l   SAVE LTC CAMPAIGN   l   Articles, Speeches & Reports   l   LTC Bullets Newsletters   l   Media   l       Members-Only Zone   l   LTC TV   l   Search   l   About Us   l   Contact Us   l   Home  
|  
Join and Contribute Online   l   LTC Graduate Seminar   |


Our Mission:

The Center for LTC Reform is a private institute dedicated to ensuring quality long-term care for all Americans by promoting public policy that targets scarce public resources to the neediest, while encouraging people who are young, healthy and affluent enough, to take responsibility for themselves.   We do this through...


VIDEO -- Examining Abuses of Medicaid Eligibility Rules -- Includes testimony from Steve Moses (at 18min:45sec)
NEED A SPEAKER? Have Steve Moses speak at your next event.
"Clash of the Titans: Moses vs Gordon on Medicaid and other Dark Matter"
at the 12th Annual ILTCI Conference. Listen.
Is Medicaid a LTC safety net or a hammock?  Read our California report. 
How Can You Work with the Center for LTC Reform?
Take our virtual tour of the Center's website.  This video webinar explains how to access and navigate the valuable content on the CLTCR website.
Testimonials
Read Medicaid Planning Quotes / Read "LTC Predictions"

CHECK OUT OUR LTC ALMANAC (Members Only)
Not a CLTCR member?  Get a free trial membership for your sneak peak at our LTC Almanac and Members-Only Zone. 
Contact us at 206-283-7036 or info@centerltc.com

Membership Levels and Benefits CLTCR Handout -- Online or PDF for print
Please share these links with others
ANNOUNCING:
The Save LTC Campaign
We Need Your Help!
Learn about our Members-Only Zone
Hear Steve Moses tell all about the online
version of our LTC Graduate Seminar

The CLTCR National LTC
Consciousness Tour Retrospective


ADS

Place your advertisement here.  

Email info@centerltc.com or call Damon at 206-283-7036 for advertising rates.   





American Independent Marketing 











Join the Center for Long-Term Care Reform.  Help us fight for rational LTC policy reform.  Receive our daily email publications.  Get a user name and password to our Members-Only Zone.  Only $150 per year.  Mail your check to Center for Long-Term Care Reform, Inc., 2212 Queen Anne Avenue North, #110, Seattle, Washington, 98109.  Contact Damon at 206-283-7036 or damon@centerltc.com if you have questions.  Join the team!

 

 

 


READ STEVE'S BIO

#############################

 

Updated, Friday, August 28, 2015, 10:13 AM (Pacific)
 
Seattle—

#############################

LTC BULLET:  LTC SNEAK PEEK

LTC Comment:  Our study of long-term care in the U.S. and New Hampshire nears completion.  Highlights after the ***news.***

*** LTC CLIPPINGS:  If you’re not subscribed to the Center for LTC Reform’s LTC Clippings service, here’s a sample of what you’re missing.  Contact Damon at 206-283-7036 or damon@centerltc.com to begin receiving these daily “heads-ups” for about $.28 per day if you’re already a member of the Center and $.33 if you’re not.

8/24/2015, “5 things to know about long-term care policies,” by Terry Savage, Chicago Tribune

Quote: “Long-term care is a subject nobody likes to think about. Yes, Medicare and supplements will pay for illness and hospitalization costs. But they don't pay for care at home, or in assisted living, when you can no longer do basic activities such as bathing, dressing, toileting and dining. Will your children come to help? Or, if you are an adult with aging parents, are you prepared for Mom or Dad to move into your home? That's where long-term care insurance comes in. Here are five things you should know:”

LTC Comment:  Here’s a piece favorable on LTCi from a solid source. ***

 

LTC BULLET:  LTC SNEAK PEEK

LTC Comment:  Last April, the Center for Long-Term Care Reform and the State Budget Solutions policy organization undertook a study of long-term care service delivery and financing in the U.S. generally and New Hampshire specifically.  I spent several weeks in the Granite State this summer researching the subject and conducting interviews.  Our report on that project is nearing completion.  Though it’s still in draft, we thought you might like to see some of our study’s major findings.  So we pulled the following “highlights” to give you a preview.  Plans are to convene a conference based on our study to discuss the future prospects for long-term care at the national and state levels.  We also plan to publish a series of op-eds based on our findings to draw candidates’ attention to the LTC issue in the first-in-the-nation presidential primary state.

Highlights:

“Considering only the expected growth in New Hampshire’s age 85-and-over population between now and 2050, LTC expenditures could nearly quadruple from $282 million to $1,047 million, more than one billion dollars every year.” 

“While [New Hampshire’s] Health and Social Services spending increased in absolute terms, it actually declined as a proportion of the state budget from 2005 ($1,785,525,000) to 2014 ($2,153,341,000) from 43.0 percent to 42.4 percent.” 

“Because the average Medicaid nursing home reimbursement rate in New Hampshire is $157 per day or $57,305 per year [within the U.S. middle income quintile], any medically qualified elderly person with net income at or below that level is eligible based on income.” 

“Since homes with less than $552,000 in equity are not countable assets, most homeowners may qualify for Medicaid.”  (New Hampshire Bar Association publication) 

It is important to note that the money which must be spent down can be used for any purpose that would benefit either spouse, such as home repairs, vehicles, life insurance, prepaid funerals, furniture, travel, etc.” (New Hampshire Bar Association publication) 

“Our attorneys have significant experience in asset protection strategies, such as Medicaid-Qualifying Irrevocable Trusts; Special Needs Trusts; conversion of assets into income through the use of Medicaid-Qualifying Annuities; Personal Care and Service Agreements; as well as other spend-down techniques that allow for transfers of assets to family members without violating Medicaid gifting rules.” (Medicaid planner’s online advertisement) 

“The bottom line, however, on Medicaid long-term care eligibility in New Hampshire, as elsewhere, is that people who seek state funding for long-term care and are willing to accept the conditions that apply, can, with or without the legal assistance of a Medicaid planner, qualify for assistance much more easily than is commonly understood.” 

“New Hampshire Medicaid’s 2012 nursing home reimbursement rate was $179.66 which only partially covered average costs of $237.05 leaving a shortfall of $57.38 per bed day, the highest shortfall in the United States for that year.” 

“With 64 percent of their caseload on Medicaid, New Hampshire nursing homes are losing money on nearly two thirds of their residents.” 

“What nursing home and home care providers projected as serious financial problems caused by low Medicaid reimbursement rates took on a tone of near desperation on behalf of small, 100-percent-Medicaid ‘assisted living’ providers.” 

“Disproportionality of Medicaid spending is slightly less pronounced in New Hampshire where 29 percent of Medicaid recipients are aged, blind and disabled but account for 67 percent of program costs, whereas poor women and children are 72 percent of New Hampshire’s recipients, but account for 33 percent of the cost.” 

“New Hampshire is one of only four states where long-term care spending on duals was 80 percent or more of total Medicaid spending on duals.” 

“The research evidence that changing [i.e., rebalancing] the delivery system will produce substantial Medicaid savings is not strong, but it is a premise strongly held by many state officials and consumer advocates.”  (Wiener and Anderson)

“Medicaid-financed home and community-based care runs the risk of replacing so-called ‘free’ care provided by friends, family, and loved ones.  AARP estimates the economic value of such care at $470 billion per year.” 

“(1) With a uniquely severe aging demographic challenge approaching, (2) with the U.S. economy already lagging most post-recession recoveries, (3) with loose monetary and fiscal policies presaging another economic bubble potentially bursting and (4) with historically high debt and unfunded entitlement liabilities, we are certainly justified to ask ‘What if?’  What if the federal government reneged on its full share of Medicaid funding either by reducing the federal match rate or by defaulting through inflation or some other means?” 

“New Hampshire imposes a 5.5 percent ‘bed tax’ on both Medicaid and private long-term care patient revenue.  In state fiscal year 2015, the bed tax raised $37.5 million, which, matched with federal funds, returned $75 million to the state.” 

“So while the trust funds won’t ‘run out’ for a good while, Social Security and Medicare will constitute a drain on general revenue, because the federal government will have to make up shortfalls in payroll tax receipts while simultaneously paying off the trust funds’ IOUs with interest.” 

“The affluent prosper under these policies as their investments in the stock market and real property go up, but the poor and middle class struggle as jobs and salaries recede.” 

“So Social Security income of people already on Medicaid represents a substantial contribution to long-term care funding.  It covers as much as 13 percent of total long-term care expenditures and represents roughly half of all ‘out of pocket’ spending for long-term care.” 

“But a serious economic setback impacting federal tax revenue and limiting the government’s ability to borrow might tip the balance against the traditional high compensatory Medicare reimbursement rates.  The impact on state Medicaid programs and their long-term care providers could be catastrophic and immediate.” 

“On Economic Performance, [New Hampshire] is 36th, two-thirds of the way down from #1, Texas, toward #50, Michigan.  On Economic Outlook, New Hampshire fares a little better at 29, a little below halfway between #1, Utah, and #50, New York.” 

“The Cato Institute issues states a Fiscal Policy Report Card,’ and New Hampshire’s is not one any kid would want to bring home to Mom.” 

Forbes magazine ranks the ‘Best States for Business and Careers’ and concludes New Hampshire is not one of them.” 

“New Hampshire was one of only eight states with unemployment rates below 4.0 percent (3.8 percent).” 

“New Hampshire ranks fourth on overall freedom, a highly promising position for its future economic prospects.  Still, it slipped from number one in 2007, a less encouraging sign.” 

 “We are unique.  We’re both payer and provider.  The counties pay most of the cost, but the state sets policy on Medicaid eligibility and reimbursement rates.  The county has nothing to do with that.  We just get a bill and pay it.  We think we should have some say in eligibility and case management because we have the financial incentive to lower the expenditures for Medicaid.”  (Quote from a county nursing home administrator)

“A more severe recession causing a steeper decline in property values could imperil New Hampshire’s unusual Medicaid long-term care financing system.” 

“The home equity exemption of $552,000 in New Hampshire (up to $828,000 in 13 other states) is a major factor, but the many other exempt assets, not to mention Medicaid planning techniques of artificial self-impoverishment, also contribute substantially.  By comparison the total amount of exempt assets, including home equity, that participants may retain while qualifying for the United Kingdom’s long-term care public assistance program is only £23,500 or $36,895 at today’s exchange rate.” 

“Had New Hampshire matched Idaho’s recovery rate, the state’s estate recoveries would have been $16.7 million in 2011, $11.8 million more than they actually were.” 

“If 80 percent of New Hampshire’s elderly population of 109,000 own homes of median value of which 65.3 percent are owned free and clear, then the total home equity that could be redirected to help fund their long-term care is .8 times 109,000 times .653 times $249,500 or $14.2 billion, many times New Hampshire Medicaid’s total expenditures for long-term care in 2014 of $281,745,000.” 

“Medicaid is the largest funding source for long-term care.  From birth to death, in one way or another, public funding offsets personal financial responsibility leaving more and more people at risk if the sources of public funding decline.” 

“From Medicaid’s paying for nearly half of all births to food stamps for one in seven Americans to welfare benefits topping median salaries in eight states including New Hampshire to surging SSDI rolls bankrupting the disability insurance system and sapping the incentive to work to unfunded pension liabilities in the trillions of dollars, this socialized house of cards is severely vulnerable to any bad economic wind that may, and likely will, come its way.” 

“Nearly two (1.9) million elderly Medicaid recipients receive long-term services and supports of whom 60 percent to 80 percent, based on interviews by the author with many eligibility workers in numerous states over the years, shelter an average of $8,000 to $12,000 each in prepaid burial plans.  Taking the low range estimate of 60 percent and $8,000, that amounts to $9.1 billion diverted from potential private LTC financing to a Medicaid-financed windfall for the funeral industry.” 

“State funds needed to match the federal funds are also vulnerable.  Each new economic bubble bursting—most recently the dot.com (2000) and housing (2008) busts—has brought worsening recessions that devastate state tax revenues and reserves.  Economists worry that the latest bubble, inflated by extremely loose monetary (credit expansion) and fiscal (spending) policy, will bring on a much worse downturn than the Great Recession.” 

“A main reason so few people purchase private LTC insurance is that for the past 50 years Americans have been able to ignore the risk and cost of LTC, wait to see if they need extended care and, if they do, qualify easily for public financing while protecting most or all of their estates.” 

“From the foregoing analysis, it is hard to reach any other conclusion than to expect the current long-term care service delivery and financing system to face severe, possibly fatal challenges as the Age Wave crests and crashes on America.” 

#############################

 

Updated, Monday, August 24, 2015, 10:13 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-033:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

  • Family Spillovers of Long-Term Care Insurance

  • The Impact of Social Security Income on Cognitive Function at Older Ages

  • New Study Identifies 9 Risk Factors for Alzheimer’s Disease

  • More Than Half of the Current Workforce Doesn't Expect Social Security

  • Has The Time Come For Short-Term Care Insurance?

  • When It Comes To Long-Term Care Insurance, Americans Don't Get It

  • Seniors, Not Millennials, Are Creating New Households

  • First almost fully-formed human brain grown in lab, researchers claim

  • Americans Who Have Advisors Are More Likely To Diversify Holdings

  • LTCI Watch: Creativity

  • 2015 Critical Illness Insurance Forum

  • Let Older Americans Keep Working

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

 

Updated, Monday, August 21, 2015, 9:36 AM (Pacific)
 
Seattle—

#############################

LTC BULLET:  THE U.S. ECONOMY NEEDS LONG-TERM CARE

LTC Comment:  U.S. fiscal and monetary policy are ruining long-term care’s prospects.  How and why after the ***news.***

*** GLICKMAN FOR PRESIDENT:  President of the Society of Actuaries, that is.  Jim asks “Although you may not be eligible to vote in the SOA election (only actuaries can vote for the President) it would be very helpful for my campaign if you can contact the actuaries at your company (as well as actuaries at other companies that you may know) and let them know about my candidacy, and how involved and dedicated I am to my volunteer activities in the LTCi industry.”  We say “hear, hear” and gladly support the candidacy of this indefatigable advocate for responsible LTC planning.  Here are a few links he pointed us to in support of his candidacy:  Lt Governor Letter; Supporter List; Jim Glickman’s Candidate Page.  Go Glickman! ***

*** CLTCR Premium Membership  --  Center for Long-Term Care Reform premium members receive our full suite of individual membership benefits including:  our LTC Bullets and E-Alerts; access to our Members-Only Zone website and Almanac of Long-Term Care; subscription to our Clipping Service; and email/phone access to Steve Moses for 24-hour turnaround queries.  Our Premium Membership is designed to give you a competitive advantage in your long-term care profession. Your increased knowledge of the critical issues and challenges we face in the field of long-term care service delivery and financing equals improved professional success for you and better LTC services for your clients and for those who have no choice but to rely on scarce public resources.  Premium Membership is $250 per year, paid up front or monthly by automatically recurring credit card payments.  Contact Damon at 206-283-7036 / damon@centerltc.com to start your Premium Membership immediately or go directly to our secure online subscription page and sign up for as little as $21 per month. ***

 

LTC BULLET:  THE U.S. ECONOMY NEEDS LONG-TERM CARE

LTC Comment:  Let’s begin with a few facts:

  • Medicaid pays for most formal long-term care whether in nursing homes or home care.
  • Medicaid is a counter-cyclical welfare program.  It ramps up caseloads and expenditures, usually with extra help from the federal government, during recessions.
  • The United States has experienced two major recessions in the 21st century, the Great Recession of 2007-2009 being the worst since the Depression.
  • To combat recessions, the federal government employs deficit spending (as when it borrows to boost Medicaid assistance).  This is called “fiscal policy.”
  • Deficit spending (fiscal policy) has created a huge national debt, currently nearing $18.4 trillion according to the US Debt Clock.
  • To combat recessions, the Federal Reserve cuts interest rates and increases the money supply.  This is called “monetary policy.”
  • Artificially low interest rates have discouraged savings, impaired the market for LTC insurance by reducing its profitability and increasing its cost, and diverted capital away from economically productive investments and into “bubbles” of real estate, stocks and bonds, benefiting mostly the affluent.
  • The same monetary policies have hurt the poor and middle class by stifling job creation, repressing wage growth, and practically eliminating income on savings.
  • Low interest rates and a bloated money supply (monetary policy) have failed to revive the U.S. economy fully after the Great Recession, making the Fed very reluctant to allow interest rates to increase.
  • We find ourselves on the cusp of an unprecedented “Age Wave.”  The huge baby-boomer population cohort does not reach the age of heaviest LTC need (85+) until 2031.
  • Social Security and Medicare run out of “trust funds” in the 2030s, but in the meantime the federal government has to make up these gargantuan entitlement programs’ annual revenue shortfalls and pay off their trust funds’ IOUs with interest out of general funds (taxes and borrowing).
  • America’s fiscal and monetary tools are worn out.  We have too much debt to borrow more safely if interest rates increase and too much money supply to print more.
  • Our artificially suppressed interest rates are too low to be lowered further in order to combat the next recession.
  • In a nutshell, the U.S. economy may not be able to generate the revenue needed to support our long-term care safety net in the short-run and definitely cannot over the long-term without major changes in fiscal and monetary policies.
  • Ironically, this state of affairs benefits the elite at the expense of the needy for whom the elite hypocritically profess noblesse oblige.

These were some of the facts running through my mind when I read this article on Monday: 

Jon Hilsenrath and Nick Timiraos, “U.S. Lacks Ammo for Next Economic Crisis:  Policy makers worry fiscal and monetary tools to battle a recession are in short supply,” Wall Street Journal, August 17, 2015; http://www.wsj.com/articles/u-s-lacks-ammo-for-next-economic-crisis-1439865442

With the factual context provided above in mind, consider these quotes from that article and draw the logical conclusions regarding long-term care financing:

Quote:  “As the U.S. economic expansion ages and clouds gather overseas, policy makers worry about recession.  Their concern isn’t that a downturn is imminent but whether they will have firepower to fight back when one does arrive.”

LTC Comment:  If Medicaid is the dominant funder of long-term care and the counter-cyclical antidote to help pay for LTC during recessions, what happens if we lack the fiscal and monetary “firepower to fight back” when the next economic downturn arrives?

Quote:  “The U.S. generally injects cash into the economy through interest-rate cuts, tax cuts or ramped-up federal spending.  Those tools could be hard to employ when the next dip comes:  Interest rates are near zero, and fiscal stimulus plans could be hampered by high levels of government debt and the prospect of growing budget deficits to cover entitlement spending on retired baby boomers.”

LTC Comment:  Uh-huh.  So?

Quote:  “With the U.S. expansion entering its seventh year, policy makers are planning how to respond to the next downturn, which history shows is inevitable.  The current expansion is now 16 months longer than the average since World War II, and none has lasted longer than a decade.  ‘The world economy is like an ocean liner without lifeboats,’ economists at HSBC Bank HSBC -2.80 % wrote in a recent research note.”

LTC Comment:  Eek!  Will the Obama Administration save us?

Quote:  “Worries stretch to the White House.  ‘Federal fiscal policy will be a more important tool in addressing future business cycles because monetary policy may be more frequently constrained,’ Jason Furman, the chairman of the White House Council of Economic Advisers, said in an interview.”

LTC Comment:  Oh good, we can just borrow more money from China at artificially low interest rates that make servicing the engorged federal debt manageable for the time being.  No worries.

Quote:  “In the most recent recession, short-term interest rates were pushed to near zero, then the central bank embarked on massive—and controversial—bond-buying programs to drive down long-term interest rates.  The Fed also promised to keep short-term interest rates low for an extended period.  . . .  The next downturn could further expand Fed bond holdings, but with the central bank’s balance sheet already exceeding $4 trillion, there are limits to how much more the Fed can buy.”

LTC Comment:  Oops.

Quote:  “No one knows how much U.S. debt can grow without triggering an increase in inflation and interest rates that would hobble investment and growth.  ‘We don’t have that much experience with countries carrying debt like the level the U.S. has right now,’ said [former CBO director] Mr. Elmendorf, the budget analyst.”

LTC Comment:  Our country’s  customary fiscal and monetary tools to jump start a lagging economy are blunt indeed.

Quote:  “The challenge is that these policies ‘sound simple, but politically, it is really hard,’ said Glenn Hubbard, the dean of the Columbia Business School who advised President George W. Bush through the 2001 recession.  ‘We have very little cushion for whoever the next president is and the next congressional leaders if they had to deal, gosh, with anything.’”

LTC Comment:  The current U.S. economy is like a medical patient who overuses antibiotics, develops a resistance to their beneficial effects, and dies from a newly drug-resistant, previously harmless germ.

Our leaders have over-used fiscal and monetary stimulants.  Now that we’re facing America’s biggest aging demographic challenge ever, we’re virtually helpless to combat future economic downturns.

The financial system has rewarded the affluent with booming equity and real estate values, but punished the poor by diverting capital from job-creating investments and by virtually eliminating returns on safe savings.

The impact on long-term care financing and hence on long-term care service delivery has been, is and will continue to be devastating.  Specifically, we rely too heavily on a means-tested welfare program, Medicaid, which itself relies too heavily on financial support from the federal government, which itself relies too heavily on faulty fiscal and monetary policies that no longer, actually never did, work.

I titled this LTC Bullet “The U.S. Economy Needs Long-Term Care.”  Now you know why.  Radical long-term changes in counter-productive government fiscal and monetary policy are needed to fix the economy and enable it to generate the prosperity required to preserve and improve LTC services and financing.

#############################

 

Updated, Monday, August 17, 2015, 9:36 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-032:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

  • China Seeks U.S. Input on Long Term Care

  • How Medicare Rewards Copious Nursing-Home Therapy

  • New LTCI tables seek government work

  • 1 in 4 Senior Women in U.S. Has Osteoporosis: CDC

  • Study Questions Validity Of Three-Day Rule

  • 3 ways to fix Social Security's funding shortfall

  • Franklin & Associates’ Barbara Franklin marks 25 years as long-term care specialist

  • Nursing home antipsychotic use down 21.7%

  • New Senior Housing Raises Concerns Supply Will Outpace Demand From Baby Boomers

  • Green Retirement Communities Are Sprouting

  • Twenty Eight of America's 'Top 100' Long-Term Care Insurance Agents Are with a Single Agency, ACSIA Partners

  • LTCG’s Vince Bodnar Named One of the ‘Most Creative People in Insurance

  • FDA approves tool for diagnosing dementia in a doctor’s office

  • Obama signs NOTICE Act into law

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

 

Updated, Friday, August 14, 2015, 10:20 AM (Pacific)
 
Seattle—


#############################

LTC Bullet:  The Top 10 LTC Bullets of All Time

LTC Comment:  Your Center for Long-Term Care Reform presents to you our top 10 LTC Bullets of all time, after the ***news.***

*** TODAY'S LTC BULLET is sponsored by Claude Thau, a GA whose proprietary tools help advisors find clients and reduce the “Ping-Pong” in the LTCi sales process. Help clients make informed final decisions about buying LTCi in 15-20 minutes!  Gauge a client's true interest in a combo product immediately!  Change work-site LTCi sales from a series of proposal deliveries to a single interactive consultation!  Claude is the lead author of the Milliman Broker World LTCi Survey, one of Senior Market Advisor's 10 "Power People" in LTCi in 2007, a past Chair of the Center for Long-Term Care Financing. Test Claude by calling 800-999-3026, x2241 or email him at claudet@targetins.com to ask questions or get references. ***

*** PHYLLIS SHELTON REPORTS on her 6th webinar covering “How to Do Successful Internet Selling and Technology Tips” here.  Get the details on this session and consider subscribing to her series of webinars at the bottom of the link. ***

*** THIS JUST IN FROM ILTCI:  “The 2015 conference session recordings are now available! [Here] is a link where you can access all the sessions and download the recordings as needed.  Thanks so much for your attendance at this year's conference. We hope to see you next year in San Antonio, TX for the 16th Annual ILTCI Conference, March 13-16, 2016!”  See http://iltciconf.org/ for further details.  Your Center for Long-Term Care Reform staff hope to see you there.  We never miss these excellent industry events. ***

*** CLTCR Premium Membership  --  Center for Long-Term Care Reform premium members receive our full suite of individual membership benefits including:  our LTC Bullets and E-Alerts; access to our Members-Only Zone website and Almanac of Long-Term Care; subscription to our Clipping Service; and email/phone access to Steve Moses for 24-hour turnaround queries.  Our Premium Membership is designed to give you a competitive advantage in your long-term care profession. Your increased knowledge of the critical issues and challenges we face in the field of long-term care service delivery and financing equals improved professional success for you and better LTC services for your clients and for those who have no choice but to rely on scarce public resources.  Premium Membership is $250 per year, paid up front or monthly by automatically recurring credit card payments.  Contact Damon at 206-283-7036 / damon@centerltc.com to start your Premium Membership immediately or go directly to our secure online subscription page and sign up for as little as $21 per month. ***

#############################

LTC BULLET:  The Top 10 LTC Bullets of All Time

LTC Comment:  Once a week, usually on Fridays, we publish our LTC Bullet.  The Bullets are often policy pieces, sort of like op-eds.  You can always find the five latest Bullets here and archives of all 1,092 Bullets (so far), by date here and by topic here.  These nearly-1,100 articles are a valuable historical resource.  Please make use of them.  Search for key terms using Control-F on your keyboard.

Today, we present to you what we feel are our top 10 LTC Bullets of all time, in this retrospective of the most interesting and dramatic LTC Bullets that we’ve published since the Center’s founding in 1998.  We’ll highlight at least one Bullet from each of seven major topics:  “The LTC Problem and Solutions”; “Reality Check:  The Facts on LTCI”; “Medicaid Planning”; “LTC Services”; “Politics and Legislation”; “Demographics and Other Data”; and “CLTCR News.” 

Read the summary quotes and check out the original Bullets at the links provided.  Here are our top 10 LTC Bullets in chronological order.  We hope you find this resource useful.

------------------

June 6, 1998:  LTC Bullet:  New York Times Misinformed on LTC Insurance.  “This morning's New York Times contained an article about long-term care financing. The article accurately conveyed the gravity of long-term care as a personal and public policy issue. Unfortunately, some information in the article regarding private long-term care insurance was inaccurate and misleading. Furthermore, the author of the article cited exclusively sources who promote public financing and denigrate private financing of long-term care. The following is a letter to the editor of the New York Times regarding the long-term care article from Stephen A. Moses, President of the Center for Long-Term Care Financing in Seattle, Washington.”

------------------

January 25, 1999 Scary Numbers.  “Center President Stephen Moses wrote the following article at the end of 1998. A few days later, the Clinton Administration put aging and long-term care on the public policy agenda in a big way. The Administration deserves credit for raising and confronting these critical issues sooner rather than later. ‘Scary Numbers’ explains why long-term care financing is so important. An abbreviated version of this article, adapted to the style of an op-ed piece, was published in the January 11, 1999 issue of National Underwriter's Life & Health Edition.”

------------------

February 3, 1999 Perils of Medicaid.  “A reporter from a prestigious financial planning publication contacted the Center for Long-Term Care Financing yesterday. She asked us to provide evidence that Medicaid nursing home care can be risky for consumers. Some Medicaid planning attorneys had told her that clients they artificially impoverish to qualify for the welfare program do not experience access and quality problems. We thought our readers would appreciate seeing the same evidence of potential Medicaid-related deficiencies gleaned from the gerontological literature that we provided to the reporter. That information follows [in this LTC Bullet].”

------------------

December 10, 2002 What About the Rate Stability of the U.S. Government?  “The strongest criticism levied today against private LTC insurance is that premiums on in-place business may have to increase someday if claims experience turns out to be worse than anticipated. This, critics say, could devastate long-time policy holders who cannot afford steep premium increases in their old age and who no longer qualify medically for new coverage. Well, that is a valid concern that insurers and regulators are taking very seriously. But what about the far more ambitious, and less achievable promises that the U.S. Government has made to seniors through Social Security and Medicare? David Wessel, in his November 21, 2002 Wall Street Journal column ‘Capital,’ titled ‘U.S. Promises Are in the Hole’ raised that question.  [Excerpts follow in this LTC Bullet.]”

------------------

March 4, 2004 No Wonder They Don't Buy LTCi.  “Do Medicaid estate planners really advise adult children to grab their parents' money, yank them from private-pay assisted living facilities, stick them in a nursing home on welfare, and transfer the cost to taxpayers and providers? Read an actual Medicaid planning ‘engagement letter’ that does exactly that.”

------------------

December 19, 2005 House Passes Historic LTC Reform; Center Helps Tip Balance; AARP Spurned  “At 6:00 AM Eastern, after pulling an historic all-nighter, the House passed long-term care reforms that exceeded our highest hopes.  Bottom line, we got everything the Senate proposed, plus everything the House proposed, and then some.  We're still on tenterhooks, however, waiting to see if the full Senate will go along.  Stay tuned to C-Span coverage of the budget bill for the suspenseful conclusion of this public policy cliffhanger.  

“Your Center for Long-Term Care Reform had a thing or two to do with this progress too.  We spent half time in Washington, DC this Summer briefing (primarily) Senate Finance Committee staff on the importance of these reforms.  Our ‘Rule of Law’ column titled ‘Welfare for the Well-To-Do’ ran over the weekend in the Wall Street Journal and was widely circulated on Capitol Hill Saturday and Sunday before the vote.  Read on for a copy of that op-ed.  As you know, we've repeatedly exposed AARP's irresponsible attacks on members of Congress who seek to save Medicaid for the poor by diverting the affluent to responsible long-term care planning.”  

------------------

March 7, 2006:  What I Believe About Long-Term Care.  “[W]hat follows is my [Steve Moses] address to a session at the meeting called ‘Shaking the Money Tree’ which was organized by LTCi veteran and MedAmerica Business Development Vice President Gail Holubinka.  Gail's idea was to have four speakers representing different perspectives on the LTC financing issue describe their vision of the topic.  She asked us to explain our underlying beliefs and to build from that foundation logically toward a description of our proposed solutions to the LTC financing crisis.” 

------------------

February 8, 2010 LTC Bullet: The Enemy of LTC Truth.  “Einstein disdained ‘unthinking respect for authority,’ but he wasn't alone. President John F. Kennedy said:

‘The great enemy of truth is very often not the lie--deliberate, contrived and dishonest--but the myth--persistent, persuasive and unrealistic. Too often we hold fast to the clichés of our forebears. We subject all facts to a prefabricated set of interpretations. We enjoy the comfort of opinion without the discomfort of thought.’

“The field of long-term care financing is a perfect case in point. What exactly are the ‘persistent, persuasive and unrealistic’ myths of long-term care?”  Read this LTC Bullet to find out.

------------------

January 6, 2009:  An LTC Tour Retrospective.  “I can't move on to bring you our huge new plans for 2009 without pausing just once more this week to look back on our LTC Tour of 2008.  Today, I invite you down memory lane with ‘An LTC Tour Retrospective.’ On Thursday, we'll give everyone a summary, and Center members a TRANSCRIPT, of the LTC Tour's educational centerpiece: our two-hour mini-version of the Center's full-day ‘Long-Term Care Graduate Seminar.’”  See also this article that appeared in Broker World.

------------------

February 3, 2012 LTC Bullet: How to Fix Long-Term Care.  “The Center for Long-Term Care Reform’s late summer, early fall [2011] project in Washington, DC produced seven important deliverables. As described in our project report titled ‘Near-Term Prospects for Long-Term Care Financing Reform,’ these work products included:

1.Pay for the Doc Fix by Fixing Medicaid LTC
2.Save Medicaid LTC $30 Billion Per Year AND Improve the Program
3. & 4. Letters from members or committees of Congress to both the GAO and the DHHS Inspector General requesting studies relevant to our project's objectives.
5.Medicaid Long-Term Care Benefits: Friendly Fire in the Class War’: Steve Moses’s testimony published by Congress.
6.Challenges to Effective Long-Term Care: Cost and Affordability’: Steve Moses’s speech to the 13th annual Health Sector Assembly in Sundance, UT.
7. Six ‘Briefing Papers’ on ‘How to Fix Long-Term Care’ with an ‘Overview’ linking to each.

“Today’s LTC Bullet conveys our ‘Overview’ of ‘How to Fix Long-Term Care.’ Subsequent LTC Bullets will deliver each of our six Briefing Papers in serial form. We hope that by reading this material you will gain a better understanding of why America’s long-term care delivery and financing system is so dysfunctional and what it will take to fix the problem. Thanks for supporting the Center for Long-Term Care Reform.”

Read this Bullet and “How to Fix LTC.”

#############################

 

Updated, Monday, August 10, 2015, 9:57 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-031:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

  • Alzheimer’s: UNM researchers may be closing in on a cure

  • Caring for a Parent With Alzheimer’s Disease

  • People are developing dementia earlier and dying of it more, a study shows

  • Genworth reduced 220 positions; won't sell its life and annuity businesses

  • Bad news on cost of living raises for Social Security

  • Providers may “Yelp” at review website's newest feature

  • Obama's bombshell: More industry rules

  • Medicare rule may needlessly extend some hospital stays

  • Don’t Blame Medicaid for Rise in Health Care Spending

  • Science Confirms It: Retirement Is Good for Your Health

  • Intercompany Long-term Care Insurance Experience Study Webcast

  • Dementia residents and caregivers say invest in direct care, not research: survey

  • Long-term care insurance rates go up for new federal enrollees — with no warning

  • 7 Long-Term Care Insurance Trends to Watch

  • Medicaid Applicant with Care Agreement Assessed Transfer Penalty Because Rate Was Too High

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

 

Updated, Friday, August 7, 2015, 09:00 AM (Pacific)
 
Seattle—

#############################

LTC Bullet:  LTC Wake-Up Call

LTC Comment:  What can aging demographics tell us about likely future Medicaid LTC expenditures?  Answers after the ***news.***

*** 2016 ILTCI CONFERENCE:  The 16th Annual Intercompany LTCI Conference will convene at The Grand Hyatt in San Antonio, Texas March 13th to 16th, 2016.  Mark your calendars and be there if you can.  Professional meetings don’t get any better than this one.  In case you’re considering sponsoring or exhibiting, conference organizers report “Please review the Promotional Opportunity Guide, Application and Exhibit Hall rules.  The conference is offering substantial discounts for signing up by Monday, September 14th.”  You can find an “Exhibitor & Sponsor Application” and “Exhibitor & Sponsor Options” at these links.***

*** PHYLLIS SHELTON REPORTS on her 5th webinar covering “My Favorite Linked Benefit Products and How Not to Sell Them” here.  Get the details on this session and consider subscribing to her series of webinars at the bottom of the link. ***

*** CLTCR Premium Membership  --  Center for Long-Term Care Reform premium members receive our full suite of individual membership benefits including:  our LTC Bullets and E-Alerts; access to our Members-Only Zone website and Almanac of Long-Term Care; subscription to our Clipping Service; and email/phone access to Steve Moses for 24-hour turnaround queries.  Our Premium Membership is designed to give you a competitive advantage in your long-term care profession. Your increased knowledge of the critical issues and challenges we face in the field of long-term care service delivery and financing equals improved professional success for you and better LTC services for your clients and for those who have no choice but to rely on scarce public resources.  Premium Membership is $250 per year, paid up front or monthly by automatically recurring credit card payments.  Contact Damon at 206-283-7036 / damon@centerltc.com to start your Premium Membership immediately or go directly to our secure online subscription page and sign up for as little as $21 per month. ***

 

LTC BULLET:  LTC WAKE-UP CALL

LTC Comment:  Recent LTC Bullets have focused on academics’ and policy-makers’ complacency about unusually small health and long-term care expenditure increases over the past few years.  See LTC Bullet:  Cassandra’s Quandary (7/17/15) and LTC Bullet:  Pandora Meets Rosy Scenario in CMS Projections (8/1/15).

Everyone seems to agree that the recent moderate medical inflation will not continue indefinitely.  But few people in a position to do something about it appear to be taking full cognizance of the potential risk and cost.  Just as consumers are enabled to be in denial about long-term care because government has indemnified them against most catastrophic LTC costs over the years, so public officials and too many of the experts who advise them have allowed mild health and LTC inflation recently to dull their level of concern about the future.

Let’s get specific.  I’m working on a study of Medicaid and long-term care financing in New Hampshire.  The Granite State is interesting on this topic for many reasons.  It has a lot of old people already and its over-65 and over-85 cohorts are growing faster than they are in most other states.  New Hampshire is also suffering from a “birth dearth” with declining rates of child-bearing and in-migration suggesting a future shortage of workers, including LTC caregivers.  As elsewhere, Medicaid strains the state budget already despite notoriously low reimbursement rates for providers.  And, of course, being the first-in-the-nation presidential primary state, New Hampshire offers a unique opportunity to push hard questions about Medicaid and LTC financing into the faces of an unusually large number of presidential candidates this year.

So, given New Hampshire’s vulnerability to LTC risk and cost, why aren’t thought-leaders and decision-makers in the “live free or die state” more concerned?  I think a decade of relatively tame Medicaid LTC expenditure increases has desensitized them.  For example, from 2005 to 2014 New Hampshire’s Medicaid long-term care expenditures for the elderly in . . .

  • Nursing Homes only increased from $174,491,000 to $192,854,000 or 10.5%.

  • Home Nursing Services (Choices for Independence Waiver) increased more rapidly from $26,086,000 to $43,512,000 or 66.8%, but these services help recipients stay out of a nursing home and in their own homes at less cost, so they’re presumed to explain the low inflation in nursing home expenditures.

  • Likewise Mid-Level Care (Choices for Independence Waiver, AKA residential care or assisted living) grew from $1,497,000 to $9,327,000 or 523.0%, but again this increase is considered to be in lieu of higher institutional costs.

  • Medical Services to support home care declined from $50,536,000 to $36,052,000, a 28.7% decrease, but they have leveled out around $36,000.

  • Total Medicaid LTC expenditures for the elderly increased from $252,610,000 in 2005 to $281,745,000 in 2014, an increase of only 11.5% over a ten-year period!

Together, these LTC expenditure data convey a message that rebalancing from institutional to home and community-based care is working to keep overall cost increases moderate.  For the sake of argument, let’s assume that this is true and that over time nursing home costs will continue to increase only slowly while increases in home care costs will moderate some, other factors remaining equal.  Should that give us peace of mind about the future?

No!  Because other factors will decidedly not remain the same.  For now, never mind the potential inflation in the market price of all levels of long-term care services.  Set aside any concerns about the financial viability of Medicaid or the risk of another national economic downturn.  Let’s look only at the predictable growth of the elderly population in New Hampshire.  This is not speculation.  Most of the baby boomers in the state who will need long-term care in the future are already there.  Of course, some will move out but demographers predict the future holds more, many more, not fewer aged people in New Hampshire.  What’s the potential impact?

We draw on AARP’s “Across the States—2012” publication for these estimates of aging in New Hampshire.[1]  The “Appendix” below lays out more details.  But here are the highlights . . .

Nursing Homes

  • Nursing homes cost New Hampshire Medicaid $145 per state resident; $979 per resident over age 65; and $6,888 per resident over age 85 for a total of $192,854,000 in 2014
  • Taking into account only growth in the aging population, nursing homes will cost New Hampshire Medicaid . . .
    • $364,171,000 in 2032, an 88.8% increase and $392,980,000 in 2050, a 103.8% increase based on age 65-plus growth from 197,000 in 2012 to 372,000 in 2032 and 401,000 in 2050
    • $344,382,000 in 2032, a 78.6% increase and $716,560,000 in 2050, a 271.6% increase based on age 85-plus growth from 28,000 in 2012 to 50,000 in 2032 and 104,000 in 2050

Home Nursing Services (Choices for Independence Waiver)

  • Home Nursing Services cost New Hampshire Medicaid $32.79 per state resident; $221 per resident over age 65; and $1,554 per resident over age 85 for a total of $43,512,000 in 2014

  • Taking into account only growth in the aging population, home nursing services  will cost New Hampshire Medicaid . . .

    • $82,163,640 in 2032 and $88,568,870 in 2050 based on age 65-plus growth

    • $77,700,000 in 2032 and $161,616,000 in 2050 based on age 85-plus growth

Mid-Level Care (Choices for Independence Waiver)

  • Mid-Level Care (assisted living) costs New Hampshire Medicaid $7.03 per state resident; $47.35 per resident over age 65; and $333.11 per resident over age 85 for a total of $9,327,000 in 2014.

  • Taking into account only growth in the aging population, mid-level care will cost New Hampshire Medicaid . . .

    • $17,612,406 in 2032 and $18,987,350 in 2050 based on age 65-plus growth

    • $16,655,357 in 2032 and $34,643,440 in 2050 based on age 85-plus growth 

Medical Services

  • Medical Services for home care recipients cost New Hampshire Medicaid $27.17 per state resident; $183.00 per resident over age 65; and $1,287.57 per resident over age 85 for a total of $36,052,000 in 2014.

  • Taking into account only growth in the aging population, medical services will cost New Hampshire Medicaid . . .

    • $68,076,000 in 2032 and $73,383,000 in 2050 based on age 65-plus growth

    • $64,378,571 in 2032 and $133,907,280 in 2050 based on age 85-plus growth

Total Medicaid Long-Term Care for the Elderly

  • Nursing homes plus home nursing plus mid-level plus medical services:  $281,745,000 as of 2014

  • Taking into account only growth in the aging population, total long-term care for the elderly will cost New Hampshire Medicaid . . .

    • $531,934,560 in 2032 and $574,196,310 in 2050 based on age 65-plus growth

    • $503,196,570 in 2032 and $1,046,964,420 based on age 85-plus growth

LTC Comment:  It is interesting to note how the estimate of growth in expenditures through 2032 is higher based on age 65+ population growth than it is based on age 85+ population growth.  Even more remarkable is that costs would increase only slightly between 2032 and 2050 based on growth in the 65+ population (from $532 million to $574 million) whereas they skyrocket (from $503 million in 2032 to over $1 billion) based on growth in the 85+ population.  That’s true because the age 85+ population growth is expected to accelerate considerably between 2032 and 2050 growing from 3.2 percent of the population to 5.9 percent.  But in the same period, the percentage of the population aged 65+ decreases from 8.0 percent to 7.4 percent.  For the same reason, and because 85 is the age at which the incidence of dementia begins to spike causing the highest long-term care expenses, the growth in the 85-plus population is probably the better factor to consider in estimating likely future costs.

Bottom line, the take away from this analysis is that other things being equal New Hampshire’s Medicaid long-term care expenditures may nearly quadruple over the next 35 years to more than one billion dollars based on nothing other than highly predictable increases in the “old-old” (85+) population.

Ceteris Non Paribus

Unfortunately, other things are never equal.  Much more than aging demographics goes into reasonably predicting future Medicaid LTC expenditures.  In our report titled “Apply the LTC Vulnerability Index to Your State:  The New Hampshire Example,” we identified six additional critical factors:

  • Morbidity or how sick future aged cohorts will be

  • Medicaid viability as a long-term care payer

  • Reliability of federal revenue to fund Medicaid LTC

  • Reliability of state revenue to fund Medicaid LTC

  • Potential of currently untapped private LTC payment sources

  • Deleterious impact of growing dependency on public programs (Entitlement Mentality)

Our forthcoming report on Medicaid and long-term care financing in New Hampshire will expand on all of these factors and integrate them into a reasonable prognostication of what the state can expect to happen going forward.  We’ll also have some recommendations for state and federal policy changes to correct the dangerous course New Hampshire and the country are pursuing currently.  So, stay tuned.

Appendix[2]

New Hampshire population:  1,326,813[3]

Nursing Homes

From 2005 to 2014:  Nursing homes $174,491,000 to $192,854,000 or 10.5% increase.  As of 2014:  $145.35 per state resident;

$978.95 per 197,000 age 65+ in 2012; 372,000 age 65+ in 2032 without inflation = $364,171,000 or 88.8% increase; 401,000 age 65+ in 2050 without inflation = $392,980,000 or 103.8% increase;

$6,887.64 per 28,000 age 85+ in 2012; 50,000 85+ in 2032 without inflation = $344,382,000 or 78.6% increase; 104,000 85+ in 2050 without inflation = $716,560,000 or 271.6% increase

Home Nursing Services

From 2005 to 2014:  Home Nursing Services $26,086,000 to $43,512,000 or 66.8% increase.  As of 2014:  $32.79 per state resident;

$220.87 per 197,000 age 65+ in 2012; 372,000 age 65+ in 2032 without inflation = $82,163,640 or 88.8% increase; 401,000 age 65+ in 2050 without inflation = $88,568,870 or 103.6% increase;

$1,554 per 28,000 age 85+ in 2012; 50,000 age 85+ in 2032 without inflation = $77,700,000 or 78.6%; 104,000 age 85+ in 2050 without inflation = $161,616,000 or 271.4% increase

Mid-Level Care

From 2005 to 2014:  Mid-Level Care $1,497,000 to $ 9,327,000 or 523.0% increase.  As of 2014:  $7.03 per state resident;

$47.35 per 197,000 age 65+ in 2012; 372,000 age 65+ in 2032 without inflation = $17,612,406 or 88.8% increase; 401,000 age 65+ in 2050 without inflation = $18,987,350 or 103.6% increase;

$333.11 per 28,000 age 85+ in 2012; 50,000 age 85+ in 2032 without inflation = $16,655.357 or 78.6%; 104,000 age 85+ in 2050 without inflation = $34,643,440 or 271.4% increase

Medical Services

From 2005 to 2014:  Medical Services $50,536,000 to $36,052,000 or 28.7% decrease, but has leveled out around $36,000.  As of 2014:  $27.17 per state resident;

$183.00 per 197,000 age 65+ in 2012; 372,000 age 65+ in 2032 without inflation = $68,076,000 or 88.8% increase; 401,000 age 65+ in 2050 without inflation = $73,383,000 or 103.6% increase;

$1,287.57 per 28,000 age 85+ in 2012; 50,000 age 85+ in 2032 without inflation = $64,378,571 or 78.6%; 104,000 age 85+ in 2050 without inflation = $133,907,280 or 271.4% increase


 

[1] Ari Houser, Wendy Fox-Grage, Kathleen Ujvari, “Across the States:  Profiles of Long-Term Services and Supports, Ninth Edition 2012,” AARP, Washington, DC, 2012, p. 216; http://www.aarp.org/home-garden/livable-communities/info-09-2012/across-the-states-2012-profiles-of-long-term-services-supports-AARP-ppi-ltc.html.

[2] Source for Medicaid LTC expenditure data:  Office of Legislative Budget Assistant, State of New Hampshire

[3] From the U.S. Census Bureau QuickFacts:  http://quickfacts.census.gov/qfd/states/33000.html

 

#############################

 

Updated, Monday, August 3, 2015, 10:55 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-030:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

  • How Spouses Can Share the Benefits of Long-Term-Care Insurance

  • Catherine Hawes: Assisted Living is a ‘Ticking Time Bomb’

  • ASPE Long-Term Care Financing Colloquium

  • Prepared for a financial emergency?

  • Advocates split with health plans, states over Medicaid long-term care rules

  • As Medicare and Medicaid Turn 50, Use of Private Health Plans Surges

  • Senior Living Provides Solutions for Residents with Alzheimer’s Disease

  • “Jaw-dropping”: Medicare deaths, hospitalizations AND costs reduced

  • What Paul Krugman Doesn't Understand About Medicare

  • Health Affairs Web First: Health Spending Growth To Remain Moderate Compared To Pre-Recession Highs

  • Alzheimer's misdiagnoses running up big Medicare bills

  • 2015’s States Most & Least Dependent on the Federal Government

  • Dementia Risk May Be Dropping With Generations

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

 

Updated, Friday, July 31, 2015, 9:28 AM (Pacific)
 
Seattle—

#############################

LTC BULLET:  PANDORA MEETS ROSY SCENARIO IN CMS PROJECTIONS

LTC Comment:  The aging demographic evils in Pandora’s “box” don’t find their way into CMS actuaries’ health expenditure estimates for the coming decade.  Quotes and comments after the ***news.***

*** TODAY'S LTC BULLET is sponsored by Claude Thau, a GA whose proprietary tools help advisors find clients and reduce the “Ping-Pong” in the LTCi sales process. Help clients make informed final decisions about buying LTCi in 15-20 minutes!  Gauge a client's true interest in a combo product immediately!  Change work-site LTCi sales from a series of proposal deliveries to a single interactive consultation!  Claude is the lead author of the Milliman Broker World LTCi Survey, one of Senior Market Advisor's 10 "Power People" in LTCi in 2007, a past Chair of the Center for Long-Term Care Financing. Test Claude by calling 800-999-3026, x2241 or email him at claudet@targetins.com to ask questions or get references. ***

*** PHYLLIS SHELTON REPORTS on her 3rd webinar on “How to Sell LTC Insurance to Companies of All Sizes” here and on her 4th webinar on “Equity-Index Annuities With and Without Underwriting” here.  Get the details on these sessions and consider subscribing to her series of webinars at the bottom of either of these links. ***

*** HONEY OF A MESSAGE:  Self-styled “Queen of Long-Term Care” Honey Leveen holds forth on “Why Self-Insuring for LTC Might be Unwise...” and other related topics here. ***

*** LTC CLIPPINGS:  If you’re not subscribed to the Center for LTC Reform’s LTC Clippings service, here’s a sample of what you’re missing.  Contact Damon at 206-283-7036 or damon@centerltc.com to begin receiving these daily “heads-ups” for about $.28 per day if you’re already a member of the Center and $.33 if you’re not.

7/29/2015, “Advocates split with health plans, states over Medicaid long-term care rules,” by Virgil Dickson, Modern Healthcare

Quote:  “Patient advocates are praising a section of the CMS' proposed Medicaid managed-care rule related to long-term care. But health plans and states are sharply critical of provisions imposing new credentialing requirements on long-term care providers and allowing beneficiaries to opt out of managed care if their provider is not in a health plan's network.

LTC Comment:  As state Medicaid programs pawn off their responsibility for long-term care to giant private insurance companies, the Feds are laying down the law.  Patients are unlikely to be winners as Medicaid managed care tries to squeeze between the rock of inadequate reimbursement and the hard place of mandated quality. ***

#############################

LTC BULLET:  PANDORA MEETS ROSY SCENARIO IN CMS PROJECTIONS

LTC Comment:  Once a year, actuaries from the Centers for Medicare and Medicaid Services prepare a report estimating national health expenditures for the coming decade.  Each year, their findings are published by the journal Health Affairs.  This year’s article by Sean P. Keehan, et al., is titled “National Health Expenditure Projections, 2014-24: Spending Growth Faster Than Recent Trends.”  You can find it here, but it’s gated so we’ll give you a peek at some representative quotes followed by our comments.

Quote:  "ABSTRACT Health spending growth in the United States is projected to average 5.8 percent for 2014-24, reflecting the Affordable Care Act's coverage expansions, faster economic growth, and population aging. Recent historically low growth rates in the use of medical goods and services, as well as medical prices, are expected to gradually increase. However, in part because of the impact of continued cost-sharing increases that are anticipated among health plans, the acceleration of these growth rates is expected to be modest. The health share of US gross domestic product is projected to rise from 17.4 percent in 2013 to 19.6 percent in 2024."  (p. 1407) 

LTC Comment:  That’s it in a nutshell.  Health costs are rising but more people are covered and thanks to an improving economy and less attractive public and private health insurance coverage we needn’t worry much about the long-term impact of population aging.  Hence there’s very little in this report, and nothing in the text, about future long-term care costs which are likely to do their worst damage outside the report’s totally inadequate 10-year window.  Pandora of the box, meet Rosy Scenario of the economic happy face.

Quote:  “Moreover, as the baby-boomer generation continues to age into eligibility for Medicare and as the Medicaid population ages, it is projected that nearly four out of every ten health care dollars will be spent on people enrolled in one or both of these two largely government-funded programs, in which per enrollee costs tend to be higher than average.” (p. 1408)

LTC Comment:  The first of the baby boomers don’t have their 85th birthdays, the age at which the risk of needing expensive long-term care begins to spike, until 2031, seven years after the last year in the CMS projections (2024).  Mentioning the baby-boomer generation’s growing impact on Medicare and Medicaid within a relatively harmless window of time has the effect of diminishing its importance.  Now is when we should be emphasizing the likely long-term impact of aging demographics, not tamping down such concerns.

Quote:  “Recent health spending trends, while low by historical standards, are consistent with expectations inferred from economic trends in the preceding periods that recently peaked in 2002 and reached a trough in 2013. Thus, health spending growth is likely to accelerate in response to improvements in economic conditions that are projected over the coming decade.”5   Footnote 5:  “Nominal GDP averaged 2.5 percent for 2008–13 and is projected to grow at an average annual rate of 4.9 percent for 2017–24.” (p. 1408)

LTC Comment:  Welcome to economic fantasyland.  GDP growth of almost five percent starting in 2017?  Don’t bet on it.  The U.S. economy succumbed to recessions in 2001 and 2008 following artificial booms created by irresponsible fiscal (deficit spending) and monetary (money printing and interest rate manipulation) policies.  The Obama Administration and the Federal Reserve doubled down on those same misbegotten fiscal and monetary policies after the Great Recession of 2008.  As a result, we’re in the Granddaddy of all artificial bubble booms right now and a truly catastrophic economic bust may be just around the corner.  In any case, the next bust is highly likely to occur within the ten-year time frame covered by the CMS health expenditure projections. 

Quote:  “In addition, the aging of the population is also expected to lead to increased Medicaid spending (5.9 percent growth over the period on average), particularly for assistance in paying for nursing home care. Average Medicaid spending per beneficiary during this [latter] period is expected to grow more rapidly than in the earlier portions of the projection period, at 5.1 percent.” (p. 1413)

LTC Comment:  That quote is all there is about LTC in the text of the article.  The CMS actuaries provide special sections expanding on “hospital services,” “physician and clinical services,” and “prescription drugs,” but they focus nowhere on long-term care.  I searched the document for “LTC,” “long-term care,” “LTSS,” and “long-term services and supports” without a single hit!  This is further evidence of how short-sighted these projections are.

You have to dig into the article’s tables or “Exhibits,” to find any details relevant to the coming surge in long-term care costs.  For example, “Exhibit 1:  National Health Expenditures (NHE), Amounts And Annual Growth From Previous Year Shown, By Spending Category, Calendar Years 2007–24,” has rows for:

  • Nursing care facilities and continuing care retirement communities:  projected to increase from $126.4 billion in 2007 to $274.4 billion in 2024, representing growth of 117.1%, with annual growth rates declining from 6.8% in 2007 to 5.8% in 2024
  • Home health care:  projected to increase from $57.8 billion in 2007 to $156.0 billion in 2024, representing growth of 169.9%, with annual growth rates declining from 10.1% in 2007 to 7.0% in 2024
  • Other health, residential, and personal care:  projected to increase from $107.7 billion in 2007 to $251.1 billion in 2024, representing growth of 133.1%, with annual growth rates declining from 9.3% in 2007 to 5.2% in 2024

The mean U.S. Gross Domestic Product growth since 2007 has been less than two percent.  (Source:  Trading Economics, http://www.tradingeconomics.com/united-states/gdp-growth)  What possible hope can we have that the U.S. economy will keep up with the 5.8%, 7.0% and 5.2% growth estimates for nursing care, home care and other personal care, respectively, projected for 2024, much less the far greater increases in these long-term care expenditure categories likely in the years following 2024?  Economist Herb Stein said “Trends that can’t continue, won’t.”  This is a perfect example.  What happens when they don’t?

Quote:  “With these changes in health insurance coverage, the share of national health spending paid for out of pocket is expected to decline from 11.6 percent in 2013 to 10.0 percent by 2024.” (p. 1414)

“Given the coverage shifts described above, by 2024 the share of national health spending financed by federal, state, and local governments is projected to rise to 47 percent from 43 percent in 2013, with total government spending projected to reach $2.5 trillion (Exhibit 4).”  (p. 1414)

LTC Comment:  The less people pay out of pocket for health and long-term care, the more unconcerned they become about the cost of their care.  U.S. health care financing dominated by third parties, including both public and private insurance and especially low-deductible coverage, has increased costs and reduced consumers’ sense of urgency about planning for potentially catastrophic health outcomes.  This is the tragic consummation that government intervention in the health care and private insurance marketplaces has caused.  We won’t see the full consequences of these policies for another decade after the CMS projections’ window.

The Center for Long-Term Care Reform and State Budget Solutions are preparing a 30-year projection of likely long-term care expenditures including recommendations to minimize damage to the country’s long-term care service delivery and financing system.

#############################

 

Updated, Monday, July 27, 2015, 9:43 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-029:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

  • Long-Term Care: Families Face Steep Costs Even When It's 'Free'

  • Surprise! Your Medicare Premium Could Soar Next Year

  • Dispelling Reverse Mortgage Myths

  • Half of Senior Care Costs to be Paid Out-of-Pocket

  • 5 things from annual check-up for Social Security, Medicare

  • Who Will Provide Care For Childless Boomers?

  • Feds Say 7.5M Paid An Average Penalty Of $200 For Not Having Health Insurance

  • Cognitive impairment progresses faster in women, study finds

  • Expanding Your Sales Portfolio? Give LTCI a Second Look

  • Alzheimer's and Medicare spending to boom over next 25 years

  • Medicare Expanding Access to Hospice Care

  • Check Out Long-Term Care Insurance Agents before Engaging with Them, ACSIA Partners Advises

  • Medicare's midlife crisis: Catastrophic finances pit doctors against patients

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

 

Updated, Friday, July 24, 2015, 11:06 AM (Pacific)
 
Seattle—

#############################

LTC BULLET:  NEW DATA ON LTC INCIDENCE, DURATION, COST AND FINANCING SOURCES

LTC Comment:  New numbers, better than the old numbers, but they require further clarification and explanation.

LTC BULLET:  NEW DATA ON LTC INCIDENCE, DURATION, COST AND FINANCING SOURCES

Highlights from the report:

  • Roughly half—not 70 percent—of elderly Americans will need long-term care.
  • One in seven—not one in five—will need five years or more.
  • Average LTC expenditures are $138,000 but, not to worry, you can cover that with only $70,000 today.
  • Average LTC expenditures if you need any paid LTC are $266,000 but you can cover that with only $134,000 today.
  • Out-of-pocket costs average $72,000, but among those who have out-of-pocket costs, they average $140,000.
  • Women’s LTC costs average $180,000 compared to $90,000 for men.
  • For those with any LTC costs, the averages jump to $320,000 for women and $194,000 for men.
  • 36 percent of people in the bottom income quintile at age 65 use Medicaid LTSS, compared to only 5 percent in the top quintile.

Highlights from our analysis:

  • This new data is a vast improvement over what we had before.
  • But this report’s analysis of the new data is fraught with political and ideological bias in ways we’ll explain and document.
  • Saying as this report does that $70,000 and $134,000 set aside today can cover future costs of $138,000 and $266,000 is inaccurate, misleading and irresponsible.
  • The report misleads by implying without evidence and incorrectly that Americans must spend down most of their wealth before receiving Medicaid LTC benefits.
  • Two out of five people receiving Medicaid LTC benefits have incomes between $50,521 and $217,032 or more. 
  • More than two-thirds (67.4 percent) getting Medicaid LTC have incomes between $28,895 and infinity. Only for the low income?  Hardly.
  • If the lowest-income-quintile people are so broke, how is it that 5.2 percent of them can expect out-of-pocket LTC expenses to exceed $250,000?
  • Analysis of long-term care risk and cost should raise consumers’ awareness and concern, not tamp it down unrealistically as this report does.

LTC Comment:  The Department of Health and Human Services’ (DHHS) Assistant Secretary for Planning and Evaluation (ASPE) has just published (July 2015) an “Issue Brief” titled “Long-term Services and Supports for Older Americans:  Risks and Financing.”  Read it here.  (Never mind the report’s use of the awkward neologism “LTSS.”  What they mean is formal, HIPAA-level “LTC” wherever it is provided.  We’ll use the clearer, traditional term.)

This new report is an important contribution to our understanding of the incidence, duration, cost and financing sources for long-term care.  But it’s a big change from what we used to think, i.e., that 70 percent of the elderly will require some LTC and 20 percent will need five years or more of care.  (For our critique of the study that generated those old estimates, see LTC Bullet:  Microsimulate This!, March 28, 2006.)  We’re asked now to believe that only 52.3 percent will need any formal LTC and that only 13.9 percent will require five years or more.

Big change.  What shall we make of the new utilization numbers, lower risk estimates, and funding source information?  That’s what today’s LTC Bullet is about.  But, bottom line, these new data give a better picture of the reality of long-term care, because they take into account the cost of housing (not just care) in residential settings and because they focus on higher-acuity, more clearly defined HIPAA-level care for two or more ADLs or incidental to cognitive impairment.

So, this is progress, but that said, let’s go through the report, quote by quote, analyze and comment.

Quote:  The issue brief’s “abstract”:  “Most Americans underestimate the risk of developing a disability and needing long-term services and supports (LTSS). Using microsimulation modeling, we estimate that about half (52%) of Americans turning 65 today will develop a disability serious enough to require LTSS, although most will need assistance for less than two years. About one in seven adults, however, will have a disability for more than five years. 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. Families will pay about half of the costs themselves out-of-pocket, with the rest covered by public programs and private insurance. While most people with LTSS needs will spend relatively little on their care, about one in six (17%) will spend at least $100,000 out-of-pocket for future LTSS.” (p. 1)

LTC Comment:  Those are powerful, but confusing numbers.  At age 65, you have roughly a 50/50 chance of needing long-term care that will cost $138,000.  But you’d only have to set aside $70,000 to cover that cost.  On the other hand, you have a 17% probability of spending $100,000 on LTC out of pocket even though half the cost of long-term care will be paid by public programs or private insurance.  You’ll need to read the whole report to unravel this confusion, but we’ll try to clarify the meaning in the following quotes and comments, with a special focus on any ideological bias that has crept into ASPE’s exposition.

Quote:  “Most Americans who receive formal LTSS pay out-of-pocket. For those with longer spells, they may pay out-of-pocket until they qualify for Medicaid. Reliance on Medicaid for those that cannot afford the full costs of LTSS may result in increased federal and state spending for LTSS.”  (p. 2)

LTC Comment:  It’s true that most people pay privately for formal LTC at least for a while.  It is also true that they continue paying privately while they receive Medicaid benefits.  This report does not explain how such private payment works nor how it impacts the LTC financing and service delivery system.  The report simply assumes that people spend down their wealth before qualifying for Medicaid.  The truth is much more complicated and critical to understand. 

First, Medicaid LTC benefits are easily available to high-income people, because anyone with income below the cost of a nursing home (at least several thousands of dollars per month) qualifies based on income.  Second, Medicaid’s LTC asset exemptions are nearly unlimited.  Uncounted assets include most home equity and a car, term life insurance, prepaid burial plans, IRAs, and one business with no dollar limits.  So for purposes of eligibility, even ignoring legal techniques used to hide or divest assets, neither income nor assets prevent most elderly Americans from qualifying for Medicaid LTC benefits.

Thus, the reality is not that most people spend down their wealth and finally become dependent on Medicaid.  The reality is that most people are eligible with little or no spend down.  Once on Medicaid, of course, they have to contribute their income to offset Medicaid’s cost for their care.  That means that the LTC provider receives Medicaid’s dismally low reimbursement rate which, but Medicaid only has to pay its de minimus rate minus whatever private income, largely Social Security and SSI, that the recipient contributes.  The result is downward pressure on quality and misleadingly low Medicaid expenditures.  Recipients’ exempt assets are also subject to estate recovery, but loopholes in the federal law and most states’ failure to enforce estate recovery aggressively allow most exempt assets to pass to heirs instead reimbursing Medicaid.  You cannot understand the distribution of payment sources arrayed in this new data without taking these facts into account.

Quote:  “A microsimulation model is used to describe the future care needs for Americans. This model can predict what percentage of individuals will develop a disability, have LTSS needs, use paid LTSS, and among those that use paid LTSS, how much they use and for how long. It estimates care costs, and how they would be financed under current policies. Microsimulation modeling provides not only the average likelihood of these outcomes, but also describes the distribution of these needs and costs.” (p. 2)

LTC Comment:  All econometric models should be taken with a grain of salt.  A key question:  if you input data from 30 years ago, does this model accurately predict current conditions in the LTC service delivery and financing system?  Unfortunately, we don’t have the necessary data from 30 years ago to answer this question.  So the lesson is to challenge all assumptions and watch carefully and critically how the model’s predictions play out over time.

Quote:  “As expected, given the aging population, the number with HIPAA-level disability is expected to grow from 6.3 million to almost 15.7 million.” (p. 3)

LTC Comment:  Whatever else we can say about LTC services and financing, we’ll have 2.5 times as many people to care for over the next 50 years.  Those aging boomers are marching relentlessly toward senescence and need.  Absent a plague targeting old people they’re going to need a lot of long-term care.  So it behooves us to get these projections right.

Quote:  “The typical person who is alive at age 65 can [be] expected to live another 20.9 years. Fifty-two percent can anticipate having at least some needs for LTSS; 19 percent are expected to have needs that last less than a year, and about 14 percent are expected to have needs that extend beyond five years.”  (p. 3)

LTC Comment:  Instead of being able to say 70 percent of aged Americans will need some long-term care, we can now say that over half will need assistance with two or more activities of daily living and that one in seven will need such help for five years or more.  That makes the risk more tangible and realistic, but still insurable.  It remains a small risk of a catastrophic loss, which is the necessary and sufficient condition to make private insurance workable.

Quote:  “While on average, individuals will need one year of paid LTSS, 48 percent of individuals will not use paid, formal LTSS at all (measured in service days, where one year is 365 days of paid LTSS). Among those who need paid LTSS services, about half will need less than a year, and a little more than 10 percent will need five years or more.”  (p. 4)

LTC Comment:  Likewise for paid LTC services, a one in ten risk of needing five years or more of paid care is eminently insurable.

Quote:  “On average, individuals can expect to spend about $138,000 for LTSS (see Table 3A, or $70,000 in PDV as shown in Table A1). However, among those who ever use paid LTSS, the average cost will be about $266,000 (Table 3B or $134,000 in PDV as shown in Table A2).”  (pps. 5-6)

LTC Comment:  Big numbers but it’s more important to examine sub-categories and sub-populations as we’ll do below.

For now, consider that the phrase “individuals can expect to spend about $138,000 for LTSS” is a little misleading.  The reality is that “various payers, including the individuals themselves, can expect to pay parts of the $138,000 expended on average per individual.” 

What bothers me most here, however, is the idea as first stated in the “abstract” above that “$138,000 in future LTSS costs . . . could be financed by setting aside $70,000 today” or that $134,000 set aside today could cover $266,000 in future LTC costs. 

What’s being employed to make this assertion is “present discounted value (PDV).”  PDV is a legitimate actuarial concept intended to show how much money you would need to have now to be able to meet a future obligation based on certain assumptions regarding investment returns and inflation.  For purposes of this paper, the authors computed PDV “using the Social Security Trustees' ultimate real interest rate of 2.9 percent. (Because the Trustees assume long-range price growth to average 2.7 percent, this amounts to a nominal discount rate of about 5.6 percent in the long-run.)” (Footnote 12, p. 12)

Now, here’s the problem with using present discounted value in this context. 

  • How many aging Americans have earmarked $70,000, much less, $134,000 to cover their future possible long-term care needs?  Very few. 
  • Who is getting a safe 2.9 percent return on their savings today?  No one. 
  • Why should we expect inflation in the cost of LTC services to be only 2.7 percent?  It won’t be. 

Suggesting that people can set aside such small sums to meet the risk of catastrophic LTC costs adds another soporific to the already overwhelming factor anesthetizing the public to LTC risks and costs.  To wit, the fact that government pays for most expensive long-term care after the care is needed, which enables the public’s denial by ameliorating the consequences of failing to plan or insure.

Quote:  “Out-of-pocket costs average $72,000. Among those who have out-of-pocket costs, these costs average $140,000. About three-fifths of individuals face no out-of-pocket costs.14 Looking at community and institutional expenses together, two predominant payers are Medicaid, comprising 34 percent and out-of-pocket payments, comprising 52 percent of the sum of total LTSS expenditures, respectively. Medicare is the next most important payer, followed by private insurance and other public programs. Payer predominance varies by setting. For example, Medicaid pays for 51 percent of the total for institutional settings. For community expenses, in contrast, out-of-pocket payments by families comprise the majority, about 68 percent.15”  (p. 6)

LTC Comment:  To read this, you’d get the impression that out-of-pocket LTC expenses are very high compared to Medicaid especially for “community services,” which implies that people are spending down savings to pay for long-term care as was stated without evidence or explanation earlier in this report.  The reality is more complicated. 

Half of the out-of-pocket expenditures for nursing home care is really just spend-through of Social Security income of people already on Medicaid.  This is important because it shows that a very significant portion of out-of-pocket expenditures does not come from asset spend down, but from another fiscally vulnerable federal entitlement program.  Sure, it’s money people could otherwise put in their pockets, but think ahead a few years.  What happens in 2035 when Social Security can only pay ¾ of what it has promised future beneficiaries?  Someone will have to make up the difference.  Medicaid?  It’s already under water and the age wave bodes ill for tax-funded welfare programs.  Medicare?  It runs out of money sooner than Social Security (2030).  Private payers?  That would mean even more cost shifting, further punishing private payers for having behaved more responsibly than others by saving, investing or insuring to pay for their own long-term care.

Do families and individuals pay even more for community care out of pocket (68 percent)?  Well, yeah, but that’s just money they would have to spend for room and board anyway.  What’s important here is that public financing pays for 28.6 percent of community-based care (Table 3B), which means Medicare and Medicaid are paying for most of the care-cost component whereas individuals and families are paying mostly for room and board expenses they would have had to fund in any case.

Quote:  “Expected LTSS costs are higher for women than for men. Women’s costs average $180,000 (Table 4B) compared to $90,000 for men (Table 4A). These could be financed by setting aside about $90,000 for women (Table A5) and about $47,000 for men (Table A3). However, when we focus on those with any LTSS expenditures, this average jumps to $320,000 for women and $194,000 for men (translating to $160,000 and 101,000, respectively, in present value terms as shown in Table A6 and Table A4).”  (p. 6)

LTC Comment:  OK, if you needed any more proof that long-term care is a “women’s issue,” there you have it.  Women have a higher probability than men of needing long-term; they need it longer on average; and if they need any at all, it’ll cost them nearly one-third of a million dollars.

But here we go again with the present-discount-value painkiller.  $320,000 looks like a lot of money at first, but the real cost today is only half that ($160,000).  So, not to worry.  Analysis of long-term care risk and cost should raise consumers’ awareness and concern, not tamp it down unrealistically.

Quote:  “The DYNASIM projections suggest that although Medicaid does reach individuals at all points in the income distribution at age 65, it primarily serves those in the bottom two quintiles. For example, about 36 percent of people in the bottom income quintile at age 65 use Medicaid LTSS, compared to just 5 percent in the top quintile at that age. Those in upper income quintiles who use Medicaid are typically individuals who have survived until their mid- to late 90s, consistent with other research (DeNardi et al., 2013).16”  (p. 7)

LTC Comment:  Well, hello!  Why is it news that Medicaid, a means-tested public welfare program, covers more poor people than rich people?  This report displays ideological bias by bending over backwards to minimize the fact that Medicaid LTC benefits accrue to middle class and affluent people as much or more than to the needy. 

Let’s cut the numbers from Table 6A a little differently.  Two out of five people (40.8 percent) in the top three income quintiles rely on Medicaid.  What are the upper limits for all five income quintiles?  According to the Census Bureau, as of 2013:

Lowest:      $28,894

Second:        50,520

Third:           78,000

Fourth:        121,059

Fifth:          $217,032 (This is actually the “lower limit of top 5 percent”)

Hmmm.  This looks quite different.  Nearly 41 percent of people receiving Medicaid LTC benefits have incomes between $50,521 and $217,032 or more.  More than two-thirds (67.4 percent) have incomes between $28,895 and infinity.  Not exactly destitute.  How does this jibe with the slanted analysis offered in this report?  It doesn’t.  From now on, every time you read in a newspaper, magazine, or alas, a peer-reviewed academic journal that only “low-income” people qualify for Medicaid LTC benefits and only after they spend down their savings to impoverishment:  Think bunk!

Not to put too fine a point on this paper’s bias, but keep an eye out for how its authors round up or down decimal numbers.  For example, when they say “about 36 percent of people in the bottom income quintile at age 65 use Medicaid LTSS, compared to just 5 percent in the top quintile at that age,” they’ve bumped up the low-income-quintile number from 35.8 percent and bumped down the top-quintile number from 5.5 percent.  That introduces a .7 percent misimpression.  Why not just use the actual numbers with the decimals intact?  Why indeed?  If you like to play “Where’s Waldo,” you’ll love reading this report sleuthing for rounding bias, or searching for typos.  Good hunting.

Quote:  “Family out-of-pocket expenditures, in contrast, are more concentrated in the higher quintiles. The average out-of-pocket LTSS expense in the top quintile is approximately $97,000 compared to closer to $45,000 in the bottom quintile. But again the mean obscures important distributional information. About 12 percent of people in the top income quintile at age 65 can expect out-of-pocket expenses in excess of a quarter million dollars.”  (p. 8)

LTC Comment:  The richest people pay only twice as much ($97,000) for LTC as the poorest people ($45,000)?  Gee, I wonder if that could have something to do with what we explained immediately above.

It’s not surprising that 11.7 percent of top-income-quintile people have out-of-pocket expenses in excess of $250,000.  But Table 6B also says that 5.2 percent of people in the lowest income quintile can expect out-of-pocket expenses to exceed $250,000.  Maybe those lowest-income people aren’t quite as broke as we thought they were.

Quote:  “Medicaid is an important payer for LTSS, but because it serves only those who meet 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. Similarly, other public expenditures (for example, including Veterans Administration care) only help to cover small shares of the population with long-term care needs. The results presented here highlight the need for better planning for LTSS to accommodate both average and catastrophic financial risks associated with chronic disability.”  (p. 8)

LTC Comment:  Well, true, that’s what these results show.  What they do not show without the explanation and clarification offered here is that Medicaid is a major payer for expensive long-term care for all income and asset levels and that as such it has for 50 years crowded out private-payers, impeded the private insurance and reverse mortgage markets as potential long-term care funders, and distorted the service delivery system in favor of the kind of welfare-financed nursing home care that most Americans prefer to avoid.

Bottom line, however, properly interpreted this data on long-term care incidence, duration, cost and financing sources is better than we have ever had before.  Use it, but don’t abuse it to suit any political or ideological bias.  If you let the facts speak for themselves they’ll shout: 

“Give Medicaid back to the poor and everyone else will save, invest or insure for long-term care.” 

Do it before it’s too late! 

#############################

 

Updated, Monday, July 20, 2015, 11:16 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-028:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

  • Why Working Past 70 Pays Off

  • What Are the Chances You'll Need Long-Term Care And How Much Will It Cost?

  • Do Americans Understand Long-Term Care?

  • The [White House] Conference on Aging that Wasn't

  • Home Health Agencies Get Medicare’s Star Treatment

  • Valuing the Invaluable 2015 Update: Undeniable Progress, but Big Gaps Remain

  • How much $100 is really worth in each state

  • Data Note: Medicare Advantage Enrollment, by Firm, 2015

  • Former CMS chief to become top lobbyist for health plans

  • More Adults Caring for Family Members As Age of Caregivers Gets Younger

  • CMS to Require Health Information Exchange for Long-Term Care

  • CMS proposes massive regulation revision for LTC

  • Democrats call for major change in Social Security

  • White House Tackles Aging Amid Booming Market For Long-Term Care

  • Federal Audits Of Medicare Advantage Reveal Widespread Overcharges

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

 

Updated, Friday, July 17, 2015, 10:24 AM (Pacific)
 
Seattle—

#############################

LTC BULLET:  CASSANDRA’S QUANDARY

LTC Comment:  With the gift of prophecy but cursed with doubters, Cassandra would be right at home predicting the future of long-term care financing, after the ***news.***

*** SHELTON REPORT:  LTCI author and trainer Phyllis Shelton reports that her July 8th Webinar on “How to Sell LTC Insurance that is Affordable in Today's Market” was a hit.  Get the details on this session and consider subscribing to her series of webinars here. ***

*** SAMPLE CLIPPING:  Every day we send LTC Clippings subscribers real time news they need to know about LTC services and financing with commentary.  Contact Damon at 206-283-7036 or damon@centerltc.com to subscribe by upgrading your membership to “Premier” ($250 per year).  That’s just an extra $100 for most Center members and only a little more than $20 per month for new subscribers.

7/15/2015, “How much $100 is really worth in each state,” by Mandi Woodruf, Yahoo Finance

Quote:  “Nothing diminishes the value of a dollar quite like your ZIP code. In a fascinating look at the cost of living in all 50 states and hundreds of metropolitan areas, the Tax Foundation shows exactly how much — and how little — 100 bucks is worth depending where you live.

LTC Comment:  What’s your buck worth?  Click on your state to find out.  And consider this:  not only does LTC cost much more in some states than others, the dollar may not go as far in those states either. ***

LTC BULLET:  CASSANDRA’S QUANDARY

LTC Comment:  In the ancient myth, Apollo granted Cassandra the ability to predict the future accurately, but when she declined his romantic advances, he doomed her to be disbelieved. 

The evasion of reality and denial of risk surrounding long-term care public policy reminds me of Cassandra’s quandary.  No matter how much irrefutable evidence we adduce for the unsustainability of the current LTC financing system, the stubborn minions of complacency persist and prevail.

I’ve seen some examples recently in my research on Medicaid and long-term care financing in New Hampshire. 

A long-term care provider expressed optimism that science would cure Alzheimer’s Disease and radically reduce future LTC costs.  My response:  “Hope for the best, but plan for the worst.”

A highly placed public official opined that LTC expenditures, which were predicted to explode two decades ago, haven’t.  My response:  “Yet!”

He went on “Besides, we can always print more money.”  My response:  “Eventually you run out of other people’s money,” as Margaret Thatcher warned.

Greek myth is a suitable lens through which to view predictions about the future of long-term care services and financing.  Modern day Greece, and Puerto Rico closer to home, are canaries in the mineshaft warning us to heed today’s LTC Cassandras. 

Can we relax about LTC financing because institutional and home care costs have not exploded yet?  Well, no, the first baby boomers won’t reach 85, the age at which long-term care becomes much more likely and expensive, until 2031.

Can we rely on current fiscal (deficit spending) and monetary (credit expansion, money printing, and interest rate manipulation) indefinitely?  Hardly.  Sooner or later, economic gravity prevails, interest rates will rise making public debt unserviceable.

But when?

My guess, to employ some tired but evocative metaphors, is that it will happen when the “silver tsunami” becomes a “perfect storm” causing an “economic freeze.”

Think about it. 

  • The boomers start coming of LTC age 85 in 2031.
  • Social Security and Medicare run out of “trust funds” in the 2030s.
  • Medicare and Social Security already collect less in payroll taxes than they pay out.
  • U.S. tax-generated general funds have to make up the entitlements’ shortfalls as well as pay off the trust funds’ bonds (IOUs).
  • Federal debt is $18.1 trillion and rising rapidly.
  • Heavy taxation impedes the economic activity necessary to generate the needed tax revenue.
  • The Federal Reserve domestically and central banks internationally are pushing the limits of their ability to expand credit in order to hide economic malaise.
  • The fiscal walls are closing on the U.S. and world economies.
  • Promiscuous spending leads to impoverishment for individuals, families (sooner) and national economies (later because of their ability to manipulate currency).
  • These lessons are legion throughout history and around the world.

Think this time is different?  See This Time Is Different: Eight Centuries of Financial Folly by Reinhart and Rogoff.

Economic bubbles expand until they don’t.  The internet and housing bubbles, inflated by easy money and credit, each lasted several years.  The current bubble, created by the very same fiscal and monetary policies that caused its predecessors, has been expanding about as long as they did before they burst.  What is different this time is that the latest economic bubble is much bigger than the others and the tools to hide it, artificially low interest rates and quantitative easing, are worn out from overuse and likely no longer effective.

So, when will Cassandra’s dire LTC predictions come true?  No later than 2030, but probably much sooner.  We’re compiling and organizing the evidence in one politically prominent state, New Hampshire.  Expect our report in September.

#############################

 

Updated, Monday, July 13, 2015, 3:57 PM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-027:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

  • Poll: Sandwich generation worried about own long-term care

  • Safeguarding Clients from Long-Term Care Costs

  • Angela Bassett Aims To Increase Dialogue Surrounding Aging And Long-Term Care

  • Jonathan Kozol’s memoir on aging can stand proudly beside Roz Chast’s

  • Retirement assets on the rise

  • 4 Tips for Parents Who Care for Kids and Elderly Parents

  • Guide to Buying Life Insurance at Every Stage of Life

  • Questions loom for insurers bulking up on government business

  • Providers fume over pay freeze

  • Alzheimer’s spurs the fearful to change their lives to delay it

  • Technology Innovations That Could Help the Elderly

  • What Many 65-Year Olds Don't Know About Medicare

  • Japan Mulls Politically Dangerous Squeeze on Senior Benefits

  • Expert says health enrollment data paints misleading picture

  • How Technology Will Revolutionize Long-Term Care

  • Medicare Advantage 2015 Spotlight: Enrollment Market Update

  • What Can We Expect From a Growing National Debt?

  • Women More Likely to Get Alzheimer's

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

                                                             

Updated, Friday, July 10, 2015,  11:49 AM (Pacific)
 
Contoocook, NH—

#############################

LTC BULLET:  AMERICA'S DEMOGRAPHIC WINTER

LTC Bullet:  The age wave isn’t our only problem.  A receding population tide is just as serious.  Details after the ***news.***

*** TODAY'S LTC BULLET is sponsored by Claude Thau, a GA whose proprietary tools help advisors find clients and reduce the “Ping-Pong” in the LTCi sales process. Help clients make informed final decisions about buying LTCi in 15-20 minutes!  Gauge a client's true interest in a combo product immediately!  Change work-site LTCi sales from a series of proposal deliveries to a single interactive consultation!  Claude is the lead author of the Milliman Broker World LTCi Survey, one of Senior Market Advisor's 10 "Power People" in LTCi in 2007, a past Chair of the Center for Long-Term Care Financing. Test Claude by calling 800-999-3026, x2241 or email him at claudet@targetins.com to ask questions or get references. ***

*** THE GRANITE STATE is where I remain conducting interviews for our study of Medicaid and long-term care financing in New Hampshire.  We described this project in LTC Bullet:  Should Presidential Hopefuls Address Long-Term Care?  As you read today’s LTC Bullet you’ll see why the demographic challenges America faces are especially acute here.  I’ll be writing our report in August for publication in September following which we’ll do a conference, publicity and outreach to the presidential candidates. ***

***  AALTCI’S SALES SUMMIT will be a FREE one-day event this year on October 27, 2015 at the Hyatt Hotel at Dulles Airport, near Washington, D.C.  Attend in person or catch the program online.  All free of charge.  Get all the details here. ***

 

LTC BULLET:  AMERICA'S DEMOGRAPHIC WINTER

LTC Comment:  Population aging is a problem we deal with frequently in this space.  It’s important to recognize, however, that the phenomenon sometimes referred to as the “birth dearth” is equally important and for many of the same reasons.

Fewer children being born now has consequences later on.  We won’t have the same “bench” of workers to provide the long-term care services that surging numbers of aging boomers will require.  Nor will there be as many employees to pay the skyrocketing income and payroll taxes that government will need to finance ongoing entitlement programs and their growing unfunded liabilities. 

So today, we point you to some fascinating information provided in the following article by our colleague Scott Moody of State Budget Solutions (SMS).  Scott and SMS are collaborating with me and the Center for Long-Term Care Reform on the study of Medicaid and LTC financing in New Hampshire mentioned above. 

 

"America's Demographic Winter" (from http://www.keypolicydata.com/demographics/
by
J. Scott Moody

Demographics is Destiny!

In the policy world, demographics is far beyond the time-horizons of politicians. Politics is played out in 2-year cycles, but demographic trends can take decades to play out. Today, America stands on the precipice of an unprecedented demographic event which has been termed “demographic winter.”

Demographic winter is mostly the result of plummeting birth rates and, to a lesser degree, the aging of the baby boom generation. The aging impact on America’s population has been offset by longer life-spans, but a baby never born has exponential ripple effects on the size of the future population. As a result of too few babies being born, many parts of America will experience a shrinking working-age population and eventually shrinking overall populations.

America is not alone. Countries like Japan, Russia, and many others in Europe are already facing shrinking populations. As we will discuss, this will create a drag on economic growth at a time when many social programs will experience tremendous increases in demand. Will future generations, fewer in number, acquiesce to the financial demands of older generations? Ready or not, we will find out.

Net Natural Population Growth

So, the place to start is to examine “net natural population” growth which is the number of births minus the number of deaths that take place in a given jurisdiction. In 2014, there were 1.4 million more births than deaths [in the U.S.] which sounds impressive. However, since 1991 the change in net natural population growth declined by -32 percent to 1.4 million from 2 million.

In stark contrast, America’s population over the same time-period increased by 26 percent to 319 million from 250 million. As such, net natural population growth is contributing less and less to the overall growth in America’s population. In fact, as a percent of population, net natural population growth has declined to 0.43 percent in 2014 from 0.79 percent in 1991—a decline of 46 percent!

Of course there is a large variation among the 50 states. There are currently two states, Maine and West Virginia, where there are more deaths than births which means net natural population growth is negative. States that have also seen large drops in the rate of natural population growth include New Hampshire (-85 percent), Vermont (-81 percent), and Rhode Island (-76 percent).  [Emphasis added.]

On the brighter side, North Dakota has seen an increase in its net natural population growth (16 percent) and Nebraska is exactly level (0 percent). Beyond these two states, net natural population growth has fallen though not nearly to the extremes cited above—South Dakota (-2 percent), Kansas (-15 percent), and Iowa (-18 percent).

To better understand what is going on, let’s now look at the components of net natural population growth—births and deaths.

Births 

There has been a decline in the absolute numbers of births between 1991 and 2014 of 175,688 to 3.96 million births from 4.13 million—this is a -4.3 percent decline. Yet, as a percent of population, the drop is a steeper -24 percent to 1.24 percent in 2014 from 1.63 percent in 1991 because the decline in births is set against the backdrop of an overall increase in America’s population.

Only a single state—North Dakota—has escaped this dramatic fall in the number of births with an increase of 1.9 percent to 1.46 percent of the state’s population from 1.43 percent in 1991. This is likely due to the boom in hydraulic fracturing which has brought a younger and more fertile population to the state. Of course, with a small population of only 638,817 it doesn’t take many births to move the needle.

On the other hand, there are states with more dramatic drops in the number of births as a percent of the population including: New Hampshire (-39 percent), California (-35 percent), Vermont (-34 percent), Connecticut (-32 percent), and Maine (-31 percent).  [Emphasis added.]

Deaths

In stark contrast, there has been an increase in the absolute number of deaths in America between 1991 and 2014 of 455,090—this is a 21 percent increase. However, the absolute increase in deaths has actually lagged behind the overall growth in population. As a percent of population, deaths have fallen by -3.8 percent to 0.81 percent in 2014 from 0.85 percent in 1991.

The states that have seen the greatest increase in deaths as a percent of the population include: Alaska (52 percent), Hawaii (34 percent), and New Mexico (17 percent). On the other hand, the states that have seen the great decrease in deaths as a percent of the population include: Nebraska (-15 percent), New York (-15 percent), and South Dakota (-12 percent).

Conclusion on Net Natural Population Growth

Despite the aging of the Baby Boom generation, deaths are not (yet) to blame for America’s downshifting net natural population growth. For now, the increase in life-spans has forestalled a more dramatic rise in deaths as a percent of the population.

The blame for America’s reduced net natural population growth falls on the reduction in the number of births in both absolute terms and as a percent of the population. There are many factors that have brought this about such as contraception, abortion, delayed marriage, the decline in religion, and the rise of two-income households.

More troubling, as Baby Boomers continue to age the number of deaths is only going to continue to rise. If the decline in births does not reverse itself, many states will soon face the prospect of declining overall population without an influx of domestic or international migrants.

Net International Migration

At the national level, there is only one form of migration and that is international migration. Between 1991 and 2014, there has been an influx of 23.7 million legal immigrants—an average of 985,671 per year. The states with the greatest number of immigrants in 2014 are: California (161,318), Florida (112,306), and New York (118,799). The states with the fewest number of immigrants in 2014 are: Montana (766), Vermont (719), and Wyoming (485).

While the absolute level of international migration looks large, it only averaged 0.34 percent of the population during this time-period. Of course, this varies by state. The states with the highest level of immigration as a percent of population in 2014 are: Hawaii (0.61 percent), New York (0.6 percent), and New Jersey (0.58 percent). The states with the lowest level of immigration as a percent of population in 2014 are: West Virginia (0.06 percent), Montana (0.07 percent), and Mississippi (0.08 percent).

Net Domestic Migration

Net domestic migration measures the movement of people from one state to another. At the national level, these movements cancel each other out. However, for specific states domestic migration can significantly add or subtract population.

Between 1991 and 2014, the big winners of domestic migration include: Florida (2,825,189), Texas (2,097,396), and Arizona (1,442,367). The big losers of domestic migration include: New York (-4,144,561), California (3,875,727), and Illinois (1,580,939).

Also, it should be noted that some unknown amount of domestic migration is disguised international immigration. States like New York and California are major gateway destinations for international immigrants, but they don’t always stay for long. If they soon migrate to another state, they are classified as domestic migrants and not as international immigrants.

However, as a percent of population, the picture of net domestic migration changes significantly. The states with the greatest domestic migration as percent of population (averaged over the time-period) were: Nevada (1.9 percent), Arizona (1.2 percent), and Idaho (0.9 percent). The states with the lowest domestic migration as a percent of population were: New York (0.9 percent), Illinois (0.5 percent), and Rhode Island (0.5 percent).

The Economic Costs of Demographic Winter

Economically, for the business community, Demographic Winter will be akin to a slow-moving economic depression by moving from population growth to population decline.  With a growing population, businesses can plan on new customers simply because there are more people.  However, with a shrinking population, businesses not only lose the prospects of new customers, they must also face losing existing customers.  If businesses are unable to find new markets, they will be faced with ongoing declines in revenue—or, put simply, an economic depression.

More specifically Arnott and Chaves find that:

[W]e show that the past 60 years—which we think of as “normal”— enjoyed a demographic tailwind which we can quantify. It was worth about 1% per year, meaning that, if we think of 3% growth as normal, it’s really 2% growth plus a demographic tailwind of 1%.

 

The coming decades—due to the rising support ratios from the aging boomers—will experience a demographic headwind of (very roughly—these will be wildly out-of-sample conditions) roughly the same 1%. So, if 3% growth was normal, 1% growth (again, very roughly) becomes normal. This is the reason behind my concerns regarding the legacy of monetary and fiscal experiments, and debt and deficits we leave our children.

So even without a fiscal calamity, Demographic Winter alone will have the economy at stall speed. A little economic hiccup will quickly send the economy into a recession or even depression. Uncle Sam has already run up an $18.1 trillion dollar tab, but adding insult to injury Demographic Winter will create another fiscal tsunami.

The Fiscal Costs of Demographic Winter

In addition to the overall negative economic impact, Demographic Winter will also have a negative fiscal impact on federal, state, and local governments.  First, people over the age of 65 impose significantly more costs to government than younger age cohorts.  Figure 2 (Figure 1 omitted) shows that a typical person over the age of 65 costs government nearly three times as much as a person under the age of 18—even with educational costs factored in. 

While these costs predominantly fall on the federal government (Social Security and Medicare), state governments should be prepared for a significant spike in Medicaid costs for those over the age of 65, especially driven by the cost of nursing homes.

Second, while expenses soar for those over the age of 65, the taxes paid by this age cohort drop by two-thirds as shown in Figure 3.  The primary culprits for this drop are the payroll and income tax, which naturally decline as people retire from the labor force.  As such, the primary fiscal concern for state policymakers moving forward is the eroding income tax base as the county continues to age. [N.B. our study state, New Hampshire, has no income tax.]

Conclusion

Clearly Demographic Winter will be the major economic and fiscal issue for the next few decades. Reversing it will be not an easy task. Of course, understanding why it is happening is the first step in fixing it. There is one variable that significantly correlates with the fertility rate—weekly religious attendance. Has America’s declining church attendance resulted in the declining fertility rate? If so, finding ways to increase church attendance does not sound like a simple solution. But find a solution we must.

Below is a recent interview I did on the subject of Demographic Winter and its impact on Maine (which is currently the oldest state in America as measured by median age).
- See more at:
http://keypolicydata.com/demographics/#sthash.CsGSLgGC.dpuf

For an excellent overview, check out this movie titled “Demographic Winter: The Decline of the Human Family.”

J. Scott Moody is CEO and Chief Economist for State Budget Solutions, a non-partisan, non-profit, national public policy organization with the mission to change the way state and local governments do business.  Reach him at jsmoody@statebudgetsolutions.org.

#############################

 

Updated, Monday, June 29, 2015, 10:15 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-026:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

  • Will Baby Boomers Change the Meaning of Retirement?

  • 'SCOTUSCare': Justice Scalia Issues Withering Dissent On Obamacare Subsidies

  • Many More Women Than Men Living to 100

  • Boomers Spend Their Kids’ Inheritance — on Supporting Them

  • Steps on the Path to Public/Private Long-Term Care Financing

  • 7 Things You Really Need To Know About Medicare But Probably Don't

  • CMS skips congressional hearing criticizing how Medicaid demos are run

  • Alzheimer’s May Begin 20 Years Before Symptoms Appear

  • How Hybrid Annuities Might Fit Into LTC Reform

  • ACSIA Partners Offers Election Poll on Key Issue: Incentives to Help More Americans Afford Long-Term Care Insurance

  • Estate Planning And The Single Girl

  • In Some States, a New Focus on Family Caregivers

  • The Evolution of Critical Illness

  • At Home, Many Seniors Are Imprisoned by Their Independence

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

Updated, Friday, June 26, 2015, 11:21 AM (Pacific)
 
Nashua, New Hampshire—


#############################

LTC Bullet:  Guest Column, “Real Sleight of Hand”

LTC Comment:  Author and LTCI marketer Stephen D. Forman opines about prestidigitation in the insurance domain after the ***news.***

*** SUMMER WEBINAR SERIES:  We highlighted Phyllis Shelton’s new program in a recent LTC Bullet.  The first webinar in the series took place on June 24:  “How to convert term life insurance into guaranteed issue LTC insurance.”  The next one will occur on July 8:  “How to sell long-term care insurance that is affordable in today's market / Finding money with High Deductible Plan F with a reserve annuity / Should we sell short-term care plans?”  Check out the whole series here. ***

*** CLTCR Premium Membership  --  Center for Long-Term Care Reform premium members receive our full suite of individual membership benefits including:  our LTC Bullets and E-Alerts; access to our Members-Only Zone website and Almanac of Long-Term Care; subscription to our Clipping Service; and email/phone access to Steve Moses for 24-hour turnaround queries.  Our Premium Membership is designed to give you a competitive advantage in your long-term care profession. Your increased knowledge of the critical issues and challenges we face in the field of long-term care service delivery and financing equals improved professional success for you and better LTC services for your clients and for those who have no choice but to rely on scarce public resources.  Premium Membership is $250 per year, paid up front or monthly by automatically recurring credit card payments.  Contact Damon at 206-283-7036 / damon@centerltc.com to start your Premium Membership immediately or go directly to our secure online subscription page and sign up for as little as $21 per month. ***

 

LTC BULLET:  GUEST COLUMN, “REAL SLEIGHT OF HAND”

LTC Comment:  The purpose of genuine insurance is to replace the small risk of a catastrophic loss with the certainty of an affordable premium.  Hence we buy life insurance, auto insurance, or fire insurance so that if we die, crash or burn (unlikely but potentially catastrophic outcomes) we’re compensated far beyond our outlay in premium payments.  Our financial risk is at least mitigated. 

Insurance works because carriers spread our risk across many other people in a way that allows for adequate indemnification at reasonable rates while covering administrative costs and profits for the underwriter.  But private insurance also prices risk.  You pay more for health insurance if you smoke, for example.  So insurance has the socially beneficial effect of encouraging responsible behavior and discouraging the opposite.  Real insurance is a neat, lean solution to a fundamental problem of human life, the unpredictability of individual tragedy.

Unfortunately, genuine insurance is getting harder and harder to find.  Government social programs, even welfare programs, call themselves “insurance.”  They spread risk, but they don’t price it so they reward irresponsible, self-destructive behavior instead of discouraging it with higher premiums.  Nowadays people expect insurance to pay for minor routine expenses, such as doctor’s visits, not just for major medical expenses.  It’s as if auto insurance paid for tune-ups.  If insurance pays routine costs, it has to be very expensive.  Hence premium costs rise or deductibles and co-insurance inflate.  I developed these points in detail here:  "The Inherent Individualism of Insurance," Navigator, Vol. 5, Nos. 10-11, November/December 2002, published in January 2003,  http://www.atlassociety.org/individualism-insurance.

But today, I’ll pass the baton to guest columnist Stephen D. Forman of Long Term Care Associates to talk about another aspect of the corruption of insurance.  He homes in on a “Real Sleight of Hand” that few people see for what it is, pseudo-insurance.

 

“Real Sleight of Hand”
by
Stephen D. Forman

In the world I inhabit—long term care—there are classically four solutions. Any salt-of-the-Earth agent knows you can only pay for long term care with Medicare, Medicaid, self-insurance, or private insurance[i]. When we speak across the metaphorical kitchen table, we are careful to point out why none of these options are viable except for private LTC insurance. We paint a picture in which our clients who have the health and means would never choose to wind up “uninsured”. To do so would risk losing everything, and ending up on welfare (Medicaid).

In another universe, the nonprofit RAND Corporation has just released new figures which point to the glowing success of the Affordable Care Act. Nearly 17 million more people in the US “have gained health insurance since the [ACA’s] major coverage expansion began.” That’s the net total of 22.8M newly insured people (who never had coverage before) less 5.9M who lost their insurance[ii]. RAND elaborates: for those gaining Medicaid coverage, “6.5 million, or 52 percent, were previously uninsured.”

Sleight of Hand

There’s just one problem.

In their official stats, RAND—and everyone else for that matter—are counting the 21M American adults presently on Medicaid as part of our “insured” population. Isn’t it funny how words evolve?

What sleight of hand! Even ten years ago, we would not have said an individual on Medicaid had health insurance. And no agent today would say that a senior on Medicaid has LTC insurance. The very statement is an oxymoron.

Yet a study was just published (by one of the same celebrated economists behind the “Medicaid Crowd Out Effect”) which may turn what we know about Medicaid on its head. For one thing, it asserts that Medicaid works as health insurance. But to reach this conclusion, it presupposes a world in which health insurance acts differently from its siblings: we buy home and auto insurance to protect us from catastrophic costs. Nowadays, we buy health insurance so we can use more healthcare. If that’s our benchmark, then Medicaid does the job: beneficiaries do get more healthcare (including preventive services) and find that doctors do not turn them away.

Of course, even before the ACA was but a glimmer, it could be said that everyone in America was covered. In fact, someone did say it—John Goodman (father of the HSA) in 2008. He was only half-joking when he suggested we count, “...only people who are denied care [as] truly uninsured. Everyone who gets care is effectively insured by some mechanism.” While an interesting thought experiment, such an overbroad definition may require fine-tuning.

The Under-Insured

It turns out there’s a third way, a star-crossed category known as the “under-insured”. Remarkably, the number of us who can call ourselves members of this group has doubled in the last decade to 31M.

One-quarter of Americans who actually have health insurance are paying so much in deductibles and out-of-pocket expenses that we’re skimping on care and less likely to see a doctor when sick for fear of the bills. Fifty percent of this group is busy paying off medical debt exceeding $4,000 or more.[iii] The big driver of under-insurance is the rise of health plans with large deductibles—both their ever-increasing size and the number of people buying them. (This rise is driven, in turn, by the shift away from employer-sponsored health insurance, and the desire by individuals paying their own freight to keep premiums down.)

Since the Commonwealth Fund (compiler of these stats) defines under-insurance as the percent of household income directed toward medical bills (10%) or the size of one’s deductible (5% of income), it will be interesting to see how Medicaid enrollees are accounted for. (The expansion had barely begun by the time the last survey was completed.) For if we were to compare, a long-term care recipient on Medicaid must contribute nearly 100% of her income toward the cost of her nursing home or home care before the public program will step in as “second payer”. Does it not follow that every Medicaid LTC recipient would meet this definition of “under-insured”?

And yet, the public is clamoring for it.

Woodwork Effect

We’re told expansion states are “reeling” from enrollment numbers that are sometimes double what they anticipated. But that’s not even the problem. (After all, as one official put it, you don’t roll out a program like this then hope no one shows up.) The trouble comes from the “woodwork effect”, which is what happens when folks come out of the woodwork to utilize a benefit that’s been made more desirable.[iv] Many people who were already eligible for Medicaid before the ACA have finally decided to enroll only because of the publicity and broader outreach accompanying the expansion.

These “woodwork” enrollees are costly. Unlike the expansion signups who are covered at the high 90%+ federal matching rate promised by the ACA, these folks receive the regular reimbursement, just 57% on average with states picking up the balance.

Those who enroll in Medicaid receive services of questionable value. That’s not this author’s opinion: that’s another conclusion from the study cited above. When the economists tried to quantify the value of benefits provided by the program they ranged from 15-cents on the dollar at a low to 20 – 40 cents at a high. In other words, a beneficiary would trade $1.00 in services for 15-cents in lump-sum cash.

Maybe that’s why you can’t give the program away. It was estimated before the ACA that 1/3rd of our nation’s uninsurance problem could be solved if those eligible for Medicaid and other public programs simply signed up—no law needed. And yet here we are 5 years down the road—plus an individual mandate and $2B/month in subsidies later—yet 36M Americans are still officially counted as uninsured (12% of the population).

During the last five years—the first five years of the Affordable Care Act—a change in the narrative has occurred. The national vocabulary has shifted beneath our feet. It is now acceptable to count 21M Americans on Medicaid as “insured”. Take away those who found “insurance” through Medicaid and the ACA isn’t just a smaller program, it’s a prodigious failure.

Public vs. Private “Insurance”

Whether this sleight of hand is a proper description, an improper appropriation or a total misnomer is anybody’s guess. At some level it’s a counting question—of import only to public policy wonks, record-keepers and statisticians. At a far more intimate level it’s about families—who can and cannot receive the care they need, the services they desire, and what the financial consequences will be.

For those of us who educate the public about their long-term care options, it’s important to note how the walls are coming down between public and private options. When ordinary Americans call on us for retirement advice in the future, it may prove difficult to reverse the consequences of years of such ingrained thought.


 

[i] We can quibble with the fringes—whether to include the VA, or what new products are meant by the term “private insurance”, but you’ll see it’s not germane to this argument.

[ii] All numbers in the RAND survey are extrapolations based on a longitudinal survey of nearly 1,600 adults 18 – 64.

[iii] This is significant: more than 60% of Americans do not have the savings to cover an emergency medical bill of $1,000. Source: http://blogs.wsj.com/economics/2015/01/07/most-americans-dont-have-savings-to-pay-unexpected-bill/

[iv] Steve Moses of the Center for Long-Term Care Reform has written frequently on this subject, for instance here: http://www.centerltc.com/pubs/Doing_LTC_RIght.pdf.

 

Mr. Forman is co-author of "The Advisor's Guide to Long-Term Care" (2nd Ed.) published by National Underwriter, and a regular contributor to LifeHealthPro and ProducersWEB. Reach him at steve@ltc-associates.com.
 

#############################

 

Updated, Monday, June 22, 2015, 11:48 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-025:  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:

  • OneAmerica seeking more deals to grow

  • How Married Couples Can Pay for Long-Term-Care Insurance With HSA Funds

  • 5 major risks to a client's retirement income

  • Maybe we should start calling it short-term care?

  • What is Medicare’s Role in End-of-Life Care?

  • Big Changes Coming for Medicare, Social Security

  • Company Offering Long-Term Care Insurance Alternatives Elects New Board Chair

  • Health insurance subsidies not effectively managed: OIG

  • Don't Forget About Deducting Your Long-Term Care Insurance Premiums

  • The 2015 Long-Term Budget Outlook

  • Four Reasons Why Your Parents Could Be Your Biggest Retirement Risk

  • America’s Seniors Find Middle-Class ‘Sweet Spot’

  • Long-Term Care Goes Virtual

  • Why People Don’t Buy Long-Term-Care Insurance

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

Updated, Friday, June 19, 2015, 10:33 AM (Pacific)
 
Nashua, New Hampshire—

#############################

LTC BULLET:  LTC ANNUITIES:  TO GET OR AVOID MEDICAID?

LTC Comment:  Annuities have a powerful role to play in funding long-term care.  But for good or ill?  That’s the question we’ll tackle after the ***news.***

*** TODAY'S LTC BULLET is sponsored by Claude Thau, a GA whose proprietary tools help advisors find clients and reduce the “Ping-Pong” in the LTCi sales process. Help clients make informed final decisions about buying LTCi in 15-20 minutes!  Gauge a client's true interest in a combo product immediately!  Change work-site LTCi sales from a series of proposal deliveries to a single interactive consultation!  Claude is the lead author of the Milliman Broker World LTCi Survey, one of Senior Market Advisor's 10 "Power People" in LTCi in 2007, a past Chair of the Center for Long-Term Care Financing. Test Claude by calling 800-999-3026, x2241 or email him at claudet@targetins.com to ask questions or get references. ***

*** THE GRANITE STATE is where I am, ensconced in the Silver Bullet of Long-Term Care (give it a couple minutes to load).  I’m here to conduct the study of Medicaid and LTC financing that we described in LTC Bullet:  How Great is Medicaid’s Unfunded LTC Liability?, April 24, 2015 and LTC Bullet:  Should Presidential Hopefuls Address Long-Term Care?, May 29, 2015.  We’ll bring you LTC embed reports from the long-term care policy front here in New England from time to time.  We’re convening a special meeting of LTC insurance and home equity experts on July 15 to explore those industries’ potential to take a bigger role in financing long-term care.  If you work in those fields in New Hampshire or if you know someone who does, please contact Steve Moses at smoses@centerltc.com or 425-891-3640. ***

*** MEDICAID ANNUITY HUSTLE:  Here’s an example of how Medicaid-compliant annuities, the subject of today’s LTC Bullet, are presented in the financial press:

“Normally, advisor Jeremy Shipp isn’t a big fan of single-premium immediate annuities. But in working with high-net-worth couples where a spouse is nursing home bound, the president at Harbor Estate Services in Richmond, Va., finds such SPIAs — known as ‘nursing home annuities’ — an attractive alternative.

“‘It’s a very misunderstood strategy by advisors,’ says Shipp, who works on an hourly and retainer basis. ‘They just don’t realize that SPIAs can be used effectively to preserve wealth and qualify a family member for Medicaid.’ . . .

“Anthony recently worked with a couple who thought they were more than $200,000 over the limits to qualify for Medicaid. Anthony discovered that most of those assets could be put into a SPIA paying out $6,400 a month over a three-year term. ‘By doing it this way,’ he says, ‘we were able to preserve more than $200,000 for the family and provide a monthly income for the husband, who is still living at home.’”

Source:  “Medicaid Annuities Offer FAs Long-Term-Care Tools,” by Murray Coleman, June 18, 2015,  Financial Advisor.

LTC Comment:  Medicaid annuity promoters justify the product by saying it protects income of the well spouse in the community, but the spousal impoverishment protections in OBRA ’93 already did that.  Medicaid annuities protect both income and assets far exceeding the intent of Congress and the law. ***

*** NATIONAL LONG TERM CARE INSURANCE SALES SUMMIT PROGRAM ANNOUNCED:  Jesse Slome says this year’s one-day Summit is free.  Come in person or tune in online.  Either way, the cost is right:  free.  Check out the date, location, the topics and speakers here.  Congratulations to Jesse and AALTCI for another innovative idea to make LTCI work under difficult market conditions. ***

 

LTC BULLET:  LTC ANNUITIES TO GET OR AVOID MEDICAID

LTC Comment:  The LTC insurance world is abuzz with news on “hybrid” products that combine long-term care protection with life insurance or annuities.  Great, bring it on; that’s a fine way to employ equity-based insurance products.  The market can use all the ways it can find to attract consumers and provide coverage for the LTC risk.  Except one!

LTC Bullets readers are no strangers to that one kind of annuity for LTC that does more harm than good.  We’ve published about Medicaid-compliant or Medicaid-friendly annuities several times.  For example:  LTC Bullet:  Annuity Blues, 11/15/13 and LTC Bullet:  How to End Medicaid Annuity Abuse, 2/28/14.  Most recently we wrote about North Dakota’s ambitious, but unsuccessful fight to curb Medicaid-annuity abuse in court:  LTC Bullet:  Medicaid Annuity Abuse:  A Case Study, June 5, 2015.

Medicaid Annuities vs. Medically-Underwritten Annuities

In a nutshell, Medicaid annuities are single-premium immediate annuities (SPIAs) so designed as to comply with federal and state rules.  They can easily be configured to protect hundreds of thousands, even a million, dollars or more from the welfare program’s “spend down” rules.  We’ve explained in the Bullets listed above how that’s done.  Today, our objective is to compare and contrast Medicaid-compliant annuities (MCAs) with medically underwritten annuities (MUAs) for long term care expenses

MUAs enable people with assets, shortened lifespans and a need to pay for long-term care to purchase annuities with higher payouts than regular annuities because of the annuitant’s reduced life expectancy.  OneAmerica’s* “ImmediateCare” product is an example the company describes thus:

ImmediateCare is a medically underwritten single premium immediate annuity designed to help fund the cost of an existing long-term care need with monthly payments guaranteed for life. No matter how long care lasts, ImmediateCare can help maintain the level of quality care desired, while at the same time protecting assets from the costs associated with an extended care stay.

ImmediateCare’s issue ages are 75-99 and its primary market is for ages 80-95.  For more on MUAs, including how they’re used in the UK, see actuary Vince Bodnar’s guest column LTC Bullet:  Medically Underwritten Annuities for LTC, May 15, 2015

Comparing MCAs and MUAs

MCAs and MUAs have some similarities.  They both utilize SPIAs.  They are both usually employed after expensive long-term care becomes necessary.  They can both involve large sums of money.  But these superficial similarities mask the two products’ huge differences in purpose and outcome.

MCAs are often purchased for huge sums of money, $400,000 in the example we highlighted in LTC Bullet:  Medicaid Annuity Abuse:  A Case Study, June 5, 2015.  MUAs usually involve smaller amounts, $100,000 or less.

MCAs are bought to protect assets from Medicaid spend down.  MUAs are purchased to empower families to pay privately for long-term care.

MCAs result in affluent individuals becoming dependent on Medicaid, a means-tested public assistance program, i.e. welfare.  MUAs enable annuitants to purchase red-carpet access to top-quality long-term care across the spectrum of care venues.

MCAs are a path to Medicaid-financed nursing homes.  MUAs help to pay for the most appropriate level of care in the home, assisted living, or a nursing home when necessary.

MCAs shift Medicaid expenditures from the genuinely needy to the legally savvy affluent.  MUAs benefit the poor and taxpayers by helping people with assets to avoid Medicaid dependency.

MCAs are often hawked by lawyers and insurance representatives who likely know better solutions exist, but instead select these dubious manipulations of the Medicaid system.  MUAs are quality products offered by honorable carriers and producers.

So there you have it.  Is the best use of LTC annuities to get or avoid Medicaid?  You be the judge.

*Full disclosure:  OneAmerica is a long-time corporate supporter of the Center for Long-Term Care Reform.

#############################

 

Updated, Monday, June 15, 2015, 10:46 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-024:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

  • To Increase Value in Medicare, Expand Coverage To Long-Term Care

  • LTCi Carriers Face Tough Crowd

  • Do you think you're in the will? Well, guess again

  • Experts say reform needed to alleviate LTC strain on Medicaid

  • Genworth Still An LTC Player Despite Sale Talk

  • Big Strides in Cancer Treatment Will Increase Long-Term Care Needs

  • Nation's sickest seniors reshape health care: 10,000 seniors cost Medicare $1 billion; containing costs a challenge as nation ages

  • 2.5 million more LTC workers needed by 2030, researchers warn

  • More Bad News For ObamaCare: Enrollees See Little Benefit From Medicaid Expansion

  • LIMRA: Sales Of Individual Life Combo Products Sold Increased In 2014

  • Family business marks 40 years in long-term care planning

  • New labor data predicts booming growth in continuing care

  • What a Life Estate Is And How It Could Save Your Home

  • Justice Department Takes Down Barriers in Retirement Homes

  • State, counties grapple with long-term care as state ages

·       #############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

 

Updated, Friday, June 12, 2015, 10:22 AM (Pacific)
 
Seattle—


#############################

LTC Bullet:  CLTCR News:  Thousand Bullets Retrospective

Friday, June 12, 2015

Seattle—

LTC Comment:  Your Center for Long-Term Care Reform continues to celebrate its publication of over 1,000 LTC Bullets with this overview of 18 years of “CLTCR News” Bullets.  Please enjoy this retrospective after the ***news.***

*** BY POPULAR DEMAND: Phyllis Shelton brings her sales training back to the LTCi industry with her Summer Webinar Series. She says: “Due to the great response to my April 30th email to see if there would be interest in a webinar series on all the different ways to sell long-term care insurance plus some new ideas, IT'S HAPPENING!” Click here to learn more about this exciting sales training opportunity. ***

*** CLTCR Premium Membership  --  Center for Long-Term Care Reform premium members receive our full suite of individual membership benefits including:  our LTC Bullets and E-Alerts; access to our Members-Only Zone website and Almanac of Long-Term Care; subscription to our Clipping Service; and email/phone access to Steve Moses for 24-hour turnaround queries.  Our Premium Membership is designed to give you a competitive advantage in your long-term care profession. Your increased knowledge of the critical issues and challenges we face in the field of long-term care service delivery and financing equals improved professional success for you and better LTC services for your clients and for those who have no choice but to rely on scarce public resources.  Premium Membership is $250 per year, paid up front or monthly by automatically recurring credit card payments.  Contact Damon at 206-283-7036 / damon@centerltc.com to start your Premium Membership immediately or go directly to our secure online subscription page and sign up for as little as $21 per month. ***

LTC Bullet:  CLTCR News:  Thousand Bullets Retrospective

LTC Comment:  Once a week, usually on Fridays, we publish our latest LTC Bullet.  The Bullets are often policy pieces, sort of like op-eds.  You can always find the latest Bullets here and archives of the rest of the 1,000+ Bullets (so far), by date here and by topic here.  These 1,000+ articles are a valuable historical resource.  Please make use of them.  Search for key terms using Control-F on your keyboard.

This series is a retrospective of the most interesting and dramatic LTC Bullets that we’ve published since the Center’s founding in 1998.  We’ll highlight one Bullet per year in each of seven major topics:  “The LTC Problem and Solutions”; “Reality Check:  The Facts on LTCI”; “Medicaid Planning”; “LTC Services”; “Politics and Legislation”; “Demographics and Other Data”; and “CLTCR News.” 

Today’s Bullet is our “Thousand Bullets Retrospective” Number 7 covering “CLTCR News.”  These “CLTCR News” Bullets cover what’s happened at the Center since 1998, including press coverage and releases.  Read our summary and check out the original at the link provided.  Enjoy this walk down memory lane.

------------------

May 15, 1998:  Center for Long-Term Care Financing Established.  “Stephen Moses and David Rosenfeld have established the Center for Long-Term Care Financing. The Center's mission is to promote universal access to top-quality long-term care by encouraging private financing and discouraging welfare financing of long-term care for most Americans.”

------------------

November 24, 1999:  You are the Wind in our Sails.  “Last September 17, we published an LTC Bullet entitled "How Are We Doing?" We asked you to comment on the Center for Long-Term Care Financing's publications, web page, and public policy initiatives. We needed your endorsements to prove to current and potential financial supporters that you--the front line troops in the battle to save long-term care--find value in our work products.

“Here's a taste of the feedback we received from reporters, publishers, advocates, agents, brokers, LTC providers, public officials and others:”

------------------

October 13, 2000:  The LTC Triathlon.  “Once a year, The Center for Long-Term Care Financing conducts a major research project. We call this year's project ‘The LTC Triathlon.’ That metaphor refers to the fact that America is in a race for survival to develop a long-term care service delivery and financing system that actually works before the baby boomer generation needs one. Center staff interviewed 119 of the leading financiers (lenders and investors), providers (home care, assisted living, and nursing homes) and insurers (agents, brokers and carriers) of long-term care in the United States. Our objective was to learn (1) what these key players know about each other's businesses, (2) how they account for the current malaise in long-term care service delivery and financing, and (3) what they think ought to be done to improve the situation. We have collected some dynamite material including many ‘colorful’ quotes. The report is circulating in draft for review by the study's respondents. We plan to publish it in final early in December, at which time copies will be available for purchase. In the meantime, here's an article by Center President Stephen Moses published in the September 2000 issue of Contemporary Long-Term Care magazine, a leading provider trade journal. The article will give you a good idea of where the Center for Long-Term Care Financing is going with our LTC Triathlon project.”

------------------

March 12, 2001:  Center President Tackles New Constellation of LTC Issues.  “Center for LTC Financing President Stephen Moses addressed the ticklish subject of ‘Long-Term Care Due Diligence for Professional Financial Advisers’ on national conference calls February 14 and February 28, 2001.  The audience was primarily attorneys, accountants and financial planners for high net-worth individuals. Steve's advice in a nutshell: you have a fiduciary responsibility to your clients (1) to apprise them of the long-term care risk, (2) to propose responsible financial planning solutions, and (3) to warn them about the dubious practice of ‘Medicaid estate planning.’”

October 12, 2001:  Tribute to George Sherman.  “On September 28, we sadly announced the passing of a good friend and colleague, George Sherman.  In the meantime, dozens of you responded to our invitation to share your thoughts and anecdotes about George.  We have compiled your stories and added some information about Sherm's life and the circumstances of his death.  You will find this information at http://www.centerltc.com/GeorgeSherman.htm.  Thank you for a wonderful outpouring of affection, admiration, appreciation and respect for this unique man who touched so many of our lives.”

------------------

August 1, 2002:  What Have You Done for Me Lately?.  “Around this time every year, we give LTC Bullets readers a report on what the Center for Long-Term Care Financing has done for you during the past year. We solicit your comments, criticism and questions. We also invite your endorsements and testimonials if you think we've earned them. We do this is preparation for the Center's 2002-2003 fundraising campaign that begins this month.”

------------------

May 15, 2003:  Open Letter to Governors on Medicaid and LTC.  “State budgets are hurting. Medicaid, America's LTC safety net, is suffering. Huge cuts in eligibility and services already underway or under consideration will hurt the poor first and most, but formerly prosperous recipients who qualified through Medicaid planning will feel the pain too. We think there is a better way. Instead of taking a meat-axe to their home and community based waivers and other Medicaid LTC services, states can target Medicaid more effectively to the genuinely needy, encourage reliance on private financing sources such as home equity conversion, and use part of the savings to encourage the purchase of private LTC insurance with state tax credits and deductions. We estimate states can save at least five percent of their Medicaid nursing home budgets in the short run and twenty percent or more over time by implementing thoughtful reforms. The Center for Long-Term Care Financing recently sent the following letter to all State Governors (and Lt. Governors, Medicaid directors, and AHCA, AAHSA, and ALFA State affiliates) offering to help assess the problem and propose solutions. LTC Bullets readers who would like to see our LTC Choice http://www.centerltc.com/pubs/CLTCFReport.pdf or Magic Bullet http://www.centerltc.com/pubs/MAGIC_Bullet.pdf recommendations implemented are encouraged to forward this issue of LTC Bullets to your Governors, state legislators, Medicaid administrators, and local media. Invite them to check out the Center for Long-Term Care Financing at http://www.centerltc.org/ and to contact” us at 206-283-7036 or info@centerltc.com.

------------------

March 17, 2004:  Center Announces Special LTC Project.  “The Council for Affordable Health Insurance (CAHI), a highly respected think tank and public policy organization in Washington, DC, solicited and accepted the following project proposal from the Center for Long-Term Care Financing. The Center will rank and critique states on their LTCi market penetration, their ability to control Medicaid LTC eligibility, and their success in Medicaid estate recovery, as well as other related issues. The timing and potential for this project are great because of the Medicaid-LTC driven fiscal crisis in the states. We hope to awaken legislators and policy-makers to the enormous potential of controlling Medicaid expenditures and preserving Medicaid for the needy by diverting more people to LTCi and home equity conversion. CAHI and the American Legislative Exchange Council (ALEC) will produce our report, distribute it to key state legislators and the media, and promote the findings.”  Editor’s note:  Access the finished product here:  The Realist's Guide to Medicaid and Long-Term Care.

------------------

May 3, 2005:  The Center is Dead . . . Long Live the Center.  “Yesterday, we made the following announcement to Center donors: ‘The Center for Long-Term Care Financing ceased to exist on Friday, April 30.’ We hastened to add, however, that the work and the mission of the Center will continue. Here's what's happening:”

------------------

May 25, 2006:  Center and Friends in the Press.  “So far this year, I've done twelve media interviews and the Center for Long-Term Care Reform has been quoted and cited in ten articles that we know about.  Publications that have covered our message include the Wall Street Journal, the Washington Post, the New York Daily News, the Dallas Morning News, Kiplinger's Personal Finance Magazine, McKnight's Long-Term Care News, Assisted Living Executive, and several others.  When you have a small budget but a big message, nothing helps more than a national media megaphone.  Today, we highlight three recent articles that cite the Center for Long-Term Care Reform and help convey our message.  Citations and excerpts follow.” 

------------------

January 18, 2007:  The Almanac of Long-Term Care.  “After being barraged for decades with urgent questions like these from friends, colleagues, readers, Center members, public officials, legislators, reporters and so on and on and on, I decided to prepare an ‘Almanac of Long-Term Care.’  Our new Almanac is a reference source that makes finding the LTC information you want quick and easy.  I needed it for myself and I'll use it as much as anyone will.  

“If you're a member of the Center for Long-Term Care Reform, you can access our new Almanac of Long-Term Care today at http://www.centerltc.com/members/LTC_ALMANAC/Main.htm.  You'll need your user name and password.  If you don't have them handy, contact Damon at 206-283-7036 or damon@centerltc.com.” 

------------------

December 17, 2008:  What Have You Done for Me Lately?.  “Thanks to the support of our individual and corporate members, and LTC Tour Regional Representatives, 2008 has been a very productive and successful year for your Center for Long-Term Care Reform. Today's LTC Bullet will list some of the year's accomplishments.”

------------------

January 6, 2009:  An LTC Tour Retrospective.  “I can't move on to bring you our huge new plans for 2009 without pausing just once more this week to look back on our LTC Tour of 2008.  Today, I invite you down memory lane with ‘An LTC Tour Retrospective.’ On Thursday, we'll give everyone a summary, and Center members a TRANSCRIPT, of the LTC Tour's educational centerpiece: our two-hour mini-version of the Center's full-day ‘Long-Term Care Graduate Seminar.’”  See also this article that appeared in Broker World.

------------------

February 2, 2010: Columbo Interviews Don Quixote of LTC.  “I [Stephen Moses] give a lot of media interviews every year, but this was the most fun.”

------------------

December 9, 2011: LTC at Sundance.  “The 13th annual Health Sector Assembly brought together 70 thought leaders to discuss LTC services and financing.  Our message was heard loud and clear.

“Following is a transcript of my remarks to the Health Sector Assembly.  At the end of those comments, I mentioned that I had prepared six ‘Briefing Papers’ which ask and answer key questions about long-term care ‘from a perspective clearly at odds with conventional long-term care analysis.’  Staff of the event distributed a summary sheet with links to all six essays to all of the attendees.  In the coming weeks and months, we will share the same material with you in forthcoming LTC Bullets.”

------------------

January 20, 2012:  New LTC Clipping Service.  “Subscribe to our new ‘LTC Clipping Service’ and Steve Moses will send you an average of 1 to 3 critical LTC articles per day so you can do business instead of searching the web.  Cost?  Discounted thanks to a grant:  Only $100 per year for Center members; $120 per year for non-members; and free to Regional Representatives of the Center.  Contact Damon at 206-283-7036 or damon@centerltc.com to subscribe.  Details follow”

------------------

December 20, 2013:  What Have You Done for Me Lately?.  “Our annual report on the Center for Long-Term Care Reform’s year follows [in this LTC Bullet].”

------------------

July 16, 2014:  Free the LTCI 5000.  “LTCI specialists should break their chains and soar.  We can help [in this LTC Bullet].”

------------------

March 27, 2015:  The 15th Annual ILTCI Conference:  A Virtual Visit.  “The annual Inter-Company Long-Term Care Insurance Conferences are always something special.  But this year’s meeting exceeded all that came before.”  Find out why in this LTC Bullet and don’t miss the next one!  

-----------------

#############################

Updated, Monday, June 8, 2015, 11:32 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-023:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact 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:

  • What Young Americans Should Look For In a Heath Care Plan

  • 7 Ways To Save On Long Term Care Insurance

  • Will the Gifts I Give My Parents Count as Income When They Apply for Medicaid?

  • Analyzing the LTCi Sale

  • In-plan annuity options grow as MetLife introduces longevity product

  • Medicare Patients, Beware This Costly Surprise

  • Medicare’s Income-Related Premiums Will Rise for Some Higher-Income Beneficiaries Beginning in 2018

  • LTC Global Announces New Agency, Contracts with Genworth General Agents

  • Lifestyle and the aging brain

  • Most Households Approaching Retirement Have Low Savings

  • Work in Retirement? Don’t Be So Sure

  • House Bill Would Make Income from Community Spouse's Annuity Available to Medicaid Applicant

  • More older Americans are being buried by housing debt

  • Seven Retirement Gaps And What To Do About Them

  • Medicaid Consuming Federal Assistance to States

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

 

Updated, Friday, June 5, 2015, 11:45 AM (Pacific)
 
Seattle—


#############################

LTC Bullet:  Medicaid Annuity Abuse:  A Case Study

LTC Comment:  Some abuses of Medicaid LTC benefits beggar the imagination.  Here’s one, after the ***news.***

*** CLTCR Premium Membership:  Center for Long-Term Care Reform premium members receive our full suite of individual membership benefits including:  our LTC Bullets and E-Alerts; access to our Members-Only Zone website and Almanac of Long-Term Care; subscription to our Clipping Service; and email/phone access to Steve Moses for 24-hour turnaround queries.  Our Premium Membership is designed to give you a competitive advantage in your long-term care profession. Your increased knowledge of the critical issues and challenges we face in the field of long-term care service delivery and financing equals improved professional success for you and better LTC services for your clients and for those who have no choice but to rely on scarce public resources.  Premium Membership is $250 per year, paid up front or monthly by automatically recurring credit card payments.  Contact Damon at 206-283-7036 / damon@centerltc.com to start your Premium Membership immediately or go directly to our secure online subscription page and sign up for as little as $21 per month. ***

 

LTC BULLET:  MEDICAID ANNUITY ABUSE:  A CASE STUDY

LTC Comment:  I’m in Bismarck, North Dakota to take a closer look at an egregious, though legal, abuse of the Medicaid long-term care safety net. 

First though, special thanks to Gene and Pamela Schmidt of thriving, tech-savvy SIA Marketing of Bismarck for hosting me.  Their exceptional LTCI brokerage works with agents throughout the USA but also maintains an excellent relationship with the local and state community, officials and regulators.  They hosted a meeting for me with Maggie Anderson, Executive Director of North Dakota’s Department of Human Services and several of her staff including the Department’s Medicaid LTC eligibility policy expert, the attorney who handles Medicaid estate recovery, the Home and Community-Based (HCBS) waiver specialist, and one of the lawyers who worked on North Dakota’s Medicaid-compliant annuity appeal, the topic of today’s LTC Bullet.

Just a quick re-cap as we’ve covered the so-called Medicaid-compliant or Medicaid-friendly annuity problem several times before:  LTC Bullet:  Annuity Blues, 11/15/13 and LTC Bullet:  How to End Medicaid Annuity Abuse, 2/28/14, for example.  In their most common usage, these are plain vanilla single-premium immediate annuities (SPIAs) crafted to meet all the requirements for qualified annuities in the Deficit Reduction Act of 2005 (DRA ’05).  They must be immediate, irrevocable, nonassignable, nontransferable, pay out in roughly equal monthly payments over a period less than the life expectancy of the annuitant, be issued by a commercial insurance company, and designate the Medicaid agency as the primary beneficiary.  (See “Using Annuities in Medicaid Long-Term Care Planning” for more.)  SPIAs designed in that way can make people with a lot of money eligible for Medicaid LTC benefits immediately without any spend down.

Here’s the example that caught our attention in North Dakota.  DHS Director Anderson (interim at the time) wrote the following in reply to a Congressional inquiry that asked “Do you consider Medicaid estate planning to be a significant problem that takes resources from the truly needy in your state?  Please explain and provide examples.”  (We highlighted this letter of inquiry from Congressman Charles W. Boustany, Jr., MD (R, LA) and others and gave examples of various states’ replies to its questions in LTC Bullet:  States Decry Medicaid LTC Loopholes, 1/11/13.)

A striking example of aggressive asset sheltering strategies is seen in Geston v. Olson No. 1:11-cv-044, 2012 WL 1409344 (D.N.D. 2012) where one spouse had dementia and, it was apparent, would eventually need nursing home care.  Shortly before going into the nursing home, the couple had liquid assets worth about $700,000, not including the home or car.  They were over the Medicaid limit by more than half a million dollars.  The community spouse, on advice of an attorney, sold the home the couple had lived in for years and bought one worth twice as much and sold the car they had and bought a brand new one worth three times as much.  The car is completely exempt under Medicaid rules.  The house also is completely exempt under Medicaid rules, as long as the community spouse lives in the house.

 

After successfully sheltering those assets, the community spouse took $400,000 cash, money that was available to be spent on the institutionalized spouse's care and instead, bought an annuity from their attorney, (an "investment" which essentially returns the premium with a very small return) in an effort to tie up the money to make the couple appear to have fewer resources.  The annuity is irrevocable, non-assignable, and non-transferable.

 

Under a very well-crafted state statute that places limits on the amounts that can be put into these types of annuities, and a long line of state case decisions that allows the Department to count the annuity as an asset, eligibility was denied.  The North Dakota Department of Human Services was sued in federal court under a civil rights action for denying Medicaid to this wealthy institutionalized spouse. Based on its interpretation of federal law and following existing federal case law, the Court ruled the annuity could not be counted as an asset.  Thus, none of the actions could be considered a disqualifying transfer, none of the 'new' resources could be considered available, and none of the annuity income could be considered available to meet the long-term care needs.

 

The community spouse has successfully retained nearly all of the wealth the couple had before the institutionalized spouse went into the nursing home and the nursing home has not received one penny.  The bill is nearly $100,000 and the couple wants Medicaid to cover it.  The couple receives nearly $8,000 a month from pensions, social security, the annuity payments, and oil lease money.  This couple is not needy and they are simply not who the Medicaid program was or is intended to cover.  While North Dakota believes that reading the statutes as a whole and applying generally accepted rules of statutory construction would not allow these provisions to be used to shelter assets, courts are consistently reading certain sections of the Act to the exclusion of relevant others to allow applicants with extensive assets to become eligible for Medicaid by transferring assets from the institutionalized spouse to the community spouse.

Outrageous, right?  This couldn’t possibly withstand thoughtful consideration, much less judicial review, certainly.  Wrong!  Here’s how it played out in court.

The Gestons and their Medicaid planning attorney challenged North Dakota Medicaid’s denial of Mr. Geston’s eligibility for nursing home benefits in District Court.  The District Court ruled that North Dakota’s governing statute “was more restrictive than, and preempted by, federal law and granted the Plaintiffs the relief they requested.”  So John Geston became eligible for Medicaid LTC benefits despite the facts described above.

Undaunted, North Dakota’s Department of Human Services appealed the case in the United States Court of Appeals for the Eighth Circuit.  Its brief, prepared by elder law attorney Stephen A. Feldman and other attorneys representing the Department, was brilliant.  We’ve posted it here so you can see.  It demolishes the plaintiffs-appellees’ case point by point showing the District Court erred (1) “by misconstruing applicable federal Medicaid law when it invalidated a North Dakota statute concluding the balance payable under a single premium immediate annuity was not a resource,” (2) “when it used Medicaid act provisions penalizing some annuity purchases by an institutionalized spouse as improper asset transfers to determine that a community spouse’s annuity was not a resource,” (3) “when it held N.D.C.C. §50-24.1-02.8(7)(b), which is consistent with the intent of congress, was more restrictive than and preempted by the federal law,” (4) “by failing to recognize that an annuity is a trustlike device and as such is a countable resource under Medicaid law,” (5) “by failing to recognize a non-qualified annuity is a resource and that the payments are comprised almost entirely of the return of the original premium comprised of countable resources,” and (6) “by failing to recognize that the anti-assignment provisions in the annuity are unenforceable as contrary to public policy under North Dakota law.”

How did the appeals court rule?  “The judgment of the district court is affirmed.”  Bottom line, the district and appellate courts in North Dakota, followed courts in other states, including Ohio and Connecticut, where Medicaid programs challenged and appealed the use of Medicaid-compliant annuities unsuccessfully.  Clearly, the problem of Medicaid-compliant annuity abuse is not going to be resolved in court.

So, surely the Centers for Medicare and Medicaid Services (CMS) is fighting the good fight to plug this leaky fiscal bucket.  After all, the federal government pays half the cost of Medicaid in North Dakota and much more in some states.  When asked for its help, however, CMS officials commiserated with the state, but explained that Medicaid annuity abuse was not high on its priority list.  It seems implementation of the Affordable Care Act (ACA, AKA “ObamaCare”) has consumed and continues to consume all of CMS’s resources.)

So, where does the situation stand?  Nothing will happen unless Congress takes action.  And on that front we do have some news that we reported to our “LTC Clippings” subscribers recently:

6/1/2015, “House Bill Would Make Income from Community Spouse's Annuity Available to Medicaid Applicant,” ElderLawAnswers

 

Quote:  “New legislation in the U.S. Congress would change the way income from a community spouse's annuity is counted for the purposes of Medicaid eligibility. The bill would make a portion of the income available to the institutionalized spouse.

 

LTC Comment:  Medicaid-compliant annuities allow affluent individuals to qualify immediately for LTC benefits without spending down their wealth.  They’re one of the biggest remaining Medicaid eligibility loopholes.  State Medicaid programs have fought them in court three times and lost.  I’m in North Dakota to study one such state’s strategy and to see what we can learn that might help to control this large financial leak from the welfare program.  The new proposed legislation described in this article is a positive development as Congress has hitherto taken little notice of the problem.

This bill if passed would make half the income from a Medicaid annuity available to offset the institutionalized spouse’s cost of care.  As North Dakota officials opined, it’s only half a loaf, but half a loaf is better than none.

We’ll leave this subject at that for now, but we will revisit it.  We’ll take a future look at a kind of annuity product that could help people in need of long-term care AND benefit Medicaid instead of crippling the safety net program.  Like Medicaid-compliant SPIAs, medically underwritten immediate annuities (MUIAs) help people with resources pay for LTC after an insurable event has occurred.  The difference is that MUIAs keep people off Medicaid and enable the welfare program to focus on its proper clientele:  the needy.  So, stay tuned.

#############################

Updated, Monday, June 1, 2015, 11:14 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-022:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  For our special introductory offer, 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:

  • How to Make the Most of Longer Lives

  • Financial Stress: Strategies for the Sandwich Generation

  • Majority of Long Term Care Insurance Buyers Select Long Deductible Cites AALTCI Study

  • Case study: How to get millennials talking about long-term care

  • A Charge To Presidential Hopefuls: A Plan For Alzheimer's

  • Thrivent doubles down on long-term care insurance at turbulent time for industry

  • ObamaCareWatch.org

  • More people with Alzheimer’s are becoming activists — which brings its own challenges

  • New online service offers ‘Yelp for insurance agents’

  • Lincoln Financial Group Releases Special Report: M.O.O.D. of America on Employee Benefits

  • Feds unveil long-awaited overhaul of Medicaid managed care

  • At Day Center for the Elderly, 'They Have Everything'

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

 

Updated, Friday, May 29, 2015, 10:10 AM (Pacific)
 
Seattle—

#############################

LTC BULLET:  SHOULD PRESIDENTIAL HOPEFULS ADDRESS LONG-TERM CARE?

LTC Comment:  Is LTC the “third rail of politics” as much as Social Security or Medicare?  Asked and answered after the ***news.***

*** TODAY'S LTC BULLET is sponsored by Claude Thau, a GA whose proprietary tools help advisors find clients and reduce the “Ping-Pong” in the LTCi sales process. Help clients make informed final decisions about buying LTCi in 15-20 minutes!  Gauge a client's true interest in a combo product immediately!  Change work-site LTCi sales from a series of proposal deliveries to a single interactive consultation!  Claude is the lead author of the Milliman Broker World LTCi Survey, one of Senior Market Advisor's 10 "Power People" in LTCi in 2007, a past Chair of the Center for Long-Term Care Financing. Test Claude by calling 800-999-3026, x2241 or email him at claudet@targetins.com to ask questions or get references. ***

*** LTC CLIPPINGS.  A very special way to team up with the Center for LTC Reform is by becoming a Premium Member and receiving a subscription to our LTC Clippings service.  National LTCI and home equity conversion expert Barbara Franklin renewed her Premium membership recently saying “The clipping service definitely keeps us on the forefront of LTC knowledge.  We could not function without it.”  Find out why.  Contact Damon at 206-283-7036 or damon@centerltc.com, join the Center, and/or upgrade to a Premium membership with LTC Clippings.  Here’s a sample sent this morning: 

5/27/2015, “A Charge To Presidential Hopefuls: A Plan For Alzheimer's,” by Bill Frist, Forbes

Quote:  “One in five Americans are obese. One in four has a risk of dying from cancer in their lifetime. But one in three that live beyond 65 will die with Alzheimer’s or another type of dementia. All these ailments have significant health impacts. The difference? We have solutions to treat obesity and can cure some cancers. Alzheimer’s is the only disease among the top 10 causes of death in America that cannot be prevented, cured, or even slowed.”

LTC Comment:  Former Senate Majority Leader Bill Frist shares our eagerness to attract the presidential contenders’ attention to long-term care. ***
 

LTC BULLET:  SHOULD PRESIDENTIAL HOPEFULS ADDRESS LONG-TERM CARE?

LTC Comment:  There’s an obvious answer to the title question:  Of course presidential candidates should talk about long-term care services and financing.  How America can care for its frail and infirm elderly as the age wave washes over us is as important and daunting as any question facing the country.

So why don’t the candidates talk about long-term care and how to pay for it?  Simple.  There’s nothing to be gained for them by tackling the topic.  If they propose more public spending on LTC, the right will lambaste them for fiscal irresponsibility.  If they advocate constraints on public financing to encourage personal responsibility, the left will excoriate them for throwing Grandma under the bus.  Damned if they do and damned if they don’t.

But these facts don’t stop us from trying to get the uber-politicians’ attention, right?  The Center for Long-Term Care Reform launched a 2007 effort in Iowa and New Hampshire we called the LTC Gadfly project:  LTC Bullet:  LTC Gadflies, January 23, 2007 and LTC Bullet:  First LTC Gadfly Brigade Mobilizes, April 12, 2007.  Our goal was to pull together a cadre of like-minded citizens to pester the candidates with LTC questions until they answered.  We couldn’t get many people interested, much less the candidates.  Once burned, twice cautious?  Well, no.  Like Edison who didn’t fail repeatedly to invent the light bulb, but only found 10,000 ways it would not work first—we forge on with a new approach.

In LTC Bullet:  How Great is Medicaid’s Unfunded LTC Liability?, April 24, 2015, we announced the Center’s latest research project titled “Soften the Boom:  Preparing Medicaid for Aging Americans’ Long Term Care Needs.”  We told you all about this new study except the state in which it will be carried out.  We’re now ready to reveal that critical fact.  The state is New Hampshire, home of the first-in-the-nation presidential primary.

I’m on my way there in the Silver Bullet of Long-Term Care as I write this in North Platt, Nebraska.  Details on the itinerary are in LTC Bullet:  On the LTC Road Again, May 1, 2015.  I’m stopping off in Bismarck, North Dakota to research the large and growing problem of Medicaid-compliant annuities with the help of Center corporate member SIA Marketing (Gene and Pamela Schmidt).  But I’ll be on site in the state capital of Concord, New Hampshire from June 24 to July 15.

I’ve already begun to contact savvy local experts about the key issues and questions we’ll address during my site visit.  We’ll convene a meeting for LTC insurance and reverse mortgage producers to learn their views.  But most of our work will be studying the demographics of aging in New Hampshire and interviewing think tank researchers, Medicaid officials, politicians, long-term care providers and senior advocates.  In the course of our research, we’ll take every opportunity to reach out to visiting presidential candidates and their staffs.

After our report is published, probably in September, our partner in this project, the State Budget Solutions think tank will convene a conference, prepare op-eds for publication, and keep the heat on presidential contenders to address the challenge of long-term care.  Here’s an overview of our New Hampshire project:

Preparing for Aging Americans’ Long-Term Care Needs in New Hampshire:

A Study by the Center for Long-Term Care Reform and State Budget Solutions

The issue:  America faces a major challenge to sustain the retirement income and health security of its aging population.  No aspect of the problem is more serious than the delivery and financing of long-term care for frail or infirm elderly people.  In no place is that challenge more daunting than New Hampshire where the age wave and the birth dearth blend with unique severity to create economic and political danger.

The project:  State Budget Solutions (SBS) retained the Center for Long-Term Care Reform (CLTCR) to review the current status and likely future prospects for long-term care (LTC) service delivery and financing in the Granite State.  The Center has conducted many similar studies at the national and state level whose reports are available here:  http://www.centerltc.com/reports.htm.  We will assess the vulnerability of New Hampshire’s LTC system over the next thirty years, which period encompasses the worst of the coming demographic Age Wave.

Specifically we will (1) review state and federal laws and regulations bearing on long-term care, (2) seek interviews with key stakeholder groups including LTC providers and insurers, Medicaid and other public officials, senior advocates, elder lawyers, etc., and (3) refine and apply the Center’s “Index of Long-Term Care Vulnerability”[1] to assess the future social, economic, and political prospects for LTC services and financing in New Hampshire.  State Budget Solutions will publish our report, convene a conference to review and challenge its findings, prepare draft state and federal legislation, and publicize the issue and proposals through the media.

Time frame:

Center president Stephen Moses is currently doing the documentary research for this project and will visit New Hampshire from late June until mid-July of 2015 to conduct the onsite interviews and reviews.  His report will be published in September 2015.  We expect that SBS’s conference will occur in October or November 2015 and that draft legislation, media articles, and op-eds will be available thereafter.

Request:  State Budget Solutions and the Center for Long-Term Care Reform request your cooperation and assistance with this project.  Please make your staff and documentary resources available for consultation and review.  We will take everyone’s facts, analysis and opinions under objective consideration and do our level best to produce a fair assessment of the challenges and reasonable proposals for their resolution.

#############################


 

[1] For a preliminary application of CLTCR’s “Index of LTC Vulnerability” to New Hampshire, see “Apply the LTC Vulnerability Index to Your State:  The New Hampshire Example” (2014) here.

 

#############################

 

Updated, Tuesday, May 26, 2015, 10:41 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-021:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  For our special introductory offer, 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:

  • GEN X: The Generation of Contradictions: As the most Financially Vulnerable and Least Proactive, Americans 35-49 Can Re-chart Their Financial Path

  • Survey: Aging America comes with greater sense of duty by children

  • There's a new trend among America's elderly class, and it's depressing

  • A promising trend in taking Social Security benefits

  • Medicaid Managed Care Coming To You

  • How Medicare Advantage Investors Profited From Loose Government Lips

  • The 6 most innovative industry products of 2015

  • The 'elder orphans' of the Baby Boom generation

  • Unexpected surges in Medicaid begin to worry some states

  • Don’t Be Scared of Retirement: Many retirement fears are overblown or untrue

  • When diligent saving goes too far

  • Difficult conversations about long-term care

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

 

Updated, Friday, May 22, 2015, 11:26 AM (Pacific)
 
Seattle—

#############################

LTC BULLET:  LONG-TERM CARE INSURANCE:  PAST, PRESENT AND FUTURE

LTC Comment:  We tweak your interest to read Paul Forte’s tour de force on LTCI after the ***news.***

*** MEMORIAL DAY WEEKEND:  Enjoy it, we’ll be back on Tuesday with members’ LTC E-Alert.  If you don’t already receive that compendium of the previous week’s most important news, articles and reports, then join the Center.  Contact Damon at 206-283-7036 or damon@centerltc.com.  You’ll have password-protected access to our Members-Only website immediately; you’ll begin receiving our weekly LTC E-Alerts and LTC Bullets; and you’ll have phone and email access to Center president Steve Moses whenever you have questions or comments about public or private long-term care financing. ***

 

LTC BULLET:  LONG-TERM CARE INSURANCE:  PAST, PRESENT AND FUTURE

LTC Comment:  If you have any interest in long-term care financing, don’t miss Paul Forte’s cover article in the May/June issue of Contingencies titled “Long-Term Care Insurance:  Past, Present and Future.”  Find it here.  This is the best concise and fact-packed treatment of the subject I’ve seen.

Paul E. Forte is chief executive officer of Long Term Care Partners LLC, the company associated with John Hancock, that manages the Federal Long-Term Care Insurance Program.  He knows whereof he speaks having worked for decades in the private long-term care insurance industry.

“Long-Term Care Insurance:  Past, Present and Future” provides exactly what the title promises.  The article begins with a timeline placing the critical events of LTCI’s history in chronological order across the top of the page.  From CNA’s launch of the first nursing-home-only product in 1964 through the growth of hybrid products in 2012-14, each major development is explained in historical and substantive context.  This isn’t just dry history, however.  Forte spices the content by opining frequently and thoughtfully.

Such is the LTCI market today. Coverage is trending toward the more finite, and it is costlier. Actuaries are now more confident that pricing for their products is being corrected, and marketing executives are more circumspect, positioning LTCI not as a total financial solution, but as a limited tool, a valuable adjunct to other financial resources. Whether such a value proposition will prove satisfactory to consumers or render private LTCI untenable is anyone’s guess.  (p. 22)

Section II of the article addresses LTCI’s “Actuarial Challenges.”  Lapse rate expectations plummeted from 5%-8% all the way down to under 1%.  Then interest rates collapsed dangerously impairing LTCI pricing.  “Mortality has been an issue, with older persons living even longer on claim than expected. . . .  But the bigger concern is morbidity, comprising incidence, utilization, recovery, and continuance.” (p.23)  Exacerbating the actuarial challenges is the lack of reinsurance, which “is almost absent in LTCI.” (p. 23)

As if the daunting challenges of making accurate actuarial projections were not enough, Section III of the article tackles the “Operational Challenges” facing LTCI.  These include inflation adjustment, determining benefit eligibility, avoiding fraud in informal benefits covering nonprofessionals, state Medicaid LTC partnership programs, rate increases, and managing closed blocks.

My interest perked up in Section IV covering “Social Insurance.”

Failure of the private LTCI market to grow has not been lost on social insurance advocates. Some have described it as “imploding,” an inaccurate appraisal. In truth, the private LTCI market has not collapsed, but private market troubles have created an opening for social insurance, which is a regular feature of the social security systems of Austria, Belgium, Germany, Israel, Japan, the Netherlands, and other countries.  (p. 25)

Forte does not draw out the irony and hypocrisy of social insurance advocates criticizing private LTCI for failures caused by government monetary and fiscal policies that artificially reduced interest rates to near zero and crowded out LTCI demand by making Medicaid LTC benefits easily accessible after the insurable event occurs.  But those points won’t be missed by regular readers of LTC Bullets.

The article offers a short history of government’s role in financing long-term care, mentioning the 1990 Pepper Commission proposals, the CLASS Act misadventure and concluding that “A more realistic design might be a co-insurance approach, with each dollar of claims divided between public- and private-sector financing.” (p. 25)

In his closing “Section V:  Future Private Market Directions,” the author describes and opines about the future prospects for stand-alone policies, hybrid options, and his own creative proposal described in his earlier Contingencies article “Fresh Thinking on Long-Term Care,” in the January/February 2014 issue. 

I found his observation about state Medicaid programs’ willingness to “sell the liability of current Medicaid beneficiaries to private-equity firms that cap the risk via managed care” (p. 26) especially interesting.  This major development in Medicaid funding of long-term care, private LTCI’s biggest competitor, is ominous for the access and quality of care available to Medicaid recipients, which is already highly questionable.

The article concludes:

Private LTCI can play a major role in financing the nation’s growing LTC needs, or it can play handmaiden to a social insurance scheme that may come to pass in the next decade. Which of these roles it assumes will hinge, I submit, on whether the private sector has the resolve to push past the short-term orientation with which it has been preoccupied, to embrace a market future that is only now starting to arrive—or whether it will decide, in the final analysis, that such a future is not worth the risk.  (p. 27)

LTC Comment:  The hour or so you spend reading this article, or the two or three you invest in studying it, will be well rewarded.  Congratulations to Paul Forte for re-telling a story many of us lived through, for embellishing it with thoughtful analysis, and for giving us his thoughts on what may be unfold next.

#############################

 

Updated, Monday, May 18, 2015, 11:26 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-020:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  For our special introductory offer, 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:

  • Is the Long-Term Care Insurance Industry in TRIAGE

  • Insurance World Draws Even More Private-Equity Cash

  • An Interview with Dr. Bill Thomas

  • More Than 1 in 3 Nursing Homes Received Relatively Low Overall Ratings on Nursing Home Compare

  • More Than Half of ER Visits May Be Needless, Study Suggests

  • Social Security forecasts ‘systemically biased’ to upside: study

  • Medicaid and Long-Term Services and Supports: A Primer

  • Selling long-term care

  • Profile of older Americans shows some states aging faster than others

  • Life insurance and the funeral trust

  • States move to protect long-term insurance buyers

  • CMS plan would completely overhaul Medicaid managed care

  • Social Security Disability Insurance Insolvency: Potential Threat or Opportunity for Insurers?

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

 

Updated, Friday, May 15, 2015, 9:00 AM (Pacific)
 
Seattle—

#############################

LTC BULLET:  MEDICALLY UNDERWRITTEN ANNUITIES FOR LTC

LTC Comment:  The Brits are selling them.  Should we?  After the ***news.***

*** EMAIL PROBLEM:  The Center is experiencing problems with our mass-emailing system.  That’s why today’s LTC Bullet wasn’t published last week.  Damon sent last week’s and this week’s LTC E-Alerts using Outlook in batches of 40, a frustrating and time-consuming process.  We’re hoping to be back up and running at full capacity soon. ***

***  MMMNA UPDATED to $1,991.25 from $1966.25:   Every year on July 1, the Centers for Medicare and Medicaid Services (CMS) updates Medicaid’s spousal impoverishment protection component called the Minimum Monthly Maintenance Needs Allowance.  That’s the amount of income up to which a community spouse can receive income transferred from an institutionalized Medicaid spouse.  It’s based on 150% of the official federal poverty rate, which is re-set every July 1.  The MMMNA can be supplemented up to a Maximum Maintenance Needs Allowance of $2980.50 if the community spouse has housing and/or other allowable additional expenses.  All the other spousal impoverishment numbers are updated at the first of the year.  We report and archive each of these numbers as soon as they’re released.  Center members can find all the key Medicaid and Medicare numbers going back to 1991 and 1993 respectively in The Zone here.  You’ll need your user name and password to access The Zone.  If you need a reminder or want to join the Center and get access to this rich source of archival information, contact Damon at 206-283-7036 or damon@centerltc.com. ***

 

LTC BULLET:  MEDICALLY UNDERWRITTEN ANNUITIES FOR LTC

LTC Comment:  Vincent L. Bodnar, ASA, MAAA, is Chief Actuary at LTCG.  In his former position as director of Towers Watson’s strategic long term care efforts and initiatives, he worked closely with insurance executives in the United Kingdom.  One of his objectives was to learn whether US LTC insurance products might transplant well into the UK market and vice versa.  We reported on one aspect of Mr. Bodnar’s research last fall in “LTC Bullet:  Out of the LTC Frying Pan into the Fire.”  Today we’ll look at a particularly interesting British LTC financing product that he thinks might fit well into the US market. 

In a presentation to the “Long Term Care Discussion Group” on May 5, 2015, Vince spoke about the British “care annuity” product.  What follows is our interpretation of what he said.  It does not necessarily reflect his or his company’s views.

Care Annuity Product

The care annuity is a medically underwritten single-premium annuity.  Unlike most LTC insurance products, this one is usually purchased by people as they begin a care episode.  Like any annuity, it converts a lump sum of money into a lifetime income stream. 

Vince explained that here in the US, we usually don’t underwrite annuities.  Insurance carriers figure that if someone is willing to swap a bundle of money for an actuarially determined lifelong income stream, then he or she must be, or they think they are, in very good physical condition.  In other words, the insured basically self-underwrites.  The carriers “figure if you asked for it, you must be healthy.”

So, why underwrite an annuity?  Someone entering long-term care can be expected to have a shorter life expectancy than the actuarial tables predict for healthy people.  The average long-term nursing home stay is roughly two years and the average assisted living stay is four years.  Underwriting for a new LTC patient means the annuity writer can give a higher payout than otherwise.  In fact, “the more conditions you have, the shorter your life span and the more you’re going to get from your income stream.”  Poor health becomes an advantage instead of a disadvantage as in traditional LTCI.

Who Benefits?

From the underwriter’s point of view, assuming the underwriting is accurate, a portion of the insureds will die before and another portion will die after the break-even point, taking into account administrative expenses and profits for the carrier.  For the insureds, this has the effect of taking the longevity risk out of the LTC financing equation.  A portion of them may die before and the other portion after they break even, but none are going to run out of money.

The British public financing system for long-term care is similar to ours in the respect that people are expected to spend their own money, up to a certain limit, before the government will contribute.  One key difference, however, is that there is no home equity exemption in the UK.  That means British home owners have a potentially substantial asset base that is vulnerable to LTC expenses and available to fund one of these care annuities.

Care Homes

“Care homes” in the UK do a routine health assessment at admission of each new resident.  The care annuity writers use this assessment as the basis for underwriting the care annuity.  which is usually purchased at this point of admission.  They usually pay directly to the care provider. 

Care homes are not as finely distinguished between nursing homes, assisted living, residential care, etc. in the UK as here.  Nor is home care as prevalent in the UK as in the US, but this kind of annuity might work as well here as there. 

Nursing homes are more expensive than assisted living facilities which are more expensive than home care, but the “money metric works out the same because of the longer life span at lower levels of care equates to a lower monthly payout for longer.”  Besides, it would be possible to re-underwrite at each stage of an insured’s decline as higher levels of care become necessary, if the care recipient wants to “buy up” the income stream amount as their care costs increase.

Limited Market

As in the USA, British people don’t understand who pays for LTC or how.  They are surprised when they learn they have to use their own assets first.  Insurers need to catch them at that point of realization and show them how to ensure their ability to meet their LTC payments throughout their lifespans while retaining any balance for survivors and heirs.  This product in the UK tends to be bought by the surviving spouse.  The typical insured is 85 years of age and widowed.

In the UK, this is a difficult market to penetrate because of awareness issues.  It is also critical to get the mortality risk right.  To some, it feels like “selling home owners insurance when the house is on fire.”  So insurance companies are reluctant to participate.  According to a British participant in the Discussion Group, there are only three companies in the UK care annuity market now, compared to seven or eight at one time.  

In the UK, there is almost always a home sale involved in funding the care annuities.  But in the US, there is a “nice swath of middle class people who could finance such a product.”  People here 80 years of age or older have an average net worth of $275,000 of which roughly half, $135,000 is home equity.  The average nursing home costs $81,000 per year.  The average elder could fund nearly four years in a nursing home with a care annuity, but the average nursing home stay is only two years.

Medicaid

This, however, is not what people in the US do.  Instead, they go on Medicaid.  And if they have too much money, they may engage in Medicaid planning.  They move assets off the books.  What happens is Medicaid takes the tail risk.  This care annuity product pools that risk together.

The key question the care annuity answers is:  How can you leverage assets that aren’t producing income and find a way to generate income from them to pay for your care?  If this product were widely available in the US, Bodnar opined, not for people who were always going to be on Medicaid, but for middle income people, it would be all about avoiding Medicaid. 

“Why avoid Medicaid?,” asked the British participant. “Didn’t you say the elders’ adult children quickly figure out ways to deplete funds?”

Here ensued a long list of reasons to avoid Medicaid provided by the speaker and members of the audience:  stigma, poor care, low reimbursement, limited home care, lack of independence and choice, transfer of assets restrictions, estate recovery, etc.

But as one audience member mentioned, most people are not aware of those disadvantages.  It’s also true that at the stage when care is needed someone other than the frail or infirm elder is usually making the financial and care giving decisions and may have a financial conflict of interest by taking advantage of Medicaid.  The simple fact is that most expensive long-term care is paid by Medicaid, whatever the program’s disadvantages.

Anti-Planning

The program ended with one member of the audience observing that the care annuity is “kind of like anti-planning.  If something happens, I have my house so I don’t need to plan.”  But Vince observed that this product addresses a segment of the population that does not want to buy a product they may not use.  And it has the advantage of starting where people actually are nowadays:  in need of care and worried about their money running out.  It would be nice if they would plan, but they don’t.

LTC Comment:  Medically underwritten annuities are available in the United States already.  Center for LTC Reform corporate member OneAmerica offers such a product, called “ImmediateCare.” Learn more about it here:  http://www.assetbasedltc.com/long-term-care-solutions/immediatecare.  Our opinion is that the medically underwritten annuity for financing long-term care could become an extremely popular product if Medicaid’s home equity exemption of up to $828,000 were eliminated as in the UK or severely reduced in combination with stronger enforcement of Medicaid’s mandatory estate recovery programs.  Under those circumstances, of course, all forms of private LTC financing--including traditional and hybrid LTC insurance, various forms of home equity conversion, and real asset spend down—would surge in popularity and use.  More private financing in the LTC delivery system would raise care access for everyone, private payers and the remaining genuinely needy Medicaid recipients.

#############################

 

Updated, Monday, May 11, 2015, 9:12 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-019:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  For our special introductory offer, 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:

  • Selling LTCi Horse Race

  • Funding Long-Term Care: Are Life Insurance Riders Enough?

  • Long Term Care Insurance Association to Publish Industry Sourcebook

  • Maturity Re-Imagined

  • The Road Not Taken – Up Until Now

  • Many Aging Boomers Face Chronic Illness, But Death Rate Is Falling: CDC

  • U.S. News Health Care Index Shows Massive Increase in Consumer Costs

  • Mutual of Omaha Offers Advocacy Services with Critical Illness Insurance

  • High-tech sensors help kids keep eye on aging parents

  • 3 out of 4 retirees receiving reduced Social Security benefits

  • Actuaries show how LTCI really works

  • Long-Term-Care Insurance: Readers Weigh In

  • How to Cushion the Costs of Long-Term-Care Insurance

  • Family-funded reverse mortgage can help elderly parents keep home

  • AGS updates guidelines for appropriate care among older adults

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

 

Updated, Monday, May 4, 2015, 10:58 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-018:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  For our special introductory offer, 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:

  • Most older adults OK with dementia screening by phone: Study

  • Long-Term-Care Insurance: Is It Worth It?

  • Put Granny in the Garage (And Other Ideas for Graying Cities)

  • Running Out Of Money Is More Than Just A Worry For Many Seniors, Study Finds

  • Long-term care: challenges and changes

  • A Vision of a Future Free of Alzheimer’s

  • Affluent Investors More Concerned With Making It Through Retirement Than Leaving a Legacy

  • Nurses, assistants most injury prone in healthcare: CDC

  • Critical-Illness Insurance:  Do You Need It?--You can ease some financial worries with critical-illness insurance

  • 7 secrets about the science of aging you ought to know

  • Genworth considers strategic options, including going private

  • Will Medicare eat the commercial health market?

  • Annuities/LTC Combos More Than Double Sales

  • U.S. to set tougher standards for companies running Medicaid

  • The Evolution of Critical Illness

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

 

Updated, Friday, May 1, 2015, 10:19 AM (Pacific)
 
Seattle—

#############################

LTC BULLET:  ON THE LTC ROAD AGAIN

LTC Comment:  The “Silver Bullet” rides again after the ***news.***

*** TODAY'S LTC BULLET is sponsored by Claude Thau, a GA whose proprietary tools help advisors find clients and reduce the “Ping-Pong” in the LTCi sales process. Help clients make informed final decisions about buying LTCi in 15-20 minutes!  Gauge a client's true interest in a combo product immediately!  Change work-site LTCi sales from a series of proposal deliveries to a single interactive consultation!  Claude is the lead author of the Milliman Broker World LTCi Survey, one of Senior Market Advisor's 10 "Power People" in LTCi in 2007, a past Chair of the Center for Long-Term Care Financing. Test Claude by calling 800-999-3026, x2241 or email him at claudet@targetins.com to ask questions or get references. ***

*** LTC CLIPPINGS interviews Steve Moses:

LTC Clippings:  What’s your goal with the Center’s LTC Clippings service?

Moses:  I want to free our members to spend more time at whatever makes them money and less time scouring the internet for information, data, and analysis to maintain their professional competency.

LTC Clippings:  How exactly do you do that?

Moses:  I find and read every academic or popular article, every think tank or government report, and every press release or news story about long-term care services and financing.  Then I forward only the most important ones to our Clippings subscribers electronically.

LTC Clippings:  Ugh!  Tons more email.

Moses:  No, we average no more than three per day.  Each “clipping” has a title, source, and representative quote, with a short comment by me to put it in context.  If the topic doesn’t interest you or you don’t have time, just hit “Delete.”

LTC Clippings:  How can someone give it a try?

Moses:  Contact Damon at 206-283-7036 or damon@centerltc.com.  All Center “Premium” members ($250 per year) are entitled to a LTC Clippings subscription.  For a limited time, we’ll add Center regular members ($150 per year) to the clippings for a one-month free trial.  Try it.  You’ll like it. ***

***  LTC CLIPPINGS EXAMPLE from last week:

4/28/2015, “Will Medicare eat the commercial health market?,” by Allison Bell, LifeHealthPRO

Quote:  “Many publicly traded health insurers are talking more about their Medicare and Medicaid plan sales these days than about their traditional commercial health insurance operations.”

LTC Comment:  This is the second clipping today focused on the growing dependency of big insurers on Medicaid and Medicare.  It looks like a trap government has laid for private industry many times before.  The snare goes like this.  Offer a very attractive publicly financed scheme, i.e. Medicare, Medicaid, managed care, etc.  Wait until the private sector buys in heavily and adapts its business plans to take full advantage.  Then when costs skyrocket, cut reimbursements, increase regulations, and leave the private companies with no choice but to cut costs and quality or get out of the business.  Caveat emptor. ***

 

LTC BULLET:  ON THE LTC ROAD AGAIN

LTC Comment:  First, let’s take a quick walk down memory lane.

Remember the Center for Long-Term Care Reform’s “Long-Term Care Consciousness Tour?”  We hit the road in an FJ Cruiser towing a 16-foot Airstream trailer bedecked with sponsors’ logos. 

During all of 2008 and the first few months of 2009, we criss-crossed the country bringing the message of rational LTC financing policy and responsible LTC planning to audiences all across the land.  In Chattanooga, Tennessee we were on all three TV networks’ local morning shows.  We spoke to LTCI producers, LTC providers, the public, and reporters at events organized by friends of the Center in each locale we visited.

Those were heady days that these links bring back to life:  LTC Bullet: An LTC Tour Retrospective; LTC Tour Slide Show; LTC Tour Media Coverage; Final LTC Tour Map

Special thanks to the LTC Consciousness Tour’s main sponsors, GoldenCare USA and American Independent Marketing, and to the many LTCI carriers, distributors and producers who made the campaign possible.

On The Road Again

This new LTC Tour will be much more low key.  On May 23, I’m hooking up the Airstream and heading north from my new home—Alpine, Texas near Big Bend National Park in far West Texas.  My rough itinerary follows.  If I’ll be passing through your area, and you’d like me to address your company, organization, or local media, just let us know by replying to this LTC Bullet.  No charge, but the Center for Long-Term Care Reform certainly won’t turn down offers of “gas money.”

I’m starting off in a part of the country that didn’t get much attention in the first LTC Tour.  From the last week of May through the first week in June, I’ll be working my way up through the panhandles of Texas, Oklahoma, and Nebraska into South Dakota arriving in Bismarck, North Dakota by early June.

In Bismarck, thanks to a gracious invitation from Gene and Pamela Schmidt of Center-corporate-member SIA Marketing, I’ll be conducting some research into the Medicaid Compliant Annuity issue and possibly doing some interviews and speaking.

Mid-June I’ll be traveling over the Great Lakes into southeastern Canada en route to New England where I’ll be doing the research described in last week’s LTC Bullet in a state still to be announced.  I’ll remain in New England through mid-July.

Around July 16, I’m heading southeast possibly for a program at the Mises Institute in Auburn, Alabama, then by the end of July back home to Alpine, Texas via the deep south.

Let’s Connect

If you’re located anywhere near that route and you’d like to stir up the conversation about long-term care planning in your town, let us know.  Maybe we can make it happen.

If you need some ideas on how to get organizations or reporters interested in an informational program on LTC planning, check out our Regional Representative’s Tool Chest here.  Feel free as well to use my professional bio here:  http://www.centerltc.com/steves_bio.pdf.

Paraphrasing Willy Nelson’s immortal words:  “I just can’t wait to get on the LTC road again.”

#############################

Updated, Monday, April 27, 2015, 11:39 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-017:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  For our special introductory offer, click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

  • Nursing Homes Are Starting to Supplant Hospitals as Focus of Basic Health Care

  • What It’s Like to Have a Stroke

  • Top Medicaid fraud convicts are nursing and home health aides, OIG says

  • 4 Secrets to Buying Long-Term-Care Insurance

  • Iowa Man Found Not Guilty of Sexually Abusing Wife With Alzheimer’s

  • Long-Term Care Insurance: How to Choose It

  • Medicare & Medicaid at 50 Video and Interactive Timelines Now Available

  • Insurers Struggling to Identify Attractive Investment Opportunities

  • A Better Nursing Home Exist

  • U.S. retirement confidence soars despite grim realities

  • How Baby Boomers Are Creating Their Own Retirement Communities

  • Your Next Sales Idea from LTCA:  "Our Dirty Little Claims Secret"

  • A Diet Might Cut the Risk of Developing Alzheimer’s

  • New Law to Strip Social Security Numbers From Medicare Cards

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

 

Updated, Friday, April 24, 2015, 10:54 AM (Pacific)
 
Seattle—

#############################

LTC BULLET:  HOW GREAT IS MEDICAID’S UNFUNDED LTC LIABILITY?

LTC Comment:  The Center for LTC Reform and State Budget Solutions have teamed up to ask and answer the critical questions of whether, at what cost, and how Medicaid’s long-term care benefits can survive the age wave.  Details after the ***news.***

*** TODAY'S LTC BULLET is sponsored by Claude Thau, a GA whose proprietary tools help advisors find clients and reduce the “Ping-Pong” in the LTCi sales process. Help clients make informed final decisions about buying LTCi in 15-20 minutes!  Gauge a client's true interest in a combo product immediately!  Change work-site LTCi sales from a series of proposal deliveries to a single interactive consultation!  Claude is the lead author of the Milliman Broker World LTCi Survey, one of Senior Market Advisor's 10 "Power People" in LTCi in 2007, a past Chair of the Center for Long-Term Care Financing. Test Claude by calling 800-999-3026, x2241 or email him at claudet@targetins.com to ask questions or get references. ***

*** J. SCOTT MOODY is Chief Executive Officer and Chief Economist of State Budget Solutions, the think tank with which we’ve partnered to conduct the study described in today’s LTC Bullet.  Scott described the “Demographic Winter” facing the USA and the world in an interview recently.  We think you’ll find his economic analysis, including the potential impact of the “birth dearth,” very interesting.  The interview begins 2 minutes and 50 seconds into https://www.youtube.com/watch?v=N-W0StXELLw&feature=youtu.be ***

*** ROSS SCHRIFTMAN is an LTCI producer, a long-term caregiver, an LTC policy activist, a frequent commentator, and a long-time Center for LTC Reform member and friend.  We’ve pointed you to his book “My Million Dollar Mom” in several earlier LTC Bullets and LTC E-Alerts.  Ross is now producing a film by the same name.  Learn more, watch a video about the project and consider contributing to his “crowd funding” effort here. ***

*** MEDICAID AND MEDICARE TURNING 50:  Our LTC Clippings subscribers received the following notice the day it was released.  If you’d like to get the most important articles, data, and analysis (3 per day on average) as soon as they go public, contact Damon at 206-283-7036 or damon@centerltc.com to subscribe to LTC Clippings.

4/22/2015, “Medicare & Medicaid at 50 Video and Interactive Timelines Now Available,” Kaiser Family Foundation

Quote:  “With Medicare and Medicaid turning 50 in July, the Kaiser Family Foundation has produced an updated video that provides a brief history of both programs, including an examination of the health care, social and political landscapes that gave rise to them, the significant ways each program has evolved over five decades and the important roles they play in the U.S. health care system today. The video includes archival footage as well as commentary and perspective from policy makers, government officials and experts.  Also available are related interactive timelines that chart key milestones in Medicare and Medicaid over the years, and a short animated video, The Story of Medicare: A Timeline.  

LTC Comment:  This 16-minute video history of Medicare and Medicaid is well worth watching, but keep in mind both the known and the unknown.  We know what happened with these two giant and growing programs.  We’ll never know whether free market solutions as good or better would have evolved without them.  We know that Medicare has a $43 trillion unfunded liability, that Medicaid is hopelessly unprepared to deal with the Age Wave, and that both programs have crowded out private sector solutions, such as LTCI and home equity conversion, which could help enormously.  We do not know, but we will find out over the next three decades, what the cost and consequences of Medicare and Medicaid will be in the long term.

 

LTC BULLET:  HOW GREAT IS MEDICAID’S UNFUNDED LTC LIABILITY?

LTC Comment:  The Center for Long-Term Care Reform’s “Index of Long-Term Care Vulnerability” applies key metrics to measure the sustainability of America’s LTC financing system.  Recently, we applied the Index to three states: 

Our Index draws on available data sources, but it lacks one key element that no one has yet computed or published.  Specifically, what is Medicaid’s unfunded liability for future long-term care?  We know the answer to that question for Social Security ($25 trillion) and Medicare ($43 trillion), but Medicaid has no “trust fund” against which to measure its adequacy or inadequacy to meet future LTC benefit commitments.  How should we define, measure and evaluate Medicaid’s unfunded LTC liability?

Following are excerpts from an approved grant proposal for a study that is getting underway to estimate Medicaid’s 30-year LTC liability in a single state.  We anticipate that answering this question in one state will lead to similar studies in more states and a national Medicaid LTC liability review as well.  By selecting a key presidential primary state [to be announced (TBA)] for this study, we hope to draw media attention to the issue of long-term care financing policy.  The State Budget Solutions think tank proposed this study and contracted with the Center for Long-Term Care Reform to conduct the data collection phase and to consult on all aspects of the project.

---------------------

“Soften the Boom:  Preparing Medicaid for Aging Americans’ Long Term Care Needs”

Executive Summary

Currently, Obamacare is dominating the Medicaid discussion at the state level, and, unfortunately, many states have already fallen for the siren call of Medicaid expansion. Lost in the debate, however, is the demographically driven crisis that Medicaid will face over the next several decades. In particular, long-term care for the aging will send Medicaid spending into the stratosphere. Yet, no one state is even estimating these future costs let alone preparing for them. This project will perform a 30-year Medicaid cost projection in a pilot state, [TBA], run an educational campaign targeted at the media and state legislators, and draft model legislation that would direct the state to perform such analysis on an annual basis.

Project Outline

While common perceptions are that America’s aging population will strain Medicare resources, it will also adversely impact Medicaid and its long-term care (LTC) coverage. This is already a problem. Three-fourths of Medicaid recipients are impoverished adults or children, but they account for only one-third of the program’s expenditures, whereas only one-fourth of Medicaid recipients are aged or disabled, but they consume two-thirds of the program’s costs. As alarming is that Medicaid’s most expensive “dual eligible” recipients—those also receiving Medicare—comprise only 15% of total recipients but account for 39% of Medicaid spending, of which 70% is for their long-term care. 

Unfortunately, policymakers lack the necessary tools to discern future costs of LTC in their states. Yet, this type of analysis is feasible; Social Security already makes such projections at the federal level, and pension systems do so at the state and local levels. A similar analysis for Medicaid, particularly future costs of LTC, would fill this informational void.

State Budget Solutions proposes to partner with the Center for Long Term Care Reform to conduct a two-part pilot program in one target state, [TBA], where LTC is already a critical problem. [The study state and its region] in general, will be the first place where the fiscal pressure of the retirement of the baby-boomer generation will be felt. At the same time, [state TBA] has a relatively friendly media and legislative atmosphere where a genuine discussion on Medicaid reform can occur.

First, the Center for Long-Term Care Reform, utilizing its “Index of Long-Term Care Vulnerability” and a wide range of peer-reviewed research sources, will analyze ways to best quantify the long-term costs of [state TBA]’s Medicaid system over a 30-year period. The Center will apply its expertise in examining state Medicaid systems by conducting extensive demographic and budget data analysis, interviews with key state Medicaid personnel, and requests under [state TBA]’s Right to Know Law.

Second, State Budget Solutions will draft model legislation with the goal of having the state’s Department of Health and Human Services perform this cost calculation on an annual basis. This model legislation is critical if this analysis will help reshape the Medicaid debate away from expansion toward one of reform and sustainability.

Given the magnitude of this issue, it should be a public policy priority for policymakers and citizens to be aware of our work. Ensuring that this information reaches a broad audience is vital to the process of enacting positive LTC reforms.  SBS will undertake a multifaceted media relations and publicity campaign to raise awareness. SBS will host a major event launching the analysis, including national and state partners including the Mercatus Center, the Manhattan Institute, and the Foundation for Government Accountability, in [state TBA’s capital]. We will also work to educate activists, the media, and legislators throughout [state TBA].

The ultimate goal of this project is to develop, test and implement a successful strategy, transferable to other states, to minimize state and federal Medicaid financial risk.

Conclusion

Two federal programs—Social Security and Medicare—are notorious for their unfunded liabilities: $25 trillion and $43 trillion, respectively. Yet, another federal program—Medicaid—consumes a growing proportion of state and federal budgets but attracts less scrutiny of its long-term fiscal viability. The future viability of Medicaid as a health and long-term care safety net for the poor depends critically on predictable growth in the aging population and on the elderly’s likely need for acute and LTC services. 

Future debates around Medicaid will continue to focus on expansion until policymakers begin to recognize the immense liability of long-term care. This pilot study will help to change the terms of the debate and pave a clear path towards true reform. In fact, the ground-breaking efforts and materials, such as the analysis, study, and model legislation, stemming from this project can then be easily duplicated in other states.

With the financial support of _______, State Budget Solutions and The Center for Long-Term Care Reform will uniquely stand within the nexus of policy makers, journalists, and activists, and focusing all of its energy and resources to collaboratively and fundamentally change how state and municipal governments do business.

J. Scott Moody
Chief Executive Officer
State Budget Solutions
603-747-2374
jsmoody@statebudgetsolutions.org

Stephen A. Moses
President
The Center for Long-Term Care Reform
206-283-7036
smoses@centerltc.com

#############################
 

Updated, Monday, April 20, 2015, 9:39 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-016:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  For our special introductory offer, 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:

  • Identifying and Preventing Elder Financial Abuse

  • Average SNF patient paid $3,400 when ineligible for Medicare, AARP report finds

  • Spouse in a nursing home? Don’t fret

  • Tips for Retiring Without Long Term Care Insurance

  • Documentary explores how couples deal with Alzheimer’s

  • Buried Amid GE’s Divestiture News Is a $28B Insurance Liability

  • Some Do's and Don'ts of a Medicaid Spend Down:  Is it time to consider this financial strategy?

  • Mike Causey's Federal Report:  Long-term care: Who, when, why?

  • FAQ: Congress Passes A Bill To Fix Medicare’s Doctor Payments. What’s In It?

  • Expert advice: Do 3 things to protect your aging brain

  • The biggest U.S. tax breaks

  • Boomer Retirement Confidence Plunges to Five-Year Low

  • An unexpected after-death side effect of Obamacare

  • When a Medicaid Eligibility Issue Becomes Urgent

  • It’s time to repeal tax on Social Security benefits

############################# 

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

############################# 

Updated, Friday, April 17, 2015, 9:35 AM (Pacific)
 
Seattle—

#############################

LTC BULLET:  GUEST COLUMN, "NEW LONG TERM CARE INSURANCE THINKING"

LTC Comment:  In any battle, including the fight to protect Americans against the risk and cost of long-term care, it’s good to hear from someone on the front lines.  Listen to one who’s charged the barricades, after the ***news.***

*** LOUIS BROWNSTONE, today’s guest columnist, testified on April 7 before a Joint Hearing of the California State Legislature’s Senate Human Services, Select Committee on Aging and Long-Term Care and Assembly Aging and Long-Term Care Committee.  Louis got the last word in batting clean-up at the end of the hearing.  To watch his six-minute testimony:

Go to www.sen.ca.gov; Click on “Media”; Click on “Media Archive”; Scroll down to “4/7…Joint Informational Hearing”; Click on “View”; Scroll over to 2 hours and 45 minutes.  Sounds complicated but I did it without technical support.  Well done, Louis. ***

*** CLTCR Premium Membership:  Center for Long-Term Care Reform premium members receive our full suite of individual membership benefits including:  our LTC Bullets and E-Alerts; access to our Members-Only Zone website and Almanac of Long-Term Care; subscription to our Clipping Service; and email/phone access to Steve Moses for 24-hour turnaround queries.  Our Premium Membership is designed to give you a competitive advantage in your long-term care profession. Your increased knowledge of the critical issues and challenges we face in the field of long-term care service delivery and financing equals improved professional success for you and better LTC services for your clients and for those who have no choice but to rely on scarce public resources.  Premium Membership is $250 per year, paid up front or monthly by automatically recurring credit card payments.  Contact Damon at 206-283-7036 / damon@centerltc.com to start your Premium Membership immediately or go directly to our secure online subscription page and sign up for as little as $21 per month. ***

 

LTC BULLET:  GUEST COLUMN, "NEW LONG TERM CARE INSURANCE THINKING"

LTC Comment:  Louis H. Brownstone is Chairman of California Long-Term Care Insurance Services, Inc. and a member of the National LTC Network.  He recently took it upon himself to reach out to his industry colleagues, California public officials, and thought leaders in the Golden State.  His mission was to engage them in a review of California’s dysfunctional long-term care financing system, especially as it impacts private long-term care insurance and LTC Partnerships.  No Don Quixote, Brownstone is realistic about the prospects for such a campaign.  But we say “Three cheers for making the effort.”

Here’s Louis Brownstone reflecting on possible new directions for the LTC insurance industry.

------------------

“New Long Term Care Insurance Thinking”
by
Louis H. Brownstone

I’ve reached the following conclusions:

  1. The long term care insurance industry's strategy of raising premiums in order to increase profitability has failed;
  1. This strategy has produced drastically lower sales and reduced profitability.
  1. The industry has neglected to recognize its skyrocketing rates "disease" for many years.
  1. The industry has finally examined itself and recognizes that strong medicine must be taken to cure its disease.

Finally, the long term care insurance industry is waking up.  It has now concluded that past policy structures with increasing premiums won't work.  It is creating new prescriptions to treat its problems.  Lots of innovative products are being filed with lots of new ideas.  The main thrust is to lower premiums.  There is a variety of new prescriptions.  What are they? 

First and most important, there are new ways to deal with the cost of inflation.  The traditional inflation riders can as much as double the premium.  Reducing the cost of inflation is in many ways equivalent to lowering ones blood pressure.  The industry has now pretty much rejected the 5% compound inflation rider, and may reject lesser percentage inflation riders as well.  Inflation may well be dealt with in the future by sloping premiums in some way, so that the initial premium is low but would rise over time as the benefits rise.  Or, policies may be sold with larger daily benefits but without an inflation rider.

Second, there's going to be a big push to sell to younger prospects, particularly in the worksite.  This would make premiums more affordable, but there is the issue of competing financial demands for people in their forties.  Human relations heads of companies need to feel that their other health insurance premiums will be stable in order to take on the long term care insurance entitlement.  This may or may not occur over the next several years.  It could be a game-changer, as selling limited long term care benefits in the worksite makes perfect sense.

Third, carriers will reduce their regulatory and reserve costs by offering policies similar to life insurance.  These would have guaranteed values, some flexibility for the policyholder, and limits of liability for the carrier.  It would result in lowering the cost of filings and making carrier-produced illustrations a central part of the sale.  This complex structure would be best suited to internet selling.  Could the agent adapt to this type of presentation?  Or, would carriers decide to utilize the efficiencies of internet selling without the use of agents?

Fourth, producers will be encouraged to accept the fact that only the wealthy can afford catastrophic protection.  Producers are becoming increasingly comfortable with the concept that some coverage is better than none, and can in many cases wind up being just what the policyholder needed.  This is a paradigm shift from the desire by agents to cover even the most acute scenarios.  Furthermore, since less than 20% of the care takes place in nursing facilities, why protect against that cost, rather than the far lower cost of eight hours of home care or twenty-four hours in an assisted living facility?   Agents are already proposing plans with reduced benefits, and long benefit periods are disappearing.

Again, this is similar in thinking to life insurance sales.  Life insurance agents often sell a $50,000 or $100,000 death benefit, assuring the prospect that the flexibility of the policy will take care of his or her family forever.  We know that this is only partial coverage for most families.  In fact, it is well recognized that despite best efforts, life insurance sales only average $130,000 per policy and only cover about 25% of the need.

If they could cover 25% of the long term care need in this country, long term care insurance agents would become rich and fulfilled.

Fifth, carriers will offer more products with defined benefits and limited liability.  They may even do this with some underwriting concessions, such as simplified underwriting.  This is assuming that they can access the MIB [Medical Information Bureau], the drug formulary, and even conduct a phone interview if they wish.  The carriers know full well that as much as 40% to 50% of their prospects will not pass current underwriting standards.  They need to find a way to sell these folks.  They have been able to do so in life insurance, selling guaranteed issue life insurance with limited benefits

Finally, there is the strong development of non-traditional long term care protection:  hybrids, linked-life and annuities with accelerated death benefits, term insurance, critical illness insurance, and more.  The carriers are more comfortable with these products because they can predict their profitability.  They sound better than they are.  Traditional long term care insurance has about twice the leverage of these products.  But many of these products will be sold, and it is incumbent on the long term care insurance agent to understand their advantages and disadvantages and to be able to sell them if they fill the client's need.

As you can see, there are a lot of new "prescriptions”.  Stay tuned as we learn more about these innovations.  Hopefully, some of them will be just what the doctor ordered.

Mr. Brownstone welcomes comments at Louis@cltcinsurance.com

#############################

 

Updated, Monday, April 13, 2015, 9:09 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-015:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  For our special introductory offer, click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

  • Medicaid planning can ease the burden of long-term care

  • The Long-Term Care Insurance Industry Ponders Its Future: Seven Trends To Watch

  • Genworth 2015 Cost of Care Survey

  • LTCI advisors optimistic about 2015 sales

  • State by State: Higher Income Class on the Rise

  • What if nearly everything we think we know about aging is wrong?

  • Revisiting Long-Term Care Insurance

  • Get long term care from whole life insurance:  If you're planning to buy a whole life policy, be sure to consider the long-term care rider

  • 6 Reasons To Consider Buying Longevity Insurance

  • An Interview with Dale Bell

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com). 

#############################

 

Updated, Friday, April 10, 2015, 9:35 AM (Pacific)
 
Seattle—

#############################

LTC BULLET:  MEDICAID PLANNING WRIT LARGE

LTC Comment:  Elder lawyers put millionaires on Medicaid, but states take extra billions from the Feds by parallel means, a less well-known story after the ***news.***

*** LTC CLIPPINGS SUBSCRIBERS received the following notice early this morning.  We’ve posted the new Genworth cost of care survey in The Zone, the Center’s password-protected website, along with all past cost surveys by various sources for historical reference.  For Center membership, including access to The Zone, and for LTC Clippings subscriptions, contact Damon at 206-283-7036 or damon@centerltc.com.

4/9/2015, “Genworth 2015 Cost of Care Survey,” Genworth Financial

Quote:  “2015 Cost of Care Overview.  Use the information below to find out and compare the cost of care in your region. Go mobile with the Cost of Care app from iTunes.

LTC Comment:  Click through to the link above to access a clickable map for state data.  Find the full report here.  National highlights (annual costs):

Homemaker Services:                        Up 2% to $44,616

Home Health Aide:                            Up 1% to $45,760

Adult Day Health Care:                     Up 3% to $17,904

Assisted Living Facility:                    Up 2% to $43,200

Nursing Home (Semi-Private)            Up 4% to $80,300

Nursing Home (Private)                     Up 4% to $91,250 ***

 

LTC BULLET:  MEDICAID PLANNING WRIT LARGE

LTC Comment:  Most people, and certainly all who read LTC Bullets, know that Medicaid planning attorneys can use sophisticated legal techniques to impoverish affluent clients artificially in order to qualify them for Medicaid’s expensive long-term care benefits.

While that’s a significant fiscal leak, it pales in comparison to the far bigger problem that Medicaid’s basic income and asset eligibility rules are so generous for long-term care that only the really wealthy even need to bother with fancy trusts, transfers or trades.  Most middle class folks qualify easily.

But here’s something perhaps even bigger that you possibly didn’t realize.   State Medicaid programs have done some pretty elaborate financial and legal sleight of hand themselves in order to draw down extra federal funds they would not otherwise be eligible to receive.

The Government Accountability Office (GAO) is not pleased with the states’ commonplace and growing practice of taxing Medicaid providers to generate funds they can then use to leverage up additional federal matching funds.  The watchdog agency published “Medicaid Financing:  States' Increased Reliance on Funds from Health Care Providers and Local Governments Warrants Improved CMS Data Collection” on July 29, 2014 and re-issued it with more state-level details on March 13, 2015.  Highlights here.

Here’s the nub of the matter in GAO’s words followed by our explanation:

GAO found, based on a questionnaire sent to state Medicaid agencies, that states financed 26 percent, or over $46 billion, of the nonfederal share of Medicaid expenditures with funds from health care providers and local governments in state fiscal year 2012. State funds were most of the remaining nonfederal share.

 

Nationally, states increasingly relied on funds from providers and local governments in recent years to finance the nonfederal share, based on GAO's analysis … . In the three selected states this increase resulted in cost shifts to the federal government. While the total amount of funds from all sources, including state funds, increased during state fiscal years 2008 through 2012, funds from providers and local governments increased as a percentage of the nonfederal share, while state funds decreased. GAO's review of selected financing arrangements in California, Illinois, and New York illustrates how the use of funds from providers and local governments can shift costs to the federal government. For example, in Illinois, a $220 million payment increase for nursing facilities funded by a tax on nursing facilities resulted in an estimated $110 million increase in federal matching funds and no increase in state general funds, and a net payment increase to the facilities, after paying the taxes, of $105 million.  [Emphasis added.]

LTC Comment:  Just in case that wasn’t crystal clear, let’s explain.  States put up part of the cost of their Medicaid programs.  The federal government matches each state’s contribution based on a formula intended to reward economically poorer states somewhat more generously than wealthier states. 

For example:  the minimum federal matching rate is 50%, which means no state gets less than $1 from the Feds for every dollar it contributes.  According to the Kaiser Family Foundation (KFF), the “Federal Medical Assistance Percentage (FMAP) for Medicaid” in Federal Fiscal Year 2016 (which begins October 1, 2015) will vary from 50% for wealthy states like AK, CA, CT, MA, MN, NH, NJ, NY, ND, VA, WA, and WY to 74.17% in Mississippi.

That means Mississippi receives almost three dollars from the federal Medicaid program for every dollar it contributes.  Ten states have FMAPs in excess of 66.6% which means they receive at least two dollars from the Feds for every dollar they put up.

Do you see why using provider taxes to generate extra federal matching funds is so lucrative?  Instead of taxing their citizens to generate revenue for their Medicaid programs, states tax their Medicaid providers, use the extra funds to get more federal money, and then kick back some of the windfall to repay the providers who paid the tax in the first place.

KFF published “Quick Take:  Medicaid Provider Taxes and Federal Deficit Reduction Efforts” on January 10, 2013.  It shows which states had how many provider taxes.  Fourteen states had four or more such taxes; only one state had none.  The federal government has attempted to curtail the use of provider taxes by limiting them to six percent of patient revenues.  According to the KFF report: 

Recent federal deficit reduction discussions have suggested gradually lowering the safe harbor threshold from 6.0 percent to 3.5 percent of net patient revenues. States have indicated that nearly 6 in 10 provider taxes currently in use by states are above that threshold. Forty-three states have at least one provider tax above this 3.5 percent threshold … ; over half of states reported at least two above this threshold.

Public policies have consequences.  Often they have unintended consequences.  Just as Medicaid planning rewards the well-to-do with inordinate amounts of public resources intended for the poor, Medicaid planning writ large by means of taxing providers to maximize federal matching funds has the unintended effect of diverting scarce federal resources to states with the wealthiest providers and the cleverest financial consultants.

But before you bewail and criticize this practice, recognize that it’s a fundamental source of funding for cash-strapped LTC providers dependent on meager Medicaid reimbursements.  Just recognize that the delicate balance of interests that tempt the affluent with Medicaid planning and reward Medicaid planning writ large by states maximizing provider taxes are all part of the same status quo that prevents substantive long-term care financing reform.

It may, and probably will, take a major economic downturn comparable to the Great Depression to blow up this stultifying balance of interests enabling a market-based solution without lucrative incentives to game the feckless federal government. 

#############################

 

Updated, Monday, April 6, 2015, 11:42 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-014:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  For our special introductory offer, 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:

  • Poor staffing led to poor care, state says in lawsuit

  • Genworth CEO’s Pay Cut 78% to $2.7 Million After Record Loss

  • 2015 Long-Term Care Study

  • Medicare plan business grows again

  • New Interactive Tool Allows Users to Explore Trends in US Health Spending and Share Custom-Made Charts

  • Alzheimer’s Association:  One in Three Seniors Dies of the Disease

  • Poll: Seniors more satisfied with Medicare Advantage

  • Do Boomers Have The Guts And Wisdom To Course Correct Our Aging Nation?

  • SCOTUS: Providers Cannot Sue Over Low Medicaid Reimbursements

  • Assisted living residents' nude calendar needs second printing

  • Thrivent Financial to acquire long-term care insurer

  • Caring for Alzheimer’s: How Three Couples Cope

  • Attitudes Toward Retirement Are Shifting:  Yet Social Security, Inflation and Market Volatility Bewilder Many

  • Top long-term care insurer no longer selling policies in Mass.:  Genworth Financial leaves over inaction on rate hike request

  • Read This Before You Retire

  • Vanguard Answers a Retirement Riddle

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

 

Updated, Friday, April 3, 2015, 11:30 AM (Pacific)
 
Seattle—

#############################

LTC BULLET:  NEW TOOL TO ANALYZE LTC SPENDING DATA

LTC Comment:  If you’re a data junkie, don’t read today’s LTC Bullet until you have plenty of free time to play with this great new analytical tool, after the ***news.***

*** AGENT REVIEW live:  Corporation for LTC Certification founder Harley Gordon and “3 in 4 Need More” marketing star Jonas Roeser have launched a new venture.  Check it (and them) out on YouTube here and here.  We wish these long-time staunch supporters of the Center all the best for a successful enterprise. ***

*** JESSE SLOME, AALTCI and the National Underwriter Life & Health Network have announced their plans to produce a free live online broadcast from the 2015 National Long Term Care Solutions Sales Summit on October 27, 2015 in Washington, DC.  Underwriting the venture are four major LTC insurance carriers:  Genworth, Transamerica, Nationwide and John Hancock.  Pre-registration for the live broadcast is required.  For information and to sign up, go to www.InsuranceExpos.com. ***

*** HAPPY BIRTHDAY TO THE CENTER:  The Center for Long-Term Care Reform turned 17 years old on April 1.  No foolin’. ***

 

LTC BULLET:  NEW TOOL TO ANALYZE LTC SPENDING DATA

LTC Comment:  The Kaiser Family Foundation just published “New Interactive Tool Allows Users to Explore Trends in US Health Spending and Share Custom-Made Charts.”  Check out a tutorial on their new “Health Spending Explorer” here.  Find a .pdf defining each of the type-of-expenditure and source-of-fund categories used in the new tool here.  Now, open the Health Spending Explorer and let’s play.

Nursing Home Expenditures Analyzed

Say we want to know what’s happened to the cost of nursing home care since 1960.  Choose the service type “Nursing Care.”  Pick “All Sources of Funds.”  Select a “Custom Range” of 1960 to 2013.  Specify “U.S. $ Billions—Inflation Adjusted.”  Voila!  You have a graph and a chart showing nursing home expenditures year by year in 2013 dollars from $5 billion in 1960 to $155.8 billion in 2013 (a 31-fold increase compared to an 8-fold increase from currency inflation alone).

OK, cool, but who exactly is putting up the bucks to pay for nursing home care?  Click on “Trends by Source of Funds.”  Pick Health Insurance, Medicaid, Medicare, Private Health Insurance and Out­-of-Pocket under “Source of Funds.”  Change your “Custom Range” to 1970 through 2013, because Medicaid and Medicare were only ramping up between 1965 and 1970.  Bingo.  You have a new graph and chart showing the contribution of each of these funding sources to the cost of nursing home care.

A couple things jump right out at you.  Total health insurance—including Medicaid, Medicare and Private Health Insurance—has exploded from $5 billion in 1970 to $98.5 in 2013 (20-fold).  What about the components of total health insurance?  Medicaid jumped from $4.5B to $46.9B (ten-fold); Medicare from $.69B to $34.6B (50-fold); and Private Health Insurance from $.04B to $12.6B (315-fold!).  But what happened to Out-of-Pocket expenditures in this period?  They increased from $9.6B to $45.8B (only 5-fold).  Obviously public and private insurance has gobbled up most of the cost of nursing home care over the past four decades.

Nuances the Data Don’t Show

Unfortunately, these numbers don’t tell us everything we need to know to understand what’s been happening with nursing home funding.  For example, what the National Health Expenditure data refer to as “out-of-pocket” expenditures actually includes contributions to their cost of care by people already on Medicaid.  Much of that amount is their income from Social Security—not asset spend down. 

Why does this matter?  Once someone is on Medicaid, the nursing home provider receives Medicaid’s dismally low reimbursement rate even if the resident’s bill is paid entirely from his or her Social Security benefits without the state or federal Medicaid program contributing anything.  Roughly half of the so-called out-of-pocket expenditures come from this source.  Given Social Security’s huge ($25 trillion) unfunded liabilities and long-term fiscal vulnerability, relying so heavily on this source to fund nursing home care creates serious, and not-commonly-recognized financial risk for LTC funders and providers.

Home Health Care Expenditures Analyzed

All right, but these days everyone knows the future of custodial long-term care lies with home and community-based services, not with nursing homes.  So, let’s use the new data analysis tool to examine home care expenditures.

Here we need to look at two different categories:

Home Health:  “Covers medical care provided in the home by freestanding home health agencies (HHAs). Medical equipment sales or rentals not billed through HHAs and non-medical types of home care (e.g., Meals on Wheels, choreworker services, friendly visits, or other custodial services) are excluded.”

Other Health and Residential:  “This category includes spending for Medicaid home and community based waivers, care provided in residential care facilities, ambulance services, school health and worksite health care. Generally these programs provide payments for services in non-traditional settings such as community centers, senior citizens centers, schools, and military field stations.”

Let’s start with Home Health.  Total health insurance coverage for home health increased from $.40B in 1970 to $70.9B in 2013 (177-fold).  Considering the components of health insurance:  Medicaid increased from $.o7B to $29.1B (416-fold); Medicare, from $.28B to $34.4B (123-fold); Private Health Insurance, from $.03B to $6.3B (210-fold).  So, what happened to out-of-pocket expenditures for home health care between 1970 and 2013?  Up from $.10B to $6.4B (64-fold).  Once again public and private insurance increased far more than out of pocket costs for home health care:  177-fold compared to 64-fold.  This matters because it shows that consumers are far less at risk for home care expenditures now than they were in 1970.  Inasmuch as consumers only insure for real risk, this explains why private insurance plays such a small role in financing home health care compared to public health insurance (Medicaid and Medicare).  The more government pays for, the less risk consumers take responsibility for insuring against.

Now consider Other Health and Residential services.

Total health insurance coverage for Other Health and Residential increased from $1.4B in 1970 to $98.7B in 2013 (71-fold).  Considering the components of health insurance for Other Health and Residential services:  Medicaid increased from $.65B to $82.6B (127-fold); Medicare, from $.09B to $5.1B (57-fold); Private Health Insurance, from $.32B to $6.6B (21-fold).  So, what happened to out-of-pocket expenditures for Other Health and Residential services between 1970 and 2013?  Up from $.80B to $7.7B (only 10-fold).  Once again public and private insurance increased far more than out of pocket costs for home health care:  71-fold compared to 10-fold.  This matters because it shows that consumers are far less at risk for Other Health and Residential services expenditures now than they were in 1970.  Inasmuch as consumers only insure for real risk, this explains why private insurance plays such a small role in financing Other Health and Residential services compared to public health insurance (Medicaid and Medicare).  The more government pays for, the less risk consumers take responsibility for insuring against.

Are There Savings from Rebalancing?

Supposedly home care costs much less than institutional long-term care.  That seems to make sense intuitively.  Researchers love to quote daily home care costs at a fraction of assisted living or nursing home expenditures per day.  But the issue is more complicated.

At $20 per hour, home care is cheaper than nursing home care, $212 per day, until it isn’t—that threshold comes at 11 hours per day.  Who takes care of Mom overnight?

Another consideration is the economy of scale that comes from treating larger numbers of residents in one institutional location.

How about the cost of ensuring care quality?  It’s much less expensive to send a team of quality-control reviewers into a nursing home or assisted living facility than to mobilize them to visit dozens of small board and care homes or private residences. 

Research shows that home care delays, but does not necessarily replace institutional long-term care.  Money apparently saved by deinstitutionalizing able-bodied elderly may be spent, and then some more, on nursing home care later on.

Research indicates that people want to receive their care at home and that they thrive when they do.  At home, they tend to live longer and die slower.  That’s a good thing, but it does not save money.

So what does the new data analyzer tell us about the overall cost of long-term care after a decade of intense efforts to rebalance from institutional to home and community-based care?

Medicaid inflation-adjusted Nursing Care expenditures only increased from $46.3B in 2003 to $46.9B in 2013.  Wow!  Success, right?

Not so fast.  Medicaid’s Home Health expenditures rose from $14.1B to $29.1B (106%) and Medicaid’s expenditures for Other Health and Residential services jumped from $52.7B to $82.6B (57%).

Overall, between 2003 and 2013, total Medicaid long-term care expenditures increased from $113.1B to $158.6B (40%).  That’s half the pace between 1993 ($51.4B) and 2003 ($92.3B) or 80%, but hardly the dramatic reduction in total expenditures anticipated by the advocates of rebalancing.

Conclusion

Our analysis is the same for Nursing Care, Home Health and Other Health and Residential expenditures.  Heavy intercession by public payers has crowded out both private out-of-pocket expenditures and private health insurance funding for all long-term care services.  The result is a fiscal disaster waiting to happen.

Social Security benefits of Medicaid recipients fund half the out-of-pocket expenditures for long-term care, but Social Security faces a $25 trillion infinite-horizon unfunded liability.  Who will make up the difference if Social Security defaults?

Medicare is a heavy contributor to all forms of long-term care.  Its relatively generous reimbursement levels help LTC providers make up for impecunious Medicaid reimbursements that are less than the cost of providing the care.  But Medicare faces a $43 trillion unfunded liability.

No one knows what Medicaid’s unfunded liability is.  Yet, we’re working on that.  But abundant peer-reviewed research verifies that easy access to Medicaid-financed long-term care after the insurable event has occurred benefits the affluent as much as the poor and diminishes the market for private long-term care insurance.

Put all these factors together, which is easier than ever to do thanks to the new analytical tool we’ve highlighted today, and you get a miserable prognosis for long-term care financing and service delivery.  Just as the bulging baby boom generation approaches the need.

#############################

 

Updated, Monday, March 30, 2015, 11:30 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-013:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  For our special introductory offer, 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:

  • Reply to High nursing home bills squeeze insurers, driving rates up

  •  U.S. retirement assets reach $24.7 trillion

  •  Regulator: Market may need to reinvent LTCI

  •  Higher Medicare costs planned for some seniors in 2018

  •  Mass. makes it hard for long-term care insurers to stay

  •  Grim News on Health Costs in Retirement

  •  The Medicaid bill that doesn’t go away when you die

  •  High nursing home bills squeeze insurers, driving rates up

  •  Tackle retirement health costs early

  •  A New Way to Pay for Long-Term Care that I Think You Should Know About

  •  As nursing homes close, residents scramble to find alternatives

  •  Alzheimer’s Patients Aren’t Always Told They Have Alzheimer’s

  •  The truth about nursing home Medicaid eligibility

  •  Caregivers may be focusing on 'futile' measures: Brown study

  •  Welfare Reform

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com). 

#############################

 

Updated, Friday, March 27, 2015, 9:20 AM (Pacific)
 
Seattle—

#############################

LTC BULLET:  THE 15TH ANNUAL ILTCI CONFERENCE:  A VIRTUAL VISIT

LTC Comment:  In case you couldn’t be there, today’s LTC Bullet provides a little glimpse and some of the flavor of an exceptional industry meeting at The Broadmoor in Colorado Springs, CO after the ***news.***

*** AGENT REVIEW, Harley Gordon’s and Jonas Roeser’s new enterprise has gone live.  Check it out here.  They say:  “Agent Review offers non-biased guidance for consumers looking for core insurance products on the Internet and insurance agents the increased opportunity of working with them by creating a visibility and credibility-positioning platform. 80% of consumers looking for insurance now start their search online, however the experience can blindly lead them to frustrating dead-ends. Agent Review aims to solve these problems by combining online reviews and insurance-specific profiles, with data you can relate to!” ***

 

LTC BULLET:  THE 15TH ANNUAL ILTCI CONFERENCE:  A VIRTUAL VISIT

LTC Comment:  The annual Inter-Company Long-Term Care Insurance Conferences are always something special.  But this year’s meeting exceeded all that came before. 

It exceeded by breaking past records:  over 1100 attendees, up from the 900s; 72 vendors, up from 56; 44 sponsors and 170 speakers.

It exceeded by offering new programs including:  demonstration rooms where exhibitors could make scheduled presentations; a “social media” room with Twitter feeds;  a “future leaders” program; a new Sales and Distribution combination track; and a new “Alternative Solutions” track, honchoed by Eileen Tell and John O’Leary, which replaced Policy and Providers, and captured me for all seven break-out sessions on the agenda.  (See the write-ups that follow.)

It exceeded with an expanded and improved mobile app, which replaced the thick and awkward hard copy agenda of the past; and numerous drawings with excellent prizes.

It exceeded by the venue (the five-star Broadmoor resort in Colorado Springs) and the quality and variety of the free food and drink.

It exceeded by raising over $5,000 for the USO.

As always, the networking opportunities were abundant, well lubricated and very enjoyable. 

All in all, this was an event not to miss.  But just in case you missed it, here’s a taste:

Opening General Session

This year’s conference theme was “All Roads Lead Forward.”  Well, let’s hope so.  Isn’t it always darkest just before the dawn?  Read through to the closing general session and see how “happy warrior” and actuary Roger Loomis painted a positive picture of premium prospects.

Master of Ceremonies David Kerr from Oliver Wyman introduced the program at the opening general session.  We learned next year’s conference will be held March 13-16, 2016 at the Grand Hyatt on the River Walk in San Antonio, Texas.  Jim Glickman, Sandra Latham and Vince Bodnar were recognized for long and faithful work on the ILTCI conferences.

The opening session was a major hit.  Carol Golden of Transamerica introduced aviator and astronaut Captain Mark Kelly, who visited the international space station four times.  Captain Kelly is also the husband of Congresswoman Gabriel “Gabby” Gifford who was shot in the head, but survived.  His talk, titled “Endeavor to Succeed” captivated the audience with inspirational anecdotes illustrating the importance of persistence, communication, and independence:  “None of us is as dumb as all of us.”  He closed with a message from his recovering wife:  “Be bold; be courageous; be your best.”  A standing ovation followed.

Selected Break-Out Sessions

Following are snippets about each of the break-out sessions I attended.  Follow the links provided to find details in the presentation materials for each session.  Check out all the conference sessions here

Economic Modeling to Explore Alternative LTC Financing Options with Gretchen Alkema, Howard Gleckman, and Don Redfoot.  You know that number everyone tosses around—70% of seniors will need LTC?  Well it’s based on a “micro-simulation” done a decade ago based on 1993 data.  I critiqued it in LTC Bullet:  Microsimulate This! On March 28, 2006.  Hey, we can do better according to these three presenters.  They recounted how the Urban Institute and the actuarial firm Milliman are collaborating with a large number of organizations interested in long-term care funding to develop newer and better methods of modeling the demographics of aging.  The goal is to come up with blocks of objective data on which everyone can agree.  Then we can argue on the value propositions without disagreeing on the foundational facts.  Ambitious, yes.  Delusional, maybe.  But worth a try?  Absolutely.  Expect results by late summer or fall.

Calculating The Value of Private LTC Insurance, with Marc Cohen presenting and Jodi Anatole reacting.  Thank heavens for Marc Cohen.  He’s done more for the credibility and reputation of the long-term care insurance industry than practically anyone else.  The new study he reported on in this program is another example of why that’s true.  LTCI gets so much negative news, yet hundreds of thousands of people are being positively impacted by the LTCI product every day.  Want to know exactly how?  Click through to his presentation slides at the link above.  You’ll find plenty of evidence to share with prospects and clients who need to be persuaded of the benefits of a large insurance premium investment.  Just comparing, as Marc does, the bang consumers get for the “insurance” buck vs. the “savings” buck should close the sale right there.  But there’s much more to mine in this data.  Check it out.

The Bipartisan Policy Center LTC Initiative, with Katherine Hayes and Brian Collins.  The BPC was founded in 2007 by four former Senate Majority Leaders.  It has special projects focused on health policy and long-term care reform.  The BPC supports the predictive modeling project described above.  The interesting thing about this session was that attendees could vote—using the conference app on their cell phones—for various possible changes to LTC insurance.  Do you want indexed premium increases?  Cash deductibles?  Auto-enrollment?  The process went too fast for me to capture the polling results so hopefully they’ll post them later at the link above.

Consumer View of Alternative LTC Solutions, with Josh Wiener and Gallina Khatutsky; Don Redfoot reacting.  What do people want when it comes to long-term care?  They have multiple concerns.  Chiefly, they’re worried about losing independence.  While they express many concerns, they don’t know much about long-term care.  They don’t understand Medicaid, the cost of services, or how long people need care.  They trust private solutions more than government.  They prefer voluntary to mandatory solutions. Even at $25 per month, they’re reluctant to buy LTCI.  On several dimensions people’s expectations and values don’t match up with actuarial requirements.  So, Josh Wiener asked:  Could you make people economically indifferent to the cost of LTC insurance by giving them a government-financed subsidy?  How much would it have to be? 

LTC Comment:  Our take on this:  stop anguishing over how to find enough government money to subsidize insurance until people will buy.  Just stop providing Medicaid LTC to the middle class and affluent after the insurable event occurs and the market will take care of the rest.

State Innovations for LTC Financing, with Larry Minnix, Olivia Mastry, and Loren Colman.  Olivia Mastry of The Collective Action Lab gave one of the best overviews of the LTC financing problem I’ve ever seen.  Do check out her slides here.  But when she gets around to discussing the seven “pathways” of reform under consideration, we part company.  She, and most everyone else, expects too much from “public” solutions and too little from “private” solutions based on personal responsibility.

The Economics of Using Savings to Fund LTC, with G. William “Bill” Hoagland, Vickie Bajtelsmit, and Karl Polzer.  All I’ll say about this program is it was about time somebody talked about the desperate financial challenges this country faces related to deficits, debt, and unfunded entitlement liabilities.  Hoagland especially nailed the big picture.  Kudos to Karl Polzer also for emphasizing the need to put stricter limits on Medicaid LTC eligibility, especially reducing the welfare program’s gigantic home equity exemption.

Closing general session:  Outlook of Market Trends and Premium Rate Stability, with economist Patty Born, A.M. Best’s Jeff Lane, and actuary Roger Loomis.  I couldn’t find a link to the presentation materials for this session.  In a nutshell, the economist described economic conditions as of 2000, 2007, and 2014 with an eye to applying what happened after the first two dates to imagining what may happen going forward from 2014.  Likewise, the A.M. Best presenter delivered a less-than-sanguine report of the likely future.  Roger Loomis, however, showed how the LTCI industry has tightened up its actuarial assumptions to the extent that future premium increases are much less likely than they were at the earlier times.  That bodes well for the LTCI market going forward.

Alzheimer’s Session, presented by representatives of the Alzheimer’s Association.  Closing this year’s conference was an excellent three-hour program updating attendees on Alzheimer’s Disease and the research underway for prevention and potential cures.

Presenters highlighted myths about the disease and countered with the facts.  A highlight was a presentation by a couple: he with an Alzheimer’s diagnosis, and his wife his primary caregiver.  Their story was sad, moving and indicative of how vulnerable the public is to lack of information and mis-information about long-term care risks and costs. 

After three days of beautiful Rocky Mountain weather, the 15th Annual Inter-Company Long-Term Care Insurance Conference ended with a wet blanket of snow followed by a bright sunny day, hopefully a metaphor for the struggling industry this conference so ably profiled.

#############################

 

Updated, Monday, March 23, 2015, 10:00 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-012:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  For our special introductory offer, 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:

Income-Related Premiums in Medicare: Who Pays, and How Much Do They Pay?

  • The mess that is long-term care funding

  •  The Shrinking Middle Class, Mapped State by State

  •  Retirees Could Lose their 'Guaranteed' Health-Care Benefits

  •  Welfare Reform

  •  What My Father’s Death Taught Me About Long-Term Care

  •  Create a Long-Term Care Plan -- Without Insurance

  •  Panelists Call Medicare Advantage Model for Chronic Care

  •  How To Solve the Looming Care Deficit

  •  Age-Linked Memory Loss May Be Worse for Men, Study Finds

  • Scientists’ New Goal: Growing Old Without Disease:  Researchers plan to test a pill to prevent or delay Alzheimer’s, heart disease and other ailments that come with age

  •  Is Divorce the Best Option for Older Americans?

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

Updated, Monday, March 16, 2015, 10:12 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-011:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  For our special introductory offer, 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:

  • Household Worth Rises by $1.5 Trillion

  • More than 40% of sepsis re-hospitalizations preventable: JAMA

  •  Live Long and Prosper? Insurance Might Help

  •  Fitch: Further Long-Term Care Losses Likely to Curb Returns

  •  Social Security Disability Insurance Is Failing

  •  Aging in place concept has been oversold, professor argues

  •  Do You Really Need $2.5 Million to Retire Well?

  •  Why the Bill to Fix Medicare Keeps Soaring

  •  Golden Girls Shared Living on the Rise

  •  Brainpower Peaks in Different Ways as People Age, Study Finds

  •  After 14 years, SNF construction ban officially lifted

  •  2014 senior housing prices hit record highs

  •  More States Consider 'Death With Dignity' Laws

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

 

Updated, Friday, March 13, 2015, 10:42 AM (Pacific)
 
Seattle—

#############################

LTC BULLET:  THE FEARLESS CAREGIVER

LTC Comment:  Informal family caregiving is a huge and growing challenge that the Fearless Caregiver took on two decades ago.  Today, he provides an exceptional set of helpful resources.  Information and links after the ***news.***

*** FRIDAY, THE 13TH and two days before his birthday on the “Ides of March.”  What better time to introduce you to the “Fearless Caregiver.”

*** 2015 LONG-TERM CARE INSURANCE SUMMIT:  It’s on!  Scheduled for October 27, 2015 in Washington, DC.  Get all the details here. ***

*** FAMILY CAREGIVER DIALOGUE:  “This March, the Family Support Research & Training Center at the University of Illinois at Chicago and Easter Seals are joining together to support a national research initiative Family Support: Tell Us What We Need to Know.  From March 9 to March 30, 2015, a national dialogue will be available for family caregivers, individuals with disabilities, providers and researchers to provide feedback on the topic they think family support researchers should explore further.  Whether it’s the practical day-to-day concerns about providing assistance; healthcare, transportation or education; or the financial, spiritual or emotional aspects of being a family caregiver, the comments provided during the survey period will be used to shape a strategic plan for family support research in the U.S.  We look forward to hearing what’s important to you!”  Details here. ***

*** OLDER AMERICANS MONTH 2015 materials available, including a poster series, sample social media, event ideas, document templates, and more.  The Administration for Community Living (ACL) has published outreach materials to support communities celebrating Older Americans Month this May.  The 2015 observance theme, “Get into the Act,” honors the 50th anniversary of the Older Americans Act and emphasizes older adults taking charge of their health and getting engaged in their communities.  Details at the Older Americans Month section of the ACL website. ***

 

LTC BULLET:  THE FEARLESS CAREGIVER

LTC Comment:  Here’s the challenge of informal family caregiving in a nutshell from an April 2014 government study “Informal Caregiving for Older Americans: An Analysis of the 2011 National Health and Aging Trends Study.”

In 2011, 18 million informal caregivers provided 1.3 billion hours of care monthly to the more than 9 million older adults receiving informal assistance. Consistent with prior studies, family members are the main source of informal care: Spouses are about 20% of caregivers and provide nearly one-third of the aggregate hours, and adult children provide nearly half of aggregate hours. Hours are concentrated among caregivers of high need recipients--the 31% assisting recipients receiving help with at least three self-care or mobility tasks and the 33% assisting persons with probable dementia, account for nearly half and 40% of aggregate hours, respectively. Informal caregivers provide an average 75 hours per month. Average monthly hours provided are significantly more for spouses (110) and other caregivers living with the care-recipient (114) and those assisting higher need recipients with self-care or mobility (84).

Even if you’re not a caregiver and don’t anticipate becoming one, this issue affects you as a tax payer  and as a potential recipient of future highly vulnerable government benefits.  According to Valuing the Invaluable: 2011 Update The Growing Contributions and Costs of Family Caregiving:  “The estimated economic value of their unpaid contributions was approximately $450 billion in 2009, up from an estimated $375 billion in 2007.”   The burden of formal paid long-term care on the federal budget is huge and has vast ramifications as we explain every January in our LTC Bullet:  So What If the Government Pays for Most LTC?, 2013 Data Update.  If it were not for the “free” care provided by friends and family, the extra burden of formal paid care on government programs would overwhelm them.

The Fearless Caregiver 

Into this breach steps the “fearless caregiver.” He’s sort of a super-hero in this field full of heroic family caregivers.  Gary Barg’s story is fascinating.  He became a caregiver over 20 years ago for a grandparent.  But let him tell you in his own words from his Today’s Caregiver website.

I heard it in her voice. She never asked me to return and help, but I knew by the distress in her voice that things were not as rosy back home as I had thought. The year was 1994, and I was living in Atlanta, Georgia. My mom had been primary caregiver for my Dad and my grandparents over the past few years and over those years, I would return home as often as possible to help in whatever way I could. But, this late August night, I heard something in her voice that made me realize that more was needed of me, and fast. I thought I would spend about a month in Miami, where my mom and the rest of my family lived; help my mom care for my grandparents and then return home to Atlanta. Simple, right?

 

Not really. Within minutes of returning to Miami, I found myself wondering how my mom was able to do all she had been doing as a caregiver. It was in and out of doctors' offices, endless hours on the phone with insurance companies, midnight dashes to the hospital, life and death decisions, heartaches and stress. And we were not alone. Not by a long shot. We would find plenty of other people like us, rushing around trying to do the best for their loved ones with little or no information, but always with enough time to share whatever information they learned which they thought would be of value to fellow caregivers. We decided to do something to help others as they were helping us. The first issue of Today's Caregiver magazine debuted July fourth, 1995 (our own independence day), caregiver.com was born shortly thereafter and the "Fearless Caregiver" annual caregivers conferences began in 1998. We have met thousands of dedicated professional and family caregivers, interviewed over 100 celebrity caregivers and hopefully helped a few caregivers along the way. I know that the caregivers we've met have been of invaluable help to us as family caregivers.

 

Even though we have been "out here" since the mid-Nineties, we know that this is just the beginning. We are proud to have been able to bring together some of the brightest and most caring people to write for caregiver.com and Today's Caregiver magazine and to speak at our conferences. We invite you to take advantage of their wisdom and e-mail us your questions, join our free internet newsletters and interact with the other caregivers visiting caregiver.com. We welcome you to our home on the Internet, hope you stick around a while and look forward to helping you in any way possible. 

Caregiver.com

Gary Barg’s story is one so many of us have experienced in our own unique ways.  But his experience led him to a career specialized in helping family caregivers.  His website Caregiver.com is a virtual super-market of resources for long-term caregivers.  Here are some examples of things you’ll find there:

Next Step

If you’re not familiar with these resources, check them out.  Subscribe to the free newsletter.  Tell your friends, family, prospects, and clients about Caregiver.com.  You’ll be doing all of them a good deed and maybe even stir up some interest in early and responsible long-term care planning.

#############################

 

Updated, Monday, March 9, 2015, 10:42 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-010:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  For our special introductory offer, 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:

  • Boomers risk retirement funds by supporting adult children

  • What Women Must Do To Ditch Bag Lady Syndrome

  • Schmedlen Named LTC Global CEO

  • Long-Term Care Crisis

  • 7 Red Flags to Watch for When Choosing a Nursing Home

  • 8 ways to successfully sell to seniors

  • Sales Of Nursing Home Annuities Soar

  • A Portrait of Old Age in America in the Pre-Medicare Era

  • Don’t Wait Too Long to Plan for Long-Term Care

  • U.S. faces 90,000 doctor shortage by 2025, medical school association warns

  • The Extra Cost Of Extra Weight For Older Adults

  • Genworth Raises Red Flags Over 'Material Weakness'

  • How to Estimate Health Costs in Retirement

  • A Fast Track to Treatment for Stroke Patients:  Video-conferencing, mobile robots and virtual neurologists help limit damage

  • Sex in Old Age May Lead to a Sharper Mind

  • Psychiatric Drug Overuse Is Cited by Federal Study

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

Updated, Friday, March 6, 2015, 11:28 AM (Pacific)
 
Seattle—

#############################

LTC BULLET:  LTC IN THE USA:  WHO PROVIDES TO WHOM AND WHO PAYS?

LTC Comment:  Data on long-term care providers has been very limited heretofore, especially for newer caregiving venues such as assisted living facilities and adult day care centers.  That’s changing.  Details after the ***news.***

*** LTC CLIPPING of the week:

3/5/2015, “A Portrait of Old Age in America in the Pre-Medicare Era,” by Eliza Berman, Time

Quote:  “When LIFE set out to do a four-part series on aging in America in 1959, the magazine’s agenda was abundantly clear. ‘The problem of old age,’ the introduction read, ‘has never been so vast or the solutions so inadequate.’ There were five times as many elderly Americans as there had been at the turn of the century, and 60 percent of them had an annual income of less than $1,000. Medicare was still two presidents away, and people who couldn’t live with their families or on their own were often sent to state institutions where, the story read, they ‘lie in bed or sit beside it, imprisoned by helplessness, waiting to die, yet clinging to lives of crushing emptiness.’

LTC Comment:  Long-term care, aka long-term services and supports, has come a long way, but still has a long way to go.  Click on the picture in this article to scroll through all 18. ***

*** LTC CLIPPINGS.  A very special way to team up with the Center for LTC Reform is by becoming a Premium Member and receiving a subscription to our LTC Clippings service.  National LTCI and home equity conversion expert Barbara Franklin renewed her Premium membership yesterday saying “The check is in the mail!  The clipping service definitely keeps us on the forefront of LTC knowledge.  We could not function without it.”  Find out why.  Contact Damon at 206-283-7036 or damon@centerltc.com, join the Center, and/or upgrade to a Premium membership with LTC Clippings. ***

*** CENTER APPEAL:  Your Center for Long-Term Care Reform is a membership organization.  We depend on your membership contributions to carry on our public policy research and advocacy efforts.  If you get value from our LTC Bullets and LTC E-Alerts, please remember our publications are only the tip of the iceberg of our efforts to promote rational LTC financing policy and responsible LTC planning.  Check out the complete range of our individual and corporate “Membership Levels and Benefits” here.  With the political winds more at our backs now and the need to reform long-term care financing more desperate than ever before, now’s the time to join forces with us at the Center.  We’ve changed federal law for the better twice and we can do it again with your help. ***

 

LTC BULLET:  LTC IN THE USA: WHO PROVIDES TO WHOM AND WHO PAYS?

LTC Comment:  A wealth of new data on paid long-term care providers is coming available thanks to the “National Study of Long-Term Care Providers.”  On February 24, 2015, two researchers associated with the study presented some of its major findings to the Long-Term Care Discussion Group in Washington, DC.  We’ll touch on a few of the highlights below, but you can find their PowerPoint presentation, including links to the new reports, data briefs, and state data web tables here.

Highlights

1.  About 58,500 paid, regulated long-term care services providers served about 8 million people.

  • 4,800 adult day services centers had 273,200 participants enrolled on a typical day
  • 12,200 home health agencies served over 4.7 million patients annually
  • 3,700 hospices served over 1.2 million patients annually
  • 15,700 nursing homes served almost 1.4 million residents on a typical day
  • 22,200 residential care communities housed 713,300 residents on a typical day

2.  The South has the largest percentage of adult day services centers (32.4%), home health agencies (48.3%), hospices (42.4%) and nursing homes (34.5%), but the West has the most residential care communities (36.4%).

3.  Nearly all home health agencies, hospices and nursing homes (98%+) employ full time RNs, but only 59.2% of adult day centers and 46.3% of residential care communities do.

4.  Adult day centers serve the highest percentage of users under age 65 (36.5%), whereas hospices (46.8%), nursing homes (42.3%) and residential care communities (50.5%) serve the most users over age 85.

5.  The U.S. population is 80% non-Hispanic whites and the vast majority of users in all provider types except adult day centers are non-Hispanic whites (75%+).  Adult day center users are 47.3% non-Hispanic whites, 20.2% Hispanic, 16.8% non-Hispanic Blacks, and 15.7% non-Hispanic Other.

6.  Nearly half (48.5%) of nursing home residents have diagnoses of Alzheimer’s Disease and an equal number have diagnoses of depression.  The comparable numbers for residential care communities are 39.6% and 24.8%, respectively.

7.  The percentage of residential care residents whose LTC in the past 30 days was paid by Medicaid participation in 2012 was 17%, varying from 0% in Louisiana to 47% in Oregon.

8.  The percentage of adult day participants whose LTC in the past 30 days was paid by Medicaid participation in 2012 was 55%, varying from 10% in Utah to 100% in Massachusetts.

LTC Comment:  By far the most stunning finding in this new data is the expansion of Medicaid to pay for 17% of residential care residents (including board and care homes, assisted living and CCRCs) and 55% of adult day participants.  This is a scary trend as I explained in a 2004 article for Assisted Living magazine titled "The Sirens' Call, The Primrose Path, and Assisted Living."  What I said then is truer than ever now:

Be careful what you wish for . . . you may get it! That's good advice for the assisted living industry, which is sorely tempted today by the sirens' call of Medicaid funding.

 

When Medicaid started paying for nursing home care in 1966, reimbursement was generous and regulation was light. As costs rose, however, Medicaid officials clamped down. First, they capped bed supply with certificates of need. Then, they restricted reimbursement levels. With price and supply artificially controlled, demand skyrocketed and nursing facilities filled to 95% of capacity with mostly Medicaid residents. Providers quickly learned that when you're losing money on every customer, you can't make up for it in volume!

 

Gradually, the nursing home industry became a virtual public utility. Care quality suffered as Medicaid eligibility bracket creep undercut private-pay census. The government responded with increasingly onerous regulations and inspections. The plaintiff's bar piled on, extracting huge and ever-increasing court settlements. Liability insurance premiums skyrocketed leading to a dearth of affordable coverage. The end result is that we have today a welfare-financed, nursing-home-based long-term care system in the wealthiest country in the world where no one wants to be institutionalized.

 

In a nutshell, as an industry leader told me once, "Medicaid demands Ritz Carlton care for Motel 6 rates while imposing a regulatory Jihad." The assisted living industry should keep that in mind before accepting more Medicaid money.

 

There is a simple, cost-free solution to this dilemma. If Medicaid required seniors to use the $1.8 trillion of home equity they own [nearly double that today] before qualifying for public assistance, fewer people would end up on public assistance. The program could then afford to pay market rates for a wider continuum of care, including assisted living.

 

With reverse mortgages supplementing seniors' income, more of them could afford assisted living without help from Medicaid. More people would buy private long-term care insurance to protect their legacies. Medicaid could get back to its basic business of providing a safety net for the genuinely needy.

 

And the assisted living industry could avoid learning firsthand the bitter lesson: "Who pays the piper, calls the tune."

That’s my story and I’m sticking to it.  In 1970, five years after Medicaid started paying for long-term care, private pay was still 49.5% of nursing home revenues.  Medicaid paid only 23.3% and Medicare, a mere 3.5%.  In 2013, 43 years later, Medicaid covered 30.1% of nursing home costs; Medicare paid 22.2%; and private-pay had dropped to 29.4%, of which half was spend-through of Social Security benefits contributed by people already on Medicaid.  In other words, Medicaid’s low reimbursement rates, less than the cost of providing the care, now afflict nearly half of nursing home revenues.  And Medicare, on which nursing homes depend to make up some of their losses on Medicaid, is perennially on the budgetary chopping block.  See “LTC Bullet:  So What If the Government Pays for Most LTC?, 2013 Data Update.”

Instead of stanching the hemorrhage of Medicaid LTC financing by targeting the public assistance program to the needy and attracting private payers back into the LTC system, the government has tried instead to save money by rebalancing from institutional care to home and community-based care.  Under the mistaken assumption that home care is less expensive than institutional care, Medicaid has gradually evolved from mostly nursing home care to roughly half and half home and community-based care.  More and more, as the data above show, Medicaid is covering residential care facilities and adult day centers.  As its LTC costs continue to explode, Medicaid will keep doing what it has always done.  It constricts the private market for long-term care services and financing by providing inferior care choices after care is already needed and it’s too late for people to save, invest or insure.

To understand how all the pieces of LTC financing policy fit together, have a look at our “How to Fix Long-Term Care,” six briefing papers that explain how we got into the LTC mess we’re in, why Medicaid pays for most long-term care not just for the poor but for the middle class and affluent too, how rebalancing from institutional to home care inevitably increases LTC costs, a strategy to save Medicaid $30 billion per year while improving LTC access and quality, and how to shift the burden of LTC financing from Medicaid and Medicare to four under-utilized alternative sources of private LTC funding

Fit those pieces together and the puzzle picture of how to fix long-term care comes into clear focus.

#############################

 

Updated, Monday, March 2, 2015, 10:25 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-009:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  For our special introductory offer, 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:

  • Regulators draft LTCI rating manual update

  • For Many Middle-Class Taxpayers On Obamacare, It’s Payback Time

  • Terry Savage: 5 Savage Truths about Medicaid and long-term care

  • 6 Things to Understand About Long-Term Care

  • EBRI: Real LTC spending

  • Measuring America’s Retirement Deficit

  • Housing in Later Life: New Freedoms to Choose

  • Two-Thirds of Today's Retirees Say They're Living in the Best Home of Their Lives: New Study Shatters Stereotypes

  • Market Watch with Chuck Jaffe: Five lies people tell themselves about retirement savings

  • Medicare Advantage proposal means rates fall, rise depending on risk

  • Long Term Care Insurance Industry Paid $7.8 Billion in Claim Benefits

  • Studies find chronic illness could increase dementia risk in the impaired

  • Longer Lives Hit Companies With Pension Plans Hard

  • Nursing home quality scores drop in new federal ratings

  • Health Insurers Face 0.9 Percent Medicare Advantage Rate Cut

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

Updated, Friday, February 27, 2015, 2:30 PM (Pacific)
 
Seattle—

#############################

LTC Bullet:  Dog Bites LTCI

LTC Comment:  A critically important positive report on LTC insurance got short media shrift while a poor academic hit job swept the wires.  Today’s LTC Bullet sets the matter straight.

#############################

LTC BULLET:  DOG BITES LTCI

LTC Comment:  “Good news” is an oxymoron.  “Bad news” is redundant.  If it bleeds, it leads.  In today’s guest column, author-adviser Stephen D. Forman explains why the much-ballyhooed Boston College (BC) “man-bites-dog” critique of private long-term care insurance over-shadowed a more thoughtful and accurate “dog-bites-man” monograph by LifePlans.  Read today’s Bullet and you’ll get the reference.

Two LTC Bullets already dismembered BC’s “Long-Term Care:  How Big a Risk” analytically.  See “LTC Bullet:  How Careless Economists Boosted LTC Risk” and “LTC Bullet:  When Bad Models Happen to Good People,” the latter piece also authored by Mr. Forman.  What we have not done until now is give comparable attention to LifePlans’ superior analysis of the benefits and impact of long-term care insurance.  The following article corrects that oversight.

Full disclosure:  Stephen D. Forman and the LTC insurance marketing company he and his brothers run are long-time supporters of the Center for Long-Term Care Reform.  They publish a very thoughtful occasional newsletter called “Your Next LTCA Sales Idea.”  Much more than “salesy” fluff, that publication appeals to an LTCI producer’s intellect.  It arms him or her with solid information and analysis to persuade reluctant prospects who’ve been misled by careless scholars and lazy journalists.  We thank the Formans for permission to share Stephen’s essay with you today. 

[N.B.:  Much of the highlighted material in the following article was not bolded in the original LifePlans’ publication quoted.]

 

"Dog Bites Man"
by Stephen D. Forman

It's a shame a recent dour model by the Center for Retirement Research went viral at the same time LifePlans, Inc. published its landmark report, "The Benefits of Long-Term Care Insurance and What They Mean for Long-Term Care Financing." Although the latter publication is one of the most defining pieces of positive news for our industry in the last decade, I can't think of a major news outlet which covered it.¹

Synthesizing novel research with that of the US Dept of Health & Human Services, the SCAN Foundation, the Mature Market Institute and America's Health Insurance Plans, the study is an update of similar work conducted in 2002. Divided into three parts, it looks first at the impact of long-term care insurance on policyholders, then its impact on family and caregiving, and finally its impact on Medicaid.

LTCI: POLICYHOLDERS

The "face value" of all LTCI policies payable stands at $1.98 trillion. Since not everyone will claim-- or claim in full-- the industry is expected to ultimately pay out $679 billion on the current in-force book. For some context, the country as a whole spent $208 billion on long term services and supports in 2010. 

Although LTCI has been dogged by a scurrilous "use it or lose it" accusation of late, the LifePlans study concludes, "LTC insurance policies provide high value in benefits relative to premiums paid." In support, the authors model a 60-year old who pays premiums through age 82 (on a statistically representative policy), then show how 22-years of premium payments would quickly be returned after just 5 months on claim.

By comparison, a 60-year old without insurance would have to set aside $1,666 each month (at 2% interest) to achieve what our LTCI policyholder can leverage with just $188 per month.

In a first, the researchers then confront the "rate increase" argument, building-in a 30% increase in year 7 in one scenario, and a 50% increase in year 7 in another to determine whether the policy still provides good value. It turns out, such rate actions barely move the dial: in the former case, 22-years of premiums are returned after just 6.6 months on claim; in the latter, just 7.3.

Finally, for good measure the researchers examine self-funding-- and quickly dismiss it. "While savings do not cover even average costs, insurance covers catastrophic situations, when much more than the average duration of care is needed."

LTCI: FAMILY

Wade into any online forum and you're sure to find them: sign-waving demonstrators telling anyone who will listen, "Insurance companies are crooks!" Even when the carrier makes good on a $700,000 claim we're told they "build up a wall and make it difficult." As LTCI producers, we've subjectively known the opposite to be true, but now LifePlans categorically rebuts such slander once and for all.

According to the report, "Almost all who filed a claim at baseline were either approved or awaiting final decision. When claims were denied, it was usually (as was to be expected) because the claimant did not meet policy benefit eligibility criteria." Furthermore, the process is easy: policyholders "do not feel they have to 'fight for' benefits," and by a landslide (94%) interviewees report no disagreements with their insurance companies-- or that their disagreements were resolved to their satisfaction.

(For context, here's a headline I wrote last year: "LTC Insurer Declines 41% of Claims. Oops! I Meant TN Medicaid.")

The positive impact of these claims on the insured and her family can be profound. Those with insurance receive 35% more care than those without. Likewise, those with insurance report almost 1/3rd fewer incidences of unmet or under-met needs (eg wetting of clothes, going without bathing, or having to stay in bed) than their uninsured counterparts.

Research from the study also shows that individuals caring for elders with LTCI are "nearly twice as likely" to be able to continue working than elders without insurance. Family caregiving hours are also reduced by about 10%, which allows caregivers to focus on companionship and social interaction rather than hands-on care. "This helps restore a greater sense of normality to the relations between adult and children... or between spouses." As we've been promoting within the industry for years, care coordination (to help locate and arrange the most suitable services) is described as "highly valued."

LTCI: MEDICAID

Medicaid pays for two of every three dollars of LTC costs in America. Like two sides of a scale, we understand there's an implicit relationship between public and private financing-- now the study helps quantify it.

By creating a simulation taking into account socio-demographic profiles, state-specific Medicaid rules, a policyholder dataset, historic trends in assets and income, and claims experience, the researchers estimated "spend down" rates both with and without LTC insurance. What they found is that LTC insurance reduces the likelihood of spend down between 47 - 65% among nursing home claimants. (Looking at other settings like assisted living and home health care, "spending down is much less likely than in a nursing home, and for those with LTC insurance it is virtually eliminated.")

From a policy perspective, we must turn to the big picture. Does encouraging the purchase of private LTC insurance make good sense? The LifePlans study concludes that each inforce policyholder will save Medicaid $6,681 over her lifetime. Multiply this over the current cohort of policyholders and we're looking at a savings of $49.4 billion.

Part of the reason LTCI is so effective is that it covers so much of the cost of care. Buyer cohorts from 1995 through 2010 were reviewed through their first 25 policy years. LifePlans found that 93 - 194% of home care costs were covered, as were 107 - 128% of assisted living costs, and 50 - 79% of nursing home costs. (Here they used average policies and average costs.)

In a separate trial, the claims of actual policyholders were studied at four, eight, twelve and sixteen month intervals. At any given point, between 69 - 75% of these policyholders were receiving "most or all" of the cost of care reimbursed by their policies.

The researchers are favorable once again: "In the service settings most highly desired by individuals with impairments-- home care and assisted living-- insurance should cover almost all of the daily costs of care for a typical policyholder." Meanwhile, nursing facility coverage is "not out of line with cost-sharing required by health insurance plans and is also consistent with expectations of individual buyers, who indicate that they expect their policies to pay for most but not necessarily all of the costs of care. They choose to accept this cost-sharing in part to keep premiums down."

A TALE OF TWO STUDIES

According to the CDC, nearly 4.5 million Americans are bitten by dogs each year. When the expected happens, it's not newsworthy. It no more surprises us than the $20.5 million in routine, clockwork claim payments made by our country's long-term care insurance carriers each and every day. There's just no headline there.

On the other hand, when "man bites dog," that's shocking and absurd. As Dr. Christopher Bader of Chapman University explains, "People often don't realize that when they're watching the news they're watching the worst possible scenario. That's why it's news: A serial killer gets airtime because he's rare, not because serial murders are on the rise."

Why should coverage of LTCI break these rules? The sensational rises to the top, while the mundane gets passed over. And the Center for Retirement Research story was very sensational. Not only did the CRR model try to upend conventional wisdom, but it teased us of bigger shoes still to drop. And in true "man bites dog" fashion, some of our nation's leading personal finance columnists began considering Medicaid as a legitimate first-look LTC solution for their readers.

Meanwhile, the LifePlans report is simply quiet good news about a solution that works. It not only demonstrates Medicaid cost savings (leading to program stability), but also better outcomes for those served. It's not sexy, and it doesn't take on the establishment.

Would it be gratifying if the media ran the LifePlans story? Of course it would! It would be a great service to their readers-- a duty, really, and a responsibility to present the other 99.99% of the news. Until then, we must be our own bullhorns. It's incumbent upon each of us to focus on the positive, both in our lives, our professions, and for the industry of long term care to which we devote ourselves so passionately.

Our clients and policyholders deserve nothing less from us.

¹ I acknowledge that some readers will be familiar with the LifePlans (AHIP) report since it has been breathlessly recirculated within our own tightknit LTC community. Still, few reviews have gone beyond the Executive Summary.

Mr. Forman is co-author of "The Advisor's Guide to Long-Term Care" (2nd Ed.) published by National Underwriter, and a regular contributor to LifeHealthPro and ProducersWEB. Reach him at steve@ltc-associates.com.

#############################

Updated, Monday, February 23, 2015, 11:09 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-008:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  For our special introductory offer, 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:

  • Is This Cheap Stock a Bargain or a Trap?

  • Feds propose maintaining payments to Medicare Advantage

  • Consumers are Buying Less Long-Term Care Insurance Coverage

  • Citing long-term care exposures, A.M. Best lowers Genworth’s strength ratings

  • Long-Term Care Insurance: Costs Are Up but Vary Widely

  • Long-Term Care Services in the United States: 2013 Overview

  • Director's Comments

  • Staffing crisis looms if home-care wages don't rise, advocates say

  • Medicaid expansion leading HCBS programs to rethink strategy: Researchers

  • Long Term Care Insurance Paid Claims Increase; Home Care Benefits Growing

  • 5 worst states for assisted living care bills

  • Facing Suits, a Nursing Home in California Seeks Bankruptcy

  • Five Things to Know About Long-Term-Care Hospitals

  • Tax Puzzle: Millions Expected to Forego Deductions as High as $4,750 for Long-Term Care Insurance

  • Genworth Launches New Advisory Council on Long Term Care

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

 

Updated, Friday, February 20, 2015, 10:17 AM (Pacific)
 
Seattle—

#############################

LTC BULLET:  THE VA WANTS TO CLOSE NEED-BASED PENSION ELIGIBILITY LOOPHOLES

LTC Comment:  The Department of Veterans Affairs (VA) has proposed new pension rules to cap income and assets and penalize asset transfers in ways similar to Medicaid’s LTC eligibility restrictions.  We explain and comment after the ***news.***

*** LTC CLIPPING AND COMMENT:  Premium- and Premium Elite members of the Center receive our coverage of critical LTC news and analysis in real time daily.  Following is a “clipping” we sent this morning followed by a comment from long-time Center supporter and ACSIA Partner George Braddock.

Our clipping:  2/19/2015, “Long-Term Care Insurance: Costs Are Up but Vary Widely,” by Ann Carrns, New York Times

Quote:  “Mr. Slome advises comparing rates from several insurers, as premiums vary widely. The latest analysis found the difference between the lowest- and highest-cost policies for the same coverage ranged from 34 percent to as much as 119 percent. . . .  An insurance broker can help sort things out, but since some work exclusively with one insurer, you may need to talk to more than one.”

LTC Comment:  Generally positive coverage in the widely read “gray lady” is as helpful as it is rare.  Kudos to Jesse Slome and Michael Kitces, also quoted in the piece.

George Braddock’s comment: 

[To the author] Ms. Carrns,

As a certified long-term care planner, I want to compliment you on yesterday’s NYT article. Surely your readers can not be reminded too often of the need to prepare for the likely consequences of old age.

If you’ll allow, I’d like to make some constructive criticism. It’s inaccurate to say that most states prohibit elimination periods over 90 days. We do business nationwide and I know of only 3 states that do so. And it’s not that most policies come with a 90-day elimination period. It’s what most consumers pick from a choice of 0, 30, 60, 90, 180, or with a few carriers, 365 days. In my 15 year practice I’ve never had anyone pick more than 90 days. 180 days doubles the insured’s liability for only minimal savings. So far none of my prospects were tempted by the 365 either. Not only is it costly to self-insure that long, it’s also risky. A large percentage of people die during their first year of disability. People who do so would not live long enough to collect with a super long deductible. Not to say 1-3 year deductibles don’t have their place, but that their appeal would probably be limited to some wealthy buyers who believe they can afford to pay out-of-pocket for years before the policy kicks in (and don’t mind if they have to cover six-figure losses). . . .

The answer to affordability for most people is not expanding the elimination period. 90% of buyers select 90 days, which is already cheaper than 0, 30 or 60. Long-term care specialists today typically look elsewhere to economize by:

1) adjusting the pool of money 2) adjusting the monthly benefit 3) adjusting the percentage of inflation protection. In the case of couples, when money is really tight, they might consider only insuring the one most apt to die second. That, of course, usually means the wife. If too much of the nest egg is consumed to pay for the first person to need care, the second could be left defenseless. Because married men will normally receive some care from wives, they generally have long-term care bills only half as high as widows. Women must be protected at all costs!

Again, Ms. Carrns, thanks for your effort to enlighten readers on this vital subject.

Sincerely,

George Holmes Braddock, II, CLTC
Certified in Long-Term Care

Whether you agree or disagree with George, this is a good example of how to comment on an article covering long-term care insurance published in a national media outlet. ***

 

LTC BULLET:  THE VA WANTS TO CLOSE NEEDS-BASED PENSION ELIGIBILITY LOOPHOLES

LTC Comment:  If you’ve ever had a loved one in an assisted living facility, you’ve probably been approached by a “financial adviser” offering this unbelievable deal:  get Mom and Dad’s savings for yourself and qualify one or both of them for veterans’ “aid and attendance” benefits.

“Too good to be true,” might be your initial reaction.  But if you attended one of the “seminars” offered by insurance agents, accountants and lawyers promoting this approach, you quickly learned it is quite accurate.  To this day, there is nothing stopping an affluent veteran from giving away all his or her assets and qualifying for substantial monthly cash payments from a program solely intended to help needy vets.

Cons and Pros

Helping heirs get early inheritances in this manner while impoverishing aging veterans has been a lucrative and growing practice for its promoters who siphon the divested funds into trusts or annuities which pay them substantial fees.  It’s a seedy grey market based on legal, but arguably unethical and unprofessional practices.  On the other hand, VA-planning lacks one of the most offensive characteristics of Medicaid planning.  The latter practice makes artificially impoverished elders dependent on a welfare program that pays too little to ensure quality care.  At least VA-planning enhances the seniors’ income making a wider range of higher quality private-pay long-term care options more feasible, assuming the beneficiaries of the asset transfer continue to support the elders’ care needs, which definitely is not always the case.

Changes Coming?

But, all that may come to an end soon.  The VA has proposed regulations to impose an asset limit, look-back period and transfer penalties similar, but by no means identical, to those governing Medicaid long-term care eligibility.  Find the January 23, 2015 Federal Register announcement detailing the proposed changes hereElderLawAnswers Monthly provides a good summary here:

The proposed rules would establish a 36-month look-back period and a penalty period of up to 10 years for those who dispose of assets to qualify for a VA pension. The penalty period would be calculated based on the total assets transferred during the look-back period to the extent they would have exceeded a new net worth limit that the rules also establish.  The proposed net worth limit would be equal to Medicaid's maximum community spouse resource allowance (CSRA) prevailing at the time the final rule is published and would be indexed for inflation as the CSRA is.

 

The amount of a claimant's net worth would be determined by adding the claimant's annual income to his or her assets. The VA would not consider a claimant's primary residence, including a residential lot area not to exceed two acres, as an asset.  But if the residence is sold, proceeds from the sale would be assets unless used to purchase another residence within the calendar year of the sale. Any penalty period would begin the first day of the month that follows the last asset transfer, and the divisor would be the applicable maximum annual pension rate in effect as of the date of the pension claim.

Differences With Medicaid Rules

Sound familiar?  “Been there, done that” thinks any Medicaid LTC policy wonk.  The VA is obviously modeling its approach on Medicaid’s but with some key differences.  The proposed look-back period is only three years instead of five years for Medicaid.  The VA’s maximum asset transfer penalty would be only 10 years instead of unlimited for Medicaid.  The VA puts no cap on the exemption for home equity, whereas Medicaid imposes a limit of between $552,000 and $828,000.  Finally, the VA’s asset transfer penalty would begin the month after the asset transfer takes place enabling the applicant to give away half of his or her assets and spend down the rest during the resulting penalty period, a so-called “half-a-loaf” strategy Medicaid no longer allows.

Savvy Medicaid eligibility experts will recognize these key differences in proposed VA rules and existing Medicaid rules.  VA is patterning its proposal on the way Medicaid LTC eligibility used to be before the transformational changes that occurred in the Deficit Reduction Act of 2005.  The DRA ’05 extended Medicaid’s transfer of assets (TOA) look-back period from three years to five years; put the first cap ever on home equity; and eliminated the egregious half-a-loaf loophole that effectively cut the TOA penalty in half.  The Center for Long-Term Care Reform proudly advocated those changes and we believe the VA will also conclude they’re necessary in time.

GAO Wake-Up Call

So, why is the VA finally wising up to these ways that needs-based “aid and attendance” benefits have been diverted from the needy to enrich middle-class heirs?  We can thank the Government Accountability Office for that wake-up call.  In a May 2012 report titled “Veterans' Pension Benefits:  Improvements Needed to Ensure Only Qualified Veterans and Survivors Receive Benefits,” GAO reached these conclusions, which we’ll quote at length because they are stunning:

The Department of Veterans Affairs’ (VA) pension program design and management do not adequately ensure that only veterans with financial need receive pension benefits. While the pension program is means tested, there is no prohibition on transferring assets prior to applying for benefits. Other means-tested programs, such as Medicaid, conduct a look-back review to determine if an individual has transferred assets at less than fair market value, and if so, may deny benefits for a period of time, known as the penalty period. This control helps ensure that only those in financial need receive benefits. In contrast, VA pension claimants can transfer assets for less than fair market value immediately prior to applying and be approved for benefits. For example, GAO identified a case where a claimant transferred over a million dollars less than 3 months prior to applying and was granted benefits. . . . 

 

GAO identified over 200 organizations that market financial and estate planning services to help pension claimants with excess assets meet financial eligibility requirements for these benefits. These organizations consist primarily of financial planners and attorneys who offer products such as annuities and trusts. GAO judgmentally selected a nongeneralizable sample of 25 organizations, and GAO investigative staff successfully contacted 19 while posing as a veteran’s son seeking information on these services. All 19 said a claimant can qualify for pension benefits by transferring assets before applying, which is permitted under the program. Two organization representatives said they helped pension claimants with substantial assets, including millionaires, obtain VA’s approval for benefits. About half of the organizations advised repositioning assets into a trust, with a family member as the trustee to direct the funds to pay for the veteran’s expenses. About half also advised placing assets into some type of annuity. Some products and services provided, such as deferred annuities, may not be suitable for the elderly because they may not have access to all their funds for their care within their expected lifetime without facing high withdrawal fees. Also, these products and services may result in ineligibility for Medicaid for a period of time. Among the 19 organizations contacted, the majority charged fees, ranging from a few hundred dollars for benefits counseling to $10,000 for establishment of a trust.  [Emphasis added.]

How to Comment on the Proposed Rules

Surely any civic-minded person can see the value of ending these abuses, right?  Well, no.  Trust purveyors and some annuity marketers who benefit from the current system are mobilizing to oppose the proposed changes.  They’re urging their clients to comment on and oppose the VA proposals.  Maybe you’d like to take the opposite position.  If so, here’s how:

DATES: VA must receive comments on or before March 24, 2015. ADDRESSES: Written comments may be submitted through http:// www.regulations.gov; by mail or hand delivery to: Director, Regulation Policy and Management (02REG), Department of Veterans Affairs, 810 Vermont Ave. NW., Room 1068, Washington, DC 20420; or by fax to (202) 273–9026. Comments should indicate that they are submitted in response to ‘‘RIN 2900– AO73, Net Worth, Asset Transfers, and Income Exclusions for Needs-Based Benefits.’’ . . .  In addition, during the comment period, comments may be viewed online through the Federal Docket Management System (FDMS) at http://www.regulations.gov.

The fight for responsible welfare eligibility policy is long and hard.  Victories are few and far between.  Yet slowly but surely we’re winning.  Keep the faith and carry on. 

#############################

 

Updated, Tuesday, February 17, 2015, 10:42 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-007:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  For our special introductory offer, click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

#############################  

  • Medicaid rules allow high-income people to temporarily receive benefits

  • Medicare, Medicaid stay on 'high risk' list

  • Alzheimer's could bankrupt Medicare

  • Dilnot reforms fail to spark long-term care market

  • Insurance Brokers and the ACA: Early Barriers and Options for Expanding Their Role

  • Atul Gawande on why doctors often fail their dying patients

  • Florida's High Court Bars Non-Lawyers From Engaging in Medicaid Planning

  • 5 things to know about Paul Forte’s LTC rescue plan

  • Audit: Government overpaid for Medicaid enrollees who also had private coverage

  • Genworth reports loss on charges

  • Why Long-term Care Insurance May Be a Better Deal Than You Think

  • Seeking a ‘Beautiful Death’

  • Minnix on leaving: Nonprofits will continue to lead the way

  • The twisted priorities of a graying nation

  • No Silver Bullet: Lessons From International Programs for Financing Long-Term Services and Supports

  • Wanted: More Docs and Nurses at VA

  • The New Old Age

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com). 

#############################

Updated, Friday, February 13, 2015, 9:49 AM (Pacific)

Seattle—

#############################

LTC Bullet:  Being Morbid

LTC Comment:  We’ll review Dr. Atul Gawande’s new book Being Mortal about the modern American way of dying after the ***news.***

 

*** Attention documentary fans:  Regarding the topic of today’s LTC Bullet, also of interest is this article “Atul Gawande on why doctors often fail their dying patients” in The Washington PostFrom the article:

Atul Gawande brought his best-selling book on end-of-life care, ‘Being Mortal,’ to the small screen Tuesday night in an hour-long documentary providing a deeply intimate look at patients in their final days, their families, and the doctors wrestling with patients' expectations — as well as their own. The consistent thread in the PBS ‘Frontline’ documentary is just how hard it is for doctors to have honest conversations with their patients about end-of-life care. ***

*** CLTCR Premium Membership  --  Center for Long-Term Care Reform premium members receive our full suite of individual membership benefits including:  our LTC Bullets and E-Alerts; access to our Members-Only Zone website and Almanac of Long-Term Care; subscription to our Clipping Service; and email/phone access to Steve Moses for 24-hour turnaround queries.  Our Premium Membership is designed to give you a competitive advantage in your long-term care profession. Your increased knowledge of the critical issues and challenges we face in the field of long-term care service delivery and financing equals improved professional success for you and better LTC services for your clients and for those who have no choice but to rely on scarce public resources.  Premium Membership is $250 per year, paid up front or monthly by automatically recurring credit card payments.  Contact Damon at 206-283-7036 / damon@centerltc.com to start your Premium Membership immediately or go directly to our secure online subscription page and sign up for as little as $21 per month. ***

#############################

LTC BULLET:  BEING MORBID

LTC Comment:  Morbidity scares me a lot more than mortality.  The unbearable pain and suffering come first.  Death is just the final release from all that and  

The heart-ache and the thousand natural shocks
That flesh is heir to; ‘tis a consummation
Devoutly to be wished.  (Hamlet

So I think Dr. Atul Gawande’s new book Being Mortal: Medicine and What Matters in the End focuses on the right topic:  how we die, the process of dying.  Instead of helping the terminally ill live the best life possible as long as possible, our medical system emphasizes heroic, often poisonous and painful, measures to sustain life regardless of quality.

Don’t misunderstand.  Dr. Gawande does not advocate euthanasia.  In fact, he criticizes its creeping (and creepy) advance in parts of Europe.  He writes with passion and authority, often from deeply personal examples, about needless end-of-life misery and ways we might better help individuals reach the end with dignity and fulfillment.

One problem.  I listened to the audio version of the book so I don’t have a hard copy from which to craft a review with quotes and illustrations.  Luckily several excellent reviews of Being Mortal have been published in the national media.  Some quotes from those and links to them follow.  For my part, suffice it to say I recommend the book.

First, Gawande’s own website has this to say here:

Medicine has triumphed in modern times, transforming the dangers of childbirth, injury, and disease from harrowing to manageable. But when it comes to the inescapable realities of aging and death, what medicine can do often runs counter to what it should.  Through eye-opening research and gripping stories of his own patients and family, Gawande reveals the suffering this dynamic has produced. Nursing homes, devoted above all to safety, battle with residents over the food they are allowed to eat and the choices they are allowed to make. Doctors, uncomfortable discussing patients’ anxieties about death, fall back on false hopes and treatments that are actually shortening lives instead of improving them. And families go along with all of it.

My favorite of the independent reviews is The Guardian’s available here.  It begins by recounting the myth of Tithonus whom the goddess Eos made immortal but, alas, neglected to ensure his health.  He withered away with age but couldn’t die.  The review summarizes:

If the first half of his book concerns nursing homes and how we can age with self-respect, the second half concerns palliative care and how we can die with grace. The stunning victories of medical science over the last century have, according to some critics, left too many doctors arrogant and unwilling to concede defeat (the militaristic clichés are essential to this vision of medicine and the body). We’re waking up to that mistake now: hospice and palliative care are at last receiving the attention and the funding they deserve; helping our patients through a good death is increasingly acknowledged to be as important as helping them flourish while alive. Much of the second half of the book concerns the health system of the US where Gawande practises, and where the hospice movement and the provision of community palliative care are relatively undeveloped compared to those in the UK.

The New York Times’ review by Timothy Egan, available here, focuses on Dr. Gawande’s development as a surgeon and the evolution of his ideas about death and dying.  It concludes:

But patients who receive good geriatric care stay happier and healthier, just as old people who can remain at home and aren’t forced into nursing homes are better able to enjoy their lives. This book makes a thorough inquiry into how the idea of the assisted-living facility arose as a supposed improvement on regimented nursing homes but has often become a disheartening place for independent-minded people to have to go. The all-important quality-of-life issue that is used to market such places, Dr. Gawande maintains, is directed more toward the people planning to leave Mom than toward Mom herself. But he sees a lot of hope in the group living concept, if it is overseen with the residents’ happinss in mind.

Reason magazine has a different take here

If Gawande had been willing to address the systemic causes of medicalized death, he could have had to face a difficult question: How can we reconcile his hope for personalized end-of-life care with the large, centralized institutions (Medicare and private insurers) that are the system's actual customers? Gawande's whole point is that objectively "needed" care has little meaning when it involves a person who is dying. The course of treatment must be based on personal preferences, on finding the correct balance of treatment and life's objectives that he so eloquently prescribes. But how can a centralized payer—in this case Medicare—ever drive the correct set of incentives for a world of personalized care?  It can’t.

Whatever the cause of the current end-of-life medical malaise, every human being has a stake in resolving these problems.  For anyone interested in and concerned about the critical issues of death and dying, including the integral role of long-term care, Being Mortal is a book not to be missed.

#############################

 

Updated, Monday, February 9, 2015, 10:35 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-006:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  For our special introductory offer, click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

#############################

  • New Test Claims It Can Tell If You Will Develop Alzheimer's... But Do You Want To Know?

  • Bold Prediction: Interest Rates Won't Go Up For 2 Decades

  • Medicare and Social Security Tabs Coming Due

  • The Market Is Watching Genworth

  • Kindred Completes Gentiva Acquisition

  • 5 ways retirement accounts could feed an LTCI boom

  • Is Obama Budget The Beginning Of The End For Nursing Home-Based Medicaid?

  • SuperAger Brains Yield New Clues to Their Remarkable Memories

  • Protecting Your Clients' Portfolios From Unpredictable Expenses

  • Maine native named to top job at Unum

  • Who’s buying LTCI?

  • 2016 budget aims for $400 billion in Medicare reductions

  • On buying long-term care insurance for a parent who doesn’t want it

  • Another Road To LTC Coverage

  • Live, From the Nursing Home

·    #############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

 

Updated, Friday, February 6, 2015, 10:27 AM (Pacific)
 
Seattle—

#############################

LTC Bullet:  Holding CMS’s Feet to the Fire

LTC Comment:  When a federal agency fails to enforce the law hurting the poor it’s supposed to help and costing tax payers billions of dollars, bureaucratic heads should roll.  Background and details after the ***news.***

 

*** Important ILTCI Conference Hotel Update:  We hear from ILTCI that they are expecting record breaking conference attendance next month in Colorado Springs, CO.  That’s great for the long-term care insurance industry.  Conference registration is still open, but The Broadmoor hotel and resort is sold out for the nights of the conference.  Fortunately, there are other excellent options provided by ILTCI which include discounted room rates and amenities. ***   

 *** CLTCR Premium Membership  --  Center for Long-Term Care Reform premium members receive our full suite of individual membership benefits including:  our LTC Bullets and E-Alerts; access to our Members-Only Zone website and Almanac of Long-Term Care; subscription to our Clipping Service; and email/phone access to Steve Moses for 24-hour turnaround queries.  Our Premium Membership is designed to give you a competitive advantage in your long-term care profession. Your increased knowledge of the critical issues and challenges we face in the field of long-term care service delivery and financing equals improved professional success for you and better LTC services for your clients and for those who have no choice but to rely on scarce public resources.  Premium Membership is $250 per year, paid up front or monthly by automatically recurring credit card payments.  Contact Damon at 206-283-7036 / damon@centerltc.com to start your Premium Membership immediately or go directly to our secure online subscription page and sign up for as little as $21 per month. ***

 

LTC BULLET:  HOLDING CMS’S FEET TO THE FIRE

LTC Comment:  Two members of Congress have demanded that the Centers for Medicare and Medicaid Services enforce laws governing Medicaid LTC eligibility that the agency has allowed states to ignore with impunity since 1993 (Omnibus Budget Reconciliation Act) and 2005 (Deficit Reduction Act). 

The laws in question bear on rules restricting asset transfers and other legal loopholes the affluent and their legal advisors use to qualify for Medicaid’s expensive long-term care benefits without first spending down privately as Congress intended.  Read the letter here.  Following is the back story.

For over three decades, several Congresses and Presidents have tried to ensure that Medicaid benefits reach only their intended beneficiaries, the genuinely needy.  We know.  Through all that time, we’ve been at the forefront of analyzing the problem of Medicaid planning abuse and urging corrective action.

It’s been a long hard slog, but not without some big successes.  Most of our recommendations in a 1988 study titled “Medicaid Estate Recoveries” for the USDHHS Inspector General—including longer and stronger transfer of assets rules and mandatory estate recovery—became law in the Omnibus Budget Reconciliation Act of 1993.  Read that study here.

After Center-co-founder Attorney David Rosenfeld drafted them (in his later role as Health Council to the House Energy and Commerce Committee) and I spent half a year in Washington, DC advocating them, critical changes to Medicaid LTC eligibility rules—including ending the egregious “half-a-loaf” strategy, putting the first limit ever on Medicaid home equity exemption, and liberating the LTC Partnership Program—became law in the Deficit Reduction Act of 2005.

In 2011, when it appeared Congress was eager to confront the burgeoning budget deficit, I spent two hot summer months back in DC working with the Cato Institute and talking to anyone who would listen about state Medicaid programs’ failure to implement those critical OBRA ’93 and DRA ’05 provisions.  I argued that fixing Medicaid LTC rules could save $30 billion annually in How to Fix Long-Term Care.”  My appeals fell mostly on deaf ears as I reported with great frustration in “Near-Term Prospects for Long-Term Care Financing Reform.”  Check it out including the cover which shows an elder on a super-charged Medicare-financed scooter heading at break-neck speed toward a brick wall of fiscal reality.

But thankfully, a few bright minds on Capitol Hill were open to learning more and doing something about it.  I’ll mention two key staffers, Brian Blase, then of the House Committee on Oversight and Government Reform and Josh Trent, then of Senator Tom Coburn’s staff.  Thanks to their efforts, requests went forth from their principals to the USDHHS Inspector General for information about the status of states’ enforcement of OBRA ’93 and DRA ’05.

In “LTC Bullet:  IG Report Reveals Costly Medicaid Enforcement Failures,” we announced the results of the Inspector General’s study conducted to respond to that congressional query: 

The U.S. Department of Health and Human Services Inspector General (IG) has reported that 23 states did not implement some or “all of the eligibility and asset transfer provisions” in the Omnibus Budget Reconciliation Act of 1993 (OBRA ’93) and the Deficit Reduction Act of 2005 (DRA ’05).  The same report provides the first data on Medicaid estate recoveries since FY 2004.  The states and federal government may be missing $2.5 billion in potential recoveries.

As we had already discovered and reported long ago, the IG’s study confirmed that too many states failed to implement critical provisions of the two laws; that California wasted untold billions of taxpayers’ money by ignoring asset transfer rules and other mandatory legal and regulatory provisions; and that most states dropped the ball on estate recoveries leaving further billions uncollected that could have helped fund Medicaid for those who truly needed its help.

It’s a sorry story of irresponsible management by states and legally actionable failure to enforce the law by the federal Centers for Medicare and Medicaid Services.  What happens next?  It depends on how CMS responds to this latest letter demand from Congress for an explanation and whether or not Congress compels CMS to take corrective action. 

We’ll be watching and we’ll let you know what, if anything, transpires to remedy CMS’s malfeasance.  The wheels of government grind slowly.  But with a new Congress now and a new President in two years, there is every reason to hope for another major success.  Success would mean targeting Medicaid to those most in need and using some of the savings to educate and incentivize consumers about responsible long-term care planning.

#############################

 

Updated, Monday, February 2, 2015, 11:30 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-005:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  For our special introductory offer, 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:

#############################

  • How to sell an annuity, from A to Z

  • The little annuity product with big buying potential

  • Why Carriers Like Lump Sum Payouts

  • Book the Man Many Say Could Bring Down ObamaCare

  • Many Seniors Not Reporting Falls to Physician:  Fewer than half tell their doctor of fall, researcher notes

  • 11 Tips on Long-Term Care as Rates Rise

  • 2015 Index of Economic Freedom

  • Long term care insurance advocate Deb Newman named to ‘Hot 100 in Insurance’

  • Average Costs For Long Term Care Insurance Rise 8.6 Percent

  • OneAmerica® Reports on Pension Risk Transfer buy-out product:  Single-premium group annuity rings up $51 million

  • Study to examine Medicaid-centric nursing homes that excel

  • To Collect Debts, Nursing Homes Are Seizing Control Over Patients

  • Lawmakers demand better adherence to Medicaid's eligibility and asset transfer rules

  • Budget Forecast Sees End to Steep Declines in Federal Deficit

  • Medicare to Rework Billions in Payments

  • How to make long-term care insurance more affordable

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

 

Updated, Friday, January 30, 2015, 10:25 AM (Pacific)
 
Seattle—

#############################

 

LTC BULLET:  LIFE INSURANCE FOR LTC

LTC Comment:  As the importance of private-pay funding for long-term care grows in the eyes of families and law makers, Chris Orestis shares his ideas for applying life insurance to the problem in today’s guest column after the ***news.***

*** ILTCI CONFERENCE.  The 15th annual Intercompany Long-Term Care Insurance Conference will convene March 22-25, 2015 at The Broadmoor resort in Colorado Springs, CO.  Get all the details and register here Captain Mark Kelly will keynote the event.  An American astronaut, decorated naval aviator, retired US Navy Captain, bestselling author and cancer survivor, Kelly gained international attention after the January 2011 assassination attempt on his wife, former US Congresswoman Gabrielle Giffords.  In between the opening and closing general sessions, you can expect the usual high caliber presentations, peerless networking, and excellent food and drink.  This is a convocation not to be missed if you can manage it.  Damon and I will be there to cover the program and report on it.  Say hello if you attend and, if you don’t (rue the thought), then watch for our “LTC Embed” accounts of the action. ***

 *** CLTCR Premium Membership  --  Center for Long-Term Care Reform premium members receive our full suite of individual membership benefits including:  our LTC Bullets and E-Alerts; access to our Members-Only Zone website and Almanac of Long-Term Care; subscription to our Clipping Service; and email/phone access to Steve Moses for 24-hour turnaround queries.  Our Premium Membership is designed to give you a competitive advantage in your long-term care profession. Your increased knowledge of the critical issues and challenges we face in the field of long-term care service delivery and financing equals improved professional success for you and better LTC services for your clients and for those who have no choice but to rely on scarce public resources.  Premium Membership is $250 per year, paid up front or monthly by automatically recurring credit card payments.  Contact Damon at 206-283-7036 / damon@centerltc.com to start your Premium Membership immediately or go directly to our secure online subscription page and sign up for as little as $21 per month. ***

 

LTC BULLET:  LIFE INSURANCE FOR LTC

LTC Comment:  For decades qualifying for Medicaid LTC benefits has been an open invitation to terrible financial planning.  Only to get those benefits would people do otherwise idiotic things like giving away all their wealth years in advance of needing care.  Or setting up a trust with the sole purpose of self-impoverishment.  Or buying a half million dollar home just to hide money that would otherwise have been disqualifying. 

Disposing of life insurance is another one of the stupid things people have been doing just to get Medicaid to pay for their LTC.  Why cash out or lapse?  Life insurance with a cash value counts against Medicaid’s low countable asset limit.  So Medicaid policy encourages people to take the cash value and buy an exempt new car or otherwise shelter the assets.  At the age of people likely to want Medicaid to pay for their LTC, few still have term insurance which has no cash value anyway.  Still many would lapse term policies, even though they’re exempt for Medicaid regardless of benefit amount.

In the following essay, Chris Orestis proposes an alternative to wasting the value of life insurance and dumping the cost of people’s LTC on tax payers prematurely.  State Medicaid programs and tax payers are likely to favor his solution.  Insurance carriers, not so much.  Life insurance policies that would otherwise have been cashed out or lapsed that end up paying in full are less profitable.  The result could be the future need to recalculate premium rates toward the upside to compensate for this added cost.

So there’s room for reasonable people to disagree.  But we invite you to read what Mr. Orestis has to say and form your own opinions.

----------------

Life Insurance for Long-Term Care
by
Chris Orestis

Introduction

Seniors have an overwhelming desire to remain independent, and do not want to become a burden on their family or a ward of the state by entering Medicaid.  Unfortunately, the current system to fund long term care has evolved into one that encourages seniors to impoverish themselves and move towards Medicaid as quickly as possible.  For the wealthy, long term care costs can be absorbed.  For the poor and disabled, government subsidized care is available.  But what about the majority of middle class Americans that need access to long term care today? New approaches to fund long term care must be encouraged, and converting life insurance policies into a Long Term Care Benefit Plan is an option that has grown into a mainstream and accepted financial solution.

Can a massive pool of in-force life insurance policies be part of the solution?

According to the National Association of Insurance Commissioners (NAIC), there is $27.2 trillion of in-force life insurance in the hands of 152 million Americans.  Too few of these policy owners understand their legal rights of ownership and do not possess the knowledge of how insurance works.  When their original need for a policy has run its course, the vast majority of owners simply walk away from what may be one of the most valuable assets they own—for nothing in return.  Life insurance is legally recognized as personal property and the owners have the right to use their assets in a number of ways including converting their policies into tax-exempt Long Term Care Benefit Plans while still alive.

A policy owner’s legal right to convert an existing life insurance policy into a long term care benefit plan is not to be confused with a long term care insurance policy, accelerated death benefit (ADB) rider, annuity, a hybrid life/LTCi product, or a loan.  This conversion option allows for the private, secondary market exchange of a life insurance policy for a Long Term Care Benefit Plan at the time that care is needed.  The benefit plan is a private market long term care funding option and is not issued by a carrier, not restricted to life policies that contain a conversion or accelerated death benefit rider, and conversion options for the owner are not restricted to only the issuing carrier.

A Long Term Care Benefit Plan converts a life insurance policy’s death benefit into a “living benefit” that will allow them to remain private pay and choose the form of care that they want.  The Long Term Care Benefit Plan pays out the present day value of a policy and protects the funds in an irrevocable, FDIC insured Benefit Account that makes monthly payments directly to the care provider.  Because the funds are protected and only used for care, it is a tax-exempt, Medicaid and VA qualified spend-down of an asset that far too many seniors abandon as they move towards long term care.

This option, by design, extends the time a person would remain private pay and delays their entry onto Medicaid.  It is a unique, tax-advantaged financial option to pay for care because all health conditions are accepted, and there are no wait periods, no care limitations, no costs to apply, no requirement to be terminally ill, and there are no premium payments. Any type of life insurance policy can be used to cover any form of senior care the policy owner wants: Homecare, Assisted Living, Nursing Home, Memory Care, and Hospice.

Legislative Attention turns to Private Pay and the Long Term Care Benefit Plan

States are under tremendous budget pressure to keep pace with exploding demand to cover long term care needs with tax payer money.  They are quickly realizing the savings that can be found for their beleaguered budgets by delaying entry onto Medicaid through the use of life insurance policy conversions into Long Term Care Benefit Plans. State legislative leaders across the country are taking action with consumer protection disclosure laws and legislation to encourage consumers to convert their life insurance to pay for long term care as an alternative to abandoning their policies. Policy owners are being encouraged to use their legal right to convert an in-force life insurance policy into a Long Term Care Benefit Plan and direct payments to cover their senior housing and long term care costs. 

In 2009, Conning and Company analyzed the emerging use of life insurance policies to pay for long term care as part of their Strategic Research Series.  In the paper they surmised:

Both state governments and the long term care industry are working to find a solution to the budgetary threat to Medicaid created as aging Baby Boomers impoverish themselves in order to have the state pay for long term care.  What is new is the concerted effort to integrate life insurance policies and long term care providers.  This new source of funds represents a potential alignment of long term care providers and state governments.

The next year, the National Conference of Insurance Legislators (NCOIL) understood the implications of billions of dollars of life insurance policies in the hands of seniors being discarded when they unanimously passed the Life Insurance Consumer Disclosure Model Act in November, 2010.  This consumer protection law requires that life insurance companies inform policy holders above the age of 60, or with a terminal or chronic condition, of approved alternatives to the lapse or surrender of a life insurance policy including “conversion to a Long Term Care Benefit Plan.”

From there, consumer protection disclosure legislation specifically endorsing the Long Term Care Benefit Plan has been introduced in the legislatures of twelve states through 2014: CA, FL, KY, LA, MA, MD, ME, NJ, NY, PA, TX, and WA.  This consumer protection disclosure bill has now been passed into law in KY and TX.

Conclusion

Long Term Care providers, insurance agents, financial planners and elder law experts are all on the same page with political leaders about this issue.  It makes no sense that seniors in need of long term care would abandon life insurance policies when the option to convert those policies into a monthly long term care benefit stream is readily available.  The owner of a life insurance policy with an immediate need for senior care services of any form (Homecare, Assisted Living, Memory Care, Nursing Home, Hospice) can now turn a death benefit into a “living benefit” that will keep someone private pay and delay their need for Medicaid.

Chris Orestis, CEO of Life Care Funding, is an 18-year veteran of both the insurance and long-term care industries.  A former Washington DC lobbyist, he is a nationally known senior care advocate and author of the Amazon best-seller book “Help on the Way,” a legislative expert, featured speaker, columnist and contributor to a number of insurance and long term care industry publications. His blog on senior living issues can be found at www.lifecarefunding.com. He can be reached at corestis@lifecarefunding.com or 888-670-7773 x 6623.

#############################

Updated, Monday, January 26, 2015, 11:03 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-004:  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.  For our special introductory offer, 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:

#############################

  • Will nursing care take all your money? Maybe not

  • 5 ideas for preventing a catastrophic caregiver drought

  • Leading Long-Term Care Insurance Agency Doubles Worksite Sales

  • Who Benefits As Medicare Burns?

  • Kitces: How to Fix LTC Insurance

  • Regional Forums to Provide Input and Ideas for the 2015 White House Conference on Aging

  • Millennials Set to Outnumber Baby Boomers
    2000-2011 Long-Term Care Intercompany Experience Study - Aggregated Databases and Report

  • No evidence that opioids are effective for long-term pain management, NIH panel says

  • Senate Report Urges Calif. To Overhaul Long-Term Care System

  • The Fifteenth Annual Intercompany Long-Term Care Insurance Conference

  • The Rising Cost of Living Longer: Analysis of Medicare Spending by Age for Beneficiaries in Traditional Medicare

  • Insurance via Internet Is Squeezing Agents

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

 

Updated, Friday, January 23, 2015, 10:42 AM (Pacific)
 
Seattle—

#############################

LTC BULLET:  SO WHAT IF THE GOVERNMENT PAYS FOR MOST LTC?, 2013 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?, 2013 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 2013 statistics on its website at http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/Tables.zip.

The current issue of Health Affairs (Vol. 34, No. 1, pps. 150-160) contains a summary and analysis of the new data titled “National Health Spending in 2013: Growth Slows, Remains in Step with the Overall Economy."  Registered subscribers to Health Affairs can access the full text of that article online at http://content.healthaffairs.org/content/34/1/150.full.

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

------------------

"So What If the Government Pays for Most LTC?, 2013 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.

America spent $155.8 billion on nursing facilities and continuing care retirement communities in 2013.  The percentage of these costs paid by Medicaid and Medicare has gone up over the past 43 years (from 26.8% in 1970 to 52.3% in 2013, up 25.5 % of the total) while out-of-pocket costs have declined (from 49.5% in 1970 to 29.4% in 2013, down 20.1% 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 1970-2013.

So What?  Consumers' liability for nursing home and CCRC costs has declined by 40.6% in the past four 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 $552,000 and in some states up to $828,000 of home equity (as of 1/1/15).  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 care (30.1% of the dollars in 2013), it covers nearly two-thirds (63%) of all nursing home residents.  Because people in nursing homes on Medicaid tend to be long-stayers, Medicaid pays something toward nearly 80 percent of all patient days. 

So What?  Medicaid pays in full or subsidizes almost four-fifths of all nursing home patient days.  If it pays even one dollar per month (with the rest 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.  The 2012 shortfall was $22.34 per Medicaid patient day and $7 billion in total.  Source:  2012 Report on Shortfalls in Medicaid Funding for Nursing Home Care.

Don't be fooled by the 8.1% of nursing home costs that CMS reports as having been paid by "private health insurance" in 2013.  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 nursing homes.  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.

How does all this affect assisted living facilities?  ALFs are 80% private pay (Source:  AHCA/NCAL Issue Brief) and they cost an average of $42,000 per year (Source:  Genworth 2014 Cost of Care Survey).  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 $552,000 or $828,000 depending on the state), plus—in unlimited 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.

The situation with home health care financing is very similar to nursing home financing.  According to CMS, America spent $79.8 billion on home health care in 2013.  Medicare (43.1%) and Medicaid (36.5%) paid 79.6% of this total and private insurance paid 7.9%.  Only 8.1% of home health care costs were paid out of pocket.  The remainder came from several small public and private financing sources.  Data source.

So What?  Only one out of every 12.5 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:

“How to Fix Long-Term Care,” 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" here (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 small steps toward addressing these problems.  A cap was placed 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 starting to crest 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.  He is the author of the policy analysis "Aging America's Achilles' Heel: Medicaid Long-Term Care," published by the Cato Institute (www.cato.org).  Learn more at www.centerltc.com or email smoses@centerltc.com. 

#############################

Updated, Tuesday, January 20, 2015, 11:30 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-003:  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.  For our special introductory offer, click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

#############################

  • California lawmaker brings back Medicaid recovery bill

  • “Still Alice” novelist shines spotlight on early onset Alzheimer’s

  •  Top Health Official Marilyn Tavenner to Step Down

  • Ruling Targets Non-Lawyers Providing Medicaid Advice

  • Strength in unity is pharmacies' motto, and hope

  • Studies from Nihon University in the Area of Elderly Care Reported (Can formal elderly care stimulate female labor supply? The Japanese experience)

  • Caregiving and work leave

  • 5 top LTC risk awareness drivers

  • Antipsychotics increase fall risk 50% for long-term care residents and those living in community, study finds

  • When Bad Models Happen to Good People

  • Study: New MRI approach can detect Alzheimer’s disease early

  • 15th Annual ILTCI Conference Program Expands with Future Leaders Program and Alzheimer’s Association Seminar

  • NIC: Nursing home and assisted living occupancy remained static in 4th quarter

  • LTCI Watch: Investors

  • For The Record: Aging Out and Moving On

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

 

Updated, Friday, January 16, 2015, 11:11 AM (Pacific)
 
Seattle—

#############################

LTC BULLET:  WHEN BAD MODELS HAPPEN TO GOOD PEOPLE

LTC Comment:  We offer the last word on that Boston College fiasco of poor scholarship and bad economics after the ***news.***

*** 1/13/2015, “15th Annual ILTCI Conference Program Expands with Future Leaders Program and Alzheimer’s Association Seminar,” Herald Online

Quote:  “The Intercompany Long Term Care Insurance Conference Association, Inc. (ILTCI) today announced special pre- and post-conference seminars for its 15th annual conference (www.iltciconf.org), to be held March 22-25, 2015 at The Broadmoor in Colorado Springs, Colorado. The Future Leaders Program will kick off with a pre-conference networking lunch on Sunday, March 22, and the Alzheimer’s Association seminar will conclude the program on Wednesday morning, March 25.”

LTC Comment:  All the more reason to get there early and stay late.  This should be another excellent industry event. ***

----------------

LTC BULLET:  WHEN BAD MODELS HAPPEN TO GOOD PEOPLE

LTC Comment:  Stephen D. Forman and the LTC insurance marketing company he and his brothers run are long-time supporters of the Center for Long-Term Care Reform.  They publish a very thoughtful occasional newsletter called “Your Next LTCA Sales Idea.”  Much more than “salesy” fluff, that publication appeals to an LTCI producer’s intellect.  It arms him or her with solid information and analysis to persuade reluctant prospects who’ve been misled by careless scholars and lazy journalists.  We thank the Formans for permission to share Stephen’s essay with you today.

----------------

"When Bad Models Happen to Good People"
by Stephen D. Forman

No single model received more attention in 2014 than one produced by the Center for Retirement Research at Boston College titled "Long-Term Care: How Big a Risk?" (November 2014, Number 14 - 18, Leora Friedberg, et. al.) At the same time, no other model has been more widely misinterpreted, wrongly extrapolated, or gleefully co-opted by LTCI detractors. Since the New Year is considered a time for looking forward, let's begin by clearing this foggy hangover from 2014, then speak no more of it.

MEDICAID 1, LTCI 0

This is the way the CRR model's conclusions are most often presented: by using monthly instead of yearly data, it was found that average nursing home stays are 30% shorter than previously believed. (On average a man stays less than 12 months, a woman 17.) In fact, 45% of patient stays do not exceed 3 months. Even worse, LTC insurance is duplicative since Medicare will cover these short stays--the study assumes the first three months of "all episodes of care are covered by Medicare." [emphasis in the original] 

Finally, CRR corrects a previous model which understated the probability of ever needing care by 32 - 63%. The conclusion? Since long term care is a relatively high-probability event--but less catastrophic than previously understood--it makes less economic sense to insure against.

The media jumped all over it:

  • "Maybe You Don't Need Long-Term Care Insurance After All" (Bloomberg)
  • "Here's a New Reason to Think Twice Before Buying Long-Term Care Insurance" (Time/Money)
  • "'Spending Down' for Medicaid is the Most Practical LTC Financing Plan for Most Americans, Researchers Assert" (McKnight's)
  • "Is Long-Term Care Insurance for You?" (Wall Street Journal)
  • "Boston College Finds Rip-Off in Long Term Care Insurance Costs When Compared to Other Options, Opines UltraTrust.com" (Estate Street Partners)

Readers who dove into these articles seeking sound advice were met with takeaways such as this: "Forgoing long-term care insurance and relying on Medicaid is the smartest financial planning decision for the majority of unmarried Americans." Lacking were any qualifications concerning Medicaid's notoriously low reimbursement rates, institutional bias, record of poor quality, or inability to access care.

This was our first sign of trouble: CRR assumes all "rational, far-sighted, well-informed" individuals make decisions entirely on the basis of money. We do not. As economists, they'd have been better served with a model in which rational individuals make decisions which maximize our utility. Had they done so, their buyers would've valued higher quality care and the ability to remain at home with family, tilting the scales in favor of LTCI.

Meanwhile, the Bloomberg piece acknowledges that the biggest threat to a retiree's nest egg "isn't a stock market crash. It's a long illness requiring round-the-clock care." Unfortunately, thanks to the new CRR model, not only should most people "just skip [LTC insurance]," but the majority of Americans (all but the richest 20 - 30% of singles) should "[spend] down their assets and then [let] Medicaid pick up the tab."

Lest we dismiss this study for its preoccupation with singles, we are warned that "forthcoming research will show long-term care insurance makes even less sense for married couples."

And why did the researchers focus on singles anyway, when 82% of all LTCI policies are purchased by members of couples? They argue that since 75%+ of nursing home residents are over age 65 and single, their limitation to singles is "not significant". Once again our economists have set out on the wrong foot: they are not modeling nursing home residents, they are modeling buyers. Oh, dear.

THE AVERAGE FAMILY HAS 2.5 CHILDREN

I've been careful in my choice of words: what the Center for Retirement Research produced was an economic model. Framing it otherwise (a study or research report) suggests a methodology or outcome which we shouldn't reinforce. Models exist in the abstract, not reality. This one invented hypothetical buyers in a controlled environment.

One particularly unfortunate problem with CRR--overlooked in all the hubbub--is that it sought to answer a question of its own making, and not one that anybody had been asking. Namely, why do only a certain percentage of single individuals (an assumption of their own creation which disagrees with other contemporary sources¹) buy LTC insurance, differing from the percentage predicted by the Brown & Finkelstein Model (i.e., the famous "Medicaid Crowd Out Effect")? This model was an attempt to reconcile the two numbers.

Now, models can serve a purpose, but they are inherently limited. In the case of CRR, even its "new" data remain archaic (10-years old) and don't square with reality: after all, insurance is built primarily around the remote but catastrophic risk--not the occasional shopping cart dinging your car door. This is why buyers and sellers have played a tug-of-war between unlimited benefit periods and short-term care. One is hard to offer profitably, while the other is hard to make desirable.

Worst of all, the model presumes that buyers care only about nursing facilities, when the exact opposite is true. Most of our clients are motivated to purchase LTCI for its ability to do the one thing Medicaid is worst-equipped to do--keep them out of the nursing home.

Then, in a final Hail Mary, they assume Medicare pays for most short stays--which one nursing home worker laughs off, "[I] can count on 2 hands out of the thousands of patients I've served, how many have actually received 100 days of Medicare coverage."

Ultimately, the economists got the results they hoped for (had they not, would this study have seen the light of day?), and were able to achieve agreement between the Brown & Finkelstein model and their own:

Singles aged 65+ who "make optimal saving and insurance decisions" (how many real people do you know like that?) are substantially less willing to buy an option to purchase LTC insurance at market premiums, based on a more-accurate transition matrix updated to 2004 based on monthly probabilities instead of annual transition events.

Now go back and read that sentence again.

Not much of a headline-grabber, huh? We should be asking ourselves what all the hoopla was about--particularly since a landmark study was released almost simultaneously as CRR which contained some of the most newsworthy, compelling and positive research about LTC insurance in over a decade. Do you remember the financial media covering this report with the same enthusiasm as the Boston College model? Do you recall seeing any of the above publications covering it at all?

Don't worry, we'll be reviewing it in our next LTCA Sales Idea. Until then, good selling! 

Reach Mr. Forman of Long Term Care Associates at steve@ltc-associates.com.

#############################

 

Updated, Monday, January 12, 2015, 10:45 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-002:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  For our special introductory offer, click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

#############################

  • New York state to promote LTC planning
  • Navigating the complexity of a long-term care insurance policy
  • Collins to lead Aging committee, says Alzheimer's will be special focus
  • Multi-drug approach could be way to treat Alzheimer’s, study suggests
  • Hybrid life-LTC policies are a hit among advisers
  • 4 ways for LTCI specialists to reach
  • LTCi New Premium Growth In 2015 Projected To Reach 10%
  • Hawaii seeks long-term services and support awareness proposals
  • Why you shouldn’t count on your family members to take care of you when you’re old
  • Key Elder Law Numbers for 2015: Our Annual Roundup
  • Health Affairs Article: At Least Half of New Medicare Advantage Enrollees Had Switched From Traditional Medicare During 2006-11
  • Doctors Face A Huge Medicare And Medicaid Pay Cut In 2015
  • As Caregiving Shifts To The Home, Scrutiny Is Lacking
  • Inter-Generational Planning
  • Mester Says Fed May Raise Rates Within the Next Six Months

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

 

Updated, Friday, January 9, 2015, 8:14 AM (Pacific)
 
Seattle—

#############################

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.***

*** 2015 MEDICARE NUMBERS updated in The Zone.  We also reported the new Medicare numbers in this LTC Clipping on Tuesday:

1/6/2015, “Key Elder Law Numbers for 2015: Our Annual Roundup,” ElderLawAnswers

Quote:  “Medicare Premiums, Deductibles and Copayments for 2015

  • Part B premium: $104.90/month (unchanged)
  • Part B deductible: $147 (unchanged)
  • Part A deductible: $1,260 (was $1,216)
  • Co-payment for hospital stay days 61-90: $315/day (was $304)
  • Co-payment for hospital stay days 91 and beyond: $630/day (was $608)
  • Skilled nursing facility co-payment, days 21-100: $157.50/day (was $152)

LTC Comment:  This is a handy compilation of all the new key Medicaid and Medicare numbers for 2015.  We’ve archived this information in The Zone for Center members here.  For a reminder of your user name and password, contact damon@centerltc.com.  We previously highlighted the new Medicaid numbers so we cite and archive only the new Medicare numbers today. ***

*** BUT DID YOU KNOW THIS?  Long-time Center supporter Carroll Harper shared this tip:  “If you know any one of the Medicare Part A deductibles and co-pays, you can figure out the rest. For example, the SNF co-pay is always the Part A deductible divided by 8, or $1260/8 = $157.50.  The co-pay for days 61 – 90 is always ¼, or $1260 divided by 4 = $315.  And the co-pay for days 91 – 150 (a beneficiary’s one-time 60-day lifetime reserve) is ½, or $1260 divided by ½ = $630. ***

*** ILTCI EXHIBITOR INFORMATION published for the 15th Annual Intercompany LTCi Conference - March 22-25, 2015 - The Broadmoor Hotel - Colorado Springs, CO.  If you didn’t receive all the details directly from the organizers, then contact Jim Glickman at jim.glickman@lifecareassurance.com or 818-867-2223.  He says:  “The ILTCI is the national conference for the Long Term Care Insurance industry (with about 1000 attendees).  In addition to all of the normal Exhibit Hall perks, we will be offering a ‘Theater’ where each exhibitor can sign up without charge, to make a presentation on their ‘solution.’  If you are a new Exhibitor, we are offering a new Exhibitor discount of $250.” ***

#############################

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 one week—today through Friday, January 16, 2015.  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.  ***

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 annual 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.

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.

--------------

Chapter 3:  Unfunded Liabilities--Social Security, Medicare, Pensions and Budgets

National Health Expenditures

Health Affairs on 2013 NHE 1214 URL

“Spending Remains at 17.4 Percent of Gross Domestic Product, Unchanged since 2009 

Bethesda, MD--A new analysis from the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS) estimates that in 2013 health care spending in the United States grew at a rate of 3.6 percent in 2013 to $2.9 trillion, or $9,255 per person. The increase was slower than the 4.1 percent growth in 2012 and continued a pattern of low growth that has held relatively steady at between 3.6 percent and 4.1 percent annual growth for five consecutive years.” 

 

Health Affairs on Estimated Health Costs through 2023 URL

“National Health Expenditure Projections, 2013-23: Faster Growth Expected With Expanded Coverage And Improving Economy”

“ABSTRACT:   In 2013 health spending growth is expected to have remained slow, at 3.6 percent, as a result of the sluggish economic recovery, the effects of sequestration, and continued increases in private health insurance cost-sharing requirements. The combined effects of the Affordable Care Act’s coverage expansions, faster economic growth, and population aging are expected to fuel health spending growth this year and thereafter (5.6 percent in 2014 and 6.0 percent per year for 2015–23). However, the average rate of increase through 2023 is projected to be slower than the 7.2 percent average growth experienced during 1990– 2008. Because health spending is projected to grow 1.1 percentage points faster than the average economic growth during 2013–23, the health share of the gross domestic product is expected to rise from 17.2 percent in 2012 to 19.3 percent in 2023.”  (p. 1)

For analysis, see:  LTC Bullet:  CMS Health Expenditure Data Mask LTC Cost Growth, September 5, 2014

 

Unfunded Liability Estimates

Medicare Trustees Report 2014 URL

2014 Annual Report Of The Boards Of Trustees Of The Federal Hospital Insurance And Federal Supplementary Medical Insurance Trust Funds

For analysis, see LTC Bullet:  Entitlement Double Talk, 8/1/14

 

Chapter 5:  Caregiving

General

DHHS on Informal Caregiving URL 0414:  http://aspe.hhs.gov/daltcp/reports/2014/NHATS-IC.cfm

“Informal Caregiving for Older Americans: An Analysis of the 2011 National Health and Aging Trends Study,” April 2014; Brenda C. Spillman, Ph.D., Urban Institute; Jennifer Wolff, Ph.D., Johns Hopkins Bloomberg School of Public Health; Vicki A. Freedman, Ph.D., University of Michigan; Judith D. Kasper, Ph.D., Johns Hopkins Bloomberg School of Public Health

AbstractThis report examines the role and experiences of informal caregivers for the older population, using a new resource, the National Survey of Caregiving (NSOC). The NSOC is unique in interviewing all informal caregivers for a nationally representative sample of persons age 65 or older receiving assistance with daily activities. NSOC respondents report on types of assistance they provide beyond traditional household (IADL) and self-care or mobility (ADL) tasks. These tasks range from assisting with transportation to help with health or medical care, including such things as injections or ostomy care. Thus, estimates capture the full range of supports informal caregivers provide and contributions they make in areas other than explicit long-term care. Information collected about positive and negative aspects of caregiving, health, and indicators of subjective well-being allows examination of how gains and burdens differ by caregiver and care recipient characteristics and by the intensity of care provided.

 

Chapter 6:  Long-Term Care Financing

General

Center for American Progress on Long-Term-Care 103114 URL

For press release

LTC Clipping 10/31/2014:  “RELEASE: CAP Issue Brief Calls for Tax Credits for Long-Term Care Insurance; Expanding Service-Corps Programs to Aid in Providing Long-Term Care,” by Center for American Progress

Quote:  “In a new issue brief, the Center for American Progress recommends two reforms to help make long-term care more affordable and allow more individuals to live independently in their homes for longer periods of time.

LTC Comment:  This unusual call for LTCI tax credits from a progressive think tank is welcome, but the report fails to recommend restrictions on easy and elastic Medicaid LTC eligibility rules without which positive incentives for LTC planning will have little effect.

 

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

ACLI on LTC URL

http://insurancenewsnet.com

LTC Clipping:  12/9/2014, “For Long-Term Care's Future, 2 Dates Loom,” by Cyril Tuohy, InsuranceNewsNet

Quote:  “American Council of Life Insurers vice president and chief economist Andrew Melnyk wants people to keep two years — 2030 and 2050 — in mind.  The year 2030 is when the youngest baby boomers turn 65 and the oldest baby boomers turn 85, and the year 2050 is when the youngest baby boomers turn 85.  Like a submarine in slow descent with water pressure building slowly on its hull, so too are the 76 million baby boomers exerting a ‘slow intensification’ on long-term care needs as they retire, Melnyk said.  …  Melnyk and associate Harsh Sharma have issued a white paper titled ‘Who Will Pay For Our Long-Term Care?’

LTC Comment:  You can find a .pdf of the full report here

 

State Budgets and Reports

NCPA on LTC in Wisconsin URL:  http://www.ncpa.org/pub/st361

11/19/2014, “Improving Long-Term Care in Wisconsin,” by  Pamela Villarreal, National Center for Policy Analysis

Quote:  “At the federal level, allow states to establish their own home equity limits, or none at all, for Medicaid eligibility.  …  Allow Medicaid to require and support reverse mortgages as an alternative to asset recovery. …  Phase out the public/private partnership, and replace it with a state income tax credit for the purchase of long-term care insurance.  …  Use home care in place of institutional care when possible.”

LTC Comment:  We agree with three of this report’s recommendations:  letting state Medicaid programs set their own home equity limits, requiring reverse mortgages as a condition of eligibility, and providing more home care assuming the first two recommendations are actually implemented so that home care doesn’t drive up Medicaid’s cost and make Medicaid dependency more attractive than ever.  Cancelling the LTC Partnership program, however, would be a mistake.  Read the full study here.

 

Chapter 7:  Long-term Care Insurance

General and Data

Benefits of LTCI by Lifeplans 1114 URL:  http://www.ahip.org/Epub/The-Benefits-of-LTC/

LTC Clipping:  11/13/2014, “New Report: Long-Term Care Insurance Offers Critical Financial Stability, Security for Consumers,” InsuranceNewsNet.com

Quote:  “With more Americans planning for retirement and future medical expenses, a new report (http://www.ahip.org/Epub/The-Benefits-of-LTC/) released by America's Health Insurance Plans (AHIP) finds that long-term care insurance offers critical protection and needed flexibility for millions of families managing the significant costs associated with long-term care. The latest analysis prepared by LifePlans finds that long-term care insurance provides a more cost-effective way to pay for health care expenses later in life, such as nursing homes, assisted living, or in-home care, rather than relying on personal savings or depleting assets in order to qualify for Medicaid.

LTC Comment:  Hard evidence of the real and substantial benefits of private long-term care insurance.  Use it to counteract adverse opinions in the media that poison public opinion.

 

SOA on LTCI Pricing 0714 URL:  https://www.soa.org/research/research-projects/ltc/research-2014-understanding-volatility.aspx

Understanding the Volatility of Experience and Pricing Assumptions in Long-Term Care Insurance

“The Society of Actuaries is pleased to make available two reports aimed at advancing knowledge in Long-Term Care pricing. The first report, authored by Actuarial Resources Corporation of Kansas, illustrates how the risks of Long-Term Care Insurance can be understood through modeling the liabilities using a Monte Carlo simulation approach.  The second report, authored by PricewaterhouseCoopers, is forthcoming. The reports can be accessed by clicking the links to the right [at the link above].”

 

Chapter 9:  Long-Term Care Providers

Medicaid Reimbursement

GAO on Provider Taxes 0714 URL:  http://www.gao.gov/products/GAO-14-627

See LTC Clipping:  July 30, 2014:  U.S. GAO - Medicaid Financing: States' Increased Reliance on Funds from Health Care Providers and Local Governments Warrants Improved CMS Data Collection:  http://www.gao.gov/products/GAO-14-627

Quote:  “GAO found, based on a questionnaire sent to state Medicaid agencies, that states financed 26 percent, or over $46 billion, of the nonfederal share of Medicaid expenditures with funds from health care providers and local governments in state fiscal year 2012. State funds were most of the remaining nonfederal share. . . .  For example, in Illinois, a $220 million payment increase for nursing facilities funded by a tax on nursing facilities resulted in an estimated $110 million increase in federal matching funds and no increase in state general funds, and a net payment increase to the facilities, after paying the taxes, of $105 million.”

LTC Comment:  Instead of taxing their citizens to raise funds for Medicaid, states tax providers like nursing homes, leverage up federal Medicaid matching funds, and kick back some of the “profits” to the providers.  It’s “Medicaid planning” on a grander scale and results in much higher costs for federal taxpayers.  It also tips the balance away from private LTC financing toward more Medicaid dependency.

 

Chapter 10:  Medicaid

Medicaid Financing

KFF on Medicaid LTC 080114 URL:  http://kff.org/medicaid/report/medicaid-and-long-term-services-and-supports-a-primer/

LTC Clipping August 1, 2014:  Medicaid and Long-Term Services and Supports: A Primer, The Henry J. Kaiser Family Foundation

http://kff.org/medicaid/report/medicaid-and-long-term-services-and-supports-a-primer/

Quote:  “With limited coverage under Medicare and few affordable options in the private insurance market, Medicaid will continue to be the primary payer for a range of institutional and community-based LTSS for persons needing assistance with daily self-care tasks.”

LTC Comment:  As usual, this report from Kaiser pooh-poohs the potential of private long-term care insurance.  But have a look at its Figure 3, a pie chart showing the sources of LTC financing.  Medicaid is 40% and other public sources are 38% leaving only 22% for private financing of which 7% is LTC insurance.  In other words, only 15% of LTC spending in the USA is “out-of-pocket.”  Can anyone really believe the share covered by private LTCI would be only 7% if it weren’t for the vast mostly un-means-tested (Medicare) or ineffectually means-tested (Medicaid) federal expenditures that have crowded out the market for LTCI?  If we were to target publicly financed LTC to the genuinely needy, most Americans would either purchase LTCI or they’d fund their LTC with savings or home equity, an outcome which would cause the next generation to plan more responsibly for LTC risk and cost.

 

Medicaid Actuarial Report 2013 URL:  http://www.cms.gov/Research-Statistics-Data-and-Systems/Research/ActuarialStudies/MedicaidReport.html

Christopher J. Truffer, et al., “Report to Congress:  2013 Actuarial Report on the Financial Outlook for Medicaid,” Office of the Actuary, Centers for Medicare & Medicaid Services, United States Department of Health & Human Services, Kathleen Sebelius, Secretary of Health and Human Services, 2013; http://www.cms.gov/Research-Statistics-Data-and-Systems/Research/ActuarialStudies/MedicaidReport.html.

“This is the fifth annual Medicaid report from the Office of the Actuary (OACT) at CMS. The purpose of this report is to describe the past and projected trends for Medicaid expenditures and enrollment, including estimates for Federal fiscal years (FYs) 2012 and 2013 and projections over the next 10 years.”  (p. 1)

For analysis, see LTC Bullet:  Does Medicaid Solvency Matter?, October 31, 2014

 

Medicaid Crowd-Out

Boston College on spend down URL:  http://crr.bc.edu/wp-content/uploads/2014/11/IB_14-18.pdf

“Long-Term Care: How Big A Risk?, By Leora Friedberg, Wenliang Hou, Wei Sun, and Anthony Webb, November 2014, Number 14-18, Center for Retirement Research, Boston College

For analysis, see LTC Bullet:  How Careless Economists Boosted LTC Risk, December 12, 2014

LTC Clipping:  11/14/2014, “'Spending down' for Medicaid is the most practical LTC financing plan for most Americans, researchers assert,” by Tim Mullaney, McKnight's LTC News

Quote:  “The upshot is that the 100-day Medicare benefit would cover many of these stays. Therefore, most ‘rational, far-sighted, well-informed’ single people would be smart to avoid paying LTC insurance premiums; if faced with a worst-case scenario, they could spend down their assets until they qualify for Medicaid, the study authors stated.”

LTC Comment:  We referenced and debunked this same Boston College report in an earlier clipping.  Ignoring Medicaid’s quality, access, financing and institutional bias problems is the height of scholarly irresponsibility.  With new political winds blowing we’ll have the chance again in coming years to combat this nonsense with hard facts and logic before state and federal legislative bodies as we have done successfully in the past.

 

Dual Eligibles

GAO on Dual Eligibles Cost-Effectiveness URL:  http://www.gao.gov/products/GAO-14-523

“Disabled Dual-Eligible Beneficiaries:  Integration of Medicare and Medicaid Benefits May Not Lead to Expected Medicare Savings,” GAO-14-523:  Published: Aug 29, 2014. Publicly Released: Sep 29, 2014.

“What GAO Found:  Overall spending for high-expenditure disabled dual-eligible beneficiaries—those in the top 20 percent of spending in their respective states—was driven largely by Medicaid spending, and the service use and health status often differed widely between those with high Medicare expenditures and high Medicaid expenditures. For these beneficiaries, Medicaid expenditures accounted for nearly two-thirds of overall spending. Also, states with high Medicaid spending often had lower Medicare spending but nearly always had greater overall spending for these beneficiaries. Furthermore, service use and health status often differed widely between high-Medicare-expenditure and high-Medicaid-expenditure disabled dual-eligible beneficiaries. Those with high Medicare expenditures were considerably more likely than those with high Medicaid expenditures to have multiple health conditions and use inpatient services but far less likely to use long-term services and supports.”

#############################

 

Updated, Monday, January 05, 2015, 11:58 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #15-001:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  For our special introductory offer, 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:

#############################

  • LTCG Announces the Appointment of Vince Bodnar as Chief Actuary

  • Long-term-care insurance helps relieve stress

  • A Sobering Perspective on a Looming Retirement Crisis

  • 2015 long-term care planning outlook: Washington

  • Long-distance caregiving: Tech fills gaps for far-flung families

  • Elder-care challenges prompt tech executives to create startups, apps

  • When Home And Health Are Just Out Of Reach

  • 2015 Medicare Fee Schedule Offers Payment for Chronic Care: Code pays for clinical staff time for developing, implementing care plan for chronic conditions

  • Obama administration to investigate insurance discrimination

  • A Deeper Dive Into Chronic Illness Riders

  • Is Long-Term-Care Insurance for You?

  • Single Digit Growth In LTCi Sales Forecast For 2015

  • Uncertainty in Long-Term Care Continues to Plague Profitability

  • The Impact of Long-Term Care Costs on Retirement Wealth Needs

  • Advisors As Guardians

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

 

Updated, Monday, December 22, 2014, 8:27 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #14-038:  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.  For our special introductory offer, click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

#############################

  • The Long-Term Care Insurance Dilemma:  Readers weigh in on why they chose to purchase pricey long-term care policies--or not to

  • New Medicare Advantage rules benefit seniors

  • 5 LTCI claim payment secrets

  • More than 65% of Medicaid now is managed care, long-term care programs to expand, PricewaterhouseCoopers reports

  • You call this a plan to reduce nursing homes?

  • Medicare Cuts Payments To 721 Hospitals With Highest Rates Of Infections, Injuries

  • UnitedHealth, Humana continue to dominate Medicare Advantage

  • Your Next Sales Idea from LTCA: ‘LTC Fallacy: Use It or Lose It

  • A post-mortem for wellness programs: What went wrong?

  • Genworth Delays Result of Reserves Review After Shortfall
    Why Eldercare Will Need More Gen Xers, Millennials--& Money

  • New Federal Budget Freezes Most Spending for Senior Services -- Again

  • 2015 [LTC Provider] Business Outlook: Payment

  • Youngest boomers turn 50 this year

  • How the Obesity Epidemic Drains Medicare and Medicaid

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

 

Updated, Friday, December 19, 2014, 11:56 AM (Pacific)
 
Seattle—

#############################

LTC BULLET:  SOA’S LTC MONOGRAPH

LTC Comment:  The Society of Actuaries has published a monograph on long-term care and retirement security.  Excerpts and links after the ***news.***

*** SEASON’S GREETINGS:  This is our last LTC Bullet of 2014.  We’ll take a break for the holidays and we wish all of you every happiness during this joyous time of year.  I’m glad we can close 2014 with an overview of new and hopeful ideas for better long-term care financing in the future.  We sense fresh enthusiasm for policy reform and possibly a more receptive political environment for desperately needed policy changes.  The Center for Long-Term Care Reform will continue our unstinting efforts in 2015 to document the need, provide the evidence, make the arguments, and advocate the solutions with the help of all our allies in this great mission to “ensure quality long-term care of all Americans.” ***

#############################

LTC BULLET:  SOA’S LTC MONOGRAPH

LTC Comment:  The Society of Actuaries’ (SOA) Committee on Post Retirement Needs and Risks in partnership with the Long Term Care Section has published a series of articles “that explore the impact of long-term care needs and expense on retirement security from a variety of aspects.”  You can access the publication’s “Introduction,” an “Overview,” a compilation of its articles’ abstracts, and each of the complete articles here.  Recordings of these papers’ formal presentations at the 2014 SOA Annual Meeting are available free of charge to SOA members here

Congratulations to the Society of Actuaries and to each of the publication’s contributors for this valuable contribution to the literature on long-term care financing.  What follows is a list of the articles in the monograph with excerpts from their abstracts and links to the full paper.

The Impact of Long-Term Care Costs on Retirement Wealth Needs,” by Vickie Bajtelsmit and Anna Rappaport.  “Abstract:  This paper provides an overview of the risks and costs of long-term care (LTC), including a discussion of who bears the risk, and the advantages and disadvantages of various funding mechanisms for long-term support and services. A summary of recent simulation studies provides evidence regarding the size of the risk and the impact on household financial wellbeing. We conclude that advance planning for LTC risk is critical for low- to middle-income households. For other than the wealthiest households, the cost at the retirement date of any LTC financing strategy will likely be prohibitive and may deplete household emergency funds. For those with greater wealth and income, paying for LTC costs as they are incurred may be a workable option.”

How American Society will Address Long-Term Care Risk, Financing and Retirement,” by John Cutler.  From the abstract:  “This paper uses a literature search and reflective analysis of current programs and policies to lay out a path … . The review covers Medicare, Medicaid, health insurance, LTC insurance (including life and annuities), Social Security, pensions, housing and reverse mortgages as well as family, caregiving and the workforce. What is clear is that a variety of approaches, both public and private, are currently available to address LTC risks. In fact, it might well be that we ARE seeing LTC reforms underway but too incremental (and fragmented) to be obvious.”

Improving Retirement by Integrating Family, Friends, Housing and Support: Lessons Learned from Personal Experience,” by Anna Rappaport, FSA, MAAA.  From the abstract:  “This paper provides insights about choices made with regard to housing and supportive services based on personal experience with family and friends. The first experience is about my mother and her choices that involved a move into independent living, assisted living, and ultimately a nursing home. The second story is about an individual interested in a continuing care retirement community (CCRC) and that individual’s attempts to investigate CCRC options. The third story relates to people who live in a community where residents help each other out. All of the stories offered insights, most of which were not obvious to me, and which so far as I know, are not easy to find in the literature. Additional insights come from discussions with friends who have been involved.”

The 65-Plus Age Wave and the Caregiving Conundrum: The Often Forgotten Piece of the Long-Term Care Puzzle,” by Sandra Timmermann, Ed.D.  From the abstract:  “Both family caregivers and those who work as paid caregivers are the backbone of the long-term care system, but are often the forgotten link in the long-term care financing discussion.  …  Paid caregivers are a critical element in the care continuum, both in the home and in facilities, but with low wages and few opportunities for advancement, the jobs are difficult to fill, turnover is high, and the potential for elder abuse is always present. …  The paper provides an overview of the situation, including current data, in each of these four areas; highlights some innovative programs and initiatives that are underway by communities, employers and policymakers; and offers some ‘blue sky’ strategies and solutions for both the public and private sectors to bring these issues to the top of the national agenda.”

Home Equity and At-Need Annuities—A Dynamic Long-Term Care Funding Duo,” by Steve Cooperstein, FSA.  From the abstract:  “This paper describes the LTC funding problem, including weaknesses of reverse mortgages and Medicaid … and how …  an at-need annuity/home equity combination can offer ‘late-in-the-game’ additional insurance leverage. An extensive anecdotal example is provided describing how this option can be effectively used to maximize care outcomes by building on other funding. Cash flow analyses of alternatives are discussed, as well as sensitivities involved and the need to focus on risk/reward choices. The potential and broader implications for practical layered funding of LTC costs, which this possibility facilitates, are also discussed.”

Long-Term Care Benefits May Reduce End-of-Life Medical Care Costs,” by Stephen K. Holland, MD; Sharrilyn R. Evered, PhD; and Bruce A. Center, PhD.  From the abstract:  “This study explores whether personal care services for functionally dependent or cognitively impaired individuals paid for by a long-term care (LTC) insurance policy can reduce health care utilization and costs at the end of life. …  Claimants using LTC benefits experienced significantly lower health care costs at end of life, including 14% lower total medical costs, 13% lower pharmacy costs, 35% lower inpatient admission costs, and 16% lower outpatient visit costs. They also experienced 8% fewer inpatient admissions and 10% fewer inpatient days. The presence of dementia at the end of life moderated these effects. This study suggests that use of insurance-based LTC services measurably reduces health care expenditures at the end of life. (Population Health Management 2014;17:332–339)” 

An Overview of the U.S. LTC Insurance Market (Past and Present):  The Economic Need for LTC Insurance, the History of LTC Regulation & Taxation and the Development of LTC Product Design Features,” by Larry Rubin, FSA, CERA, MAAA, et al.  “Abstract:  We provide reasons for why U.S. individuals should save for and buy private long-term care (LTC) insurance in the context of demographic trends and increasing cost and coverage constraints on Medicare, Medicaid and the federal budget. Then, we review the history of national regulation (including the recently repealed CLASS Act), especially with respect to pricing and rate review processes. We also examine the U.S. tax code, as it has affected LTC insurance, with specific focus on distinguishing between qualified and non-qualified LTC policies and the lack of a cash surrender value, non-forfeiture clauses, and marketability due to long waiting periods. Next, we examine the LTC insurance market from the early years (1980s and 1990s) through today, with emphasis on the inadequacy of the level-premium structure, dissatisfaction with core LTC products from both consumers and insurance companies, and which carriers have either left the market or persisted into 2014. Finally, we contrast the primary features of LTC product design (so far) to what is needed to make LTC insurance viable going forward, with specific discussion on benefit triggers, coverage portability, non-forfeiture provisions, initial price levels and contract language, all as they help better align the interests of policyholders, regulators and insurers.”

Can Long Term Care Protection in Other Developed Countries Provide Guidance for the United States? Germany as an Example,” by Doug Andrews, FCIA, FSA, FIA.  “Abstract:  This paper presents comparative research with respect to a number of developed countries regarding the adequacy and sustainability of programs for care and support of the elderly of which long-term care (LTC) is one component. It may provide guidance to those in the United States by helping to place the adequacy and sustainability of their programs for care and support in an international context. It suggests that the approach to LTC used in Germany of mandated social insurance provided by private sector insurers would be worthy of consideration for implementation in the United States.”

Financing Future LTSS and Long Life through More Flexible 401(k)s and IRAs,” by Karl Polzer.  From the abstract:  “This paper proposes and evaluates changing 401(k) and individual retirement account (IRA) rules to help address two major risks facing participants in defined-contribution (DC) retirement accounts: 1) the risk of outliving one’s savings; and 2) the risk of having to pay substantial amounts for long-term services and supports (LTSS). The proposal would allow retirees to invest a portion of their DC retirement savings in a special retirement account for longer without penalty than under current tax rules and could provide additional tax incentives for money drawn from the accounts used to pay for LTSS or long-term care insurance (LTCI).”

The American Long Term Care Insurance Program (ALTCIP),” by Paul E. Forte. “Abstract: The American Long Term Care Insurance Program (ALTCIP) proposes a public-private partnership for financing long-term services and supports (LTSS). At once an exchange that offers consumers greater access to affordable products and a mechanism for ensuring ongoing quality, the ALTCIP could increase the number of persons with private LTSS coverage in the next 10 years, thus relieving government spending, while giving insurers themselves protections not available in the open market. A paper on the ALTCIP detailing its regulatory structure and operations was submitted to the Commission on Long-Term Care in 2013. An abbreviated version was published in Contingencies (January 2014) under the title ‘Fresh Thinking on Long Term Care.’”

Home Equity: A Strategic Resource for Long-Term Services and Supports” by Barbara R. Stucki, Ph.D.  From the abstract:  “The house is a unique and complex asset that serves as both a place to live and as a store of wealth. It is also becoming the primary setting for the delivery of health care and long-term services and supports (LTSS) in later life. Until recently, however, there has been little discussion about using home equity to pay for LTSS beyond reverse mortgages. This paper examines the diverse body of economic and social research on the magnitude, timing, and motivations for decumulating housing wealth in retirement to pay for LTSS. The aim is to provide a more nuanced framework for incorporating housing wealth in efforts to support older people and family caregivers. The study also reviews new data that show how the use of home equity could change in response to the economic and social pressures of our aging society.”

An Affordable Long-Term Care Solution through Risk Sharing,” Kailan Shang, Hua Su, and Yu Lin.  From the executive summary:  “In this paper, we propose an LTC product that has an investment-risk-sharing mechanism between the insurer and the insured. The investment risk will be partially transferred to the clients with a guarantee that is much cheaper than those provided by traditional LTC products. The insurance risks are still borne by insurers. The benefit is adjustable with a floor, and the premium is flexible. Policyholders can choose their own investment strategies according to their risk tolerance depending on ages, levels of wealth, and other factors. The benefit of the risk-sharing arrangement is three-fold: (a) the risk of the new product is lower for the insurers, (b) the price of the product is flexible and affordable, and (c) more risky investment strategies can be used at the discretion of the policyholders to address the rising LTC expenses.”

#############################

 

Updated, Monday, December 15, 2014, 10:35 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #14-037:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  For our special introductory offer, click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

#############################

  • The way America pays for nursing homes is a disaster. So how do other countries do it?

  • Out Of Medicaid Managed Care, Government Report Warns

  • Six ways to safely spend more in retirement

  • Voluntary benefits in 2015: What employers need to know

  • How Retiring Abroad Could Affect Your Long-Term-Care Insurance

  • Federal Spending by the Numbers, 2014: Government Spending

  • Trends in Graphics, Tables, and Key Points (Including 51 Examples of Government Waste)

  • For Long-Term Care's Future, 2 Dates Loom

  • Medicare Advantage 2015 Data Spotlight: Overview of Plan Changes

  • Half of Doctors Listed as Serving Medicaid Patients Are Unavailable, Investigation Finds

  • Older Americans a Pillar of Housing Market With High Ownership Rate

  • Lawyers See Big Profits from Disability Claims

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

Updated, Friday, December 12, 2014, 9:44 AM (Pacific)
 
Seattle—

#############################

LTC BULLET:  HOW CARELESS ECONOMISTS BOOSTED LTC RISK

LTC Comment:  We explain how Boston College economists generated poor long-term care planning advice that national media unfortunately amplified, after the ***news.***

*** CLIPPING AND E-ALERT HIGHLIGHTS.  Center for Long-Term Care Reform regular members ($150 per year) receive our weekly LTC E-Alert compendia of the past week’s news every Monday.  Premium members ($250) get the news in real time averaging three LTC Clippings per work day.  Contact Damon at 206-283-7036 or damon@centerltc.com to join or subscribe.  Here are some highlights from recent news:  CI soars double digits; federal spending explodes; LTC risk peaks in 2030, 2050; Docs unavailable to Medicaid patients; the elderly support housing and vice versa; lawyers abusing SSDI.  Your prospects and competition are reading these stories.  If you aren’t, they have a leg up on you.  Our LTC Clippings and LTC E-Alerts also bring you Steve Moses’s terse and trenchant analysis. ***

 

LTC BULLET:  HOW CARELESS ECONOMISTS INCREASED LTC RISK

LTC Comment:  Substantive ignorance and sophisticated economic modeling do not mix well.  A recent case in point is “Long-Term Care:  How Big a Risk?,” by Leora Friedberg, Wenliang Hou, Wei Sun, and Anthony Webb of the Center for Retirement Research at Boston College.  Read the “brief” describing their research here.

The authors are accomplished economists.  We won’t challenge their methodology or technical findings, which are very interesting.  They “show that previous research understates the risk of going into care but overstates the average duration of stay of those ever institutionalized.”  (p. 1)  They conclude that “This finding strengthens the claim that . . . few individuals would choose to buy insurance even if they were rational, far-sighted, and well-informed.” (p. 5)

That conclusion is not valid.  It ignores what truly “rational, far-sighted, and well-informed” consumers need to know, but don’t, about Medicaid LTC benefits.  To wit, Medicaid is a means-tested public assistance program, i.e., welfare.  It has a dismal reputation for problems of access, quality, inadequate reimbursement, discrimination, institutional bias, and loss of independence and control.  People who pay privately for long-term care command red-carpet access to high quality care at the most appropriate level including care in their own homes.  Medicaid dependents take what they can get, usually underfunded nursing home care.  Armed with this substantive knowledge, informed consumers are wiser to ignore advice based purely on econometric analysis.

Media Malfeasance

Yet due to these authors’ failure to acknowledge Medicaid’s shortcomings and because of the media’s unquestioning distribution and faulty interpretation of their findings, a terribly irresponsible message was sent to consumers, most of whom remain inadequately informed to make smart LTC planning decisions.  For example:

11/11/14, “Here’s a New Reason to Think Twice Before Buying Long-term Care Insurance,” by Penelope Wang, Time

11/12/14, “Maybe You Don't Need Long-Term Care Insurance After All,” by Ben Steverman, Bloomberg

11/14/2014, “'Spending down' for Medicaid is the most practical LTC financing plan for most Americans, researchers assert,” by Tim Mullaney, McKnight's LTC News

Econometricians Make Poor Financial Planners

These technically proficient economists’ substantive ignorance contributed in another way to their mistaken conclusions and the bad advice that followed in the media.  In the first paragraph of their article, they say “Medicaid only covers the long-term care costs of the indigent.”  (p. 1)  If that were true, if people really had to become impoverished before getting help from Medicaid, they would worry about LTC risk and cost.  They would plan responsibly and purchase LTC insurance, often with the financial help of potential heirs, even at elevated premium levels.  But the assertion that Medicaid only covers LTC costs for the “indigent” is so patently and demonstrably false it is frightening to comprehend how it, and so many other assertions like it, routinely pass by peer reviewers and find their way into otherwise reliable professional journals.

What is the truth?  Medicaid covers not only the indigent but the majority of all Americans who need expensive long-term care, including the middle class and many of the affluent.  That fact is so well established that it boggles the mind how serious scholars so commonly ignore it.  Here’s a primer on how Medicaid financial eligibility rules allow, in fact encourage, people with substantial wealth to qualify for its LTC benefits.

Financial Eligibility for Medicaid LTC Benefits

Income

Income rarely interferes with Medicaid LTC eligibility because most states deduct private medical and LTC expenses from income before asking if someone is “poor” enough to qualify.  Even states with “income caps” are compelled by federal law to allow “Miller income diversion trusts,” which similarly sidestep ostensible income limits.  The rule of thumb across America is that anyone 65 or older with the appropriate level of medical need who has income less than the cost of a nursing home (currently $77,380 per year for a semi-private room) qualifies for Medicaid LTC benefits based on income.  Median U.S. income is $32,000; the 90th percentile reaches $77,500.  Clearly, Medicaid LTC does not require “low income” as is routinely asserted in the academic and popular literature.  All one needs is too little income to pay for all one’s medical and LTC expenses. 

Assets

Because income does not disqualify most applicants for Medicaid LTC benefits, the program’s supposedly strict asset spend down requirements are critically important.  If they don’t work as intended, the program will not prevent excessive utilization by the well-to-do.  There again, popular and academic sources routinely claim incorrectly that people must spend down privately for LTC until impoverished before Medicaid will help.  Three points regarding that fiction:

First, it does not matter how people spend down their assets to meet Medicaid’s limit on countable assets, usually $2,000.  As long as they purchase items for fair market value (FMV) it does not matter what they buy.  Medicaid planning attorneys have recommended big parties or world cruises as spend down strategies.  They routinely offer lists of exempt assets--such as bigger homes, expensive cars, or new furniture--that families can buy to get an infirm elder’s assets down to the needed level. 

Second, uncounted assets are virtually unlimited.  These include equity in a home and all contiguous property of between $552,000 and $828,000 as of January 1, 2015.  Medicaid LTC applicants and recipients may also retain--without any dollar limit--a business including the capital and cash flow, one auto, home furnishings, personal belongings, prepaid burial plans for self and immediate relatives, and their Individual Retirement Accounts.  Such uncounted assets often amount to hundreds of thousands of dollars according to Medicaid eligibility workers we’ve interviewed and quoted in numerous reports here.

Third, Medicaid LTC applicants who still have too much income or assets can retain professional counsel to help them self-impoverish artificially.  An internet search for “Medicaid planning” will reveal thousands of such advisors, their advertisements, and their dubious methods.  Medicaid planners’ major strategies include “Medicaid-friendly annuities,” reverse half-a-loaf strategies, and irrevocable income-only trusts, but their legal quivers are full of simple and complicated techniques to justify their big fees.  The average cost in legal fees to qualify someone in need of care quickly for Medicaid LTC benefits is roughly equal to the cost of one month in a nursing home private pay.

Who’s Indigent?

The dictionary defines the noun “indigent” as a needy person (synonyms:  vagrant, homeless person, down-and-out, beggar, pauper, derelict, have-not) and the adjective “indigent” as poor or needy (synonyms:  impecunious, destitute, penniless, impoverished, insolvent, poverty-stricken.)  If people had to become genuinely indigent before receiving help from Medicaid for LTC expenses, the market for private LTC insurance would be vastly larger than it is now.  People would tap their home equity to supplement their incomes so they could afford LTCI premiums, instead of sheltering as much wealth as possible in their homes to qualify for Medicaid.  Families would pull together to buy LTC insurance for their aging loved ones instead of tearing themselves apart fighting over the spoils of impoverishing their elders via Medicaid planning.  Attorneys and financial planners would strongly recommend LTC insurance if they could not rake in big fees converting affluent citizens into beggars dependent on Medicaid’s “low cost care of uncertain quality.”

Facts have consequences.  By focusing only on technical economic analysis and ignoring the substantive reality of how Medicaid actually works, these authors, this work, and the misbegotten reporting it engendered increased consumers’ LTC risk, swelled Medicaid’s liability for future LTC costs, and further damaged the struggling LTC insurance industry’s prospects.  Instead of solving the long-term care insurance puzzle (i.e., why so few people buy LTCI) as they claim, these researchers compounded the conundrum by ignoring its cause and the main obstacle to its solution.

#############################

 

Updated, Monday, December 8, 2014, 2:30 PM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #14-036:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  For our special introductory offer, 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:

#############################

·       Why Caring for Older Adults Is Getting Costlier

·       Growth In U.S. Health Spending In 2013 Is Lowest Since 1960

·       VA Health Care:  Improvements Needed to Manage Higher-Than-Expected Demand for the Family Caregiver Program

·       Addressing the Fear of Losing Financial Independence:  Even Wealthy Women Worry About Becoming ‘The Best Dressed Bag Lady in Their Community’

·       40 Percent of Seniors Report Having a Disability

·       2015 Medicaid Spousal Impoverishment Numbers

·       Genworth Declines Most in S&P 500 as JPMorgan Cuts Target

·       6 Ways to Fix Social Security

·       An Aging Parent’s Frustrations, Heard but Not Absorbed

·       5 things to know about 2 controversial LTC studies

·       Too Few Americans Undergo Dementia Screening

·       Retirees Turn to Virtual Villages for Mutual Support

·       Improved quality of Medicare plans and steady premiums are great news

·       LTCi Sales In 2015 Will Equate To $5B In Benefit Payments

·       Google’s latest: A spoon that steadies tremors

·       4 Things to Include in Your Long-Term Care Plan

·       Thanksgiving Feast -- Family Talk

·       How retirement benefits will change in 2015

 

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

Updated, Friday, December 5, 2014, 11:23 AM (Pacific)
 
Seattle—

#############################

LTC BULLET:  IG REPORT REVEALS MEDICAID ESTATE RECOVERY WEAKNESS

LTC Comment—A newly released USDHHS Inspector General report shows few states do Medicaid estate recoveries well resulting in a potential annual loss, we infer, of $2.5 billion.  Details, numbers, and why it matters after the ***news.***

*** 2015 MEDICAID SPOUSAL IMPOVERISHMENT NUMBERS RELEASED:

Following are the key Medicaid numbers for 2015 including the new home equity exemption levels.  Both the Community Spouse Resource Allowance (CSRA) and the Minimum Monthly Maintenance Needs Allowance (MMMNA) have nearly doubled since they began at $60,000 and $1,500 per month after passage of the Medicare Catastrophic Coverage Act in 1988.  We archive this information for every year since 1991 in “The Zone” here.  If you need your user name and password to access The Zone, just ask Damon at damon@centerltc.com or contact him to join the Center and gain access to this rich information source.

Minimum Community Spouse Resource Allowance$23,844  (This is the minimum amount community spouses may retain if half their joint assets with a Medicaid-applicant spouse is less than this amount.  In other words, if a couple had $40,000 in combined countable assets, the community spouse could retain $23,844 even though half their joint assets is only $20,000.)

Maximum Community Spouse Resource Allowance (CSRA)$119,220  (This is the maximum amount the community spouse may retain of half the couple’s joint assets.  In other words, if the joint assets are $300,000, the community spouse may retain only $119,220, not half or $150,000.  Some “generous” states make this maximum their minimum as well so that the community spouse may retain the full $119,220 even though their joint assets are, for example, $200,000, half of which would be only $100,000.)

Maximum Monthly Maintenance Needs Allowance (MMMNA)$2,980.50 per month  (This is the maximum income the community spouse may retain of the Medicaid spouse’s income.  Otherwise countable income of the Medicaid spouse can be transferred to the community spouse to bring her or him up to this maximum.)

The minimum monthly maintenance needs allowance for the lower 48 states remains $1,966.25 ($2,457.50 for Alaska and $2,261.25 for Hawaii) until July 1, 2015.  (Every year in July, when the new poverty level numbers are reported, the minimum MMMNA is adjusted based on inflation.)

Home Equity Limits (These amounts have increased annually based on inflation from the original $500,000 and $750,000 set in the Deficit Reduction Act of 2005):
Minimum:   $552,000
Maximum:  $828,000

For CMS's full chart of the 2015 SSI and Spousal Impoverishment Standards: go here. ***

*** 2015 ILTCI COLORADO SPRINGS BROADMOOR LTCI CONFERENCE NEWS:  This year's mobile app, sponsored by Mutual of Omaha, is ready.  Download it.  Organizers report this is your best tool for checking out the schedule, speakers, location maps, and for setting up your personal conference schedule.  New speaker and event announcements are coming soon.  Early-Bird Pricing ($100 discount) ends January 22, 2015 Exhibitor and sponsor opportunities are available, with extra discounts for first-time participants. ***

*** LTC QUEEN RECOMMENDS “this film should renew/re-vitalize passion and commitment to LTC insurance for anyone in the industry.  It’s also an excellent movie for family holiday viewing, a great way to start a conversation about LTC, a wonderful family story.”  Watch the trailer for “Glen Campbell . . . I’ll Be Me.”  Thanks to Center Regional Representative Honey Leveen of Houston, Texas for this tip. ***
 

LTC BULLET:  IG REPORT REVEALS MEDICAID ESTATE RECOVERY WEAKNESS

LTC Comment:  Federal and state Medicaid programs leave upwards of $2.5 billion in potential estate recoveries on the table.  You won’t find that number in a newly released IG report, but our fuller analysis provided below reveals it.  By allowing huge income and asset exemptions from LTC spend down requirements without strong estate recovery, Medicaid rewards failure to plan for long-term care, crowds out private LTC financing alternatives, and incurs huge unnecessary expenditures.  The consequences of this short-sighted policy plague the financing and delivery of long-term services and supports throughout the USA.

Background.  Medicaid is a means-tested public assistance program, i.e., welfare.  Applicants for the program’s expensive long-term care benefits must qualify based on limited income and assets.  Wealthier people and their legal advisors have found many ways to hide or transfer excess assets in order to take advantage of Medicaid benefits.  The federal government has attempted to discourage this so-called Medicaid planning with two major statutes.  The Omnibus Budget Reconciliation Act of 1993 (OBRA ’93) made transfer of assets restrictions longer and stronger and required recovery of costs from recipients’ estates.  The Deficit Reduction Act of 2005 (DRA ’05) placed the first cap ever on Medicaid’s home equity exemption and prohibited several of Medicaid’s more egregious loopholes.  Over time, evidence accumulated that some states did not implement some or all of the requirements in these two laws.  See for example the Center for Long-Term Care Reform’s report for the Pacific Research Institute titled Medi-Cal LTC: Safety Net or Hammock?  In 2011, two members of the U.S. House of Representatives and two Senators asked the USDHHS Inspector General to investigate “whether States are implementing provisions of Federal law that are meant to limit individuals with above-average wealth from accessing Medicaid.”  They also asked the IG to “provide data on States' efforts with regard to estate recovery, including the amount of resources States put into estate recoveries; and [to] update estate recovery figures for each State.”

The IG Report:  On July 7, 2014, the Inspector General issued a letter report responding to the Congressmen’s and the Senators’ inquiry.  For reasons related to their concern that negative findings in the report could influence the recent midterm election, public release of the IG’s report was postponed until recently, Monday, November 17, 2014.  You can now read the IG’s full report on the Center for Long-Term Care Reform’s website here:  http://centerltc.com/OIG/IG_LetterReport.pdf.

We reported two weeks ago on the IG report’s findings regarding states’ failures to implement mandatory provisions of OBRA ’93 and DRA ’05:  “LTC Bullet:  IG Report Reveals Costly Medicaid Enforcement Failures,” Friday, November 21, 2014.  This week we report on the IG’s findings with regard to estate recoveries.

Major Findings and Analysis.  Quotes from the IG report and our comments follow.

IG Report:  “All 51 States reported that they have implemented the estate recovery requirements of the OBRA [Omnibus Budget Reconciliation Act of 1993].  All States reported that they are recovering assets from the probate estates of deceased Medicaid recipients when the recipients are not survived by spouses.”

LTC Comment:  It took more than a decade for all states to implement even the minimum estate recovery effort mandated by OBRA ’93.  According to details in the IG report’s “Enclosure B,” nine states—including staunch holdouts Texas, Michigan and Georgia—waited a decade or more to begin estate recoveries after the program became legally mandatory.  The Centers for Medicare and Medicaid Services (CMS) failed to enforce the law during that period.

IG Report:  “States reported total yearly recoveries nationwide that ranged from $429.5 million in fiscal year (FY) 2005 to $497.9 million in FY 2011.”

LTC Comment:  This is the first official public accounting of Medicaid estate recoveries since a 2005 report by the DHHS Assistant Secretary for Planning and Evaluation (ASPE) based on 2004 data:  “Medicaid Estate Recovery Collections:  Policy Brief #6.”
That earlier report showed 2004 recoveries totaling $362 million ($431 million in 2011 dollars).  Thus, adjusting for inflation, total annual estate recoveries have increased only $67 million or 16% between 2004 and 2011. 

IG Report:  “The yearly amounts of resources used to achieve these recoveries ranged from $20.5 million in FY 2005 to $34.2 million in FY 2011.  Enclosure C includes estate recovery figures for each State.”

LTC Comment:  Overall in 2011, states spent $34 million to recover $498 million, a recovery success ratio of 14.6 to one.  Not bad.  Who wouldn’t invest one dollar to receive $14.60 in return?  States vary widely on this cost ratio from Nevada that recovers only $3 per dollar invested to Missouri that recovers $52 for the same dollar of program cost.  Estate recovery experts understand, however, that very low or very high recovery ratios indicate program inefficiency, i.e., that a state is spending too much or too little to maximize total recoveries.  States maximize estate recoveries by investing more in their programs until they reach a point of diminishing marginal returns.

IG Report:  “As of November 2013, 26 States had reported that they have adopted an expanded definition of an estate to allow recovering medical assistance costs from the assets that are not included in the definition of an estate in State probate law. These States are: California, Delaware, the District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Minnesota, Missouri, Montana, Nevada, New Hampshire, New Jersey, North Dakota, Ohio, Oregon, South Dakota, Virginia, Washington, Wisconsin, and Wyoming.”

LTC Comment:  Before OBRA ’93 Medicaid estate recovery programs were restricted to recovery only from probate estates.  Because many assets pass outside of probated estates, as for example through joint tenancy with right of survivorship, substantial wealth was retained by heirs and lost from estate recovery.  It is impressive that over half the states have taken advantage of this important voluntary option.

IG Report:  “Further, 42 States reported that they have also implemented the optional provision for recovering all medical assistance costs from the individual's estate. The nine exceptions were Louisiana, North Carolina, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Vermont, and Washington.”

LTC Comment:  OBRA ’93 required states to recover LTC costs from estates of deceased recipients, but the statute also gave states the option to recover other medical costs incurred by Medicaid.  This provision attracted media attention when ObamaCare added millions of non-LTC recipients to the Medicaid rolls making them theoretically though not practically liable to estate recovery.  The new recipients are younger, less likely to have significant assets and less likely to die leaving an estate than elderly recipients.

IG Report:  “All 51 States appear to be recovering the assets in the probate estate of a deceased Medicaid recipient when the recipient is not survived by his or her spouse. However, we noted that certain provisions within the Act and State laws have prevented some States from recovering medical assistance costs after the death of a surviving spouse.”

LTC Comment:  Spousal recoveries have enormous potential.  In a 1989 report titled “Medicaid:  Recoveries From Nursing Home Residents' Estates Could Offset Program Costs,” GAO concluded

Because about one-third of Medicaid nursing home residents who own a home have a spouse living in the community, a significant portion of potential recoveries is lost unless a state authorizes recoveries from the estates of surviving spouses. For example, GAO estimates that California will recover about $15.8 million from the estates of Medicaid recipients admitted to nursing homes in 1985 under its existing recovery program.  But it could recover an additional $11 million if the state enacts legislation to authorize recoveries from the estates of the surviving spouse when he or she, in turn, dies. (See pp. 22 and 37.)” (p. 4)

Failure to recover from deceased Medicaid recipients’ spouses’ estates results in assets protected by Medicaid’s generous income and asset eligibility rules going to heirs and being lost forever to the program at taxpayers’ expense.  Obstacles to spousal recoveries identified in the IG’s report should be removed by new federal legislation.

IG Report:  “We hope that this information is responsive to your request. We look forward to working with you and your staff on these and other oversight issues.”

LTC Comment:  Unfortunately, the IG did not report the most important information about estate recoveries that analysts need to evaluate the program’s success or failure.  The aforementioned 2005 DHHS-ASPE study provided not only total estate recoveries by state, but also reported state-by-state recoveries as a percentage of each state’s Medicaid nursing home expenditures.  Without data comparing recoveries to expenditures, it is impossible to rank states’ estate recovery performance. 

It is not clear why the IG neglected to provide that critical information and analysis, but the Center for Long-Term Care Reform has corrected their oversight.  Here, here, and here you can find, respectively, (1) an alphabetical list of states showing their total estate recoveries, their recoveries as a percentage of their nursing home expenditures, and their recoveries as a percentage of their total long-term care expenditures (including home and community-based care), (2) a list of states with the same information in ascending order of their recoveries as a percentage of nursing home expenditures, and (3) a list of states with the same information in ascending order of their recoveries as a percentage of total long-term care expenditures.  [Source of data: Steve Eiken, et al., “Medicaid Expenditures for Long Term Services and Supports in 2011,” revised October 2013, Truven Health Analytics for the Centers for Medicare and Medicaid Services, State Summary Table:  Medicaid Expenditures for Long-Term Services and Supports: 2011.]

Our findings based on this analysis

  • The states with the highest percentage of nursing home costs recovered in 2011 were Idaho (5.4%), Oregon (3.7%), Iowa (3.6%) and Maine (3.1%).  (We exclude New Mexico [49.2%] because its extremely low nursing home expenditures compared to total LTC costs distorts the ranking.)
     
  • The same states show up in the top category based on percent of total LTC costs (including HCBS) recovered, but they are joined by Delaware and Wisconsin:  Idaho:  2.2%; Iowa, 1.3%; Wisconsin, .9%; Delaware, .8%; Oregon, .8%; Maine, .8%.
     
  • Do the percentages sound small?  Well, they are.  Federal law and regulations severely limit states’ ability to recover from estates fully and efficiently.  Last year, we analyzed ways to maximize recoveries in spite of existing constraints in a study of the leading Medicaid estate recovery states aimed at increasing Maine’s recoveries:  “Maximizing NonTax Revenue from MaineCare Estate Recoveries.”
     
  • Nevertheless, actual and potential dollar recoveries are nothing to sneeze at:  For example, what if every state in the country recovered at the same rate as the most successful state, Idaho?  Total recoveries would have been $2,845,253,843 instead of $497,905,382 based on percentage of nursing home expenditures recovered and $2,941,856,963 instead of $497,905,382 based on percentage of total LTC costs recovered.  That’s nearly $2.5 billion in money now allowed to pass unencumbered to heirs.  Those lost funds have the effect of converting Medicaid from a long-term care safety net program for the needy to free inheritance insurance for prosperous baby boomers.

LTC Comment:  To unleash the full potential of Medicaid estate recoveries federal legislation is needed to (1) close eligibility loopholes that allow affluent individuals to take advantage of Medicaid LTC benefits while retaining large, often huge, financial resources; (2) encourage recoveries from surviving spouses’ estates, (3) enable recoveries from abusive Medicaid-compliant annuities and trusts, and (4) maximize many other potential recovery sources currently inhibited by existing law and regulations.

#############################

Updated, Monday, November 24, 2014, 10:58 AM (Pacific)
 
Seattle—

#############################

LTC E-ALERT #14-035:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  For our special introductory offer, 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:

#############################

  • Actuaries chart the LTC universe

  • America’s seniors are getting a lousy deal on healthcare

  • Adverse Events In Older Adults: The Need For Better Long-Term Care Financing And Delivery Innovation

  • We Must Beat Alzheimer's Before It Beats Us! And Here's How!

  • Genworth CEO remains bullish on long-term care business

  • How to Protect the Assets of Medicaid Recipients

  • Raise Interest Rates, Make Grandma Smile

  • New Medicaid Rule Could Challenge State Shift Away From Nursing Homes

  • Retirement Expectations’ a Casualty of the Great Recession

  • Improving Long-Term Care in Wisconsin

  • 5 ways to kill the LTCI slump

  • Poll: Hispanics More Positive on Long-Term Care

  • Majority of Households Receive More in Government Payments than they Pay in Taxes

  • Elder Law: Moving to a nursing home? Ask about ratio of Medicare to Medicaid beds

  • Nursing homes that primarily serve whites have sharply higher RN staffing, CPI claims

  • Aging population prompts more employers to offer elder-care benefits to workers

#############################

"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

#############################

Updated, Friday, November 21, 2014, 12:30 PM (Pacific)
 
Seattle—

#############################

LTC BULLET:  IG REPORT REVEALS COSTLY MEDICAID ENFORCEMENT FAILURES

LTC Comment--The USDHHS Inspector General reports that many states failed to implement mandatory provisions in OBRA ’93 and/or DRA ’05 designed to discourage abuse of Medicaid LTC benefits.  Details after the ***news.***

*** HAPPY THANKSGIVING ***

*** LTCI BENEFITS HOME CARE:  The nation's providers of home health care aides and services can expect significantly increased revenue as a result of growing sales of long-term care insurance products. “We expect 300,000 Americans will purchase a new traditional long-term care insurance policy or a combo product in 2015,” predicts Jesse Slome, executive director of the American Association for Long-Term Care Insurance (AALTCI).  "The maximum potential benefit value for just 2015 new sales will equate to about $5 billion in future benefit payments for home care services."  Contact: Jesse Slome, 818-597-3227, jslome@aaltci.org. *** 

*** BIPARTISAN POLICY CENTER (BPC) presented “Threats to Retirement Security: Longevity, Long-Term Care and Leakage” on Thursday, Nov. 20.  Video of the program is archived here; scroll to bottom of the page.  BPC’s Commission on Retirement Security and Personal Savings and Long-Term Care Initiative hosted this event “to discuss how LTSS needs, the risk of outliving savings and pre-retirement withdrawals can make a financially secure retirement more difficult to achieve” and to “examine potential solutions to these problems, including expanded use of annuities and long-term care insu