I’ve followed long-term care since 1982. Back then
nearly all formal, paid LTC services were provided in nursing homes.
Medicaid was the dominant payor, but paid too little to ensure quality
care. Nicer private-pay options like assisted living were becoming
available, but most people could not afford them. A budding new product,
LTC insurance was gaining traction slowly but was constrained by the
dominance of subsidized Medicaid nursing home care. Much of the care
burden fell on unpaid family members by default.
Before 1980 the Medicaid program allowed unlimited
asset transfers to qualify. People ignored LTC risk and cost until care
became necessary and then moved seamlessly onto public assistance.
Medically needy eligibility rules allowed high income people to qualify by
deducting their private medical and LTC expenses, enabling them to become
“low income.” Despite its dismal reputation for poor access and quality,
Medicaid nursing home care was the path of least resistance for people
needing expensive long-term care. Its availability impeded the
development of home-based care options and private-pay alternatives like
insurance.
At the time, I was working for the Health Care
Financing Administration (HCFA), the predecessor of the current Centers
for Medicare and Medicaid Services (CMS). As I analyzed the LTC
marketplace in the early 1980s, I concluded that easy access to Medicaid
nursing home benefits trapped elders in underfunded nursing homes,
discouraged service delivery and financing alternatives, and would
bankrupt the economy as the age wave crested and crashed over time.
Something had to be done to break this cycle of perverse incentives
leading to bad outcomes. Why prepare for LTC when you could ignore the
risk, avoid insurance premiums, and get the government to pay if and when
you needed care?
HCFA management suppressed that paper. They didn’t
think a mid-level Seattle regional office staffer should be writing
national policy papers. But the Inspector General of the Department of
Health and Human Services (IG) and the Government Accountability Office
(GAO) both picked up on my paper and conducted national studies from the
same analytical perspective. The IG hired me out of HCFA to conduct their
study and write its 1988
report. I also consulted on
GAOs 1989 report. Both national studies recommended tightening
Medicaid financial eligibility rules and requiring estate recoveries as a
means to reduce expenditures and encourage private LTC financing
alternatives.
At first, it looked like this strategy would succeed.
Federal legislation passed year after year to target Medicaid LTC to the
needy while encouraging the affluent to plan early and avoid public
assistance. COBRA ’85 prohibited “Medicaid qualifying trusts”; MCCA ’88
required states for the first time to penalize asset transfers for the
purpose of qualifying for Medicaid; OBRA ’93 made estate recoveries
mandatory. So by the mid-1990s the key elements were in place to
revolutionize LTC policy, eliminate the perverse incentive trapping elders
in nursing homes on Medicaid, and breathe new life into the private home
care and LTC insurance markets.
Alas, history did not play out as we hoped. The
states didn’t implement the new rules fully or aggressively; the federal
government didn’t enforce the tighter eligibility and mandatory estate
recovery measures; the media didn’t cover the new system’s incentives to
plan for LTC and avoid Medicaid; and elder law Medicaid planners found
evermore creative ways to circumvent the rules. So consumer behavior
didn’t change. People continued to ignore LTC risk and cost, waiting to
see if they would ever need expensive LTC, and then turning to Medicaid
when high cost care became necessary. That common result relieved the LTC
financial burden on heirs further entrenching their tendency to ignore LTC
until needed and then rely on Medicaid.
A Republican Congress and President Clinton became so
frustrated by skyrocketing Medicaid LTC costs benefiting the affluent as
much as the poor that they made it a crime to transfer assets to qualify
for Medicaid in HIPAA ‘96. Outrage at this “Throw Granny in Jail” law led
to its repeal by BBA ’97 and replacement with the “Throw Granny’s Lawyer
in Jail” law. The latter did not survive judicial scrutiny as it was
deemed unenforceable to hold attorneys legally culpable for recommending a
practice (asset transfers) that were no longer illegal. Nothing more
happened to target Medicaid to the needy and incentivize LTC planning by
the affluent until a last gasp effort in DRA ’05, which capped Medicaid’s
home equity exemption for the first time ever.
Every one of these beneficial federal statutes
achieved during the preceding years occurred after and in response to an
economic recession. When federal and state budgets were tight during
recessions, politicians and policy makers were forced to look for ways to
constrain Medicaid expenditures while preventing care access and quality
from deteriorating. That’s when the measures recounted above to lengthen
and strengthen asset transfer penalties, enforce estate recoveries, and
encourage private LTC insurance gained traction. “LTC Partnerships” and
LTC insurance tax deductions were also passed in those years and for those
reasons. But once the recessions ended, and budget constraints relaxed,
the pressure for wiser policies receded, and higher spending to mollify
advocacy groups returned.
Then came the Great Recession of 2007-2009 and all
progress stopped. This big recession did not lead to beneficial
legislation as in the past. Why? Starting a few years before, but
accelerating after the Great Recession, the Federal Reserve began pushing
interest rates down toward zero. The resulting artificially low interest
rates distorted incentives throughout the economy including in the LTC
market. Deficits and debt didn’t matter so much when the cost of servicing
the debt was nominal because interest rates were negligible. Pressure to
control Medicaid LTC expenditures abated and costs grew with few
constraints. Medicaid expanded to provide more desirable home and
community based services making it more attractive to consumers. The LTC
insurance market suffered as carriers could not obtain anticipated returns
on their reserves and were forced to raise premiums, thus angering current
insureds and alienating prospects.
These conditions continued and worsened until a
government spending blow out during the Covid pandemic caused deficits and
debt to skyrocket and inflation to spike. A return to artificially low
interest rates and continued unbounded spending is unlikely. The national
debt currently exceeds $34.3 trillion, a six-fold increase since 2000 and
up $200 billion in just the past month. The interest rate to service the
national debt doubled between January 2022 (1.56%) and January 2024
(3.15%). Debt service cost is already
18% of total federal spending and
2.4% of GDP. It will increase in tandem with the rising debt.
The U.S. government will soon spend more on interest payments than defense.
Social Security, Medicare, Medicaid, Obamacare, and other federal health
care programs consumed
46% of all federal spending in 2022. These costs will continue to rise
at least until statutory entitlement cutbacks begin in the late 2020s and
the 2030s. The
staggering unfunded liabilities of Social Security ($26.6T) and
Medicare ($40.9T) alone guarantee these programs will encumber the
productive economy for decades ahead. On top of everything, boomers start
turning 85, their age of greatest medical and LTC need, in 2031.
Coming up with those policy proposals is the task
before us. But we can’t continue doing more of the same. Keeping Medicaid
LTC financial eligibility generous, allowing big income and asset
exemptions, and threatening estate recovery to persuade the public to plan
and insure for LTC did not work. Government gave the carrots but withheld
the sticks, so consumers ignored LTC until they needed it and then turned
to Medicaid. Consequently LTC services and financing in the U.S. are as
bad or worse today as they were in 1982. Long-term care in America remains
broken, marked by nursing home bias, too little home care, dubious access
and quality, inadequate funding, caregiver shortages, stressed out unpaid
family caregivers, and growing complaints of structural racism. A radical
new approach to LTC financing policy is needed.
Medically needy income eligibility, which allows high
income people to qualify for Medicaid if their medical and LTC expenses
are high enough, must end. Likewise Miller income diversion trusts, that
achieve the same purpose in states that do not use the medically needy
income system, should not be allowed. Such policies divert Medicaid funds
that should support the underprivileged to people who could pay a portion,
often a large portion, sometimes their entire LTC bill privately.
Medically needy policies also mean that nursing home and home health
providers receive their revenue at notoriously low Medicaid rates instead
of at market rates that are half again as high on average. This heavier
dependency on Medicaid impedes care access and quality for the affluent as
well as the poor.
Another income policy that needs to end is the
requirement people on Medicaid contribute nearly all their income,
including their Social Security benefits, to offset Medicaid’s cost for
their care. This policy makes Medicaid vulnerable to Social Security’s
precarious financial condition. When statutorily required 23% benefit cuts
occur in the 2030s, state Medicaid programs and the already financially
strained LTC providers they support will be devastated. A better policy is
to have all people pay LTC providers at the market rate up to their
ability to do so and for Medicaid to make up the difference when
recipients fall short. That will ensure higher revenue for LTC providers
allowing them to improve care and alleviating caregiver shortages as they
are able to pay higher wages.
Asset eligibility rules also need to change. Current
rules allow applicants to reduce their countable wealth by purchasing
exempt assets. Because exempt assets, including home equity, IRAs, a
business, a vehicle, home furnishings, personal belongings, etc. are
virtually unlimited, countable assets in any amount are easily eliminated
in this way. Medicaid should require that asset spend down be for medical
or LTC expenses in order to count as it does for income spend down now.
The huge Medicaid home equity exemption, $731,000 in every state where it
isn’t $1,071,000, should end. Home equity is easily converted to liquid
cash flow to purchase top quality LTC in the private market. Obviously,
abusive Medicaid Asset Protection Trusts and Medicaid friendly annuities,
that allow even the wealthiest families to co-opt Medicaid to fund their
LTC, should end.
Once all income and asset exemptions are eliminated,
Medicaid LTC benefits will be available only to the truly needy. More
affluent people will pay their own way. The extra private revenue flowing
through the system will improve care for everyone and eliminate the
caregiver shortage by paying higher wages. Faced with a real spend down
requirement, that has never existed in the U.S. before, consumers will
take the risk and cost of LTC seriously for the first time. Many will plan
early and save, invest or insure for LTC. Others, if they continue to
ignore LTC will face serious consequences if they need LTC later in life.
These consequences will signal to others that planning for LTC is
imperative because the costs of failing to do so are too great.
But isn’t this plan too draconian? Can a humane
society really refuse to provide long-term care unless and until people
have used up all their own income and assets paying privately? Yes, but
only if we reconceptualize LTC and reprioritize it among life’s
necessities. As I explained in “Long-Term Care: The Solution,” LTC risk
and cost are not as great as we once thought. For example, nearly half of
Americans turning 65 will never need paid care. See the paper for more on
this point. Likewise, it turns out that aging Americans have much more
wealth they could use for LTC if they had a reason to do so, including $12
trillion in home equity, $35 trillion in retirement savings, and $21
trillion in life insurance. See the paper on this point too. LTC is the
single biggest financial risk aging Americans face, but it has been
treated as an afterthought, easy to ignore, because Medicaid was always
there to cover the cost if and when expensive care became necessary. With
Medicaid gone as an asset-protecting, long-term care fail safe, people
will put a much higher priority on planning for the risk.
So, having created the necessity for people to plan
ahead for LTC, what is needed is a way for them to do so without being
devastated financially at a time of their lives when other financial
responsibilities, such as raising children and making car and mortgage
payments, have always taken precedence. In the LTC Solution paper I
proposed seven LTC Choices designed to enable people to prepare for future
LTC expenses without impinging excessively on their current cash flow. The
basic ideas are (1) to focus on preparing people to pay for their average
expected LTC liability, instead of their having to plan for the unlikely,
but devastating catastrophic cost if the worse happens and (2) to allow
savers to earmark a portion of the wealth they are already accumulating to
be used for LTC if and only if such care becomes necessary.
So here are the seven LTC Choices in their barest
form. See the paper for details. (1) Buy less LTC insurance at lower
premiums to cover average LTC risk instead of the full catastrophic risk
as now. (2) Establish a new tax-favored account for long-term care. Carve
out enough retirement savings (3), home equity (4), life insurance (5), or
estate wealth (6) to cover average LTC risk. (7) Incentivize younger
people to start LTC planning earlier with easier goals reflecting their
longer time to prepare. Each of these LTC Choices is intended to make it
easier for people to cover their expected lifetime LTC risk and cost.
Private organizations or companies, similar to
Underwriters Laboratories (UL), should evolve to help consumers define
their average LTC risk and to set goals to achieve it.
With the moral hazard of easy access to Medicaid
gone; with consumers expected only to cover their average LTC risk; and
with the ability to tap existing sources of funds established, most people
will prepare privately for LTC. Private revenue at market rates flowing to
LTC providers will improve LTC access, quality and choice. With most
people prepared to pay for care, families will be relieved of providing
the heaviest and most intimate kinds of LTC. They will be able to focus on
giving love and support. Caregiver shortages will disappear as wages for
the profession rise from bare minimums now to private market rates.
Medicaid LTC expenditures will decline radically as the program refocuses
on helping only the remnant who have no other means to pay for private
care. With Medicaid program resources relieved, it should pay market rates
for care thus improving access, quality and choice for the smaller number
of remaining recipients.
An additional benefit of refocusing Medicaid LTC on
the needy in this way is that it will end the problem of structural LTC
racism. In its current form, Medicaid benefits the affluent to the
detriment of the underprivileged. Prosperous people gain access to
Medicaid’s best LTC providers by holding back “key money” when they spend
down assets to qualify. This key money enables them to pay privately for a
time. Nursing homes and home care providers are desperate for private
payers, so they roll out the red carpet for anyone who can pay privately
even for a while. Poor people don’t have key money. Their scarce savings
are quickly consumed. They only have access to the mostly Medicaid
facilities and services that have the worst reputations for care. By
diverting affluent people to private pay, Medicaid will be able to provide
better care to people in need thus eliminating the structural racism that
pervades the system now.
The many deficiencies of today’s LTC service delivery
and financing system have been self-inflicted by perverse incentives in
public policy. Whether well-intentioned or simply unintended, policies
that invited prosperous people to ignore LTC until they need it and then
qualify for public assistance distorted the LTC marketplace. Efforts to
change policy to encourage responsible planning failed. They will always
fail as long as consumers can ignore LTC, get government to pay, and
retain wealth for inheritances. “Long-Term
Care: The Problem” and “Long-Term
Care: The Solution” explain what’s wrong and how to fix it in greater
detail.
What will it take to achieve this radical
transformation of LTC policy and Medicaid eligibility? Most likely it will
take a commensurately radical downturn in the economy. Only desperate
measures to make budget ends meet will compel change of the magnitude
needed. But such measures may soon become unavoidable as servicing the
national debt at ever increasing interest rates becomes impossible; more
deficit spending, money printing and borrowing further increase the debt
relentlessly; and the resulting inflation finally shows the public how it
is forced to pay for decades of irresponsible fiscal and monetary policy.
As these pressures grow, the oncoming crisis of unfunded entitlement
liabilities will hit just as the boomer generation’s greatest medical and
LTC need arises in the 2030s, making that decade as bad or worse than the
1930s.
As bleak as the current situation is, it will
improve. As economic conditions deteriorate, policymakers will either
respond with thoughtful changes along the lines described above. Or
economic reality will compel such changes by making the current system
fiscally unsustainable and such changes therefore unavoidable. The only
remaining question is whether America can fix Medicaid LTC by returning
the program to its roots as LTC protection for the needy or whether the
current system has to collapse before that happens anyway by default. When
and how will this process play out? In the same way Hemmingway described
going bankrupt: gradually at first, then suddenly.
LTC Comment: Medicaid channels billions of dollars to
the funeral business that could pay for better long-term care for the
needy. Evidence and consequences after the ***news.***
*** ILTCI 2023: Last year’s Intercompany Long-Term
Care Insurance Conference was a huge success! Over 950 attendees from
across the US attended. Organizers say: “We look forward to bringing you
another amazing conference in 2024. Here’s how our attendees
self-identified the area of the industry they work in:
“Many readers and colleagues know Rich Wierman, an
LTCA producer for over 20 years. The Baldwin Hills, CA home [buried in
mud] belongs to his daughter Kristy and son-in-law Matt, who find
themselves overwhelmed after ‘nearly every room of their home is filled
with about 4 feet of mud.’ [LTCA’s Steve Forman] asked Rich if [he] could
share their story in his words:
Shock: "This tragedy is huge and hard to believe.
This home in LA was Matt and Kristy’s first home, an extensive fixer-upper
they poured their lives into. They finished the last remodel last year and
it was beautiful. Matt was there all last week and I picked him up from
the [Seattle] airport Friday night and he mentioned he was concerned about
the torrential rains coming that weekend. Sunday night at 10:30pm, their
cameras and alarms went off on their phones. Then they went dark, and a
neighbor confirmed their fears. Kristy called me at 11:00pm and told me
the house was destroyed. Matt flew there in the morning and has spent all
week assessing the damage, clearing the house, and trying to determine
what to do next. It was confirmed that insurance does not cover natural
disasters like this. What a huge shock and disappointment!"
LTC Comment: Medicaid is the biggest long-term care (LTC)
payer in the United States. It contributed 43% of the $530 billion
Americans spent on LTC in 2021. Eligibility for Medicaid is means-tested.
Recipients are allowed to retain no more than $2,000 in countable assets
on average. Wealth in excess of that amount is supposed to be spent down.
But Medicaid does not require that excess assets be
spent down for medical or long-term care. Program applicants may instead
reduce their wealth to the usual $2,000 qualifying level by converting
countable into exempt assets. Exempt assets are virtually unlimited. They
include most home equity, tax-favored retirement accounts, a vehicle, a
business and
many more.
But Medicaid recipients hold one exempt asset more
than all the others combined. According to
ElderLawAnswers: “By purchasing a prepaid
funeral contract, you can turn available assets into exempt assets
that won't affect your eligibility.” Which final expenses can applicants
prepay with a funeral trust to achieve Medicaid financial eligibility more
quickly and easily?
How much do funerals cost and how much of that
expense can Medicaid applicants use to facilitate and expedite their spend
down?
USA Today reports: “The median cost of a funeral is $7,848, according
to a recent study conducted by the National Funeral Directors Association.
The median cost of a funeral with cremation comes in at $6,970.” How does
the average value of a funeral trust purchased to achieve Medicaid
eligibility compare with the average cost of a funeral? Roughly double.
Irrevocable Funeral Trusts [IFTs] can be established
for each spouse. Typically, an elderly couple applying for Medicaid, would
establish two trusts, each for around $10,000 – $15,000. These trusts
would lower the couple’s countable assets for Medicaid purposes by $20,000
– $30,000. Furthermore, some states allow IFTs to be established for one’s
adult children. Some of these states include Arizona, Colorado, Illinois,
Missouri, and Oregon. (American
Council on Aging)
That is a lot of money diverted from private
long-term care spend down to funeral expenses. But how prevalent is this
practice? Very little evidence exists about the level of non-countable
assets retained by Medicaid LTC recipients. More studies are needed. One
Government Accountability Office (GAO,
2014) analysis did address the question head on ten years ago.
“GAO identified four main methods used by applicants
to reduce their countable assets—income or resources—and qualify for
Medicaid coverage” including “spending countable resources on goods and
services that are not countable towards financial eligibility, such as
prepaid funeral arrangements.” (GAO,
2014, “Highlights” page). GAO concluded “Nearly 75 percent of
applicants owned some non-countable resources, such as burial contracts;
the median amount of non-countable resources was $12,530” (Ibid.).
These findings were based on a small sample in only
three states. They are not generalizable to the entire population of
Medicaid recipients. But they do dramatically suggest the need to conduct
more studies that are applicable to the broader base. Just assume for a
moment that three-fourths of all Medicaid recipients divert $12,530 from
private spending to prepay funeral costs. How much money are we talking
about?
Medicaid’s policy of allowing applicants to avoid
spending down assets for long-term care by purchasing prepaid funeral
contracts is ethically dubious. It reduces market-rate compensation to LTC
providers, replacing it with Medicaid reimbursements that are notoriously
low, often less than the cost of the care provided. Inadequate revenue
translates into access and quality problems, caregiver shortages due to
poor compensation, and excessive residual caregiving for unpaid family
members. The policy harms Medicaid, Medicaid recipients, and taxpayers
while it benefits the funeral industry, which has a less than stellar
reputation. According to the
Wall Street Journal: “Unethical funeral homes have exploited
grieving customers for decades.”
Subsidizing the funeral industry at the expense of
LTC for the needy is only one of many ways current Medicaid eligibility
policy impairs care access and quality. To make sense of what is wrong
with LTC and why, read the
Paragon Health Institute’s “Long-Term
Care: The Problem” and “Long-Term
Care: The Solution” and watch this “virtual
LTC event” featuring age wave visionary Ken Dychtwald and leading LTC
researchers.
LTC Comment: For a scintillating 75-minute virtual
LTC event, go
here and read on for a transcript of the program’s opening commentary,
after the ***news.***
*** MEDIA COVERAGE of the
Paragon Health Institute’s January 9, 2024 “virtual
LTC event” and related issues is notable. Following are links to and
LTC Clippings about this coverage.
1/9/2024, “Qualifying
for Medicaid LTC Benefits Could Get Tougher,” by Allison Bell,
ThinkAdvisor -
LINK to LTC Clipping
1/12/2024, “Public
policy must address flaws in long-term care financing, experts say,”
Kathleen Steele Gaivin, McKnights Senior Living and McKnights Business
Daily -
LINK to LTC Clipping
January 2024, “Easy
Medicaid Access Discourages Long-term Care Planning,” by Kevin Stone,
Health Care News -
LINK to LTC Clipping
1/15/2024, “Preserving
long-term Medicaid for the poor,” by Gary D. Alexander, Washington
Times -
LINK to LTC Clipping
1/16/2024, “Medicaid
should not be for the middle class | Opinion,” by Sally Pipes,
PENNLIVE.com -
LINK to LTC Clipping
1/16/2024, “Medicaid
should not be for middle class,” by Sally C. Pipes, TribLive
No LTC Clipping
*** ILTCI ’24 seeks exhibitors and sponsors for this
year’s conference in San Diego. See the current sponsor list
here. Inquire about and/or request exhibit space
here. Register
here. Register now to capture the
$100 Early Bird Discount which ends today, January 19. This year’s
meeting convenes March 17 to 20 at San Diego’s newly renovated Town
& Country Resort. This is the big one with the best LTCI content and
networking you’ll find anywhere. I’ll host a special session: “Stephen
Moses (Center
for LTC Reform president) will present two new papers “Long-Term
Care: The Problem” and “Long-Term
Care: The Solution.” He will explain why LTC financing reform has
languished since the Great Recession, but will flourish anew soon. Steve
will also preview his forthcoming paper ‘Ending Structural Long-Term Care
Racism.’ Don’t miss this review of the past and forecast of the future by
the 2019 ILTCI Recognition Award recipient.” ***
***
ILTCI RECOGNITION AWARD: The ILTCI Conference is reviving this
tradition. Marc Cohen was the ILTCI Recognition Award’s first recipient in
2018. Steve Moses received the honor in 2019. After the 2020 conference
was cancelled due to Covid, the ILTCI Recognition Award was not announced
or bestowed for the 2021 to 2023 conferences. But kudos to 2024 ILTCI
Conference Chair Karen Smyth and the organization’s Board of Directors for
restoring the tradition in 2024 with this announcement: “Now is your
chance to nominate a person(s) or organization that has made a
significant, long-term contribution towards the attainment of the ILTCI
vision. Help us showcase the best of our industry and acknowledge their
contributions. Nominees must have worked within the long term care
insurance industry in some capacity for minimum of five years to qualify.
Submissions will be accepted through February 1, 2024.” Find the
nomination form
here. Act soon as the deadline is only 12 days away! ***
*** STOP. Go back one item. Don’t skip over this
chance to nominate an organization or person who has made a “significant,
long-term contribution towards the attainment of the ILTCI vision.” The
ILTCI vision is “to create an environment for aging in America that
includes thoughtful, informed planning that takes into account the most
effective and efficient use of resources in addressing the risks and costs
of long term care for all levels of American society.” Nominate someone
for the ILTCI Recognition Award
here now. ***
LTC BULLET: PARAGON’S VIRTUAL LONG-TERM CARE EVENT
LTC Comment: On January 9, 2024, the
Paragon Health Institute sponsored and hosted a 75-minute virtual LTC
event. Check out a video recording of the proceedings
here.
Paragon president Brian Blase opened and closed the
program with summary remarks. Age wave visionary Ken Dychtwald moderated
the discussion and explained how LTC fits into the broader cultural,
demographic, and gerontological context. He asked the participants many
provocative questions. Steve Moses briefly summarized findings from two
Paragon reports—“Long-Term
Care: The Problem” and “Long-Term
Care: The Solution.” Two discussants reacted: Richard Johnson from the
Urban Institute and Mark Warshawsky from the American Enterprise
Institute. Over 100 people attended via Zoom. They asked an unusually
large number of questions (34) for such a brief program, some of which
were answered live and others are addressed in the Paragon reports.
Steve set the stage with a 12-minute presentation,
the text of which follows below. Rich and Mark had six minutes each to
respond. Their feedback and their answers to questions reflected
substantial agreement, but also many insightful diverging views. Do click
through to
watch the whole program and see for yourselves. In the meantime,
here’s how Steve set the stage:
Welcome and thank you for participating in today’s
discussion.
Long-term care in America is broken, marked by
nursing home bias, too little home care, dubious access and quality,
inadequate funding, caregiver shortages, stressed out unpaid family
caregivers, and growing complaints of structural racism.
Everyone bewails these problems, but few ask or
explain their cause. Most jump to “solutions” that involve more government
money and regulation. But, arguably, government money and regulation
caused these problems. Certainly, Medicaid is at their root.
Medicaid reimburses providers 70% of market rates,
too little to ensure access and quality. Resulting low salaries cause
caregiver shortages and worsen the burden on families. Federal law
underwrites Medicaid’s nursing home bias and impedes home care
alternatives.
Medicaid’s impact is much greater than its 42%
contribution to LTC spending implies. By requiring recipients to
contribute their incomes, Medicaid shifts costs to the private sector. It
relies heavily on recipients’ Social Security income, and on Medicare,
which pays higher reimbursements, enabling Medicaid to pay often less than
care costs.
This arrangement is unsustainable. The boomer
generation starts turning 85 in 2031, when their LTC need is greatest,
just as Medicare and Social Security face statutory cuts. With higher
caseloads, less revenue from Social Security, and reduced Medicare
payments, rising Medicaid expenditures will constrict budgets, further
impairing providers’ ability to deliver good care.
What caused Medicaid’s dominance that created these
problems? Policy makers sought to provide a safety net for the needy, but
they created a financial fail safe for the elderly instead. A program
reputed to help only low income people who have spent down their savings
for care is actually available to higher income people who preserve most
of their wealth.
As a rule of thumb, monthly income below the cost of
a nursing home is not disqualifying; most large assets, such as home
equity, are exempt; any remaining countable wealth is removable by
purchasing exempt assets; and if eligibility is still out of reach, legal
advisers extend it to affluent clients by means of trusts, annuities, and
other financial strategies.
What has this system wrought? By giving publicly
financed LTC to the middle class and affluent late in life and allowing
them to preserve wealth, it encouraged consumers to ignore this risk early
in life. It indemnified them against the worst consequences of failing to
prepare. In other words, Medicaid created a “moral hazard” that
discouraged early and responsible LTC planning.
Despite constant warnings that aging Americans are
“Dying Broke,” few people plan for LTC. Private insurance languishes. The
high “out-of-pocket” costs that CMS reports are deceptive. Most are
payments from income, not assets, toward the cost of care for people
already on Medicaid. If you back out all other LTC payment sources, what
remains that could come from personal savings is only 6%.
Taking all this into account, we concluded that to
end LTC’s problems would require ending Medicaid as a late-life,
wealth-preserving funding source for all but the truly indigent. The
solution is to convert Medicaid into the program most think it was
originally intended to be and many claim it still is, a safety net for
people actually impoverished by private LTC costs.
To achieve that objective, we propose to end all
Medicaid rules that enable people with substantial incomes and assets to
qualify. On the income side, that means eliminating the “medically needy”
method of determining income eligibility and stopping the use of income
diversion trusts in “income cap” states. All private income would remain
in the private-pay system instead of coming to providers at harmfully low
Medicaid rates as now.
On the asset side, we propose to eliminate the ways
people qualify for Medicaid benefits while preserving wealth. Purchase of
exempt assets to reduce countable resources is the biggest of these and
the least understood. The home equity exemption, over $1 million in some
states, should disappear entirely. The look-back period for asset transfer
penalties should be 20 years instead of five. Legal schemes to remove
wealth from LTC spend down should end.
Phase these changes in gradually. Exempt everyone too
old or infirm to adapt and prepare. People 55 or older and younger people
with chronic disability or early onset dementia would be unaffected. Tell
others that Medicaid eligibility rules have changed; there is no way to
fund LTC and preserve estates going forward without taking personal
responsibility; so they should prepare now in case they need care later.
Private firms can estimate individuals’ risk levels actuarially giving
each a planning goal to achieve by a date (or age) certain. People who
prepare for LTC risk at younger ages could have a lower goal set.
Is this plan draconian? No more so than the way
Medicaid is described today as requiring “catastrophic” spend down into
total “impoverishment.” Consider the plan’s benefits. Consumers would
prepare for LTC instead of ignoring that risk until they need care. Fewer
would rely on Medicaid, substantially reducing numbers of high cost “dual
eligibles.” Reduced Medicaid budgets could pay providers market rates,
which would improve quality and relieve caregiver shortages. Families
would mobilize to help elders plan and protect inheritances by avoiding
Medicaid instead of taking advantage of it. With most LTC funded
privately, families could turn over the heaviest and most intimate
personal care to paid caregivers. Nursing homes would provide sub-acute
and rehab care but long-term custodial care would devolve naturally toward
home care as market-based consumer preferences prevail.
The challenge to achieve these benefits may not be as
great as we once thought. Research, by one of today’s interlocutors, Dr.
Johnson, found that while 56% of people turning 65 will need LTC, 44% will
not. The average $121,000 cost for those who do need care, 43% of which
Medicaid pays today, could be financed by setting aside the “present
discounted value” (PDV) of $70,000 at age 65. Starting earlier, less would
be needed.
We also identified substantial wealth held by aging
Americans that is untapped for LTC. It is locked up in home equity ($12
trillion), retirement savings ($35 trillion) and life insurance ($21
trillion). By mobilizing this wealth to fund LTC, reliance on Medicaid
could be drastically reduced and access to quality care vastly increased.
But that objective faces two obstacles.
First: that wealth already supports other worthy
goals such as estate planning, retirement savings, and life insurance.
Second: young families saving for retirement while making car and mortgage
payments cannot assume the added burden of LTC planning. We resolve those
two challenges by reprioritizing LTC among life’s risks and offering ways
for people to meet their planning objective more easily.
LTC is the biggest financial risk aging people face,
but Medicaid obscured that fact. Granting LTC top priority, public policy
should allow people to meet their planning responsibility by earmarking
wealth they are already accumulating for other purposes to be used first
for LTC if needed. We propose seven “LTC Choices” to help them do that.
LTC Choice #1 recognizes private insurance would be
more affordable covering only average risk. Choice #2 proposes a new
tax-favored account for LTC. Numbers 3, 4 and 5 would enable people to
earmark part of their home equity, retirement savings, and life insurance
for LTC if and only if needed. LTC Choice #6 does the same for estates and
#7 favors people who start younger with more easily attainable goals.
With average LTC risk and cost handled in the private
market, the burden on Medicaid will decline substantially, but not
disappear. Medicaid for catastrophic coverage will remain but only for the
truly indigent whose savings have actually been consumed by private
LTC expenditures.
Exploding Medicaid costs and the service delivery and
financing dysfunctions they caused are undesirable and insupportable. What
could be more reasonable than to solve them by converting Medicaid into
the program most people think it already is?
#############################
Updated, Tuesday, January 16, 2024,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-002: LTC NEWS AND COMMENT
LTC
Comment: Do you spend hours searching the internet for useful articles,
key data, and relevant reports to keep you on the forefront of
professional knowledge? Do you lose business because you’re blindsided by
clients or competitors who learn critical information before you do?
Here’s an antidote:
LTC
Clippings: The Center for Long-Term Care Reform notifies subscribers to
our LTC Clippings service daily of information you need to know. Each
message contains only the critical facts about new publications: a title,
representative quote, a link to the original, and our analysis in a
sentence or two. To inquire or subscribe, contact Damon at 206-283-7036
or
damon@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC
E-Alerts: Once a week, we compile our daily LTC Clippings into a summary,
email it to Center for Long-Term Care Reform members, and archive it in
The Zone, our password-protected members-only website. Center members
also receive our weekly LTC Bullet op-ed. To join the Center and receive
all these benefits and more, contact Damon at 206-283-7036 or
damon@centerltc.com.
We no
longer post our LTC E-Alerts on the Center’s public access website, but
here’s what today’s LTC E-Alert contained: links, quotes and comments on
the following articles, reports, or data:
-
Cost of linked-benefit LTC insurance drops by up to
27 percent from last year
-
Public policy must address flaws in long-term care
financing, experts say
-
New Paragon research on Medicare clinician
payments, Medicaid expansion, long-term care, and the CDC
-
Long-Term Care: The Problem and The Solution
-
Qualifying for Medicaid LTC Benefits Could Get
Tougher
-
States Begin Tapping Medicaid Dollars to Combat Gun
Violence
-
Researchers dissect LTC’s immigrant workforce, push
for even more
-
Home health is fastest-growing component of
national health spending
-
California is robbing America’s poor to fund
Medicaid for its rich
-
HCBS staffing shortages lead to severe cuts to
programs, services, new report finds
-
Financial hardship drives unhappiness in people
living with dementia, study finds
-
Fines suspended for nursing homes that violate
minimum staffing law
-
What is the Centers for Medicare and Medicaid
Services’ New AHEAD Model?
#############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Friday, January 5, 2024, 10:03 AM (Pacific)
Seattle—
#############################
LTC BULLET:
SO WHAT IF THE GOVERNMENT PAYS FOR MOST LTC, 2022 DATA UPDATE
LTC Comment: Heads up! We're about to
explain why long-term care insurance sales have disappointed, why people
don't "use their homes to stay at home" and why LTC providers who depend
on public financing are at risk. Details after the ***news.***
|
*** TODAY'S LTC
BULLET is sponsored by Claude Thau (BackNine Insurance). BackNine
gives you a free personalized website at no cost. Your clients
(& family & friends) can, with as little or as much of your
involvement as you or they want, buy life insurance and LTCi, and can
speed issue by scheduling a paramed and uploading medical records
immediately. We quote stand-alone LTCi, linked-benefit and life with a
LTC rider side-by-side. Claude is the lead author of Milliman’s annual
Broker World LTCi Survey & a past Chair of the Center for Long-Term
Care Financing. Contact him at 913-707-8863 or
claude@back9ins.com to learn
about more great BackNine features and services. *** |
***
VIRTUAL LTC EVENT on January 9, 2024:
Register now for this timely, provocative discussion sponsored by the
Paragon Health Institute. Steve Moses will present findings from two
Paragon papers: “Long-Term
Care: The Problem” and “Long-Term
Care: The Solution.” Responding will be
Richard W. Johnson, Senior Fellow and Director of the Program on
Retirement Policy at the Urban
Institute and
Mark J. Warshawsky, Senior Fellow at the American
Enterprise Institute and Former Deputy Commissioner for Retirement and
Disability Policy at the Social Security Administration.
Ken Dychtwald, Ph.D., Founder and CEO of Age
Wave will moderate the discussion and Q&A.
Brian C. Blase, Ph.D., President of Paragon
Health Institute hosts and oversees the event. Please forward today’s
LTC Bullet and this invitation to everyone you think might be
interested. Thanks. See you on the Zoom screen January 9. ***
*** ILTCI KEYNOTER
announced: Maria C. Carrillo, Ph.D., Chief Science Officer of the
Alzheimer's Association, will deliver the keynote address at the 2024
Inter-Company Long-Term Care Insurance Conference in San Diego.
Register now for the March 17-20, 2024 meeting at the
Town and Country Resort. Early bird registration discounts end January
18, so act soon to save $100. ***
LTC BULLET: SO WHAT IF THE GOVERNMENT
PAYS FOR MOST LTC, 2022 DATA UPDATE
LTC Comment: Once a year around this
time the Centers for Medicare and Medicaid Services (CMS) report health
care expenditure data for the latest year of record. Recently, CMS posted
2022 statistics on its website
here. Click on this link
NHE Tables (ZIP) to download the tables, unzip them, and then click on
the data tables of interest, Tables 13, 14 and 15 for our purposes here.
Health Affairs
has published a summary and analysis of this new data
titled “National Health Care Spending In 2022: Growth Similar To
Prepandemic Rates." The article is “open access” so available free
here. Unfortunately, the Health Affairs article has little to
say about long-term care, so read on to get that story.
Following is our annual analysis of
the latest long-term care expenditure data. Note that we added Table 13,
“Other Health, Residential, and Personal Care Expenditures,” to our
analysis this year. We focused only on nursing home* and home health
expenditures before.
Heads Up:
This may be the most important LTC Bullet we publish all year. It
is the twenty-second in a row we’ve done annually to analyze the federal
government’s enormous, and we argue, often detrimental, impact on
long-term care financing. If you'd like to see the earlier versions, go
here and search for “So What if the Government Pays.” You’ll find our
yearly analyses of the data going all the way back to "So
What If the Government Pays for Most LTC, 2002 Data Update."
------------------
"So What If the Government Pays for
Most LTC, 2022 Data Update"
by
Stephen A. Moses
Ever wonder why LTC insurance sales
and market penetration are so discouraging? Or why reverse mortgages are
rarely used to pay for long-term care? Or why LTC service providers are
always struggling to survive financially and still provide quality care?
Read on.
Nursing Homes
America spent $191.3 billion on
nursing facilities and continuing care retirement communities in 2022, a
5.6% increase compared to 2021. The percentage of these costs paid by
Medicaid and Medicare has gone up over the past half century (from 26.8%
in 1970 to 52.7% in 2022, up 25.9 % of the total) while out-of-pocket
costs have declined in the same period (from 49.2% in 1970 to 25.2% in
2022, down 24.0% of the total). Source:
Table 15: Nursing Care Facilities and Continuing Care Retirement
Communities Expenditures; Levels, Percent Change, and Percent
Distribution, by Source of Funds: Selected Calendar Years 1970-2022.
So What? Consumers' liability for
nursing home and CCRC costs has declined by over half, down 51.2% in the
past five decades while the share paid by Medicaid and Medicare has nearly
doubled, up 96.6%.
No wonder people are not as eager
to buy LTC insurance as they would be if they were more at risk for the
cost of their care! No wonder they don't use
home equity for LTC when Medicaid exempts at least $713,000 and in some
states up to $1,071,000 of home equity (as of 1/1/24). No wonder nursing
homes struggle financially—their dependency on parsimonious government
reimbursements is increasing while their more profitable private payers
are disappearing.
Unfortunately, these problems are even
worse than the preceding data suggest. Over half of the so-called
"out-of-pocket" costs reported by CMS are really just contributions toward
their cost of care by people already covered by Medicaid. These are
not out-of-pocket costs in terms of ASSET spend down, but rather only
INCOME, most of which comes from Social Security benefits, another
financially struggling government program. Thus, although Medicaid pays
less than one-third of the cost of nursing home (and CCRC) care (30.6% of
the dollars in 2022), it covers nearly two-thirds (65.1%)
of all nursing home patient days.
So What? Medicaid pays in full or
subsidizes nearly two-thirds of all nursing home patient days. Even if
Medicaid pays nothing, with the entire amount due contributed from the
recipient's income, the nursing home receives Medicaid's dismally low
reimbursement rate.
No wonder the public is not as
worried about nursing home costs as they would be if they were more at
risk for the cost of their care.
No wonder nursing homes risk insolvency when so much of
their revenue comes from Medicaid, often at reimbursement rates less than
the cost of providing the care. “Medicaid, the primary payer for nursing
homes, covers more than 60 percent of all nursing home residents and
approximately 50 percent of costs for long term care services. Medicaid
reimbursements, on the other hand, only cover 70 to 80 percent of the
actual cost of care.” (Source: AHCA/NCAL, “Financial
Challenges Continue To Affect Nursing Homes, Emphasizing Need For Higher
Medicaid Reimbursement Rates,” October 14, 2020)
Private Health Insurance
Don't be fooled by the 9.5% of nursing
home costs that CMS reports as having been paid by "private health
insurance" in 2022. That category does not include private long-term care
insurance. (See category definitions
here.) No one knows how much LTC insurance pays toward nursing home
care, because many LTCI policies pay beneficiaries who then pay the
providers. Thus, a large proportion of insurance payments for nursing home
care gets reported as if it were "out-of-pocket" payments. This fact
further inflates the out-of-pocket figure artificially.
Assisted Living
How does all this affect assisted
living facilities? According to the
Genworth Cost of Care Survey for 2021, ALFs cost an average of $54,000
per year, up 4.7% from 2020. Although assisted living facilities
remain mostly private pay, “61%
of ALFs are Medicaid certified” and only “a
small minority of state Medicaid programs do not cover services in
assisted living.” (Find these quotes under the source’s “Finance”
tab.) Over time assisted living facilities have followed nursing homes
down the
primrose path of accepting more and more revenue from Medicaid.
Many people who could afford assisted
living by spending down their illiquid wealth, especially home equity,
choose instead to take advantage of Medicaid nursing home benefits.
Medicaid exempts one home and all contiguous property (up to $713,000 or
$1,071,000 depending on the state), plus—in unlimited dollar amounts—one
business, one automobile, prepaid burials, term life insurance, personal
belongings and Individual Retirement Accounts not to mention wealth
protected by sophisticated
asset sheltering and divestment techniques marketed by
Medicaid planning attorneys. Income rarely interferes with Medicaid
nursing home eligibility unless such income exceeds the cost of private
nursing home care.
So What? For most people, Medicaid
nursing home benefits are easy to obtain without spending down assets
significantly and Medicaid's income contribution requirement is usually
much less expensive than paying the full cost of assisted living.
No wonder ALFs are struggling to
attract enough private payers to be profitable. No wonder people are not as eager to buy LTC
insurance as they would be if they were more at risk for the cost of their
care. This problem has been radically exacerbated in recent years because
more and more state Medicaid programs are paying for assisted living as
well as nursing home care, which makes Medicaid eligibility more desirable
than ever.
Home Health Care
The situation with home health care
financing is very similar to nursing home financing. According to CMS,
America spent $132.9 billion on home health care in 2022, 6.0% more than
in 2021 ($125.4). Medicare (35.8%) and Medicaid (35.3%) paid 71.1% of this
total and private health insurance (not LTC insurance) paid 14.0%. Only
11.6% of home health care costs were paid out of pocket. The remainder
came from several small public and private financing sources. Data source:
Table 14: Home Health Care Services Expenditures; Levels, Percent Change,
and Percent Distribution, by Source of Funds: Selected Calendar Years
1970-2022.
So What? Only one out of every nine
dollars spent on home health care comes out of the pockets of patients and
a large portion of that comes from the income (not assets) of people
already on Medicaid.
No wonder the public does not feel
the sense of urgency about this risk that they would if they were more
personally at risk for the cost of their care.
Other Health, Residential, and
Personal Care
This category includes a lot of
long-term care spending that is not encompassed by the nursing home and
home health NHE categories, such as Medicaid home and community based
waivers and care provided in residential care facilities. The trends are
very similar. Americans spent $246.5 billion on these services in 2022, up
9.7% from $224.7 in 2021. Medicare (1.7%) and Medicaid (60.6%) paid 62.3%
of that total; private health insurance and other third parties
contributed 34.5%; out-of-pocket expenditures amounted to only 3.2%. Data
Source:
Table 13: Other Health, Residential, and Personal Care Services
Expenditures: Levels, Percent Change, and Percent Distribution, by Source
of Funds: Selected Calendar Years 1970-2022
So what? Only one dollar out of $29
spent on these important LTC services comes from a private payer.
No wonder the public feels so
little sense of worry about planning, saving, investing or insuring for
long-term care.
Summary:
|
Service |
Total |
OOP |
OOP % |
|
|
|
|
|
|
Nursing home |
191.3 |
48.3 |
25.2% |
|
Home health |
132.9 |
15.4 |
11.6% |
|
Other health, residential and
personal care |
246.5 |
7.8 |
3.2% |
|
|
|
|
|
|
TOTAL |
570.7 |
71.5 |
12.5% |
Across all three kinds of LTC
services out-of-pocket expenditures account for only $1 in $8 spent. Half
of this spending comes from income of people already on Medicaid. Thus
only 6.25%, or $1 in $16, could have come from spend down of savings.
Bottom line,
people only buy insurance against real financial risk. As long as they can
ignore the risk, avoid the premiums, and get government to pay for their
long-term care when and if such care is needed, they will remain in denial
about the need for LTC insurance. As long as Medicaid and Medicare are
paying for a huge proportion of all nursing home and home health care
costs while out-of-pocket expenditures remain only nominal, nursing homes
and home health agencies will remain starved for financial oxygen.
The solution is simple. Target Medicaid financing of long-term care to the needy and use the
savings to fund education and tax incentives to encourage the public to
plan early to be able to pay privately for long-term care. For ideas and
recommendations on how to implement this solution, see
www.centerltc.com.
Note especially:
“Long-Term
Care: The Solution” (2023) with the
Paragon Health Institute at
https://paragoninstitute.org/research-paper-page-moses-ltc-solution-20231002/
“Long-Term
Care: The Problem” (2022) with the
Paragon Health Institute at
https://paragoninstitute.org/long-term-care-the-problem/
“Medicaid
and Long-Term Care” (2020) at
http://www.centerltc.com/pubs/Medicaid_and_Long-Term_Care.pdf
“How
to Fix Long-Term Care Financing” (2017), at
http://www.centerltc.com/pubs/How-To-Fix-Long-Term-Care-Financing.pdf
In the Deficit Reduction Act of 2005,
Congress took some significant steps toward addressing these problems. A
cap was placed for the first time on Medicaid's home equity exemption and
several of the more egregious Medicaid planning abuses were ended. But
much more remains to be done. With the Age Wave cresting and threatening
to crash over the next two decades, we can only hope it isn't too late
already.
* Note that CMS changed the definition of National
Health Expenditure Accounts (NHEA) categories in 2011, adding for example
Continuing Care Retirement Communities (CCRCs) to Nursing Care Facilities.
This change had the effect of reducing Medicaid's reported contribution to
the cost of nursing home care from over 40% in 2008 to under one-third
(32.8%) in 2009. CMS also created a new category called "Other Third Party
Payers" (7.1%) which includes "worksite health care, other private
revenues, Indian Health Service, workers' compensation, general
assistance, maternal and child health, vocational rehabilitation, other
federal programs, Substance Abuse and Mental Health Services
Administration, other state and local programs, and school health." For
definitions of all NHEA categories, see
http://www.cms.gov/NationalHealthExpendData/downloads/quickref.pdf.
Stephen A. Moses is president of the Center for Long-Term Care Reform in
Seattle, Washington. The Center's mission is to ensure quality long-term
care for all Americans. Steve Moses writes, speaks and consults throughout
the United States on long-term care policy. Learn more at
www.centerltc.com or email
smoses@centerltc.com.
#############################
Updated, Tuesday, January 02, 2024,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-001:
LTC NEWS AND COMMENT
LTC
Comment: Do you spend hours searching the internet for useful articles,
key data, and relevant reports to keep you on the forefront of
professional knowledge? Do you lose business because you’re blindsided by
clients or competitors who learn critical information before you do?
Here’s an antidote:
LTC
Clippings: The Center for Long-Term Care Reform notifies subscribers to
our LTC Clippings service daily of information you need to know. Each
message contains only the critical facts about new publications: a title,
representative quote, a link to the original, and our analysis in a
sentence or two. To inquire or subscribe, contact Damon at 206-283-7036
or
damon@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC
E-Alerts: Once a week, we compile our daily LTC Clippings into a summary,
email it to Center for Long-Term Care Reform members, and archive it in
The Zone, our password-protected members-only website. Center members
also receive our weekly LTC Bullet op-ed. To join the Center and receive
all these benefits and more, contact Damon at 206-283-7036 or
damon@centerltc.com.
We no
longer post our LTC E-Alerts on the Center’s public access website, but
here’s what today’s LTC E-Alert contained: links, quotes and comments on
the following articles, reports, or data:
-
Investors predict senior living rent increases of 3
to 7 percent
-
Bold Changes Are in Store for Medi-Cal in 2024, but
Will Patients Benefit?
-
Let’s Go Washington turns in over 2.6 million
signatures for all six landmark initiatives
-
Negative Wealth Shock and Cognitive Decline and
Dementia in Middle-Aged and Older US Adults
-
‘Tougher Every Day’: Nursing Home Operators, CCRCs
Weigh in on Future of Skilled Nursing
-
Americans Over 70 Hold More Than 30% of the
Country’s Wealth
-
Aging Into Uncertainty: How will we navigate the
looming long-term care crisis?
-
Senior-held home equity rises for second
consecutive quarter
#############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Monday, December 18, 2023, 10:03 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #23-037:
LTC NEWS AND COMMENT
LTC Comment: Do you spend hours searching
the internet for useful articles, key data, and relevant reports to keep
you on the forefront of professional knowledge? Do you lose business
because you’re blindsided by clients or competitors who learn critical
information before you do? Here’s an antidote:
LTC Clippings: The Center for Long-Term
Care Reform notifies subscribers to our LTC Clippings service daily of
information you need to know. Each message contains only the critical
facts about new publications: a title, representative quote, a link to
the original, and our analysis in a sentence or two. To inquire or
subscribe, contact Damon at 206-283-7036 or
damon@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC E-Alerts: Once a week, we compile our
daily LTC Clippings into a summary, email it to Center for Long-Term Care
Reform members, and archive it in The Zone, our password-protected
members-only website. Center members also receive our weekly LTC Bullet
op-ed. To join the Center and receive all these benefits and more,
contact Damon at 206-283-7036 or
damon@centerltc.com.
We no longer post our LTC E-Alerts on the
Center’s public access website, but here’s what today’s LTC E-Alert
contained: links, quotes and comments on the following articles, reports,
or data:
-
Demographics drive retirement saving disparities
-
Closing the Medicaid Gap Is Just the First Step, as
Nursing Homes Fight for Predictable Reimbursement
-
Who Uses Medicaid Long-Term Services and Supports?
-
Nursing home, CCRC-related spending tops $191
billion, CMS says
-
New Poll Finds Older Americans Believe Medicare
Should Cover Weight-Loss Drugs
-
Naked
-
Global Atlantic, John Hancock Strike Biggest LTCI
Reinsurance Deal Ever
-
Home care largely unaffordable, especially for
middle-class seniors, Harvard research shows
-
Views Washington state long term care tax offers
lessons for everyone
-
Forced to work in a vacuum, MedPAC recommends
another Medicare cut
-
Researchers find a way to predict which of our
organs will fail first
#############################
"LTC E-Alerts" are
a
feature offered by the Center for Long-Term Care Reform, Inc. to members
at the $150 per year level or higher. We'll track and report to you news
and analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
############################
Updated,
Friday, December 15, 2023 10:40 AM (Pacific)
Seattle—
#############################
LTC
BULLET: “DYING BROKE” WAS DEAD WRONG
LTC Comment: Who knows more about long-term care (LTC)
than KFF and the New York Times? Answer: anyone who deals in facts
and logic instead of anecdotes and ideology. We explain after the
***news.***
*** REGISTER NOW for the 2024 Intercompany Long Term
Care Insurance Conference! Plan now for the March 17 - 20, 2024
convocation at the Town & Country Resort in San Diego, CA. Organizers say
the “agenda includes numerous educational sessions over two days across
seven tracks with ample time for networking and reconnecting with
colleagues. Contact them at
info@iltciconf.org if you’d like to
exhibit or
sponsor. Go here to
register and here to
book your hotel. The host hotel room block is almost full, so get this
done soon. I’ll attend the meeting, cover it for media, and regale anyone
interested with the findings and recommendations from two new studies: “Long-Term
Care: The Problem” and “Long-Term
Care: The Solution.” ***
*** THE NAKED TRUTH about long-term care:
12/2023, “Naked,”
by Ron Hagelman, Broker World
Quote: “Stephen has laid out a blueprint that attacks the
problem at its core. …
Step One: Eliminate the Moral Hazard. Shut down all planning tools used to
avoid personal responsibility—to include purchase of exempt assets,
eliminate home equity exemptions, prohibit asset protection trusts and
Medicaid compliant annuities. And perhaps most importantly extend the look
back period to 20 years and then ‘monitor and enforce compliance.’
Step Two: Publicize the now exposed true risk.
Step Three: Reconceptualize the actual size of the risk.
Step Four: Proselytize affordable planning at younger ages.”
LTC Comment: I thank my friend, Broker World columnist and
all-around LTC advocate, Ron Hagelman, for this thoughtful summary and
exposition of key facts and recommendations (“the naked truth”) in the
Paragon Health Institute’s “Long-Term
Care: The Problem” and “Long-Term
Care: The Solution.” Read Ron first and then the papers to see for
yourself.
*** JOIN AND SUBSCRIBE. Center members receive our
LTC Bullets and LTC E-Alerts. Center president Steve Moses
reads everything relevant to LTC in the popular and academic media. He
distills the essence of all important articles and reports in LTC
Clippings. He gives you the date, title, author, a representative
quote and his interpretation of the publications’ meaning and
significance. You get one or two extra emails daily, but you save time
you’d otherwise spend researching issues and client questions on your own.
All members receive a compilation of the week’s LTC Clippings every
Monday in our LTC E-Alert. Premium members receive the Clippings
in real time. Check out our Membership Levels and Benefits
here. Learn about our “Members-Only Zone”
here. You’ll be amazed how economical joining the Center and gaining
access to all our online content is. We’re fighting the good fight for
rational LTC financing policy. Join our team
here. Still undecided? Contact
damon@centerltc.com or
smoses@centerltc.com. ***
LTC BULLET: “DYING BROKE” WAS DEAD WRONG
LTC Comment: The New York Times and KFF
(formerly the Kaiser Family Foundation) partnered to examine “the ways in
which the financial and emotional toll of providing and paying for
long-term care are wreaking havoc on the lives of millions of Americans.”
Their investigative series, titled “Dying
Broke,” began with an alarming article: “Facing
Financial Ruin as Costs Soar for Elder Care.” Like so much of what
passes as investigative journalism in the LTC services and financing
field, this report bewails the dismal conditions currently, warns of an
aging onslaught that will make everything worse, and laments inadequate
LTC funding from public and private sources, but says nothing about what
caused these problems nor what to do about them, other than asking
government to spend more.
The
Paragon Health Institute has published two reports that address both
the cause of these problems (“Long-Term
Care: The Problem”) and how to solve them (“Long-Term
Care: The Solution”) without spending more government money.
The following applies insights from those Paragon papers to explain what’s
wrong with the KFF/NYT’s findings and analysis. Our perspective follows
these quotes from “Dying
Broke.”
KFF/NYT: “Millions of families are facing such
daunting life choices — and potential financial ruin — as the escalating
costs of in-home care, assisted living facilities, and nursing homes
devour the savings and incomes of older Americans and their relatives.”
“‘People are exposed to the possibility of depleting
almost all their wealth,’ said Richard Johnson, director of the program on
retirement policy at the Urban Institute.”
LTC Comment: Are LTC costs truly devouring the
savings and incomes of aging Americans and their families? Dying Broke
offers anecdotes and asserts that people are vulnerable to catastrophic
LTC spend down, but it provides zero evidence that such devastating
expenditures actually happen. Our study, “Long-Term
Care: The Problem,” explains that government, mostly Medicaid and
Medicare, funds the vast majority of all formal paid LTC. Private LTC
financing has dwindled from around half in 1970 to a quarter today, most
of which is income, not assets, that people already on Medicaid have to
contribute. If so many peoples’ savings are devastated by catastrophic LTC
costs, shouldn’t that fact show up in the data?
KFF/NYT: “The prospect of dying broke looms as
an imminent threat for the boomer generation, which vastly expanded the
middle class and looked hopefully toward a comfortable retirement on the
backbone of 401(k)s and pensions. Roughly 10,000 of them will turn 65
every day until 2030, expecting to live into their 80s and 90s as the
price tag for long-term care explodes, outpacing inflation and reaching a
half-trillion dollars a year, according to federal researchers.”
LTC Comment: The oft-reported datum that
10,000 boomers turn 65 daily is rarely balanced by the fact that about
5,700 of them die each day and a third are already dead and free of
future LTC risk or cost. Of that half-trillion dollars per year spent on
LTC, Medicaid pays 44%; Medicare, 20%; other public sources, 7%; private
insurance, 8%; and other private sources (mostly philanthropic), 7%;
making a total of 86% that people do not pay out of their own pockets. Of
the remaining 14% that the government reports as “out-of-pocket” LTC
spending, half or more comes from Social Security and other income that
people already on Medicaid are required to contribute to offset the
cost of their government-funded care. In other words, only 7% of LTC
expenditures nationwide could possibly come from people’s savings. Hardly
devastating and certainly not a mandate for more government deficit
spending.
KFF/NYT: “The United States has no coherent
system of long-term care, mostly a patchwork. The private market, where a
minuscule portion of families buy long-term care insurance, has shriveled,
reduced over years of giant rate hikes by insurers that had underestimated
how much care people would actually use. Labor shortages have left
families searching for workers willing to care for their elders in the
home. And the cost of a spot in an assisted living facility has soared to
an unaffordable level for most middle-class Americans. They have to run
out of money to qualify for nursing home care paid for by the government.”
LTC Comment: This paragraph combines a lot of
truth, misunderstanding and falsehood. It’s true America’s LTC services
and financing system is an incoherent mess, that too few families own
private LTC insurance, that we face a dire shortage of caregivers and that
care costs are going through the roof. What matters, however, is why these
conditions persist. On that, KFF and NYT blank out. The answer lies in
correcting the falsehood that people “have to run out of money to qualify”
for government LTC financing. If that were true, more people would worry
and plan for LTC, more would buy private insurance, and more would pay
privately at market rates for home and community-based care resolving the
worker shortages as competitive market forces contain costs.
KFF/NYT: “Medicaid, the federal-state
program, covers long-term care, usually in a nursing home, but only for
the poor. Middle-class people must exhaust their assets to qualify,
forcing them to sell much of their property and to empty their bank
accounts.”
Paragon:
Archimedes said “Give me a lever long enough and a fulcrum on which to
place it, and I shall move the world.” The “fallacy of impoverishment,”
the idea that Medicaid requires catastrophic impoverishment to qualify for
LTC benefits, is the lever long enough and the fulcrum strong enough to
explain all of the problems with LTC and to plot a course to a solution.
If people really had to “exhaust their assets to qualify,” if generations
of Americans had been wiped out financially by LTC costs, we wouldn’t be
in the mess we’re in. People would have quickly taken the risk and cost of
LTC seriously and prepared. But the truth is that Medicaid allows
practically unlimited income and assets to remain with people who receive
its publicly financed LTC benefits. How and why that is true and the dire
ramifications for the LTC services and financing system, we explain in “Long-Term
Care: The Problem” and “Long-Term
Care: The Solution.”
KFF/NYT: “The only true safety net for many
Americans is Medicaid, which represents, by far, the largest single source
of funding for long-term care.
“More than 4 in 5 middle-class people 65 or older who
need long-term care for five years or more will eventually enroll,
according to an
analysis for the federal government by the Urban Institute. Almost
half of upper-middle-class couples with lifetime earnings of more than
$4.75 million will also end up on Medicaid.
“Qualifying for a slot in a nursing home paid by
Medicaid can be formidable, with many families spending thousands of
dollars on lawyers and consultants to navigate state rules. Homes may be
sold or couples may contemplate divorce to become eligible.”
LTC Comment: There you have it. Just about
everyone who has high LTC expenses eventually ends up on Medicaid. But
have they really impoverished themselves to qualify? That’s what KFF/NYT
assume. They cite the “Health and Retirement Study” (HRS), but the HRS
says nothing about how much people spend on health and LTC expenses before
they become eligible for Medicaid. HRS only records “transitions” to
Medicaid. As we explain in “Long-Term
Care: The Problem” and “Long-Term
Care: The Solution,” most people can easily qualify financially for
Medicaid LTC benefits because private health and LTC expenses are deducted
from income before the “low-income” criterion is applied (or in some
states income diversion trusts achieve the same purpose) and most assets
seniors own are exempt from eligibility limits or can be easily converted
to exempt form. On top of that, Medicaid planners, including specialized
lawyers and other financial professionals, qualify even high net worth
clients using special trusts and annuities, while holding back “key money”
to ensure their affluent clients have access to the best facilities and
care available through Medicaid. Poor people Medicaid is supposed to serve
don’t have key money so they end up in the least desirable care Medicaid
offers.
In summary:
“‘Dying Broke’ Was Dead Wrong”
by
Stephen A. Moses
<656 words>
Who knows more about long-term care (LTC) than KFF
and the New York Times? Answer: anyone who deals in facts and logic
instead of anecdotes and ideology.
KFF and NYT joined forces to frighten the
public about LTC risk and cost. Their article series
Dying Broke, begins with
“Facing Financial Ruin as Costs Soar for Elder Care.” If those titles
sound familiar it is because the media barraged the country with the same
warnings for decades.
If LTC is such a huge risk and cost, if people are
being impoverished in large numbers by its cost, if families are buckling
under the strain of providing care the government funds inadequately, then
why hasn’t something been done? Why the hand-wringing without action or
change?
The answer lies in elites’ misunderstanding of the
LTC problems’ cause. They believe poor care access and quality, nursing
home bias, caregiver shortages, and excessive reliance on over-stressed
family caregivers come from too little government spending for LTC.
Ironically, the exact opposite is true.
Government spent too much for LTC and in the wrong
ways. Medicaid made nursing homes the dominant venue of care by paying for
them exclusively. Medicaid crowded out private savings and LTC insurance
by enabling people to preserve wealth and receive publicly funded care
late in life. Medicaid reimbursed providers too little to fund quality
care or attract paid caregivers.
What makes KFF/NYT cling to the simplistic
explanation that government spends too little and ignore the obvious, but
more complicated cause? A progressive “LTC Narrative” dominates their
thinking and obscures reality. Here are some examples from Dying Broke.
According to
“Facing Financial Ruin as Costs Soar for Elder Care,” “Millions of
families are facing … daunting life choices — and potential financial ruin
— as the escalating costs of in-home care, assisted living facilities, and
nursing homes devour the savings and incomes of older Americans and their
relatives.” Shouldn’t we expect evidence to support such a dire statement?
None is offered.
The article continues “Medicaid, the federal-state
program, covers long-term care, usually in a nursing home, but only for
the poor. Middle-class people must exhaust their assets to qualify,
forcing them to sell much of their property and to empty their bank
accounts.” That is certainly the conventional wisdom about Medicaid, but
is it true? Blank out.
And still: “The only true safety net for many
Americans is Medicaid, which represents, by far, the largest single source
of funding for long-term care. More than 4 in 5 middle-class people 65 or
older who need long-term care for five years or more will eventually
enroll, according to an
analysis for the federal government by the Urban Institute. Almost
half of upper-middle-class couples with lifetime earnings of more than
$4.75 million will also end up on Medicaid.”
So, this is the narrative: LTC wipes out the savings
of millions because the main funder, Medicaid, requires impoverishment
causing even upper-middle-class couples with millions in savings to
qualify for public welfare. But what happens to that narrative if none of
this is true?
What if Medicaid does not require low income or
exhausting assets to qualify for LTC benefits? What if there is no
evidence of widespread catastrophic spend down caused by LTC costs? What
if millionaires qualify for Medicaid without spending down and while
retaining their wealth for heirs? If all that’s true, it throws the LTC
narrative into a cocked hat and invites an entirely different analysis
leading to radically different recommendations.
The
Paragon Health Institute’s October 2022 paper “Long-Term
Care: The Problem” substantiates those unconventional points and
explains how Medicaid caused LTC’s problems. Its October 2023 paper “Long-Term
Care: The Solution” proposes new public policy to save Medicaid for
the neediest and uplift LTC services with an infusion of private
financing.
Discard the LTC narrative; focus on facts; think
clearly about public policy incentives; and real change becomes possible,
even likely.
#############################
Updated, Monday, December 11, 2023,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #23-036:
LTC NEWS AND COMMENT
LTC
Comment: Do you spend hours searching the internet for useful articles,
key data, and relevant reports to keep you on the forefront of
professional knowledge? Do you lose business because you’re blindsided by
clients or competitors who learn critical information before you do?
Here’s an antidote:
LTC
Clippings: The Center for Long-Term Care Reform notifies subscribers to
our LTC Clippings service daily of information you need to know. Each
message contains only the critical facts about new publications: a title,
representative quote, a link to the original, and our analysis in a
sentence or two. To inquire or subscribe, contact Damon at 206-283-7036
or
damon@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC
E-Alerts: Once a week, we compile our daily LTC Clippings into a summary,
email it to Center for Long-Term Care Reform members, and archive it in
The Zone, our password-protected members-only website. Center members
also receive our weekly LTC Bullet op-ed. To join the Center and receive
all these benefits and more, contact Damon at 206-283-7036 or
damon@centerltc.com.
We no
longer post our LTC E-Alerts on the Center’s public access website, but
here’s what today’s LTC E-Alert contained: links, quotes and comments on
the following articles, reports, or data:
-
Retirement planning, true life expectancy not on
most adults’ radar, increasing the risk of outliving resources
-
The needs of middle-class Americans over 55 often
go unmet: SCEPA
-
Medicaid consultant used nursing home meetings to
fleece residents: AG
-
Event Recording Available
-
Fitch offers bleak outlook for life plan
communities for 2024
-
Models can predict when older adults with dementia
may need nursing home care
-
Medi-Cal Senior Care Change Will Pressure
California’s State Budget
-
US Is Unprepared to Provide Housing and Care for
Millions of Older Adults
-
Government must encourage personal responsibility,
prohibit easy access to Medicaid
#############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Monday, December 4, 2023,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #23-035: LTC NEWS AND COMMENT
LTC
Comment: Do you spend hours searching the internet for useful articles,
key data, and relevant reports to keep you on the forefront of
professional knowledge? Do you lose business because you’re blindsided by
clients or competitors who learn critical information before you do?
Here’s an antidote:
LTC
Clippings: The Center for Long-Term Care Reform notifies subscribers to
our LTC Clippings service daily of information you need to know. Each
message contains only the critical facts about new publications: a title,
representative quote, a link to the original, and our analysis in a
sentence or two. To inquire or subscribe, contact Damon at 206-283-7036
or
damon@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC
E-Alerts: Once a week, we compile our daily LTC Clippings into a summary,
email it to Center for Long-Term Care Reform members, and archive it in
The Zone, our password-protected members-only website. Center members
also receive our weekly LTC Bullet op-ed. To join the Center and receive
all these benefits and more, contact Damon at 206-283-7036 or
damon@centerltc.com.
We no
longer post our LTC E-Alerts on the Center’s public access website, but
here’s what today’s LTC E-Alert contained: links, quotes and comments on
the following articles, reports, or data:
-
2024 SSI, Spousal Impoverishment, and Medicare
Savings Program Resource Standards
-
Americans are tapping retirement nest eggs to pay
for every day, emergency expenses
-
New insurance rider aims to be solution for LTSS
funding
-
A Look at Waiting Lists for Medicaid Home- and
Community-Based Services from 2016 to 2023
-
How Medicaid Waivers Have Affected Nursing Home
Utilization – And Why the Staffing Proposal May Further This Trend
-
U.S. Long-Term Care Insurance Users Average $1.4M
in Household Wealth: Study
-
The Own Your Future LTSS Funding and Services
Initiative: Options to Increase Access to Long-Term Care Financing,
Services, and Supports in Minnesota
-
State Medicaid expenses to grow as federal dollars
wane in FY 2024
#############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Friday, December 1, 2023,
10:40 AM (Pacific)
Seattle—
#############################
LTC
BULLET: LONG-TERM CARE: THE SOLUTION (THE SERIAL, PART 4)
LTC Comment:
Today we offer easy access to a must-read new study by Center president
Steve Moses, after the ***news.***
|
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personalized website at no cost. Your clients (& family & friends)
can, with as little or as much of your involvement as you or they
want, buy life insurance and LTCi, and schedule parameds and upload
their medical records to speed the process. We quote stand-alone LTCi,
linked-benefit and life with a LTC rider side-by-side and provide a
sales track with video support. Claude is the lead author of
Milliman’s annual Broker World LTCi Survey & a past Chair of the
Center for Long-Term Care Financing. Contact him at 913-707-8863 or
claude@back9ins.com discuss how he might
help you. *** |
*** 11/30/2023,
“Government
must encourage personal responsibility, prohibit easy access to Medicaid,”
by Steve Moses and Brian Blase, Washington Times
Quote:
“Well-intentioned government policy tried to help people but ended up
trapping generations in nursing homes on welfare. The government must now
solve the problem it created by encouraging personal responsibility and
prohibiting easy access to Medicaid while preserving wealth. This will
naturally lead our nation’s consumers and providers to solve the LTC
system challenges.”
LTC Comment:
America’s LTC financing crisis is self-imposed by counterproductive public
policies. To understand the problems and the solution, read “Long-Term
Care: The Problem” and “Long-Term
Care: The Solution.”
*** 11/27/2023,
“A
Long-Term Solution To America's Long-Term Care Crisis,” by Sally
Pipes, Forbes
Quote:
“Indeed, Medicaid has become such a major source of long-term care
coverage that middle-income and even some wealthy Americans rely on the
program to support them in their twilight years. … It is precisely this
perverse incentive that Stephen A. Moses outlined in his 2022 Paragon
Health Institute paper ‘Long-Term
Care: The Problem.’ Moses, one of the nation's leading experts in
long-term care, determined that access to Medicaid and other
publicly-funded safety nets ‘discourages responsible [long-term care]
planning when people are still young, healthy, and affluent enough to
save, invest, or insure for the risk.’ Rather than continue down the same
path, Moses urged policymakers to consider free-market solutions to the
‘problems caused by well-intentioned but ultimately damaging government’
policies. In a
paper released last month—‘Long-Term Care: The Solution’—Moses offers
some suggestions on how to do just that.”
LTC Comment:
We thank Sally Pipes, president and chief executive officer of the Pacific
Research Institute, for this clear and compelling review of “Long-Term
Care: The Problem” and “Long-Term
Care: The Solution.” Click through for the rest of her
thought-provoking article. ***
*** 10/19/2023,
“Medicaid
should only be ‘safety net’ for LTC needs, expert says,” by Kathleen
Steele Gaivin, McKnight’s Senior Living.
Quote:
“‘Medicaid [long-term care] should be restored as a safety net for
indigent elderly people,’ but ‘lawmakers should eliminate the ability to
access publicly funded LTC while preserving wealth,’
Stephen Moses, president of the
Center for Long-Term Care Reform, writes in a new paper, ‘Long-Term
Care: The Solution.’ … The new paper is a follow-up to Moses’ “Long-Term
Care: The Problem,” which was published a year ago by the Paragon
Institute.”
LTC Comment:
This article is a reasonable interpretation of what my paper says, but I
urge readers to see for themselves, because the topic is complicated and
full of nuances. I’m always eager to receive comments or criticism at
smoses@centerltc.com. ***
*** APPEAL: The
Center for Long-Term Care Reform, in partnership with the
Paragon Health Institute, is embarking on a campaign to improve LTC
services and financing. In “Long-Term
Care: The Problem,” we explained what’s wrong and why. In “Long-Term
Care: The Solution,” we discard the failed policies of the past and
propose a radical new approach based on engaging vast sources of private
wealth currently diverted from LTC funding. We will reach out to the
media, brief federal and state policy and law makers, speak at
conferences, and write for publication, all toward the end of achieving
the policy goals in “Long-Term
Care: The Solution.” Will you help us in this effort? Join the Center
or contribute online
here. Check out the Center’s “Membership Levels and Benefits” schedule
here. Most corporate memberships include a briefing by Center
president and “LTC Solution” author Stephen Moses. Call or write for more
information: 206-283-7036;
damon@centerltc.com;
smoses@centerltc.com. LTC policy has floundered for too long. Let’s
get this done! ***
LTC BULLET:
LONG-TERM CARE: THE SOLUTION (THE SERIAL, PART 4)
LTC Comment:
The
Paragon Health Institute published “Long-Term
Care: The Solution” on October 3. This new report is long and
complicated, but important. So LTC Bullets is delivering it to you
in bite-sized pieces over several weeks. Published so far:
Long-Term Care: The Solution (The Serial), October 20, 2023,
Long-Term Care: The Solution (The Serial, Part 2), November 3, 2023
and
Long-Term Care: The Solution (The Serial, Part 3). Today, read
“Poverty Reconceptualized,” “Managing the Back End,” “Why Not Social
Insurance Instead?,” “Summary and Conclusion” and the “Appendix:
Exactly How Much Wealth Do People Have and Why Aren’t They Using
More of It for LTC?”
Excerpts from “Long-Term
Care: The Solution”
by
Stephen A. Moses
President,
Center for Long-Term Care Reform
[Box Insert]
Poverty Reconceptualized:
Clearly there
is enough wealth in the American economy to fund quality LTC for all
Americans if it is mobilized with better incentives than prevail now. In
fact, poverty, properly measured, is already uncommon in the United
States.[67]
A 2018 Cato Institute study reports, “Improved estimates of poverty show
that only about 2 percent of today’s population lives in poverty, well
below the 11 percent to 15 percent that has been reported during the past
five decades.”[68]
How can that be? “By design, the official estimates of income inequality
and poverty omit significant government transfer payments to low-income
households; they also ignore taxes paid by households.”[69]
What is the bottom line? “The net effect is that pretax data overstate the
true income of upper-income households by as much as 50 percent, and
missing transfers understate the true income of lower-income households by
a factor of two or more.”[70]
The rich are poorer and the poor, richer than we thought. “More than 50
years after the United States declared the War on Poverty, poverty is
almost entirely gone.… Public policy debate should begin with the
realization that only about 2 percent of the population—not 13.5
percent—live in poverty.”[71]
The official poverty level
calculated by the government does not involve the level of total
destitution some may associate with it. Consider a poor household’s
consumption a decade ago according to a Heritage Foundation analysis:
The typical poor
household, as defined by the government, has a car and air conditioning,
two color televisions, cable or satellite TV, a DVD player, and a VCR. By
its own report, the typical poor family was not hungry, was able to obtain
medical care when needed. The typical average poor American has more
living space in his home than the average (non-poor) European has.[72]
Worries about
income inequality are also misplaced. “By not counting two-thirds of all
transfer payments as income to the recipients of the transfers and not
counting taxes paid as income lost to taxpayers, government statistics
dramatically overstate income inequality.… The facts reveal a very
different and better America than the one currently described in debates
across much of the political spectrum.”[73]
Phil Gramm and John Early concluded: “By eroding self-reliance, worker
pride and labor-force participation, government-generated income equality
undermines the very foundations of American prosperity.”[74]
Applying this
corrected understanding of poverty and “inequality” to the challenge of
financing LTC suggests, as do other facts referenced above, that America
has more sources of wealth to work with than previously contemplated by
most experts. Mustered and employed more sensibly, these resources would
suffice to ensure access to quality LTC for all Americans.
[End box
insert]
Managing the Back End
This proposed
approach of withdrawing Medicaid asset protection in the future and
encouraging private LTC planning in the present will not cover everyone
who may need LTC later. Some will be unable to fund any of the options
that will become available. Others will decide not to plan. But most
people, faced with an immediate requirement to confront LTC risk and cost,
will likely take steps to prepare. Still, 14.7 percent of people turning
65 will incur LTC expenses of $250,000 or more, nearly half of which
Medicaid already pays.[75]
Much relieved of the need to cover most of the cost of LTC, Medicaid could
continue as the payer of last resort for these people.
With the
techniques used to qualify for Medicaid while preserving wealth eliminated
in the future for people currently under age 55, over time Medicaid LTC
benefits will no longer be available to people while also allowing them to
retain income and resources. Far fewer people will be dependent on
Medicaid. At that point the program should pay full private market rates
so remaining recipients can receive high-quality home care, assisted
living, or nursing home care as needed. The existing two-tier LTC service
delivery system—in which Medicaid recipients receive lower cost, less
desirable care compared to market-rate private payers—should largely end.
Resources accumulated in private hands through insurance, targeted savings
or from reverse mortgages or liens, will suffice to fund the vast majority
of all LTC for most people. In fact, even before those measures are
employed, most older adults could already finance substantial LTC if
required to use resources they already own for that purpose.[76]
With most LTC
provided within the private market at market payment rates, LTC providers
would prosper instead of being underpaid by Medicaid as they now are.
Private market competition would ensure adequate compensation for LTC
nursing and support staff, which would eliminate their shortage. In
addition, fewer people would need to provide direct care themselves for
friends and family. They could instead provide love and support without
having to provide bathing assistance or change adult diapers.
Entrepreneurs would compete to find newer and better service delivery
methods. The financial burden on government and taxpayers would lessen
substantially. Impoverishment due to LTC, to whatever heretofore
unsubstantiated level it has existed,[77]
would mostly disappear.
Why Not Social Insurance Instead?
Why not simply
require by government fiat that everyone must pay a tax so that all can
receive a LTC benefit when it is needed? That is the sirens’ song of
social insurance.
Why is social
insurance so appealing to intellectuals and politicians despite their
inability to get such plans approved by voters? By compelling citizens to
participate in the scheme, social insurance avoids the biggest problem of
voluntary private insurance. People are not forced to purchase private LTC
insurance, so many do not, leaving too many unprotected. By forcing
everyone to pay for social insurance, government ensures that the
substantial financial risk of LTC is spread across the whole population.
Social insurance avoids adverse selection, the problem of only those most
likely to use the insured benefit purchasing private insurance for it,
resulting in a solvency death spiral. Despite these apparent benefits,
proposals for compulsory LTC social insurance have never achieved the
approval of voters and taxpayers. Why?
The compulsion
and universality of social insurance also have vital downsides, including
loss of freedom and some perverse incentives. Because social insurance
spreads (but does not price) risk, it rewards irresponsibility and
punishes responsible behavior. Private insurance, on the other hand,
spreads but also prices risk. People pay more for private life insurance
if they smoke, so it discourages smoking and rewards healthier behavior.
Social insurance does the opposite. It charges everyone the same
regardless of how much risk they bring into the risk pool, thus rewarding
high-risk people and behaviors while punishing low-risk people and
behaviors. Private insurance rewards personal responsibility and
self-reliance, whereas social insurance rewards and thus encourages
government dependency.
The moral
precept of social insurance is “from each according to his ability, to
each according to his need,” the fundamental principle of socialism.
Across a society the incentives and disincentives of social insurance
undermine personal responsibility, discourage individual effort, and lead
to excessive reliance on others for support, including government
authorities exercising their monopoly of the legitimate use of force.
Social insurance always and everywhere tends toward collective mediocrity
and individual failure. In light of the short-term solvency denouement of
Social Security and Medicare, we should view new social insurance plans
with increasing skepticism.
Summary and
Conclusion
Albert Einstein
said, “We can’t solve problems by using the same kind of thinking we used
when we created them.”[78]
The kind of thinking that created LTC’s problems is that markets cannot
provide the services people need without massive government regulation and
financing. No other way of thinking about the problem has been seriously
considered. But recent research suggests how to reconceptualize the
quandary policymakers face so that LTC is not such a titanic crisis and
may be fixable with a market-based solution.
Eliminating the
means by which people have ignored LTC planning early in life while
preserving wealth and qualifying for Medicaid later can encourage
consumers to prepare early and responsibly for future LTC risk. Showing
them ways to set aside wealth that they already possess or will accumulate
over time can enable them to manage the LTC risk while fulfilling other
responsibilities such as raising a family, car and house payments,
retirement, and education savings.
LTC need not be
the overwhelming challenge that pushes analysts toward “easy” solutions
involving economically harmful payroll taxes, government compulsion, and
public entitlement programs. Properly conceived and with the right
financial tools and incentives available, LTC can be fully financed and
vastly improved without undue pressure on families, consumers, or
taxpayers.
Appendix:
Exactly How Much Wealth Do People Have and Why Aren’t They Using
More of It for LTC?
The following table is condensed from a more
detailed version published by the National Council on Aging and the
LTSS Center in a February 2023 report. It
displays the wealth of older adult households by quintile through 80
percent and then by decile to 100 percent. The report states that
“the bottom 20%, approximately 11 million households, have no assets. This
group has a 2018 median income of $16,989 and would be unable to rely on
personal finances to pay for LTSS, especially with rising costs of care.”[79]
Clearly, this is an economic group for which Medicaid LTC benefits are
intended to provide a safety net.
Older Adult Households Divided into Quintiles
or Deciles of Total Net Wealth (2018)
|
Quintiles |
0-20% |
21-40% |
41-60% |
61-80% |
81-90% |
91-100% |
|
Total
household income (median) |
$16,989 |
$27,240 |
$40,000 |
$52,229 |
$71,135 |
$109,092 |
|
Net value
[home equity] of primary residence (median) |
0 |
$45,000 |
$115,000 |
$220,000 |
$300,000 |
$400,000 |
|
Household
value of financial assets (non-housing, median) |
0 |
$2,000 |
$16,300 |
$130,000 |
$480,000 |
$1,331,254 |
The report
continues: “The next three quintiles (21–40%, 41–60%, and 61–80%) of older
adults saw modest increases in their financial assets between 2016 and
2018, but these individuals would still be unable to afford more than
two years of nursing home care in a semi-private room or four years in
an assisted living community if their median income and household value of
financial assets were added together. Despite adults’ preference to age
in place, 60% of adults would be unable to afford two years of in-home
long-term services and supports.”[80]
That conclusion is striking. If 60
percent of middle-class aging Americans cannot afford two years of in-home
LTSS, then it follows that 40 percent can. If so, that would cover the
average LTC risk and cost for most of them: “[O]ver half of adults 65 and
older will need LTSS for less than two years … .”[81]
But are people
actually spending down their wealth for LTC? How much of their income,
“household value,” and other financial assets do people actually use to
fund their own LTC? Conventional wisdom holds that high LTC costs force
wide swaths of American elders into impoverishment, leaving them dependent
eventually on Medicaid. Is that what happens? Do middle-income people have
any other choice? If faced with high LTC costs, would people in the fourth
wealth quintile (61-80 percent) need to spend down their wealth before
qualifying for Medicaid-financed LTC?
Their median
total household income is $52,229. The rule of thumb for income is that
anything below the cost of a nursing home is not disqualifying. That is
because private health and LTC expenditures are usually deducted from
income before comparing the balance to Medicaid’s very low allowable
limit.[82]
A well spouse would keep any income in his/her sole name plus a “monthly
maintenance needs allowance” of up to $2,465 or $29,580 per year (as of
2023) from the recipient’s income. Any remaining income in the Medicaid
recipient’s name would go to offset the program’s cost for his/her care,
but if there is an estate recovery later, the recipient would be liable
only for what Medicaid spent for his/her care, which is much less than
what the private pay cost would have been.
Thus, while
some private income goes for care, this out-of-pocket cost—mostly Social
Security income (explained below)—merely reduces Medicaid’s share of the
extremely low reimbursement, often less than the cost of care, that the
LTC provider receives. Although the recipient is paying out of pocket,
he/she is not commanding the better access and higher quality care
associated with paying privately. He/she is trapped in the lower Medicaid
level of America’s two-tier LTC system.
What about
assets? Must they be spent down before getting Medicaid? The “net value of
primary residence” (i.e. home equity) of people in the fourth wealth
quintile is $220,000. Does that amount interfere with Medicaid LTC
eligibility compelling asset spend down? No. Medicaid exempts a minimum of
$688,000 of home equity and up to $1,033,000 in some states. Even the
richest people would qualify for Medicaid based on their home equity of
$400,000.
But, as is
widely known, Medicaid allows applicants/recipients to hold no more than
$2,000 in “countable” assets while qualifying for or receiving Medicaid
LTC benefits. The fourth quintile’s “household value of financial assets
(non-housing, median)” is $130,000. But that is just a starting point. If
there is a spouse, Medicaid computes the couple’s jointly owned assets and
sets aside half—not to exceed $148,620 but never less than $29,724 (as of
2023)—for the “community spouse.” Then Medicaid takes out the
non-countable assets people own, such as “pre-paid burial and funeral
expenses, an automobile, term life insurance, life insurance policies with
a combined cash value limited to $1,500, household furnishings/appliances,
and personal items, such as clothing and engagement/wedding rings.”[83]
Very few people in the fourth quintile of wealth will have much savings
left after these deductions, but whatever remains can easily be converted
to non-countable status by investing more money in the home or purchasing,
in unlimited amounts, any of the other exempt items just listed.
When they
confront high LTC costs, do middle-class people ignore these generous
Medicaid financial eligibility limits and pay out of pocket? Do they
voluntarily plunge themselves into real impoverishment from a sense of
personal responsibility or shame at depending on public assistance? Some
do. More used to. But nowadays information on how to qualify for Medicaid
without spending down for care is universally available in magazine
articles and self-help books, in legal treatises and on the internet.
Google “Medicaid planning in [any state]” to find long lists of attorneys
who specialize in qualifying clients for Medicaid while preserving their
wealth. Even state Medicaid eligibility workers routinely explain to
middle-class applicants how to speed up or entirely eliminate their “spend
down” process by purchasing exempt assets. Workers report that people
think of Medicaid (public assistance) as though it were an entitlement
like Medicare.[84]
They ask, as Jane Bryant Quinn did in a 1989 Newsweek column, “Do
Only the Suckers Pay?”[85]
So, no, ignoring easy access to Medicaid LTC benefits and paying out of
pocket is the exception, not the rule.
But what about
the conventional wisdom that people all across America must be, and
actually are, spending down to impoverishment before obtaining Medicaid?
If that is true, it should show up in the data. But it does not. The
percentage of nursing home costs paid by Medicaid and Medicare has nearly
doubled over the past half-century from 26.8 percent in 1970 to 52.3
percent in 2021, while out-of-pocket costs have shrunk by half in the same
period from 49.2 percent in 1970 to 24.5 percent in 2021.[86]
Nursing home private-pay revenue has plummeted to 7 percent.[87]
The situation
with home health care is very similar. America spent $125.2 billion on
home health care in 2021, of which Medicare (37.2 percent) and Medicaid
(34.2 percent) paid 71.4 percent. Private health insurance (not LTC
insurance) paid 12.7 percent. Only 10.3 percent of home health care costs
were paid out of pocket. The remainder came from several small public and
private financing sources.[88]
Maybe people are spending down for assisted living. Some surely do, but
“Almost 1 in 5
[assisted living] residents relies on Medicaid to pay for daily
services (18%),” “61% of [assisted living facilities] are Medicaid
certified,” and only “a small minority of state Medicaid programs do not
cover services in assisted living.”[89]
Assisted living began exclusively as a private-pay option, but that is
changing rapidly. Still, to count spend down for assisted living as an
out-of-pocket LTC expenditure is dubious, because a large portion of the
fee for assisted living covers room and board, not LTC.
So how can it
still be that “Family out-of-pocket costs are also substantial, averaging
$44,800 and accounting for 37% of the total” LTSS expenses, averaging
$120,900 per person?[90]
The answer is another anomaly of Medicaid LTC financing policy: People
receiving Medicaid LTC benefits are required to contribute all but a small
portion of their income to offset Medicaid’s cost for their care. While
this income “spend-through” is rarely considered, research from three
decades ago documented that it is substantial, roughly half of what is
reported as out-of-pocket costs.[91]
This matters because the spend-through income—mostly Social Security
benefits, although correctly considered to be a private out-of-pocket
expenditure for Medicaid LTC—is not asset spend down and does not come
from people’s savings or home equity. Relatively little of what is
reported as personal out-of-pocket LTC expenditures comes from savings or
home equity expended for nursing home or home health care. Much of it is
Social Security income that is vulnerable to that entitlement program’s
potential insolvency and has been contributed by people already on
Medicaid, some of whom are receiving Medicaid while residing in assisted
living facilities or continuing care retirement communities (CCRCs).[92]
Removing private payments for assisted living and CCRCs, much of which
cover room and board costs and not LTC, leaves much less reported
out-of-pocket LTC costs remaining that could actually constitute
consumption of life savings or real property assets.
Finally,
analysts often refer to the University of Michigan Health and Retirement
Study and its auxiliary, the Asset and Health Dynamics among the Oldest
Old study for evidence to support their presumption that people are
spending down assets to qualify for Medicaid LTC benefits. Research does
show that people tend to decumulate assets rapidly at older ages, and many
do qualify for Medicaid thereafter. But there is nothing in the data to
link decumulation of wealth with spend down on health or LTC costs. Those
sources show only that transitions to Medicaid eligibility occur. Such
transitions may as likely be the result of Medicaid planning (i.e.,
artificial self-impoverishment) conducted many years before in
anticipation of the future need for LTC.
The widespread
belief that high LTC costs impoverish large numbers of aging Americans is
unsupported by the evidence. Medicaid financial LTC eligibility rules do
not exclude people up to and through the fourth quintile of wealth. Ample
evidence suggests that the public is aware of methods to qualify easily
for Medicaid LTC benefits or quickly learn how when expensive care costs
arise. Private-pay revenue for LTC providers, including home health
agencies and skilled nursing facilities, is low and falling. Private pay
for assisted living and CCRCs—much of which does not go for LTC but rather
for room and board—should not be bunched in with spending for home health
and skilled nursing. In the absence of evidence of high out-of-pocket
spend down for LTC, analysts should reassess what is actually happening
and how to address reform.
In summary,
middle-class Americans have enough wealth to fund their average expected
LTC costs, and this wealth is largely exempt from Medicaid spend down
rules. Information on how to access Medicaid LTC benefits without spending
down is widely available, and there is no evidence of widespread LTC spend
down resulting in impoverishment. So, one can conclude that changing
Medicaid eligibility policy to remove the option to ignore LTC, shelter
personal wealth, and rely on public benefits when LTC becomes necessary
should free up enormous resources of private wealth to support LTC
financing.
[67]
Phil Gramm, Robert Ekelund, and John Early, The Myth of American
Inequality: How Government Biases Policy Debate (Lanham, MD:
Rowman and Littlefield, 2022).
[69]
Early, “Reassessing the Facts,” p. 2.
[70]
Early, “Reassessing the Facts,” p. 4.
[71]
Early, “Reassessing the Facts,” 21.
[75]
“About 15% of older adults can expect their total LTSS expenses from
age 65 onward to amount to more than $250,000, whereas about 8% will
have positive but low costs (less than $10,000). A smaller percentage
(about 6%) will spend $250,000 or more out of pocket on LTSS. Fourteen
percent will spend at least $100,000 out of pocket on LTSS after
turning 65.” Johnson and Dey, “Long-Term Services and Supports for
Older Americans,” p. 8.
[76]
“Most older adults could finance a substantial amount of paid home
care out of pocket. About three-quarters of non-Medicaid,
community-dwelling adults ages sixty-five and older could cover at
least two years of moderate amounts of paid home care—the median
duration among recipients—with their available resources, and about
two-thirds could fund that amount of care using only their income and
financial assets.” Johnson and Wang, “The Financial Burden of Paid
Home Care on Older Adults,” p. 999.
[77]
LTC researchers often claim that spend down for high LTC costs plunge
wide swaths of older Americans into impoverishment, leaving them
dependent on Medicaid. That presumption has become conventional wisdom
as well. But proof for this “fallacy of impoverishment” is never
offered. Researchers claim data from the HRS and AHEAD surveys
substantiate spend down. But those sources only document “transitions”
to Medicaid. Such transitions could occur due to spend down. But they
are as likely or more so to happen as a result of Medicaid planning,
artificial self-impoverishment, conducted much earlier in anticipation
of future LTC need. Certainly, spend down of assets on health or LTC
expenses is not required to achieve Medicaid LTC financial eligibility
as explained in Long-Term Care: The Problem and above.
[80]
Basel et al., “The Continued Toll of Financial Insecurity in
Retirement.” Emphasis in original.
[81]
Basel et al., “The Continued Toll of Financial Insecurity in
Retirement.”
[82]
Most states (34) use the “medically needy” income eligibility method.
They deduct private medical and LTC expenses from income before
determining eligibility, enabling people to qualify despite having
incomes well above categorical eligibility limits. Other states use an
“income cap” method, allowing income up to 300 percent of the
Supplemental Security Income monthly limit. People with much higher
incomes can still qualify for Medicaid in income cap states by
diverting any excess income to an income diversion trust, also known
as a “Miller” or “Qualified Income Trust.” For an explanation of the
medically needy and income cap pathways to Medicaid income
eligibility, see American Council on Aging, “Income Spend Down,”
updated December 14, 2022,
https://www.medicaidplanningassistance.org/medicaid-spend-down/.
[85]
Jane Bryant Quinn, “Do Only the Suckers Pay?,” Newsweek,
December 18, 1989.
[88]
CMS, National Health Expenditure Data, Table 14. To access Table 14,
open and unzip
NHE Tables (ZIP).
[90]
Basel et al., “The Continued Toll of Financial Insecurity in
Retirement.”
[91]
“An
estimated 41 percent...of out-of- pocket spending for nursing home
care was received as income by patients or their representatives from
monthly social security benefits.” Helen C. Lazenby and Suzanne W.
Letsch, “National
Health Expenditures, 1989,”
Health Care Financing Review 12, no. 2 (1990), p. 8,
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4193104/.
Later research confirmed that Social Security spend-through is almost
half of nursing home out-of-pocket costs. Nelda McCall, ed., Who
Will Pay for Long Term Care? Insights from the Partnership Programs
(Chicago: Health Administration Press, 2001), p. 19.
[92]
The Centers for Medicare and Medicaid Services changed the definition
of National Health Expenditure Accounts categories in 2011, adding
CCRCs to Nursing Care Facilities. This change had the effect of
reducing Medicaid’s reported contribution to the cost of nursing home
care and increasing the amount reported as “out of pocket”
expenditures, because CCRCs, like assisted living facilities, are
mostly private pay.
#############################
Updated, Monday, November 27, 2023,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #23-034:
LTC NEWS AND COMMENT
LTC
Comment: Do you spend hours searching the internet for useful articles,
key data, and relevant reports to keep you on the forefront of
professional knowledge? Do you lose business because you’re blindsided by
clients or competitors who learn critical information before you do?
Here’s an antidote:
LTC
Clippings: The Center for Long-Term Care Reform notifies subscribers to
our LTC Clippings service daily of information you need to know. Each
message contains only the critical facts about new publications: a title,
representative quote, a link to the original, and our analysis in a
sentence or two. To inquire or subscribe, contact Damon at 206-283-7036
or
damon@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC
E-Alerts: Once a week, we compile our daily LTC Clippings into a summary,
email it to Center for Long-Term Care Reform members, and archive it in
The Zone, our password-protected members-only website. Center members
also receive our weekly LTC Bullet op-ed. To join the Center and receive
all these benefits and more, contact Damon at 206-283-7036 or
damon@centerltc.com.
We no
longer post our LTC E-Alerts on the Center’s public access website, but
here’s what today’s LTC E-Alert contained: links, quotes and comments on
the following articles, reports, or data:
-
A Long-Term Solution To America's Long-Term Care
Crisis
-
10 Things You Should Know About Long-Term Care
Insurance
-
Brian Blase Discusses Affordable Care Act
Enrollment
-
The way we pay for long-term care needs a
fundamental rethink
-
Does It Make Sense to Self-Fund Long-Term Care
Expense?
-
Why long-term care in America is a long-term
problem
-
When You Go Home for Thanksgiving
-
Why Long-Term Care Insurance Falls Short for So
Many
-
Americans would have difficulty paying for a year
of long-term care: survey
-
Federal, lender support needed for assisted living
operators to lower rates, leader says
-
Nursing home care continues to outpace most
categories of national health spending: Altarum
#############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Monday, November 20, 2023, 10:03 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #23-033:
LTC NEWS AND COMMENT
LTC Comment: Do you spend hours searching
the internet for useful articles, key data, and relevant reports to keep
you on the forefront of professional knowledge? Do you lose business
because you’re blindsided by clients or competitors who learn critical
information before you do? Here’s an antidote:
LTC Clippings: The Center for Long-Term
Care Reform notifies subscribers to our LTC Clippings service daily of
information you need to know. Each message contains only the critical
facts about new publications: a title, representative quote, a link to
the original, and our analysis in a sentence or two. To inquire or
subscribe, contact Damon at 206-283-7036 or
damon@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC E-Alerts: Once a week, we compile our
daily LTC Clippings into a summary, email it to Center for Long-Term Care
Reform members, and archive it in The Zone, our password-protected
members-only website. Center members also receive our weekly LTC Bullet
op-ed. To join the Center and receive all these benefits and more,
contact Damon at 206-283-7036 or
damon@centerltc.com.
We no longer post our LTC E-Alerts on the
Center’s public access website, but here’s what today’s LTC E-Alert
contained: links, quotes and comments on the following articles, reports,
or data:
-
Can a Nursing Home
Take Our Assets? We Have a $1 Million IRA and a Trust to Protect Us
-
Why High Interest
Rates Are Good News for Long-Term Care Insurance
-
Facing Financial
Ruin as Costs Soar for Elder Care
-
The Affordability
of Long-Term Care and Support Services: Findings from a KFF Survey
-
The Biden
Administration Is Slow to Act as Millions Are Booted off Medicaid,
Advocates Say
-
Can I Be
Compensated for the Care I Give to My Elderly Parents?
-
Don't be afraid of
too many LTC Insurance Choices!
-
Genworth Moves
Ahead With Long-Term Care Reboot
-
Removing Medicaid
Loopholes to Improve Long-Term Health Care
-
12 Ways Long-Term
Care Risk Eats Your AUM
-
Worried About
Long-Term Care Expenses? Let’s Do Something About It
#############################
"LTC E-Alerts" are
a
feature offered by the Center for Long-Term Care Reform, Inc. to members
at the $150 per year level or higher. We'll track and report to you news
and analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Monday, November 17, 2023, 10:03 AM (Pacific)
Seattle—
#############################
LTC BULLET: LONG-TERM
CARE: THE SOLUTION (THE SERIAL, Part 3)
LTC Comment: Today we
offer easy access to a must-read new study by Center president Steve
Moses, after the ***news.***
*** PODCAST: “Removing
Medicaid Loopholes to Improve Long-Term Health Care,” by AnneMarie
Schieber, The Heartland Institute, 11/7/2023
Quote: “Stephen Moses, one of the leading experts on long term care
in the U.S. says the nation can dramatically improve the quality of
long-term care if we could get rid of the many loopholes that allow just
about anyone to qualify for Medicaid coverage. Few people save for long
term care because it is widely accepted that the government will pick up
the tab. But government paid care has really impacted the quality of
care. Many of the elderly live their last days in nursing homes. Moses,
and the Paragon [Health] Institute released their latest report on the
problems with long term care in the U.S., called Long-Term
Care: The Solution. In October 2022, Moses and Paragon outlined
the problems in Long-Term
Care: The Problem. … This podcast begins with a discussion
on Medicaid loopholes, the response from Congress, whether a solution is
workable immediately, and how special interests might respond to closing
off loopholes. The conversation then turns to why the public needs to be
better educated on long-term care. The idea that it must be debilitatingly
expensive isn’t true.”
LTC Comment: Get the essence of the LTC problem and its solution in
this 36-minute podcast. Many thanks to Health Care News managing
editor AnneMarie Schieber and the Heartland Institute for publishing this
important message. ***
*** COLUMN: “The
federal Medicaid bait and switch,” by Stephen A. Moses, McKnight’s
LTC News, 11/6/2023
Quote: “How to unleash trillions of dollars in home equity,
retirement savings and life insurance lying fallow now and mobilize them
to supercharge LTC service delivery is the new paper’s topic. How to do
that without unsettling young people and families who have more immediate
goals and responsibilities they currently put ahead of LTC planning is the
paper’s proposal. I invite McKnight’s readers [and everyone else]
to review ‘Long-Term
Care: The Problem’ and ‘Long-Term
Care: The Solution,’ consider their analysis and recommendations, and
share your comments and criticism with the author.”
LTC Comment: Have a look at these two papers and let me know what
you think. I believe the opportunity to change LTC financing for the
better is coming again. The system described in the first paper is
unsustainable and the proposal in the second paper is practical, new, and
achievable. Just do it. ***
*** APPEAL: The
Center for Long-Term Care Reform, in partnership with the
Paragon Health Institute, is embarking on a campaign to improve LTC
services and financing. In “Long-Term
Care: The Problem,” we explained what’s wrong and why. In “Long-Term
Care: The Solution,” we discard the failed policies of the past and
propose a radical new approach based on engaging vast sources of private
wealth currently diverted from LTC funding. We will reach out to the
media, brief federal and state policy and law makers, speak at
conferences, and write for publication, all toward the end of achieving
the policy goals in “Long-Term
Care: The Solution.” Will you help us in this effort? Join the Center
or contribute online
here. Check out the Center’s “Membership Levels and Benefits” schedule
here. Most corporate memberships include a briefing by Center
president and “LTC Solution” author Stephen Moses. Call or write for more
information: 206-283-7036;
damon@centerltc.com;
smoses@centerltc.com. LTC policy has floundered for too long. Let’s
get this done! ***
LTC BULLET: LONG-TERM CARE: THE SOLUTION (THE SERIAL, Part 3)
LTC Comment: The
Paragon Health Institute published “Long-Term
Care: The Solution” on October 3. This new report is long and
complicated, but important. So LTC Bullets will deliver it to you
in bite-sized pieces over several weeks. Published so far:
Long-Term Care: The Solution (The Serial), October 20, 2023 and
Long-Term Care: The Solution (The Serial, Part 2), November 3, 2023.
Today, read “Changing Course: From Failed Threats to Stronger Incentives,”
“How to Engage the Public in Long-Term Care Planning While They Still Have
Time to Prepare,” “How These Policy Changes Would Impact the LTC Market,”
“People Already Have More Funds Available for LTC Than They Are Using
Now,” and “Methods to Satisfy Individual LTC Responsibility.” Next time:
“Poverty Reconceptualized,” “Managing the Back End,” and “Why Not Social
Insurance Instead?” Finally, in Part 4, expect “Summary and Conclusion”
and the “Appendix: Exactly How Much Wealth Do People Have
and Why Aren’t They Using More of It for LTC?”
Excerpts from “Long-Term
Care: The Solution”
by
Stephen A. Moses
President,
Center for Long-Term Care Reform
Changing
Course: From Failed Threats to Stronger Incentives
Policies intended to
scare consumers into planning privately for the risk and cost of LTC did
not work. People could always ignore LTC and, if they needed expensive
care over an extended period later, easily transfer the liability to
Medicaid. The program’s financial eligibility rules allowed (1) ownership
of practically unlimited exempt assets; (2) asset transfers five years in
advance; (3) very large home equity protection; (4) major trust, annuity,
and life estate exemptions; (5) large incomes so long as private health
and LTC expenses were also high; and (6) substantial wealth transfer to
heirs due to scant enforcement of the estate recovery mandate. Easy access
to Medicaid meant the measures taken to encourage LTC planning and
policies to encourage the purchase of private insurance for LTC largely
failed. This condition will remain unless and until the public is engaged
in LTC planning earlier in life.
How to
Engage the Public in Long-Term Care Planning While They Still Have Time to
Prepare
Step One:
Eliminate Moral Hazard
Lawmakers should
eliminate the moral hazard that has discouraged early LTC planning. That
is, end the ability and practice to (1) ignore the LTC risk; (2) avoid the
need to save, invest, or insure to prepare; (3) wait to see if expensive
care is ever needed and, if it is; (4) transfer the liability to taxpayers
by qualifying for Medicaid while preserving wealth. The methods people use
to preserve wealth while qualifying for Medicaid LTC benefits late in life
must cease. Those practices include but are not limited to:
a.
Purchase of exempt assets.
This is the biggest, most costly, and hardest to measure method of
artificial self-impoverishment to qualify for Medicaid. Medicaid
requires that personal assets be spent down to a very low level (usually
$2,000) before eligibility is granted. But the program does not require
that such assets be expended for health or long-term care needs.[29]
This loophole allows Medicaid applicants to protect unlimited wealth by
purchasing goods or services that are not included among countable
resources. Such exempt items include an expensive home and—without any
dollar limit—the following: one automobile, prepaid burial plans, one
business including the capital and cash flow, term life insurance,
household goods, personal belongings, and even individual retirement
accounts (IRAs) in many cases.[30]
Medicaid planners routinely advise clients to maximize this path to
eligibility. They provide long lists of exempt items for clients to
purchase in order to reduce their countable wealth for Medicaid
eligibility.[31]
No study has ever been conducted to measure this very easy Medicaid
planning method’s incidence or cost.
Recommendation: Eliminate the exempt asset loophole by requiring
that spend down of assets must be for health or LTC expenditures and
documented in the case record as is already required and done for income
spend down.[32]
b. Home equity exemption.
Current Medicaid law exempts between $688,000 and $1,033,000 of home
equity, depending on the state. As home equity is most seniors’ biggest
asset, protecting this wealth from LTC liability discourages responsible
and early LTC planning. Financial tools and methods such as reverse
mortgages and home equity loans enable individuals and families to
access otherwise illiquid home equity for the purpose of funding private
home-based LTC. As the legitimate purpose of Medicaid is to ensure
access to quality LTC for the underprivileged, the program should not
shelter home equity from eligibility consideration on behalf of
middle-class and affluent applicants. Otherwise, Medicaid operates as
free inheritance insurance for heirs instead of a safety net for those
in need.
Recommendation: Eliminate the Medicaid home equity exemption
according to a phase-in schedule with enough advance warning to
incentivize early LTC planning without unduly affecting people already
too old to prepare.
c.
Medicaid Asset Protection
Trusts (MAPT). “A Medicaid Asset Protection Trust is exactly
as it sounds—a trust designed to protect assets from being counted for
Medicaid eligibility.”[33]
Putting wealth, including real property, into an MAPT five years ahead
of application for Medicaid LTC benefits removes unlimited amounts from
eligibility consideration or spend down requirements.
Recommendation: Prohibit MAPTs immediately for all applicants and
recipients. Once the law is changed, Medicaid legal advisers will
self-enforce by no longer using or recommending the practice.
d.
Medicaid Compliant Annuities.
“A Medicaid Compliant Annuity is a single premium immediate annuity (SPIA)
that contains zero cash value and provides income to the owner. Properly
structured, this annuity functions as a spend-down tool that eliminates
excess countable assets, allowing the nursing home resident to become
eligible for Medicaid benefits.”[34]
There is no limit on how much wealth can be sheltered with a Medicaid
compliant annuity. A congressional study cited a Rhode Island resident
sheltering $400,000 and a Virginia resident sheltering $900,000 this
way.[35]
Recommendation: Eliminate Medicaid-compliant annuities as a means
to qualify for Medicaid while preserving wealth at any age.
e.
Five-year asset transfer
look-back. Assets transferred
for the purpose of qualifying for Medicaid within five years of
application are used to determine eligibility according to a formula
that delays eligibility based on the amount of the transfer.[36]
Assets transferred more than five years before application are not
considered no matter how great the amount divested. Because the median
period of time from diagnosis to death in dementia cases is five years,[37]
families that transfer assets at early signs of mental weakening can
entirely avoid Medicaid spend down requirements. Because real property
ownership and transfers are publicly recorded, easy to check, and
represent the largest portion of seniors’ wealth, the look-back period
to discourage their transfer for purposes of Medicaid qualification
should be much longer. It is unlikely that so many people would become
Medicaid eligible and join the most expensive dually eligible recipients
of Medicaid and Medicare if they were under notice of asset
transfer limits 20 years in advance instead of five.
Recommendation: Expand the Medicaid asset transfer look-back period
from five to 20 years. As all real property transfers are recorded and
often automated now, checking for a look-back of 20 years is no more
difficult than the current five-year look-back requirement. People would
be much less likely to initiate asset transfers to qualify 20 years
ahead of a potential LTC need as they routinely do five years ahead. In
other words, this rule would be self-enforcing and not generally require
enforcement 20 years later at the point of Medicaid application.
A systematic review of
Medicaid income and asset eligibility loopholes (described and promoted in
the vast formal legal literature on Medicaid estate planning[38])
would reveal many more oversights in Medicaid law and regulations that
discourage responsible LTC planning and smooth the way onto Medicaid for
people who do not plan for LTC. Some of the more egregious examples
include spousal refusal, life estates, and half-a-loaf strategies.[39]
These should be eliminated as well. At a minimum, the GAO should
immediately undertake a systematic study of Medicaid LTC eligibility rules
and enforcement to ascertain the incidence and costs of these major
loopholes. GAO should examine a valid random sample of Medicaid LTC cases
generalizable to the national universe of such cases. Such a study should
employ more intense review and verification techniques than are used by
state Medicaid agencies. Severe staff and financial shortages cause the
state agencies to miss applicants’ unreported income and resources,
resulting in eligibility errors that closer scrutiny would reveal.
Establishing national LTC financial eligibility error rates would finally
reveal how much Medicaid loses as a safety net for the needy and how large
its moral hazard impact is on the non-needy due to eligibility loopholes
and errors.
How These Policy Changes Would
Impact the LTC Market
Without any government
program ensuring both the financing of LTC benefits and asset
protection in the future, consumers would be far more concerned about LTC
risk and therefore much more likely than they are now to save, invest, or
insure against the risk. Fewer middle-class and affluent people would end
up dependent on public assistance, so the public safety net could do a
better job for the truly needy. Adult children would encourage and assist
their parents to plan ahead instead of turning to Medicaid for relief when
needed. Principles of personal responsibility guided by risk management
techniques would prevail. More private financing would flow through the
service delivery system relieving LTC providers from the burden of
notoriously low Medicaid reimbursement rates. The market would set prices
and allocate resources to meet consumer preferences instead of providers
offering only what the government is able and willing to finance. Home-
and community-based services would dominate—because that is what people
prefer—and investors, entrepreneurs, and companies would be rewarded for
providing these services. Nursing homes would still have an important
role, but they would primarily provide skilled sub-acute and
rehabilitative care rather than long-term custodial assistance.
These policy changes
should be phased in so that they affect older people less or not at all
and give younger people enough time to adapt. For example, people 55 or
older and younger people with chronic disability or early onset dementia
could be exempted from the change altogether. Current rules would remain
in effect for them as they age into their 80s, the time of life when LTC
becomes most likely. People 45-54, newly on notice that they can no longer
count on easy access to Medicaid LTC while preserving wealth, should be
expected to have a minimal level of LTC savings, investment, or insurance
in place by age 65 sufficient to offset their average LTC liability.
Likewise, people younger than 44 should be on notice that they need to
have sufficient resources set aside by age 65 to offset their average
catastrophic LTC risk. How each of these age groups can reasonably be
expected to achieve these levels of protection is addressed below under
Steps Three and Four.
We will need to monitor
and enforce compliance with these new expectations regarding LTC planning.
Without either, we can expect widespread non-compliance, leaving many
unprotected for LTC risk as now but no longer protected against asset
spend down in the future as before. Private fiduciary organizations could
be tasked with identifying individuals’ LTC risks and to follow up with
each person until the risk is covered. There could be a role for some
level of government to follow up with people who remain derelict in this
responsibility. Artificial intelligence could help monitor and administer
a program to incentivize early LTC planning.[40]
Step Two: Publicize LTC Risk and
Cost
Once Medicaid is
preserved for the truly needy by preventing people from using it late in
life and protecting their wealth, that change should be publicized widely.
Without the ability to access government programs to finance LTC later in
life while preserving wealth, people will have far greater incentives to
engage in proper planning. From Washington State’s experiment in
payroll-funded social insurance for LTC, we know that individuals will
prepare once they are confronted with the urgent need to deal with LTC
risk.
Washington Governor Jay
Inslee signed a law in 2019 establishing the WA Cares Fund. The program
was designed to charge workers a 0.58 percent payroll tax beginning
January 1, 2022, to fund a lifetime LTC benefit of up to $36,500 after a
10-year vesting period. It faced strong public opposition, failing twice
to receive citizens’ support at the ballot box.[41]
To make WA Cares more attractive to voters, an opt-out choice was added
that allowed people to avoid the payroll tax by owning private LTC
insurance purchased no later than November 1, 2021. As of August 15, 2022,
475,072 Washingtonians had taken that option,[42]
overwhelming the private LTC insurance carriers’ ability and desire to
supply the product.[43]
Carriers, backlogged by the heavy new demand, worried the new policies
taken out in minimal amounts to avoid the payroll tax would quickly lapse,
creating an administrative headache and expense.
The key insight of the
WA Cares Fund experience is that it took forcing people to pay immediately
for LTC to get them to purchase private insurance for the risk. Prior to
the Washington experience, no amount of scaring people about LTC cost or
encouraging them with tax incentives persuaded many to buy the product.
After WA Cares offered a way to opt out of its payroll tax, LTC insurance
sales exploded. Nationally, more than three times as many people purchased
the product in 2021 compared to 2020. Most of these new buyers were
Washingtonians seeking to escape the WA Cares program’s payroll tax.[44]
Adding the opt out harmed the program by diverting individuals with higher
incomes and more favorable LTC risks to private coverage, but it also
pointed the way to better LTC policy.
Clearly, an important
answer to the LTC challenge lies in making LTC risk and cost real for
consumers earlier in their lives. Eliminating Medicaid eligibility
loopholes would create this condition, and it does so without threatening
all workers with a new, economically harmful payroll tax as in the WA
Cares example. Publicizing the change in future Medicaid LTC eligibility
across the country, at least as widely and frequently as WA Cares was
promoted to Washingtonians, should result in a similar increase in
consumer demand for any and all private means to save, invest, or insure
against LTC risk and cost.
Step Three: Reconceptualize the
LTC Challenge
LTC risk and cost are
both frightening and seemingly so distant in the future that most people
choose to ignore them, especially in the face of more immediately pressing
responsibilities. One key to refocus consumers on LTC is to
reconceptualize the problem, with new information that reveals it is less
intimidating than usually conceived. In the past several years, new
research has suggested that LTC may not be such an overwhelming financial
risk for most people as previously assumed.
In 2022, HHS’s Assistant
Secretary for Planning and Evaluation estimated “that over half (56%) of
Americans turning 65 today will develop a disability serious enough to
require LTSS.”[45]
But that means nearly half, 44 percent, can expect to have zero LTC need.
In fact, “While individuals on average will need 0.8 years of paid LTSS,
55% of older adults will not use any paid LTSS.”[46]
Furthermore, on average “an American turning 65 today will incur $120,900
in future LTSS costs, measured in today’s dollars.”[47]
This amount could be financed by setting aside[48]
the present discounted value of $69,800[49]
at age 65.[50]
Earmarking $70,000 at age 65 for future LTC expenses does not sound nearly
as daunting as insuring against the full catastrophic LTC risk
potential of $250,000.[51]
If people begin LTC planning earlier than age 65, even less would be
needed to set aside.[52]
In essence, the burden is much more manageable than previously conceived.
Once the principle is
established that every person has a responsibility to cover an objectively
determined amount of LTC liability by a certain age, each person’s target
amount could be adjusted in a way that treats people fairly based on their
sex, income, health status, and other relevant demographic
characteristics.
People Already Have More Funds
Available for LTC Than They Are Using Now
There is more good news.
In June 2019, Johnson and Wang “simulated the financial burden of paid
home care for a nationally representative sample of non-Medicaid
community-dwelling adults ages sixty-five and older.”[53]
They “found that 74 percent could fund at least two years of a moderate
amount of paid home care if they liquidated all of their assets, and 58
percent could fund at least two years of an extensive amount of paid home
care.”[54]
Furthermore: “Nearly nine in ten older adults have enough resources,
including income and wealth, to cover assisted living expenses for two
years.”[55]
So the potential LTC financial burden is much more manageable than we
thought. The evidence that people accumulate substantial savings that
could be used for LTC if they had more incentive to do so is very
encouraging. Assuming the removal of Medicaid’s generous financial
eligibility rules that obviate the need to plan for LTC, the path forward
will be much less fraught.
Exactly How Much Wealth Do
People Have and Why Aren’t They Using More of It for LTC?
This paper’s Appendix
answers those questions based on new research and draws the appropriate
conclusions for LTC financing policy reform.
Step Four: Show Younger People a
Better Way
Even if the LTC
financing challenge is not as daunting as previously believed and families
possess more wealth than we thought, we still need ways to make it easier
for younger people and families to identify and put to use the means at
their disposal to prepare for LTC risk and cost. Government should advise
all Americans by age 25 that LTC planning is a personal responsibility
planning for which should start no later than age 40 and be achieved by
age 65. The termination of all methods to qualify for Medicaid LTC
benefits late in life while preserving wealth should be disclosed,
publicized, and frequently reiterated in state and federal government
publications. By age 65, most Americans should be prepared to pay for
their expected LTC expenses, which would require them on average to have
$70,000 saved, set aside, or insured for that purpose. LTC Choices 1-7
below suggest some methods by which people could fulfill their LTC
planning responsibility. Entrepreneurs can be expected to produce many
more.
A private fiduciary
organization similar to Underwriters Laboratories could counsel Americans
on LTC risk and cost, propose methods to prepare, evaluate their proposals
to meet their responsibility, and help them achieve the needed protection.
Private insurers could estimate individual need and recommend the
necessary level of coverage with quality control review by independent
actuaries or auditors. Following are several possibilities that could
satisfy the need to plan for LTC with minimal financial disruption for
individuals and families carrying other financial responsibilities at the
same time. The basic strategy is twofold: (1) to aim LTC planning toward a
more realistic goal of meeting each individual’s probable risk and (2) to
minimize the immediate cost of preparing for LTC risk by earmarking funds
already accumulated in retirement savings to be used for LTC if and only
if LTC becomes necessary.
Methods to Satisfy Individual
LTC Responsibility
LTC Choice #1:
Private Insurance. Purchase private LTC insurance that meets minimal
coverage standards based on age, sex, health status, etc. Instead of huge
premiums to cover potential lifetime coverage of expensive nursing home
custodial care,[56]
adequate insurance coverage for each individual’s personal risk will prove
much more affordable. Most analysts believe private LTC insurance is
unlikely ever to penetrate enough middle-income households to become a
significant payment source. But they have always assumed that people would
need much more coverage at too great a cost to attract enough buyers to
make a big difference. That assumption may be wrong.
Smaller, less expensive
LTC insurance policies could have a disproportionately large impact on the
aging public’s ability to afford senior housing, including home care and
assisted living. The National Investment Center reported that reducing the
annual cost of senior housing by $15,000, from $60,000 to $45,000 per
year, would expand the middle market for senior housing[57]
by 3.6 million individuals, enabling 71 percent of middle-income seniors
to afford the product.[58]
Where could consumers find that extra $15,000 to bring the cost of senior
housing into reach? The premium for an annual LTC insurance benefit of
$15,000 would only cost a small fraction of the premium required for the
comprehensive coverage that consumers find so financially daunting now.
Unfortunately, insurance regulations sometimes forbid carriers from
offering coverage with a benefit of less than $18,000 per year. Once
again, well-intentioned regulation stands in the way of sensible LTC
policy and planning.
LTC Choice #2:
Investment Accounts. Establish a new tax-deferred investment account
similar to the 401(k) or IRAs already available to cover future
predictable LTC expenses. Consider a fully tax-exempt investment account
as an even greater savings facilitator. To soften the impact of
contributing to an extra retirement account, savers could be allowed to
use a portion of their existing retirement accounts or health savings
accounts to satisfy the LTC responsibility.[59]
The strategy is to use a portion of funds already saved for other purposes
by allocating them for LTC if and only if LTC becomes necessary.
LTC Choice #3:
Retirement Savings. Allow a portion of retirement savings to meet the
LTC planning responsibility. At the end of March 2023, total U.S.
retirement assets were $35.4 trillion, including $12.5 trillion in IRAs,
$9.8 trillion in defined contribution accounts, and $10.9 trillion in
combined government and private defined benefit plans. Annuity reserves
outside of retirement accounts add another $2.2 trillion.[60]
LTC Choice #4: Home
Equity. Over 78 percent of age 65 and over households own homes.[61]
Many could lien their home equity to support LTC or withdraw sufficient
funds through reverse mortgages to purchase private LTC insurance as in
LTC Choice #1. The $12.4 trillion in home equity held by people 62 years
of age and older[62]
would both cover the LTC expenses for a large portion of them and send
huge waves of desperately needed private revenue into the LTC service
delivery system. This new private revenue—at rates 50 percent more than
what Medicaid pays—would improve care quality and access for all LTC
patients, including those dependent on public financing. Estimating
potential savings to Medicaid from this source is difficult. Little is
known about current home ownership by Medicaid LTC recipients, because
Medicaid exempts most home equity. A dated (but unique) 1989 GAO study
found, “About 14 percent of the Medicaid nursing home residents in the
eight states GAO reviewed owned a home,” and “By using home equity to
defray Medicaid costs as Oregon does, the six states that now lack
recovery programs could recover about $85 million [$218 million in today’s
dollars] from recipients admitted to nursing homes.”[63]
Diverting home equity earlier in life to finance LTC risk later, instead
of relying on Medicaid and then attempting to recover from estates after
death, would unleash the huge potential of home equity to finance quality
LTC for more people.
LTC Choice #5: Life
Insurance. Many life insurance policy holders can carve out enough of
their cash values or death benefits to meet their personal LTC
responsibility. Total life insurance coverage in the United States was
$21.2 trillion by the end of 2021.[64]
There are several ways to access the cash value of life insurance without
dying. They include dropping the policy to collect its surrender value,
selling the policy by means of a “life settlement,” and withdrawing funds
or borrowing from the policy.[65]
Even a term life policy, with no cash value, can sometimes be sold.[66]
The current perverse incentive created by government policy when people
need LTC is to liquidate cash value life insurance, spend the money on
exempt assets, and then apply for Medicaid when the funds are gone.
Eliminating that loophole would free up trillions of private life
insurance value to offset public LTC expenditures.
LTC Choice #6: The
Deferred Reverse Estate Annuity Mortgage (DREAM). This option—a
legally binding and officially recorded lien on one’s estate set aside for
LTC—does not currently exist, but it is similar to the existing Medicaid
estate recovery obligation except that it moves the responsibility forward
in time and ensures eventual LTC funding availability. The DREAM mortgage
satisfies the LTC planning responsibility only if it is formally executed,
is legally recorded, and applies to all property that will pass inside or
outside of a probated estate. Unlike asset transfer limitations and estate
recovery, this option secures the property so that it is available to pay
for care in the private market. This is a way for people to prepare for
LTC risk and cost, lock in the ability to pay privately for care, and have
no immediate need to expend income. They merely obligate a portion of
their estates for their LTC if needed. Any remainder would pass to heirs,
although it would be unprotected by Medicaid, as it is currently. This is
the easiest and least intrusive of all the methods to satisfy the LTC
planning responsibility.
LTC Choice #7:
Capture the other end of the age spectrum from estates. People who
begin saving, insuring, or setting aside resources for LTC before age 40
could receive a reduced LTC responsibility level. So, in addition to the
lower discounted present value of their LTC responsibility, they would
have an added incentive to begin LTC planning earlier. Employers could
introduce LTC responsibility to job seekers in their early 20s.
Increasingly, younger people are having to care for their parents and
grandparents. If they become sensitized to the need for LTC planning
earlier than others and they take action, their LTC responsibility could
be satisfied earlier and at less personal cost than for others who begin
preparation later in life.
All seven of these
options are manageable by private companies—such as employers, insurers,
banks, or brokers—eliminating much of the huge federal and state
bureaucracy currently managing Medicaid LTC eligibility determination and
estate recovery. Other tools and methods of satisfying the LTC planning
objective will evolve naturally in a market not distorted by Medicaid
rules that reward failure to plan.
[29]
For purposes of income spend down, as opposed to asset spend down,
Medicaid does require that monthly income be expended for health or
LTC expenses to qualify as a cost under medically needy income
eligibility rules. Analysts often confuse this distinction and assume
incorrectly that assets must be, and usually are, spent for
health-related costs as well. There is no evidence that people
decumulate assets due to health or LTC expenses, despite analysts’
typical assumption that they do. They ignore the possibility that
assets could be divested by other means, such as Medicaid planning
techniques.
[30]
States apply exempt asset rules inconsistently, and the federal
government enforces them inconsistently.
[31]
For example: “The real goal, though, is to work with your parents on
an asset-shifting plan that will allow them to have Medicaid pick up
the tab for their long-term care if need be.… One way to do this is by
turning assets that aren’t exempt from Medicaid into those that are.
Money in the bank or a certificate of deposit could be spent on a
prepaid funeral or a more extravagant engagement ring, for example;
both are exempt assets” (Smart Money, October 1997, pp.
134-36).
“Another sheltering strategy is to convert available, countable assets
into non-countable exempt assets. For example, money in checking or
savings accounts may be used, without creating a period of
ineligibility, to purchase or improve a home, pay off a mortgage, buy
a cemetery lot, pre-pay funeral services, pre-pay residence-related
taxes and insurance, or even pay outstanding bills, including legal
fees” (Hal Fliegelman and Debora C. Fliegelman, “Giving Guardians the
Power to Do Medicaid Planning,” Wake Forest Law Review 32, no.
2 [Summer 1997], pp. 341-42, 359, 362-64, 373).
“Viatical settlements may provide an opportunity for families that
include a senior in need of long-term care, to meet financial
obligations without disqualifying the senior for Medicaid benefits….
Viatication affords a policyholder the means by which to convert a
‘non-exempt’ asset (i.e., a life insurance policy) to an ‘exempt’
asset for purposes of Medicaid regulation…. Possible uses of viatical
settlement proceeds to create an ‘exempt’ asset include: (a) paying
off a home mortgage; (b) making major home repairs or improvements;
(c) paying off outstanding medical bills; (d) prepaying tax
obligations, including real estate taxes; (e) purchasing or replacing
a car; (f) creating a burial fund or making prepayments for funeral
costs; and (g) purchasing a long-term care policy for a spouse. These
alternative uses permit viators to put viatical proceeds to good use
and still retain their Medicaid eligibility or the Medicaid
eligibility of their spouses” (NAELA, 1996 conference proceedings,
Session 11, pp. 18-19, 21-23).
[32]
Enforcement of this requirement should be as routine as enforcement of
the existing rule that income spend down for medically needy
eligibility must be for health-related costs.
[35]
On September 14, 2012, four congressional sponsors of the Medicaid
Long-Term Care Reform Act (H.R. 6033) queried state governors “on
policies to strengthen program integrity and make Medicaid more
sustainable for state and federal budgets.” The questions they asked
and the responses they received, including the Medicaid compliant
annuity examples cited above, are summarized in Stephen A. Moses, “LTC
Bullet: States Decry Medicaid LTC Loopholes,” Center for Long-Term
Care Reform, January 11, 2013,
http://www.centerltc.com/bullets/archives2013/984.htm;
and Stephen A. Moses, “LTC Bullet: The Medicaid Long-Term Care Reform
Act of 2012,” Center for Long-Term Care Reform, October 5, 2012,
http://www.centerltc.com/bullets/archives2012/973.htm.
[36]
The ineligibility penalty is the number of months of delayed
eligibility equal to the amount of assets transferred for less than
fair market value for the purpose of qualifying for Medicaid divided
by the average cost of a nursing home in the state.
[37]
“Median
time from recorded diagnosis until institutionalization and until
death for people with dementia was 3.9 and 5.0 years, respectively” (Karlijn
J. Joling et al., “Time from Diagnosis to Institutionalization and
Death in People with Dementia,” Alzheimer’s and Dementia 16,
no. 4 [April 2020],
https://pubmed.ncbi.nlm.nih.gov/32072728/).
[39]
“Spousal Refusal, which has been dubbed, ‘just say no,’ is when a
non-applicant spouse of a long-term care Medicaid applicant refuses to
help pay the cost of long-term care for their spouse. While spouses
are legally obligated to financially support one another, Medicaid
cannot legally deny care if a non-applicant spouse refuses to
contribute towards the cost of care of their spouse” (American Council
on Aging, “How Spousal Refusal Works as a Strategy to Medicaid
Eligibility,” updated May 31, 2023,
https://www.medicaidplanningassistance.org/spousal-refusal/).
Note
that spousal refusal is clearly illegal under federal law, but it is
routinely permitted in New York and Florida and sporadically in some
other states.
Life
estate: “A common dilemma that our Fortune 500 clients run into is how
to preserve their homes while also gaining Medicare [sic]
eligibility. A transfer subject to a life estate may be used to
preserve your home and facilitate your eligibility for Medicaid. With
this planning tool, you transfer the ‘remainder interest’ in your
house to your children (or other beneficiaries), and keep a ‘life
estate’ for yourself. As a practical matter, you deed the house to the
remainder beneficiaries and incorporate language in the deed to retain
your life estate. The life estate gives you the legal right to live in
the house for life” (Kevin Won, “Residence Transfer Subject to Life
Estate: Medicaid Planning for Fortune 500 Employees and Retirees,” The
Retirement Group, October 29, 2020,
link).
“Half
a Loaf, Reverse Half a Loaf, and Modern Half a Loaf are Medicaid
gifting strategies (also called transfer strategies) that have been or
are currently used for the purpose of reducing countable assets to
qualify for Medicaid. These strategies can also preserve some of the
Medicaid applicant’s assets for their family members” (American
Council on Aging, “How the Modern Half a Loaf Strategy Helps Families
Become Medicaid Eligible and Preserves Assets,” updated January 25,
2023,
https://www.medicaidplanningassistance.org/modern-half-a-loaf/).
[40]
“A data analytics application could review household data or claims
information to spot anomalous patterns that suggest ineligibility.”
William J. Oliver with Josh Archambault, “MassHealth Protecting
Medicaid Resources for the Most Vulnerable: How Massachusetts Saved
Hundreds of Millions through Enhanced Eligibility Verification,”
Pioneer Institute, October 2018, p. 7,
link
[41]
“Washington Advisory Vote 20, a non-binding question concerning
whether to maintain or repeal House Bill 1087, was on the
ballot in
Washington as an
advisory question on
November 5, 2019. A majority of voters voted in favor of repealing
the bill.” Ballotpedia, “Washington Advisory Vote 20, Nonbinding
Question on Tax to Fund Long-Term Healthcare Services (2019),”
link.
“Washington Senate Joint Resolution 8212, the Authorize Fund
Investment of Long-Term Services and Supports Trust Account Amendment,
was on the
ballot in
Washington as a
legislatively referred constitutional amendment on
November 3, 2020. It was defeated.” Ballotpedia, “Washington
Senate Joint Resolution 8212, Authorize Fund Investment of Long-Term
Services and Supports Trust Account Amendment (2020),”
link.
[42]
“As of Monday, Aug. 15, [2022] the [State of Washington] Employment
Security Department reports the following WA Cares exemption numbers:
-
Total opt-out requests submitted: 478,781
-
Total opt-out requests processed: 478,681
-
Total opt-out requests approved: 475,072
-
Applications processed as a percentage of
total: 99.98%.”
Elizabeth Hovde, “Updated Numbers on People Exempted from State’s
Long-Term-Care Program and Payroll Tax,” Washington Policy Center,
August 16, 2022,
https://www.washingtonpolicy.org/publications/detail/updated-numbers-on-people-exempted-from-states-long-term-care-program-and-payroll-tax.
[43]
“Washington State’s ‘Washington Cares Fund’ (WCF) stimulated a
tremendous demand for private LTCI from individuals and businesses
within WA…. Partly because the tax applies to all earned income, LTCI
sales in Washington soared to unprecedented levels. Insurers quickly
became backlogged with applications and were concerned about early
lapses as the law provided a permanent WCF exemption based on only a
one-time attestation. Insurers reduced design flexibility, and then
discontinued sales in WA before the November 1 deadline.” Claude Thau,
Allen Schmitz, and Chris Giese, “2022 Milliman Long Term Care
Insurance Survey,” Broker World, July 1, 2022,
https://brokerworldmag.com/2022-milliman-long-term-care-insurance-survey/.
[44]
“We estimate total stand-alone LTCI annualized new premium sales of
nearly $200 million in 2021 … almost 1/3 more than our 2020 estimate
of $150 million. However, premium outside the state of Washington
decreased 6.0 percent, based on the insurers that reported sales.
“We
estimate that 140,000 to 150,000 people purchased stand-alone LTCI
coverage in 2021, more than triple the 2020 numbers. Outside of WA,
the number of new insureds dropped 9.4 percent based on the insurers
that reported sales.” Thau, Schmitz, and Giese, “2022 Milliman Long
Term Care Insurance Survey.”
[46]
Johnson and Dey, “Long-Term Services and Supports for Older
Americans,” p. 6.
[47]
Johnson and Dey, “Long-Term Services and Supports for Older
Americans,” p. 1. On page 5, Johnson and Dey clarify: “We project that
total paid LTSS expenses will average $120,900 per person (Table 3).
Medicaid is the largest payer of LTSS, averaging $51,800 after age 65
and accounting for 43% of the total. Family out-of-pocket costs are
also substantial, averaging $44,800 and accounting for 37% of the
total.”
[48]
“These estimates differ from a present discounted value (PDV) of
expenditures at age 65, the amount that an individual would need to
set aside at age 65 to cover future LTSS expenses. The PDV is lower
than the sum-of-expenditures measure because it accounts for the
investment returns that could be earned on funds set aside at age 65
until LTSS expenses begin, often after age 80. We show PDV projections
in the appendix.” Johnson and Dey, “Long-Term Services and Supports
for Older Americans,” p. 6.
[49]
Johnson and Dey, “Long-Term Services and Supports for Older
Americans,” p. 17. Table A1.
[50]
“PDV estimates, which are reported in Tables A1-A9, use the Social
Security trustees’ ultimate real interest rate of 2.5%. Because the
trustees assume long-range price growth averages 2.6%, this real
discount rate is equivalent to a nominal long-run discount rate of
about 5.1%.” Johnson and Dey, “Long-Term Services and Supports for
Older Americans,” p. 13.
[52]
Resources set aside for future LTC expenses would be expended in the
private LTC market, where services cost more—often 150 percent of what
Medicaid pays for the same service. This differential needs to be
accounted for in estimating the average and catastrophic LTC
responsibility of individuals. On the plus side, paying privately for
LTC tends to command better access to higher quality care across a
wider choice of care venues than Medicaid does.
[54]
Johnson and Wang, “The Financial Burden of Paid Home Care on Older
Adults.”
[55]
Johnson and Wang, “The Financial Burden of Paid Home Care on Older
Adults,” p. 1000.
[56]
“Over the past two decades, annual LTCI premiums in the stand-alone
market have increased significantly for both current and new
policyholders. Higher average premiums reflect increased demand for
more comprehensive benefit packages (including inflation protection)
and higher daily benefit amounts” (Kirsten J. Colello, “Long-Term Care
Insurance: Overview,” Congressional Research Service, updated July 21,
2023,
https://crsreports.congress.gov/product/pdf/IF/IF11614).
[57]
“We conservatively defined the middle market as those individuals in
the 41st to 80th percentile of individual income and annuitized assets
in 2014. For seniors age 75-84, that band corresponds to $25,001 to
$74,298 in annual income and assets. The band is wider for older
seniors age 85 and above, where it ranges from $24,450 to $95,051”
(Beth Burnham Mace et al., “Middle Market Seniors Housing Study:
Executive Summary,” National Investment Center,
https://www.nic.org/wp-content/uploads/pdf/Executive-Summary.pdf).
[58]
“By reducing annual seniors housing costs by $15,000 per year—from
$60,000 to $45,000— the potential market expands by 3.6 million
individuals 75+. At the $45,000 annual cost level, 10.2 (71 percent)
million middle-income seniors have resources including housing equity
above the annual cost” (Mace et al., “Middle Market Seniors Housing
Study”).
[59]
Already, limited LTC insurance premiums and certain LTC expenses can
be withdrawn from HSAs tax free.
[61]
“According to the Housing Vacancy Survey, 78.5 percent of households
age 65 and over owned their primary residences in 2018.” Joint Center
for Housing Studies of Harvard University, “Housing America's Older
Adults 2019: A Supplement to the State of the Nation’s Housing
Report,” 2019, p. 6,
link.
[62]
National Reverse Mortgage Lenders Association, “Senior Home Equity
Levels Fall Slightly to $12.39T in Q4,” press release, April 21, 2023,
link.
[63]
GAO, Medicaid: Recoveries from Nursing Home Residents’ Estates
Could Offset Program Costs, p. 4.
[64]
“Americans purchased $3.3 trillion of new life insurance coverage in
2021, a 1.3 percent decrease from 2020. By the end of 2021, total life
insurance coverage in the United States was $21.2 trillion, an
increase of 3.7 percent from 2020 (Table 7.1).” American Council of
Life Insurers, “Life Insurers Fact Book,” November 28, 2022,
https://www.acli.com/about-the-industry/life-insurers-fact-book.
[65]
“Life insurance can provide much-needed cash for loved ones you leave
behind when you die.… But life insurance also can provide cash for you
while you’re living—that is, if you have a cash value life insurance
policy.… You can access the cash in a variety of ways. That’s right:
It’s yours for the taking.” Cameron Huddleston, “Cash Out Life
Insurance Guide,” Forbes, updated May 19, 2022,
https://www.forbes.com/advisor/life-insurance/tap-cash-value/.
[66]
“You can sell either a term life policy or a permanent life policy.
However, if you have a term life policy, investors prefer that the
policy have an option to be converted to a permanent policy because
they don’t want to risk having the insured outlive the length of the
policy…. Or the insured’s life expectancy must be shorter than the
term of the policy to sell it.” Cameron Huddleston and Amy Denise,
“Life Settlements Provide Escape Hatch When You Need Cash,” Forbes,
updated March 28, 2021,
https://www.forbes.com/advisor/life-insurance/life-settlements/.
#############################
Updated,
Monday, November 13, 2023, 10:03 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #23-032:
LTC NEWS AND COMMENT
LTC Comment: Do you spend hours searching
the internet for useful articles, key data, and relevant reports to keep
you on the forefront of professional knowledge? Do you lose business
because you’re blindsided by clients or competitors who learn critical
information before you do? Here’s an antidote:
LTC Clippings: The Center for Long-Term
Care Reform notifies subscribers to our LTC Clippings service daily of
information you need to know. Each message contains only the critical
facts about new publications: a title, representative quote, a link to
the original, and our analysis in a sentence or two. To inquire or
subscribe, contact Damon at 206-283-7036 or
damon@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC E-Alerts: Once a week, we compile our
daily LTC Clippings into a summary, email it to Center for Long-Term Care
Reform members, and archive it in The Zone, our password-protected
members-only website. Center members also receive our weekly LTC Bullet
op-ed. To join the Center and receive all these benefits and more,
contact Damon at 206-283-7036 or
damon@centerltc.com.
We no longer post our LTC E-Alerts on the
Center’s public access website, but here’s what today’s LTC E-Alert
contained: links, quotes and comments on the following articles, reports,
or data:
·
The $600 Billion Dilemma: How to Help Family Caregivers
·
These lawmakers should be more careful about what they ask
for
·
What is the Average Age and Disability Level of Older People
Moving Into Long-Term Care?
·
Japan’s aging population to increase burden on nursing care
costs
·
Long-Term Care Insurance Coverage: State-to-State 2023
·
As People Live Longer, Family Caregivers Face Financial
Challenges
·
Study: People entering nursing homes have more severe
disabilities than those going into independent living
·
The federal Medicaid bait and switch
#############################
"LTC E-Alerts" are
a
feature offered by the Center for Long-Term Care Reform, Inc. to members
at the $150 per year level or higher. We'll track and report to you news
and analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Monday, November 6, 2023, 10:03 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #23-031:
LTC NEWS AND COMMENT
LTC Comment: Do you spend hours searching
the internet for useful articles, key data, and relevant reports to keep
you on the forefront of professional knowledge? Do you lose business
because you’re blindsided by clients or competitors who learn critical
information before you do? Here’s an antidote:
LTC Clippings: The Center for Long-Term
Care Reform notifies subscribers to our LTC Clippings service daily of
information you need to know. Each message contains only the critical
facts about new publications: a title, representative quote, a link to
the original, and our analysis in a sentence or two. To inquire or
subscribe, contact Damon at 206-283-7036 or
damon@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC E-Alerts: Once a week, we compile our
daily LTC Clippings into a summary, email it to Center for Long-Term Care
Reform members, and archive it in The Zone, our password-protected
members-only website. Center members also receive our weekly LTC Bullet
op-ed. To join the Center and receive all these benefits and more,
contact Damon at 206-283-7036 or
damon@centerltc.com.
We no longer post our LTC E-Alerts on the
Center’s public access website, but here’s what today’s LTC E-Alert
contained: links, quotes and comments on the following articles, reports,
or data:
- Nursing Home Construction Dwindles As Operators Downsize – But a
Lack of Medicaid Beds is Most Concerning
- Millennials Join Ranks of ‘Sandwiched’ Caregivers
- It’s time to dig in and let CMS do the digging out
- Can a Nursing Home Take Our Assets? We Have a $500k IRA and a Trust
to Protect Us
- Long-term care has its congressional moment
- Report reveals minorities’ LTSS access barriers, reliance on family
caregivers
- Surge in Dementia Cases by 2040 Expected
- Executive order from Biden on regulating AI in healthcare expected
this week, as the world starts to come to grips with the new technology
#############################
"LTC E-Alerts" are
a
feature offered by the Center for Long-Term Care Reform, Inc. to members
at the $150 per year level or higher. We'll track and report to you news
and analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Friday, November 3, 2023, 10:40 AM (Pacific)
Seattle—
#############################
LTC BULLET: LONG-TERM
CARE: THE SOLUTION (THE SERIAL, Part 2)
LTC Comment: Today we
offer easy access to a must-read new study by Center president Steve
Moses, after the ***news.***
*** ILTCI REGISTRATION
OPEN: “Registration is Now Open for the 2024 Intercompany Long Term Care
Insurance Conference!” reports the meeting’s organizing committee. “Our
in-person conference will be March 17 - 20, 2024 at the newly remodeled
Town & Country Resort in San Diego, CA. Our agenda includes numerous
educational sessions over two days across
seven tracks with ample time for networking and reconnecting with
colleagues. We still have room for
exhibitors and
sponsors! Please contact us at
info@iltciconf.org if you are interested in either opportunity to
showcase your products and services to our attendees.” Click
here to register and
here to reserve your hotel. I’ll be there covering the conference as I
have been for most of its predecessors as recounted in
History of LTC Insurance Conferences (2021). Read our coverage
of this year’s conference in
LTC Bullet: Virtual Visit to ILTCI 2023. ***
*** APPEAL: The
Center for Long-Term Care Reform, in partnership with the
Paragon Health Institute, is embarking on a campaign to improve LTC
services and financing. In “Long-Term
Care: The Problem,” we explained what’s wrong and why. In “Long-Term
Care: The Solution,” we discard the failed policies of the past and
propose a radical new approach based on engaging vast sources of private
wealth currently diverted from LTC funding. We will reach out to the
media, brief federal and state policy and law makers, speak at
conferences, and write for publication, all toward the end of achieving
the policy goals in “Long-Term
Care: The Solution.” Will you help us in this effort? Join the Center
or contribute online
here. Check out the Center’s “Membership Levels and Benefits” schedule
here. Most corporate memberships include a briefing by Center
president and “LTC Solution” author Stephen Moses. Call or write for more
information: 206-283-7036;
damon@centerltc.com;
smoses@centerltc.com. LTC policy has floundered for too long. Let’s
get this done! ***
LTC BULLET: LONG-TERM
CARE: THE SOLUTION (THE SERIAL, Part 2)
LTC Comment: The
Paragon Health Institute published “Long-Term
Care: The Solution” on October 3. This new report is long and
complicated, but important. So LTC Bullets will deliver it to you
in bite-sized pieces over the next few weeks. Today, read “The LTC
Solution” (introduction), “What Did Not Work,” and “What Happened and Why
Action Is Imperative Now.” Next time: a whole new approach to LTC
financing that will unleash the potential of private financing, including
insurance.
Excerpts from “Long-Term
Care: The Solution”
by
Stephen A. Moses
President,
Center for Long-Term Care Reform
The LTC Solution
In “Long-Term Care: The
Problem,”[4]
I described the lessons of LTC history. Public programs have paid for most
expensive LTC since 1965. Government policies diverted the public from
early private LTC planning and left too many people dependent on
welfare-financed nursing home care. Private sector entrepreneurs
interceded repeatedly with preferred options such as assisted living,
private home care, and insurance. But the dominance of Medicaid and
Medicare financing for nursing homes prevented alternative modes of LTC
service delivery and financing from fully developing based on consumer
preferences. Given the damage government financing and interference have
caused, what are the best LTC policy options going forward?
America’s many LTC
service delivery and financing problems are understandable, manageable,
and correctable. The fundamental issue is that people do not plan,
prepare, save, invest, or insure early enough to be able to pay for LTC
when they need it, usually much later in life. The current challenge
facing policymakers is twofold: (1) how to get people to think about and
plan for LTC in their younger, working years, when LTC risk and cost seem
distant and low compared to more immediate needs, and (2) how to provide
and pay for LTC in the future for burgeoning numbers of aging people who
are unprepared to meet its cost. The growing emphasis on healthy aging,
with its resulting expansion of lifespans, will make these imperatives
more important than ever to achieve.[5]
The reason most people
do not plan early enough for LTC is that, since its establishment in 1965,
Medicaid has paid for most expensive formal LTC not only for the poor but
also for the middle class and many affluent people. The fallacy of
impoverishment—the mistaken belief that eligibility for Medicaid’s LTC
benefits requires spend down of income and assets into destitution—has
prevented analysts from seeing this connection between Medicaid’s
availability and the public’s seemingly irrational denial of LTC risk. The
problem is not that people intentionally plan to use Medicaid if they ever
need LTC. Few know who pays for LTC, and most wrongly believe Medicare
does.[6]
Rather, Medicaid’s actual availability when care is needed
(usually many years later) enables consumers’ denial of the risk and cost
and leaves them unprepared and unprotected when confronted with chronic
long-term illness.
Thus, the fundamental
solution to the LTC policy problem is to direct the public’s attention to
this large risk and cost earlier—before it is too late for them to prepare
personally. That has been a major goal of LTC public policy ever since
Medicaid’s LTC expenditures spiked far above original expectations in the
1970s. Through the 1980s and 1990s and into the mid-2000s, policymakers of
both political parties sought to ensure that escalating Medicaid LTC
expenditures went only to the people who needed them most. Numerous laws
attempted to discourage the overuse of Medicaid LTC benefits by people who
could and should pay for their own care. Those measures’ objective was to
convince consumers that they should prepare for likely LTC costs in the
future in order to avoid possibly devastating LTC expenditures that could
consume their life savings. Although they were largely unsuccessful, the
measures intended to scare the public straight point the way toward a
better solution. But before designing and implementing a successful
solution, it is crucial first to understand what policies failed and why
they failed.
What Did Not Work
Congress did not include
LTC in Medicare but added nursing home coverage for the poor to Medicaid,
recognizing its growing need and costs for an aging population. Medicaid
expenditures exceeded expectations from the start of the program.[7]
LTC costs in Medicaid increased especially rapidly.[8]
Medicaid extended eligibility to anyone unable to afford nursing home
care,[9]
and it reduced or eliminated strict eligibility criteria, transfer of
assets restrictions, and mandatory liens that were previously commonplace
in state welfare programs.[10]
This easy access to Medicaid nursing home care created a moral hazard that
desensitized the public to LTC risk and cost.[11]
So long as LTC constituted a small risk of a catastrophic loss sometime in
the distant future that a government program would then cover if
necessary, most people ignored the risk. Most of those who later
confronted catastrophic LTC costs ended up on Medicaid whether or not they
knew from the beginning that Medicaid would pay.
Presidents and
Congresses of both parties tried to subdue Medicaid LTC expenditure growth
by suppressing the tendency to ignore LTC and rely on Medicaid in a long
series of statutory and regulatory reforms. President Carter and a
Democrat-controlled House and Senate took the initial step to rein in
Medicaid LTC benefits in 1980 by imposing the program’s first ever limit
on asset transfers to qualify for the program.[12]
That measure triggered the first law journal article on how to circumvent
Medicaid eligibility rules and become eligible while preserving wealth.[13]
In 1982, President
Reagan signed legislation passed by a Democratic House and a Republican
Senate that lengthened and strengthened asset transfer restrictions and
allowed states to impose liens to secure property for later recovery from
recipients’ estates.[14]
In 1988, with Democrats controlling both houses of Congress, President
Reagan signed legislation that, for the first time, required state
Medicaid programs to penalize people who made inappropriate asset
transfers.[15]
None of these measures succeeded in controlling LTC spending growth.
Medicaid planning articles multiplied in formal legal publications and in
the popular media. The techniques to qualify for Medicaid included hiding
money, transferring assets, juggling resources, changing wills and titles
to property, and setting up a Medicaid trust to access benefits without
spending down savings.[16]
In the late 1980s,
studies by the Office of the Inspector General (OIG) of the U.S.
Department of Health and Human Services (HHS)[17]
and the Government Accountability Office (GAO)[18]
documented inconsistent state enforcement of the asset transfer, lien, and
estate recovery regulations. The OIG report observed: “It is their
children, after all, who stand to inherit whatever property remains after
the costs of long-term care are paid and who currently reap the windfall
of Medicaid subsidies. We must emphasize that the issue is enrichment of
nonneedy adult heirs, not denial of care to the elderly.”[19]
The government watchdogs recommended tightening Medicaid financial
eligibility rules; making estate recoveries mandatory; and conducting
further studies to analyze the relationships among Medicaid LTC
eligibility, reduced private LTC spending, and low private LTC insurance
take-up. A Democrat-controlled Congress concurred in 1993 when President
Clinton signed legislation that required estate recoveries and made the
asset transfer look-back period longer and stronger.[20]
But these efforts did little to reduce reliance on Medicaid LTC and
nothing to abate an onslaught of legal treatises, law journal articles,
popular books, magazine stories, and advertisements recommending “Medicaid
estate planning.”[21]
In 1996, frustrated
about continued abuses of Medicaid LTC, a Republican House and Senate sent
President Clinton a bill that made it a crime to transfer assets for the
purpose of qualifying for Medicaid.[22]
He signed what became known as the “Throw Granny in Jail Act.” When senior
advocates objected, a Republican Congress replaced it in 1997 with the
“Throw Granny’s Lawyer in Jail Law.”[23]
President Clinton signed this legislation, which made it a crime to accept
a fee for advising a client to transfer assets to qualify for Medicaid,
but the Justice Department deemed it unenforceable because transferring
assets to qualify was no longer a crime in itself,[24]
and a federal judge later ruled the law unconstitutional.[25]
Nothing more was done to
restrain Medicaid LTC overuse for almost a decade until a Republican
Congress passed the Deficit Reduction Act (DRA), which President Bush
signed in 2006. The DRA extended the asset transfer look-back period to a
full five years. It also put the first ever cap on Medicaid’s home equity
exemption, allowing states to set a limit from $500,000 up to a maximum of
$750,000. The DRA’s home equity limit increased annually with inflation,
reaching $688,000 and $1,033,000, respectively, in 2023. In 2018, the
median home equity of homeowners ages 65 plus was only $143,500.[26]
Consequently, Hest, Alarcon, and Blewett “estimate
that nearly the entire elderly
population would meet the home equity threshold,”[27]
rendering it ineffectual to discourage Medicaid LTC eligibility except by
the wealthiest. When he signed the DRA, President Bush said, “The bill
tightens the loopholes that allowed people to game the system by
transferring assets to their children so they can qualify for Medicaid
benefits. Along with Governors of both parties, we are sending a clear
message: Medicaid will always provide help for those in need, but we will
never tolerate waste, fraud, or abuse.”[28]
That was
the expressed intent not only of the DRA but of the whole history of
bipartisan legislation described above. Yet Medicaid
LTC expenditures kept increasing
despite this long, concerted effort.
The public continued to ignore LTC risk and cost. Since 2006, no Congress
has passed legislation to target Medicaid to those most in need. Nor has
legislation advanced to encourage middle-class and affluent people to
prepare early to be able to pay for their own LTC and avoid Medicaid
dependency. Earlier economic recessions had led to legislation designed to
spend Medicaid LTC money more wisely, discourage its use by the middle
class, and encourage the non-needy to take personal responsibility. But
after the Great Recession of December 2007 to June 2009 no further
measures of that kind appeared.
What Happened and Why
Action Is Imperative Now
Innovative and risky new
fiscal and monetary policies in effect since the 1990s explain why
politicians permitted Medicaid spending to skyrocket over the past two
decades. The Federal Reserve dropped interest rates to near zero. Public
funds were spent with little constraint. The national debt soared, but few
worried because servicing the debt at miniscule interest rates seemed
manageable particularly given politicians’ generally short time horizons.
With budgetary pressures relaxed, policymakers felt little incentive to
address Medicaid’s excessive LTC spending or to reduce its long-standing
moral hazard regarding LTC. But all that is changing today with higher
inflation and interest rates and rising fiscal pressures from federal
programs, particularly the massive unfunded liabilities of Social Security
and Medicare. Budgetary pressures are again forcing policymakers to
address Medicaid LTC financing expenditures.
[4] Moses, “Long-Term Care: The Problem.”
[5] For example: “Even making small
changes in your daily life can help you live longer and better. In
general, you can support your physical health by staying active,
eating and sleeping well, and going to the doctor regularly” (National
Institutes of Health, National Institute on Aging, “What Do We Know
About Healthy Aging?,”
https://www.nia.nih.gov/health/what-do-we-know-about-healthy-aging).
[7] “Because of the attention focused on
Medicare, Title XIX [Medicaid] was passed by Congress with little
public notice. This relative obscurity was lost when the cost of New
York State’s Medicaid program (effective May 1, 1966) became known.
Federal cost estimates for the entire Medicaid Program were shown to
have been grossly underestimated.… The amounts expended to finance
Medicaid in the first two years were surprisingly high. Estimates in
1965 of the annual federal cost of Medicaid ranged from $150 million
to $238 million. Yet actual federal expenditures were $621 million in
the calendar year 1966. In 1967, Congress estimated that the annual
federal share would rise to $1.4 billion in fiscal 1968 and to $3.1
billion by 1972, provided no additional restrictions were placed on
the 1965 program.” (p. 63, 65, footnotes omitted) ______, Columbia
Journal of Law and Social Problems, “Medicaid: The Patchwork Crazy
Quilt,” April 1969.
[8] “During the decade following the 1965
passage of Medicare and Medicaid, there was a dramatic expansion in
the supply of nursing home beds and an even more dramatic escalation
in costs. New facilities were built, and a more sophisticated set of
owners emerged, including the multistate, multifacility systems or
chains. These developments were largely a product of four factors: (1)
the availability of funding; (2) the method of reimbursing facilities;
(3) increasing demand; and (4) federal health and safety regulation.”
Catherine Hawes and Charles D. Phillips, The Changing Structure of
the Nursing Home Industry and the Impact of Ownership on Quality,
Cost, and Access (Washington: National Academies Press, 1986),
https://www.ncbi.nlm.nih.gov/books/NBK217907/.
[9] “The principal group that is eligible
for federal sharing of medical care costs is the categorically
related medically needy, i.e., the aged, disabled, blind, or
members of families with dependent children, whose income and
resources exceed the maximum levels established by the state in
question for eligibility for cash public assistance payments, but
are not adequate to pay all their medical care expenses.” Sydney
E. Bernard and Eugene Feingold, “The Impact of Medicaid,” Wisconsin
Law Review 726 (1970), p. 753 (footnotes omitted, bolding added),
[LINK].
[10] “Many [pre-Medicaid state assistance
plans] required that the beneficiary must transfer to the pension
authority any property they possessed before any payment would be
made. Most had property and income caps to limit eligibility,
generally a maximum of $3,000 in property and $300-$365 a year in
income. Most required that benefits would be denied to anyone who gave
away property in order to qualify for public assistance. Most required
that a lien be placed on the estate of the beneficiary to be collected
upon their death. Most required that recipients be ‘deserving,’ and
benefits were denied to anyone who deserted a spouse, failed to
support their families, had committed any crime, or had been a tramp
or beggar.” Jeff Hoyt, “Senior Living History: 1930-1939,”
SeniorLiving.org., July 27, 2023,
https://www.seniorliving.org/history/1930-1939/.
[11] “Those states which attempted to
bring the poor into the mainstream by providing liberal eligibility
standards, broad benefits, and adequate fees found themselves running
into opposition at home and in Congress on both financial and
ideological grounds.… High costs are the result of precisely those
aspects of Medicaid which were welcomed by social reformers-the
broadening of eligibility requirements and of services covered, the
maintenance of effort and equality of treatment requirements, and the
payment of more generous fees.” Bernard and Feingold, “The Impact of
Medicaid,” 752-53.
[12] The Omnibus Budget Reconciliation Act
of 1980 imposed the program’s first limit on asset transfers to
qualify for Medicaid. Previously “applicants were expressly permitted
to transfer resources that otherwise would have disqualified them from
receiving any benefits.” (p. 372) “The new SSI rule was expressly not
applicable to assets which were exempt when transferred, and this
included the family home. Because of this exemption, courts were
prohibiting states from applying their transfer rules to assets that
were exempt when transferred.” (p. 373 [footnotes omitted], Timothy N.
Carlucci, “The Asset Transfer Dilemma: Disposal of Resources and
Qualification for Medicaid Assistance,” Drake Law Review 36,
no. 369 (1986-1987), [LINK].
[13] “Careful planning even under adverse
state law will still be able to achieve the goal of excluding an
applicant’s resources for purposes of determining Medicaid
eligibility” (William G. Talis, “Medicaid as an Estate Planning Tool,”
Massachusetts Law Review 66 [Spring 1981], p. 94).
[14] The Tax Equity and Fiscal
Responsibility Act of 1982 expanded the voluntary two-year transfer of
assets restriction to include exempt homes and permitted state
Medicaid programs to place liens under certain limited circumstances
in order to secure real property until it could be recovered from the
estates of deceased Medicaid recipients to offset the cost of their
LTC. Nevertheless, this Medicaid planner was undeterred: “With
long-range planning, the cooperation of relatives, some good health,
and maybe a little luck, couples will be in a position to negotiate
between the rock and a hard place that Congress has placed in the
Medicaid path” (Gill Deford, “Medicaid Liens, Recoveries, and Transfer
of Assets after TEFRA,” Clearinghouse Review, June 1984).
[15] The Medicare Catastrophic Coverage
Act of 1988 also required state Medicaid programs to look back
30 months (previously only 24 months and voluntary) for inappropriate
asset transfers. It established an ineligibility penalty equal to the
amount of assets transferred for less than fair market value for the
purpose of qualifying for Medicaid divided by the average cost of a
nursing home in the state. So, for example, an applicant who gave away
$80,000 to qualify for Medicaid in a state where nursing home care
averaged $8,000 per month would be ineligible for 10 months from the
date of the transfer. The law also capped the maximum asset transfer
penalty at 30 months. Although Medicare provisions contained in this
legislation were repealed, these Medicaid provisions remained.
[16] For example: “So
is there any practical way to juggle assets to qualify for Medicaid
before losing everything? The answer is yes! By following the tips on
these pages, an older person or couple can save most or all of their
savings, despite our lawmakers’ best efforts…. Here are the best
options: Hide money in exempt assets…. Transfer assets directly to
children tax-free…. Pay children for their help…. Juggle assets
between spouses…. Pass assets to children through a spouse…. Transfer
a home while retaining a life estate…. Change wills and title to
property…. Write a durable power of attorney… Set up a Medicaid
Trust…. Get a divorce” (Armond D. Budish, Avoiding the
Medicaid Trap: How to Beat the Catastrophic Costs of Nursing-Home Care
[New York: Henry Holt, 1981]).
[19] HHS, Office of Inspector General,
Medicaid Estate Recoveries, pp. 47-48.
[20] The Omnibus Budget Reconciliation Act
of 1993 (OBRA ’93) implemented many of the OIG’s and GAO’s
recommendations. It extended the look-back period for asset transfers
to a full three years (36 months) for most improper transfers and to
five years for transfers into or out of a trust. The law also dropped
the 30-month cap on the eligibility penalty, making it potentially
unlimited. OBRA ’93 made estate recoveries mandatory for the first
time. It prohibited the common practice of “pyramid divestment,” which
had allowed asset transfer penalties to run simultaneously, enabling
as much as a million dollars to be jettisoned in less than a year to
achieve eligibility without additional penalty.
[21] For example: “Now we have more
complicated plans, but we have plans. We are going to bill more. OBRA
’93 was bad for our clients, but good for us…. Numerically, most of
the techniques we use are still there…. It is worth trying anything
once; then network and tell each other what we got away with…. Most of
my clients get eligible quickly just from thoughtful spending” (Robert
Fleming, speech before the National Academy of Elder Law Attorneys [NAELA]
Institute, November 21, 1993).
“WE STILL BELIEVE THAT ALMOST ANYONE CAN
BECOME MEDICAID ELIGIBLE FOR LONG-TERM CARE BENEFITS EVEN IN CRISIS….
It is still possible to transfer non-exempt assets (countable) into
exempt assets (non-countable) for purposes of obtaining eligibility.
The catch will be planning around the estate recovery program…. For
instance, the conversion of cash into an interest in a third person’s
residence is a way to shelter cash assets as part of the spend-down
amount. The interest in the residence would then be transferred into a
limited partnership. This limited partnership interest is not real
property and is, therefore, not subject to having a lien placed
against it” (Baird Brown and Robert Fleming, “Planning Options That
OBRA ‘93 Does Not Affect,” NAELA Elder Law Institute proceedings,
1993, Section 12, pp. 11, 14, 16; emphasis in original).
“While many practitioners may believe that
the Medicaid qualifications rules limit benefit eligibility to only
the very poor, significant planning opportunities exist which can be
utilized to qualify an individual for Medicaid benefits who otherwise
has the financial resources to pay the cost of long-term care” (Harley
Gordon, How to Protect Your Life Savings from Catastrophic Illness
and Nursing Homes [Boston: Financial Strategies Press, 1994], p.
66).
[22] The Health Insurance Portability and
Accountability Act of 1996 made transferring assets for less than fair
market value to qualify for Medicaid a crime punishable by a fine of
up to $10,000 and up to a year in jail.
[23] The Balanced Budget Act of 1997
repealed the criminalization of asset transfers and targeted lawyers
who recommended asset transfers instead. The law’s criminalization of
Medicaid planning advice set the elder law bar back on its heels for a
while, but it also had a lasting impact. From then on, caution
prevailed more often among elder law attorneys. They retreated from
using terms such as juggling assets or Ziegfield Follies
spending to qualify for Medicaid. Some reflected in print about the
profession’s poor judgment and bad reputation in this regard:
Unfortunately,
members of the Medicaid planning bar have sometimes been their own
worst enemies. For example, at the May 1996 Symposium of the National
Academy of Elder Law Attorneys, two prominent NAELA members (one a
former President of the organization) gave a presentation on Medicaid
planning. Using the format of a skit in which other NAELA members
played the roles of the family, the presenters took the audience
through a session in which an elderly couple, whose net worth exceeded
$750,000, was counseled on how to arrange their affairs to attain
Medicaid eligibility. Among the assets in the couple’s portfolio was a
vacation home. The skit became fodder for critics of Medicaid
eligibility planning and indeed was widely criticized by other NAELA
members (Timothy L. Takacs and David L. McGuffey, “Medicaid Planning:
Can It Be Justified? Legal and Ethical Implications of Medicaid
Planning,” William Mitchell Law Review, 29, no. 111, p. 135).
[24] “US Attorney General Janet Reno has
sent Speaker of the House Newt Gingrich a letter dated March 11, 1998,
to the effect that the Department of Justice will take no action
against professionals who advise people on transferring their assets
to become eligible for Medicaid’s LTC benefits.” George Sherman,
“Department of Justice Won’t Enforce Law Prohibiting Professional
Assistance for Medicaid Transfers,” LTC News and Comment, May
1998.
[25] “A federal law that made it illegal
to advise people how to shed assets to qualify for Medicaid is
unconstitutional, a federal judge ruled Tuesday. The 1997 law was
intended to prevent financially secure people from giving away or
hiding assets in order to qualify for taxpayer-funded Medicaid
benefits.” Tampa Bay Times, “‘Granny’s Adviser’ Law Is Struck
Down,” September 13, 2005,
https://www.tampabay.com/archive/1998/09/23/granny-s-adviser-law-is-struck-down/.
#############################
Updated, Monday, October 30, 2023,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #23-030:
LTC NEWS AND COMMENT
LTC
Comment: Do you spend hours searching the internet for useful articles,
key data, and relevant reports to keep you on the forefront of
professional knowledge? Do you lose business because you’re blindsided by
clients or competitors who learn critical information before you do?
Here’s an antidote:
LTC
Clippings: The Center for Long-Term Care Reform notifies subscribers to
our LTC Clippings service daily of information you need to know. Each
message contains only the critical facts about new publications: a title,
representative quote, a link to the original, and our analysis in a
sentence or two. To inquire or subscribe, contact Damon at 206-283-7036
or
damon@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC
E-Alerts: Once a week, we compile our daily LTC Clippings into a summary,
email it to Center for Long-Term Care Reform members, and archive it in
The Zone, our password-protected members-only website. Center members
also receive our weekly LTC Bullet op-ed. To join the Center and receive
all these benefits and more, contact Damon at 206-283-7036 or
damon@centerltc.com.
We no
longer post our LTC E-Alerts on the Center’s public access website, but
here’s what today’s LTC E-Alert contained: links, quotes and comments on
the following articles, reports, or data:
-
New initiative aims to strengthen ties between
family caregivers, paid caregivers
-
Should you buy long-term care insurance for your
grandparents?
-
Transamerica Faces Suit Tied to Long-Term Care
Buyout
-
Caregiving crisis prompts search for long-term care
solutions
-
Rise in nursing home costs ‘drastically’ affects
middle class: analysis
-
Baby boomers are aging. Their kids aren’t ready
-
Dementia’s staggering financial cost is revealed in
new report: ‘Bankrupting families’
-
Most Seniors Will Need Long-Term Care. Here’s How
to Save for It
#############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Monday, October 23, 2023, 10:03 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #23-029:
LTC NEWS AND COMMENT
LTC Comment: Do you spend hours searching
the internet for useful articles, key data, and relevant reports to keep
you on the forefront of professional knowledge? Do you lose business
because you’re blindsided by clients or competitors who learn critical
information before you do? Here’s an antidote:
LTC Clippings: The Center for Long-Term
Care Reform notifies subscribers to our LTC Clippings service daily of
information you need to know. Each message contains only the critical
facts about new publications: a title, representative quote, a link to
the original, and our analysis in a sentence or two. To inquire or
subscribe, contact Damon at 206-283-7036 or
damon@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC E-Alerts: Once a week, we compile our
daily LTC Clippings into a summary, email it to Center for Long-Term Care
Reform members, and archive it in The Zone, our password-protected
members-only website. Center members also receive our weekly LTC Bullet
op-ed. To join the Center and receive all these benefits and more,
contact Damon at 206-283-7036 or
damon@centerltc.com.
We no longer post our LTC E-Alerts on the
Center’s public access website, but here’s what today’s LTC E-Alert
contained: links, quotes and comments on the following articles, reports,
or data:
-
Medicaid should only be ‘safety net’ for LTC needs,
expert says
-
‘Sirens Going Off’: Providers Warn of Mass
Closures, Vast Nursing Home Deserts Due to Staffing Mandate
-
Minimum wage to increase to $25 for nursing home,
assisted living workers in California
-
Study: Dementia diagnosis causes out-of-pocket
spending to skyrocket, net worth to plummet
-
Sex Appears to Protect Brain Health in Older
Adults, Scientists Say
-
Underrated and underutilized: A look at long-term
care insurance
-
Assisted living providers must pay attention to
Medicaid beneficiary protections in HCBS regulations, groups warn
-
Another state takes the Medicaid MCO plunge as
questions about delayed, denied care mount
-
Chronic diseases take a toll on U.S. life
expectancy
-
Can states ease homelessness by tapping Medicaid
funding? Oregon is betting on it
-
A focus on HCBS can eliminate bias in senior living
and care: report
-
Staffing mandate could shift big costs to states —
but they may not know it yet
-
Long-term-care planning using trusts
#############################
"LTC E-Alerts" are
a
feature offered by the Center for Long-Term Care Reform, Inc. to members
at the $150 per year level or higher. We'll track and report to you news
and analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Friday, October 20, 2023, 10:40 AM (Pacific)
Seattle—
#############################
LTC
BULLET: LONG-TERM CARE: THE SOLUTION (THE SERIAL)
LTC Comment: Today we offer easy access to a
must-read new study by Center president Steve Moses, after the ***news.***
*** APPEAL: The
Center for Long-Term Care Reform, in partnership with the
Paragon Health Institute, is embarking on a campaign to improve LTC
services and financing. In “Long-Term
Care: The Problem,” we explained what’s wrong and why. In “Long-Term
Care: The Solution,” we discard the failed policies of the past and
propose a radical new approach based on engaging vast sources of private
wealth currently diverted from LTC funding. We will reach out to the
media, brief federal and state policy and law makers, speak at
conferences, and write for publication, all toward the end of achieving
the policy goals in “Long-Term
Care: The Solution.” Will you help us in this effort? Join the Center
or contribute online
here. Check out the Center’s “Membership Levels and Benefits” schedule
here. Most corporate memberships include a briefing by Center
president and “LTC Solution” author Stephen Moses. Call or write for more
information: 206-283-7036;
damon@centerltc.com;
smoses@centerltc.com. LTC policy has floundered for too long. Let’s
get this done! ***
LTC BULLET: LONG-TERM CARE: THE SOLUTION (THE SERIAL)
LTC Comment: The
Paragon Health Institute published “Long-Term
Care: The Solution” last week. This new report is long and
complicated, but important. So LTC Bullets will deliver it to you
in bite-sized pieces over the next few weeks. Today, read “About the
Author,” the “Executive Summary” and the “Abstract.” Next time, “What Did
Not Work” and then a whole new approach to LTC financing that will unleash
the potential of private financing, including insurance.
Excerpts from “Long-Term
Care: The Solution”
by
Stephen A. Moses
President,
Center for Long-Term Care Reform
ABOUT THE AUTHOR
Steve Moses is president of the Center for Long-Term Care Reform. The
center promotes universal access to top-quality long-term care by
encouraging private financing as an alternative to Medicaid dependency for
most Americans. Previously, Mr. Moses was president of the Center for
Long-Term Care Financing (1998-2005), Director of Research for LTC, Inc.
(1989-98), a senior analyst for the Inspector General of the U.S.
Department of Health and Human Services (1987-89), a Medicaid state
representative for the Health Care Financing Administration (1978-87), an
HHS departmental management intern (1975-78), and a Peace Corps volunteer
in Venezuela (1968-1970). He is widely recognized as an expert and
innovator in the field of long-term care.
EXECUTIVE SUMMARY
What This Paper Covers
How to pay for aging Americans’ long-term care (LTC) is a difficult
policy problem. This paper follows “Long-Term
Care: The Problem,” in which I explained how well-intended government
policy caused many of LTC’s problems. Too many people end up on Medicaid,
which pays too little to ensure access to quality home care and causes
excessive reliance on institutionalization and unpaid help from families
and friends. In this paper, I propose reforms to reduce dependence on
Medicaid and free up private financing to fix the LTC challenges.
What We Found
When people encounter high LTC costs later in life, they typically
qualify more easily for Medicaid than commonly thought. This moral hazard
discourages early LTC planning. The past policy approach of generous
Medicaid LTC eligibility with estate recovery after death did not
adequately promote proper planning, either through savings or insurance.
Most Americans possess enough wealth to fund their average LTC needs,
which is about two years of home-based services. If the average
65-year-old had $70,000 set aside for LTC, it would grow to meet that need
after age 85, when LTC commonly occurs. Positive incentives to plan early
and pay privately avoid the loss of freedom and high economic cost from
compulsory, payroll-funded policies.
Why It Matters
With the aging of the baby boomers and an increasing percentage of the
population living past 85, creating a sustainable LTC policy is crucial.
If Medicaid did not pay for expensive LTC after care is needed, more
consumers would prepare privately and avoid Medicaid dependency. Unless
policy is changed and the incentive to avoid proper LTC planning is
removed, the LTC system will fail, harming those who most need public
support.
Policy Suggestions
Medicaid LTC should be restored as a safety net for indigent elderly
people. Lawmakers should eliminate the ability to access publicly funded
LTC while preserving wealth. This paper details seven options to empower
younger and middle-age Americans to meet a new, publicized individual LTC
planning responsibility. This would unleash wealth currently unused for
LTC that remains locked in home equity, individual retirement accounts,
life insurance, and estates and reorient the LTC system to cater to
seniors’ desires to age in their homes rather than in institutions.
ABSTRACT
As explained in my previous work for the Paragon Health Institute, “Long-Term
Care: The Problem,” public financing and regulation—principally
through Medicaid—caused most of the problems with long-term care (LTC).
Those problems include dubious access and quality, nursing home bias, too
little home- and community-based care, inadequate provider revenue,
reduced private financing from insurance, savings or home equity,
caregiver shortages, excessive emotional and financial strain on family
caregivers, and systemic racism. Ignoring this causal connection between
Medicaid and LTC’s problems, many analysts recommend increasing the
government’s role, including by means of a new compulsory payroll-financed
social insurance program. But adding even more of the government funding
and regulation that caused LTC’s problems would only make these problems
worse.
The main components of a better solution are already
in place. Personal, not public, responsibility for LTC is deeply rooted in
American values, statutes, and policy. Medicaid is the largest LTC payor,
but it is not a social insurance program like Medicare. Employees and
employers do not contribute a payroll tax to finance it. Medicaid, rather,
was intended as the payor of last resort for people who cannot live
independently without LTC services and supports but lack sufficient
personal funds to purchase them. For decades, federal policymakers of both
parties tried to ensure that scarce Medicaid LTC resources went solely to
the needy. They failed, leaving Medicaid, including state and federal
budgets, financially overwhelmed and most people, regardless of their
economic condition, using public assistance if they incur catastrophic LTC
costs. The proper goal of public policy remains to target Medicaid
benefits to the truly needy and to divert middle-class and affluent people
to private financing alternatives. Achieving that goal would deliver a
higher quality LTC system that meets patients’ needs and improves care
both for those able to pay and for those who need a safety net. The key
question remains: How can policymakers reconfigure LTC financing policy to
ensure that scarce public resources reach only those most in need?
Congress should remove Medicaid as an end-of-life,
wealth-preserving, fail-safe for the middle class and affluent. Medicaid
should not reward people who neglect to plan responsibly for LTC by both
paying for services and providing asset protection. New public policy
should incentivize early planning for LTC that employs private wealth,
including savings, home equity, life insurance, and a revitalized private
LTC insurance market. Recent research documents lower risk of severe LTC
expenses and indicates that consumers have more funds available to pay
privately for LTC than previously believed. These facts suggest a way to
revitalize the senior living market financially to the benefit of LTC
consumers and providers alike. With more private LTC financing, fewer
people will become dependent on Medicaid. Medicaid can then become a
better payer of last resort than it is now. This paper explains how and
why this new approach is plausible, practical, and preferable given
current demographic and financial conditions.
#############################
Updated,
Monday, October 9, 2023, 10:30 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #23-028:
LTC NEWS AND COMMENT
LTC Comment: Do you spend hours searching
the internet for useful articles, key data, and relevant reports to keep
you on the forefront of professional knowledge? Do you lose business
because you’re blindsided by clients or competitors who learn critical
information before you do? Here’s an antidote:
LTC Clippings: The Center for Long-Term
Care Reform notifies subscribers to our LTC Clippings service daily of
information you need to know. Each message contains only the critical
facts about new publications: a title, representative quote, a link to
the original, and our analysis in a sentence or two. To inquire or
subscribe, contact Damon at 206-283-7036 or
damon@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC E-Alerts: Once a week, we compile our
daily LTC Clippings into a summary, email it to Center for Long-Term Care
Reform members, and archive it in The Zone, our password-protected
members-only website. Center members also receive our weekly LTC Bullet
op-ed. To join the Center and receive all these benefits and more,
contact Damon at 206-283-7036 or
damon@centerltc.com.
We no longer post our LTC E-Alerts on the
Center’s public access website, but here’s what today’s LTC E-Alert
contained: links, quotes and comments on the following articles, reports,
or data:
·
California is leading the way in Medicaid abuse
·
Feds Rein In Use Of Predictive Software That Limits Care For
Medicare Advantage Patients
·
MedPAC members rip ‘brute force test’ of staffing mandate,
ponder consequences and possible gaming
·
New Supreme Court term has major implications for long-term
care
·
Does Putting Your Home in a Trust Protect It From Medicaid?
·
Release of ‘Long-Term Care: The Solution
·
AHCA CEO: Nursing Home Policy Nightmare Just Starting,
Business Nightmare Persists — But Clinical Nightmare Over
·
Experts create new vision for senior living
#############################
"LTC E-Alerts" are
a
feature offered by the Center for Long-Term Care Reform, Inc. to members
at the $150 per year level or higher. We'll track and report to you news
and analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Friday, October 6, 2023, 10:40 AM (Pacific)
Seattle—
#############################
LTC
BULLET: LONG-TERM CARE: THE SOLUTION
LTC
Comment: The
Paragon Health Institute
released “Long-Term
Care: The Solution”
this week. The announcement and links to the study’s content after the
***news.***
***
APPEAL: The
Center for Long-Term Care Reform,
in partnership with the
Paragon Health Institute,
is embarking on a campaign to improve LTC services and financing. In “Long-Term
Care: The Problem,”
we explained what’s wrong and why. In “Long-Term
Care: The Solution,”
we discard the failed policies of the past and propose a radical new
approach based on engaging vast sources of private wealth currently
diverted from LTC funding. We will reach out to the media, brief federal
and state policy and law makers, speak at conferences, and write for
publication, all toward the end of achieving the policy goals in “Long-Term
Care: The Solution.”
Will you help us in this effort? Join the Center or contribute online
here.
Check out the Center’s “Membership Levels and Benefits” schedule
here.
Most corporate memberships include a briefing by Center president and “LTC
Solution” author Stephen Moses. Call or write for more information:
206-283-7036;
damon@centerltc.com;
smoses@centerltc.com.
LTC policy has floundered for too long. Let’s get this done! ***
LTC
BULLET: LONG-TERM CARE: THE SOLUTION
LTC
Comment: Here’s how Paragon Health Institute president Brian Blase
announced the paper.
Today, Paragon is releasing an important new report,
Long-Term Care: The Solution,
authored by Stephen Moses. Steve is the nation’s top expert on long-term
care financing and his new report contains a solution to a very difficult
policy problem.
Given the structure of our major entitlement programs—Social Security,
Medicare, and Medicaid—the aging of the baby boomers presents a variety of
public policy challenges. One is long-term care (LTC), which consists of
medical and supportive services that people require at home or in
institutions when they are unable to care for themselves.
As Steve wrote in a 2022
Paragon report, Long-Term Care: The Problem,
well-intended government policy caused many of LTC’s problems. Government
programs have largely paid our nation’s LTC expenses since 1965.
Unfortunately, easy access to Medicaid while retaining wealth creates a
moral hazard that discourages responsible LTC planning during early and
middle adulthood and crowds out private sector alternatives. Too many
people end up on Medicaid, which pays too little to ensure access to
quality home care and causes excessive reliance on institutionalization
and unpaid help from families and friends.
In
Long-Term Care: The Solution,
Steve constructs a reform that would reduce dependence on Medicaid and
free up private financing to fix the LTC challenges. The following are
from the paper’s executive summary, and the entire paper is worth a read
to understand both why past efforts to reform Medicaid LTC have failed and
why this new approach is our best hope to improve government LTC policy.
What Steve Found
When people encounter high LTC costs later in life, they typically qualify
more easily for Medicaid than commonly thought. This moral hazard
discourages early LTC planning. The past policy approach of generous
Medicaid LTC eligibility with estate recovery after death did not
adequately promote proper planning, either through savings or insurance.
Most Americans possess enough wealth to fund their average LTC needs,
which is about two years of home-based services. If the average
65-year-old had $70,000 set aside for LTC, it would grow to meet that need
after age 85, when LTC commonly occurs. Positive incentives to plan early
and pay privately avoid the loss of freedom and high economic cost from
compulsory, payroll-funded policies.
Why It Matters
With the aging of the baby boomers and an increasing percentage of the
population living past 85, creating a sustainable LTC policy is crucial.
If Medicaid did not pay for expensive LTC after care is needed, more
consumers would prepare privately and avoid Medicaid dependency. Unless
policy is changed and the incentive to avoid proper LTC planning is
removed, the LTC system will fail, harming those who most need public
support.
Policy Suggestions
Medicaid LTC should be restored as a safety net for indigent elderly
people. Lawmakers should eliminate the ability to access publicly funded
LTC while preserving wealth. This paper details seven options to empower
younger and middle-age Americans to meet a new, publicized individual LTC
planning responsibility. This would unleash wealth currently unused for
LTC that remains locked in home equity, individual retirement accounts,
life insurance, and estates and reorient the LTC system to cater to
seniors’ desires to age in their homes rather than in institutions.
#############################
Updated, Monday, October 2, 2023,
9:38 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #23-027:
LTC NEWS AND COMMENT
LTC
Comment: Do you spend hours searching the internet for useful articles,
key data, and relevant reports to keep you on the forefront of
professional knowledge? Do you lose business because you’re blindsided by
clients or competitors who learn critical information before you do?
Here’s an antidote:
LTC
Clippings: The Center for Long-Term Care Reform notifies subscribers to
our LTC Clippings service daily of information you need to know. Each
message contains only the critical facts about new publications: a title,
representative quote, a link to the original, and our analysis in a
sentence or two. To inquire or subscribe, contact Damon at 206-283-7036
or
damon@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC
E-Alerts: Once a week, we compile our daily LTC Clippings into a summary,
email it to Center for Long-Term Care Reform members, and archive it in
The Zone, our password-protected members-only website. Center members
also receive our weekly LTC Bullet op-ed. To join the Center and receive
all these benefits and more, contact Damon at 206-283-7036 or
damon@centerltc.com.
We no
longer post our LTC E-Alerts on the Center’s public access website, but
here’s what today’s LTC E-Alert contained: links, quotes and comments on
the following articles, reports, or data:
-
Shortcomings of the ACA Exchanges: Far Less
Enrollment at a Much Higher Cost
-
Minnesota Tops New AARP Long-Term Care Scorecard;
Other States Lag Behind
-
A Winning Health Policy Agenda
-
Insights Care Honors Ken Dychtwald
-
CMS to lose half of staff in shutdown, full impact
on providers uncertain
-
John Hancock to Sell Long-Term Care Hybrid Through
Worksites
-
[Updated] BREAKING: Price of nursing home staffing
mandate is $6.8B, 100K more workers, analysis finds
-
Expiring PHE policies spell trouble for HCBS
programs
#############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Monday, September 25, 2023,
9:37 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #23-026:
LTC NEWS AND COMMENT
LTC
Comment: Do you spend hours searching the internet for useful articles,
key data, and relevant reports to keep you on the forefront of
professional knowledge? Do you lose business because you’re blindsided by
clients or competitors who learn critical information before you do?
Here’s an antidote:
LTC
Clippings: The Center for Long-Term Care Reform notifies subscribers to
our LTC Clippings service daily of information you need to know. Each
message contains only the critical facts about new publications: a title,
representative quote, a link to the original, and our analysis in a
sentence or two. To inquire or subscribe, contact Damon at 206-283-7036
or
damon@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC
E-Alerts: Once a week, we compile our daily LTC Clippings into a summary,
email it to Center for Long-Term Care Reform members, and archive it in
The Zone, our password-protected members-only website. Center members
also receive our weekly LTC Bullet op-ed. To join the Center and receive
all these benefits and more, contact Damon at 206-283-7036 or
damon@centerltc.com.
We no
longer post our LTC E-Alerts on the Center’s public access website, but
here’s what today’s LTC E-Alert contained: links, quotes and comments on
the following articles, reports, or data:
-
Commission recommends increasing
hours-worked requirement for WA Cares, among other proposals
-
Medicare Can Cover a Lot More Home Care:
Witness to Senate Panel
-
End of pandemic-era payments to family
caregivers could complicate workforce shortages
-
Older adults at risk for dementia see fast
declines in household wealth before dementia onset
-
Recession would add to ‘deteriorating’ CCRC
outlook: Fitch
-
Protect Aging Clients Against Undue
Influence
-
More than half of older Americans will need
long-term term care. Many can’t afford the rising cost
-
How Medicare Impedes Health Care Innovation
-
Substantial differences’ in assisted
living, nursing home admissions show need for improved health equity,
researchers say
-
Long-Term Care Insurance Sales Rise at Some
Carriers: A.M. Best
-
Demand for direct care workers expected to
outpace availability: report
-
Gallup Poll Shows Public’s Deep Aversion to
Nursing Homes, 42% of Americans Give ‘D’ or ‘F’
-
Pandemic Aid Lifts Federal Share of State
Budgets to New Highs
-
Long-Term Care Claims Skyrocket In 2022
-
Study: Being a family caregiver does not
mean you will plan for your own long-term care
#############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Friday, September 22, 2023,
10:40 AM (Pacific)
Seattle—
#############################
LTC BULLET:
LONG-TERM CARE RACISM: DIAGNOSIS, TREATMENT, AND CURE
LTC Comment: Once you understand its cause and
effects, LTC racism’s cure becomes manageable. Analysis after the
***news.***
*** “LONG-TERM CARE: THE SOLUTION,”
Paragon Health Institute’s long-awaited sequel to “Long-Term
Care: The Problem,” published last fall, is due to be published on
October 2. “The Solution” explains why the challenge of financing LTC for
burgeoning numbers of aging Americans remains unmet and proposes a
solution. As Medicaid caused most of LTC’s problems, that program’s
radical reform is the key to resolving them. The same Medicaid reform is
also the crucial step required to eliminate systemic LTC racism. Stay
tuned. ***
LTC BULLET: LONG-TERM CARE RACISM: DIAGNOSIS,
TREATMENT, AND CURE
LTC Comment: Our
previous LTC Bullet offered a selection of quotes about LTC
racism from peer-reviewed journal articles and invited readers to reflect
on the material and its meaning before turning to analysis and
recommendations. Let’s go now to that next step.
What is LTC racism?
“Structural [LTC] racism
operates through laws and policies that allocate resources in ways that
disempower and devalue members of racial and ethnic minority groups,
resulting in inequitable access to high-quality care.” (“Structural
Racism In Historical And Modern US Health Care Policy,” 2022,
Abstract)
What are some examples
of LTC racism?
“The long-term services and supports (LTSS) sector is
a microcosm of systemic racism that exists in our society. Nationally,
half of frontline professional caregivers are nonwhite, while mid- and
executive-level managers and board members are predominately white.” (“The
Value Proposition for Diversity: Creating A Pipeline of Diversity in The
LTSS Sector,” 2022, Abstract)
“Long-term services and supports (LTSS), including
care received at home and in residential settings such as nursing homes,
are highly racially segregated; Black, Indigenous, and persons of color (BIPOC)
users have less access to quality care and report poorer quality
of life compared to their White counterparts. Systemic racism lies at
the root of these disparities,
manifesting via racially segregated care, low Medicaid reimbursement, and
lack of livable wages for staff, along with other policies and processes
that exacerbate disparities.” (“Evidence
for Action: Addressing Systemic Racism Across Long-Term Services and
Supports,” 2022, p. 1)
“Findings revealed that black residents are more
likely than white residents to be restrained with bed rails, side rails,
and trunk restraints. Findings suggest that racial disparities exist in
the use of physical restraints. Implications for practice, policy, and
research are discussed.” (“Racial
disparities in the use of physical restraints in U.S. nursing homes,”
2013, Abstract)
“Racial disparities in nursing homes have been
reported for a number of outcomes, including pressure ulcers, influenza vaccination rates, pain
management, hospice use and in-hospital death. (16–19, 22) Our findings confirm that compared
to Whites, Black residents experience more aggressive EOL[End of Life] care with higher
rates of in-hospital deaths and lower rates of hospice use.” (“Racial
Disparities in In-Hospital Death and Hospice Use Among Nursing Home
Residents at the End-of-life,” 2012, p. 6)
What causes LTC racism?
“Nursing home care is currently a two-tiered system.
The lower tier consists of facilities housing mainly Medicaid residents
and, as a result, has very limited resources. The nearly 15 percent of
U.S. nonhospital-based nursing homes that serve predominantly Medicaid
residents have fewer nurses, lower occupancy rates, and more
health-related deficiencies. They are more likely to be terminated from
the Medicaid/Medicare program, are disproportionately located in the
poorest counties, and are more likely to serve African-American residents
than are other facilities. The public reporting of quality indicators,
intended to improve quality through market mechanisms, may result in
driving poor homes out of business and will disproportionately affect
nonwhite residents living in poor communities. This article recommends a
proactive policy stance to mitigate these consequences of quality
competition.” (“Driven
to Tiers: Socioeconomic and Racial Disparities in the Quality of Nursing
Home Care,” 2004, Abstract)
“A tiered system of nursing home care that
concentrates blacks in marginal-quality nursing homes also appears to
exist.” (p. 1449) “We found that nursing home care was relatively
segregated in 2000, with two thirds of all black residents living in just
10 percent of all facilities.” (p. 1453) “Disparities in payment between
Medicaid and private payers make the financial viability of a nursing home
dependent on the proportion of private-pay patients it is able to attract.
Homes unable to attract sufficient private-pay patients will tend to have
lower nurse staffing levels and more-serious inspection deficiencies.” (p,
1456) “Nursing home operators might also try to control admissions to
their facilities, limiting the number of first-day-eligible Medicaid
admissions and expanding as much as possible admissions of those with
sufficient resources that are unlikely to spend down and become eligible
for Medicaid.” (p. 1456) “It [discrimination] might also play a role in
shaping the decisions of white private-pay nursing home patients and their
families about where to get care, including whether to opt for non–nursing
home alternatives altogether.” (p. 1456) (“Separate
And Unequal: Racial Segregation And Disparities In Quality Across U.S.
Nursing Homes,” 2007)
LTC racism: Diagnosis
The definition above attributes structural LTC racism
to the “laws and policies that allocate resources in ways that disempower
and devalue members of racial and ethnic minority groups, resulting in
inequitable access to high-quality care.” What are those laws and
policies? They are the statutes, regulations, policies, procedures, and
guidelines that cause long-term care’s two-tiered structure: one top
quality tier for private payers and a lower tier for Medicaid dependents.
Specifically, Medicaid LTC financial eligibility
rules sort people who need extended care into two groups. Those who have
too much income and resources are expected to spend down in the private
market. Those who have liquid wealth low enough to qualify become Medicaid
recipients with all that entails for the access and quality of care they
can expect. This is cause number one of LTC racism. People with wealth,
privileged majorities, enjoy the better LTC tier, while underprivileged
marginalized groups rely predominantly on Medicaid, in the lower tier.
But the reality is actually much worse than this
simple sorting of people by wealth suggests. Medicaid financial
eligibility rules allow people with substantial income and assets to
qualify for LTC benefits along with the poor and disadvantaged. States
either subtract private health and LTC expenses from income before they
apply the low-income standard or they permit excess income to be diverted
to a “Miller trust.” The rule of thumb is that income below the cost of a
nursing home, easily $8,000 or $9,000 per month, is not disqualifying. Nor
do assets stand in the way of Medicaid LTC eligibility in most cases,
because the largest assets seniors possess are exempt, such as a home,
car, personal belongings, etc. and any countable liquid wealth is easily
made non-countable by purchasing exempt assets. Even far more affluent
people qualify for Medicaid LTC benefits by retaining elder law attorneys
to impoverish them artificially with special trusts, annuities and other
sophisticated strategies.
Key Money: LTC Racism’s Motor
Why would people who could afford private LTC
manipulate eligibility rules to qualify for Medicaid which has such a poor
reputation for access and quality? Some Medicaid facilities are better
than others. They may serve mostly Medicare or private residents, receive
much higher reimbursement rates, enjoy philanthropic support, and have
only a few Medicaid beds. Savvy seniors, their families, and legal
advisors learn to use “key money” to access those better facilities.
Medicaid planners tell their affluent clients to hold back enough liquid
capital from the artificial impoverishment process to enable them to pay
privately for a while. Because LTC providers are desperate for private
payers who contribute half again as much as Medicaid to their bottom line,
they roll out the red carpet for new private-pay admissions. Once in a
good facility, the advisor flips a legal switch converting the client to
Medicaid. By law the provider cannot expel a resident simply because the
funding source changes from private to Medicaid.
This is how Medicaid, commonly considered a LTC
safety net for the poor, came to be the dominant LTC funding source for
nearly everyone, even the affluent, stricken by catastrophic LTC costs. By
covering the “medically needy”—people with too much income to qualify
categorically, but too little income to pay their health and LTC expenses
privately—Medicaid’s limited resources were overwhelmed. The program tried
to do too much for too many and ended up doing too little for most. Worse,
Medicaid allowed privileged majorities to coopt its better facilities and
services while diverting the less advantaged, who lack key money, to the
program’s least desirable facilities and services. This is how structural
racism, deficient public LTC services for those most in need, came to
predominate. Nothing will change until this cause is removed.
LTC racism: Treatment
The most common remedy for LTC racism proposed in the
academic literature is to allocate more resources to Medicaid so it can
pay caregivers more, provide better services, offer more home- and
community-based care, and relieve family caregivers. For example, one
source calls for a multi-prong effort to add “disproportionate-share
payment adjustments to nursing homes with a higher proportion of Medicaid
residents” and to equalize “Medicaid and private-pay payments.” (“Separate
And Unequal: Racial Segregation And Disparities In Quality Across U.S.
Nursing,” 2007, Abstract) Another source suggests “increase Medicaid
and Medicare reimbursement rates, especially for providers serving high
proportions of Medicaid-eligible and BIPOC older adults” and “expand
access to Medicaid-waivered HCBS services,” “increase promotion of
integrated HCBS programs that can be targeted to BIPOC consumers.”
(“Evidence
for Action: Addressing Systemic Racism across Long-Term Services and
Supports,” 2022, Abstract) All have proven to be politically
unachievable goals.
But simply spending more on Medicaid would only mean
increased resources going disproportionately to the over-privileged with
relatively less reaching the underprivileged. The only way to eliminate
LTC racism once and for all is to remove from Medicaid dependency the
people who rely on the program now, but who could, should and would have
prepared to pay privately otherwise. The easy availability of Medicaid LTC
late in life while preserving wealth created a moral hazard that
discouraged early planning for LTC. The middle class and affluent who
crowd out the poor from Medicaid’s best services, could have saved,
invested or insured for LTC and avoided reliance on Medicaid. Bottom line,
it is they who must be incentivized to take personal responsibility early
in life so that later, when they need LTC, they can pay privately, access
the best possible care in the most desirable venues, and free up Medicaid
to do a better job for those most in need. Relieved of the burden to cover
everyone, Medicaid will have the resources to pay private rates, afford
top-quality professional caregivers thus eliminating their shortage, offer
more HCBS, and move everyone on the program into the top-tier of LTC
services.
Long-Term Care: Cure
The solution to LTC racism is to move privileged
groups into the private LTC market in order to save and improve Medicaid
for the less fortunate. That is a big ask. How can we possibly do it?
Government tried unsuccessfully for decades (1) to reduce excess Medicaid
dependency (employing income and asset limits, transfer of assets
penalties, estate recoveries, even “Throw Granny in Jail”) and (2) to
encourage private LTC insurance. Nothing worked. People struggling in
mid-life with house and car payments, child care, elder care, retirement
and education savings, etc. would not think, plan or prepare for the
potential risk and cost of LTC in the distant future. The fact that
Medicaid paid for the vast bulk of catastrophic LTC expenses probably
didn’t enter their awareness but it influenced their financial planning
nonetheless, enabling their denial.
These conditions are the dam obstructing progress
toward a solution of LTC racism. I propose a way to break that dam and
improve both private and Medicaid LTC in a new paper, titled “Long-Term
Care: The Solution,” for the
Paragon Health Institute. It is due for publication on October 2 and
follows a paper, “Long-Term
Care: The Problem” that Paragon published last fall. We’ll bring you
more analysis and answers soon.
#############################
Updated, Monday, September 11, 2023,
9:32 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #23-025:
LTC NEWS AND COMMENT
LTC
Comment: Do you spend hours searching the internet for useful articles,
key data, and relevant reports to keep you on the forefront of
professional knowledge? Do you lose business because you’re blindsided by
clients or competitors who learn critical information before you do?
Here’s an antidote:
LTC
Clippings: The Center for Long-Term Care Reform notifies subscribers to
our LTC Clippings service daily of information you need to know. Each
message contains only the critical facts about new publications: a title,
representative quote, a link to the original, and our analysis in a
sentence or two. To inquire or subscribe, contact Damon at 206-283-7036
or
damon@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC
E-Alerts: Once a week, we compile our daily LTC Clippings into a summary,
email it to Center for Long-Term Care Reform members, and archive it in
The Zone, our password-protected members-only website. Center members
also receive our weekly LTC Bullet op-ed. To join the Center and receive
all these benefits and more, contact Damon at 206-283-7036 or
damon@centerltc.com.
We no
longer post our LTC E-Alerts on the Center’s public access website, but
here’s what today’s LTC E-Alert contained: links, quotes and comments on
the following articles, reports, or data:
-
State veterans home rife with deficiencies,
inaccurate COVID death reports: federal report
-
Biden’s Proposal to Restrict Affordable Health
Options
-
Fitch Downgrade Could Mean Medicaid Cuts
-
Could legacy long-term care (LTC) blocks be the
next wave of M&A deals?
-
Understanding the Stages of Dementia: A
Compassionate Guide for Families and Caregivers
-
Fixing Medicaid rolls doesn’t mean leaving people
without coverage
-
Biden unloads on nursing home operators
#############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Friday, September 8, 2023,
10:40 AM (Pacific)
Seattle—
#############################
LTC BULLET: LONG-TERM
CARE RACISM
LTC Comment: What is LTC
racism? How does it manifest? What should be done? Excerpts from the
scholarly literature follow the ***news.***
|
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LTC BULLET: LONG-TERM
CARE RACISM
LTC Comment: We know
America’s LTC service delivery and financing system is fraught with
problems. These problems include dubious access and quality, nursing home
bias, too little home- and community-based care, inadequate provider
revenue, reduced private financing from insurance, savings or home equity,
caregiver shortages, and excessive emotional and financial strain on
family caregivers. We also know that these problems impact
socioeconomically marginalized groups disproportionately.
A large and growing
scholarly literature attributes this LTC status quo to systemic,
structural or institutionalized racism. Examples of unfair and inequitable
LTC conditions and outcomes abound. So do ideas and recommendations about
how to fix or improve LTC services and financing by eliminating or
reducing LTC racism. Today’s LTC Bullet offers a selection of
quotes about LTC racism from many peer-reviewed journal articles. For now,
let’s reflect on this material and its meaning before we turn soon to
analysis and recommendations.
Definition: “[I]nstitutionalized
racism is defined as differential access to the goods, services, and
opportunities of society by race. Institutionalized racism is normative,
sometimes legalized, and often manifests as inherited disadvantage. It is
structural, having been codified in our institutions of custom, practice,
and law, so there need not be an identifiable perpetrator.”
Levels of Racism: A Theoretic Framework and a Gardener’s Tale, 2000,
p. 1212
Examples: “The
long-term services and supports (LTSS) sector is a microcosm of systemic
racism that exists in our society. Nationally, half of frontline
professional caregivers are nonwhite, while mid- and executive-level
managers and board members are predominately white.”
The Value Proposition for Diversity: Creating A Pipeline of Diversity in
The LTSS Sector, 2022, Abstract
“Long-term services and
supports (LTSS), including care received at home and in residential
settings such as nursing homes, are highly racially segregated; Black,
Indigenous, and persons of color (BIPOC) users have less access to quality
care and report poorer quality
of life compared to their White counterparts. Systemic racism lies at
the root of these disparities,
manifesting via racially segregated care, low Medicaid reimbursement, and
lack of livable wages for staff, along with other policies and processes
that exacerbate disparities.” Evidence
for Action: Addressing Systemic Racism Across Long-Term Services and
Supports, 2022, p. 1
“Long-term services and
supports for older persons in the United States are provided in a complex,
racially segregated system, with striking racial disparities in access,
process, and outcomes of care for residents, which have been magnified
during the Coronavirus Disease 2019 pandemic. These disparities are in
large measure the result of longstanding patterns of structural,
interpersonal, and cultural racism in US society, which in aggregate
represent an underpinning of systemic racism that permeates the long-term
care system's organization, administration, regulations, and human
services. … Additional foundational drivers include a fragmented payment
system that advantages persons with financial resources, and reimbursement
policies that systematically undervalue long-term care workers.”
Addressing Systemic Racism in Nursing Homes: A Time for Action, 2021,
Abstract
“In this study, nursing
homes with the highest proportions of non-White residents experienced
COVID-19 death counts that were 3.3-fold higher than those of facilities
with the highest proportions of White residents.”
Factors Associated With Racial Differences in Deaths Among Nursing Home
Residents With COVID-19 Infection in the US, 2021, p. 1/10.
“We found that a larger
share of Hispanic Medicare residents that are admitted to nursing homes
have ADRD [Alzheimer’s disease and related dementias] compared with
African American and White beneficiaries. Both Hispanics and African
Americans with ADRD received care in segregated nursing homes with fewer
resources and lower quality of care compared with White residents.”
Disparities in Nursing Home Use and Quality Among African American,
Hispanic, and White Medicare Residents With Alzheimer's Disease and
Related Dementias, 2019, p.1
“Using Medicaid claims
data for a national cohort of dual eligibles with MS, we find state HCBS
priority is associated with disparities in utilization-blacks and
Hispanics receiving HCBS more often do so in low-priority states compared
with whites.”
Racial Disparities in Medicaid Home and Community-Based Service
Utilization among White, Black, and Hispanic Adults with Multiple
Sclerosis: Implications of State Policy, 2019, Abstract
“Disparities between
vaccination coverage among racial/ethnic minorities versus Whites ranged
from 2% to 20% for influenza and 6% to 15% for pneumococcal vaccination.
Researchers reported racial/ethnic minorities were more likely to refuse
vaccinations and less likely to have vaccinations offered and their
vaccination status tracked compared to Whites.”
Racial/Ethnic Disparities in Influenza and Pneumococcal Vaccinations Among
Nursing Home Residents: A Systematic Review, 2018, p. e205
“Despite the increased
use of nursing homes by minority residents, nursing home care remains
highly segregated. Compared to whites, racial/ethnic minorities tend to be
cared for in facilities with limited clinical and financial resources, low
nurse staffing levels, and a relatively high number of care deficiency
citations. … We also found that increasing the Medicaid payment rate might
help improve both overall quality and disparities, but state case-mix
payment approaches might worsen both.”
Deficiencies In Care At Nursing Homes And Racial & Ethnic Disparities
Across Homes Declined, 2006–11, 2015, p. 1
“Highlights
- Patients of
each race prefer nursing homes with higher prevalence of patients of
their own race.
- Preference
for distance and quality of care are same for patients of both the
races.
- Both
preference for distance and preference for racial homogeneity contribute
to racial disparity in nursing home quality of care.
- Results are
robust among subgroup of patients with same Medicaid eligibility and
similar likelihood of becoming long-stay resident.
- Simulations
based on estimated sorting model suggest that interventions targeting
nursing homes serving minority population would yield a greater
reduction in racial quality disparities than interventions targeting low
quality nursing homes.”
Racial Segregation and Quality of Care Disparity in US Nursing Homes,
2014, p. 28
“Findings revealed that
black residents are more likely than white residents to be restrained with
bed rails, side rails, and trunk restraints. Findings suggest that racial
disparities exist in the use of physical restraints. Implications for
practice, policy, and research are discussed.”
Racial disparities in the use of physical restraints in U.S. nursing homes,
2013, Abstract
“Racial disparities in
nursing homes have been reported for a number of outcomes, including
pressure ulcers, influenza vaccination rates, pain management, hospice use
and in-hospital death.(16–19, 22) Our findings confirm that compared to
Whites, Black residents experience more aggressive EOL[End of Life] care
with higher rates of in-hospital deaths and lower rates of hospice use.”
Racial Disparities in In-Hospital Death and Hospice Use Among Nursing Home
Residents at the End-of-life, 2012, p. 6
“Between 1999 and 2008,
the number of elderly Hispanics and Asians living in US nursing homes grew
by 54.9 percent and 54.1 percent, respectively, while the number of
elderly black residents increased 10.8 percent. During the same period,
the number of white nursing home residents declined 10.2 percent. These
shifts have been driven in part by changing demographics, especially the
fast growth of older minority populations. However, the numbers of
minority residents in nursing homes increased more rapidly than the
minority population overall, even in areas with high concentrations of
minority populations. Thus, these results may indicate unequal minority
access to home and community-based alternatives, which are generally
preferred for long-term care. When designing initiatives to balance
institutional and noninstitutional long-term care, policy makers should
take steps to reduce racial and ethnic disparities.”
Growth of Racial and Ethnic Minorities in US Nursing Homes Driven by
Demographics and Possible Disparities in Options, 2011, p.1358
“Greater PU [pressure
ulcer] occurrence among Blacks may not result from differential
within-facility treatment of Blacks versus Whites. Rather, Blacks are more
likely to reside in facilities with poorer care quality. To improve PU
care for Blacks, efforts should focus on improving the overall quality of
care for facilities with high proportion of Black residents.”
Pressure ulcer prevalence among Black and White nursing home residents in
New York State: Evidence of racial disparity?, 2010, p. 1
“Although segregation in
nursing homes seems to have declined slightly, elderly Hispanics are more
likely than their non-Hispanic white peers to reside in nursing homes that
are characterized by severe deficiencies in performance, understaffing,
and poor care.”
Elderly Hispanics More Likely To Reside In Poor-Quality Nursing Homes,
2010, p. 65
“Disparities in quality
of care are more consistently documented and appear to be related to
racial and socioeconomic segregation of long-term care facilities as
opposed to within-provider discrimination. Market-based incentives
policies should explicitly incorporate the goal of mitigating the
potential unintended consequence of increased disparities.”
Disparities in long-term care: building equity into market-based reforms,
2009, Abstract
“Compared to Whites,
African Americans were less likely to have completed an advance directive
(35.5% vs. 67.4%, P<.001) and had less favorable beliefs about
hospice care (Hospice Beliefs and Attitudes Scale score, P<.001).
African Americans were more likely to express discomfort discussing death,
want aggressive care at the end of life, have spiritual beliefs which
conflict with the goals of palliative care, and distrust the healthcare
system.”
What explains racial differences in the use of advance directives and
attitudes toward hospice care?, 2008, p. 1
“Average nursing-home
case-mix acuity for African Americans and Caucasians were essentially
identical, suggesting that shifts in payment incentives have eliminated
the selective admission of easy-care private-pay (predominantly Caucasian)
patients and helped fuel the growth of private pay home care and assisted
living for this segment of the population. While these shifts in
incentives helped increase the use of nursing homes by African Americans,
a high degree of segregation and disparity in the quality of the nursing
homes used by African Americans persists. Parity in use is an illusive
benchmark for measuring progress in assuring equity in treatment.”
Racial disparities in access to long-term care: the illusive pursuit of
equity, 2008, Abstract
“Nursing homes remain
relatively segregated, roughly mirroring the residential segregation
within metropolitan areas. As a result, blacks are much more likely than
whites to be located in nursing homes that have serious deficiencies,
lower staffing ratios, and greater financial vulnerability. Changing
health care providers’ behavior will not be sufficient to eliminate
disparities in medical treatment in nursing homes.” p. 1448
“A tiered system of
nursing home care that concentrates blacks in marginal-quality nursing
homes also appears to exist.5” (p. 1449) “We found that nursing home care
was relatively segregated in 2000, with two thirds of all black residents
living in just 10 percent of all facilities.” (p. 1453) “Disparities in
payment between Medicaid and private payers make the financial viability
of a nursing home dependent on the proportion of private-pay patients it
is able to attract. Homes unable to attract sufficient private-pay
patients will tend to have lower nurse staffing levels and more-serious
inspection deficiencies.”18 (p, 1456) “Nursing home operators might also
try to control admissions to their facilities, limiting the number of
first-day-eligible Medicaid admissions and expanding as much as possible
admissions of those with sufficient resources that are unlikely to spend
down and become eligible for Medicaid.” (p. 1456) “It [discrimination]
might also play a role in shaping the decisions of white private-pay
nursing home patients and their families about where to get care,
including whether to opt for non–nursing home alternatives altogether.”
(p. 1456)
Separate And Unequal: Racial Segregation And Disparities In Quality Across
U.S. Nursing Homes, 2007
“Non-Hispanic Whites
(Whites) experienced substantially better functional outcomes than did
home health care recipients of other racial/ethnic backgrounds. The
disparity in outcomes was most pronounced between Whites and African
Americans.”
Racial and ethnic disparities in the outcomes of elderly home care
recipients, 2005, Abstract
“Nursing home care is
currently a two-tiered system. The lower tier consists of facilities
housing mainly Medicaid residents and, as a result, has very limited
resources. The nearly 15 percent of U.S. nonhospital-based nursing homes
that serve predominantly Medicaid residents have fewer nurses, lower
occupancy rates, and more health-related deficiencies. They are more
likely to be terminated from the Medicaid/Medicare program, are
disproportionately located in the poorest counties, and are more likely to
serve African-American residents than are other facilities. The public
reporting of quality indicators, intended to improve quality through
market mechanisms, may result in driving poor homes out of business and
will disproportionately affect nonwhite residents living in poor
communities. This article recommends a proactive policy stance to mitigate
these consequences of quality competition.”
Driven to Tiers: Socioeconomic and Racial Disparities in the Quality of
Nursing Home Care, 2004, Abstract
“African Americans are
about one-third as likely as Caucasians to have living wills and one-fifth
as likely as Caucasians to have DNR orders; Hispanics are about one-third
as likely as Caucasians to have DNR orders and just as likely as
Caucasians to have living wills. In conclusion, we found that the presence
of advance care plans is related to race, even after controlling for
health and other demographic factors.”
Persistence of racial disparities in advance care plan documents among
nursing home residents, 2002, Abstract
“Results: Most
African Americans resided in nursing homes and smaller RC/AL facilities
and tended to be concentrated in a few predominantly African American
facilities, whereas the vast majority of Whites resided in predominantly
White facilities. Facilities housing African Americans tended to be
located in rural, nonpoor, African American communities, to admit
individuals with mental retardation and difficulty in ambulating, and to
have lower ratings of cleanliness/maintenance and lighting.
“Conclusions: These
racial disparities may result from economic factors, exclusionary
practices, or resident choice. Whether separation relates to inequities in
care is undetermined.”
Distribution of African Americans in Residential Care/Assisted Living and
Nursing Homes: More Evidence of Racial Disparity?, 2002, p. 1272
Solutions: “We
developed a set of recommendations for LTSS based on existing evidence,
including (1) increase Medicaid and Medicare reimbursement rates,
especially for providers serving high proportions of Medicaid-eligible and
BIPOC older adults; (2) reconsider the design of pay-for-performance
programs as they relate to providers who serve underserved groups; (3)
include culturally sensitive measures, such as quality
of life, in public reporting of quality of care, and develop and
report health equity measures in outcomes of care for BIPOC individuals;
(4) implement culture change so services are more person-centered and
homelike, alongside improvements in staff wages and benefits in
high-proportion BIPOC nursing homes; (5) expand access to Medicaid-waivered
HCBS services; (6) adopt culturally appropriate HCBS practices, with
special attention to family caregivers; (7) and increase promotion of
integrated HCBS programs that can be targeted to BIPOC consumers, and
implement models that value community
health workers.”
Evidence for Action: Addressing Systemic Racism Across Long-Term Services
and Supports, 2022, p. 1
“Focusing limited
available resources on facilities with high proportions of non-White
residents is needed to support nursing homes during potential future
[Covid-19] outbreaks.”
Factors Associated With Racial Differences in Deaths Among Nursing Home
Residents With COVID-19 Infection in the US, 2021, pp. 1-2/10.
“The solution to racial
health inequities is to address
racism and its attendant harms and erect a new health care
infrastructure that no longer profits from the persistence of inequitable
disease.”
On Racism: A New Standard For Publishing On Racial Health Inequities,
2020
“Ten-dollar increments
in Medicaid rates reduced the odds of hospitalization by 4 percent (95
percent CI=0.93–1.00) for white residents and 22 percent (95 percent
CI=0.69–0.87) for black residents.” (p. 869)
“Quality NH care is dependent on the availability of resources (Mor et al.
2004; Miller et al. 2006) but NHs that are largely Medicaid-reliant are
often disadvantaged because Medicaid rates are generally below private pay
rates and sometimes below actual costs of care (Seidman 2002). Such
facilities disproportionately serve black residents (Mor et al. 2004).”
(p. 870)
“That higher Medicaid payment rates reduced the risk of hospitalization
substantially more for black than for white residents suggests that
efforts to reduce racial disparities in NH care must include strategies to
better support Medicaid-reliant NHs.” (p. 879)
Relationship between State Medicaid Policies, Nursing Home Racial
Composition, and the Risk of Hospitalization for Black and White Residents,
2008
“What can be done to cut
this knot? A multi-prong effort in four areas could help: (1)
disproportionate-share payment adjustments to nursing homes with a higher
proportion of Medicaid residents; (2) equalization of Medicaid and
private-pay payments; (3) certificate-of-need and broader regional
planning responsive to racial-disparity concerns; and (4) ongoing
monitoring and more rigorous enforcement of Title VI in admission
practices. Indeed, some of the MSA variations on these measures of
disparities may reflect variations in effort in these areas. These
findings are not very different for the nursing home sector than for other
parts of the health system in terms of the characteristics of this knot or
in the possible approaches to cutting it.”
Separate And Unequal: Racial Segregation And Disparities In Quality Across
U.S. Nursing Homes, 2007, pp. 1456-7
#############################
Updated,
Tuesday, September 5, 2023, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #23-024:
LTC NEWS AND COMMENT
LTC Comment: Do you spend hours searching
the internet for useful articles, key data, and relevant reports to keep
you on the forefront of professional knowledge? Do you lose business
because you’re blindsided by clients or competitors who learn critical
information before you do? Here’s an antidote:
LTC Clippings: The Center for Long-Term
Care Reform notifies subscribers to our LTC Clippings service daily of
information you need to know. Each message contains only the critical
facts about new publications: a title, representative quote, a link to
the original, and our analysis in a sentence or two. To inquire or
subscribe, contact Damon at 206-283-7036 or
damon@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC E-Alerts: Once a week, we compile our
daily LTC Clippings into a summary, email it to Center for Long-Term Care
Reform members, and archive it in The Zone, our password-protected
members-only website. Center members also receive our weekly LTC Bullet
op-ed. To join the Center and receive all these benefits and more,
contact Damon at 206-283-7036 or
damon@centerltc.com.
We no longer post our LTC E-Alerts on the
Center’s public access website, but here’s what today’s LTC E-Alert
contained: links, quotes and comments on the following articles, reports,
or data:
-
BREAKING: CMS issues first-ever nursing home
staffing mandate
-
BREAKING: CMS nursing home staffing mandate in
question after study leaks
-
Proposed mandatory long-term care insurance: A
closer look at the potential negatives
-
Short-Term Plans: The Battle for Health Insurance
Choice
-
Can the Left and Right Agree on Health Reform?
-
As forecast price of federal staffing mandate
climbs to $11.7B, analysts offer alternatives
-
Researchers identify lifestyle factors that predict
nursing home needs later in life
#############################
"LTC E-Alerts" are
a
feature offered by the Center for Long-Term Care Reform, Inc. to members
at the $150 per year level or higher. We'll track and report to you news
and analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Monday, August 28, 2023, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #23-023 LTC NEWS AND COMMENT
LTC Comment: Do you spend hours searching
the internet for useful articles, key data, and relevant reports to keep
you on the forefront of professional knowledge? Do you lose business
because you’re blindsided by clients or competitors who learn critical
information before you do? Here’s an antidote:
LTC Clippings: The Center for Long-Term
Care Reform notifies subscribers to our LTC Clippings service daily of
information you need to know. Each message contains only the critical
facts about new publications: a title, representative quote, a link to the
original, and our analysis in a sentence or two. To inquire or subscribe,
contact Steve at 425-891-3640 or
smoses@centerltc.com. Read testimonials
by satisfied subscribers
here.
To subscribe online, please click
here.
LTC E-Alerts: Once a week, we compile our
daily LTC Clippings into a summary, email it to Center for Long-Term Care
Reform members, and archive it in The Zone, our password-protected
members-only website. Center members also receive our weekly LTC Bullet
op-ed. To join the Center and receive all these benefits and more, contact
Steve at 425-891-3640 or
smoses@centerltc.com.
We no longer post our LTC E-Alerts on the
Center’s public access website, but here’s what today’s LTC E-Alert
contained: links, quotes and comments on the following articles, reports,
or data:
·
Dementia Risk From Midlife Onward Predicted With New Tool
·
California Warns Against Dishonest Marketing Tied to
Long-Term Care Proposal
·
AHCA offers ‘wake-up call’ on bed and facility counts:
446,000 residents may be displaced
·
New research uncovers racial inequities in home health
patients’ health outcomes
·
The Upheaval at America’s Disappearing Nursing Homes, in
Charts
·
Alarming reality: One in four Americans with cognitive
impairment lives alone
·
China population: 100 million more senior citizens expected
in next decade as ageing crisis enters ‘crucial juncture’
·
Here's the Size of Social Security Cuts if Congress Doesn't
Act Soon: CRFB
#############################
"LTC E-Alerts" are a feature offered by the
Center for Long-Term Care Reform, Inc. to members at the $150 per year
level or higher. We'll track and report to you news and analysis regarding
long-term care financing, service delivery, and research. We hope The LTC
E-Alerts will help you attain and maintain a high level of knowledge and
competency in this complex field. The Center for Long-Term Care Reform,
Inc. is a private institute dedicated to ensuring quality LTC for all
Americans (www.centerltc.com).
#############################
Updated,
Friday, August 25, 2023, 10:40 AM (Pacific)
Seattle—
#############################
LTC
BULLET: YOU PAY FOR CALIFORNIA’S LTC PROFLIGACY AND STRUCTURAL RACISM
LTC
Comment: California’s Medicaid program (Medi-Cal)
says come one, come all for free LTC, sends the bill to federal taxpayers,
and institutionalizes structural LTC racism. What’s happening, after the
***news.***
***
HELP us change LTC financing policy for the better. Whenever you see an
article or report that says something like:
“Only low-income people qualify for Medicaid.”
“Medicaid only pays for long-term care after you spend down into
impoverishment.”
“Millions across America are losing their life savings to long-term care.”
“LTC insurance costs too much and will never be a major payer.”
“The best way to fix LTC is to add it to Medicare.”
Forward the source to me (smoses@centerltc.com)
or to Damon (damon@centerltc.com).
We will contact the author, explain why those commonplace beliefs are
false, provide evidence to back up our conclusion, offer correct
information, recommend public policy solutions, and propose to become a
source for the author’s future publications on LTC.
With
the
Paragon Health Institute’s
publication of our monographs “Long-Term
Care: The Problem”
and (soon) “Long-Term Care: The Solution,” the time is right again to
address and correct misconceptions about LTC financing among reporters,
analysts, and policy makers.
Let’s fix long-term care once and for all.
***
LTC
BULLET: YOU PAY FOR CALIFORNIA’S LTC PROFLIGACY AND STRUCTURAL RACISM
LTC
Comment: California is eliminating one of the last remaining reasons
people have to plan privately for long-term care risk and cost. The state
already lifted Medi-Cal’s countable asset limit from $2,000 to $130,000 in
2022. Effective January 1, 2024, the Golden State will eliminate the asset
limit entirely. This change applies to people receiving LTC benefits in
the community or nursing homes. It will add 18,000 new recipients without
their having to spend down or prove their wealth. (McKnight’s
Senior Living).
Why
should you care? After all, California is notorious for crazy public
policies. (Have you been to San Francisco lately?) You may not have to pay
for most of their well-intentioned, unintended consequences. But you are
paying for this one. The way Medicaid (including Medi-Cal) works, the
state puts up part of the program’s cost and the federal government pays
the rest. For California this
match rate
is 50/50. So, for every wealthy Californian newly eligible for Medi-Cal
LTC benefits, we federal taxpayers in New Mexico, Illinois, New York,
etc., etc. are paying half.
Surely the federal government will not stand for this fiscal inequity.
But, no, the Centers for Medicare and Medicaid Services (CMS)
approved the state plan amendment
removing the asset limit, calling it a “first
of its kind.” Will
other states follow in California’s footsteps? Will yours?
Maybe you’re thinking “Oh well, at least people have to be ‘low income’
before California can make me pay for their long-term care.” But, no
again, the state has
“no
income limit” for “institutional / Nursing Home Medicaid,”
although: “All of a beneficiary’s monthly income, with the exception of a Personal
Needs Allowance of
$35 / month, Medicare premiums, and a Spousal
Income Allowance (if
applicable), must be paid to the nursing home as a Share of Cost.” (American
Council on Aging).
Think of income as kind of a “deductible,” a small price for the asset
rich to access government-funded LTC.
Playing fast and loose with welfare-financed LTC benefits is nothing new
for California. I documented many examples 12 years ago in Medi-Cal
LTC: Safety Net or Hammock?
On pages 25-28 of that report, check out the ways California ignored
federal mandates from the Omnibus Budget Reconciliation Act of 1993 and
the Deficit Reduction Act of 2005. You paid for all this “generosity”
also.
Medi-Cal’s Structural LTC Racism
On
average, Medicaid pays LTC providers less than the cost of care, roughly
70 percent of what private payers must contribute. Consequently, Medicaid
often provides deficient care access and quality compared to what affluent
private payers command. Financially underprivileged minorities tend to end
up on Medicaid and in nursing homes that are more dependent on Medicaid
than nicer, mostly private-pay skilled facilities or assisted living.
Thus, Medi-Cal’s more favorable treatment of affluent people in terms of
eligibility and access has led to charges of structural racism. According
to an open access article in
Health Affairs*:
Structural racism in coverage and financing has created a two-tier system
of racially segregated care in which minority people receive
poorer-quality care.… Inequities in nursing home care provide a
particularly vivid example.… Stark racial segregation in nursing homes
persists today.
Awful as that sounds, the full story is even worse. If Medicaid and Medi-Cal
care is so poor, why would people who can afford to pay privately want to
qualify for it? Elder law attorneys who specialize in “Medicaid planning,”
the legal practice of artificially impoverishing affluent clients to
qualify them for publicly funded LTC benefits, have a ready answer.
Nursing homes are desperate for revenue because Medicaid (Medi-Cal) pays
them so little. They will roll out the red carpet for anyone who can pay
privately at rates half again as much as Medicaid pays. So lawyers advise
clients to hold back enough “key money” to pay privately for a while.
That’s how their upscale clients can get into the nicer facilities that
accept only a few Medicaid recipients. Then after a short period paying
privately, the attorney implements a plan to impoverish the client on
paper by means of common legal steps, such as: to purchase unlimited
exempt assets; set up a Medicaid Asset Protection Trust; buy a
Medicaid-compliant annuity; or use other methods described
here,
while legally avoiding estate recovery. Voila. Another well-to-do person
enters a rare, top-quality facility paid for by Medicaid. Once in, the
placement is permanent:
Keep
in mind that, once you have been admitted to a Medi-Cal certified
facility, you cannot be transferred or evicted simply because of a change
from private pay to Medi-Cal payment status even when a (illegal) duration
of stay contract has been signed. This applies while the Medi-Cal
application is pending, as well. (CANHR,
pps. 6-7)
Unfortunately, poor people don’t have the key money to buy their way into
the nicer nursing homes in this way. That’s why they end up in the less
desirable places that are more likely to be featured in tabloid exposes of
deficient care. Worse, the poor on Medi-Cal may be unable to access care
in California at all. According to the California Advocates for Nursing
Home Reform (CANHR):
Over
the past 5 years, one of the most disturbing violations of state and
federal laws has been the increase in discrimination against Medi-Cal
beneficiaries who need nursing home care. Call a nursing home and tell
them that your mother, a Medi-Cal beneficiary, has dementia along with
other medical issues and that her doctor has recommended a nursing home–
good luck in finding a placement within 200 miles – or at all! … Nursing
home discrimination against Medi-Cal beneficiaries and residents has
become epidemic in California, and the state regulatory agencies do
nothing to contain it. (Source:
Medi-Cal
Discrimination In Nursing Homes – Getting In Is Half The Battle)
By
making it even easier than it was already for affluent people to crowd out
the poor from better LTC, Medi-Cal has exacerbated the problem of
structural LTC racism which in fact afflicts Medicaid nationwide.
If
you want to know why these problems persist, read the
Paragon Health Institute’s
paper “Long-Term
Care: The Problem.”
If you want to know what to do about it, watch for “Long-Term Care: The
Solution,” coming soon from Paragon and the
Center for Long-Term Care Reform.
*
Ruqaiijah Yearby, Brietta Clark, and José Figueroa, “Structural Racism in
Historical and Modern US Health Care Policy,” Health Affairs, vol.
41, no. 2 (2022).
#############################
Updated,
Monday, August 21, 2023, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #23-022 LTC NEWS AND COMMENT
LTC Comment: Do you spend hours searching
the internet for useful articles, key data, and relevant reports to keep
you on the forefront of professional knowledge? Do you lose business
because you’re blindsided by clients or competitors who learn critical
information before you do? Here’s an antidote:
LTC Clippings: The Center for Long-Term
Care Reform notifies subscribers to our LTC Clippings service daily of
information you need to know. Each message contains only the critical
facts about new publications: a title, representative quote, a link to the
original, and our analysis in a sentence or two. To inquire or subscribe,
contact Steve at 425-891-3640 or
smoses@centerltc.com. Read testimonials
by satisfied subscribers
here.
To subscribe online, please click
here.
LTC E-Alerts: Once a week, we compile our
daily LTC Clippings into a summary, email it to Center for Long-Term Care
Reform members, and archive it in The Zone, our password-protected
members-only website. Center members also receive our weekly LTC Bullet
op-ed. To join the Center and receive all these benefits and more, contact
Steve at 425-891-3640 or
smoses@centerltc.com.
We no longer post our LTC E-Alerts on the
Center’s public access website, but here’s what today’s LTC E-Alert
contained: links, quotes and comments on the following articles, reports,
or data:
-
HealthyLife.net
(Moses podcast interview)
-
Nine out of 10
seniors concerned about senior living cost, care and quality: report
-
State becomes
first to strip Medicaid asset limit
-
8 Big Things
Clients Don't Know About Estate Planning, Long-Term Care and Probate
-
Japan:
Long-term care insurance system under funding pressure
-
Minnesota
studies a Medicare companion product for LTC coverage
-
‘Old Age’
Enters a New Age: Dramatic shifts in demography and Americans' views of
aging revealed in new Harris Poll study conducted by Age Wave
-
The Long View:
Six reasons to start retirement planning in your 20s
-
Brains of
people with Alzheimer’s are low on some antioxidants, study finds
-
How Do You Hide
Money From Nursing Homes
-
Medicaid
spending up for seniors but who will bankroll coming growth
-
Got Insurance?
You May Be on Medicaid Too
#############################
"LTC E-Alerts" are a feature offered by the
Center for Long-Term Care Reform, Inc. to members at the $150 per year
level or higher. We'll track and report to you news and analysis regarding
long-term care financing, service delivery, and research. We hope The LTC
E-Alerts will help you attain and maintain a high level of knowledge and
competency in this complex field. The Center for Long-Term Care Reform,
Inc. is a private institute dedicated to ensuring quality LTC for all
Americans (www.centerltc.com).
#############################
Updated, Monday, August 14, 2023,
10:40 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #23-021 LTC NEWS AND COMMENT
LTC
Comment: Do you spend hours searching the internet for useful articles,
key data, and relevant reports to keep you on the forefront of
professional knowledge? Do you lose business because you’re blindsided by
clients or competitors who learn critical information before you do?
Here’s an antidote:
LTC
Clippings: The Center for Long-Term Care Reform notifies subscribers to
our LTC Clippings service daily of information you need to know. Each
message contains only the critical facts about new publications: a title,
representative quote, a link to the original, and our analysis in a
sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or
smoses@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC
E-Alerts: Once a week, we compile our daily LTC Clippings into a summary,
email it to Center for Long-Term Care Reform members, and archive it in
The Zone, our password-protected members-only website. Center members also
receive our weekly LTC Bullet op-ed. To join the Center and receive all
these benefits and more, contact Steve at 425-891-3640 or
smoses@centerltc.com.
We no
longer post our LTC E-Alerts on the Center’s public access website, but
here’s what today’s LTC E-Alert contained: links, quotes and
comments on the following articles, reports, or data:
-
Nursing homes
and adult care costs surged by largest amount in July
-
Life
Settlements Can Pay for Long-Term Care
-
What Happens to
the Items I Bought to Qualify for Medicaid?
-
Genworth Set to
Offer Long-Term Care Services in Texas
-
Painful and
Getting Worse: Rise of Medicare Advantage Drains Vast Revenue from SNF
Sector, Worsens Workforce Instability
-
Transforming
health care for older adults
-
Providers must
confront radical change in shifting competitive landscape: experts
-
Minority groups
comprise more than 25 percent of MA beneficiaries, study finds
-
Many Americans
Believe AI Will Provide Their In-Home Care As They Age
-
More Baby
Boomers are living alone. One reason why: ‘gray divorce’
#############################
"LTC
E-Alerts" are a feature offered by the Center for Long-Term Care Reform,
Inc. to members at the $150 per year level or higher. We'll track and
report to you news and analysis regarding long-term care financing,
service delivery, and research. We hope The LTC E-Alerts will help you
attain and maintain a high level of knowledge and competency in this
complex field. The Center for Long-Term Care Reform, Inc. is a private
institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Friday, August 11, 2023, 10:40 AM (Pacific)
Seattle—
#############################
LTC
BULLET: LET’S FIX LONG-TERM CARE ONCE AND FOR ALL
LTC
Comment: If you had to diagnose and cure what ails LTC in a single page,
what would you say? Steve’s answer follows.
LTC
BULLET: LET’S FIX LONG-TERM CARE ONCE AND FOR ALL
LTC
Comment: Policymakers’ attention spans are extremely short. So one pagers
are grist for the policy mill in DC and state capitals. But writing short
is much harder than writing long.
Mark
Twain said
“I didn't have time to write a short letter, so I wrote a long one
instead.” These LTC Bullets aim to say what they want to say in
less than 1000 words. But we often blow through that target. So let’s take
the time today to keep it short. Here’s everything you need to know about
what’s wrong with LTC, why, and what to do about it in one page. But if
this précis leaves you wanting more, read “Long-Term
Care: The Problem”
and await “Long-Term Care: The Solution,” coming soon.
Let’s Fix Long-Term Care Once and for All
Step
One:
Understand the Cause. People who ignore LTC planning but end up needing
catastrophically expensive care later in life routinely transfer that
liability and cost to taxpayers via Medicaid.
Step
Two:
Understand the Problem. As the dominant LTC payer, Medicaid caused most of
LTC’s deficiencies including nursing home bias, access and quality
problems, inadequate reimbursement, caregiver shortages, and excessive
reliance on “free” care by friends and family.
Step
Three:
Understand the Solution. As long as most people can ignore LTC risk and
cost, wait to see if they ever need expensive care, and shift the cost to
Medicaid, few will plan early to save, invest or insure for LTC. That must
change for more private revenue to fix long-term care.
Step
Four:
Understand the Plan. Medicaid allows people who failed to prepare
privately for LTC to shelter unlimited wealth in trusts, annuities,
five-year asset transfers and exempt assets including, over $1 million in
home equity. This must end for consumers to take LTC seriously.
Step
Five:
Understand the Reasoning. If we remove those major loopholes by which
people qualify for Medicaid LTC benefits late in life, consumers will have
no choice but to plan for LTC earlier. WA Cares proved that by threatening
a LTC tax that unleashed a LTCI fire sale.
Step
Six:
Understand the Practicality. It is unrealistic to expect younger people
and families to plan for LTC at a time in their lives when they’re also
saving for retirement and children’s education, making house and car
payments, etc. So we must offer a way to ease that burden.
Step
Seven:
Understand the Research. The LTC financing burden may be more manageable
than we previously believed. $70,000 invested by a 65-year-old now will
cover his/her average LTC cost of $138,000 later. Aging Americans have
enough saved already to cover two years of LTC.
Step
Eight:
Understand the Potential. If people only had to cover their individual
average LTC risk by setting aside or earmarking resources they already
have or are in the process of saving, they could do so more easily and
while simultaneously covering their other financial needs.
Step
Nine:
Understand the Options. Purchase less LTC insurance at lower premiums to
cover average LTC risk instead of catastrophic potential as now. Carve out
enough home equity, life insurance, Individual Retirement Account balances
or estate wealth to cover average risk.
Step
Ten:
Retain Medicaid as the payer of last resort for anyone who cannot or will
not prepare privately for LTC and to cover catastrophic costs. But make
this resource available only after all personal income and assets of
applicants/recipients are consumed by private LTC costs.
Summary and Conclusion:
If we recognize these facts and implement these measures, America’s
failing LTC service delivery and financing system can be saved and
improved. There is ample wealth to ensure access to quality long-term care
for all Americans. Simply replace perverse incentives to ignore LTC that
prevail now with positive incentives to plan for LTC.
#############################
Updated, Monday, August 7, 2023,
10:40 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #23-020 LTC NEWS AND COMMENT
LTC
Comment: Do you spend hours searching the internet for useful articles,
key data, and relevant reports to keep you on the forefront of
professional knowledge? Do you lose business because you’re blindsided by
clients or competitors who learn critical information before you do?
Here’s an antidote:
LTC
Clippings: The Center for Long-Term Care Reform notifies subscribers to
our LTC Clippings service daily of information you need to know. Each
message contains only the critical facts about new publications: a title,
representative quote, a link to the original, and our analysis in a
sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or
smoses@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC
E-Alerts: Once a week, we compile our daily LTC Clippings into a summary,
email it to Center for Long-Term Care Reform members, and archive it in
The Zone, our password-protected members-only website. Center members also
receive our weekly LTC Bullet op-ed. To join the Center and receive all
these benefits and more, contact Steve at 425-891-3640 or
smoses@centerltc.com.
We no
longer post our LTC E-Alerts on the Center’s public access website, but
here’s what today’s LTC E-Alert contained: links, quotes and
comments on the following articles, reports, or data:
-
Nationwide Maps
Consumers' Long-Term Care Insurance Confusion
-
Tracking The
Elusive Medicaid Workforce To Improve Access
-
National
Advisory Commission for long-term care proposed — without providers
-
In a rapidly
aging America, Medicaid can be a lifeline for long-term care
-
Introducing
OmniFlex™: A Revolutionary Short-Term Care Plan Redefining the Industry,
offered by ManhattanLife
-
In policy
break, Medicare to pay for respite services under new dementia care
model
-
CNA hourly pay
nears $19 average, while admins score major gains of their own: salary
survey
-
Long-term care:
Insurance innovation can’t come soon enough
#############################
"LTC
E-Alerts" are a feature offered by the Center for Long-Term Care Reform,
Inc. to members at the $150 per year level or higher. We'll track and
report to you news and analysis regarding long-term care financing,
service delivery, and research. We hope The LTC E-Alerts will help you
attain and maintain a high level of knowledge and competency in this
complex field. The Center for Long-Term Care Reform, Inc. is a private
institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Monday, July 31, 2023, 10:40
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #23-019 LTC NEWS AND COMMENT
LTC
Comment: Do you spend hours searching the internet for useful articles,
key data, and relevant reports to keep you on the forefront of
professional knowledge? Do you lose business because you’re blindsided by
clients or competitors who learn critical information before you do?
Here’s an antidote:
LTC
Clippings: The Center for Long-Term Care Reform notifies subscribers to
our LTC Clippings service daily of information you need to know. Each
message contains only the critical facts about new publications: a title,
representative quote, a link to the original, and our analysis in a
sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or
smoses@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC
E-Alerts: Once a week, we compile our daily LTC Clippings into a summary,
email it to Center for Long-Term Care Reform members, and archive it in
The Zone, our password-protected members-only website. Center members also
receive our weekly LTC Bullet op-ed. To join the Center and receive all
these benefits and more, contact Steve at 425-891-3640 or
smoses@centerltc.com.
We no
longer post our LTC E-Alerts on the Center’s public access website, but
here’s what today’s LTC E-Alert contained: links, quotes and
comments on the following articles, reports, or data:
-
California to
eliminate asset tests for Medicaid
-
Comedy Video:
D.C.'s Premier Elder Care Community
-
New OIG Report
Examines Prior Authorization Denials in Medicaid MCOs
-
The Forgotten
Generation: Generation X Approaches Retirement
-
Pandemic loans
showed dollars will move the staffing shortage needle: study
-
8 facts about
Americans with disabilities
-
Medicare
Advantage Plans Face More Budget Pressure
-
At-home,
finger-prick blood test for Alzheimer’s is latest touted stab at early
diagnoses
-
Healthcare
bankruptcy filings set to triple
-
What Is
Transfer Trauma?
#############################
"LTC
E-Alerts" are a feature offered by the Center for Long-Term Care Reform,
Inc. to members at the $150 per year level or higher. We'll track and
report to you news and analysis regarding long-term care financing,
service delivery, and research. We hope The LTC E-Alerts will help you
attain and maintain a high level of knowledge and competency in this
complex field. The Center for Long-Term Care Reform, Inc. is a private
institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Friday, July 28, 2023, 10:40
AM (Pacific)
Seattle—
#############################
LTC BULLET:
CASSANDRA’S CURRENT QUANDARY
LTC Comment: Apollo
granted Cassandra the ability to predict the future accurately, but cursed
her to be disbelieved. That’s a familiar quandary for anyone warning today
about LTC jeopardy. Details after the ***news.***
*** 7/20/2023, “The
CLTC Digest Quarter 3,” Certification for Long-Term Care
Quote: “We are
pleased to share the 2023 3rd Quarter edition of the CLTC Digest. As
always, you will find highly educational and insightful articles, and a
case study, to expand your knowledge and skills when it comes to helping
clients plan for extended care.”
LTC Comment: I
discovered an earlier issue of the CLTC Digest and was very
impressed. I asked if they would consider an article by me. They did and
it became the cover story in this latest issue. If you have the CLTC
certification, you can access this new journal issue online. Non-CLTCs can
purchase it for $9.95. Go to
https://www.ltc-cltc.com/ and click on Store, and then on Marketing
Materials. What’s more, CLTC is offering a special deal on their eCLTC (self-study)
program. It's $200 off the street rate. That’s a convenient and easy way
to get the CLTC designation. But don’t wait; the special ends July 31.
That deadline is this coming Monday! ***
LTC BULLET: CASSANDRA’S
CURRENT QUANDARY
LTC Comment: In 2015 the
Center for Long-Term Care Reform published
Cassandra’s Quandary. That paper proposed and provided
an example of a tool to measure long-term care vulnerability. What, we
asked, are the national and state-level risks to the provision and
financing of long-term care services? We closely examined these seven
variables.
Aging Demographics:
How many older people are coming in the next few decades?
Morbidity: How sick will they be?
Public Funding: How viable is Medicaid as the dominant
long-term care payer?
Economy, Federal: How reliable is federal revenue on which
Medicaid mostly depends?
Economy, State: How reliable is state revenue on which
Medicaid secondarily depends?
Private Financing Alternatives: How much private-pay revenue
is available to relieve LTC financing pressure on Medicaid?
Entitlement Mentality: How strong has cradle-to-grave
dependency on public programs become?
It is high time to ask
those questions again. Our recent paper for the
Paragon Health Institute, titled
Long-Term Care: The Problem, updates the LTC service
delivery and financing challenge.
Our new paper
forthcoming soon, titled Long-Term Care: The Solution, will propose
a radically new approach to the LTC challenge. In the meantime, following
are some excerpts to consider from the original
Cassandra’s Quandary:
Executive Summary
It may already be too
late to save America’s long-term care safety net. But it is not too late
to examine its problems and to propose policy changes to relieve or
eliminate them. That is this report’s objective.
Long-term care service
delivery and financing face enormous challenges. Risk and cost are very
high, yet few Americans plan early to save, invest or insure for long-term
care (LTC). Consequently most people who need expensive LTC end up
depending on Medicaid, an under-funded, means-tested, public welfare
program.
Originally conceived as
a last resort for people in dire need, Medicaid has become the dominant
funder of long-term care for middle class and even affluent people, not
only the poor. By trying to do too much for too many, Medicaid has hurt
the poor. Decades of institutional bias and questionable access and
quality resulted from dismally low reimbursement rates. Programs for the
poor, as the adage goes, are poor programs.
Nor have more prosperous
people truly benefited from easy access to Medicaid LTC benefits. Lenient
and elastic eligibility rules mandated by the federal government enabled
them to dodge high LTC costs, but only at the expense of losing their
ability to choose their LTC providers, select their preferred level and
venue of care, and demand high quality care as private payers who can
change providers.
Today, on the cusp of an
unprecedented increase in older Americans most likely to need long-term
care, the United States faces exceptionally high debt and unfunded
entitlement liabilities, a weak economy despite years of fiscal and
monetary pump priming, and a populace more dependent on social insurance
and welfare programs than ever before.
But health and long-term
care expenditures have not yet exploded despite long and frequent warnings
they would. Public program cost and utilization projections within the
usual ten-year outlook window appear manageable. Deficit spending, enabled
by artificially induced low interest rates, defers short-term worries.
Complacency prevails. [No longer. Irresponsible fiscal and monetary
policies finally created excessive debt, higher interest rates and spiking
inflation.]
Lift your sights to
2050, only 35 years from now [27 years now], and all confidence about the
existing long-term care system should dissolve. But we face a dilemma like
the mythical Cassandra’s. She was blessed with accurate prognostication
but cursed to be disbelieved. The primary purpose of this report is to
take the longer view, enumerate the coming challenges, estimate the
current LTC system’s survivability, awaken greater concern and propose
corrective actions.
New Hampshire is an apt
harbinger of the country’s long-term care challenges. The state’s age 85
plus population will nearly quadruple in the next three and a half
decades. If its Medicaid long-term care expenditures for the elderly keep
pace they’ll increase from $282 million per year to $1,047 million, more
than one billion dollars every year. Sustainability at that level is
highly dubious.
What exactly are America
and the Granite State up against? To answer that question, we offer an
“Index of Long-Term Care Vulnerability” that lists the major challenges
and provides a way to measure, analyze and score their impact. We break
out aging demographics, future morbidity, Medicaid’s viability, federal
and state revenue sustainability, private financing potential, and
entitlement mentality as the key subjects for review.
We conclude that
America’s and New Hampshire’s long-term care service delivery and
financing systems - as currently operating and as they are most likely to
evolve - will not survive the coming demographic age wave and that radical
changes in federal and state laws and regulations are needed to align
consumer incentives with the need to finance future long-term care
adequately.
We recommend (1)
changing the system by which the federal government funds state long-term
care systems; (2) empowering states to experiment with different
approaches to long-term care financing; (3) reducing dependency on
government funding of long-term care by re-targeting scarce public
resources to the genuinely needy; and (4) incentivizing private long-term
care financing to encourage early planning, saving, investing and
insuring. …
We have plenty of
reasons to worry:
• The boomers start
coming of heavy-LTC-usage age 85 in 2031.
• Social Security and
Medicare run out of “trust funds” in the early 2030s, less than 20 years
from now. [Only a decade away now.]
• Gallup pollsters
report “51% of non-retirees doubt they will receive Social Security” and
“[t]wo-thirds say Social Security is in crisis or has major problems.”
• U.S. tax-generated
general funds will have to make up the entitlements’ annual shortfalls as
well as pay off the trust funds’ bonds (IOUs).
• Federal debt is $18.9
trillion and rising rapidly. [Now 72 percent higher at $32.6 trillion and
rising even faster.]
• Heavy taxation impedes
the economic activity necessary to generate needed tax revenue.
• The Federal Reserve
domestically and central banks internationally are pushing the limits of
their ability to expand credit in order to conceal economic malaise.
• Fiscal walls are
closing on the U.S. and world economies.
• Promiscuous spending
leads to impoverishment for individuals or families (sooner) and national
economies (later, because of their ability to manipulate currency).
• These lessons are
legion throughout history and around the world.
But there are “none so
blind as those who will not see,” so this report takes a wide-eyed look at
an expansive range of indicators in order to identify and score the LTC
system’s risk between now and 2050.
LTC Comment: The
analysis and warning presented in
Cassandra’s Quandary is more relevant and worrisome than
ever. That’s why we encourage you to consider it again and revisit the
“Index of Long-Term Care Vulnerability” it proposed as a tool to help wake
up doubters and resolve the quandary of LTC denial. The Center applied the
“Index of LTC Vulnerability” in three additional states in the mid-2010s.
Check out:
We are reviving the
Index of Long-Term Care Vulnerability as a tool to arouse interest and
concern about LTC again as we prepare to propose a new approach to a
solution. Stay tuned.
NB: If you try to open
the
Index of Long-Term Care Vulnerability and get this message as I do:
“Website blocked due to suspicious content,” just disregard it and click
“Continue to this website.” Rest assured, it is safe to do so.
#############################
Updated,
Monday, July 24, 2023, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #23-018 LTC NEWS AND COMMENT
LTC Comment: Do you spend hours searching
the internet for useful articles, key data, and relevant reports to keep
you on the forefront of professional knowledge? Do you lose business
because you’re blindsided by clients or competitors who learn critical
information before you do? Here’s an antidote:
LTC Clippings: The Center for Long-Term
Care Reform notifies subscribers to our LTC Clippings service daily of
information you need to know. Each message contains only the critical
facts about new publications: a title, representative quote, a link to the
original, and our analysis in a sentence or two. To inquire or subscribe,
contact Steve at 425-891-3640 or
smoses@centerltc.com. Read testimonials
by satisfied subscribers
here.
To subscribe online, please click
here.
LTC E-Alerts: Once a week, we compile our
daily LTC Clippings into a summary, email it to Center for Long-Term Care
Reform members, and archive it in The Zone, our password-protected
members-only website. Center members also receive our weekly LTC Bullet
op-ed. To join the Center and receive all these benefits and more, contact
Steve at 425-891-3640 or
smoses@centerltc.com.
We no longer post our LTC E-Alerts on the
Center’s public access website, but here’s what today’s LTC E-Alert
contained: links, quotes and comments on the following articles, reports,
or data:
-
For Home Care
Providers, There’s Untapped Potential In Long-Term Care Insurance
-
The CLTC Digest
Quarter 3
-
Nursing care
has fastest-growing prices of healthcare sectors
-
Family
caregivers have fewer assets, more debt issues than non-caregivers
-
For some
Washington residents, the new WA Cares Fund may seem appealing. But
sticking with a private long-term care insurance plan might still be the
better option. Our expert has the details.
-
Alzheimer’s
among seniors is most common in these parts of the US, first-of-its-kind
data shows
-
Dementia
patients fared better in LTC facilities, not home, during pandemic, new
study shows
-
New Paragon
Study: The Harm of Delaying the Disenrollment of Medicaid Ineligibles
-
KFF: Only 29%
of Nursing Homes Would Meet 4-Hour Federal Staffing Mandate
-
Tax Advantaged
Strategies to Help Clients Plan for Long-Term Care
-
AHCA to White
House: Nursing home staffing mandate spells ‘disaster’
-
Republicans
want to make state's long-term care tax optional
-
Biden’s
long-term care agenda faces headwinds Workforce shortages: Medicaid
reimbursement rates make it hard to hire staff for long-term, home and
community-based care facilities
-
Is Work From
Home to Blame for Senior Housing’s Muted Recovery?
-
Independent
living program to aid hundreds of aging, disabled adults
#############################
"LTC E-Alerts" are a feature offered by the
Center for Long-Term Care Reform, Inc. to members at the $150 per year
level or higher. We'll track and report to you news and analysis regarding
long-term care financing, service delivery, and research. We hope The LTC
E-Alerts will help you attain and maintain a high level of knowledge and
competency in this complex field. The Center for Long-Term Care Reform,
Inc. is a private institute dedicated to ensuring quality LTC for all
Americans (www.centerltc.com).
#############################
Updated,
Friday, July 14, 2023, 10:40 AM (Pacific)
Seattle—
#############################
LTC
BULLET: LTC BLOCK GRANT OR WAIVER POTENTIAL
LTC Comment: Consider
how a Medicaid block grant or waiver could improve long-term care, after
the ***news.***
*** 2023 MILLIMAN LONG
TERM CARE INSURANCE SURVEY: This 25th consecutive annual review of
stand-alone long-term care insurance (LTCI) authored by Claude Thau,
Nicole Gaspar, and Chris Giese, and published by Broker World
magazine is
available in the insurance trade journal’s July 2023 issue. More
discussion of worksite sales, including a comparison of worksite sales
distributions vs. non-worksite sales distributions will be in Broker
World magazine’s August issue. If you don’t subscribe to this
important industry source, fix that problem now
here. ***
LTC BULLET: LTC BLOCK
GRANT OR WAIVER POTENTIAL
LTC Comment: Medicaid
law encourages excessive federal and state spending and increases public
welfare dependency. These problems manifest in long-term care due to
federal financial participation (FFP) match rates that reward increasing
state expenditures and through generous financial eligibility policies
that discourage early, private LTC planning and subsidize reliance on
Medicaid when LTC is needed late in life.
Decades of federal and
state efforts to discourage Medicaid LTC expenditure growth by making
benefits harder to get, such as lower income and asset eligibility limits,
asset transfer restrictions, property liens and estate recoveries, failed
to achieve the objective of controlling costs. The rules were weak and
full of loopholes. The federal government did not enforce them. The states
did not implement them effectively. The media did not publicize them. So
the public continued to ignore LTC planning and rely on Medicaid when care
was needed driving costs higher and impairing care access and quality,
especially for the needy Medicaid is supposed to serve.
As long as these federal
rules prevail, nothing is likely to change. If new, worsening economic
conditions, including rising debt, deficits, interest rates and inflation
compel change, there are very limited options available politically.
Doubling down on earlier failed efforts to scare the public straight about
LTC by insisting on, but not enforcing, the risk that their life savings
are at stake, is futile. Completely eliminating Medicaid as a LTC safety
net that preserves middle class and affluent wealth could save the program
for the poor, but would prove difficult to implement politically unless
and until budgetary pressures compel its adoption. What might work
instead?
Over the years, two
ideas have received serious consideration that would allow experimentation
toward finding a solution to the LTC conundrum just described. One idea is
to “block grant” Medicaid, give states a limited amount of money to pursue
the program’s objectives, but allow them much more flexibility to set and
enforce eligibility controls. Another idea, long an option under federal
law, is to allow states to request and receive “waivers” of federal law
and regulations enabling them to experiment with new ideas and methods not
otherwise permissible. Neither approach has been tried in the endeavor to
control costs, preserve Medicaid LTC benefits for the needy, and encourage
personal LTC planning by the financially comfortable. But what if an
oncoming recession or depression compels more creative measures than in
the past? How could states configure LTC benefits under a block grant or
waiver?
Following is a proposal
I offered in “The
Long-Term Care Financing Crisis:
Danger or Opportunity?: A Case Study in Maryland”
(1995). It refers explicitly to using a block grant to achieve the
objective, but could as effectively be applied using a waiver as I
proposed in “Doing
LTC RIght” (2010). The waiver option is based on and inspired by Rhode
Island’s ingenious “global Medicaid waiver” designed, obtained and
administered by
Gary D. Alexander, then Secretary of the Rhode Island Executive Office
of Health and Human Services and currently head of the Medicaid and Health
Safety Net Initiative at the
Paragon Health Institute.
Note that the following
proposal refers mostly to nursing home care as that was the dominant venue
of care at the time, but it also explains how and why the plan will
encourage transition from institutional to home and community-based care.
See what you think of this approach and feel free to share your feedback
or questions with me at smoses@centerltc.com.
Long-Term Care Financing Under a
Medicaid Block Grant
Notes Toward a Model State Statute[1]
by
Stephen A. Moses
1.
Introduction
Medicaid is
known as the "pac-man" of state budgets and the "800-pound gorilla" of
long-term care. We all know something has to be done to control this
fiscally hemorrhaging giant.
On the
positive side, if Medicaid block grants pass this year [block granting
Medicaid received serious consideration in 1995], states will have the
authority for the first time to implement the proper corrective actions.
That is a tremendous incentive to prepare now to meet the risks and
opportunities that lie immediately ahead.
The big
questions public policy makers face are what to do and how to do it. We
cannot plot a course of corrective action until we understand completely
the mess we are in and how we got into it. The purpose of this paper is to
explain the problem, show how it developed and propose a solution.
Medicaid
nursing home expenditures nearly doubled between Federal Fiscal Year (FFY)
1988 and FFY 1993. Today, Medicaid pays for 73.7 percent of all nursing
home patient days in the United States. At least 85 to 90 percent of all
nursing home payments come from Medicaid, Social Security benefits
contributed by Medicaid patients toward their cost of care, Medicare, or
private patient income (not assets). Dozens of recent empirical studies
indicate that Medicaid "spenddown" is much lower than previously believed.
In fact, there is no evidence whatsoever of the much-touted, widespread
catastrophic spenddown.
Although
Medicaid is ostensibly a means-tested public assistance program, i.e.
welfare, evidence abounds that middle-class Americans and even the
well-to-do qualify easily for the program's nursing home benefits.
Congressional actions (in OBRA '93) to close Medicaid eligibility
loopholes and mandate estate recovery have had little effect because of
unforeseen weaknesses in the law, sluggish implementation by the states,
lukewarm enforcement by the Health Care Financing Administration, and
creative end-running by public and private Medicaid estate planning
attorneys.
Finally,
Medicaid has developed a dismal reputation for problems of access,
quality, reimbursement, discrimination, institutional bias, and welfare
stigma. How did America come to provide for the long-term care needs of
its proud, self-reliant World War II generation by consigning them to a
welfare program that is going bankrupt?
II.
Background
In 1965,
America was just starting to have a problem with long-term care. People
were living longer, but dying slower of chronic illnesses that caused
frailty and cognitive impairment. That was when a prosperous private
market in low-cost home and community-based services and long-term care
insurance might have developed in the United States. It did not.
Instead,
with every good intention, the new Medicaid program offered publicly
financed nursing home care. This subsidy confronted families with a very
difficult choice. They could pay out-of-pocket for the home care and
assisted living services seniors prefer or they could accept nursing home
care paid for by the government. Most people chose the safety and
financial benefits of the Medicaid option. Therefore, the market for home
care withered, private long-term care insurance expired stillborn, and
Medicaid-financed nursing home care flourished.
The nursing
home industry took full advantage of this situation. As fast as the
industry could build them, nursing home beds filled with Medicaid
residents. Stunned by the cost, Medicaid attempted to control the
construction of new beds with Certificate of Need (CON) programs on the
principle that "we cannot pay for a bed that does not exist." By the
mid-1970's, health planning for nursing homes was in full swing.
Capping
supply, however, only spurred the nursing home industry to drive up rates.
Government costs grew faster than ever. So Medicaid capped reimbursement
rates too. This compelled the nursing home industry to increase private
pay reimbursement rates to compensate. So began the highly problematical
differential between Medicaid rates and private pay rates. Today, Medicaid
pays only 80 percent of private pay rates on average nationally.
Higher
private rates made Medicaid more attractive to private payers and this led
to pressure on legislators to liberalize Medicaid eligibility. A long
process of eligibility bracket creep gradually made Medicaid nursing home
benefits available even to upper middle class people who had or could
obtain the expertise to manipulate eligibility rules. A whole sub-practice
of law--Medicaid estate planning--developed to take advantage of this new
opportunity.
With the
supply and price of nursing home beds capped by government fiat and with
Medicaid eligibility increasingly generous, nursing home occupancy
skyrocketed to 95 percent nationally. Nursing home operators realized they
could fill their beds easily with low-paying Medicaid patients no matter
what kind of care they offered. To achieve adequate operating margins,
however, nursing homes had to attract a sufficient supply of full-paying
private patients or they had to cut costs drastically.
If they
tried to attract more lucrative private payers with preferred treatment,
however, the nursing homes were deemed guilty of discrimination against
Medicaid patients. If they tried to cut costs instead, they came under
fire for technical violations or quality problems. In response, Congress
and state governments pressured the industry to provide higher quality
care without discriminating against low-paying Medicaid recipients. Given
its fiscal duress, however, Medicaid could not offer higher reimbursement
rates to achieve these goals.
Caught
between the proverbial rock and a hard place, the nursing home industry
put up a strong fight. Armed with the Boren Amendment, a law that requires
Medicaid to provide reimbursement adequate to operate an efficient nursing
facility, many state nursing home associations took the battle to court.
By now, however, state and federal Medicaid expenditures were rising so
fast and taxpayers were so reluctant to pay for growing public spending
that large increases in nursing home reimbursement were out of the
question.
In the
meantime, a wave of academic speculation in the late 1970's indicated that
paying for home and community-based services (HCBS) instead of nursing
home care could save a lot of money. For years, therefore, Medicaid
experimented with HCBS waivers as a cost-saving measure. In time, however,
hard empirical research showed that (desirable as they may be) home and
community-based services do not save money overall. Today, institutional
bias remains Medicaid's strongest cost containment tool and one of its
gravest deficiencies.
In a
nutshell, just as heavy demand was building for a private seniors housing
market in the 1960's, Medicaid co-opted the trend by providing easy access
to subsidized nursing home care. Confronted with a choice between paying
out-of-pocket for a lower level of care or receiving a higher level of
care at much less expense, seniors and their families made the predictable
economic choice. Not surprisingly, Medicaid nursing home caseloads and
expenditures increased rapidly and drastically. In response, Medicaid
capped bed supply and reimbursement rates, which led inevitably to
excessively high occupancy, private-pay rate inflation, discrimination
against low-paying Medicaid patients, and increasingly serious quality
problems. In time, Medicaid nursing home care acquired its reputation for
impeded access, doubtful quality, inadequate reimbursement, widespread
discrimination, pervasive institutional bias, and excessive cost. Medicaid
remains, however, the only way the middle class can pay for long-term care
without spending their savings. That is why so many otherwise independent
and responsible Americans end up dying in nursing homes on welfare.
III.
The Challenge
If the
foregoing analysis of the Medicaid malaise is accurate, a sensible
solution comes easily into focus. To facilitate universal access to top
quality long-term care for all Americans, a new, cost-effective,
block-granted, publicly financed, long-term care program should have the
following characteristics.
-
It should save
taxpayers money while improving access to quality long-term care for all
citizens;
-
It should encourage,
instead of discouraging, private financing of home and community-based
services and assisted living;
-
It should encourage,
instead of discouraging, the purchase of private long-term care
insurance to pay for all levels of extended care;
-
It should combine
generous eligibility criteria to protect the unprotected with strong
incentives for everyone to plan ahead for self-protection;
-
It should pay
market-based reimbursement rates to assure access to quality care for
all participants and to eliminate discrimination;
-
It should promote
strong market competition between providers of all levels of care;
-
It should maximize the
number of consumers in the marketplace who have a pecuniary interest in
getting the best possible care at the lowest possible price.
Is a single program that
combines all these features possible? Yes, but only if it is based on a
common understanding and agreement as to its goals and objectives. In the
course of numerous research studies over the past 12 years, I have found
almost universal consensus on the following ethical foundation.
IV.
The Moral High Ground
We
have very limited dollars available for public assistance. We must take
care of the truly poor and disadvantaged first. The middle class and
well-to-do should pay privately for long-term care to the extent they are
able without suffering financial devastation. Prosperous people who rely
on public assistance for long-term care should reimburse the taxpayers
before giving away their wealth to heirs. Seniors and their heirs who wish
to avoid such recovery from the estate should plan ahead, purchase private
long-term care insurance, and pay privately for the care of their choice
when the time comes.
What would a publicly
financed long-term care program based on this philosophical underpinning
look like?
V.
Model State Statute for a Senior Financial Security Program (SFSP)
(Rough draft state
statutory language is presented below in highlighted italics.)
The following are the key components of the program.
A.
Preserve generous eligibility
1.
Status Quo
Despite the
conventional wisdom that seniors must spend down their life savings to
receive Medicaid nursing home benefits, the truth is that most seniors
qualify easily regardless of income or assets.
Most state Medicaid
programs place no limit on how much income someone can have and still
qualify for nursing home benefits. If your total medical costs, including
nursing home care, approximate or exceed your income, you are eligible.
The well known $2,000
limit on assets is meaningless. Medicaid recipients can also keep exempt
assets of unlimited value, such as a home, a business, and a car. Married
folks have it even easier than single people. They can shelter an
additional $74,820 in assets and $1,870.50 per month in income. [These
figures are $148.620 and $3,715.50 respectively as of 2023 having nearly
doubled since 1995 due to inflation.]
For the truly
well-to-do, even these generous limits are easily overcome. Any competent
Medicaid planner can deliver Medicaid eligibility almost overnight to
practically anyone for less than the cost of one month in a private
nursing home.
Given Medicaid's
generous nursing home eligibility criteria, there is little wonder why
most Americans (1) fail to plan ahead for long-term care risk, (2) neglect
to purchase private long-term care insurance, (3) hesitate to spend their
own money on home care or assisted living, and (4) end up in nursing homes
subsidized by Medicaid.
2.
Senior Financial Security Program
Drastically cutting
Medicaid nursing home eligibility and coverage for the middle class is not
politically feasible. Strong senior interest groups would fight such cuts
aggressively and both private and legal services attorneys would tie such
a system in knots of litigation. Fortunately, it is not necessary to burn
the village in order to save it. The Senior Financial Security Program
preserves Medicaid's generous eligibility and coverage. This is the
program’s biggest political selling point.
3.
Model State Statute
"Seniors who
need nursing home care may qualify for the Senior Financial Security
Program if their income is inadequate to pay for such care and if their
assets do not exceed $2,000 plus certain exempt resources enumerated
below.
"To qualify for
assistance, however, every participant must provide a net worth statement
confirmed by a certified public accountant. This net worth statement
constitutes security offered by program participants to assure repayment
of benefits received. As the participant receives benefits, the cost to
the SFSP will be deducted from the participant's net worth ledger. As long
as the ledger has a positive balance, the program participant is in
receipt of a government-sponsored loan. When the ledger's balance turns
negative, the participant converts to 'public assistance.'
"Exempt assets
that SFSP participants may retain are similar to those permitted by the
traditional Medicaid program with a few additional limitations.
"Home: no limit
on value for one single-family residence, however, expensive homes
purchased (or additions constructed) within eight years of applying for
benefits will be treated as a transfer of assets to qualify (see transfer
of assets restrictions below).
"Automobile:
one car of any value provided it is actually used for the benefit of the
program participant. Transfer of an automobile, even though exempt, will
be deemed a transfer of assets subject to penalty. Program participants
may not give away exempt assets and replace them with new exempt assets as
a means to qualify for assistance or avoid estate recovery.
"Funeral plan:
one prepaid funeral plan, not to exceed the average cost in the state of a
simple service and disposal of remains (perhaps $2,500). Program
participants may not shelter tens of thousands of dollars in burial plans
as a means to qualify for assistance.
"Other exempt
resources and limitations to be delineated."
B.
Prohibit divestiture
1.
Status Quo
Under the existing
Medicaid program, anyone who transfers assets three years [now five years]
before applying for assistance can give away any amount of money and
qualify with no questions asked. Unfortunately, the average period of time
from onset to death in Alzheimer's Disease is eight years. If the family
transfers her assets the first time Grandma forgets to turn off the stove,
they guarantee her unlimited Medicaid nursing home benefits three years
later with no expense or inconvenience.
Today, many Medicaid
estate planning attorneys advise their clients and colleagues to initiate
a "gifting strategy" years in advance in order to assure easy Medicaid
eligibility. Such a strategy may include many tactics including outright
gifts, establishment of trusts, retention of life estates, purchase of a
partial interest in adult children's homes, and conversion of non-exempt
into exempt assets. The options are limited only by the imagination of the
Medicaid planner.
2.
Senior Financial Security Program
The SFSP cannot
protect generous eligibility and survive without eliminating divestiture
planning altogether. Seniors and their heirs must get the message very
clearly that long-term care is an enormous financial risk, that people
should save and insure throughout their lives to protect against this
risk, and that giving away assets for any reason at a time when the
long-term care risk is at its peak is a very dangerous proposition.
Of course, by
birthright, any American is free to dispose of his assets in any way he
wishes and at any time. One must no longer be allowed, however, to give
away one's wealth in order to compel other Americans to provide oneself
with expensive long-term care benefits.
Adult children, other
relatives, friends and charities to whom older people give away income or
assets must realize that if such a gift leaves seniors unable to pay for
their own care and dependent on the public dole, that the state will seek
restitution.
3.
Model State Statute
"Any assets
transferred for less than fair market value within eight years of applying
for assistance constitute a debt owing the state (up to the total public
benefits paid) and such debt is payable by the transferees who received
the assets and/or by the estate of the program participant or by such
persons who may have received the assets by means other than a formal
probated estate. Any asset transferred in contemplation of qualifying for
the SFSP or of avoiding estate recovery shall be considered a fraudulent
conveyance.
"A transfer of
assets is any divestiture of purchasing power including but not limited to
gifts, purchase of exempt assets, divorce, purchase of unsalable or
undividable property, divestment into trusts, converting assets into joint
tenancy, etc.
"The intent of
this provision is to assure that no purchasing power possessed within
eight years of application by anyone who later depends on the SFSP shall
be used for any other purpose than the care and maintenance of the owner
or reimbursement to the SFSP for providing such care and maintenance.
"If any
purchasing power shall have been taken from an SFSP participant improperly
or illegally, the program shall petition the appropriate court to appoint
a private attorney as the participant's conservator (reimbursed on
contingency) to recoup the misappropriated assets on behalf of the
participant and the program. Such recoupment may include relitigating
abusive divorce decrees, reversing improper asset transfers, invading
inappropriate trusts, and partitioning undivided property."
C.
Require legal security as a condition of eligibility
1.
Status Quo
Exempt assets
divested legally or illegally while on Medicaid are lost forever as a
source of long-term care financing for seniors. Nor can such divested
resources serve as a non-tax revenue source to the program. Under the
existing Medicaid program, states are permitted but not required to place
liens on the homes of recipients under certain highly restrictive
circumstances. Very few states use the lien authority to secure assets for
later recovery. Even states that utilize liens have limited success
enforcing and collecting on them because of extensive exclusions in the
federal law. Consequently, exempt and non-exempt assets held openly or
concealed by Medicaid recipients routinely disappear during the period of
eligibility either legally or illegally as relatives, friends and others
take advantage of the senior's incapacity to relieve them of their
resources.
2.
Senior Financial Security Program
No competent
financial institution will extend a loan of hundreds of thousands of
dollars to anyone without requiring security. The government can no longer
afford to do so either. People who expect to depend on the SFSP while
preserving substantial income and assets for the support of their
dependents must realize and agree that they lose some measure of control
over these resources in the process.
Of course, all
citizens have the option to use their income and assets as they see fit.
For example, they can sell their homes and cars to pay privately for
long-term care if they choose. But if they prefer to use a public program
to pay for their care, they must recognize the obligation to encumber
their resources for later recovery, after the resources are no longer
needed by their legitimate surviving dependents.
3.
Model State Statute
"As a condition
of eligibility for the SFSP, all participants must allow the state to
place a lien on their exempt property. The lien shall apply to all real
and personal property retained by the participant with the exception of
the $2,000 liquid asset exclusion and certain highly private personal
property such as original wedding rings.
"Such liens
shall be officially recorded in the appropriate legal manner and shall be
enforceable upon sale of the asset or upon the death of a program
participant, or if the participant is survived by a legitimate dependent,
upon the death of the last surviving exempt dependent relative (to be
defined).
"Nothing in
this statute shall be construed in any way to prohibit or prevent an SFSP
participant from disposing of his property in any way he sees fit. The
sole purpose is to assure that his creditor, i.e. the state in the form of
the SFSP, knows of the transaction, can recover benefits paid as
appropriate, and can terminate eligibility if appropriate."
D.
Require estate recoveries
1.
Status Quo
For most of the
history of the existing Medicaid program, nursing home recipients could
preserve unlimited exempt assets in the form of homes, cars and personal
property and pass this wealth to their heirs completely unencumbered. It
was not until the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA
'82) that Congress gave state Medicaid programs the authority to recover
from recipients’ estates. It was not until the Omnibus Budget
Reconciliation Act of 1993 that Congress required estate recoveries.
Consequently, few states have so far implemented strong, cost-effective
estate recovery programs.
2.
Senior Financial Security Progra
As long as Americans
can ignore the risk of long-term care, avoid the premiums for private
insurance, wait to see if they ever need to go to a nursing home, and if
so, get the government to pay while still passing all their wealth to
heirs, most people will not pay for their own care and public costs will
continue to explode. Extensive research indicates that states can save
five percent or more of the cost of their nursing home programs by
recovering benefits paid from the estates of deceased recipients. The
potential liability of estate recovery provides a huge incentive for
future generations to insure privately or pay for less expensive, lower
levels of care in the private marketplace in order to avoid or postpone
exorbitant nursing home costs. By requiring and strictly enforcing estate
recovery, the SFSP assures that those participants, who are able, pay
their own way thus preserving their dignity. It is not welfare if you pay
it back.
3.
Model State Statute
"Every
participant in the Senior Financial Security Program must agree in writing
to pay back the entire cost of care from his or her estate or from the
proceeds of sale of real or personal property during program eligibility
up to the total value of the estate or sale. If the program participant
should predecease a spouse or other legitimate, dependent heir or joint
tenant, the participant's share of any jointly owned property or
purchasing power shall be recovered from such third party as soon as it is
no longer needed for the maintenance of the dependent, and in any case, no
later than upon the death of the dependent third party.
"It is
expressly understood that the term 'estate' is not limited to the formal
probated estate, but includes all purchasing power held by the program
participant within eight years of applying for the SFSP in whatever form
it passes to another before or after program participation and later
death.
"The intent of
this rule is to assure that people pay for their own long-term care,
either directly by retaining providers in the private marketplace or
indirectly by reimbursing the Senior Financial Security Program. The
financial viability of the SFSP and its ability to provide care to less
fortunate participants depends on strong estate recovery enforcement."
E.
Encourage home and community-based services and long-term care insurance
1.
Status Quo
As explained in the
background section of this paper, Medicaid extinguished the private
markets for home and community-based services (HCBS) and long-term care
insurance when it began providing subsidized nursing home care in 1965.
Later efforts to retrofit HCBS and encourage private insurance, i.e.,
Medicaid waivers and public/private partnerships respectively, have proven
to be too little too late. With all its resources sucked into the black
hole of institutional long-term care, state Medicaid programs have been
unable to fund the HCBS waivers adequately. With regard to long-term care
insurance: people do not buy apples on one side of the street when they
can get them for free on the other.
2.
Senior Financial Security Program
By prohibiting
divestiture of assets to qualify, by requiring liens on all property as a
condition of eligibility, and by mandating recovery from estates of every
program participant who retains exempt assets, the SFSP creates an
enormous incentive for future generations to plan ahead, buy insurance,
pay privately for home care or assisted living, and avoid as long as
possible starting the meter running for publicly financed nursing home
care. Nevertheless, the SFSP should make this goal explicit in the
program's statutory language.
3.
Model State Statute
"The purpose of
the Senior Financial Security Program is to protect those who are unable
to take care of themselves. The program does not replace any individuals'
responsibility to provide for their own long-term care. Program
requirements that prohibit divestiture of assets, require security for
benefits paid, and mandate recovery from estates are expressly intended to
encourage all citizens to plan ahead, purchase quality long-term care
insurance, pay privately for appropriate, cost-effective levels of care,
and rely on the Senior Financial Security Program only as a last resort."
F.
Educate the public
1.
Status Quo
The main reason
that Medicaid nursing home costs have grown explosively for 30 years is
that the program desensitized the public to the risk and cost of long-term
care. Most people today do not know who pays for long-term care. Medicare,
Medicaid or Santa Claus, why should it matter? All the public knows for
sure is that someone must pay, because they hear few genuine anecdotes of
catastrophic spenddown and they never see Alzheimer's patients wandering
the streets with nowhere to go and no one to take care of them. Until
Americans understand and internalize the risk of long-term care, they will
not plan ahead to protect themselves against it and they will continue to
end up in nursing homes on Medicaid.
Extensive research
over the past 12 years suggests that Medicaid nursing home expenditures
could be reduced by as much as 15 to 20 percent by persuading the public
to pay privately for long-term care either out-of-pocket or by means of
insurance coverage.
2.
Senior Financial Security Program
The big challenge to
public policy is to provide a long-term care safety net that protects the
frail and vulnerable without discouraging the hale and able from planning
ahead to take care of themselves. The SFSP achieves this objective by
building a downside risk into reliance on public financing of long-term
care, i.e. the lien and estate recovery liability, and by
aggressively promulgating information about the probability, cost, and
personal responsibility of long-term care. To assure that this critical
feature of the program is not neglected, the SFSP model statute expressly
incorporates a non-tax revenue source to support it.
3.
Model State Statute
"Ten percent
(or such proportion as shall be necessary to achieve the objective) of the
revenue generated by Senior Financial Security Program's lien and estate
recovery efforts shall be used exclusively to support a public education
initiative on long-term care. The purpose of this initiative is to educate
the public, the medical profession, the bar, the judiciary, financial
advisors, and all other individuals in the community who influence the
lives of older people, concerning the importance of long-term care
planning. Such education and training will include but not be limited to
(1) the probability of requiring long-term care, (2) the average
incidence, duration and cost of nursing home care, (3) the principles of
how to identify and select a reliable long-term care insurance policy, (4)
the kinds of free and fee-for-service assistance available to postpone
institutionalization (e.g., meals on wheels, chore services, adult day
care, congregate care, assisted living, etc.), and (5) the eligibility,
lien and estate recovery requirements associated with dependency on the
Senior Financial Security Program.
"The purpose of
this education program is to assure that no one in the state turns 50
years of age without having received complete information on long-term
care risk and on all of the private options available to plan for it."
VI.
Conclusion
Fully
implemented and aggressively enforced, the Senior Financial Security
Program will empower any state to assure universal access to top quality
long-term care for rich and poor citizens alike across the entire
continuum from home and community-based services to sub-acute nursing home
care while simultaneously saving the taxpayers money and enhancing the
private market for all long-term care providers and insurers.
The goal of
the program should be to provide eligibility and coverage equal to or
better than conventional Medicaid nursing home benefits at no more than 80
percent of the former cost. In 1993 dollars, this constitutes a savings to
taxpayers of approximately $5 billion per year nationally.
Stephen A. Moses is
Director of Research for LTC, Incorporated, a private firm in Seattle,
Washington specializing in long-term care financing and insurance. He
served as a career federal employee for 18 years, mostly with the Health
Care Financing Administration which administers Medicaid and Medicare.
#############################
Updated,
Monday, July 10, 2023, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #23-017 LTC NEWS AND COMMENT
LTC Comment: Do you spend hours searching
the internet for useful articles, key data, and relevant reports to keep
you on the forefront of professional knowledge? Do you lose business
because you’re blindsided by clients or competitors who learn critical
information before you do? Here’s an antidote:
LTC Clippings: The Center for Long-Term
Care Reform notifies subscribers to our LTC Clippings service daily of
information you need to know. Each message contains only the critical
facts about new publications: a title, representative quote, a link to the
original, and our analysis in a sentence or two. To inquire or subscribe,
contact Steve at 425-891-3640 or
smoses@centerltc.com. Read testimonials
by satisfied subscribers
here.
To subscribe online, please click
here.
LTC E-Alerts: Once a week, we compile our
daily LTC Clippings into a summary, email it to Center for Long-Term Care
Reform members, and archive it in The Zone, our password-protected
members-only website. Center members also receive our weekly LTC Bullet
op-ed. To join the Center and receive all these benefits and more, contact
Steve at 425-891-3640 or
smoses@centerltc.com.
We no longer post our LTC E-Alerts on the
Center’s public access website, but here’s what today’s LTC E-Alert
contained: links, quotes and comments on the following articles, reports,
or data:
-
Alzheimer’s
drug Leqembi has full FDA approval now and that means Medicare will pay
for it
-
State factsheet
not helpful for long-term-care crisis
-
A Closer Look
at the Five Largest Publicly Traded Companies Operating Medicaid Managed
Care Plans
-
‘Astronomical’
Medicare Advantage Denials, Pre-Auth Issues Cause Outcry from Nursing
Homes
-
Retirees are
underestimating how long they will live
-
Medicare
Advantage retaining sicker patients with more complex health needs:
study
-
Ages 55-Plus
Control Three Quarters Of U.S. Investable Assets, But Assets Aren’t Main
Driver For Retirement: Net equity in real estate jumps; taxable now
outpaces retirement assets
-
Dollars spent
on HCBS go further than those spent on nursing homes, study finds
-
Nursing home,
home health fast-growing health spending categories
-
Washington
State Long-Term Care Insurance Program to Launch Saturday
-
Majority Of
Americans Have Taken A Financial Hit Due To Rising Interest Rates
-
LTC workers
need higher wages, better training now that society’s applause has
ended: report
-
TOMORROW:
Medicaid Redeterminations: Setting the Record Straight
-
Medicaid Long
Term Care Update
#############################
"LTC E-Alerts" are a feature offered by the
Center for Long-Term Care Reform, Inc. to members at the $150 per year
level or higher. We'll track and report to you news and analysis regarding
long-term care financing, service delivery, and research. We hope The LTC
E-Alerts will help you attain and maintain a high level of knowledge and
competency in this complex field. The Center for Long-Term Care Reform,
Inc. is a private institute dedicated to ensuring quality LTC for all
Americans (www.centerltc.com).
#############################
Updated,
Friday, June 30, 2023, 10:40 AM (Pacific)
Seattle—
#############################
LTC
BULLET: THE LTC NARRATIVE
LTC
Comment: The dominant long-term care narrative crowds out inquiry,
critical reasoning and creativity leaving conformity and groupthink. We
explain after the ***news.***
***
HAPPY INDEPENDENCE DAY ***
|
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LTC
BULLET: THE LTC NARRATIVE
“A
dominant narrative is an explanation or story that is told in service of
the dominant social group’s interests and ideologies. It usually achieves
dominance through repetition, the apparent authority of the speaker (often
accorded to speakers who represent the dominant social groups), and the
silencing of alternative accounts. Because dominant narratives are so
normalized through their repetition and authority, they have the illusion
of being objective and apolitical, when in fact they are neither.”
College of Literature, Science and Arts, University of Michigan
LTC
Comment: Most LTC researchers remind me of the fish who asked “What is
water?” They are so steeped in the “LTC narrative” that they don’t see,
consider or question anything else. What is the LTC narrative? It goes
something like this:
Long-term care is a huge risk and cost that can and does wipe out the life
savings of huge numbers of aging Americans. Medicaid is the only option
that helps people who need expensive, extended, custodial care. But
Medicaid requires impoverishment and has a dubious reputation for care
access and quality. So, therefore, America needs a new compulsory,
payroll-funded social insurance program similar to Medicare to pay for
long-term care.
Nothing in the LTC narrative is true. There is no evidence that LTC
frequently wipes out life savings and researchers cite none. Medicaid is
not the only option for long-term care; people could save, invest or
insure for LTC risk, but few do. Why not? Medicaid does not require
impoverishment. That is a myth. Medicaid allows recipients to have income
up to the monthly cost of a nursing home and to retain practically
unlimited exempt assets. No new LTC entitlement program is needed nor
desirable. Rather, we should fix the one, Medicaid, we already have.
Although nothing in the LTC narrative is true, most LTC researchers take
it for granted. Why? It fits their ideological prejudice against free
markets and in favor of government financing and control. How? They affirm
the LTC narrative by ignoring or misrepresenting all evidence to the
contrary, by redefining or misinterpreting data to fit the narrative, and
by equivocating on key terms such as impoverishment, spend down,
out-of-pocket expenses and Medicaid planning.
How
do LTC researchers ignore or misrepresent evidence that contradicts the
LTC narrative? They pretend that Medicaid financial eligibility rules
require impoverishment when the truth is that income rarely stands in the
way of qualification for LTC benefits and applicant/recipients may retain
virtually unlimited non-countable assets, including very large home
equity, one vehicle, a business, personal belongings and home furnishings,
even retirement savings accounts. LTC researchers rarely acknowledge the
vast legal literature on methods to circumvent Medicaid financial limits
and qualify the affluent who possess even much greater wealth. If they do
concede that Medicaid planning occurs, they disingenuously pretend it is
limited to asset transfers, a method far less common and significant than
other, more frequent and important techniques of artificial
self-impoverishment, such as the purchase of exempt assets.
How
do LTC researchers redefine or misinterpret data to fit the LTC narrative?
To promote the misconception that elders all across the country are
spending down into impoverishment for LTC, it helps if out-of-pocket LTC
expenditures appear high and Medicaid expenditures appear low. That
supports the LTC narrative that long-term care is wiping out people’s
savings, that Medicaid does not do enough to help, and that, therefore, a
big new government program is needed. So LTC researchers try to make
out-of-pocket LTC costs appear higher than they actually are, as high as
50 percent, by including room and board expenses in assisted living or
residential care facilities’ LTC spending tallies. But people incur room
and board costs whether or not they need or receive LTC.
The
Centers for Medicare and Medicaid Services (CMS) are also complicit. The
agency changed the definition of nursing home services to include
Continuing Care Retirement Communities in 2011. That change deceptively
made Medicaid expenditures look lower and out-of-pocket costs appear
higher because CCRCs are almost entirely private-pay. In fact, Medicaid’s
share of nursing home expenditures has been going up and out-of-pocket
expenditures, down for decades. Full price out-of-pocket private pay SNF
revenue has collapsed to only seven percent leaving nursing homes heavily
dependent on Medicaid’s notoriously inadequate reimbursements. But you
wouldn’t discern that in CMS’s biased reporting.
How
do LTC researchers equivocate on key terms of art to validate the LTC
narrative?
(1)
They insist Medicaid requires “impoverishment” when the truth is that
people need only a cash flow problem, e.g., too little income to afford
long-term care privately, to qualify. Medicaid’s role in long-term care
financing is that it reduces the risk and cost of long-term care
substantially, not that it impoverishes people.
(2)
The LTC researchers equivocate on the meaning of “spend down.” They often
imply and sometimes assert incorrectly that Medicaid requires applicants
to spend down countable resources for health or LTC expenses to qualify.
But Medicaid has no such requirement. People may spend down countable
assets to purchase and retain exempt assets, thus qualifying for LTC
benefits while preserving wealth. Purchase of exempt assets is the single
most common method of Medicaid planning and is almost universally
practiced by applicants with excess countable assets.
(3)
LTC researchers prevaricate on terms like “out of pocket,” spend down and
impoverishment, when they misrepresent data from their main data sources,
the Health and Retirement Study (HRS) and its auxiliary, the Asset and
Health Dynamics among the Oldest Old (AHEAD) study. The HRS and AHEAD
studies are often cited as proof older Americans spend down for long-term
care until impoverished and thus become eligible for Medicaid LTC
benefits. But neither of those data sources provides any information about
how elders’ decumulate wealth. They only show that wealth declined and a
transition to Medicaid eligibility occurred. Such transitions could as
well and as likely have occurred due to purchase of exempt assets as to
LTC spend down.
In
conclusion, the LTC narrative reflects the dominant scholarly social
group’s ideological bias in favor of compulsory government social
insurance and against free market competition. The narrative prevails due
to constant repetition, the unchallenged authority of its “experts,” and
by silencing other accounts. Because no other analyses or evidence can
penetrate the LTC narrative’s peer-review barricade, it has the illusion
of being objective and apolitical, when it is neither. Unless and until
critics deconstruct the LTC narrative and replace it with consistent,
principled analysis and recommendations, little success in the
decades-long effort to improve LTC services and financing will occur.
#############################
Updated, Monday, June 26, 2023, 10:40
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #23-016 LTC NEWS AND COMMENT
LTC
Comment: Do you spend hours searching the internet for useful articles,
key data, and relevant reports to keep you on the forefront of
professional knowledge? Do you lose business because you’re blindsided by
clients or competitors who learn critical information before you do?
Here’s an antidote:
LTC
Clippings: The Center for Long-Term Care Reform notifies subscribers to
our LTC Clippings service daily of information you need to know. Each
message contains only the critical facts about new publications: a title,
representative quote, a link to the original, and our analysis in a
sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or
smoses@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC
E-Alerts: Once a week, we compile our daily LTC Clippings into a summary,
email it to Center for Long-Term Care Reform members, and archive it in
The Zone, our password-protected members-only website. Center members also
receive our weekly LTC Bullet op-ed. To join the Center and receive all
these benefits and more, contact Steve at 425-891-3640 or
smoses@centerltc.com.
We no
longer post our LTC E-Alerts on the Center’s public access website, but
here’s what today’s LTC E-Alert contained: links, quotes and
comments on the following articles, reports, or data:
-
Russian hackers
expose information of 2.5 million Genworth customers
-
A blow to CMS’s
credibility … thank goodness
-
ChatGPT and
Beyond: How Artificial Intelligence is Shaping the Future of Nursing
Home Operations
-
Americans pay
$17.5 billion to support parents in a year
-
Should State
Long-Term Care Insurance Funds Invest In Stocks?
-
Ben Veghte: As
long-term care needs grow, WA Cares offers long-term solution for
working Washingtonians
-
Medicaid
changes could help assisted living help more older adults
-
‘Harmful Yet
Largely Invisible:’ Resident Fear of Staff Highlighted in Recent Report
-
Workers in
Germany will soon pay more for long-term care insurance
#############################
"LTC
E-Alerts" are a feature offered by the Center for Long-Term Care Reform,
Inc. to members at the $150 per year level or higher. We'll track and
report to you news and analysis regarding long-term care financing,
service delivery, and research. We hope The LTC E-Alerts will help you
attain and maintain a high level of knowledge and competency in this
complex field. The Center for Long-Term Care Reform, Inc. is a private
institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Monday, June 19, 2023, 10:40
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #23-015 LTC NEWS AND COMMENT
LTC
Comment: Do you spend hours searching the internet for useful articles,
key data, and relevant reports to keep you on the forefront of
professional knowledge? Do you lose business because you’re blindsided by
clients or competitors who learn critical information before you do?
Here’s an antidote:
LTC
Clippings: The Center for Long-Term Care Reform notifies subscribers to
our LTC Clippings service daily of information you need to know. Each
message contains only the critical facts about new publications: a title,
representative quote, a link to the original, and our analysis in a
sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or
smoses@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC
E-Alerts: Once a week, we compile our daily LTC Clippings into a summary,
email it to Center for Long-Term Care Reform members, and archive it in
The Zone, our password-protected members-only website. Center members also
receive our weekly LTC Bullet op-ed. To join the Center and receive all
these benefits and more, contact Steve at 425-891-3640 or
smoses@centerltc.com.
We no
longer post our LTC E-Alerts on the Center’s public access website, but
here’s what today’s LTC E-Alert contained: links, quotes and
comments on the following articles, reports, or data:
-
Medicare spending expected to top $1
trillion this year, CMS says
-
What to Know About Buying Long-Term Care
Insurance
-
Long Term Care Insurance & Inflation
-
White House asks states to pump the brakes
on Medicaid disenrollment
-
UC Davis Health launches new geriatric
division
-
New tool detects falls 32 days before they
happen
-
It’s no better in 16 years of long-term
care study in SD
-
Public Long Term Care Insurance Programs
-
Social Security COLA Estimated at 2.7% for
2024 as Inflation Cools
-
New long-term care solution for couples
eliminates the guesswork of who will need care: Nationwide CareMatters
Together is the first cash-indemnity, linked benefit solution designed
for two lives
-
Researchers identify home health fraud
patterns across U.S.
#############################
"LTC
E-Alerts" are a feature offered by the Center for Long-Term Care Reform,
Inc. to members at the $150 per year level or higher. We'll track and
report to you news and analysis regarding long-term care financing,
service delivery, and research. We hope The LTC E-Alerts will help you
attain and maintain a high level of knowledge and competency in this
complex field. The Center for Long-Term Care Reform, Inc. is a private
institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Friday, June 16, 2023, 10:40
AM (Pacific)
Seattle—
#############################
LTC BULLET:
THE MEDICAID SPEND DOWN BULLETS
LTC Comment:
Does it matter whether Medicaid spend down actually occurs? We’ve explored
and answered that question and covered related issues in 25 years of
LTC Bullets. Find them all archived chronologically and by subject
here.
LTC BULLET:
THE MEDICAID SPEND DOWN BULLETS
LTC Comment: The fallacy
that eligibility for Medicaid LTC benefits requires catastrophic spend
down of life savings is endemic in the academic and popular literature on
long-term care financing. Most of the Center for Long-Term Care Reform's
1,358 LTC Bullets published since 1998 bear on identifying and
correcting that error in one way or another. Following is a small sample
of Bullets that debunk and/or explain the consequences of assuming
falsely that Medicaid forces LTC spend down. Bottom line, if Medicaid
really did require asset spend down, the public would not be so blasé
about LTC risk and cost; more people would plan ahead for LTC by saving,
investing or insuring; much more private revenue at market rates would
flow through to LTC providers who could then provide better care access
and quality; fewer people would need public welfare as a last resort LTC
payer; and families would feel the burden of caregiving less with far more
elders prepared to receive paid home care. For our long series of LTC
Bullets correcting errors about LTC financing made by financially
well-endowed think tanks, advocacy organizations, government agencies and
the media that broadcast their messages, see
LTC Bullet: Still Standing Guard.
The Medicaid Spend
Down Bullets
LTC Bullet: How to Unleash Long-Term Care Insurance and Assisted Living,
June 15, 1999
LTC Comment: We highlighted the importance of Medicaid spend down
in this early Bullet. “A public financing system should be
implemented that guarantees every American access to quality care at the
appropriate level in the private marketplace, but requires the quid pro
quo that financial assistance in obtaining such care constitutes a
dollar-for-dollar spend down of one’s estate assets payable after death.
Only with this kind of system can an incentive be created that is strong
enough to persuade the financially able to take responsibility for
themselves so that publicly financed programs can be saved to serve those
who cannot provide for themselves.”
LTC Bullet: HCFA Data Easily Misconstrued, February 23, 2000
LTC Comment: This LTC Bullet disproved the common notion
“that out-of-pocket nursing home expenditures are destroying the life
savings of huge numbers of older Americans.” It became the model for our
2004 to 2022 series titled “So What if the Government Pays for Most
Long-Term Care?” Find those 19 annual updates of newly reported CMS data
here by searching for “So What?”
LTC Bullet:
"Nursing Home Care Virtually Free For Life," May 7, 2002
LTC Comment: While researchers claimed LTC costs wiped out life
savings across the U.S, this Bullet showed how easy that tragic
spend down outcome was to avoid. “What follows is a transcription of
excerpts from a professionally produced and mass-distributed videotape.
The tape is an advertisement for a man and his company who promise
‘nursing home care virtually free for life.’ This financial miracle worker
proudly proclaims that he is not an attorney, a financial planner, nor,
perish the thought, an insurance agent.”
LTC Bullet:
New LTC Expenditure Data Provide Clues to Low LTCI Sales and LTC
Facilities' Financial Woes, January 14, 2003
LTC Comment: This is another precursor of what became the “So
What?” series described above. It explains how the lack of real Medicaid
LTC spend down accounts for dysfunctions in the LTC service delivery and
financing system. “Heads up! We're about to explain why long-term care
insurance sales have been disappointing and why the nursing home and
assisted living industries are in such a woeful financial condition. The
explanation is complicated, but hey, if it were simple, everyone else
would have figured it out already.”
LTC Bullet: GAO on TOA Underwhelms, October 5, 2005
LTC Comment: We observed that the Government Accountability
Office's "letter report" titled "Medicaid:
Transfers of Assets by Elderly Individuals to Obtain Long-Term Care
Coverage" “disappoints in many ways. It asked the wrong questions. It
used the wrong methods. It searched the wrong data. And, consequently, it
provides little new information of value.” For example, its “trite
observation that people ‘can’ quickly spend down for nursing home care
begs the question ‘Do they?’ Answer: there is no evidence of widespread
nursing home spend down. All but 10 to b15 percent of total nursing home
costs are accounted for by direct or indirect government financing and
personal income, not assets.”
LTC Bullet: Who Still Gets Medicaid LTC Without Spending Down?,
April 20, 2006
LTC Comment: Even after the Deficit Reduction Act, the vast
majority of seniors who need long-term care can get it from Medicaid
without spending down their own assets for care. The DRA limited home
equity for the first time and extended the lookback period for asset
transfers to five years. But the home equity limit it imposed ($500,000 to
$750,000) excludes almost no one; the five year lookback is too short to
make a difference given the slow onset of Alzheimer’s Disease; and most
people qualify for Medicaid LTC benefits without spending down wealth
anyway based on the program’s generous and elastic financial eligibility
rules.
LTC Bullet: Spousal Refusal Robs Taxpayers and the Poor,
December 14, 2010
LTC Comment: Medicaid financial eligibility rules are so generous
that most people qualify without using Medicaid planning techniques to
avoid spending down their savings. But some married couples with even
higher income and assets dodge even those lenient rules to shelter much
more wealth. This Bullet describes the “squalid practice” of
“spousal refusal” used mostly in New York and Florida.
LTC Bullet: Nursing Home Spend Down Misunderstood and Late-Breaking
LTCI Industry News, July 20, 2012
LTC Comment: A recent Employee Benefit Research Institute (EBRI)
study that claims nursing home stays are wiping out Americans’ savings is
based on a fallacy and mistaken. Author Sudipto Banerjee assumes without
evidence that people must and do spend down their life savings for
long-term care before they become eligible for Medicaid LTC benefits. We
explain that (1) Medicaid does not require such spend down, (2) there is
no evidence in the source cited that it occurs, and (3) how people can and
do qualify for Medicaid LTC benefits without spending down their wealth
for care.
LTC Bullet: Medicaid Spend Down that Isn’t and Why it Matters,
July 19, 2013
LTC Comment: Claiming “transitions” to Medicaid are evidence of
catastrophic LTC asset “spend down” misrepresents the truth and should be
publicly recanted. This Bullet explains who, what, when, where and
why. It reviews two articles titled “Medicaid Spend Down: New Estimates
and Implications for Long-Term Services and Supports Financing Reform” and
“Medicaid Spend Down: Implications for Long-Term Services and Supports and
Aging Policy,” and concludes “What these papers call ‘spend down’ is
nothing more than ‘transition’ from non-Medicaid status to Medicaid
eligibility. Neither the articles nor the research they report contain any
measurement whatever of money actually spent for health care, long-term
care or anything else.”
LTC Bullet: Is it Spend Down or Medicaid Planning?, July 14,
2017
LTC Comment: A lot of what passes for Medicaid “spend down” in the
scholarly literature is really Medicaid planning. We explain, give
examples, and critically review an often-cited article that argues the
opposite by economist Norma B. Coe titled “Financing
Nursing Home Care: New Evidence from Spend Down Behavior,” Tilburg
University, 2007.
LTC Bullet: Retirement Confidence and Asset Spend Down, April
27, 2018
LTC Comment: We review “Asset
Decumulation or Asset Preservation? What Guides Retirement Spending?,”
by Sudipto Banerjee, in which he challenges the assumption “that retirees
will spend down their accumulated assets to fund their retirement needs”
and concludes there are several complicated reasons why people decumulate
assets slowly in retirement or not at all. We offer a simpler explanation:
“[C]atastrophic spend down for long-term care is a myth because Medicaid
pays for most expensive LTC, exempts most assets, is easy to get after
care is needed without spending down assets significantly and only
requires income as the patient’s contribution to the cost of care.
Consequently, after decades living in retirement, most people at most
levels of wealth, spend down very little.”
LTC Bullet: LTC Bankruptcy, March 4, 2022
LTC Comment: Clare Ansberry describes
a heartrending case of long-term care spending unto impoverishment in “Caring
for Older Relatives Is So Expensive That Even AARP’s Expert Filed for
Bankruptcy” (Wall Street Journal,
2/20/22). We explain that tragic stories like that are very uncommon,
because catastrophic spend down to qualify for Medicaid LTC is
unnecessary. It is common, although unwise, to extrapolate from such
anecdotes to the conclusion that a new government entitlement for LTC is
needed.
LTC Bullet: Biased LTC Scholarship Misinforms Policymakers,
September 2, 2022
LTC Comment: Many “progressive” analysts equivocate on terms like
“impoverishment,” “spend down,” “Medicaid planning,” and “out of pocket.”
They do not interview the right people to learn how individuals qualify
for Medicaid without spending down personal wealth and they rely on widely
accepted data sources that are actually highly dubious in this regard (HRS
and AHEAD). Such analysts ignore or misrepresent important facts and
emphasize only information that confirms their biases. We analyze a case
in point: Richard W. Johnson and Melissa M. Favreault, “Economic
Hardship and Medicaid Enrollment in Later Life: Assessing the Impact of
Disability, Health, and Marital Status Shocks.”
LTC Bullet: LTC Strawman, September 30, 2022
LTC Comment: Critics claim self-impoverishment by high net worth
people to qualify for Medicaid is uncommon. But disproving a claim no one
has ever made contributes nothing to a crucial conversation about who
should qualify for Medicaid LTC benefits, when and under what
circumstances. The right question the same critics ignore is “Do most
people need to spend down their life’s savings for long-term care before
they can get help from Medicaid?” The answer to that question is “No.”
LTC Bullet: What if Most People Don’t Spend Down for Medicaid LTC?,
June 2, 2023
LTC Comment: This Bullet (1) shows how people through and
including the fourth wealth quintile qualify for Medicaid LTC benefits
without spending down for care, (2) debunks the idea that people don’t
know how to qualify for Medicaid without spending down or don’t take
advantage of Medicaid due to a sense of responsibility or shame, (3)
argues that if we take into account wealth people already have that goes
unused for LTC, the need to save, invest or insure for this risk would be
vastly reduced, and (4) concludes that we do not need a huge new payroll
funded compulsory social insurance program for LTC.
#############################
Updated,
Monday, June 12, 2023, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #23-014 LTC NEWS AND COMMENT
LTC Comment: Do you spend hours searching
the internet for useful articles, key data, and relevant reports to keep
you on the forefront of professional knowledge? Do you lose business
because you’re blindsided by clients or competitors who learn critical
information before you do? Here’s an antidote:
LTC Clippings: The Center for Long-Term
Care Reform notifies subscribers to our LTC Clippings service daily of
information you need to know. Each message contains only the critical
facts about new publications: a title, representative quote, a link to the
original, and our analysis in a sentence or two. To inquire or subscribe,
contact Steve at 425-891-3640 or
smoses@centerltc.com. Read testimonials
by satisfied subscribers
here.
To subscribe online, please click
here.
LTC E-Alerts: Once a week, we compile our
daily LTC Clippings into a summary, email it to Center for Long-Term Care
Reform members, and archive it in The Zone, our password-protected
members-only website. Center members also receive our weekly LTC Bullet
op-ed. To join the Center and receive all these benefits and more, contact
Steve at 425-891-3640 or
smoses@centerltc.com.
We no longer post our LTC E-Alerts on the
Center’s public access website, but here’s what today’s LTC E-Alert
contained: links, quotes and comments on the following articles, reports,
or data:
-
New York
Regrets How It Regulated Long-Term Care Insurance Rates
-
My Child Helps
Pay My Bills. Do I Need to Tell Medicaid?
-
The Nation's
Fiscal Health: Action Needed to Address Projected Unsustainable Debt
Levels
-
Setting the
Record Straight on Medicaid Redeterminations
-
‘New retirement
reality’ undermines planning, survey finds
-
WA Cares
investment meeting talks money, mentions renewed website
-
What Should We
Do About Medicare?
-
The Future of
Assisted Living: AI in Elderly Care
-
‘Impetus’
ignored: LeadingAge CEO calls on Congress, White House to act on broader
threats to long-term care
-
Social Security
and Medicare Are Ticking Time Bombs
-
Americans
refocusing on future amid decline in financial readiness for retirement:
analysis
-
Ensuring
Resident Coverage During the Medicaid Unwinding
#############################
"LTC E-Alerts" are a feature offered by the
Center for Long-Term Care Reform, Inc. to members at the $150 per year
level or higher. We'll track and report to you news and analysis regarding
long-term care financing, service delivery, and research. We hope The LTC
E-Alerts will help you attain and maintain a high level of knowledge and
competency in this complex field. The Center for Long-Term Care Reform,
Inc. is a private institute dedicated to ensuring quality LTC for all
Americans (www.centerltc.com).
#############################
Updated,
Friday, June 2, 2023, 10:40 AM (Pacific)
Seattle—
#############################
LTC
BULLET: WHAT IF MOST PEOPLE DON’T SPEND DOWN FOR MEDICAID LTC?
LTC
Comment: Analysts make long-term care financing look very bleak—and
therefore in need of a big, new government program—by ignoring Medicaid’s
huge, damaging role. Why, how, and what to do about it, after the
***news.***
***
2023
SPOUSAL IMPOVERISHMENT NUMBERS
are out. Center members can find them for this year and every other year
back to 1991 in our “members
only zone.”
You’ll need your user name and password to access The Zone. Contact
damon@centerltc.com
for a reminder or to join and get a UN/PW. These new numbers reflect a
8.2% cost of living increase. Here are some highlights: The Medicaid home
equity exemption is now at least $688,000 and as high as $1,033,000 in
some states. The Community Spouse Resource Allowance that started at
$60,000 in 1988 is now $148,620. The Maximum Monthly Maintenance Needs
Allowance that began at $1,500 when the Medicare Catastrophic Coverage Act
of 1988 ended Medicaid spousal impoverishment is now $3,715.50. For
insights on what these numbers mean for LTC financing policy and Medicaid
spend down risk, read the rest of today’s LTC Bullet. ***
LTC
BULLET: WHAT IF MOST PEOPLE DON’T SPEND DOWN FOR MEDICAID LTC?
LTC
Comment: The
National Council on Aging
(NCOA) and
The
LeadingAge LTSS Center @UMass Boston
published an Issue Brief titled “The
Continued Toll of Financial Insecurity in Retirement”
in February. Its authors include Rocki Basel, PhD and Susan Silberman, PhD
of NCOA; and Jane Tavares, PhD, Marc Cohen, PhD, and Molly Wylie, MS of
the LeadingAge LTSS Center.
One
of the authors, Marc Cohen, is a longtime friend and fellow LTC analyst.
NPR interviewed him about the new report in a piece titled “The
cost of long-term care in the U.S. is outpacing the income and savings of
older adults.”
Marc summarized the Issue Brief’s dismal findings and concluded “that
middle-income Americans are particularly vulnerable due to a lack of
affordable care options. And for those earning too much to qualify for
Medicaid — but not enough to cover the growing cost of care — there are
few options. … There's a private insurance market that provides private
insurance for long-term care, but those policies are pretty much out of
the financial reach of middle-income Americans. To fill this gap in care,
… some states have considered an employer-provided social insurance
program for long-term care that’s modeled off Social Security.”
Let’s quickly review the Issue Brief’s discouraging results and then ask
these questions: Are people’s incomes and assets really preventing their
eligibility for Medicaid LTC benefits? Is private LTC insurance hopelessly
overpriced for the middle class and so nevermore a part of the solution?
To make up the LTC financing shortfall, do we really have to have another
state or federal social insurance program? What if there were a better way
to finance LTC for rich and poor alike, revitalize private LTC insurance,
and do it all without a big, new, compulsory, payroll-funded, government
Ponzi scheme? Wouldn’t that be great? Read on. We quote the Issue Brief
and then comment.
Issue Brief:
“Over a 20-year period,
more than 25% of adults age 50 and over will experience a shock resulting
in a 75% or more drop in net wealth.
Among adults age 70 and older, more than two-thirds will experience at
least one negative shock with financial consequences over a nine-year
period.” (Emphasis in the original.)
LTC
Comment:
Ouch! At least there is a social safety net in place and some private
charity remaining to help those most in need. But it gets worse …
Issue Brief:
“One of the most significant costs burdening older adults is long-term
care services and supports (LTSS), ranging from non-medical assistance
with activities of daily living to medical care in a skilled nursing
facility. While many Americans underestimate the need for LTSS,
over half of adults 65 and older will need LTSS
for
less than two years, and about one in seven will require care for more
than five years. Financing even one year of care can prove unwieldy for
most Americans. In 2018,
the average yearly cost of a private room in a nursing home was $105,485,
and that of a home health care aide was $37,440.”
LTC
Comment:
More
recent data
are somewhat less daunting: “While individuals on average will need 0.8
years of paid LTSS, 55% of older adults will not use any paid LTSS. About
24% of older adults (or about half of paid LTSS users) will receive less
than a year of paid LTSS (measured in service days), and about 4% of older
adults will use five years or more.” On the other hand,
more
recent (2021) data
show higher costs: $108,405 for a year in a private nursing home room and
$61,776 for a home health aide ($27 per hour, 44 hours per week, 52 weeks
per year). Definitely, not a pretty picture.
Issue Brief:
“As Medicare does not absorb the shock of LTSS costs, this financial risk
is often faced directly by older adults and their families or by social
safety net programs such as Medicaid.”
LTC
Comment:
OK, but what is the balance between the risk “faced directly by older
adults and their families or by social safety net programs such as
Medicaid.” We’re expected to presume that wide swaths of aging Americans
are forced into poverty by high LTC costs resulting in their becoming
impoverished and on Medicaid eventually. Is there any evidence that
occurs? Not in this Issue Brief. In fact, the Health and Retirement Study
(HRS) on which the Issue Brief is based provides zero evidence of asset
spend down for LTC incidental to Medicaid LTC eligibility. The HRS
documents only “transitions” to Medicaid, which could occur due to
Medicaid planning, i.e., artificial self-impoverishment, conducted years
before LTC is needed and Medicaid eligibility occurs. So, what does the
Issue Brief tell us about aging Americans’ ability to purchase LTC with
their own resources?
Issue Brief:
“Though the value of financial assets marginally increased or stayed the
same for 80% of older adults from 2016 to 2018, the bottom 20%,
approximately 11 million households, have no assets. This group has a 2018
median income of $16,989 and would be unable to rely on personal finances
to pay for LTSS, especially with rising costs of care. The next three
quintiles (21– 40%, 41–60%, and 61–80%) of older adults saw modest
increases in their financial assets between 2016 and 2018, but these
individuals would still be unable to afford more than two years of
nursing home care in a semi-private room or four years in an assisted
living community if their median income and household value of financial
assets were added together. Despite adults’ preference to age in place,
60% of adults would be unable to afford two years of in-home long-term
services and supports. Therefore, although the need for services both
in the short- and long-term remains a reality for many older Americans,
most do not have the financial resources to afford either.”
LTC
Comment:
So, the bottom quintile has no assets and very low income. That’s
practically the definition of someone who qualifies for Medicaid LTC. But
what about the next three higher quintiles? According to the Issue Brief,
these folks can afford two years of nursing home care, four years in an
assisted living facility, and 40% of them could manage two years of
in-home LTC. Sounds like they’re in pretty could shape since the Issue
Brief says “over
half of adults 65 and older will need LTSS
for
less than two years.”
But,
here’s the kicker. If these middle-income people are spending their money
on LTC, where is the evidence? Nursing home private-pay revenue has
plummeted to about 7 percent so that’s not where it’s going. Maybe these
folks are spending their substantial savings on home care. But no,
Medicare (37.2%) and Medicaid (34.2%) paid
71.4% of the $125.2
billion Americans spent on home health care in 2021. Private health
insurance (not LTC insurance) paid another 12.7%. Only 10.3% of home
health care costs were paid out of pocket. So that’s not where all this
wealth is being spent. Maybe people are spending down for assisted living.
Some surely do but “Almost 1
in 5 [ALF] residents relies on Medicaid to pay for daily services
(18%),”
“48%
of ALFs are Medicaid certified”
and only “a
small minority of state Medicaid programs do not cover services in
assisted living.”
(Find these quotes under the source’s “Finance” tab.) Bottom line: there
is no evidence that private-pay LTC spend down is consuming significant
amounts of middle class savings. What’s happening instead?
Let’s consider those questions we raised earlier.
Are
people’s incomes and assets really preventing their eligibility for
Medicaid LTC benefits?
Click through to the
Issue Brief
and scroll down to “FIGURE 1. Older Adult Households Divided into
Financial Quintiles based on Net Value of Total Wealth.” Look at the
income, savings and home equity amounts for the fourth wealth quintile,
representing 61-80% of older adults. Their total household income is
$52,229. Would that disqualify them for Medicaid LTC benefits? Would that
force them to spend down into impoverishment before getting help? No. The
rule of thumb is that income below the cost of a nursing home is not
disqualifying. That’s because private health and LTC expenditures are
deducted from income before comparing it to Medicaid’s allowable limit. A
well spouse, if there is one, would keep a spousal impoverishment
protection “maximum monthly maintenance needs allowance” of $2,465 or
$29,580 per year. Only the remaining income balance in the recipient’s
name would go to offset Medicaid’s cost for his/her care. Thus, while some
private income goes for care, this out-of-pocket cost, mostly Social
Security income, merely reduces Medicaid’s share of the dismally low
reimbursement, often less than the cost of care, that the LTC provider
receives. Although the recipient is paying out of pocket, he/she is not
commanding the better access and higher quality care associated with
paying privately. He/she is trapped in the lower Medicaid level of
America’s two-tier LTC system.
Well, what about assets? The “net value of primary residence,” i.e. home
equity, of folks in the fourth wealth quintile is $220,000. Would that
interfere with Medicaid LTC eligibility compelling asset spend down? Well,
no. Medicaid exempts a minimum of $688,000 of home equity and up to
$1,033,000 in some states. Even the richest people, in the 91-100% decile
of the Issue Brief’s Figure 1, would qualify for Medicaid based on their
home equity of $400,000.
But,
as everyone knows, you can’t have more than $2,000 in “countable” assets
and still qualify for Medicaid LTC. So, what is the fourth quintile’s
“Household Value of Financial Assets (non-housing, median)” and
would that disqualify them for Medicaid? That total is $130,000. Way more
than $2,000. But, we’re just getting started. First, if there is a spouse,
compute the couple’s jointly owned assets, and set aside half, not to
exceed $148, 620 but never less than $29,724, for the “community spouse.”
Back out the non-countable assets people own such as “pre-paid
burial and funeral expenses, an automobile, term life insurance, life
insurance policies with a combined cash value limited to $1,500, household
furnishings / appliances, and personal items, such as clothing and
engagement / wedding rings.”
Very few people in the fourth quintile of wealth will have much left, but
whatever remains can easily be converted to non-countable status by
investing more money in the home or purchasing any of the items just
listed.
Do
you think that people confronting high LTC costs ignore those generous
Medicaid financial eligibility limits and pay out-of-pocket? Do they
plunge themselves into real impoverishment from a sense of personal
responsibility or shame at depending on public assistance? Some do. More
used to do. But nowadays information on how to qualify for Medicaid
without spending down for care is universally available in magazine
articles, self-help books, and on the internet. Google “Medicaid planning
in [your state],” if you have any doubt. Even state Medicaid eligibility
workers routinely explain to middle class applicants how to speed up or
entirely eliminate their “spend down” process by purchasing exempt assets.
Workers report that people now think of Medicaid (welfare) as though it
were an entitlement like Medicare. They ask themselves, as Jane Bryant
Quinn did in her 12/18/89 Newsweek column, “Do Only the Suckers
Pay?” So, no, ignoring easy access to Medicaid LTC benefits and paying out
of pocket, is not the rule. It is the exception.
Is
private LTC insurance hopelessly overpriced for the middle class and so
nevermore a part of the solution?
It
is so disappointing and disheartening to see former supporter of private
LTC insurance, not to mention potential buyers and current owners,
abandoning the product in favor of more government dependency. We need
instead to reconceptualize LTC risk based on new data, some of which is
recounted in the Issue Brief, but much more of which is at our fingertips
in the recent research on LTC risk and cost. For example, if most people
can afford a couple years of LTC as the Issue Brief acknowledges, but they
have no reason to spend their own money for LTC because even the folks in
the fourth wealth quintile are immediately eligible for Medicaid without
spending down, why not change the rules and realign the incentives. Let’s
say we eliminate all the ways people qualify for Medicaid while preserving
wealth for people under 65 today. Then we tell younger folks they only
need to insure for their average LTC risk, not for the whole potential
catastrophic risk. That would collapse the premiums they would need to pay
to a level affordable even by the middle class at a time in their lives
when they’re also coping with house and car payments, retirement and
education savings. They’d buy this coverage because they could no longer
ignore LTC risk, wait to see if they ever need expensive care and, if they
do, go on Medicaid and still preserve most of their wealth. What about
that remaining catastrophic risk? Medicaid can handle it if most people
are protected for those first couple years of LTC need and because the
eligibility loopholes that allow wealth preservation are gone, the assets
that are no longer sheltered or divested will go to fund LTC in the
private market for anyone who failed to insure.
To
make up the LTC financing shortfall, do we really have to have another
state or federal social insurance program?
No.
People respond to incentives. Stop giving them an easy way to avoid LTC
risk and cost while preserving their wealth and they’ll look creatively
for ways to cover that risk. They will find many possibilities such as
tapping home equity, life insurance, retirement savings and many other
sources of wealth that currently dodge LTC responsibility. All that’s
needed is a real incentive in public policy for people to take personal
responsibility and prepare, putting to use some of the wealth that
Medicaid diverts from private LTC spending now.
What
if there were a better way to finance LTC for rich and poor alike,
revitalize private LTC insurance, and do it all without a big, new,
compulsory, payroll-funded, government Ponzi scheme?
Wouldn’t that be great?
Yes,
and the proposal to achieve that is on its way. Stay tuned!
#############################
Updated,
Tuesday, May 30, 2023, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #23-013 LTC NEWS AND COMMENT
LTC Comment: Do you spend hours searching
the internet for useful articles, key data, and relevant reports to keep
you on the forefront of professional knowledge? Do you lose business
because you’re blindsided by clients or competitors who learn critical
information before you do? Here’s an antidote:
LTC Clippings: The Center for Long-Term
Care Reform notifies subscribers to our LTC Clippings service daily of
information you need to know. Each message contains only the critical
facts about new publications: a title, representative quote, a link to the
original, and our analysis in a sentence or two. To inquire or subscribe,
contact Steve at 425-891-3640 or
smoses@centerltc.com. Read testimonials
by satisfied subscribers
here.
To subscribe online, please click
here.
LTC E-Alerts: Once a week, we compile our
daily LTC Clippings into a summary, email it to Center for Long-Term Care
Reform members, and archive it in The Zone, our password-protected
members-only website. Center members also receive our weekly LTC Bullet
op-ed. To join the Center and receive all these benefits and more, contact
Steve at 425-891-3640 or
smoses@centerltc.com.
We no longer post our LTC E-Alerts on the
Center’s public access website, but here’s what today’s LTC E-Alert
contained: links, quotes and comments on the following articles, reports,
or data:
-
Gary D.
Alexander and Elizabeth Stelle: Medicaid eligibility matters
-
America aged
rapidly in the last decade as baby boomers grew older and births dropped
-
U.S. Nursing
Homes Fail to Report Many Serious Falls, Bedsores: Study
-
Washington’s
long-term care program still flawed as new tax looms
-
Wearable AI
patch monitors multiple health factors for seniors
-
3 nursing homes
closing quickly as Ohio leaders plead for Medicaid adjustment
-
Is The Next
Wave Of Life Expectancy Gains On The Horizon?
-
People with
disabilities need more access to HCBS, researchers say
-
Senior-Living
Debt Defaults Far Outpace the Rest of Government Debt Market
-
The History of
Medicare Advantage: From Inception to Growing Popularity
#############################
"LTC E-Alerts" are a feature offered by the
Center for Long-Term Care Reform, Inc. to members at the $150 per year
level or higher. We'll track and report to you news and analysis regarding
long-term care financing, service delivery, and research. We hope The LTC
E-Alerts will help you attain and maintain a high level of knowledge and
competency in this complex field. The Center for Long-Term Care Reform,
Inc. is a private institute dedicated to ensuring quality LTC for all
Americans (www.centerltc.com).
#############################
Updated,
Monday, May 22, 2023, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #23-012 LTC NEWS AND COMMENT
LTC Comment: Do you spend hours searching
the internet for useful articles, key data, and relevant reports to keep
you on the forefront of professional knowledge? Do you lose business
because you’re blindsided by clients or competitors who learn critical
information before you do? Here’s an antidote:
LTC Clippings: The Center for Long-Term
Care Reform notifies subscribers to our LTC Clippings service daily of
information you need to know. Each message contains only the critical
facts about new publications: a title, representative quote, a link to the
original, and our analysis in a sentence or two. To inquire or subscribe,
contact Steve at 425-891-3640 or
smoses@centerltc.com. Read testimonials
by satisfied subscribers
here.
To subscribe online, please click
here.
LTC E-Alerts: Once a week, we compile our
daily LTC Clippings into a summary, email it to Center for Long-Term Care
Reform members, and archive it in The Zone, our password-protected
members-only website. Center members also receive our weekly LTC Bullet
op-ed. To join the Center and receive all these benefits and more, contact
Steve at 425-891-3640 or
smoses@centerltc.com.
We no longer post our LTC E-Alerts on the
Center’s public access website, but here’s what today’s LTC E-Alert
contained: links, quotes and comments on the following articles, reports,
or data:
-
The Home Care
Workforce Has Not Kept Pace With Growth In Home And Community-Based
Services
-
Don't let
caregiving sabotage retirement planning
-
Senators
probing largest Medicare Advantage plans over how algorithms factor in
care denials
-
Complete
Debacle’: US House Hearing on Nursing Home Covid Deaths Blames Political
Acrimony, Policies, Staffing
-
Western Diet
Identified as Risk Factor For Alzheimer's Disease, Scientists Warn
-
Medicaid and
leadership challenges, as state takes over nursing home
-
What to know
about Washington Cares payroll tax as premiums are set to resume
-
Medicare,
Medicaid Spending Similar Among Dual Eligible Beneficiaries
-
Sorry kids if I
need long-term care, I’m spending your inheritance
-
40 percent of
healthcare working hours can be augmented by AI, study finds
#############################
"LTC E-Alerts" are a feature offered by the
Center for Long-Term Care Reform, Inc. to members at the $150 per year
level or higher. We'll track and report to you news and analysis regarding
long-term care financing, service delivery, and research. We hope The LTC
E-Alerts will help you attain and maintain a high level of knowledge and
competency in this complex field. The Center for Long-Term Care Reform,
Inc. is a private institute dedicated to ensuring quality LTC for all
Americans (www.centerltc.com).
#############################
Updated,
Friday, May 19, 2023, 10:40 AM (Pacific)
Seattle—
#############################
LTC
BULLET: WHO NEEDS LTC? HOW MUCH? SO WHAT?
LTC Comment: Do 70% need LTC or half?
For one year or three? Who pays? What’s it going to cost me? Medicaid?
Medicare? Based on sum-of-expenditures or present discounted value? The
key LTC numbers are shifting again, after the ***news.***
*** GET YOUR free article from the
CLTC Digest. CLTC, the people behind “Certification
for Long-Term Care” publish this thought-provoking quarterly journal.
They’re offering a free download of an article in the latest issue: “Your
Clients are Running Out of Money. (You just don’t know it” by Leigh
Maynard. Get it
here. Just scroll down and fill out the simple form. Heads up! I’ll be
in the next issue of CLTC Digest with a piece on “The Elephant, The Blind
Men, and Long-Term Care.” ***
*** LTC CLIPPINGS keep you
apprised of important industry news so you know what’s happening before
clients or prospects blindside you. Steve Moses reads everything online or
in print about long-term care, sends you one or two items each day like
the ones that follow, and welcomes your questions or comments. If you
haven’t subscribed to LTC Clippings yet or if you aren’t a member
of the Center, fix that now
here. Thanks for your consideration.
5/17/2023,
“Senators
probing largest Medicare Advantage plans over how algorithms factor in
care denials,” by Bob Herman and Casey Ross, STAT
Quote: “Senators warned the country’s largest Medicare
Advantage insurers at a hearing on Wednesday that they must abide by
Medicare’s coverage rules and cannot rely on algorithms to deny care that
patients need. … The hearing comes on the heels of a STAT investigation
that found Medicare
Advantage insurers are routinely relying on proprietary algorithms as a
basis for denying care. Instead of using the technology as a guide for
a Medicare patient’s care in a nursing home or rehab facility, many
Medicare Advantage plans are using it as a hard-and-fast rule to avoid
paying for care and to discharge patients home as soon as possible — even
if patients are not ready.”
LTC Comment: Are AI robots replacing human claims adjusters? How
will patients fare?
5/17/2023,
“Medicaid
and leadership challenges, as state takes over nursing home,” by
Jessica R. Towhey, McKnight’s LTC News
Quote: “A Rhode Island nursing home with more than 30 citations for
deficiencies and whose administrator’s license was suspended last month
has been put into state receivership. … ‘Rhode Island Medicaid has been
chronically underfunded for more than a decade,’ said John Gage, president
and CEO of the Rhode Island Health Care Association. The state’s Medicaid
rates are based on 2011 actual costs inflated by approximately 1% per year
since 2012, Gage said. The estimated shortfall is $50 million to $60
million per year, and the pre-pandemic gap between reimbursement and the
cost of care was approximately $30 per patient per day. Both Gage and his
counterpart at LeadingAge Rhode Island, which represents nonprofit
facilities, said the gap is likely much higher now.”
LTC Comment: If only Rhode Island officials had listened when we
warned them this was coming and how to avoid it in
Doing LTC RIght (2010) and
The Age Wave, the Ocean State, and Long-Term Care (2009).
5/8/2023,
“TCARE
Welcomes Long-Term Care Executive Vince Bodnar as Chief Actuary,” by
Julia Pitlyk, Technology Today
Quote: “TCARE,
the industry-leading, evidence-based caregiver support platform designed
to prevent family caregiver burnout, welcomes Vince Bodnar as its Chief
Actuary. With nearly 40 years of experience, Bodnar is recognized as one
of the country’s leading long-term care financing experts.”
LTC Comment: Vince Bodnar is one of the most creative and impactful
thinkers in the LTC insurance space. Maybe that’s why he’s in such demand,
changing jobs so often. Congratulations, Vince, do keep us posted on where
to send your LTC Clippings and LTC Bullets.
5/8/2023,
“Provider
payments could be at ‘catastrophic’ risk if federal debt limit breached,”
by Jessica R. Towhey, McKnight’s LTC News
Quote: “Without a legislative solution from warring political
parties in Congress and the White House, the US is in danger of breaching
its debt limit, which would have serious repercussions for the long-term
care sector, advocates and experts warned. … If the US defaults on its
debt, which it has never done, those payments would halt, at least
temporarily. Even a short-term cessation could be ‘catastrophic,’ said
Katie Smith Sloan, president and CEO of LeadingAge, in an email to McKnight’s
Long-Term Care News on Friday.”
LTC Comment: Live by government funding and regulation, die by
them. Politicians say we have to raise the debt ceiling because the U.S.
always pays its bills? That’s a phony argument. If the U.S. paid its
bills, it wouldn’t be $32 trillion in debt and in need of a debt ceiling
increase. No, they want to raise the debt limit so they can go on
borrowing, spending and not paying the bills. ***
LTC BULLET: WHO NEEDS LTC? HOW MUCH?
SO WHAT?
LTC Comment: Those are important
questions. But the answers are a moving target. The experts used to say
that 70 percent of the elderly will require some LTC and 20 percent will
need five years or more. We critiqued the study that produced those
estimates in
LTC Bullet: Microsimulate This!, March 28, 2006. We were not
impressed. It was full of misleading, ideologically biased statements.
Garbage in, garbage out, we concluded.
Then in 2015, new and better data
became available. Roughly half—not 70 percent—of elderly Americans will
need long-term care. One in seven—not one in five—will require five years
or more. We critiqued the study (Favreault and Dey, 2016) that produced
these new estimates in
LTC Bullet: New Data on LTC Incidence, Duration, Cost and Financing
Sources, July 24, 2015. We concluded the new data was a “vast
improvement over what we had before,” but this report was also fraught
with political and ideological bias.
If those two opening paragraphs tweak
your interest, by all means click through, read the source documents and
our analysis in those LTC Bullets from 17 and eight years ago,
respectively. But right now, let’s consider the latest in this series of
LTC risk and cost estimates. The U.S. Department of Health and Human
Services’ Assistant Secretary for Planning and Evaluation (ASPE) published
“Long-Term
Services and Supports for Older Americans: Risks and Financing, 2022,”
by Richard W. Johnson and Judith Dey on September 27, 2022.
Based on this new study’s Abstract,
the key numbers have moved around again, but not so drastically this time.
Now “over half (56%)” will need some LTC and about “one in five” (22%)
will need more than five years. Is the
Urban Institute’s Dynasim microsimulation model finally homing in on
less variable, more stable estimates? Let’s take a closer look at how the
newest data varies from what preceded it in 2015. We’ll proceed from here
with quotes from the new paper followed by our “LTC Comments.”
Johnson/Dey:
“The results presented here differ from those reported in Favreault and
Dey (2016) … our updated model projects longer average durations of LTSS
needs (3.1 years versus 2.0 years) … The updated model also projects lower
average LTSS expenditures ($120,900 versus $138,100), especially for
family out-of-pocket payments. These differences result from some
definitional changes between the two analyses and numerous technical
changes and updates. … An important substantive change between this brief
and Favreault and Dey (2016) is that we removed from our expected cost
tables the incidental LTSS that Medicare covers. … Medicare generally does
not pay for long-term care when it is the only service a person needs.”
(p. 10)
LTC Comment:
Those are very big changes! LTC duration is up by more than 50 percent
from two years to 3.1 years. Average LTC expenditures plummeted 12.5
percent from $138,100 to $120,900. What’s more, these authors are no
longer counting Medicare as a contributor to LTC costs. That makes sense
from the standpoint that Title 20 doesn’t pay for LTC, but it distorts
financial analysis substantially by ignoring the role Medicare profits
play in propping up LTC providers’ ability to survive losses from
Medicaid’s meager reimbursement rates.
The paper goes on for two more
paragraphs explaining the tweaks to their model that caused the big
changes. Maybe we better not assume these important estimates of LTC risk
and cost are settling into a more consistent pattern. Be that as it may,
let’s consider what the new estimates would mean if they are correct and
do remain stable.
(Note that we prefer the traditional
designation “long-term care” (LTC) instead of the awkward neologism
“long-term services and supports” (LTSS) used in the Johnson/Dey report.
To their credit, they do at least acknowledge in an end note that “LTSS is
also sometimes called long-term care.” p. 11)
Johnson/Dey:
“Although most people with LTSS needs will spend relatively little on
their care, 14% will spend at least $100,000 out of pocket for future LTSS.”
(p. 1)
LTC Comment:
That sounds like a small risk of a substantial loss that could be replaced
by an affordable premium, which is the role of private insurance in our
economy. But, the report downplays that potential.
Johnson/Dey:
“A private market for LTSS insurance exists, but less than 8% of Americans
have purchased coverage (Freundlich 2014), partly because of high and
rising premiums and the exit of insurers from the market (Scism 2015).
Sales figures from recent years suggest the market has stagnated or even
shrunk (Cohen 2016; Schmitz and Giese 2019; Ujvari 2018).” (p. 2)
LTC Comment:
Why so little demand for private insurance in the face of such a clearly
insurable risk? The obvious answer is that someone or something else pays
for LTC obviating the public’s need to worry about it and deflating demand
for the product. But Johnson/Dey also downplay that possibility.
Johnson/Dey:
“Although Medicaid provides LTSS to those with chronic disabling
conditions (Komisar 2013; Tompson et al. 2013), it is available only for
individuals who meet income and other eligibility requirements (U.S.
Department of Health and Human Services 2015).” (p. 1)
LTC Comment:
So, Medicaid pays for LTC but only for people who meet its eligibility
requirements? That makes Medicaid sound somewhat insignificant. What are
Medicaid’s financial eligibility requirements? How hard are they to
satisfy? Is it possible for people with substantial wealth to qualify for
Medicaid LTC benefits without spending down their wealth to qualify? The
paper blanks out on these crucial topics. But it does elsewhere
acknowledge Medicaid’s very large LTC financing role.
Johnson/Dey:
“Medicaid is the largest payer of LTSS, averaging $51,800 after age 65 and
accounting for 43% of the total [$120,900].” (p. 6)
“Most Americans who receive paid LTSS
pay some share out of pocket. Those with longer spells may pay out of
pocket until they qualify for Medicaid. Reliance on Medicaid for those who
cannot afford the full cost of LTSS may increase federal and state
spending for LTSS.” (p. 2)
LTC Comment:
So, Medicaid is a huge LTC payor but it doesn’t desensitize the public to
LTC risk or impede demand for private LTC insurance because it has
financial eligibility limits to which people must spend down over “longer
spells” of paying privately until they finally become eligible. That’s the
hidden narrative the report fails to make explicit. Where is the proof for
their assumption that people must pay out of pocket before Medicaid
starts? Scholars of this stature should know and acknowledge that there is
no evidence in the HRS or AHEAD data bases on which they rely of Medicaid
“spend down.” Those sources only show that “transitions” to Medicaid occur
for whatever reason. On that subject, we offer these observations:
LTC Bullet: Medicaid Spend Down that Isn’t and Why it
Matters, July 19, 2013
LTC Bullet: Behind AHEAD, September 2, 2016
LTC Bullet: Is it Spend Down or Medicaid Planning?, July 14, 2017
The truth is that Medicaid exempts
virtually unlimited resources, including home equity, personal belongings,
a car and many others. People receive Medicaid benefits despite having
large incomes if their health and LTC expenses are high enough, as they
usually are for people in need of LTC. This report, like its predecessors,
simply presumes without evidence that people “spend down” before
qualifying for Medicaid. To its credit, this report does not make the
explicit, preposterous, unsubstantiated claims of its predecessors that
wide swaths of the American public spend down for LTC into total
impoverishment. Still it, like they, ignore how Medicaid financial
eligibility actually works as explained in ubiquitous legal tomes,
magazine articles and internet ads for Medicaid estate planning.
Nevertheless, they do give some lip service to the fact that Medicaid
covers more than the poor.
Johnson/Dey:
“The DYNASIM4 projections suggest that although Medicaid is used by older
adults throughout the age-65 income distribution, it primarily serves
those in the bottom two income quintiles (Table 8).” (p. 9)
LTC Comment:
Medicaid is mostly for the poor? That should be no surprise. It is a
welfare program, after all. What’s really important is their admission
that “Medicaid is used by older adults throughout the age-65 income
distribution.” These authors recognize that fact, but make no effort to
explain how or why it can happen if people must spend down wealth to
qualify as they believe, assume and imply without giving a shred of
evidence. But let’s look again at the basic facts.
Johnson/Dey:
“About 15% of older adults can expect their total LTSS expenses from age
65 onward to amount to more than $250,000, whereas about 8% will have
positive but low costs (less than $10,000). A smaller percentage (about
6%) will spend $250,000 or more out of pocket on LTSS. Fourteen percent
will spend at least $100,000 out of pocket on LTSS after turning 65.” (p.
8)
LTC Comment:
Sounds pretty daunting, doesn’t it? But their Table 7 breaks it down.
Turns out that of that “15 percent,” actually 14.7 percent, who spend more
than $250,000 only 6.4 percent, shown as “6 percent” in the paper, are
paying out of pocket. The rest comes from Medicaid, “other public,” or
private insurance. In other words, long-term care financing is very
complicated, constitutes a heavy burden both on taxpayers and individuals,
and is going to get much worse given the current demographics of aging,
before it gets better. But even with all the public and private money
poured into the current system, it still fails friends and families who
are left with the need to provide care themselves without pay.
Johnson/Dey:
“Many older adults with care needs receive substantial amounts of unpaid
care from family members and friends. Our projections indicate that the
value of unpaid family care received by adults born between 2021 and 2025
with significant disabilities averages $91,900 (Table 10). Among people
receiving unpaid family care, the average value of care reaches $204,000,
more than the value of all paid LTSS. Women receive more unpaid care than
men.” (p. 9)
LTC Comment:
Bottom line: America’s long-term care service delivery and financing
system is a huge, expensive, unproductive, debilitating failure. It traps
people on public welfare, discourages personal responsibility and early
planning, subsidizes institutional care, inhibits the home care people
prefer, and still leaves much of the direct caregiving duties for stressed
out, untrained, unpaid family and friends to provide. The whole mess seems
hopeless.
But what if different incentives
prevailed? What if the rules that allow people to ignore LTC until they
need it and qualify for Medicaid without spending down their wealth
disappeared? What if people had to save, invest or insure for long-term
care or actually face impoverishment if confronted with catastrophic LTC
costs? What if we told everyone below a certain age—65, 50, 40,
whatever—that the Medicaid planning techniques used in the past to qualify
for LTC benefits will no longer exist for them in the future?
I submit that people would worry much
more about LTC risk and cost. They would seek ways to save, invest or
insure for that risk. But how could they come up with the funds to save or
buy private insurance while they are in their prime earning years, but
still making house and car payments, saving for their own retirement, and
setting aside funds for their children’s education? I find a clue to the
answer in this report that is otherwise sterile of policy ideas.
Johnson/Dey:
“These estimates differ from a present discounted value (PDV) of
expenditures at age 65, the amount that an individual would need to set
aside at age 65 to cover future LTSS expenses. The PDV is lower than the
sum-of-expenditures measure because it accounts for the investment returns
that could be earned on funds set aside at age 65 until LTSS expenses
begin, often after age 80. We show PDV projections in the appendix.” (p.
6)
LTC Comment:
Say what? What does that even mean? The cost estimates provided in the
main body of this report represent what people or programs could be
expected to pay for long-term care over time in today’s dollars. But how
much would they need to set aside at age 65, assuming a reasonable rate of
return, to cover their expected future expenses? We find the answer to
that question in the PDV tables of the report’s Appendix. For example:
To cover the $120,900 “projected sum
of LTSS expenditures from age 65 through death for adults who turn 65 in
2021-2025” would require that an individual set aside only the “projected
PDV of expenditures from age 65 through death for adults who turn 65 in
2021-2025” of $69,800. Still a big number but much less onerous.
Likewise, to cover the $245,400 sum of
expenditures liability for people who actually experience LTC costs, would
require only $141,700 in PDV set aside. Still big, but more manageable.
How do they figure that?
Johnson/Dey:
“PDV estimates, which are reported in Tables A1-A9, use the Social
Security trustees' ultimate real interest rate of 2.5%. Because the
trustees assume long-range price growth averages 2.6%, this real discount
rate is equivalent to a nominal long-run discount rate of about 5.1%.” (p.
13)
LTC Comment:
In other words, much less money set aside at age 65 in an investment
earning 5.1 percent per annum would cover future average or catastrophic
LTC costs. Now imagine, if those funds were earmarked for LTC at even
younger ages, how much easier the average or catastrophic risk would be to
meet.
Of course the numbers are very
different for men and women, and that needs to be considered and accounted
for, but let’s stick with the averages for purposes of the argument now.
Here’s my point: what if instead of
expecting people to shoulder the entire burden of potentially catastrophic
LTC costs and then giving them easy access to Medicaid later if they
ignored that risk as happens now, we rather created a new expectation that
everyone is responsible by a specified age for the present discounted
value of their average LTC risk? That would still leave the catastrophic
risk for Medicaid to cover, but it would relieve the welfare program of
supporting the middle class and affluent who could, should, and would
save, invest or insure at least for their average LTC risk.
How could people save, invest or
insure for even that smaller LTC responsibility while still keeping up
with their other financial liabilities? Don’t expect any help from
Johnson/Dey.
Johnson/Dey:
“Conclusion Most Americans who survive to age 65 can expect to need
and use LTSS. … Average long-term care costs can be out of reach for many
Americans. Medicaid is an important payer of LTSS, but because it serves
only those who meet strict income and asset criteria many families pay for
LTSS out of pocket. Private LTSS insurance has only a modest reach, and it
predominantly covers costs for those high in the income distribution.
Other public expenditures, such as U.S. Department of Veterans Affairs
(VA) care, only help cover small shares of the population with LTSS needs.
The value of unpaid care provided by family members and friends to people
with significant disabilities exceeds the value of paid care, and unpaid
care is even more important when people have less severe disability. Our
results highlight the need for better planning for LTSS to accommodate
both average and catastrophic financial risks associated with chronic
disability.” (p. 10)
LTC Comment:
Shall we conclude that nothing works and the situation is hopeless? Or
shall we accept the reality that “average long-term care costs can be out
of reach for many Americans” and everyone needs “better planning for LTSS”
and do something about it? If you lean toward taking action, then what? We
have a plan, but it’s under development and we cannot share it yet. But
here’s a hint. Our plan involves persuading and enabling
middle-aged and younger Americans to save or set aside enough to cover the
average present discounted value of their LTC liability. Maybe they’ll
also insure for their catastrophic risk if the insurance industry can come
up with a new product to cover and secure the smaller average catastrophic
PDV. Stay tuned to LTC Bullets for details in the coming months.
#############################
Updated, Monday, May 15, 2023, 10:40
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #23-011 LTC NEWS AND COMMENT
LTC
Comment: Do you spend hours searching the internet for useful articles,
key data, and relevant reports to keep you on the forefront of
professional knowledge? Do you lose business because you’re blindsided by
clients or competitors who learn critical information before you do?
Here’s an antidote:
LTC
Clippings: The Center for Long-Term Care Reform notifies subscribers to
our LTC Clippings service daily of information you need to know. Each
message contains only the critical facts about new publications: a title,
representative quote, a link to the original, and our analysis in a
sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or
smoses@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC
E-Alerts: Once a week, we compile our daily LTC Clippings into a summary,
email it to Center for Long-Term Care Reform members, and archive it in
The Zone, our password-protected members-only website. Center members also
receive our weekly LTC Bullet op-ed. To join the Center and receive all
these benefits and more, contact Steve at 425-891-3640 or
smoses@centerltc.com.
We no
longer post our LTC E-Alerts on the Center’s public access website, but
here’s what today’s LTC E-Alert contained: links, quotes and
comments on the following articles, reports, or data:
-
Argentum Releases New Report Outlining
Policy Solutions to Increase Access to Assisted Living
-
How to Use a Trust to Plan for Long-Term
Care
-
Social Security COLA Estimated at 3.1% for
2024
-
AHCA’s CEO: Nursing Homes Must Prepare for
‘Massive’ Staffing Mandate Battle, Adapt to Managed Care ‘Mega-Trend’
-
TCARE Welcomes Long-Term Care Executive
Vince Bodnar as Chief Actuary
-
The Nation's Fiscal Health: Road Map Needed
to Address Projected Unsustainable Debt Levels
-
Provider payments could be at
‘catastrophic’ risk if federal debt limit breached
-
AARP poll: Majority of voters want more
support for family caregivers
#############################
"LTC
E-Alerts" are a feature offered by the Center for Long-Term Care Reform,
Inc. to members at the $150 per year level or higher. We'll track and
report to you news and analysis regarding long-term care financing,
service delivery, and research. We hope The LTC E-Alerts will help you
attain and maintain a high level of knowledge and competency in this
complex field. The Center for Long-Term Care Reform, Inc. is a private
institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Monday, May 8, 2023, 10:40
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #23-010 LTC NEWS AND COMMENT
LTC
Comment: Do you spend hours searching the internet for useful articles,
key data, and relevant reports to keep you on the forefront of
professional knowledge? Do you lose business because you’re blindsided by
clients or competitors who learn critical information before you do?
Here’s an antidote:
LTC
Clippings: The Center for Long-Term Care Reform notifies subscribers to
our LTC Clippings service daily of information you need to know. Each
message contains only the critical facts about new publications: a title,
representative quote, a link to the original, and our analysis in a
sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or
smoses@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC
E-Alerts: Once a week, we compile our daily LTC Clippings into a summary,
email it to Center for Long-Term Care Reform members, and archive it in
The Zone, our password-protected members-only website. Center members also
receive our weekly LTC Bullet op-ed. To join the Center and receive all
these benefits and more, contact Steve at 425-891-3640 or
smoses@centerltc.com.
We no
longer post our LTC E-Alerts on the Center’s public access website, but
here’s what today’s LTC E-Alert contained: links, quotes and
comments on the following articles, reports, or data:
-
The Hidden
Costs Home Health Providers Face When Taking On More MA Patients
-
Genworth
Creates Discounted LTC Provider Network
-
Biden Moves To
Increase Pay For Medicaid Home Care Aides. Will It Work?
-
‘Big Trouble’:
Medicare Advantage Rates Strain SNF Margins, Deepen Sector’s Pain
-
Regular
internet use may be linked to lower dementia risk in older adults, study
says
-
A Clever
Strategy to Get Your Long-Term Care Costs Covered by Medicaid
-
ChatGPT’s blind
spots can compromise caregiving, authors warn
-
Life Estates:
Helpful or Problematic? (Part 3: Medicaid)
-
The Super SNF
Comes of Age: Advanced Care Programs Expand, Yield Results
-
Retirement
Confidence Hits Lowest Point Since 2008: EBRI
-
AI chats could
be more empathetic than doctors’ responses to patient questions, study
finds
-
Half of All
Eligible Medicare Beneficiaries Are Now Enrolled in Private Medicare
Advantage Plans
-
How Can I
Protect My IRA From Medicaid?
#############################
"LTC
E-Alerts" are a feature offered by the Center for Long-Term Care Reform,
Inc. to members at the $150 per year level or higher. We'll track and
report to you news and analysis regarding long-term care financing,
service delivery, and research. We hope The LTC E-Alerts will help you
attain and maintain a high level of knowledge and competency in this
complex field. The Center for Long-Term Care Reform, Inc. is a private
institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Friday, May 5, 2023, 10:40 AM (Pacific)
Seattle—
#############################
LTC Bullet: AI on LTC
LTC Comment: Artificial intelligence (AI) is all the
rage these days. Does it help or hurt long-term care planning? We ask; AI
answers; and we respond after the ***news.***
|
*** TODAY'S LTC BULLET is
sponsored by Claude Thau with BackNine Insurance. Back9 gives you a
free personalized website at no cost. Your clients (& family &
friends) can, with as little or as much of your involvement as you or
they want, buy life insurance and LTCi, and schedule parameds and
upload their medical records to speed the process. We quote
stand-alone LTCi, linked-benefit and life with a LTC rider
side-by-side and provide a sales track with video support. Claude is
the lead author of Milliman’s annual Broker World LTCi Survey & a past
Chair of the Center for Long-Term Care Financing. Contact him at
913-707-8863 or
claude@back9ins.com discuss how he might
help you. *** |
LTC BULLET: AI ON LTC
LTC Comment: “Artificial
intelligence is the simulation of human intelligence processes by
machines, especially computer systems.” Click the link for details,
but bottom line, among other features: AI makes it possible for us to ask
questions online and get plausible narrative answers almost
instantaneously. Leaving aside for now that some experts’ worry AI
technology could threaten human survival, we decided to
Ask AI some important questions about LTC financing policy. What
follows are our questions, AI’s answers, and our comments in response.
Especially, don’t miss
iAskAI’s answer to my final question at the very end: “If you were to
write an ‘LTC Bullet,’ what would it say?” Here’s an excerpt from the
chatbot’s answer: “The LTC Bullet is known for its in-depth analysis and
comprehensive coverage of long-term care issues. It is highly regarded by
policymakers, industry professionals, and academics alike. The publication
is available to subscribers only and is distributed via email. In
conclusion, the LTC Bullet is a valuable resource for those interested in
long-term care policy and financing. It provides insightful analysis on a
range of topics related to long-term care and is highly regarded by
industry professionals and policymakers.” Gosh, thanks.
Should I buy LTC insurance or wait to see if I
ever need long-term care and if I do use Medicaid planning?
According to iAsk.AI Answer Engine: Long-term
care (LTC) insurance is a type of insurance that covers the cost of
long-term care services, such as home health care, nursing home care, and
assisted living facilities. It is designed to help individuals pay for
these services without depleting their savings or relying on Medicaid.
However, whether or not to buy LTC insurance depends on several factors.
One factor to consider is your age and health status.
LTC insurance premiums increase with age, so if you are young and healthy,
it may be more affordable to purchase LTC insurance now than to wait until
you are older and at a higher risk of needing long-term care. On the other
hand, if you have pre-existing health conditions, you may not be able to
qualify for LTC insurance or may have to pay higher premiums.
Another factor to consider is your financial
situation. If you have significant assets and income, you may be able to
afford the cost of long-term care without depleting your savings or
relying on Medicaid. However, if you have limited assets and income, LTC
insurance may be a good option to help protect your financial security.
It is also important to consider the potential
benefits of Medicaid planning. Medicaid is a government program that
provides health coverage for low-income individuals and families. It also
covers the cost of long-term care for those who meet certain eligibility
requirements. However, Medicaid planning can be complex and requires
careful consideration of your financial situation and goals.
In summary, whether or not to buy LTC insurance
depends on several factors, including your age and health status,
financial situation, and goals for long-term care. It is important to
carefully weigh the potential benefits and costs of LTC insurance and
Medicaid planning before making a decision.
LTC Comment: Not a lot of help. Pretty
wishy-washy. Doesn’t define Medicaid planning, acknowledge it involves
artificial self-impoverishment to qualify for public welfare, nor disclose
Medicaid’s serious access and quality deficiencies. On the other hand, the
answer emphasizes LTCI’s downsides such as age-based premiums and
pre-existing conditions without developing the product’s substantial
benefits. So we homed in on Medicaid planning with this question …
What are the main techniques Medicaid planning
attorneys use to qualify their clients for Medicaid LTC benefits while
preserving their wealth?
According to iAsk.AI Answer Engine: Medicaid
planning attorneys use several techniques to qualify for Medicaid
long-term care benefits while preserving their clients' wealth. These
techniques include:
1. Asset Protection Trusts: Attorneys can create irrevocable trusts that
protect assets from being counted towards Medicaid's asset limit. These
trusts can be set up so that the client and their spouse can still receive
income generated by the assets in the trust, but the assets themselves are
protected.
2. Medicaid Compliant Annuities: Attorneys can also use annuities to
convert countable assets into income streams that are not counted towards
Medicaid's asset limit. These annuities must meet certain criteria to be
considered Medicaid compliant.
3. Spend Down Strategies: Attorneys can help clients spend down their
assets in a way that maximizes their eligibility for Medicaid benefits.
This might involve paying off debts, making home modifications, or
prepaying funeral expenses.
It's important to note that Medicaid planning strategies can be complex
and should only be undertaken with the guidance of an experienced
attorney. Additionally, there are strict rules governing Medicaid
eligibility, and any attempts to hide or transfer assets could result in
penalties or disqualification from benefits.
LTC Comment: What struck me most about this
answer is how it differs from what LTC researchers say about Medicaid
planning. They rarely refer to any artificial self-impoverishment
techniques other than asset transfers, which AI doesn’t even mention and
are relatively uncommon methods. Note that AI does mention “spend down
strategies” which are more accurately described as reducing countable
resources by purchasing exempt assets. That is the Medicaid planning
method used the most. So, let’s ask about it.
Can people with large assets qualify for Medicaid
LTC benefits by purchasing "exempt" resources?
According to iAsk.AI Answer Engine: Yes,
people with large assets may be able to qualify for Medicaid long-term
care (LTC) benefits by purchasing "exempt" resources. Medicaid is a joint
federal and state program that provides healthcare coverage to eligible
individuals with low income and limited assets. Medicaid can also cover
the cost of long-term care services, such as nursing home care, for those
who meet certain eligibility requirements.
To qualify for Medicaid LTC benefits, an individual must meet both
financial and medical eligibility criteria. Financial eligibility is
determined by the individual's income and assets. In most states, an
individual cannot have more than $2,000 in countable assets to be eligible
for Medicaid LTC benefits. However, some assets are considered exempt and
are not counted towards this limit.
Exempt assets may include a primary residence (up to a certain equity
value), one vehicle, personal belongings, and certain types of prepaid
funeral arrangements. Some states may also allow individuals to purchase
exempt resources, such as annuities or trusts, in order to reduce their
countable assets and meet the eligibility criteria for Medicaid LTC
benefits.
It is important to note that purchasing exempt resources can be a complex
process and may have legal and financial implications. It is recommended
that individuals consult with a qualified attorney or financial advisor
before making any decisions regarding the purchase of exempt resources.
In summary, people with large assets may be able to qualify for Medicaid
LTC benefits by purchasing "exempt" resources. However, this strategy
should only be pursued after careful consideration and consultation with a
qualified professional.
LTC Comment: So, purchasing exempt assets is a
“complex process” and people should consult a “qualified attorney” before
using it? Nonsense. This technique of self-impoverishment is very easy,
completely unlimited, and involves no special legal knowledge. State
Medicaid eligibility workers routinely advise applicants and their
families to speed up their “spend down” process by purchasing exempt
assets, especially prepaid burial funds. Of course, people who do consult
Medicaid planning lawyers will get the extra help of receiving long lists
of exempt assets they are advised to buy in order to reduce their
countable wealth. What does this easy access to Medicaid LTC benefits
after people need care mean for the marketability of private LTC
insurance? Let’s ask.
Does Medicaid Planning for LTC benefits impede the
private LTC insurance market?
According to iAsk.AI Answer
Engine: Medicaid planning for long-term care (LTC) benefits can
potentially impede the private LTC insurance market. Medicaid is a
government-funded program that provides healthcare coverage to low-income
individuals, including coverage for long-term care services. Medicaid
planning involves legally restructuring an individual's finances to
qualify for Medicaid benefits, which can include transferring assets or
income to a spouse or trust.
One potential way that Medicaid planning can impede the private LTC
insurance market is by reducing the demand for private insurance. Since
Medicaid provides coverage for long-term care services, individuals may
choose not to purchase private insurance policies, especially if they
believe they can qualify for Medicaid benefits through planning. This
reduction in demand could lead to higher premiums and reduced
profitability for private insurers, which could ultimately discourage
insurers from offering LTC policies.
Another way that Medicaid planning can impact the private LTC insurance
market is by creating adverse selection. Adverse selection occurs when
individuals who are more likely to use LTC services are more likely to
purchase private insurance policies, while those who are less likely to
need LTC services opt-out of purchasing insurance. This can lead to higher
premiums and reduced profitability for insurers, which again could
discourage insurers from offering LTC policies.
However, it is important to note that there are also arguments against the
idea that Medicaid planning impedes the private LTC insurance market. For
example, some experts argue that Medicaid planning actually increases
awareness of the need for long-term care services and encourages
individuals to consider their options for financing these services,
including private insurance.
In conclusion, while there are arguments both for and against the idea
that Medicaid planning impedes the private LTC insurance market, it is
clear that there is a complex relationship between these two factors that
requires further research and analysis.
LTC Comment: Pretty good answer except on a
couple points. AI says Medicaid planning might discourage LTC insurance if
people “believe they can qualify for Medicaid benefits through planning.”
Such belief is not necessary. Nor is it common. Most people don’t know who
pays for LTC. But because Medicaid does pay and has paid since 1965, it
enables consumers’ denial resulting in their skipping LTCI while they’re
still young, healthy, and affluent enough to buy it. Of course, the idea
that easy access to free LTC if it’s ever needed by means of Medicaid
planning somehow increases awareness and encourages LTC planning is
preposterous. How can free care at the point of need funded by the
government not crowd out planning decades ahead, paying high premiums for
many years and maybe getting nothing from your coverage in the end if you
never need LTC? Count on AI to stretch every point to present a “balanced”
view. But does any of this really matter?
How common is it for people to artificially
impoverish themselves to become eligible for Medicaid LTC benefits?
According to iAsk.AI Answer
Engine: It is difficult to determine the exact number of people who
artificially impoverish themselves to become eligible for Medicaid LTC
benefits. However, it is a known practice that some individuals engage in
to qualify for government-funded long-term care benefits.
To be eligible for Medicaid LTC benefits, an individual must meet certain
income and asset requirements. These requirements vary by state but
generally require that an individual's income and assets fall below a
certain threshold. Some individuals may artificially lower their income or
transfer assets to family members in order to meet these requirements.
This practice of artificially impoverishing oneself is not illegal, but it
may be considered unethical by some. Additionally, it can have negative
consequences for the individual and their family members. For example,
transferring assets can result in gift taxes and can also disqualify the
individual from receiving Medicaid benefits for a period of time.
It is important to note that there are legal ways to plan for Medicaid
eligibility without resorting to artificial impoverishment. Consulting
with a qualified elder law attorney or financial planner can help
individuals and families navigate the complex rules surrounding Medicaid
eligibility.
In conclusion, while there is no exact number on how common it is for
people to artificially impoverish themselves to become eligible for
Medicaid LTC benefits, it is a known practice that some individuals engage
in.
LTC Comment: This answer is a good example of
the double talk you get from attorneys and most LTC researchers when you
ask them about Medicaid planning. They downplay its frequency and
whitewash its morality to divert attention and avoid regulation. So, is
there no “exact number” of how many people ignore the risk of long-term
care, avoid saving or insuring for the need, and take advantage of the
Medicaid poverty program if necessary? Don’t you think that is something
policy makers ought to know? Why are there no academic studies to measure
this problem?
What is the "two Mercedes strategy" to gain
Medicaid LTC eligibility?
According to iAsk.AI Answer
Engine: The "two Mercedes strategy" is a planning technique used to
gain Medicaid long-term care (LTC) eligibility by spending down assets.
Essentially, the strategy involves purchasing exempt assets, such as two
Mercedes-Benz cars, in order to reduce the countable assets of an
individual seeking Medicaid LTC coverage.
In order to qualify for Medicaid LTC coverage, an
individual must meet certain asset and income requirements. Generally, an
individual's countable assets cannot exceed a certain amount (varies by
state), and their income must be below a certain level. However, there are
certain assets that are considered exempt and do not count towards the
asset limit. These can include a primary residence, personal belongings,
and one vehicle.
The "two Mercedes strategy" takes advantage of this
exemption by purchasing two high-value vehicles that are exempt from the
asset limit. By doing so, the individual can reduce their countable assets
and potentially qualify for Medicaid LTC coverage.
It is important to note that this strategy may not
work in all cases and should only be used after consulting with a
qualified elder law attorney or financial planner. Additionally, it is
important to consider the ongoing costs associated with owning two luxury
vehicles.
In conclusion, the "two Mercedes strategy" is a
planning technique used to gain Medicaid LTC eligibility by spending down
assets on exempt assets such as two high-value vehicles. However, it is
important to consult with a professional before implementing this
strategy.
LTC Comment: Well, iAskAI finally got an
answer clearly wrong. The “two Mercedes” method does not involve buying
two cars. Two cars would make one ineligible for Medicaid. Rather, one
purchases a single luxury vehicle, which is exempt in any dollar amount,
and gives it away. That gift is not a transfer of assets for less than
fair market value for the purpose of qualifying for Medicaid which would
trigger a penalty because owning the car was not disqualifying in the
first place and giving it away therefore is not done for the purpose of
qualifying for Medicaid. But maybe I’m splitting hairs. AskAI got the
basic idea right that people can qualify for Medicaid LTC benefits by
purchasing an expensive car and giving it away, though only one at a time.
Does it hurt the poor when Medicaid planning
attorneys qualify affluent clients for Medicaid LTC benefits?
According to iAsk.AI Answer
Engine: Medicaid planning attorneys qualifying affluent clients for
Medicaid LTC benefits can potentially hurt the poor by diverting resources
from those who truly need it. When affluent clients are qualified for
Medicaid, they are essentially taking advantage of a system that is meant
to help those who are unable to afford long-term care. This can lead to a
strain on resources and funding, which can ultimately harm the poor who
rely on Medicaid for their healthcare needs.
However, it is important to note that not all
Medicaid planning attorneys engage in this practice. Some attorneys may
work within the legal framework to help their clients qualify for Medicaid
benefits while also ensuring that resources are not diverted away from
those who truly need it.
Furthermore, there are also other factors that
contribute to the strain on Medicaid resources, such as an aging
population and rising healthcare costs. Addressing these issues would
require a comprehensive approach that goes beyond just targeting Medicaid
planning attorneys.
Overall, while there may be instances where Medicaid
planning attorneys qualifying affluent clients for Medicaid LTC benefits
can hurt the poor, it is not a black and white issue and requires careful
consideration of various factors.
LTC Comment: Not black and white? Some
Medicaid planners ensure resources are not diverted from the poor? Name
one. How would they do that even if they wanted to? I think iAskAI must
have an algorithm that searches for arguments to balance any potential
disagreement, but often fails to come up with plausible counterpoints.
What percentage of Medicaid LTC applicants
purchase prepaid burial funds to spend down to asset limits?
According to iAsk.AI Answer
Engine: I'm sorry, but I cannot provide a comprehensive answer to this
question as there is no available data or statistics on the percentage of
Medicaid Long-Term Care (LTC) applicants who purchase prepaid burial funds
to spend down to asset limits. The Medicaid program is administered by
individual states, and each state has its own rules and regulations
regarding eligibility requirements and asset limits. While some states may
allow the purchase of prepaid burial funds as a way to spend down assets,
it is not a universal practice across all states.
Additionally, there is no centralized database or reporting system that
tracks the specific financial strategies used by Medicaid LTC applicants
to meet asset limits. Therefore, it is impossible to provide an accurate
percentage or estimate of how many individuals use prepaid burial funds
for this purpose.
It is worth noting, however, that Medicaid planning and asset protection
strategies are complex and often require the assistance of an experienced
elder law attorney or financial advisor. These professionals can help
individuals navigate the rules and regulations surrounding Medicaid
eligibility and develop a customized plan to protect their assets while
still qualifying for benefits.
LTC Comment: I’ve conducted many state-level
studies of Medicaid eligibility and planning. State Medicaid eligibility
workers told me that between two-third and 80 percent of Medicaid LTC
applicant/recipients shelter assets in prepaid burial funds averaging
around $7,000 or $8,000 each. If that is true nationwide, it amounts to
many billions of dollars diverted from personal LTC responsibility to
public liability, constituting a huge subsidy for the funeral industry at
taxpayers’ expense. Again, this is an aspect of poor public policy that
researchers should study, analyze, and report, but don’t.
Is it ethical to self-impoverish oneself by
transferring wealth five years in advance, purchasing exempt assets, or
putting money into special annuities or trusts in order to qualify for
Medicaid's welfare LTC benefits?
According to iAsk.AI Answer
Engine: It is a controversial topic whether it is ethical to
self-impoverish oneself by transferring wealth five years in advance,
purchasing exempt assets, or putting money into special annuities or
trusts in order to qualify for Medicaid's welfare LTC benefits.
On one hand, some argue that it is unethical to take advantage of a
government program intended for those who are truly in need. They argue
that individuals who engage in these practices are essentially gaming the
system and taking resources away from those who may not have any other
means of support. Additionally, some argue that these practices may be
considered fraudulent and could result in legal consequences.
On the other hand, others argue that it is not unethical to engage in
these practices as they are simply taking advantage of legal loopholes
within the system. They argue that individuals have a right to protect
their assets and ensure that they are able to receive the care they need
without depleting their life savings. Additionally, some argue that these
practices can actually benefit society as a whole by reducing the burden
on government-funded programs.
Ultimately, whether or not it is ethical to self-impoverish oneself in
order to qualify for Medicaid's welfare LTC benefits is a matter of
personal opinion and values.
LTC Comment: Exactly how can using Medicaid
planning to get the government to pay for one’s long-term care “actually
benefit society as a whole by reducing the burden on government-funded
programs.” That is just more double talk in groundless justification of
practices that hurt taxpayers, the poor, and even the affluent who end up
in nursing homes on public welfare but could have purchased quality home
care instead.
Should people who shelter wealth in exempt assets,
such as a home, car or business, in order to qualify for Medicaid LTC
benefits, be required to repay Medicaid after they die?
According to iAsk.AI Answer
Engine: Yes, people who shelter wealth in exempt assets such as a
home, car, or business in order to qualify for Medicaid long-term care (LTC)
benefits should be required to repay Medicaid after they die. This is
because Medicaid is a needs-based program that provides healthcare
assistance to those who cannot afford it. It is not intended to provide a
way for individuals to pass on their wealth to their heirs while still
receiving government assistance.
The practice of sheltering assets in order to qualify for Medicaid LTC
benefits is known as Medicaid planning. While it is legal, it can be seen
as unethical by some. Medicaid planning involves transferring assets out
of an individual's name in order to meet the program's asset and income
limits. Exempt assets, such as a primary residence, are not counted
towards these limits.
However, when an individual who has received Medicaid LTC benefits passes
away, their estate may be subject to estate recovery. This means that
Medicaid can recover the cost of the benefits paid out from the
individual's estate after they die. This includes any assets that were
transferred out of the individual's name during the Medicaid planning
process.
The National Academy of Elder Law Attorneys (NAELA) explains that
estate recovery is required by federal law and applies to all states that
receive Medicaid funds. However, each state has its own rules regarding
how and when estate recovery can occur.
The Centers for Medicare & Medicaid Services (CMS) provides
guidance on estate recovery and states that it can only be applied to
individuals who are over 55 years old, permanently institutionalized, or
who receive home and community-based services through a waiver program.
The Kaiser Family Foundation notes that estate recovery is
controversial because it can create a burden for heirs who may not have
been aware of the Medicaid planning their loved one engaged in. However,
the foundation also notes that estate recovery helps ensure that Medicaid
funds are used appropriately and can help offset the cost of the program.
In conclusion, individuals who shelter wealth in exempt assets in order to
qualify for Medicaid LTC benefits should be required to repay Medicaid
after they die. This is because Medicaid is a needs-based program, not an
inheritance planning tool. Estate recovery is a legal requirement and
helps ensure that Medicaid funds are used appropriately.
LTC Comment: OK, so we don’t need to worry
about Medicaid planning because Medicaid “can recover the cost” from “the
individual’s estate.” That would be a valid point if states actually
enforced estate recoveries and the federal government compelled them to do
so in compliance with the law. But that rarely happens. Nor do the media
publicize the estate recovery liability. Consequently, estate recovery
risk does not incentivize the public to plan privately for LTC and leaves
them relying on Medicaid in the end despite the welfare program’s
downsides. Is Medicaid really “a needs-based program, not an inheritance
planning tool” when eligibility is so easy to obtain and estate recovery
is so easy to avoid?
How easy is it to avoid Medicaid estate recovery?
According to iAsk.AI Answer
Engine: Avoiding Medicaid estate recovery can be a complex and
challenging process. However, there are some legal strategies that can
help individuals protect their assets from Medicaid estate recovery. One
of the most effective ways to avoid Medicaid estate recovery is by
transferring assets out of the individual's name before they apply for
Medicaid benefits. This can be done through various legal mechanisms, such
as irrevocable trusts, gifting, or purchasing exempt assets.
Another approach to avoiding Medicaid estate recovery is by using
annuities. By purchasing an annuity, the individual can convert their
countable assets into an income stream that is not subject to Medicaid
estate recovery. However, it is important to note that annuities must meet
certain criteria to be considered exempt from Medicaid estate recovery.
Additionally, some states have implemented laws that allow individuals to
protect their homes from Medicaid estate recovery by transferring
ownership to a spouse or child. However, these laws vary by state and may
have limitations on the amount of equity that can be protected.
It is important to note that attempting to avoid Medicaid estate recovery
through fraudulent means, such as hiding assets or providing false
information on a Medicaid application, can result in serious legal
consequences.
In summary, while there are legal strategies available for avoiding
Medicaid estate recovery, it is important to consult with a qualified
attorney who specializes in elder law and Medicaid planning to determine
the best approach for your individual situation.
LTC Comment: All in all, AI does a pretty good
job of summarizing the facts and arguments on both sides of the Medicaid
planning debate. Unfortunately, AI grants equal credibility to specious
arguments in favor of Medicaid planning and to common sense objections to
the practice. What I take away from this is that we need more and better
research and analysis on this topic to avoid the errors of thought and
ethics that AI does such an effective job of summarizing and justifying.
Anybody out there want to fund such a study? I’m ready to conduct it.
One last question for
iAsk.AI: “If you were to write an ‘LTC Bullet,’ what would it
say?”
According to iAsk.AI Answer
Engine: As an AI Search Engine, I am not capable of writing an "LTC
Bullet" as it is a publication produced by the Center for Long-Term Care
Reform. However, I can provide information on what an LTC Bullet is and
its purpose.
An LTC Bullet is a publication produced by the Center for Long-Term Care
Reform (CLTCR), which is a private institute that aims to ensure quality
long-term care for all Americans. The purpose of an LTC Bullet is to
provide analysis and commentary on issues related to long-term care
policy, financing, and delivery. The publication covers a range of topics
such as Medicaid, Medicare, long-term care insurance, and the aging
population.
The LTC Bullet is known for its in-depth analysis and comprehensive
coverage of long-term care issues. It is highly regarded by policymakers,
industry professionals, and academics alike. The publication is available
to subscribers only and is distributed via email.
In conclusion, the LTC Bullet is a valuable resource for those interested
in long-term care policy and financing. It provides insightful analysis on
a range of topics related to long-term care and is highly regarded by
industry professionals and policymakers.
LTC Comment: No argument there from us. Thanks, iAsk.AI. Good luck
as you pursue your wide-ranging interests. Please don’t destroy humankind.
#############################
Updated, Monday, May 1, 2023, 10:40
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #23-009 LTC NEWS AND COMMENT
LTC
Comment: Do you spend hours searching the internet for useful articles,
key data, and relevant reports to keep you on the forefront of
professional knowledge? Do you lose business because you’re blindsided by
clients or competitors who learn critical information before you do?
Here’s an antidote:
LTC
Clippings: The Center for Long-Term Care Reform notifies subscribers to
our LTC Clippings service daily of information you need to know. Each
message contains only the critical facts about new publications: a title,
representative quote, a link to the original, and our analysis in a
sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or
smoses@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC
E-Alerts: Once a week, we compile our daily LTC Clippings into a summary,
email it to Center for Long-Term Care Reform members, and archive it in
The Zone, our password-protected members-only website. Center members also
receive our weekly LTC Bullet op-ed. To join the Center and receive all
these benefits and more, contact Steve at 425-891-3640 or
smoses@centerltc.com.
We no
longer post our LTC E-Alerts on the Center’s public access website, but
here’s what today’s LTC E-Alert contained: links, quotes and
comments on the following articles, reports, or data:
- CMS proposes that 80 percent of Medicaid payments for home care go
to direct care workers
- Feds to crack down on harmful uses of AI
- What is Medicaid and why should you and your farm care?
- Rising interest rates helping to stabilize long-term care insurance
policies
- Startup to Sell Life-LTC Hybrid at the Worksite
- Older adults’ housing equity dips to $12.39 trillion in fourth
quarter
- Washington nursing homes get 13.6 percent Medicaid boost — no
strings attached
- The Future is Here. Watch Ken Dychtwald’s keynote at NextMed and be
ready to embrace healthy longevity
- Poll: 40% of clinicians thinking of quitting
- Most older patients embrace move toward deprescribing, poll finds
#############################
"LTC E-Alerts" are a feature offered by the
Center for Long-Term Care Reform, Inc. to members at the $150 per year
level or higher. We'll track and report to you news and analysis regarding
long-term care financing, service delivery, and research. We hope The LTC
E-Alerts will help you attain and maintain a high level of knowledge and
competency in this complex field. The Center for Long-Term Care Reform,
Inc. is a private institute dedicated to ensuring quality LTC for all
Americans (www.centerltc.com).
#############################
Updated, Monday, April 24, 2023,
10:40 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #23-008 LTC NEWS AND COMMENT
LTC
Comment: Do you spend hours searching the internet for useful articles,
key data, and relevant reports to keep you on the forefront of
professional knowledge? Do you lose business because you’re blindsided by
clients or competitors who learn critical information before you do?
Here’s an antidote:
LTC
Clippings: The Center for Long-Term Care Reform notifies subscribers to
our LTC Clippings service daily of information you need to know. Each
message contains only the critical facts about new publications: a title,
representative quote, a link to the original, and our analysis in a
sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or
smoses@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC
E-Alerts: Once a week, we compile our daily LTC Clippings into a summary,
email it to Center for Long-Term Care Reform members, and archive it in
The Zone, our password-protected members-only website. Center members also
receive our weekly LTC Bullet op-ed. To join the Center and receive all
these benefits and more, contact Steve at 425-891-3640 or
smoses@centerltc.com.
We no
longer post our LTC E-Alerts on the Center’s public access website, but
here’s what today’s LTC E-Alert contained: links, quotes and
comments on the following articles, reports, or data:
-
How Assured Allies Is Helping People Thrive
As Long As Possible Without Long-Term Care
-
Why Medicaid is for the middle class
-
The Home Care Workforce Has Not Kept Pace
With Growth In Home And Community-Based Services
-
80% of Older Americans Cannot Pay for
Long-Term Care or Withstand a Financial Shock, New Study Shows
-
Biden Order Could Create Federal Long-Term
Care Benefits Demand
-
BREAKING: New Biden executive order would
tie Medicare rates to turnover
-
CVS report finds more seniors facing
chronic conditions
-
Life Insurance Is Profitable Again, but Too
Late for Many Insurers
#############################
"LTC
E-Alerts" are a feature offered by the Center for Long-Term Care Reform,
Inc. to members at the $150 per year level or higher. We'll track and
report to you news and analysis regarding long-term care financing,
service delivery, and research. We hope The LTC E-Alerts will help you
attain and maintain a high level of knowledge and competency in this
complex field. The Center for Long-Term Care Reform, Inc. is a private
institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Friday, April 21, 2023, 10:40 AM (Pacific)
Seattle—
#############################
LTC
BULLET: LONG-TERM CARE AND THE SOCIAL COMPACT
LTC
Comment: When governments promise their citizens less risk through
pay-as-you-go entitlement programs, they reduce the public’s sense of
personal responsibility leaving people unprotected by either public
programs or private savings when their ability to tax and borrow runs out.
More after the ***news.***
***
AS THE CENTER FOR LONG-TERM CARE REFORM, founded April 1, 1998, begins its
second quarter century we seek your support for our pursuit of public
policy aimed to improve long-term care financing and service delivery in
the United States. Over the years, we’ve had some success influencing
federal policy (OBRA ’93 and DRA ’05) but much more remains to be done.
Ask about those laws and our role in passing them. In the meantime, we’ve
published dozens of state and federal level studies
here;
authored scores of articles
here;
delivered speeches all across the country for decades
here;
published to date 1,354 LTC Bullets (our now bi-weekly op-ed like
columns, archived by date and topic
here;
and we’ve sent thousands of daily LTC Clippings to keep our members
apprised of new events, reports, developments and potential professional
vulnerabilities so they are ready for anything prospects or clients may
hit them with. Most recently we are working with the
Paragon Health Institute
to clarify the long-term care problem (Long-Term
Care: The Problem)
so we can present a radically new, market-based approach to solve it (Long-Term
Care: The Solution, due this fall.) Won’t you help us keep this noble
mission vibrant and successful? To join the Center, support our efforts,
become part of our team, and receive the
benefits of membership,
contact Damon at 206-283-7036 or
Damon@centerltc.com.
Or join and contribute online
here.
Thank you for your time and consideration. Let’s do this! ***
LTC
BULLET: LONG-TERM CARE AND THE SOCIAL COMPACT
LTC
Comment: America and Americans have strayed from the binding
principles—balancing personal freedom and individual responsibility—that
made the country great. No social issue illustrates this problem better
than long-term care (LTC).
To
need LTC is a high risk: seventy percent of people who reach age 65 will
eventually develop severe need. Forty-eight percent will receive paid care
averaging $138,000. Among those who need paid care, about half will
require less than a year, and a little more than 10 percent will need five
years or more at an average cost of $266,000.
Thus, LTC represents a high probability of significant cost, but a
relatively small risk of ruinously high expense. That is precisely the
condition for which private insurance is best suited. That is, to replace
the small risk of catastrophic loss with the certainty of an affordable
premium.
Yet,
most people do not buy private insurance for LTC risk. Why?
Since its founding in 1965, Medicaid has paid for most catastrophically
high LTC costs. Although it is ostensibly a means-tested public assistance
program, Medicaid’s financial eligibility rules allow its LTC benefits
recipients to retain substantial exempt assets and to have high incomes as
long as their personal health and LTC expenses were comparably high.
By
offsetting the public’s catastrophic LTC risk, Medicaid desensitized
consumers to the need to plan, save, invest or insure when they were still
young, healthy and affluent enough to do so. This “moral hazard” left most
aging Americans, including the Greatest Generation, unprotected for LTC
risk and dependent on Medicaid nursing home care.
As
the dominant LTC funder, Medicaid paid too little to ensure access to
quality care, created “institutional bias” by paying only for nursing
homes, caused caregiver shortages due to low wages, crowded out private
financing from insurance or home equity conversion, and left too great a
direct caregiving burden on financially and emotionally stressed friends
and families.
In
other words, by attempting to solve the problem of financing LTC, Medicaid
had the opposite effect of reducing the public’s perception of the risk
resulting in too many people in need of LTC dependent on public welfare
and too few prepared to pay privately for the type, quality and venue of
care they prefer.
That
is how Medicaid LTC violated the social compact. Instead of protecting
their freedom to take care of themselves, Medicaid undercut their sense of
personal responsibility leaving them dependent on a public welfare program
unable to meet their needs.
LTC
is only one example. Social Security and Medicare are two more programs
that told citizens they are protected for income and health security in
old age, but are now facing massive unfunded liabilities and the high
probability of insolvency in the short term.
Government promises should never replace personal freedom and individual
responsibility.
For
full development of this argument and its conclusion, including citations
to scholarly sources, read
How to Fix Long-Term Care Financing
(2017),
Medicaid and Long-Term Care
(2020), and
Long-Term Care: The Problem
(2022). Expect Long-Term Care: The Solution this fall.
#############################
Updated, Monday, April 17, 2023,
10:40 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #23-007 LTC NEWS AND COMMENT
LTC
Comment: Do you spend hours searching the internet for useful articles,
key data, and relevant reports to keep you on the forefront of
professional knowledge? Do you lose business because you’re blindsided by
clients or competitors who learn critical information before you do?
Here’s an antidote:
LTC
Clippings: The Center for Long-Term Care Reform notifies subscribers to
our LTC Clippings service daily of information you need to know. Each
message contains only the critical facts about new publications: a title,
representative quote, a link to the original, and our analysis in a
sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or
smoses@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC
E-Alerts: Once a week, we compile our daily LTC Clippings into a summary,
email it to Center for Long-Term Care Reform members, and archive it in
The Zone, our password-protected members-only website. Center members also
receive our weekly LTC Bullet op-ed. To join the Center and receive all
these benefits and more, contact Steve at 425-891-3640 or
smoses@centerltc.com.
We no
longer post our LTC E-Alerts on the Center’s public access website, but
here’s what today’s LTC E-Alert contained: links, quotes and
comments on the following articles, reports, or data:
-
Social Security and Medicare Reform
-
Fast Facts about Medicare and Social
Security
-
The Growing Opportunity For Wealth
Transfer; Not Only For The Wealthy
-
Falling Inflation May Be Too Late for
Retirees. Here’s Where It’s Still Hitting Hardest
-
Hourly wage growth slowing across long-term
care, Fitch Ratings says
-
BREAKING: CMS failed to publicly post
deficiencies for two-thirds of nursing homes, OIG finds
-
Weight loss linked to 10 percent higher
mortality in elders, particularly men
-
Anxiety Abounds as Americans Contemplate
Social Security, Market Risks
-
Study finds frailty prevalent in
middle-aged and older adults
-
Feds broaden nursing home quality campaign
with new discharge, satisfaction and vaccination measures
-
Nursing Homes Profited Off Pandemic,
Reports Kaiser
#############################
"LTC
E-Alerts" are a feature offered by the Center for Long-Term Care Reform,
Inc. to members at the $150 per year level or higher. We'll track and
report to you news and analysis regarding long-term care financing,
service delivery, and research. We hope The LTC E-Alerts will help you
attain and maintain a high level of knowledge and competency in this
complex field. The Center for Long-Term Care Reform, Inc. is a private
institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Monday, April 10, 2023, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #23-006 LTC
NEWS AND COMMENT
LTC Comment: Do you
spend hours searching the internet for useful articles, key data, and
relevant reports to keep you on the forefront of professional knowledge?
Do you lose business because you’re blindsided by clients or competitors
who learn critical information before you do? Here’s an antidote:
LTC Clippings: The
Center for Long-Term Care Reform notifies subscribers to our LTC Clippings
service daily of information you need to know. Each message contains only
the critical facts about new publications: a title, representative quote,
a link to the original, and our analysis in a sentence or two. To inquire
or subscribe, contact Steve at 425-891-3640 or
smoses@centerltc.com. Read testimonials by satisfied subscribers
here. To subscribe online,
please click
here.
LTC E-Alerts: Once a
week, we compile our daily LTC Clippings into a summary, email it to
Center for Long-Term Care Reform members, and archive it in The Zone, our
password-protected members-only website. Center members also receive our
weekly LTC Bullet op-ed. To join the Center and receive all these benefits
and more, contact Steve at 425-891-3640 or
smoses@centerltc.com.
We no longer post our
LTC E-Alerts on the Center’s public access website, but here’s what
today’s LTC E-Alert contained: links, quotes and comments on the
following articles, reports, or data:
-
Lawmaker again
tries to rid workers of a payroll tax that begins in July
-
10 State-Level
Long-Term Care Bills to Track Now
-
Assisted-living
homes are rejecting Medicaid and evicting seniors
-
Government
forecast predicts steep climb in nursing home costs for next two years
-
Continental
General Agrees to Acquire Elevance LTCI Policies
-
Solving today’s
enigma of the state long-term care tax mandates of tomorrow
-
Exclusive: US to
build $300 mln database to fuel Alzheimer's research
-
My Wacky Idea to
Save Social Security
-
Study: Burnout
high among all healthcare professionals
-
Long-term care
insurance could create huge fiscal burden for adult children of aging
boomers
-
Medicare, Social
Security financial shortfalls would ‘further cripple’ long-term care,
advocates say
#############################
"LTC E-Alerts" are a
feature offered by the Center for Long-Term Care Reform, Inc. to members
at the $150 per year level or higher. We'll track and report to you news
and analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The Center
for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Friday, April 7, 2023, 10:40 AM (Pacific)
Seattle—
#############################
LTC
BULLET: LTC TANSTAAFL
LTC
Comment: Free lunches are the most expensive after the ***news.***
***
CENTER’S 25TH ANNIVERSARY: On April 1, 1998 attorney David
Rosenfeld and I founded the Center for Long-Term Care Financing (now
Reform). A quarter century later, the Center is still going strong. David
moved on to play a major role as a Congressional staffer in passing our
proposals as part of the Deficit Reduction Act of 2005. Damon joined as VP
for Administration in 2002 and he’s kept us in business ever since. We
thank our corporate and individual members for your many years of support,
encouragement, collegiality and friendship. The most promising
opportunities to improve LTC financing public policy are immediately
ahead. Stay committed with us. ***
LTC
BULLET: LTC TANSTAAFL
LTC
Comment: TANSTAAFL: There Ain’t No Such Thing
As A Free Lunch. That immortal verity pertains
today more than ever. But equally true is its corollary that everyone
wants a free lunch and many will fall for the promise of one when offered.
Government is the worst purveyor of free lunches that turn out to be very
expensive indeed. Pay a little now and get a lot later. That’s the formula
employed by Social Security, Medicare, Ponzi, and Bankman-Fried. The
outcome is always the same. Sooner or later there aren’t enough new
suckers to keep the game going.
Medicaid LTC’s free lunch isn’t as obvious. You don’t have to pay in to
get the bonanza later. You only have to be broke. Medicaid even says that
if you aren’t broke and you need expensive LTC, you have to become broke
by paying for your own care first to qualify.
Not
much of a free lunch if you put it that way. But here’s the twist. When
the time comes that you need high-cost LTC, you don’t have to impoverish
yourself. Reaching “low income” is easy. Medicaid subtracts your private
health and LTC costs. Most big assets are exempt so uncounted.
Here’s how Medicaid LTC offers a free lunch. It turns the typical Ponzi
entitlement scheme on its head. It says “ignore the risk of LTC and if you
need it you’ll lose your life’s savings paying for it before you get any
help from the government.” Then, when you need care, government pays
anyway, ignoring the draconian warnings.
Medicaid LTC’s free lunch is the worst of both worlds. People ignore the
impoverishment warnings with impunity. They don’t plan, save, invest or
insure for LTC. The fact that government always paid in the end enabled
their denial of the risk.
There are two ways to eliminate Medicaid LTC’s upside down free lunch. You
can force everyone to pay a tax to fund a new entitlement for LTC. That’s
WA Cares. It turns LTC into a conventional social insurance free lunch
scheme.
A
better approach is to establish a LTC planning responsibility, offer many
ways to meet it, monitor compliance, but only enforce responsibility when
it’s unmet voluntarily. Instead of threatening catastrophic spend down
maybe someday without following through, incentivize responsible early
planning as a way to avoid any government compulsion.
That’s the plan that I’m working on now, details of which are being
formulated every day. So stay tuned.
#############################
Updated, Monday, April 3, 2023, 10:40
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #23-005 LTC NEWS AND COMMENT
LTC
Comment: Do you spend hours searching the internet for useful articles,
key data, and relevant reports to keep you on the forefront of
professional knowledge? Do you lose business because you’re blindsided by
clients or competitors who learn critical information before you do?
Here’s an antidote:
LTC
Clippings: The Center for Long-Term Care Reform notifies subscribers to
our LTC Clippings service daily of information you need to know. Each
message contains only the critical facts about new publications: a title,
representative quote, a link to the original, and our analysis in a
sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or
smoses@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC
E-Alerts: Once a week, we compile our daily LTC Clippings into a summary,
email it to Center for Long-Term Care Reform members, and archive it in
The Zone, our password-protected members-only website. Center members also
receive our weekly LTC Bullet op-ed. To join the Center and receive all
these benefits and more, contact Steve at 425-891-3640 or
smoses@centerltc.com.
We no
longer post our LTC E-Alerts on the Center’s public access website, but
here’s what today’s LTC E-Alert contained: links, quotes and
comments on the following articles, reports, or data:
-
How to Get Your Long-Term Care Planning on
the Right Track
-
Why the U.S. Health Care System Must
Address the Shortage of Geriatricians Now
-
100 Must-Know Statistics About Long-Term
Care: 2023 Edition
-
Medicaid a major challenge to providing
affordable assisted living, NCAL says
-
Retirement plan contribution rate decreases
-
The Looming Collapse of a Long-Term Care
Insurer Raises Questions for DFS
-
Study: Older adults spending billions on
home repairs to age in place
-
Life expectancy confusion may be
jeopardizing retirement planning: study
-
Long-Term Care Planning vs. Taxes: Finding
a Healthy Balance
-
CalPERS to pay $800 million settlement over
claims it misled retirees on costs of long-term care insurance
############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
.JPG)
