list, there’s a very high probability that you’ll be dead before you actually get the services.

DG: Howard, one of the ideas around investing in community and home based services, I think, is a little bit of this assumption that that’s better from a financial standpoint and a health outcome standpoint than paying for care delivered at a nursing home. What does the research say about delivering care at home or in the community?

HG: It’s less expensive as long as you don’t need very, very high levels of care. Imagine you’re somebody who needs an aide to come in a couple of hours in the morning to help you get started, help you get dressed, help you take a shower. If that’s you, then it’s vastly cheaper. If you are somebody who is bed bound with high levels of, say, dementia, it’s probably cheaper to be in a nursing home. In terms of the outcomes, I hate to say it, but it depends. There is a program that was developed by Johns Hopkins School of Nursing called Capable, where you get a team of people, including an occupational therapist and a home repair person and a nurse, and there is very robust research that showed that program keeps people out of the hospital. But there are a lot of other programs that we think work, but we don’t know for sure. The one thing we know for sure, unquestionably, is that people want to stay home. 

DG: There’s a downside to President Biden’s plan for Howard.

While light on details, the point is to support services for the 4 million people who receive long-term care through Medicaid, arguably those with the highest need.

But that leaves out about 10 million people — think a retired school teacher with a small pension — who have too much money to qualify for Medicaid but need care.

And Medicare generally doesn’t cover long-term care, so you either buy insurance, pay out-of-pocket or go without.

HG: And President Biden’s proposal isn’t doing anything for them. With $400 billion, you can walk and chew gum at the same time. You don’t have to just do one thing. And what I would propose doing is providing some money to expand Medicaid home and community based services. Absolutely. But also providing money to the right nursing homes so they can provide the care they need, and providing some sort of a social insurance program. I’ve worked with some people over the years who propose a catastrophic program that says you are responsible for the first couple of years of care, but after that, you would be eligible for a public program. And it’s worth noting that every developed country in the world, except for the United States and England, has a public social insurance program for long term care.

DG: So you really, to be clear, because there are lots of policy details here, your point is you applaud the Biden administration for focusing on an infrastructure problem that we’re having, but fault the administration for not dreaming big enough.

HG: For not dreaming big enough and for being too narrowly focused in its goal. He’s putting all his eggs in one basket. And what I’d rather see him do is provide a little more flexibility, a little more diversity in how he spends his money. But again, to take nothing away from what he’s doing, just the fact that a president of the United States is finally putting this issue on a front burner is really, really important. And now it’s going to be a matter of just taking this goal that he’s got and creating the details to make it manageable.

DG: Howard, thanks for taking the time to talk to us on Tradeoffs.

HG: Thank you, Dan. Good to be with you.

DG: When we come back, home care workers and what Biden’s proposal may mean for them.


DG: Welcome back.

In addition to focusing on Medicaid, the other specific idea President Biden included in his $400 billion home care plan was raising the wages of home health care workers.

Biden: With better wages, benefits and opportunities for millions of people who will be able to get to work in an economy that works for them.

Rachel Werner: It’s a really disenfranchised group of workers and they don’t have a lot of political capital. And so they have historically been really undervalued and underpaid within the home care industry.

DG: Rachel Werner is the executive director of the Leonard Davis Institute of Health Economics at the University of Pennsylvania. And she’s thought a lot about the more than 2 million home health care workers in the U.S.

RW: Nine out of 10 of them are women. Over half are people of color, and almost a third immigrants. The typical income for a home care worker is between $15,000 and $20,000 per year, which is not far above the poverty line. And actually, close to 20% of home care workers do live in poverty. So, we’ve got this really essential group of people who really are the foundation of the home care industry in the United States. And we really routinely dismiss and undervalue the work that they do.

DG: And so, Rachel, when we think about this system in our country to support long-term care, there are a lot of needs for this money. How do you think about prioritizing worker pay among the other places this money could go to shore up this system of ours?

RW: One of the things that we have learned, I hope, over the past year during the pandemic is that the workers within the long term system are really the backbone of that system, and that without an adequate workforce, the entire long-term care system just collapses. And so I think taking the money and investing it in that workforce is the one of the most important first steps we can do to really shore up the long-term care system and make it a more highly functioning and stable part of the health care system.

DG: What evidence or research convinces you of that?

RW: So there are higher rates of hospitalizations, higher rates of death in these areas where we can’t find enough people to staff nursing homes or home health agencies. There’s also evidence that because of the poor conditions that people work in, there are very high rates of turnover in the industry, which has been associated with worse outcomes for patients. And so investing in the workforce to make the job more appealing, to keep a more stable workforce and a larger workforce would certainly have better outcomes for patients.

DG: So when you say to me, “Hey, Dan, let’s prioritize the workforce here,” the way you see it is that it offers a real dual benefit. It benefits the workforce in improving the quality and conditions and the economic security that they have. And by doing that, evidence would suggest that’s going to have a real positive spillover effect for the patients, the older adults that they serve.

Would the idea be that the federal government would effectively subsidize the pay of these jobs?

RW: For this to be feasible over the long term, Medicaid would really have to increase their payment rates across the board, and those payments would then have to go directly to the direct care workers, like home care workers. That’s all very unregulated right now. And so whether or not even if Medicaid raised their rates, they would go to home care workers is really an open question. But that would need to happen for this to be sustainable over the long run.

DG: Are there any projections, Rachel, or any plans, has anyone done any sort of back of the envelope estimate of how much we need to spend to raise these wages to get the benefits you’re talking about?

RW: The federal government did a study recently looking at what would happen if we raised the wages of the lowest paid nursing home workers to $15 an hour. And they found it would cost a lot, about $2.5 billion. So let’s translate that to home care. It turns out there are even more of these low-wage workers in the home health space, probably three times as many, so we’d be looking at a pretty expensive proposition. But as I said, there would be a lot of benefits to doing this too.

DG: Right. So in other words, not only is additional money needed, but new systems and sort of a reimagining of this system is required.

RW: I think that we have a chronic problem of undervaluing aging adults in this country, and we don’t only undervalue people as they age, we undervalue the people that we need to care for them with dignity as they age. And so really, to address this, we need to rearrange our priorities and start taking care of people in a more serious way as they age. And part of that is taking care of the workforce that cares for them on a daily basis. And so I think I’m excited about the potential of this bill, and I’m hopeful about the benefits that it could have, but I hope that it’s only the first step.

DG: Rachel Werner, thanks for taking the time to talk to us on Tradeoffs.

RW: Thank you.

DG: I’m Dan Gorenstein. This is Tradeoffs.

Want more Tradeoffs? Sign up for our weekly newsletter!

Episode Resources

Related Reporting on Home Health Care and President Biden’s Infrastructure Plan:

FACT SHEET: The American Jobs Plan (White House, 3/31/2021)

Biden jobs plan seeks $400 billion to expand caretaking services as U.S. faces surge in aging population (Jeff Stein, Washington Post, 4/2/2021)

Biden Proposes The Biggest Medicaid Home-Based Long-Term Care Expansion In History, But…. (Howard Gleckman, Forbes, 4/1/2021)

Biden Makes Big Commitment To Home-Based Medicaid Long-Term Care, But Gaps Remain (Howard Gleckman, Forbes, 7/21/2020)

Related Research and Reports on Home Health Care:

U.S. Home Care Workers: Key Facts (PHI, 9/3/2019)

Medicaid Long Term Services and Supports Annual Expenditures Report (Center for Medicare and Medicaid Services, 1/7/2021)

Making Care Work Pay (Christian Weller, Beth Almeida, Marc Cohen and Robyn Stone; LeadingAge; September 2020)

Medicaid Home and Community-Based Services Enrollment and Spending (Molly O’Malley Watts, MaryBeth Musumeci and Priya Chidambaram; KFF; 2/4/2020)

The effect of workforce assignment on performance: Evidence from home health care (Guy David and Kunhee Lucy Kim, Journal of Health Economics, May 2018)

Older People Projected to Outnumber Children for First Time in U.S. History (U.S. Census Bureau, 3/13/2018)

Episode Credits


Howard Gleckman, Senior Fellow, Urban Institute

Rachel Werner, MD, PhD, Executive Director, Leonard Davis Institute of Health Economics at the University of Pennsylvania

The Tradeoffs theme song was composed by Ty Citerman. Additional music provided by Blue Dot Sessions.

This episode was produced by Ryan Levi and mixed by Andrew Parrella.

Additional thanks to the Tradeoffs Advisory Board and our stellar staff!