Other studies have shown similar results. Data gathered on institutionalized people in Durham showed about 90 percent were unmarried. 1/ Further, a 20-year Duke University study 2/ showed that those who have no spouses or children are more likely to be institutionalized.

Knowing these two major differences, we can examine the status of the noninstitutionalized population and identify those older people that have a high probability of being institutionalized. These people will be the 31 percent of the greatly or extremely impaired who live alone. While they comprise about 5 percent of noninstitutionalized older people, 66 percent of those institutionalized are from this group.

The second phase of our Cleveland study will analyze changes in well-being over time and identify factors contributing to these changes. The data developed during the second phase of the Cleveland study also provided the capability to further examine the people identified as having a high potentiality of being institutionalized to determine which services, if available, may enable these people to remain at home. By relating changes in well-being to services received, such an examination may also identify when it would be less costly to maintain these people at home.

PROPOSAL TO CREATE PUBLIC SERVICE
JOBS TO HELP ELDERLY SICK AT HOME

In August 1977, the Administration presented its welfare reform proposals. Included was a proposal to create about 1.4 million public service jobs and training slots, of which 200,000 jobs would be for providing home services to sick older Americans. All low-income families with children would be eligible for these jobs, but the proposal assumes that about 43 percent of the job program participants would be currently receiving welfare under the Aid for Families With Dependent Children program--thus reducing direct welfare costs.

1/Pfeiffer, E. (Ed.) "Multidimensional Functional Assessment: The OARS Methodology," Center for the Study of Aging and Human Development, Duke University, Durham, North Carolina.

2/Palmore, E. (Ed.) "Normal Aging I" Duke University Press, (Durham, 1970).

We believe that if the Congress adopts the public service job portion of these welfare reform proposals, the jobs created for assisting the sick and elderly should be focused on helping those who live alone and who are without family support. Otherwise, such jobs will merely duplicate or augment the existing family and friend networks and would not satisfy the unmet needs of the elderly. However, as one HEW official pointed out, it may be unreasonable to expect that families or friends would continue to provide such services when they become available at public expense.

CONCLUSIONS

The true costs of maintaining the elderly and sick in their own homes have been largely hidden because the greatest portion of such costs represent the services provided by families and friends rather than those provided at public expense. The importance of the family and friend is evidenced by the fact that the greatly or extremely impaired elderly who live with their spouses or children generally are not institutionalized whereas those who live alone usually are. Thus, the potential for home health benefits as an alternative to institutionalization depends largely on a person's living arrangements. The Administration's welfare reform package includes a proposal for the creation of jobs to help the elderly to remain at home. If these jobs were to meet the needs of the sick and elderly who do not have the supportive services of families and friends, it could provide a strong potential for providing an alternative to institutionalization.

RECOMMENDATION TO THE CONGRESS

In its deliberations on the Administration's Welfare Reform proposals, we recommend that the Congress consider focusing the jobs created for assisting the sick and elderly on those older people who live alone and are without family support.

CHAPTER 3

COST IMPACT OF MAKING CHANGES TO HOME

HEALTH CARE PROGRAMS UNDER MEDICARE AND MEDICAID

The Subcommittee asked for information and our evaluation on the cost impact of possible changes to the Medicare and Medicaid programs which would increase the availability of services and provide services not currently covered by the programs.

We asked HEW to provide the estimated costs for the proposed changes. For one proposed change that would affect Medicaid--the addition of homemaker services--HEW advised us that it was conducting a number of experiments to determine if homemaker services could be a cost-effective substitute for skilled care. HEW personnel stated that until the studies were completed, they could not estimate the cost of adding homemaker services to Medicaid.

Mandatory home health care benefits for all Medicaid eligibles is the other proposed change. Home health care to the medically needy is technically not a requirement under the law, but it is provided in 32 States and jurisdictions that have a medically needy program; therefore, the cost of this proposed change would be minimal.

SSA actuaries estimated that for fiscal year 1978, the additional costs for each of the proposed changes to Medicare, computed separately, would be as follows:

The above amounts should not be totaled because if more than one limitation were removed, there would be interactions. For example, the estimated $1,250 million for eliminating the skilled care requirement does not include the 1 million persons who consider themselves homebound and in need of home services, but not necessarily skilled care. Most of these are eligible for Medicare and are suitable recipients for homemaker services. The cost of providing this service could result in expenditures of $2 to $3 billion if the skilled care requirement was eliminated and homemaker service was added.

A discussion of each of the proposed changes is presented below.

LIMIT ON NUMBER OF VISITS

For Medicare, a beneficiary is eligible for 100 visits per spell of illness a year following a qualifying inpatient stay under part A and 100 visits per calendar year under part B.

SSA actuaries estimated additional costs of about $12.5 million for an additional 300,000 visits for fiscal year 1978 if these visit limitations were removed--a 2-percent increase in home health benefits costs. This assumes that about 3,000 people would exhaust part B benefits and use an additional 100 visits a year.

According to SSA data, few beneficiaries exhaust the presently allowed number of Medicare home health care visits. This data showed that, as of January 21, 1977, of the 553,941 people who received home health care under part A, 11,849 or about 2 percent exhausted their benefits. For persons receiving part B home health care during the last 3 years, benefits were used as follows:

a/SSA considered the data for 1976 incomplete.

SSA could not provide information on the number of people who had exhausted both parts A and B benefits.

Because about 97 percent of part A Medicare beneficiaries have part B coverage, we assume that most people who exhausted part A benefits continued to receive services under part B. Thus, very few people (about 3,000) exhaust all available home health benefits under Medicare.

We contacted 36 individuals who exhausted their part B benefits during 1976, or the agencies providing services to them, to find out if they had incurred additional expenses after their Medicare benefits had been exhausted. Thirtyfive continued to receive home health services and one was institutionalized to receive physical therapy treatment under Medicare. The additional home health expenses, which ranged from $5.00 per visit in Cleveland to an average of about $33.00 per visit in Jacksonville, Florida, were paid from community funds, absorbed by the local agency, paid partly by the individual, or paid by Medicaid. Only three individuals were able to pay a portion of their costs for the additional benefits received.

Data on the number of additional visits received by all 35 individuals was not available. However, 13 individuals received, on the average, an additional 61 visits during 1976 which indicates to us that the assumption that individuals exhausting benefits would use an additional 100 per year may be a little high.