A graying population and the fiscal woes of Medicaid are forcing the nation to reconsider how best to provide long-term health care for the aged and disabled. States are experimenting with ways to reshape their long-term care programs, the National Governors Association has proposed measures to restrain Medicaid spending for the needy and encourage greater use of private insurance, and Congress is moving to close loopholes that allow some well-off Americans to hide assets so as to qualify for Medicaid. The flurry of activity won't come close to solving the nation's long-term care problems, but it usefully highlights how far the country is from seriously confronting this issue - either through public programs or private insurance. 

MEDICARE Long stays in nursing homes, where the average cost has reached $70,000 a year for private patients, are not covered by Medicare. In a more rational world, Medicare would cover long-term care much as it now covers short-term illnesses for older Americans. But with federal deficits looming for years to come and the government struggling to rein in existing entitlement programs, the political climate makes it impossible to even consider that now.

MEDICAID By default, Medicaid has become the primary payer for long-term care. It accounts for almost half of the nation's spending on long-term care and shells out more money to nursing homes than to hospitals or managed care companies. But Medicaid is a means-tested program that serves the poor and those in the middle class whose assets are quickly exhausted after a short stay in a nursing home. Given efforts in Congress and many states to restrain growth in Medicaid spending, people will find it harder to get help from this source in the future. 

Flagrant abuses and questionable asset transfers that allow some well-off individuals to qualify for Medicaid are likely to be curtailed, as they should be, but that is not the answer to the governors' prayers for fiscal relief. In a more promising effort to restrain costs, many states are reducing the use of nursing homes and relying instead on care delivered at home or in the community, where it is often cheaper. That is a salutary development provided the care is of good quality. Most elderly patients would prefer to be treated at home rather than in a nursing home.

PRIVATE PAYMENTS Only the wealthy can easily afford to pay out of pocket for years of care in a high-cost nursing home. Unfortunately, private insurance has not had wide appeal. Only some 10 percent of the elderly have policies, and while that number is expected to rise, the policies are too expensive for many people, including those who most need protection. 

As long as the federal government avoids tackling the long-term care problem head on, it should at least be leading the effort to create a patchwork of mini-solutions. Tax credits or deductions might encourage more people to buy long-term care coverage, and the insurance industry should be pressured to come up with more attractive packages. Washington could also take the lead in finding ways to tap into the greatest asset owned by most people, the equity value of their home, without endangering the security of the patient or a surviving spouse. 

Beyond such particulars, what's needed most is a shift in thinking. Americans have to realize that there is no entitlement to long-term care and that few employers include long-term care in their health insurance packages. That thought should lead to two things: serious financial planning on an individual basis, and a long national conversation about how much responsibility the government should have in ensuring proper care for the elderly and disabled.