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Updated, Monday, December 4, 2023, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #23-035:  LTC NEWS AND COMMENT

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

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

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

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

• 2024 SSI, Spousal Impoverishment, and Medicare Savings Program Resource Standards

• Americans are tapping retirement nest eggs to pay for every day, emergency expenses

• New insurance rider aims to be solution for LTSS funding

• A Look at Waiting Lists for Medicaid Home- and Community-Based Services from 2016 to 2023

• How Medicaid Waivers Have Affected Nursing Home Utilization – And Why the Staffing Proposal May Further This Trend

• U.S. Long-Term Care Insurance Users Average $1.4M in Household Wealth: Study

• The Own Your Future LTSS Funding and Services Initiative: Options to Increase Access to Long-Term Care Financing, Services, and Supports in Minnesota

• State Medicaid expenses to grow as federal dollars wane in FY 2024

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

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Updated, Friday, December 1, 2023, 10:40 AM (Pacific)
 
Seattle—

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LTC BULLET: LONG-TERM CARE: THE SOLUTION (THE SERIAL, PART 4)

LTC Comment: Today we offer easy access to a must-read new study by Center president Steve Moses, after the ***news.***

*** 11/30/2023, “Government must encourage personal responsibility, prohibit easy access to Medicaid,” by Steve Moses and Brian Blase, Washington Times

Quote: “Well-intentioned government policy tried to help people but ended up trapping generations in nursing homes on welfare. The government must now solve the problem it created by encouraging personal responsibility and prohibiting easy access to Medicaid while preserving wealth. This will naturally lead our nation’s consumers and providers to solve the LTC system challenges.”

LTC Comment: America’s LTC financing crisis is self-imposed by counterproductive public policies. To understand the problems and the solution, read “Long-Term Care: The Problem” and “Long-Term Care: The Solution.”

*** 11/27/2023, “A Long-Term Solution To America's Long-Term Care Crisis,” by Sally Pipes, Forbes

Quote: “Indeed, Medicaid has become such a major source of long-term care coverage that middle-income and even some wealthy Americans rely on the program to support them in their twilight years. … It is precisely this perverse incentive that Stephen A. Moses outlined in his 2022 Paragon Health Institute paper ‘Long-Term Care: The Problem.’ Moses, one of the nation's leading experts in long-term care, determined that access to Medicaid and other publicly-funded safety nets ‘discourages responsible [long-term care] planning when people are still young, healthy, and affluent enough to save, invest, or insure for the risk.’ Rather than continue down the same path, Moses urged policymakers to consider free-market solutions to the ‘problems caused by well-intentioned but ultimately damaging government’ policies. In a paper released last month—‘Long-Term Care: The Solution’—Moses offers some suggestions on how to do just that.”

LTC Comment: We thank Sally Pipes, president and chief executive officer of the Pacific Research Institute, for this clear and compelling review of “Long-Term Care: The Problem” and “Long-Term Care: The Solution.” Click through for the rest of her thought-provoking article. ***

*** 10/19/2023, “Medicaid should only be ‘safety net’ for LTC needs, expert says,” by Kathleen Steele Gaivin, McKnight’s Senior Living.

Quote: “‘Medicaid [long-term care] should be restored as a safety net for indigent elderly people,’ but ‘lawmakers should eliminate the ability to access publicly funded LTC while preserving wealth,’ Stephen Moses, president of the Center for Long-Term Care Reform, writes in a new paper, ‘Long-Term Care: The Solution.’ … The new paper is a follow-up to Moses’ “Long-Term Care: The Problem,” which was published a year ago by the Paragon Institute.”

LTC Comment: This article is a reasonable interpretation of what my paper says, but I urge readers to see for themselves, because the topic is complicated and full of nuances. I’m always eager to receive comments or criticism at smoses@centerltc.com. ***

*** APPEAL: The Center for Long-Term Care Reform, in partnership with the Paragon Health Institute, is embarking on a campaign to improve LTC services and financing. In “Long-Term Care: The Problem,” we explained what’s wrong and why. In “Long-Term Care: The Solution,” we discard the failed policies of the past and propose a radical new approach based on engaging vast sources of private wealth currently diverted from LTC funding. We will reach out to the media, brief federal and state policy and law makers, speak at conferences, and write for publication, all toward the end of achieving the policy goals in “Long-Term Care: The Solution.” Will you help us in this effort? Join the Center or contribute online here. Check out the Center’s “Membership Levels and Benefits” schedule here. Most corporate memberships include a briefing by Center president and “LTC Solution” author Stephen Moses. Call or write for more information: 206-283-7036; damon@centerltc.com; smoses@centerltc.com. LTC policy has floundered for too long. Let’s get this done! ***

LTC BULLET: LONG-TERM CARE: THE SOLUTION (THE SERIAL, PART 4)

LTC Comment: The Paragon Health Institute published “Long-Term Care: The Solution” on October 3. This new report is long and complicated, but important. So LTC Bullets is delivering it to you in bite-sized pieces over several weeks. Published so far: Long-Term Care: The Solution (The Serial), October 20, 2023, Long-Term Care: The Solution (The Serial, Part 2), November 3, 2023 and Long-Term Care: The Solution (The Serial, Part 3). Today, read “Poverty Reconceptualized,” “Managing the Back End,” “Why Not Social Insurance Instead?,” “Summary and Conclusion” and the “Appendix: Exactly How Much Wealth Do People Have and Why Aren’t They Using More of It for LTC?” 

Excerpts from “Long-Term Care: The Solution”
by
Stephen A. Moses
President, Center for Long-Term Care Reform

[Box Insert] Poverty Reconceptualized:

Clearly there is enough wealth in the American economy to fund quality LTC for all Americans if it is mobilized with better incentives than prevail now. In fact, poverty, properly measured, is already uncommon in the United States.[67] A 2018 Cato Institute study reports, “Improved estimates of poverty show that only about 2 percent of today’s population lives in poverty, well below the 11 percent to 15 percent that has been reported during the past five decades.”[68] How can that be? “By design, the official estimates of income inequality and poverty omit significant government transfer payments to low-income households; they also ignore taxes paid by households.”[69] What is the bottom line? “The net effect is that pretax data overstate the true income of upper-income households by as much as 50 percent, and missing transfers understate the true income of lower-income households by a factor of two or more.”[70] The rich are poorer and the poor, richer than we thought. “More than 50 years after the United States declared the War on Poverty, poverty is almost entirely gone.… Public policy debate should begin with the realization that only about 2 percent of the population—not 13.5 percent—live in poverty.”[71]

The official poverty level calculated by the government does not involve the level of total destitution some may associate with it. Consider a poor household’s consumption a decade ago according to a Heritage Foundation analysis:

The typical poor household, as defined by the government, has a car and air conditioning, two color televisions, cable or satellite TV, a DVD player, and a VCR. By its own report, the typical poor family was not hungry, was able to obtain medical care when needed. The typical average poor American has more living space in his home than the average (non-poor) European has.[72]

Worries about income inequality are also misplaced. “By not counting two-thirds of all transfer payments as income to the recipients of the transfers and not counting taxes paid as income lost to taxpayers, government statistics dramatically overstate income inequality.… The facts reveal a very different and better America than the one currently described in debates across much of the political spectrum.”[73] Phil Gramm and John Early concluded: “By eroding self-reliance, worker pride and labor-force participation, government-generated income equality undermines the very foundations of American prosperity.”[74]

Applying this corrected understanding of poverty and “inequality” to the challenge of financing LTC suggests, as do other facts referenced above, that America has more sources of wealth to work with than previously contemplated by most experts. Mustered and employed more sensibly, these resources would suffice to ensure access to quality LTC for all Americans.

[End box insert]

Managing the Back End

This proposed approach of withdrawing Medicaid asset protection in the future and encouraging private LTC planning in the present will not cover everyone who may need LTC later. Some will be unable to fund any of the options that will become available. Others will decide not to plan. But most people, faced with an immediate requirement to confront LTC risk and cost, will likely take steps to prepare. Still, 14.7 percent of people turning 65 will incur LTC expenses of $250,000 or more, nearly half of which Medicaid already pays.[75] Much relieved of the need to cover most of the cost of LTC, Medicaid could continue as the payer of last resort for these people.

With the techniques used to qualify for Medicaid while preserving wealth eliminated in the future for people currently under age 55, over time Medicaid LTC benefits will no longer be available to people while also allowing them to retain income and resources. Far fewer people will be dependent on Medicaid. At that point the program should pay full private market rates so remaining recipients can receive high-quality home care, assisted living, or nursing home care as needed. The existing two-tier LTC service delivery system—in which Medicaid recipients receive lower cost, less desirable care compared to market-rate private payers—should largely end. Resources accumulated in private hands through insurance, targeted savings or from reverse mortgages or liens, will suffice to fund the vast majority of all LTC for most people. In fact, even before those measures are employed, most older adults could already finance substantial LTC if required to use resources they already own for that purpose.[76]

With most LTC provided within the private market at market payment rates, LTC providers would prosper instead of being underpaid by Medicaid as they now are. Private market competition would ensure adequate compensation for LTC nursing and support staff, which would eliminate their shortage. In addition, fewer people would need to provide direct care themselves for friends and family. They could instead provide love and support without having to provide bathing assistance or change adult diapers. Entrepreneurs would compete to find newer and better service delivery methods. The financial burden on government and taxpayers would lessen substantially. Impoverishment due to LTC, to whatever heretofore unsubstantiated level it has existed,[77] would mostly disappear.

Why Not Social Insurance Instead?

Why not simply require by government fiat that everyone must pay a tax so that all can receive a LTC benefit when it is needed? That is the sirens’ song of social insurance.

Why is social insurance so appealing to intellectuals and politicians despite their inability to get such plans approved by voters? By compelling citizens to participate in the scheme, social insurance avoids the biggest problem of voluntary private insurance. People are not forced to purchase private LTC insurance, so many do not, leaving too many unprotected. By forcing everyone to pay for social insurance, government ensures that the substantial financial risk of LTC is spread across the whole population. Social insurance avoids adverse selection, the problem of only those most likely to use the insured benefit purchasing private insurance for it, resulting in a solvency death spiral. Despite these apparent benefits, proposals for compulsory LTC social insurance have never achieved the approval of voters and taxpayers. Why?

The compulsion and universality of social insurance also have vital downsides, including loss of freedom and some perverse incentives. Because social insurance spreads (but does not price) risk, it rewards irresponsibility and punishes responsible behavior. Private insurance, on the other hand, spreads but also prices risk. People pay more for private life insurance if they smoke, so it discourages smoking and rewards healthier behavior. Social insurance does the opposite. It charges everyone the same regardless of how much risk they bring into the risk pool, thus rewarding high-risk people and behaviors while punishing low-risk people and behaviors. Private insurance rewards personal responsibility and self-reliance, whereas social insurance rewards and thus encourages government dependency.

The moral precept of social insurance is “from each according to his ability, to each according to his need,” the fundamental principle of socialism. Across a society the incentives and disincentives of social insurance undermine personal responsibility, discourage individual effort, and lead to excessive reliance on others for support, including government authorities exercising their monopoly of the legitimate use of force. Social insurance always and everywhere tends toward collective mediocrity and individual failure. In light of the short-term solvency denouement of Social Security and Medicare, we should view new social insurance plans with increasing skepticism.

Summary and Conclusion

Albert Einstein said, “We can’t solve problems by using the same kind of thinking we used when we created them.”[78] The kind of thinking that created LTC’s problems is that markets cannot provide the services people need without massive government regulation and financing. No other way of thinking about the problem has been seriously considered. But recent research suggests how to reconceptualize the quandary policymakers face so that LTC is not such a titanic crisis and may be fixable with a market-based solution.

Eliminating the means by which people have ignored LTC planning early in life while preserving wealth and qualifying for Medicaid later can encourage consumers to prepare early and responsibly for future LTC risk. Showing them ways to set aside wealth that they already possess or will accumulate over time can enable them to manage the LTC risk while fulfilling other responsibilities such as raising a family, car and house payments, retirement, and education savings.

LTC need not be the overwhelming challenge that pushes analysts toward “easy” solutions involving economically harmful payroll taxes, government compulsion, and public entitlement programs. Properly conceived and with the right financial tools and incentives available, LTC can be fully financed and vastly improved without undue pressure on families, consumers, or taxpayers.

Appendix: Exactly How Much Wealth Do People Have and Why Aren’t They Using More of It for LTC?

The following table is condensed from a more detailed version published by the National Council on Aging and the LTSS Center in a February 2023 report. It displays the wealth of older adult households by quintile through 80 percent and then by decile to 100 percent. The report states that “the bottom 20%, approximately 11 million households, have no assets. This group has a 2018 median income of $16,989 and would be unable to rely on personal finances to pay for LTSS, especially with rising costs of care.”[79] Clearly, this is an economic group for which Medicaid LTC benefits are intended to provide a safety net.

Older Adult Households Divided into Quintiles or Deciles of Total Net Wealth (2018)                                                             

The report continues: “The next three quintiles (21–40%, 41–60%, and 61–80%) of older adults saw modest increases in their financial assets between 2016 and 2018, but these individuals would still be unable to afford more than two years of nursing home care in a semi-private room or four years in an assisted living community if their median income and household value of financial assets were added together. Despite adults’ preference to age in place, 60% of adults would be unable to afford two years of in-home long-term services and supports.”[80]

That conclusion is striking. If 60 percent of middle-class aging Americans cannot afford two years of in-home LTSS, then it follows that 40 percent can. If so, that would cover the average LTC risk and cost for most of them: “[O]ver half of adults 65 and older will need LTSS for less than two years … .”[81]

But are people actually spending down their wealth for LTC? How much of their income, “household value,” and other financial assets do people actually use to fund their own LTC? Conventional wisdom holds that high LTC costs force wide swaths of American elders into impoverishment, leaving them dependent eventually on Medicaid. Is that what happens? Do middle-income people have any other choice? If faced with high LTC costs, would people in the fourth wealth quintile (61-80 percent) need to spend down their wealth before qualifying for Medicaid-financed LTC?

Their median total household income is $52,229. The rule of thumb for income is that anything below the cost of a nursing home is not disqualifying. That is because private health and LTC expenditures are usually deducted from income before comparing the balance to Medicaid’s very low allowable limit.[82] A well spouse would keep any income in his/her sole name plus a “monthly maintenance needs allowance” of up to $2,465 or $29,580 per year (as of 2023) from the recipient’s income. Any remaining income in the Medicaid recipient’s name would go to offset the program’s cost for his/her care, but if there is an estate recovery later, the recipient would be liable only for what Medicaid spent for his/her care, which is much less than what the private pay cost would have been.

Thus, while some private income goes for care, this out-of-pocket cost—mostly Social Security income (explained below)—merely reduces Medicaid’s share of the extremely low reimbursement, often less than the cost of care, that the LTC provider receives. Although the recipient is paying out of pocket, he/she is not commanding the better access and higher quality care associated with paying privately. He/she is trapped in the lower Medicaid level of America’s two-tier LTC system.

What about assets? Must they be spent down before getting Medicaid? The “net value of primary residence” (i.e. home equity) of people in the fourth wealth quintile is $220,000. Does that amount interfere with Medicaid LTC eligibility compelling asset spend down? No. Medicaid exempts a minimum of $688,000 of home equity and up to $1,033,000 in some states. Even the richest people would qualify for Medicaid based on their home equity of $400,000.

But, as is widely known, Medicaid allows applicants/recipients to hold no more than $2,000 in “countable” assets while qualifying for or receiving Medicaid LTC benefits. The fourth quintile’s “household value of financial assets (non-housing, median)” is $130,000. But that is just a starting point. If there is a spouse, Medicaid computes the couple’s jointly owned assets and sets aside half—not to exceed $148,620 but never less than $29,724 (as of 2023)—for the “community spouse.” Then Medicaid takes out the non-countable assets people own, such as “pre-paid burial and funeral expenses, an automobile, term life insurance, life insurance policies with a combined cash value limited to $1,500, household furnishings/appliances, and personal items, such as clothing and engagement/wedding rings.”[83] Very few people in the fourth quintile of wealth will have much savings left after these deductions, but whatever remains can easily be converted to non-countable status by investing more money in the home or purchasing, in unlimited amounts, any of the other exempt items just listed.

When they confront high LTC costs, do middle-class people ignore these generous Medicaid financial eligibility limits and pay out of pocket? Do they voluntarily plunge themselves into real impoverishment from a sense of personal responsibility or shame at depending on public assistance? Some do. More used to. But nowadays information on how to qualify for Medicaid without spending down for care is universally available in magazine articles and self-help books, in legal treatises and on the internet. Google “Medicaid planning in [any state]” to find long lists of attorneys who specialize in qualifying clients for Medicaid while preserving their wealth. Even state Medicaid eligibility workers routinely explain to middle-class applicants how to speed up or entirely eliminate their “spend down” process by purchasing exempt assets. Workers report that people think of Medicaid (public assistance) as though it were an entitlement like Medicare.[84] They ask, as Jane Bryant Quinn did in a 1989 Newsweek column, “Do Only the Suckers Pay?”[85] So, no, ignoring easy access to Medicaid LTC benefits and paying out of pocket is the exception, not the rule.

But what about the conventional wisdom that people all across America must be, and actually are, spending down to impoverishment before obtaining Medicaid? If that is true, it should show up in the data. But it does not. The percentage of nursing home costs paid by Medicaid and Medicare has nearly doubled over the past half-century from 26.8 percent in 1970 to 52.3 percent in 2021, while out-of-pocket costs have shrunk by half in the same period from 49.2 percent in 1970 to 24.5 percent in 2021.[86] Nursing home private-pay revenue has plummeted to 7 percent.[87]

The situation with home health care is very similar. America spent $125.2 billion on home health care in 2021, of which Medicare (37.2 percent) and Medicaid (34.2 percent) paid 71.4 percent. Private health insurance (not LTC insurance) paid 12.7 percent. Only 10.3 percent of home health care costs were paid out of pocket. The remainder came from several small public and private financing sources.[88] Maybe people are spending down for assisted living. Some surely do, but “Almost 1 in 5 [assisted living] residents relies on Medicaid to pay for daily services (18%),” “61% of [assisted living facilities] are Medicaid certified,” and only “a small minority of state Medicaid programs do not cover services in assisted living.”[89] Assisted living began exclusively as a private-pay option, but that is changing rapidly. Still, to count spend down for assisted living as an out-of-pocket LTC expenditure is dubious, because a large portion of the fee for assisted living covers room and board, not LTC.

So how can it still be that “Family out-of-pocket costs are also substantial, averaging $44,800 and accounting for 37% of the total” LTSS expenses, averaging $120,900 per person?[90] The answer is another anomaly of Medicaid LTC financing policy: People receiving Medicaid LTC benefits are required to contribute all but a small portion of their income to offset Medicaid’s cost for their care. While this income “spend-through” is rarely considered, research from three decades ago documented that it is substantial, roughly half of what is reported as out-of-pocket costs.[91] This matters because the spend-through income—mostly Social Security benefits, although correctly considered to be a private out-of-pocket expenditure for Medicaid LTC—is not asset spend down and does not come from people’s savings or home equity. Relatively little of what is reported as personal out-of-pocket LTC expenditures comes from savings or home equity expended for nursing home or home health care. Much of it is Social Security income that is vulnerable to that entitlement program’s potential insolvency and has been contributed by people already on Medicaid, some of whom are receiving Medicaid while residing in assisted living facilities or continuing care retirement communities (CCRCs).[92] Removing private payments for assisted living and CCRCs, much of which cover room and board costs and not LTC, leaves much less reported out-of-pocket LTC costs remaining that could actually constitute consumption of life savings or real property assets.

Finally, analysts often refer to the University of Michigan Health and Retirement Study and its auxiliary, the Asset and Health Dynamics among the Oldest Old study for evidence to support their presumption that people are spending down assets to qualify for Medicaid LTC benefits. Research does show that people tend to decumulate assets rapidly at older ages, and many do qualify for Medicaid thereafter. But there is nothing in the data to link decumulation of wealth with spend down on health or LTC costs. Those sources show only that transitions to Medicaid eligibility occur. Such transitions may as likely be the result of Medicaid planning (i.e., artificial self-impoverishment) conducted many years before in anticipation of the future need for LTC.

The widespread belief that high LTC costs impoverish large numbers of aging Americans is unsupported by the evidence. Medicaid financial LTC eligibility rules do not exclude people up to and through the fourth quintile of wealth. Ample evidence suggests that the public is aware of methods to qualify easily for Medicaid LTC benefits or quickly learn how when expensive care costs arise. Private-pay revenue for LTC providers, including home health agencies and skilled nursing facilities, is low and falling. Private pay for assisted living and CCRCs—much of which does not go for LTC but rather for room and board—should not be bunched in with spending for home health and skilled nursing. In the absence of evidence of high out-of-pocket spend down for LTC, analysts should reassess what is actually happening and how to address reform.

In summary, middle-class Americans have enough wealth to fund their average expected LTC costs, and this wealth is largely exempt from Medicaid spend down rules. Information on how to access Medicaid LTC benefits without spending down is widely available, and there is no evidence of widespread LTC spend down resulting in impoverishment. So, one can conclude that changing Medicaid eligibility policy to remove the option to ignore LTC, shelter personal wealth, and rely on public benefits when LTC becomes necessary should free up enormous resources of private wealth to support LTC financing.
 

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Updated, Monday, November 27, 2023, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #23-034:  LTC NEWS AND COMMENT

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

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

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

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

• A Long-Term Solution To America's Long-Term Care Crisis

• 10 Things You Should Know About Long-Term Care Insurance

• Brian Blase Discusses Affordable Care Act Enrollment

• The way we pay for long-term care needs a fundamental rethink

• Does It Make Sense to Self-Fund Long-Term Care Expense?

• Why long-term care in America is a long-term problem

• When You Go Home for Thanksgiving

• Why Long-Term Care Insurance Falls Short for So Many

• Americans would have difficulty paying for a year of long-term care: survey

• Federal, lender support needed for assisted living operators to lower rates, leader says

• Nursing home care continues to outpace most categories of national health spending: Altarum

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

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Updated, Monday, November 20, 2023, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #23-033:  LTC NEWS AND COMMENT

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

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

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

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

• Can a Nursing Home Take Our Assets? We Have a $1 Million IRA and a Trust to Protect Us

• Why High Interest Rates Are Good News for Long-Term Care Insurance

• Facing Financial Ruin as Costs Soar for Elder Care

• The Affordability of Long-Term Care and Support Services: Findings from a KFF Survey

• The Biden Administration Is Slow to Act as Millions Are Booted off Medicaid, Advocates Say

• Can I Be Compensated for the Care I Give to My Elderly Parents?

• Don't be afraid of too many LTC Insurance Choices!

• Genworth Moves Ahead With Long-Term Care Reboot

• Removing Medicaid Loopholes to Improve Long-Term Health Care

• 12 Ways Long-Term Care Risk Eats Your AUM

• Worried About Long-Term Care Expenses? Let’s Do Something About It

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

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Updated, Monday, November 17, 2023, 10:03 AM (Pacific)
 
Seattle—

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LTC BULLET: LONG-TERM CARE: THE SOLUTION (THE SERIAL, Part 3)

LTC Comment: Today we offer easy access to a must-read new study by Center president Steve Moses, after the ***news.***

*** PODCAST: “Removing Medicaid Loopholes to Improve Long-Term Health Care,” by AnneMarie Schieber, The Heartland Institute, 11/7/2023
Quote: “Stephen Moses, one of the leading experts on long term care in the U.S. says the nation can dramatically improve the quality of long-term care if we could get rid of the many loopholes that allow just about anyone to qualify for Medicaid coverage. Few people save for long term care because it is widely accepted that the government will pick up the tab. But government paid care has really impacted the quality of care.  Many of the elderly live their last days in nursing homes. Moses, and the Paragon [Health] Institute released their latest report on the problems with long term care in the U.S., called Long-Term Care: The Solution. In October 2022, Moses and Paragon outlined the problems in Long-Term Care: The Problem. … This podcast begins with a discussion on Medicaid loopholes, the response from Congress, whether a solution is workable immediately, and how special interests might respond to closing off loopholes. The conversation then turns to why the public needs to be better educated on long-term care. The idea that it must be debilitatingly expensive isn’t true.”
LTC Comment: Get the essence of the LTC problem and its solution in this 36-minute podcast. Many thanks to Health Care News managing editor AnneMarie Schieber and the Heartland Institute for publishing this important message. ***

*** COLUMN: “The federal Medicaid bait and switch,” by Stephen A. Moses, McKnight’s LTC News, 11/6/2023 
Quote: “How to unleash trillions of dollars in home equity, retirement savings and life insurance lying fallow now and mobilize them to supercharge LTC service delivery is the new paper’s topic. How to do that without unsettling young people and families who have more immediate goals and responsibilities they currently put ahead of LTC planning is the paper’s proposal. I invite McKnight’s readers [and everyone else] to review ‘Long-Term Care: The Problem’ and ‘Long-Term Care: The Solution,’ consider their analysis and recommendations, and share your comments and criticism with the author.”
LTC Comment: Have a look at these two papers and let me know what you think. I believe the opportunity to change LTC financing for the better is coming again. The system described in the first paper is unsustainable and the proposal in the second paper is practical, new, and achievable. Just do it. ***

*** APPEAL: The Center for Long-Term Care Reform, in partnership with the Paragon Health Institute, is embarking on a campaign to improve LTC services and financing. In “Long-Term Care: The Problem,” we explained what’s wrong and why. In “Long-Term Care: The Solution,” we discard the failed policies of the past and propose a radical new approach based on engaging vast sources of private wealth currently diverted from LTC funding. We will reach out to the media, brief federal and state policy and law makers, speak at conferences, and write for publication, all toward the end of achieving the policy goals in “Long-Term Care: The Solution.” Will you help us in this effort? Join the Center or contribute online here. Check out the Center’s “Membership Levels and Benefits” schedule here. Most corporate memberships include a briefing by Center president and “LTC Solution” author Stephen Moses. Call or write for more information: 206-283-7036; damon@centerltc.com; smoses@centerltc.com. LTC policy has floundered for too long. Let’s get this done! ***

LTC BULLET: LONG-TERM CARE: THE SOLUTION (THE SERIAL, Part 3)

LTC Comment: The Paragon Health Institute published “Long-Term Care: The Solution” on October 3. This new report is long and complicated, but important. So LTC Bullets will deliver it to you in bite-sized pieces over several weeks. Published so far: Long-Term Care: The Solution (The Serial), October 20, 2023 and Long-Term Care: The Solution (The Serial, Part 2), November 3, 2023. Today, read “Changing Course: From Failed Threats to Stronger Incentives,” “How to Engage the Public in Long-Term Care Planning While They Still Have Time to Prepare,” “How These Policy Changes Would Impact the LTC Market,” “People Already Have More Funds Available for LTC Than They Are Using Now,” and “Methods to Satisfy Individual LTC Responsibility.” Next time: “Poverty Reconceptualized,” “Managing the Back End,” and “Why Not Social Insurance Instead?” Finally, in Part 4, expect “Summary and Conclusion” and the “Appendix: Exactly How Much Wealth Do People Have and Why Aren’t They Using More of It for LTC?”

Excerpts from “Long-Term Care: The Solution”
by
Stephen A. Moses
President, Center for Long-Term Care Reform

Changing Course: From Failed Threats to Stronger Incentives

Policies intended to scare consumers into planning privately for the risk and cost of LTC did not work. People could always ignore LTC and, if they needed expensive care over an extended period later, easily transfer the liability to Medicaid. The program’s financial eligibility rules allowed (1) ownership of practically unlimited exempt assets; (2) asset transfers five years in advance; (3) very large home equity protection; (4) major trust, annuity, and life estate exemptions; (5) large incomes so long as private health and LTC expenses were also high; and (6) substantial wealth transfer to heirs due to scant enforcement of the estate recovery mandate. Easy access to Medicaid meant the measures taken to encourage LTC planning and policies to encourage the purchase of private insurance for LTC largely failed. This condition will remain unless and until the public is engaged in LTC planning earlier in life.

How to Engage the Public in Long-Term Care Planning While They Still Have Time to Prepare

Step One: Eliminate Moral Hazard

Lawmakers should eliminate the moral hazard that has discouraged early LTC planning. That is, end the ability and practice to (1) ignore the LTC risk; (2) avoid the need to save, invest, or insure to prepare; (3) wait to see if expensive care is ever needed and, if it is; (4) transfer the liability to taxpayers by qualifying for Medicaid while preserving wealth. The methods people use to preserve wealth while qualifying for Medicaid LTC benefits late in life must cease. Those practices include but are not limited to:

a.  Purchase of exempt assets. This is the biggest, most costly, and hardest to measure method of artificial self-impoverishment to qualify for Medicaid. Medicaid requires that personal assets be spent down to a very low level (usually $2,000) before eligibility is granted. But the program does not require that such assets be expended for health or long-term care needs.[29] This loophole allows Medicaid applicants to protect unlimited wealth by purchasing goods or services that are not included among countable resources. Such exempt items include an expensive home and—without any dollar limit—the following: one automobile, prepaid burial plans, one business including the capital and cash flow, term life insurance, household goods, personal belongings, and even individual retirement accounts (IRAs) in many cases.[30] Medicaid planners routinely advise clients to maximize this path to eligibility. They provide long lists of exempt items for clients to purchase in order to reduce their countable wealth for Medicaid eligibility.[31] No study has ever been conducted to measure this very easy Medicaid planning method’s incidence or cost.
Recommendation: Eliminate the exempt asset loophole by requiring that spend down of assets must be for health or LTC expenditures and documented in the case record as is already required and done for income spend down.[32]

b.  Home equity exemption. Current Medicaid law exempts between $688,000 and $1,033,000 of home equity, depending on the state. As home equity is most seniors’ biggest asset, protecting this wealth from LTC liability discourages responsible and early LTC planning. Financial tools and methods such as reverse mortgages and home equity loans enable individuals and families to access otherwise illiquid home equity for the purpose of funding private home-based LTC. As the legitimate purpose of Medicaid is to ensure access to quality LTC for the underprivileged, the program should not shelter home equity from eligibility consideration on behalf of middle-class and affluent applicants. Otherwise, Medicaid operates as free inheritance insurance for heirs instead of a safety net for those in need.
Recommendation: Eliminate the Medicaid home equity exemption according to a phase-in schedule with enough advance warning to incentivize early LTC planning without unduly affecting people already too old to prepare.

c.  Medicaid Asset Protection Trusts (MAPT). “A Medicaid Asset Protection Trust is exactly as it sounds—a trust designed to protect assets from being counted for Medicaid eligibility.”[33] Putting wealth, including real property, into an MAPT five years ahead of application for Medicaid LTC benefits removes unlimited amounts from eligibility consideration or spend down requirements.
Recommendation: Prohibit MAPTs immediately for all applicants and recipients. Once the law is changed, Medicaid legal advisers will self-enforce by no longer using or recommending the practice.

d.  Medicaid Compliant Annuities. “A Medicaid Compliant Annuity is a single premium immediate annuity (SPIA) that contains zero cash value and provides income to the owner. Properly structured, this annuity functions as a spend-down tool that eliminates excess countable assets, allowing the nursing home resident to become eligible for Medicaid benefits.”[34] There is no limit on how much wealth can be sheltered with a Medicaid compliant annuity. A congressional study cited a Rhode Island resident sheltering $400,000 and a Virginia resident sheltering $900,000 this way.[35]
Recommendation: Eliminate Medicaid-compliant annuities as a means to qualify for Medicaid while preserving wealth at any age.

e.  Five-year asset transfer look-back. Assets transferred for the purpose of qualifying for Medicaid within five years of application are used to determine eligibility according to a formula that delays eligibility based on the amount of the transfer.[36] Assets transferred more than five years before application are not considered no matter how great the amount divested. Because the median period of time from diagnosis to death in dementia cases is five years,[37] families that transfer assets at early signs of mental weakening can entirely avoid Medicaid spend down requirements. Because real property ownership and transfers are publicly recorded, easy to check, and represent the largest portion of seniors’ wealth, the look-back period to discourage their transfer for purposes of Medicaid qualification should be much longer. It is unlikely that so many people would become Medicaid eligible and join the most expensive dually eligible recipients of Medicaid and Medicare if they were under notice of asset transfer limits 20 years in advance instead of five.
Recommendation: Expand the Medicaid asset transfer look-back period from five to 20 years. As all real property transfers are recorded and often automated now, checking for a look-back of 20 years is no more difficult than the current five-year look-back requirement. People would be much less likely to initiate asset transfers to qualify 20 years ahead of a potential LTC need as they routinely do five years ahead. In other words, this rule would be self-enforcing and not generally require enforcement 20 years later at the point of Medicaid application.

A systematic review of Medicaid income and asset eligibility loopholes (described and promoted in the vast formal legal literature on Medicaid estate planning[38]) would reveal many more oversights in Medicaid law and regulations that discourage responsible LTC planning and smooth the way onto Medicaid for people who do not plan for LTC. Some of the more egregious examples include spousal refusal, life estates, and half-a-loaf strategies.[39] These should be eliminated as well. At a minimum, the GAO should immediately undertake a systematic study of Medicaid LTC eligibility rules and enforcement to ascertain the incidence and costs of these major loopholes. GAO should examine a valid random sample of Medicaid LTC cases generalizable to the national universe of such cases. Such a study should employ more intense review and verification techniques than are used by state Medicaid agencies. Severe staff and financial shortages cause the state agencies to miss applicants’ unreported income and resources, resulting in eligibility errors that closer scrutiny would reveal. Establishing national LTC financial eligibility error rates would finally reveal how much Medicaid loses as a safety net for the needy and how large its moral hazard impact is on the non-needy due to eligibility loopholes and errors.

How These Policy Changes Would Impact the LTC Market

Without any government program ensuring both the financing of LTC benefits and asset protection in the future, consumers would be far more concerned about LTC risk and therefore much more likely than they are now to save, invest, or insure against the risk. Fewer middle-class and affluent people would end up dependent on public assistance, so the public safety net could do a better job for the truly needy. Adult children would encourage and assist their parents to plan ahead instead of turning to Medicaid for relief when needed. Principles of personal responsibility guided by risk management techniques would prevail. More private financing would flow through the service delivery system relieving LTC providers from the burden of notoriously low Medicaid reimbursement rates. The market would set prices and allocate resources to meet consumer preferences instead of providers offering only what the government is able and willing to finance. Home- and community-based services would dominate—because that is what people prefer—and investors, entrepreneurs, and companies would be rewarded for providing these services. Nursing homes would still have an important role, but they would primarily provide skilled sub-acute and rehabilitative care rather than long-term custodial assistance.

These policy changes should be phased in so that they affect older people less or not at all and give younger people enough time to adapt. For example, people 55 or older and younger people with chronic disability or early onset dementia could be exempted from the change altogether. Current rules would remain in effect for them as they age into their 80s, the time of life when LTC becomes most likely. People 45-54, newly on notice that they can no longer count on easy access to Medicaid LTC while preserving wealth, should be expected to have a minimal level of LTC savings, investment, or insurance in place by age 65 sufficient to offset their average LTC liability. Likewise, people younger than 44 should be on notice that they need to have sufficient resources set aside by age 65 to offset their average catastrophic LTC risk. How each of these age groups can reasonably be expected to achieve these levels of protection is addressed below under Steps Three and Four.

We will need to monitor and enforce compliance with these new expectations regarding LTC planning. Without either, we can expect widespread non-compliance, leaving many unprotected for LTC risk as now but no longer protected against asset spend down in the future as before. Private fiduciary organizations could be tasked with identifying individuals’ LTC risks and to follow up with each person until the risk is covered. There could be a role for some level of government to follow up with people who remain derelict in this responsibility. Artificial intelligence could help monitor and administer a program to incentivize early LTC planning.[40]

Step Two: Publicize LTC Risk and Cost

Once Medicaid is preserved for the truly needy by preventing people from using it late in life and protecting their wealth, that change should be publicized widely. Without the ability to access government programs to finance LTC later in life while preserving wealth, people will have far greater incentives to engage in proper planning. From Washington State’s experiment in payroll-funded social insurance for LTC, we know that individuals will prepare once they are confronted with the urgent need to deal with LTC risk.

Washington Governor Jay Inslee signed a law in 2019 establishing the WA Cares Fund. The program was designed to charge workers a 0.58 percent payroll tax beginning January 1, 2022, to fund a lifetime LTC benefit of up to $36,500 after a 10-year vesting period. It faced strong public opposition, failing twice to receive citizens’ support at the ballot box.[41] To make WA Cares more attractive to voters, an opt-out choice was added that allowed people to avoid the payroll tax by owning private LTC insurance purchased no later than November 1, 2021. As of August 15, 2022, 475,072 Washingtonians had taken that option,[42] overwhelming the private LTC insurance carriers’ ability and desire to supply the product.[43] Carriers, backlogged by the heavy new demand, worried the new policies taken out in minimal amounts to avoid the payroll tax would quickly lapse, creating an administrative headache and expense.

The key insight of the WA Cares Fund experience is that it took forcing people to pay immediately for LTC to get them to purchase private insurance for the risk. Prior to the Washington experience, no amount of scaring people about LTC cost or encouraging them with tax incentives persuaded many to buy the product. After WA Cares offered a way to opt out of its payroll tax, LTC insurance sales exploded. Nationally, more than three times as many people purchased the product in 2021 compared to 2020. Most of these new buyers were Washingtonians seeking to escape the WA Cares program’s payroll tax.[44] Adding the opt out harmed the program by diverting individuals with higher incomes and more favorable LTC risks to private coverage, but it also pointed the way to better LTC policy.

Clearly, an important answer to the LTC challenge lies in making LTC risk and cost real for consumers earlier in their lives. Eliminating Medicaid eligibility loopholes would create this condition, and it does so without threatening all workers with a new, economically harmful payroll tax as in the WA Cares example. Publicizing the change in future Medicaid LTC eligibility across the country, at least as widely and frequently as WA Cares was promoted to Washingtonians, should result in a similar increase in consumer demand for any and all private means to save, invest, or insure against LTC risk and cost.

Step Three: Reconceptualize the LTC Challenge

LTC risk and cost are both frightening and seemingly so distant in the future that most people choose to ignore them, especially in the face of more immediately pressing responsibilities. One key to refocus consumers on LTC is to reconceptualize the problem, with new information that reveals it is less intimidating than usually conceived. In the past several years, new research has suggested that LTC may not be such an overwhelming financial risk for most people as previously assumed.

In 2022, HHS’s Assistant Secretary for Planning and Evaluation estimated “that over half (56%) of Americans turning 65 today will develop a disability serious enough to require LTSS.”[45] But that means nearly half, 44 percent, can expect to have zero LTC need. In fact, “While individuals on average will need 0.8 years of paid LTSS, 55% of older adults will not use any paid LTSS.”[46] Furthermore, on average “an American turning 65 today will incur $120,900 in future LTSS costs, measured in today’s dollars.”[47] This amount could be financed by setting aside[48] the present discounted value of $69,800[49] at age 65.[50] Earmarking $70,000 at age 65 for future LTC expenses does not sound nearly as daunting as insuring against the full catastrophic LTC risk potential of $250,000.[51] If people begin LTC planning earlier than age 65, even less would be needed to set aside.[52] In essence, the burden is much more manageable than previously conceived.

Once the principle is established that every person has a responsibility to cover an objectively determined amount of LTC liability by a certain age, each person’s target amount could be adjusted in a way that treats people fairly based on their sex, income, health status, and other relevant demographic characteristics.

People Already Have More Funds Available for LTC Than They Are Using Now

There is more good news. In June 2019, Johnson and Wang “simulated the financial burden of paid home care for a nationally representative sample of non-Medicaid community-dwelling adults ages sixty-five and older.”[53] They “found that 74 percent could fund at least two years of a moderate amount of paid home care if they liquidated all of their assets, and 58 percent could fund at least two years of an extensive amount of paid home care.”[54] Furthermore: “Nearly nine in ten older adults have enough resources, including income and wealth, to cover assisted living expenses for two years.”[55] So the potential LTC financial burden is much more manageable than we thought. The evidence that people accumulate substantial savings that could be used for LTC if they had more incentive to do so is very encouraging. Assuming the removal of Medicaid’s generous financial eligibility rules that obviate the need to plan for LTC, the path forward will be much less fraught.

Exactly How Much Wealth Do People Have and Why Aren’t They Using More of It for LTC?

This paper’s Appendix answers those questions based on new research and draws the appropriate conclusions for LTC financing policy reform.

Step Four: Show Younger People a Better Way

Even if the LTC financing challenge is not as daunting as previously believed and families possess more wealth than we thought, we still need ways to make it easier for younger people and families to identify and put to use the means at their disposal to prepare for LTC risk and cost. Government should advise all Americans by age 25 that LTC planning is a personal responsibility planning for which should start no later than age 40 and be achieved by age 65. The termination of all methods to qualify for Medicaid LTC benefits late in life while preserving wealth should be disclosed, publicized, and frequently reiterated in state and federal government publications. By age 65, most Americans should be prepared to pay for their expected LTC expenses, which would require them on average to have $70,000 saved, set aside, or insured for that purpose. LTC Choices 1-7 below suggest some methods by which people could fulfill their LTC planning responsibility. Entrepreneurs can be expected to produce many more.

A private fiduciary organization similar to Underwriters Laboratories could counsel Americans on LTC risk and cost, propose methods to prepare, evaluate their proposals to meet their responsibility, and help them achieve the needed protection. Private insurers could estimate individual need and recommend the necessary level of coverage with quality control review by independent actuaries or auditors. Following are several possibilities that could satisfy the need to plan for LTC with minimal financial disruption for individuals and families carrying other financial responsibilities at the same time. The basic strategy is twofold: (1) to aim LTC planning toward a more realistic goal of meeting each individual’s probable risk and (2) to minimize the immediate cost of preparing for LTC risk by earmarking funds already accumulated in retirement savings to be used for LTC if and only if LTC becomes necessary.

Methods to Satisfy Individual LTC Responsibility

LTC Choice #1: Private Insurance. Purchase private LTC insurance that meets minimal coverage standards based on age, sex, health status, etc. Instead of huge premiums to cover potential lifetime coverage of expensive nursing home custodial care,[56] adequate insurance coverage for each individual’s personal risk will prove much more affordable. Most analysts believe private LTC insurance is unlikely ever to penetrate enough middle-income households to become a significant payment source. But they have always assumed that people would need much more coverage at too great a cost to attract enough buyers to make a big difference. That assumption may be wrong.

Smaller, less expensive LTC insurance policies could have a disproportionately large impact on the aging public’s ability to afford senior housing, including home care and assisted living. The National Investment Center reported that reducing the annual cost of senior housing by $15,000, from $60,000 to $45,000 per year, would expand the middle market for senior housing[57] by 3.6 million individuals, enabling 71 percent of middle-income seniors to afford the product.^[58] Where could consumers find that extra $15,000 to bring the cost of senior housing into reach? The premium for an annual LTC insurance benefit of $15,000 would only cost a small fraction of the premium required for the comprehensive coverage that consumers find so financially daunting now. Unfortunately, insurance regulations sometimes forbid carriers from offering coverage with a benefit of less than $18,000 per year. Once again, well-intentioned regulation stands in the way of sensible LTC policy and planning.

LTC Choice #2: Investment Accounts. Establish a new tax-deferred investment account similar to the 401(k) or IRAs already available to cover future predictable LTC expenses. Consider a fully tax-exempt investment account as an even greater savings facilitator. To soften the impact of contributing to an extra retirement account, savers could be allowed to use a portion of their existing retirement accounts or health savings accounts to satisfy the LTC responsibility.[59] The strategy is to use a portion of funds already saved for other purposes by allocating them for LTC if and only if LTC becomes necessary.

LTC Choice #3: Retirement Savings. Allow a portion of retirement savings to meet the LTC planning responsibility. At the end of March 2023, total U.S. retirement assets were $35.4 trillion, including $12.5 trillion in IRAs, $9.8 trillion in defined contribution accounts, and $10.9 trillion in combined government and private defined benefit plans. Annuity reserves outside of retirement accounts add another $2.2 trillion.[60]

LTC Choice #4: Home Equity. Over 78 percent of age 65 and over households own homes.[61] Many could lien their home equity to support LTC or withdraw sufficient funds through reverse mortgages to purchase private LTC insurance as in LTC Choice #1. The $12.4 trillion in home equity held by people 62 years of age and older[62] would both cover the LTC expenses for a large portion of them and send huge waves of desperately needed private revenue into the LTC service delivery system. This new private revenue—at rates 50 percent more than what Medicaid pays—would improve care quality and access for all LTC patients, including those dependent on public financing. Estimating potential savings to Medicaid from this source is difficult. Little is known about current home ownership by Medicaid LTC recipients, because Medicaid exempts most home equity. A dated (but unique) 1989 GAO study found, “About 14 percent of the Medicaid nursing home residents in the eight states GAO reviewed owned a home,” and “By using home equity to defray Medicaid costs as Oregon does, the six states that now lack recovery programs could recover about $85 million [$218 million in today’s dollars] from recipients admitted to nursing homes.”[63] Diverting home equity earlier in life to finance LTC risk later, instead of relying on Medicaid and then attempting to recover from estates after death, would unleash the huge potential of home equity to finance quality LTC for more people.

LTC Choice #5: Life Insurance. Many life insurance policy holders can carve out enough of their cash values or death benefits to meet their personal LTC responsibility. Total life insurance coverage in the United States was $21.2 trillion by the end of 2021.[64] There are several ways to access the cash value of life insurance without dying. They include dropping the policy to collect its surrender value, selling the policy by means of a “life settlement,” and withdrawing funds or borrowing from the policy.[65] Even a term life policy, with no cash value, can sometimes be sold.[66] The current perverse incentive created by government policy when people need LTC is to liquidate cash value life insurance, spend the money on exempt assets, and then apply for Medicaid when the funds are gone. Eliminating that loophole would free up trillions of private life insurance value to offset public LTC expenditures.

LTC Choice #6: The Deferred Reverse Estate Annuity Mortgage (DREAM). This option—a legally binding and officially recorded lien on one’s estate set aside for LTC—does not currently exist, but it is similar to the existing Medicaid estate recovery obligation except that it moves the responsibility forward in time and ensures eventual LTC funding availability. The DREAM mortgage satisfies the LTC planning responsibility only if it is formally executed, is legally recorded, and applies to all property that will pass inside or outside of a probated estate. Unlike asset transfer limitations and estate recovery, this option secures the property so that it is available to pay for care in the private market. This is a way for people to prepare for LTC risk and cost, lock in the ability to pay privately for care, and have no immediate need to expend income. They merely obligate a portion of their estates for their LTC if needed. Any remainder would pass to heirs, although it would be unprotected by Medicaid, as it is currently. This is the easiest and least intrusive of all the methods to satisfy the LTC planning responsibility.

LTC Choice #7: Capture the other end of the age spectrum from estates. People who begin saving, insuring, or setting aside resources for LTC before age 40 could receive a reduced LTC responsibility level. So, in addition to the lower discounted present value of their LTC responsibility, they would have an added incentive to begin LTC planning earlier. Employers could introduce LTC responsibility to job seekers in their early 20s. Increasingly, younger people are having to care for their parents and grandparents. If they become sensitized to the need for LTC planning earlier than others and they take action, their LTC responsibility could be satisfied earlier and at less personal cost than for others who begin preparation later in life.

All seven of these options are manageable by private companies—such as employers, insurers, banks, or brokers—eliminating much of the huge federal and state bureaucracy currently managing Medicaid LTC eligibility determination and estate recovery. Other tools and methods of satisfying the LTC planning objective will evolve naturally in a market not distorted by Medicaid rules that reward failure to plan.
 

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Updated, Monday, November 13, 2023, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #23-032:  LTC NEWS AND COMMENT

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

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

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

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

·       The $600 Billion Dilemma: How to Help Family Caregivers

·       These lawmakers should be more careful about what they ask for

·       What is the Average Age and Disability Level of Older People Moving Into Long-Term Care?

·       Japan’s aging population to increase burden on nursing care costs

·       Long-Term Care Insurance Coverage: State-to-State 2023

·       As People Live Longer, Family Caregivers Face Financial Challenges

·       Study: People entering nursing homes have more severe disabilities than those going into independent living

·       The federal Medicaid bait and switch

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

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Updated, Monday, November 6, 2023, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #23-031:  LTC NEWS AND COMMENT

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

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

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

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

• Nursing Home Construction Dwindles As Operators Downsize – But a Lack of Medicaid Beds is Most Concerning
• Millennials Join Ranks of ‘Sandwiched’ Caregivers
• It’s time to dig in and let CMS do the digging out
• Can a Nursing Home Take Our Assets? We Have a $500k IRA and a Trust to Protect Us
• Long-term care has its congressional moment
• Report reveals minorities’ LTSS access barriers, reliance on family caregivers
• Surge in Dementia Cases by 2040 Expected
• Executive order from Biden on regulating AI in healthcare expected this week, as the world starts to come to grips with the new technology

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

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Updated, Friday, November 3, 2023, 10:40 AM (Pacific)
 
Seattle—

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LTC BULLET: LONG-TERM CARE: THE SOLUTION (THE SERIAL, Part 2)

LTC Comment: Today we offer easy access to a must-read new study by Center president Steve Moses, after the ***news.***

*** ILTCI REGISTRATION OPEN: “Registration is Now Open for the 2024 Intercompany Long Term Care Insurance Conference!” reports the meeting’s organizing committee. “Our in-person conference will be March 17 - 20, 2024 at the newly remodeled Town & Country Resort in San Diego, CA.  Our agenda includes numerous educational sessions over two days across seven tracks with ample time for networking and reconnecting with colleagues. We still have room for exhibitors and sponsors! Please contact us at info@iltciconf.org if you are interested in either opportunity to showcase your products and services to our attendees.” Click here to register and here to reserve your hotel. I’ll be there covering the conference as I have been for most of its predecessors as recounted in History of LTC Insurance Conferences (2021). Read our coverage of this year’s conference in LTC Bullet: Virtual Visit to ILTCI 2023. ***

*** APPEAL: The Center for Long-Term Care Reform, in partnership with the Paragon Health Institute, is embarking on a campaign to improve LTC services and financing. In “Long-Term Care: The Problem,” we explained what’s wrong and why. In “Long-Term Care: The Solution,” we discard the failed policies of the past and propose a radical new approach based on engaging vast sources of private wealth currently diverted from LTC funding. We will reach out to the media, brief federal and state policy and law makers, speak at conferences, and write for publication, all toward the end of achieving the policy goals in “Long-Term Care: The Solution.” Will you help us in this effort? Join the Center or contribute online here. Check out the Center’s “Membership Levels and Benefits” schedule here. Most corporate memberships include a briefing by Center president and “LTC Solution” author Stephen Moses. Call or write for more information: 206-283-7036; damon@centerltc.com; smoses@centerltc.com. LTC policy has floundered for too long. Let’s get this done! ***

LTC BULLET: LONG-TERM CARE: THE SOLUTION (THE SERIAL, Part 2)

LTC Comment: The Paragon Health Institute published “Long-Term Care: The Solution” on October 3. This new report is long and complicated, but important. So LTC Bullets will deliver it to you in bite-sized pieces over the next few weeks. Today, read “The LTC Solution” (introduction), “What Did Not Work,” and “What Happened and Why Action Is Imperative Now.”  Next time: a whole new approach to LTC financing that will unleash the potential of private financing, including insurance. 

Excerpts from “Long-Term Care: The Solution”
by
Stephen A. Moses
President, Center for Long-Term Care Reform

The LTC Solution

In “Long-Term Care: The Problem,”[4] I described the lessons of LTC history. Public programs have paid for most expensive LTC since 1965. Government policies diverted the public from early private LTC planning and left too many people dependent on welfare-financed nursing home care. Private sector entrepreneurs interceded repeatedly with preferred options such as assisted living, private home care, and insurance. But the dominance of Medicaid and Medicare financing for nursing homes prevented alternative modes of LTC service delivery and financing from fully developing based on consumer preferences. Given the damage government financing and interference have caused, what are the best LTC policy options going forward?

America’s many LTC service delivery and financing problems are understandable, manageable, and correctable. The fundamental issue is that people do not plan, prepare, save, invest, or insure early enough to be able to pay for LTC when they need it, usually much later in life. The current challenge facing policymakers is twofold: (1) how to get people to think about and plan for LTC in their younger, working years, when LTC risk and cost seem distant and low compared to more immediate needs, and (2) how to provide and pay for LTC in the future for burgeoning numbers of aging people who are unprepared to meet its cost. The growing emphasis on healthy aging, with its resulting expansion of lifespans, will make these imperatives more important than ever to achieve.[5]

The reason most people do not plan early enough for LTC is that, since its establishment in 1965, Medicaid has paid for most expensive formal LTC not only for the poor but also for the middle class and many affluent people. The fallacy of impoverishment—the mistaken belief that eligibility for Medicaid’s LTC benefits requires spend down of income and assets into destitution—has prevented analysts from seeing this connection between Medicaid’s availability and the public’s seemingly irrational denial of LTC risk. The problem is not that people intentionally plan to use Medicaid if they ever need LTC. Few know who pays for LTC, and most wrongly believe Medicare does.[6] Rather, Medicaid’s actual availability when care is needed (usually many years later) enables consumers’ denial of the risk and cost and leaves them unprepared and unprotected when confronted with chronic long-term illness.

Thus, the fundamental solution to the LTC policy problem is to direct the public’s attention to this large risk and cost earlier—before it is too late for them to prepare personally. That has been a major goal of LTC public policy ever since Medicaid’s LTC expenditures spiked far above original expectations in the 1970s. Through the 1980s and 1990s and into the mid-2000s, policymakers of both political parties sought to ensure that escalating Medicaid LTC expenditures went only to the people who needed them most. Numerous laws attempted to discourage the overuse of Medicaid LTC benefits by people who could and should pay for their own care. Those measures’ objective was to convince consumers that they should prepare for likely LTC costs in the future in order to avoid possibly devastating LTC expenditures that could consume their life savings. Although they were largely unsuccessful, the measures intended to scare the public straight point the way toward a better solution. But before designing and implementing a successful solution, it is crucial first to understand what policies failed and why they failed.

What Did Not Work

Congress did not include LTC in Medicare but added nursing home coverage for the poor to Medicaid, recognizing its growing need and costs for an aging population. Medicaid expenditures exceeded expectations from the start of the program.[7] LTC costs in Medicaid increased especially rapidly.[8] Medicaid extended eligibility to anyone unable to afford nursing home care,[9] and it reduced or eliminated strict eligibility criteria, transfer of assets restrictions, and mandatory liens that were previously commonplace in state welfare programs.[10] This easy access to Medicaid nursing home care created a moral hazard that desensitized the public to LTC risk and cost.[11] So long as LTC constituted a small risk of a catastrophic loss sometime in the distant future that a government program would then cover if necessary, most people ignored the risk. Most of those who later confronted catastrophic LTC costs ended up on Medicaid whether or not they knew from the beginning that Medicaid would pay.

Presidents and Congresses of both parties tried to subdue Medicaid LTC expenditure growth by suppressing the tendency to ignore LTC and rely on Medicaid in a long series of statutory and regulatory reforms. President Carter and a Democrat-controlled House and Senate took the initial step to rein in Medicaid LTC benefits in 1980 by imposing the program’s first ever limit on asset transfers to qualify for the program.[12] That measure triggered the first law journal article on how to circumvent Medicaid eligibility rules and become eligible while preserving wealth.[13]

In 1982, President Reagan signed legislation passed by a Democratic House and a Republican Senate that lengthened and strengthened asset transfer restrictions and allowed states to impose liens to secure property for later recovery from recipients’ estates.[14] In 1988, with Democrats controlling both houses of Congress, President Reagan signed legislation that, for the first time, required state Medicaid programs to penalize people who made inappropriate asset transfers.[15] None of these measures succeeded in controlling LTC spending growth. Medicaid planning articles multiplied in formal legal publications and in the popular media. The techniques to qualify for Medicaid included hiding money, transferring assets, juggling resources, changing wills and titles to property, and setting up a Medicaid trust to access benefits without spending down savings.[16]

In the late 1980s, studies by the Office of the Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS)[17] and the Government Accountability Office (GAO)[18] documented inconsistent state enforcement of the asset transfer, lien, and estate recovery regulations. The OIG report observed: “It is their children, after all, who stand to inherit whatever property remains after the costs of long-term care are paid and who currently reap the windfall of Medicaid subsidies. We must emphasize that the issue is enrichment of nonneedy adult heirs, not denial of care to the elderly.”[19] The government watchdogs recommended tightening Medicaid financial eligibility rules; making estate recoveries mandatory; and conducting further studies to analyze the relationships among Medicaid LTC eligibility, reduced private LTC spending, and low private LTC insurance take-up. A Democrat-controlled Congress concurred in 1993 when President Clinton signed legislation that required estate recoveries and made the asset transfer look-back period longer and stronger.[20] But these efforts did little to reduce reliance on Medicaid LTC and nothing to abate an onslaught of legal treatises, law journal articles, popular books, magazine stories, and advertisements recommending “Medicaid estate planning.”[21]

In 1996, frustrated about continued abuses of Medicaid LTC, a Republican House and Senate sent President Clinton a bill that made it a crime to transfer assets for the purpose of qualifying for Medicaid.[22] He signed what became known as the “Throw Granny in Jail Act.” When senior advocates objected, a Republican Congress replaced it in 1997 with the “Throw Granny’s Lawyer in Jail Law.”[23] President Clinton signed this legislation, which made it a crime to accept a fee for advising a client to transfer assets to qualify for Medicaid, but the Justice Department deemed it unenforceable because transferring assets to qualify was no longer a crime in itself,[24] and a federal judge later ruled the law unconstitutional.[25]

Nothing more was done to restrain Medicaid LTC overuse for almost a decade until a Republican Congress passed the Deficit Reduction Act (DRA), which President Bush signed in 2006. The DRA extended the asset transfer look-back period to a full five years. It also put the first ever cap on Medicaid’s home equity exemption, allowing states to set a limit from $500,000 up to a maximum of $750,000. The DRA’s home equity limit increased annually with inflation, reaching $688,000 and $1,033,000, respectively, in 2023. In 2018, the median home equity of homeowners ages 65 plus was only $143,500.[26] Consequently, Hest, Alarcon, and Blewett “estimate that nearly the entire elderly population would meet the home equity threshold,”[27] rendering it ineffectual to discourage Medicaid LTC eligibility except by the wealthiest. When he signed the DRA, President Bush said, “The bill tightens the loopholes that allowed people to game the system by transferring assets to their children so they can qualify for Medicaid benefits. Along with Governors of both parties, we are sending a clear message: Medicaid will always provide help for those in need, but we will never tolerate waste, fraud, or abuse.”[28]

That was the expressed intent not only of the DRA but of the whole history of bipartisan legislation described above. Yet Medicaid LTC expenditures kept increasing despite this long, concerted effort. The public continued to ignore LTC risk and cost. Since 2006, no Congress has passed legislation to target Medicaid to those most in need. Nor has legislation advanced to encourage middle-class and affluent people to prepare early to be able to pay for their own LTC and avoid Medicaid dependency. Earlier economic recessions had led to legislation designed to spend Medicaid LTC money more wisely, discourage its use by the middle class, and encourage the non-needy to take personal responsibility. But after the Great Recession of December 2007 to June 2009 no further measures of that kind appeared.

What Happened and Why Action Is Imperative Now

Innovative and risky new fiscal and monetary policies in effect since the 1990s explain why politicians permitted Medicaid spending to skyrocket over the past two decades. The Federal Reserve dropped interest rates to near zero. Public funds were spent with little constraint. The national debt soared, but few worried because servicing the debt at miniscule interest rates seemed manageable particularly given politicians’ generally short time horizons. With budgetary pressures relaxed, policymakers felt little incentive to address Medicaid’s excessive LTC spending or to reduce its long-standing moral hazard regarding LTC. But all that is changing today with higher inflation and interest rates and rising fiscal pressures from federal programs, particularly the massive unfunded liabilities of Social Security and Medicare. Budgetary pressures are again forcing policymakers to address Medicaid LTC financing expenditures.

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Updated, Monday, October 30, 2023, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #23-030:  LTC NEWS AND COMMENT

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

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

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

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

• New initiative aims to strengthen ties between family caregivers, paid caregivers

• Should you buy long-term care insurance for your grandparents?

• Transamerica Faces Suit Tied to Long-Term Care Buyout

• Caregiving crisis prompts search for long-term care solutions

• Rise in nursing home costs ‘drastically’ affects middle class: analysis

• Baby boomers are aging. Their kids aren’t ready

• Dementia’s staggering financial cost is revealed in new report: ‘Bankrupting families’

• Most Seniors Will Need Long-Term Care. Here’s How to Save for It

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

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Updated, Monday, October 23, 2023, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #23-029:  LTC NEWS AND COMMENT

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

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

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

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

• Medicaid should only be ‘safety net’ for LTC needs, expert says

• ‘Sirens Going Off’: Providers Warn of Mass Closures, Vast Nursing Home Deserts Due to Staffing Mandate

• Minimum wage to increase to $25 for nursing home, assisted living workers in California

• Study: Dementia diagnosis causes out-of-pocket spending to skyrocket, net worth to plummet

• Sex Appears to Protect Brain Health in Older Adults, Scientists Say

• Underrated and underutilized: A look at long-term care insurance

• Assisted living providers must pay attention to Medicaid beneficiary protections in HCBS regulations, groups warn

• Another state takes the Medicaid MCO plunge as questions about delayed, denied care mount

• Chronic diseases take a toll on U.S. life expectancy

• Can states ease homelessness by tapping Medicaid funding? Oregon is betting on it

• A focus on HCBS can eliminate bias in senior living and care: report

• Staffing mandate could shift big costs to states — but they may not know it yet

• Long-term-care planning using trusts

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

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

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Updated, Friday, October 20, 2023, 10:40 AM (Pacific)
 
Seattle—

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LTC BULLET: LONG-TERM CARE: THE SOLUTION (THE SERIAL)

LTC Comment: Today we offer easy access to a must-read new study by Center president Steve Moses, after the ***news.***

*** APPEAL: The Center for Long-Term Care Reform, in partnership with the Paragon Health Institute, is embarking on a campaign to improve LTC services and financing. In “Long-Term Care: The Problem,” we explained what’s wrong and why. In “Long-Term Care: The Solution,” we discard the failed policies of the past and propose a radical new approach based on engaging vast sources of private wealth currently diverted from LTC funding. We will reach out to the media, brief federal and state policy and law makers, speak at conferences, and write for publication, all toward the end of achieving the policy goals in “Long-Term Care: The Solution.” Will you help us in this effort? Join the Center or contribute online here. Check out the Center’s “Membership Levels and Benefits” schedule here. Most corporate memberships include a briefing by Center president and “LTC Solution” author Stephen Moses. Call or write for more information: 206-283-7036; damon@centerltc.com; smoses@centerltc.com. LTC policy has floundered for too long. Let’s get this done! ***
 

LTC BULLET: LONG-TERM CARE: THE SOLUTION (THE SERIAL)

LTC Comment: The Paragon Health Institute published “Long-Term Care: The Solution” last week. This new report is long and complicated, but important. So LTC Bullets will deliver it to you in bite-sized pieces over the next few weeks. Today, read “About the Author,” the “Executive Summary” and the “Abstract.” Next time, “What Did Not Work” and then a whole new approach to LTC financing that will unleash the potential of private financing, including insurance.

Excerpts from “Long-Term Care: The Solution”
by
Stephen A. Moses
President, Center for Long-Term Care Reform

ABOUT THE AUTHOR
Steve Moses is president of the Center for Long-Term Care Reform. The center promotes universal access to top-quality long-term care by encouraging private financing as an alternative to Medicaid dependency for most Americans. Previously, Mr. Moses was president of the Center for Long-Term Care Financing (1998-2005), Director of Research for LTC, Inc. (1989-98), a senior analyst for the Inspector General of the U.S. Department of Health and Human Services (1987-89), a Medicaid state representative for the Health Care Financing Administration (1978-87), an HHS departmental management intern (1975-78), and a Peace Corps volunteer in Venezuela (1968-1970). He is widely recognized as an expert and innovator in the field of long-term care. 

EXECUTIVE SUMMARY
What This Paper Covers
How to pay for aging Americans’ long-term care (LTC) is a difficult policy problem. This paper follows “Long-Term Care: The Problem,” in which I explained how well-intended government policy caused many of LTC’s problems. Too many people end up on Medicaid, which pays too little to ensure access to quality home care and causes excessive reliance on institutionalization and unpaid help from families and friends. In this paper, I propose reforms to reduce dependence on Medicaid and free up private financing to fix the LTC challenges.
What We Found
When people encounter high LTC costs later in life, they typically qualify more easily for Medicaid than commonly thought. This moral hazard discourages early LTC planning. The past policy approach of generous Medicaid LTC eligibility with estate recovery after death did not adequately promote proper planning, either through savings or insurance. Most Americans possess enough wealth to fund their average LTC needs, which is about two years of home-based services. If the average 65-year-old had $70,000 set aside for LTC, it would grow to meet that need after age 85, when LTC commonly occurs. Positive incentives to plan early and pay privately avoid the loss of freedom and high economic cost from compulsory, payroll-funded policies.
Why It Matters
With the aging of the baby boomers and an increasing percentage of the population living past 85, creating a sustainable LTC policy is crucial. If Medicaid did not pay for expensive LTC after care is needed, more consumers would prepare privately and avoid Medicaid dependency. Unless policy is changed and the incentive to avoid proper LTC planning is removed, the LTC system will fail, harming those who most need public support.
Policy Suggestions
Medicaid LTC should be restored as a safety net for indigent elderly people. Lawmakers should eliminate the ability to access publicly funded LTC while preserving wealth. This paper details seven options to empower younger and middle-age Americans to meet a new, publicized individual LTC planning responsibility. This would unleash wealth currently unused for LTC that remains locked in home equity, individual retirement accounts, life insurance, and estates and reorient the LTC system to cater to seniors’ desires to age in their homes rather than in institutions.

ABSTRACT
As explained in my previous work for the Paragon Health Institute, “Long-Term Care: The Problem,” public financing and regulation—principally through Medicaid—caused most of the problems with long-term care (LTC). Those problems include dubious access and quality, nursing home bias, too little home- and community-based care, inadequate provider revenue, reduced private financing from insurance, savings or home equity, caregiver shortages, excessive emotional and financial strain on family caregivers, and systemic racism. Ignoring this causal connection between Medicaid and LTC’s problems, many analysts recommend increasing the government’s role, including by means of a new compulsory payroll-financed social insurance program. But adding even more of the government funding and regulation that caused LTC’s problems would only make these problems worse.

The main components of a better solution are already in place. Personal, not public, responsibility for LTC is deeply rooted in American values, statutes, and policy. Medicaid is the largest LTC payor, but it is not a social insurance program like Medicare. Employees and employers do not contribute a payroll tax to finance it. Medicaid, rather, was intended as the payor of last resort for people who cannot live independently without LTC services and supports but lack sufficient personal funds to purchase them. For decades, federal policymakers of both parties tried to ensure that scarce Medicaid LTC resources went solely to the needy. They failed, leaving Medicaid, including state and federal budgets, financially overwhelmed and most people, regardless of their economic condition, using public assistance if they incur catastrophic LTC costs. The proper goal of public policy remains to target Medicaid benefits to the truly needy and to divert middle-class and affluent people to private financing alternatives. Achieving that goal would deliver a higher quality LTC system that meets patients’ needs and improves care both for those able to pay and for those who need a safety net. The key question remains: How can policymakers reconfigure LTC financing policy to ensure that scarce public resources reach only those most in need?

Congress should remove Medicaid as an end-of-life, wealth-preserving, fail-safe for the middle class and affluent. Medicaid should not reward people who neglect to plan responsibly for LTC by both paying for services and providing asset protection. New public policy should incentivize early planning for LTC that employs private wealth, including savings, home equity, life insurance, and a revitalized private LTC insurance market. Recent research documents lower risk of severe LTC expenses and indicates that consumers have more funds available to pay privately for LTC than previously believed. These facts suggest a way to revitalize the senior living market financially to the benefit of LTC consumers and providers alike. With more private LTC financing, fewer people will become dependent on Medicaid. Medicaid can then become a better payer of last resort than it is now. This paper explains how and why this new approach is plausible, practical, and preferable given current demographic and financial conditions.

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Updated, Monday, October 9, 2023, 10:30 AM (Pacific)
 
Seattle—

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LTC E-ALERT #23-028:  LTC NEWS AND COMMENT

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

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

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

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

·       California is leading the way in Medicaid abuse

·       Feds Rein In Use Of Predictive Software That Limits Care For Medicare Advantage Patients

·       MedPAC members rip ‘brute force test’ of staffing mandate, ponder consequences and possible gaming

·       New Supreme Court term has major implications for long-term care

·       Does Putting Your Home in a Trust Protect It From Medicaid?

·       Release of ‘Long-Term Care: The Solution

·       AHCA CEO: Nursing Home Policy Nightmare Just Starting, Business Nightmare Persists — But Clinical Nightmare Over

·       Experts create new vision for senior living

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

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

Updated, Friday, October 6, 2023, 10:40 AM (Pacific)
 
Seattle—

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

LTC BULLET: LONG-TERM CARE: THE SOLUTION

LTC Comment: The Paragon Health Institute released “Long-Term Care: The Solution” this week. The announcement and links to the study’s content after the ***news.***

*** APPEAL: The Center for Long-Term Care Reform, in partnership with the Paragon Health Institute, is embarking on a campaign to improve LTC services and financing. In “Long-Term Care: The Problem,” we explained what’s wrong and why. In “Long-Term Care: The Solution,” we discard the failed policies of the past and propose a radical new approach based on engaging vast sources of private wealth currently diverted from LTC funding. We will reach out to the media, brief federal and state policy and law makers, speak at conferences, and write for publication, all toward the end of achieving the policy goals in “Long-Term Care: The Solution.” Will you help us in this effort? Join the Center or contribute online here. Check out the Center’s “Membership Levels and Benefits” schedule here. Most corporate memberships include a briefing by Center president and “LTC Solution” author Stephen Moses. Call or write for more information: 206-283-7036; damon@centerltc.com; smoses@centerltc.com. LTC policy has floundered for too long. Let’s get this done! ***

LTC BULLET: LONG-TERM CARE: THE SOLUTION

LTC Comment: Here’s how Paragon Health Institute president Brian Blase announced the paper.

 Today, Paragon is releasing an important new report, Long-Term Care: The Solution, authored by Stephen Moses. Steve is the nation’s top expert on long-term care financing and his new report contains a solution to a very difficult policy problem.
 
Given the structure of our major entitlement programs—Social Security, Medicare, and Medicaid—the aging of the baby boomers presents a variety of public policy challenges. One is long-term care (LTC), which consists of medical and supportive services that people require at home or in institutions when they are unable to care for themselves.
 
As Steve wrote in a 2022 Paragon report, Long-Term Care: The Problem, well-intended government policy caused many of LTC’s problems. Government programs have largely paid our nation’s LTC expenses since 1965. Unfortunately, easy access to Medicaid while retaining wealth creates a moral hazard that discourages responsible LTC planning during early and middle adulthood and crowds out private sector alternatives. Too many people end up on Medicaid, which pays too little to ensure access to quality home care and causes excessive reliance on institutionalization and unpaid help from families and friends.
 
In Long-Term Care: The Solution, Steve constructs a reform that would reduce dependence on Medicaid and free up private financing to fix the LTC challenges. The following are from the paper’s executive summary, and the entire paper is worth a read to understand both why past efforts to reform Medicaid LTC have failed and why this new approach is our best hope to improve government LTC policy.
 
What Steve Found
 
When people encounter high LTC costs later in life, they typically qualify more easily for Medicaid than commonly thought. This moral hazard discourages early LTC planning. The past policy approach of generous Medicaid LTC eligibility with estate recovery after death did not adequately promote proper planning, either through savings or insurance. Most Americans possess enough wealth to fund their average LTC needs, which is about two years of home-based services. If the average 65-year-old had $70,000 set aside for LTC, it would grow to meet that need after age 85, when LTC commonly occurs. Positive incentives to plan early and pay privately avoid the loss of freedom and high economic cost from compulsory, payroll-funded policies.
 
Why It Matters
 
With the aging of the baby boomers and an increasing percentage of the population living past 85, creating a sustainable LTC policy is crucial. If Medicaid did not pay for expensive LTC after care is needed, more consumers would prepare privately and avoid Medicaid dependency. Unless policy is changed and the incentive to avoid proper LTC planning is removed, the LTC system will fail, harming those who most need public support.
 
Policy Suggestions
 
Medicaid LTC should be restored as a safety net for indigent elderly people. Lawmakers should eliminate the ability to access publicly funded LTC while preserving wealth. This paper details seven options to empower younger and middle-age Americans to meet a new, publicized individual LTC planning responsibility. This would unleash wealth currently unused for LTC that remains locked in home equity, individual retirement accounts, life insurance, and estates and reorient the LTC system to cater to seniors’ desires to age in their homes rather than in institutions.

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Updated, Monday, October 2, 2023, 9:38 AM (Pacific)
 
Seattle—

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LTC E-ALERT #23-027:  LTC NEWS AND COMMENT

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

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

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

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

• Shortcomings of the ACA Exchanges: Far Less Enrollment at a Much Higher Cost

• Minnesota Tops New AARP Long-Term Care Scorecard; Other States Lag Behind

• A Winning Health Policy Agenda

• Insights Care Honors Ken Dychtwald

• CMS to lose half of staff in shutdown, full impact on providers uncertain

• John Hancock to Sell Long-Term Care Hybrid Through Worksites

• [Updated] BREAKING: Price of nursing home staffing mandate is $6.8B, 100K more workers, analysis finds

• Expiring PHE policies spell trouble for HCBS programs

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

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Updated, Monday, September 25, 2023, 9:37 AM (Pacific)
 
Seattle—

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LTC E-ALERT #23-026:  LTC NEWS AND COMMENT

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

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

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

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

• Commission recommends increasing hours-worked requirement for WA Cares, among other proposals

• Medicare Can Cover a Lot More Home Care: Witness to Senate Panel

• End of pandemic-era payments to family caregivers could complicate workforce shortages

• Older adults at risk for dementia see fast declines in household wealth before dementia onset

• Recession would add to ‘deteriorating’ CCRC outlook: Fitch

• Protect Aging Clients Against Undue Influence

• More than half of older Americans will need long-term term care. Many can’t afford the rising cost

• How Medicare Impedes Health Care Innovation

• Substantial differences’ in assisted living, nursing home admissions show need for improved health equity, researchers say

• Long-Term Care Insurance Sales Rise at Some Carriers: A.M. Best

• Demand for direct care workers expected to outpace availability: report

• Gallup Poll Shows Public’s Deep Aversion to Nursing Homes, 42% of Americans Give ‘D’ or ‘F’

• Pandemic Aid Lifts Federal Share of State Budgets to New Highs

• Long-Term Care Claims Skyrocket In 2022

• Study: Being a family caregiver does not mean you will plan for your own long-term care

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

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

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LTC BULLET: LONG-TERM CARE RACISM: DIAGNOSIS, TREATMENT, AND CURE

LTC Comment: Once you understand its cause and effects, LTC racism’s cure becomes manageable. Analysis after the ***news.***

*** “LONG-TERM CARE: THE SOLUTION,” Paragon Health Institute’s long-awaited sequel to “Long-Term Care: The Problem,” published last fall, is due to be published on October 2. “The Solution” explains why the challenge of financing LTC for burgeoning numbers of aging Americans remains unmet and proposes a solution. As Medicaid caused most of LTC’s problems, that program’s radical reform is the key to resolving them. The same Medicaid reform is also the crucial step required to eliminate systemic LTC racism. Stay tuned. ***
 

LTC BULLET: LONG-TERM CARE RACISM: DIAGNOSIS, TREATMENT, AND CURE

LTC Comment: Our previous LTC Bullet offered a selection of quotes about LTC racism from peer-reviewed journal articles and invited readers to reflect on the material and its meaning before turning to analysis and recommendations. Let’s go now to that next step.

What is LTC racism?

“Structural [LTC] racism operates through laws and policies that allocate resources in ways that disempower and devalue members of racial and ethnic minority groups, resulting in inequitable access to high-quality care.” (“Structural Racism In Historical And Modern US Health Care Policy,” 2022, Abstract)

What are some examples of LTC racism?

“The long-term services and supports (LTSS) sector is a microcosm of systemic racism that exists in our society. Nationally, half of frontline professional caregivers are nonwhite, while mid- and executive-level managers and board members are predominately white.” (“The Value Proposition for Diversity: Creating A Pipeline of Diversity in The LTSS Sector,” 2022, Abstract)

“Long-term services and supports (LTSS), including care received at home and in residential settings such as nursing homes, are highly racially segregated; Black, Indigenous, and persons of color (BIPOC) users have less access to quality care and report poorer quality of life compared to their White counterparts. Systemic racism lies at the root of these disparities, manifesting via racially segregated care, low Medicaid reimbursement, and lack of livable wages for staff, along with other policies and processes that exacerbate disparities.” (“Evidence for Action: Addressing Systemic Racism Across Long-Term Services and Supports,” 2022, p. 1)

“Findings revealed that black residents are more likely than white residents to be restrained with bed rails, side rails, and trunk restraints. Findings suggest that racial disparities exist in the use of physical restraints. Implications for practice, policy, and research are discussed.” (“Racial disparities in the use of physical restraints in U.S. nursing homes,” 2013, Abstract)

“Racial disparities in nursing homes have been reported for a number of outcomes, including pressure ulcers, influenza vaccination rates, pain management, hospice use and in-hospital death. (16–19, 22) Our findings confirm that compared to Whites, Black residents experience more aggressive EOL[End of Life] care with higher rates of in-hospital deaths and lower rates of hospice use.” (“Racial Disparities in In-Hospital Death and Hospice Use Among Nursing Home Residents at the End-of-life,” 2012, p. 6)

What causes LTC racism?

“Nursing home care is currently a two-tiered system. The lower tier consists of facilities housing mainly Medicaid residents and, as a result, has very limited resources. The nearly 15 percent of U.S. nonhospital-based nursing homes that serve predominantly Medicaid residents have fewer nurses, lower occupancy rates, and more health-related deficiencies. They are more likely to be terminated from the Medicaid/Medicare program, are disproportionately located in the poorest counties, and are more likely to serve African-American residents than are other facilities. The public reporting of quality indicators, intended to improve quality through market mechanisms, may result in driving poor homes out of business and will disproportionately affect nonwhite residents living in poor communities. This article recommends a proactive policy stance to mitigate these consequences of quality competition.” (“Driven to Tiers: Socioeconomic and Racial Disparities in the Quality of Nursing Home Care,” 2004, Abstract)

“A tiered system of nursing home care that concentrates blacks in marginal-quality nursing homes also appears to exist.” (p. 1449) “We found that nursing home care was relatively segregated in 2000, with two thirds of all black residents living in just 10 percent of all facilities.” (p. 1453) “Disparities in payment between Medicaid and private payers make the financial viability of a nursing home dependent on the proportion of private-pay patients it is able to attract. Homes unable to attract sufficient private-pay patients will tend to have lower nurse staffing levels and more-serious inspection deficiencies.” (p, 1456) “Nursing home operators might also try to control admissions to their facilities, limiting the number of first-day-eligible Medicaid admissions and expanding as much as possible admissions of those with sufficient resources that are unlikely to spend down and become eligible for Medicaid.” (p. 1456) “It [discrimination] might also play a role in shaping the decisions of white private-pay nursing home patients and their families about where to get care, including whether to opt for non–nursing home alternatives altogether.” (p. 1456) (“Separate And Unequal: Racial Segregation And Disparities In Quality Across U.S. Nursing Homes,” 2007)

LTC racism: Diagnosis

The definition above attributes structural LTC racism to the “laws and policies that allocate resources in ways that disempower and devalue members of racial and ethnic minority groups, resulting in inequitable access to high-quality care.” What are those laws and policies? They are the statutes, regulations, policies, procedures, and guidelines that cause long-term care’s two-tiered structure: one top quality tier for private payers and a lower tier for Medicaid dependents.

Specifically, Medicaid LTC financial eligibility rules sort people who need extended care into two groups. Those who have too much income and resources are expected to spend down in the private market. Those who have liquid wealth low enough to qualify become Medicaid recipients with all that entails for the access and quality of care they can expect. This is cause number one of LTC racism. People with wealth, privileged majorities, enjoy the better LTC tier, while underprivileged marginalized groups rely predominantly on Medicaid, in the lower tier.

But the reality is actually much worse than this simple sorting of people by wealth suggests. Medicaid financial eligibility rules allow people with substantial income and assets to qualify for LTC benefits along with the poor and disadvantaged. States either subtract private health and LTC expenses from income before they apply the low-income standard or they permit excess income to be diverted to a “Miller trust.” The rule of thumb is that income below the cost of a nursing home, easily $8,000 or $9,000 per month, is not disqualifying. Nor do assets stand in the way of Medicaid LTC eligibility in most cases, because the largest assets seniors possess are exempt, such as a home, car, personal belongings, etc. and any countable liquid wealth is easily made non-countable by purchasing exempt assets. Even far more affluent people qualify for Medicaid LTC benefits by retaining elder law attorneys to impoverish them artificially with special trusts, annuities and other sophisticated strategies.

Key Money: LTC Racism’s Motor

Why would people who could afford private LTC manipulate eligibility rules to qualify for Medicaid which has such a poor reputation for access and quality? Some Medicaid facilities are better than others. They may serve mostly Medicare or private residents, receive much higher reimbursement rates, enjoy philanthropic support, and have only a few Medicaid beds. Savvy seniors, their families, and legal advisors learn to use “key money” to access those better facilities. Medicaid planners tell their affluent clients to hold back enough liquid capital from the artificial impoverishment process to enable them to pay privately for a while. Because LTC providers are desperate for private payers who contribute half again as much as Medicaid to their bottom line, they roll out the red carpet for new private-pay admissions. Once in a good facility, the advisor flips a legal switch converting the client to Medicaid. By law the provider cannot expel a resident simply because the funding source changes from private to Medicaid.

This is how Medicaid, commonly considered a LTC safety net for the poor, came to be the dominant LTC funding source for nearly everyone, even the affluent, stricken by catastrophic LTC costs. By covering the “medically needy”—people with too much income to qualify categorically, but too little income to pay their health and LTC expenses privately—Medicaid’s limited resources were overwhelmed. The program tried to do too much for too many and ended up doing too little for most. Worse, Medicaid allowed privileged majorities to coopt its better facilities and services while diverting the less advantaged, who lack key money, to the program’s least desirable facilities and services. This is how structural racism, deficient public LTC services for those most in need, came to predominate. Nothing will change until this cause is removed.

LTC racism: Treatment

The most common remedy for LTC racism proposed in the academic literature is to allocate more resources to Medicaid so it can pay caregivers more, provide better services, offer more home- and community-based care, and relieve family caregivers. For example, one source calls for a multi-prong effort to add “disproportionate-share payment adjustments to nursing homes with a higher proportion of Medicaid residents” and to equalize “Medicaid and private-pay payments.” (“Separate And Unequal: Racial Segregation And Disparities In Quality Across U.S. Nursing,” 2007, Abstract) Another source suggests “increase Medicaid and Medicare reimbursement rates, especially for providers serving high proportions of Medicaid-eligible and BIPOC older adults” and “expand access to Medicaid-waivered HCBS services,” “increase promotion of integrated HCBS programs that can be targeted to BIPOC consumers.” (“Evidence for Action: Addressing Systemic Racism across Long-Term Services and Supports,” 2022, Abstract) All have proven to be politically unachievable goals.

But simply spending more on Medicaid would only mean increased resources going disproportionately to the over-privileged with relatively less reaching the underprivileged. The only way to eliminate LTC racism once and for all is to remove from Medicaid dependency the people who rely on the program now, but who could, should and would have prepared to pay privately otherwise. The easy availability of Medicaid LTC late in life while preserving wealth created a moral hazard that discouraged early planning for LTC. The middle class and affluent who crowd out the poor from Medicaid’s best services, could have saved, invested or insured for LTC and avoided reliance on Medicaid. Bottom line, it is they who must be incentivized to take personal responsibility early in life so that later, when they need LTC, they can pay privately, access the best possible care in the most desirable venues, and free up Medicaid to do a better job for those most in need. Relieved of the burden to cover everyone, Medicaid will have the resources to pay private rates, afford top-quality professional caregivers thus eliminating their shortage, offer more HCBS, and move everyone on the program into the top-tier of LTC services.

Long-Term Care: Cure

The solution to LTC racism is to move privileged groups into the private LTC market in order to save and improve Medicaid for the less fortunate. That is a big ask. How can we possibly do it? Government tried unsuccessfully for decades (1) to reduce excess Medicaid dependency (employing income and asset limits, transfer of assets penalties, estate recoveries, even “Throw Granny in Jail”) and (2) to encourage private LTC insurance. Nothing worked. People struggling in mid-life with house and car payments, child care, elder care, retirement and education savings, etc. would not think, plan or prepare for the potential risk and cost of LTC in the distant future. The fact that Medicaid paid for the vast bulk of catastrophic LTC expenses probably didn’t enter their awareness but it influenced their financial planning nonetheless, enabling their denial.

These conditions are the dam obstructing progress toward a solution of LTC racism. I propose a way to break that dam and improve both private and Medicaid LTC in a new paper, titled “Long-Term Care: The Solution,” for the Paragon Health Institute. It is due for publication on October 2 and follows a paper, “Long-Term Care: The Problem” that Paragon published last fall. We’ll bring you more analysis and answers soon.
 

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

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LTC E-ALERT #23-025:  LTC NEWS AND COMMENT

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

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

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

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

• State veterans home rife with deficiencies, inaccurate COVID death reports: federal report

• Biden’s Proposal to Restrict Affordable Health Options

• Fitch Downgrade Could Mean Medicaid Cuts

• Could legacy long-term care (LTC) blocks be the next wave of M&A deals?

• Understanding the Stages of Dementia: A Compassionate Guide for Families and Caregivers

• Fixing Medicaid rolls doesn’t mean leaving people without coverage

• Biden unloads on nursing home operators

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

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

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LTC BULLET: LONG-TERM CARE RACISM

LTC Comment: What is LTC racism? How does it manifest? What should be done? Excerpts from the scholarly literature follow the ***news.***

*** THE INTERCOMPANY LONG-TERM CARE INSURANCE 2024 CONFERENCE (March 17-20, 2024 in San Diego, CA) has announced “Exhibitor & Sponsor Applications for ILTCI 2024 are Now Available! (With Early Bird Pricing).” Check out the Exhibitor & Sponsor opportunities here and here, respectively. Organizers “anticipate opening attendee registration in October so stay tuned for more updates to come!” ***

LTC BULLET: LONG-TERM CARE RACISM

LTC Comment: We know America’s LTC service delivery and financing system is fraught with problems. These problems include dubious access and quality, nursing home bias, too little home- and community-based care, inadequate provider revenue, reduced private financing from insurance, savings or home equity, caregiver shortages, and excessive emotional and financial strain on family caregivers. We also know that these problems impact socioeconomically marginalized groups disproportionately.

A large and growing scholarly literature attributes this LTC status quo to systemic, structural or institutionalized racism. Examples of unfair and inequitable LTC conditions and outcomes abound. So do ideas and recommendations about how to fix or improve LTC services and financing by eliminating or reducing LTC racism. Today’s LTC Bullet offers a selection of quotes about LTC racism from many peer-reviewed journal articles. For now, let’s reflect on this material and its meaning before we turn soon to analysis and recommendations.

Definition: “[I]nstitutionalized racism is defined as differential access to the goods, services, and opportunities of society by race. Institutionalized racism is normative, sometimes legalized, and often manifests as inherited disadvantage. It is structural, having been codified in our institutions of custom, practice, and law, so there need not be an identifiable perpetrator.” Levels of Racism: A Theoretic Framework and a Gardener’s Tale, 2000, p. 1212

Examples: “The long-term services and supports (LTSS) sector is a microcosm of systemic racism that exists in our society. Nationally, half of frontline professional caregivers are nonwhite, while mid- and executive-level managers and board members are predominately white.” The Value Proposition for Diversity: Creating A Pipeline of Diversity in The LTSS Sector, 2022, Abstract

“Long-term services and supports (LTSS), including care received at home and in residential settings such as nursing homes, are highly racially segregated; Black, Indigenous, and persons of color (BIPOC) users have less access to quality care and report poorer quality of life compared to their White counterparts. Systemic racism lies at the root of these disparities, manifesting via racially segregated care, low Medicaid reimbursement, and lack of livable wages for staff, along with other policies and processes that exacerbate disparities.” Evidence for Action: Addressing Systemic Racism Across Long-Term Services and Supports, 2022, p. 1

“Long-term services and supports for older persons in the United States are provided in a complex, racially segregated system, with striking racial disparities in access, process, and outcomes of care for residents, which have been magnified during the Coronavirus Disease 2019 pandemic. These disparities are in large measure the result of longstanding patterns of structural, interpersonal, and cultural racism in US society, which in aggregate represent an underpinning of systemic racism that permeates the long-term care system's organization, administration, regulations, and human services. … Additional foundational drivers include a fragmented payment system that advantages persons with financial resources, and reimbursement policies that systematically undervalue long-term care workers.” Addressing Systemic Racism in Nursing Homes: A Time for Action, 2021, Abstract

“In this study, nursing homes with the highest proportions of non-White residents experienced COVID-19 death counts that were 3.3-fold higher than those of facilities with the highest proportions of White residents.” Factors Associated With Racial Differences in Deaths Among Nursing Home Residents With COVID-19 Infection in the US, 2021, p. 1/10.

“We found that a larger share of Hispanic Medicare residents that are admitted to nursing homes have ADRD [Alzheimer’s disease and related dementias] compared with African American and White beneficiaries. Both Hispanics and African Americans with ADRD received care in segregated nursing homes with fewer resources and lower quality of care compared with White residents.” Disparities in Nursing Home Use and Quality Among African American, Hispanic, and White Medicare Residents With Alzheimer's Disease and Related Dementias, 2019, p.1

“Using Medicaid claims data for a national cohort of dual eligibles with MS, we find state HCBS priority is associated with disparities in utilization-blacks and Hispanics receiving HCBS more often do so in low-priority states compared with whites.” Racial Disparities in Medicaid Home and Community-Based Service Utilization among White, Black, and Hispanic Adults with Multiple Sclerosis: Implications of State Policy, 2019, Abstract

“Disparities between vaccination coverage among racial/ethnic minorities versus Whites ranged from 2% to 20% for influenza and 6% to 15% for pneumococcal vaccination. Researchers reported racial/ethnic minorities were more likely to refuse vaccinations and less likely to have vaccinations offered and their vaccination status tracked compared to Whites.” Racial/Ethnic Disparities in Influenza and Pneumococcal Vaccinations Among Nursing Home Residents: A Systematic Review, 2018, p. e205

“Despite the increased use of nursing homes by minority residents, nursing home care remains highly segregated. Compared to whites, racial/ethnic minorities tend to be cared for in facilities with limited clinical and financial resources, low nurse staffing levels, and a relatively high number of care deficiency citations. … We also found that increasing the Medicaid payment rate might help improve both overall quality and disparities, but state case-mix payment approaches might worsen both.” Deficiencies In Care At Nursing Homes And Racial & Ethnic Disparities Across Homes Declined, 2006–11, 2015, p. 1

“Highlights

• Patients of each race prefer nursing homes with higher prevalence of patients of their own race.
• Preference for distance and quality of care are same for patients of both the races.
• Both preference for distance and preference for racial homogeneity contribute to racial disparity in nursing home quality of care.
• Results are robust among subgroup of patients with same Medicaid eligibility and similar likelihood of becoming long-stay resident.
• Simulations based on estimated sorting model suggest that interventions targeting nursing homes serving minority population would yield a greater reduction in racial quality disparities than interventions targeting low quality nursing homes.” Racial Segregation and Quality of Care Disparity in US Nursing Homes, 2014, p. 28

“Findings revealed that black residents are more likely than white residents to be restrained with bed rails, side rails, and trunk restraints. Findings suggest that racial disparities exist in the use of physical restraints. Implications for practice, policy, and research are discussed.” Racial disparities in the use of physical restraints in U.S. nursing homes, 2013, Abstract

“Racial disparities in nursing homes have been reported for a number of outcomes, including pressure ulcers, influenza vaccination rates, pain management, hospice use and in-hospital death.(16–19, 22) Our findings confirm that compared to Whites, Black residents experience more aggressive EOL[End of Life] care with higher rates of in-hospital deaths and lower rates of hospice use.” Racial Disparities in In-Hospital Death and Hospice Use Among Nursing Home Residents at the End-of-life, 2012, p. 6

“Between 1999 and 2008, the number of elderly Hispanics and Asians living in US nursing homes grew by 54.9 percent and 54.1 percent, respectively, while the number of elderly black residents increased 10.8 percent. During the same period, the number of white nursing home residents declined 10.2 percent. These shifts have been driven in part by changing demographics, especially the fast growth of older minority populations. However, the numbers of minority residents in nursing homes increased more rapidly than the minority population overall, even in areas with high concentrations of minority populations. Thus, these results may indicate unequal minority access to home and community-based alternatives, which are generally preferred for long-term care. When designing initiatives to balance institutional and noninstitutional long-term care, policy makers should take steps to reduce racial and ethnic disparities.” Growth of Racial and Ethnic Minorities in US Nursing Homes Driven by Demographics and Possible Disparities in Options, 2011, p.1358

“Greater PU [pressure ulcer] occurrence among Blacks may not result from differential within-facility treatment of Blacks versus Whites. Rather, Blacks are more likely to reside in facilities with poorer care quality. To improve PU care for Blacks, efforts should focus on improving the overall quality of care for facilities with high proportion of Black residents.” Pressure ulcer prevalence among Black and White nursing home residents in New York State: Evidence of racial disparity?, 2010, p. 1

“Although segregation in nursing homes seems to have declined slightly, elderly Hispanics are more likely than their non-Hispanic white peers to reside in nursing homes that are characterized by severe deficiencies in performance, understaffing, and poor care.” Elderly Hispanics More Likely To Reside In Poor-Quality Nursing Homes, 2010, p. 65

“Disparities in quality of care are more consistently documented and appear to be related to racial and socioeconomic segregation of long-term care facilities as opposed to within-provider discrimination. Market-based incentives policies should explicitly incorporate the goal of mitigating the potential unintended consequence of increased disparities.” Disparities in long-term care: building equity into market-based reforms, 2009, Abstract 

“Compared to Whites, African Americans were less likely to have completed an advance directive (35.5% vs. 67.4%, P<.001) and had less favorable beliefs about hospice care (Hospice Beliefs and Attitudes Scale score, P<.001). African Americans were more likely to express discomfort discussing death, want aggressive care at the end of life, have spiritual beliefs which conflict with the goals of palliative care, and distrust the healthcare system.” What explains racial differences in the use of advance directives and attitudes toward hospice care?, 2008, p. 1

“Average nursing-home case-mix acuity for African Americans and Caucasians were essentially identical, suggesting that shifts in payment incentives have eliminated the selective admission of easy-care private-pay (predominantly Caucasian) patients and helped fuel the growth of private pay home care and assisted living for this segment of the population. While these shifts in incentives helped increase the use of nursing homes by African Americans, a high degree of segregation and disparity in the quality of the nursing homes used by African Americans persists. Parity in use is an illusive benchmark for measuring progress in assuring equity in treatment.” Racial disparities in access to long-term care: the illusive pursuit of equity, 2008, Abstract

“Nursing homes remain relatively segregated, roughly mirroring the residential segregation within metropolitan areas. As a result, blacks are much more likely than whites to be located in nursing homes that have serious deficiencies, lower staffing ratios, and greater financial vulnerability. Changing health care providers’ behavior will not be sufficient to eliminate disparities in medical treatment in nursing homes.” p. 1448

“A tiered system of nursing home care that concentrates blacks in marginal-quality nursing homes also appears to exist.5” (p. 1449) “We found that nursing home care was relatively segregated in 2000, with two thirds of all black residents living in just 10 percent of all facilities.” (p. 1453) “Disparities in payment between Medicaid and private payers make the financial viability of a nursing home dependent on the proportion of private-pay patients it is able to attract. Homes unable to attract sufficient private-pay patients will tend to have lower nurse staffing levels and more-serious inspection deficiencies.”18 (p, 1456) “Nursing home operators might also try to control admissions to their facilities, limiting the number of first-day-eligible Medicaid admissions and expanding as much as possible admissions of those with sufficient resources that are unlikely to spend down and become eligible for Medicaid.” (p. 1456) “It [discrimination] might also play a role in shaping the decisions of white private-pay nursing home patients and their families about where to get care, including whether to opt for non–nursing home alternatives altogether.” (p. 1456) Separate And Unequal: Racial Segregation And Disparities In Quality Across U.S. Nursing Homes, 2007

“Non-Hispanic Whites (Whites) experienced substantially better functional outcomes than did home health care recipients of other racial/ethnic backgrounds. The disparity in outcomes was most pronounced between Whites and African Americans.” Racial and ethnic disparities in the outcomes of elderly home care recipients, 2005, Abstract

“Nursing home care is currently a two-tiered system. The lower tier consists of facilities housing mainly Medicaid residents and, as a result, has very limited resources. The nearly 15 percent of U.S. nonhospital-based nursing homes that serve predominantly Medicaid residents have fewer nurses, lower occupancy rates, and more health-related deficiencies. They are more likely to be terminated from the Medicaid/Medicare program, are disproportionately located in the poorest counties, and are more likely to serve African-American residents than are other facilities. The public reporting of quality indicators, intended to improve quality through market mechanisms, may result in driving poor homes out of business and will disproportionately affect nonwhite residents living in poor communities. This article recommends a proactive policy stance to mitigate these consequences of quality competition.” Driven to Tiers: Socioeconomic and Racial Disparities in the Quality of Nursing Home Care, 2004, Abstract

“African Americans are about one-third as likely as Caucasians to have living wills and one-fifth as likely as Caucasians to have DNR orders; Hispanics are about one-third as likely as Caucasians to have DNR orders and just as likely as Caucasians to have living wills. In conclusion, we found that the presence of advance care plans is related to race, even after controlling for health and other demographic factors.” Persistence of racial disparities in advance care plan documents among nursing home residents, 2002, Abstract

“Results: Most African Americans resided in nursing homes and smaller RC/AL facilities and tended to be concentrated in a few predominantly African American facilities, whereas the vast majority of Whites resided in predominantly White facilities. Facilities housing African Americans tended to be located in rural, nonpoor, African American communities, to admit individuals with mental retardation and difficulty in ambulating, and to have lower ratings of cleanliness/maintenance and lighting.

“Conclusions: These racial disparities may result from economic factors, exclusionary practices, or resident choice. Whether separation relates to inequities in care is undetermined.” Distribution of African Americans in Residential Care/Assisted Living and Nursing Homes: More Evidence of Racial Disparity?, 2002, p. 1272

Solutions: “We developed a set of recommendations for LTSS based on existing evidence, including (1) increase Medicaid and Medicare reimbursement rates, especially for providers serving high proportions of Medicaid-eligible and BIPOC older adults; (2) reconsider the design of pay-for-performance programs as they relate to providers who serve underserved groups; (3) include culturally sensitive measures, such as quality of life, in public reporting of quality of care, and develop and report health equity measures in outcomes of care for BIPOC individuals; (4) implement culture change so services are more person-centered and homelike, alongside improvements in staff wages and benefits in high-proportion BIPOC nursing homes; (5) expand access to Medicaid-waivered HCBS services; (6) adopt culturally appropriate HCBS practices, with special attention to family caregivers; (7) and increase promotion of integrated HCBS programs that can be targeted to BIPOC consumers, and implement models that value community health workers.” Evidence for Action: Addressing Systemic Racism Across Long-Term Services and Supports, 2022, p. 1

“Focusing limited available resources on facilities with high proportions of non-White residents is needed to support nursing homes during potential future [Covid-19] outbreaks.” Factors Associated With Racial Differences in Deaths Among Nursing Home Residents With COVID-19 Infection in the US, 2021, pp. 1-2/10.

“The solution to racial health inequities is to address racism and its attendant harms and erect a new health care infrastructure that no longer profits from the persistence of inequitable disease.” On Racism: A New Standard For Publishing On Racial Health Inequities, 2020 

“Ten-dollar increments in Medicaid rates reduced the odds of hospitalization by 4 percent (95 percent CI=0.93–1.00) for white residents and 22 percent (95 percent CI=0.69–0.87) for black residents.” (p. 869)
“Quality NH care is dependent on the availability of resources (Mor et al. 2004; Miller et al. 2006) but NHs that are largely Medicaid-reliant are often disadvantaged because Medicaid rates are generally below private pay rates and sometimes below actual costs of care (Seidman 2002). Such facilities disproportionately serve black residents (Mor et al. 2004).” (p. 870)
“That higher Medicaid payment rates reduced the risk of hospitalization substantially more for black than for white residents suggests that efforts to reduce racial disparities in NH care must include strategies to better support Medicaid-reliant NHs.” (p. 879) Relationship between State Medicaid Policies, Nursing Home Racial Composition, and the Risk of Hospitalization for Black and White Residents, 2008

“What can be done to cut this knot? A multi-prong effort in four areas could help: (1) disproportionate-share payment adjustments to nursing homes with a higher proportion of Medicaid residents; (2) equalization of Medicaid and private-pay payments; (3) certificate-of-need and broader regional planning responsive to racial-disparity concerns; and (4) ongoing monitoring and more rigorous enforcement of Title VI in admission practices. Indeed, some of the MSA variations on these measures of disparities may reflect variations in effort in these areas. These findings are not very different for the nursing home sector than for other parts of the health system in terms of the characteristics of this knot or in the possible approaches to cutting it.” Separate And Unequal: Racial Segregation And Disparities In Quality Across U.S. Nursing Homes, 2007, pp. 1456-7

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

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

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

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

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

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

• BREAKING: CMS issues first-ever nursing home staffing mandate

• BREAKING: CMS nursing home staffing mandate in question after study leaks

• Proposed mandatory long-term care insurance: A closer look at the potential negatives

• Short-Term Plans: The Battle for Health Insurance Choice

• Can the Left and Right Agree on Health Reform?

• As forecast price of federal staffing mandate climbs to $11.7B, analysts offer alternatives

• Researchers identify lifestyle factors that predict nursing home needs later in life

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

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

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

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

LTC Clippings: The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know. Each message contains only the critical facts about new publications: a title, representative quote, a link to the original, and our analysis in a sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or smoses@centerltc.com. Read testimonials by satisfied subscribers here. To subscribe online, please click here.

LTC E-Alerts: Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website. Center members also receive our weekly LTC Bullet op-ed. To join the Center and receive all these benefits and more, contact Steve at 425-891-3640 or smoses@centerltc.com. 

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

·       Dementia Risk From Midlife Onward Predicted With New Tool

·       California Warns Against Dishonest Marketing Tied to Long-Term Care Proposal

·       AHCA offers ‘wake-up call’ on bed and facility counts: 446,000 residents may be displaced

·       New research uncovers racial inequities in home health patients’ health outcomes

·       The Upheaval at America’s Disappearing Nursing Homes, in Charts

·       Alarming reality: One in four Americans with cognitive impairment lives alone

·       China population: 100 million more senior citizens expected in next decade as ageing crisis enters ‘crucial juncture’

·       Here's the Size of Social Security Cuts if Congress Doesn't Act Soon: CRFB

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

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

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LTC BULLET: YOU PAY FOR CALIFORNIA’S LTC PROFLIGACY AND STRUCTURAL RACISM

LTC Comment: California’s Medicaid program (Medi-Cal) says come one, come all for free LTC, sends the bill to federal taxpayers, and institutionalizes structural LTC racism. What’s happening, after the ***news.***

*** HELP us change LTC financing policy for the better. Whenever you see an article or report that says something like:

“Only low-income people qualify for Medicaid.”
“Medicaid only pays for long-term care after you spend down into impoverishment.”
“Millions across America are losing their life savings to long-term care.”
“LTC insurance costs too much and will never be a major payer.”
“The best way to fix LTC is to add it to Medicare.”

Forward the source to me (smoses@centerltc.com) or to Damon (damon@centerltc.com). We will contact the author, explain why those commonplace beliefs are false, provide evidence to back up our conclusion, offer correct information, recommend public policy solutions, and propose to become a source for the author’s future publications on LTC.

With the Paragon Health Institute’s publication of our monographs “Long-Term Care: The Problem” and (soon) “Long-Term Care: The Solution,” the time is right again to address and correct misconceptions about LTC financing among reporters, analysts, and policy makers. Let’s fix long-term care once and for all. ***

LTC BULLET: YOU PAY FOR CALIFORNIA’S LTC PROFLIGACY AND STRUCTURAL RACISM

LTC Comment: California is eliminating one of the last remaining reasons people have to plan privately for long-term care risk and cost. The state already lifted Medi-Cal’s countable asset limit from $2,000 to $130,000 in 2022. Effective January 1, 2024, the Golden State will eliminate the asset limit entirely. This change applies to people receiving LTC benefits in the community or nursing homes. It will add 18,000 new recipients without their having to spend down or prove their wealth. (McKnight’s Senior Living).

Why should you care? After all, California is notorious for crazy public policies. (Have you been to San Francisco lately?) You may not have to pay for most of their well-intentioned, unintended consequences. But you are paying for this one. The way Medicaid (including Medi-Cal) works, the state puts up part of the program’s cost and the federal government pays the rest. For California this match rate is 50/50. So, for every wealthy Californian newly eligible for Medi-Cal LTC benefits, we federal taxpayers in New Mexico, Illinois, New York, etc., etc. are paying half.

Surely the federal government will not stand for this fiscal inequity. But, no, the Centers for Medicare and Medicaid Services (CMS) approved the state plan amendment removing the asset limit, calling it a “first of its kind.” Will other states follow in California’s footsteps? Will yours?

Maybe you’re thinking “Oh well, at least people have to be ‘low income’ before California can make me pay for their long-term care.” But, no again, the state has “no income limit” for “institutional / Nursing Home Medicaid,” although: “All of a beneficiary’s monthly income, with the exception of a Personal Needs Allowance of $35 / month, Medicare premiums, and a Spousal Income Allowance (if applicable), must be paid to the nursing home as a Share of Cost.” (American Council on Aging). Think of income as kind of a “deductible,” a small price for the asset rich to access government-funded LTC.

Playing fast and loose with welfare-financed LTC benefits is nothing new for California. I documented many examples 12 years ago in  Medi-Cal LTC: Safety Net or Hammock? On pages 25-28 of that report, check out the ways California ignored federal mandates from the Omnibus Budget Reconciliation Act of 1993 and the Deficit Reduction Act of 2005. You paid for all this “generosity” also.

Medi-Cal’s Structural LTC Racism

On average, Medicaid pays LTC providers less than the cost of care, roughly 70 percent of what private payers must contribute. Consequently, Medicaid often provides deficient care access and quality compared to what affluent private payers command. Financially underprivileged minorities tend to end up on Medicaid and in nursing homes that are more dependent on Medicaid than nicer, mostly private-pay skilled facilities or assisted living.

Thus, Medi-Cal’s more favorable treatment of affluent people in terms of eligibility and access has led to charges of structural racism. According to an open access article in Health Affairs*:

Structural racism in coverage and financing has created a two-tier system of racially segregated care in which minority people receive poorer-quality care.… Inequities in nursing home care provide a particularly vivid example.… Stark racial segregation in nursing homes persists today.

Awful as that sounds, the full story is even worse. If Medicaid and Medi-Cal care is so poor, why would people who can afford to pay privately want to qualify for it? Elder law attorneys who specialize in “Medicaid planning,” the legal practice of artificially impoverishing affluent clients to qualify them for publicly funded LTC benefits, have a ready answer. 

Nursing homes are desperate for revenue because Medicaid (Medi-Cal) pays them so little. They will roll out the red carpet for anyone who can pay privately at rates half again as much as Medicaid pays. So lawyers advise clients to hold back enough “key money” to pay privately for a while. That’s how their upscale clients can get into the nicer facilities that accept only a few Medicaid recipients. Then after a short period paying privately, the attorney implements a plan to impoverish the client on paper by means of common legal steps, such as: to purchase unlimited exempt assets; set up a Medicaid Asset Protection Trust; buy a Medicaid-compliant annuity; or use other methods described here, while legally avoiding estate recovery. Voila. Another well-to-do person enters a rare, top-quality facility paid for by Medicaid. Once in, the placement is permanent:

Keep in mind that, once you have been admitted to a Medi-Cal certified facility, you cannot be transferred or evicted simply because of a change from private pay to Medi-Cal payment status even when a (illegal) duration of stay contract has been signed. This applies while the Medi-Cal application is pending, as well. (CANHR, pps. 6-7)

Unfortunately, poor people don’t have the key money to buy their way into the nicer nursing homes in this way. That’s why they end up in the less desirable places that are more likely to be featured in tabloid exposes of deficient care. Worse, the poor on Medi-Cal may be unable to access care in California at all. According to the California Advocates for Nursing Home Reform (CANHR):

Over the past 5 years, one of the most disturbing violations of state and federal laws has been the increase in discrimination against Medi-Cal beneficiaries who need nursing home care. Call a nursing home and tell them that your mother, a Medi-Cal beneficiary, has dementia along with other medical issues and that her doctor has recommended a nursing home– good luck in finding a placement within 200 miles – or at all! … Nursing home discrimination against Medi-Cal beneficiaries and residents has become epidemic in California, and the state regulatory agencies do nothing to contain it. (Source: Medi-Cal Discrimination In Nursing Homes – Getting In Is Half The Battle)

By making it even easier than it was already for affluent people to crowd out the poor from better LTC, Medi-Cal has exacerbated the problem of structural LTC racism which in fact afflicts Medicaid nationwide.

If you want to know why these problems persist, read the Paragon Health Institute’s paper “Long-Term Care: The Problem.” If you want to know what to do about it, watch for “Long-Term Care: The Solution,” coming soon from Paragon and the Center for Long-Term Care Reform.

* Ruqaiijah Yearby, Brietta Clark, and José Figueroa, “Structural Racism in Historical and Modern US Health Care Policy,” Health Affairs, vol. 41, no. 2 (2022).

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

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

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

LTC Clippings: The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know. Each message contains only the critical facts about new publications: a title, representative quote, a link to the original, and our analysis in a sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or smoses@centerltc.com. Read testimonials by satisfied subscribers here. To subscribe online, please click here.

LTC E-Alerts: Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website. Center members also receive our weekly LTC Bullet op-ed. To join the Center and receive all these benefits and more, contact Steve at 425-891-3640 or smoses@centerltc.com. 

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

• HealthyLife.net (Moses podcast interview)

• Nine out of 10 seniors concerned about senior living cost, care and quality: report

• State becomes first to strip Medicaid asset limit

• 8 Big Things Clients Don't Know About Estate Planning, Long-Term Care and Probate

• Japan: Long-term care insurance system under funding pressure

• Minnesota studies a Medicare companion product for LTC coverage

• ‘Old Age’ Enters a New Age: Dramatic shifts in demography and Americans' views of aging revealed in new Harris Poll study conducted by Age Wave

• The Long View: Six reasons to start retirement planning in your 20s

• Brains of people with Alzheimer’s are low on some antioxidants, study finds

• How Do You Hide Money From Nursing Homes

• Medicaid spending up for seniors but who will bankroll coming growth

• Got Insurance? You May Be on Medicaid Too

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

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

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

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

LTC Clippings: The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know. Each message contains only the critical facts about new publications: a title, representative quote, a link to the original, and our analysis in a sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or smoses@centerltc.com. Read testimonials by satisfied subscribers here. To subscribe online, please click here.

LTC E-Alerts: Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website. Center members also receive our weekly LTC Bullet op-ed. To join the Center and receive all these benefits and more, contact Steve at 425-891-3640 or smoses@centerltc.com. 

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

• Nursing homes and adult care costs surged by largest amount in July

• Life Settlements Can Pay for Long-Term Care

• What Happens to the Items I Bought to Qualify for Medicaid?

• Genworth Set to Offer Long-Term Care Services in Texas

• Painful and Getting Worse: Rise of Medicare Advantage Drains Vast Revenue from SNF Sector, Worsens Workforce Instability

• Transforming health care for older adults

• Providers must confront radical change in shifting competitive  landscape: experts

• Minority groups comprise more than 25 percent of MA beneficiaries, study finds

• Many Americans Believe AI Will Provide Their In-Home Care As They Age

• More Baby Boomers are living alone. One reason why: ‘gray divorce’

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

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

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LTC BULLET: LET’S FIX LONG-TERM CARE ONCE AND FOR ALL

LTC Comment: If you had to diagnose and cure what ails LTC in a single page, what would you say? Steve’s answer follows.

LTC BULLET: LET’S FIX LONG-TERM CARE ONCE AND FOR ALL

LTC Comment: Policymakers’ attention spans are extremely short. So one pagers are grist for the policy mill in DC and state capitals. But writing short is much harder than writing long. Mark Twain said “I didn't have time to write a short letter, so I wrote a long one instead.” These LTC Bullets aim to say what they want to say in less than 1000 words. But we often blow through that target. So let’s take the time today to keep it short. Here’s everything you need to know about what’s wrong with LTC, why, and what to do about it in one page. But if this précis leaves you wanting more, read “Long-Term Care: The Problem” and await “Long-Term Care: The Solution,” coming soon.

Let’s Fix Long-Term Care Once and for All

Step One: Understand the Cause. People who ignore LTC planning but end up needing catastrophically expensive care later in life routinely transfer that liability and cost to taxpayers via Medicaid.

Step Two: Understand the Problem. As the dominant LTC payer, Medicaid caused most of LTC’s deficiencies including nursing home bias, access and quality problems, inadequate reimbursement, caregiver shortages, and excessive reliance on “free” care by friends and family.

Step Three: Understand the Solution. As long as most people can ignore LTC risk and cost, wait to see if they ever need expensive care, and shift the cost to Medicaid, few will plan early to save, invest or insure for LTC. That must change for more private revenue to fix long-term care.

Step Four: Understand the Plan. Medicaid allows people who failed to prepare privately for LTC to shelter unlimited wealth in trusts, annuities, five-year asset transfers and exempt assets including, over $1 million in home equity. This must end for consumers to take LTC seriously.

Step Five: Understand the Reasoning. If we remove those major loopholes by which people qualify for Medicaid LTC benefits late in life, consumers will have no choice but to plan for LTC earlier. WA Cares proved that by threatening a LTC tax that unleashed a LTCI fire sale.

Step Six: Understand the Practicality. It is unrealistic to expect younger people and families to plan for LTC at a time in their lives when they’re also saving for retirement and children’s education, making house and car payments, etc. So we must offer a way to ease that burden.

Step Seven: Understand the Research. The LTC financing burden may be more manageable than we previously believed. $70,000 invested by a 65-year-old now will cover his/her average LTC cost of $138,000 later. Aging Americans have enough saved already to cover two years of LTC.

Step Eight: Understand the Potential. If people only had to cover their individual average LTC risk by setting aside or earmarking resources they already have or are in the process of saving, they could do so more easily and while simultaneously covering their other financial needs.

Step Nine: Understand the Options. Purchase less LTC insurance at lower premiums to cover average LTC risk instead of catastrophic potential as now. Carve out enough home equity, life insurance, Individual Retirement Account balances or estate wealth to cover average risk.

Step Ten: Retain Medicaid as the payer of last resort for anyone who cannot or will not prepare privately for LTC and to cover catastrophic costs. But make this resource available only after all personal income and assets of applicants/recipients are consumed by private LTC costs.

Summary and Conclusion: If we recognize these facts and implement these measures, America’s failing LTC service delivery and financing system can be saved and improved. There is ample wealth to ensure access to quality long-term care for all Americans. Simply replace perverse incentives to ignore LTC that prevail now with positive incentives to plan for LTC.

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

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

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

LTC Clippings: The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know. Each message contains only the critical facts about new publications: a title, representative quote, a link to the original, and our analysis in a sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or smoses@centerltc.com. Read testimonials by satisfied subscribers here. To subscribe online, please click here.

LTC E-Alerts: Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website. Center members also receive our weekly LTC Bullet op-ed. To join the Center and receive all these benefits and more, contact Steve at 425-891-3640 or smoses@centerltc.com. 

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

• Nationwide Maps Consumers' Long-Term Care Insurance Confusion

• Tracking The Elusive Medicaid Workforce To Improve Access

• National Advisory Commission for long-term care proposed — without providers

• In a rapidly aging America, Medicaid can be a lifeline for long-term care

• Introducing OmniFlex™: A Revolutionary Short-Term Care Plan Redefining the Industry, offered by ManhattanLife

• In policy break, Medicare to pay for respite services under new dementia care model

• CNA hourly pay nears $19 average, while admins score major gains of their own: salary survey

• Long-term care: Insurance innovation can’t come soon enough

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

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

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

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

LTC Clippings: The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know. Each message contains only the critical facts about new publications: a title, representative quote, a link to the original, and our analysis in a sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or smoses@centerltc.com. Read testimonials by satisfied subscribers here. To subscribe online, please click here.

LTC E-Alerts: Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website. Center members also receive our weekly LTC Bullet op-ed. To join the Center and receive all these benefits and more, contact Steve at 425-891-3640 or smoses@centerltc.com. 

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

• California to eliminate asset tests for Medicaid

• Comedy Video: D.C.'s Premier Elder Care Community

• New OIG Report Examines Prior Authorization Denials in Medicaid MCOs

• The Forgotten Generation: Generation X Approaches Retirement

• Pandemic loans showed dollars will move the staffing shortage needle: study

• 8 facts about Americans with disabilities

• Medicare Advantage Plans Face More Budget Pressure

• At-home, finger-prick blood test for Alzheimer’s is latest touted stab at early diagnoses

• Healthcare bankruptcy filings set to triple

• What Is Transfer Trauma?

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

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

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LTC BULLET: CASSANDRA’S CURRENT QUANDARY

LTC Comment: Apollo granted Cassandra the ability to predict the future accurately, but cursed her to be disbelieved. That’s a familiar quandary for anyone warning today about LTC jeopardy. Details after the ***news.***

*** 7/20/2023, “The CLTC Digest Quarter 3,” Certification for Long-Term Care

Quote: “We are pleased to share the 2023 3rd Quarter edition of the CLTC Digest. As always, you will find highly educational and insightful articles, and a case study, to expand your knowledge and skills when it comes to helping clients plan for extended care.”

LTC Comment: I discovered an earlier issue of the CLTC Digest and was very impressed. I asked if they would consider an article by me. They did and it became the cover story in this latest issue. If you have the CLTC certification, you can access this new journal issue online. Non-CLTCs can purchase it for $9.95. Go to https://www.ltc-cltc.com/ and click on Store, and then on Marketing Materials. What’s more, CLTC is offering a special deal on their eCLTC (self-study) program. It's $200 off the street rate. That’s a convenient and easy way to get the CLTC designation. But don’t wait; the special ends July 31. That deadline is this coming Monday! ***

LTC BULLET: CASSANDRA’S CURRENT QUANDARY

LTC Comment: In 2015 the Center for Long-Term Care Reform published Cassandra’s Quandary. That paper proposed and provided an example of a tool to measure long-term care vulnerability. What, we asked, are the national and state-level risks to the provision and financing of long-term care services? We closely examined these seven variables. 

Aging Demographics: How many older people are coming in the next few decades?
Morbidity: How sick will they be?
Public Funding: How viable is Medicaid as the dominant long-term care payer?
Economy, Federal: How reliable is federal revenue on which Medicaid mostly depends?
Economy, State: How reliable is state revenue on which Medicaid secondarily depends?
Private Financing Alternatives: How much private-pay revenue is available to relieve LTC financing pressure on Medicaid?
Entitlement Mentality: How strong has cradle-to-grave dependency on public programs become?

It is high time to ask those questions again. Our recent paper for the Paragon Health Institute, titled Long-Term Care: The Problem, updates the LTC service delivery and financing challenge.

Our new paper forthcoming soon, titled Long-Term Care: The Solution, will propose a radically new approach to the LTC challenge. In the meantime, following are some excerpts to consider from the original Cassandra’s Quandary:

Executive Summary

It may already be too late to save America’s long-term care safety net. But it is not too late to examine its problems and to propose policy changes to relieve or eliminate them. That is this report’s objective.

Long-term care service delivery and financing face enormous challenges. Risk and cost are very high, yet few Americans plan early to save, invest or insure for long-term care (LTC). Consequently most people who need expensive LTC end up depending on Medicaid, an under-funded, means-tested, public welfare program.

Originally conceived as a last resort for people in dire need, Medicaid has be­come the dominant funder of long-term care for middle class and even affluent people, not only the poor. By trying to do too much for too many, Medicaid has hurt the poor. Decades of institutional bias and questionable access and quality resulted from dismally low reimbursement rates. Programs for the poor, as the adage goes, are poor programs.

Nor have more prosperous people truly benefited from easy access to Medic­aid LTC benefits. Lenient and elastic eligibility rules mandated by the federal government enabled them to dodge high LTC costs, but only at the expense of losing their ability to choose their LTC providers, select their preferred level and venue of care, and demand high quality care as private payers who can change providers.

Today, on the cusp of an unprecedented increase in older Americans most likely to need long-term care, the United States faces exceptionally high debt and un­funded entitlement liabilities, a weak economy despite years of fiscal and mon­etary pump priming, and a populace more dependent on social insurance and welfare programs than ever before.

But health and long-term care expenditures have not yet exploded despite long and frequent warnings they would. Public program cost and utilization pro­jections within the usual ten-year outlook window appear manageable. Deficit spending, enabled by artificially induced low interest rates, defers short-term worries. Complacency prevails. [No longer. Irresponsible fiscal and monetary policies finally created excessive debt, higher interest rates and spiking inflation.]

Lift your sights to 2050, only 35 years from now [27 years now], and all confidence about the existing long-term care system should dissolve. But we face a dilemma like the mythical Cassandra’s. She was blessed with accurate prognostication but cursed to be disbelieved. The primary purpose of this report is to take the longer view, enumerate the coming challenges, estimate the current LTC system’s survivabil­ity, awaken greater concern and propose corrective actions.

New Hampshire is an apt harbinger of the country’s long-term care challenges. The state’s age 85 plus population will nearly quadruple in the next three and a half decades. If its Medicaid long-term care expenditures for the elderly keep pace they’ll increase from $282 million per year to $1,047 million, more than one billion dollars every year. Sustainability at that level is highly dubious.

What exactly are America and the Granite State up against? To answer that ques­tion, we offer an “Index of Long-Term Care Vulnerability” that lists the major challenges and provides a way to measure, analyze and score their impact. We break out aging demographics, future morbidity, Medicaid’s viability, federal and state revenue sustainability, private financing potential, and entitlement mental­ity as the key subjects for review.

We conclude that America’s and New Hampshire’s long-term care service deliv­ery and financing systems - as currently operating and as they are most likely to evolve - will not survive the coming demographic age wave and that radical changes in federal and state laws and regulations are needed to align consumer incentives with the need to finance future long-term care adequately.

We recommend (1) changing the system by which the federal government funds state long-term care systems; (2) empowering states to experiment with different approaches to long-term care financing; (3) reducing dependency on govern­ment funding of long-term care by re-targeting scarce public resources to the genuinely needy; and (4) incentivizing private long-term care financing to en­courage early planning, saving, investing and insuring. …

We have plenty of reasons to worry:

• The boomers start coming of heavy-LTC-usage age 85 in 2031.

• Social Security and Medicare run out of “trust funds” in the early 2030s, less than 20 years from now. [Only a decade away now.]

• Gallup pollsters report “51% of non-retirees doubt they will receive Social Security” and “[t]wo-thirds say Social Security is in crisis or has major problems.”

• U.S. tax-generated general funds will have to make up the entitlements’ annual shortfalls as well as pay off the trust funds’ bonds (IOUs).

• Federal debt is $18.9 trillion and rising rapidly. [Now 72 percent higher at $32.6 trillion and rising even faster.]

• Heavy taxation impedes the economic activity necessary to generate needed tax revenue.

• The Federal Reserve domestically and central banks internationally are pushing the limits of their ability to expand credit in order to conceal economic malaise.

• Fiscal walls are closing on the U.S. and world economies.

• Promiscuous spending leads to impoverishment for individuals or families (sooner) and national economies (later, because of their ability to manipulate currency).

• These lessons are legion throughout history and around the world.

But there are “none so blind as those who will not see,” so this report takes a wide-eyed look at an expansive range of indicators in order to identify and score the LTC system’s risk between now and 2050.

LTC Comment: The analysis and warning presented in Cassandra’s Quandary is more relevant and worrisome than ever. That’s why we encourage you to consider it again and revisit the “Index of Long-Term Care Vulnerability” it proposed as a tool to help wake up doubters and resolve the quandary of LTC denial. The Center applied the “Index of LTC Vulnerability” in three additional states in the mid-2010s. Check out: 

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

We are reviving the Index of Long-Term Care Vulnerability as a tool to arouse interest and concern about LTC again as we prepare to propose a new approach to a solution. Stay tuned.

NB: If you try to open the Index of Long-Term Care Vulnerability and get this message as I do: “Website blocked due to suspicious content,” just disregard it and click “Continue to this website.” Rest assured, it is safe to do so.

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

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

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

LTC Clippings: The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know. Each message contains only the critical facts about new publications: a title, representative quote, a link to the original, and our analysis in a sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or smoses@centerltc.com. Read testimonials by satisfied subscribers here. To subscribe online, please click here.

LTC E-Alerts: Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website. Center members also receive our weekly LTC Bullet op-ed. To join the Center and receive all these benefits and more, contact Steve at 425-891-3640 or smoses@centerltc.com. 

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

• For Home Care Providers, There’s Untapped Potential In Long-Term Care Insurance

• The CLTC Digest Quarter 3

• Nursing care has fastest-growing prices of healthcare sectors

• Family caregivers have fewer assets, more debt issues than non-caregivers

• For some Washington residents, the new WA Cares Fund may seem appealing. But sticking with a private long-term care insurance plan might still be the better option. Our expert has the details.

• Alzheimer’s among seniors is most common in these parts of the US, first-of-its-kind data shows

• Dementia patients fared better in LTC facilities, not home, during pandemic, new study shows

• New Paragon Study: The Harm of Delaying the Disenrollment of Medicaid Ineligibles

• KFF: Only 29% of Nursing Homes Would Meet 4-Hour Federal Staffing Mandate

• Tax Advantaged Strategies to Help Clients Plan for Long-Term Care

• AHCA to White House: Nursing home staffing mandate spells ‘disaster’

• Republicans want to make state's long-term care tax optional

• Biden’s long-term care agenda faces headwinds Workforce shortages: Medicaid reimbursement rates make it hard to hire staff for long-term, home and community-based care facilities

• Is Work From Home to Blame for Senior Housing’s Muted Recovery?

• Independent living program to aid hundreds of aging, disabled adults

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

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

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LTC BULLET: LTC BLOCK GRANT OR WAIVER POTENTIAL

LTC Comment: Consider how a Medicaid block grant or waiver could improve long-term care, after the ***news.***

*** 2023 MILLIMAN LONG TERM CARE INSURANCE SURVEY: This 25th consecutive annual review of stand-alone long-term care insurance (LTCI) authored by Claude Thau, Nicole Gaspar, and Chris Giese, and published by Broker World magazine is available in the insurance trade journal’s July 2023 issue. More discussion of worksite sales, including a comparison of worksite sales distributions vs. non-worksite sales distributions will be in Broker World magazine’s August issue. If you don’t subscribe to this important industry source, fix that problem now here. ***

LTC BULLET: LTC BLOCK GRANT OR WAIVER POTENTIAL

LTC Comment: Medicaid law encourages excessive federal and state spending and increases public welfare dependency. These problems manifest in long-term care due to federal financial participation (FFP) match rates that reward increasing state expenditures and through generous financial eligibility policies that discourage early, private LTC planning and subsidize reliance on Medicaid when LTC is needed late in life.

Decades of federal and state efforts to discourage Medicaid LTC expenditure growth by making benefits harder to get, such as lower income and asset eligibility limits, asset transfer restrictions, property liens and estate recoveries, failed to achieve the objective of controlling costs. The rules were weak and full of loopholes. The federal government did not enforce them. The states did not implement them effectively. The media did not publicize them. So the public continued to ignore LTC planning and rely on Medicaid when care was needed driving costs higher and impairing care access and quality, especially for the needy Medicaid is supposed to serve.

As long as these federal rules prevail, nothing is likely to change. If new, worsening economic conditions, including rising debt, deficits, interest rates and inflation compel change, there are very limited options available politically. Doubling down on earlier failed efforts to scare the public straight about LTC by insisting on, but not enforcing, the risk that their life savings are at stake, is futile. Completely eliminating Medicaid as a LTC safety net that preserves middle class and affluent wealth could save the program for the poor, but would prove difficult to implement politically unless and until budgetary pressures compel its adoption. What might work instead?

Over the years, two ideas have received serious consideration that would allow experimentation toward finding a solution to the LTC conundrum just described. One idea is to “block grant” Medicaid, give states a limited amount of money to pursue the program’s objectives, but allow them much more flexibility to set and enforce eligibility controls. Another idea, long an option under federal law, is to allow states to request and receive “waivers” of federal law and regulations enabling them to experiment with new ideas and methods not otherwise permissible. Neither approach has been tried in the endeavor to control costs, preserve Medicaid LTC benefits for the needy, and encourage personal LTC planning by the financially comfortable. But what if an oncoming recession or depression compels more creative measures than in the past? How could states configure LTC benefits under a block grant or waiver?

Following is a proposal I offered in “The Long-Term Care Financing Crisis: Danger or Opportunity?: A Case Study in Maryland” (1995). It refers explicitly to using a block grant to achieve the objective, but could as effectively be applied using a waiver as I proposed in “Doing LTC RIght” (2010). The waiver option is based on and inspired by Rhode Island’s ingenious “global Medicaid waiver” designed, obtained and administered by Gary D. Alexander, then Secretary of the Rhode Island Executive Office of Health and Human Services and currently head of the Medicaid and Health Safety Net Initiative at the Paragon Health Institute.

Note that the following proposal refers mostly to nursing home care as that was the dominant venue of care at the time, but it also explains how and why the plan will encourage transition from institutional to home and community-based care. See what you think of this approach and feel free to share your feedback or questions with me at smoses@centerltc.com.

Long-Term Care Financing Under a Medicaid Block Grant
Notes Toward a Model State Statute^[1]
by
Stephen A. Moses

1.         Introduction

            Medicaid is known as the "pac-man" of state budgets and the "800-pound gorilla" of long-term care. We all know something has to be done to control this fiscally hemorrhaging giant.

            On the positive side, if Medicaid block grants pass this year [block granting Medicaid received serious consideration in 1995], states will have the authority for the first time to implement the proper corrective actions. That is a tremendous incentive to prepare now to meet the risks and opportunities that lie immediately ahead.

            The big questions public policy makers face are what to do and how to do it. We cannot plot a course of corrective action until we understand completely the mess we are in and how we got into it. The purpose of this paper is to explain the problem, show how it developed and propose a solution.

            Medicaid nursing home expenditures nearly doubled between Federal Fiscal Year (FFY) 1988 and FFY 1993. Today, Medicaid pays for 73.7 percent of all nursing home patient days in the United States. At least 85 to 90 percent of all nursing home payments come from Medicaid, Social Security benefits contributed by Medicaid patients toward their cost of care, Medicare, or private patient income (not assets). Dozens of recent empirical studies indicate that Medicaid "spenddown" is much lower than previously believed. In fact, there is no evidence whatsoever of the much-touted, widespread catastrophic spenddown.

            Although Medicaid is ostensibly a means-tested public assistance program, i.e. welfare, evidence abounds that middle-class Americans and even the well-to-do qualify easily for the program's nursing home benefits. Congressional actions (in OBRA '93) to close Medicaid eligibility loopholes and mandate estate recovery have had little effect because of unforeseen weaknesses in the law, sluggish implementation by the states, lukewarm enforcement by the Health Care Financing Administration, and creative end-running by public and private Medicaid estate planning attorneys.

            Finally, Medicaid has developed a dismal reputation for problems of access, quality, reimbursement, discrimination, institutional bias, and welfare stigma. How did America come to provide for the long-term care needs of its proud, self-reliant World War II generation by consigning them to a welfare program that is going bankrupt?

II.        Background

            In 1965, America was just starting to have a problem with long-term care. People were living longer, but dying slower of chronic illnesses that caused frailty and cognitive impairment. That was when a prosperous private market in low-cost home and community-based services and long-term care insurance might have developed in the United States. It did not.

            Instead, with every good intention, the new Medicaid program offered publicly financed nursing home care. This subsidy confronted families with a very difficult choice. They could pay out-of-pocket for the home care and assisted living services seniors prefer or they could accept nursing home care paid for by the government. Most people chose the safety and financial benefits of the Medicaid option. Therefore, the market for home care withered, private long-term care insurance expired stillborn, and Medicaid-financed nursing home care flourished.

            The nursing home industry took full advantage of this situation. As fast as the industry could build them, nursing home beds filled with Medicaid residents. Stunned by the cost, Medicaid attempted to control the construction of new beds with Certificate of Need (CON) programs on the principle that "we cannot pay for a bed that does not exist." By the mid-1970's, health planning for nursing homes was in full swing.

            Capping supply, however, only spurred the nursing home industry to drive up rates. Government costs grew faster than ever. So Medicaid capped reimbursement rates too. This compelled the nursing home industry to increase private pay reimbursement rates to compensate. So began the highly problematical differential between Medicaid rates and private pay rates. Today, Medicaid pays only 80 percent of private pay rates on average nationally.

            Higher private rates made Medicaid more attractive to private payers and this led to pressure on legislators to liberalize Medicaid eligibility. A long process of eligibility bracket creep gradually made Medicaid nursing home benefits available even to upper middle class people who had or could obtain the expertise to manipulate eligibility rules. A whole sub-practice of law--Medicaid estate planning--developed to take advantage of this new opportunity.

            With the supply and price of nursing home beds capped by government fiat and with Medicaid eligibility increasingly generous, nursing home occupancy skyrocketed to 95 percent nationally. Nursing home operators realized they could fill their beds easily with low-paying Medicaid patients no matter what kind of care they offered. To achieve adequate operating margins, however, nursing homes had to attract a sufficient supply of full-paying private patients or they had to cut costs drastically.

            If they tried to attract more lucrative private payers with preferred treatment, however, the nursing homes were deemed guilty of discrimination against Medicaid patients. If they tried to cut costs instead, they came under fire for technical violations or quality problems. In response, Congress and state governments pressured the industry to provide higher quality care without discriminating against low-paying Medicaid recipients. Given its fiscal duress, however, Medicaid could not offer higher reimbursement rates to achieve these goals.

            Caught between the proverbial rock and a hard place, the nursing home industry put up a strong fight. Armed with the Boren Amendment, a law that requires Medicaid to provide reimbursement adequate to operate an efficient nursing facility, many state nursing home associations took the battle to court. By now, however, state and federal Medicaid expenditures were rising so fast and taxpayers were so reluctant to pay for growing public spending that large increases in nursing home reimbursement were out of the question.

            In the meantime, a wave of academic speculation in the late 1970's indicated that paying for home and community-based services (HCBS) instead of nursing home care could save a lot of money. For years, therefore, Medicaid experimented with HCBS waivers as a cost-saving measure. In time, however, hard empirical research showed that (desirable as they may be) home and community-based services do not save money overall. Today, institutional bias remains Medicaid's strongest cost containment tool and one of its gravest deficiencies.

            In a nutshell, just as heavy demand was building for a private seniors housing market in the 1960's, Medicaid co-opted the trend by providing easy access to subsidized nursing home care. Confronted with a choice between paying out-of-pocket for a lower level of care or receiving a higher level of care at much less expense, seniors and their families made the predictable economic choice. Not surprisingly, Medicaid nursing home caseloads and expenditures increased rapidly and drastically. In response, Medicaid capped bed supply and reimbursement rates, which led inevitably to excessively high occupancy, private-pay rate inflation, discrimination against low-paying Medicaid patients, and increasingly serious quality problems. In time, Medicaid nursing home care acquired its reputation for impeded access, doubtful quality, inadequate reimbursement, widespread discrimination, pervasive institutional bias, and excessive cost. Medicaid remains, however, the only way the middle class can pay for long-term care without spending their savings. That is why so many otherwise independent and responsible Americans end up dying in nursing homes on welfare.

III.       The Challenge

            If the foregoing analysis of the Medicaid malaise is accurate, a sensible solution comes easily into focus. To facilitate universal access to top quality long-term care for all Americans, a new, cost-effective, block-granted, publicly financed, long-term care program should have the following characteristics.

• It should save taxpayers money while improving access to quality long-term care for all citizens;

• It should encourage, instead of discouraging, private financing of home and community-based services and assisted living;

• It should encourage, instead of discouraging, the purchase of private long-term care insurance to pay for all levels of extended care;

• It should combine generous eligibility criteria to protect the unprotected with strong incentives for everyone to plan ahead for self-protection;

• It should pay market-based reimbursement rates to assure access to quality care for all participants and to eliminate discrimination;

• It should promote strong market competition between providers of all levels of care;

• It should maximize the number of consumers in the marketplace who have a pecuniary interest in getting the best possible care at the lowest possible price. 

Is a single program that combines all these features possible? Yes, but only if it is based on a common understanding and agreement as to its goals and objectives. In the course of numerous research studies over the past 12 years, I have found almost universal consensus on the following ethical foundation.

IV.       The Moral High Ground

            We have very limited dollars available for public assistance. We must take care of the truly poor and disadvantaged first. The middle class and well-to-do should pay privately for long-term care to the extent they are able without suffering financial devastation. Prosperous people who rely on public assistance for long-term care should reimburse the taxpayers before giving away their wealth to heirs. Seniors and their heirs who wish to avoid such recovery from the estate should plan ahead, purchase private long-term care insurance, and pay privately for the care of their choice when the time comes.

What would a publicly financed long-term care program based on this philosophical underpinning look like?

V.        Model State Statute for a Senior Financial Security Program (SFSP)

(Rough draft state statutory language is presented below in highlighted italics.) The following are the key components of the program.

          A.           Preserve generous eligibility

                        1. Status Quo

                        Despite the conventional wisdom that seniors must spend down their life savings to receive Medicaid nursing home benefits, the truth is that most seniors qualify easily regardless of income or assets.

                        Most state Medicaid programs place no limit on how much income someone can have and still qualify for nursing home benefits. If your total medical costs, including nursing home care, approximate or exceed your income, you are eligible.

                        The well known $2,000 limit on assets is meaningless. Medicaid recipients can also keep exempt assets of unlimited value, such as a home, a business, and a car. Married folks have it even easier than single people. They can shelter an additional $74,820 in assets and $1,870.50 per month in income. [These figures are $148.620 and $3,715.50 respectively as of 2023 having nearly doubled since 1995 due to inflation.]

                        For the truly well-to-do, even these generous limits are easily overcome. Any competent Medicaid planner can deliver Medicaid eligibility almost overnight to practically anyone for less than the cost of one month in a private nursing home.

                        Given Medicaid's generous nursing home eligibility criteria, there is little wonder why most Americans (1) fail to plan ahead for long-term care risk, (2) neglect to purchase private long-term care insurance, (3) hesitate to spend their own money on home care or assisted living, and (4) end up in nursing homes subsidized by Medicaid.

                       2. Senior Financial Security Program

                        Drastically cutting Medicaid nursing home eligibility and coverage for the middle class is not politically feasible. Strong senior interest groups would fight such cuts aggressively and both private and legal services attorneys would tie such a system in knots of litigation. Fortunately, it is not necessary to burn the village in order to save it. The Senior Financial Security Program preserves Medicaid's generous eligibility and coverage. This is the program’s biggest political selling point.

                        3. Model State Statute

                        "Seniors who need nursing home care may qualify for the Senior Financial Security Program if their income is inadequate to pay for such care and if their assets do not exceed $2,000 plus certain exempt resources enumerated below.

                        "To qualify for assistance, however, every participant must provide a net worth statement confirmed by a certified public accountant. This net worth statement constitutes security offered by program participants to assure repayment of benefits received. As the participant receives benefits, the cost to the SFSP will be deducted from the participant's net worth ledger. As long as the ledger has a positive balance, the program participant is in receipt of a government-sponsored loan. When the ledger's balance turns negative, the participant converts to 'public assistance.'

                        "Exempt assets that SFSP participants may retain are similar to those permitted by the traditional Medicaid program with a few additional limitations.

                        "Home: no limit on value for one single-family residence, however, expensive homes purchased (or additions constructed) within eight years of applying for benefits will be treated as a transfer of assets to qualify (see transfer of assets restrictions below).

                        "Automobile: one car of any value provided it is actually used for the benefit of the program participant. Transfer of an automobile, even though exempt, will be deemed a transfer of assets subject to penalty. Program participants may not give away exempt assets and replace them with new exempt assets as a means to qualify for assistance or avoid estate recovery.

                        "Funeral plan: one prepaid funeral plan, not to exceed the average cost in the state of a simple service and disposal of remains (perhaps $2,500). Program participants may not shelter tens of thousands of dollars in burial plans as a means to qualify for assistance.

                        "Other exempt resources and limitations to be delineated."

          B.           Prohibit divestiture

                        1. Status Quo

                        Under the existing Medicaid program, anyone who transfers assets three years [now five years] before applying for assistance can give away any amount of money and qualify with no questions asked. Unfortunately, the average period of time from onset to death in Alzheimer's Disease is eight years. If the family transfers her assets the first time Grandma forgets to turn off the stove, they guarantee her unlimited Medicaid nursing home benefits three years later with no expense or inconvenience.

                        Today, many Medicaid estate planning attorneys advise their clients and colleagues to initiate a "gifting strategy" years in advance in order to assure easy Medicaid eligibility. Such a strategy may include many tactics including outright gifts, establishment of trusts, retention of life estates, purchase of a partial interest in adult children's homes, and conversion of non-exempt into exempt assets. The options are limited only by the imagination of the Medicaid planner.

                        2. Senior Financial Security Program

                        The SFSP cannot protect generous eligibility and survive without eliminating divestiture planning altogether. Seniors and their heirs must get the message very clearly that long-term care is an enormous financial risk, that people should save and insure throughout their lives to protect against this risk, and that giving away assets for any reason at a time when the long-term care risk is at its peak is a very dangerous proposition.

                        Of course, by birthright, any American is free to dispose of his assets in any way he wishes and at any time. One must no longer be allowed, however, to give away one's wealth in order to compel other Americans to provide oneself with expensive long-term care benefits.

                        Adult children, other relatives, friends and charities to whom older people give away income or assets must realize that if such a gift leaves seniors unable to pay for their own care and dependent on the public dole, that the state will seek restitution.

                        3. Model State Statute

                        "Any assets transferred for less than fair market value within eight years of applying for assistance constitute a debt owing the state (up to the total public benefits paid) and such debt is payable by the transferees who received the assets and/or by the estate of the program participant or by such persons who may have received the assets by means other than a formal probated estate. Any asset transferred in contemplation of qualifying for the SFSP or of avoiding estate recovery shall be considered a fraudulent conveyance.

                        "A transfer of assets is any divestiture of purchasing power including but not limited to gifts, purchase of exempt assets, divorce, purchase of unsalable or undividable property, divestment into trusts, converting assets into joint tenancy, etc.

                        "The intent of this provision is to assure that no purchasing power possessed within eight years of application by anyone who later depends on the SFSP shall be used for any other purpose than the care and maintenance of the owner or reimbursement to the SFSP for providing such care and maintenance.

                        "If any purchasing power shall have been taken from an SFSP participant improperly or illegally, the program shall petition the appropriate court to appoint a private attorney as the participant's conservator (reimbursed on contingency) to recoup the misappropriated assets on behalf of the participant and the program. Such recoupment may include relitigating abusive divorce decrees, reversing improper asset transfers, invading inappropriate trusts, and partitioning undivided property."

          C.          Require legal security as a condition of eligibility

                        1. Status Quo

                        Exempt assets divested legally or illegally while on Medicaid are lost forever as a source of long-term care financing for seniors. Nor can such divested resources serve as a non-tax revenue source to the program. Under the existing Medicaid program, states are permitted but not required to place liens on the homes of recipients under certain highly restrictive circumstances. Very few states use the lien authority to secure assets for later recovery. Even states that utilize liens have limited success enforcing and collecting on them because of extensive exclusions in the federal law. Consequently, exempt and non-exempt assets held openly or concealed by Medicaid recipients routinely disappear during the period of eligibility either legally or illegally as relatives, friends and others take advantage of the senior's incapacity to relieve them of their resources.

                        2. Senior Financial Security Program

                        No competent financial institution will extend a loan of hundreds of thousands of dollars to anyone without requiring security. The government can no longer afford to do so either. People who expect to depend on the SFSP while preserving substantial income and assets for the support of their dependents must realize and agree that they lose some measure of control over these resources in the process.

                        Of course, all citizens have the option to use their income and assets as they see fit. For example, they can sell their homes and cars to pay privately for long-term care if they choose. But if they prefer to use a public program to pay for their care, they must recognize the obligation to encumber their resources for later recovery, after the resources are no longer needed by their legitimate surviving dependents.

                        3. Model State Statute

                        "As a condition of eligibility for the SFSP, all participants must allow the state to place a lien on their exempt property. The lien shall apply to all real and personal property retained by the participant with the exception of the $2,000 liquid asset exclusion and certain highly private personal property such as original wedding rings.

                        "Such liens shall be officially recorded in the appropriate legal manner and shall be enforceable upon sale of the asset or upon the death of a program participant, or if the participant is survived by a legitimate dependent, upon the death of the last surviving exempt dependent relative (to be defined).

                        "Nothing in this statute shall be construed in any way to prohibit or prevent an SFSP participant from disposing of his property in any way he sees fit. The sole purpose is to assure that his creditor, i.e. the state in the form of the SFSP, knows of the transaction, can recover benefits paid as appropriate, and can terminate eligibility if appropriate."

          D.          Require estate recoveries

                        1. Status Quo

                        For most of the history of the existing Medicaid program, nursing home recipients could preserve unlimited exempt assets in the form of homes, cars and personal property and pass this wealth to their heirs completely unencumbered. It was not until the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA '82) that Congress gave state Medicaid programs the authority to recover from recipients’ estates. It was not until the Omnibus Budget Reconciliation Act of 1993 that Congress required estate recoveries. Consequently, few states have so far implemented strong, cost-effective estate recovery programs.

                        2. Senior Financial Security Progra                         

                        As long as Americans can ignore the risk of long-term care, avoid the premiums for private insurance, wait to see if they ever need to go to a nursing home, and if so, get the government to pay while still passing all their wealth to heirs, most people will not pay for their own care and public costs will continue to explode. Extensive research indicates that states can save five percent or more of the cost of their nursing home programs by recovering benefits paid from the estates of deceased recipients. The potential liability of estate recovery provides a huge incentive for future generations to insure privately or pay for less expensive, lower levels of care in the private marketplace in order to avoid or postpone exorbitant nursing home costs. By requiring and strictly enforcing estate recovery, the SFSP assures that those participants, who are able, pay their own way thus preserving their dignity. It is not welfare if you pay it back.

                        3. Model State Statute

                        "Every participant in the Senior Financial Security Program must agree in writing to pay back the entire cost of care from his or her estate or from the proceeds of sale of real or personal property during program eligibility up to the total value of the estate or sale. If the program participant should predecease a spouse or other legitimate, dependent heir or joint tenant, the participant's share of any jointly owned property or purchasing power shall be recovered from such third party as soon as it is no longer needed for the maintenance of the dependent, and in any case, no later than upon the death of the dependent third party.

                        "It is expressly understood that the term 'estate' is not limited to the formal probated estate, but includes all purchasing power held by the program participant within eight years of applying for the SFSP in whatever form it passes to another before or after program participation and later death.

                        "The intent of this rule is to assure that people pay for their own long-term care, either directly by retaining providers in the private marketplace or indirectly by reimbursing the Senior Financial Security Program. The financial viability of the SFSP and its ability to provide care to less fortunate participants depends on strong estate recovery enforcement."

          E.           Encourage home and community-based services and long-term care insurance

                        1. Status Quo

                        As explained in the background section of this paper, Medicaid extinguished the private markets for home and community-based services (HCBS) and long-term care insurance when it began providing subsidized nursing home care in 1965. Later efforts to retrofit HCBS and encourage private insurance, i.e., Medicaid waivers and public/private partnerships respectively, have proven to be too little too late. With all its resources sucked into the black hole of institutional long-term care, state Medicaid programs have been unable to fund the HCBS waivers adequately. With regard to long-term care insurance: people do not buy apples on one side of the street when they can get them for free on the other.

                        2. Senior Financial Security Program

                        By prohibiting divestiture of assets to qualify, by requiring liens on all property as a condition of eligibility, and by mandating recovery from estates of every program participant who retains exempt assets, the SFSP creates an enormous incentive for future generations to plan ahead, buy insurance, pay privately for home care or assisted living, and avoid as long as possible starting the meter running for publicly financed nursing home care. Nevertheless, the SFSP should make this goal explicit in the program's statutory language.

                        3. Model State Statute

                        "The purpose of the Senior Financial Security Program is to protect those who are unable to take care of themselves. The program does not replace any individuals' responsibility to provide for their own long-term care. Program requirements that prohibit divestiture of assets, require security for benefits paid, and mandate recovery from estates are expressly intended to encourage all citizens to plan ahead, purchase quality long-term care insurance, pay privately for appropriate, cost-effective levels of care, and rely on the Senior Financial Security Program only as a last resort."

          F.           Educate the public

                        1. Status Quo

                        The main reason that Medicaid nursing home costs have grown explosively for 30 years is that the program desensitized the public to the risk and cost of long-term care. Most people today do not know who pays for long-term care. Medicare, Medicaid or Santa Claus, why should it matter? All the public knows for sure is that someone must pay, because they hear few genuine anecdotes of catastrophic spenddown and they never see Alzheimer's patients wandering the streets with nowhere to go and no one to take care of them. Until Americans understand and internalize the risk of long-term care, they will not plan ahead to protect themselves against it and they will continue to end up in nursing homes on Medicaid.

                        Extensive research over the past 12 years suggests that Medicaid nursing home expenditures could be reduced by as much as 15 to 20 percent by persuading the public to pay privately for long-term care either out-of-pocket or by means of insurance coverage.

                        2. Senior Financial Security Program

                        The big challenge to public policy is to provide a long-term care safety net that protects the frail and vulnerable without discouraging the hale and able from planning ahead to take care of themselves. The SFSP achieves this objective by building a downside risk into reliance on public financing of long-term care, i.e. the lien and estate recovery liability, and by aggressively promulgating information about the probability, cost, and personal responsibility of long-term care. To assure that this critical feature of the program is not neglected, the SFSP model statute expressly incorporates a non-tax revenue source to support it.

                        3. Model State Statute

                        "Ten percent (or such proportion as shall be necessary to achieve the objective) of the revenue generated by Senior Financial Security Program's lien and estate recovery efforts shall be used exclusively to support a public education initiative on long-term care. The purpose of this initiative is to educate the public, the medical profession, the bar, the judiciary, financial advisors, and all other individuals in the community who influence the lives of older people, concerning the importance of long-term care planning. Such education and training will include but not be limited to (1) the probability of requiring long-term care, (2) the average incidence, duration and cost of nursing home care, (3) the principles of how to identify and select a reliable long-term care insurance policy, (4) the kinds of free and fee-for-service assistance available to postpone institutionalization (e.g., meals on wheels, chore services, adult day care, congregate care, assisted living, etc.), and (5) the eligibility, lien and estate recovery requirements associated with dependency on the Senior Financial Security Program.

                        "The purpose of this education program is to assure that no one in the state turns 50 years of age without having received complete information on long-term care risk and on all of the private options available to plan for it."

VI.      Conclusion

          Fully implemented and aggressively enforced, the Senior Financial Security Program will empower any state to assure universal access to top quality long-term care for rich and poor citizens alike across the entire continuum from home and community-based services to sub-acute nursing home care while simultaneously saving the taxpayers money and enhancing the private market for all long-term care providers and insurers.

          The goal of the program should be to provide eligibility and coverage equal to or better than conventional Medicaid nursing home benefits at no more than 80 percent of the former cost. In 1993 dollars, this constitutes a savings to taxpayers of approximately $5 billion per year nationally.

Stephen A. Moses is Director of Research for LTC, Incorporated, a private firm in Seattle, Washington specializing in long-term care financing and insurance. He served as a career federal employee for 18 years, mostly with the Health Care Financing Administration which administers Medicaid and Medicare.

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

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

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

LTC Clippings: The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know. Each message contains only the critical facts about new publications: a title, representative quote, a link to the original, and our analysis in a sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or smoses@centerltc.com. Read testimonials by satisfied subscribers here. To subscribe online, please click here.

LTC E-Alerts: Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website. Center members also receive our weekly LTC Bullet op-ed. To join the Center and receive all these benefits and more, contact Steve at 425-891-3640 or smoses@centerltc.com. 

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

• Alzheimer’s drug Leqembi has full FDA approval now and that means Medicare will pay for it

• State factsheet not helpful for long-term-care crisis

• A Closer Look at the Five Largest Publicly Traded Companies Operating Medicaid Managed Care Plans

• ‘Astronomical’ Medicare Advantage Denials, Pre-Auth Issues Cause Outcry from Nursing Homes

• Retirees are underestimating how long they will live

• Medicare Advantage retaining sicker patients with more complex health needs: study

• Ages 55-Plus Control Three Quarters Of U.S. Investable Assets, But Assets Aren’t Main Driver For Retirement: Net equity in real estate jumps; taxable now outpaces retirement assets

• Dollars spent on HCBS go further than those spent on nursing homes, study finds

• Nursing home, home health fast-growing health spending categories

• Washington State Long-Term Care Insurance Program to Launch Saturday

• Majority Of Americans Have Taken A Financial Hit Due To Rising Interest Rates

• LTC workers need higher wages, better training now that society’s applause has ended: report

• TOMORROW: Medicaid Redeterminations: Setting the Record Straight

• Medicaid Long Term Care Update

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

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

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LTC BULLET: THE LTC NARRATIVE

LTC Comment: The dominant long-term care narrative crowds out inquiry, critical reasoning and creativity leaving conformity and groupthink. We explain after the ***news.***

*** HAPPY INDEPENDENCE DAY ***

LTC BULLET: THE LTC NARRATIVE

“A dominant narrative is an explanation or story that is told in service of the dominant social group’s interests and ideologies. It usually achieves dominance through repetition, the apparent authority of the speaker (often accorded to speakers who represent the dominant social groups), and the silencing of alternative accounts. Because dominant narratives are so normalized through their repetition and authority, they have the illusion of being objective and apolitical, when in fact they are neither.” College of Literature, Science and Arts, University of Michigan

LTC Comment: Most LTC researchers remind me of the fish who asked “What is water?” They are so steeped in the “LTC narrative” that they don’t see, consider or question anything else. What is the LTC narrative? It goes something like this:

Long-term care is a huge risk and cost that can and does wipe out the life savings of huge numbers of aging Americans. Medicaid is the only option that helps people who need expensive, extended, custodial care. But Medicaid requires impoverishment and has a dubious reputation for care access and quality. So, therefore, America needs a new compulsory, payroll-funded social insurance program similar to Medicare to pay for long-term care.

Nothing in the LTC narrative is true. There is no evidence that LTC frequently wipes out life savings and researchers cite none. Medicaid is not the only option for long-term care; people could save, invest or insure for LTC risk, but few do. Why not? Medicaid does not require impoverishment. That is a myth. Medicaid allows recipients to have income up to the monthly cost of a nursing home and to retain practically unlimited exempt assets. No new LTC entitlement program is needed nor desirable. Rather, we should fix the one, Medicaid, we already have.

Although nothing in the LTC narrative is true, most LTC researchers take it for granted. Why? It fits their ideological prejudice against free markets and in favor of government financing and control. How? They affirm the LTC narrative by ignoring or misrepresenting all evidence to the contrary, by redefining or misinterpreting data to fit the narrative, and by equivocating on key terms such as impoverishment, spend down, out-of-pocket expenses and Medicaid planning.

How do LTC researchers ignore or misrepresent evidence that contradicts the LTC narrative? They pretend that Medicaid financial eligibility rules require impoverishment when the truth is that income rarely stands in the way of qualification for LTC benefits and applicant/recipients may retain virtually unlimited non-countable assets, including very large home equity, one vehicle, a business, personal belongings and home furnishings, even retirement savings accounts. LTC researchers rarely acknowledge the vast legal literature on methods to circumvent Medicaid financial limits and qualify the affluent who possess even much greater wealth. If they do concede that Medicaid planning occurs, they disingenuously pretend it is limited to asset transfers, a method far less common and significant than other, more frequent and important techniques of artificial self-impoverishment, such as the purchase of exempt assets.

How do LTC researchers redefine or misinterpret data to fit the LTC narrative? To promote the misconception that elders all across the country are spending down into impoverishment for LTC, it helps if out-of-pocket LTC expenditures appear high and Medicaid expenditures appear low. That supports the LTC narrative that long-term care is wiping out people’s savings, that Medicaid does not do enough to help, and that, therefore, a big new government program is needed. So LTC researchers try to make out-of-pocket LTC costs appear higher than they actually are, as high as 50 percent, by including room and board expenses in assisted living or residential care facilities’ LTC spending tallies. But people incur room and board costs whether or not they need or receive LTC.

The Centers for Medicare and Medicaid Services (CMS) are also complicit. The agency changed the definition of nursing home services to include Continuing Care Retirement Communities in 2011. That change deceptively made Medicaid expenditures look lower and out-of-pocket costs appear higher because CCRCs are almost entirely private-pay. In fact, Medicaid’s share of nursing home expenditures has been going up and out-of-pocket expenditures, down for decades. Full price out-of-pocket private pay SNF revenue has collapsed to only seven percent leaving nursing homes heavily dependent on Medicaid’s notoriously inadequate reimbursements. But you wouldn’t discern that in CMS’s biased reporting.

How do LTC researchers equivocate on key terms of art to validate the LTC narrative?

(1) They insist Medicaid requires “impoverishment” when the truth is that people need only a cash flow problem, e.g., too little income to afford long-term care privately, to qualify. Medicaid’s role in long-term care financing is that it reduces the risk and cost of long-term care substantially, not that it impoverishes people.

(2) The LTC researchers equivocate on the meaning of “spend down.” They often imply and sometimes assert incorrectly that Medicaid requires applicants to spend down countable resources for health or LTC expenses to qualify. But Medicaid has no such requirement. People may spend down countable assets to purchase and retain exempt assets, thus qualifying for LTC benefits while preserving wealth. Purchase of exempt assets is the single most common method of Medicaid planning and is almost universally practiced by applicants with excess countable assets.

(3) LTC researchers prevaricate on terms like “out of pocket,” spend down and impoverishment, when they misrepresent data from their main data sources, the Health and Retirement Study (HRS) and its auxiliary, the Asset and Health Dynamics among the Oldest Old (AHEAD) study. The HRS and AHEAD studies are often cited as proof older Americans spend down for long-term care until impoverished and thus become eligible for Medicaid LTC benefits. But neither of those data sources provides any information about how elders’ decumulate wealth. They only show that wealth declined and a transition to Medicaid eligibility occurred. Such transitions could as well and as likely have occurred due to purchase of exempt assets as to LTC spend down.

In conclusion, the LTC narrative reflects the dominant scholarly social group’s ideological bias in favor of compulsory government social insurance and against free market competition. The narrative prevails due to constant repetition, the unchallenged authority of its “experts,” and by silencing other accounts. Because no other analyses or evidence can penetrate the LTC narrative’s peer-review barricade, it has the illusion of being objective and apolitical, when it is neither. Unless and until critics deconstruct the LTC narrative and replace it with consistent, principled analysis and recommendations, little success in the decades-long effort to improve LTC services and financing will occur.

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

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

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

LTC Clippings: The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know. Each message contains only the critical facts about new publications: a title, representative quote, a link to the original, and our analysis in a sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or smoses@centerltc.com. Read testimonials by satisfied subscribers here. To subscribe online, please click here.

LTC E-Alerts: Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website. Center members also receive our weekly LTC Bullet op-ed. To join the Center and receive all these benefits and more, contact Steve at 425-891-3640 or smoses@centerltc.com. 

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

• Russian hackers expose information of 2.5 million Genworth customers

• A blow to CMS’s credibility … thank goodness

• ChatGPT and Beyond: How Artificial Intelligence is Shaping the Future of Nursing Home Operations

• Americans pay $17.5 billion to support parents in a year

• Should State Long-Term Care Insurance Funds Invest In Stocks?

• Ben Veghte: As long-term care needs grow, WA Cares offers long-term solution for working Washingtonians

• Medicaid changes could help assisted living help more older adults

• ‘Harmful Yet Largely Invisible:’ Resident Fear of Staff Highlighted in Recent Report

• Workers in Germany will soon pay more for long-term care insurance

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

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

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

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

LTC Clippings: The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know. Each message contains only the critical facts about new publications: a title, representative quote, a link to the original, and our analysis in a sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or smoses@centerltc.com. Read testimonials by satisfied subscribers here. To subscribe online, please click here.

LTC E-Alerts: Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website. Center members also receive our weekly LTC Bullet op-ed. To join the Center and receive all these benefits and more, contact Steve at 425-891-3640 or smoses@centerltc.com. 

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

• Medicare spending expected to top $1 trillion this year, CMS says

• What to Know About Buying Long-Term Care Insurance

• Long Term Care Insurance & Inflation

• White House asks states to pump the brakes on Medicaid disenrollment

• UC Davis Health launches new geriatric division

• New tool detects falls 32 days before they happen

• It’s no better in 16 years of long-term care study in SD

• Public Long Term Care Insurance Programs

• Social Security COLA Estimated at 2.7% for 2024 as Inflation Cools

• New long-term care solution for couples eliminates the guesswork of who will need care: Nationwide CareMatters Together is the first cash-indemnity, linked benefit solution designed for two lives

• Researchers identify home health fraud patterns across U.S. 

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

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

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LTC BULLET: THE MEDICAID SPEND DOWN BULLETS

LTC Comment: Does it matter whether Medicaid spend down actually occurs? We’ve explored and answered that question and covered related issues in 25 years of LTC Bullets. Find them all archived chronologically and by subject here.
 

LTC BULLET: THE MEDICAID SPEND DOWN BULLETS

LTC Comment: The fallacy that eligibility for Medicaid LTC benefits requires catastrophic spend down of life savings is endemic in the academic and popular literature on long-term care financing. Most of the Center for Long-Term Care Reform's 1,358 LTC Bullets published since 1998 bear on identifying and correcting that error in one way or another. Following is a small sample of Bullets that debunk and/or explain the consequences of assuming falsely that Medicaid forces LTC spend down. Bottom line, if Medicaid really did require asset spend down, the public would not be so blasé about LTC risk and cost; more people would plan ahead for LTC by saving, investing or insuring; much more private revenue at market rates would flow through to LTC providers who could then provide better care access and quality; fewer people would need public welfare as a last resort LTC payer; and families would feel the burden of caregiving less with far more elders prepared to receive paid home care. For our long series of LTC Bullets correcting errors about LTC financing made by financially well-endowed think tanks, advocacy organizations, government agencies and the media that broadcast their messages, see LTC Bullet: Still Standing Guard.

The Medicaid Spend Down Bullets

LTC Bullet: How to Unleash Long-Term Care Insurance and Assisted Living, June 15, 1999
LTC Comment: We highlighted the importance of Medicaid spend down in this early Bullet. “A public financing system should be implemented that guarantees every American access to quality care at the appropriate level in the private marketplace, but requires the quid pro quo that financial assistance in obtaining such care constitutes a dollar-for-dollar spend down of one’s estate assets payable after death. Only with this kind of system can an incentive be created that is strong enough to persuade the financially able to take responsibility for themselves so that publicly financed programs can be saved to serve those who cannot provide for themselves.”

LTC Bullet: HCFA Data Easily Misconstrued, February 23, 2000
LTC Comment: This LTC Bullet disproved the common notion “that out-of-pocket nursing home expenditures are destroying the life savings of huge numbers of older Americans.” It became the model for our 2004 to 2022 series titled “So What if the Government Pays for Most Long-Term Care?” Find those 19 annual updates of newly reported CMS data here by searching for “So What?”

LTC Bullet: "Nursing Home Care Virtually Free For Life," May 7, 2002
LTC Comment: While researchers claimed LTC costs wiped out life savings across the U.S, this Bullet showed how easy that tragic spend down outcome was to avoid. “What follows is a transcription of excerpts from a professionally produced and mass-distributed videotape. The tape is an advertisement for a man and his company who promise ‘nursing home care virtually free for life.’ This financial miracle worker proudly proclaims that he is not an attorney, a financial planner, nor, perish the thought, an insurance agent.”

LTC Bullet: New LTC Expenditure Data Provide Clues to Low LTCI Sales and LTC Facilities' Financial Woes, January 14, 2003
LTC Comment: This is another precursor of what became the “So What?” series described above. It explains how the lack of real Medicaid LTC spend down accounts for dysfunctions in the LTC service delivery and financing system. “Heads up! We're about to explain why long-term care insurance sales have been disappointing and why the nursing home and assisted living industries are in such a woeful financial condition. The explanation is complicated, but hey, if it were simple, everyone else would have figured it out already.”

LTC Bullet: GAO on TOA Underwhelms, October 5, 2005
LTC Comment: We observed that the Government Accountability Office's "letter report" titled "Medicaid: Transfers of Assets by Elderly Individuals to Obtain Long-Term Care Coverage" “disappoints in many ways. It asked the wrong questions. It used the wrong methods. It searched the wrong data. And, consequently, it provides little new information of value.” For example, its “trite observation that people ‘can’ quickly spend down for nursing home care begs the question ‘Do they?’ Answer: there is no evidence of widespread nursing home spend down. All but 10 to b15 percent of total nursing home costs are accounted for by direct or indirect government financing and personal income, not assets.”

LTC Bullet: Who Still Gets Medicaid LTC Without Spending Down?, April 20, 2006
LTC Comment: Even after the Deficit Reduction Act, the vast majority of seniors who need long-term care can get it from Medicaid without spending down their own assets for care. The DRA limited home equity for the first time and extended the lookback period for asset transfers to five years. But the home equity limit it imposed ($500,000 to $750,000) excludes almost no one; the five year lookback is too short to make a difference given the slow onset of Alzheimer’s Disease; and most people qualify for Medicaid LTC benefits without spending down wealth anyway based on the program’s generous and elastic financial eligibility rules. 

LTC Bullet: Spousal Refusal Robs Taxpayers and the Poor, December 14, 2010
LTC Comment: Medicaid financial eligibility rules are so generous that most people qualify without using Medicaid planning techniques to avoid spending down their savings. But some married couples with even higher income and assets dodge even those lenient rules to shelter much more wealth. This Bullet describes the “squalid practice” of “spousal refusal” used mostly in New York and Florida.

LTC Bullet: Nursing Home Spend Down Misunderstood and Late-Breaking LTCI Industry News, July 20, 2012
LTC Comment: A recent Employee Benefit Research Institute (EBRI) study that claims nursing home stays are wiping out Americans’ savings is based on a fallacy and mistaken. Author Sudipto Banerjee assumes without evidence that people must and do spend down their life savings for long-term care before they become eligible for Medicaid LTC benefits. We explain that (1) Medicaid does not require such spend down, (2) there is no evidence in the source cited that it occurs, and (3) how people can and do qualify for Medicaid LTC benefits without spending down their wealth for care.

LTC Bullet: Medicaid Spend Down that Isn’t and Why it Matters, July 19, 2013
LTC Comment: Claiming “transitions” to Medicaid are evidence of catastrophic LTC asset “spend down” misrepresents the truth and should be publicly recanted. This Bullet explains who, what, when, where and why. It reviews two articles titled “Medicaid Spend Down: New Estimates and Implications for Long-Term Services and Supports Financing Reform” and “Medicaid Spend Down: Implications for Long-Term Services and Supports and Aging Policy,” and concludes “What these papers call ‘spend down’ is nothing more than ‘transition’ from non-Medicaid status to Medicaid eligibility. Neither the articles nor the research they report contain any measurement whatever of money actually spent for health care, long-term care or anything else.”

LTC Bullet: Is it Spend Down or Medicaid Planning?, July 14, 2017
LTC Comment: A lot of what passes for Medicaid “spend down” in the scholarly literature is really Medicaid planning. We explain, give examples, and critically review an often-cited article that argues the opposite by economist Norma B. Coe titled “Financing Nursing Home Care: New Evidence from Spend Down Behavior,” Tilburg University, 2007.  

LTC Bullet: Retirement Confidence and Asset Spend Down, April 27, 2018
LTC Comment: We review “Asset Decumulation or Asset Preservation? What Guides Retirement Spending?,” by Sudipto Banerjee, in which he challenges the assumption “that retirees will spend down their accumulated assets to fund their retirement needs” and concludes there are several complicated reasons why people decumulate assets slowly in retirement or not at all. We offer a simpler explanation: “[C]atastrophic spend down for long-term care is a myth because Medicaid pays for most expensive LTC, exempts most assets, is easy to get after care is needed without spending down assets significantly and only requires income as the patient’s contribution to the cost of care. Consequently, after decades living in retirement, most people at most levels of wealth, spend down very little.”

LTC Bullet: LTC Bankruptcy, March 4, 2022
LTC Comment: Clare Ansberry describes a heartrending case of long-term care spending unto impoverishment in “Caring for Older Relatives Is So Expensive That Even AARP’s Expert Filed for Bankruptcy” (Wall Street Journal, 2/20/22). We explain that tragic stories like that are very uncommon, because catastrophic spend down to qualify for Medicaid LTC is unnecessary. It is common, although unwise, to extrapolate from such anecdotes to the conclusion that a new government entitlement for LTC is needed.

LTC Bullet: Biased LTC Scholarship Misinforms Policymakers, September 2, 2022
LTC Comment: Many “progressive” analysts equivocate on terms like “impoverishment,” “spend down,” “Medicaid planning,” and “out of pocket.” They do not interview the right people to learn how individuals qualify for Medicaid without spending down personal wealth and they rely on widely accepted data sources that are actually highly dubious in this regard (HRS and AHEAD). Such analysts ignore or misrepresent important facts and emphasize only information that confirms their biases. We analyze a case in point: Richard W. Johnson and Melissa M. Favreault, “Economic Hardship and Medicaid Enrollment in Later Life: Assessing the Impact of Disability, Health, and Marital Status Shocks.”

LTC Bullet: LTC Strawman, September 30, 2022
LTC Comment: Critics claim self-impoverishment by high net worth people to qualify for Medicaid is uncommon. But disproving a claim no one has ever made contributes nothing to a crucial conversation about who should qualify for Medicaid LTC benefits, when and under what circumstances. The right question the same critics ignore is “Do most people need to spend down their life’s savings for long-term care before they can get help from Medicaid?” The answer to that question is “No.”

LTC Bullet: What if Most People Don’t Spend Down for Medicaid LTC?, June 2, 2023
LTC Comment: This Bullet (1) shows how people through and including the fourth wealth quintile qualify for Medicaid LTC benefits without spending down for care, (2) debunks the idea that people don’t know how to qualify for Medicaid without spending down or don’t take advantage of Medicaid due to a sense of responsibility or shame, (3) argues that if we take into account wealth people already have that goes unused for LTC, the need to save, invest or insure for this risk would be vastly reduced, and (4) concludes that we do not need a huge new payroll funded compulsory social insurance program for LTC.

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

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

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

LTC Clippings: The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know. Each message contains only the critical facts about new publications: a title, representative quote, a link to the original, and our analysis in a sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or smoses@centerltc.com. Read testimonials by satisfied subscribers here. To subscribe online, please click here.

LTC E-Alerts: Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website. Center members also receive our weekly LTC Bullet op-ed. To join the Center and receive all these benefits and more, contact Steve at 425-891-3640 or smoses@centerltc.com. 

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

• New York Regrets How It Regulated Long-Term Care Insurance Rates

• My Child Helps Pay My Bills. Do I Need to Tell Medicaid?

• The Nation's Fiscal Health: Action Needed to Address Projected Unsustainable Debt Levels

• Setting the Record Straight on Medicaid Redeterminations

• ‘New retirement reality’ undermines planning, survey finds

• WA Cares investment meeting talks money, mentions renewed website

• What Should We Do About Medicare?

• The Future of Assisted Living: AI in Elderly Care

• ‘Impetus’ ignored: LeadingAge CEO calls on Congress, White House to act on broader threats to long-term care

• Social Security and Medicare Are Ticking Time Bombs

• Americans refocusing on future amid decline in financial readiness for retirement: analysis

• Ensuring Resident Coverage During the Medicaid Unwinding

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

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

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LTC BULLET: WHAT IF MOST PEOPLE DON’T SPEND DOWN FOR MEDICAID LTC?

LTC Comment: Analysts make long-term care financing look very bleak—and therefore in need of a big, new government program—by ignoring Medicaid’s huge, damaging role. Why, how, and what to do about it, after the ***news.***

*** 2023 SPOUSAL IMPOVERISHMENT NUMBERS are out. Center members can find them for this year and every other year back to 1991 in our “members only zone.” You’ll need your user name and password to access The Zone. Contact damon@centerltc.com for a reminder or to join and get a UN/PW. These new numbers reflect a 8.2% cost of living increase. Here are some highlights: The Medicaid home equity exemption is now at least $688,000 and as high as $1,033,000 in some states. The Community Spouse Resource Allowance that started at $60,000 in 1988 is now $148,620. The Maximum Monthly Maintenance Needs Allowance that began at $1,500 when the Medicare Catastrophic Coverage Act of 1988 ended Medicaid spousal impoverishment is now $3,715.50. For insights on what these numbers mean for LTC financing policy and Medicaid spend down risk, read the rest of today’s LTC Bullet. ***
 

LTC BULLET: WHAT IF MOST PEOPLE DON’T SPEND DOWN FOR MEDICAID LTC?

LTC Comment: The National Council on Aging (NCOA) and The LeadingAge LTSS Center @UMass Boston published an Issue Brief titled “The Continued Toll of Financial Insecurity in Retirement” in February. Its authors include Rocki Basel, PhD and Susan Silberman, PhD of NCOA; and Jane Tavares, PhD, Marc Cohen, PhD, and Molly Wylie, MS of the LeadingAge LTSS Center.

One of the authors, Marc Cohen, is a longtime friend and fellow LTC analyst. NPR interviewed him about the new report in a piece titled “The cost of long-term care in the U.S. is outpacing the income and savings of older adults.” Marc summarized the Issue Brief’s dismal findings and concluded “that middle-income Americans are particularly vulnerable due to a lack of affordable care options. And for those earning too much to qualify for Medicaid — but not enough to cover the growing cost of care — there are few options. … There's a private insurance market that provides private insurance for long-term care, but those policies are pretty much out of the financial reach of middle-income Americans. To fill this gap in care, … some states have considered an employer-provided social insurance program for long-term care that’s modeled off Social Security.”

Let’s quickly review the Issue Brief’s discouraging results and then ask these questions: Are people’s incomes and assets really preventing their eligibility for Medicaid LTC benefits? Is private LTC insurance hopelessly overpriced for the middle class and so nevermore a part of the solution? To make up the LTC financing shortfall, do we really have to have another state or federal social insurance program? What if there were a better way to finance LTC for rich and poor alike, revitalize private LTC insurance, and do it all without a big, new, compulsory, payroll-funded, government Ponzi scheme? Wouldn’t that be great? Read on. We quote the Issue Brief and then comment.

Issue Brief: “Over a 20-year period, more than 25% of adults age 50 and over will experience a shock resulting in a 75% or more drop in net wealth. Among adults age 70 and older, more than two-thirds will experience at least one negative shock with financial consequences over a nine-year period.” (Emphasis in the original.)

LTC Comment: Ouch! At least there is a social safety net in place and some private charity remaining to help those most in need. But it gets worse …

Issue Brief: “One of the most significant costs burdening older adults is long-term care services and supports (LTSS), ranging from non-medical assistance with activities of daily living to medical care in a skilled nursing facility. While many Americans underestimate the need for LTSS, over half of adults 65 and older will need LTSS for less than two years, and about one in seven will require care for more than five years. Financing even one year of care can prove unwieldy for most Americans. In 2018, the average yearly cost of a private room in a nursing home was $105,485, and that of a home health care aide was $37,440.”

LTC Comment: More recent data are somewhat less daunting: “While individuals on average will need 0.8 years of paid LTSS, 55% of older adults will not use any paid LTSS. About 24% of older adults (or about half of paid LTSS users) will receive less than a year of paid LTSS (measured in service days), and about 4% of older adults will use five years or more.” On the other hand, more recent (2021) data show higher costs: $108,405 for a year in a private nursing home room and $61,776 for a home health aide ($27 per hour, 44 hours per week, 52 weeks per year). Definitely, not a pretty picture.

Issue Brief: “As Medicare does not absorb the shock of LTSS costs, this financial risk is often faced directly by older adults and their families or by social safety net programs such as Medicaid.”

LTC Comment: OK, but what is the balance between the risk “faced directly by older adults and their families or by social safety net programs such as Medicaid.” We’re expected to presume that wide swaths of aging Americans are forced into poverty by high LTC costs resulting in their becoming impoverished and on Medicaid eventually. Is there any evidence that occurs? Not in this Issue Brief. In fact, the Health and Retirement Study (HRS) on which the Issue Brief is based provides zero evidence of asset spend down for LTC incidental to Medicaid LTC eligibility. The HRS documents only “transitions” to Medicaid, which could occur due to Medicaid planning, i.e., artificial self-impoverishment, conducted years before LTC is needed and Medicaid eligibility occurs. So, what does the Issue Brief tell us about aging Americans’ ability to purchase LTC with their own resources?

Issue Brief: “Though the value of financial assets marginally increased or stayed the same for 80% of older adults from 2016 to 2018, the bottom 20%, approximately 11 million households, have no assets. This group has a 2018 median income of $16,989 and would be unable to rely on personal finances to pay for LTSS, especially with rising costs of care. The next three quintiles (21– 40%, 41–60%, and 61–80%) of older adults saw modest increases in their financial assets between 2016 and 2018, but these individuals would still be unable to afford more than two years of nursing home care in a semi-private room or four years in an assisted living community if their median income and household value of financial assets were added together. Despite adults’ preference to age in place, 60% of adults would be unable to afford two years of in-home long-term services and supports. Therefore, although the need for services both in the short- and long-term remains a reality for many older Americans, most do not have the financial resources to afford either.”

LTC Comment: So, the bottom quintile has no assets and very low income. That’s practically the definition of someone who qualifies for Medicaid LTC. But what about the next three higher quintiles? According to the Issue Brief, these folks  can afford two years of nursing home care, four years in an assisted living facility, and 40% of them could manage two years of in-home LTC. Sounds like they’re in pretty could shape since the Issue Brief says “over half of adults 65 and older will need LTSS for less than two years.”

But, here’s the kicker. If these middle-income people are spending their money on LTC, where is the evidence? Nursing home private-pay revenue has plummeted to about 7 percent so that’s not where it’s going. Maybe these folks are spending their substantial savings on home care. But no, Medicare (37.2%) and Medicaid (34.2%) paid 71.4% of the $125.2 billion Americans spent on home health care in 2021. Private health insurance (not LTC insurance) paid another 12.7%. Only 10.3% of home health care costs were paid out of pocket. So that’s not where all this wealth is being spent. Maybe people are spending down for assisted living. Some surely do but “Almost 1 in 5 [ALF] residents relies on Medicaid to pay for daily services (18%),” “48% of ALFs are Medicaid certified” and only “a small minority of state Medicaid programs do not cover services in assisted living.” (Find these quotes under the source’s “Finance” tab.) Bottom line: there is no evidence that private-pay LTC spend down is consuming significant amounts of middle class savings. What’s happening instead?

Let’s consider those questions we raised earlier.

Are people’s incomes and assets really preventing their eligibility for Medicaid LTC benefits?

Click through to the Issue Brief and scroll down to “FIGURE 1. Older Adult Households Divided into Financial Quintiles based on Net Value of Total Wealth.” Look at the income, savings and home equity amounts for the fourth wealth quintile, representing 61-80% of older adults. Their total household income is $52,229. Would that disqualify them for Medicaid LTC benefits? Would that force them to spend down into impoverishment before getting help? No. The rule of thumb is that income below the cost of a nursing home is not disqualifying. That’s because private health and LTC expenditures are deducted from income before comparing it to Medicaid’s allowable limit. A well spouse, if there is one, would keep a spousal impoverishment protection “maximum monthly maintenance needs allowance” of $2,465 or $29,580 per year. Only the remaining income balance in the recipient’s name would go to offset Medicaid’s cost for his/her care. Thus, while some private income goes for care, this out-of-pocket cost, mostly Social Security income, merely reduces Medicaid’s share of the dismally low reimbursement, often less than the cost of care, that the LTC provider receives. Although the recipient is paying out of pocket, he/she is not commanding the better access and higher quality care associated with paying privately. He/she is trapped in the lower Medicaid level of America’s two-tier LTC system.

Well, what about assets? The “net value of primary residence,” i.e. home equity, of folks in the fourth wealth quintile is $220,000. Would that interfere with Medicaid LTC eligibility compelling asset spend down? Well, no. Medicaid exempts a minimum of $688,000 of home equity and up to $1,033,000 in some states. Even the richest people, in the 91-100% decile of the Issue Brief’s Figure 1, would qualify for Medicaid based on their home equity of $400,000.

But, as everyone knows, you can’t have more than $2,000 in “countable” assets and still qualify for Medicaid LTC. So, what is the fourth quintile’s “Household Value of Financial Assets (non-housing, median)” and would that disqualify them for Medicaid? That total is $130,000. Way more than $2,000. But, we’re just getting started. First, if there is a spouse, compute the couple’s jointly owned assets, and set aside half, not to exceed $148, 620 but never less than $29,724, for the “community spouse.” Back out the non-countable assets people own such as “pre-paid burial and funeral expenses, an automobile, term life insurance, life insurance policies with a combined cash value limited to $1,500, household furnishings / appliances, and personal items, such as clothing and engagement / wedding rings.” Very few people in the fourth quintile of wealth will have much left, but whatever remains can easily be converted to non-countable status by investing more money in the home or purchasing any of the items just listed.

Do you think that people confronting high LTC costs ignore those generous Medicaid financial eligibility limits and pay out-of-pocket? Do they plunge themselves into real impoverishment from a sense of personal responsibility or shame at depending on public assistance? Some do. More used to do. But nowadays information on how to qualify for Medicaid without spending down for care is universally available in magazine articles, self-help books, and on the internet. Google “Medicaid planning in [your state],” if you have any doubt. Even state Medicaid eligibility workers routinely explain to middle class applicants how to speed up or entirely eliminate their “spend down” process by purchasing exempt assets. Workers report that people now think of Medicaid (welfare) as though it were an entitlement like Medicare. They ask themselves, as Jane Bryant Quinn did in her 12/18/89 Newsweek column, “Do Only the Suckers Pay?” So, no, ignoring easy access to Medicaid LTC benefits and paying out of pocket, is not the rule. It is the exception.

Is private LTC insurance hopelessly overpriced for the middle class and so nevermore a part of the solution?

It is so disappointing and disheartening to see former supporter of private LTC insurance, not to mention potential buyers and current owners, abandoning the product in favor of more government dependency. We need instead to reconceptualize LTC risk based on new data, some of which is recounted in the Issue Brief, but much more of which is at our fingertips in the recent research on LTC risk and cost. For example, if most people can afford a couple years of LTC as the Issue Brief acknowledges, but they have no reason to spend their own money for LTC because even the folks in the fourth wealth quintile are immediately eligible for Medicaid without spending down, why not change the rules and realign the incentives. Let’s say we eliminate all the ways people qualify for Medicaid while preserving wealth for people under 65 today. Then we tell younger folks they only need to insure for their average LTC risk, not for the whole potential catastrophic risk. That would collapse the premiums they would need to pay to a level affordable even by the middle class at a time in their lives when they’re also coping with house and car payments, retirement and education savings. They’d buy this coverage because they could no longer ignore LTC risk, wait to see if they ever need expensive care and, if they do, go on Medicaid and still preserve most of their wealth. What about that remaining catastrophic risk? Medicaid can handle it if most people are protected for those first couple years of LTC need and because the eligibility loopholes that allow wealth preservation are gone, the assets that are no longer sheltered or divested will go to fund LTC in the private market for anyone who failed to insure.

To make up the LTC financing shortfall, do we really have to have another state or federal social insurance program?

No. People respond to incentives. Stop giving them an easy way to avoid LTC risk and cost while preserving their wealth and they’ll look creatively for ways to cover that risk. They will find many possibilities such as tapping home equity, life insurance, retirement savings and many other sources of wealth that currently dodge LTC responsibility. All that’s needed is a real incentive in public policy for people to take personal responsibility and prepare, putting to use some of the wealth that Medicaid diverts from private LTC spending now.

What if there were a better way to finance LTC for rich and poor alike, revitalize private LTC insurance, and do it all without a big, new, compulsory, payroll-funded, government Ponzi scheme? Wouldn’t that be great?

Yes, and the proposal to achieve that is on its way. Stay tuned!

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

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

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

LTC Clippings: The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know. Each message contains only the critical facts about new publications: a title, representative quote, a link to the original, and our analysis in a sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or smoses@centerltc.com. Read testimonials by satisfied subscribers here. To subscribe online, please click here.

LTC E-Alerts: Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website. Center members also receive our weekly LTC Bullet op-ed. To join the Center and receive all these benefits and more, contact Steve at 425-891-3640 or smoses@centerltc.com. 

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

• Gary D. Alexander and Elizabeth Stelle: Medicaid eligibility matters

• America aged rapidly in the last decade as baby boomers grew older and births dropped

• U.S. Nursing Homes Fail to Report Many Serious Falls, Bedsores: Study

• Washington’s long-term care program still flawed as new tax looms

• Wearable AI patch monitors multiple health factors for seniors

• 3 nursing homes closing quickly as Ohio leaders plead for Medicaid adjustment

• Is The Next Wave Of Life Expectancy Gains On The Horizon?

• People with disabilities need more access to HCBS, researchers say

• Senior-Living Debt Defaults Far Outpace the Rest of Government Debt Market

• The History of Medicare Advantage: From Inception to Growing Popularity

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

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

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

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

LTC Clippings: The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know. Each message contains only the critical facts about new publications: a title, representative quote, a link to the original, and our analysis in a sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or smoses@centerltc.com. Read testimonials by satisfied subscribers here. To subscribe online, please click here.

LTC E-Alerts: Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website. Center members also receive our weekly LTC Bullet op-ed. To join the Center and receive all these benefits and more, contact Steve at 425-891-3640 or smoses@centerltc.com. 

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

• The Home Care Workforce Has Not Kept Pace With Growth In Home And Community-Based Services

• Don't let caregiving sabotage retirement planning

• Senators probing largest Medicare Advantage plans over how algorithms factor in care denials

• Complete Debacle’: US House Hearing on Nursing Home Covid Deaths Blames Political Acrimony, Policies, Staffing

• Western Diet Identified as Risk Factor For Alzheimer's Disease, Scientists Warn

• Medicaid and leadership challenges, as state takes over nursing home

• What to know about Washington Cares payroll tax as premiums are set to resume

• Medicare, Medicaid Spending Similar Among Dual Eligible Beneficiaries

• Sorry kids if I need long-term care, I’m spending your inheritance

• 40 percent of healthcare working hours can be augmented by AI, study finds

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

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

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LTC BULLET: WHO NEEDS LTC? HOW MUCH? SO WHAT?

LTC Comment: Do 70% need LTC or half? For one year or three? Who pays? What’s it going to cost me? Medicaid? Medicare? Based on sum-of-expenditures or present discounted value? The key LTC numbers are shifting again, after the ***news.***

*** GET YOUR free article from the CLTC Digest. CLTC, the people behind “Certification for Long-Term Care” publish this thought-provoking quarterly journal. They’re offering a free download of an article in the latest issue: “Your Clients are Running Out of Money. (You just don’t know it” by Leigh Maynard. Get it here. Just scroll down and fill out the simple form. Heads up! I’ll be in the next issue of CLTC Digest with a piece on “The Elephant, The Blind Men, and Long-Term Care.”  ***

*** LTC CLIPPINGS keep you apprised of important industry news so you know what’s happening before clients or prospects blindside you. Steve Moses reads everything online or in print about long-term care, sends you one or two items each day like the ones that follow, and welcomes your questions or comments. If you haven’t subscribed to LTC Clippings yet or if you aren’t a member of the Center, fix that now here. Thanks for your consideration.

5/17/2023, “Senators probing largest Medicare Advantage plans over how algorithms factor in care denials,” by Bob Herman  and Casey Ross, STAT
Quote: “Senators warned the country’s largest Medicare Advantage insurers at a hearing on Wednesday that they must abide by Medicare’s coverage rules and cannot rely on algorithms to deny care that patients need. … The hearing comes on the heels of a STAT investigation that found Medicare Advantage insurers are routinely relying on proprietary algorithms as a basis for denying care. Instead of using the technology as a guide for a Medicare patient’s care in a nursing home or rehab facility, many Medicare Advantage plans are using it as a hard-and-fast rule to avoid paying for care and to discharge patients home as soon as possible — even if patients are not ready.”
LTC Comment: Are AI robots replacing human claims adjusters? How will patients fare?

5/17/2023, “Medicaid and leadership challenges, as state takes over nursing home,” by Jessica R. Towhey, McKnight’s LTC News
Quote: “A Rhode Island nursing home with more than 30 citations for deficiencies and whose administrator’s license was suspended last month has been put into state receivership. … ‘Rhode Island Medicaid has been chronically underfunded for more than a decade,’ said John Gage, president and CEO of the Rhode Island Health Care Association. The state’s Medicaid rates are based on 2011 actual costs inflated by approximately 1% per year since 2012, Gage said. The estimated shortfall is $50 million to $60 million per year, and the pre-pandemic gap between reimbursement and the cost of care was approximately $30 per patient per day. Both Gage and his counterpart at LeadingAge Rhode Island, which represents nonprofit facilities, said the gap is likely much higher now.”
LTC Comment: If only Rhode Island officials had listened when we warned them this was coming and how to avoid it in Doing LTC RIght (2010) and The Age Wave, the Ocean State, and Long-Term Care (2009).

5/8/2023, “TCARE Welcomes Long-Term Care Executive Vince Bodnar as Chief Actuary,” by Julia Pitlyk, Technology Today
Quote: “TCARE, the industry-leading, evidence-based caregiver support platform designed to prevent family caregiver burnout, welcomes Vince Bodnar as its Chief Actuary. With nearly 40 years of experience, Bodnar is recognized as one of the country’s leading long-term care financing experts.”
LTC Comment: Vince Bodnar is one of the most creative and impactful thinkers in the LTC insurance space. Maybe that’s why he’s in such demand, changing jobs so often. Congratulations, Vince, do keep us posted on where to send your LTC Clippings and LTC Bullets.

5/8/2023, “Provider payments could be at ‘catastrophic’ risk if federal debt limit breached,” by Jessica R. Towhey, McKnight’s LTC News
Quote: “Without a legislative solution from warring political parties in Congress and the White House, the US is in danger of breaching its debt limit, which would have serious repercussions for the long-term care sector, advocates and experts warned. … If the US defaults on its debt, which it has never done, those payments would halt, at least temporarily. Even a short-term cessation could be ‘catastrophic,’ said Katie Smith Sloan, president and CEO of LeadingAge, in an email to McKnight’s Long-Term Care News on Friday.”
LTC Comment: Live by government funding and regulation, die by them. Politicians say we have to raise the debt ceiling because the U.S. always pays its bills? That’s a phony argument. If the U.S. paid its bills, it wouldn’t be $32 trillion in debt and in need of a debt ceiling increase. No, they want to raise the debt limit so they can go on borrowing, spending and not paying the bills. ***

LTC BULLET: WHO NEEDS LTC? HOW MUCH? SO WHAT?

LTC Comment: Those are important questions. But the answers are a moving target. The experts used to say that 70 percent of the elderly will require some LTC and 20 percent will need five years or more. We critiqued the study that produced those estimates in LTC Bullet: Microsimulate This!, March 28, 2006.  We were not impressed. It was full of misleading, ideologically biased statements. Garbage in, garbage out, we concluded.

Then in 2015, new and better data became available. Roughly half—not 70 percent—of elderly Americans will need long-term care. One in seven—not one in five—will require five years or more. We critiqued the study (Favreault and Dey, 2016) that produced these new estimates in LTC Bullet: New Data on LTC Incidence, Duration, Cost and Financing Sources, July 24, 2015. We concluded the new data was a “vast improvement over what we had before,” but this report was also fraught with political and ideological bias.

If those two opening paragraphs tweak your interest, by all means click through, read the source documents and our analysis in those LTC Bullets from 17 and eight years ago, respectively. But right now, let’s consider the latest in this series of LTC risk and cost estimates. The U.S. Department of Health and Human Services’ Assistant Secretary for Planning and Evaluation (ASPE) published “Long-Term Services and Supports for Older Americans: Risks and Financing, 2022,” by Richard W. Johnson and Judith Dey on September 27, 2022.

Based on this new study’s Abstract, the key numbers have moved around again, but not so drastically this time. Now “over half (56%)” will need some LTC and about “one in five” (22%) will need more than five years. Is the Urban Institute’s Dynasim microsimulation model finally homing in on less variable, more stable estimates? Let’s take a closer look at how the newest data varies from what preceded it in 2015. We’ll proceed from here with quotes from the new paper followed by our “LTC Comments.”

Johnson/Dey: “The results presented here differ from those reported in Favreault and Dey (2016) … our updated model projects longer average durations of LTSS needs (3.1 years versus 2.0 years) … The updated model also projects lower average LTSS expenditures ($120,900 versus $138,100), especially for family out-of-pocket payments. These differences result from some definitional changes between the two analyses and numerous technical changes and updates. … An important substantive change between this brief and Favreault and Dey (2016) is that we removed from our expected cost tables the incidental LTSS that Medicare covers. … Medicare generally does not pay for long-term care when it is the only service a person needs.” (p. 10)

LTC Comment: Those are very big changes! LTC duration is up by more than 50 percent from two years to 3.1 years. Average LTC expenditures plummeted 12.5 percent from $138,100 to $120,900. What’s more, these authors are no longer counting Medicare as a contributor to LTC costs. That makes sense from the standpoint that Title 20 doesn’t pay for LTC, but it distorts financial analysis substantially by ignoring the role Medicare profits play in propping up LTC providers’ ability to survive losses from Medicaid’s meager reimbursement rates.

The paper goes on for two more paragraphs explaining the tweaks to their model that caused the big changes. Maybe we better not assume these important estimates of LTC risk and cost are settling into a more consistent pattern. Be that as it may, let’s consider what the new estimates would mean if they are correct and do remain stable.

(Note that we prefer the traditional designation “long-term care” (LTC) instead of the awkward neologism “long-term services and supports” (LTSS) used in the Johnson/Dey report. To their credit, they do at least acknowledge in an end note that “LTSS is also sometimes called long-term care.” p. 11)

Johnson/Dey: “Although most people with LTSS needs will spend relatively little on their care, 14% will spend at least $100,000 out of pocket for future LTSS.” (p. 1)

LTC Comment: That sounds like a small risk of a substantial loss that could be replaced by an affordable premium, which is the role of private insurance in our economy. But, the report downplays that potential.

Johnson/Dey: “A private market for LTSS insurance exists, but less than 8% of Americans have purchased coverage (Freundlich 2014), partly because of high and rising premiums and the exit of insurers from the market (Scism 2015). Sales figures from recent years suggest the market has stagnated or even shrunk (Cohen 2016; Schmitz and Giese 2019; Ujvari 2018).” (p. 2)

LTC Comment: Why so little demand for private insurance in the face of such a clearly insurable risk? The obvious answer is that someone or something else pays for LTC obviating the public’s need to worry about it and deflating demand for the product. But Johnson/Dey also downplay that possibility.

Johnson/Dey: “Although Medicaid provides LTSS to those with chronic disabling conditions (Komisar 2013; Tompson et al. 2013), it is available only for individuals who meet income and other eligibility requirements (U.S. Department of Health and Human Services 2015).” (p. 1)

LTC Comment: So, Medicaid pays for LTC but only for people who meet its eligibility requirements? That makes Medicaid sound somewhat insignificant. What are Medicaid’s financial eligibility requirements? How hard are they to satisfy? Is it possible for people with substantial wealth to qualify for Medicaid LTC benefits without spending down their wealth to qualify? The paper blanks out on these crucial topics. But it does elsewhere acknowledge Medicaid’s very large LTC financing role.

Johnson/Dey: “Medicaid is the largest payer of LTSS, averaging $51,800 after age 65 and accounting for 43% of the total [$120,900].” (p. 6)

“Most Americans who receive paid LTSS pay some share out of pocket. Those with longer spells may pay out of pocket until they qualify for Medicaid. Reliance on Medicaid for those who cannot afford the full cost of LTSS may increase federal and state spending for LTSS.” (p. 2)

LTC Comment: So, Medicaid is a huge LTC payor but it doesn’t desensitize the public to LTC risk or impede demand for private LTC insurance because it has financial eligibility limits to which people must spend down over “longer spells” of paying privately until they finally become eligible. That’s the hidden narrative the report fails to make explicit. Where is the proof for their assumption that people must pay out of pocket before Medicaid starts? Scholars of this stature should know and acknowledge that there is no evidence in the HRS or AHEAD data bases on which they rely of Medicaid “spend down.” Those sources only show that “transitions” to Medicaid occur for whatever reason. On that subject, we offer these observations: 

LTC Bullet: Medicaid Spend Down that Isn’t and Why it Matters, July 19, 2013
LTC Bullet: Behind AHEAD, September 2, 2016
LTC Bullet: Is it Spend Down or Medicaid Planning?, July 14, 2017

The truth is that Medicaid exempts virtually unlimited resources, including home equity, personal belongings, a car and many others. People receive Medicaid benefits despite having large incomes if their health and LTC expenses are high enough, as they usually are for people in need of LTC. This report, like its predecessors, simply presumes without evidence that people “spend down” before qualifying for Medicaid. To its credit, this report does not make the explicit, preposterous, unsubstantiated claims of its predecessors that wide swaths of the American public spend down for LTC into total impoverishment. Still it, like they, ignore how Medicaid financial eligibility actually works as explained in ubiquitous legal tomes, magazine articles and internet ads for Medicaid estate planning. Nevertheless, they do give some lip service to the fact that Medicaid covers more than the poor.

Johnson/Dey: “The DYNASIM4 projections suggest that although Medicaid is used by older adults throughout the age-65 income distribution, it primarily serves those in the bottom two income quintiles (Table 8).” (p. 9)

LTC Comment: Medicaid is mostly for the poor? That should be no surprise. It is a welfare program, after all. What’s really important is their admission that “Medicaid is used by older adults throughout the age-65 income distribution.” These authors recognize that fact, but make no effort to explain how or why it can happen if people must spend down wealth to qualify as they believe, assume and imply without giving a shred of evidence. But let’s look again at the basic facts.

Johnson/Dey: “About 15% of older adults can expect their total LTSS expenses from age 65 onward to amount to more than $250,000, whereas about 8% will have positive but low costs (less than $10,000). A smaller percentage (about 6%) will spend $250,000 or more out of pocket on LTSS. Fourteen percent will spend at least $100,000 out of pocket on LTSS after turning 65.” (p. 8)

LTC Comment: Sounds pretty daunting, doesn’t it? But their Table 7 breaks it down. Turns out that of that “15 percent,” actually 14.7 percent, who spend more than $250,000 only 6.4 percent, shown as “6 percent” in the paper, are paying out of pocket. The rest comes from Medicaid, “other public,” or private insurance. In other words, long-term care financing is very complicated, constitutes a heavy burden both on taxpayers and individuals, and is going to get much worse given the current demographics of aging, before it gets better. But even with all the public and private money poured into the current system, it still fails friends and families who are left with the need to provide care themselves without pay.

Johnson/Dey: “Many older adults with care needs receive substantial amounts of unpaid care from family members and friends. Our projections indicate that the value of unpaid family care received by adults born between 2021 and 2025 with significant disabilities averages $91,900 (Table 10). Among people receiving unpaid family care, the average value of care reaches $204,000, more than the value of all paid LTSS. Women receive more unpaid care than men.” (p. 9)

LTC Comment: Bottom line: America’s long-term care service delivery and financing system is a huge, expensive, unproductive, debilitating failure. It traps people on public welfare, discourages personal responsibility and early planning, subsidizes institutional care, inhibits the home care people prefer, and still leaves much of the direct caregiving duties for stressed out, untrained, unpaid family and friends to provide. The whole mess seems hopeless.

But what if different incentives prevailed? What if the rules that allow people to ignore LTC until they need it and qualify for Medicaid without spending down their wealth disappeared? What if people had to save, invest or insure for long-term care or actually face impoverishment if confronted with catastrophic LTC costs? What if we told everyone below a certain age—65, 50, 40, whatever—that the Medicaid planning techniques used in the past to qualify for LTC benefits will no longer exist for them in the future?

I submit that people would worry much more about LTC risk and cost. They would seek ways to save, invest or insure for that risk. But how could they come up with the funds to save or buy private insurance while they are in their prime earning years, but still making house and car payments, saving for their own retirement, and setting aside funds for their children’s education? I find a clue to the answer in this report that is otherwise sterile of policy ideas.

Johnson/Dey: “These estimates differ from a present discounted value (PDV) of expenditures at age 65, the amount that an individual would need to set aside at age 65 to cover future LTSS expenses. The PDV is lower than the sum-of-expenditures measure because it accounts for the investment returns that could be earned on funds set aside at age 65 until LTSS expenses begin, often after age 80. We show PDV projections in the appendix.” (p. 6)

LTC Comment: Say what? What does that even mean? The cost estimates provided in the main body of this report represent what people or programs could be expected to pay for long-term care over time in today’s dollars. But how much would they need to set aside at age 65, assuming a reasonable rate of return, to cover their expected future expenses? We find the answer to that question in the PDV tables of the report’s Appendix. For example:

To cover the $120,900 “projected sum of LTSS expenditures from age 65 through death for adults who turn 65 in 2021-2025” would require that an individual set aside only the “projected PDV of expenditures from age 65 through death for adults who turn 65 in 2021-2025” of $69,800. Still a big number but much less onerous.

Likewise, to cover the $245,400 sum of expenditures liability for people who actually experience LTC costs, would require only $141,700 in PDV set aside. Still big, but more manageable.

How do they figure that?

Johnson/Dey: “PDV estimates, which are reported in Tables A1-A9, use the Social Security trustees' ultimate real interest rate of 2.5%. Because the trustees assume long-range price growth averages 2.6%, this real discount rate is equivalent to a nominal long-run discount rate of about 5.1%.” (p. 13)

LTC Comment: In other words, much less money set aside at age 65 in an investment earning 5.1 percent per annum would cover future average or catastrophic LTC costs. Now imagine, if those funds were earmarked for LTC at even younger ages, how much easier the average or catastrophic risk would be to meet.

Of course the numbers are very different for men and women, and that needs to be considered and accounted for, but let’s stick with the averages for purposes of the argument now.

Here’s my point: what if instead of expecting people to shoulder the entire burden of potentially catastrophic LTC costs and then giving them easy access to Medicaid later if they ignored that risk as happens now, we rather created a new expectation that everyone is responsible by a specified age for the present discounted value of their average LTC risk? That would still leave the catastrophic risk for Medicaid to cover, but it would relieve the welfare program of supporting the middle class and affluent who could, should, and would save, invest or insure at least for their average LTC risk.

How could people save, invest or insure for even that smaller LTC responsibility while still keeping up with their other financial liabilities? Don’t expect any help from Johnson/Dey.

Johnson/Dey: “Conclusion Most Americans who survive to age 65 can expect to need and use LTSS. … Average long-term care costs can be out of reach for many Americans. Medicaid is an important payer of LTSS, but because it serves only those who meet strict income and asset criteria many families pay for LTSS out of pocket. Private LTSS insurance has only a modest reach, and it predominantly covers costs for those high in the income distribution. Other public expenditures, such as U.S. Department of Veterans Affairs (VA) care, only help cover small shares of the population with LTSS needs. The value of unpaid care provided by family members and friends to people with significant disabilities exceeds the value of paid care, and unpaid care is even more important when people have less severe disability. Our results highlight the need for better planning for LTSS to accommodate both average and catastrophic financial risks associated with chronic disability.” (p. 10)

LTC Comment: Shall we conclude that nothing works and the situation is hopeless? Or shall we accept the reality that “average long-term care costs can be out of reach for many Americans” and everyone needs “better planning for LTSS” and do something about it? If you lean toward taking action, then what? We have a plan, but it’s under development and we cannot share it yet. But here’s a hint. Our plan involves persuading and enabling middle-aged and younger Americans to save or set aside enough to cover the average present discounted value of their LTC liability. Maybe they’ll also insure for their catastrophic risk if the insurance industry can come up with a new product to cover and secure the smaller average catastrophic PDV. Stay tuned to LTC Bullets for details in the coming months.

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

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

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

LTC Clippings: The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know. Each message contains only the critical facts about new publications: a title, representative quote, a link to the original, and our analysis in a sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or smoses@centerltc.com. Read testimonials by satisfied subscribers here. To subscribe online, please click here.

LTC E-Alerts: Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website. Center members also receive our weekly LTC Bullet op-ed. To join the Center and receive all these benefits and more, contact Steve at 425-891-3640 or smoses@centerltc.com. 

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

• Argentum Releases New Report Outlining Policy Solutions to Increase Access to Assisted Living

• How to Use a Trust to Plan for Long-Term Care

• Social Security COLA Estimated at 3.1% for 2024

• AHCA’s CEO: Nursing Homes Must Prepare for ‘Massive’ Staffing Mandate Battle, Adapt to Managed Care ‘Mega-Trend’

• TCARE Welcomes Long-Term Care Executive Vince Bodnar as Chief Actuary

• The Nation's Fiscal Health: Road Map Needed to Address Projected Unsustainable Debt Levels

• Provider payments could be at ‘catastrophic’ risk if federal debt limit breached

• AARP poll: Majority of voters want more support for family caregivers

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

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

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

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

LTC Clippings: The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know. Each message contains only the critical facts about new publications: a title, representative quote, a link to the original, and our analysis in a sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or smoses@centerltc.com. Read testimonials by satisfied subscribers here. To subscribe online, please click here.

LTC E-Alerts: Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website. Center members also receive our weekly LTC Bullet op-ed. To join the Center and receive all these benefits and more, contact Steve at 425-891-3640 or smoses@centerltc.com. 

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

• The Hidden Costs Home Health Providers Face When Taking On More MA Patients

• Genworth Creates Discounted LTC Provider Network

• Biden Moves To Increase Pay For Medicaid Home Care Aides. Will It Work?

• ‘Big Trouble’: Medicare Advantage Rates Strain SNF Margins, Deepen Sector’s Pain

• Regular internet use may be linked to lower dementia risk in older adults, study says

• A Clever Strategy to Get Your Long-Term Care Costs Covered by Medicaid

• ChatGPT’s blind spots can compromise caregiving, authors warn

• Life Estates: Helpful or Problematic? (Part 3: Medicaid)

• The Super SNF Comes of Age: Advanced Care Programs Expand, Yield Results

• Retirement Confidence Hits Lowest Point Since 2008: EBRI

• AI chats could be more empathetic than doctors’ responses to patient questions, study finds

• Half of All Eligible Medicare Beneficiaries Are Now Enrolled in Private Medicare Advantage Plans

• How Can I Protect My IRA From Medicaid?

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

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

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LTC Bullet: AI on LTC

LTC Comment: Artificial intelligence (AI) is all the rage these days. Does it help or hurt long-term care planning? We ask; AI answers; and we respond after the ***news.***

LTC BULLET: AI ON LTC

LTC Comment: “Artificial intelligence is the simulation of human intelligence processes by machines, especially computer systems.” Click the link for details, but bottom line, among other features: AI makes it possible for us to ask questions online and get plausible narrative answers almost instantaneously. Leaving aside for now that some experts’ worry AI technology could threaten human survival, we decided to Ask AI some important questions about LTC financing policy. What follows are our questions, AI’s answers, and our comments in response.

Especially, don’t miss iAskAI’s answer to my final question at the very end: “If you were to write an ‘LTC Bullet,’ what would it say?” Here’s an excerpt from the chatbot’s answer: “The LTC Bullet is known for its in-depth analysis and comprehensive coverage of long-term care issues. It is highly regarded by policymakers, industry professionals, and academics alike. The publication is available to subscribers only and is distributed via email. In conclusion, the LTC Bullet is a valuable resource for those interested in long-term care policy and financing. It provides insightful analysis on a range of topics related to long-term care and is highly regarded by industry professionals and policymakers.” Gosh, thanks.

Should I buy LTC insurance or wait to see if I ever need long-term care and if I do use Medicaid planning?

According to iAsk.AI Answer Engine: Long-term care (LTC) insurance is a type of insurance that covers the cost of long-term care services, such as home health care, nursing home care, and assisted living facilities. It is designed to help individuals pay for these services without depleting their savings or relying on Medicaid. However, whether or not to buy LTC insurance depends on several factors.

One factor to consider is your age and health status. LTC insurance premiums increase with age, so if you are young and healthy, it may be more affordable to purchase LTC insurance now than to wait until you are older and at a higher risk of needing long-term care. On the other hand, if you have pre-existing health conditions, you may not be able to qualify for LTC insurance or may have to pay higher premiums.

Another factor to consider is your financial situation. If you have significant assets and income, you may be able to afford the cost of long-term care without depleting your savings or relying on Medicaid. However, if you have limited assets and income, LTC insurance may be a good option to help protect your financial security.

It is also important to consider the potential benefits of Medicaid planning. Medicaid is a government program that provides health coverage for low-income individuals and families. It also covers the cost of long-term care for those who meet certain eligibility requirements. However, Medicaid planning can be complex and requires careful consideration of your financial situation and goals.

In summary, whether or not to buy LTC insurance depends on several factors, including your age and health status, financial situation, and goals for long-term care. It is important to carefully weigh the potential benefits and costs of LTC insurance and Medicaid planning before making a decision.

LTC Comment: Not a lot of help. Pretty wishy-washy. Doesn’t define Medicaid planning, acknowledge it involves artificial self-impoverishment to qualify for public welfare, nor disclose Medicaid’s serious access and quality deficiencies. On the other hand, the answer emphasizes LTCI’s downsides such as age-based premiums and pre-existing conditions without developing the product’s substantial benefits. So we homed in on Medicaid planning with this question …

What are the main techniques Medicaid planning attorneys use to qualify their clients for Medicaid LTC benefits while preserving their wealth?

According to iAsk.AI Answer Engine: Medicaid planning attorneys use several techniques to qualify for Medicaid long-term care benefits while preserving their clients' wealth. These techniques include:

1. Asset Protection Trusts: Attorneys can create irrevocable trusts that protect assets from being counted towards Medicaid's asset limit. These trusts can be set up so that the client and their spouse can still receive income generated by the assets in the trust, but the assets themselves are protected.

2. Medicaid Compliant Annuities: Attorneys can also use annuities to convert countable assets into income streams that are not counted towards Medicaid's asset limit. These annuities must meet certain criteria to be considered Medicaid compliant.

3. Spend Down Strategies: Attorneys can help clients spend down their assets in a way that maximizes their eligibility for Medicaid benefits. This might involve paying off debts, making home modifications, or prepaying funeral expenses.

It's important to note that Medicaid planning strategies can be complex and should only be undertaken with the guidance of an experienced attorney. Additionally, there are strict rules governing Medicaid eligibility, and any attempts to hide or transfer assets could result in penalties or disqualification from benefits.

LTC Comment: What struck me most about this answer is how it differs from what LTC researchers say about Medicaid planning. They rarely refer to any artificial self-impoverishment techniques other than asset transfers, which AI doesn’t even mention and are relatively uncommon methods. Note that AI does mention “spend down strategies” which are more accurately described as reducing countable resources by purchasing exempt assets. That is the Medicaid planning method used the most. So, let’s ask about it.

Can people with large assets qualify for Medicaid LTC benefits by purchasing "exempt" resources?

According to iAsk.AI Answer Engine: Yes, people with large assets may be able to qualify for Medicaid long-term care (LTC) benefits by purchasing "exempt" resources. Medicaid is a joint federal and state program that provides healthcare coverage to eligible individuals with low income and limited assets. Medicaid can also cover the cost of long-term care services, such as nursing home care, for those who meet certain eligibility requirements.

To qualify for Medicaid LTC benefits, an individual must meet both financial and medical eligibility criteria. Financial eligibility is determined by the individual's income and assets. In most states, an individual cannot have more than $2,000 in countable assets to be eligible for Medicaid LTC benefits. However, some assets are considered exempt and are not counted towards this limit.

Exempt assets may include a primary residence (up to a certain equity value), one vehicle, personal belongings, and certain types of prepaid funeral arrangements. Some states may also allow individuals to purchase exempt resources, such as annuities or trusts, in order to reduce their countable assets and meet the eligibility criteria for Medicaid LTC benefits.

It is important to note that purchasing exempt resources can be a complex process and may have legal and financial implications. It is recommended that individuals consult with a qualified attorney or financial advisor before making any decisions regarding the purchase of exempt resources.

In summary, people with large assets may be able to qualify for Medicaid LTC benefits by purchasing "exempt" resources. However, this strategy should only be pursued after careful consideration and consultation with a qualified professional.

LTC Comment: So, purchasing exempt assets is a “complex process” and people should consult a “qualified attorney” before using it? Nonsense. This technique of self-impoverishment is very easy, completely unlimited, and involves no special legal knowledge. State Medicaid eligibility workers routinely advise applicants and their families to speed up their “spend down” process by purchasing exempt assets, especially prepaid burial funds. Of course, people who do consult Medicaid planning lawyers will get the extra help of receiving long lists of exempt assets they are advised to buy in order to reduce their countable wealth. What does this easy access to Medicaid LTC benefits after people need care mean for the marketability of private LTC insurance? Let’s ask.

Does Medicaid Planning for LTC benefits impede the private LTC insurance market?

According to iAsk.AI Answer Engine: Medicaid planning for long-term care (LTC) benefits can potentially impede the private LTC insurance market. Medicaid is a government-funded program that provides healthcare coverage to low-income individuals, including coverage for long-term care services. Medicaid planning involves legally restructuring an individual's finances to qualify for Medicaid benefits, which can include transferring assets or income to a spouse or trust.

One potential way that Medicaid planning can impede the private LTC insurance market is by reducing the demand for private insurance. Since Medicaid provides coverage for long-term care services, individuals may choose not to purchase private insurance policies, especially if they believe they can qualify for Medicaid benefits through planning. This reduction in demand could lead to higher premiums and reduced profitability for private insurers, which could ultimately discourage insurers from offering LTC policies.

Another way that Medicaid planning can impact the private LTC insurance market is by creating adverse selection. Adverse selection occurs when individuals who are more likely to use LTC services are more likely to purchase private insurance policies, while those who are less likely to need LTC services opt-out of purchasing insurance. This can lead to higher premiums and reduced profitability for insurers, which again could discourage insurers from offering LTC policies.

However, it is important to note that there are also arguments against the idea that Medicaid planning impedes the private LTC insurance market. For example, some experts argue that Medicaid planning actually increases awareness of the need for long-term care services and encourages individuals to consider their options for financing these services, including private insurance.

In conclusion, while there are arguments both for and against the idea that Medicaid planning impedes the private LTC insurance market, it is clear that there is a complex relationship between these two factors that requires further research and analysis.

LTC Comment: Pretty good answer except on a couple points. AI says Medicaid planning might discourage LTC insurance if people “believe they can qualify for Medicaid benefits through planning.” Such belief is not necessary. Nor is it common. Most people don’t know who pays for LTC. But because Medicaid does pay and has paid since 1965, it enables consumers’ denial resulting in their skipping LTCI while they’re still young, healthy, and affluent enough to buy it. Of course, the idea that easy access to free LTC if it’s ever needed by means of Medicaid planning somehow increases awareness and encourages LTC planning is preposterous. How can free care at the point of need funded by the government not crowd out planning decades ahead, paying high premiums for many years and maybe getting nothing from your coverage in the end if you never need LTC? Count on AI to stretch every point to present a “balanced” view. But does any of this really matter?

How common is it for people to artificially impoverish themselves to become eligible for Medicaid LTC benefits?

According to iAsk.AI Answer Engine: It is difficult to determine the exact number of people who artificially impoverish themselves to become eligible for Medicaid LTC benefits. However, it is a known practice that some individuals engage in to qualify for government-funded long-term care benefits.

To be eligible for Medicaid LTC benefits, an individual must meet certain income and asset requirements. These requirements vary by state but generally require that an individual's income and assets fall below a certain threshold. Some individuals may artificially lower their income or transfer assets to family members in order to meet these requirements.

This practice of artificially impoverishing oneself is not illegal, but it may be considered unethical by some. Additionally, it can have negative consequences for the individual and their family members. For example, transferring assets can result in gift taxes and can also disqualify the individual from receiving Medicaid benefits for a period of time.

It is important to note that there are legal ways to plan for Medicaid eligibility without resorting to artificial impoverishment. Consulting with a qualified elder law attorney or financial planner can help individuals and families navigate the complex rules surrounding Medicaid eligibility.

In conclusion, while there is no exact number on how common it is for people to artificially impoverish themselves to become eligible for Medicaid LTC benefits, it is a known practice that some individuals engage in.

LTC Comment: This answer is a good example of the double talk you get from attorneys and most LTC researchers when you ask them about Medicaid planning. They downplay its frequency and whitewash its morality to divert attention and avoid regulation. So, is there no “exact number” of how many people ignore the risk of long-term care, avoid saving or insuring for the need, and take advantage of the Medicaid poverty program if necessary? Don’t you think that is something policy makers ought to know? Why are there no academic studies to measure this problem?

What is the "two Mercedes strategy" to gain Medicaid LTC eligibility?

According to iAsk.AI Answer Engine: The "two Mercedes strategy" is a planning technique used to gain Medicaid long-term care (LTC) eligibility by spending down assets. Essentially, the strategy involves purchasing exempt assets, such as two Mercedes-Benz cars, in order to reduce the countable assets of an individual seeking Medicaid LTC coverage.

In order to qualify for Medicaid LTC coverage, an individual must meet certain asset and income requirements. Generally, an individual's countable assets cannot exceed a certain amount (varies by state), and their income must be below a certain level. However, there are certain assets that are considered exempt and do not count towards the asset limit. These can include a primary residence, personal belongings, and one vehicle.

The "two Mercedes strategy" takes advantage of this exemption by purchasing two high-value vehicles that are exempt from the asset limit. By doing so, the individual can reduce their countable assets and potentially qualify for Medicaid LTC coverage.

It is important to note that this strategy may not work in all cases and should only be used after consulting with a qualified elder law attorney or financial planner. Additionally, it is important to consider the ongoing costs associated with owning two luxury vehicles.

In conclusion, the "two Mercedes strategy" is a planning technique used to gain Medicaid LTC eligibility by spending down assets on exempt assets such as two high-value vehicles. However, it is important to consult with a professional before implementing this strategy.

LTC Comment: Well, iAskAI finally got an answer clearly wrong. The “two Mercedes” method does not involve buying two cars. Two cars would make one ineligible for Medicaid. Rather, one purchases a single luxury vehicle, which is exempt in any dollar amount, and gives it away. That gift is not a transfer of assets for less than fair market value for the purpose of qualifying for Medicaid which would trigger a penalty because owning the car was not disqualifying in the first place and giving it away therefore is not done for the purpose of qualifying for Medicaid. But maybe I’m splitting hairs. AskAI got the basic idea right that people can qualify for Medicaid LTC benefits by purchasing an expensive car and giving it away, though only one at a time.

Does it hurt the poor when Medicaid planning attorneys qualify affluent clients for Medicaid LTC benefits?

According to iAsk.AI Answer Engine: Medicaid planning attorneys qualifying affluent clients for Medicaid LTC benefits can potentially hurt the poor by diverting resources from those who truly need it. When affluent clients are qualified for Medicaid, they are essentially taking advantage of a system that is meant to help those who are unable to afford long-term care. This can lead to a strain on resources and funding, which can ultimately harm the poor who rely on Medicaid for their healthcare needs.

However, it is important to note that not all Medicaid planning attorneys engage in this practice. Some attorneys may work within the legal framework to help their clients qualify for Medicaid benefits while also ensuring that resources are not diverted away from those who truly need it.

Furthermore, there are also other factors that contribute to the strain on Medicaid resources, such as an aging population and rising healthcare costs. Addressing these issues would require a comprehensive approach that goes beyond just targeting Medicaid planning attorneys.

Overall, while there may be instances where Medicaid planning attorneys qualifying affluent clients for Medicaid LTC benefits can hurt the poor, it is not a black and white issue and requires careful consideration of various factors.

LTC Comment:  Not black and white? Some Medicaid planners ensure resources are not diverted from the poor? Name one. How would they do that even if they wanted to? I think iAskAI must have an algorithm that searches for arguments to balance any potential disagreement, but often fails to come up with plausible counterpoints.   

What percentage of Medicaid LTC applicants purchase prepaid burial funds to spend down to asset limits?

According to iAsk.AI Answer Engine: I'm sorry, but I cannot provide a comprehensive answer to this question as there is no available data or statistics on the percentage of Medicaid Long-Term Care (LTC) applicants who purchase prepaid burial funds to spend down to asset limits. The Medicaid program is administered by individual states, and each state has its own rules and regulations regarding eligibility requirements and asset limits. While some states may allow the purchase of prepaid burial funds as a way to spend down assets, it is not a universal practice across all states.

Additionally, there is no centralized database or reporting system that tracks the specific financial strategies used by Medicaid LTC applicants to meet asset limits. Therefore, it is impossible to provide an accurate percentage or estimate of how many individuals use prepaid burial funds for this purpose.

It is worth noting, however, that Medicaid planning and asset protection strategies are complex and often require the assistance of an experienced elder law attorney or financial advisor. These professionals can help individuals navigate the rules and regulations surrounding Medicaid eligibility and develop a customized plan to protect their assets while still qualifying for benefits.

LTC Comment: I’ve conducted many state-level studies of Medicaid eligibility and planning. State Medicaid eligibility workers told me that between two-third and 80 percent of Medicaid LTC applicant/recipients shelter assets in prepaid burial funds averaging around $7,000 or $8,000 each. If that is true nationwide, it amounts to many billions of dollars diverted from personal LTC responsibility to public liability, constituting a huge subsidy for the funeral industry at taxpayers’ expense. Again, this is an aspect of poor public policy that researchers should study, analyze, and report, but don’t.

Is it ethical to self-impoverish oneself by transferring wealth five years in advance, purchasing exempt assets, or putting money into special annuities or trusts in order to qualify for Medicaid's welfare LTC benefits?

According to iAsk.AI Answer Engine: It is a controversial topic whether it is ethical to self-impoverish oneself by transferring wealth five years in advance, purchasing exempt assets, or putting money into special annuities or trusts in order to qualify for Medicaid's welfare LTC benefits.

On one hand, some argue that it is unethical to take advantage of a government program intended for those who are truly in need. They argue that individuals who engage in these practices are essentially gaming the system and taking resources away from those who may not have any other means of support. Additionally, some argue that these practices may be considered fraudulent and could result in legal consequences.

On the other hand, others argue that it is not unethical to engage in these practices as they are simply taking advantage of legal loopholes within the system. They argue that individuals have a right to protect their assets and ensure that they are able to receive the care they need without depleting their life savings. Additionally, some argue that these practices can actually benefit society as a whole by reducing the burden on government-funded programs.

Ultimately, whether or not it is ethical to self-impoverish oneself in order to qualify for Medicaid's welfare LTC benefits is a matter of personal opinion and values.

LTC Comment: Exactly how can using Medicaid planning to get the government to pay for one’s long-term care “actually benefit society as a whole by reducing the burden on government-funded programs.” That is just more double talk in groundless justification of practices that hurt taxpayers, the poor, and even the affluent who end up in nursing homes on public welfare but could have purchased quality home care instead.

Should people who shelter wealth in exempt assets, such as a home, car or business, in order to qualify for Medicaid LTC benefits, be required to repay Medicaid after they die?

According to iAsk.AI Answer Engine: Yes, people who shelter wealth in exempt assets such as a home, car, or business in order to qualify for Medicaid long-term care (LTC) benefits should be required to repay Medicaid after they die. This is because Medicaid is a needs-based program that provides healthcare assistance to those who cannot afford it. It is not intended to provide a way for individuals to pass on their wealth to their heirs while still receiving government assistance.

The practice of sheltering assets in order to qualify for Medicaid LTC benefits is known as Medicaid planning. While it is legal, it can be seen as unethical by some. Medicaid planning involves transferring assets out of an individual's name in order to meet the program's asset and income limits. Exempt assets, such as a primary residence, are not counted towards these limits.

However, when an individual who has received Medicaid LTC benefits passes away, their estate may be subject to estate recovery. This means that Medicaid can recover the cost of the benefits paid out from the individual's estate after they die. This includes any assets that were transferred out of the individual's name during the Medicaid planning process.

The National Academy of Elder Law Attorneys (NAELA) explains that estate recovery is required by federal law and applies to all states that receive Medicaid funds. However, each state has its own rules regarding how and when estate recovery can occur.

The Centers for Medicare & Medicaid Services (CMS) provides guidance on estate recovery and states that it can only be applied to individuals who are over 55 years old, permanently institutionalized, or who receive home and community-based services through a waiver program.

The Kaiser Family Foundation notes that estate recovery is controversial because it can create a burden for heirs who may not have been aware of the Medicaid planning their loved one engaged in. However, the foundation also notes that estate recovery helps ensure that Medicaid funds are used appropriately and can help offset the cost of the program.

In conclusion, individuals who shelter wealth in exempt assets in order to qualify for Medicaid LTC benefits should be required to repay Medicaid after they die. This is because Medicaid is a needs-based program, not an inheritance planning tool. Estate recovery is a legal requirement and helps ensure that Medicaid funds are used appropriately.

LTC Comment: OK, so we don’t need to worry about Medicaid planning because Medicaid “can recover the cost” from “the individual’s estate.” That would be a valid point if states actually enforced estate recoveries and the federal government compelled them to do so in compliance with the law. But that rarely happens. Nor do the media publicize the estate recovery liability. Consequently, estate recovery risk does not incentivize the public to plan privately for LTC and leaves them relying on Medicaid in the end despite the welfare program’s downsides. Is Medicaid really “a needs-based program, not an inheritance planning tool” when eligibility is so easy to obtain and estate recovery is so easy to avoid?

How easy is it to avoid Medicaid estate recovery?

According to iAsk.AI Answer Engine: Avoiding Medicaid estate recovery can be a complex and challenging process. However, there are some legal strategies that can help individuals protect their assets from Medicaid estate recovery. One of the most effective ways to avoid Medicaid estate recovery is by transferring assets out of the individual's name before they apply for Medicaid benefits. This can be done through various legal mechanisms, such as irrevocable trusts, gifting, or purchasing exempt assets.

Another approach to avoiding Medicaid estate recovery is by using annuities. By purchasing an annuity, the individual can convert their countable assets into an income stream that is not subject to Medicaid estate recovery. However, it is important to note that annuities must meet certain criteria to be considered exempt from Medicaid estate recovery.

Additionally, some states have implemented laws that allow individuals to protect their homes from Medicaid estate recovery by transferring ownership to a spouse or child. However, these laws vary by state and may have limitations on the amount of equity that can be protected.

It is important to note that attempting to avoid Medicaid estate recovery through fraudulent means, such as hiding assets or providing false information on a Medicaid application, can result in serious legal consequences.

In summary, while there are legal strategies available for avoiding Medicaid estate recovery, it is important to consult with a qualified attorney who specializes in elder law and Medicaid planning to determine the best approach for your individual situation.

LTC Comment: All in all, AI does a pretty good job of summarizing the facts and arguments on both sides of the Medicaid planning debate. Unfortunately, AI grants equal credibility to specious arguments in favor of Medicaid planning and to common sense objections to the practice. What I take away from this is that we need more and better research and analysis on this topic to avoid the errors of thought and ethics that AI does such an effective job of summarizing and justifying. Anybody out there want to fund such a study? I’m ready to conduct it.

One last question for iAsk.AI: “If you were to write an ‘LTC Bullet,’ what would it say?”

According to iAsk.AI Answer Engine: As an AI Search Engine, I am not capable of writing an "LTC Bullet" as it is a publication produced by the Center for Long-Term Care Reform. However, I can provide information on what an LTC Bullet is and its purpose.

An LTC Bullet is a publication produced by the Center for Long-Term Care Reform (CLTCR), which is a private institute that aims to ensure quality long-term care for all Americans. The purpose of an LTC Bullet is to provide analysis and commentary on issues related to long-term care policy, financing, and delivery. The publication covers a range of topics such as Medicaid, Medicare, long-term care insurance, and the aging population.

The LTC Bullet is known for its in-depth analysis and comprehensive coverage of long-term care issues. It is highly regarded by policymakers, industry professionals, and academics alike. The publication is available to subscribers only and is distributed via email.

In conclusion, the LTC Bullet is a valuable resource for those interested in long-term care policy and financing. It provides insightful analysis on a range of topics related to long-term care and is highly regarded by industry professionals and policymakers.

LTC Comment: No argument there from us. Thanks, iAsk.AI. Good luck as you pursue your wide-ranging interests. Please don’t destroy humankind.

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

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

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

LTC Clippings: The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know. Each message contains only the critical facts about new publications: a title, representative quote, a link to the original, and our analysis in a sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or smoses@centerltc.com. Read testimonials by satisfied subscribers here. To subscribe online, please click here.

LTC E-Alerts: Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website. Center members also receive our weekly LTC Bullet op-ed. To join the Center and receive all these benefits and more, contact Steve at 425-891-3640 or smoses@centerltc.com. 

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

• CMS proposes that 80 percent of Medicaid payments for home care go to direct care workers
• Feds to crack down on harmful uses of AI
• What is Medicaid and why should you and your farm care?
• Rising interest rates helping to stabilize long-term care insurance policies
• Startup to Sell Life-LTC Hybrid at the Worksite
• Older adults’ housing equity dips to $12.39 trillion in fourth quarter
• Washington nursing homes get 13.6 percent Medicaid boost — no strings attached
• The Future is Here. Watch Ken Dychtwald’s keynote at NextMed and be ready to embrace healthy longevity
• Poll: 40% of clinicians thinking of quitting
• Most older patients embrace move toward deprescribing, poll finds

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

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

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

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

LTC Clippings: The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know. Each message contains only the critical facts about new publications: a title, representative quote, a link to the original, and our analysis in a sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or smoses@centerltc.com. Read testimonials by satisfied subscribers here. To subscribe online, please click here.

LTC E-Alerts: Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website. Center members also receive our weekly LTC Bullet op-ed. To join the Center and receive all these benefits and more, contact Steve at 425-891-3640 or smoses@centerltc.com. 

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

• How Assured Allies Is Helping People Thrive As Long As Possible Without Long-Term Care

• Why Medicaid is for the middle class

• The Home Care Workforce Has Not Kept Pace With Growth In Home And Community-Based Services

• 80% of Older Americans Cannot Pay for Long-Term Care or Withstand a Financial Shock, New Study Shows

• Biden Order Could Create Federal Long-Term Care Benefits Demand

• BREAKING: New Biden executive order would tie Medicare rates to turnover

• CVS report finds more seniors facing chronic conditions

• Life Insurance Is Profitable Again, but Too Late for Many Insurers

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

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

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LTC BULLET: LONG-TERM CARE AND THE SOCIAL COMPACT

LTC Comment: When governments promise their citizens less risk through pay-as-you-go entitlement programs, they reduce the public’s sense of personal responsibility leaving people unprotected by either public programs or private savings when their ability to tax and borrow runs out. More after the ***news.***

*** AS THE CENTER FOR LONG-TERM CARE REFORM, founded April 1, 1998, begins its second quarter century we seek your support for our pursuit of public policy aimed to improve long-term care financing and service delivery in the United States. Over the years, we’ve had some success influencing federal policy (OBRA ’93 and DRA ’05) but much more remains to be done. Ask about those laws and our role in passing them. In the meantime, we’ve published dozens of state and federal level studies here; authored scores of articles here; delivered speeches all across the country for decades here; published to date 1,354 LTC Bullets (our now bi-weekly op-ed like columns, archived by date and topic here; and we’ve sent thousands of daily LTC Clippings to keep our members apprised of new events, reports, developments and potential professional vulnerabilities so they are ready for anything prospects or clients may hit them with. Most recently we are working with the Paragon Health Institute to clarify the long-term care problem (Long-Term Care: The Problem) so we can present a radically new, market-based approach to solve it (Long-Term Care: The Solution, due this fall.) Won’t you help us keep this noble mission vibrant and successful? To join the Center, support our efforts, become part of our team, and receive the benefits of membership, contact Damon at 206-283-7036 or Damon@centerltc.com. Or join and contribute online here. Thank you for your time and consideration. Let’s do this! ***

LTC BULLET: LONG-TERM CARE AND THE SOCIAL COMPACT

LTC Comment: America and Americans have strayed from the binding principles—balancing personal freedom and individual responsibility—that made the country great. No social issue illustrates this problem better than long-term care (LTC).

To need LTC is a high risk: seventy percent of people who reach age 65 will eventually develop severe need. Forty-eight percent will receive paid care averaging $138,000. Among those who need paid care, about half will require less than a year, and a little more than 10 percent will need five years or more at an average cost of $266,000.

Thus, LTC represents a high probability of significant cost, but a relatively small risk of ruinously high expense. That is precisely the condition for which private insurance is best suited. That is, to replace the small risk of catastrophic loss with the certainty of an affordable premium.

Yet, most people do not buy private insurance for LTC risk. Why?

Since its founding in 1965, Medicaid has paid for most catastrophically high LTC costs. Although it is ostensibly a means-tested public assistance program, Medicaid’s financial eligibility rules allow its LTC benefits recipients to retain substantial exempt assets and to have high incomes as long as their personal health and LTC expenses were comparably high.

By offsetting the public’s catastrophic LTC risk, Medicaid desensitized consumers to the need to plan, save, invest or insure when they were still young, healthy and affluent enough to do so. This “moral hazard” left most aging Americans, including the Greatest Generation, unprotected for LTC risk and dependent on Medicaid nursing home care.

As the dominant LTC funder, Medicaid paid too little to ensure access to quality care, created “institutional bias” by paying only for nursing homes, caused caregiver shortages due to low wages, crowded out private financing from insurance or home equity conversion, and left too great a direct caregiving burden on financially and emotionally stressed friends and families.

In other words, by attempting to solve the problem of financing LTC, Medicaid had the opposite effect of reducing the public’s perception of the risk resulting in too many people in need of LTC dependent on public welfare and too few prepared to pay privately for the type, quality and venue of care they prefer.

That is how Medicaid LTC violated the social compact. Instead of protecting their freedom to take care of themselves, Medicaid undercut their sense of personal responsibility leaving them dependent on a public welfare program unable to meet their needs.

LTC is only one example. Social Security and Medicare are two more programs that told citizens they are protected for income and health security in old age, but are now facing massive unfunded liabilities and the high probability of insolvency in the short term.

Government promises should never replace personal freedom and individual responsibility.

For full development of this argument and its conclusion, including citations to scholarly sources, read How to Fix Long-Term Care Financing (2017), Medicaid and Long-Term Care (2020), and Long-Term Care: The Problem (2022). Expect Long-Term Care: The Solution this fall.

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

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

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

LTC Clippings: The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know. Each message contains only the critical facts about new publications: a title, representative quote, a link to the original, and our analysis in a sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or smoses@centerltc.com. Read testimonials by satisfied subscribers here. To subscribe online, please click here.

LTC E-Alerts: Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website. Center members also receive our weekly LTC Bullet op-ed. To join the Center and receive all these benefits and more, contact Steve at 425-891-3640 or smoses@centerltc.com. 

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

• Social Security and Medicare Reform

• Fast Facts about Medicare and Social Security

• The Growing Opportunity For Wealth Transfer; Not Only For The Wealthy

• Falling Inflation May Be Too Late for Retirees. Here’s Where It’s Still Hitting Hardest

• Hourly wage growth slowing across long-term care, Fitch Ratings says

• BREAKING: CMS failed to publicly post deficiencies for two-thirds of nursing homes, OIG finds

• Weight loss linked to 10 percent higher mortality in elders, particularly men

• Anxiety Abounds as Americans Contemplate Social Security, Market Risks

• Study finds frailty prevalent in middle-aged and older adults

• Feds broaden nursing home quality campaign with new discharge, satisfaction and vaccination measures

• Nursing Homes Profited Off Pandemic, Reports Kaiser 

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

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

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

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

LTC Clippings: The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know. Each message contains only the critical facts about new publications: a title, representative quote, a link to the original, and our analysis in a sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or smoses@centerltc.com. Read testimonials by satisfied subscribers here. To subscribe online, please click here.

LTC E-Alerts: Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website. Center members also receive our weekly LTC Bullet op-ed. To join the Center and receive all these benefits and more, contact Steve at 425-891-3640 or smoses@centerltc.com. 

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

• Lawmaker again tries to rid workers of a payroll tax that begins in July

• 10 State-Level Long-Term Care Bills to Track Now

• Assisted-living homes are rejecting Medicaid and evicting seniors

• Government forecast predicts steep climb in nursing home costs for next two years

• Continental General Agrees to Acquire Elevance LTCI Policies

• Solving today’s enigma of the state long-term care tax mandates of tomorrow

• Exclusive: US to build $300 mln database to fuel Alzheimer's research

• My Wacky Idea to Save Social Security

• Study: Burnout high among all healthcare professionals

• Long-term care insurance could create huge fiscal burden for adult children of aging boomers

• Medicare, Social Security financial shortfalls would ‘further cripple’ long-term care, advocates say 

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

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

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LTC BULLET: LTC TANSTAAFL

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

*** CENTER’S 25^TH ANNIVERSARY: On April 1, 1998 attorney David Rosenfeld and I founded the Center for Long-Term Care Financing (now Reform). A quarter century later, the Center is still going strong. David moved on to play a major role as a Congressional staffer in passing our proposals as part of the Deficit Reduction Act of 2005. Damon joined as VP for Administration in 2002 and he’s kept us in business ever since. We thank our corporate and individual members for your many years of support, encouragement, collegiality and friendship. The most promising opportunities to improve LTC financing public policy are immediately ahead. Stay committed with us. ***
 

LTC BULLET: LTC TANSTAAFL

LTC Comment: TANSTAAFL: There Ain’t No Such Thing As A Free Lunch. That immortal verity pertains today more than ever. But equally true is its corollary that everyone wants a free lunch and many will fall for the promise of one when offered.

Government is the worst purveyor of free lunches that turn out to be very expensive indeed. Pay a little now and get a lot later. That’s the formula employed by Social Security, Medicare, Ponzi, and Bankman-Fried. The outcome is always the same. Sooner or later there aren’t enough new suckers to keep the game going.

Medicaid LTC’s free lunch isn’t as obvious. You don’t have to pay in to get the bonanza later. You only have to be broke. Medicaid even says that if you aren’t broke and you need expensive LTC, you have to become broke by paying for your own care first to qualify.

Not much of a free lunch if you put it that way. But here’s the twist. When the time comes that you need high-cost LTC, you don’t have to impoverish yourself. Reaching “low income” is easy. Medicaid subtracts your private health and LTC costs. Most big assets are exempt so uncounted.

Here’s how Medicaid LTC offers a free lunch. It turns the typical Ponzi entitlement scheme on its head. It says “ignore the risk of LTC and if you need it you’ll lose your life’s savings paying for it before you get any help from the government.” Then, when you need care, government pays anyway, ignoring the draconian warnings.

Medicaid LTC’s free lunch is the worst of both worlds. People ignore the impoverishment warnings with impunity. They don’t plan, save, invest or insure for LTC. The fact that government always paid in the end enabled their denial of the risk.

There are two ways to eliminate Medicaid LTC’s upside down free lunch. You can force everyone to pay a tax to fund a new entitlement for LTC. That’s WA Cares. It turns LTC into a conventional social insurance free lunch scheme.

A better approach is to establish a LTC planning responsibility, offer many ways to meet it, monitor compliance, but only enforce responsibility when it’s unmet voluntarily. Instead of threatening catastrophic spend down maybe someday without following through, incentivize responsible early planning as a way to avoid any government compulsion.

That’s the plan that I’m working on now, details of which are being formulated every day. So stay tuned.

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

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

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

LTC Clippings: The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know. Each message contains only the critical facts about new publications: a title, representative quote, a link to the original, and our analysis in a sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or smoses@centerltc.com. Read testimonials by satisfied subscribers here. To subscribe online, please click here.

LTC E-Alerts: Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website. Center members also receive our weekly LTC Bullet op-ed. To join the Center and receive all these benefits and more, contact Steve at 425-891-3640 or smoses@centerltc.com. 

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

• How to Get Your Long-Term Care Planning on the Right Track

• Why the U.S. Health Care System Must Address the Shortage of Geriatricians Now

• 100 Must-Know Statistics About Long-Term Care: 2023 Edition

• Medicaid a major challenge to providing affordable assisted living, NCAL says

• Retirement plan contribution rate decreases

• The Looming Collapse of a Long-Term Care Insurer Raises Questions for DFS

• Study: Older adults spending billions on home repairs to age in place

• Life expectancy confusion may be jeopardizing retirement planning: study

• Long-Term Care Planning vs. Taxes: Finding a Healthy Balance

• CalPERS to pay $800 million settlement over claims it misled retirees on costs of long-term care insurance

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

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

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LTC BULLET: VIRTUAL VISIT TO ILTCI 2023

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

LTC BULLET: VIRTUAL VISIT TO ILTCI 2023

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

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

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

Tracks

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

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

The App

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

Some sessions: 

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

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

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

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

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

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

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

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

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

• What challenges are impeding public/private collaboration?

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

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

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

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

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

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

Bonus session reviews prepared by Damon Moses: 

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

Key messages:

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

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

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

Key messages:

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

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

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

Key messages:

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

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

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

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

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

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

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

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

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

Several audience members approached the microphone to share their answers.

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

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

Supplemental content before and after the conference

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

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

SOA Professionalism Course, Wednesday, March 15th

Alzheimer's Association Session, Wednesday, March 15th

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

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

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

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

LTC Clippings: The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know. Each message contains only the critical facts about new publications: a title, representative quote, a link to the original, and our analysis in a sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or smoses@centerltc.com. Read testimonials by satisfied subscribers here. To subscribe online, please click here.

LTC E-Alerts: Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website. Center members also receive our weekly LTC Bullet op-ed. To join the Center and receive all these benefits and more, contact Steve at 425-891-3640 or smoses@centerltc.com. 

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

• Some State Regulators Frown on Life-Long-Term Care Combo Products

• High concentration of dually eligible older adults in assisted living warrants study of care quality, researchers say

• OIG: Personal care providers accounted for most Medicaid fraud convictions again in 2022

• Costs for linked-benefit long-term care insurance policies drop up to 15 percent from last year

• Medicare costs could soar with availability of new obesity drugs, experts say

• What Can Help Clients See the Long-Term Care Cost Threat? Science

• Denied by AI: How Medicare Advantage plans use algorithms to cut off care for seniors in need

• How Life and Annuity Issuers Could Get Silicon Valley Bank Flu

• The Role Of Medicaid In Addressing Climate Change And Climate-Related Inequity

• Exclusive: Biden administration warns states to minimize coverage loss as they restart Medicaid eligibility reviews

• Biden pledges $150B for HCBS in new budget

• Long term care insurance in the UK: What's going on?

• New evidence of four distinct pain trajectories in nursing home residents

• Family caregivers’ unpaid work valued at $600 billion: report

• AARP: Paid caregivers are key to relieving family caregiver burden

• Assured Allies secures $42.5M Series B to help Americans ‘successfully age’

• A tax-advantaged solution for long-term care needs

• GoldenCare Long-Term Care Insurance

• 7 Long-Term Care Program Ideas for Taxphobic Times

• Aggressive Medicare Advantage marketing floods TV and mailboxes with misleading ads. The Biden administration is cracking down

• Argentum’s Workforce Projections for Senior Care Report Sees a Need to Fill 20 Million Job Openings Through 2040

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

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

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LTC E-ALERT #23-003 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 Steve at 425-891-3640 or smoses@centerltc.com. Read testimonials by satisfied subscribers here. To subscribe online, please click here.

LTC E-Alerts: Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website. Center members also receive our weekly LTC Bullet op-ed. To join the Center and receive all these benefits and more, contact Steve at 425-891-3640 or smoses@centerltc.com. 

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

• Terry Savage and Brian Gordon on long-term care insurance

• Social Security Checks Got a Historic Boost This Year. Retirees Say It’s Not Enough

• The High Cost of Waiting to Plan for Long Care

• As States Prepare to Resume Disenrollments, Medicaid/CHIP Enrollment Will Reach Nearly 95 million in March, and the Pandemic-Era Enrollment Growth of 23 million Accounts for 1 in 4 Enrollees

• They could lose the house — to Medicaid

• As Debate Heats Up in Washington Over Possible Entitlement Cuts, A New KFF Analysis Details the 30% of Federal Spending That Goes to Health Care Programs

• A Hidden Source of Wealth Many Retirees Overlook

• The problematic politics of Japan’s ageing electorate

• Long-term care insurance costs in Germany to increase from July

• Better cardiovascular health may explain declining dementia rates: study

• Older adults fearful they could outlive savings: survey

• Skilled Nursing Operators Protest ‘Insane Amount’ of Administration Needed as Medicare Advantage Expands

• The Real Federal Deficit: Social Security And Medicare

• New Life Policy Can Protect Against Disability and Long-Term Care Risk

• Brian Blase and Frederick Isasi on Medicare and Medicaid

• 7.7% Increase in Long-Term Care Benefits Payouts

• CMS Officials Confirm End of PHE Nursing Home Waivers, Barring Congressional Action,

• What Long-Term Care Insurance Policyholders Need to Know

• They offer to help nursing home residents get Medicaid. Too often, say legislators, they cheat them

• States, other countries offer insights into making long-term care more affordable: report

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

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

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LTC BULLET: LTCI AND INNOVATIVE FINANCIAL PLANNING

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

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

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

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

LTC BULLET: LTCI AND FINANCIAL PLANNING INNOVATION

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

LTC Clippings: The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know. Each message contains only the critical facts about new publications: a title, representative quote, a link to the original, and our analysis in a sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or smoses@centerltc.com. Read testimonials by satisfied subscribers here. To subscribe online, please click here.

LTC E-Alerts: Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website. Center members also receive our weekly LTC Bullet op-ed. To join the Center and receive all these benefits and more, contact Steve at 425-891-3640 or smoses@centerltc.com. 

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

• Are Payments To Medicare Advantage Plans Inflated?

• More than 1 in 6 Americans now 65 or older as U.S. continues graying

• Bridging the Gap: A Discussion of Short-Term and Long-Term Care

• Is Applying for Medicaid for Do-It-Yourselfers?

• Researchers ID 8 social factors that lead to early death in seniors

• Medicare Recipients Face Significantly Higher Projected Costs: EBRI

• Death, Finances and How Many of Us Get Our Money Needs Wrong

• Genworth to Launch Senior Care Provider Network Business

• FACTSHEET: State of the Nursing Home Sector

• Study: Prevalence of disabilities among older Americans is much lower than a decade earlier

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

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

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LTC BULLET: LTCI EDUCATION

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

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

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

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

LTC BULLET: LTCI EDUCATION

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

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

Steve Moses

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

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

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

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

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

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

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

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

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

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

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

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

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

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LTC E-ALERT #23-001 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 Steve at 425-891-3640 or smoses@centerltc.com. Read testimonials by satisfied subscribers here. To subscribe online, please click here.

LTC E-Alerts: Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website. Center members also receive our weekly LTC Bullet op-ed. To join the Center and receive all these benefits and more, contact Steve at 425-891-3640 or smoses@centerltc.com. 

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

• Fight to Rename 'Medicare Advantage' Gets New Push

• Report: Medicaid Falls Short on Costs of Care in Nursing Homes

• Most long-term care doesn’t qualify for insurance benefit

• Feds to Cut Medicare Advantage Plan Pay Over Health Score Creep

• Two KFF Analyses Explore the Demographics of People Jointly Enrolled in Medicare and Medicaid As Well As Program Enrollment and Spending for This Population

• Debate: Will Secure 2.0 Act Help Americans Pay for Long-Term Care?

• Can I Apply for Medicaid Home Care If I Left Long-Term Care?

• Human Freedom Index: 2022

• Look To The States, Not Congress, For Long-Term Care Financing Reform

• CMS Proposal Marks Shift After Years of Skilled Nursing Frustration with Medicare Advantage Diversions

• Small-town nursing homes closing amid staffing crunch

• Millions of Medicaid beneficiaries may lose coverage as disenrollments resume in April

• Older adults’ housing wealth hits new record at $11.81 trillion

• Can My Mom Pay Me Rent If She Will Be Applying for Medicaid?

• Top 5 States for Long-Term Care Planning Increases

• Medicaid HCBS study shows ‘we still know very little’ about COVID in senior living

• Impact of Secure Act and Long-Term Care Insurance Provisions Discussed

• 10 Things to Know About the Unwinding of the Medicaid Continuous Enrollment Provision

• Will Secure 2.0 Increase Long-Term Care Insurance Sales?

• Congratulations to the McKnight’s Pinnacle Career Achievement Award winner

• Public, private partnerships key to New York state Master Plan for Aging

• Nursing home staff shortage a ‘crisis’ in Clark County, Washington

• 81 percent of nursing homes receive less than cost of care for Medicaid patients: analysis

• CMS releases new Medicaid guidance for states to tackle unmet social needs

• California to Reality-Check $144K Public Long-Term Care Benefits Package

• Nursing Homes Need $11.3b Annually To Meet Proposed Staffing Minimum

• Spiraling costs threaten growing optimism for skilled nursing in 2023 Outlook Survey

• 2023: The Year Medicare Advantage Begins To Dominate Traditional Medicare

• CVD Benefits of Activity Seen Below Widely Quoted Step Goal in Older Adults

• US life expectancy falls to lowest levels since 1996 due to COVID, drug overdoses: CDC

• House Passes Secure 2.0 Act in $1.7T Spending Bill

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

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

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LTC BULLET: MAKE LTC SIMPLE AGAIN

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

*** HAPPY NEW YEAR ***

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

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

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

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

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

LTC BULLET: MAKE LTC SIMPLE AGAIN

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

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

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

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

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

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

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

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

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

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

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

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

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

LTC Clippings: The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know. Each message contains only the critical facts about new publications: a title, representative quote, a link to the original, and our analysis in a sentence or two. To inquire or subscribe, contact Steve at 425-891-3640 or smoses@centerltc.com. Read testimonials by satisfied subscribers here. To subscribe online, please click here.

LTC E-Alerts: Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website. Center members also receive our weekly LTC Bullet op-ed. To join the Center and receive all these benefits and more, contact Steve at 425-891-3640 or smoses@centerltc.com. 

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

• Maine Has A Plan To Help Family Caregivers. Other States Should Follow

• Parkinson’s disease strikes many more older adults than previously estimated: research

• Regulators End Effort to Develop Long-Term Care Hybrid Rules

• Enemies

• The 10 Fastest Rising Costs for Seniors

• Caring for Aging Relatives is Draining, Both Financially and Emotionally

• Viagra Lowers the Risk of Alzheimer’s by Almost 70%, Study Says

• Welcome to the December e-Brief

• How to Talk to Your Parents About Long-Term Care

• How Medicare Advantage plans dodged auditors and overcharged taxpayers by millions

• Entering the Winter Season, How Many Nursing Facility Residents and Staff Were Up-To-Date With Their COVID-19 Vaccines?

• Growing Older with Enthusiasm

• Defiant Sloan to nursing home critics: Address funding to tackle staffing challenge

• Lawmakers can help workers with this WA Cares repeal bill

• Am I Allowed to Have Two Cheap Cars With Medicaid?

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"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).