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Updated, Friday, September 22, 2023, 10:40 AM (Pacific)

Seattle—

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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.

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Updated, Monday, September 11, 2023, 9:32 AM (Pacific)

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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

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"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).

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Updated, Friday, September 8, 2023, 10:40 AM (Pacific)

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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

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Updated, Tuesday, September 5, 2023, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #23-024: LTC NEWS AND COMMENT

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

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Updated, Monday, August 28, 2023, 10:40 AM (Pacific)

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LTC E-ALERT #23-023 LTC NEWS AND COMMENT

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.

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

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Updated, Friday, August 25, 2023, 10:40 AM (Pacific)

Seattle—

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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).

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Updated, Monday, August 21, 2023, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #23-022 LTC NEWS AND COMMENT

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.

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

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Updated, Monday, August 14, 2023, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #23-021 LTC NEWS AND COMMENT

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.

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’

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Updated, Friday, August 11, 2023, 10:40 AM (Pacific)

Seattle—

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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.

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Updated, Monday, August 7, 2023, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #23-020 LTC NEWS AND COMMENT

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.

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

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Updated, Monday, July 31, 2023, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #23-019 LTC NEWS AND COMMENT

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.

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?

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Updated, Friday, July 28, 2023, 10:40 AM (Pacific)

Seattle—

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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:

NEW JERSEY: The Index of Long-Term Care Vulnerability--A Case Study in New Jersey (2014) (Executive Summary on the Common Sense Institute of New Jersey website) and full report permanently archived here.
GEORGIA: The Index of Long-Term Care Vulnerability: A Case Study in Georgia (2013)
VIRGINIA: The Index of Long-Term Care Vulnerability: A Case Study in Virginia (2013) (on the Thomas Jefferson Institute for Public Policy website) and permanently archived here.

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.

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Updated, Monday, July 24, 2023, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #23-018 LTC NEWS AND COMMENT

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.

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

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Updated, Friday, July 14, 2023, 10:40 AM (Pacific)

Seattle—

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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.

[1] This paper was originally presented at the 22nd Annual Meeting of the American Legislative Exchange Council in San Diego on August 10, 1995. It was later published in “The Long-Term Care Financing Crisis: Danger or Opportunity?: A Case Study in Maryland,” LTC, Inc., Seattle, Washington, September 15, 1995.

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Updated, Monday, July 10, 2023, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #23-017 LTC NEWS AND COMMENT

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.

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Updated, Friday, June 30, 2023, 10:40 AM (Pacific)

Seattle—

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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 ***

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.

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Updated, Monday, June 26, 2023, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #23-016 LTC NEWS AND COMMENT

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.

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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

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Updated, Monday, June 19, 2023, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #23-015 LTC NEWS AND COMMENT

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.

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.

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Updated, Friday, June 16, 2023, 10:40 AM (Pacific)

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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.

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Updated, Monday, June 12, 2023, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #23-014 LTC NEWS AND COMMENT

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.

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

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Updated, Friday, June 2, 2023, 10:40 AM (Pacific)

Seattle—

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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!

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Updated, Tuesday, May 30, 2023, 10:40 AM (Pacific)

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LTC E-ALERT #23-013 LTC NEWS AND COMMENT

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.

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

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Updated, Monday, May 22, 2023, 10:40 AM (Pacific)

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LTC E-ALERT #23-012 LTC NEWS AND COMMENT

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.

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

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Updated, Friday, May 19, 2023, 10:40 AM (Pacific)

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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.

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Updated, Monday, May 15, 2023, 10:40 AM (Pacific)

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LTC E-ALERT #23-011 LTC NEWS AND COMMENT

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.

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

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Updated, Monday, May 8, 2023, 10:40 AM (Pacific)

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LTC E-ALERT #23-010 LTC NEWS AND COMMENT

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.

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?

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Updated, Friday, May 5, 2023, 10:40 AM (Pacific)

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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.***

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.

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Updated, Monday, May 1, 2023, 10:40 AM (Pacific)

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LTC E-ALERT #23-009 LTC NEWS AND COMMENT

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.

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

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Updated, Monday, April 24, 2023, 10:40 AM (Pacific)

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LTC E-ALERT #23-008 LTC NEWS AND COMMENT

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.

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

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Updated, Friday, April 21, 2023, 10:40 AM (Pacific)

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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.

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Updated, Monday, April 17, 2023, 10:40 AM (Pacific)

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LTC E-ALERT #23-007 LTC NEWS AND COMMENT

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.

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

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Updated, Monday, April 10, 2023, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #23-006 LTC NEWS AND COMMENT

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.

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

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Updated, Friday, April 7, 2023, 10:40 AM (Pacific)

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LTC BULLET: LTC TANSTAAFL

LTC Comment: Free lunches are the most expensive after the ***news.***

*** CENTER’S 25^TH 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.

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Updated, Monday, April 3, 2023, 10:40 AM (Pacific)

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LTC E-ALERT #23-005 LTC NEWS AND COMMENT

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.

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

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Updated, Friday, March 24, 2023, 10:40 AM (Pacific)

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LTC BULLET: VIRTUAL VISIT TO ILTCI 2023

LTC Comment: Last week’s ILTCI conference in Denver had a hopeful theme and a promising new focus. Read on for a virtual visit to the program for those of you who were not there, but may wish to consider attending next year.

LTC BULLET: VIRTUAL VISIT TO ILTCI 2023

LTC Comment: Steve Schoonveld chaired the 2023 ILTCI conference in Denver. He opened the program with a brief retrospective of its past iterations. The first was January 2001 in Miami with 500 attendees. Florida, Texas and Nevada accounted for 13 of the 21 total locations. The latest Denver conference had over 950 in attendance; 270 unique companies were represented including 66 exhibitors, 34 sponsors, and over 200 presenters and moderators. If you’re interested in the history of these meetings, have a look at our History of LTC Insurance Conferences (2021). It covers all of the major LTCI meetings for the previous two decades and contains pictures of LTCI’s leading lights over the years. (They’ve aged, but most are still going strong.)

This year’s planning and education committee focused on bringing in new speakers and topics and it showed. The meeting’s theme “Take the Lead” was evident throughout with a constant focus on innovation. Most evident was a special emphasis on wellness and finding ways to meet the needs of prospects and clients, especially people at risk or already in claim. It’s not just about selling policies and managing books of business anymore. It is more than ever about helping people age well and stay healthy. More on that as we describe some of the sessions below.

As usual, this ILTCI conference was ideal for networking. The exhibit hall offered free drinks and excellent food. Special thanks are due to the sponsors. Exhibitors included many who represented the meeting’s “Take the Lead” theme and its special focus on wellness and healthy aging. Check out lists of the exhibitors and sponsors so you can thank them. With this year’s conference in the rear view mirror, it’s not too soon to begin planning for next year’s ILTCI program in San Diego, CA – March 17-20, 2024 – at the newly renovated Town & Country resort.

Tracks

Here is the distribution of this year’s attendees based on their self-reported tracks:

Track Title	101%
Actuarial & Finance	25%
Advisors, Agents, & Agencies	19%
Aging in Place Solutions	7%
Claims & Underwriting	12%
Legal, Compliance, & Regulatory	9%
Management & Operations	17%
Marketing & Research	7%
Technology & Eldercare Services	5%

Behaviorist and humorist Jeff Kreisler delivered this year’s opening keynote address focusing on “why we do what we do.” He describes himself as just another typical Princeton educated lawyer turned award-winning comedian, best-selling author and champion for behavioral science. Kreisler is author of Dollars and Sense: How We Misthink Money and How To Spend Smarter and Head of Behavioral Science for JP Morgan Chase. The presentation was interesting, humorous and thought provoking. Margie Barrie, who covered the conference for ThinkAdvisor, reviewed the keynote in “What Can Help Clients See the Long-Term Care Cost Threat? Science.”

The App

This year’s conference smart phone app was excellent, the best so far. One could find all the attendees, plan a schedule based on searching all available sessions in each block, and review the handouts. The downside was that this detailed information was not included in the online version of the program. That makes it much more difficult to share session details as we were unable to cut and paste. Another problem was that the sound system in several of the meeting rooms was very poor making it impossible to capture some of the content. What follows nevertheless is a little information on each of several sessions. Hopefully, this will give you a good idea of what the conference was like and what you might expect if you come next year.

Some sessions:

3/13/23 10:30am
Title: “The Impact of State Legislative Activity on our Industry - Friend or Foe?”
Producer: Melissa Bova
Speakers: Moench, Stephanie; Veghte, Ben; Bova, Melissa; Gugig, Mike; Simonson, Dawn
Topic: “How can public sector activity targeted at LTC services and supports help or hurt activity in the private sector?”

Much is happening in this realm in several states including California and Minnesota, but of course the biggest development is WA Cares in Washington State. Ben Veghte, WA Cares’ Director made the case for that program, about to start withholding payroll taxes in the Evergreen State July 1. He is an articulate advocate for a program that, at the least, has had its ups and downs. Claude Thau brought some balance to the conversation by pointing out that WA Cares’ website claims people no longer have to worry about LTC risk. Claude observed that such a statement is false and should be removed. Veghte said he’d look into it.

3/13/23 2pm
Title: “How are consumer needs influencing product development?”
Producer: Josh Falco
Speakers: Nisenson, Larry; Tell, Eileen; Falco, Josh; Walbrun, Dave; Haas, Mike
Topic: Discuss the new and innovative ways consumers are getting help with long-term care.

This was the first of several sessions I attended focused on the mission to serve prospects and clients better, to understand their needs, and meet them. Eileen Tell offered examples of what consumers think they know about LTC that is wrong. When researchers ask what people want in a product and what they would be willing to pay, they get untenable answers. There’s a disconnect between reality and expectations. Larry Nisenson spoke about Assured Allies’ quantitative approach to discern what people really want, healthy aging in place, and to help them achieve it with NeverStop.

3/13/23 3:45pm
Title: “The New Trend in Integrating Caregiving Benefits with LTCI Benefits”
Producer: Larry Nisenson
Speakers: Nisenson, Larry; McInerney, Thomas; Sikorski, Cathy; Martin, Todd
Topic: How are caregiving and LTCI linked and how can we leverage relationships with HR representatives to tighten the connection further?

This was another session aimed at better integrating long-term care insurance benefits with caregiving needs. Genworth CEO Thomas McInerney mentioned his company’s largest claim ($1.3 million) on an original premium of $1,500. Todd Martin asked how many in the audience have caregiving experience. Answer, 90%. He observed there is involuntary employee turnover due to LTC with serious ramifications for the organizations affecting their ability to acquire and retain top talent. Cathy Sikorski emphasized the importance of bringing LTCI into the workplace.

3/14/23 9am
Title: “Leveraging Public & Private Insurances & Resources to Improve Health Outcomes”
Producer: Colleen Dennis
Speakers: O'Leary, John; Plaskon, Todd; Lillis, Maureen; Ludden, Beth; Dennis, Colleen
Topic: Join this session to learn how to leverage public and private insurances and companies like Medicare, Medicare Advantage, non-profits, and AAA’s to improve health outcomes and lower costs. We’ll specifically talk about what we can learn/utilize from Medicare (equipment coverage, use of the OASIS data for homecare claimants, use of the MDS data for facility claimants) and Medicare Advantage (meal delivered programs, transportation). Panelists will also discuss how to find resources in the area (e.g. life alerts, Meals on Wheels) to complement wellness programs and/or to reduce reliance on caregivers.

This was a fascinating session with its focus on integrating services, less so on financing. Beth Ludden of Genworth observed there are many critical organizations that elders who need them do not know about, including the Area Agencies on Aging. She observed we work in our insurance bubbles too much, unaware of services that are out there. Medicare and Medicaid are ahead of the LTC insurance industry in focusing on hands-on or supervisory care. Other panelists shared many examples of organizations that can help and ideas to enhance the cooperation and mutual effectiveness of public and private insurance sources.

3/14/23 10:45am
Title: “Teamwork Makes the (LTC) Dream Work: Public/Private Collaboration”
Producer: Stephanie Moench
Speakers: Cain, Steve; Moench, Stephanie; Arland, Jamala; Mueller, Jamie
Topic: This session explores opportunities for the private LTC market to collaborate with state programs, e.g., through the development of supplemental insurance products, to meet consumers' evolving LTC needs. During this interactive discussion, panelists will delve into key considerations related to public/private collaboration with the goal of expanding industry awareness and sparking product innovation, such as:

• What challenges are impeding public/private collaboration?

• How will publicly funded LTC programs impact private LTC market dynamics and product designs?

• How can we proactively promote public/private collaboration while mitigating consumer confusion?

• What are some of the key supplemental (and substitutive) LTC product opportunities for insurers given the range public programs designs being discussed? What are the primary actuarial considerations that could impact the consumer’s decision? Providing consumers with a range of options (public and private) should better enable them to holistically plan for their future LTC needs--teamwork makes the (LTC) dream work!

This was yet another session aimed at making the collaboration between public and private insurance work better. Stephanie Moench, for Oliver Wyman, spoke of the landscape of public LTC programs, showing a map with 14 or 15 states highlighted that are in creative phases. Steve Cain observed the need to meet people where they are, the workplace.

3/14/23, 2pm
Title: “The Results Are In: Aging in Place/Wellness Programs Seem Promising for the LTCI Industry”
Producer: Jodi Anatole and Vince Bodnar
Speakers: Jacobs, Dave; Anatole, Jodi; Moore, Nate; Gal, Afik; Hu, Char; Henderson, James
Topic: One of the greatest reasons LTCI carriers hesitate to implement an Aging in Place/Wellness program is lack of actual results. While these programs are still new, results are beginning to emerge that seem very promising. After a rigorous selection process, we have assembled a panel of vendors who will share their strategies and results - with a focus on the bottom line. This session should give you a deeper understanding on why these programs are worth the investment and how they can help you manage your block.

Each speaker had 10 minutes to share their company’s approach and results. All were impressive. Afik Gal of Assured Allies went first reporting that they work with people before they become claimants with an evidence based approach. They help people get their confidence back. Return on investment of 167%. Other speakers discussed their unique approaches and report similarly impressive results.

Bonus session reviews prepared by Damon Moses:

Session: “Modernizing The LTC Customer Experience Using Technology”
Track: Management & Operations
Moderator/Producer: Jennifer Jones
Speakers: Jim DuEst, Duane Anderson, Kim Poulopoulos, Jennifer Jones
Description: “Please join this panel to hear more about how companies are leveraging technology to modernize the long term care customer experience throughout the policy lifecycle from underwriting to rate increases to claims. Hear from carriers, reinsurers, and administrators on their strategies, success stories, and challenges, as well as learn about emerging trends in technology in our industry.”

Key messages:

Investment in technology to increase efficiency and automation is necessary for improving the LTC Customer experience.
Improve customer experience by employing technology such as Chat GPT.
Improve health outcomes by collecting personalized data through wearables such as Fitbit.
Some of the biggest challenges preventing technological progression are: resources, organizational issues and overcoming legacy systems.

Session: ”The LTC Renaissance: New Product and Market Opportunities”
Track: Actuarial & Finance
Moderator/Producer: Erik Wenzel
Speakers: Brian Vestergaard, MacKenzie Madsen, Erik Wenzel, Tom Riekse
Description: “This is an exciting time for the LTC industry—the confluence of rising interest rates, proposed public financing solutions, demographic shifts, post-pandemic focus on health and wellness, and technological advancement gives the industry an opportunity for an "LTC Renaissance”. This session is presented by those on the frontlines of the imminent renaissance and will cover:

New market opportunities presented by state-sponsored LTC programs
The growth of group and worksite distribution channels
Middle-market solutions
New market entrants and innovative features
Wellness programs on new business”

Key messages:

LTC is currently in a period of renaissance of renewed interest and product innovation.
State-sponsored programs are increasing interest in LTCi as a tax avoidance measure.
Accessibility, affordability and ease of premium payments are important to LTCi consumers.
Hybrid products linked to the market and products with variable benefits will be important.
Consumers should look at an LTCi policy as a valid component of a holistic financial portfolio and should be able to view the value of their policy easily online.

Session: “Caregivers need help too!”
Track: Aging in Place Solutions
Moderator/Producer: Robin Devine
Speakers: Ali Ahmadi, Karen Brown, Tracey Gendron, Timothy Peck, Robin Devine
Description: “Caregivers take care of us, we need to take care of them. A Discussion on raising the level of awareness of the needs and wants of older adult and their caregivers.

“Caregiver burnout doesn’t need to be inevitable. So, why do we so often associate caregiving with burnout? The caring relationship is one that has both joy and frustration - just like all other relationships. Join our panel discussion where leaders in Caregiving, Gerontology, and Innovation share methods, ideas and best practices to support care partners by breaking through their misconceptions and helping them increase choice, control, and independence. We will have a conversation around preventative vs reactive caregiver support concepts.”

Key messages:

Women tend to be default primary caregivers, often as a spouse or eldest daughter.
24% of caregivers provide care for 5 years or more.
$470 billion is the economic value provided by informal caregivers.
LTC as ecosystem of care. Caregiving is a natural and normal part of everyone’s lifecycle and should be destigmatized. People fall into two categories: current caregivers or future caregivers.
Further support caregivers by improving care infrastructure and examining the health consequences of ageism.

3/14/23, 3:30 Closing General Session
Title: “Taking the Lead: Building Towards 2030”

The closing session was comprised of three panels and a poll.

The first panel, titled “The Future of Caregiving and Care Management,” engaged Karen Brown of the Colorado Commission on Aging; Noreen Guanci, co-founder CEO of Long-Term Solutions in Massachusetts; Maureen Lillis, COO of Independent Living Systems; and Robert Eaton, principal at Milliman in Tampa. They discussed caregiver shortages, poor caregiver compensation, and the importance of valuing caregivers. One idea: Train high school students to do caregiving so they have jobs when they graduate. The ILTCI conference has come a long way toward understanding and supporting caregiving since its Aging in Place track 10 years ago.

The second panel, titled “The Future of Care Financing,” engaged moderator Vince Bodnar of FTI Consulting; John O’Leary, president of O’Leary Marketing; Anna Frankowska, CEO of Graceful Finance; Shannen Logue, Deputy Insurance Commissioner in Pennsylvania; and Liz Christopher, COO of Home Care Genie. They discussed the public and private realms of LTC financing, how both involve many different aspects, and often do not understand each other. But all are trying to do the same thing, which is to find adequate financing to support the country’s caregiving needs. Shannen asked, “why are so many people qualified for Medicaid?” Vince asked “what is the best way to reach the middle market?” Both good questions the answers to which would wisely begin with a careful study of how Medicaid LTC eligibility determination actually works, enabling potential middle market prospects to access Medicaid when they need LTC late in life without significant spend down. A sense of optimism is growing as the profession is starting to focus on our customers and policy holders.

The third panel, engaged industry veterans Ron Hagelman, author of the long-running monthly column “The Last Word on LTCI” in Broker World and his long-time business partner Barry Fisher of Blaze ‘n Bear Insurance Services, Inc., in amusing, and informational back and forth banter about their perspectives on long-term care services and financing. Barry observed “people who need to be here aren’t” and that Medicaid crowds out private products due to the “elder law industrial complex.” He compared the moral hazard of letting Medicaid co-opt private insurance with the current travail in the banking system where government bailouts ensure even more irresponsible banking behavior in the future. He said “private insurance should be the first line of defense; public, second.” I’ll have more to say along those lines in my closing LTC Comment. Ron observed LTC is “all about control,” what can I do to assure best quality of care for loved ones and clients. As a fellow old-timer, this session was my favorite of the conference.”

Director’s Pitch: Conference director Steve Schoonveld closed the meeting with his “Pitch.” He said “So we have health insurance that protects or maintains your health. It’s called dental insurance and not tooth decay insurance. Vision insurance and not blindness insurance. Auto insurance and not crash insurance. Life Insurance covers the value of your life in case of death.

So, does LTC insurance and extended care insurance cover your care or should it insure your wellness? I offer that this conference will be called the Intercompany Wellness Insurance Conference, or the IWIC by 2030.” Finally, he posed these questions to the audience:

In 23 years of ILTCI conference, what has surprised you the most?
What are the likely trends you expect in the next 7 years?
Predict the theme of the 2030 conference and explain why.
Rename Long-Term Care Insurance.
“Punt the pitch” and make the case for your preferred 2030 conference location.

Several audience members approached the microphone to share their answers.

A final electronic poll asked “How many ILTCI conferences audience members had attended.”

1. First, 34%
2. 2-5 times, 38%
3. 10 times, 14%
4. 11-15 times, 7%
5. 16-20 times, 5%
6. All 21 times, 1%

Supplemental content before and after the conference

CLTC delivered two classes the weekend before the conference - a Master Class and a pilot for their new Product Insider class. “Both were a hit!”

SOA Section Council Meeting (Open to All), Sunday, March 12

SOA Professionalism Course, Wednesday, March 15th

Alzheimer's Association Session, Wednesday, March 15th

Closing LTC Comment: I was moved and heartened by this ILTCI conference’s “Take the Lead” theme and its overwhelming focus on wellness and serving clients’ needs. Both were encouraging and inspiring. But as an attendee of nearly all of the meeting’s earlier iterations, I missed some of the former sessions’ broader content and fiery interactions. To my mind the biggest missing pieces are the absence of policy and provider tracks. It’s as though the LTCI industry has given up the battle, succumbing to Medicaid’s crowd out effect without further effort. It’s stuck in its silo lacking the former invitation to nursing homes, home health agencies, assisted living facilities to come, share, argue, and conceive together. I remember debates and challenging questions, that are less evident now. Harley Gordon and George Sherman, where are you when we need you? I hope the LTCI business does not subside into a go-along-to-get-along truce with government, ironically just as LTCI’s prospects are looking up and government’s, especially its entitlement programs, are going down.

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Updated, Monday, March 20, 2023, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #23-004 LTC NEWS AND COMMENT

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.

Some State Regulators Frown on Life-Long-Term Care Combo Products
High concentration of dually eligible older adults in assisted living warrants study of care quality, researchers say
OIG: Personal care providers accounted for most Medicaid fraud convictions again in 2022
Costs for linked-benefit long-term care insurance policies drop up to 15 percent from last year
Medicare costs could soar with availability of new obesity drugs, experts say
What Can Help Clients See the Long-Term Care Cost Threat? Science
Denied by AI: How Medicare Advantage plans use algorithms to cut off care for seniors in need
How Life and Annuity Issuers Could Get Silicon Valley Bank Flu
The Role Of Medicaid In Addressing Climate Change And Climate-Related Inequity
Exclusive: Biden administration warns states to minimize coverage loss as they restart Medicaid eligibility reviews
Biden pledges $150B for HCBS in new budget
Long term care insurance in the UK: What's going on?
New evidence of four distinct pain trajectories in nursing home residents
Family caregivers’ unpaid work valued at $600 billion: report
AARP: Paid caregivers are key to relieving family caregiver burden
Assured Allies secures $42.5M Series B to help Americans ‘successfully age’
A tax-advantaged solution for long-term care needs
GoldenCare Long-Term Care Insurance
7 Long-Term Care Program Ideas for Taxphobic Times
Aggressive Medicare Advantage marketing floods TV and mailboxes with misleading ads. The Biden administration is cracking down
Argentum’s Workforce Projections for Senior Care Report Sees a Need to Fill 20 Million Job Openings Through 2040

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Updated, Monday, March 6, 2023, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #23-003 LTC NEWS AND COMMENT

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.

Terry Savage and Brian Gordon on long-term care insurance
Social Security Checks Got a Historic Boost This Year. Retirees Say It’s Not Enough
The High Cost of Waiting to Plan for Long Care
As States Prepare to Resume Disenrollments, Medicaid/CHIP Enrollment Will Reach Nearly 95 million in March, and the Pandemic-Era Enrollment Growth of 23 million Accounts for 1 in 4 Enrollees
They could lose the house — to Medicaid
As Debate Heats Up in Washington Over Possible Entitlement Cuts, A New KFF Analysis Details the 30% of Federal Spending That Goes to Health Care Programs
A Hidden Source of Wealth Many Retirees Overlook
The problematic politics of Japan’s ageing electorate
Long-term care insurance costs in Germany to increase from July
Better cardiovascular health may explain declining dementia rates: study
Older adults fearful they could outlive savings: survey
Skilled Nursing Operators Protest ‘Insane Amount’ of Administration Needed as Medicare Advantage Expands
The Real Federal Deficit: Social Security And Medicare
New Life Policy Can Protect Against Disability and Long-Term Care Risk
Brian Blase and Frederick Isasi on Medicare and Medicaid
7.7% Increase in Long-Term Care Benefits Payouts
CMS Officials Confirm End of PHE Nursing Home Waivers, Barring Congressional Action,
What Long-Term Care Insurance Policyholders Need to Know
They offer to help nursing home residents get Medicaid. Too often, say legislators, they cheat them
States, other countries offer insights into making long-term care more affordable: report

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Updated, Friday, March 3, 2023, 10:40 AM (Pacific)

Seattle—

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LTC BULLET: LTCI AND INNOVATIVE FINANCIAL PLANNING

LTC Comment: “Adapt or die,” capitalism demands. Consider how long-term care insurance evolves and survives after the ***news.***

*** ILTCI CONFERENCE themed “Take the Lead” convenes in Denver March 12-15, only days away. Register here. Find lodging here. Click here for the conference app and how to reach the hotel from the airport. This is the big one, folks. Be there if you can. If you can’t, watch for our virtual visit to the conference, summarizing its highlights, shortly after it ends. In the meantime, check out our “History of LTC Insurance Conferences (2021). It has narrative and pictures covering twenty years of LTCI professional meetings. What a gauntlet we’ve run! ***

*** CERTIFICATION FOR LONG TERM CARE will be in Denver for the ILTCIconf offering a new Product Insider class that provides “an impartial deep dive” into all the LTCi product types on the market, who offers them, their pros and cons and client applications. CLTC reports: “Because we are excited about our new class and want your participation in our roll out event in Denver on March 12^th, 8:00 – 2:00, we have a very special (and limited) offer. ILTCI Price: Only $500 (current street rate: $899); CLTC Training Pre-Requisite: Waived.” Register here. ***

*** CLTCR APPEAL. Every so often, we need to appeal for your support of the Center for Long-Term Care Reform. This is one of those times. Please review our “Membership Levels and Benefits Schedule.” It explains all the ways individuals, companies and organizations can work together with us to improve long-term care financing policy. We are on the verge of an opportunity for statutory LTC policy reform the likes of which we have not seen in decades. I know because I’ve been in the thick of the fight for 40 years, as my bio recounts. The Paragon Health Institute recently published my assessment of what’s wrong with long-term care in America: “Long-Term Care: The Problem.” Watch for our radical proposal to fix LTC policy coming in the fall titled Long-Term Care: The Solution. Center members can follow our progress and contribute their own ideas and recommendations by reading our biweekly LTC Bullets, our weekly LTC E-Alerts, and our daily LTC Clippings (for premium members). Join our campaign! ***

LTC BULLET: LTCI AND FINANCIAL PLANNING INNOVATION

LTC Comment: Financing long-term care is a critical part of ensuring that all Americans have access to quality extended care when they need it. But so is preventing and delaying the need for paid long-term care by promoting wellness and well-being. Assured Allies is a company dedicated to combining data science, personalized technology, and human touch to unlock the benefits of healthy aging for individuals, families, and insurers. It should come as no surprise that when they succeed in that mission it benefits the people they help and their LTC insurers. The Center for Long-Term Care Reform is proud to count Assured Allies among our corporate members.

I was so impressed with Assured Allies’ creative strategy to integrate wellness, retirement planning, and long-term care financing that I asked the company to prepare a “Guest Bullet” sharing their approach. The result follows in a piece authored by the company’s Chief Growth Officer, Larry Nisenson. He has committed to share more about Assured Allies’ mission and approach in the future. In the meantime, he suggests this video. But for now, here’s …

“The Role of Long-Term Care Insurance and Innovation in Financial Planning”
by
Larry Nisenson

Retirement financing in America was revolutionized when Congress passed the Revenue Act of 1978, which allowed employees to set aside a portion of their salary in a tax-deferred retirement account or 401K. As the defined benefit plans of our parents’ generation shrank, the modern world of retirement investing flourished. Today, almost 50 years later, Americans have socked away over five trillion dollars in these retirement juggernauts. In reaction to this sea change, a new retirement planning industry boomed to help individuals save and invest enough for their futures. The industry focused on three main areas of retirement planning: accumulation of assets, income generation and wealth transfer.

While these phases are critical to retirement planning, there is a key risk that is often overlooked by even the most astute financial planners: the impact of a long-term care event. According to an ASPE Research Brief presented to the HHS in August of 2020, over 50 percent of people over age 65 will require long-term care at some point, making this a huge oversight for half the population. Long-term care may be brief for some, but the average statistics—a length of three years, and a cost of over $120,000—are sobering indeed.

Despite the urgent need for long-term care insurance (LTCI) to cover this potential liability, the industry has sold only about 7 million LTCI policies in the last 40+ years, an incredible decline from the 2003 peak, when sales exceeded $2 billion in premium. In 2020, according to Milliman, the industry only sold $150 million of stand-alone LTCI, over a 90 percent drop from its high two decades ago. Hybrid products have picked up some of that slack, but consumers are hardly rushing to purchase any of those choices in droves. Why not?

There are several reasons for the gap in coverage, including fewer carriers who write LTCI, lack of consumer awareness of the risk, and negative agent and consumer sentiments due to rising premiums and a general misunderstanding of health care insurance. Many consumers believe that Medicare will cover long-term services and support (LTSS), but in most cases, that isn’t accurate. Since the vast majority of LTC claims are non-medical in nature, Medicare isn’t the answer.

The aging demographics of the U.S. today render this problem even more dire. According to the U.S. Census Bureau, there will be over 80 million Americans over the age of 65 by 2030 as the last of the Baby Boomers head into retirement. With so many of them financially unprepared, it becomes even more critical that the retirement industry steps up to provide products that meet people’s needs and show them a workable path toward financial security in retirement.
To accomplish this, the industry must continue to embrace change and innovation from every angle. The participants need to include incumbent carriers, agents and distributors and, of course, regulators. Innovation can happen on many fronts, but I’d like to focus on three areas: annuities, underwriting and wellness incentives.

First, let’s look at annuities. The fixed index annuity space is a familiar one for many agents and consumers and, according to LIMRA, is experiencing a recent boom—2022 was a record sales year with almost $80 billion in sales. Deferred annuities have been used by consumers during all three phases of their retirement planning, but to date have not been considered as a long-term care solution, as evidenced by the somewhat anemic sales of less than $500 million in 2021. In addition to the overlooked potential of deferred annuities, the Pension Protection Act (PPA) has opened the door to incredibly powerful new annuity hybrid product opportunities in the LTCI space.

The PPA was enacted by Congress in 2006 and generally allows consumers to enjoy both tax-deferred growth of their annuity contract and tax-free distributions for qualified long-term care expenses. This only applies to non-qualified annuities with true LTC benefits, not acceleration riders attached to the policy. There are other rules of course, but this incredibly efficient tax policy should be on every consumer's mind and in every advisor’s playbook. Even so, demand for hybrid LTC annuities probably won’t accelerate without innovations on the consumer front. Underwriting continues to be a friction point for consumers. Given the advancements in electronic medical records (EMRs), data science and clinical understanding of morbidity drivers, there's no reason we can’t offer a more streamlined experience.

At my company, Assured Allies, we’ve developed and brought to market an all-digital underwriting experience that takes less than 30 minutes and provides objective underwriting decisions that achieve as good if not better risk assessment than traditional morbidity underwriting. A single 30-minute video assessment allows us to assess the physical and cognitive abilities of the applicant and then feed the scores into an algorithm that determines which class is appropriate for the applicant. Our approach is much more in line with the immediacy that consumers expect and reflects the trend lines of other companies in today’s underwriting space as well.

The final innovation I’d like to address is wellness incentives. Wellness programs offer opportunities to enhance LTC products for both the consumer and the carrier. John Hancock’s Vitality program has done a wonderful job of incentivizing policyholders to participate in healthy living, but to date, this type of innovation has been missing on the annuity side. Assured Allies introduced the NeverStop wellness program on Bridge, our first annuity product, launched in partnership with EquiTrust in Q4 of 2022. Policyholders who participate in NeverStop wellness take an active role in their aging journey and can earn additional long-term care dollars if they need to access their benefits.

There are many other examples of innovation that are surfacing for consumers in the caregiving space, the voluntary benefit world and the insurance product world. Assured Allies is proud to be part of this wave of innovation; we must continue to push these efforts forward to make successful aging accessible to all. An important consideration for all these enhancements is the regulatory front and the push by the NAIC for more innovation. The task force has done a great job of advancing their thinking and being open to new ideas, and we need to see more states embracing these innovations. This is key to private enterprises’ ability to meet consumers where they are with modern solutions that answer their needs.

Larry Nisenson is Chief Growth Officer for Assured Allies. Reach him at 908-500-0770 or larry.nisenson@assuredallies.com

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Updated, Monday, February 20, 2023, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #23-002 LTC NEWS AND COMMENT

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.

Are Payments To Medicare Advantage Plans Inflated?
More than 1 in 6 Americans now 65 or older as U.S. continues graying
Bridging the Gap: A Discussion of Short-Term and Long-Term Care
Is Applying for Medicaid for Do-It-Yourselfers?
Researchers ID 8 social factors that lead to early death in seniors
Medicare Recipients Face Significantly Higher Projected Costs: EBRI
Death, Finances and How Many of Us Get Our Money Needs Wrong
Genworth to Launch Senior Care Provider Network Business
FACTSHEET: State of the Nursing Home Sector
Study: Prevalence of disabilities among older Americans is much lower than a decade earlier

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Updated, Monday, February 17, 2023, 10:40 AM (Pacific)

Seattle—

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LTC BULLET: LTCI EDUCATION

LTC Comment: CLTC exemplifies certified excellence in LTC education. More on what that means after the ***news.***

*** 2022 LTCI PAID CLAIMS: Jesse Slome, Director, American Association for Long-Term Care Insurance reports “Long-term care insurance companies paid out a record $13.25 billion in 2022. Claim benefit payouts for policyholders with traditional long-term care insurance coverage grew from $12.3 billion in 2021. The increase in benefit payouts is expected as policyholders age and start to require care. For calendar year 2018 the Association reported that long-term care insurers paid out $10.3 billion. Link to the reported info here. ***

*** CLTC, the subject of today’s Guest LTC Bullet is sponsoring some special programs. One, titled “The Rise of LTC-Annuities: What’s New? Why Now? What Lies Ahead?, is scheduled for February 22, 2023 (Wednesday) at 2:00 P.M. EST. Another, called the CLTC Product Insider class will be offered March 12 at the ILTCI conference in Denver. Check out these programs here. ***

*** THE 2023 ILTCI CONFERENCE is less than a month away. Check out the Denver March 12-15 program here. Register here. The 2023 ILTCI Mobile App, sponsored by Nationwide, is already available to registrants. Themed “Take the Lead,” the conference will convene at the Sheraton Downtown Denver. Comedian lawyer (evidently not an oxymoron) Jeff Kreisler, is slated to keynote the program. Organizers say “Last year’s conference was a huge success! Over 750 attendees from across the US attended. We look forward to bringing you another amazing conference in 2023.” For a history of this and other LTC insurance conferences over the years, check out our History of LTC Insurance Conferences (2021). You’ll find summaries of each conference and many pictures of much younger LTCI luminaries, who are older and wiser now. Don’t miss this opportunity to get the latest industry news, scuttlebutt and networking. ***

LTC BULLET: LTCI EDUCATION

LTC Comment: The Certification for Long-Term Care company and training have been around for a long time. They are highly regarded and deeply appreciated by people who care about LTC insurance excellence. That includes myself and the Center for Long-Term Care Reform, which is proud to have CLTC as a corporate member.

Our appreciation for CLTC got an extra boost when I saw the latest issue of their CLTC Digest. It contains serious articles by thoughtful experts bearing on issues of concern to anyone serious about improving the delivery and financing of long-term care. In fact, the Digest’s “new year and fresh look” spurred me to email this to CLTC’s Executive Director Amber Pate: “I’m so impressed with CLTC’s program and development, especially the CLTC Digest. The industry has had nothing like that since George Sherman published LTC News & Comment in the 1990s.” Old timers like me remember how that monthly newsletter kept us all at the forefront of LTCI news and analysis at a time when anything and everything still seemed possible, in fact more than likely, to happen. If the CLTC Digest can help rekindle that sense of mission and hope, it will be a valuable part of our common objective, to improve long-term care for all Americans. So I added “I’d very much like to publish a guest LTC Bullet about CLTC and the Digest.”

Steve Moses

LTC Comment: Now here’s today’s Guest Bullet column by CLTC’s Director of Education.

The Value of Education in the Long-Term Care Insurance Industry
by
Celeste Cobb

The impact of an unexpected need for extended care has serious, if not irreversible consequences for families and for their ability to keep future financial commitments. Long-term care planning is a critical component of risk management and retirement planning and is considered the most overlooked aspect of insurance and financial planning in our country. A long-term care event and associated expenses pose the greatest threat to an aging client’s financial security.

Long-term care insurance is a complex product. Long term care planning is a complex process. Back in 1997 elder law attorney Harley Gordon, Esq. created the Certification for Long-Term Care (CLTC®) because he believed long-term care planning was an essential component of comprehensive financial, retirement and estate planning. He also did not support the common practice of educating a client about the risk of needing care for the purpose of purchasing an insurance product. Such tactics serve only to create an adversarial environment because most people believe that the worst will happen to someone else. Attempting to convince the client otherwise will only provoke an argument that leads to frustration for the advisor and the client.

As a result, Harley developed a program built on the concept of “consultative engagement.” Its goal is to educate a client about the consequences, emotionally, physically and financially, to those he or she loves, if an unexpected extended care event happens. When it is done correctly, the individual is persuaded to decide to plan for such an event, and to fund it.

The 16-hour CLTC Master Class is the hallmark of Harley’s vision and awards the CLTC designation to those who pass the 100-question exam. Over the past 26 years, tens of thousands of planning professionals have completed this training, and carry the CLTC (Certified in Long-Term Care) designation.

CLTC has many industry thought leaders among its alumni. Becoming a CLTC graduate grants instant access to this elite group of long-term care planning specialists. It also provides objective credibility for the advisor about his or her intent, commitment, and skills in extended care planning. With the advance of technology and the changing work environment, advisors have a choice of how they complete the Master Class today. There is the traditional live classroom option, or a student can join a virtual classroom, or pursue a self-study program via eCLTC.

CLTC leaders recognize the need to adapt and continually increase the value of CLTC because much has changed since 1997. New training programs have been introduced including a shortened, 4-hour continuing-education-approved “Foundations” class developed for advisors who want to know the basics, but don’t wish to specialize.

Most recently, a new “Product Insider” class was developed to answer the ever present questions about LTC insurance products. There are many ways to fund an extended care plan today, and this new class provides in depth and impartial training on the features, client applicability, pros and cons of each.

CLTC recognizes that education extends well beyond the class room. Therefore, it provides tools and “news” members can use to advance their knowledge and practice. Industry experts join our monthly webinars and contribute to our quarterly CLTC Digest. Monthly newsletters give quick updates on CLTC and industry happenings. A variety of planning and education tools are developed, updated and shared regularly, some targeted for use with a client, and others for advisors only. All materials are impartial, carrying only the CLTC logo. While it is true that all of the leading insurance carriers and distributors endorse CLTC, it is not aligned with any one organization.

CLTC’s mission is to educate financial, legal, accounting and other professionals about the need to discuss proactively with their clients the consequences of not having a plan will have on them and their families during retirement. As a former First Lady said, “There are only four types of people in the world: those who have been caregivers, those who are currently caregivers, those who will be caregivers, and those who will need caregivers.”

Celeste Cobb is CLTC’s Director of Education. Reach her at celeste@ltc-cltc.com or 203-770-2438.

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Updated, Monday, February 6, 2023, 10:40 AM (Pacific)

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LTC E-ALERT #23-001 LTC NEWS AND COMMENT

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.

Fight to Rename 'Medicare Advantage' Gets New Push
Report: Medicaid Falls Short on Costs of Care in Nursing Homes
Most long-term care doesn’t qualify for insurance benefit
Feds to Cut Medicare Advantage Plan Pay Over Health Score Creep
Two KFF Analyses Explore the Demographics of People Jointly Enrolled in Medicare and Medicaid As Well As Program Enrollment and Spending for This Population
Debate: Will Secure 2.0 Act Help Americans Pay for Long-Term Care?
Can I Apply for Medicaid Home Care If I Left Long-Term Care?
Human Freedom Index: 2022
Look To The States, Not Congress, For Long-Term Care Financing Reform
CMS Proposal Marks Shift After Years of Skilled Nursing Frustration with Medicare Advantage Diversions
Small-town nursing homes closing amid staffing crunch
Millions of Medicaid beneficiaries may lose coverage as disenrollments resume in April
Older adults’ housing wealth hits new record at $11.81 trillion
Can My Mom Pay Me Rent If She Will Be Applying for Medicaid?
Top 5 States for Long-Term Care Planning Increases
Medicaid HCBS study shows ‘we still know very little’ about COVID in senior living
Impact of Secure Act and Long-Term Care Insurance Provisions Discussed
10 Things to Know About the Unwinding of the Medicaid Continuous Enrollment Provision
Will Secure 2.0 Increase Long-Term Care Insurance Sales?
Congratulations to the McKnight’s Pinnacle Career Achievement Award winner
Public, private partnerships key to New York state Master Plan for Aging
Nursing home staff shortage a ‘crisis’ in Clark County, Washington
81 percent of nursing homes receive less than cost of care for Medicaid patients: analysis
CMS releases new Medicaid guidance for states to tackle unmet social needs
California to Reality-Check $144K Public Long-Term Care Benefits Package
Nursing Homes Need $11.3b Annually To Meet Proposed Staffing Minimum
Spiraling costs threaten growing optimism for skilled nursing in 2023 Outlook Survey
2023: The Year Medicare Advantage Begins To Dominate Traditional Medicare
CVD Benefits of Activity Seen Below Widely Quoted Step Goal in Older Adults
US life expectancy falls to lowest levels since 1996 due to COVID, drug overdoses: CDC
House Passes Secure 2.0 Act in $1.7T Spending Bill

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Updated, Friday, December 30, 2022, 10:40 AM (Pacific)

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LTC BULLET: MAKE LTC SIMPLE AGAIN

LTC Comment: There must be a better way to do LTC. There is. Read on after the ***news.***

*** HAPPY NEW YEAR ***

*** RON HAGELMAN deserves our special thanks and a shout out. Here’s how we covered his latest column for Broker World in a recent LTC Clipping. ***

12/1/2022, “Enemies,” by Ronald R. Hagelman, Broker World

Quote: “In my humble opinion no one has been a more consistent hard headed advocate of exposing the corrosive relationship between the public response to custodial care for the aged and the lack of success in private responses to reduce and return control of individual claims destiny than Stephen Moses. His most recent manifesto ‘Long-Term Care: The Problem’ recently released from the Paragon Health Institute once again provides conclusive irrefutable evidence that the still mushrooming consequence of current market conditions is the fault of existing misguided public response to the problem. The truth is we have always been fighting ourselves. It is the incestuous relationship between the holy trinity of Social Security, Medicaid and Medicare that has made it virtually impossible for us to adequately blunt this risk from the private sector. Private funding solutions including insurance, reverse mortgages and life settlements have had no room to breathe free when all the oxygen has already been sucked out of the room by State and Federal mandated, frequently capped and therefore underfunded, politically loose footballs. This exceptional white paper provides more than a sufficient arsenal of hard statistic ammunition to defeat any spurious attempt to defend the expansion of public taxpayer funded strategies. More of the same will not help. It will however most certainly exacerbate the problem.”

LTC Comment: Ron Hagelman’s monthly column for Broker World is a mainstay of thoughtful analysis and hopeful optimism in a struggling market. Ron is a friend and ally in our common mission to improve long-term care for all. I thank him for this recognition and urge his readers to take his advice: read Long-Term Care: The Problem and look forward to Long-Term Care: The Solution, forthcoming next year from Paragon Health Institute. To borrow Mr. Hagelman’s well-known tagline: “Other than that I have no opinion on the subject.”

*** OFF TO COLOMBIA. Honestly, I can’t remember a time in its almost 25 years that the Center for Long-Term Care Reform fully closed down for a holiday from our 24/7 mission to improve LTC public policy. But now we’re going to do just that. January 2 Damon joins Steve on a flight to Panama, followed by speedboats through the San Blas Islands to Colombia, with more boats and busses to Cartagena, and finally on through the Andes, to Bogota, Medellin and other points of interest. So please enjoy a respite from LTC Bullets and LTC E-Alerts until Steve returns February 8. He’ll keep the LTC Clippings coming to premium members though perhaps with a little less frequency. Hasta luego. ***

LTC BULLET: MAKE LTC SIMPLE AGAIN

America’s long-term care system is complicated, confusing and counterproductive. People want to receive care at home, but the system shunts them into nursing homes. They want qualified caregivers they choose for themselves, but they get whatever Medicaid offers at minimum wages. They don’t want to burden their families, but the financial and emotional strain of LTC on friends and families is worse today than ever. What happened?

This part is not complicated. Since Medicaid began in 1965, government has paid the cost of catastrophic LTC. No matter how often analysts, politicians or the media told them they could lose their life’s savings to LTC, consumers would not save, invest or insure against that risk. They didn’t believe the scary warnings, but most importantly, the warnings were untrue. Most people never ended up needing prohibitively expensive extended care and those who did got it paid for by Medicaid without catastrophic spend down.

Never mind for now all the complicating details such as “doesn’t Medicaid require impoverishment?” Why do people ignore the risk and cost of LTC? Are they stupid? Or just “in denial?” Don’t we have to take care of them if they can’t or won’t take care of themselves? Isn’t government the only solution? If not Medicaid, then what? Don’t we need a new compulsory, payroll-funded, social insurance entitlement for LTC? That’s the course most analysts’ reasoning and their argument usually takes.

Don’t go down that rabbit hole. I can refute that argument and I have done many times. For now, keep it simple, just consider the basic fact. That is, few people worry about or do anything to prepare for LTC until they need it. Then when the costs mount, they slip onto Medicaid. We’ll make no progress solving the LTC challenge until we confront that reality and change it. How can we get people to deal with LTC risk and cost while they are still young, healthy and affluent enough to prepare and avoid public assistance in the future?

We saw one way to do it when Washington State confronted its citizens with the threat of a .58 percent payroll tax for a lifetime benefit of $36,500, but gave them a way out by purchasing private LTC insurance. Almost half a million Washingtonians jumped at that chance overwhelming the insurance carriers with demand for minimal policies the industry feared would be quickly dropped. Clearly people don’t want more government compulsion or taxes and they’re willing to buy private insurance to avoid them.

There’s no denying that confronting people with the need to deal with LTC risk now, not later, worked. So, how could we get people to plan for LTC now without forcing them into a big new government entitlement program? Here’s a way.

Establish by law the responsibility to fund a certain limited amount of LTC by age 50. Let a private organization or agency determine the amount, which should be somewhere between a person’s actuarial probability of needing paid care someday and the higher amount that would be required if the worst happens, such as high cost need for an extended time.

People could meet their personal responsibility in any of many ways. They could buy private LTC insurance. They could tap their home equity, $11.1 trillion for people 62 or older. They could use life insurance, over $20 trillion in effect. They could apply a portion of current or newly created retirement accounts to prefund for LTC. They could pledge some of their future estate toward LTC, legally secured to avoid the failure of Medicaid’s estate recovery program.

Clearly, there is plenty of money available in the U.S. economy to fund top quality LTC for all Americans. All we need to do is get people to plan for LTC before it’s too late for them to avoid anything but Medicaid. Government’s role should be limited to establishing the individual LTC responsibility in general which the private sector would then price out actuarially for each citizen.

Most people would act responsibly as they do when they protect themselves against other risks such as early death, fire, accident, or health risk. For those who don’t, let the usual measures when people don’t meet their legal responsibilities suffice, such as tax collection, grant reductions, or LTC avoidance fees. In other words, government would enforce LTC responsibility only in cases where people have not fulfilled their responsibility voluntarily. Not in all cases against everyone as in the WA Cares program.

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Updated, Monday, December 19, 2022, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #22-037 LTC NEWS AND COMMENT

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.

Maine Has A Plan To Help Family Caregivers. Other States Should Follow
Parkinson’s disease strikes many more older adults than previously estimated: research
Regulators End Effort to Develop Long-Term Care Hybrid Rules
Enemies
The 10 Fastest Rising Costs for Seniors
Caring for Aging Relatives is Draining, Both Financially and Emotionally
Viagra Lowers the Risk of Alzheimer’s by Almost 70%, Study Says
Welcome to the December e-Brief
How to Talk to Your Parents About Long-Term Care
How Medicare Advantage plans dodged auditors and overcharged taxpayers by millions
Entering the Winter Season, How Many Nursing Facility Residents and Staff Were Up-To-Date With Their COVID-19 Vaccines?
Growing Older with Enthusiasm
Defiant Sloan to nursing home critics: Address funding to tackle staffing challenge
Lawmakers can help workers with this WA Cares repeal bill
Am I Allowed to Have Two Cheap Cars With Medicaid?

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Updated, Friday, December 16, 2022, 10:40 AM (Pacific)

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LTC BULLET: SO WHAT IF THE GOVERNMENT PAYS FOR MOST LTC, 2021 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.

LTC BULLET: SO WHAT IF THE GOVERNMENT PAYS FOR MOST LTC, 2021 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 2021 statistics on its website at NHE Tables (ZIP). Click on that link to download the tables, unzip them, then click on the data tables of interest, Tables 14 and 15 for our purposes.

Health Affairs has published a summary and analysis of the new data titled “National Health Care Spending In 2021: Decline In Federal Spending Outweighs Greater Use Of Health Care." Health Affairs subscribers can access the full text of that article here. Others can purchase it. The “Abstract” is available free. Unfortunately, the Health Affairs summary has little to say about long-term care, so read on to get that story.

Following is our annual analysis of the latest nursing home and home health care data.*

Heads Up: This may be the most important LTC Bullet we publish all year. It is the twenty-first 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.” 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, 2021 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 $181.3 billion on nursing facilities and continuing care retirement communities in 2021, a 7.9% decrease compared to 2020 due to pandemic disruptions. The percentage of these costs paid by Medicaid and Medicare has gone up over the past half century (from 26.8% in 1970 to 52.3% in 2021, up 25.5 % of the total) while out-of-pocket costs have declined in the same period (from 49.2% in 1970 to 24.5% in 2021, down 24.7% 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 1970-2021.

So What? Consumers' liability for nursing home and CCRC costs has declined by over half, down 50.2% in the past five decades while the share paid by Medicaid and Medicare has nearly doubled, up 95.1%.

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 $688,000 and in some states up to $1,033,000 of home equity (as of 1/1/23). No wonder nursing homes are struggling 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 (29.9% of the dollars in 2021), 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 9.0% of nursing home costs that CMS reports as having been paid by "private health insurance" in 2021. 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, “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.) 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 $688,000 or $1,033,000 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 $125.2 billion on home health care in 2021, nearly the same as in 2020 ($125.0). Medicare (37.2%) and Medicaid (34.2%) paid 71.4% of this total and private health insurance (not LTC insurance) paid 12.7%. Only 10.3% 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 1970-2021.

So What? Only one out of every ten 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 at risk for the cost of their care.

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 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

“CASSANDRA’S QUANDARY: The Future of Long-Term Care” (2016), at http://www.centerltc.com/pubs/FIA-Cbassandra-Quandry.pdf.

“How to Fix Long-Term Care,” a series of briefing papers, at http://www.centerltc.com/BriefingPapers/Overview.htm;

"Medi-Cal Long-Term Care: Safety Net or Hammock?" at http://www.centerltc.com/pubs/Medi-Cal_LTC--Safety_Net_or_Hammock.pdf;

"The LTC Graduate Seminar Transcript" at http://www.centerltc.com/members/LTCGraduateSeminarTranscription112712.pdf (requires password, contact smoses@centerltc.com);

"Aging America's Achilles' Heel: Medicaid Long-Term Care" at http://www.centerltc.com/AgingAmericasAchillesHeel.pdf; and

"The Realist's Guide to Medicaid and Long-Term Care" at http://www.centerltc.org/realistsguide.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.

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Updated, Monday, December 5, 2022, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #22-036 LTC NEWS AND COMMENT

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.

How Medicaid mission creep undermines real health care
Medicare Advantage Coverage is Rising for the Declining Share of Medicare Beneficiaries with Retiree Health Benefits
Study: 70% Want To Age At Home, But Only 10% Have Long-Term Insurance
COVID mortality trending older, with 9 in 10 deaths in adults aged 65 and older
More Families Depend on Medicaid to Pay for Long-Term Care
Ongoing Impacts of the Pandemic on Medicaid Home & Community-Based Services (HCBS) Programs: Findings from a 50-State Survey
A Look at Waiting lists for Home and Community-Based Services from 2016 to 2021
Congressional Research Service Issues In Focus White Paper on Overview of Long-Term Care Insurance
People are still getting out of a coming payroll tax for long-term-care program
Federal Government Suspends Sale Of Long-Term Care Insurance To Its Employees
Magic Johnson's Firm Powers New Long-Term Care Effort
Private Equity Trying Harder to Keep People Out of Nursing Homes, Not Invest in Them
Hidden audits reveal millions in overcharges by Medicare Advantage plans
Notice of Federal Long Term Care Insurance Program (FLTCIP)–Suspension of Applications for FLTCIP Coverage

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Updated, Friday, December 2, 2022, 10:40 AM (Pacific)

Seattle—

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LTC BULLET: LAST UNTIL LTC

LTC Comment: The question of how to obtain and pay for LTC is moot unless you survive long enough to need it. A guide follows the ***news.***

*** STEVE MOSES FEATURED IN HEALTH CARE NEWS:

11/18/2022, “More Families Depend on Medicaid to Pay for Long-Term Care,” by AnneMarie Schieber, Health Care News

Quote: “Medicaid is the government’s health care safety net, but for LTC, it has become a hammock, says Stephen Moses, president of the Center for Long-Term Care Reform and author of the Paragon report, titled ‘Long-Term Care: The Problem.’ ‘The common wisdom is you have to become impoverished before the government helps you with long-term care, but the truth is very different,’ Moses told The Heartland Daily Podcast on November 1. ‘I call it “the fallacy of impoverishment.’” The 40-page report shows how liberal enrollment policies disincentivize families from saving for LTC and how dependence on Medicaid and Medicare has compromised care and driven out more innovative, cost-efficient options. … It is critical for Congress to start pushing for private options now, says Brian Blase, president of the Paragon Health Institute. … Moses is working on a second report on solutions.”

LTC Comment: Check out the article and the podcast. Then keep an eye out for “Long-Term Care: The Solution,” forthcoming from the Paragon Health Institute. ***

LTC BULLET: LAST UNTIL LTC

LTC Comment: Hospitals and long-term care are joined at the hip. One of the reasons America has a big nursing home industry is that policy makers sought to moderate Medicare expenditures at the outset in 1965. Paying for sub-acute and rehabilitation in skilled nursing facilities through Medicaid reduced higher Medicare hospitalization costs. But making the transition from acute to long-term care has always been a challenge. Often families are left with an urgent, high-pressure need to find a suitable nursing home placement when Medicare coverage runs out, private funding is unavailable, Medicaid beds are scarce and eligibility uncertain. But before you even get to cope with those issues, you must survive the hospital.

So, when I read the following essay by LTCI author, trainer, producer and all around industry maven Margie Barrie, I thought it’s something all LTC Bullets readers should see. Margie’s story is all the more poignant given her and her husband-patient Bernie’s long active involvement in the LTC insurance business. Too much of what she says and warns is familiar to me as one who has managed hospitalizations for late parents and wife. In today’s government funded and regulated health care system, the funder (Medicare or Medicaid) becomes the providers’ customer, getting most of their attention, instead of the patient who needs care. Lesson learned. Don’t surrender to medical or bureaucratic authority. Demand clarity, reason and respect.

A much abbreviated version of the following piece was published by ThinkAdvisor. We offer this unabridged account with the author’s permission.

“8 Steps to Maneuver Through a Medical Crisis with a Loved One”
by
Margie Barrie

I started writing this article while sitting by my husband’s bedside in the hospital. The last few weeks have been a medical nightmare.

My purpose is to share what I have learned the hard way – strategies needed to successfully maneuver through a medical crisis with a loved one.

Here’s what happened:

Week 1 - My husband Bernie had emergency gall bladder surgery. It was very badly infected, and he had sepsis. With the hospitalist system now in place in many hospitals, you’re assigned a surgeon in the emergency room. I will call him Dr. S.

Week 3 - We had a 9 a.m. follow-up appointment with Dr. S. Bernie was still having pain and very weak.

LESSON 1 – Be assertive. If you think there is a problem that is not being addressed by the doctor, don’t take no for an answer. Speak up and listen to your gut feelings.

Dr. S. found that the incision was badly infected. He drained it and said Bernie should return home and a home health care nurse would visit daily to check it.

I replied: “There is something really wrong here. Please do additional tests.”

Dr. S. disagreed. I insisted. And finally he replied – in a very aggravated tone - that I should take him to the emergency room if I was worried.

That’s what I did. After numerous tests, we were informed that the sepsis was worse, and that Dr. S. would do emergency surgery the next morning.

If I had taken him home - like originally advised – my husband probably would have died.

LESSON 2 – Take copious notes. If possible, record the conversation.

The following morning, a surgery that was supposed to take one hour lasted three. When Dr. S. found me in the waiting room to discuss the surgery results, I was anticipating good news. I was shocked to hear what he had to say . . . that he had to do another emergency surgery in two days.

I did take some notes but was so horrified that I missed a lot of what he was explaining. After Dr. S. left, the woman who had been sitting nearby came over and hugged me. She had overheard the conversation. Then I asked her to help me recall what Dr. S had said so I could take more notes.

Keep a notebook. Write down the name of every person providing medical updates and what they said and when. If they know you have their name, they immediately feel accountable and will be more likely to provide the attention you want and need to stay on top of the medical crisis.

LESSON 3 – Doctors and other medical personnel seem to sugarcoat the patient’s condition.

Probe to get the hard facts. The following day, I called ICU for an update and was told he was doing fantastically. Meanwhile, he was on a breathing tube and heavily sedated.

I wanted to know the truth. I finally drove to my primary care doctor’s office to ask him in person for more details. I then asked: “Could my husband die from this and should I have my sons fly in.” He hesitated and then said yes.

Also, I learned that there were a number of small blood clots in his left leg. That could result in a stroke. Ask why various medications and IVs are being used.

LESSON 4 – Be aware of the limitations of the hospitalist system.

Many hospitals are now using the hospitalist system – where every doctor seeing a patient is a specialist in a certain area. From a management perspective, it is touted as providing continuity of care for an in-patient.

However, from a spouse’s vantage point, it’s frustrating. I never could get in touch with any doctor who could provide a comprehensive picture of all the problems. My primary care doctor is not allowed to see inpatients, because he is with an outside group practice. But he was able to access the hospital records and keep me updated.

LESSON 5 – Take control when needed.

When Bernie was improving and moved to a regular hospital room, I quickly realized that the doctors were only talking to him. He was also sugarcoating the facts so I wouldn’t worry. I needed to know all the facts. I have continually reminded my husband of that – and have now been calling the Case Manager and other key people to make sure I’m in the loop. That is very important.

LESSON 6 – Memorize these two magic words - Unsafe Discharge.

Even if a hospital wants to discharge a patient – primarily because of the revised Medicare payment system - you can protest and insist that the patient stay longer. The words to use are “Unsafe Discharge.” And then the hospital needs to keep the person for the longer period of time while the appeal is underway.

It was important that my husband be admitted to the hospital’s rehab area rather than going to an outside facility. First, the care is excellent; and two, Dr. S. wanted to continue to monitor his progress. A friend advised me to protest a discharge until my husband was strong enough to get three hours of physical therapy a day, which is the admission requirement. I called the Case Manager to introduce myself and told her upfront that I would appeal any discharge plans until my husband was approved to go to their rehab facility. And it worked - he has now been moved there.

LESSON 7 – Use the CaringBridge website to provide updates.

It’s wonderful to have family and friends concerned about my husband’s progress, but it’s overwhelming to be fielding numerous calls, emails and texts in addition to working and going to the hospital every day. This free website enables you to provide a journal entry and people can then comment. I read it every morning – all this support and love are so appreciated.

LESSON 8 – Take time for yourself.

You will need it to survive this. Many days when I leave the hospital I am exhausted and stressed. My solution right now – gourmet chocolate ice cream. It does help.

Margie Barrie, an agent with ACSIA Partners, has been writing the ThinkAdvisor LTCI Insider column since 2000. She is the author of two books and a frequent conference speaker.

LTC Comment: Get well soon, Bernie!

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Updated, Monday, November 21, 2022, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #22-035 LTC NEWS AND COMMENT

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.

Changes In The LTC Industry Call For Advance Planning By Seniors Who Intend To Age In Place
Long-term-care law might be changing again, and solvency is sought
Long-Term Crisis: The Case for Reforming Medicaid ‘Personal Care’ in New York
Can Returning Assets Eliminate a Medicaid Transfer Penalty?
Millennials Are Asking About Long-Term Care
VA Nursing Home Care: Opportunities Exist to Enhance Oversight of State Veterans Homes
Nursing Home Operators Brace For the Threat of a Tripledemic
White House to extend PHE designation through April, reports say
Medicare Advantage 2023 Spotlight: First Look
Turkey, Pumpkin Pie and the Long-Term Care Conversation: LTCI Insider
Report backs immigration as a way to improve long-term care
Pandemic Drives Federal Share of State Revenue to Record High
‘Substantial’ decline in dementia rates due in part to higher education levels: study
States’ use of LTSS varies widely for dual-eligible adults with dementia
A SCOTUS nursing home case could limit the rights of millions of patients

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Updated, Friday, November 11, 2022, 10:40 AM (Pacific)

Seattle—

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LTC BULLET: WHAT HAVE YOU DONE FOR ME LATELY?

LTC Comment: The Center for Long-Term Care Reform is a membership organization. Thank you for your support. Here’s an update on our recent LTC research and advocacy on your behalf, after the ***news.***

*** HONOR VETERANS TODAY ***

*** TODAY'S LTC BULLET is sponsored by Claude Thau with BackNine Insurance. In addition to many unique services to advisors relative to individual, worksite and affinity LTCi (including his revolutionary “Range of Exposure” tool that protects FPs from risks most don’t recognize). New service: your own free insurance website allowing clients to buy insurance with as little or as much of your involvement as you or they want. 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 kick his tires & discuss how he might help you. ***

*** REGISTRATION IS NOW OPEN for the 2023 Intercompany Long Term Care Insurance Conference! Organizers report “Our in-person conference will be March 12 - 15th at the Sheraton Downtown Denver in Denver, CO. Our agenda includes over 45 educational sessions 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 through here to register and book your hotel. ***

LTC BULLET: WHAT HAVE YOU DONE FOR ME LATELY?

LTC Comment: Step one to solve a problem is to recognize you have one. For long-term care services and financing, we’re long past step one. Everyone recognizes America’s LTC system is broken.

Step two is to define the problem. We have lots of published content on that as well. The Center for Long-Term Care Reform recently collaborated with the Paragon Health Institute to offer our definition: Long-Term Care: The Problem.

Step three is to explain what caused the problem. It’s step three where we part company with most analysts. In the face of LTC’s many challenges, they throw up their analytical hands in despair and turn immediately to recommend more government spending, central planning and regulation to save the day. We argue that those “solutions” are actually what caused the problems in the first place. Doing more of what you’ve been doing and expecting a different result defines insanity.

So, what caused LTC’s many dysfunctions? Here’s how we explained it in Long-Term Care: The Problem:

Providing and funding long-term care (LTC) for the elderly is a large and growing challenge. Baby boomers start turning 85—the age at which health and LTC costs spike—in 2031, as Social Security and Medicare face insolvency. The government, mostly through Medicare and Medicaid, finances almost three-fourths of LTC expenditures (72.3 percent in 2020). Central planning, public funding, heavy regulation, and easy access to welfare benefits have caused most of LTC’s problems, such as nursing home bias, poor access and quality, inadequate revenue for care providers, caregiver shortages, and the terrible emotional and financial distress for caregiving families. Medicaid especially is responsible because, despite the conventional wisdom that it requires impoverishment, the program’s LTC benefits are routinely available not only to the poor but to the middle class and affluent as well. …

Access to publicly financed LTC [late in life] creates a moral hazard that discourages responsible LTC planning when people are still young, healthy, and affluent enough to save, invest, or insure for the risk. Policymakers should consider how public financing created and worsened LTC’s problems before proposing more of the same to address those problems.

Step four to solve a problem is to eliminate its cause. For long-term care, that means removing the perverse incentives in Medicaid that have (1) discouraged early and responsible LTC planning and (2) rewarded ignorance and complacency about LTC risk and cost with windfall welfare benefits for patients and their families if and when catastrophic care costs occur.

How to achieve the objective of retargeting Medicaid to the genuinely needy and persuading everyone else to plan early to save, invest or insure for LTC is the subject of our forthcoming paper, again with the Paragon Health Institute, titled “Long-Term Care: The Solution.” Watch for it in the new year.

What else have we been up to at the Center for Long-Term Care Reform? Today’s LTC Bullet is our 1,346^th. They’re all archived chronologically and by topic here. Check them out. So far this year, we’ve published 34 LTC E-Alerts, our weekly collection (for all members) of our daily LTC Clippings (for premium members). In the Clippings and the LTC E-Alerts, Steve Moses scans the news and research to keep members apprised of what they need to know to stay on the professional forefront.

On November 1, AnneMarie Schieber of the Heartland Daily Podcast interviewed Center president Stephen Moses about “How Medicaid Compromised Long-Term Care”. She summarized: “In the interview, Moses discusses:

1. How easy is it to get Medicaid to pay for long-term care?

2. How has this compromised the quality of long-term care over the decades?

3. Who will need long term care? Can any of us live independently until we die?

4. Baby boomers…most are now 65…what kind of pressure will that put on long-term care and Medicaid in 10, 20, and 30 years from now?

5. What about counting on family members to care for you? How about covering your care with your own wealth and investments?”

Click here to listen to this 20-minute podcast.

On November 2, RealClearPolicy published Steve’s article “What’s Wrong With Long-Term Care.” He concluded:

The only solution to this compendium of complications is to eliminate the moral hazard created when people can ignore the risk and cost of LTC until they need it and transfer the liability to taxpayers. To do that, we must: change Medicaid financial eligibility rules so they no longer desensitize the public to LTC risk and cost; front load the need to plan, save, invest or insure for LTC so most people deal with it when they’re still young, healthy and affluent enough to manage such financial decisions; and remove Medicaid as an eventual LTC safety net for people who fail to plan but retain wealth.

Here are a few more of our published contributions to the long-term care conversation in the past year.

“What works for long-term care and what doesn’t,” by Stephen A. Moses, McKnight’s Long-Term Care News, November 17, 2021

“Long Term Care Irony,” by Stephen A. Moses, Broker World, December 1, 2021

“The irony of long-term care advocacy,” by Stephen A. Moses, McKnight’s Long-Term Care News, December 17, 2021

“The Great Long-Term Care Compromise,” by Stephen A. Moses, Broker World, January 1, 2022

“Trappings of LTC system leave operators trapped,” by Stephen A. Moses, McKnight’s Long-Term Care News, February 23, 2022.

“Long-Term Care Epiphany,” by Stephen A. Moses, Broker World, June 2022

“Long-term care’s mortal risk,” by Stephen A. Moses, McKnight’s LTC News, June 6, 2022

“LTC insurance sales suddenly surge,” by Stephen A. Moses, McKnight’s LTC News, August 10, 2022

Won’t you join us in the Center for Long-Term Care Reform’s noble mission to “ensure quality long-term care for all Americans?” To join, contact Damon at 206-283-7036 or damon@centerltc.com. Sign up online at http://www.centerltc.com/support/index.htm. With your help, we can do this!

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Updated, Monday, November 7, 2022, 10:40 AM (Pacific)

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LTC E-ALERT #22-034 LTC NEWS AND COMMENT

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.

OneAmerica® Long-Term Care Survey Shares Consumers' Perspectives
Genworth Executives Review Long-Term Care Rate Hike Settlements
Medi-Cal’s long-term care services reach only a small portion of seniors, disabled adults
WA Cares suddenly solvent? Hopefully, but it depends — and the long-term-care law still isn’t good
What’s Wrong With Long-Term Care?
How Medicaid Compromised Long-Term Care (Guest: Stephen Moses), with AnneMarie Schieber
54% of Consumers Have Cut Retirement Savings Due to Inflation: Allianz Life
Soaring dementia treatment costs leave care providers with task of finding solutions: report
Team Biden’s latest welfare expansion: Medicaid payments for housing, food, even furniture
California study holds lessons for middle-market providers nationwide: NIC

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Updated, Monday, October 31, 2022, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #22-033 LTC NEWS AND COMMENT

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.

Another Facility Shuttered as Montana Nursing Home Closures Continue
Don't Miss LTC Impact Day This Monday!
WA Cares Fund projected to be solvent through 2098 in new analysis
GE to End $2.5B Long-Term Care Insurance Reinsurance Arrangement
Home health spending outpacing rate of national healthcare spending
In the U.S., Income and Wealth are Concentrated at the Top. Where Does This Leave Older Americans?
Annual nursing home, home healthcare spending more than double the recent rate of healthcare overall
One in 10 older U.S. adults has dementia, new national data show
Nursing homes becoming ‘loss leaders’ as they struggle with funds, staffing, sector leaders say
Pandemic-delayed move-ins mean residents come to senior living with greater needs: NIC
Millions at risk of losing health insurance if U.S. ends Covid public health emergency in January
Why long-term care advocates are holding their breath over likely Congress power shift
Older Households: Comparison of Income, Wealth, and Survival in the United States with Selected Countries
Inside the Social Security COLA Calculations
U.S. extends public health emergency, buying LTC a bit more time

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Updated, Friday, October 28, 2022, 10:40 AM (Pacific)

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LTC BULLET: WA CARES REPERCUSSIONS

LTC Comment: Washington State politicians and bureaucrats think they can do LTC insurance better than private sector professionals. What could possibly go wrong?, after the ***news.***

*** SUBSCRIBE to LTC Clippings and Steve Moses (2019 ILTCI Recognition Award Honoree) will become your research assistant. Steve will tip you twice a day (on average) with news and views on things you need to know to stay at the forefront of professional expertise. You’ll see the latest articles, reports, data, and op-eds before your clients confront you with them sight unseen. You’ll get trenchant analysis and valuable ideas on how to address objections and complaints. Contact Damon at 206-283-7036 or damon@centerltc.com for details or subscribe directly here: http://www.centerltc.com/newonlinepaymentspage.htm. Choose “Premium Membership” to receive our LTC Clippings. For example, here are some recent LTC Clippings:

10/24/2022, “WA Cares Fund projected to be solvent through 2098 in new analysis,” by King 5 Staff, King5 News
Quote: “Washington state’s long-term care program - known as the WA Cares Fund - is projected to be solvent through June 2098, according to a new study published by the Office of the State Actuary. … Click here to read the full report.”
LTC Comment: Milliman is the actuarial gold standard and it produced this report. But didn’t other actuaries give us similar assurances in 1935 (Social Security) and 1965 (Medicare)? Now look at their prognoses: insolvency by 2035 and 2028, respectively. What will WA Cares look like after a few years of high inflation, rising interest rates, and increasing government budget deficits? Can actuaries factor in those considerations?

10/26/2022, “Home health spending outpacing rate of national healthcare spending,” by Diane Eastabrook, McKnight’s Home Care
Quote: “Spending on home healthcare rose by 10.5% in August, more than double the 4.9% increase in healthcare spending overall, according to a new report by research and consulting firm Altarum. Spending on skilled nursing care wasn’t far behind, expanding by 10.2%. … Demand for home health services have outpaced those for skilled nursing over the past two years. A report last spring found discharges to home health between the second quarter of 2020 and the third quarter of 2021 increased by 2.5% to 24.1% of total inpatient discharges, while the number of patients released to SNFs declined by 2.4% to 18.6% of total discharges.”
LTC Comment: Experts thought rebalancing from nursing homes to home care would save money. That prospect isn’t panning out as I’ve always predicted. Research shows that home care delays, but doesn’t necessarily replace institutional care over a lifetime or across society. People want home care and they should have it, but when government pays for most of it, shortages and quality problems predominate. They’re worsening as inflation from excessive public spending and money printing increases.

10/26/2022, “Don't Miss LTC Impact Day This Monday!” by NAIFA’s Limited & Extended Care Planning Center
Quote: “Long-Term Care Awareness Month starts in November, and NAIFA's Limited & Extended Care Planning Center is kicking it off one day early with ‘Don't Be Scared of Long-Term Care’ this Monday, October 31 from 9 am to 5 pm. Join industry experts at the top of each hour to hear the latest insights on long-term care! Each session will last 30 minutes, with 15 minutes left for questions and answers so you can get the information that's most beneficial to you. Registration is free and you are welcome to hop in and out of the sessions throughout the day. All you need to do is register and one link gets you full access.”
LTC Comment: Click through to check out the sessions on offer.

LTC BULLET: WA CARES REPERCUSSIONS

LTC Comment: In my estimation, no one knows more about private long-term care insurance than Claude Thau. He’s run a carrier, been a broker/dealer, and guided hundreds of producers up the steep ladder of success in LTCi sales. Claude is the lead author of Milliman’s annual Broker World LTCi Survey and a past Chair of the Center for Long-Term Care Financing (1998-2005). He knows whereof he speaks.

In the current month’s issue of Broker World, he addressed future prospects for the WA Cares Fund (WCF), Washington State’s foray into compulsory, payroll-funded, social insurance for long-term care. Following are some key points from Claude’s article, but definitely go to the source itself for all the interesting context and details. (If you don’t yet subscribe to Broker World, you can correct that oversight here.)

“What May Be The Repercussions of The Washington Cares Fund?,” by Claude Thau, Broker World, October 1, 2022

Thau: “When working to get the law passed, proponents expressed confidence that WCF would stimulate a significantly increased future market for private LTCI because WCF would educate consumers regarding their need for LTCI.”

He points out several reasons why such a positive outcome is doubtful:

Confusion: “WCF uses different triggers than the HIPAA-defined triggers used by private LTCI and pays different providers. To the degree that it is hard to remember trigger definitions and provider qualifications, it becomes much more difficult when faced with conflicting definitions.”

Dried-Up Stream of Sales: “Because Washingtonians wanted to be exempt from the WCF tax, the industry sold more than 90 times as many WA policies with LTCI features in 2021 than in 2020. Because of the avalanche of 2021 sales, demand is likely to be greatly muted for the next several years. … Rather than devoting disproportionate attention to WA’s small, unattractive LTCI market, insurers, brokers, employers, and others might sit on the sidelines for an extended period.”

Lack of Perceived Need: “Many Washingtonians seem likely to think they need no additional coverage. Unfortunately, rather than educate Washingtonians regarding the value of supplemental coverage, the state promotes WCF with messages such as ‘We no longer have to worry about how we will afford long term care as we age.’”

Denigration of the Private LTCI industry: “In addition to suggesting that WCF is all the coverage Washingtonians need, WA officials spread inaccurate and misleading comments denigrating private LTCI.”

Financial advisor hesitance: “Because of the complications introduced by WCF, financial advisors seem more likely to be hesitant to raise the issue of LTCI with their clients. The reduced likelihood of a sale also discourages what may be fruitless discussion, and more work for less compensation is not very motivating. … Employers and employee benefit managers also seem less likely to be interested. Thus, much of the private LTCI industry might sit on the sidelines for at least several years.”

Increased Total Cost: “The combined cost for LTCI (WCF plus private insurance) will increase significantly compared to prior to WCF for two reasons:

Buyers are forced to have a zero-day elimination period which increases the price (but provides additional value).
People who can afford private LTCI tend to be healthy high-earners, who are overcharged for WCF coverage to subsidize less affluent and less healthy Washingtonians.

“The market is not likely to respond favorably to the high combined cost.”

Future Impact: “For the above reasons, WCF seems likely to shrink future LTCI sales significantly, particularly stand-alone LTCI sales. Future sales may migrate heavily toward life insurance or annuities with LTCI features. The life insurance or annuity side of the contract is less confusing and guarantees a pay-out.”

“The 2021 private LTCI sales in WA were less likely to include automatic compound benefit increases. In addition to providing less coverage up-front, the shortfall is likely to increase over time.”

“In addition to its impact on future LTCI sales in WA, WCF has encouraged other states to consider state-run LTCI programs. In California, a task force is exploring creation of a state LTCI program. Most observers think a CA-run program is nearly certain.”

LTC Comment: Next Claude opines about how this shotgun spread of state LTC programs might differ in terms of exemptions and “triggers, total coverage, compounding, benefits, vesting, etc.” He asks:

“Will insurers be interested in complementing state programs if those programs vary by jurisdiction? Will financial advisors consider such complexity worth their effort? Will employers and employee benefit advisors consider LTCI programs if they must vary by employee resident state? What will happen to individuals who move from one state to another? Will inconsistencies increase pressure for a uniform national program? Will consumers, employers, advisors and insurers sit on the sidelines in what they might view as a turbulent market with a questionable future?”

In sum: “Hopefully, other jurisdictions will involve the insurance industry in discussions about all aspects of a state-run LTCI program throughout the development process. Such involvement should include front-end salespeople as well as insurance company home office personnel. It should include careful consideration of the insurance industry’s comments, not just token participation.”

LTC Comment: Left unsaid is the fact that the WA Cares Fund designers did not consult the insurance industry in any meaningful way which may account for many of that plan’s problems.

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Updated, Monday, October 17, 2022, 10:40 AM (Pacific)

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LTC E-ALERT #22-032 LTC NEWS AND COMMENT

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.

Washington State Issues New Rules for Long-Term Care Fund
Slowing home sales could delay recovery for independent living, CCRCs: Fitch
Social Security COLA for 2023 Set at 8.7%
The US Needs To Help Seniors And Their Families Navigate Long-Term Care
Research Centers Post Long-Term Care Policy Papers
Fiscal Policy Report Card on America’s Governors 2022
Parkinson: Nursing home sector pinning hopes on ‘Medicaid adequacy’ rule
One quarter of clinicians say they want to switch careers, survey finds
Providers demand tax credit to help New Yorkers fund home care
Paper analyzes government policy’s role in creating LTC problems
Study: Most Pre-Retirees Unprepared to Retire by Age 65

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Updated, Friday, October 14, 2022, 10:40 AM (Pacific)

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LTC BULLET: LTC REFLECTIONS

LTC Comment: America made great strides toward fixing long-term care until 2006. Then, nothing since. What happened? When will progress resume? We explain after the ***news.***

*** THE PARAGON HEALTH INSTITUTE published my new study last week titled “Long-Term Care: The Problem.” PHI president Brian Blase summarized the paper and stated: “You can find ‘Long-Term Care: The Problem’ and an executive summary here.” He also announced: “The next paper, ‘Long-Term Care: The Solution,’ will be published early next year and will provide a set of reforms to address the problems caused by misguided government policies.” McKnight’s Senior Living covered the study in “Paper analyzes government policy’s role in creating LTC problems” by Kathleen Steele Galvin. ***

LTC BULLET: LTC REFLECTIONS

LTC Comment: Long-term care in the USA is fraught with problems. To name a few: dubious access and quality, institutional bias, excessive dependency on inadequate government financing, caregiver shortages, and worn out, financially distressed families struggling to support loved ones in need of help. What went wrong?

I argue in a new paper titled “Long-Term Care: The Problem,” that Medicaid is the primary cause of those dysfunctions. Specifically, availability of Medicaid LTC benefits when care is needed late in life created a moral hazard that discouraged responsible LTC planning while consumers were still young, health and affluent enough save, invest or insure for the risk. Easy access to Medicaid late in life enabled consumers’ denial of LTC risk and cost leaving them nowhere to turn when catastrophic LTC costs ensued except to Medicaid. Too many people dependent on inadequate Medicaid funding led directly to all the other problems cited above. Enough here about that; see the paper for details.

What I want to cover today is a certain mystery. Congresses and presidents from both political parties worked for decades to fix what’s wrong with long-term care and Medicaid. When Medicaid LTC expenditures vastly exceeded original expectations, they set about controlling costs. They imposed financial eligibility restrictions. They required penalties to discourage artificially self-impoverishing asset transfers. They made estate recoveries mandatory. They encouraged private LTC insurance with limited tax deductibility; offered the LTC Partnership program to forgive estate recoveries; and urged the public to “Own Your Future” by preparing for the likely eventuality of needing long-term care one day. All this was done to wean the public off Medicaid and prepare them to pay privately for top quality long-term care in the most appropriate venue if and when they needed it.

Nothing worked fully, but progress was being made until 2006. After that, nothing. What happened? That’s the mystery. Here’s my explanation.

From Medicaid’s early days legislative efforts to control its spending on long-term care and to focus the public on early LTC planning coincided with economic recessions. The economy would tank; politicians couldn’t make budget ends meet; deficits and the national debt grew; pressure mounted to curb spending; and statutory changes were passed to control costs by ensuring Medicaid LTC benefits went only to the truly needy. Consider these examples of recessions that led directly to legislative reforms:

Recessions	Legislation
January to July 1980	Omnibus Reconciliation Act of 1980 imposed the first ever restriction on asset transfers to qualify for Medicaid.
July 1981 to November 1982	Tax Equity and Fiscal Responsibility Act of 1982 authorized state Medicaid programs to penalize asset transfers, place liens on real property, and recover benefits from the estates of deceased recipients Consolidated Omnibus Budget Reconciliation Act of 1985 attempted unsuccessfully to prohibit "Medicaid qualifying trusts." Medicare Catastrophic Coverage Act of 1988 required Medicaid asset transfer penalties, mandated a 30-month look back, and capped maximum asset transfer penalties at 30 months.
July 1990 to March 1991	Omnibus Budget Reconciliation Act of 1993 made estate recovery mandatory, expanded the look back period to five years, eliminated the cap on asset transfer penalties, and prohibited “pyramid divestment.” Health Insurance Portability Act of 1996 made it a crime to transfer assets to qualify for Medicaid (Throw Granny in Jail Act) and Balanced Budget Act of 1997 repealed Throw Granny in Jail and replaced it with Throw Granny’s Lawyer in Jail.
March 2001 to November 2001	Deficit Reduction Act of 2005 placed the first cap on Medicaid’s home equity exemption, limited the half-a-loaf loophole, amended the annuity rules, and unencumbered the Long-Term Care Partnership Program.
After 2000, the linkage between recessions and legislative reform was broken.	A sea change in economic policy around the turn of the century unleashed Medicaid spending. The Federal Reserve forced interest rates down artificially. The U.S. Treasury spent beyond its means. The Federal Reserve monetized the resulting debt. Inflation occurred but it was disguised by rising real estate, stock and bond values. Consumers didn’t feel the pinch. The rest of the world bought our debt, sending the USA valuable goods in exchange for bonds we sold and they bought relying on our promises to repay them. Modern Monetary Theory prevailed.
December 2007 to June 2009 (The Great Recession) and February 2020 to April 2020 (Covid 19 Recession)	These recessions spurred no legislation to control Medicaid LTC spending by targeting benefits away from the middle class and toward the truly needy. In fact, they led to ever more generous funding of all Medicaid programs including long-term care. The Covid 19 recession created a tsunami of spending. The federal government prevented state Medicaid programs from culling even ineligible people from the rolls. Enhanced federal matching funds were conditioned upon keeping everyone on Medicaid until the national health emergency (NHE) ended. The pandemic subsided but the NHE has been extended out of fear that millions would be forced off Medicaid when it ends.

What is going on? As long as politicians were under budgetary pressure to control expenditures, they responded with legislation intended to target scarce Medicaid resources to people most in need. Eligibility controls, rules against asset divestiture, and mandatory estate recoveries sent the message that people should plan early and responsibly to save, invest or insure against their personal LTC risk. But after 2006, with the government money spigots wide open and the Federal Reserve liberally monetizing whatever debt the federal government created while forcing interest rates to near zero, pressure to control costs disappeared. Consequently, no further progress was made to ensure Medicaid LTC benefits went only to the genuinely needy. More and more Medicaid became the primary LTC payer for catastrophic costs not only of the poor but of the middle class and affluent as well.

What is changing? We are now experiencing a regression to the mean of economic and political policy making. Excessive government spending during the pandemic created an economic bubble. Too low interest rates caused excessive optimism, malinvestment, booming stock markets, and engorged real estate values. Too much money chased too few goods as the government channeled unearned funds to non-working people and non-producing businesses. The bill for that and for earlier decades of careless spending and irresponsible monetary policy is finally coming due. The price of payment is consumer inflation. All the “generous” government spending over the years that created a national debt currently exceeding $31 trillion is now in collection status. Consumers make the payments for their government’s profligacy at the grocery store, at the gas station, in their monthly rent or mortgage payments, in literally everything they buy.

What does this mean going forward? Careless fiscal and monetary policies unleashed debt and inflation. High inflation makes servicing the huge national debt unsustainable. All of a sudden, politicians at both the state and federal levels are being forced to deal again with budget shortfalls. It’s harder than ever for them to raise taxes, because the pressure of inflation has tapped out tax payers. The pols can no longer get away with printing money and monetizing the debt, because that only increases inflation and tightens the fiscal vise. A long-delayed rendezvous with economic reality is underway.

So here is what I predict. This new economic and political reality will once again force politicians to control Medicaid LTC expenditures. They will need either to revisit the kinds of interventions tried before and reinstate them with stronger enforcement. Or they will have to try something different. I think we’ve learned what does not work. Telling people they could lose their life savings to catastrophic LTC costs when it wasn’t true, did not work. Because the federal and state governments did not adequately enforce income and asset eligibility rules, including asset transfer restrictions, and mandatory estate recoveries, the public was desensitized to LTC risk and remains so.

What are the odds that will change in the future? Nil. When the current recession finally ends and the economy improves, the politicians will return to their usual ways. As soon as the budget pressure is off, they’ll lose interest in controlling Medicaid LTC expenditure. Benefits will continue to flow to the middle class and affluent. States won’t enforce strict eligibility rules or estate recoveries. Moral hazard will reign as before with few people worrying about LTC risk and cost until they need high cost care. Then they’ll turn as they always have to Medicaid and around we’ll go again in this endless negative cycle.

No, we have to do something different. What to do and how to do it is the subject of my next paper for the Paragon Health Institute titled “Long-Term Care: The Solution.” Watch for it early in the next year, but expect clues to its direction in these LTC Bullets, both past and future.

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Updated, Monday, October 10, 2022, 10:40 AM (Pacific)

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LTC E-ALERT #22-031 LTC NEWS AND COMMENT

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.

Legal Ease: Medicaid Asset Protection Planning — what is it?
Elder Care: Nursing homes, Medicaid and the middle class
Exercise caution with zero-premium Medicare Advantage plans
As seniors’ presence in nursing homes drops, young people with disabilities stuck with few alternatives: study
Medicaid Long-Term Care’s Real Problem Is Insufficient Resources, Not Abuse By Wealthy Seniors
Pick Up the Phone: Older Clients Want to Hear From You
After a Dementia Diagnosis: Preparing for the Future
Nursing Home Surprise: Advantage Plans May Shorten Stays to Less Time Than Medicare Covers
‘Tens of thousands’ of nursing home caregivers could lose their jobs this week: AHCA
Dementia Diagnosis Linked to Suicide
10 Things to Know About the Unwinding of the Medicaid Continuous Enrollment Requirement
‘They’ve been an afterthought’: millions of elderly Americans still vulnerable as pandemic caution wanes
Beer is GOOD for you! Scientists claim two pints a day may slash your risk of dementia
The Walmart, UnitedHealth Group deal: Another big retail, health care partnership
Sages of Aging hosted by Ken Dychtwald, PhD
Census finds more than 3 million older adults on the move each year
‘The Forgotten Middle’: Seniors Facing Housing, Care Crisis
Seniors are stuck home alone as health aides flee for higher-paying jobs

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Updated, Friday, September 30, 2022, 10:40 AM (Pacific)

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LTC BULLET: LTC STRAWMAN

LTC Comment: 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. What this means and why it matters after the ***news.***

*** 9/14/2022, “Family Caregivers Confront Considerable Challenges,” by The Certification for Long-Term Care, Cision PR Newswire

Quote: “Nearly all family caregivers say they are ‘always’ or ‘often’ providing emotional support (80%) to a loved one needing long-term care. That can levy a heavy toll on caregivers' well-being and relationships in their lives. In our survey, burn out, lack of expertise and concerns about their ability to focus on their jobs were cited as the most important reasons why family caregivers sought paid home care. … Among the survey's other findings:

33% of family caregivers find getting the emotional support they need one of their biggest challenges
32% of family caregivers worry about juggling caregiving and their job
27% of those who decided not to bring in paid home care did so because they felt it was their duty to provide care
44% felt using paid home care could have helped reduce the emotional and physical strain of being a caregiver”

LTC Comment: Everyone knows long-term caregiving is demanding, stressful, and expensive. But this study puts some empirical flesh on those observational bones. Despite a small sample (200 who used paid care and 200 who didn’t), the reported numbers are credible and do comport, I think, with many of our personal caregiving experiences. Eileen J. Tell, CEO of ET Consulting, LLC, conducted the study and presented findings this week at the CLTC Leadership Summit in Minneapolis. For a pdf copy of the full report, contact Celeste Cobb at celeste@ltc-cltc.com. Kudos to CLTC for supporting this research. ***

LTC BULLET: LTC STRAWMAN

LTC Comment: Marc Cohen, a distinguished LTC scholar I consider my friend, insists Medicaid forces people to spend down into impoverishment before they qualify for Medicaid LTC benefits. I maintain that accessing Medicaid LTC benefits without spending down significantly is easy, commonplace and recommended by thousands of lawyers and financial advisors. Who’s right?

Marc has published a new article he says supports his point of view. Does it? Let’s see. Definitely consider what he and co-author Jane Tavares have to say. Then read on for my response. Here’s their article:

Marc A. Cohen & Jane Tavares (2022): Are Wealthy Older Adults who use Medicaid Opportunistically Accessing the Program?, Journal of Aging & Social Policy, DOI: 10.1080/08959420.2022.2127597

To link to this article: https://doi.org/10.1080/08959420.2022.2127597

The article’s “Abstract” says it all:

There has been longstanding concern that wealthy older adults may be accessing the program by opportunistically divesting assets in order to qualify for coverage rather than by having high medical or LTSS expenses on which they spend down their resources to eligibility levels. … Our findings demonstrate that this may occur among a relatively small proportion of wealthy people, and that tightening Medicaid eligibility criteria would likely have only a very modest impact on program expenditures.

What are we to make of that problem statement and those findings? Is it true there has been a “longstanding concern that wealthy older adults may be accessing” Medicaid “by opportunistically divesting assets”? Maybe, but I’m not aware of anyone having claimed such behavior is widespread. Certainly I have not and I am the only author cited in the article as having made the claim. My 1990 piece in The Gerontologist titled “The Fallacy of Impoverishment,” the one Cohen and Tavares reference, says nothing about asset divestiture by the wealthy.

My position is much more modest and nuanced. It is that qualifying for Medicaid long-term care benefits does not require impoverishment, that Medicaid’s income and asset limits allow middle class and moderately affluent people to qualify without spending down their savings significantly, and that in some cases even more wealthy people can qualify without spending down appreciably, with the help of lawyers who specialize in “artificial impoverishment.” In fact, when I searched my dozens of national and state-level reports about Medicaid planning I found not a single use of the term “opportunistic.” When I used the term “wealthy” it was either to quote a state Medicaid eligibility official complaining about the abuse or to point out that rich people can qualify for Medicaid LTC benefits, which Cohen and Tavares acknowledge is true, not that they do so in large numbers.

So why all the hyperventilating about wealthy people accessing Medicaid by opportunistically divesting assets? It is to divert attention from the real problem which is that Medicaid has become the dominant long-term care funding source for most Americans and that it is available without significant asset spend down after care is needed and long after it is too late for people to plan early and responsibly to handle the high risk and cost of long-term care privately. It is that reality that has caused most of the long-term care system’s problems including excessive dependency on welfare-financed nursing home care, insufficient supply of home and community-based services, meager public funding resulting in serious access and quality problems, as well as severe caregiver shortages, and the lack of demand for private insurance to spread the risk.

Why do scholars like Cohen and Tavares, and nearly all of their “peers” choose to focus exclusively on minor problems like the wealthy capturing Medicaid instead of the big problem, that Medicaid crowds out personal LTC responsibility and planning? Why do they fail to mention, much less explain, the many Medicaid planning techniques that are far more common and costly to Medicaid than asset divestiture? Why is there no mention of the National Academy of Elder Law Attorneys, the Medicaid planners’ professional association nor the vast formal legal literature on Medicaid planning? How do they manage such intellectual sleight of hand when the real problem is so much more obvious and compelling?

The answer is that the real problem violates the dominant ideological narrative to which most academics subscribe. That narrative is that Medicaid requires impoverishment and that aging Americans in the millions are being wiped out financially by high and rising long-term care costs. It isn’t true. There is no empirical evidence that it is true and these authors provide none. In fact, Medicaid does pay for most catastrophic LTC expenses and its financial eligibility rules are very generous and elastic. But the impoverishment narrative is necessary to garner support for these experts’ preferred “solution,” a new, compulsory, payroll-tax-funded social insurance program to fund long-term care. Why is it that we only hear this narrative and almost nothing about how Medicaid actually works? Because very little information to the contrary can penetrate the “peer review” wall that protects the dominant narrative from critical scrutiny.

In a 2017 report titled “How to Fix Long-Term Care Financing” for the Foundation for Government Accountability I answered the question “Why Do Analysts Wrongly Claim Medicaid Long-Term Care Eligibility Requires Impoverishment?” Here’s my answer in a nutshell, but do go to the source for the full six-page explanation.

First, analysts wrongly claim Medicaid requires impoverishment because they equivocate on the meaning of “impoverishment.” … Second, … they equivocate on the meaning of “spend down.” … Third, … they equivocate on the meaning of “Medicaid planning.” … Fourth, … they equivocate on the meaning of “out-of-pocket” expenditures for long-term care by claiming they are higher than they really are. … Fifth, … they rely on data, much of it faulty, from HRS and AHEAD surveys. Sixth, … they do not ask the people who know the truth.

Until analysts come to grips with the real reasons long-term care service delivery and financing are so dysfunctional by confronting each of those issues honestly, there will be little hope for improvement. Focusing instead on asset divestiture by the wealthy is a Strawman argument: “an intentionally misrepresented proposition that is set up because it is easier to defeat than an opponent's real argument.”

Marc, I challenge you, as I have done before, to debate the real issue in a public forum. To wit: What is Medicaid’s role in the long-term care system and how can we repair the damage it has caused? You can pitch socializing the LTC risk by partnering with government and I’ll defend a freer market relying more on individual initiative and responsibility.

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Updated, Monday, September 26, 2022, 10:40 AM (Pacific)

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LTC E-ALERT #22-030 LTC NEWS AND COMMENT

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.

What Are Medicaid Asset Protection Trusts?
Information campaign on aging and long-term care is wise; taking more earnings from workers isn’t
Industry Leaders Split on Whether Skilled Nursing’s Future Should Include Separate Short, Long-Term Care
U.S. Retirement Income Imbalance
Alzheimer’s might not be primarily a brain disease. A new theory suggests it’s an autoimmune condition
America’s age tipping point is approaching — we’re totally unprepared
BREAKING: Congressional study eviscerates for-profit nursing homes
Over 7 Million U.S. Seniors Have Mental Declines That Threaten Financial Skills
A Review of 62 Studies Finds Few Big Differences Between Traditional Medicare and Medicare Advantage on a Variety of Measures
4 tips for selling long-term-care insurance
10 Things About Long-Term Services and Supports (LTSS)
Risk of Alzheimer’s nearly doubles in seniors with COVID, analysis shows
Northwestern Mutual Adds a Long-Term Care Hybrid
Family Caregivers Confront Considerable Challenges
Medicare Advantage Is A Diamond In The Government Healthcare Rough
‘It’s Becoming Too Expensive to Live’: Anxious Older Adults Try to Cope With Limited Budgets
Support for greater government role in health care for older adults
While Inflation Takes a Toll on Seniors, Billions of Dollars in Benefits Go Unused
Nursing homes fire back after CMS warning about ‘exploitative’ debt-collection practices

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Updated, Friday, September 16, 2022, 10:40 AM (Pacific)

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LTC BULLET: LTC STUDIES SHARE FLAWS

LTC Comment: Three new LTC studies don’t ask “what went wrong?” before prescribing more of what caused LTC’s problems in the first place. We explain after the ***news.***

*** ROMEO RAABE, LUTCF, LTCP is The Long-Term Care Guy of Wisconsin, a proactive advocate for better LTC financing policy, and a long-time Regional Representative of the Center for LTC Reform. Contact him at (920) 884-3030 or rraabe@thelongtermcareguy.com. He offers this comment:

“Are We Selling Appropriate LTCi?”
by
Romeo Raabe

There are a multitude of different products sold to help pay for the cost of LTC. There are also many choices as to how much money is needed, for how long, with or without inflation, various deductibles, and choices of facility coverage, home care coverage or both. Everyone has an opinion on these options but the important part is for our clients to have sufficient cash flow to pay for the care they need - when they need it. That is the point, isn't it?

One type of comment I often hear is “This can turn $100,000 into $300,000 for LTC.” Sounds pretty good to many, but let’s ask how much the client can get out each month and is that enough along with other cash flow to pay the bills? If not, and they spend down to Medicaid, have we done any good other than earn a commission? If the plan, which the client understands, is just to have enough to cover some home care, then it’s fine. But if the client expects to be able to afford a nursing home, it’s not.

Something is not always better than nothing if it does not do what the client expects. First, do no harm. ***

LTC BULLET: LTC STUDIES SHARE FLAWS

LTC Comment: America has an abundance of dedicated, well-intentioned analysts who lament the state of long-term care and want to fix it. I could list (and have listed) dozens of studies these scholars conducted which share two fatal flaws. First, none of them ask—much less answer— what caused the long-term care system’s current dysfunctional state before recommending more government funding and regulation to fix it. Second, they all founder on the shoals of inadequate financing.

Add these three recently released studies to that list:

Study # One: “Improving Care for Older Adults: Convergence Dialogue on Reimagining Care for Older Adults Project Staff and Consultants: Final Report” tells us what’s wrong with long-term care and prescribes:

1. “Establish a broad constellation of financially sound and adaptable care settings that reflect the desires and needs of older adults.

2. “Ensure There Are Enough Caregivers

3. “Finance the Future Care System”

Why are these measures necessary? What caused the problems they’re supposedly needed to resolve? Why is it government’s job to fix a broken system already dominated by government spending and regulation? Blank out.

Study # Two: “The National Imperative to Improve Nursing Home Quality: Honoring Our Commitment to Residents, Families, and Staff (2022)” devotes 600 pages to lamenting the sorry state of nursing home care in the USA …

“First, the way in which the United States finances, delivers, and regulates care in nursing home settings is ineffective, inefficient, fragmented, and unsustainable. …

“Second, immediate action to initiate fundamental change is necessary. …

“Third, federal and state governments, nursing homes, health care and social care providers, payers, regulators, researchers, and others need to make clear a shared commitment to the care of nursing home residents. …

“Fourth, extreme care needs to be taken to ensure that quality-improvement initiatives are implemented using strategies that do not exacerbate disparities in resource allocation, quality of care, or resident outcomes (including racial and ethnic disparities), which are all too common in nursing home settings.

“Fifth, high-quality research is needed to advance the quality of care in nursing homes.

“Sixth, the nursing home sector has suffered for many decades from both underinvestment in ensuring the quality of care and a lack of accountability for how resources are allocated. …

“Finally, key partners, such as the Centers for Medicare & Medicaid Services (CMS) and other federal agencies, may not currently have the full authority or resources to carry out the actions recommended.”

So, what’s the bottom line?

“Therefore, as a final overarching conclusion, the committee notes that all relevant federal agencies need to be granted the authority and resources from the U.S. Congress to implement the recommendations of this report.”

In other words, everything wrong with nursing home care in the United States is directly related to public financing and regulation, but the National Academies of Sciences, Engineering, and Medicine can think of nothing better to do about it than to pile on more of the same.

Study # Three: “Where Am I, Where Do I Go: The Missing Entry Point to Long-Term Care Solutions for Older Adults and Their Caregivers” explains how America’s LTC system leaves people in crisis floundering, under extreme financial pressure, lacking guidance, not knowing what to do, but having to do something fast. It paints a beautiful picture of an improved system that points everyone in need of long-term care to the best possible solution.

But here again: “Although this paper does not specifically recommend a funding model for the hubs, we recognize that funding will be a barrier to achieving our vision. Historically, policy options for long-term care have focused on creating a financing system to fund services, which is critically important for supporting families and funding a long-term care workforce. However, policy must also focus on the navigational needs of older adults and their families.”

In other words, the need is so great we just have to find a way to do this and pay for it. Can’t somebody do something?!

LTC Comment: The only way we’ll ever confront long-term care’s problems successfully and actually solve them is to begin by asking: what caused the problems in the first place? I’ve answered that question already in two reports—Medicaid_and_Long-Term_Care and How to Fix Long-Term Care Financing—with two more forthcoming: “The Long-Term Care Problem” and “The Long-Term Care Solution.” Bottom line, government financing and regulation caused LTC’s problems. Medicaid paid for expensive LTC after care is needed resulting in a moral hazard that prevented most people from planning ahead for the LTC risk and left them dependent on public assistance when the need arose later. To solve LTC’s problems, Frontload LTC so most people save, invest, or insure for the risk and cost while they’re still young, healthy and affluent enough to do so and thus dramatically reduce the number of people who end up dependent on Medicaid. The free market will do the rest, directing creative entrepreneurial energy toward finding the best ways to meet consumers’ LTC preferences and needs.

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Updated, Monday, September 12, 2022, 10:40 AM (Pacific)

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LTC E-ALERT #22-029 LTC NEWS AND COMMENT

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.

Cracks in the foundation: The experience of care aides in long-term care homes during the COVID-19 pandemic
Study: 72% of middle-class seniors may not be able to afford assisted living by 2033
Helping prospects navigate long-term care system an ‘enormous opportunity’ for senior living: report
A Valuable New Framework For Improving The Care Of Older Adults
‘Red-hot inflation’ drives senior living asking rates to record high
Envisioning new financing models to mitigate the crisis in long-term care
Why Medicare Advantage is the basis for Medicare reform
What Is Community Medicaid?
A 2022 Introduction to Ken Dychtwald, PhD
Almost half of eligible Medicare beneficiaries use Medicare Advantage, analysis shows
‘Death spiral’ for SNFs as Medicare Advantage pay decreases

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Updated, Tuesday, September 6, 2022, 10:40 AM (Pacific)

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LTC E-ALERT #22-027 LTC NEWS AND COMMENT

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.

Other states have proposed long-term-care laws that could sneak up on workers
Rising Interest Rates Will Crush the Federal Budget
MedPAC Members Concerned About Medicare's Finances
Simple musical test predicts cognitive decline in older adults, study shows
Study: More middle-income seniors to tax home care, housing resources in coming years
Birth of LTCi: Fatal miscalculations spur decades of angst
Inflation drives long-term care costs even higher. Here’s how planning ahead can help families afford it
5 Reasons Affluent Clients Might Need Long-Term Care Insurance
Single Seniors Are Struggling to Retire
Life Settlement Firm Plans to Go Public Through $619M SPAC Deal
Watch Out! RMDs Can Trigger Massive Medicare Means Testing Surcharges
The rich are using long-term care funds meant for the poor
9 Lessons From John Hancock's $26M LTCI Settlement

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Updated, Friday, September 2, 2022, 10:40 AM (Pacific)

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LTC BULLET: BIASED LTC SCHOLARSHIP MISINFORMS POLICYMAKERS

LTC Comment: Government-funded, ideologically biased research causes bad policy decisions, as we explain after the ***news.***

*** *** SUBSCRIBE to LTC Clippings and Steve Moses (2019 ILTCI Recognition Award Honoree) will become your research assistant. Steve will tip you twice a day (on average) with news and views on things you need to know to stay at the forefront of professional expertise. You’ll see the latest articles, reports, data, and op-eds before your clients confront you with them sight unseen. You’ll get trenchant analysis and valuable ideas on how to address objections and complaints. Contact Damon at 206-283-7036 or damon@centerltc.com for details or subscribe directly here: http://www.centerltc.com/newonlinepaymentspage.htm. Choose “Premium Membership” to receive our LTC Clippings. For example, here are some recent LTC Clippings:

8/31/2022, “Birth of LTCi: Fatal miscalculations spur decades of angst,” by John Hilton, InsuranceNewsNet
Quote: “In fact, the assumptions stood on a quite reasonable foundation, Slome explained. But two things did not play out as insurance executives and actuaries expected: the changing dynamics of long-term care, and the lapse rates. Fast forward a few decades, and LTCi is a perplexing product landscape. The need for the product is overwhelming, yet, insurers are busier trying to maintain old blocks of business that are actuarially unsound. That means repeated rate requests in states across the country. It means reduced benefits. It means denying coverage to nearly half of applicants who most need it. Finally, it means some insurers have gone insolvent. Many others have left the LTCi business entirely. Meanwhile, state insurance regulators struggle to weigh the needs of policyholders against the needs of insurers. It has pitted state against state in some instances.”
LTC Comment: “The best laid schemes o’ mice an’ men. Gang aft a-gley”--Robert Burns. But there’s even more to it than my friend Jesse Slome points out. The Federal Reserve forced interest rates to near zero which made obtaining reasonably expected returns on reserves impossible. That forced carriers to raise premiums which alienated prospects and angered insureds. Those same artificially low interest rates enticed politicians to spend with abandon resulting in the inflation we’re experiencing now. Likewise Medicare and Social Security face insolvency in a decade or so. When will those government programs acknowledge they cannot pay promised benefits and take action as LTCI carriers already have? If rate increases upset LTCI insureds, what do you think the reaction will be from voters when Medicare and Social Security cut benefits or raise payroll taxes?

8/30/2022, “5 Reasons Affluent Clients Might Need Long-Term Care Insurance,” by Margie Barrie, ThinkAdvisor
Quote: “Here’s a common question from financial planners: Should they be recommending long-term care insurance to high-net-worth clients, or should their clients self-fund long-term care risk?
The decision to consider long-term care protection is often based on the value of the client’s assets. However, there are other risk factors that need to be considered, because those factors will affect the client’s portfolio and may have tax implications. In many situations, long-term care protection may provide a solution for portfolio risk management and legacy planning issues in the most cost-effective and efficient manner currently available.”
LTC Comment: These are five of the best, but least recognized, reasons to own LTCI protection.

8/29/2022, “The rich are using long-term care funds meant for the poor,” by Mark Warshawsky, The Hill
Quote: “Unfortunately, several studies show that many older people with significant real estate and financial asset holdings get long-term care from Medicaid for free or at subsidized rates. These findings should not be surprising because, in many states, the rules and administration of the program are loose and porous, and little effort is made to recover assets from the estates of deceased Medicaid users, despite this being required by federal law. By my estimate every year almost $6 billion of Medicaid funds are inappropriately used for the long-term care of individuals with significant asset holdings. Breaking this amount down, almost $3 billion could be recuperated from enhanced estate recoveries and more than $3 billion from retirement assets.”
LTC Comment: It’s good to see someone else pointing out this problem as we have done frequently since 1988 in many national and state level studies. Unfortunately, the author’s solution has proved inadequate and unenforceable. That’s why we’re proposing a better approach: LTC Bullet: Frontload LTC.

*** READ STEVE MOSES’s latest published articles:

“LTC insurance sales suddenly surge,” by Stephen A. Moses, McKnight’s LTC News, August 10, 2022

“Long-term care’s mortal risk,” by Stephen A. Moses, McKnight’s LTC News, June 6, 2022

“Long-Term Care Epiphany,” by Stephen A. Moses, Broker World, June 2022

“Trappings of LTC system leave operators trapped,” by Stephen A. Moses, McKnight’s Long-Term Care News, February 23, 2022.

“The Great Long-Term Care Compromise,” by Stephen A. Moses, Broker World, January 1, 2022

“The irony of long-term care advocacy,” by Stephen A. Moses, McKnight’s Long-Term Care News, December 17, 2021

“What works for long-term care and what doesn’t,” by Stephen A. Moses, McKnight’s Long-Term Care News, November 17, 2021

“What’s better for senior living and care — the market or government?,” by Stephen A. Moses, McKnight’s Senior Living, October 25, 2021

“Long-term care’s problems are bad and getting worse — but fixable,” by Stephen A Moses, McKnight’s LTC News, October 4, 2021 ***

LTC BULLET: BIASED LTC SCHOLARSHIP MISINFORMS POLICYMAKERS

LTC Comment: It’s no wonder so many policymakers want a new, compulsory, centrally planned, taxpayer-funded, budget-busting, LTC entitlement program when the researchers they pay for advice blank out or misrepresent information critical to good decision making. When policymakers believe falsely that Medicaid requires impoverishment and that wide swaths of the American public are being wiped out financially by private LTC expenditures, of course they’re tempted to impose a government solution from on high.

I explained what I mean by that and gave examples in How to Fix Long-Term Care Financing (pages 13-18). In a nutshell, 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.

In “LTC Bullet: LTC Center Standing Guard,” I listed and linked to 100 LTC Bullets in which we analyzed and critiqued biased scholarship tending to promote public LTC funding and to discourage private financing alternatives. Today we add another example to that list. To wit:

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,” published by the U.S. Department of Health and Human Services Office of the Assistant Secretary for Planning and Evaluation, January 31, 2021, https://aspe.hhs.gov/reports/economic-hardship-medicaid-enrollment-later-life#results.

What follows are quotes from that study Johnson & Favreault and our LTC Comments in reply:

Johnson & Favreault: “This report assesses the financial security of older adults and examines the role that disability, health, and marital shocks play in economic hardship in later life. … We also focus on enrollment in Medicaid, which is available only to people with very limited financial resources.” (p. 2)

LTC Comment: J&F have a lot of interesting things to say about “economic hardship in later life,” but we’ll focus on their comments regarding Medicaid LTC eligibility, especially the idea that it is “available only to people with very limited financial resources.”

Johnson & Favreault: “Many older adults have amassed significant wealth over their working years that can supplement their income. Wealth holdings at older ages are becoming increasingly common as employers replace traditional defined-benefit pensions, which provide retirees with a steady income stream that lasts until death, with retirement plans that provide workers with retirement savings accounts to which both employees and employers contribute.” (p. 4)

LTC Comment: Good point. There’s a lot of wealth held by aging Americans in IRAs and 401Ks, and far more residing in home equity. But how much of this financial wherewithal finds its way into paying for long-term care?

Johnson & Favreault: “About 70 percent of adults develop serious LTSS needs after age 65 (Johnson 2019). …The onset of nursing home care and cognitive impairment has the largest impacts on household wealth.” (p. 6)

LTC Comment: OK, now we know that aging people possess huge amounts of liquid and illiquid financial resources and they have a high risk of very expensive long-term care. Again, are they actually spending that money on long-term care? Is there any evidence?

Johnson & Favreault: “Relatively few older adults with significant wealth deplete their holdings before they die, and those who spend their savings usually experience significant health shocks (Table 3).” (p. 6)

LTC Comment: Interesting, but more of the same. Most older adults don’t deplete their wealth but those who do experience health shocks. So does that latter group spend their money on health and LTC? Are we supposed to presume so? Apparently, but empirical evidence that such spend down is actually happening would be very helpful. But none is offered.

Johnson & Favreault: “Another indicator of economic hardship is Medicaid enrollment. Because people qualify for Medicaid only if they have virtually no assets, except for a home, and very little income, receipt of Medicaid benefits is a strong indicator of financial vulnerability.” (p. 7)

“Medicaid enrollment is a reliable indicator of economic hardship because people qualify only if they have very low income (after covering health care costs) and few assets.” (p. 10)

LTC Comment: Wait a minute. Eligibility for Medicaid proves economic hardship? That’s a circular argument as I explained in “LTC Bullet: Begging the LTC Question.” Turn it around and you have: there’s no hardship if people can qualify for Medicaid while preserving wealth. Is that what these analysts really believe? Evidently so as it follows logically. Read on.

Johnson & Favreault: “Adults ages 65 and older may qualify for Medicaid if they have virtually no assets, except for a home, and very little income. The program’s asset test limits Medicaid eligibility to people with no more than $2,000 in countable assets if single and no more than $3,000 in countable assets if married. Countable assets exclude the value of the home and such things as automobiles, household goods, the surrender value of life insurance, and burial funds.” (p. 7)

LTC Comment: What’s wrong with this picture of Medicaid LTC eligibility? J&F want us to believe that Medicaid LTC financial eligibility rules force people to spend down their wealth even though they provide no evidence that actually happens and they acknowledge “countable assets exclude” practically all wealth seniors hold. Those excluded assets include up to between $635,000 and $955,000 of home equity depending on the state and, with no dollar limit at all, one business, individual retirement accounts, term life insurance, burial funds for the immediate family, household goods and personal effects including heirlooms. Does Medicaid require people to spend any remaining countable assets for LTC as J&F imply? No. People can spend their countable assets on anything they want, including non-countable assets. So anyone with too much countable wealth can qualify quickly and easily by purchasing exempt assets such a house, car, or diamond ring (represented to be a family heirloom). Converting countable into non-countable assets in this way is the easiest and single most common technique of Medicaid planning.

Johnson & Favreault: “A single SSI beneficiary without earnings who does not receive Social Security or other income, like a state supplement could receive no more than $771 in monthly income in 2019 (equivalent to $9,252 per year), well below the FPL. Many states extend Medicaid eligibility to people with income up to 138 percent of the FPL.” (p. 7)

LTC Comment: Oh, so you must be desperately income-poor to qualify for Medicaid LTC benefits? Not so fast. They admit there’s more to it.

Johnson & Favreault: “Many states account for individuals’ health care spending when determining Medicaid eligibility by subtracting applicants’ out-of-pocket costs for medically necessary services and supplies from their countable income. This adjustment essentially allows people to ‘spenddown’ their income until they qualify for Medicaid. Other states achieve similar outcomes by allowing applicants to assign that portion of their income that exceeds the Medicaid income threshold to a special trust used to help cover service costs. The state receives any funds remaining in these trusts after a Medicaid enrollee’s death, up to the amount the state paid in Medicaid benefits.” (p. 7)

LTC Comment: Oh, Medicaid income eligibility rules are not so draconian after all. In fact, in the real world, unconfused by academic obfuscation, the rule of thumb is that anyone with income below the cost of a nursing home—easily $8,000 per month—qualifies based on income assuming their private health and LTC expenditures are high enough, as they usually are for aged people in need of expensive health and long-term care. Bottom line, neither the possession of substantial assets nor high income interferes with Medicaid LTC eligibility for people who know and take advantage of the rules or seek professional legal assistance to help them qualify.

Johnson & Favreault: “Despite concern that some older adults game the system by transferring wealth to their children to qualify for Medicaid, there is little evidence that this practice is widespread, especially after the 2005 Deficit Reduction Act tightened Medicaid eligibility rules (Baird, Hurd and Rohwedder 2016).” (p. 8)

LTC Comment: Here J&F give lip service to the possibility that people can qualify for Medicaid LTC benefits without spending down. But lip service is all it is. Asset transfers are only a minor form of Medicaid planning, the tip of the iceberg. J&F focus on asset transfers to divert attention from far more common methods. Purchase of exempt assets is by far the most frequently used and costly (to taxpayers) technique. But there are dozens of ways to shelter wealth. See this list for example: https://www.medicaidplanningassistance.org/medicaid-planning-techniques/. What exposes these researchers’ intellectual dishonesty is their total failure to acknowledge the widespread practice and methods of Medicaid planning as well as the vast professional legal literature on how to do it. For a history and bibliography of Medicaid planning over the past four decades see pages 34-65 in How to Fix Long-Term Care Financing.

Johnson & Favreault: “Older adults who develop serious LTSS needs account for 77 percent of Medicaid enrollees in the bottom lifetime earnings quintile, 79 percent in the second quintile, 87 percent in the middle quintile, 91 percent in the fourth quintile, and 90 percent in the top quintile (numbers not shown in the table). Serious LTSS need is a relatively weak predictor of Medicaid enrollment for older adults with limited lifetime earnings because their limited financial resources often qualifies them for benefits even without receiving paid LTSS and spending down some of their wealth.” (p. 18)

LTC Comment: So, poor people qualify for Medicaid? Not exactly news. But people who need LTC account for 91% of Medicaid enrollees in the fourth income quintile and 90% in the top quintile? That’s more believable. But how can it be so if Medicaid financial eligibility restrictions are as severely limiting as these analysts insist? Simple. It isn’t true and the researchers are wrong about Medicaid LTC eligibility.

Johnson & Favreault: “Although many middle-income older adults have savings they can use to supplement their incomes and help make ends meet, they run the risk of depleting their wealth if out-of-pocket health care costs persist, which could force them to turn to Medicaid. We project that 25 percent of older adults in the middle lifetime earnings quintile enroll in Medicaid after age 65. Nearly nine in ten of these older middle-class Medicaid enrollees have serious LTSS needs.” (p. 20)

LTC Comment: Thus, Johnson & Favreault conclude their paper. They say middle class people run the risk of depleting their wealth due to high health and LTC expenses. But they provide no empirical evidence whatsoever that this actually happens. They fail to recognize the simple reality that Medicaid financial eligibility rules are generous and elastic allowing people who choose that course to qualify for Medicaid without spending down assets significantly for care and despite having substantial incomes. There’s little wonder remaining why government, in this case USDHHS-ASPE, finances such research. To gain power and control, to promote more public financing and regulation of the LTC market, it helps to have research reports that say the public is devastated by catastrophic costs and existing programs like Medicaid aren’t doing enough. The opposite is true. Medicaid does too much and does it after care is needed when it is too late for people to save, invest or insure responsibly against the LTC risk. The only true solution to this real problem is to move LTC risk and cost forward in time so responsible people can prepare. See Frontload LTC for details.

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Updated, Monday, August 29, 2022, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #22-027 LTC NEWS AND COMMENT

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.

3 Reasons Not to Tap Your Home Equity Right Now
Fears grow over controversial long-term care bill
Inflation replaces staffing as top concern for many operators: survey
Congress Considers Strategies To Improve Medicare And Medicaid Integration For Dual-Eligible Individuals
World Insurance: Inflation Risks Front And Center
Long-term care accounts for 54 percent of healthcare bankruptcies this year
U.S. life expectancy dropped by average of 2 years in 2020, new data reveal
What older adults do while they sit affects dementia risk, study indicates
7 Reasons New York’s $26M John Hancock LTCI Action Matters for Advisors
BREAKING: CMS bulletin presses states on Medicaid nursing home spending

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Updated, Monday, August 22, 2022, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #22-026 LTC NEWS AND COMMENT

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.

Opting out of the long-term-care payroll tax is more complicated than necessary, suggesting it’s just a nice gesture
Updated numbers on people exempted from state’s long-term-care program and payroll tax
Long Term Care Insurance — The Latest
Value-Based Care Series: Anne Tumlinson, CEO, ATI Advisory
Consumer Reps Say Advisors Need Clients' LTC Insurance Rate-Hike Info
40 states now cover around-the-clock Medicaid HCBS as provided in assisted living
Over 50% Of Generation X Can't Afford To Help Their Senior Parents
With new acquisition, Humana carves out larger slice of Medicaid pie
Federal Staffing Minimums Won’t Solve Labor Woes For Nursing Homes in Disadvantaged Neighborhoods
Law in the Marketplace: Do you need Medicaid planning?

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Updated, Monday, August 15, 2022, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #22-025 LTC NEWS AND COMMENT

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.

Miller Trusts Can Help You Qualify for Medicaid
Problems persist at Washington hospitals due to lack of long-term care options
LTC insurance sales suddenly surge
Will a Medicaid Recipient Lose His Benefits If He Sends His Incarcerated Son Money Every Month?
What You Need to Know About Medicaid’s Personal Needs Allowance
Social Security: 3 Reasons Why Record COLA Increase in 2023 Could Backfire on Seniors
59 percent of adult children cannot afford assisted living, home care for parents: survey
Major nursing home association urges COVID emergency extension, revised guidance
Amazon Could Roll Into Home Care
We Have a Short Time to Fix Long-Term Care
Socioeconomic deprivation associated with increased dementia risk and faster memory decline
Filling The Gaps: The Role And Value Of Supplemental Benefits In Medicare Advantage·

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Updated, Friday, August 12, 2022, 10:40 AM (Pacific)

Seattle—

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LTC BULLET: LTC ALMANAC UPDATE

LTC Comment: We’ve updated the “Almanac of Long-Term Care” in The Zone. More on the LTC Almanac and today’s update after the ***news.***

*** SUBSCRIBE to LTC Clippings and Steve Moses (2019 ILTCI Recognition Award Honoree) will become your research assistant. Steve will tip you twice a day (on average) with news and views on things you need to know to stay at the forefront of professional expertise. You’ll see the latest articles, reports, data, and op-eds before your clients confront you with them. You’ll get trenchant analysis and valuable ideas on how to address objections and complaints. Contact Damon at 206-283-7036 or damon@centerltc.com for details or subscribe directly here: http://www.centerltc.com/newonlinepaymentspage.htm. Choose “Premium Membership” to receive our LTC Clippings. For example, here are some recent LTC Clippings.

8/4/2022, “Facing stagnant Medicaid rates, this state has lost 10 percent of SNF beds in 2022,” by John Hall, McKnight’s LTC News
Quote: “The loss of seven nursing homes and hundreds of beds in a short period of time has set healthcare officials in Montana reeling, even as the state is trying to regain its footing following the brunt of the COVID pandemic. It’s part of a trend that has seen more than 1,000 nursing homes close since 2015, industry officials said. In just the past six months, Montana has lost approximately 10% of its nursing home beds. Operators of the closed facilities said they could no longer absorb losses in excess of $100 per resident per day.”
LTC Comment: If only Montana had listened when we explained what was wrong with long-term care and what to do about it: LONG-TERM CARE IN MONTANA: A Blueprint for Cost-Effective Reform (1993).

8/2/2022, “As new Alzheimer’s drugs have failed, scientists are shifting focus to other potential causes,” by Berkeley Lovelace, Jr., NBC News
Quote: “As yet another Alzheimer's drug targeting plaque buildup in the brain fails to improve cognition in patients, leading scientists said a significant shift is underway in the search for effective treatments for the disease. The new direction in Alzheimer’s research — away from focusing solely on beta-amyloid plaques to other potential causes, including brain inflammation and conditions related to diabetes — comes from growing evidence that multiple factors contribute to the development of the disease.”
LTC Comment: “If at first you don’t succeed, try, try again” but doing the same thing over and over again is the definition of insanity. So, it’s about time science looks more closely at the idea of Alzheimer’s as “Type 3 Diabetes,” the result of unhealthy lifestyles.

7/28/2022, “Funding, unionization needed to improve wages, working conditions in long-term care: report,” by Kimberly Bonvissuto, McKnight’s Senior Living
Quote: “Expanding public funding, increasing the minimum wage and unionizing workers are the first steps toward improving wages and working conditions in the residential long-term care industry, according to the authors of a new report. 'The state of the residential long-term care industry,' from Washington, DC-based think tank Economic Policy Institute, covers employment trends in the industry and suggests interventions to try to ensure that long-term care services are accessible, affordable, safe and enriching for those who need them.”
LTC Comment: Public financing and government control dominate long-term care now. Instead of recommending more of the same, shouldn’t we first ask why the system is such a mess already? That is the more promising analytical approach in Medicaid_and_Long-Term_Care (2020) and How to Fix Long-Term Care Financing (2017). ***

LTC BULLET: LTC ALMANAC UPDATE

LTC Comment: Center members know and appreciate our "Almanac of Long-Term Care" in The Zone, our password-protected website.

*** SPECIAL: We are making access to The Zone, including the "Almanac of Long-Term Care," free for two weeks—today through Friday, August 26, 2022. To access this introductory peek into The Zone, go to http://www.centerltc.com/members/index.htm and use the following case-sensitive user name and password: UN: IntrotoZone / PW: FreeTrial. Like what you see? Then join the Center for Long-Term Care Reform here. Or contact Damon at 206-283-7036 or damon@centerltc.com. ***

Suggestion: Read through the following update to stay current on new resource materials. Then browse the full LTC Almanac at your leisure. When you need a quick fact or the latest research on a particular topic, you'll know right where to go. Enjoy.

The LTC Almanac is divided into 11 sections:

Aging Demographics
International
Unfunded Liabilities--Social Security, Medicare, and Budgets
Long-Term Care
Caregiving
Long-Term Care Financing
Long-Term Care Insurance
Reverse Mortgages
Long-Term Care Providers
Medicaid
Medicaid Planning

Each section is divided into sub-sections and under each sub-section we provide a list by date of the most important reports and articles published on the topic, usually with a few highlights and sometimes with analysis.

The Almanac of Long-Term Care is a great way to find statistics you need quickly or to get current on topics you need to know the latest information about.

The Zone and the LTC Almanac are for Center for Long-Term Care Reform members only, except during the current free trial offer. Join the Center here: http://www.centerltc.com/support/index.htm. Call or email Damon at 206-283-7036 or damon@centerltc.com. He can give you a user name and password to open up The Zone even before your dues payment arrives. Individual annual memberships are $150. Premium memberships with access to our “Clipping Service” start at $250. Premium Elite and “Regional Representative” membership (if you qualify professionally) are $500. Corporate memberships with many extra benefits start at $1,000. See our "Membership Levels and Benefits" schedule here.

Caveat: With time, some hyperlinks go bad. In a huge document like the "LTC Almanac," we can't keep all the links current all the time. If you find a bad link, but want to get to the material, contact us. We often have an electronic copy of the document and we can usually find a current live link. We'll also fix the link in the LTC Almanac so it will be current again for others.

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Chapter 1: Aging Demographics

United States

General Stats

2020 Older Americans, Key Indicators of Wellbeing URL: https://agingstats.gov/docs/LatestReport/OA20_508_10142020.pdf

10/29/2020, “Older Americans 2020: Key Indicators of Well-Being,” AgingStats.gov
Quote: “This report provides the latest data on the 40 key indicators selected by the Forum to portray aspects of the lives of older Americans and their families. It is divided into six subject areas: population, economics, health status, health risks and behaviors, health care, and environment. Download the Full 2020 Report (PDF)”
LTC Comment: Generally a good source for aging stats, but this quote from page 52 is false: “In 2017, about 44 percent of long-term care facility costs for Medicare beneficiaries age 65 and over were covered by Medicaid; another 51 percent of these costs were paid out of pocket.” Private out-of-pocket LTC facility costs are much lower than half, closer to 10%. See “LTC Bullet: So What If the Government Pays for Most LTC, 2018 Data Update” and Medicaid and Long-Term Care, p.49ff.

2019 Profile of Older Americans: LINK

7/21/2020, “Now Available: 2019 Profile of Older Americans,” Administration for Community Living
Quote: “The Profile of Older Americans is an annual summary of the available statistics related to the older population in the United States. Principal sources of data are the U.S. Census Bureau, the National Center for Health Statistics, and the Bureau of Labor Statistics. The Profile illustrates the shifting demographics of Americans age 65 and older. It includes key topic areas such as income, living arrangements, education, health, and caregiving. This year's report includes special sections on obesity as well as aerobic activity and muscle-strengthening activities.”
LTC Comment: This is your annual go-to source for demographic data on the aging.

Chapter 2: International

General

Weiner, Coe, Hoffman and Werner, 0420: LINK

POLICY OPTIONS FOR FINANCING LONG-TERM CARE IN THE U.S. Janet Weiner, Norma B. Coe, Allison K. Hoffman, and Rachel M. Werner

Abstract: Unlike many other developed nations, the U.S. has no system that protects its residents against the high costs of long-term care, which many people will need as they age. Medicaid coverage kicks in only after families have exhausted their resources. Until then, families bear the financial and caregiving burden of LTC themselves. In the absence of a national system, several states have considered or passed programs that offer some support for LTC. Many peer nations have more comprehensive systems to spread the risk for LTC costs across their population, through social insurance or other mechanisms. This Issue Brief reviews international models of financing LTC, as well as recent state efforts, to help U.S. policymakers design a program that can meet the LTC challenges of an aging population.

LTC Comment: This papers makes the false assumption that “Medicaid coverage kicks in only after families have exhausted their resources” and concludes that “the U.S. has no system that protects its residents against the high costs of long-term care.” It is exactly the U.S. system that prevents early and responsible personal long-term care planning by indemnifying elders and their heirs with public LTC financing after care is needed and with generous financial eligibility rules riven with loopholes that allow families to retain substantial assets. This “moral hazard” is what ails U.S. long-term care, not the lack of government imposed regulations and funding.

Chapter 4: Long-Term Care

Covid

COVID-19 and the Future of Long-Term Care: The Urgency of Enhanced Federal Financing
Feder, Judy.
J Aging Soc Policy ; 32(4-5): 350-357, 2020.
Article in English | MEDLINE | ID: covidwho-343189
https://search.bvsalud.org/global-literature-on-novel-coronavirus-2019-ncov/resource/en/covidwho-343189

ABSTRACT The economic threat posed by responses to COVID 19 endangers financing for long-term care across the states that is already inadequate and inequitable. Increasing the federal share of Medicaid spending as unemployment rises would mitigate fiscal pressure on states and preserve public services. But unlike the demand for Medicaid’s health care protections, which rises when economic activity declines, the demand for long-term care protections will grow even in a healthy economy as the population ages. Enhanced federal support is urgent not only to cope with the virus today but also to meet the long-term care needs of the nation’s aging population in the years to come. Long-term care financing policy should be modified to either adjust federal matching funds by the age of each state’s population, or fully federalize the funding of LTC expenses of Medicaid beneficiaries who are also eligible for Medicare.

Chapter 6: Long-Term Care Financing

LTC Approaches and Studies

New Approaches to Long-Term Care Access for Middle-Income Households by the Milken Institute

LTC Bullet: Milken Groupthink Fumbles LTC Financing
Friday, April 16, 2021
Seattle—

LTC Comment: You might expect innovative ideas from the Milken Institute, but when it comes to long-term care financing, all you get is ideological retreads. We explain below.

LTC BULLET: MILKEN GROUPTHINK FUMBLES LTC FINANCING

LTC Comment: The Milken Institute, chaired by former junk-bond king, now philanthropist Michael Milken, modestly bills itself as a “catalyst for practical, scalable solutions to global challenges.” Toward that end they “conduct research and analysis and convene top experts, innovators, and influencers from different backgrounds and competing viewpoints.” Lately, the Milken Institute tackled the problem of providing and financing long-term care for the broad American middle class. Last week it published “New Approaches to Long-Term Care Access for Middle-Income Households,” a timely look at a critical topic that begs for fresh analysis and ideas.

Did the Milken Institute deliver? Yes and no. The report does a yeoman’s job of describing the problem. It offers creative ideas to address service delivery problems, proposing for example a “Medicare Advantage Demonstration Project” and that the country should “Scale Up Integrated Care Programs.” But when it comes to how to pay for long-term care, the report founders as its many predecessors have done. It makes no attempt to understand why long-term care financing is so inadequate in the United States. It parrots the prevailing academic shibboleths, ignores critical facts, and proposes nothing new or promising. We get no original analysis or ideas. We’re asked to hang our hopes on a fatally flawed exercise in political futility, the LTC Trust Act in Washington State.

What went wrong? Following are quotes from the Milken Institute’s “New Approaches to Long-Term Care Access for Middle-Income Households” followed by our comments.
Read the rest of this LTC Bullet here.

Nursing Home and Home Care Expenditure Data from CMS and Health Affairs

National Health Expenditure Projections, 2021–30: Growth To Moderate As COVID-19 Impacts Wane: https://www.healthaffairs.org/doi/10.1377/hlthaff.2022.00113

ABSTRACT Although considerable uncertainty remains, the COVID-19 pandemic and public health emergency are expected to continue to influence the near-term outlook for national health spending and enrollment. National health spending growth is expected to have decelerated from 9.7 percent in 2020 to 4.2 percent in 2021 as federal supplemental funding was expected to decline substantially relative to 2020. Through 2024 health care use is expected to normalize after the declines observed in 2020, health insurance enrollments are assumed to evolve toward their prepandemic distributions, and the remaining federal supplemental funding is expected to wane. Economic growth is expected to outpace health spending growth for much of this period, leading the projected health share of gross domestic product (GDP) to decline from 19.7 percent in 2020 to just over 18 percent over the course of 2022–24. For 2025–30, factors that typically drive changes in health spending and enrollment, such as economic, demographic, and health-specific factors, are again expected to primarily influence trends in the health sector. By 2030 the health spending share of GDP is projected to reach 19.6 percent.

National Health Care Spending In 2018: Growth Driven By Accelerations In Medicare And Private Insurance Spending: https://www.healthaffairs.org/doi/10.1377/hlthaff.2019.01451

ABSTRACT US health care spending increased 4.6 percent to reach $3.6 trillion in 2018, a faster growth rate than the rate of 4.2 percent in 2017 but the same rate as in 2016. The share of the economy devoted to health care spending declined to 17.7 percent in 2018, compared to 17.9 percent in 2017. The 0.4-percentage-point acceleration in overall growth in 2018 was driven by faster growth in both private health insurance and Medicare, which were influenced by the reinstatement of the health insurance tax. For personal health care spending (which accounted for 84 percent of national health care spending), growth in 2018 remained unchanged from 2017 at 4.1 percent. The total number of uninsured people increased by 1.0 million for the second year in a row, to reach 30.7 million in 2018.

Who Will Pay for LTC? (includes "Not the VA")

“The middle ground for fixing long-term care costs: the WISH act”
https://www.healthaffairs.org/do/10.1377/forefront.20210729.585743/
Marc A. Cohen, Stuart M. Butler
August 9, 2021
Health Affairs article with details on the WISH Act

Roughly one week before Americans celebrated the July 4 holiday, Representative Thomas Suozzi (D-NY) introduced a revolutionary bill (H.R. 4289) designed to repair our broken system for financing long-term services and supports (LTSS). The “WISH Act”—Well-Being Insurance for Seniors to be at Home—is based on an idea first put forward by a group of long-term care experts known as the Long-Term Care Financing Collaborative, which was convened in 2012 by the Convergence Center for Policy Resolution and included the authors of this blog post. The idea was developed further in a 2018 paper presented at the Bipartisan Policy Center. If enacted, the WISH Act could significantly transform our LTSS financing system by harnessing the best of what the public and private sectors can jointly do to solve a problem that neither sector seems able to solve on its own. And it does this in a fiscally responsible way.

LTC Comment: This dream come true for advocates of government funding petered out when Thomas Suozzi (D-NY) decided to run for New York Governor.

State LTC Initiatives

Cohen, Tell on State Initiatives 0720: https://www.ltsscenter.org/wp-content/uploads/2020/07/State-LTSS-Financing-Executive-Summary-July-2020.pdf

7/27/2020, “New Report: Exploring LTSS Social Insurance Strategies in 6 States,” by Marc Cohen, et al., LeadingAge LTSS Center @UMass Boston and the Center for Consumer Engagement in Health Innovation

Quote: “A new analysis from the LeadingAge LTSS Center @UMass Boston and the Center for Consumer Engagement in Health Innovation examines activity across 6 states that are exploring social insurance initiatives to help finance long-term services and supports (LTSS). The Robert Wood Johnson Foundation supported the study. Learning from New State Initiatives in Financing Long-Term Services and Supports, a 48-page report detailing findings from the analysis, was developed in partnership with Community Catalyst’s Center for Consumer Engagement in Health Innovation. A 12-page Executive Summary is also available. The study was led by Marc Cohen, LTSS Center co-director; Ann Hwang, director of the Center for Consumer Engagement in Health Innovation; and Michael Miller, director of strategy policy at Community Catalyst.”

LTC Comment: Can more government regulation and compulsion improve a long-term care system ruined by excessive government interference and financing? How will the epidemiological, monetary and fiscal consequences of the pandemic affect the answer? Are bankrupt states reliant on overextended federal largesse and driven by anti-market ideology part of the solution or much of the problem? Hopefully, this report, written by two distinguished LTC insurance scholars (Cohen, Tell plus others) will give us some answers. I’m eager to dig into it and will share my perspective in a future LTC Bullet. [LTC Bullet: Umpteenth Long-Term Care Study Disappoints. Friday, August 14, 2020]

Chapter 7: Long-Term Care Insurance

Criticism

Esworthy, Tumlinson and Cohen on LTC insurance, 0620: https://atiadvisory.com/wp-content/uploads/2020/06/Protecting-Consumers-and-Medicaid-from-Catastrophic-Long-Term-Care-Costs_June-2020.pdf

“Protecting Consumers and Medicaid from Catastrophic Long-Term Care Costs:
How financial challenges in the long-term care insurance industry may shift costs to policyholders and Medicaid.”

“The long-term care insurance (LTCi) market has been on a twenty year downward spiral, driven by an unfavorable (i.e., declining) interest rate environment, higher than expected benefit costs, and lower than expected voluntary lapse rates.1 Some carriers have exited the industry entirely, whether voluntarily or via insolvency. Those carriers who have remained in the market have turned to premium increases in order to remain viable.2 LTCi is a financial product that promises over 7 million policyholders.”

LTC Comment: Kicking LTC insurance when it’s down.

Chapter 9: Long-Term Care Providers

Assisted Living

Suggested citation:
Sengupta M, Lendon JP, Caffrey C, Melekin A, Singh P. Post-acute and long-term care providers and services users in the United States, 2017–2018. National Center for Health Statistics. Vital Health Stat 3(47). 2022. DOI: https://dx.doi.org/10.15620/cdc:115346.

6/13/2022, “Assisted living’s place in the long-term care continuum,” by Lois A. Bowers, McKnight’s Senior Living
Quote: “According to the report, assisted living is the long-term and post-acute care service provider with the most settings in the United States, with 31,400 assisted living and similar residential care communities providing such services. By comparison, 15,600 nursing homes, 11,500 home health agencies, 4,700 hospices, 4,200 adult day centers, 1,200 inpatient rehabilitation facilities and 400 long-term care hospitals provide long-term and post-acute care services. Home care agencies, however, had approximately 4,940,300 discharges in 2017, and 1,562,500 patients received services from hospices that year. By comparison, in 2018, 1,321,200 people were current residents in nursing homes and 918,700 current residents were living in assisted living communities; also in 2018, 251,100 current participants were enrolled in adult day services center, and in 2017, 380,400 patients received services from inpatient rehabilitation facilities and 115,800 patients received services from long-term care hospitals. … Want to take a deeper dive into the information? The report is available on the CDC website.”
LTC Comment: Fascinating facts about the LTC continuum very hard to find anywhere else.

Chapter 10: Medicaid

Medicaid Financing and Burwell Data

Medicaid Long Term Services and Supports Annual Expenditures Report
Federal Fiscal Year 2019
December 9, 2021
Burwell Data

Executive Summary
Long-term services and supports (LTSS) encompass a wide range of medical and nonmedical services and supports for people with physical, intellectual, mental, or other disabilities or conditions. These can include institutional care, such as that provided in nursing facilities, intermediate care facilities for individuals with intellectual or developmental disabilities (ICF/IDD), and mental health facilities,1 and home and community-based services (HCBS), such as personal care and home health, among other services. Medicaid is the primary payer of LTSS, covering slightly more than half of all spending for such services and supports in the United States (Centers for Medicare & Medicaid Services n.d.; O’Malley Watts et al. 2020). Over the past several decades, federal and state initiatives and consumer preferences have led to shifts in Medicaid LTSS expenditure patterns across settings and service types, including increases in HCBS expenditures.
This report is the latest in a series of reports, sponsored by Centers for Medicare & Medicaid Services (CMS), on Medicaid LTSS expenditures.

Medicaid Eligibility

KFF on Medicaid Financial Eligibility
https://www.kff.org/report-section/medicaid-financial-eligibility-in-pathways-based-on-old-age-or-disability-in-2022-findings-from-a-50-state-survey-issue-brief/
7/11/2022, “Medicaid Financial Eligibility in Pathways Based on Old Age or Disability in 2022: Findings from a 50-State Survey,” by MaryBeth Musumeci, Molly O'Malley Watts, and Meghana Ammula, KFF
Quote: “This issue brief presents state-level data on Medicaid financial eligibility criteria and adoption of the major non-MAGI pathways as of January 2022. It includes mandatory and optional pathways to full Medicaid eligibility as well as state options to expand Medicaid financial eligibility for people who need long-term services and supports (LTSS) in nursing homes or other institutions or in the community.”
LTC Comment: I’m often asked about state-level Medicaid financial eligibility rules. Today I have good news and bad news. The good news is that this publication by the Kaiser Family Foundation has tons of that information. The bad news is that Medicaid eligibility is so complicated—a Serbonian bog according to one jurist—that you may not be able to make much sense out of it. Still, this is a very valuable resource for those of us who can’t just shake our heads in dismay and ignore the subject. For the rest of you, here’s a useful, and much simpler, rule of thumb. Anyone with income less than the cost of a nursing home can qualify for Medicaid LTC benefits. Assets don’t matter because the big ones are exempt and the rest can easily be converted to exempt status. Is it any wonder people don’t worry about paying for LTC until they need it?

Hest, Alarcon and Blewitt on Modeling Financial Eligibility for Medicaid Longterm
Services and Supports
Robert Hest, Giovaan Alarcon & Lynn A. Blewett
To cite this article: Robert Hest, Giovaan Alarcon & Lynn A. Blewett (2020): Modeling Financial
Eligibility for Medicaid Long-term Services and Supports, Journal of Aging & Social Policy, DOI:
10.1080/08959420.2020.1740638
To link to this article: https://doi.org/10.1080/08959420.2020.1740638

ABSTRACT Medicaid plays a significant role in financing long-term services and supports (LTSS) for low-income elderly (65+) in the United States. We modeled the impact of changing income, home equity, and asset limitations on Medicaid eligibility across states. We found that one in five elderly adults (10 million individuals) meet all three tests and would be financially eligible for Medicaid LTSS. Imposing additional restrictions on income allowances and eligibility thresholds had greatest impact on financial eligibility for Medicaid LTSS. Few states have opted to restrict financial eligibility and are instead looking for ways to keep people living independently in the community.

LTC Comment: I analyzed this article in LTC Bullet: Rethink LTC Financing. Friday, February 19, 2021

Blewitt and Hest, 0520
https://doi.org/10.1080/08959420.2020.1774312

“Emergency Flexibility for States to Increase and Maintain Medicaid Eligibility for LTSS under COVID-19”b Lynn A. Blewett & Robert Hest To cite this article: Lynn A. Blewett & Robert Hest (2020) Emergency Flexibility for States to Increase and Maintain Medicaid Eligibility for LTSS under COVID-19, Journal of Aging & Social Policy, 32:4-5, 343-349, DOI: 10.1080/08959420.2020.1774312 To link to this article: https://doi.org/10.1080/08959420.2020.1774312

Medicaid Managed LTSS

GAO on Medicaid Managed Care 1220 URL: https://www.gao.gov/assets/720/710680.pdf

12/16/2020, “Medicaid Long-Term Services and Supports: Access and Quality Problems in Managed Care Demand Improved Oversight,” Government Accountability Office, GAO-21-49

Quote: “Medicaid spends about a third of its budget on long-term services and supports for adults and children with disabilities and chronic conditions. Over half of states contract with managed care organizations to provide those services. We examined 6 states, each of which reported finding significant problems with the quality of care provided through these contracts. In some cases, the problems led to patient injury or neglect. This suggests that problems may be widespread, raising concerns given gaps we found in monitoring and oversight. Our recommendations include drafting a national oversight strategy.”

LTC Comment: This was never going to end well as we observed in this “LTC Bullet: How the Government Ruined LTC (and We’ll Fix It)” on June 10, 2016:
What about long-term care specifically? The big change there is that Medicaid, the dominant LTC payer, has shirked its responsibility for providing and paying for quality community and institutional care. How so? Instead of paying home care and nursing facility providers directly (however inadequately), state Medicaid programs all across the country are shifting to “managed long-term care.” That means they contract with private companies to (1) find and sign up providers, (2) direct Medicaid recipients to this limited range of locked in providers, and (3) pay the providers after taking a cut for themselves--all for less than it would have cost Medicaid to pay the providers itself. Traditional direct-care LTC providers wonder how adding an extra payee and a new level of bureaucracy will lower costs and improve quality. But for now, that’s the Holy Grail of managed long-term care.

Medicaid Estate Recovery (and Liens)

MACPAC, “Medicaid and CHIP Payment and Access Commission” recommended curtailing Medicaid estate recoveries in its
March 2021 Report to Congress on Medicaid and CHIP

We analyzed and critiqued their proposal in two LTC Bullets:

040221 LTC Bullet #1302--MACPAC Captured
030521 LTC Bullet #1300--MACPAC Misfires

Little has been heard of this misguided proposal since.

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Updated, Monday, August 8, 2022, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #22-024 LTC NEWS AND COMMENT

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.

Webinars aim to gather more support for long-term-care law and tax
Facing stagnant Medicaid rates, this state has lost 10 percent of SNF beds in 2022
As new Alzheimer’s drugs have failed, scientists are shifting focus to other potential causes
Want to improve Medicare Advantage? Deliver some real advantages
American Caregivers: The Time To Plan Is Now
Funding, unionization needed to improve wages, working conditions in long-term care: report
Mega Millions sales boost senior citizen programs
Asset Limit Changes for Non-MAGI Medi-Cal
Low pay, poor working conditions common for long-term care workers: report
Older adults’ home equity exceeds $11.12 trillion in first quarter: report
Unique New Mexico program turns immigrants into caregivers
True Cost of Aging’ Index Shows Many Seniors Can’t Afford Basic Necessities
CMS offering new tool to transition more people away from SNFs

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Updated, Friday, July 29, 2022, 10:40 AM (Pacific)

Seattle—

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LTC BULLET: LTCI SALES SURGE

LTC Comment: All of a sudden LTCI sales exploded to the upside last year. What happened? Could it happen again? How? Some thoughts after the ***news.***

*** LTC CLIPPINGS are notifications we send to Center Premium Members daily with news, data, reports, and information they need to know to stay at the professional forefront. Steve Moses scans the popular and scholarly media, condenses vital information, and forwards to you a message with the title, author, a link, a representative quote and his “LTC Comment” analyzing the significance. Don’t miss any more LTC Clippings. To subscribe contact Damon at 206-283-7036 or damon@centerltc.com. Here are two examples of need-to-know LTC clippings we sent recently:

7/27/2022, “Older adults’ home equity exceeds $11.12 trillion in first quarter: report,” by Kathleen Steele Galvin, McKnight’s Senior Living

Quote: “Homeowners aged 62 or more years increased their home equity by the first quarter of 2022 by 4.9%, to a record $11.12 trillion, from the fourth quarter of 2021, according to the latest quarterly release from the National Reverse Mortgage Lenders Association, published Tuesday. That’s a difference of $520 billion. … Some older adults are using reverse mortgages to finance their moves to senior living communities.”

LTC Comment: Expect senior home equity to decline as the housing recession continues but to remain a critical source of LTC financing when the broader economic recession takes its toll on public LTC funding programs.

7/28/2022, “Low pay, poor working conditions common for long-term care workers: report,” by Kathleen Steele Galvin, McKnight’s Senior Living

Quote: “Low pay and poor working conditions are the norm for workers in long-term care, according to a report published Wednesday by the think tank Economic Policy Institute. … Their key findings:

80.9% of long-term care workers are women.
22.4% are Black women, and 12.8% are immigrant women.
$15.22 is the median hourly pay rate, below the US median hourly wage of $20.07.
7.2% live in poverty, a higher percentage than the poverty rate for all workers (5.3%).
6.9% are covered by a union contract, a lower rate than the overall workforce (11.9%). …

Increased public funding is an answer to ensuring higher pay, better staffing levels and improved working conditions for workers, according to the researchers. They also called upon policymakers to raise the minimum wage and strengthen protections for workers seeking to organize a union.”

LTC Comment: The kneejerk answer is always to throw more money at the problems. But shouldn’t the first step be to ask why LTC has these problems? The market is dominated by public funding and government regulation. If it is such a mess, do we really believe more public funding and regulation will make it better? To understand what’s wrong and what can fix it, try these studies: Medicaid_and_Long-Term_Care (2020) and How to Fix Long-Term Care Financing (2017). ***

LTC BULLET: LTCI SALES SURGE

LTC Comment: In the 1980s and ‘90s long-term care insurance sales moved gradually upwards. We had every reason to believe that trend would continue. After all, the undesirable alternative was to pay out of pocket for long-term care if needed or to rely on public welfare. But by the early 2000s, LTCI sales took a downward turn. Analysts and policy makers wrote the product off as a way to offset public funding from Medicaid. The private long-term care insurance market languished. Until now!

What happened? To find out, read the “2022 Milliman Long Term Care Insurance Survey” in Broker World’s July 2022 issue. (Subscribe here.) This is the magazine’s 24th consecutive annual review of stand-alone long-term care insurance (LTCI). Kudos to authors Claude Thau, Allen Schmitz, and Chris Giese. Here are some pull quotes (footnotes omitted, but emphasis added) from the article followed by our comments.

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.

Worksite sales soared. We estimate that new annualized premium from worksite sales tripled in 2021, while non-work-site premium increased by 6.0 percent. We estimate that there were about 9.3 times as many worksite sales in 2021 compared to 2020, while non-worksite sales increased 47 percent.

For the first time ever in our survey, more males purchased LTCI than females, which appears to have been driven by the WCF exemption.

Reflecting nine companies’ data, the inforce number of cases increased for the first time since 2014, by 3.6 percent, because of WA sales.

MARKET PERSPECTIVE … Washington State’s “Washington Cares Fund” (WCF) stimulated a tremendous demand for private LTCI from individuals and businesses within WA. WCF imposes a 0.58 percent payroll tax to fund a $36,500 lifetime pool (intended to inflate according to the Washington consumer price index) for care received in WA as defined in the Revised Code of Washington 50B.04. However, people who purchased qualifying private stand-alone or combination LTCI by November 1, 2021 could file to be exempt from the tax. … WA accounted for 60 percent of reported stand-alone LTCI policies sold and 60 percent of combination life/LTCI on-going premium (i.e., excluding single premium) policies sold in 2021 after having accounted for 3.0 percent of stand-alone LTCI sales in 2020 and only 1.6 percent of combination life/LTCI sales in 2020. Including estimated sales, we think more than 70 percent of the stand-alone policies sold in 2021 were sold in WA. (Note: WA had received 470,000 applications for exemption as of March 2022.)

[I]nsurers reported 44 times as many stand-alone policies sold in WA in 2021 as in 2020 but only 12 times as much new annualized premium. …

[I]nsurers reported 92 times as many combination on-going premium policies sold in WA in 2021 as in 2020 but only 9.8 times as much new annualized premium. Outside WA, insurers reported 0.6 percent more policies and 18 percent more premium in 2021 than in 2020. As a result, our national data for such combination policies shows 2.5 times as many new policies and 1.4 times as much annualized new premium. …

WA sales distorted the characteristics of sales significantly, as will be explained throughout this report. Given the observed sales in WA, it appears likely consumers generally sought the least expensive way to opt out of WCF.

The national placement rate increased from 57.8 percent in 2020 to 61.7 percent in 2021 … driven by WA sales. WA had a 72.7 percent placement rate, which appears to be influenced by healthy and young applicants. Outside WA, the placement rate was 54.1 percent. Only 13.3 percent of WA business was declined (27.4 percent elsewhere) and declines were lower in WA for all age bands. Only 14.1 percent of WA business was incomplete, suspended, not taken out or returned during the free look period (18.5 percent elsewhere). Our surveys have never found placement rates parallel to 2021 WA experience. …

Current premiums are much more stable than past premiums, partly because today’s premiums reflect much more conservative assumptions based on far more credible data and lower assumed investment yields.

LTC Comment: Wow! That’s amazing. All of a sudden, national sales tripled, though premiums only increased one-third. Worksite sales jumped over nine fold, but worksite premiums only tripled. More men than women bought policies for the first time ever. National placement rates jumped from 57.8 percent in 2020 to 61.7 percent in 2021. Most amazing of all, one state—Washington—accounted for 60 percent of national sales after generating only three percent the year before. But it’s not all good news. Outside of Washington, new insureds dropped 9.4 percent and premiums declined 6.0 percent.

What’s going on? It’s pretty obvious. Faced with a real and immediate risk and cost of long-term care—that is, Washington’s payroll tax threat—people grabbed the only way available to avoid it—to buy LTCI by a date certain. Nearly half a million workers sought the exemption. Overrun by demand the LTCI market froze and most seeking the coverage were unable to close the deal by actually purchasing a policy. No problem. That and other issues of poor design caused the state to send WA Cares back to the drawing board, delaying implementation until July 2023. But the key point was made.

Lesson learned: while consumers won’t buy private long-term care insurance to offset a risk and cost that may or may not occur decades in the future, they will snap up the product to escape an immediate cost imposed by the government in the form of a compulsory payroll tax.

Hmmm. What should we make of that new insight? Should every state, or even the federal government itself, impose a WA Cares-like payroll tax to fund meager LTC benefits and give everyone a chance to opt out in the hope they’ll insure privately to escape the trap? Even if others did a better job than WA Cares of planning and designing such a program, it would be a very unfortunate development indeed. It would follow the social insurance programs we already have, such as Medicare and Social Security, currently unfunded to the tune of $56 trillion, down the fiscal sinkhole.

There is a better way. Instead of imposing a politically unpopular and economically ill-advised new tax to fund an inadequate LTC “trust fund” with a private LTC insurance escape hatch, why not simply establish and publicize a new personal long-term care responsibility. Let a private organization or agency actuarially determine each individual’s personal contribution and responsibility to the LTC risk pool. Then allow people to meet their responsibility as they see fit as long as they satisfy agreed upon measures of accountability. How?

The possibilities are endless. One could purchase private LTC insurance in a sufficient amount. Or earmark a portion of home equity--now $11.12 trillion just among older homeowners--to long-term care. Or tap life insurance--$19.6 trillion. Or draw from IRAs ($13.2 trillion)/401Ks ($7.3 trillion). Or contribute to a new kind of IRA for LTC. Or formally encumber part of one’s estate. Given a reason to do so, consumers and entrepreneurs would find creative, economically beneficial ways to meet each person’s LTC responsibility.

Research shows that the LTC responsibility is not as onerous as previously thought. On average “an American turning 65 today will incur $138,000 in future LTSS costs, which could be financed by setting aside $70,000 today” (Favreault and Dey, 2016, p. 1). That does not sound so daunting. If we could get most Americans to satisfy that level of risk now, we would be left with a far tinier share of the overall cost of LTC for public financing to pick up later.

But what about those who do not or cannot cover their personal LTC responsibility up front? If they can but will not, then let government enforce the responsibility, but not with a universal, compulsory, payroll tax punishing everyone and damaging the economy. Rather more conventional methods should suffice such as withholding other public benefits or imposing a new, narrowly focused tax clearly defined to cover the individual’s LTC responsibility.

For those who don’t satisfy their individual LTC responsibility because they can’t, well, at least there will be many fewer of them when the time eventually comes that they need long-term care and less depleted public coffers will be better able to provide access to and quality of care for them.

It turns out financing long-term care for an aging population isn’t the overwhelming problem all the studies make it out to be. Reconceptualized as an immediate cost, long-term care planning is manageable. There’s more than enough wealth in the American economy to ensure every person receives quality care in the most appropriate setting when they need it.

We tried getting people to plan responsibly for long-term care by threatening them with the loss of their life’s savings if they have catastrophic LTC costs. But in the end, when the time came, Medicaid stepped in and paid for most high-cost long-term care. So generation after generation never came to grips with the real risk and cost of LTC. That was the real problem all along. Now that we understand it, we know what to do about it. All that remains is to summon the political will and act.

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Updated, Monday, July 25, 2022, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #22-023 LTC NEWS AND COMMENT

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.

Accessing Long Term Care Through Medicaid
CMS releases first-ever quality measures for home- and community-based services
The Perfect Storm: Nursing Home Industry Outlook is ‘Not Pretty’ Amid Rising Inflation, Labor Costs
Adults poorly planning for long-term care needs, surveys find
Record Social Security bump could push seniors into higher tax bracket, experts say
Congress’ Epic Fail In Caring For Frail Older Adults
Almost half of all long-term care insurance applications declined for those over 70
AHCA calls for action as 60 percent of SNFs limit new admissions
COVID-19 public health emergency extended again

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Updated, Monday, July 18, 2022, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #22-022 LTC NEWS AND COMMENT

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.

LTSS reform needed to ensure access to quality care, doctors’ group says
Medicaid Financial Eligibility in Pathways Based on Old Age or Disability in 2022: Findings from a 50-State Survey
Could a hybrid model be the solution to serving millions more older adults?
Long Term Care State Payroll Tax Update
Many Baby Boomers Will Soon Need Adult Supervision
Democrats Propose Raising Taxes on Some High Earners to Bolster Medicare
Bonuses, 5.49% salary jump part of soaring costs for CCRC nurse leaders: report
Jobs Aplenty, but a Shortage of Care Keeps Many Women From Benefiting
As interest rates climb, life-LTC combined insurance premiums decline, expert says
Making Difficult Decisions: Long-term care or keep farming assets?
9 Emerging Senior Living Technologies That Will Power the Future of Assisted Living
Home health patients experience higher rehospitalization rates in study
The Supreme Court just put regulatory oversight on notice

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Updated, Friday, July 15, 2022, 10:40 AM (Pacific)

Seattle—

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LTC Comment: If you want consumers to take the risk and cost of long-term care seriously enough to prepare for them, make the responsibility real and move it forward to now. We explain after the ***news.***

*** LTC CLIPPINGS are news items we send to Center Premium Members daily with news, data, studies, and information they need to know to stay at the professional forefront. Steve Moses scans the popular and scholarly media, condenses vital information, and forwards to you a message with the title, author, a link, a representative quote and his “LTC Comment” analyzing the significance. Don’t miss any more LTC Clippings. To subscribe contact Damon at 206-283-7036 or damon@centerltc.com. Here are three examples of need-to-know LTC clippings we sent recently:

7/11/2022, “Medicaid Financial Eligibility in Pathways Based on Old Age or Disability in 2022: Findings from a 50-State Survey,” by MaryBeth Musumeci, Molly O'Malley Watts, and Meghana Ammula, KFF
Quote: “This issue brief presents state-level data on Medicaid financial eligibility criteria and adoption of the major non-MAGI pathways as of January 2022. It includes mandatory and optional pathways to full Medicaid eligibility as well as state options to expand Medicaid financial eligibility for people who need long-term services and supports (LTSS) in nursing homes or other institutions or in the community.”
LTC Comment: I’m often asked about state-level Medicaid financial eligibility rules. Today I have good news and bad news. The good news is that this publication by the Kaiser Family Foundation has tons of that information. The bad news is that Medicaid eligibility is so complicated—a Serbonian bog according to one jurist—that you may not be able to make much sense out of it. Still, this is a very valuable resource for those of us who can’t just shake our heads in dismay and ignore the subject. For the rest of you, here’s a useful, and much simpler, rule of thumb. Anyone with income less than the cost of a nursing home can qualify for Medicaid LTC benefits. Assets don’t matter because the big ones are exempt and the rest can easily be converted to exempt status. Is it any wonder people don’t worry about paying for LTC until they need it?

6/2022, “Long Term Care State Payroll Tax Update,” BuddyIns
Quote: “This update is intended for our community of LTC planning advocates and insurance practitioners to stay up-to-date on the latest legislative news that we are following at BuddyIns. This is not a comprehensive assessment, so please email us with any news from your neck of the woods.”
LTC Comment: Thanks to BuddyIns for this update on a question I’m probably asked more than any other: which states are doing what about LTC financing? What all the state initiatives have in common is to rely on the threat of government force to impose compulsory participation in social insurance plans on the model of existing, failed federal entitlement programs. Watch for this coming Friday’s [now today’s] “LTC Bullet: Frontload LTC” for a better solution grounded in personal responsibility and individual freedom.

7/4/2022, “The Supreme Court just put regulatory oversight on notice,” by John O’Connor, McKnight’s LTC News
Quote: “By any measure, the Supreme Court just wrapped up one of its more memorable sessions. … But the decision that may most directly affect long-term care providers was actually directed at the Environmental Protection Agency. And its potential impact on skilled care might be hard to overestimate. … The majority opinion, written by Chief Justice John Roberts, claimed the agency’s heightened emissions rules were a ‘fundamental revision’ of existing law. He added that it’s up to Congress, not the EPA, to make ‘a decision of such magnitude.’”
LTC Comment: What’s that got to do with long-term care? O’Connor explains: “Talk about the importance of timing: Just one day earlier, the Centers for Medicare & Medicaid Services proposed regulations that would allow surveyors to use payroll data to investigate staffing rules violations, force facilities to hire infection preventionists, and revamp arbitration requirements, among other provisions. … And it’s not just these latest rules for nursing homes that could come under fire. Any regulation that arguably steps over the line would appear to be fair game. So how big is the Supreme Court’s EPA ruling? Let’s put it this way: Regulatory oversight might never be the same.” Let’s hope the ongoing, long growing tyranny by bureaucrats is finally curtailed. ***

LTC BULLET: FRONTLOAD LTC

LTC Comment: The fundamental problem with long-term care is that people don’t worry about it until they’re too old, frail, demented, infirm or broke to plan responsibly for it. That’s why most people who need expensive care for a long time end up relying on public financing, usually from Medicaid. But Medicaid is welfare and “programs for the poor are poor programs.” So too many people needing long-term care are stuck in underfunded nursing homes or waiting in long lines (665,000 deep) for scarce, waivered home care slots. What’s to be done?

Governments, federal and state, think they have a solution. If people won’t take responsibility to plan for long-term care before it’s too late, then force them to do it. Require companies to charge employees payroll deductions to create trust funds that can pay benefits when covered individuals qualify. Whether federal (WISH Act) or state (WA Cares) the principle is the same in such proposals: use the government’s monopoly on the legal use of force to compel people to prefund their long-term care. But we’ve seen that principle at work already in Social Security and Medicare, two entitlements on the brink of insolvency with unfunded liabilities totaling $56 trillion. Do we really want to go there again?

What else might work? We know what didn’t work. The federal government tried telling people that if they don’t prepare for long-term care but need it later they could lose their life’s savings. That might have worked if it had been true. But giant Medicaid asset exemptions and financial eligibility loopholes along with non-enforcement of mandatory estate recoveries defeated that plan. People who ignored the warnings and ended up needing expensive long-term care got Medicaid, often while protecting most of their wealth. So, unsurprisingly, the next generation followed suit, ignoring long-term care until they needed it, then relying on Medicaid. The long-term care system spiraled downward into its current dismal state.

What have we learned? A couple things. Threatening people with impoverishment doesn’t work if you don’t enforce it. Forcing people to pay extra taxes, premiums, or payroll deductions (whatever you want to call them), under threat of fines or imprisonment, for a promise of minimal benefits from another government program likely to become insolvent is repugnant. Voters twice rejected WA Cares and every attempt to impose a federal LTC social insurance program has proved a non-starter.

Still, we have learned something important from the government’s clumsy attempts to force people to comply with a long-term care imperative. I refer to what happened when the WA Cares program offered citizens an option to escape its mandatory payroll deductions by purchasing private long-term care insurance. Nearly half a million Washingtonians clutched that parachute and jumped. New LTC insured lives nearly tripled from 57,200 in 2020 to 153,687 in 2021 … nationwide! Who knew? People won’t buy insurance for an unknowable risk off in the distant future, but they will leap at the chance to avoid a mandatory government program right now!

Well, now we know. So is there a way to have the good result (widespread early LTC planning) without the bad outcome (compulsory government interference)? Of course. Treat the public like grownups. Explain LTC risk including each person’s responsibility to prepare for it. To wit: long-term care can and probably will happen to them some day. They have a personal responsibility to plan for it and prepare. If they do, the government will leave them alone. If they don’t, they may lose government benefits that would otherwise accrue to them or have to answer to a public or private agency entrusted with the task to establish and enforce each individual’s LTC responsibility.

How can you meet your LTC responsibility and avoid loss of your government benefits or garnishment of other income? Many ways. Buy private LTC insurance in an amount satisfactory to meet your actuarially determined risk. Carve out a portion of your home equity and earmark it to meet that responsibility. Tap your life insurance value. Set aside sufficient funds in a new IRA-like fund to be created. Obligate part of your estate, secured and recorded (unlike Medicaid estate recoveries) to fund your long-term care if needed. The possibilities are endless. All that is needed is a private entity to calculate each individual’s LTC responsibility, track it, and ensure it is met. Government could follow up with those who don’t participate voluntarily, hopefully very few, but otherwise stay out of the LTC market.

Why would people cooperate with this plan when they ignore LTC risk and cost now? Two reasons. First, they confront this risk and cost immediately, not as a maybe in the distant future. Second, they are only responsible for the risk they bring into the risk pool. Researchers found that the average individual’s LTC cost risk is $138,000 and that it could be met by setting aside and investing $70,000 now. Obviously some people will incur more costs and some less, but removing the average risk from the risk pool will leave any remaining public responsibility, such as a vastly reduced Medicaid program, greatly relieved.

The only solution to what ails long-term care in the USA is to engage citizens to plan and prefund their risk and cost as early as possible. To do that without using government force to compel compliance, establish a legal obligation to a minimum level of individual LTC preparation and offer creative ways to meet the responsibility voluntarily. Only enforce the obligation to plan on those who do not act. Frontload long-term care!

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Updated, Tuesday, July 5, 2022, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #22-021 LTC NEWS AND COMMENT

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.

US long-term care insurers see large spike in new customers in 2021
Staffing Shortages Have U.S. Nursing Homes in Crisis
LeadingAge chastises HHS for ‘devastating’ home health rule
AARP Poll Reveals Strong Support for Family Caregiver Tax Credit
Cocktail lounge attendant? Eclectic mix of people filling heretofore unheard-of senior living positions
Long-term inflation threatens life plan community margins
Flu vax cuts seniors’ dementia odds by 40 percent over 4 years, large study finds
Post-acute and Long-term Care Providers and Services Users in the United States, 2017–2018, Analytical and Epidemiological Studies
Many Retirees Wish They'd Planned, Saved Earlier: EBRI Survey
Average Annual Assisted Living Rates Surpass $51K, New Jersey Most Expensive State
Senate Retirement Bill Could Include LTCI Premium Provision
WA Cares 'relatively higher risk' investment policy approved
Nursing home COVID-19 infections quadruple as booster rate slows

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Updated, Friday, June 24, 2022, 10:40 AM (Pacific)

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LTC BULLET: MEDICAID’S PLAN TO FAIL

LTC Comment: AARP says too few people plan for old age even though most believe they’ll need long-term care, but it offers no clue as to why or what to do about it. Insights and analysis after the ***news.***

*** LTC CLIPPINGS are news items we send to Center Premium Members daily with news, data, studies, and information they need to know to stay at the professional forefront. Steve Moses scans the popular and scholarly media, condenses vital information, and forwards to you a message with the title, author, a link, a representative quote and his “LTC Comment” analyzing the significance. To subscribe to LTC Clippings, contact Damon at 206-283-7036 or damon@centerltc.com. Here are two examples of LTC clippings sent this week:

5/2022, “Post-acute and Long-term Care Providers and Services Users in the United States, 2017–2018, Analytical and Epidemiological Studies,” by Sengupta, Manisha, et. al., National Center for Health Statistics
Quote: Key Findings [excerpts]
In 2018, about 69,000 paid, regulated post-acute and long-term care services providers in seven major sectors served more than 9.5 million people in the United States.
• Post-acute and long-term care services were provided by 4,200 adult day services centers, 11,500 home health agencies, 4,700 hospices, 15,600 nursing homes, 31,400 assisted living and similar residential care communities, 1,200 inpatient rehabilitation facilities, and 400 long-term care hospitals (Appendix III, Table IX).
• In 2018, an estimated 251,100 current participants were enrolled in adult day services centers; 1,321,200 people were current residents in nursing homes; and 918,700 current residents were living in residential care communities. In 2017, about 4,940,300 patients were discharged from home health agencies; 1,562,500 patients received services from hospices; 380,400 patients received services from inpatient rehabilitation facilities; and 115,800 patients received services from long-term care hospitals (Appendix III, Table XII).
LTC Comment: Consult the report for much more data on the LTC continuum. Center friend Bill Comfort observed that “the CDC data notes that Home HEALTH Care is for Medicare-paid skilled care at home. From my first look at the report, it appears that this doesn’t address at all private-duty, private-pay, custodial home care. The 11,500 home HEALTH agencies do not include the likes of Home Instead, Right At Home, Comfort Keepers, and all the mom and pop home care agencies at all! We continue to get a distorted view of post-acute and just basic custodial care from this oversight.”

6/23/2022, “Many Retirees Wish They'd Planned, Saved Earlier: EBRI Survey,” by Dinah Wisenberg Brin, ThinkAdvisor
Quote: “Half of surveyed retirees said they would have changed their financial habits during their working years. But those who paid a professional to develop a financial plan were satisfied and felt the service was worth the expense. Unexpected medical expenses, preventive health spending, inadequate retirement savings and inflation led the list of retirees' pre-retirement financial concerns.”
LTC Comment: Yet few people plan for old age. To learn why and what to do about it, read tomorrow’s [now today’s] “LTC Bullet: Medicaid’s Failure to Plan.”

LTC BULLET: MEDICAID’S PLAN TO FAIL

LTC Comment: There are few people in the LTC profession I’ve known longer and respect more than John O’Connor. He is editorial director, vice president and associate publisher at McKnight’s Long-Term Care News and sister publication, McKnight’s Senior Living. I’ve been reading John’s thoughtful commentaries since 1989 when I left government LTC research to join the private sector.

O’Connor’s “Editor’s Column” yesterday made several points that form a fine foundation for a crucial conclusion. Read “Worse than a bad plan for senior living” and then rejoin me for some observations.

He begins: “Even though Ben Franklin uttered the words more than two centuries ago, they still ring true today: ‘If you fail to plan, you are planning to fail.’ I was reminded of his gentle warning while reading about the AARP’s latest ‘Long-Term Care Readiness’ survey.”

Who in the insurance side of the LTC business hasn’t heard that Franklin quote and probably used it in sales?

The AARP study John refers to, titled “Long-Term Care Readiness: An AARP Survey of Adults 50+,” is available here. Read its “Key Findings” below and then we’ll see what John does with them.

“Key findings
“Uncertainty about Medicare coverage of long-term care services is common among adults 50-plus. Roughly half (46%) incorrectly believe Medicare covers care in a nursing home or care in the home from a home health aide.
“Recognizing that they may need assistance as they get older does not mean that adults 50-plus have really thought about *how* they will live independently. Nearly seven in 10 (68%) believe that they will need assistance with their daily activities as they get older, yet fewer than three in 10 (28%) have given a lot of thought to how they will continue to live independently if they need such assistance.
“The COVID-19 pandemic has had little effect on one’s thinking about independent living, with more than six in 10 (62%) thinking about the topic about the same now as two years ago.
“Roughly six in 10 adults 50-plus are concerned about multiple issues regarding aging, with concerns about not being able to live independently and becoming a strain or burden on family topping the list. Slightly fewer say they are concerned about not having enough money saved, needing to live in a nursing home or assisted living facility, or not being able to remain in their own home.
“When it comes to planning for their futures, half have discussed their end-of-life plans with family and have written a will. More than four in 10 have also planned for their funeral expenses and have designated a legal Power of Attorney, but far fewer say they have researched or made plans for in-home, community-based, or nursing home care.”

Back to John O’Connor’s column: “Consider, less than a third of the respondents (28%) have given much thought to how they will live independently should a need for assistance arise. That’s right, 28%. It’s a safe bet the percent of people in this crowd planning their next vacation is considerably higher. And it’s not like those who are 50 or older are unaware bad things might happen later in life. In fact, more than two-in-three (68%) believe they will need help with their daily activities at some point. For those who have reached age 65, the number spikes to 75%.”

He concludes: “If I’m running a senior living organization, these findings scare the heck out of me. Because what they strongly suggest is that more and more senior living services will need be paid for by states and the federal government going forward. Many potential prospects in the suddenly popular middle market may not have the means to pay their own way.”

What does he advise senior living providers to do? If you don’t want to be a “publicly subsidized enterprise” subject to the “regulatory hoops” and less than “generous” payments skilled nursing facilities endure, then consider waging “a campaign to get people to actually prepare for the decline old age will surely bring.”

He continues: “But be warned, your work is cut out for you. … it’s probably safe to say the fail-to-plan crowd is pretty dug in. Which is very unfortunate. Their eat, drink and be merry mentality may be OK for a night of celebration. But it’s no way to prep for the challenges of old age. As many will discover, once the party ends.”

LTC Comment: What I don’t find in John O’Connor’s column, nor in the AARP study, is the question “Why don’t people plan?” much less an answer. So let me try to provide both.

What could possibly explain why so few people worry or plan for old age? Why will their failure to plan leave future senior living providers as dependent as nursing home operators on meager government reimbursements? What could possibly be done to reverse this unfortunate outcome?

To me the answers are as glaringly obvious as the questions themselves. People don’t plan for old age because they’ve been assured the don’t need to by (1) Social Security, (2) Medicare, and (3) Medicaid. Read Medicaid and Long-Term Care for a full explanation.

Senior living providers are doomed to follow nursing homes down the primrose path of Medicaid dependency, including excessive regulation and inadequate payments, because of the moral hazard (“lack of incentive to guard against risk where one is protected from its consequences”) the entitlement program caused.

What could/should be done to fix this mess? Stop doing what government has always done. Stop giving easy access to Medicaid-funded care after the insurable event has already occurred. In other words, end “The Entitlement Put.”

Instead, move the LTC responsibility forward to a time when it’s not too late for people to plan. Enforce it then, but not by channeling everyone into compulsory payroll-funded government programs that are no better than the ones that caused LTC’s problems in the first place. Let people choose how to meet their LTC obligation—through insurance, or a home equity carve out, or an investment set aside, or a formal, recorded lien on their estate, or some other legitimate, trackable means—as a way to avoid government interference altogether instead of as an escape from a public program that traps everyone like WA Cares.

Closing LTC Comment: Hey John, how would you answer those three questions? What do you think of my answers? I’ll keep an eye out for that “Editor’s Column.” Thanks for the important contribution you and sidekick Jim Berklan make toward our common objective of improving long-term care.

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Updated, Monday, June 20, 2022, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #22-020 LTC NEWS AND COMMENT

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.

Healthy lifestyle shown to decrease dementia risk up to 36 percent: study
The Future Of WA Cares: A Response To Warshawsky
Update on number of people opting out of state's long-term-care program
Can I Use a Medicaid Beneficiary’s Inheritance to Pay Her Assisted Living Facility Three Months in Advance?
New form of dementia prevalent in 40% of older adults
‘Startling’ lack of physical activity found in assisted living pilot study
Older adults more likely to have multiple ailments compared with prior generations
A Permanent Pandemic Means a Huge Medicaid Expansion
Shingles is not associated with increased risk of dementia, finds study
Assisted living’s place in the long-term care continuum

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Updated, Monday, June 13, 2022, 10:40 AM (Pacific)

Seattle—

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LTC E-ALERT #22-019 LTC NEWS AND COMMENT

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.

Medicaid Weighs Attaching Strings to Nursing Home Payments to Improve Patient Care
Nursing Home Closures Hit Smaller Markets as Financial, Staffing Crisis Deepens Across Industry
OPM Expects to ‘Revise’ FLTCIP Premiums, Could Temporarily Bar New Enrollments
A Two-Year Reprieve For Medicare Insolvency Sounds Like Good News. But It Isn’t
Under the radar: cash-only caregivers
House members launch new caucus focused on long-term care
A Small World Is a Big Solution for Workforce Woes
US Nursing Homes Face Closure Risks From Staffing Shortages
With 41% leap in nursing home costs, ‘doing nothing’ not an option: AHCA
Long-term care’s mortal risk

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Updated, Friday, June 10, 2022, 10:40 AM (Pacific)

Seattle—

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LTC BULLET: THE ENTITLEMENT PUT

LTC Comment: Eliminating personal risk is morally hazardous especially when government does it. Considerations after the ***news.***

*** STEVE MOSES’S latest published articles:

“Long-Term Care Epiphany,” by Stephen A. Moses, Broker World, June 2022

“Long-term care’s mortal risk,” by Stephen A. Moses, McKnight’s LTC News, June 6, 2022 ***

*** WILL NY FOLLOW WA CARES down the primrose path of compulsory public LTC financing? Rumor has it New York State may copycat Washington State’s WA Cares Fund program. We asked longtime Center friend Bob Vandy, President of Advisors Insurance Brokers (an Integrity Marketing Group Company). Bob assures us based on advice from a knowledgeable Empire State lobbyist that there is a Senate Bill in NY, but no companion bill in the Assembly. “The legislation’s sponsor is interested in LTC and someone we will engage with in preparation for next session/budget. My NAIFA lobbying contact says ‘all indications are that the bill is unlikely to go any further in this legislative session.’” So rest easy for the time being. In the meantime, if you want to know what New York really should do about long-term care, read Long-Term Care Financing in New York: How to Save Money While Serving the Needy. ***

LTC BULLET: THE ENTITLEMENT PUT

LTC Comment: Human beings evolved to fear danger and to respond with “fight or flight.” Then around the turn of the twentieth century governments took it upon themselves to make private risk go away. They set out to provide collective security instead. We’re living now with the consequences of 100-plus years of that policy. We don’t worry about or plan ahead for the “thousand natural shocks that flesh is heir to” as much as we otherwise would.

Lose your job? Get unemployment insurance. Face a pandemic? Checks will roll in. Get sick? Apply for ObamaCare or Medicaid. Old and sick? Medicare. Broke? Welfare. Old and broke? Supplemental Security Income. Frail or demented? Medicaid LTC. Want college? Get a guaranteed student loan. Can’t pay it back? Ask forgiveness. Do we have a safety net or a hammock in which we’ve