|
READ STEVE'S BIO.JPG)
#############################
Updated,
Monday, June 17, 2013, 1:21 PM (Pacific)
Seattle—
#############################
PATHOLOGICAL
ALTRUISM AND LTC NEWS AND COMMENT
LTC Comment: Why
is it that so much government does to "help people" ends up hurting them?
Case in point:
Medicaid made nursing home care virtually free in 1965 (good intentions),
but the result was little demand for private home care or LTC insurance
and today (unintended consequence), a bankrupt, welfare-financed,
nursing-home-based LTC system that serves no one well.
Here’s a quote
from a paper that develops the concept of "pathological altruism" to
explain such outcomes:
"Presented here
are the mechanistic bases and potential ramifications of pathological
altruism, that is, altruism in which attempts to promote the welfare of
others instead result in unanticipated harm."
“Concepts
and implications of altruism bias and pathological altruism,” Barbara
A. Oakley, Proceedings of the National Academy of Sciences
I found this research fascinating. I hope you do
too.
#############################
6/15/2013, “Ruinous promises: States cannot
pretend to be in good financial health unless they tackle pensions [link],”
The Economist
Quote: "Few fiscal problems are as grave, or
as little understood, as underfunded state and municipal pensions. The
funding gap for all state schemes is estimated at $4 trillion-25% of GDP."
LTC Comment: The feds can just print more
money (up to a point), but the states have no easy out from the closing
fiscal vise of unfunded pensions.
#############################
6/13/2013, “SCAN:
66 percent of Californians want a public LTC program,” by Allison
Bell, LifeHealthPRO
Quote: "When survey workers asked whether
participants in California would favor 'a government administered
long-term care insurance program, similar to Medicare' to 'help Americans
prepare for the costs of ongoing living assistance,' 66 percent said they
favor the idea of setting up a Medicare-like government-administered LTC
program . . .."
LTC Comment: Well, if Californians want it,
it must be a good idea. Never mind Medicare's $38.6 trillion unfunded
liability. Let’s spend more funny money and bill it to the future.
#############################
6/13/2013, “Elderly
Americans Living With Children Are More Unhappy,” by Khadeeja Safdar,
Wall Street Journal
Quote: "Young children are supposed to bring
joy into their grandparent's lives. But according to two researchers,
elderly Americans who live with children under the age of 18 experience
inferior living situations and worse emotional health than those who
don't."
LTC Comment: All the more reason to plan
early to remain independent late in life.
#############################
6/12/2013, “Latest
Research Reinforces The Need For LTC Planning,” InsuranceNews.net
Quote: "According to recent data from
Genworth men are taking an increasingly active role in caregiving. The
data also shows the impact of long term care on caregivers and care
recipients; money, time spent and emotional issues could be minimized if
those involved take a more proactive role towards planning."
LTC Comment: Damon and I are living that
reality with his 100-year-old Grandmother, my mother, in claim on her
Genworth policy I purchased in 1987 and moving from assisted living (seven
years) to a skilled nursing facility. Difficult transitions.
#############################
6/12/2013, “What Do You Mean I'm Getting Old?
Denial About Aging and Our Impending Long-Term Care Crisis [link],”
by Bruce Chernof, Health Affairs
Quote: "However, there is promise for
innovative approaches to solving these issues: Americans across the
political spectrum show majority support for public policy solutions to
transform the nation's system of long-term care. Seventy-seven percent
support tax breaks to encourage saving for long-term care expenses; about
half (51 percent) of Americans support a government-administered long-term
care insurance program."
LTC Comment: Bruce Chernof, the newly
appointed Chairman of the LTC Commission, which will meet for the first
time June 27, advocates something like mandatory CLASS. Luckily, the
Commission's Vice Chair is Mark Warshawsky who has a much better
understanding of why LTC financing is the way it is and what's necessary
to fix it.
#############################
6/10/2013, “Low
blood sugar in some diabetics boosts dementia risk,” by Melissa Healy,
Los Angeles Times
Quote: "For older patients with Type
2 diabetes, an aggressive focus on keeping high blood sugar down
increases the risk of driving blood sugar too low--and with that, boosting
the likelihood of developing
dementia, says a new study. As if that weren't bad enough, the new
research finds that dementia, in turn, increases the risk of hypoglycemic
episodes."
LTC Comment: Double jeopardy.
#############################
6/10/2013, “Medicare
Advantage 2013 Spotlight: Enrollment Market Update,” Kaiser Family
Foundation
Quote: "While about 28 percent of Medicare
beneficiaries nationally are now enrolled in Medicare Advantage plans, the
share varies greatly by state -- ranging from 49 percent in Minnesota to
less than 4 percent in Iowa and Alaska. National Medicare Advantage
enrollment tends to be concentrated among a small number of organizations,
with five firms (and affiliates) accounting for two-thirds of enrollment."
LTC Comment: Medicare Advantage continues to
grow despite disadvantages imposed on it with the intent to shore up
demand for traditional Medicare.
#############################
6/8/2013, “For
Retirees, a Million-Dollar Illusion,” by Jeff Sommer, New York
Times
Quote: "In 1953, when ‘How to Marry a
Millionaire’ was in movie theaters, $1 million bought the equivalent of
$8.7 million today. Now $1 million won’t even buy an
average Manhattan apartment or come remotely close to paying the
average salary of an N.B.A. basketball player. Still, $1 million is
more money than 9 in 10 American families possess."
LTC Comment: Anyone smart enough to have that
million bucks should also have the brains to protect it with LTCI.
#############################
6/7/2013, “Doctors
Should Steer Conversation to Older Drivers: Study,” HealthDay News
Quote: "With 10,000 baby boomers turning 65
every day, the number of elderly drivers on U.S. roads is accelerating
rapidly, researchers say. But doctors and other health care providers
often wait too long before they talk to seniors about giving up driving,
even though many elderly patients are ready to discuss the issue much
sooner, according to a new study."
LTC Comment: A perennial problem that will
accelerate dangerously as boomers age.
#############################
6/7/2013, “IG
says flaws in Medicare databases invite fraud and abuse,”
Washington Examiner
Quote: "On the eve of an historic expansion
in the federal role in healthcare, a government review finds Medicare
overwhelmed by new-medical provider information and unable to police its
existing databases against the fraudulent use of taxpayer money.
Government investigators found that the data systems used to catalog the
records of Medicare providers were riddled with inaccurate or incomplete
information. When compared, 97 percent of files studied were
inconsistent."
LTC Comment: Building on a foundation of
straw.
#############################
Updated, Friday, June 14, 2013, 1:19 PM (Eastern)
Richmond, VA—
#############################
LTC BULLET: IMPLEMENTING A MEDICAID AND LTC
FINANCING STUDY
LTC Comment: What goes into planning, implementing
and completing one of the Center for Long-Term Care Reform’s state-level
Medicaid/LTC financing studies, after the ***news.***
|
*** TODAY'S LTC BULLET is sponsored
by Claude Thau, a General Agent whose proprietary sales tools enable
clients to make informed final decisions about buying LTCi in 15-20
minutes, let you evaluate a client's real interest in a combo product
in a few minutes, and change work-site LTCi from a proposal-delivery
process to interactive consultation. Claude is the lead author of the
Milliman Broker World LTCi Survey, was named one of the 10 "Power
People" in the LTCi industry by Senior Market Advisor in 2007 and was
Chairman of the Board of the Center for Long-Term Care Financing. Test
Claude by calling 800-999-3026, x2241 or email him at claudet@targetins.com
to ask questions or get references. *** |
*** LTC COMMISSION will meet June 27, with
Bruce Chernof of the
SCAN Foundation as Chair and
Mark Warshawsky of
Towers Watson as Vice Chair. Created January 1, 2013 by the fiscal
cliff avoidance legislation (American
Taxpayer Relief Act), the new commission is a consolation prize for
the elimination, in the same statute, of the CLASS Act. According to the
law, members of the commission were to be appointed “not later than 30
days” after enactment. Oops, missed that deadline by a couple months,
with the White House making its three appointments, completing the
membership, in mid-March. “Not later than 6 months” after their
appointment, the members of the commission are supposed to vote on a
comprehensive “long-term care plan.” With only three months remaining of
the original six allotted to complete its work, the Commission begins
handicapped by time pressures. Expectations are low, but whatever the LTC
Commission achieves or doesn’t will at least point public attention now
and again toward the looming catastrophe of long-term care financing. ***
LTC BULLET: IMPLEMENTING A MEDICAID AND LTC
FINANCING STUDY
LTC Comment: Over the past three years, the Center
for Long-Term Care Reform has completed Medicaid and LTC financing studies
in California, New York, Pennsylvania, Rhode Island and Maine. We’ve
reported to you faithfully on the results of those studies and our reports
are readily available on the Center’s website
here and on the sponsors’ websites as well.
So far, however, we have not described what goes into
conducting one of our state-level studies. Let’s correct that oversight
today. Following below the “fold” is a document, titled “Implementing a
Medicaid and Long-Term Care Financing Study,” which we provide to each
project sponsor at the beginning of the process.
Over the years, study sponsors have included state
governments, state Medicaid programs, LTC provider trade associations, and
State Policy Network-affiliated think tanks. Whoever the sponsor and
whichever the state, we always proceed in the same, methodical way. We
gather information systematically from face-to-face interviews with key
officials and experts. We analyze germane current and archival documents,
gleaning from them the history, status, and likely future course of
Medicaid and LTC financing in the state.
We seek to understand the way Medicaid LTC
eligibility actually works, irrespective of the conventional wisdom that
it requires catastrophic spend down and total impoverishment. We try to
discern the challenges key stakeholder groups face and we gather their
ideas and suggestions. We analyze the politically realistic options for
change. And we recommend policies that improve the LTC financing system
for all while reducing dependency on publicly financed care.
We are not always able to schedule all of the desired
appointments. Nor can we locate all desirable documentation in every
state. We’re usually limited to one intensive week onsite to do all of
the face-to-face interviews. This Summer, however, for the three studies
we’re conducting in Virginia, New Jersey, and Georgia, I’m onsite for at
least three weeks in each place. That’s because we’ve taken the
Silver Bullet of Long-Term Care on the road again and I’m living all
Summer on the East coast.
As these three studies develop, we’ll keep you posted
on our progress and results. In the meantime, here’s how we begin each
project and what we do in the process.
#############################
Implementing a Medicaid and LTC Financing Study
for [State Name]
Responsibilities
I'm counting on the [project sponsor name] to help me
find key information and documents not easily accessible online and to
help locate interviewees and schedule appointments for the site visit. I
anticipate scheduling the site visit for [dates].
I will provide guidance including a full briefing on
the issue, suggestions on where and how to find documents and information,
names of organizations and/or individuals to contact, draft letters
describing our inquiry, documents and web links establishing my and the
Center for Long-Term Care Reform's bona fides, etc.
After you look this document over, let’s talk by
phone about how to begin the process. There are several things we can do
in the ensuing weeks which will save us time once we can begin in earnest.
Following is a list of organizations and individuals
to interview during my site visit and a list of documents and information
we need to begin collecting soon.
Interviews/Briefings to schedule for site visit
Governor: if possible, a short briefing and
interview on the issue, the proposed study and likely recommendations, 15
or 20 minutes
Governor's health policy specialist: longer briefing
and interview, up to one hour
Key state legislators and staff, especially chairs of
germane committees and sub-committees: short briefings for the
principals, longer sessions with staff. OK to set up one briefing for all
legislators and staff, but also schedule personal briefings for key
legislators who want them.
State Insurance Commissioner: if possible, a short
briefing on the issue, the study and likely recommendations, 15 or 20
minutes
Insurance commission LTC insurance specialist:
longer briefing and interview, at least one hour
Medicaid single-state agency head and State Medicaid
Director: together or separately, a short briefing on the issue, the
study and likely recommendations, 15 or 20 minutes
State Medicaid LTC financial eligibility policy
specialist: intensive briefing and interview, two hours
State Medicaid lien and estate recovery program
manager: intensive briefing and interview, two hours
State Medicaid local offices (one urban, one
suburban, and one rural): in each of the three offices, two-hour
briefings and interviews with a Medicaid financial eligibility supervisor
and at least one, but preferably more, eligibility workers who actually
take and process applications Medicaid LTC benefits.
Proprietary (AHCA affiliate) and non-proprietary
(Leading Age [formerly AAHSA] affiliate) nursing home/assisted living
trade association representatives, including executive directors of the
state affiliates, their government affairs directors, and a sampling of
members (nursing home and assisted living owners or managers).
Home health agencies representatives from trade
associations and members.
Long-term care insurance representatives including
individual producers and people representing carriers and major brokers.
NAIFA, NAHU affiliates.
Reverse mortgage specialists including
representatives of lenders and individual producers
Elder law attorneys including Medicaid planners.
Senior advocates (AARP, NCOA, Area Agencies on Aging,
LTC Ombudsman)
Business (Chamber of Commerce, etc) and/or taxpayer
representatives who have an interest in long-term care financing issues.
(Employee absenteeism and presenteeism re family LTC responsibilities have
become as big a problem as child care.)
Documents or Information:
Any data or reports on the current budgetary crisis
especially as relates to funding Medicaid and long-term care.
Details on measures (1) taken already and (2)
anticipated, to cut Medicaid costs, especially cuts that affect LTC.
Break out of state spending on Medicaid vs other
state programs, i.e. education, corrections, etc.
[State] Medicaid expenditures for long-term care for
the elderly broken out by nursing home and HCBS (home and community-based
care) for the past five years, more years if possible.
Any available reports on Medicaid financing of
long-term care in [State], including studies bearing on advisability and
potential savings from nursing home diversion to HCBS.
[State] Medicaid (TEFRA) lien and/or estate
recoveries for the past five years, excluding recoveries for fraud.
Medicaid financial eligibility rules for nursing home
and HCBS, e.g. asset limits, countable vs. non countable assets, income
limits, spousal impoverishment protections, etc.
Any demographic studies related to aging of the
[State] population and the likely impact of the Age Wave.
Medicaid reimbursement rates for nursing homes and
home care providers and private pay rates in the state for comparison.
Any reports or data bearing on quality of care in
[State] nursing homes and by home care providers.
Information on nursing home liability insurance
issues, premiums, claims experience, etc.
Percent of nursing home residents in [State] covered
by Medicaid, Medicare, private pay and other systems.
Summary of [State]'s Medicaid waivers that provide
care for the elderly.
Any studies that document "Medicaid estate planning,"
the practice of artificially impoverishing people to qualify them for
Medicaid LTC benefits.
Any studies documenting the use of private long-term
care insurance or home equity conversion to fund long-term care in
[State].
Insurance commission regulations bearing on long-term
care insurance.
Data on home ownership and home equity of [State’s]
residents especially for the age 62+ cohort that could qualify for reverse
mortgages.
Status of "LTC Partnership" take-up and
implementation in [State].
#############################
Updated, Monday, June 10, 2013, 12:56 PM (Eastern)
Richmond, VA—
#############################
FLTCI IN THE
LIMELIGHT AND LTC NEWS AND COMMENT
LTC Comment:
Private long-term care insurance gets more than its share of negative
media coverage. So when a good, positive story comes out, it’s worth
highlighting. Such is our lead for today’s LTC E-Alert . . .
6/5/2013, “LTC:
Perfect gift for him, her & you,” by Mike Causey, FederalNewsRadio.com
Quote: "Personal example: My mother was a
long-time federal worker (HUD, HHS, Social Security and the U.S.
Information Agency). She retired before the government offered LTC
coverage. But as soon as they did, I urged her to sign up. She very
reluctantly agreed, although like a lot of us, she didn't like to think
about things like that. Anyhow, I thought I was doing her a favor. Turns
out it was one of the biggest late-in-life gifts she could give to me.
After being healthy as a horse and a big walker (she didn't learn to drive
until her early 30s), as well as following a careful diet, she got
dementia. We didn't know it at first, but it got worse. For the last
couple of years, she had to be in a nursing home. She required watching
and 'round-the-clock care. As her only child, I (with a very big assist
from my kids and their spouses) was it! Thanks to her federal annuity,
Social Security (she worked a long time in the private sector, too) and
LTC, she had relatively few bills. Same for me. It was sad, it was
trouble, it was awful (especially for her). But it could have been so much
worse. She was able to stay in a great place (considering the situation)
that was 20 minutes from me and her grandchildren. Thanks to LTC, the
icing on the cake, she had a very good quality of life (considering the
circumstances), and we weren't always sweating the money and quality of
care."
LTC Comment: Congratulations to CEO Paul
Forte and everyone associated with the federal LTC insurance program for
this terrific publicity and for making one more LTC story have the
happiest possible ending.
#############################
6/7/2013, “Fine
Print and Red Tape in Long-Term Care Policies,” by Tara Siegel
Bernard, New York Times
Quote: "One of the big reasons people buy
long-term care insurance is to avoid burdening a spouse or grown children
when they can no longer care for themselves. But some family members are
shouldering another type of burden: one that involves piles of paperwork
and repeated phone calls, as they are forced to navigate a labyrinth of
requirements to collect benefits that the insured spent many years
paying."
LTC Comment: Thank goodness the
alternative—applying for Medicaid benefits—is so efficient and
unburdensome. Not!
#############################
6/6/2013, “Genworth
To Eliminate 400 Jobs,” InsuranceNewsNet.com
Quote: "Genworth Financial, Inc. (NYSE: GNW)
today announced an expense reduction plan as it continues to work on
improving the operating performance of its businesses. This plan will
eliminate approximately 400 positions, including 150 open positions that
will not be filled, and will reduce related information technology and
program spend. When fully implemented, the company expects to realize
approximately $80 to $90 million in annual pre-tax expense savings
primarily related to these actions."
LTC Comment: The private LTCI industry
struggles to adapt with premium increases and expense reductions while the
public LTC programs continue to ignore financial reality and the Fed
supports bad fiscal policy with near-zero interest rates. When will this
bubble pop?
#############################
6/7/2013, “CMS
crackdown doubles Medicare removals,” by Tim Mullaney, McKnight’s
LTC News
Quote: "The Centers for Medicare & Medicaid
Services has removed 14,663 healthcare providers and suppliers from the
Medicare program in the last two years, the agency announced Thursday. The
figure more
than doubles the number of removals from the prior two-year period."
LTC Comment: Government is much more
proficient at giving money away than it is at preventing fraud or
recovering mis-appropriated funds. Profit motive and competition compel
private companies to monitor spending more carefully in the first place
and to correct abuses by employees or customers quickly and efficiently.
#############################
6/6/2013, “Feds
settle first genetic discrimination lawsuit,” by Keith R. McMurdy,
Employee Benefit Adviser
Quote: "Plans may not request or require
individuals or their family members to undergo genetic testing or to
provide genetic information. As defined in the law, genetic information
includes family medical history and information regarding individuals' and
family members' genetic tests."
LTC Comment: Forbidding private insurance to
use genetic information in underwriting invites abuse of the same
information by insureds, increases adverse selection, and undercuts
actuarial analysis.
#############################
6/4/2013, “Timely
Long Term Care Insurance Option Reduces Coverage Costs,” by Jesse
Slome, WSJ press release: “The Wall Street Journal news
department was not involved in the creation of this content.”
Quote: "'The Guaranteed Purchase Option (GPO)
allows more people to buy coverage they can afford,' explains Jesse Slome,
director of the American Association for Long-Term Care Insurance (AALTCI).
'You lock in meeting the required good health qualifications along with
the advantage of lower rates, plus you still have the ability to increase
coverage in future years -- an extremely attractive combination.'"
LTC Comment: Premium Elite Center member
Sally Leimbach observed “Jesse is correct but consumers have to be careful
that their state will allow that [Guaranteed Purchase Option] as
Partnership Qualified. Most of those options go away if not exercised and
when a person goes on claim. Still better then nothing, but consumers
MUST receive the full pros and cons from their broker to make a fully
informed decision.”
#############################
6/3/2013, “Baby boomers are killing themselves
at an alarming rate, raising question: Why? [link],”
by Tara Bahrampour, The Washington Post
Quote: "It has long held true that elderly
people have higher suicide rates than the overall population. But
numbers released in May by the Centers for Disease Control and
Prevention show a dramatic spike in suicides among middle-aged people,
with the highest increases among men in their 50s, whose rate went up by
nearly 50 percent to 30 per 100,000; and women in their early 60s, whose
rate rose by nearly 60 percent (though it is still relatively low compared
with men, at 7 in 100,000)."
LTC Comment: “(I
hope I die before I get old (Talkin' 'bout my generation)).”
#############################
5/31/2013, “Congressional Long-Term Care Panel
Will Finally Meet, But Odds For Success Are Worsening [link],”
by Howard Gleckman, Forbes
Quote: "The other controversy focused on
whether wealthy people artificially dispose of or hide assets in order to
become eligible for Medicaid. Stephen Moses frequently makes this claim
and he did again on Friday based on what he says are interviews with state
Medicaid officials. Unfortunately, Mark echoed this claim. However, many
studies, including a new one by Josh Wiener, tell a different story. The
vast majority of those who enroll in Medicaid long-term care never had
much in the way of assets, and thus had very little to give away. While it
is true that some people abuse the system, the evidence is pretty clear:
The problem is much smaller than Stephen and Mark assert."
LTC Comment: Apparently Mr. Gleckman drifted
off when I explained how basic Medicaid eligibility and Medicaid planning
in general, not simply asset transfers, explain why the affluent get as
many benefits from the welfare program as the poor, as established by a
Chicago Fed study. Thankfully, C-SPAN covered the event live and the
video is archived on AEI's website so please do watch and reach your own
conclusions: http://www.aei.org/events/2013/05/31/long-term-care-markets-or-mandates/.
#############################
5/31/2013, “Dementia
Risk Raised 35% by General Anesthesia in Study,” by Kristen Hallam,
Bloomberg
Quote: "Older people who undergo general
anesthesia for major surgery have a 35 percent higher risk of developing
dementia later in life, according to a French study."
LTC Comment: One more factor to underwrite?
#############################
5/31/2013, “Medicare
Trust Fund's Life Extended, But What Does It Really Mean?,” by Mary
Agnes Carey and Kaiser Health News, PBS News Hour
Quote: "Slower growth in spending is helping
extend the life of Medicare's hospital trust fund to 2026, two years
beyond last year's estimate,
officials said Friday. They also reported, however, that Social
Security's disability trust fund, which pays monthly benefits to disabled
workers and their families, is expected to be exhausted by 2016. Social
Security will begin to
run out of money in 2033, nearly the same time frame as predicted last
year."
LTC Comment: You could call the Medicare news
"good" except that all the money in the "trust fund" has already been
borrowed and spent by the government. Hardly encouraging, yet the media
coverage of this development was mostly cheerful!
#############################
5/31/2013, “Using
your Health Savings Account for Long-Term Care,” by Ann G.
Schnorrenberg, US News & World Report
Quote: "Health savings accounts are one of
the most tax favored savings vehicles available to Americans. Since they
are completely tax free — funded with
pre-tax dollars and not subject to taxes at withdrawal —they are a
great way to save money for future medical costs. In particular, the HSA
could be a good way to help cover long-term care costs."
LTC Comment: “[A]n HSA (health savings
account) is an account established to pay for qualified medical expenses,
including qualified long term care costs and long term care insurance
premiums. Contributions and withdrawals are tax-free for qualified
expenses.” Source:
The Federal LTC Insurance Program.
#############################
5/31/2013, “SNF
margins cut in half, Alliance report says,” by Tim Mullaney,
McKnight’s LTC News
Quote: "With income margins decimated by
Medicare and Medicaid cuts and access to capital strangled, skilled
nursing facilities will be unable to care for the nation's booming senior
population unless changes are made, according to a new report from the
Alliance for Quality Nursing Home Care."
LTC Comment: The fiscal walls are finally
closing in on government-financed long-term care.
#############################
5/30/2013, “Coping With Alzheimer's: A Mother
and Daughter Portrait Of Long-Term Care [link],”
PBS
Quote: “After being diagnosed with
Alzheimer's, professional artist Mary Wyant slowly lost her ability to
paint and the ability to take care of herself. Ray Suarez examines the
story of Mary and her daughter Rebecca, who is now her mother's legal
guardian and primary caretaker, about the daily struggles of long-term
care.”
LTC Comment: The following note from Center
member B.J. Randolph inspired us to find and share this item: "Did you
see the evening PBS news? A great video of a 48 year old daughter caring
for her mother with Alzheimer's Disease, for years, to illustrate a
message, '70% of 65 year olds will need care ..... but the majority has
not made plans for it .....' It was a lengthy part of the news ... well
done. I was both touched and hopeful that LTC was reaching a national
audience on this respected program and that the subject is emerging more
and more into the light of day."
#############################
5/30/2013, “Variation
In Medicare Costs Is Mainly Due To Post-Acute Care,” by Peter Ubel,
Forbes
Quote: "If we want to control Medicare
spending, this analysis suggests we need to focus our efforts on
post-acute care. Our obsession with hospital costs and physician bills may
be misplaced. It could be time to look much more closely at things like
the nursing home industry, the home healthcare industry, and places that
specialize in long-term care. Not quite as sexy as those other topics. But
worrying about sexy doesn't help us control healthcare spending!"
LTC Comment: More proof rational LTC
financing policy is critical and could produce major savings.
#############################
5/30/2013, “Debt of the Elderly: Housing: Debt
payments as a percentage of income steadily rising [link],”
by Craig Copeland, Ph.D., Life & Health Advisor
Quote: "As described in more detail below,
debt levels of the current elderly and near-elderly are at much higher
levels than they have been for past generations. Among families with heads
age 75 or older, both housing and consumer debt levels increased in 2010.
Moreover, for this cohort, a larger percentage had debt levels above the
threshold considered problematic. While a high debt level is not
necessarily a sign of financial danger for all elderly or near elderly
families (especially if they are also high-income), housing debt
(typically the most financially significant asset elderly families have)
is of particular concern, because leveraging it at this point in their
lives may leave them without a major resource to finance an adequate
retirement."
LTC Comment: This finding is worrisome
especially because tapping home equity to fund LTC privately and to
encourage the purchase of LTC insurance is just about the only hope
government has to save Medicaid as a long-term care safety net.
#############################
5/29/2013, “SSA Representative Payee Program:
Addressing Long-Term Challenges Requires a More Strategic Approach [link],”
Government Accountability Office
Quote: "Although changing demographics and
resource constraints will challenge the future administration of the
Representative Payee Program, SSA has done little to position itself for
the long term. The projected growth in the aged population, as well as the
incidence of individuals with dementia, will have implications for the
program, as SSA will have to spend more resources finding and monitoring
payees. These challenges are exacerbated by staff and resource
constraints, which could make SSA less able to identify and address payee
benefit misuse."
LTC Comment: Abuse of Social Security by
representative payees is a major problem for LTC providers. Frail or
infirm elderly on Medicaid must contribute most of their income toward
their cost of care, including their Social Security benefits. But payee
reps, often the same people who take early inheritances to put their
parents on Medicaid, sometimes keep the Social Security checks for
themselves. Federal and state Medicaid programs usually do nothing to
help recoup such funds. They leave the responsibility to collect in the
hands of LTC providers who are already receiving less than the cost of
care from Medicaid. Losing the Social Security income too adds insult to
injury and is one more reason why LTC providers are struggling and
publicly financed LTC has a quality problem.
#############################
5/29/2013, “Genworth
Down to Underperform,” Nasdaq
Quote: "Life insurance sales slipped 68% year
over year, while long-term care insurance sales decreased 17% year over
year. In addition, loss ratios of long-term care insurance business have
been increasing over the past several years and ranged from 65% to 71%
over the last five years."
LTC Comment: Lower lapse rates and higher
loss ratios make a double whammy.
#############################
5/29/2013, “Health
Differences May Explain Medicare Spending Variation,” by Jordan Rau,
National Public Radio
Quote: "The idea that uneven Medicare health
care spending around the country is caused by wasteful practices and
overtreatment — a concept that has influenced portions of the federal
health law — took another hit in a study published Tuesday. The
analysis concludes that differing levels of health of people around
the country explain between 75 percent and 85 percent of cost variations
in Medicare. ‘People really are sicker in some parts of the country,’ said
Dr. Patrick Romano, one of the authors.’”
LTC Comment: Just as the alleged $70 billion
savings from CLASS disappeared in the light of good analysis, so too is
another dubious health-reform money saver proving baseless. There simply
are not billions of dollars to be saved by standardizing Medicare’s
service delivery.
#############################
5/28/2013, “Boomers:
Older, Wiser and... Worried,” by Gail Buckner, FoxBusiness
Quote: "Now, a recent study by Merrill Lynch
and the demographic experts at Age Wave indicates that as boomers are
moving into the next stage of their lives, their priorities are coming
into sharper focus. And their attention is not about having a fat 401(k).
There is fear of the unknown, such as how healthy they or their spouse
will be. A shockingly-high number of boomers- 90%- say they are not
confident they will be able to afford they health care they might need.
They've mixed feelings about living longer. They're worried about running
out of assets and concerned that Social Security and pension benefits they
are expecting might not be there."
LTC Comment: Consumers are worried, yes, but
most fail to act. Could it be that eight decades of social insurance
programs--which spread but don’t price risk--created a sense of
entitlement that undercuts personal responsibility?
#############################
5/28/2013, “Senior
health care crisis looms; report ranks states,” by Michelle Healy,
USA Today
Quote: "An aging nation that's living longer
but with growing rates of obesity, diabetes and other chronic diseases
points to an emerging health care crisis, says a report out Tuesday that
analyzes seniors' health status state-by-state. . . . LONG-TERM CARE:
Investigate your options early."
LTC Comment: The evidence mounts as
dependably as consumers and policy makers ignore it.
#############################
5/24/2013, “Sequestration
2.0 likely to take another bite out of provider payments,” by John
O’Connor, McKnight’s LTC News
Quote: "For many long-term care providers,
dealing with funding cuts that began in March has amounted to making the
best of a bad situation. Automatic sequestration cuts are trimming
Medicare payments by 2%, while many complementary programs are being held
back or halted. That's the bad news. The really bad news is that things
are likely to get worse. Thanks to pending sequestration cuts that are
beginning to look all but inevitable, more cuts may be coming."
LTC Comment: Historically, when government
cuts LTC provider rates, providers compensate by raising private-pay
rates, which increases the incentive for people to qualify for public
financing. It's a vicious downward cycle ruining quality care while
discouraging responsible LTC planning.
#############################
Updated, Friday, June 7, 2013, 12:30 PM (Eastern)
Richmond, Virginia—
#############################
LTC BULLET: THE ROLE OF ESTATE RECOVERIES IN LTC
FINANCING
LTC Comment: When Medicaid pays for expensive LTC
without recovering from estates, it subsidizes irresponsibility and hurts
the poor. Details after the ***news.***
*** SILVER BULLET IN VIRGINIA. I write this in the
Silver Bullet of Long-Term Care with rain pattering on the aluminum
roof. I’m in Richmond, Virginia to begin a study of Medicaid and
long-term care financing for the
Thomas Jefferson Institute for Public Policy, the Commonwealth’s
leading non-partisan think tank. From here, I’ll head to New Jersey and
later to Georgia to conduct the same studies. In the meantime, we’re
keeping a close eye on LTC public policy developments in Washington, DC
including the new LTC Commission’s slow start. ***
*** LTC COMMISSION. The new study group has a huge
task, a short time frame, a late start and little or no budget.
Nevertheless, there is a propitious beginning to report. Mark Warshawsky,
Ph.D. wrote an excellent paper titled “Questions
for the New Federal Commission on Long-Term Care.” Tap the link and
read it in the
LTC Discussion Group’s archives. You won’t be disappointed. And
don’t miss the American Enterprise Institute’s panel discussion of
Warshawsky’s paper (“Long-term
care: Markets or mandates?”) which was covered live by C-SPAN and is
available on AEI’s website for viewing
here. Hear my 15-minutes of commentary at the 1:32:44 (one hour, 32
minute, and 44 second) point in the program. Controversy erupted after
the program when two panelists privately challenged my assertion that IRAs
are exempt for purposes of determining asset eligibility for Medicaid LTC.
My position proved correct when the question was put to an expert on the
subject of SSI eligibility. ***
*** “TRUST FUND MADNESS” is the Washington Post’s
hook to Bob Samuelson’s column titled “Trust
funds are least of Social Security, Medicare problems.” If you read
any of the many good-news columns about alleged improvements in the Social
Security and Medicare “trust funds,” you should read Samuelson’s rebuttal
which puts the lie to such Panglossian nonsense. ***
#############################
LTC BULLET: THE ROLE OF ESTATE RECOVERIES IN LTC
FINANCING
LTC Comment: The Center for Long-Term Care Reform
has published a new report titled “Maximizing
NonTax Revenues from MaineCare Estate Recoveries.” It explains the
need for estate recoveries, recounts best practices from leading estate
recovery states, recommends 20 actions MaineCare (Maine’s name for
Medicaid) should take to increase recoveries, and includes an annotated
bibliography of publications both for and against estate recovery. We
thank the
Maine Heritage Policy Center and the
Maine Health Care Association for their support of this work. Check
out the report here:
http://oig.hhs.gov/oei/reports/oai-09-86-00078.pdf. “Read the
Executive Summary” below. But first some background:
The DHHS Inspector General’s 1988 report titled “Medicaid
Estate Recoveries,” which I wrote by the way, made three major
recommendations:
- Tighten Medicaid LTC eligibility so that it isn’t
so easy for people to qualify for benefits without spending down some of
their own money.
- Encourage liens on real property to ensure
recipients’ will either retain ownership during their lifetimes or that
Medicaid will be repaid if the property is sold.
- Recover from estates of deceased Medicaid LTC
recipients to (a) recoup program expenditures, (b) prevent
Medicaid-financed windfalls for heirs who take early inheritances to
impoverish their parents, (c) incentivize others to plan early and
responsibly for LTC so they don’t end up on Medicaid, and (d) return
non-tax dollars to Medicaid to relieve taxpayers and support quality
care for the truly needy.
Federal law (OBRA ’93) implemented all three of those
recommendations creating what has been called a “government-sponsored home
equity conversion program.” The plan was that Medicaid would retain its
huge asset exemptions so that people stricken by the chronic illness of
old age would not be forced into poverty, but neither would they be
rewarded for failing to save, invest or insure for long-term care.
On the way from federal legislation to nationwide
implementation, however, the plan went awry. State Medicaid programs
didn’t implement strongly, the federal government didn’t enforce
aggressively, the media didn’t report, and the public remained unaware and
hence uninfluenced by the positive incentives in the law to plan for LTC.
Two decades later, Medicaid coverage for LTC expenses
remains easy to obtain without spending down, most states do not utilize
liens to secure exempt property, and estate recoveries—though
mandatory—remain spotty. Consequently, Medicaid continues to discourage
responsible LTC planning, rewards failure to plan for LTC, and therefore
crowds out both privately financed home and community-based care and
private LTC insurance to pay for care.
Bottom line, Medicaid LTC financing remains a
quagmire of perverse incentives and unintended consequences that will get
much worse as the baby-boom generation retires and finally needs LTC in
big numbers. So, what does our new report have to say about the situation
as it is manifested in Maine and the eight other leading states we
reviewed?
#############################
Executive Summary from “Maximizing
NonTax Revenue from MaineCare Estate Recoveries”:
MaineCare is Medicaid in Maine, a means-tested public
assistance program, partially funded by the state and federal
governments. It is the dominant payer for institutional and home and
community-based long-term care in the state.
MaineCare, especially its long-term care component,
is a huge expense to the state budget, at risk of crowding out
expenditures for other critical state programs, facts explained and
documented in our earlier
report titled “The Maine Thing About Long-Term Care Is that Federal
Rules Preclude a High-Quality, Cost-Effective Safety Net.”
Federal law exempts substantial assets from
Medicaid’s resource limits, such as for example, home equity up to a
minimum of $536,000. But federal law also mandates that state Medicaid
programs recover the cost of care provided from the estates of deceased
recipients or from the estates of their surviving exempt relatives.
Thus, although Medicaid is intended as a health and
long-term care safety net for the poor, it has also become the predominant
funder of most expensive long-term care for the middle class and often for
the affluent as well. Without strong estate recovery, state Medicaid
programs become free inheritance insurance for baby-boomer heirs.
MaineCare operates an inexpensive and quite effective
estate recovery program that returns an average of $6.7 million per year
in state and federal funds to the state which can be re-invested in the
program to benefit citizens who need help with the catastrophic cost of
long-term care in the future.
By interviewing experts in eight of the leading
Medicaid estate recovery states, we identified numerous ways in which
MaineCare might increase its estate recoveries by as much as double or
triple the amount of current recoveries to a total of $13.4 million or
$20.1 million, respectively.
To achieve such dramatic results, MaineCare would
need to seek new state statutory authorities such as an expanded
definition of “estate,” the ability to place liens on real property during
a recipient’s lifetime, and elimination of the current “family allowance”
which prevents recovery from estates with less than $10,000 in most cases.
Operationally, MaineCare would need to invest more in
its estate recovery unit to reduce its cost-effectiveness ratio from $25
in recoveries for each dollar of cost to something more closely
approaching a ratio that maximizes total recoveries, perhaps $10 to $15 in
recoveries per dollar of cost. With additional staff resources, the
MaineCare estate recovery unit could pursue all of the best practices
listed in the “Recommendations” section below.
MaineCare’s long-term care program performs a
valuable service for Mainers, enabling them to obtain expensive long-term
care when they need it without financial devastation. The program’s
federally mandated quid pro quo is that beneficiaries of the
state’s and federal government’s largesse repay the program from their
estates.
That is the moral high ground MaineCare’s estate
recovery program occupies. Citizens, policy makers and law makers who
support and encourage the program help to ensure that MaineCare will
continue to provide a long-term care safety net for Mainers without
busting the state’s budget.
#############################
#############################
Updated, Thursday, May 30, 2013, 12:57 PM (Eastern)
Washington, DC—
#############################
LTC BULLET: LET’S PLAY LTC JEOPARDY
LTC Comment: Good public policy comes down to asking
the right questions. Finally, someone has and we’ll provide the right
answers after the ***news.***
*** A VERY THOUGHTFUL PAPER written by an appointee
to the new LTC Commission inspired today’s LTC Bullet. Tomorrow
(Friday) morning, you can watch online as its author presents the paper
and five experts discuss it. We highlight this opportunity because it
promises to be a very enlightening program and well worth anyone’s time
who cares about LTC financing policy. The details follow. ***
*** AMERICAN ENTERPRISE INSTITUTE (www.AEI.org)
presents “Long-Term Care: Markets or Mandates?” on Friday, May 31, 2013
from 9:15 a.m. - 11:15 AM Eastern Time at AEI headquarters in Washington,
DC. LTC Commission appointee Mark Warshawsky will “explain the
implications of another publicly funded long-term care insurance program.
A panel will then debate whether another government program is the best
way to ensure that families can afford to provide the necessary services
for their aging loved ones.” Serving on the panel with Steve Moses
(representing the market-based position) are Howard Gleckman (who writes
op-eds for Forbes), Joshua Wiener (a widely-published LTC analyst
who favors public financing) and Matt Salo (Director of the National
Medicaid Directors Association). AEI’s highly regarded analyst Joe Antos
will moderate the program. If you can’t be there in person, check out the
live stream
here or catch it
later in AEI’s archives where the full video will be posted within 24
hours. For more information, please contact Catherine Griffin at
catherine.griffin@aei.org, 202-862-5920. ***
#############################
LTC BULLET: LET’S PLAY LTC JEOPARDY
LTC Comment: When it was announced, no one—I among
them—held out much hope for the new “LTC Commission,” created by the
oxymoronically named
American Taxpayer Relief Act of 2012. But the first output to come
from one of the new commission’s members has me thinking more positively.
Mark J. Warshawsky, Ph.D., who served as Assistant
Treasury Secretary for Economic Policy in the G.W. Bush administration,
has written a
paper titled “Questions for the New Federal Commission on Long-term
Care to Address Prior to Legislative Recommendations.” He’s definitely
asking the right questions, as few scholars have, so do click the link and
read his paper. Your time will be amply rewarded.
But right now let’s play a little “LTC Jeopardy.” As
on the
TV quiz show, we’ll supply the answers and then see which of Dr.
Warshawsky’s questions they resolve. Because our answers contradict much
of the conventional academic wisdom about LTC financing, I think you’ll
see why we’re so excited someone’s finally asking the critical questions
that only our analysis can explain.
We’ll close with a final “LTC Comment” that resolves
once and for all the puzzling conundrums raised by Warshawsky’s paper.
Ready contestants? Here goes.
Answer #1: Well-intentioned but
counterproductive public policy, which pays for most expensive long-term
care without requiring strict financial eligibility limits, has
anesthetized the public to LTC risk and cost resulting in their failure to
plan, save, invest or insure and guaranteeing a ever-worsening financial
crisis as the Age Wave crests.
MJW’s Questions: “What has caused this rapid
growth in LTC spending? . . . What role is played by the creation of
government funded social insurance and welfare programs? Other factors?
Will the rapid growth continue into the near future? The next twenty to
thirty years? Over the horizon used by the Trustees of the Social Security
and Medicare programs?” (p. 3)
Answer #2: Despite decades of wishful
thinking by academics and policy makers, providing home care financed by
public programs without limiting eligibility to people in financial need
does not save money compared to institutional care because home care loses
the economy of scale, is very expensive to control for quality, crowds out
free family care, invites fraud, encourages Medicaid gaming/dependency,
and discourages private LTC planning and personal responsibility.
MJW’s Questions: “In light of a reported
trend in up-coding as well as recent discoveries of outright fraud on
Medicare arising from the home health care industry, is growth in this
component of spending a source of concern? Can home health care be an
efficient replacement of nursing home services, saving the government
money, or does it replace free care provided by families and friends and
volunteers?” (p. 3)
Answer #3: Decades of easy access to publicly
funded long-term care through Medicaid, Medicare and the VA has left those
programs shackled with trillions of dollars of unfunded liabilities and
hopelessly unable to meet the claims of future beneficiaries.
MJW’s Questions: “In light of the
well-established tendency (commonly called moral hazard) for insurance
provision to encourage over-spending, is this shift in the sources of
funding for LTC [from mostly private to mostly public] efficient, both in
terms of government spending and outcomes? . . . How significant is
growing LTC spending in Medicare’s long-standing and deepening deficits
and its poor future prospects? . . . How significant are the absence of
look-back periods and other constraints on program eligibility for the
growth in spending by the VA on LTC? . . . Combining all sources of
federal government spending on LTC, and taking a Trustees long horizon
approach to evaluating the sustainability of spending and financing, what
is the long-term projected status of current law federal government
support of LTC?” (p. 4)
Answer #4: Asset shifting, or more generally
Medicaid planning, is a problem, but the far bigger problem, rarely
recognized by analysts including Warshawsky, is that Medicaid LTC
eligibility is easy for most middle class people to obtain because income
is rarely an obstacle and virtually unlimited assets are exempt.
MJW’s Questions: “What is the empirical
evidence on asset shifting to gain Medicaid eligibility for LTC services?
How strong is state-level enforcement of these rules, including collection
efforts? What are the administrative systems in place to police compliance
with these rules?” (p. 5)
Answer #5: Because of Medicaid’s generous
income and asset eligibility rules, people can ignore the risk of LTC,
wait to see if they ever need expensive long-term care, and if they do,
qualify easily for the program’s most expensive benefit. That’s been true
since Medicaid began in 1965, so it’s no surprise that most aging
Americans don’t make LTC planning or insurance a priority.
MJW’s Questions: What is the evidence,
empirical or logical, that the Medicaid crowd-out explanation for the
(growing but still) relatively moderate size of the private LTC insurance
market is the (largely) correct one? (p. 5)
Answer #6: The fact that affluent people get
as much or more Medicaid LTC benefits as poor people is only hard to
understand if you assume incorrectly—as most scholars do, including those
whose
Chicago Fed paper Warshawsky cites—that Medicaid forces people to
spend down into impoverishment unless they “shift assets.” It doesn’t.
MJW’s Questions: “In particular, does the
empirical finding that the well-to-do and long-lived qualify for Medicaid
to a surprisingly high degree imply that significant asset transference
activity is taking place, or, alternatively, that these households are
inadequately protected financially for longevity?” (p. 5)
Answer #7: Public information programs about
the need to plan for LTC have little effect because they invariably claim
that catastrophic asset spend down awaits victims of long-term illness
which is not true because public financing is factually easy to obtain and
the public simply doesn’t take such scary “education” seriously.
MJW’s Questions: “How economically
significant are the survey results of public confusion about government
program coverage for LTC. That is, does lack of knowledge account for why
there is not more saving and insurance provision among those for whom
advance planning may be possible and sensible (middle class population and
above)? If this explanation is important, what are its implications? In
particular, can public information campaigns or private marketing help
alleviate the knowledge gap?” (pps. 5-6)
Answer #8: The LTC Partnership Program only
increases LTC insurance sales marginally because forgiveness of the
alleged Medicaid spend down requirement, which hardly exists in the first
place and likely wouldn’t occur until decades after purchase of a
partnership policy, is little incentive to plan or buy. By targeting
Medicaid LTC benefits to people most in need, public policy could unleash
an enormous source of new private financing for LTC from home equity
conversion and private LTC insurance, which would finally be in demand.
MJW’s Questions: “Do partnership policies
save or cost the government (state and federal) money? Do they expand the
LTCI market beyond what it would be otherwise in a leveraged way, for
example, through marketing of partnership policies, thereby increasing
public knowledge of the limits and deficiencies of public insurance? In
the current low inflation environment, is the 5% automatic increase
feature for partnership policies still a reasonable requirement? Are there
other non-insurance private sources of individual funds of LTC spending
whose accumulation can be encouraged? Can Medicaid and Medicare be better
structured to incent the wider use of private insurance and/or personal
savings accumulated over a working lifetime for LTC?” (p. 6)
LTC Comment: Okay, enough with Jeopardy.
Let’s put the Qs & As back into the normal order. In a nutshell, Mark
Warshawsky’s paper asks the following questions either explicitly or by
implication:
If people can’t get government-financed long-term
care without spending down their life’s savings into total impoverishment,
then . . .
- How in the world do affluent people qualify for
Medicaid LTC and get as many or more benefits than poor people?
- How come the National Health Expenditure Accounts
show decades of skyrocketing public LTC costs and plummeting
out-of-pocket expenditures?
- Why does peer-reviewed research show that Medicaid
“crowds out” private LTC insurance? Are people just ignorant of their
catastrophic spend down risk?
- Why don’t public education programs convince
people to plan for LTC and buy LTC insurance if the risks and costs are
so huge?
- Why have the LTC Partnerships had so little
impact?
- Why is private financing of home care minimal
while Medicare and Medicaid home care financing explodes?
The answers to all these questions and many more turn
on correcting the fallacious premise that most analysts assume, i.e.
that “people can’t get government-financed long-term care without
spending down their life’s savings into total impoverishment.”
Here are the facts:
- Income rarely obstructs eligibility for Medicaid
LTC benefits because states either subtract medical and LTC expenses
from income before determining eligibility (medically needy systems) or
they allow Miller income diversion trusts which accomplish the same
purpose. High-income people qualify easily for Medicaid LTC benefits as
long as their health care and LTC expenses exceed or closely approach
their income. All they need is a cash flow problem.
- Only very high assets interfere with Medicaid LTC
eligibility because a home and all contiguous property are exempt from a
minimum equity of $536,000 to a maximum in 14 states of $802,000. On
top of that, the following resources are exempt with no dollar limit
whatsoever: one business including the capital and cash flow; one
automobile; prepaid burial plans; individual retirement accounts; term
life insurance; home furnishings and personal belongings. Purchasing
such exempt assets is a simple, commonplace way to “spend down” to
Medicaid’s exceptionally generous asset limits.
- Highly affluent people, who still don’t qualify
for Medicaid LTC benefits despite these extremely generous rules, can
easily reconfigure their income and assets (and avoid mandatory estate
recovery) by retaining Medicaid planners who use special trusts,
“Medicaid-friendly annuities,” “reverse half-a-loaf” strategies, life
care contracts and other sophisticated legal techniques to impoverish
them artificially.
- Middle class and affluent people on Medicaid
occupy the nicest beds in the best LTC facilities because they can
afford to pay privately for awhile. That buys them red carpet access to
excellent care, because nursing homes and assisted living facilities
desperately need private residents who must pay half again as much on
average as Medicaid pays. Thus poor people are crowded out of the best
Medicaid facilities and are forced into the 100% Medicaid facilities
that have given nursing home care such a bad name.
- Because Medicaid LTC financing has been so easy to
obtain after the insurable event occurs and for nearly 50 years, most
people don’t think or worry about LTC risk and costs until chronic
illness strikes, at which time it’s too late to save, invest or insure
and the only way to preserve the estate is to take advantage of
Medicaid. Thus, the problem isn’t that people are ignorant, nor that
they are planning consciously to rely on Medicaid. The problem is that
Medicaid has always paid for most expensive LTC which has enabled
consumers’ “denial” of the risk.
- From these facts, which remain unrecognized in the
peer-reviewed LTC financing literature, flow all the anomalies
enumerated in Mark Warshawsky’s paper and their resolution. Easy access
to public LTC funding desensitized the public to LTC risk, eliminated
demand for home equity conversion or LTC insurance to fund LTC
privately, crowded out a market for privately financed home and
community-based care, caused decades of explosive public LTC
expenditures, and ensures the eventual collapse of the public programs.
But here’s the good news: if we just stop doing what
we’ve always done (giving away free LTC after people need it), we’ll stop
getting the same result (exploding public costs, complacent consumers, and
minimal private LTC financing). That’s the formula for sane public
policy.
And even better news: it won’t be hard to do. Drop
the federal home equity exemption from its current stratospheric level to
something closer to England’s $36,000 exemption (for all assets including
home equity); eliminate the “Maintenance of Effort” requirement in
ObamaCare so that state Medicaid programs can tighten LTC eligibility
rules within existing federal limits; and encourage state experimentation
with tighter financial limits and stronger estate recovery programs
designed to encourage early and responsible LTC planning.
Do those things and the puzzling conundrums raised by
Mark Warshawsky’s excellent paper will disappear like morning mist in the
hot summer sunshine.
#############################
Updated,
Tuesday, May 28, 2013, 12:24 PM (Eastern)
Columbus, OH—
#############################
LTC E-Alert #13-017: Hybrids vs.
Traditional LTCI and LTC News and Comment
LTC Comment:
Thanks to Bronze Corporate Member Rick Leonard, President of Long Term
Care Resources, for this thought-provoking query:
“Most of the LIMRA and other studies we see on
individual LTC sales never account for hybrids like TLC and Moneyguard.
There are now numerous other Life policies that have LTC riders and these
sales are not tracked.
“As I look at this, I consider every one of these
hybrid or Life w/ LTC rider sales to be an LTC sale. It may not provide
the coverage of traditional LTC but the in the customer’s mind – the LTC
issue has been solved. The Life agent is selling it that way in a lot of
cases and even if the limitations are explained to the consumer, they have
checked off the box for having LTC coverage. They are not replying to any
direct mail letter we send them or any other solicitation from an LTC
Advisor.
“So, under this view point, the year over year sales
on LTC may look drastically different and the market penetration as well.
Have you seen any data that includes any hybrid or Life w/rider sales
data?
“Thanks for your help.
Rick Leonard
President
Long Term Care Resources
“PS With a $50,000 average premium, this would
convert to $70 million or more in LTC premium. The actual people planning
for LTC could look very different than traditional LTC sales. Life
distribution far outpaces traditional LTC sellers.”
We replied:
“Rick:
“According to Broker World's "2012
Long-Term Care Insurance Survey" authored by Claude Thau & Dawn
Helwig & Allen Schmitz and published in the July 2012 issue:
“‘Life/LTCI and annuity/LTCI products (referred to as
hybrid, combination, linked or asset-based products) continue to become a
larger factor in long term care planning, accounting for more than $1.5
billion in single premium sales in 2011. These products are attractive
because benefits are certain to be received; pricing has been more stable
than for past stand-alone LTCI policies; and certificates of deposit have
low yields. These products may supplement stand-alone LTCI. If interest
rates rise sharply in the future, there may be an avalanche of 1035
tax-free exchanges to hybrid annuities.’”
Query: Do hybrid policy sales crowd out
traditional LTCI?
------------------
5/24/2013, “AALTCI:
Average age of life-LTC insureds drops,” by Allison Bell,
LifeHealthPRO
Quote: "The percentage of male buyers who are
under age 65 increased to 56 percent in 2012, from 53.5 percent in 2011.
The percentage of female buyers who are under age 65 increased to 53.5
percent, from 50 percent. . . . [T]he approval rate for consumers who
applied through agents affiliated with the firm fell to about 65 percent
in 2012 and 2013, from about 81 percent from 1999 through 2011."
LTC Comment: Makes sense: younger people are
buying LTCI as coverage rejections increase.
------------------
5/24/2013, “Senior
panel to consider LTCI model update,” by Allison Bell,
LifeHealthPRO
Quote: "The Senior Issues Task Force, an arm
of the National Association of Insurance Commissioners (NAIC), has put
proposed changes to the NAIC's
LTCI model regulation and a proposed
model LTCI rate increase bulletin on the agenda for a two-day
LTCI meeting."
LTC Comment: Beware! The regulators are at
it again.
------------------
5/24/2013, “How Growth of Elderly Population
in U.S. Compares With Other Countries [link],”
by Francesca Colombo, PBS News Hour
Quote: "By 2050, more than 32 million
Americans will be over the age of 80, and the share of the 80-plus
generation will have doubled to 7.4 percent. Across the 34 OECD countries,
the share of people over the age of 80 is projected to grow even faster,
from 4 percent today to almost 10 percent in the same time period. While
more and more elderly people will still enjoy active, healthy lives and
contribute to society, many are likely to have at least one chronic
condition. Today, three out of four Americans aged 65 years and older have
to cope with health concerns such as cardiovascular disease, diabetes,
cancer or chronic respiratory diseases."
LTC Comment: The OECD countries face even
greater challenges from the age wave than we do. But our problem is bad
enough. Complacency is very dangerous both for individuals and for public
policy makers.
------------------
5/23/2013, “New York Long Term Care Insurance
Partnership Costs Too Much for Many [link],”
by Jesse Slome, Kansas City InfoZine
Quote: "The high cost for New York Long Term
Care Insurance Partnership policies make far more affordable options well
worth considering today according to the head of the American Association
for Long-Term Care Insurance."
LTC Comment: What LTC Partnerships give in
Medicaid spend down forgiveness, they too often take away with mandated
benefits that make the coverage unaffordable.
------------------
5/23/2013, “Healthy, Retiring Rapidly and
Collecting Social Security: The MetLife Report on the Oldest Boomers [link],”
MetLife Mature Market Institute
Quote: "Now turning 67 years old, the first
set of Baby Boomers, those born in 1946, continue to be myth-busters,
according to a new study, Healthy, Retiring Rapidly and Collecting
Social Security: The MetLife Report on the Oldest Boomers. The data,
from the company’s MetLife Mature Market Institute, says the earliest
Boomers aren’t necessarily “working ’till they drop,” as was predicted."
Source:
http://www.lifehealth.com/oldest-boomers-are-retiring-at-a-quick-rate/
LTC Comment: Find the MMMI study
here. Highlights: “Long-term care rose to the top of the list of
retirement concerns; 31% reporting concern about providing for themselves
or their spouses.”
“Despite the fact that they are worried about
long-term care, just under a quarter owns private long-term care
insurance.”
------------------
5/22/2013, “Stroke
Costs to Double by 2030, Groups Say,” by Crystal Phend, MedPage
Today
Quote: "The rising prevalence of stroke in an
aging population is likely to more than double the cost of stroke care
over the next two decades, the American Heart Association and American
Stroke Association warned."
LTC Comment: A datum that should open aging
eyes to the need for LTCI.
------------------
5/22/2013, “How
can we fix long-term care insurance?,” by Alicia H. Munnell, WSJ
MarketWatch
Quote: "My colleagues and I really like the
idea of a catastrophic policy with the premiums paid up front. That is,
the product would pay benefits only after the individual had paid for,
say, 18 months of nursing home care - about $120,000. This arrangement
would change an unbounded black hole of an expense into a known quantity.
Moreover, the premium for this benefit would be relatively modest and
could be paid in a single lump sum at retirement so that people would not
worry about premium costs climbing as they age. The hope would be that
once people felt like they understood the dimensions of their exposure to
long-term care costs, they would feel more comfortable about spending
their 401(k) balances and tapping their home equity."
LTC Comment: A smart government would grant
above-the-line tax deductibility to such a policy in a heartbeat, because
it would translate into massive, easily documented Medicaid savings many
times the cost of the deduction. That’s because the biggest expense to
Medicaid is long-term institutional care. The average period of time from
onset to death in Alzheimer’s Disease is eight years.
------------------
5/22/2013, “Why Baby Boomers
Need To Get Real About Health and Long-Term Care Costs In Retirement [link],”
by Howard Gleckman, Forbes
Quote: "That collapse in assets, driven by
both medical and long-term care costs, may partially explain why so many
nursing home residents end up on Medicaid. As Josh Wiener found in his
recent study, the vast majority of those who became eligible for
Medicaid long-term care benefits never had much to start with."
LTC Comment: If that alleged "collapse in
assets" were really happening, LTCI would be flying off the shelves. But
Medicaid co-opts most LTC spend down by paying for the vast majority of
all high LTC costs, especially for middle-class and affluent people. Both
the author of this article and the researcher he cites will be on a panel
with me at the American Enterprise Institute on May 31. Check "events" at
www.aei.org for details,
http://www.aei.org/events/2013/05/31/long-term-care-markets-or-mandates/
They'll stream the event and archive it too. It should be a fascinating
discussion.
------------------
5/22/2013, “Medicare
Nixes Coverage For New Cancer Tests,” by Scott Gottlieb, M.D.,
Forbes
Quote: "Medicare has sharply changed the way
it pays for diagnostic tests, cutting payment rates and curtailing
coverage for some new tests altogether. The makeover in the way that
Medicare reimburses molecular diagnostics has been foreshadowed for years,
but was abruptly put into effect this summer."
LTC Comment: Significance for CI insurance?
------------------
5/22/2013, “Recession
not entirely at fault for retirement crisis,” by Teck Lim, Employee
Benefit Adviser
Quote: "The economic recession may have
sparked a retirement crisis in America, but other significant factors
played a role in the derail. On average, retired and pre-retired Americans
reported to have lost $117,000 in retirement savings due to unanticipated
events, according to a survey conducted by Ameriprise Financial in
February."
LTC Comment: Long-term care is a major
retirement "derailer," but it goes unmentioned in this article.
------------------
5/21/2013, “Pensions Are Top Income Source for
Wealthier U.S. Retirees; Social Security top source for less wealthy
retirees [link],”
by Jeffrey M. Jones, Gallup Economy
Quote: "Specifically, 62% of retirees younger
than age 70 say Social Security is a major source of retirement funds for
them, compared with 61% of retirees aged 70 or older. Thirty-six percent
of both age groups say pension plans are a major source of retirement
income. In fact, the only noticeable difference between younger and older
retirees comes in the extent to which they rely on 401(k) plans or IRAs,
with older retirees more likely to cite these as a major source of
retirement funds."
LTC Comment: Any port in a storm, but Social
Security is a weak vessel in the coming demographic tsunami.
------------------
5/21/2013, “Wealthy
Unprepared for Long-Term-Care Costs,” by Teck Lim, Financial
Planning
Quote: "Of the 711 high-net-worth adults with
over $3 million in investable assets surveyed, 47% have created a
financial plan to address long-term care needs that they and their spouse
or partner might need, but only 18% have a financial plan that accounts
for their parents' long-term care costs."
LTC Comment: Maybe that’s because public
policy incentivizes adult children to ignore LTC risk and cost for their
parents, take an early inheritance if LTC needs arise, and put the parents
in a nursing home on Medicaid.
------------------
5/21/2013, “SNFs could see 50% payment
reduction for Pre-Existing Condition Insurance Plan claims [link],”
by Tim Mullaney, McKnight’s LTC News
Quote: "The PCIP program was created as part
of the Affordable Care Act in 2010. It was designed as a stop-gap program
for people with pre-existing conditions, so that they could get healthcare
coverage before the ACA takes full effect in 2014. At that time, most
insurers will no longer be able to deny coverage or charge high premiums
due to pre-existing conditions."
LTC Comment: Another federal bait and switch.
Promise consumers free services, then refuse to pay providers to supply
it.
------------------
5/20/2013, “Too
young for long-term care insurance?,” by Bill Losey, WSJ
MarketWatch
Quote: "The fact of the matter is that
long-term care insurance is something that nearly all of us are going to
need. Whether we spend our later years in a nursing home, an
assisted-living facility or live them out in our own home, we are probably
going to need some sort of care."
LTC Comment: No truer words were ever spoken.
------------------
5/19/2013, “HSAs
cover critical illness insurance,” by Joanne Wojcik, Business
Insurance
Quote: “Critical illness insurance is one of
a handful of supplemental health insurance policies that workers covered
by high-deductible health plans linked with health savings accounts can
purchase under Internal Revenue Service rules. . . . Besides critical
illness, other types of insurance permitted with high-deductible health
plans linked to HSAs are accident, disability, dental, vision and
long-term care, as well as insurance that pays a fixed amount per day of
hospitalization.”
LTC Comment: This is one of those rare areas
in which CI and LTCI get positive encouragement from public policy.
------------------
#############################
Updated,
Friday, May 24, 2013, 11:30 AM (Pacific)
Seattle, WA—
#############################
LTC Bullet #1,000: Medicaid
Planning: Thousand Bullets Retrospective
LTC Comment: Today the Center for
Long-Term Care Reform celebrates its 1,000th LTC Bullet
with this overview of 15 years of “Medicaid Planning” Bullets after
the ***news.***
*** AMERICAN ENTERPRISE
INSTITUTE (www.AEI.org)
presents “Long-Term Care: Markets or Mandates?” on Friday, May 31, 2013
from 9:15 a.m. - 11:15 a.m. at AEI headquarters in Washington, DC. LTC
Commission appointee Mark Warshawsky will “explain the implications of
another publicly funded long-term care insurance program. A panel will
then debate whether another government program is the best way to ensure
that families can afford to provide the necessary services for their aging
loved ones.” Serving on the panel with Steve Moses (representing the
market-based position) are Howard Gleckman (who writes op-eds for Forbes),
Joshua Wiener (a highly regarded LTC analyst who favors public financing)
and Matt Salo (Director of the National Medicaid Directors Association).
If you can’t be there in person, check out the program’s live stream
here.
For more information, please contact Catherine Griffin at
catherine.griffin@aei.org, 202-862-5920. ***
*** PREMATURE LANDING.
Last week's LTC Bullet, titled "How Will the LTC Plane Land?," included
some of the top level results of a Delphi survey. The detailed report,
including individual comments by survey participants, was explicitly
embargoed, but LTC Bullets requested and believed we received permission
to publish the top-level, summary findings. Evidently we misunderstood,
as the directors of that study have indicated it was not their intent to
permit any distribution of the results beyond the survey participants. We
regret the error. Please disregard the report until it is released
publicly. ***
LTC BULLET #1,000:
Medicaid Planning: THOUSAND BULLETS RETROSPECTIVE
LTC Comment: Once a
week, usually on Fridays, we publish our LTC Bullet. The
Bullets are often policy pieces, sort of like op-eds. You can always
find the five latest Bullets
here and archives of all 995 Bullets (so far), by date
here and by topic
here. These 1,000 articles are a valuable historical resource.
Please make use of them. Search for key terms using Control-F on your
keyboard.
This year, in
celebration of this thousandth LTC Bullet and the Center’s
15th anniversary (April 1), we are releasing a retrospective of
the most interesting and dramatic LTC Bullets that we’ve published
since the Center’s founding in 1998. We’ll highlight one Bullet
per year in each of seven major topics: “The LTC Problem and Solutions”;
“Reality Check: The Facts on LTCI”; “Medicaid Planning”; “LTC Services”;
“Politics and Legislation”; “Demographics and Other Data”; and “CLTCR
News.”
Today’s Bullet is our
“Thousand Bullets Retrospective” Number 3 covering “Medicaid Planning.”
These “Medicaid Planning” Bullets address the impact Medicaid
planning has on public programs and benefit recipients, the latest court
and administration rulings and the effect on the marketability of private
long-term care solutions. Read our summary and check out the original at
the link provided. Enjoy this walk down memory lane.
------------------
October 23, 1998: LTC Bullet:
Attorneys Promote Medicaid as Alternative to LTC Insurance [link].
“Elder law attorneys who specialize in Medicaid planning (i.e.,
transferring or sheltering assets in order to qualify clients for
Medicaid's long-term care benefits) routinely defend their practice by
arguing that LTC insurance is not an alternative for their clients. They
publicly claim to be helping only those who cannot afford or otherwise
qualify for insurance. But what are they telling each other? In the Fall,
1998 issue of the NAELA Quarterly (the journal of the National Academy of
Elder Law Attorneys), Baird Brown, a fellow and member of NAELA, clearly
portrays Medicaid as the preferred alternative to LTC insurance.”
------------------
February 3, 1999:
LTC Bullet: Perils of Medicaid. “A reporter from a prestigious
financial planning publication contacted the Center for Long-Term Care
Financing yesterday. She asked us to provide evidence that Medicaid
nursing home care can be risky for consumers. Some Medicaid planning
attorneys had told her that clients they artificially impoverish to
qualify for the welfare program do not experience access and quality
problems. We thought our readers would appreciate seeing the same evidence
of potential Medicaid-related deficiencies gleaned from the gerontological
literature that we provided to the reporter. That information follows.”
------------------
August 15, 2000:
Bill Gates on Medicaid? “Should Microsoft Chairman Bill Gates
have Medicaid pay the bill if he ever needs long-term care? It makes sense
‘if you follow the arguments of elder law attorneys to their logical
conclusions,’ says an Arkansas state official and critic of Medicaid
planning. Here's the story:
The August 2000 issue of
the trade journal Contemporary Long-Term Care contains an article
entitled ‘The Booming Business of Elder Law’ by New Hampshire nursing home
administrator David Irwin.
Perhaps you've heard us
say: ‘You can't sell apples (LTC insurance) on one side of the street when
they're giving them away (Medicaid benefits) on the other.’ Irwin's
article shows that Medicaid planners are still dispensing plenty of the
free fruit that gums up the long-term care insurance market.
Easy money for Medicaid
planners means tough sales for responsible financial planners and
insurance agents. Want to see what you are up against? Here are some
excerpts [in this
LTC Bullet].”
------------------
April 25, 2001:
They're Baaaack . . . Medicaid Planners Rise Again. “Ever since
Congress and then-President Bill Clinton nailed them with mandatory estate
recovery (OBRA '93), "Throw Granny in Jail" (HIPAA '96) and "Throw
Granny's Lawyer in Jail" (BBA '97), the Medicaid estate planning attorneys
have laid low. Their conference agendas and publications carefully
avoided the phrase "Medicaid estate planning." Even their highly
publicized firebrands toned down the rhetoric considerably. Their trade
association, the National Academy of Elder Law Attorneys (NAELA),
plateaued at just under 4,000 members after skyrocketing for years. Of
course, we know from following their actions—not just their words—that the
actual practice of artificially impoverishing clients to qualify them for
Medicaid hardly skipped a beat. Whether from shame or fear of
prosecution, however, the Medicaid planning bar hunkered down in defensive
mode for several years and didn't promote their services as loudly as
before. That's all over now.” [See also:
They're Baaack, Part II: Frank Comments,
They're Baaack, Part III: "Buy Cattle, Get Medicaid,
They're Baaack, Part IV: "Abandon Your Spouse . . . Get Medicaid",
They're Baaack, Part V: "A Person With $1 Million Is Not Wealthy" and
They're Baaack, Part VI: "Medicaid for the Upper Crust".]
------------------
September 5, 2002:
Medicaid Planning Full Disclosure. “LTC Bullets readers frequently
send us examples of flyers and web sites promoting easy access to Medicaid
nursing home benefits. Complaints about Medicaid planning are just as
likely to come from state and federal welfare administrators as they are
to come from insurance agents and financial planners. Over the years,
eight Congresses and three Presidents have struggled to discourage the
widespread practice of artificial impoverishment to qualify for Medicaid.
The government even went so far as to make it a crime: "Throw Granny in
Jail" (repealed) and "Throw Granny's Lawyer in Jail" (unenforceable).
Nothing seems to work. Now come Ross Schriftman, Associate Chair for
Long-Term Care, and the National Association of Health Underwriters (NAHU)
Long-Term Care Committee with a fascinating idea they have under
consideration. Why not require Medicaid Planners to disclose the nature,
consequences, and suitability of the self-impoverishment products they
offer just as insurance agents and carriers must do for the legitimate
financial products they market? You'll find the proposal that the NAHU
folks are considering [in this
LTC Bullet].”
------------------
March 4, 2003:
In the Lion's Den of Medicaid Planning. “Medicaid planners wave a
magic legal wand and shift the cost of long-term care from affluent elders
to taxpayers and LTC providers while delivering a financial windfall to
client heirs. See how one senior advocate and health care columnist spoke
truth to power in a lion's den of Medicaid planners [in this
LTC Bullet].”
------------------
March 4, 2004:
No Wonder They Don't Buy LTCi. “Do Medicaid estate planners really
advise adult children to grab their parents' money, yank them from
private-pay assisted living facilities, stick them in a nursing home on
welfare, and transfer the cost to taxpayers and providers? Read an actual
Medicaid planning ‘engagement letter’ that does exactly that.”
------------------
August 8, 2005: The
Great Debate on Medicaid and LTC. “On September 7, 2005 at the Cato
Institute in Washington, DC, Steve Moses, president of the Center for
Long-Term Care Reform, will debate Vincent Russo, a leading elder law
attorney in New York and a former president of the National Academy of
Elder Law Attorneys.” Watch or listen to a recording of the debate here:
http://www.cato.org/events/medicaid-long-term-care-crisis-who-should-pay [link].
------------------
August 3, 2006:
Dueling Letters. “When I saw two articles justifying and promoting
Medicaid planning in Life Insurance Selling magazine, I sent the
following letter to the editor, Gordon Bess. He published it with the
Medicaid planner's reply in the magazine's July 2006 issue. Both letters
follow, republished with permission from Life Insurance Selling (www.lifeinsuranceselling.com).”
------------------
May 30, 2007:
Medicaid Pushers. “Another NAELA member offers easy Medicaid LTC and
seduces insurance producers with a promise of huge incomes.” Read about
it in this LTC Bullet.
------------------
June 3, 2008:
Medicaid Planning Update. “We have not published an LTC Bullet
to expose the damaging practice of Medicaid estate planning for a long
while. Following is kind of a grab bag, but it'll give you a feel . . .
more like nausea . . . for the lucrative business of poverty-making.”
------------------
February 4, 2009:
Why Stimulate Medicaid Planning? “The stimulus bill could help the
poor elderly, the states, LTC providers, and encourage responsible LTC
planning by closing Medicaid loopholes, but it doesn't.” Click the link
above to find out why.
------------------
August 31, 2010:
Medicaid Planning Up, LTCI Down. “It's no secret that long-term care
insurance sales have languished over the past few years, despite a recent
blip up. But government-financed LTC is on a rampage of expansion. It
isn't just the new CLASS program, which is actuarially unsound and bound
to wither and die. It's Medicaid, the historically dominant funder of
long-term care for most Americans--rich, poor and in between.”
------------------
July 19, 2011:
Russian Mafiosos, Medicaid and LTC. “Remember the film maker who
posed as a pimp and brought down ACORN? Well, James O'Keefe is at it
again. Only this time, his hidden camera is aimed at Ohio's Medicaid
eligibility workers. Following are excerpts from ‘New O'Keefe
investigation uncovers Medicaid fraud’ by Matthew Boyle in yesterday's ‘The
Daily Caller.’ Read the whole article and view the 23-minute video
here. Then read our ‘LTC Comment’ on this scandal's relevance to LTC
financing.”
------------------
February 24, 2012:
Medicaid Planning for Long-Term Care. “This week, in
LTC Bullet: Medicaid Planning for Long-Term Care, we tackle the
controversial topic of how affluent people artificially self-impoverish to
qualify for Medicaid LTC benefits and what the government has attempted
unsuccessfully to discourage the practice.”
#############################
Updated, Monday, May 20, 2013, 10:30
AM (Pacific)
Seattle, WA—
#############################
LTC E-Alert #13-016: LTC News and
Comment
LTC Comment:
Subscribers to our Clipping Service received the following news items,
individually and in real time, in the form of short emails with a link, a
quote and occasionally some brief commentary. In order to keep our
Clipping Service subscribers on the forefront of LTC knowledge, we spend
the time and effort gathering current, critical information on long-term
care issues so they don’t have to. By dividing the labor, we can all work
more efficiently. If you like what you read in our “LTC News and Comment”
E-Alerts, please consider subscribing to our Clipping Service.
Find all the details
here. Contact Damon at 206-283-7036 or
damon@centerltc.com to subscribe.
#############################
05/17/2013,
Kiplinger 2013 Retirement Guide Showcases Steps To Starting a Long-Term
Care Home Plan, Spotlighting True Freedom II Plans By American Senior
Services Incorporated (link),
WSJ.com
Quote: "Kiplinger's Personal Finance recently published its
annual 2013 retirement guide, which will stay on shelves for months and
provides numerous articles on programs and services that should be
considered in long-term care planning. The issue also features three steps
to living safely and independently as you age in your home by American
Senior Services Incorporated (ASSI) via its True Freedom plans (http://www.truefreedomhomecare.com)."
LTC Comment:
Check out
http://www.truefreedomhomecare.com for more information on ASSI’s
innovative approach to home care.
#############################
05/17/2013,
The Journey: Make your finances solid before helping adult kids, by
Janet Kidd Stewart,
chicagotribune.com
Quote: "More than half of people 45 or older who are parents
said they expect they will have to provide financial support to adult
children, according to the 2013 Merrill Lynch Retirement Study. The survey
polled 6,300 people. More than a third expect to provide support to
grandchildren, 16 percent expect they will help parents and 10 percent
said they expect to help siblings, the survey found.
"Particularly for less wealthy retirees, it's also important to cover
the practical bases if you're going to be on the hook for family members,
whether it's nursing care for parents or graduate school for Junior. That
means investigating long-term care insurance well in advance of the need
and being realistic about how much you can help children with education
expenses, said former IRS attorney Sandy Botkin, author of 'Achieve
Financial Freedom — Big Time!'"
LTC Comment:
Financial planning for retirement, including having a viable long-term
care plan in place, is just about the best way parents can help
their adult children.
#############################
05/16/2013,
Maine Democrats, Republicans duel over Medicaid, hospital payback, by
Steve Mistler,
The Morning Sentinel
Quote: "The two sides held dueling press conferences at the
State House a day after Democratic leaders moved to meld one of their
highest priorities,
Medicaid expansion to cover
about 60,000 Mainers, with the Republican-backed plan to pay the state’s
$181 million share of back payments to the Maine’s 39 hospitals. The
conflict in Augusta mirrors debates that have unfolded in other state
legislatures over expanding Medicaid through the Affordable Care Act. It’s
an issue that has brought forth entrenched ideologies and political
positions on the federal health care law and one of its pillars, Medicaid,
the publicly funded health insurance program for low income residents."
LTC Comment:
The debate on Medicaid expansion continues.
#############################
05/16/2013,
Senate confirms Tavenner as CMS administrator, by Tim Mullaney,
McKnight's Long Term Care News
Quote: "Marilyn Tavenner has become the first confirmed head of
the Centers for Medicare & Medicaid Services in seven years. The Senate
confirmed her as CMS administrator on Wednesday, in a 91-7 vote."
#############################
05/16/2013, Invitation:
Long-term care: Markets or mandates? (May 31)
Quote:
“To protect Americans from the costs
of long-term health care for the elderly and disabled, President Obama’s
health law established the Community Living Assistance Services and
Supports Act (CLASS). Less than two years later, the Obama administration
announced that CLASS could not operate without large and growing deficits,
and the program was terminated. In its wake, the Commission on Long-Term
Care -- created by the fiscal cliff legislation -- is charged with
developing a new way to finance long-term care services and supports. The
commission’s report is due in September 2013.”
LTC Comment:
At this event presented by the
American Enterprise Institute in Washington, D.C. on May 31, I will debate
two of the leading advocates of government-financed long-term care. If you
are not able to attend in person, note that the event will be streamed
live, no registration necessary. Steve
#############################
05/15/2013,
Retirement savers lose $117,000 to unexpected events, by
Melanie Hicken, CNN Money
Quote:
"Unexpected setbacks, ranging from stock market declines to suddenly
supporting an adult child, have taken a major hit to Baby Boomers'
retirement savings, according to a recent survey. Such 'retirement
derailers' set savers back an average of $117,000, according to an
Ameriprise Financial survey of 50-to-70-year-olds with at least $100,000
in cash savings and investments."
LTC Comment:
Speaking of “retirement derailers.” That’s an understatement when
considering the risk and cost of long-term care.
#############################
05/14/2013,
“Covering
the Rising Cost of Long-Term Care” by Caitlin Kelly, NYTimes.com
Quote: "FEW sticker shocks are as bracing as the price of
hiring someone to help with the simplest activities — bathing, toilet use,
dressing, eating and moving. Whether recovering from surgery or a stroke
or suffering a chronic illness like
arthritis, those needing skilled
help need deep pockets indeed. And those requiring full-time nursing or
assisted-living care face even steeper costs. A 2013 report by Genworth
Financial, an insurance provider based in Richmond, Va., estimates the
national median daily cost of a private room in a nursing home at $230 a
day, an increase of 3.6 percent over 2012 — some $6,900 per month. Sharing
that room is only $27 less a day, according to
the report."
#############################
05/15/2013,
“BREAKING
NEWS: L&HA e-newsLink,”
LIFE&Health Advisor
Quote: "Advanced Resources Marketing (ARM), one of the
country’s largest distributors of Long Term Care Insurance (LTCi),
announced today that Henrik Larsen,
MBA, CLTC, has been promoted from Vice President of Marketing to Chief
Executive Officer."
LTC Comment:
Congratulations to
Henrik Larsen.
#############################
05/10/2013,
“Buy
Long-Term-Care Insurance With Tax-Free Money-Kiplinger,” by Kimberly
Lankford, Kiplinger
Quote: "Can I use money from my health savings account to
pay for long-term-care insurance?
"Yes. If you have a tax-qualified long-term-care policy (which includes
most policies that pay
benefits
if you need help with at least two activities of daily living or have
cognitive impairment), then you may be able to make a tax-free withdrawal
from your health savings account to pay for a portion of your premiums.
The annual limits depend on your age. In 2013, you can withdraw up to $360
from your HSA tax-free to pay premiums if you’re age 40 or younger; $680
if you’re 41 to 50; $1,360 if you’re 51 to 60; $3,640 if you’re 61 to 70;
and $4,550 if you’re 71 or older."
#############################
05/15/2013,
3 concerns for women planning retirement, by
Stephen Williams, MarketWatch
Quote:
"According to recent U.S. census data, almost 50% of women age 65 or older
are single, either because they have been widowed, divorced or never
married. Women face unique challenges in retirement, as on average women
live longer, are more likely to need long-term care and have a lower risk
tolerance than men. All of these factors combine to increase their risk of
running out of money in their later years. However, there are specific
steps women can take to be more prepared for retirement, whether they are
single or married."
#############################
05/11/2013,
10 Reasons Critical Illnesses Pose Retirement Risk,
by Philip Moeller,
The Best Life
(usnews.com)
Quote: "Health care clearly has emerged as the greatest
financial risk faced by retirees. The incidence of expensive chronic
diseases is higher for today's retiring baby boomers than it was for their
parents. Longevity gains have added years to average life spans, but these
extra years may seem more curse than blessing if they are spent dealing
with serious illness and unaffordable medical bills. Doesn't insurance
cover these things? Not exactly. Basic Medicare leaves retirees on the
hook for a 20 percent co-pay with no cap. Supplemental Medicare policies
can close much of this gap. But they don't cover most long-term care
expenses, and neither does Medicare. The Employee Benefit Research
Institute says a 65-year-old couple with median drug expenses would need
$283,000 to have a 90 percent chance of covering their out-of-pocket drug
expenses during the remainder of their lives. And this total does not
include long-term care."
LTC Comment:
See also news from one of our
recent LTC Bullets: “LIMRA, LOMA, SOA, and NACII are teaming up
again to sponsor the Critical Illness Insurance Forum, “the premier
critical illness insurance gathering in North America and a great
opportunity for industry professionals to network and communicate with
their peers.” Details: 2013 Critical Illness Insurance Forum
September 16–18, 2013 Harbor Beach Marriott Resort & Spa, Fort
Lauderdale, FL Event
Details |
Save the Date |
Register Now”
#############################
05/11/2013,
The truth about nursing home Medicaid eligibility, by Matthew Wallace,
The Times Herald
Quote: "There are many misconceptions about nursing home
Medicaid eligibility. We have discussed some of these issues before.
However, I continue to get these questions, so I thought I would cover
them again. Medicaid laws are complex and confusing. I do not recommend
that you try to plan for Medicaid by yourself."
LTC Comment:
Ever wonder how affluent people
qualify for Medicaid without spending down? Here's a Medicaid planning
attorney telling readers how it's done. Like most Medicaid planners, this
author gives lip service to LTC insurance, but only after he's told you
why you don't need it. This is precisely what the Center for LTC Reform
is fighting to change.
#############################
05/10/2013,
Alzheimer's keeps frustrating Big Pharma,
by Bruce Kennedy,
MSN Money
Quote: "When some of the world's leading researchers on
Alzheimer's
meet in Boston in July to discuss therapies and treatments for the
so-far incurable neurological disease, will they have any breakthroughs to
mention? Chances are, probably not. Years of research and tests by the
pharmaceutical industry, which looks to benefit from patents for an
effective Alzheimer's treatment, have so far yielded little to no positive
results. And that's leading to questions about whether Big Pharma might
still consider Alzheimer's research cost-effective."
LTC Comment:
Curing, treating, or at least mitigating as much as possible the effects
of Alzheimer's is key to restraining the ever increasing cost of long-term
care.
#############################
04/19/2013,
LTC service contracts, by Allison Bell, LifeHealthPro
Quote:
"Jonas Roeser -- one of the people
who helped promote the 3in4 Need More long-term care insurance (LTCI)
outreach campaign with a tireless ability to generate publicity -- is now
trying to get attention for a different kind of long-term care (LTC)
planning. He has been working with people like Mark Golberg, Tom Skiff
and Peter Gelbwaks, long-time LTCI marketers, on an effort to develop and
sell non-medical long-term support services (LTSS) service contracts.
"Roeser and colleagues
at American Senior Services Inc. (ASSI) are taking a different route:
Having an association sell a package that provides access to LTC planning
services and a set amount of discounted non-medical long-term support
services, such as companion care services and homemaker services."
LTC Comment:
Click
www.truefreedomhomecare.com for
more information on
American Senior Services Inc.
#############################
05/09/2013,
Six Global Destinations for an Affordable Retirement,
by
Michael Foster, Fox Business
Quote: "Over the 20th century, many retirees moved from New
England, California and the Midwest to the sunny and sparsely populated
Sun Belt, where low taxes and warm weather beckoned. Today, many Americans
are moving much farther afield to enjoy a new life at a low cost.
Thousands are migrating to Asia, South America, Europe and beyond to
stretch their retirement dollars. And foreign countries, eager for the
boost to their economies, have taken notice. With so many nations
interested in attracting retirees from abroad, Americans are spoiled for
choice. Bankrate uncovers six up-and-coming destinations where retirees
can easily live on an income of $2,000 a month. In some cases, retirees
are already living there for far less. Read on to discover the
affordability of housing, food and medical care at these retirement
destinations."
#############################
05/09/2013,
More Tips on Long-Term Care Insurance, by Mark Miller, Morningstar
Quote: "Morningstar columnist Mark Miller presents a closer
look at hybrid life insurance/LTCI policies, timing an LTCI purchase,
self-insuring, and finding the right broker."
LTC Comment:
In terms of not waiting too long (or until it’s too late), timing is key
in the purchase of LTCi.
#############################
05/08/2013,
“New
Retirement Realities: Part 3 Of 3 'The Family Factor,'” by Ken
Dychtwald Ph.D., The Huffington Post
Quote: "This is the third part in a three-part series
exploring findings from 'Americans' Perspectives on New Retirement
Realities and the Longevity Bonus [link],'
a landmark national study just completed by my [Ken Dychtwald] firm, Age
Wave, in partnership with Merrill Lynch. The study was conducted by
research firm Harris Interactive among representative samples of more than
6,000 respondents age 45 and older.
"The term 'sandwich generation' was coined in the 1980s to describe
baby boomers who needed to simultaneously care for both children and aging
parents. Today, the sandwich generation is morphing into a kind of Rubik's
Cube puzzle of connections and arrangements. It's not uncommon for people
to find themselves extending one type of support or another to parents,
in-laws, siblings, children, step-children, and grandchildren--sometimes
at the same time!"
LTC Comment: We forwarded the series announcement with link to
Part 1 recently. See also
Part 2 for another good read.
#############################
05/08/2013,
How To Hire (And When To Fire) A Caregiver, Forbes
Quote:
"From time to time, when I worked as a social worker in a skilled nursing
facility, visiting family members complained to me about certain staff
members. Residents too often were worried that if they themselves griped
to senior managers, there might be some form of retaliation. That’s
understandable — and it’s why we must advocate for our loved ones in
long-term care residences. If there’s a staff member who isn’t doing his
or her job properly, an administrator needs to know. And if the issue is a
bad attitude, and not just a need for more specific training, perhaps it’s
time for that aide to find another job. Addressing problems with an
in-home caregiver can be more complicated. The person your family hired
may turn out to be unqualified or have a negative attitude. But the
patient may still like him or her, in spite of apparent flaws."
#############################
05/08/2013,
“New Retirement Realities: A 3-part series on a pivotal new study,” Age
Wave
Quote: “Today,
with longer lives, pre-retirees and retirees are pioneering new territory
that is far more complex and unpredictable. To better understand how
people are now thinking about retirement, we are excited to share with you
a fascinating national investigation,
‘Americans' Perspectives on New Retirement Realities and the Longevity
Bonus [link],’ an
Age Wave/Merrill Lynch collaboration conducted by Harris Interactive.”
LTC Comment:
An interesting series from a former board member of the Center for
Long-Term Care Financing, Ken Dychtwald.
#############################
05/07/2013,
“How
Would A Critical Illness Affect You?,” Life & Health Advisor
Quote: "An overwhelming majority (90%) of our nation’s
middle-income Americans say they are not financially prepared for a
critical illness diagnosis, according to a new study released by
Washington National Institute for Wellness Solutions (IWS)."
LTC Comment:
Click
www.criticalillnesseducation.org/ for more information on this
important protection.
#############################
05/07/2013,
“Woman
With Alzheimer's Receives First Ever Brain Pacemaker,” by Tim Watt,
Sunrise Senior Living
Quote: "Pacemakers have helped individuals with heart problems
for years, and now, a similar technology is being used to treat
Alzheimer's disease. Kathy Sanford recently became the first person with
the cognitive illness to receive what is being referred to as a 'brain
pacemaker.'
"While it's too early to tell whether the brain pacemaker will be a
successful treatment for Alzheimer's disease, doctors say early research
looks positive."
#############################
05/06/2013,
“10
Unexpectedly Great States for Retirement,” by Chris Kahn, Fox
Business
Quote: "What are the best states for retirees? The popular
answer seems to be anywhere along the Sun Belt, where retiring Americans
have flocked for generations in search of sunshine, swimming pools and
year-round golf. Yet, if you consider other factors that are important for
seniors, you'd find that some of the best spots are actually located
farther north. Bankrate pored through a slew of key factors, including
access to medical care, cost of living, local crime rates, state and local
taxes -- as well as climate. Here, in ascending order, is Bankrate's list
of the 10 unexpectedly best states for
retirement ."
#############################
05/06/2013, “WINEGARDEN:
Treating Alzheimer's with regulations,” by Wayne
Winegarden, Washington Times
Quote: "The U.S. health care system is rife with rising costs
and stagnating quality. All too often, the cure for these ailments calls
for ever greater government intervention. Such cures misdiagnose the
problem. The health care system’s problems are caused by too little
patient control, not too little government intervention.
"Reduced patient control takes critical health care decisions away
from the patient and gives it to government bureaucrats. Along with other
adverse consequences, such as skyrocketing health care inflation, reduced
patient control leads to a less responsive, more rigid medical system. The
current issue surrounding early detection tests for
Alzheimer’s exemplifies this problem."
#############################
Updated,
Friday, May 24, 2013, 11:30 AM (Pacific)
Seattle, WA—
#############################
LTC Bullet #1,000: Medicaid Planning: Thousand Bullets Retrospective
LTC Comment:
Today the Center for Long-Term Care Reform celebrates its 1,000th
LTC Bullet with this overview of 15 years of “Medicaid Planning”
Bullets after the ***news.***
*** AMERICAN
ENTERPRISE INSTITUTE (www.AEI.org)
presents “Long-Term Care: Markets or Mandates?” on Friday, May 31, 2013
from 9:15 a.m. - 11:15 a.m. at AEI headquarters in Washington, DC. LTC
Commission appointee Mark Warshawsky will “explain the implications of
another publicly funded long-term care insurance program. A panel will
then debate whether another government program is the best way to ensure
that families can afford to provide the necessary services for their aging
loved ones.” Serving on the panel with Steve Moses (representing the
market-based position) are Howard Gleckman (who writes op-eds for Forbes),
Joshua Wiener (a highly regarded LTC analyst who favors public financing)
and Matt Salo (Director of the National Medicaid Directors Association).
If you can’t be there in person, check out the program’s live stream
here.
For more information, please contact Catherine Griffin at
catherine.griffin@aei.org, 202-862-5920. ***
*** PREMATURE
LANDING. Last week's LTC Bullet, titled "How Will the LTC Plane Land?,"
included some of the top level results of a Delphi survey. The detailed
report, including individual comments by survey participants, was
explicitly embargoed, but LTC Bullets requested and believed we received
permission to publish the top-level, summary findings. Evidently we
misunderstood, as the directors of that study have indicated it was not
their intent to permit any distribution of the results beyond the survey
participants. We regret the error. Please disregard the report until it
is released publicly. ***
LTC BULLET #1,000:
Medicaid Planning: THOUSAND BULLETS RETROSPECTIVE
LTC Comment: Once a
week, usually on Fridays, we publish our LTC Bullet. The
Bullets are often policy pieces, sort of like op-eds. You can always
find the five latest Bullets
here and archives of all 995 Bullets (so far), by date
here and by topic
here. These 1,000 articles are a valuable historical resource.
Please make use of them. Search for key terms using Control-F on your
keyboard.
This year, in
celebration of this thousandth LTC Bullet and the Center’s
15th anniversary (April 1), we are releasing a retrospective of
the most interesting and dramatic LTC Bullets that we’ve published
since the Center’s founding in 1998. We’ll highlight one Bullet
per year in each of seven major topics: “The LTC Problem and Solutions”;
“Reality Check: The Facts on LTCI”; “Medicaid Planning”; “LTC Services”;
“Politics and Legislation”; “Demographics and Other Data”; and “CLTCR
News.”
Today’s Bullet is our
“Thousand Bullets Retrospective” Number 3 covering “Medicaid Planning.”
These “Medicaid Planning” Bullets address the impact Medicaid
planning has on public programs and benefit recipients, the latest court
and administration rulings and the effect on the marketability of private
long-term care solutions. Read our summary and check out the original at
the link provided. Enjoy this walk down memory lane.
------------------
October 23, 1998: LTC Bullet:
Attorneys Promote Medicaid as Alternative to LTC Insurance (link).
“Elder law attorneys who specialize in Medicaid planning (i.e.,
transferring or sheltering assets in order to qualify clients for
Medicaid's long-term care benefits) routinely defend their practice by
arguing that LTC insurance is not an alternative for their clients. They
publicly claim to be helping only those who cannot afford or otherwise
qualify for insurance. But what are they telling each other? In the Fall,
1998 issue of the NAELA Quarterly (the journal of the National Academy of
Elder Law Attorneys), Baird Brown, a fellow and member of NAELA, clearly
portrays Medicaid as the preferred alternative to LTC insurance.”
------------------
February 3, 1999:
LTC Bullet: Perils of Medicaid. “A reporter from a prestigious
financial planning publication contacted the Center for Long-Term Care
Financing yesterday. She asked us to provide evidence that Medicaid
nursing home care can be risky for consumers. Some Medicaid planning
attorneys had told her that clients they artificially impoverish to
qualify for the welfare program do not experience access and quality
problems. We thought our readers would appreciate seeing the same evidence
of potential Medicaid-related deficiencies gleaned from the gerontological
literature that we provided to the reporter. That information follows.”
------------------
August 15, 2000:
Bill Gates on Medicaid? “Should
Microsoft Chairman Bill Gates have Medicaid pay the bill if he ever needs
long-term care? It makes sense ‘if you follow the arguments of elder law
attorneys to their logical conclusions,’ says an Arkansas state official
and critic of Medicaid planning. Here's the story:
The August 2000 issue
of the trade journal Contemporary Long-Term Care contains an
article entitled ‘The Booming Business of Elder Law’ by New Hampshire
nursing home administrator David Irwin.
Perhaps you've heard
us say: ‘You can't sell apples (LTC insurance) on one side of the street
when they're giving them away (Medicaid benefits) on the other.’ Irwin's
article shows that Medicaid planners are still dispensing plenty of the
free fruit that gums up the long-term care insurance market.
Easy money for
Medicaid planners means tough sales for responsible financial planners and
insurance agents. Want to see what you are up against? Here are some
excerpts [in this
LTC Bullet].”
------------------
April 25, 2001:
They're Baaaack . . . Medicaid Planners
Rise Again. “Ever since
Congress and then-President Bill Clinton nailed them with mandatory estate
recovery (OBRA '93), "Throw Granny in Jail" (HIPAA '96) and "Throw
Granny's Lawyer in Jail" (BBA '97), the Medicaid estate planning attorneys
have laid low. Their conference agendas and publications carefully
avoided the phrase "Medicaid estate planning." Even their highly
publicized firebrands toned down the rhetoric considerably. Their trade
association, the National Academy of Elder Law Attorneys (NAELA),
plateaued at just under 4,000 members after skyrocketing for years. Of
course, we know from following their actions—not just their words—that the
actual practice of artificially impoverishing clients to qualify them for
Medicaid hardly skipped a beat. Whether from shame or fear of
prosecution, however, the Medicaid planning bar hunkered down in defensive
mode for several years and didn't promote their services as loudly as
before. That's all over now.” [See also:
They're Baaack, Part II: Frank Comments,
They're Baaack, Part III: "Buy Cattle, Get Medicaid,
They're Baaack, Part IV: "Abandon Your Spouse . . . Get Medicaid",
They're Baaack, Part V: "A Person With $1 Million Is Not Wealthy" and
They're Baaack, Part VI: "Medicaid for the Upper Crust".]
------------------
September 5, 2002:
Medicaid Planning Full Disclosure. “LTC Bullets readers frequently
send us examples of flyers and web sites promoting easy access to Medicaid
nursing home benefits. Complaints about Medicaid planning are just as
likely to come from state and federal welfare administrators as they are
to come from insurance agents and financial planners. Over the years,
eight Congresses and three Presidents have struggled to discourage the
widespread practice of artificial impoverishment to qualify for Medicaid.
The government even went so far as to make it a crime: "Throw Granny in
Jail" (repealed) and "Throw Granny's Lawyer in Jail" (unenforceable).
Nothing seems to work. Now come Ross Schriftman, Associate Chair for
Long-Term Care, and the National Association of Health Underwriters (NAHU)
Long-Term Care Committee with a fascinating idea they have under
consideration. Why not require Medicaid Planners to disclose the nature,
consequences, and suitability of the self-impoverishment products they
offer just as insurance agents and carriers must do for the legitimate
financial products they market? You'll find the proposal that the NAHU
folks are considering [in this
LTC Bullet].”
------------------
March 4, 2003:
In the Lion's Den of Medicaid Planning. “Medicaid planners wave a
magic legal wand and shift the cost of long-term care from affluent elders
to taxpayers and LTC providers while delivering a financial windfall to
client heirs. See how one senior advocate and health care columnist spoke
truth to power in a lion's den of Medicaid planners [in this
LTC Bullet].”
------------------
March 4, 2004:
No Wonder They Don't Buy LTCi. “Do
Medicaid estate planners really advise adult children to grab their
parents' money, yank them from private-pay assisted living facilities,
stick them in a nursing home on welfare, and transfer the cost to
taxpayers and providers? Read an actual Medicaid planning ‘engagement
letter’ that does exactly that.”
------------------
August 8, 2005: The
Great Debate on Medicaid and LTC. “On September 7, 2005 at the Cato
Institute in Washington, DC, Steve Moses, president of the Center for
Long-Term Care Reform, will debate Vincent Russo, a leading elder law
attorney in New York and a former president of the National Academy of
Elder Law Attorneys.” Watch or listen to a recording of the debate
here.
------------------
August 3, 2006:
Dueling Letters. “When I saw two articles justifying and promoting
Medicaid planning in Life Insurance Selling magazine, I sent the
following letter to the editor, Gordon Bess. He published it with the
Medicaid planner's reply in the magazine's July 2006 issue. Both letters
follow, republished with permission from
Life Insurance Selling
(www.lifeinsuranceselling.com).”
------------------
May 30, 2007:
Medicaid Pushers. “Another NAELA member offers easy Medicaid LTC and
seduces insurance producers with a promise of huge incomes.” Read about
it in this LTC Bullet.
------------------
June 3, 2008:
Medicaid Planning Update. “We have not published an LTC Bullet
to expose the damaging practice of Medicaid estate planning for a long
while. Following is kind of a grab bag, but it'll give you a feel . . .
more like nausea . . . for the lucrative business of poverty-making.”
------------------
February 4, 2009:
Why Stimulate Medicaid Planning? “The stimulus bill could help the
poor elderly, the states, LTC providers, and encourage responsible LTC
planning by closing Medicaid loopholes, but it doesn't.” Click the link
above to find out why.
------------------
August 31, 2010:
Medicaid Planning Up, LTCI Down. “It's no secret that long-term care
insurance sales have languished over the past few years, despite a recent
blip up. But government-financed LTC is on a rampage of expansion. It
isn't just the new CLASS program, which is actuarially unsound and bound
to wither and die. It's Medicaid, the historically dominant funder of
long-term care for most Americans--rich, poor and in between.”
------------------
July 19, 2011:
Russian Mafiosos, Medicaid and LTC. “Remember the film maker who
posed as a pimp and brought down ACORN? Well, James O'Keefe is at it
again. Only this time, his hidden camera is aimed at Ohio's Medicaid
eligibility workers. Following are excerpts from ‘New O'Keefe
investigation uncovers Medicaid fraud’ by Matthew Boyle in yesterday's ‘The
Daily Caller.’ Read the whole article and view the 23-minute video
here. Then read our ‘LTC Comment’ on this scandal's relevance to LTC
financing.”
------------------
February 24, 2012:
Medicaid Planning for Long-Term Care. “This week, in
LTC Bullet: Medicaid Planning for Long-Term Care, we tackle the
controversial topic of how affluent people artificially self-impoverish to
qualify for Medicaid LTC benefits and what the government has attempted
unsuccessfully to discourage the practice.”
#############################
Updated,
Friday, May 17, 2013, 11:46 AM (Central)
Branson, MO—
#############################
LTC BULLET: HOW WILL THE LTC PLANE LAND?
LTC Comment: Net results from 50 LTC experts opining
about LTC financing after the ***news.***
|
*** TODAY'S LTC BULLET is sponsored
by Claude Thau, a General Agent whose proprietary sales tools enable
clients to make informed final decisions about buying LTCi in 15-20
minutes, let you evaluate a client's real interest in a combo product
in a few minutes, and change work-site LTCi from a proposal-delivery
process to interactive consultation. Claude is the lead author of the
Milliman Broker World LTCi Survey, was named one of the 10 "Power
People" in the LTCi industry by Senior Market Advisor in 2007 and was
Chairman of the Board of the Center for Long-Term Care Financing. Test
Claude by calling 800-999-3026, x2241 or email him at claudet@targetins.com
to ask questions or get references. *** |
*** AMERICAN ENTERPRISE INSTITUTE (www.AEI.org)
presents “Long-Term Care: Markets or Mandates?” on Friday, May 31, 2013
from 9:15 a.m. - 11:15 a.m. at AEI headquarters in Washington, DC. LTC
Commission appointee Mark Warshawsky will “explain the implications of
another publicly funded long-term care insurance program. A panel will
then debate whether another government program is the best way to ensure
that families can afford to provide the necessary services for their aging
loved ones.” Serving on the panel with Steve Moses (representing the
market-based position) are Howard Gleckman (who writes op-eds for
Forbes), Joshua Wiener (a highly regarded LTC analyst who favors
public financing) and Matt Salo (Director of the National Medicaid
Directors Association). If you can’t be there in person, check out the
program’s live stream
here. For more information, please contact Catherine Griffin at
catherine.griffin@aei.org, 202-862-5920. ***
*** CENTER NEWS. We have submitted our final report
on the Center’s study of Medicaid estate recovery in Maine titled
“Maximizing NonTax Revenue from MaineCare Estate Recoveries.” More about
that report and our findings soon. We have begun our review of Medicaid
and long-term care financing in Virginia. The Center is conducting that
study with the support and participation of the
Thomas Jefferson Institute for Public Policy. Finally, reprising our
2008 “National
LTC Consciousness Tour,” Steve Moses is headed east in the
Silver Bullet of Long-Term Care. He’ll be nearby and girded for the
fight as the LTC policy battle in Washington, DC heats up. Expect many
“LTC embed” dispatches from that front in the coming months! ***
LTC BULLET: HOW WILL THE LTC PLANE LAND?
LTC Comment: There’s an old quip about flying in bad
weather: “It’s better to on the ground wishing you were in the air than
in the air wishing you were on the ground.”
I thought of that maxim when I received the latest
communiqué from the “Land This Plane Delphi Study” panel led by John
O’Leary, Roger Loomis, and Ron Hagelman, all leaders and veterans in the
LTC insurance industry’s ongoing struggles. The Society of Actuaries’
Long-Term Care Section and the Forecasting and Futurism Section sponsored
the project.
This study aims to identify the best solution for
long-term care financing. I and 49 other “experts” filled out a survey
questionnaire some time ago and the results are in. There will be a
detailed public report published in the future, but for now LTC Bullets
has permission to share with you the questions asked and the top-line
results and analysis, which follow.
A round of applause and hearty thanks are due the
subject matter specialists who generously gave of their valuable
professional time to complete the questionnaire. But a very special
expression of appreciation goes to those who designed the questionnaire,
identified the experts, compiled and published the results. Three cheers!
For my part, I find a lot to agree with here. After
all, I’m 1/50 of the input. But I find a lot to disagree with too,
especially in the detailed comments that remain embargoed. But that’s
what makes a good discussion and a vigorous debate. Which, heaven knows,
long-term care financing policy certainly needs.
----------------
QUESTION 1: MEDICAID DISCOURAGES THE USE OF REVERSE
MORTGAGES TO FUND LTC, FAMILY CAREGIVING, AND HOME CARE. FIXING THESE
INCENTIVES WOULD PROVIDE SIGNIFICANT COST SAVINGS.
Strongly Agree
8
Somewhat Agree
15
Neither agree nor Disagree
9
Somewhat Disagree
5
Strongly Disagree
2
ANALYSIS
There is general agreement that Medicaid discourages
use of personal means that might decrease the cost of LTC services to the
government, but many think better protections for community, spouse, and
care recipient are needed, as current reverse mortgage products are not
great.
QUESTION 2: IF YOU BELIEVE MEDICAID IS HINDERING
PRIVATE OR THE OTHER SOLUTIONS, HOW CAN MEDICAID BE MODIFIED TO DISCOURAGE
ABUSE, FRAUD, AND USE BY PEOPLE WITH OTHER OPTIONS?
ANALYSIS
There is some agreement that the Medicaid "crowd-out"
effect has been overstated. But there is also agreement that what is
killing Medicaid isn't fraud or abuse as is often alleged, but legal
loopholes. These loopholes need to be closed and other restrictions should
apply to prevent less needy people from accessing benefits.
QUESTION 3: HOW CAN MEDICAID BE MODIFIED TO REDUCE
COST AND MORE EFFICIENTLY PROVIDE CARE? PLEASE DESCRIBE.
ANALYSIS
There is general agreement that more emphasis should
be placed on home and community based care delivery. HCBS viewed as
cheaper and more popular except with a minority who view nursing homes as
a step up from their own residence. If HCBS are expanded, more
restrictions should apply.
QUESTION 4: SOCIAL INSURANCE IS INHERENTLY A FAIRER
AND CHEAPER MECHANISM TO PROVIDE LTC INSURANCE COVERAGE.
Strongly Agree
3
Somewhat Agree
10
Neither agree nor Disagree
11
Somewhat Disagree
4
Strongly Disagree
11
Blank
5
ANALYSIS
Most respondents are not convinced that public
sector may not be able to deliver a more "fair" product, but they want to
make sure that private market continues to receive a reasonable
opportunity to market. Some see social insurance as always favoring
current over future generations, but many would like to see a
public-private partnership with private LTCI industry supplementing the
standardized and universalized public offering.
QUESTION 5: THERE SHOULD BE A PUBLIC OPTION TO
PURCHASE LTCI FROM THE GOVERNMENT.
Strongly Agree
3
Somewhat Agree
7
Neither agree nor Disagree
9
Somewhat Disagree
8
Strongly Disagree
11
Blank
6
ANALYSIS
Respondents are largely
indifferent to whether you could buy LTCI from the federal government,
although few think it would be a bad thing if it were set up right away,
perhaps as a supplement to Medicare.
QUESTION 6: THE GOVERNMENT SHOULD PROVIDE SUBSIDIES
FOR THE PURCHASE OF LTCI FROM THE PRIVATE MARKET.
Strongly Agree
12
Somewhat Agree
13
Neither agree nor Disagree
3
Somewhat Disagree
6
Strongly Disagree
4
Blank
6
ANALYSIS
While some regard government deficits as a serious impediment to any
subsidies, others say that government funding is not impossible if certain
changes to the private market could be made, such as maximizing the
universality, either by uniform regulations, mandates, or both. Incentives
should take the form of tax breaks from both state and federal government
and would stipulate a minimum amount of coverage.
QUESTION 7: IF YOU BELIEVE THERE SHOULD BE A PUBLIC OPTION OR GOVERNMENT
SUBSIDIES, HOW SHOULD IT WORK?
ANALYSIS
There is broad agreement that a public option or government subsidy for
LTCI should not be ruled out, but that it should run like a private
insurance plan, with underwriting, deductibles, and full, risk-based
premiums. However, there is no agreement as to exactly how such a program
would work, except that there is potential in a "Medigap" model, where a
public program might carve out a gap to be covered by private LTCI, or
private LTCI would begin after a minimum public benefit is exhausted.
QUESTION 8: THERE SHOULD BE A MEDICARE CHRONIC CARE BENEFIT TO REACH THE
COSTLIEST OF THOSE NEEDING LONG-TERM CARE.
Strongly Agree
6
Somewhat Agree
9
Neither agree nor Disagree
8
Somewhat Disagree
6
Strongly Disagree
9
ANALYSIS
There is not much support for having Medicare pick up more of the cast of
chronic care for those now receiving this care under LTC, because 1)
Medicare already is running huge deficits and 2) Medicare would then be
perceived as covering LTC.
QUESTION 9: THE RECENT COURT DECISION CONCERNING THE MEDICARE AT-HOME
BENEFIT, JIMMO, ET. AL VS. SEBELIUS, WILL ALTER MEDICARE LONG-TERM CARE
COVERAGE IN A SIGNIFICANT WAY.
Strongly Agree
6
Somewhat Agree
10
Neither agree nor Disagree
12
Somewhat Disagree
4
Strongly Disagree
3
ANALYSIS
Most agree that the recent court decision will increase the cost of care
under Medicare, and the increase could be significant. Most also agree
that Medicare will be put under even more pressure that could jeopardize
the solvency of Medicare itself.
QUESTION 10: MORBIDITY ASSOCIATED WITH UNHEALTHY LIFESTYLE CHOICES IS AN
IMPORTANT NATIONAL ISSUE.
Strongly Agree
23
Somewhat Agree
12
Neither agree nor Disagree
1
Somewhat Disagree
4
Strongly Disagree
0
ANALYSIS (FOR #10-12)
All commend healthy lifestyles. But it’s hard to prove the link between
lifestyle and LTC service needs. While data will be available in the
future, absence of tracking means it is hard to link lifestyle/behavior to
actual long term care risk outcomes.
QUESTION 11: WHAT SPECIFIC CHANGES IN BEHAVIOR WOULD HAVE THE MOST
SIGNIFICANT IMPACT IN REDUCING PEOPLE'S RISK OF NEEDING LTC SERVICES?
|
Rank |
Walking and other
physical exercise |
Brain fitness
exercises |
Improve diet
|
Reduce stress
|
Improve social
networks |
|
1 |
32 |
1 |
6 |
1 |
4 |
|
2 |
10 |
15 |
11 |
3 |
5 |
|
3 |
2 |
8 |
20 |
7 |
7 |
|
4 |
0 |
8 |
5 |
25 |
6 |
|
5 |
0 |
12 |
2 |
8 |
22 |
ANALYSIS (FOR #10-12)
All commend healthy lifestyles. But it’s hard to prove the link between
lifestyle and LTC service needs. While data will be available in the
future, absence of tracking means it is hard to link lifestyle/behavior to
actual long term care risk outcomes.
QUESTION 12: WHAT, IF ANYTHING, SHOULD THE GOVERNMENT DO TO PROMOTE MORE
HEALTHY LIFESTYLES?
ANALYSIS (FOR #10-12)
All commend healthy lifestyles. But it’s hard to prove the link between
lifestyle and LTC service needs. While data will be available in the
future, absence of tracking means it is hard to link lifestyle/behavior to
actual long term care risk outcomes.
QUESTION 13: WHAT POSITIVE INCENTIVES, IF ANY,
SHOULD THE GOVERNMENT OFFER TO ENCOURAGE PEOPLE TO ADEQUATELY PREPARE FOR
THEIR FUTURE LTC NEEDS?
Tax Credits for Purchasing LTCi policy
24 support
LTC tax-qualified savings plans
27 support
Expanded partnership Plans
20 support
Other
17
QUESTION 14: WHAT NEGATIVE INCENTIVES, IF ANY, SHOULD THE GOVERNMENT OFFER
TO ENCOURAGE PEOPLE TO ADEQUATELY...-LEVY A TAX IF ADEQUATE PREPARATION IS
NOT BEING DONE (SIMILAR TO THE TAX LEVIED IF A PERSON DOES NOT BUY MEDICAL
INSURANCE AS REQUIRED UNDER THE AFFORDABLE CARE ACT)
Levy a tax if adequate preparation is not being
done (similar to the tax levied if a person does not buy medical insurance
as required under the Affordable Care Act)
11 support
Reduce projected Social Security benefits if
adequate preparation is not being done
7 support
Other
15 Support
QUESTION 15: IF ABLE, ADULT CHILDREN HAVE A RESPONSIBILITY TO HELP THEIR
PARENTS DEAL WITH LTC AS NEEDED.
Strongly Agree
13
Somewhat Agree
12
Neither agree nor Disagree
7
Somewhat Disagree
3
Strongly Disagree
4
ANALYSIS
Most agree that whatever an adult child's moral obligation to his parents,
government should not legislate or enforce it.
QUESTION 16: PEOPLE HAVE THE RIGHT TO DIE.
Strongly Agree
19
Somewhat Agree
5
Neither agree nor Disagree
6
Somewhat Disagree
3
Strongly Disagree
5
ANALYSIS
The majority of the 38 respondents agree with a
person’s right to die. However, there might be some confusion on whether
right to die refers to “assisted suicide” versus refusing medical care.
Also, only a few mentioned any potential impact on LTC.
QUESTION 17: WHAT CAN BE
DONE ETHICALLY TO ALLOW PEOPLE TO DIE IF THEY WISH TO DO SO?
Agree with the Right to Die
Strongly Agree
19
Somewhat Agree
5
Neither agree nor Disagree
6
Somewhat Disagree
3
Strongly Disagree
5
ANALYSIS
The majority of the 38 respondents agree with a
person’s right to die. The most popular answer to this question is to
promote education on the issue as well as promote advanced planning. A few
stated that laws need to be changed to allow it.
QUESTION 18: ALLOWING
(OR FAVORING) THIS PRODUCT DESIGN WOULD BE IN THE PUBLIC'S BEST INTEREST:
TAX-QUALIFIED PRODUCTS WITH SHORT BENEFIT PERIODS (E.G., 6 MONTHS)
Strongly Agree
15
Somewhat Agree
12
Neither agree nor Disagree
1
Somewhat Disagree
7
Strongly Disagree
5
ANALYSIS
The group is divided between those who like
shorter, more affordable offerings and those who think a six-month benefit
period is too short to be meaningful, with most of the premium going to
expenses and not benefits. However, most agree that the industry should
offer products geared to supplementing the risk of LTCI, not covering 100%
of it, making sure that there is protection against catastrophic loss.
QUESTION 19: ALLOWING
(OR FAVORING) THIS PRODUCT DESIGN WOULD BE IN THE PUBLIC'S BEST INTEREST:
PRODUCTS WITH LONG ELIMINATION PERIODS (E.G., OVER 1 YEAR).
Strongly Agree
22
Somewhat Agree
15
Neither agree nor Disagree
1
Somewhat Disagree
1
Strongly Disagree
1
ANALYSIS
Most agree that policies with long elimination
periods should be sold, because they make good economic sense if properly
understood, but many note that they will not likely be properly understood
after time of sale or at time of claim. In any event, such a plan should
be sold as part of an LTC plan or solution, so as to ensure adequate cash
flow during the elimination period.
QUESTION 20: ALLOWING
(OR FAVORING) THIS PRODUCT DESIGN WOULD BE IN THE PUBLIC'S BEST INTEREST:
PRODUCTS THAT REQUIRE STRICTER BENEFIT TRIGGERS.
Strongly Agree
4
Somewhat Agree
10
Neither agree nor Disagree
2
Somewhat Disagree
12
Strongly Disagree
11
ANALYSIS
Most don't like the idea of stricter benefit
periods. This is not necessary, nor would it be good for consumers.
QUESTION 21: ALLOWING
(OR FAVORING) THIS PRODUCT DESIGN WOULD BE IN THE PUBLIC'S BEST INTEREST:
PRODUCTS THAT OFFER HEALTHY-LIFESTYLE PREMIUM DISCOUNTS THAT ARE REMOVABLE
IF THE HEALTHY LIFESTYLE IS DISCONTINUED.
Strongly Agree
9
Somewhat Agree
9
Neither agree nor Disagree
8
Somewhat Disagree
7
Strongly Disagree
6
ANALYSIS
Healthy lifestyle discounts hard to monitor,
impractical. Most think they cannot be administered.
QUESTION 22: ALLOWING
(OR FAVORING) THIS PRODUCT DESIGN WOULD BE IN THE PUBLIC'S BEST INTEREST:
A SPECIAL TAX-QUALIFIED SAVINGS PLAN FOR LTC WHICH COULD BE USED FOR LTCI
PREMIUM OR LTC COSTS DIRECTLY.
Strongly Agree
22
Somewhat Agree
10
Neither agree nor Disagree
3
Somewhat Disagree
4
Strongly Disagree
2
ANALYSIS
Tax qualified savings plan--while some see
benefits, most think it will not really change the landscape: many will
not save enough, low income will not participate, and high living costs
make it impractical for older persons, and add complexity.
QUESTION 23: ALLOWING
(OR FAVORING) THIS PRODUCT DESIGN WOULD BE IN THE PUBLIC'S BEST INTEREST:
"UNIVERSAL LTC" WHERE PREMIUMS NET OF POLICY CHARGERS BUILD AN ACCOUNT
VALUE
Strongly Agree
12
Somewhat Agree
16
Neither agree nor Disagree
6
Somewhat Disagree
6
Strongly Disagree
2
ANALYSIS
Universal LTC--While it may actually be a
better, more balanced product, it will not really expand the market and is
therefore not really in the general public's interest. Universal LTC is
viewed as niche product too few can afford, not best use of funds,
complicated, expensive to administer.
QUESTION 24: WHAT OTHER
INNOVATIVE PRODUCT DESIGNS WOULD BE IN THE PUBLIC'S BEST INTEREST?
ANALYSIS
Other innovative products: lots of ideas, but
little agreement. Some prefer revised insurance risk / transfer products,
some insurance plus savings vehicles. More talk of catastrophic coverage,
alignment with health plans / longevity cost-sharing a la major medical.
QUESTION 25: THE CURRENT
APPROACH TO RATE STABILITY REGULATION DISCOURAGES COMPANIES FROM OFFERING
LTC PRODUCTS THAT THE MARKET NEEDS.
Strongly Agree
4
Somewhat Agree
13
Neither agree nor Disagree
7
Somewhat Disagree
5
Strongly Disagree
6
ANALYSIS
There was no overall
consensus about the effect of rate stability regulation. However, with one
exception, there is universal support for retaining the rate stability
provisions.
QUESTION 26: INSURANCE
COMPANIES COULD OFFER MORE AFFORDABLE PRODUCTS IF THEY COULD AUTOMATICALLY
CHANGE CURRENT PREMIUMS BASED ON CURRENT INTEREST RATES.
Strongly Agree
8
Somewhat Agree
15
Neither agree nor Disagree
6
Somewhat Disagree
4
Strongly Disagree
3
ANALYSIS
Respondents agree by a margin of more than three
to one that carriers could offer more affordable products with premiums
based on current interest rates but overwhelmingly disagreed that this was
appropriate for the market.
QUESTION 27: HOW COULD
RATE STABILITY REGULATION BE IMPROVED?
ANALYSIS
The common opinion was that rate stability
regulation should be more closely followed with a defined approach that
leaves little room for ambiguity. Regulators and carriers should fully use
the regulations that exist.
QUESTION 28: THE
GOVERNMENT SHOULD FUND A PUBLIC AWARENESS CAMPAIGN ABOUT THE NEED FOR
LONG-TERM CARE PLANNING.
Strongly Agree
20
Somewhat Agree
11
Neither agree nor Disagree
3
Somewhat Disagree
4
Strongly Disagree
2
ANALYSIS
Most believe government should fund public
awareness. Public Education is necessary but not a sufficient condition
for success. Products need to be viable, affordable. No real agreement on
whether this has helped or not. Some think it has, some think it is a
waste of time and money.
QUESTION 29: FINANCIAL
ADVISORS HAVE A FIDUCIARY RESPONSIBILITY TO MAKE SURE THEIR CLIENTS ARE
AWARE OF THE RISKS AND COSTS OF LONG-TERM CARE…
Strongly Agree
27
Somewhat Agree
9
Neither agree nor Disagree
3
Somewhat Disagree
0
Strongly Disagree
2
ANALYSIS
Financial advisors have fiduciary
responsibility. Most think it should be built into training or otherwise
reinforced.
QUESTION 30: WHAT ELSE
CAN BE DONE TO IMPROVE AMERICA'S PROSPECTS FOR DEALING WITH LONG-TERM CARE
ISSUES THAT WEREN'T PROMOTED BY THE PRECEDING QUESTIONS?
ANALYSIS
Government needs to take constructive action,
education & also risk management. While not advocating a social insurance
approach, a number see and understand that the failures of the private
market and the failures of government officials are leading us in this
direction. There is some agreement that the insurance industry has failed
to live up to its responsibility. They see the exit of carriers post CLASS
rate increases as the only real response the industry has made for
mitigating risk. They think that private LTCI needs a backstop in place
until more consistently credible experience develops.
#############################
Updated,
Friday, May 10, 2013, 11:29 AM (Central)
Alpine, TX—
#############################
LTC BULLET: AFTER CLASS AND THE LTC COMMISSION
LTC Comment: Are you a pessimist or an optimist
about long-term care? Take an astute, if mistaken, analyst’s Rorschach
test after the ***news.***
***
LIFEHEALTHPRO says "Jonas Roeser -- one of the people who helped
promote the 3in4 Need More long-term care insurance (LTCI) outreach
campaign with a tireless ability to generate publicity -- is now trying to
get attention for a different kind of long-term care (LTC) planning . . .
: Having an association sell a package that provides access to LTC
planning services and a set amount of discounted non-medical long-term
support services, such as companion care services and homemaker
services." Learn more
here. Register for a webinar Wednesday, May 15th beginning at 11am
Eastern
here. ***
*** ANNOUNCING: CLTCR Premium Membership -- Center
for Long-Term Care Reform premium members receive our full suite of
individual membership benefits including: our LTC Bullets and
E-Alerts; access to our Members-Only Zone website and Almanac
of Long-Term Care; subscription to our
Clipping Service; and email/phone access to Steve Moses for 24-hour
turnaround queries. Our Premium Membership is designed to give you a
competitive advantage in your long-term care profession. Your
increased knowledge of the critical issues and challenges we face in the
field of long-term care service delivery and financing equals improved
professional success for you and better LTC services for your clients and
for those who have no choice but to rely on scarce public resources.
Premium Membership is $250 per year, paid up front or monthly by
automatically recurring credit card payments. Contact Damon at
206-283-7036 /
damon@centerltc.com to start your Premium Membership
immediately or go directly to our secure online subscription page and
sign up for as little as $21 per month. ***
LTC BULLET: AFTER CLASS AND THE LTC COMMISSION
LTC Comment: Josh Wiener, AKA Joshua M. Wiener,
Ph.D., Distinguished Fellow and Director for Aging, Disability, and
Long-Term Care at RTI International, is the author or editor of eight
books and more than 200 articles, most of them on long-term care
financing. He does fine work and he writes very well. I nearly always
agree with his facts and statistical analysis. I almost never agree with
his conclusions or opinions. To watch and hear our ideas clash, check out
this debate between us on the question “Long-Term
Care: Who Should Pay” as moderated by national political commentator
Morton Kondracke.
Dr. Wiener has a short article in the current issue
of Health Affairs titled “After
CLASS: The Long-Term Care Commission's Search For A Solution.” In
three pages, he summarizes the current state of long-term care financing,
laments our on-going dependency on Medicaid, predicts the current system
will be unable to sustain future costs, eulogizes what he considers the
impending demise of private long-term care insurance, opines about how to
revive CLASS, concludes (predictably) that mandatory social insurance is
the only practical answer, but believes the new LTC Commission isn’t going
to get us to that solution. [Health Affairs, 32, no. 5
(2013):831-834. Want to read the article? The journal will sell you
24-hour access to the article for $12.95 or 30-day access to the whole
issue for $29.95 or you can subscribe as the Center does for $158 per
year.]
This is a good article. I’ll praise some of it
before I bury all of it. As usual, Josh musters accurate and interesting
facts. For example:
Two intertwined factors will dominate
the [LTC] commission’s considerations as it begins its work. First is the
rapidly growing need for additional long-term care driven by an aging
population. If current use rates are held constant, the number of people
needing informal care, home care, and nursing home care will roughly
double between 2000 and 2040.
The second factor is a likely
substantial increase in public spending on long-term care. It is simply
not possible to finance services for twice as many people using the same
amount of money. The Organization for Economic Cooperation and Development
projects that public long-term care expenditures in the United States,
which were about 1 percent of gross domestic product (GDP) in 2005, will
climb to 2–3 percent in 2050. (p. 832, footnotes omitted)
Long-term care financing dominated by an already
over-stretched welfare program is unsustainable? Granted, agreed,
stipulated. But now what? Consider some of the options we’ve tried.
An active market for private long-term
care insurance has existed since about 1985, yet only approximately 12
percent of people age sixty-five or older and 5 percent of people age
forty-five or older have private long-term care insurance. Despite
numerous potential tools to promote private long-term care insurance—for
example, making the cost of policies tax deductible—the market for
long-term care insurance is in danger of imploding. (p. 833)
To his credit, the author correctly recognizes two of
the main reasons for the difficulties confronting private long-term care
insurance: lower lapse rates than actuaries predicted and near-zero
interest rates imposed by the Fed. But he neglected the most important
reason, which I’ll disclose at the end of this review.
Or how about having another go at CLASS: “Although
its chances are slim in the current political environment, another path
would be to revive the CLASS Act, making changes to ensure its financial
viability as a voluntary program.” (p. 833) Sounds crazy, but maybe you
could tighten the work requirement and reduce or eliminate premium
subsidies. On the other hand, that would just transform—heaven forfend—“a
rejuvenated CLASS Act into something more like private insurance, raising
questions about the program’s fundamental public policy purpose.”
Evidently private insurance serves no legitimate public purpose.
So none of the approaches we’ve taken so far can
succeed. Medicaid? Out. Private LTC insurance? Out. CLASS? Just
wishful thinking. What’s left besides gloom, doom and despair?
Another option would be to make
participation in a public long-term care insurance program mandatory. The
obvious benefit of mandatory social insurance is that everyone would be
covered and everyone would pay, creating extensive coverage and a broad
tax base. But opponents resist new taxes and believe that any public
program would be overly rigid. (p. 833)
Yeah, what a shame people aren’t willing to pony up
more tax money to finance another program like the social insurance
entitlements we already have such as Medicare ($38.6 trillion unfunded
liability) and Social Security ($20.5 trillion). Somehow, the
collectivists’ dream “that everyone would be covered and everyone would
pay, creating extensive coverage and a broad tax base” always turns into
an economic nightmare for individuals, threatening everyone’s prosperity
and happiness.
Wiener suggests a “Rorschach test for policy makers”
(p. 832):
Are you a pessimist? “Pessimists argue strongly for
efforts to shift costs to the private sector and imply that America cannot
afford to grow old. At the very least, this group sees any expansion of
public programs as a formula for disaster.” (p. 832)
Or are you an optimist? “For optimists, the increase
of one to two percentage points in public spending is fairly modest, given
the large increase in need. After all, they argue, even if long-term care
rises to 3 percent of GDP, it will remain a relatively small portion of
overall health expenditures, which accounted for 17.9 percent of GDP in
2011.” (p. 832)
A better test is “Are you a realist or are you a
dreamer?” How can anyone seriously believe that doubling down on bankrupt
social insurance schemes will solve anything?
Now what is the fatal error in this article and in
the author’s reasoning? He assumes without evidence and in contradiction
of reality that “routine catastrophic out-of-pocket costs . . . often
leave people impoverished” (p. 831) and that “catastrophic out-of-pocket
costs . . . impoverish many middle-class Americans.” (p. 833) That is
conventional wisdom but there is no proof it is true. Medicaid
eligibility rules allow virtually unlimited income if medical and LTC
expenses are high enough. Assets are unlimited for all practical purposes
due to generous exemptions for home equity (up to $802,000) and (all
unlimited) for a business, auto, IRAs, term life insurance, prepaid
burials, and personal belongings. People who still don’t qualify using
the basic rules every eligibility worker tells every applicant, can
consult a Medicaid planner and self-impoverish quickly and easily by means
of sophisticated legal techniques.
Of course, this does not mean that no one spends down
life’s savings to qualify for Medicaid. It only means that unfortunate
outcome occurs either voluntarily or due to ignorance. That’s why the
data show and Josh Wiener has recently published that most people who
“spend down” to Medicaid, i.e. start LTC as private payers and
convert to Medicaid, have few assets and little income. The poor are
quickly wiped out financially by catastrophic long-term care costs. But
the middle class and affluent, who have access to financial planners,
accountants and attorneys, routinely learn how Medicaid works when they or
loved ones begin to need expensive long-term care. They not only qualify
easily, the really affluent ones who do consult elder lawyers nail down
the best spots in the nicest facilities by using “key money.” They buy
their way into upscale assisted living facilities or nursing homes starved
for private payers because of Medicaid’s meager reimbursement rates.
After a few months, their lawyer flips the switch and, voila, Medicaid
starts picking up the tab.
The Medicaid long-term care system is dysfunctional
and corrupt, but it is not unfixable. Stop paying for long-term care
publicly after the privately insurable event occurs and stop protecting
over three-quarters of a million dollars of home equity from LTC
liability, and it won’t take long for critically needed private dollars to
flow into the service delivery system improving access and quality for
everyone. Those private dollars will come from real asset spend down once
the rules require it, from home equity conversion through reverse
mortgages which allow people to buy quality home care that enables them to
remain in their homes and off Medicaid, and from the private long-term
care insurance people will rush to the carriers to buy once they realize
they really need it.
That’s not pessimism; it’s realism. Expecting social
insurance to solve the long-term care dilemma isn’t optimism; it’s
self-delusion.
#############################
Updated,
Monday, May 6, 2013, 12:02 PM (Central)
Alpine, TX—
#############################
THE 401-K WORLD
AND LTC NEWS AND COMMENT
LTC Comment: Our
first item after the ***news*** today features an op-ed by Thomas Friedman
of the New York Times. He argues that our new digital world places
more responsibility on the individual who in the future can expect fewer
benefits from government and employers. So right, as I agreed in our “LTC
Comment” following the “Quote” from his piece.
But no sooner did
I bask in the glow of this happy idea that individualism is on the rise
and dependency waning, than I read “A
Darkening Digital Future” by L. Gordon Crovitz in the Wall Street
Journal, warning the opposite. He reviews Google founder Eric
Schmidt’s and Jared Cohen’s new book "The
New Digital Age: Reshaping the Future of People, Nations and Business,"
focusing on the “bad news” it conveys:
“Many authoritarian regimes dedicate significant resources to limiting
what their people can do online. The authors predict a ‘Balkanization of
the Internet’ as more countries and groups hive off their own corners,
narrowing what has been a globally connected network. The authors warn of
separate ideological and religious versions of the Internet. Countries
like Saudi Arabia and Yemen could create a ‘Sunni Web,’ especially now
that the Internet domain system allows characters from non-Roman
alphabets, including Arabic. Iran says it plans to build its own ‘halal
Internet,’ then disconnect from the rest of the world.”
On the other
hand: “By 2025, they write, ‘the majority of the world's population will,
in one generation, have gone from having virtually no access to unfiltered
information to accessing all of the world's information through a device
that fits in the palm of the hand.’” That’s a surge of individual
intellectual power that will be very hard for authoritarian regimes to
stifle in the end.
*** Have a look
at Marilee Driscoll’s review of Margie Barrie’s new book
here and buy it here: "Selling
LTCI today: 46 Ways to Find Clients and Close More Sales." ***
*** LIMRA, LOMA,
SOA, and NACII are teaming up again to sponsor the Critical Illness
Insurance Forum, “the premier critical illness insurance gathering in
North America and a great opportunity for industry professionals to
network and communicate with their peers.” Details: 2013
Critical Illness Insurance Forum
September 16–18, 2013 Harbor Beach Marriott
Resort & Spa, Fort Lauderdale, FL
Event
Details |
Save the Date |
Register Now ***
#############################
4/30/2013, “It's
a 401(k) World,” by Thomas L. Friedman, New York Times
Quote: "We now live in a 401(k) world - a
world of defined contributions, not defined benefits . . .. Government
will do less for you. Companies will do less for you. Unions can do less
for you. There will be fewer limits, but also fewer guarantees. Your
specific contribution will define your specific benefits much more. Just
showing up will not cut it."
LTC Comment: We don't include many op-eds in
the LTC E-Alerts, but this one struck me as important. I could
re-title it "Why I'm Optimistic." Collectivism, including social
insurance entitlements, never succeeded anywhere but they'll fail even
faster in our brave, new, "hyper-connected" world. This new world fits
better than our current nanny state with the values and traits that made
America great in the first place--freedom, individualism, personal
responsibility, ambition, and hard work. Now all we have to do is get
from where we are to where this article correctly states we're headed.
(Special thanks to Center member B.J. Randolph for tipping us to this
piece.)
#############################
5/3/2013, “Hancock
has gender-based LTCI pricing OKs in 42 states,” by Allison Bell,
LifeHealthPRO
Quote: "Executives at
Manulife Financial Corp. (TSX:MFC) said they have made progress with
revamping the long-term care insurance (LTCI) product line at the
company's John Hancock unit. . . . The John Hancock Long-Term Care
business -- which reports its performance in U.S. dollars -- is reporting
$105 million in net income for the quarter on $721 million in 'subtotal
revenue,' compared with a net loss on $690 million in subtotal revenue for
the first quarter of 2012. . . . The company has received approvals for
one new product in 47 states, and has received approvals to sell a
'gender-distinct' product -- a product with gender-based pricing -- in 42
states."
LTC Comment: Lucky gals. Take care of the
guys until they need LTC and then pay extra for the privilege.
#############################
5/2/2013, “Unum
continues to fight low rates, soft employment,” by Allison Bell,
LifeHealthPRO
Quote: "Unum Group Corp. (NYSE:UNM) is still
facing pressure from a weak labor market and low interest rates. The low
rates continue to pound the company's long-term disability (LTD) insurance
business and its closed block of long-term care insurance business,
leading the company to pass rate increases onto consumers."
LTC Comment: It’s a tough time to do private
insurance when the government competes with public insurance and handicaps
private business with artificially low interest rates.
#############################
5/2/2013, “Most
people aren't meeting exercise guidelines,” by Nanci Hellmich, USA
Today
Quote: "About 79% of adults don't meet the
physical activity guidelines that advise getting at least 21/2 hours a
week of moderate-intensity aerobic activity such as brisk walking, or one
hour and 15 minutes a week of vigorous-intensity aerobic activity, such as
jogging."
LTC Comment: Not good news given the
oft-reported fact that exercise, physical and mental, is important to
prevent or delay chronic illness and dementia.
#############################
5/1/2013, “Medicaid
has mixed record on improving health for poor, study says,” by Noam N.
Levey, Los Angeles Times
Quote: "As state leaders debate whether to
expand their
Medicaid programs next year under President
Obama’s healthcare law, new research suggests the government insurance
plan for the poor has only a mixed record of improving health.
"Medicaid beneficiaries are less likely than the
uninsured to have catastrophic medical expenses and significantly less
likely to suffer from depression, researchers at the Harvard School of
Public Health and the
Massachusetts Institute of Technology found.
"But those on Medicaid did no better controlling
their
blood pressure or cholesterol levels, raising questions about the
program’s ability by itself to help low-income Americans become healthier.
"The lack of health gains came even though Medicaid
beneficiaries went to the doctor’s office and the hospital and filled
prescriptions more frequently than those without coverage."
LTC Comment: One more reason to challenge
the wisdom of expanding Medicaid through ObamaCare . . . in case you
needed another reason.
#############################
5/1/2013, “Genworth
to Cease New Sales of AARP-Branded Products on June 1,” Stockhouse
Quote: "Genworth Financial, Inc. (NYSE: GNW)
has announced the cessation of new sales of AARP-branded long term care
insurance products through Genworth Life Insurance Company and Genworth
Life Insurance Company of New York (Genworth). Genworth will discontinue
sales of AARP-branded products on June 1, 2013."
LTC Comment: AARP’s policy branch disses LTCI,
while it’s money raising side sells it. What do they really believe?
#############################
5/1/2013, “Elder
Housing Options for Clients,” by June Fletcher, Financial Planning
Quote: "The collective home equity of
homeowners 62 and older fell to $3.2 trillion in the fourth quarter of
2012 from $4 trillion at the end of 2006. Yet older homeowners who have
lived in their homes since the start of 2000 have seen their total equity
rise by more than 50%, according to the National Reverse Mortgage Lenders
Association. For some, a reverse mortgage may be a good way to fund the
cost of long-term care."
LTC Comment: Likewise, proceeds of a reverse
mortgage can help aging homeowners afford LTC insurance to protect their
home equity and the rest of their assets as well.
#############################
4/30/2013, “Financial
Q1 Profit More Than Doubles,” RTT News
Quote: "Insurance company Genworth
Financial
Inc. (
GNW ) on Tuesday reported a profit for the first quarter that more
than doubled from last year, reflecting strong results at its U.S.
mortgage and life insurance divisions. The company's shares gained more
than 5 percent in extended trading following the announcement of the
results. Tom McInerney, President and CEO of Genworth Financial said, 'We
achieved several milestones in the first quarter of 2013, including
progress on our long term care premium rate increase plans . . .. Long
term care insurance net operating income declined 43 percent to $20
million.'"
LTC Comment: Hmmm. Premiums up but income
down.
#############################
4/30/2013, “Nursing
home robots could come soon, if Japanese government funding pays off,”
by Tim Mullaney, McKnight’s LTC News
Quote: "Starting this year, the Japanese
government will subsidize up to 60% of research and development costs
related to these robots, according to the Daily Press. One type of robot
would assist in transfers, another would help residents walk, a third type
would monitor people with dementia who wander, and the fourth type would
be self-cleaning robotic toilets."
LTC Comment: And maybe a fifth type will help
with breaking and entering, a la “Robot
and Frank.”
#############################
4/30/2013, “Health-Care
Owners Shun Nursing Homes,” by A.D. Pruitt, Wall Street Journal
Quote: "Some of the nation's largest
health-care landlords are pulling back from nursing homes on concerns they
will be less profitable in an era of steep Medicare and Medicaid cuts.
Health Care REIT Inc.,
HCN +0.98% which leases to about 250 nursing homes nationwide, and
Senior Housing Properties Trust,
SNH +0.78% which is the landlord to nearly 50 nursing homes, have
indicated they are greatly reducing their exposure or that they might exit
the sector."
LTC Comment: Developments we predicted.
Capital always migrates to its highest and best use. With most of the
income to the LTC provider sector coming from financially pinched
government programs investors are rightfully wary of putting their money
to work there.
#############################
4/30/2013, “House
bill would tighten Medicaid eligibility for long-term care,” by Tim
Mullaney, McKnight’s LTC News
Quote: "A new House bill
would reduce the amount of home equity that is exempted when determining
Medicaid eligibility for long-term care. The 'Medicaid Program Integrity
Act of 2013' would give states the option of setting the home equity
exemption as low as $50,000. . . . Private long-term care insurance should
be expanded, and the federal government should increase efforts to inform
the public that Medicare does not fund long-term nursing home stays,
wrote Boustany, Blackburn and Gingrey on Monday."
LTC Comment: While unlikely
to become law any time soon, this legislation would accomplish the single
most important thing that must be done to give Medicaid back to the
genuinely needy and unleash the potential of private LTC financing. Kudos
to the sponsors.
#############################
4/29/2013, “Penn
Treaty parties spar over policyholder panel proposal,” by Allison
Bell, LifeHealthPRO
Quote: "Penn Treaty Network America Insurance
Company and a sister company are still operating in rehabilitation, and
the chairman of the companies' boards is still skirmishing in court with
the rehabilitator. The latest battle is over whether the rehabilitator --
Pennsylvania Insurance Commissioner Michael Consedine -- should get to
create a policyholder committee."
LTC Comment: The sad story continues.
#############################
4/29/2013, “Retirement
expert: Medicare already means-tested,” by Phil Ciciora, EurekAlert
Quote: "The Obama administration's
controversial proposal to 'means-test' Medicare recipients is ostensibly
aimed at generating more cash for the government from those who can afford
it - or squeezing more money out of upper-income seniors, depending upon
one's point of view. But according to a University of Illinois expert on
retirement benefits, the Medicare program is already means-tested. . . .
Editor's notes: To contact Richard L. Kaplan, call 217-333-2499, or email
rkaplan@illinois.edu. The article, ‘Top
Ten Myths of Medicare,’ is available online.”
LTC Comment: Dick Kaplan is an elder law
attorney, professor, author and friend. We disagree on much but not about
the fact that Medicaid is already means-tested and likely to become more
so.
#############################
4/29/2013, “Obama
Administration Mulls Rule To Give Home Health Aides Better Wage,” by
Alvin Tran Khn, Kaiser Health News
Quote: "The
average yearly salary for home health aides in 2012 was $21,830,
according to the Labor Department. Only
21 states and the District of Columbia extend minimum wage guarantees
to at least some in-home care workers. Among them, 12 states have a
minimum wage that is higher than the federal standard – $7.25 an hour. The
administration wants to change that, however. In December, 2011, President
Barack Obama
proposed a revision to the Fair Labor Standards Act that would extend
both overtime and minimum wage protections to home-care workers employed
by third parties, such as home care agencies. ‘They work hard and play by
the rules and they should see that work and responsibility rewarded,’
Obama said."
LTC Comment: Good intentions beg the
question: Where will the money come from in a long-term care financing
system dominated by government programs that pay providers less than the
cost of providing the care?
#############################
4/27/2013, “Loans
Borrowed Against Pensions Squeeze Retirees,” by Jessica
Silver-Greenberg, New York Times
Quote: "To retirees, the offers can sound
like the answer to every money worry: convert tomorrow's pension checks
into today's hard cash. But these offers, known as pension advances, are
having devastating financial consequences for a growing number of older
Americans, threatening their retirement savings and plunging them further
into debt."
LTC Comment: Run the economy into a hole,
choke off the job market, drive interest rates down to zero, and then
wonder why old people are getting desperate.
#############################
4/26/2013, “Critical
Illness Insurance Showcased in Kiplinger's 2013 Retirement Guide,”
Insurance Broadcasting
Quote: "Kiplinger's Personal Finance recently
featured information about the importance of critical illness insurance on
page three of its annual retirement guide, which offers numerous articles
on programs and services that should be considered in retirement
planning."
LTC Comment: Much needed recognition for an
on-coming insurance product.
#############################
4/26/2013, “The
Unluckiest Generation: What Will Become of Millennials?,” by Derek
Thompson, The Atlantic
Quote: "This so-called millennial cohort, the
largest generation in American history, landed in the cradle during an
awful recession, learned to walk during the Reagan recovery, came of age
in the booming 1990s, and entered the labor market after the Sept. 11
attacks and before the Great Recession, the two tragedies of the early
21st century."
LTC Comment: The biggest generation? Fact is
we boomers aren’t it any more. What life challenges these youngsters
face! And what a pitiful inheritance they'll receive as late comers to
the Ponzi scheme of social insurance "entitlements."
#############################
4/26/2013, “Why
Your Grandpa Is Cooler Than You,” by Mireille Silcoff, New York
Times
Quote: "There is baby-boomer old, an
audacious, aspirational sort of old. Common depictions include couples
sky-diving for their 40th anniversaries; Richard Branson doing all manner
of macho rich-guy nonsense; and the woman of a certain age on a seashore
holding a fluttering piece of voile toward the winds of freedom. Then
there is old old, a realm often belonging to the parents of the baby
boomers. This is nursing-home old. This is prunes-for-breakfast old. This
is 'I've fallen, and I can't get up' old."
LTC Comment: This article argues that the
young think old is cool, especially “Advanced Style.” Left me flat but
maybe I’m still too young to recognize cool when I see it.
#############################
Updated,
Friday, May 3, 2013, 11:50 AM (Central)
Alpine, TX—
#############################
LTC BULLET: THE MEDICAID PROGRAM INTEGRITY ACT
LTC Comment: New proposed legislation opposes the
two biggest perverse incentives in public policy that discourage
responsible LTC planning.
LTC BULLET: THE MEDICAID PROGRAM INTEGRITY ACT
LTC Comment: I often get questions like this one.
“Mr. Moses, you’ve been writing about Medicaid and long-term care
financing for a long time. You’ve made hundreds of recommendations over
the years. If you had to pick just one or two things policy makers could
do to improve LTC, what would they be?”
You couldn’t find a better answer to that question
than H.R. 1703, “The
Medicaid Program Integrity Act of 2013” recently introduced in the
U.S. House of Representatives by Congressman Charles W. Boustany, M.D. (R,
LA). The provisions in this bill, when they become law, as they must
sooner or later, in this or some other form, will correct the two biggest
problems facing long-term care.
What are those problems?
First, the “Maintenance of Effort” (MOE) requirement
in ObamaCare prevents state Medicaid programs from tightening their income
and asset eligibility rules. Consequently, for example, states that made
access to Medicaid’s most expensive LTC benefits very easy during good
economic times are unable to tighten that access now in order to save
money, ensure scarce LTC resources go to their neediest citizens, and send
the message to the general public that long-term care is a personal risk
and responsibility for which families should plan early and responsibly.
The Medicaid Program Integrity Act repeals the MOE requirement. It would
therefore, allow the 13 states and DC which opted for a home equity
exemption of $750,000 (currently inflated to $802,000) to reduce the
amount of their exemption to the minimum allowed under federal law,
currently $536,000. But that limit still leaves our home equity exemption
almost 15 times larger than socialized England’s $36,600 exemption, which
includes all property, not just home equity like ours.
So, second, that huge home equity exemption is the
single biggest loophole in federally imposed Medicaid LTC eligibility
rules. As long as it remains in effect, even at the reduced level of over
half a million dollars, the vast majority of Americans can qualify easily
for Medicaid LTC benefits without spending down simply by hiding their
money in their homes. (Mandatory estate recovery, intended to ensure that
all assets, including home equity, go to re-pay Medicaid after recipients
die, was achieved in 1993, but unfortunately remains very easy to evade.)
The Medicaid Program Integrity Act allows state Medicaid programs to
reduce their home equity exemption to as low as $50,000. That’s still
over a third more than England allows, but it would send a very strong
message to middle class and affluent Americans that failure to plan for
long-term care could cost them and their heirs dearly.
Eliminating the maintenance of effort requirement and
enabling states to reduce their home equity exemptions to a more
reasonable level are the two most important actions the federal government
could take to reduce perverse incentives in current law that discourage
responsible LTC planning. There are many more things that need to be
done, such as (1) stopping the abuse of “Medicaid-friendly annuities”
which allow couples to divert hundreds of thousands of dollars from
Medicaid spend down without any pre-planning and (2) closing the “reverse
half-a-loaf” loophole that survived the Deficit Reduction Act’s valiant
effort to return Medicaid LTC to the needy. To find other examples, read
any of the Center for Long-Term Care Reform’s many national and
state-level studies
here.
Bottom line, the Medicaid Program Integrity Act does
not do everything that needs to be done to fix LTC financing policy, but
it does do the two most important things and that’s a critical step in the
right direction.
Are we tilting at windmills to ask Congress to pass
and the President to sign such a bill? Probably, in the short term. But
I’ve learned that perseverance in tilting often tips windmills over.
We’ve made important progress over the years since the Tax Equity and
Fiscal Responsibility Act of 1982 (TEFRA ’82) first allowed states on a
voluntary basis to restrict asset transfers, place liens on real property,
and recover from estates. Legislation in 1988 (MCCA ’88) made asset
transfer restrictions mandatory. OBRA ’93 made transfer of asset limits
longer and stronger and estate recoveries mandatory. HIPAA ’96 and BBA
’97 tried to stop asset transfers altogether. And the DRA ’05 further
strengthened asset transfer restrictions and put the first cap ever on the
home equity exemption. For the full history and complete citations, see
our “LTC Graduate Seminar Transcription”
here.
So progress is slow. But it is inevitable. The USA
cannot continue indefinitely to finance LTC for the middle class and
affluent through a welfare program that serves no one well. Kudos to the
author of the Medicaid Program Integrity Act of 2013 and to its
supporters. Tilt away proudly.
#############################
Updated,
Monday, April 30, 2013, 10:30 AM (Pacific)
Seattle—
#############################
LTC NEWS AND
COMMENT: REJECT CLASS 2.0
LTC Comment:
Today’s first item is a critical new development in the fight to fix
America’s dysfunctional long-term care financing system. The Medicaid
Program Integrity Act, newly introduced in Congress, addresses the three
most urgent challenges facing policy makers:
1. The
need to stop a move toward “CLASS 2.0,” i.e. the favorite solution
of dyed-in-the-wool-statists, which is to replace the failed CLASS program
with a mandatory version modeled after other bankrupt social insurance
entitlement programs from which no one can escape.
2. The
need to reduce Medicaid’s exorbitant home equity exemption, up to $802,000
and increasing annually, to a figure closer to the property exemption in
England, $36,000 including home equity and all other property.
3. The
need to eliminate the ObamaCare “Maintenance of Effort” restriction as it
applies to Medicaid LTC eligibility so that states can target their scarce
LTC resources to genuinely needy citizens without risking their entire
federal Medicaid match.
We’re proud to
say we’ve repeatedly urged policy makers to address all three of these
objectives in Center for Long-Term Care Reform publications, most recently
in “How
to Fix Long-Term Care,” seven briefing papers that fully document the
problem and the solution.
The Medicaid
Program Integrity Act will be available online soon at Congress’s “Thomas”
website. In the meantime, Center members in good standing may request a
copy of the bill by emailing
Damon@centerltc.com. While you’re at it, why not upgrade to one of
our premium membership levels which include a subscription to our
“clippings service?”
#############################
4/28/2013, “Reject
CLASS 2.0 and Address Medicaid's Looming LTC Crisis,” by Rep. Charles
Boustany with Rep. Marsha Blackburn and Rep. Phil Gingrey, Townhall.com
Quote: “Federal rules force states to
disregard more than a half million dollars in home equity and the entire
amount of other valuable assets during enrollment.
“Making matters worse, the 2010 law prohibits states
from tightening loopholes that allow welfare abuse. Virginia provides an
example of a Medicaid applicant who purchased a $900,000 annuity, naming
his wife the beneficiary of $89,000 per month. Obamacare forces Virginia
to ignore this income when deciding eligibility. . . .
“To protect Medicaid for poor Americans, we recently
introduced the Medicaid Program Integrity Act. The bill would give states
the option to reduce the Medicaid home equity exemption as low as $50,000.
It would also eliminate Obamacare's Maintenance of Effort rules,
preventing states from closing loopholes allowing Medicaid abuse.
“Congress should reject CLASS 2.0, encourage personal
responsibility, and protect Medicaid for those it was intended to protect.
Ultimately, this will give middle-class Americans greater choice,
independence and control over LTC services they need in a setting of their
choice.”
LTC Comment: Although its chances of getting
past the House, the Senate and President Obama’s veto pen are remote, this
bill dodges another CLASS fiasco and tackles the most important problems
with Medicaid LTC that need fixing. To wit, the program’s outrageously
high home equity exemption and the self-destructive prohibition on
eligibility reform in ObamaCare.
#############################
4/26/2013, “SEC
halts trading in embattled LTCI seller,” InvestmentNews.com
Quote: "The
Securities and Exchange Commission temporarily halted trading in the
stocks of Penn Treaty American Corp., an embattled long-term-care insurer
that's now under the guidance of state regulators. It's been about seven
years since Penn Treaty filed a quarterly or annual financial statement
with the SEC. The last one, a 10-K for 2006's results, was submitted in
April 2008. The delay was due to accounting concerns related to the
company's policyholder benefit reserve liability."
LTC Comment: Penn Treaty’s sad saga
continues.
#############################
4/26/2013, “Long-Term Care Insurance Leader Joins
American Senior Services Incorporated (ASSI): Mark Goldberg Appointed
Chief Operating Officer, Will Support ASSI's New National Alternative to
Traditional Home Care Insurance, ‘True Freedom II’ [link],”
by American Senior Services Incorporated
Quote: "American Senior Services Incorporated
(ASSI) (http://www.truefreedomhomecare.com)
today announced that Mark Goldberg, a leader in the long-term care
planning field, has joined as Chief Operating Officer."
LTC Comment: Congratulations to an old friend
of responsible long-term care planning.
#############################
4/26/2013, “Your
biggest assets are Social Security, Medicare,” by Rex Nutting, WSJ
MarketWatch
Quote: "For most people, the value of the
pensions and health care they'll get in retirement far exceeds the value
of all the rest of their wealth, including the equity in their homes, the
money they have in the bank, and any funds they've been able to sock away
in retirement accounts."
LTC Comment: I found this article
fascinating. It imputes an annuity value to Social Security and Medicare
benefits emphasizing how much more important those resources are to most
Americans than are real assets, such as home equity and investments, of
which they have very little. But this observation begs two questions:
(1) What happens when Social Security and Medicare collapse as they are
bound to do? (2) If it hadn't been for the false sense of security
created by those unfunded entitlement programs, would most Americans have
saved, invested and insured more in the private market and therefore been
much more secure in the long run? It'll take another decade or two, but
we're going to find out just how serious this problem is.
#############################
4/25/2013, “A.M. Best Affirms Ratings of The
Northwestern Mutual Life Insurance Company and Its Subsidiary [link],”
Boston Herald
Quote: "NLTC has exhibited solid revenue
growth in recent years, reflecting strong long-term care insurance sales
associated with improving economic conditions, as well as several recent
market exits and significant premium increases by its shrinking list of
competitors. The company experienced a surge in sales over the most
recent period after announcing that it would be suspending certain policy
features. A.M. Best notes that operating results within the long-term
care insurance line of business have been impacted by costs associated
with increasing sales and substantial increases in reserves due to the low
interest rate environment and less favorable morbidity. While A.M. Best
maintains a cautious view on long-term care insurance, NLTC (one of only a
few carriers that offer participating policies) has not implemented
premium rate increases on inforce policies since it entered the business
in 1998. However, the company recently increased premiums on new sales
and eliminated some of the more generous product features in an effort to
decrease risk improve profitability in this line of business. A.M. Best
notes the challenges faced by long-term care insurance writers due to the
current low interest rate environment and will monitor Northwestern
Mutual's growth in this product line."
LTC Comment: Nice to see a good news story
for a change.
#############################
4/24/2013, “Not
their parents' long-term care insurance,” by Carol Einhorn,
LifeHealthPRO
Quote: "Many of our clients and their moms
and dads (if they were smart) bought
long-term care insurance (LTCI)
five, 10, 20 or even 30 years ago. Now, as we work with prospects and
clients in their 40s, 50s, 60s and 70s who have not yet purchased long-term
care protection, we are facing a whole new world of LTCI options."
LTC Comment: As the LTCI world turns.
#############################
4/25/2013, “The MetLife Study of Generation
X: The MTV Generation Moves into Mid-Life [link],”
MetLife Mature Market Institute
Quote: “They may have been known as the MTV
Generation or sometimes ‘the slackers,’ when they first started entering
the workforce more than 25 years ago, but members of Generation X (Gen X,
those born between 1965 and 1976) are now as affluent, stable and saddled
with responsibility as their parents were at the same age. A new study
from the MetLife Mature Market Institute . . . reports that 70% of Gen
Xers live with a spouse or partner. They have an average of 2.5 children
and 82% own their own homes, though 17% of those report that the value of
those homes is less than the debt attached to them. Forty-three percent
have remained in the same type of career throughout their working years
and just more than 40% have been with the same employer for 10 years or
more. 75% are working full or part-time. Most are part of a dual-earner
household.”
LTC Comment: Welcome to the new LTCI target
demographic. The oldest Gen Xers turn 50 in 2015 and the younger ones are
coming right along.
#############################
4/24/2013, “Do
Seniors Hide Assets to Get Medicaid Long-Term Care Benefits?,” by
Howard Gleckman, Forbes
Quote: "There is a widespread belief that
seniors, in cahoots with shady lawyers and greedy children, hide their
assets so they can receive Medicaid long-term care benefits. It turns out
that this image—sort of the greedy geezer equivalent of Cadillac-driving
welfare queens—is largely an urban myth."
LTC Comment: As usual, this author has the
facts and import of his topic all wrong. He infers that Medicaid planning
is uncommon because most people who "spend down" to Medicaid LTC
eligibility are already poor. The truth is that middle class and affluent
people don't have to "spend down" at all. They're already eligible for
Medicaid when they enter expensive long-term care, precisely because they
have manipulated their income and assets, often with the help of a
Medicaid planning attorney, to make themselves eligible for aid before
they even apply. Ironically, it's only the poor, who don't have the
advice of high-priced lawyers, whose meager savings are wiped out quickly
after they enter care, usually a Medicaid nursing home. Unfortunately,
this new myth that Medicaid planning is uncommon is misleading analysts,
media and policy makers. All you have to do is ask a Medicaid eligibility
worker to find out how widespread Medicaid planning is, or read any of the
Center for LTC Reforms reports here: http://www.centerltc.com/reports.htm.
But this author, and his ilk, who seek to cover up the problem can't be
bothered with learning the truth. If you agree, read the Forbes
article and offer your response.
#############################
4/24/2013, “Poll:
Aging Americans in Denial About Need for Long-Term Care,” by
Associated Press
Quote: "We're in denial: Americans
underestimate their chances of needing long-term care as they get older --
and are taking few steps to get ready. A new poll examined how people 40
and over are preparing for this difficult and often pricey reality of
aging, and found two-thirds say they've done little to no planning."
LTC Comment: Special thanks to Center member
Bill Comfort for tipping us to this article with his note . . . "And not a
peep about LTC insurance as a viable funding source ....." Subsequently
this poll received a lot of secondary coverage across the media.
#############################
4/23/2013, “Medicaid
planning & SPIAs,” by Russell E. Towers, J.D., CLU, ChFC,
LifeHealthPRO
Quote: "The use of short term 'period certain
only' single premium immediate annuity (SPIA) remains a viable tool in
assisting some of your clients to qualify for
Medicaid benefits while protecting asset values for their heirs."
LTC Comment: The item immediately below
quoted an article by Howard Gleckman who claims Medicaid planning isn't
really much of a problem. Now check out this article on the use of
annuities for Medicaid planning. It's a nationwide fiasco, permitted by
the Centers for Medicare and Medicaid Services, and ignored by Congress,
which allows people with hundreds of thousands of dollars to qualify for
Medicaid without spending down a red cent. I cited actual examples in our
recent study of Medicaid and LTC financing in Maine
here and you'll find several other egregious examples in replies from
state Governors to a Congressional inquiry that we compiled
here. The blood boils!”
#############################
4/23/2013, “LTC
Advocates Make Case for Immigration Overhaul,” by Bill Myers,
Provider Magazine
Quote: "Joining up with a wide swath of
small- and medium-sized business interests, the American Health Care
Association has urged Congress to expand expert visas and to rethink some
of the restrictions that operators say prevent willing immigrants from
joining the ranks of the nation's caretakers."
LTC Comment: What does it say about
government dominated LTC financing in the USA that providers are totally
dependent on low cost foreign labor to provide the care?
#############################
4/23/2013, “Hollywood's
hot new target demo? Baby Boomers,” by Susan Wloszczyna, USA Today
Quote: "[F]ilms that cater to grown-up tastes
are becoming a valuable commodity for studios looking to tap into a
growing demographic: ticket-buyers age 50 and up who still adhere to the
ritual of seeing the latest releases on the big screen rather than
streaming via Netflix or renting from services such as Redbox."
LTC Comment: Next year every baby boomer will
be age 50 plus. Expect more movie themes dealing with boomer concerns,
such as parental caregiving and LTC risk.
#############################
4/22/2013, “Beleaguered
caregivers getting help from apps,” by Jim Fitzgerald,
LifeHealthPRO
Quote: "From GPS devices and computer
programs that help relatives track a wandering Alzheimer's patient to iPad
apps that help an autistic child communicate, a growing number of tools
for the smartphone, the tablet and the laptop are catering to beleaguered
caregivers. With the baby boom generation getting older, the market for
such technology is expected to increase."
LTC Comment: More evidence that the online
conduit to caregivers, prime candidates for LTC insurance for themselves,
is growing exponentially.
#############################
4/22/2013, “Day
Centers Sprout Up, Luring Fit Elders and Costing Medicaid,” by Nina
Bernstein, New York Times
Quote: "Not a wheelchair or walker was in
sight at these so-called social adult day care centers. Yet the cost of
attendance was indirectly being paid by
Medicaid, under Gov.
Andrew M. Cuomo’s sweeping redesign of $2 billion in spending on
long-term care meant for the impaired elderly and those with disabilities.
Such centers have mushroomed, from storefronts and basements to a new
development in the Bronx that recently
figured in a corruption scandal. With little regulation and less
oversight, they grew in two years from eight tiny programs for people with
dementia to at least 192 businesses across the city.”
LTC Comment: New York is famous for turning
"Medicaid" into a verb. Want to spend money on a new program? "Medicaid
it," in other words, find a way to charge Medicaid and collect half the
cost in federal matching funds. The stern eye of the U.S. House Oversight
and Government Reform Committee is focused on this practice now, so we can
expect much more scrutiny of the empire state's egregious Medicaid
practices, many of which we highlighted in the Center for LTC Reform's
2011 report
here.
#############################
4/22/2013, “Ditch
Your Sky-High Long-Term Care Insurance?,” by Jack Hungelmann, Fox
Business
Quote: "The only advice I can give you for
sure is to not drop your policy altogether. I do recommend that you talk
to a financial planner or your long-term care insurance agent for
guidance. By knowing your specific financial circumstances, these
professionals will be able to help you decide on the best course of
action."
LTC Comment: I’m helping a friend with
precisely the same 78 percent premium hike right now. Tough situation,
but inflicted on us not by carriers responsibly seeking solvency for their
books of business, but rather by government policies that drove interest
rates to zero while providing easy access to Medicaid LTC after the
insurable event occurs
#############################
4/22/2013, “The
Retirement Home, Alive With Intrigue,” by Paula Span, New York
Times
Quote: "In her new novel 'Life After Life,'
the author Jill McCorkle's signal accomplishment is that she has rendered
one of these places as a small but convincing universe. She's written a
funny and moving book, but Ms. McCorkle doesn't play Pine Haven for laughs
or generate cheap drama by portraying it as a hellish dump. The
community, apparently a continuing care retirement community, or C.C.R.C.,
emerges as a kind of small town with its own pleasures, conflicts and
concerns."
LTC Comment: Don’t confuse this book with
another of the same title by Kate Atkinson, which is a best seller that,
based on reviews, sounds like a take off on “Ground Hog’s Day,” except
repeating “life after life” instead of day after day.
#############################
4/22/2013, “A
Profile of Older Americans: 2012,” USDHHS, Administration on Aging
Quote: "Profile of Older Americans:
Electronic version of the popular brochure with the latest key statistics
on older Americans in key subject areas. It includes both narrative and
statistical charts. The 2012 edition is only available online."
LTC Comment: Proof positive the Age Wave is
finally starting to crest.
#############################
4/18/2013, “IRS Health Insurance Penalty Will
Not Motivate Consumers To Buy Insurance [link],”
Insurance Broadcasting
Quote: "HealthPocket consumer survey found
that most people don't feel a penalty for remaining uninsured will
motivate them to buy insurance starting in October. When survey takers
were asked, 'Will the $95 IRS penalty motivate you to shop this October
for an Obamacare health plan?' nearly two-thirds of consumers surveyed
answered 'No.' Only 8 percent of respondents answered 'Yes' and nearly 30
percent were unsure. Beginning in 2014, consumers will be required to buy
health insurance under the Affordable Care Act. An IRS tax penalty will
be levied on consumers who fail to purchase health insurance, with some
exceptions for people with financial hardships or religious beliefs that
preclude them from purchasing health insurance, among others. The tax
penalty for not purchasing health insurance will start at $95 per
individual or 1 percent of household income, whichever is greater. By
2016, the penalty will rise to 2.5 percent of annual household income or a
minimum of $695 per person, whichever is greater."
LTC Comment: Well as the saying goes “A
failure to plan is a plan to fail.” The hodge-podge of ObamaCare patched
together and forced to pass by one party in Congress certainly qualifies
as a failure to plan.
#############################
4/18/2013, "LTC Connection Launches ‘Members
Only’ Website, Offering Producers Expertise On Demand [link],"
InsuranceNewsNet
Quote: "LTC Connection, the Long-Term Care
insurance (LTCi) industry's leading provider of mandatory LTC
certification training is pleased to announce the launch of their newest
product, the ‘LTC Inner Circle(tm)’. Designed to help new, occasional,
and seasoned LTCi specialists, this user-friendly membership site will
transform the way producers sell and market LTC insurance, offering
producers an immediate access to LTC insurance expertise, sales and
marketing training, tools and resources.”
LTC Comment: Congratulations to Center
supporter LTC Connection.
#############################
Updated,
Friday, April 26, 2013, 10:25 AM (Pacific)
Seattle—
#############################
LTC BULLET: CENTER TACKLES MEDICAID ESTATE
RECOVERIES
LTC Comment: Medicaid estate recoveries (MER)
fulfill Congressional intent that assets sheltered to qualify for public
assistance will later “be used to defray the cost of supporting the
individual” in government-financed long-term care. Read our study plan
for MER in Maine after the ***news.***
.JPG)
*** HERE’S WHAT YOU’RE MISSING if you aren’t a
premium member of the Center and eligible to receive our daily “clippings”
service. According to Nancy A. Dykeman, CLTC, CSA, who is a National
Speaker, Educator, Trainer with Long-term Care Planning Consultants, LLC
of South Carolina:
“Steve and Damon, these clippings are amazing as I
prepare speeches, training and articles about aging. I’m writing 3
chapters for the new CSA textbook (wonderful new company owns SCSA and has
stepped up everything to a top level) and I need ‘food’ for my chapters.
All of this is so good. I just didn’t know the clippings would be so
helpful. Thank you so much.”
If you’d like to receive our “clippings,” which
average three per day by email, contact Damon at 206-283-7036 or
damon@centerltc.com. What you’ll get are short quotes from critical
articles you should know about and a hyperlink to the source in case you
want to read the whole piece. Premium individual members of the Center
($250 per year), Premium Elite Members ($500 per year) and corporate
members qualify for a subscription to the clippings at no extra cost.
You’ll save time and money getting the professional information you need
without having to search it out for yourself. Not sure? Ask Damon for a
free trial. ***
*** MEDICAID PLANNING DENIERS: It's rare to find a
writer who gets so much so wrong so often in so many ways, but Howard
Gleckman fills the bill. His latest Forbes blog post says: "There
is a widespread belief that seniors, in cahoots with shady lawyers and
greedy children, hide their assets so they can receive Medicaid long-term
care benefits. It turns out that this image-sort of the greedy geezer
equivalent of Cadillac-driving welfare queens-is largely an urban myth."
Ironically, LifeHealthPRO published an article the same day
explaining how affluent people easily shelter hundreds of thousands of
dollars and qualify immediately for Medicaid LTC benefits: “Medicaid
planning & SPIAs,” by Russell E. Towers, J.D., CLU, ChFC. Lest
readers be taken in by deniers’ sophistry, here’s my reply:
“As usual, this author has the facts and import of
his topic all wrong. He infers that Medicaid planning is uncommon because
most people who ‘spend down’ to Medicaid LTC eligibility are already poor.
The truth is that middle class and affluent people don't have to ‘spend
down’ at all. They're already eligible for Medicaid when they enter
expensive long-term care, precisely because they have manipulated their
income and assets, often with the help of a Medicaid planning attorney, to
make themselves eligible for aid before they even apply. Ironically, it's
only the poor, who don't have the advice of high-priced lawyers, whose
meager savings are wiped out quickly after they enter care, usually a
Medicaid nursing home. Unfortunately, this new myth that Medicaid
planning is uncommon is misleading analysts, media and policy makers. All
you have to do is ask a Medicaid eligibility worker to find out how
widespread Medicaid planning is, or read any of the Center for LTC Reforms
reports here:
http://www.centerltc.com/reports.htm. But this author, and his ilk,
who seek to cover up the problem can't be bothered with learning the
truth. If you agree, read the Forbes post and offer your reply
online.” ***
*** AFTERTHOUGHT: Would anyone like to see and hear
a debate between Steve Moses and Howard Gleckman? If a sponsor wants to
step up, I’ll gladly throw down the gauntlet. Jesse Slome? What a draw
for the next “Producers Summit.” Or how about next year’s Intercompany
Long-Term Care Insurance Conference. A Moses/Gleckman contest of wits
might make that meeting’s 2012 “Clash of the Titans: Moses vs Gordon on
Medicaid and Other Dark Matter” seem like patsy cake by comparison. Who’s
game? ***
*** THANKFULLY, someone in Congress is trying to do
something about the widespread abuse of Medicaid by affluent people and
their lawyers. According to his April 24 press release, Congressman
Charles W. Boustany, M.D. (R, LA) “introduced the Medicaid Program
Integrity Act, legislation removing federal rules permitting welfare abuse
under Medicaid.” This legislation, if passed would allow states to reduce
the mandatory Medicaid home equity exemption from as high as $802,000 now
to as low as $50,000 in the future. That would unleash a desperately
needed flow of private home-equity-conversion dollars into the LTC service
delivery system, relieve financial pressure on Medicaid, and help to give
welfare-financed LTC back to the genuinely needy. The legislation would
also do away with ObamaCare’s “Maintenance of Effort” rule as it applies
to Medicaid LTC eligibility thus enabling states for the first time in
years to tighten up their income and asset eligibility standards. ***
#############################
LTC BULLET: CENTER TACKLES MEDICAID ESTATE
RECOVERIES
LTC Comment: Following is a study proposal submitted
by the Center for Long-Term Care Reform to the Maine
Heritage Policy Center and to the
Maine Health Care Association. Your Center has been working on this
project since April 1, 2013. So far, we have:
- Reviewed the documentary and legislative history
of Medicaid estate recoveries.
- Interviewed representatives of seven leading state
MER programs by telephone.
- Visited and conducted in depth interviews in
person with representatives of the private contractor that operates the
Medicaid estate recovery program in Iowa (Des Moines).
- Visited and conducted in depth interviews in
person with representatives of the Medicaid estate recovery program in
Maine (Augusta).
We are currently analyzing our findings, developing
cost-effectiveness measures to compare the various state programs, and
developing our interim report due May 1, 2013. We’ll report on those
initial results next week. For now, here’s a look at the research task
we’ve undertaken along with an explanation of why the Medicaid estate
recovery program is such an important part of the long-term care financing
marketplace.
#############################
Project Proposal:
Maximizing NonTax Revenue from MaineCare Estate Recoveries
Submitted to the Maine Heritage Policy Center
and
the Maine Health Care Association
on February 14, 2013
by
Stephen A. Moses, President
Center for Long-Term Care Reform
I. Objective: Produce a step-by-step plan to
increase the State of Maine’s Medicaid estate recovery revenue from an
average of $6.7 million per year currently to $13.8 million per year with
a net increase in non-tax revenue to the state of $7.1 million per year.
We will provide a guide for the MaineCare (Medicaid) program on how to
maximize estate recoveries while maintaining the moral and political high
ground for such a program.
II. Background: Federal law requires all
states to recover the cost of care provided by Medicaid from the estates
of deceased recipients.
The purpose of this requirement is to restore funds previously sheltered
from spend down, especially resources sheltered by means of the home
equity exemption, so they are available to help others in need rather than
passing as a “windfall”
to heirs.
MaineCare has a relatively successful estate recovery
program. Average recoveries for state fiscal years (SFY) 2009-2012 were
$6,725,000 per year. Staff estimate the cost of recovery, including four
positions, benefits and other expenses, to be $272,673 per year for a
return on investment (ROI) of approximately 25 to one. MaineCare estate
recovery staff anticipate that with stronger laws supporting recovery and
with additional staff, annual recoveries could realistically increase by
$1.5 million to $2.0 million.
Potential additional revenue from estate recoveries
may be even higher, however. Maine’s program exempts the first $7,000 of
estate value from recovery; does not recover from the estates of spouses
predeceased by MaineCare recipients;
and does not use TEFRA liens
to ensure that real property is retained by recipients until recovery from
their estates.
A small, informal sample of new estate recovery cases
showed that seven out of ten owned homes meaning potential recoveries
should be substantial.
Yet, of MaineCare’s 4217 nursing facility recipients, only 297 or 7.1% own
homes that are exempt due to “intent to return.”
These homes have an average equity value of $105,114 and a median equity
value of $87,200, both far below MaineCare’s $750,000 home equity
exemption. Because we know a much larger percentage of age-65-plus people
own homes, a key question to answer is “what happened to that home equity
before the homeowners ended up on MaineCare?”
By hiring more staff, seeking stronger legislative
authorities, researching and applying best practices from other states,
Maine could aspire to achieve estate recoveries comparable to those of the
most successful state, Oregon, which brought in recoveries equal to 5.8%
of its Medicaid nursing home expenditures.
A comparable rate of recovery for Maine would more than double the non-tax
revenue Maine recovers from estates to $13.8 million per year.
The preceding information was taken from the November
2012 report of an earlier study of MaineCare long-term care financing by
Stephen A. Moses conducted for the Maine Health Care Association and
titled “The Maine Thing About Long-Term Care Is That Federal Rules
Preclude a High-Quality, Cost-Effective Safety Net [link].”
III. Diagnosis: Rapidly increasing Medicaid
long-term care expenditures in Maine have placed enormous pressure on the
state budget. Difficult decisions must be made to reduce costs or
increase revenues. One effective way to do both with minimal negative
impact on the needy is to increase Medicaid estate recoveries. Estate
recoveries not only produce extra nontax revenue but they help to awaken
the public to the importance of paying privately for long-term care. The
more likely and well known recovery from the estate becomes, the more
likely people will be to purchase insurance or use their home equity to
pay for long-term care. Anything that delays or prevents Medicaid
dependency reduces the cost of the program.
IV. Treatment: By maximizing estate
recoveries, articulating the moral high ground of personal responsibility
for long-term care, publicizing the estate recovery program, and
encouraging private long-term care financing alternatives like insurance
and home equity conversion, the State of Maine can relieve the fiscal
burden of long-term care on tax payers, improve Medicaid's ability to
provide quality care to the genuinely needy, and avoid the worse
consequences likely otherwise to occur in the wake of the baby boomer "Age
Wave."
V. Work Plan: To achieve the objective and
goals of this project, we propose the following activities:
1.
Conceptual Framework (the starting point): The key to successful estate
recoveries is KISS: "Keep it simple." The idea is to find estates to
recover and to recover them as inexpensively and efficiently as possible.
(Liens are merely a sub-category of recovery to which the same principles
apply.) The first step is to find out quickly when a Medicaid nursing
home recipient dies. Years of practical experience have shown that the
best source of this information is the local eligibility worker and/or the
personal representative of the recipient. The next step is to ascertain
whether Medicaid has made sufficient payments on a case to warrant
recovery efforts. If not, no further effort is necessary. If so, the
final step is to contact the personal representative of the deceased
recipient, determine whether or not a recoverable estate exists, and
initiate the recovery process.
In other
words, one begins with a manageable amount of information--Maine can
expect about [500] elderly nursing home recipients to die per month--and
proceeds by an orderly process of elimination and prioritization to target
staff efforts onto the most recoverable cases. Once this process has been
refined and perfected manually, certain elements of it can be automated
cost-effectively. The secret, however, is to start small, experiment,
adopt procedures that work, drop those that do not, work the best and
easiest cases first, measure progress in actual dollars recovered, and add
staff and budget proportionately to the program's actual success.
2. Preliminary Review (2
weeks)
a. The
first step to ensure a successful lien and/or estate recovery program is
to capture the latest experience and best practices of successful recovery
programs around the country.
(1) We
will conduct a literature review: identify and document significant
studies of Medicaid liens and estate recoveries and identify best
practices for Maine to consider.
(2) We
will identify and conduct telephone interviews with managers of the
leading Medicaid estate recovery programs in the country. For example,
how much money do they recover? Do they use TEFRA liens? How many
recovery staff do they employ? How do they identify estates from which to
recover? Do they recover from surviving spouses' estates? Have they used
or considered using a private contractor to recover from estates on
contingency and with what results?
(3) We
will identify what the leading estate recovery states do, how they do it,
and why it is successful. We will analyze and compare their latest
programs, state statutory authorities, forms, procedures, automation
approaches and controls. We will document best practices and assess their
applicability in Maine.
b. The
second step is to review and analyze Maine's Medicaid eligibility
determination and information collection and verification process; to
examine the availability of vital statistics including death records and
property ownership, value, and transfer records; and to study the process
in Maine for filing liens, placing estate claims, and enforcing
liabilities. We will also identify techniques used by recipients,
Medicaid planners, and other financial advisers to avoid Medicaid estate
recovery liability. We will identify corrective actions to make estate
recovery less avoidable.
c. In
light of the findings from these initial studies, we will conduct a
comprehensive review and analysis of Maine's current Medicaid estate
recovery program. We will propose state legislation necessary to maximize
Maine's estate recovery potential.
d. We will
present an interim report following the preliminary study phase
summarizing our progress, problems, findings and recommendations.
3. Design (two weeks)
a. The
next step is to design an adaptation of Maine's current estate recovery
program that takes advantage of lessons learned by other states, provides
for experimentation with alternative techniques, adapts quickly and
effectively to unique circumstances or problems in Maine and maximizes
early recoveries through prioritization and error-prone profiling. Our
project design takes into account the following kinds of considerations.
b. Lien
and estate recovery programs must perform three basic functions: (1)
identify assets, (2) track and preserve assets, and (3) recover assets
when available. Based on our review of MaineCare’s current estate
recovery program and our analysis of estate recovery programs in other
states, we will design and propose an enhanced program and implementation
strategy for Maine.
4. Report (two weeks): We
will provide a comprehensive final report at the end of the sixth week of
the project which fully describes the preliminary study, design, and
recommended implementation, recounts problems encountered and solutions
recommended, and lays out an operational guide for a successful lien and
estate recovery program.
VI. Site Visits: We anticipate the need to
spend approximately 5 work days in Maine during this project for the
purpose of consulting directly with state staff on the analysis and design
phases of this project. We will return to Maine for a one-week series of
meetings and briefings on MaineCare and long-term care financing to be
planned by the Maine Heritage Policy Center sometime after completion of
this project and publication of its report.
VII. Schedule: We recommend beginning this
project by April 1, 2013 and completing it by May 15, 2013.
VIII. Deliverables: One interim status
report in letter format and a final report in electronic form reflecting
accomplishment of all of the commitments made within this proposal. One
week of presentations by Stephen Moses at the direction of the Maine
Heritage Policy Center and in consultation with the Maine Health Care
Association (MHCA).
IX. Business Proposal: We propose to conduct
the work described in this proposal for the following compensation to the
Center for Long-Term Care Reform: [omitted]
X. Experience and Credentials: All
substantive work related to this project will be performed by Stephen A.
Moses, President of the Center for Long-Term Care Reform. The Center's
other staff will assist Mr. Moses with planning, research, and logistics.
A copy of Stephen Moses’s professional biography is attached. Additional
information on his direct experience with Medicaid lien and estate
recovery programs and practices follows.
Stephen A. Moses was a career employee of the United
States government for 18 years with extensive public benefit recovery
experience. He is intimately familiar with the Social Security Act
programs having conducted quality control reviews, state management
assessments, state plan and waiver reviews and approvals, and special
studies on them for many years. In 1978, for example, he conducted a
special study of the Idaho Child Support Enforcement Program which
launched that state from almost last to almost first in national
collection standings. He was the only federal employee ever invited to
run a state child support collection agency, in order to field test his
recommendations.
In 1981, Mr. Moses was the principal investigator and
sole author of Third Party Liability in the Medicaid Program: A
Seattle Case Study. This study and report, published by the Health
Care Financing Administration, received national recognition. The study
involved identification and actual collection of previously unidentified
third party resources on a valid random sample of Medicaid cases. This
was the first study ever to discover and verify that 75 percent of all
third party resources not identified at the public assistance eligibility
interview are related to the employment health coverage of an AFDC
recipient or an absent parent. This study was the earliest empirical
documentation of the efficacy of automated data matches between public
assistance eligibility rolls and state employment security records.
Mr. Moses served for nine years with the Health Care
Financing Administration, for most of that time as a "Medicaid State
Representative." In that capacity, he conducted periodic reviews of
Oregon's long-term care eligibility system, asset control methodologies,
and estate recovery program; he directed a feasibility study of closing
eligibility loopholes and implementing estate recoveries in Idaho; and he
surveyed every Medicaid eligibility system, lien and estate recovery
program in the country (The
Medicaid Estate Recovery Study, Region 10, November 1985).
In 1987, Mr. Moses joined the Office of Inspector
General of the U.S. Department of Health and Human Services where he was
the national project director and author of another national study of
Medicaid nursing home eligibility, Medicaid estate planning, and asset and
resource divestiture problems titled
Medicaid Estate Recoveries, June 1988. He also directed and
authored Transfer of Assets in the Medicaid Program: A Case Study in
Washington State, May 1989 for the Office of Inspector General. Both
of these projects delved deeply into all of the topics proposed for review
in Maine. Mr. Moses advised the General Accounting Office on all aspects
of its study titled Medicaid: Recoveries from Nursing Home Residents'
Estates Could Offset Program Costs [link],
March 1989. He briefed then-incumbent Secretary Otis Bowen of the US-DHHS
and Administrator William Roper of HCFA on the growing national problem of
Medicaid asset/resource divestiture and the need for Medicaid estate
recoveries and he wrote the Inspector General's contribution to the report
to Congress on these subjects that was mandated by the Medicare
Catastrophic Coverage Act of 1988 (Medicaid Estate Recoveries: A
Management Advisory Report, December 1988.)
On the national scene, Mr. Moses has advised the
United States Congress on liens and estate recoveries. He presented a
21-page report titled Medicaid Loopholes: A Statutory Analysis with
Recommendations to the Senate Committee on Finance in 1991. He
presented a critique and analysis of the bill which ultimately became OBRA
'93 to the Senate Special Committee on Aging and the Senate Committee on
Finance in July 1993. This report, titled Medicaid Estate Planning:
An Analysis of GAO's Massachusetts Report and Senate/House Conference
Language, was instrumental in fending off efforts by lobbyists to
dilute the strong loophole-closing and estate recovery provisions in OBRA
'93.
Since leaving federal service in 1989, Mr. Moses has
published hundreds of articles on Medicaid estate planning, nursing home
eligibility, transfer of assets, liens and estate recoveries, and
long-term care service delivery, financing and policy; he has consulted on
these subjects in most U.S. states and spoken at innumerable national
conferences. He has testified before over half of America's state
legislatures. As Director of Research for LTC, Inc., Mr. Moses directed
and authored studies on Medicaid nursing home eligibility, asset and
resource transferring techniques, methods to control divestiture, estate
recoveries, and how to implement OBRA '93 in numerous states, e.g.:
Medicaid Estate Recoveries in Massachusetts: How to Increase Non-Tax
Revenue and Program Fairness, December 1990; The Senior Financial
Security Program: A Plan for Long-Term Care Reform in Wisconsin, June
1992; Medicaid Estate Planning in Kentucky: How to Identify, Measure
and Eliminate Legal Excesses, March 29, 1993; Long-Term Care in
Montana: A Blueprint for Cost-Effective Reform, September 23, 1993;
The Florida Fulcrum: A Cost-Saving Strategy to Pay for Long-Term Care,
April 21, 1994; The Magic Bullet: How to Pay for Universal Long-Term
Care, A Case Study in Illinois, February 1, 1995; The Long-Term
Care Financing Crisis: Danger or Opportunity? A Case Study in Maryland,
September 15, 1995; The Heartland Manifesto: How to Finance Long-Term
Care for Middle America, August 1, 1996; The Jersey Share: How to
Pay for Long-Term Care with Less Federal Money, March 31, 1997. Most
of these reports and publications are available for review upon request.
For additional, more recent examples, see
http://www.centerltc.com/reports.htm.
Since founding the Center for Long-Term Care Reform
in 1998, Mr. Moses has continued to speak, write and publish on long-term
care financing issues. The Center for Long-Term Care Reform's website at
http://www.centerltc.org/ contains many of his speeches, published
articles, and reports. The Center's four original public policy reports
are available in .pdf format on the website. These include LTC
Choice: A Simple, Cost-Free Solution to the Long-Term Care Financing
Puzzle (1998), The Myth of Unaffordability: How Most Americans
Should, Could and Would Buy Private Long-Term Care Insurance (1999),
The LTC Triathlon: Long-Term Care's Race for Survival (2000), and
The Heartland Model for Long-Term Care Reform: A Case Study in
Nebraska" (2003). A biographical sketch of Stephen Moses is attached.
#############################
#############################
Updated,
Monday, April 22, 2013, 10:31 AM (Pacific)
Augusta, Maine—
#############################
PROVIDER
SHORTAGES AND LTC NEWS AND COMMENT
LTC Comment:
This week’s news contains several articles about the shortage of
direct-service LTC caregivers.
Public policy has
consequences. If you channel most Americans into Medicaid-financed
long-term care, then pay providers less than the cost of providing their
care, you should expect to have too few highly qualified caregivers and a
lot of bad health outcomes.
Simultaneously,
such a policy makes consumers complacent about the cost of LTC and less
likely to save, invest or insure for the risk. We’re only now getting to
the point where the negative consequences of Medicaid LTC—serious problems
of access, quality, reimbursement, discrimination and institutional
bias—are coming to the awareness of consumers. But by the time they need
care, it’s too late for responsible planning and the path of least
resistance is to qualify for Medicaid, often by means of gaping
eligibility loopholes and welfare “planners.”
Unfortunately,
the poor’s meager savings are wiped out before they know what hits them.
That’s why studies show that most victims of “spend down” have low incomes
and assets to begin with. The middle class and affluent don’t have to
spend down. They just work the system, converting their wealth into
exempt form without having to spend it.
That’s why a
strong estate recovery system is critical. Without it Medicaid LTC
financing is little more than free inheritance insurance for the baby
boomer generation. This Friday’s LTC Bullet will fill you in about
our study to enhance Medicaid estate recoveries in the state of Maine.
#############################
4/21/2013, “Tip-Swapping on Long-Term Care
Insurance: Morningstar.com readers offer their input on whether to buy it,
when to buy it, and what features to seek in this complicated insurance
product [link],”
by Christine Benz, Morningstar.com
Quote: "Rforno wrote, 'I saw first-hand the
value of long-term care plans now that I'm taking care of my father, [who
has severe dementia.] His [insurance] has covered the vast majority of
everything in assisted living for the past three years as his condition
worsened, he never understood why he had to write those checks, but I'm
extremely thankful I kept making him do it. Ergo last year when I had the
opportunity to pick up a long-term plan through a one-time open season
when my university employer tweaked its group policy slightly, I pounced
especially when the number of firms offering individual long-term care
plans has shrinking in recent years.'"
LTC Comment: Nobody likes LTCI . . . until
they need it.
#############################
4/19/2013, “LTCI
carrier may have pulled back from some states,” by Allison Bell,
LifeHealthPRO
Quote: "State Farm Insurance may have quietly
pulled out of some state long-term care insurance (LTCI) markets. The
American Association for Long-Term Care Insurance (AALTCI) recently
reported that it has heard that the policyholder-owned mutual insurer has
stopped selling LTCI coverage in Arizona, California, Connecticut, Hawaii,
Indiana, Nevada and New York."
LTC Comment: Another one exits gradually,
quietly.
#############################
4/19/2013, “CMS work group recommends approach
for employing former criminals in long-term care settings [link],”
by Tim Mullaney, McKnight’s LTC News
Quote: "The work group consists of Centers
for Medicare & Medicaid Services employees and volunteers from 11 state
agencies. It was formed in response to a March 2011 report from the
Department of Health and Human Services Office of Inspector General, which
found 92% of nursing facilities employ at least one person with a criminal
conviction."
LTC Comment: Juxtapose this item with the
other articles about America’s LTC caregiver shortage that you’ll
encounter below. What a disaster LTC public policy has created.
#############################
4/18/2013, “Long-Term-Care
Top Concern Among Investors: UBS,” by Lorie Konish,
OnWallStreet.com
Quote: “[T]he number of investors who cited
long-term care - including health care and other support - as a top
concern climbed to 31% from 26% in January. For 16% of the investors
surveyed, long-term care ranked as a greater concern than retirement.
Investors also said they do not feel prepared to fund the long-term care
they will need. While 64% of investors indicated they are 'highly
prepared' when it comes to retirement planning, just 37% said they are
highly prepared with regard to planning for their long-term care needs.
And those results also hold an opportunity for financial advisors, with
39% of investors ages 25 to 49 indicating they are interested in more
guidance for their long-term care planning.”
LTC Comment: LTC risk and cost are showing up
on boomers’ radar screens.
#############################
4/18/2013, “UnitedHealth
warns of Medicare profit squeeze,” CBS News
Quote: "UnitedHealth Group, the largest
provider of Medicare Advantage plans, warned Thursday that funding cuts
for the privately run versions of the federal Medicare program will force
it to reconsider its expectations for earnings growth next year. CEO
Stephen Hemsley told analysts that the government-subsidized coverage for
elderly and disabled people faces a reimbursement cut of about 4 percent
next year. That's on top of other possible federal funding reductions and
an expected 3 percent rise in medical costs."
LTC Comment: American industry is so
gullible. Government repeatedly offers new programs with generous
reimbursements to incentivize participation. Once businesses are locked
in, Uncle Sam takes away the punch bowl and the party ends badly for
companies, shareholders, and consumers. There are so many examples that
one wonders why private industry isn’t more wary. Crony capitalism run
amuck.
#############################
4/18/2013, “Arkansas’ unusual Medicaid pledge:
‘The program is not an entitlement program [link],’”
by Sarah Kliff, Washington Post
Quote: "The Arkansas state legislature has
officially passed legislation to use Medicaid expansion dollars to buy
private insurance for some 250,000 state residents.
"The
bill used to do so contains one of the more unusual provisions I’ve
ever seen in health-care legislation. It requires those enrolling in the
Medicaid expansion to acknowledge that they’re not enrolling in an
entitlement program. The relevant section: (i) An eligible individual
enrolled in the program shall affirmatively acknowledge that:
(1) The program is not a perpetual federal or state right or a guaranteed
entitlement;
(2) The program is subject to cancellation upon appropriate notice; and
(3) The program is not an entitlement program."
LTC Comment: Medicaid is in fact a
means-tested public assistance program, not an entitlement. Medicaid
benefits can be reduced or eliminated by government at any time. There is
nothing wrong, and much good, in requiring Medicaid applicants and
recipients—especially those who take advantage of the program’s huge asset
exemptions—to acknowledge they are participating in a welfare program and
not enrolling in an entitlement for which they’ve paid premiums to earn
benefits.
#############################
4/17/2013, “Transition
Boomers Prefer Income Over Higher Returns,” by Cyril Tuohy,
InsuranceNewsNet
Quote: "Despite the market's recent strength,
'transition boomers,' or people between the ages of 55 and 65, said they
would protect their retirement savings with a guaranteed return rather
than watching their assets lose value in the market, according to the 2013
Transition Boomers and Retirement Income survey from Allianz Life."
LTC Comment: Protecting principal, a key role
for LTCI, is more and more important to boomers.
#############################
4/17/2013, “Top
Dem sees 'train wreck' for PPACA,” by Ricardo Alonso-Zaldivar,
LifeHealthPRO
Quote: "A senior Democratic senator who
helped write the
Patient Protection and Affordable Care Act (PPACA) stunned
administration officials Wednesday, saying openly he thinks it's headed
for a ‘train wreck’ because of bumbling implementation."
LTC Comment: It’s looking more and more like
PPACA as a whole will go down in the end like its CLASS component did last
year.
#############################
4/17/2013, “Scooter
Store Bankrupt After Medicare Audit Uncovered Fraud,” by Alan Farnham,
ABC News
Quote: "The Scooter Store, which claims it
has given 700,000 senior citizens back their mobility, has itself run
aground. The company this week filed for Chapter 11 bankruptcy, listing
assets of $1 million to $10 million and liabilities of between $50 million
and $100 million. Major creditors include the Centers for Medicare and
Medicaid Services (CMS), which,
according to the filing, is looking to collect $19.5 million--the
amount the
Scooter Store previously had agreed to repay the U.S. government after
an independent audit found that the company had overbilled Medicare and
Medicaid by $46.8 million to $87.7 million from 2009 to 2011."
LTC Comment: I hope this means no more TV ads
promoting “free” scooters compliments of Medicare.
#############################
4/17/2013, “Call
to integrate long-term care products with pensions,” by Donia
O'Loughlin, FT Adviser
Quote: "Swiss Re's UK chief executive has
called for long-term care saving products to be integrated into pensions
in order to boost the amount that people put aside and has said he would
like to see care needs being subject to a ‘soft compulsion’ to save in the
same way as auto-enrolment."
LTC Comment: Should we “compel” people to
save or insure for long-term care? The question only gets asked when the
alternative is that government programs pay when people don’t insure.
Another approach that does not involve government compulsion is to stop
paying for LTC after the insurable event occurs for people who possess
expensive homes and other large exempt or sheltered assets. Give the
public a real incentive to plan responsibly for long-term care.
#############################
4/17/2013, “Nursing Homes May Face Readmission
Penalties Similar to Hospitals [link],”
ALFA
Quote: "The HHS cites analysis by the
Medicare Payment Advisory Commission which indicates that nearly 14
percent of individuals on Medicare discharged from a hospital to a skilled
nursing setting are readmitted to the hospital for conditions that could
potentially have been avoided. The HHS 2014 budget proposal recommends
reducing payments by up to three percent for skilled nursing facilities
that are determined to have high rates of preventable hospital
readmissions. The proposed penalties would take effect in 2017, with an
estimated $2.2 billion in savings over 10 years."
LTC Comment: First pay less than the cost of
care for the 66% of nursing home residents who are on Medicaid, then cut
reimbursement from Medicare when low cost care for “dual eligibles”
results in bad outcomes. Welcome to LTC financing policy in the USA.
#############################
4/17/2013, “Proposed rules broaden
opportunities for veterans needing post-acute care [link],”
by
Tim Mullaney,
McKnight’s LTC News
Quote: "Newly proposed rules could impact
veterans' nursing home care. One rule would
provide more
flexibility to veterans in terms of their healthcare benefits
under the Department of Veterans Affairs. A separate rule would prioritize
government funding for state homes that provide care to veterans."
LTC Comment: Center members can review our
section titled “Reasons Why Veterans Should Not Depend on VA Benefits for
Long-Term Care [link]”
in The Zone. If you need your user name and password, just reply to this
email and Damon will look it up and let you know.
#############################
4/16/2013, “CNAs
vs. Football,” by Steve Monroe, Seniors Housing Weekly Update
Quote: "So, what is more punishing to the
human body, playing professional football or working in a skilled nursing
facility? Apparently, there is not too much difference in terms of missing
work from injuries or needing to find another line of work. The real
difference, of course, is the rate of pay. Monday's Wall Street Journal
laid it out in black and white. Why would you toil away in a job that pays
slightly higher than the minimum wage, where your customers (the
residents) sometimes throw food at you, yell at you, bite you, and where
you may have to work extra shifts and on Holidays whether you want to or
not. And let's not forget the pulled muscles. True, many people in the
industry say it is a calling, but I am not sure how many people are
‘called’ to be CNAs. Sounds more like an excuse for the low wages
currently paid. But can the wages really go up? Not with cuts in Medicare
and stagnant Medicaid reimbursement. So we have high unemployment, but
apparently 11,000 CNA jobs are unfilled nationwide, and an age wave that's
growing by the year. How else do you spell disaster?"
LTC Comment: Just in case you wondered why we
have a shortage of LTC caregivers even though unemployment is high.
#############################
4/16/2013, “Long-Term
Care Panel Seen as Likely to Flop,” by Kathleen Struck, MedPage
Today
Quote: "Without financial support, the
federal government's new unpaid and volunteer long-term care commission is
likely to do little more than produce yet another report about the
challenge of providing care for an aging nation, experts said."
LTC Comment: You get what you pay for and you
don’t get what you don’t pay for. Pretty basic economics but the federal
government doesn’t exactly excel in that discipline.
#############################
4/15/2013, “For
the Elderly, Diseases That Overlap,” by Matthew Bloch and Hannah
Fairfield, New York Times
Quote: "Alzheimer’s
disease,
high blood pressure and heart disease are the three most common
chronic conditions in assisted living facilities: 82 percent of residents
have at least one of them, according to a new government study. But what
is alarming is how these ailments overlap."
LTC Comment: The geriatric triple threat.
#############################
4/15/2013, “How
to handle a long-term care rate hike,” by Glenn Ruffenach, WSJ
MarketWatch
Quote: "Yes, getting a notice of a premium
increase is typically a nasty surprise. That said, policyholders should
first educate themselves about why the increase has occurred - and should
recognize that such increases don't simply 'help the insurer make up for
lost profits,' Kitces writes. Rather, premium hikes 'keep the company
solvent to pay policy owners going forward.'"
LTC Comment: Well, it’s about time someone in
the national media made that point! Now, someone should tell the
government to prepare to pay its entitlement claims someday. The Social
Security and Medicare “trust funds” have nothing in them but IOUs and
Medicaid comes straight out of current budgets.
#############################
4/15/2013, “Diabetics develop dementia 2 years
sooner than others, researchers find [link],”
by Tim Mullaney, McKnight’s LTC News
Quote: "Those with diabetes and dementia died
an average of 2.6 years earlier than non-diabetics, and those with a long
history of diabetes who were diagnosed with dementia before turning 65
died almost twice as fast, the researchers said. However, as people get
older, the impacts of having both diabetes and dementia become less
pronounced."
LTC Comment: More evidence that obesity,
diabetes and dementia are a plague.
#############################
4/14/2013, “As
America Ages, Shortage of Help Hits Nursing Homes,” by James R.
Hagerty, Wall Street Journal
Quote: "Nursing homes and operators of
agencies providing home-care services already are straining to find enough
so-called direct-care workers, who help the elderly or disabled with such
things as eating and bathing. They also face looming retirements in the
current workforce, in which one-fifth of workers are 55 years old or
older. The reasons for the shortage: pay is low, typically less than $12
an hour, injury rates are high, and the work can be unpleasant and
physically draining."
LTC Comment: America has Medicaid to thank
for dragging down reimbursement rates to levels that preclude paying
salaries adequate to attract enough high-quality direct service
caregivers. Even private payers, who must pay on average half again as
much as Medicaid pays for the two-thirds of all nursing home residents it
covers, are affected by the shortage of adequately paid caregivers.
#############################
3/26/2013, “Consumers Find That Health
Insurance Is Not Enough: Critical Illness Insurance Spotlighted on TV
Segments Nationwide; Experts Offer Free Guide [link],”
Yahoo Finance
Quote: "According to the American Association
of Critical Illness, 1.5 million Americans will declare bankruptcy this
year – 60 percent of them due to medical bills (a 50% increase over the
last six years). Surprisingly, 78 percent of them have health insurance,
but are still unable to meet the high cost of deductibles, co-payments,
and daily living expenses. A new educational platform,
http://www.criticalillnesseducation.org, has been launched to help
consumers better understand the benefits of supplemental solutions like
Critical Illness Insurance to help fill the gaps."
LTC Comment: Congratulations to Center
corporate member
American Independent Marketing for this initiative.
#############################
Updated,
Monday, April 19, 2013, 11:58 AM (Pacific)
Augusta, Maine—
#############################
LTC BULLET: SHELTON ON LTCI
LTC Comment: Phyllis Shelton’s new book on long-term
care insurance is a tour de force. Reviewed after the ***news.***
*** MEDICAID ESTATE RECOVERIES: I’m working on a
study of Medicaid estate recoveries in Maine. Last week I interviewed
experts by phone in six states that do Medicaid recoveries especially
well. This week I visited a model program in Des Moines, Iowa and now I’m
drilling down with Medicaid staff in Maine searching for ways to enhance
their program. Why estate recoveries? It’s how a program like Medicaid,
intended as a safety net for the poor, can also help middle class people
who’ve failed to plan. By collecting from estates, Medicaid can allow
program recipients to retain some income and assets, such as a home, which
they’d otherwise have to liquidate when stricken by long-term chronic
illness. In the absence of estate recoveries, which federal law made
mandatory in 1993, Medicaid operates as free inheritance insurance
indemnifying heirs and desensitizing baby boomer consumers to the risk and
cost of LTC. Maine does a good job with estate recoveries already, but we
hope to help the state find ways to do even better. Watch for a full
report in next week’s LTC Bullet. ***
*** CRITICAL ILLNESS. "According to the American
Association for Critical Illness, 1.5 million Americans will declare
bankruptcy this year – 60 percent of them due to medical bills (a 50%
increase over the last six years). Surprisingly, 78 percent of them have
health insurance, but are still unable to meet the high cost of
deductibles, co-payments, and daily living expenses. A new educational
platform,
http://www.criticalillnesseducation.org, has been launched to help
consumers better understand the benefits of supplemental solutions like
Critical Illness Insurance to help fill the gaps." Read more
here. ***
*** SPOTLIGHT ON: “LTC
Almanac”
The Center for Long-Term Care Reform’s “LTC Almanac”
is a compendium of information on all aspects of long-term care
service delivery and financing organized chronologically by subject for
quick and easy access. The “LTC Almanac” conveniently provides information
that will give you a competitive advantage in your long-term care
profession. Your increased knowledge of the critical issues and challenges
we face in the field of long-term care service delivery and financing
equals better LTC services for your clients and for those who have no
choice but to rely on scarce public resources. Members can access the “LTC
Almanac” by clicking
here. If you need your username and password, or are not yet a member,
contact Damon at 206-283-7036 or
damon@centerltc.com. ***
#############################
LTC BULLET: SHELTON ON LTCI
LTC Comment: Phyllis Shelton’s latest volume on LTCI
covers this topical moving target admirably. So much is changing in the
field of long-term care planning, yet this book is comprehensive, up to
date through the start of 2013 and (mostly) accurate. I could quibble
with a few points about Medicaid, but they’re minor and, if you’re
concerned about that morass of complexity, you’d probably better consult
your local welfare agency anyhow.
Protecting Your Family with Long-Term Care
Insurance: A Complete Guide to Long-Term Care Planning including
traditional and hybrid policies and alternative funding options!, by
Phyllis Shelton, LTCi Publishing, Henderson, Tennessee, 2013 is presented
in eight chapters. They cover the usual obligatory material such as LTC
risk, cost, planning, coverage, and options. I’ll focus on a couple of
things I thought the book did especially well.
Phyllis Shelton has been a thoughtful analyst and
passionate advocate of private long-term care insurance for over 25
years. She weaves her background and experience into nearly every page of
the book. You’ll find personal stories from her own family and from her
thousands of clients. These anecdotes ground the needfully complex
details and theory in practical and emotional reality. Readers will take
this journey of discovery with a guide who’s been around the block more
than most experts.
One key area of LTC planning that usually gets short
shrift is “what do you do if you can’t qualify for LTC insurance?”
Shelton does a particularly good job with this subject.
“Chapter 7: People Who Do Not Qualify for LTC
Insurance” covers Life Insurance or Annuities, Life Settlements, Reverse
Mortgages, LTC Immediate Annuities (medically underwritten), Short-Term
Care Products, and Medicaid. “Chapter 6: Alternatives to LTC Insurance”
covers some of the same subjects from a different perspective.
The author’s own flyleaf caveat says what the
prospective consumer needs to know about this book: “You’re not sure LTC
insurance is the best solution for you? No problem. After you read this
book, you will know enough to make an informed decision and I will have
done my job. However, I caution you to not procrastinate on this
decision. The long-term care insurance market is changing rapidly. And
you, dear friend, could become uninsurable with your next heartbeat.”
My own dust jacket blurb for the book sums it up:
“The name Phyllis Shelton is synonymous with long-term care education.
Who better to guide you through the shoals of LTC planning in this time of
rapid change and elevated risk?”
Find promotional details and where to order the book
here:
http://www.ltcconsultants.com/newsletter/2013/pyf/index.shtml.
#############################
Updated,
Monday, April 15, 2013, 11:20 AM (Pacific)
Seattle—
#############################
Tax Day and LTC News and Comment
LTC Comment:
Happy Tax Day. Well that’s a contradiction in terms, but at least we can
set the filing hassle aside for another year. Well, except for the
quarterlies.
Or, no, wait.
There is another big tax day coming this week: “Tax Freedom Day® is the
day when the nation as a whole has earned enough money to pay off its
total tax bill for the year.” That’s April 18 this year according to the
“Tax
Foundation.”
We’re not exactly
emancipated from taxes after that day, of course, as state, local, sales
and property taxes keep biting all year.
Are taxes the
price we pay for civilization or an anchor dragging prosperity down?
Both. The challenge is to get the balance right.
Don’t hold your
breath.
#############################
4/13/2013, “Medicare
Increase Could Ding Some in Middle Class,” by Associated Press,
BizSmart
Quote: "'Means testing' of Medicare benefits
was introduced in 2007 under President George W. Bush in the form of
higher outpatient premiums for the top-earning retirees. Obama's health
care law expanded the policy and also added a surcharge for prescription
coverage. The latest proposal ramps up the reach of means testing and sets
up a political confrontation between AARP and liberal groups on one side
and fiscal conservatives on the other."
LTC Comment: This is how government will pull
the entitlement safety net away from the middle class and affluent--not
all at once, but rather in dribs and drabs.
#############################
4/11/2013, “The
Chained CPI - How Big Of A Difference Does It Make?,” by Arthur Stein,
Seeking Alpha
Quote: "While a Chained CPI may provide a
more accurate indication of inflation, it seems clear the reason for the
switch is to reduce the federal budget deficit. Lower COLAs reduce annual
increases in Social Security payments and federal pensions. Tax revenue
increases because tax brackets, deductions and exemptions do not rise as
quickly."
LTC Comment: This proposal is likely to pass.
It's one more example of how government will withdraw entitlement
benefits in small bites which in the end mean major retrenchment.
Consumers who see this coming will turn more and more to private savings
and insurance.
#############################
4/10/2013, “Retiree health benefits: Facing
extinction? Inflation, reforms lead more firms to shed retiree plans [link],”
by Elizabeth O'Brien, WSJ Market Watch
Quote: "Employer-provided health insurance
for retirees has been dwindling for decades now, but the trend is
accelerating, experts say. Mounting costs have caused more employers to
scale back or eliminate medical benefits for their former workers."
LTC Comment: The silver lining in this dark
crowd is the growth of high-deductible health plans and Health Savings
Accounts, assuming the government allows them to survive and prosper.
#############################
4/10/2013, “Presidential
Budget Caps Retirement Savings,” by Terry Savage, Huff Post
Quote: “The government wants to limit how
much money you can save in a tax-deferred retirement account, saying too
many people are taking tax deductions for saving more money than they are
likely to need.”
LTC Comment: Several articles came out last
week about the plan in the President's new budget proposal (released
Wednesday, 4/10) to cap retirement savings. Not a good idea for reasons
Terry Savage enumerates in this piece, but it could be a sideways benefit
for LTC insurance. With tax-deferred savings limited to $3 million, maybe
people would be more likely to use some of their extra income to protect
their savings from LTC risk. Just a thought.
#############################
4/10/2013, “Nursing home costs approach
$84,000 a year, Genworth survey shows [link],”
by Tim Mullaney, McKnight’s LTC News
Quote: "The cost of long-term care continues
to rise, according to the 10th annual Cost of Care Survey from
insurance company Genworth. The median annual cost of a private nursing
home room reached $83,950 this year, up 3.6% from 2012,
the report showed. Over the last five years, the cost of a private
nursing home room has outpaced inflation, going up 4.5% on an annualized
basis. Assisted living costs increased even more dramatically over the
last year. The median annual cost for assisted living increased 4.6%
year-over-year, to reach $41,400 for a single-occupancy one-bedroom."
LTC Comment: Genworth’s press release and
other articles on the report made much of the fact that the cost of
non-institutional LTC services is increasing more slowly: “The cost of
receiving care in a setting such as an assisted living facility or nursing
home is dramatically increasing, while the cost to receive care at home
through homemaker services or a home health aide is rising at a much more
gradual pace.” (From
the press release.) Center members will find the latest Genworth LTC
survey data linked in “The
Zone” for easy future reference.
#############################
4/9/2013, “Gene
linked to higher Alzheimer's risk in blacks,” by Janice Lloyd, USA
Today
Quote: "A new gene mutation has been
identified that nearly doubles African Americans' risk for getting
Alzheimer's disease, according to a large, government-funded report out
Tuesday."
LTC Comment: Awful news. A kind of medical
piling on.
#############################
4/9/2013, “Medicaid
patients struggle most with preventable chronic illnesses,” by Kathryn
Mayer, LifeHealthPRO
Quote: "U.S. adults whose primary health
insurance source is Medicaid are in significantly worse health than those
with employer-sponsored coverage - and it's mainly preventable."
LTC Comment: Well, maybe, but Medicaid
recipients tend to be less educated and poorer so that preventability of
their health problems is difficult and dubious for a public program.
#############################
4/9/2013, “On the Critical List?: A MetLife
Report on the Health Status of the 40+ Population [link],”
MetLife Mature Market Institute
Quote: "Treating diseases as they emerge runs
counter to what individuals should be doing - focusing on health and
wellness. The paper offers solutions for individuals, service providers
and employers to improve health status, including the use of technology,
implementing wellness and education programs, and more."
LTC Comment: An ounce of prevention is worth
a pound of cure, but huge public funding of acute care may actually
diminish personal responsibility about prevention.
#############################
4/9/2013, “Is
now the time for long-term care insurance?,” by Donald Jay Korn,
Employee Benefit Adviser
Quote: “‘If the long-term care market is
'broken,' why are some experts calling this year the year to buy the
product? . . . 'Insurance carriers are having to withdraw some of the more
desirable benefits to keep rates as stable as possible,' Shelton says.
'Now is the time to buy before gender rating kicks in and before the best
inflation option [5%, compounded for life] becomes unaffordable or goes
away. It takes time for new products to get approved - some states are
really slow - so I believe we have until the end of this year before most
of the changes are pushed through.'”
LTC Comment: Another LTCI fire sale? Watch
for our review of Phyllis Shelton’s new book, coming soon.
#############################
4/9/2013, “Four
Out of Ten Seniors Lapse or Surrender Life Insurance,” Life &
Health Advisor
Quote: "Approximately 40 percent of seniors
have lapsed or surrendered their life insurance policies, according to a
study cited in Conning Research & Consulting’s 2012 report on the life
insurance settlement industry. Conning published the numbers from a survey
performed in April 2010 among U.S. seniors by the
Insurance Studies Institute. The number reflects a tragic,
long-accepted truth in the life insurance industry. An overwhelming number
of beneficiaries will never claim the death benefit from their caretaker’s
life insurance policy. In fact, life insurance companies rely on the high
probability that they will never pay out a customer’s policy; they reap
most of their profit from lapsed, unclaimed policies."
LTC Comment: If instead of lapsing those
policies people could use them to fund long-term care it would generate a
lot of private financing for LTC providers. Representatives of the
provider profession have recommended legislation to encourage or require
such use of life insurance benefits.
#############################
4/8/2013, “Prudential Long Term Care Insurance
Group Enrollments Ending Soon [link],”
ExpertClick
Quote: "Prudential long term care insurance
announced that June 30 is the final date for submission of applications
from eligible employees working at companies that offer group long-term
care insurance coverage previously sold by the insurer."
LTC Comment: Slow slide continues.
#############################
4/8/2013, “MedAmerica
trims California LTCI product line,” by Allison Bell, LifeHealthPro
Quote: "MedAmerica
has stopped selling one type of long-term care insurance (LTCI) policy in
California but is continuing to sell another type of LTCI policy in the
state. The company said it will stop selling the CareDirections Simplicity
line in California but will continue to sell the FlexCare product there."
LTC Comment: And more.
#############################
4/7/2013, “The
numbers behind the decline in workplace benefits,” by Alana Semuels,
Los Angeles Times
Quote: "Only 28% of U.S. companies offer
long-term care insurance, down from 45% in 2008, according to a survey
from the Society for Human Resource Management."
LTC Comment: Wrong direction, but this sounds
a little extreme. We’ll keep an eye out for other evidence.
#############################
4/5/2013, “More
Sharing Services,” by David Dankwa, InsuranceNewsNet
Quote: "A Portland-based law firm, Williams
Love O'Leary & Powers, has filed a class-action lawsuit in a federal court
in Oregon against Bankers Life, alleging that the insurer has a habit of
denying long-term care benefits to the elderly."
LTC Comment: Another black eye for the
business? Or another example of expecting LTCI to pay claims not covered
by a policy?
#############################
4/2/2013, “6 Months Before New Obamacare Plans
Arrive, Consumers Still Don't Know What They're Buying [link],”
InsuranceBroadcasting
Quote: "A new HealthPocket consumer survey
indicates most people don't understand the most fundamental change to
health plan designs under Obamacare. When survey takers were asked, 'How
Will The New Obamacare Bronze, Silver, Gold, and Platinum Health Plans
Always Differ From One Another?' 86% percent responded that they did not
know. Only 4 percent selected the correct answer ‘% of medical costs
covered by insurance’ when listed among five answer options in the survey.
"The Affordable Care Act creates four basic health
plan designs to replace existing health plans and address the needs of
most plan shoppers who are not enrolled in a grandfathered health plan,
Medicaid, or Medicare. These plans are designated the Bronze Plan, the
Silver Plan, the Gold Plan, and the Platinum Plan. All plans will share a
mandatory set of insurance coverage features known as the Essential Health
Benefits. The new plans differ from one another based on the percentage of
medical expenses paid by the insurance plan, ranging from 60 percent of
expenses to 90 percent of expenses."
LTC Comment: Who knew? This was the law they
had to pass to find out what was in it! And even that’s taking a long
time.
#############################
Updated,
Friday, April 12, 2013, 11:35 AM (Pacific)
Seattle—
#############################
LTC Bullet: Reality Check: The Facts on LTCI: Thousand Bullets
Retrospective
LTC Comment: Overview 15 years of “Reality Check:
The Facts on LTCI” after the ***news.***
*** ANNOUNCING: CLTCR Premium Membership -- Center
for Long-Term Care Reform premium members receive our full suite of
individual membership benefits including: our LTC Bullets and
E-Alerts; access to our Members-Only Zone website and Almanac
of Long-Term Care; subscription to our
Clipping Service; and email/phone access to Steve Moses for 24-hour
turnaround queries. Our Premium Membership is designed to give you a
competitive advantage in your long-term care profession. Your
increased knowledge of the critical issues and challenges we face in the
field of long-term care service delivery and financing equals improved
professional success for you and better LTC services for your clients and
for those who have no choice but to rely on scarce public resources.
Premium Membership is $250 per year, paid up front or monthly by
automatically recurring credit card payments. Contact Damon at
206-283-7036 /
damon@centerltc.com to start your Premium Membership
immediately or go directly to our secure online subscription page and
sign up for as little as $21 per month. ***
*** Genworth has recently published its latest (2013)
annual
Cost of Care Survey. Here are the
press release,
cost of care map and
key findings. The report’s key findings can be summarized from the
press release:
In its 10th
year, the Genworth (NYSE:GNW)
2013 Cost of Care Survey shows a continued upward trajectory when it
comes to the cost of obtaining long term care services. The cost of
receiving care in a setting such as an assisted living facility or nursing
home is dramatically increasing, while the cost to receive care at home
through homemaker services or a home health aide is rising at a much more
gradual pace.
As
usual, this report has been archived along with many other
Long-Term Care Cost Surveys in our
Members-Only Zone (password protected). If you need your user
name and password, or are not yet a member and would like to join, click
here or simply contact Damon (206-283-7036 /
damon@centerltc.com). ***
#############################
LTC BULLET: THE LTC
PROBLEM AND SOLUTIONS: THOUSAND BULLETS RETROSPECTIVE
LTC Comment: Once a week, usually on Fridays, we
publish our LTC Bullet. The Bullets are often policy
pieces, sort of like op-eds. You can always find the five latest
Bullets
here and archives of all 994 Bullets (so far), by date
here and by topic
here. These nearly-1000 articles are a valuable historical resource.
Please make use of them. Search for key terms using Control-F on your
keyboard.
This year, in celebration of the thousandth LTC
Bullet and the Center’s 15th anniversary (April 1), we are
releasing a retrospective of the most interesting and dramatic LTC
Bullets that we’ve published since the Center’s founding in 1998.
We’ll highlight one Bullet per year in each of seven major topics:
“The LTC Problem and Solutions”; “Reality Check: The Facts on LTCI”;
“Medicaid Planning”; “LTC Services”; “Politics and Legislation”;
“Demographics and Other Data”; and “CLTCR News.”
Today’s Bullet is our “Thousand Bullets
Retrospective” Number 2 covering “Reality Check: The Facts on LTCI.”
These “Reality Check” Bullets address inaccuracies and faulty data
that abound in media coverage of long term care insurance and include
anecdotes from the popular press that highlight the benefits of planning
ahead and taking personal responsibility for long term care. Read our
summary and check out the original at the link provided. Enjoy this walk
down memory lane.
------------------
June 6, 1998:
LTC Bullet: New York Times Misinformed on LTC Insurance. “This
morning's New York Times contained an article about long-term care
financing. The article accurately conveyed the gravity of long-term care
as a personal and public policy issue. Unfortunately, some information in
the article regarding private long-term care insurance was inaccurate and
misleading. Furthermore, the author of the article cited exclusively
sources who promote public financing and denigrate private financing of
long-term care. The following is a letter to the editor of the New York
Times regarding the long-term care article from Stephen A. Moses,
President of the Center for Long-Term Care Financing in Seattle,
Washington.”
------------------
November 22, 1999:
LTC Bullet: SmartMoney Isn't So Smart. “The November issue of
SmartMoney magazine contains a worrisome article titled ‘To Protect and To
Save’ by Jackie Day Packel. The article is full of misleading statements,
inaccuracies, and dangerous advice about long-term care insurance. This
LTC Bullet is the second in our ‘LTC Reality Check’ series. The
comprehensive analysis--which we encourage you to save as a valuable
reference--comes courtesy of Eileen Tell, Vice President of The LTC Group,
Inc. Eileen can be reached at
ETELL@LTCG.COM with any questions or comments.”
------------------
November 20, 2000:
LTC Bullet: Reporter Nails It. “We are often frustrated by unfair
and inaccurate media coverage of long-term care financing issues.
Reporters usually criticize private long-term care insurance (LTCI)
mercilessly while giving government programs like Medicaid and Medicare a
free ride. Of course, LTCI has its challenges. Rate stability and agent
training come to mind. But the government programs have far more serious
deficiencies related to access, quality, reimbursement, discrimination,
and institutional bias. Nevertheless, private long-term care insurance is
routinely lambasted in the media while the public financing programs get
off scot-free. Except . . . once in awhile a reporter gets it right with
accurate and thoughtful advice. The following are excerpts from an article
entitled ‘Nail Down Long-Term Care Now’ by Pam Kelley in the November 7,
2000 issue of ‘The Charlotte Observer.’”
------------------
January 8, 2001:
LTC Bullet: The Mote in LTC's Eye.
"LTC Bullets readers often ask us for sample speeches from which they can
draw ideas to use in their own public addresses. We've obliged
occasionally by posting transcripts of lectures delivered by Center for
LTC Financing President Steve Moses on our web site at
www.centerltc.org. We've received so much positive feedback on these
postings that we have decided to add more of Steve's talks to the site.
The speech we are posting today is entitled ‘The Mote in LTC's Eye.’ You
can find the transcript at
http://www.centerltc.org/speakers/mote.htm. This talk argues that
public criticism of the long-term care service delivery and insurance
professions is often overblown, heavily biased, and grossly unfair.
Conversely, the media and senior advocates who lambaste long-term care
providers and insurers rarely apply the same strict standards of review
and criticism toward public programs. Nevertheless, Medicaid and Medicare
are arguably more responsible for long-term care's serious access and
quality problems than is the private sector.”
------------------
December 17, 2002: LTC Bullet--Book Report:
"J.K. Lasser's Choosing the Right Long-Term Care Insurance" [link].
“Following is an article that purports to warn consumers about dangers of
LTC insurance touted in a new book. Thereafter, read comments by
author/trainer Phyllis Shelton and a critical book report by Center for
Long-Term Care Financing President Stephen Moses.”
------------------
July 2, 2003:
LTC Bullet: The WSJ on LTCI--Reality Check.
“We desperately need good media coverage of long-term insurance.
Unfortunately, most newspaper stories on this topic are inaccurate and
misleading. Today's LTC Bullet, written by Eileen Tell of the Long-Term
Care Group, is the latest in our series of ‘LTC Reality Checks.’ Our
reality-check Bullets address inaccuracies and faulty data that abound in
media coverage of long term care insurance. They also cover anecdotes from
the popular press that highlight the benefits of planning ahead and taking
personal responsibility for long term care. You can read the whole series
of 61 LTC Reality Check Bullets at
http://www.centerltc.com/bullets/subject.htm - reality_ck We extend
our sincere appreciation to Ms. Tell and to her employer, the LTC Group,
for this informative critique of a recent Wall Street Journal
article (Kelly Greene, ‘Buying a Security Blanket -- Revisited,’ WSJ
Online, June 9, 2003). We encourage LTC Bullets readers to
forward this Bullet to your local reporters who cover long-term care. To
share this Bullet with the Wall Street Journal, send a copy to
mailto:encore@wsj.com. Excerpts from the article follow Ms. Tell's
review in this [LTC
Bullet].”
------------------
October 20, 2004:
LTC Bullet: Reality Check: Flawed Article on LTCi. “Long-term care
insurance. Can't live with it; can't live without it. That's the media's
schizophrenic attitude toward this struggling financial services product.
Jonathan Clements' ‘Getting Going’ column, titled ‘The Flawed, Expensive
Insurance Policy That You Really Ought to Consider,’ in the October 13,
2004 Wall Street Journal is a case in point. If you have a
subscription to the WSJ Online, you can access the Clements column
here. Following [in this
LTC Bullet] are some quotes from the piece followed by our
comments.”
------------------
December 7, 2005:
LTC Bullet: LTC Demagogy.
“What drives AARP? Advocacy of good public policy? Or cynical,
narrow-minded, misguided self-interest? The Medicaid motives of this
mammoth mouthpiece for maturity are now clear. ‘The nation's top senior
citizen advocacy group has targeted members of Congress with
advertisements in their hometown papers opposing House spending cuts,
largely because of the bill's provision to change Medicaid. . . . The
group ran ads Friday in the local newspapers of several Republicans,
including some liberals, and of some key lawmakers who will help merge the
House and Senate versions of the bill, such as Sen. Charles E. Grassley,
Iowa Republican and Senate Finance Committee chairman.’ Source: Amy
Fagan, ‘AARP Ads Fight Medicaid Changes,’ The Washington Times,
December 5, 2005,
http://www.washingtontimes.com/national/20051204-113549-6448r.htm. A
few good people in Congress finally muster the courage to reform Medicaid
so it can better serve the interests of the truly needy and how does AARP
respond? Here's the notorious newspaper ad targeted against members in
their local districts who defend Medicaid against abuse. (The House
budget reconciliation package at issue is the Deficit Reduction Act of
2005. Review it at
http://thomas.loc.gov/cgi-bin/query/z?c109:hr.4241:.)” Read more in
this
LTC Bullet.
------------------
March 28, 2006:
LTC Bullet: Microsimulate This!
“Heaven knows that people--including policy analysts, legislators,
policy makers, senior advisors and just plain folks--desperately need
reliable information on the risks and costs of long-term care. Therefore,
the article by Peter Kemper, Harriet L. Komisar, and Lisa Alecxih titled
‘Long-Term Care Over an Uncertain Future: What Can Current Retirees
Expect?’ and published in the Winter 2005/2006 issue of the journal
Inquiry (Vol. 42, pps. 335-350) is a welcome addition to the
literature. (You can purchase a .pdf of this article for $10 at
www.inquiryjournal.org.) We won't take issue with the article's
estimates of LTC incidence which are well within the ranges of earlier
research. We do believe, however, that mistaken assumptions lead the
authors to some incorrect conclusions about LTC costs and probable sources
of future funding. We wonder what the output would show if the authors
input reality, instead of mistaken assumptions, into their microsimulation
model. To explain, here are quotes [in this
LTC Bullet] from the article followed by our comments and
analysis.”
------------------
October 10, 2007: LTC Bullet: 125,000 LTCi
Policies and No Claims Payment Problem [link].
“A week after New York Times muckraker Charles Duhigg bashed LTCi
last March, I explained what's really happening in an LTC E-Alert (one of
our daily ‘mental vitamins’ for Center members.) The Society of Actuaries
re-published my piece in its "Long-Term Care News" (August
2007, Issue No. 19, pps. 11-12.) And here it is again [in this
LTC Bullet].”
------------------
March 12, 2008: LTC Bullet: National Underwriter
Highlights Center's WSJ Response [link].
“After the publication of ‘LTC Bullet: WSJ Attacks LTCI, We
Respond’ on Tuesday, February 26, 2008, we received a flood of phone and
email messages thanking the Center. Read that piece at
http://www.centerltc.com/bullets/latest/747.htm. ‘In all my years
defending Medicaid as an LTC safety net for the poor by encouraging
responsible LTC planning by the middle class and affluent, I've never
received such an outpouring of appreciation,’ said Center for LTC Reform
president Steve Moses. Now, the insurance industry publication
National Underwriter has echoed the sentiment and elaborated on the
need for and kind of industry response that is required.” Read more in
this
LTC Bullet.
------------------
March 12, 2009: LTC
Bullet: LTCi Pollyannas. “Steve Moses's letter (in this
LTC Bullet) to the editor of National Underwriter's LTC
E-Wire speaks for itself. The letter does not, however, recommend a
collapse of Medicaid, LTCi's biggest competitor. It only predicts what
will happen. Therefore, a better title than the one assigned by the
editor would be: ‘What will unleash the long-term care market?’ The text
of the letter and a link to the online version follow [in this
LTC Bullet].”
------------------
February 8, 2010: LTC
Bullet: The Enemy of LTC Truth. “Einstein disdained ‘unthinking
respect for authority,’ but he wasn't alone. President John F. Kennedy
said:
‘The great enemy of truth is very often not the
lie--deliberate, contrived and dishonest--but the myth--persistent,
persuasive and unrealistic. Too often we hold fast to the clichés of our
forebears. We subject all facts to a prefabricated set of interpretations.
We enjoy the comfort of opinion without the discomfort of thought.’
The field of long-term care financing is a perfect
case in point. What exactly are the ‘persistent, persuasive and
unrealistic’ myths of long-term care?” Read this
LTC Bullet to find out.
------------------
November
4, 2011:
LTC Bullet: Why 9 Out of 10 Get LTCI Wrong. “I [Steve Moses] was
practically blown over when I read the following article by Steve Forman,
a long time supporter of the Center for Long-Term Care Reform whose
company,
LTC Associates, is a corporate member of the Center. ‘I couldn't have
said it better myself’ isn't praise I give often or lightly, but it's
deserved in this case. I hope you enjoy these excerpts and that you check
out the full article on the Producers eSource
here.”
------------------
July 20, 2012: LTC Bullet: Nursing Home
Spend Down Misunderstood and Late-Breaking LTCI Industry News [link].
“The
Employee Benefit Research Institute (EBRI) usually does excellent
research and analysis. But they sure got this one wrong. According to ‘Effects
of Nursing Home Stays on Household Portfolios,’ by Sudipto Banerjee,
Ph.D., Employee Benefit Research Institute, Issue Brief #372, June 2012,
the cost of nursing home care is wiping out life’s savings, impoverishing
families, and leaving them dependent on Medicaid. Well, that should sound
familiar. It’s how the problem of long-term care financing has always
been described. Wrongly. What’s different this time is that the EBRI
report claims to base the mistaken conclusion on facts.” How so? Read
this
Bullet for Steve’s analysis.
#############################
Updated,
Monday, April 08, 2013, 10:32 AM (Pacific)
Seattle--
LTC NEWS AND
COMMENT
LTC Comment: So
far, all the hullaballoo about the National Long-Term Care Commission has
produced nothing. We’re told the 15-member panel, which was finally
appointed over a month after the statutory deadline of February 1, has
neither met nor selected a Chairperson. The wheels of government,
especially LTC policy, do grind slowly, but hey, let’s get on with this.
In the meantime, news continues as this week’s LTC E-Alert
recounts.
#############################
4/5/2013,
“Why
the time is right for critical illness insurance,” by Bob Patience,
LifeHealthPRO
Quote:
"CI as a group voluntary benefit offers multiple advantages to employers
and employees, and momentum for CI coverage is building in light of the
current environment. For benefits advisors and consultants who understand
CI's role in promoting employees' financial wellness, it's an ideal time
to present the product to employers."
LTC Comment:
CI will advance as Medicare and Medicaid retreat.
#############################
4/6/2013,
“Get ready: Mandatory HMO-style
plans coming for long-term care [link],”
by Diane C. Lade, Sun Sentinel
Quote:
"If you or an elder relative is receiving
nursing home, assisted living or in-home care through
Medicaid, start watching the mailbox. State health-care officials are
mailing notices about changes to Florida's new Medicaid Long-term Care
Managed Care Program — changes that will dramatically alter how people
will get this assistance and what their choices may be. . . . One major
difference: Medicaid participants — often seniors whose medical care has
depleted their resources and are facing nursing home placement — could
apply for Medicaid on their own in the past and shop for their own care
centers or agencies. Now all Medicaid adults needing long-term care must
go through the state's managed care system and use providers in
their plan's network."
LTC Comment:
One more reason NOT to plan for Medicaid.
#############################
4/4/2013,
“Thrivent's
new product looks at the long term,” by Lee Schafer, Star Tribune
Quote:
"Thrivent Financial for Lutherans started offering its own long-term care
insurance last year, coming back into a market that other big insurers
have exited. It's done well with its product, selling it based on a very
simple idea. Before talking insurance policies, Thrivent advisers say to
clients, shouldn't we talk through who you would like to take care of you,
and where, should the day come when you can no longer manage on your own?"
LTC Comment:
Welcome back, Thrivent! Other carriers will follow suit sooner or later
as the manifest destiny of private insurance to replace public financing
plays out over time.
#############################
4/3/2013,
“Cancer clinics are turning away thousands of Medicare patients. Blame the
sequester [link],”
by Sarah Kliff, Washington Post
Quote:
"Cancer clinics across the country have begun turning away thousands of
Medicare patients, blaming the sequester budget cuts."
LTC Comment:
Oh, so the problem is the cure (cost control) not the cancer (exploding
Medicare costs.)
#############################
4/3/2013,
“Misperceptions
of Benefits Make Trimming Them Harder,” by
Jackie Calmes, New
York Times
Quote:
"President Obama had Senate
Republicans nodding in agreement during a recent ice-breaking dinner as he
described a basic problem for the nation’s fiscal future: For each dollar
that Americans pay for
Medicare, they ultimately draw about $3 in benefits. What’s more, he
added, most people do not understand that."
LTC Comment:
Denial isn’t a river in Egypt.
#############################
4/3/2013,
“Dementia
Care Cost Is Projected to Double by 2040,” by
Pam Belluck, New York Times
Quote:
"The most rigorous study to date of how much it costs to care for
Americans with
dementia found that the financial burden is at least as high as that
of heart disease or
cancer, and is probably higher. And both the costs and the number of
people with dementia will more than double within 30 years, skyrocketing
at a rate that rarely occurs with a chronic disease."
LTC Comment:
Yet another wake up call for consumers and policy makers.
#############################
4/3/2013,
“Worried
About Being a Bag Lady in Your Old Age?,” by Terry Savage, Huff
Post
Quote:
"Despite all the bad publicity about rising prices of Long Term Care
insurance, you owe it to yourself to purchase at least a policy that will
cover a portion of your costs -- perhaps one to three years of care, for
about $200 per day, with some inflation protection. Or you can consider
one of the new 'combined' policies that offer both long term care benefits
and a death benefit (or cash value withdrawal) if you don't use the care
benefit. You make a one-time cash deposit into the policy, leveraging
your dollars to pay for care. The need for long term custodial care will
become a huge issue in coming years, especially for women. If you're part
of a couple, it is likely your spouse will need care first -- using up the
family financial resources, and your energy as a caregiver. And women
alone especially need the resources of finding caregivers that come with
an LTC insurance policy."
LTC Comment:
And that’s the “Savage truth.”
#############################
4/3/2013,
“New Long Term Care Insurance Guide For Women On Their Own [link],”
ExpertClick
Quote:
"A new consumer guide advises women on their own about the importance of
long term care planning. . . . The new guide is available in electronic
format allowing insurance professionals to attach copies to emails, post
on their websites and offer via blogs and other media. Guides are
personalized with the agent's contact information, photograph and other
personalization."
LTC Comment:
A timely addition to the armory of sales tools given the onset of higher
premiums for women.
#############################
4/3/2013,
“PPACA
small business insurance market delayed a year,” Employee Benefit
News
Quote:
"Small business employees
will have to wait a year before they can choose their own medical plans
after the Obama administration delayed a part of the
Patient Protection and Affordable Care Act intended to provide them
with coverage options. Starting in 2014, workers at companies with fewer
than 100 employees were supposed to have been able to choose from a
variety of health plans through new small-business
insurance marketplaces. They’ll instead wait until at least 2015,
according to regulations released by the Department of Health and Human
Services."
LTC Comment:
ObamaCare continues to evolve, escalate in cost, and unravel.
#############################
4/2/2013,
“Feds:
Exchanges can set up life, disability alliances,” by Allison Bell,
LifeHealthPRO
Quote:
"Managers of the new Patient Protection and Affordable Care Act (PPACA)
health insurance exchanges may be able to connect with partners that sell
vision insurance, disability insurance, life insurance, long-term care
insurance (LTCI) and other ancillary insurance products. Officials at
the Center for Consumer Information & Insurance Oversight (CCIIO), the arm
of the U.S. Department of Health and Human Services (HHS) that oversees
the exchange programs, give guidelines for ancillary products sales in a
set of answers to frequently asked questions (FAQs) [link]."
(Bold emphasis added)
LTC Comment:
So what’s that mean for LTCI marketers?
#############################
4/2/2013,
“Automatic
2% Medicare cuts begin,” by Tim Mullaney, McKnight’s LTC News
Quote:
"The 2% reduction in Medicare payments known as sequestration began
Monday. Providers will be reimbursed 98 cents on the dollar for Medicare
fee-for-service claims with dates of service or dates of discharge on or
after April 1, 2013, according to the Centers for Medicare & Medicaid
Services. Providers should begin to see the impact by mid-April. . . .
The payment reductions will cost skilled nursing facilities about $782.5
million in fiscal year 2014, according to Avalere Health research."
LTC Comment:
LTC providers, especially nursing homes, depend on generous reimbursements
from Medicare to offset losses on the majority of their residents who
depend on Medicaid. As Medicare and Medicaid cut back, providers will
have to seek alternative funding sources.
#############################
4/1/2013,
“'Jaw-Dropping' Report Exemplifies Investor Confidence in Nursing Home,
Assisted Living Markets [link],”
Miami Herald
Quote:
"Today, Brian Lee, Executive Director of Families for Better Care, called
Irving Levin and Associates' 2013 Senior Care Acquisition Report
'jaw-dropping.' The report showed unprecedented growth in the nursing
home and assisted living sectors, as figures climbed higher than ever;
astonishing even the most seasoned investors. The median bed price (an
appraisal benchmark) for nursing homes catapulted to a record $57,400 per
bed along with a near-record average price per bed, ringing in at $60,400.
Four in ten nursing homes sold for more than $50,000 per bed, an 18%
increase over the previous year. But as strong as the nursing home market
was, assisted living facilities fared even better, setting records in
average and median price per unit at $164,000 and $152,000 respectively."
LTC Comment:
How long can the LTC provider business stay “jaw-droppingly” good as the
government ratchets back Medicare and Medicaid rates?
#############################
4/1/2013,
“U.S.
to boost rather than cut payments to health insurers,” by Sandhya
Somashekhar, The Washington Post
Quote:
"The Obama administration reversed
itself Monday, scrapping plans to cut by 2.2 percent the rates paid to
health insurers that take part in the Medicare Advantage program. . . .
On Monday, the Centers for Medicare and Medicaid Services (CMS) announced
that it was changing its method of calculating reimbursement rates.
Instead of cutting payments for Medicare Advantage plans, it will increase
them by 3.3 percent."
LTC Comment:
It’s very hard, in the end, for politicians and bureaucrats to force
through changes that consumers and the market don’t want.
#############################
4/1/2013,
“Nursing home residents with dementia can be taken off antipsychotics
without behavioral consequences, researchers say [link],”
by Tim Mullaney, McKnight’s LTC News
Quote:
"After reviewing the studies, the researchers determined that it's
generally safe and advisable to stop giving antipsychotics to those with
behavioral symptoms of dementia, including agitation, aggression,
depression, wandering and delusions."
LTC Comment:
Less medication of the ailing aging is usually a good thing.
#############################
3/31/2013,
“Scrubbing Medicaid: An audit discovers thousands of people who aren't
eligible for their benefits. The victims? Other Medicaid recipients [link],”
editorial, Chicago Tribune
Quote:
"An audit discovers thousands of people who aren't eligible for their
benefits. The victims? Other Medicaid recipients."
LTC Comment:
Amazing follow through! Julie Hamos runs Medicaid in Illinois. She
testified before Congress about Medicaid eligibility abuse the same day I
did in September 2011. Here's
the hearing video. She was stunned by how easily middle class and
affluent people qualify for Medicaid LTC benefits. Unlike most in her
position of responsibility, she went back to her job and did something
about it, as this story explains.
#############################
3/30/2013,
“Pet
Trusts: Caring For Your Pets When You Can't,” by Lexie Rigden,
PhillyBurbs.com
Quote:
"For New Jersey pet owners, a pet trust fund may put an end to worrying
about a pet's long term care. The New Jersey Legislature (some of them
presumably pet lovers themselves) has expressly recognized pet trust funds
as valid."
LTC Comment:
Now that we have Fido covered, how about Grandma?
#############################
2/29/2013,
“The Liberal Medicare Advantage Revolt: Democrats suddenly object to cuts
in private insurance for seniors [link],”
editorial, Wall Street Journal
Quote:
"A big political story this year is likely to be Democrats turning on
their White House minders as the harmful and unpopular parts of the
Affordable Care Act ramp up. On the heels of the recent 79-20 Senate
uprising against the 2.3% medical device tax, now comes the surge of
Democrats pleading on behalf of Medicare Advantage."
LTC Comment:
Politicians are relearning the 1988 lesson from "Medicare Catastrophic"
which was repealed a year later when middle-class seniors rebelled.
#############################
3/29/2013,
“Cancer survivors pose challenges and opportunities for long-term care [link],”
by John O'Connor, McKnight’s LTC News
Quote:
"Thanks to earlier detection and better treatments, the nation's No. 2
killer (after heart disease) is becoming far less of a death sentence than
it was a mere generation ago. To put things in perspective, these cancer
survivors mean millions of fewer tombstones in the nation's cemeteries.
What does this mean for long-term care operators? Simply put, more
business."
LTC Comment:
What does it mean for LTC financing? Quicker Medicaid insolvency and
growing demand for private LTC financing alternatives.
#############################
3/28/2013,
“Rising
Household Debt a Game Changer for Seniors,” by Josh Boak, The
Fiscal Times
Quote:
"More and more Americans are spending their golden years racking up debt-a
trend that if left unchecked could derail entitlement reform and alter the
traditional pattern of wealth being transferred from older to younger
generations."
LTC Comment:
More likely, it will supercharge entitlement reform and reverse the trend
of young people supporting senior entitlements they’ll never enjoy
themselves.
#############################
Updated,
Friday, April 05, 2013, 10:52 AM (Pacific)
Seattle--
LTC BULLET: SCAN THE
LTC POSSIBILITIES
LTC Comment: SCAN is
a fountainhead of ideas about long-term care financing, but are those
ideas potable? Analysis after the ***news.***
|
*** TODAY'S LTC BULLET is sponsored
by Claude Thau, a General Agent whose proprietary sales tools enable
clients to make informed final decisions about buying LTCi in 15-20
minutes, let you evaluate a client's real interest in a combo product
in a few minutes, and change work-site LTCi from a proposal-delivery
process to interactive consultation. Claude is the lead author of the
Milliman Broker World LTCi Survey, was named one of the 10 "Power
People" in the LTCi industry by Senior Market Advisor in 2007 and was
Chairman of the Board of the Center for Long-Term Care Financing. Test
Claude by calling 800-999-3026, x2241 or email him at claudet@targetins.com
to ask questions or get references. *** |
*** ON THE ROAD
AGAIN. Remember the Center for Long-Term Care Reform’s 2008 “National
Long-Term Care Consciousness Tour?” Steve Moses criss-crossed the
country carrying our message of rational LTC public policy and responsible
LTC planning to hundreds of media outlets, organizations, companies and
individuals. But that year, the bottom fell out of the U.S. (and world)
economy blunting the impact of our campaign and plunging the LTC market
into recession. Today, however, things are looking up. LTC financing
policy is back on the media’s and policy makers’ radar screens.
Politicians have to find ways to curb entitlement spending. LTC providers
need protection from meat-axe program cuts. Purveyors of private LTC
financing options have the solution on both fronts. All we need to do is
lay out the facts, answer the objections, and persuade the powers-that-be
to act. So, Steve says: “It’s time to hit the road again!” He’s taking
the
Silver Bullet of Long-Term Care out of cold storage and prepping it
for another cross-country run. Stay tuned for more on our plans for
raising LTC consciousness in 2013 and how you can participate and help.
***
*** NAIFA OR NOT?
Many Center members and readers are also avid supporters of NAIFA, a
national organization that advocates on behalf of private insurance.
We’ve heard that NAIFA is mounting a national appeal for new members
representing the LTC insurance field. That’s a very positive development
as long-term care needs all the political influence it can garner in the
states and nationally. Recently a NAIFA national official invited Center
president Stephen Moses to speak at the organization’s next national
conference--September in San Antonio. The Center declined the invitation
because we have a policy not to accept engagements that involve travel
expenses and lost work time without compensation to the Center. Still, it
seems like a highly desirable audience to reach with the message Steve was
invited to present: “Long-Term Care Financing: Past, Present and
Future.” So just in case there may be a person, group or company out
there in Centerland who’d like to sponsor Steve’s presentation to NAIFA
this Fall, here’s a special deal. We’ll upgrade any individual willing to
contribute $250 for this purpose to “Premium Member” status with “clipping
service” privileges plus a Bullet or LTC E-Alert sponsorship (usually
$500). For any corporate member willing to contribute $1,000 or more,
we’ll extend a year of privileges at the “Bronze” level, usually $5,000
per year. All member levels and benefits are described
here. If you’re interested, let Damon know ASAP at 206-283-7036 or
damon@centerltc.com. This window of opportunity closes Friday, April
12. ***
#############################
LTC BULLET: SCAN THE
LTC POSSIBILITIES
LTC Comment:
According to
its website: “The SCAN Foundation is an independent, non-profit
public charity devoted to transforming health care for seniors in ways
that encourage independence and preserve dignity.” That’s a noble goal
and based on the organization’s prolific publications and omnipresent CEO,
Dr. Bruce Chernof (who was recently appointed to the National LTC
Commission), SCAN’s endowment must be vast. So, what’s their latest
offering?
On March 20, while I
was exploring the Himalayan hill station of Shimla, India, SCAN sponsored
a major LTC financing shindig at the National Press Club in Washington,
DC.
Here you can read the eight policy briefs SCAN released that day and
watch videos of two panel discussions surveying “The
Current Landscape of Long-Term Care Financing” and “Long-Term
Care Policy Considerations.” But I’ve already done that homework for
you so I thought I’d save you the time and effort by providing the
following Cliff’s Notes summary of the key content.
I’ll focus on the two
most significant of the new research papers, but note here that Eileen
Tell, Senior VP of
Univita Health, deserves honorable mention for her “Overview
of Current Long-Term Care Financing Options.” Likewise, Jeremy Pincus,
et al., for “Size of the Employer and Self-Employed Markets Without
Access to Long-Term Care Coverage Options [link],”
which describes an “enormous untapped market” and explains how to tap it.
Following, are the two papers I’d like to address in more detail.
“Medicaid Spend Down:
Implications for Long-Term Services and Supports and Aging Policy [link],”
by Joshua M. Wiener, et al., sets out “to analyze the Medicaid
spend-down experience” and “the potential impact of various models of
insurance for LTSS [AKA LTC], focusing on . . . the recently repealed
Community Living Assistance Services and Supports (CLASS) Act, and
mandatory programs, such as those that operate in Germany and Japan.” The
paper concludes: (1) “The high cost of long-term services and supports (LTSS)
results in catastrophic out-of-pocket costs for many people needing
services, some of whom spend down to Medicaid eligibility”; (2) “[T]he
income and assets of people who spend down are considerably lower than
commonly assumed, casting doubt about whether the spend down population
could be expected to purchase private long-term care insurance”; and
therefore (3) “A mandatory long-term care insurance program can shift the
LTSS financing burden more effectively from Medicaid to insurance
financing . . ..”
Backing these
conclusions are data from the “Health and Retirement Study” and “Avalere
Health’s Long-Term Care-Policy Simulation (LTC-PS) Model.” We’ve
previously critiqued and debunked published inferences from the same data
source
here and simulation models are notoriously unreliable, e.g.
climate change models. Before we take anything seriously in this latest
scholarly attempt to convince us that Medicaid spend down is pervasive,
but Medicaid doesn’t crowd out private LTC financing sources, we should
consider these three facts.
(1)
A raft of Medicaid spend-down studies in the late 1980s and early
1990s proved that the vast majority of institutionalized Medicaid
recipients were already eligible for Medicaid at admission and did not
“spend down.” In 1991, I surveyed and interpreted these studies in “The
Myth of Medicaid Spend Down.”
(2)
The fact is that income and assets rarely stand in the way of
Medicaid long-term care eligibility. Most states deduct medical and LTC
expenses from income before determining eligibility which makes it routine
for people with high incomes to qualify. Miller income diversion trusts
enable the same result in the other states. Because of practically
unlimited asset exemptions—the home (up to $802,000) and with no limit, a
business, prepaid burial plans, a car, personal belongings, IRA accounts,
term life insurance, etc.—asset spend down to Medicaid eligibility is
unnecessary, voluntary, and therefore rare among middle class and affluent
people who choose to take advantage of the program’s generous eligibility
rules. In other words, just because people become eligible for Medicaid
LTC, it does not mean they “spent down.”
(3)
Anyone who has ever interviewed a Medicaid eligibility specialist
anywhere in the USA—and I’ve interviewed scores of them—or reviewed actual
Medicaid LTC eligibility cases—and I’ve reviewed hundreds of them—knows
that Medicaid spend down only crushes the poor and ignorant. Middle class
and affluent applicants/recipients dodge spend down with impunity. They
are the people who could, should and would plan for long-term care, buy
LTC insurance, and relieve Medicaid of the burden of their care if
Medicaid spend down really did require them to pay for their own care
first.
Unless and until the
authors of this paper address these realities, which they ignored in their
paper, their data and conclusions remain dubious at best.
The second new paper
I want to highlight is “Making Progress: Expanding Risk Protection for
Long-Term Services and Supports through Private Long-Term Care Insurance [link],”
by Richard G. Frank, Marc Cohen, and Neale Mahoney. They argue “that the
current private market for LTCI is not functioning well . . . there is
both an under-demand and undersupply of LTCI . . . today's political
environment demands that . . . insurance program designs be structured as
voluntary . . . that there is little taste for new mandated benefits and
the criteria for making new financial outlays by government will be
extremely demanding. This means that program designs must have some level
of medical underwriting, have low budgetary impacts, and be structured in
a way that makes them attractive to a broader population of consumers, as
well as profitable or break-even for program sponsors.”
Right on! Those are
certainly the lessons learned by the abortive pseudo-insurance fiasco
called CLASS. But why exactly is the LTCI market not functioning well and
how do we fix it? These authors say the problem is a combination of
demand factors (consumer denial, misperception, myopia, confusion,
mistrust) and supply factors (adverse selection, high cost, risk mis-management).
Well, sure, but why is the public so seemingly irrational and ignorant
about long-term care risk and cost? And why can’t the insurance industry
deal effectively with product design, pricing, marketing, and risk
mitigation for LTCI as it has for other products? Blank out. Instead of
explaining why these conditions exist, the paper goes directly into
speculation about product designs that might ameliorate the market’s
supposed dysfunction. That’s dangerous.
If you don’t know why
you have a problem in the first place, you run the risk of proposing
solutions that exacerbate instead of improve the situation. At best
you’re left with a shotgun approach, trying a lot of ideas that may or may
not help. That’s where this paper ends up. On the demand side, it
recommends simplifying and standardizing products, indexing premiums,
launching more education campaigns, mandating availability, etc. On the
supply side, the authors propose reinsurance pools, more employer
coverage, and co-marketing with health insurance. Some of those
suggestions may be helpful, but in the absence of an explanation for why
the problems exist that they’re intended to address, we have no standard
by which to judge. Furthermore, might not simplified products mean less
choice and flexibility for consumers? Why would more education help when
education efforts heretofore have failed? Co-marketing with health
insurance? Do we really need ObamaCare for LTC?
There is a much
better way to approach and solve the problem of LTCI market dysfunction.
First, explain why the problem exists. Answer: For nearly 50 years, the
government, through Medicaid and Medicare has paid for the vast majority
of all catastrophically high long-term care costs. Consequently,
consumers have been shielded from the risk and cost of LTC resulting in
their denial and intransigence about long-term care planning. Second,
address this real problem head on. Stop giving away free LTC to middle
class and affluent people after the insurable event occurs, and before
long such people will start to (1) spend their own money for LTC, (2) tap
their home equity to purchase quality LTC in the most appropriate setting
for their care, and (3) in time, in order to avoid the new objective
reality of a previously nonexistent Medicaid spend down liability, they’ll
buy LTCI products in droves . . . even without simplified products,
reinsurance pools, and other tinkerings that address only symptoms rather
than causes.
Identify correctly
the cause of the ostensible market dysfunction and correct it in this way
and you’ll not only unleash the LTC insurance market, but you’ll preserve
Medicaid as an LTC safety net for the genuinely needy.
#############################
Updated,
Monday, April 1, 2013, 9:49 AM (Pacific)
Seattle--
LTC BULLET: NATIONAL
LTC COMMISSION DISBANDED
LTC Comment: In a
surprise announcement early this morning, Tungan Sheek, a spokesperson for
the newly appointed National Commission on Long Term Care, told reporters
that all 15 members of the Commission had resigned.
“The new Commission
members were ‘outraged,’” explained Sheek, “because no one was appointed
to represent private long-term care financing interests despite an
explicit requirement to that effect in the authorizing legislation.”
With the long-term
care financing crisis mounting, state and federal budgets under water, the
demographic Age Wave cresting and the Great Recession continuing to
repress economic activity and government revenues, several former
Commission members lamented the shortsightedness of relying on public
financing of LTC while discounting the enormous potential of home equity
conversion and private LTC insurance.
“I hope a new round
of appointments to the LTC Commission will remedy this problem,” said one
disgruntled former member who preferred to remain anonymous, “but I worry
that all the focus is on expanding Medicaid, which is why we have a
long-term care financing problem in the first place.”
How or if Congress
and the President will respond to this development remains unknown.
------------
April Fools!
------------
LTC Comment: Happy
April Fools Day! The foregoing announcement is totally fictitious, but
the following one isn’t. Today, the Center for Long-Term Care Reform
celebrates our 15th anniversary. Steve Moses and David
Rosenfeld founded the Center on April 1, 1998. For a detailed history of
the Center for LTC Reform, check out the dozens of LTC Bullets
we’ve published over the years reporting on the Center’s progress at “CLTCR
News.”
“It’s been a great
run,” said Steve this morning. “We’ve impacted federal law for the better
many times over the years—MCCA '88, OBRA '93, HIPAA '96, BBA '97 and DRA
'05—to mention a few. But I’ve never been more optimistic about the
prospects for beneficial LTC financing reform than I am right now. With
your support, we’ll soon achieve our goal to improve safety-net financing
of LTC by enhancing private LTC financing sources.”
Carpe diem
-- even if it is April Fools Day.
#############################
Updated,
Friday, March 29, 2013, 10:49 AM (Pacific)
Seattle--
LTC News and Comment
LTC Comment:
Subscribers to our Clipping Service received the following news items,
individually and in real time, in the form of short emails with a link, a
quote and occasionally some brief commentary. In order to keep our
Clipping Service subscribers on the forefront of LTC knowledge, we spend
the time and effort gathering current, critical information on long-term
care issues so they don’t have to. By dividing the labor, we can all work
more efficiently. If you like what you read in our “LTC News and Comment”
E-Alerts, please consider subscribing to our Clipping Service.
Find all the details
here. Contact Damon at 206-283-7036 or
damon@centerltc.com to subscribe.
#############################
03/28/2013,
Child's liability for parent's nursing home care upheld, by Jeffrey
Marshall
Quote: "The Pennsylvania Supreme Court has
declined to hear the appeal of a son seeking to avoid personal
liability for his mother’s nursing home costs. Lower courts had held John
Pittas responsible for his mother’s unpaid nursing home bill of nearly
$93,000. The Supreme Court’s action leaves the lower Superior Court ruling
in the case (HCRA
v. Pittas) as the guiding precedent in Pennsylvania."
LTC Comment:
We’ve been alerting our Clipping Service subscribers to developments in
this case since May, 2012. See also the “News” section of this
LTC Bullet.
------------------
03/28/2013,
State Farm Pulls Long Term Care Insurance From Seven States
Quote: "State Farm Insurance has announced it will cease
offering long term care insurance in California, Arizona, Connecticut,
Hawaii, Indiana, Nevada and New York."
------------------
03/27/2013,
Uncle Sam's LTCI hand, by Allison Bell, LifeHealthPro
Quote: "The United States is now stumbling toward what,
apparently, if a thousand gears click smoothly into place, will be a
system in which having some kind of acute health care coverage will be
almost mandatory. Now health policy analysts have concluded in a new
report that having any kind of mandatory long-term care insurance (LTCI)
would probably be a lot more effective at shoring up the U.S. long-term
care (LTC) system than any imaginable voluntary system."
LTC Comment: Stay tuned for analysis from your Center for
Long-Term Care Reform.
#############################
03/27/2013,
CalPERS Long Term Care Insurance Rate Increases Addressed,
Quote: "Newspaper reports about an 85 percent hike in the cost
of long term care insurance offered to California State employees tells
only part of the story according to Jesse Slome, executive director of the
American Association for Long-Term Care Insurance.
"The Association executive explained that current CalPERS policyholders
will very likely still be paying less money for their coverage than they
would for new coverage. 'We field calls from consumers outraged but when
they hear what comparable coverage costs today, they realize the value in
what they have.' Slome notes that very few policyholders will drop their
coverage. 'That's what the news reports would lead you to believe but it
doesn't work that way and we challenge any reporter to follow-up after the
2015 rate increase to report what actually took place. I'm not holding my
breath,' he concluded."
#############################
03/27/2013,
CMS to post more nursing home deficiency data online next month, by
Tim Mullaney,
McKnight's Long Term Care News
Quote: "Citing the desire for the public to know more about
nursing homes, the Centers for Medicare & Medicaid Services will make more
information about nursing home deficiencies available online next month,
according to a
recent memorandum."
#############################
03/26/2013,
GOP lawmakers look to repeal Medicaid expansion,
by Pete Kasperowicz,
The Hill's Floor Action
Quote: "Rep. Matt Salmon (R-Ariz.) and five other House
Republicans have introduced legislation that would repeal the 2010
expansion of Medicaid benefits to lower-income Americans. The Medicaid
Expansion Repeal and State Flexibility Act,
H.R. 1404, would eliminate the expansion of Medicaid that happened
under the 2010 healthcare law. Salmon said that law 'essentially bribed
states' to expand Medicaid eligibility to people with incomes at 138
percent of the poverty level."
LTC Comment:
What could possibly go wrong with something that is basically a political
payday loan? [Lighthearted sarcasm intended]
#############################
03/26/2013,
Consumers Find That Health Insurance Is Not Enough: Critical Illness
Insurance Spotlighted on TV Segments Nationwide; Experts Offer Free Guide
[link],
MarketWatch
Quote: "According to the American Association of Critical
Illness, 1.5 million Americans will declare bankruptcy this year - 60
percent of them due to medical bills (a 50% increase over the last six
years). Surprisingly, 78 percent of them have health insurance, but are
still unable to meet the high cost of deductibles, co-payments, and daily
living expenses. A new educational platform,
http://www.criticalillnesseducation.org, has been launched to help
consumers better understand the benefits of supplemental solutions like
Critical Illness Insurance to help fill the gaps."
LTC Comment:
This innovative product keeps gaining traction in the United States and
abroad.
#############################
03/26/2013,
Amount of post-acute care accounts for regional differences in Medicare
spending, report says [link],
by Tim Mullaney,
McKnight's Long Term Care News
Quote:
"Geographic variations in Medicare
payments can be largely explained by how much skilled nursing and
post-acute care is being used, according to a recently released interim
report from the Institute of Medicine."
#############################
03/25/2013,
Expense and Emotions Affect Decisions About Long-Term Care, by Ann
Carrns, NYTimes.com
Quote: "His father has required a live-in health care aide for
the last two years. He has been able to afford that and stay in his home
because about 30 years ago, he bought a long-term care
insurance policy.
“‘Anything relating to long-term care triggers a lot of emotions,
because most of us want to believe we’ll never need it,’ said Nora Dowd
Eisenhower, economic security director at the
National Council on Aging. Many people who consider the policies have
firsthand experience caring for an aging parent, she said, and most of
them want coverage that will pay for care in their homes.”
LTC Comment:
The prospect of living the rest of your life assured that you’ll age with
dignity, in the setting of your choice, without being a burden to your
family surely will conjure some emotions and hopefully result in
responsible long-term care planning.
#############################
03/22/2013,
LTCI sales boosters: 5 tools, by Stephen Forman, LifeHealthPro
Quote: "If you're an optimist like me, then you already believe
2013 is going to be a banner year for the long-term care insurance (LTCi)
industry. It looks like we're trending on the gains we made last year, in
which the top 5 carriers posted a combined growth of 25% new business
sales year-over-year. (Not everyone fared so well, but I've written before
how our industry is undergoing a
natural process of contraction and thinning just as 200 other markets
have.) Still, how the market outside your doorstep fares is of marginal
concern: you want to know how to improve your own bottom line. Allow me to
share with you five reasons why 2013 is going to be your best year yet for
helping Americans plan smartly for their retirement:"
LTC Comment:
Helpful tips from this LTCi savant.
#############################
03/21/2013,
Broken long-term care financing system must be fixed within 5 years, SCAN
says [link],
by Tim Mullaney,
McKnight's Long Term Care News
Quote:
"The country's long-term care
financing system for consumers must be revamped within five years to meet
the needs of aging baby boomers, according to The SCAN Foundation. In
eight reports released Wednesday, the organization laid out policy
recommendations for taking pressure off government programs while
increasing the availability and affordability of long-term care financing
for consumers.
“'The current private
long-term care insurance market is effectively broken, as it has never
held more than 10% of the potential market and many insurers have stopped
offering these policies altogether,' stated Gretchen E. Alkema, Ph.D.,
vice president of policy and communications at The SCAN
Foundation. 'Reasons for lack of uptake are many: lack of public
understanding and interest, high monthly premiums, and underwriting
standards that make it difficult for individuals to qualify for
coverage.'"
LTC Comment:
Read this article to find out how
“this ‘broken’ market has resulted in massive costs to government
programs.” Then read just about anything published by your
Center for Long-Term Care Reform for evidence that the opposite is
true.
#############################
03/21/2013,
Money Talks to Have With Your Spouse,
by
Mary Schwager, Fox Business
Quote: "4. Long term care planning: A slower than expected
economic recovery coupled with increased life expectancies and
ever-increasing costs of medical care has made relying on government
funded long term care resources unrealistic. Initiate the discussion by
encouraging your spouse to sit down with a long term care insurance
professional. What you are looking for here is a maximum daily benefit
that coincides with the cost of care in your area. Don't be seduced by the
5 percent inflation protection, because the actual cost of care increases
approximately 12 percent per year."
LTC Comment:
Long-term care financing is a critical facet to anyone’s retirement plan.
#############################
03/20/2013,
Can the wonks save private LTCI?, by Allison Bell, LifeHealthPro
Quote: "The
SCAN Foundation has brought about 200 long-term care (LTC) policy
specialists to Washington this week to try to wake the United States up
and get it off of the demographic train tracks."
LTC Comment:
Stay tuned for analysis from your Center for Long-Term Care Reform.
#############################
03/20/2013,
How to Live in Assisted Living, by Judith Graham,
NYTimes.com
Quote: "Sometimes Martin Bayne speaks in little more than a
whisper, like many people with advanced Parkinson’s disease. But his voice
has a way of carrying. Many consider him the nation’s foremost advocate
for people in assisted living. 'Marty communicates the truth about living
and aging and dying in America,' said Joy Loverde, a caregiving expert and
author of 'The
Complete Eldercare Planner.'"
LTC Comment:
Read this article for thoughtful comments on how to live happily and
purposefully in assisted living by Mr. LTC. This is recommended reading
for caregivers and for anyone with a loved one in assisted living. See
also: “Culture
Change Means Nothing Without This.”
#############################
03/19/2013,
A Third of U.S. Seniors Die With Dementia, Study Finds, by Serena
Gordon, US News and World
Report
Quote: "There's more troubling news for America's aging
population: A new report finds that one in every three seniors now dies
while suffering from Alzheimer's or another form of dementia.
"Released Tuesday, the report also focuses on the toll that Alzheimer's
takes on families, particularly those caregiving from a distance. In 2012,
more than 15 million people were Alzheimer's caregivers. They provided
more than 17 billion hours of unpaid care that the Alzheimer's group
estimated was valued at $216 billion."
LTC Comment:
LTCi remains a viable option for many to mitigate the myriad
costs—financial, physical, emotional, professional, social, familial
etc.—of this devastating disease.
#############################
03/19/2013,
Hawaii lawmaker introduces LTCI tax credit bill, by Allison Bell,
LifeHealthPro
Quote: "A group of seven lawmakers in Hawaii are trying to get
their state to offer a long-term care insurance (LTCI) purchase tax
credit. The lawmakers have introduced state
House Bill 304, a bill that would give state residents with incomes
under a designated limit the ability to take a tax credit equal to up to
10 percent of the cost of LTCI premiums."
#############################
03/19/2013,
2013 Long Term Care Insurance Sales Growth Reported American Association
for Long Term Care Insurance [link]
Quote: "A number of leading long term care insurance companies
recorded significant increases in submitted applications during the first
two months of 2013 compared to the same time period last year."
LTC Comment:
Great news and a good start.
#############################
03/19/2013,
How to Reduce Health-Care Costs in Retirement, by
Donna Fuscaldo, Fox Business
Quote: "When it comes to retirement savings
planning, studies show that health-care costs are often the most
under-planned expenses in retirement. And while it’s impossible to predict
your health-care future, there are ways to reduce these costs.
"Long-term care
insurance can help combat the costs associated with a long-term illness
that may involve the expenses of a nursing home or assisted-living."
LTC Comment:
The
quote above is true, but having long-term care insurance could also
provide the option of staying at home if possible, instead of in a nursing
home or assisted living.
#############################
03/18/2013,
Life spans rise, but so do 'sick years', By Matthew Heimer,
MarketWatch
Quote: "Baby boomers and their financial advisers can tie
themselves in knots trying to plan financially for medical costs in
retirement – accumulating
some extra nest-egg padding to handle out-of-pocket costs, for
example, or buying long-term care insurance. But data published as part of
a recent study of longevity and health shows why those seemingly morbid
calculations are essential. According to the Global Burden of Disease
Study 2010 (GBD 2010), a major data-gathering project led by the Institute
for Health Metrics and Evaluation at the University of Washington, the
average American can expect to spend a little over 10 years of his or her
life in less-than-good health, with much of that time concentrated in the
retirement years."
LTC Comment:
The good news is we’re living longer; the bad news is we’re living those
extra years sicker. Savvy consumers will plan for this long in advance.
#############################
03/17/2013,
Medicaid benefits politicians more than it benefits citizens, by
Richard Grant, Forbes
Quote: "In how many states have the governors or legislators
claimed that their state would be a net beneficiary of federal spending
for Medicaid expansion? There are supporters of Medicaid expansion in all
50 states who do make such claims. But not everyone can be a net
beneficiary of subsidization.
"Medicaid, by lowering the perceived price of medical care, increases
the demand on care providers. But it does nothing to increase the supply
of medical care. The result, now and increasingly in the future, is
shortages of service for those who were supposed to be helped by Medicaid,
and an increased cost burden for those who are insured and able to pay."
LTC Comment:
Those who are able are wise to save, invest or insure for their long-term
care needs far in advance. This equals better LTC services for all,
including the truly needy for whom Medicaid was intended.
#############################
03/15/2013,
Are Americans ready to fix Social Security?, by Steve Vernon, CBS
News
Quote: "In spite of numerous proposals and debates on the
topic, our political leaders still haven't found the courage to address
Social Security's funding challenges. This year, we've witnessed the
coming and going of the fiscal cliff and sequestration, following such
non-events in previous years as the debt 'supercommittee' and the
Simpson-Bowles recommendations to reduce our debt. Any Social Security
reform would involve some combination of benefit reductions and increases
in Social Security (FICA) taxes. But are Americans willing to make these
hard choices?"
LTC Comment:
Suppose Social Security is made solvent, it still would not be enough to
retire on for most people. Long-term financial planning, beyond Social
Security, is essential in preparing for the high cost of aging.
#############################
03/14/2013,
AHCA calls for immigration reform to meet staffing shortage, by
Elizabeth Leis Newman,
McKnight's Long Term Care News
Quote: "Saying the current permanent visa programs for
immigrants are 'insufficient and inadequate' to meet long-term care
staffing needs, the American Health Care Association
outlined its vision of immigration reform Wednesday. 'A critical part
of any immigration reform package must take into account ways to supply
the U.S. economy with the workers it needs to recover from the downturn
and grow,' said Mark Parkinson, president and CEO of AHCA."
#############################
Quote: "Women live longer, and that means women will have more
years of retirement to pay for—in many cases, living on their own or in
long-term care. So why are women less likely to have a
financial plan, and what can we do about it?"
#############################
03/13/2013,
AALTCI finds sharp rise in LTCI costs, by Allison Bell,
LifeHealthPro
Quote: "The cost of a typical U.S. individual long-term care
insurance (LTCI) policy increased 20 percent between 2012 and 2013, to
about $2,065 in premiums per year. The
American Association for Long-Term Care Insurance has reported that
finding in a preview of the data that will appear in its new national LTCI
price index report."
#############################
03/13/2013,
White House Finally Fills Out Long-Term Care Commission, by
Howard Gleckman,
Forbes
Quote: "The White House finally appointed the last three
members of the
congressional long-term care commission, making it possible for the
panel to get down to work. The nominations, which were supposed to have
been made by Feb 1, are Henry Claypool, Executive Vice President of the
American Association of People with Disabilities and a top aide at the
Department of
Health and Human Services from 2009-2012; Dr. Julian
Harris, a physician and the
Massachusetts Medicaid director; and Carol Raphael, the Vice Chair of
the AARP board and former CEO of the Visiting Nurse Service of
New York."
#############################
03/11/2013,
Clients underestimate retirement income needs, by John Sulllivan
LifeHealthPro
Quote: "The rich got it wrong. Despite a general sense of confidence
in their
financial readiness
for retirement, affluent Americans might be overlooking critical tenets of
retirement planning, according to a new Schwab survey."
LTC Comment:
Even for “affluent” Americans, financial and personal well-being can
easily be marginalized by a serious medical event. Add to that the many
increasing costs of enjoying a long life as well as the statistical
probability of needing long-term care and retirement planning can be a
real challenge. Yet, LTCi still languishes as a retirement planning tool,
but for how long? Medicaid cannot continue to be the primary payor of
long-term care services indefinitely. Once government stops giving away
long-term care to people who otherwise would have purchased insurance, the
LTCi market will take off.
#############################
LTC Bullet: Virtual Visit to the 13th Annual
Intercompany LTCI Conference in Dallas, Texas
Wednesday, March 20, 2013
Seattle—
The
13th Annual Intercompany LTCI Conference, co-sponsored by
the LTCi section of the Society of Actuaries, held March 3-6, at the
Hilton Anatole hotel in Dallas, Texas was another excellent industry
event. Aiming “to enhance the dialogue between producers, technology and
the risks looming in the LTC industry,” the conference did just that by
bringing together 700+ attendees, close to 60
exhibitors and 40+
sponsors and
co-sponsors. A broad range of over 48
educational sessions offered ample occasions for learning and
professional development, while receptions and meals provided many
valuable opportunities for networking with a diverse range of industry
professionals. With Steve unable to attend the conference and Damon busy
volunteering at conference registration, we decided to recruit some Center
for Long-Term Care Reform friends and members, all of whom attended the
conference, to submit some of their impressions. For doing so, we wish to
thank:
Overall, the mood of the conference was one of
optimism and motivation. In reference to this, Sally Leimbach states:
“Several Exhibitors seemed to me to be relatively small providers vying
to become a part of the process of underwriting LTCi or providing services
at time of claim. To me, that showed optimism about the growth of the
market among providers.” Sally continues by mentioning she encountered
“[m]ore optimism than expected. It rubbed off. I have come back
reenergized for educating people to plan for LTC and selling to assist to
meet the ever important need.” What an excellent reminder of why events
like this are so important to the industry.
Many conference attendees in Dallas expressed high
satisfaction with the value of networking opportunities with industry
professionals as well as the quality of educational content. Honey Leveen
states:
For marketing people like me, the SOA [ILTCI conference] is valuable. I
gain insight into the LTCi product, its actuarial, underwriting, and other
elements I would otherwise not learn about. I learn about the latest LTCi
sales approaches, both from the sessions and from colleagues. I learn
about upcoming LTCi products. Also, I get breaking news on LTCi national
politics. I feel my attendance at SOA conferences definitely gives me a
competitive edge.
A first-time ILTCI conference attendee, Stephen
Forman, acknowledges challenges inherent to providing educational sessions
that would appeal to such a diverse group of attendees: “How can you
appeal to the interests of hundreds of individual attendees when
scheduling so many diverse topics? You can’t. Overall, the workshops I
attended were terrific, both in educational value and quality of
presenters.”
Stephen Forman also commented on conference
attendees:
There was a terrific sense of camaraderie among the attendees, and so many
folks were friendly. This was a great chance to meet Home Office friends,
“Hey, I’ve emailed you a thousand times, nice to put a face with a name!”
and to meet your LinkedIn and Twitter friends, “Oh, it’s you!” Since I
personally do a lot of writing, it was very validating to finally meet
folks in person who’ve read my pieces, “Hey, you’re the guy who wrote that
article!” What’s not to like about that?
One aspect of the conference that absolutely caused a
buzz was the keynote speaker,
Frank Abagnale. Recognized as “one of the world’s most respected
authorities on forgery, embezzlement and secure documents,” Mr. Abagnale
engendered polarized reactions to his selection as keynote speaker;
nevertheless, attendees raved about his presentation. Here’s Claude
Thau’s take: “Frank Abagnale’s key-note presentation was excellent. It
was an unexpected, yet strong, call for ethical behavior and training.
BRAVO! We should show the DVD to our families, friends, associates and
politicians.”
Another popular benefit of this conference is the
subsidized (by the ILTCI conference) tuition of Harley Gordon’s
CLTC Master Class. Conference attendees were able to enroll in
the class at a dramatically reduced price and earn their CLTC—the LTC
industry’s esteemed and ubiquitous professional designation. Here’s
Stephen Forman on the CLTC Master Class:
Terrific content, one-of-a-kind presentation. From speaking with my
classmates, I think many shared my takeaway: Harley Gordon’s message is a
game-changer (moving away from a risk-based conversation to one that is
based on consequences. In this way, our market expands from merely those
who have experienced an extended care event to anyone in America who loves
his or her family). However, successful execution of this content will
rely on our ability to translate it into our own voices.
Final thoughts: What I take home from each ILTCI
conference, and this is true for the AALTCI Producers Summit as well, is a
renewed sense of appreciation for the LTCi industry and all the talented
people in it who devote themselves to protecting others from the risk and
cost of long-term care. It’s a diverse group of attendees, but I’ve
noticed that what draws many to the industry (and to these conferences)
are personal long-term care experiences and the resulting desire to help
others plan for their long-term care needs. Many thanks are due to Jim
Glickman, everyone on the conference organizing committee,
Meeting Masters, Hilton Anatole staff and, of course, all the
sponsors, exhibitors, speakers and attendees for making this event
exceptional. See you
next time.
#############################
Updated, Tuesday, March 12, 2013, 12:02
PM (Pacific)
Seattle--
LTC News and Comment
LTC Comment:
Subscribers to our Clipping Service received the following news items,
individually and in real time, in the form of short emails with a link, a
quote and occasionally some brief commentary. In order to keep our
Clipping Service subscribers on the forefront of LTC knowledge, we spend
the time and effort gathering current, critical information on long-term
care issues so they don’t have to. By dividing the labor, we can all work
more efficiently. If you like what you read in our “LTC News and Comment”
E-Alerts, please consider subscribing to our Clipping Service.
Find all the details
here. Contact Damon at 206-283-7036 or
damon@centerltc.com to subscribe.
#############################
03/11/2013,
“The
10 Worst Places to Retire,” by Emily Brandon,
US News and World Report
Quote: "Retirement is especially difficult if you live in a
place with expensive real estate, high taxes, and steep healthcare costs.
Retiring in a city with an inordinately high cost of living means you will
have to save more money and invest more successfully just to make ends
meet. Here are 10 U.S. cities where it's extremely difficult to retire
well:"
#############################
03/08/2013,
“It's
about the benefits,” by Jesse R. Slome, LifeHealthPro
Quote: "Private insurers paid $6.6 billion in benefits last
year to individuals who were getting care at home, in assisted living
communities and in skilled nursing facilities.
"Consumers associate long-term care with nursing home care. They may
not realize that private insurance actually enables many people to remain
at home when care is needed.
"Consumers also may have trouble imagining how high LTC costs can get.
They may not realize that the value of the largest known LTCI claim open
in 2012 exceeded $1.7 million."
LTC Comment:
This article succinctly shows the value the LTCi industry brings to our
nation.
#############################
03/07/2013,
“Obamacare's Costly Medicaid Expansion: How Does Your State Fare? [link],”
The Heritage Foundation
Quote: "Obamacare’s Medicaid expansion is touted by the law’s
proponents as a ‘no-brainer.’ While it is true that some states may see
projected savings, it is erroneous to claim that this experience applies
to every state."
#############################
03/07/2013,
“Newer Long Term Care Insurance Options Offer Significant Savings [link],”
Reuters
Quote: "Newer options are enabling individuals in their 50s and
60s to obtain more affordable long term care insurance protection. A
just-released report suggests ways current choices and comparison-shopping
can save hundreds of dollars in yearly costs."
#############################
03/06/2013,
“Lethal bacteria affecting long-term care facilities could spell 'end of
antibiotics,' CDC says [link],”
by Tim Mullaney,
McKnight's Long Term Care News
Quote: "A lethal type of antibiotic-resistant bacteria is on
the rise in acute and long-term care facilities, and providers must act to
prevent the spread of these germs that kill about half of all people who
become infected, the Centers for Disease Control & Prevention announced
Tuesday."
LTC Comment:
All the more reason to purchase LTCi and stay out of nursing homes.
#############################
03/06/2013,
“Genworth
Suspends California Long-Term Care Sales,”
by Zachary Tracer,
Businessweek
Quote: "Genworth Financial Inc. (GNW),
the provider of life insurance and mortgage guaranties, said it is
suspending sales of individual long-term care coverage in California as
the company works to start replacement offerings with better returns.
#############################
03/05/2013,
“The
Experts: How to Plan for Retirement Expenses,” WSJ.com
Quote:
"In roughing out a retirement budget, what should an individual figure for
expenses? Do people's expenses fall a little or a lot—or maybe even go
up—when they leave the workforce? The Wall Street Journal put this
question to The Experts, an exclusive group of industry and thought
leaders who engage in in-depth online discussions of topics from the print
Report. This question relates to a recent article on
changing rules for retirement
spending.”
LTC
Comment:
LTCi offsets the catastrophic financial risk and cost of long-term care
and allows savvy consumers to focus their remaining resources elsewhere,
without fear of losing their nest egg if an insurable event should occur.
#############################
03/05/2013,
“Employers and Employees Agree on the Value of Voluntary Benefits [link],”
MarketWatch
Quote: "Indicating a possible future trend, 44% of brokers
currently selling voluntary products are expecting increased demand for
these benefits over the next five years, representing an increase of 10%
over last year. Brokers foresee the biggest increase in the adoption of
critical illness insurance, with 41% believing it will increase. Critical
illness coverage pays a lump sum for covered illnesses or conditions such
as cancer, heart attack and stroke surgery. Interestingly, signaling that
better communication and more education may be needed regarding worksite
benefits, 27% of employees surveyed said they weren't sure if critical
illness is part of their current employee benefit package."
LTC Comment:
Critical illness insurance is gaining traction here in the United States
after relative success in countries with more socialized healthcare
systems. Is this correlation or causation?
#############################
03/04/2013,
“Another
panel OKs Hawaii LTC study bill,” by Allison Bell, LifeHealthPro
Quote: "Supporters of private long-term care insurance (LTCI)
have won a partial victory in Hawaii. Members of the Hawaii House Finance
Committee have voted 16-0 with one excused absence to approve a bill, H.B.
1, that calls for the director of the state executive office on aging to
commission a study of the idea of setting up a mandatory, government-run,
limited-benefit long-term care insurance (LTCI) program in the state."
#############################
03/04/2013,
“Children's Inheritance First to Go When Paying for Long-Term Care Costs [link],”
MarketWatch
Quote: "Those expecting to leave loved ones an inheritance
should not bank on it - especially if they are not planning for long-term
care (LTC) costs in retirement. According to a Nationwide Financial
survey, about half (48 percent) of those age 50 and over agree that paying
for their LTC costs will take away from the money intended for their
children as an inheritance, and 43 percent would rather use these funds to
cover LTC costs than pass money to their heirs."
LTC Comment:
Adult children have a vested interest in not only protecting their
parents’ personal well-being after they no longer can live on their own,
they have a financial interest in protecting their inheritance. What an
excellent angle to use with prospects.
#############################
03/03/2013,
“Dementia
Continues To Increase Among Elderly,”
by Megan Hanks,
Gazettes.com
Quote: "Apply for long-term care insurance. According to the
Alzheimer’s Association, in 2011 more than 15 million family members and
other unpaid caregivers provided an estimated 17.4 billion hours of care
to people with Alzheimer’s disease and other dementias, estimated to value
more than $210 billion. Medicare payments for services to beneficiaries
with Alzheimer’s and other dementias 65 years of age and older were three
times greater than payments for beneficiaries without some form of
dementia, and Medicaid were 19 times greater."
LTC Comment:
LTCi remains the best way for most to prepare for the challenges brought
forth by Alzheimer’s disease.
#############################
03/03/2013,
“How
advisers can help clients deal with Alzheimer's,”
by Dr. Robert Pokorski, InvestmentNews
Quote: "Discuss insurance options for the financial
consequences of Alzheimer's disease, including long-term-care insurance,
annuities and life insurance with riders that provide a benefit if chronic
care is needed.
"For advisers' own protection and to ensure that they can effectively
meet the needs of clients, they should document discussions with clients.
For example, a note can be put in the individual's file: 'We discussed the
possibility of Alzheimer's and other serious conditions, the high cost of
chronic care and insurance solutions. The client wasn't interested.'”
LTC Comment:
Recommended reading:
"Long-Term Care Due Diligence for Professional Financial Advisers".
#############################
03/01/2013,
“Planning
for Alzheimer's,” by Kimberly
Lankford, Kiplinger
Quote: "'You think you've saved enough, and it's overwhelming,'
says Julie. 'My father felt financially comfortable. You can have a couple
hundred thousand dollars in the bank, and it can all go in just a year or
two.'
"Neither Elizabeth Dobson nor Rebecca Barnard has long-term-care
insurance. That's the only way to get broad coverage for custodial care in
a variety of locations: your home, an assisted-living facility or a
nursing home."
LTC Comment:
Nobody wants to plan for Alzheimer’s, but those who do, and use their LTCi
policy, no doubt are glad they did.
#############################
02/28/2013,
“New
Evidence Supports Palliative Care Benefits,”
by Julia Little, Sunrise
Senior Living
Quote:
"Palliative care is designed to give
an individual the highest level of well-being, and now a new study has
proven that comfort really can cure. A study published recently in The
Gerontologist shows that seniors who were receiving palliative care as
part of their long-term care services had a significant reduction in
emergency room visits and depression."
LTC Comment:
The results from this study show the benefits of having a wide variety of
care options available when needed.
#############################
02/28/2013,
“Top
quality Medicare Advantage plans in strong position-official,”
by David Morgan,
Reuters
Quote: "Medicare Advantage insurance plans that meet the
program's higher quality standards should be in a strong position to
withstand federal payment reductions proposed for 2014, a senior U.S.
health official said on Thursday."
#############################
02/27/2013,
“LTCI
Watch: PCIP,” by Allison Bell, LifeHealthPro
Quote: "Claude Thau, a long-term care insurance (LTCI) actuary,
has argued that keeping LTCI providers and LTCI supervisors separate
provides much needed checks and balances. Maybe one side will co-opt the
other, but at least they will be (or, could be) separate groups of people
who look at LTCI situations from different perspectives."
#############################
02/27/2013,
“Long-term
care: An asset-based approach,” by Bill Coffin, LifeHealthPro
Quote: "Long-term care insurance (LTCI) is the best product
nobody ever buys. With people living longer lives and with the cost of
health care increasing much faster than people's ability to save, the need
for some kind of funding mechanism for long-term care (LTC) is
obvious. And yet, long-term care insurance on its own remains a difficult
sell. Bruce Moon, vice president of product management for OneAmerica
speaks with National Underwriter Life & Health about what he thinks has
gone wrong with long-term care insurance, and how it can still go right."
LTC Comment:
An interesting conversation about LTCi innovation with Bruce Moon.
#############################
02/27/2013,
“Medicare
Advantage Enrollment Tops 14.5 Million,” MarketWatch
Quote: "Aggregated enrollment in Medicare Advantage (MA) plans
increased by 1.260 million members between February 2012 and February
2013, according to a new report by Mark Farrah Associates (MFA). Nearly
14.6 million people were enrolled in Medicare Advantage plans as of
February 2013, 28.5% of the 51.1 million people eligible for Medicare,
according to the Centers for Medicare and Medicaid Services (CMS)."
#############################
02/26/2013,
“Report:
Chris Christie will support Obamacare's Medicaid expansion,”
by Sarah Kliff, The Washington Post
Quote: "Republican opposition to the Medicaid expansion appears
to be fading fast. New Jersey Gov. Chris Christie will announce his
support for the expansion this afternoon,
according to the New Jersey Star-Ledger, following a similar statement
from Florida Gov. Rick Scott last week. He followed early February
announcements from governors in Ohio and Michigan."
#############################
02/24/2013,
“Alzheimer's
epidemic puts advisers 'and their practices' at risk,”
InvestmentNews
Quote: "The number of Americans with Alzheimer's disease is
expected to nearly triple by 2050. This impending epidemic will put even
more pressure on advisers as they try to help clients prepare for the
possibility of a costly health crisis."
LTC Comment:
See also: “How
advisers can help clients deal with Alzheimer's” and
"Long-Term Care Due Diligence for Professional Financial Advisers".
#############################
Updated, Wednesday, February 27, 2013,
11:56 AM (Pacific)
Seattle--
LTC NEWS AND
COMMENT
LTC Comment:
Subscribers to our Clipping Service received the following news items,
individually and in real time, in the form of short emails with a link, a
quote and occasionally some brief commentary. In order to keep our
Clipping Service subscribers on the forefront of LTC knowledge, we spend
the time and effort gathering current, critical information on long-term
care issues so they don’t have to. By dividing the labor, we can all work
more efficiently. If you like what you read in our “LTC News and Comment”
E-Alerts, please consider subscribing to our Clipping Service.
Find all the details
here. Contact Damon at 206-283-7036 or
damon@centerltc.com to subscribe.
#############################
Quote: "A single woman will pay between $900 and $1,300 yearly
for long term care insurance protection currently being offered by leading
insurers. However, they will soon be paying more warns one of the nation's
leading industry experts.
"The difference will be significant, as much as 40 percent more, so the
incentive to act sooner rather than later can really result in significant
savings," Slome notes. The organization reports that a single woman, age
55 who qualifies for preferred health rates will pay between $902 and
$1,325 yearly for $164,000 of current coverage." The pricing is based on
policies offering a Future Purchase Option feature which allows the
individual to add to their coverage in future years without having to meet
health qualifications."
LTC Comment: As always, planning early for
long-term care is imperative, especially for women.
#############################
Quote: "I attended a breakout session at last week's
LIMRA Distribution Conference in Orlando featuring a pair of top
independent producers talking about what they value most from home
offices, above and beyond product payout. Both said producers who are at
the top of their game don't make decisions based on product and payout but
want to closely align themselves with organizations that have the
following characteristics:"
LTC Comment: Talented producers that thrive selling LTCi no
doubt have valuable opinions regarding home office support.
#############################
Quote: "Q: Many more agents are
selling over
the Internet. How do they structure their presentation? A: Internet
selling is gaining in popularity. An expert in this area is Amy Pollock, a
specialist with LTC Financial Partners. Here are her tips on how to
present long-term care insurance in this non-traditional selling method."
LTC Comment: See also last month’s “How
to sell LTCI online,” by Margie Barrie.
#############################
2/22/2013,
Millions more could join Medicaid as Republican governors cave in [link],
by Tami Luhby, CNN Money
Quote: "Despite their initial, vehement protests, a growing
number of Republican governors are giving their blessing to expanding
Medicaid in their states. That opens the door for millions of poor
Americans to enroll in government health care coverage, beginning in
2014."
LTC Comment: Stay tuned to see who is next.
#############################
Quote: "A key CalPERS committee Wednesday approved a plan to
reopen its long-term care insurance to new policyholders, widen the
eligibility pool and introduce a new, cheaper benefit program."
LTC Comment: They’re raising rates as well. See also: “CalPERS
enrollees receive notice of long-term care rate hikes.”
#############################
2/21/2013,
Deficit-reduction plan to gain $600 billion from lower provider payments
and higher beneficiary premiums [link],
by Tim Mullaney,
McKnight's Long Term
Care News
Quote: "The co-chairs of President Barack Obama's deficit
reduction commission are promoting a way to achieve $600 billion in
healthcare 'savings' in a
new version of their deficit reduction plan. Medicare and Medicaid
cuts would be targeted over the next 10 years.
"Long-term care providers are among those facing a
possible 2% reduction in Medicare payments if sequestration cuts take
effect. They have protested this reduction, which would come on the heels
of an
11.1% reduction in Medicare payments that took effect in late 2011."
#############################
Quote: "Millions of middle-aged Americans worry about parents
in their 50s and 60s who lack long term care insurance (LTCi). Should they
buy policies for their unprotected parents, and if so, how should they go
about it?
"One important point: Financial professionals should encourage clients
to think about the topic as early as possible. If clients wait until their
parents have health problems, that's too late. If clients wait until their
parents actually need long-term care (LTC) services, that's far too late.
To actually get coverage, the parents need to apply when they're still
able to qualify for coverage."
LTC Comment: Adult children should act fast
to protect their parents from the risk and cost of long-term care.
#############################
2/20/2013,
OneAmerica survey finds generational retirement confidence donut [link],
by Tristan Lejeune, Employee Benefit News
Quote: "The youngest and the oldest working-age Americans have
the most confidence in their ability to retire comfortably, according to a
new survey from OneAmerica. The first-time survey, which OneAmerica
intends to repeat to track data, identified a “confidence donut” for those
between the ages of 30 and 50."
LTC Comment: Interesting results.
#############################
Quote: "Yet, private LTC insurance could be a valuable tool. It
merits a close look when you're making your later-life financial plans.
Jesse Slome, executive director of the American Association for Long-Term
Care Insurance (AALTCI), has assembled useful data about LTC policies and
the likelihood you would ever need to use them."
LTC Comment: Some useful data from AALTCI in
this article.
#############################
Quote: "With an 85 percent premium hike
looming, government workers and retirees covered by CalPERS' costliest
long-term care insurance policies face a crucial decision: Swallow the
increase or get out of a program they have been paying into for years.
"CalPERS says it is hiking rates to keep the
insurance fund solvent long-term. Losses from higher-than-expected
claims, lower-than-expected investment returns and loose
underwriting standards early on forced the decision."
LTC Comment: Not immune to the same
challenges as the private LTCi industry, even CalPERS is raising rates to
keep its reserves solvent.
#############################
2/19/2013, “Health
Insurers Sell Off on Medicare Advantage Rate Proposal,” by Matt Egan,
FOXBusiness
Quote: "Shares of major health insurers like
Humana (HUM) and UnitedHealth (UNH) tumbled Tuesday morning in response to
a new U.S. proposal to set 2014 Medicare Advantage rates at lower levels
than the industry had been bracing for."
LTC Comment: This is so typical. The
government entices the private sector into new programs with generous
policies. Then after companies adapt to take full advantage, the
government removes the financial punch bowl and the party ends badly.
#############################
Quote:
"The insurance
industry said Tuesday that plans to cut payments to private Medicare
Advantage plans will hurt seniors' access to care. The Health and Human
Services Department said Friday that Medicare Advantage plans will face a
2.2 percent payment cut in 2014. America's Health Insurance Plans (AHIP)
said the cuts go too far."
LTC Comment:
Cuts to Medicare loom while Medicaid is set to expand under ACA.
#############################
Updated, Friday, February 22, 2013, 11:01 AM
(Pacific)
Seattle--
LTC Bullet:
Bipartisan Congressional Blast at New York Medicaid
LTC Comment: Congressional Republicans and Democrats
concurred in a scathing critique of New York State’s Medicaid program.
Details after the ***news.***
*** TODAY'S LTC BULLET is sponsored by Claude Thau, a
General Agent whose proprietary sales tools enable clients to make
informed final decisions about buying LTCi in 15-20 minutes, let you
evaluate a client's real interest in a combo product in a few minutes, and
change work-site LTCi from a proposal-delivery process to interactive
consultation. Claude is the lead author of the Milliman Broker World LTCi
Survey, was named one of the 10 "Power People" in the LTCi industry by
Senior Market Advisor in 2007 and was Chairman of the Board of the Center
for Long-Term Care Financing. Test Claude by calling 800-999-3026, x2241
or email him at claudet@targetins.com to ask questions or get references.
***
*** ESTATE RECOVERY PROJECT: The Maine Heritage
Policy Center and the Maine Health Care Association have retained the
Center for Long-Term Care Reform to conduct a study of Medicaid estate
recoveries in Maine. Our goal is to make recommendations that could
double the state’s nontax revenues from this source while simultaneously
encouraging Mainers to plan early for LTC and avoid dependency on Medicaid
altogether. We’ll begin the research for this project on April 1 and
submit our report by May 15. ***
#############################
LTC BULLET: BIPARTISAN CONGRESSIONAL BLAST AT NEW
YORK MEDICAID
LTC Comment: In its first bipartisan report in four
years, the U.S. House Oversight and Government Reform Committee, led by
Darrell Issa (R-CA), has lambasted New York state government for egregious
abuses of Medicaid, including the welfare program’s most expensive
long-term care component.
Following is the Committee’s press release
announcing, describing and linking to the full report. Further below, we
provide links to some of the caustic newspaper articles and editorials the
report engendered. Finally, we offer some background on the Center for
LTC Reform’s extensive work that identified and criticized many of the
same abuses.
We especially applaud this report’s recommendations
that New York Medicaid should enforce Medicaid eligibility rules, ban the
“spousal refusal” gimmick used to dodge asset limits, and strengthen
estate recoveries to discourage use of Medicaid as free inheritance
insurance for heirs.
----------------
Press Release: Oversight Committee Adopts
Bipartisan Recommendations to Prevent New York Medicaid Misspending and
Recover Past Overpayments
February 14, 2013
Contact: Ali Ahmad (202) 225-0037
WASHINGTON - Today, the House Oversight and
Government Reform Committee adopted the bipartisan Committee report
entitled “Billions of Federal Tax Dollars Misspent on New York’s
Medicaid Program [link].”
[This link takes you to a page with further links to a video and to
the full published report. If you watch the video, note that the
committee’s deliberation begins at 7 minutes, 21 seconds into the video.]
The report details some of the historic problems with New York State's
Medicaid program as revealed by independent investigators, news
organizations, and the Committee's own research. The report shows that
fraud, waste, abuse, and mismanagement has been a large problem in New
York’s Medicaid program for decades. The report discusses the
long-standing and aggressive State approach to maximize federal dollars
flowing into the State through the federal Medicaid reimbursement.
The report makes several significant, bipartisan
recommendations for reforming New York’s Medicaid program to save
taxpayers billions of dollars a year.
- Stop Overpayments and Recover an Appropriate
Share of the Overpayments for Taxpayers
“CMS should finalize an agreement with New York on a
corrected payment methodology that ends the developmental center
overpayments as soon as possible. CMS should pursue recovery of an
appropriate portion of previous overpayments in excess of reasonable costs
for federal taxpayers.” – p. 28
- Ensure Accurate Accounting in Correcting New
York Medicaid Misspending
“New York State has submitted several waiver
applications to CMS that relate to the financing of its Medicaid program.
The Medicaid Redesign Team (MRT) Waiver Amendment asks CMS to allow New
York to keep $10 billion of the anticipated federal savings from the
waiver... Before considering the merits of these waivers, CMS and the
State must come to an agreement to reduce the State’s developmental
centers to a rate of about one-fifth of their current levels, as CMS
indicated was its intention at the September 20, 2012 hearing before the
Subcommittee on Health Care, District of Columbia, Census and National
Archives.” - p. 27
- Complete an Independent Audit of New York’s
Medicaid Program
“CMS or a qualified government watchdog agency should
conduct a complete and independent audit of New York’s Medicaid program,
including the work of New York State’s Office of the Medicaid Inspector
General (OMIG).” - p. 28
Additional recommendations:
- Only individuals who meet the legal eligibility
thresholds should be enroll in New York's Personal Care Services
Program.
- New York should aggressively pursue estate
recovery against those who abuse Medicaid eligibility rules.
- New York's legislature should codify Governor
Cuomo’s executive order that limits compensation of executives at
organizations that are funded almost entirely by Medicaid.
The report discusses several steps taken by Governor
Cuomo’s Administration to address the problems. The report also discusses
concerns that the Cuomo Administration has not been forthcoming with this
Committee and the serious allegations that New York is not adequately
policing fraud and abuse in the State’s Medicaid program.
The report was adopted by a voice vote. Only Rep.
Carolyn Maloney (D-NY) voiced opposition to the Committee’s adoption of
the report.
###
Caitlin A. Carroll
Deputy Press Secretary
House Committee on Oversight and Government Reform
Chairman Darrell Issa
Rayburn 2157
Office: 202-225-0459
Cell: 202-579-7257
caitlin.carroll@mail.house.gov
----------------
Media coverage of the Committee’s findings and
report:
“States
fall for Medicaid trap,” by Betsy McCaughey, former Lieutenant
Governor of New York, Boston Herald, 2/16/13
“House panel: Medicaid is a $54B mess: New York's
Medicaid system needs audit to study waste, abuse, draft report says [link],”
by James M. Odato, Times Union, February 6, 2013.
“NY
Medicaid exec pay is sickening,” by Carl Campanile and Chuck Bennett,
New York Post, February 5, 2013
“House
panel adopts stinging report on NY Medicaid system,” by James M. Odato,
Times Union, February 14, 2013
----------------
Over the years, the Center for Long-Term Care Reform
has conduced several studies of Medicaid and long-term care financing in
New York. Examples of our reports that revealed and criticized many of
the same conditions identified in the Oversight Committee’s report
include.
NEW YORK: Our report: Long-Term Care Financing in
New York: The Consequences of Denial [link],
March 2011
NEW YORK: Long-Term Care Financing in New York:
How to Save Money While Serving the Needy [link],
shorter version of the above report published by the Empire Center (Link
to abridged version of the
report on the Empire Center website (pdf
here))
NEW YORK: The New York Long-Term Care Compact
Proposal: Update, Analysis and Recommendations [link],
July 2007
LTC Bullet: Friendly Fire in the Class War (LTC Embed Report #6),
Thursday, September 22, 2011: This Bullet described Steve Moses testimony
before the Oversight Committee on some of the same subjects as the
Committee’s current report addressed.
#############################
Updated, Tuesday, February 19, 2013,
11:30 AM (Pacific)
Seattle--
LTC COMMISSION
DAY NUMBER MINUS 19 AND LTC NEWS AND COMMENT
LTC Comment:
Twelve members of the 15-person LTC Commission created by the law that
repealed CLASS have been appointed. It remains to learn whom President
Obama will choose for the panel. So far, despite the law’s stipulation
that the LTC insurance industry should be represented on the Commission,
that hasn’t happened. What do you think the odds are that the President
will fill that gap with one of his three appointments?
*** ILTCI
CONFERENCE: Registration is still open for the Thirteenth Annual
Intercompany Long Term Care Insurance Conference to be held from March
3-6, 2013, at the Hilton Anatole in Dallas, Texas. A current schedule and
event details can be found at
http://www.iltciconf.org. Check out all the details on registration
here. This is the first of the SOA/ILTCI conferences I’ll miss, says
Steve Moses, due to a travel planning oversight. But Damon will be
there. Look him up and say hello. ***
#############################
2/17/2013,
“Long-term
focus for coverage, company,” by Todd Nelson, Star Tribune
Quote:
"Deb Newman, CEO of Richfield-based Newman Long Term Care, has written
more than 25,000 long-term care policies since she founded the firm in
1990."
LTC Comment:
Congratulations to Center corporate member Deb Newman and Newman LTC on
this complimentary column her and the LTCI industry.
#############################
2/17/2013,
“Repeal of Va.'s long-term care insurance tax credit fails in committee,”
IFAWebnews.com [link]
Quote:
"Virginia residents who own or purchase long-term care insurance get at
least one more year of a premium tax credit after a transportation funding
bill failed in the Virginia General Assembly."
LTC Comment:
Bullet dodged in Virginia but state legislators trying to cut LTCI tax
incentives is a bad precedent.
#############################
2/15/2013,
“Beyond
Long-Term Care,” by Kelly Greene, Wall Street Journal
Quote:
"But insurers have been battered by low interest rates and expensive
claims, leading a few large firms to quit selling new policies in the past
few years. Others have jacked up rates on existing policyholders. That has
led some families and financial advisers to look for other ways to hedge
against the potential for late-life custodial care that can decimate
decades of retirement savings in just a few years. Some families are
choosing CCRCs. They offer a range of care depending on medical need, from
independent living that appeals to some healthy older adults seeking
social activities, transportation or meals to 24-hour skilled-nursing
care."
LTC Comment:
CCRCs and LTCI are not mutually exclusive. Many CCRCs encourage residents
to purchase long-term care insurance.
#############################
2/14/2013,
“Confronting
the legacy of Baby Boomer long-term care,” by Victoria Yates,
MedIll Reports
Quote:
"Now these aging pioneers are leaving their children with an unwanted
legacy. By 2020 a third of working Americans will be faced with ensuring
some form of long-term care for their parents."
LTC Comment:
Yet, our public policy still encourages adult children of aging Americans
to ignore LTC until parents need it, take an early inheritance, and put
Mom, Dad, or both in a nursing home on Medicaid.
#############################
2/14/2013,
“As
Alzheimer's rate soars, concern rises over costs,” by Janice Lloyd,
USA TODAY
Quote:
"New reports that the number of Alzheimer's cases in the USA will likely
triple to 13.8 million by 2050 are raising concerns about the nation's
ability to afford care. Care for patients with Alzheimer's and other forms
of dementia will increase 500% by 2050, reaching $1.1 trillion, according
to the Alzheimer's Association. This is in 2012 dollars. About 70% of
costs for Alzheimer's care are billed to Medicare and Medicaid. "
LTC Comment:
Thank goodness Medicare and Medicaid are financially whole and ready to
meet this huge challenge. Not!
#############################
2/14/2013,
“Culture
Change Means Nothing Without This,” ChangingAging
Quote:
"After a decade in assisted living, Martin Bayne knows more about long
term care than just about any living person. Fewer than one out of 25,000
residents survive that long in institutional care. And Martin has an
important message for those of us promoting culture change - nothing we're
doing will make a shred of difference until residents take responsibility
for finding purpose in their own life."
LTC Comment:
Some of you may remember Martin Bayne as "Mr. Long-Term Care" a decade or
two ago.
#############################
2/14/2013,
“A
New Commission: Time to Cheer or Yawn?,” by Paula Span, New York
Times
Quote:
"Even Connie Garner, the longtime
Kennedy staff member who directs the advocacy group called Advance Class,
was skeptical. 'What can you really do in six months?' she said. Actuaries
and policy types had been working on the Class plan for 19 months before
the plug was pulled. 'And so what if you introduce a bill?' she went on.
'You can introduce stuff and nothing happens.'"
LTC Comment:
The importance of this LTC
Commission is not what it will accomplish--zilch--but the media attention
it will draw to the LTC policy issue. That's where our long preparation of
hard evidence, solid arguments, and irrefutable logic will bear fruit.
#############################
2/13/2013,
“Married
baby boomers better prepared for retirement,” by Margarida Correia,
Employee Benefit News
Quote:
"Married
baby boomers are much more likely to have retirement savings and a
retirement savings goal. More than eight in 10 married baby boomers
(81.9%) report having retirement savings and 55.7% have gone through the
process of calculating a retirement savings goal, compared with only 66.6%
and 40.8%, respectively, for singles."
LTC Comment:
Maybe it just boils down to the old adage “two can live more cheaply than
one.”
#############################
2/12/2013,
“Caregiving
for parents: What it can cost,” by Elizabeth O'Brien, WSJ
MarketWatch
Quote:
"Ask your parents about their plans for retirement, and how they'd like to
be cared for if they are not able to do it themselves. Try to understand
your parents' financial situation, asking whether they've considered
reverse mortgages, or whether they have long-term care insurance. Siblings
can begin discussing how they might divide up caregiving responsibilities,
and how they might pay for care to be provided if they don't assume the
duties themselves."
LTC Comment:
Sound advice.
#############################
2/11/2013,
“£75,000 cap on bills for
long-term care disappoints campaigners,” The Guardian [link]
Quote:
"Bills for
long-term care in old age are to be capped at £75,000 [$116,307] in
England, in a £1bn move to be funded by dragging more people into the
inheritance tax net, it has been announced."
LTC Comment:
We should watch what England and the U.K. do about LTC financing and how
it turns out because the same measure is likely to be recommended here.
#############################
2/7/2013,
“Hawaiian
panel OKs public LTC plan bill,” by Allison Bell, LifeHealthPRO
Quote:
“If passed as written, H.B. 1 would require the director of the state's
executive office of aging to hire actuaries to analyze the idea of setting
up a ‘limited, mandatory, public’ LTCI program for Hawaii's workers,
according to the state legislative tracking system.”
LTC Comment:
Expect something similar to be the new federal LTC Commission's
recommendation.
#############################
2/6/2013,
“The
Long-Term Care Financing Crisis,” by Diane Calmus, Heritage Foundation
Quote:
"Long-term care (LTC) in the United States is in crisis. The current
system is not meeting the needs of the frail elderly and disabled
populations. As the 77 million baby boomers enter retirement, the LTC
crisis will likely grow, both because of the sheer number of the baby
boomers and because of medical advances that have increased longevity.
Regrettably, few have prepared to pay for their LTC, either through
insurance or savings. Policymakers need to move swiftly to reform the
current system to ensure that tomorrow's retirees have access to high
quality care without bankrupting future generations."
LTC Comment:
Overview of the issue by a Heritage Foundation intern.
#############################
Updated, Friday, February 15, 2013,
10:57 AM (Pacific)
Seattle--
LTC BULLET: THE LTC
DOZEN (SO FAR)
LTC Comment: Read
profiles of the first twelve appointees to the Commission on Long-Term
Care after the ***news.***
*** LTCI
UNREPRESENTED: Of the 12 appointees to the LTC Commission named so far
none represents “private long-term care insurance providers” as required
by the statute creating the Commission. We’ll see if President Obama
fills that gap when he names his three appointees. ***
*** ILTCI
CONFERENCE: Registration is still open for the Thirteenth Annual
Intercompany Long Term Care Insurance Conference to be held from March
3-6, 2013, at the Hilton Anatole in Dallas, Texas. A current schedule and
event details can be found at
http://www.iltciconf.org. Check out all the details on registration
here. This is the first of the SOA/ILTCI conferences I’ll miss, says
Steve Moses, due to a travel planning oversight. But Damon will be
there. Look him up and say hello. ***
*** NYT ON LTC
COMMISSION: The New York Times’ “New Old Age Blog” took notice
this week of the Commission on Long-Term Care. “A
New Commission: Time to Cheer or Yawn?,” by Paula Span, reflected
common doubts that the LTC Commission will accomplish much of consequence.
For example: "Even Connie Garner, the longtime Kennedy staff member who
directs the advocacy group called
Advance Class, was skeptical. ‘What can you really do in six months?’
she said. Actuaries and policy types had been working on the Class plan
for 19 months before the plug was pulled. ‘And so what if you introduce a
bill?’ she went on. ‘You can introduce stuff and nothing happens.’" Our
LTC Clipping about this article opined: “The importance of this
LTC Commission is not what it will accomplish--zilch--but the media
attention it will draw to the LTC policy issue. That's where the Center
for LTC Reform’s long preparation of hard evidence, solid arguments, and
irrefutable logic will bear fruit.” ***
*** SPEAKING OF OUR
CLIPPING SERVICE. The Center for Long-Term Care Reform’s “clipping
service” is the best way to stay abreast of critical professional news.
Don’t waste your valuable time and effort searching the internet and
reading a lot of junk just to locate what you really need to know. Steve
Moses has to do that anyway and he’ll save you the trouble, send you an
average of three key items to review per day, and provide a representative
quote and a link to the source so you can dig deeper if you wish. Premium
members of the Center and higher ($250+ per year) receive our clippings at
no extra charge. Corporate members receive one complimentary clipping
service subscription upon request and are eligible for additional
subscriptions at a discounted rate. For details, contact Damon at
206-283-7036 or
damon@centerltc.com. ***
#############################
LTC BULLET: THE LTC
DOZEN
LTC Comment:
The American Taxpayer Relief Act of 2012 (ATRA ’12) repealed the CLASS
Act and established a “Commission on Long-Term Care.” The Commission’s
mandate is to . . .
develop
a plan for the establishment, implementation, and financing of a
comprehensive, coordinated, and high quality system that ensures the
availability of long term services and supports for individuals in need of
such services and supports, including elderly individuals, individuals
with substantial cognitive or functional limitations, other individuals
who require assistance to perform activities of daily living, and
individuals desiring to plan for future long-term care needs.
The LTC Commission
will consist of 15 members, three each appointed by the President, the
Majority Leader of the Senate, the Minority Leader of the Senate, the
Speaker of the House and the Minority Leader of the House. The statutory
deadline for these appointments was February 1, 2013, by which date none
of the appointments had been made. In the meantime, however, 12 members
have been appointed. Only the President’s three appointments remain to be
named.
According to ATRA
’12, the Commission members must represent a wide range of long-term care
interests:
The
membership of the Commission shall include individuals who-
(A)
represent the interests of-
(i)
consumers of long-term services and supports and related insurance
products, as well as their representatives;
(ii)
older adults;
(iii)
individuals with cognitive or functional limitations;
(iv)
family caregivers for individuals described in clause (i), (ii), or (iii);
(v) the
health care workforce who directly provide long-term services and
supports;
(vi)
private long-term care insurance providers;
(vii)
employers;
(viii)
State insurance departments; and
(ix)
State Medicaid agencies;
(B) have
demonstrated experience in dealing with issues related to long-term
services and supports, health care policy, and public and private
insurance; and
(C)
represent the health care interests and needs of a variety of geographic
areas and demographic groups.
Who are the 12
appointees named to the Commission so far?
Special thanks to
Jonathan S. Westin, Health Policy Director,
The Jewish Federations of North America (JFNA) for preparing and
permitting us to publish the following profiles of the first 12 appointees
to the Long-Term Care Commission.
Javaid Anwar
[appointed by Harry Reid, Majority Leader of the Senate]
Dr. Javaid Anwar, MD
serves as Chief Executive Officer of Quality Care Consultants LLC,
providing consulting service in Health Care Policy/Strategy to Employers,
Health Insurers & Hospitals. Mr. Anwar serves as Vice President of Health
Care Services for MGM/Mirage, a fortune 100 company. He served as Chairman
of Governor Guinn's Committee on Access to Health Care in Nevada. He
serves as member of the Operational Board of Nevada Cancer Institute and
President of Nevada.
Judith Y.
Brachman [appointed by John
Boehner, Speaker of the House]
Judith Y. Brachman
has served with distinction in government positions throughout her career
which has been focused on issues pertaining to health services and housing
for those in need. From 1991 – 1999, Ms. Brachman served as Director of
The Ohio Department of Aging, a cabinet-level agency that administers
services and supports for older adults, their caregivers and their
families. Ms. Brachman played an integral role as director of this agency
for eight years under Former Governor George V. Voinovich where she
focused on ensuring that care would be delivered in a pragmatic yet
innovative way that would add value to the Buckeye State’s older
population.
Ms. Brachman also
served as an Assistant Secretary of Fair Housing & Equal Opportunity, U.S.
Department of Housing and Urban Development during the Reagan
Administration. A chief accomplishment of her tenure was her work on the
1988 reauthorization of the Fair Housing Act which ensured more inclusive
language that enabled persons with disabilities in need of long-term
services and supports access under the reauthorized law. Ms. Brachman has
also served on the Ohio Board of Nursing, which has afforded her deep
knowledge of the state’s workforce challenges.
Within the non-profit
sector, Ms. Brachman serves as a member of the JFNA Board of Trustees and
is currently the national co-chair of JFNA’s Aging and Family Caregiving
Committee for the past five years. In these roles, Ms. Brachman has
balanced her roles as a tireless advocate for those in need with the duty
of delivering care with a finite amount of funds from both government
sources as well as philanthropic ones.
Laphonza Butler
[appointed by Harry Reid, Majority Leader of the Senate]
Laphonza Butler is
the President of SEIU ULTCW – the United Long Term Care Workers’ Union,
which represents 180,000 in-home caregivers and nursing home workers
across California. Ms. Butler brings to her position years of experience
working to improve the lives of members by successfully running strategic
organizing campaigns, forming alliances with community and political
allies, and partnering with other unions to build workers’ strength.
Ms. Butler has played
an important role in shaping the labor movement’s strategy for organizing
the newly emergent multi-national, multi-service corporations such as
Sodexho, Compass, and Aramark. In response to the outsourcing of millions
of food service jobs, SEIU and Unite Here joined forces to form Service
Workers United to organize and represent food service workers. As the
organizing director of SEIU 1199 Maryland, she organized and bargained
collective bargaining agreements to represent hospital and nursing home
workers in facilities like Johns Hopkins Hospital.
Bruce Chernof
[appointed by House Minority Leader Nancy Pelosi]
Bruce Allen Chernof,
MD, FACP, currently serves as the President & Chief Executive Officer of
The SCAN Foundation whose mission is to advance the development of a
sustainable continuum of care for seniors. The SCAN Foundation is one of
the largest foundations in the United States focused entirely on improving
the quality of health and life for seniors.
Prior to heading The
SCAN Foundation, Dr. Chernof served as the Director and Chief Medical
Officer for the Los Angeles County Department of Health Services, after
serving as the Department’s Senior Medical Director for Clinical Affairs
and Affiliations since December 2004. Earlier in his career, Dr. Chernof
served as Regional Medical Director for California Health Programs at
Health Net, California's largest network-model managed care plan where he
managed the Healthy Families program statewide and the managed care
Medicaid program in Los Angeles County. Previously, Dr. Chernof worked as
an academic general internist in the VA system as well as at Olive View
UCLA Medical Center, serving as a UCLA faculty member.
Currently, Dr.
Chernof is an Adjunct Professor of Medicine at UCLA. Dr. Chernof served as
the founding Director of UCLA’s five-year combined MD/MBA Program. In
2002, the Geffen School of Medicine at UCLA recognized Dr. Chernof with
the Award for Excellence in Education for these innovative programs. He
has had work published in a variety of journals including Medical Care,
and the Journal of General Internal Medicine.
Judy Feder
[appointed by Harry Reid, Majority Leader of the Senate]
Judy Feder is a
professor of public policy and, from 1999 to 2008, served as dean of the
Georgetown Public Policy Institute. A widely published scholar, Dr.
Feder’s health policy research began at the Brookings Institution,
continued at the Urban Institute, and, since 1984, flourished at
Georgetown University. In the late 1980s, Dr. Feder moved from policy
research to policy leadership, actively promoting effective health reform
as staff director of the congressional Pepper Commission (chaired by Sen.
John D. Rockefeller IV) in 1989-90; principal deputy assistant secretary
for planning and evaluation at the Department of Health and Human Services
in former President Bill Clinton’s first term; a senior fellow at the
Center for American Progress (2008-2011) and, today, as an Institute
Fellow at the Urban Institute.
Dr. Feder matches her
own contributions to policy with her contributions to nurturing emerging
policy leaders. As dean from 1999 to 2008, she built the Georgetown Public
Policy Institute into one of the nation’s leading public policy schools,
whose graduates participate in policymaking, policy research, and policy
politics, not only throughout Washington but throughout the nation and the
world.
Bruce
Greenstein
[appointed by Mitch McConnell, Minority Leader of the Senate]
Bruce D. Greenstein
is the Secretary of the Louisiana Department of Health and Hospitals. He
has extensive experience in the health care field, having worked in both
the private and public sector. On the state level, Bruce worked for
Governor Lawton Chiles in Florida leading the design and administration of
health care programs. On the federal level, he served as Associate
Regional Administrator and Director of Waivers and Demonstrations in U.S.
Department of Health and Human Services (HHS), where he oversaw the state
Medicaid programs and led the federal government's Medicaid state reform
efforts. Most recently, he served as the managing director of worldwide
health for Microsoft Corp. Bruce enjoys combining his technological
knowledge and health care experience in his role as DHH Secretary.
Stephen L.
Guillard [appointed by John
Boehner, Speaker of the House]
Stephen L. Guillard
most recently served as Executive Vice President, Chief Operating Officer
and member of the Board of Directors of HCR ManorCare, a Toledo,
Ohio-based healthcare company. Prior to joining HCR ManorCare, Mr.
Guillard was Chairman and Chief Executive Officer of Harborside
Healthcare, a Boston-based post-acute services firm from 1988 to 2005.
Prior to his tenure at Harborside Healthcare, Mr. Guillard was Chairman
and Chief Executive Officer of Diversified Health Services in
Philadelphia, Pennsylvania.
Mr.
Guillard has focused on promoting quality improvements at long-term care
facilities. As part of his involvement, he served four years as chairman
of The Alliance for Quality Nursing Home Care, a coalition of 18 national
provider organizations that care for 650,000 elderly and disabled patients
annually and employ approximately 425,000 caregivers nationwide.
Neil L. Pruitt,
Jr.
[appointed by Mitch McConnell,
Minority Leader of the Senate]
Neil L.
Pruitt, Jr. is Chairman and Chief Executive officer of UHS-Pruitt
Corporation, an integrated health care company offering independent and
assisted living, skilled nursing services, rehabilitation services, home
health and hospice care as well as pharmacy services, community-based
services, medical supplies and care management. Mr. Pruitt also serves as
the Chair of the Board of Governors of the American Health Care
Association. He is a recognized leader in the health care profession and
is a member of The Alliance for Quality Nursing Home Care, a board member
of the United Hospice Foundation and past Chairman of the Georgia Health
Care Association.
Judith Stein
[appointed by House Minority Leader Nancy Pelosi]
Judith Stein founded
the Center for Medicare Advocacy, Inc. in 1986 where she is currently the
Executive Director. Ms. Stein has focused on legal representation of the
elderly since beginning her legal career in 1975. From 1977 until 1986,
Ms. Stein was the Co-Director of Legal Assistance to Medicare Patients
(LAMP) where she managed the first Medicare advocacy program in the
country. She has extensive experience in developing and administering
Medicare advocacy projects, representing Medicare beneficiaries, producing
educational materials, teaching and consulting. She has been lead or
co-counsel in numerous federal class action and individual cases
challenging improper Medicare policies and denials.
Ms. Stein is the
editor and co-author of books, articles, and other publications regarding
Medicare and related issues including the Medicare Handbook (Aspen
Publishers, Inc., 13th Edition, 2011; update annually) and a contributor
to the on-line periodical, Neiman Watchdog. Ms. Stein is a Past
President and a Fellow of the National Academy of Elder Law Attorneys (NAELA),
a past Commissioner of the American Bar Association Commission on Law and
Aging, an elected member of the National Academy of Social Insurance (NASI),
and a recipient of the Health Care Financing Administration (HCFA, now
CMS) Beneficiary Services Certificate of Merit. She represented Senator
Christopher Dodd as a delegate to the 2005 White House Conference on Aging
and received the Connecticut Commission on Aging “Age-wise Advocate Award”
in 2007.
Grace-Marie Turner
[appointed by John Boehner, Speaker
of the House]
Grace-Marie
Turner is president of the Galen Institute, a public policy research
organization that she founded in 1995 to promote an informed debate over
free-market ideas for health reform. Ms. Turner has been instrumental in
developing and promoting ideas for reform to transfer power over health
care decisions to doctors and patients. She speaks and writes extensively
about incentives to promote a more competitive, patient-centered
marketplace in the health sector.
Ms. Turner
served for a three-year term as a member of the National Advisory Council
of Healthcare Research and Quality and served as a member of the Medicaid
Commission, charged with making recommendations to modernize and improve
Medicaid.
She has
been published in hundreds of major newspapers, including The Wall
Street Journal and USA Today, and has appeared on ABC’s
20/20 and on hundreds of radio and television programs in the U.S.
Grace-Marie is founder and facilitator of the Health Policy Consensus
Group which serves as a forum for analysts from market-oriented think
tanks around the country to analyze and develop policy recommendations.
George
Vradenburg [appointed by
House Minority Leader Nancy Pelosi]
George
Vradenburg is a civic activist and philanthropist, driven by a passion for
public service. President of the Vradenburg Foundation, he founded
USAgainstAlzheimer's, a national disease advocacy network and chairs the
Geoffrey Beene Foundation-Alzheimer's Initiative on early diagnosis.
Prior to December 2003, he was Strategic Advisor, AOL Time Warner, having
served in senior executive positions at AOL, AOL Time Warner and Time
Warner. Before joining America Online, Mr. Vradenburg served as Senior
Vice President and General Counsel of CBS Inc. and Executive Vice
President of Fox, Inc.
Previous board
positions have included Vice Chair of the INOVA Health System Foundation,
Human Rights First and the Survivors’ Fund (serving families of 9/11
victims at the Pentagon). With his wife Trish, Mr. Vradenburg founded and
co-chairs the National Alzheimer’s Gala and the Alzheimer’s Action PAC and
publishes Tikkun Magazine (a Jewish and Interfaith Critique of Politics,
Culture & Society).
Mark
J. Warshawsky
[appointed by Mitch McConnell, Minority Leader of the Senate]
Mark J.
Warshawsky is Director of Retirement Research at Towers Watson, a global
human capital consulting firm. He conducts and oversees research on
employer-sponsored retirement programs and policies, social security,
financial planning and health care financing. He has written numerous
articles published in leading peer-reviewed scholarly journals,
practitioner publications, conference volumes and working papers, has
organized several research conferences, and has testified before Congress
on public policies relating to pensions, annuities and other economic
issues. He is a co-author of the Fundamentals of Private Pensions, Ninth
Edition, 2009, published by Oxford University Press, and of Retirement
Income: Risks and Strategies, forthcoming, MIT Press.
A member of the Social Security Advisory Board for a term through 2012, he
is also on the Advisory Board of the Pension Research Council of the
Wharton School.
From 2004 to 2006, Dr. Warshawsky served as assistant secretary for
economic policy at the U.S. Treasury Department. There he played a key
role in the development of the Administration’s pension reform proposals,
particularly pertaining to the funding of single-employer defined benefit
plans, which formed the basis of the Pension Protection Act of 2006. Dr.
Warshawsky’s research led directly to the 2001-2 regulatory reform of
minimum distribution requirements for qualified retirement plans. He is
the inventor of the life care annuity, a product innovation integrating
the immediate life annuity and long-term care insurance. For that
research, Dr. Warshawsky won a prize from the British Institute of
Actuaries in 2001. He has also held senior-level economic research
positions at the Internal Revenue Service, the Federal Reserve Board in
Washington, D.C. and TIAA-CREF, where he established the Paul A. Samuelson
Prize.
#############################
Updated, Monday, February 11, 2013,
11:06 AM (Pacific)
Seattle--
DAY NUMBER MINUS
10 AND LTC NEWS AND COMMENT
LTC Comment:
Another week has passed with most appointments to the Commission on
Long-Term Care still unmade. We are awaiting three appointments each by
the White House, the Senate Majority Leader and the Speaker of the House.
They were due February 1. They’re ten days late. Why the delay?
It’s speculation,
but one wonders. According to the
American Taxpayer Relief Act of 2012, the Commission’s report isn’t
due until half a year “after appointment of the members of the
Commission.” Here’s the actual language from the statute:
Not later than 6 months after
appointment of the members of the Commission . . . , the Commission shall
vote on a comprehensive and detailed report based on the longterm care
plan described in subsection (b)(1) that contains any recommendations or
proposals for legislative or administrative action as the Commission deems
appropriate, including proposed legislative language to carry out the
recommendations or proposals (referred to in this section as the
“Commission bill”).
Could it be that
for some reason the President and Congressional Republicans are delaying
their appointments in order to delay the deadline for completion of the
Commission’s report? It’s hard to imagine why the President would be so
motivated, because the Commission, heavily biased toward more government
LTC spending, is likely to follow his preferences. But Senate and House
Republicans, rumored to care little about the Commission, may well prefer
to see it languish indefinitely.
For our part at
the Center for Long-Term Care Reform, we’d like to see the Commission
appointed and underway with its deliberations. Yes, it’s likely to
recommend something we consider counterproductive. But, on the other
hand, it will attract media attention to the long-term care issue. We
have mustered the evidence and logic to address the problems and solutions
surrounding LTC in ways that do not require expansion of government’s
role; do in fact involve a smaller, less expensive role for government;
will expand the markets for private financing alternatives; and will
improve access to and quality of care for all. So, let the Commission and
the media scrutiny begin. Bring it on!
Here’s the
current status of appointments to the Commission on Long-Term Care
followed by the rest of our report this week:
2/6/2013,
“Reid
and Pelosi Appoint Members of LTC Commission,” by Emily Wilson,
Leading Age
Quote:
“Sen. Reid's appointments are:
* Javaid Anwar, a
Nevada physician.
* Laphonza Butler of California, president of the United Long-Term Care
Workers Union.
* Judy Feder of Virginia, a professor of public policy at the Georgetown
Public Policy Institute.
Rep. Pelosi's
appointments are:
* Dr. Bruce Allen
Chernof, president and CEO of The SCAN Foundation.
* Judith Stein, founder and executive director of the Center for Medicare
Advocacy, Inc.
* George Vrandenburg, civic activist, philanthropist, and president of the
Vrandenburg Foundation and founder of USAgainstAlzheimer's.”
LTC Comment:
Not a propitious start.
Judith Stein is a past president of the National Academy of Elder Law
Attorneys (NAELA), the Medicaid estate planners’ trade association. Judy
Feder is a long-time advocate of government financed long-term care who
also served on the “Pepper Commission” 23 years ago. Bruce Chernof leans
heavily toward public financing options. When will we see some balance on
this commission?
#############################
2/7/2013,
“San
Diego Hospice Files For Bankruptcy,” by Randy Dotinga, Kaiser
Health News
Quote:
"Hobbled by a federal investigation into its practice of treating patients
who had more than six months left to live, one of the biggest hospices in
the country has filed for bankruptcy as it tries to continue operating. .
. . The financial woes facing San Diego Hospice, which has slashed its
workforce and patient load, might not be isolated. Hospices nationwide are
under intense scrutiny from Medicare, and facing lower growth in their
reimbursement levels."
LTC Comment:
Juxtapose this article with the one below at 2/5/13.
#############################
2/6/2013,
“Lack of nursing home input compromised obesity-lifespan studies,
researchers say,” by Tim Mullaney, McKnight’s LTC News [link]
Quote:
"Controversial
studies have proposed recently that elevated body mass doesn't lead to
bad health outcomes after a certain age. Some proponents of the 'obesity
paradox' have said the extra padding cushions falls and provides energy
that can fuel the body during illness, extending the lifespan of obese
seniors. However, studies that were based on National Health Interview
Survey data are flawed, according to researchers from Columbia
University's Mailman School of Public Health and the University of Texas.
The NIH surveys did not include seniors living in nursing homes or
institutional settings,
skewing the results in favor of healthier people, the researchers
say."
LTC Comment:
So much for the “obesity paradox” that puzzled readers. Sloppy research
published uncritically wastes a lot of time and money.
#############################
2/6/2013,
“An
Alzheimer's 'epidemic' could hit the USA by 2050,” by Janice Lloyd,
USA TODAY
Quote:
"A new government-funded report confirms what advocacy groups have been
warning for years: The number of people in the USA with Alzheimer's
disease will almost triple by 2050, straining the health care system and
taxing the health of caregivers."
LTC Comment:
The article urges more money for research but not a word on financing or
insurance to pay for care.
#############################
2/6/2013,
“For
Women, Reduced Access to Long-Term Care Insurance,” by Jane Gross,
New York Times
Quote:
"'This was a very, very good business for a short time, with people buying
long-term care insurance like it was candy in a candy store,' said Michael
Perry, a vice president at the Opus Advisory Group, a strategic financial
planning firm in Purchase, N.Y."
LTC Comment:
Oh really? When exactly was that candy sale? I've been around the LTCI
market for 30 years and I missed it somehow. Of course, all along,
Medicaid's been giving the candy away.
#############################
2/6/2013,
“Genworth
Declines as Long-Term Care Insurance Falters,” by Zachary Tracer,
Bloomberg
Quote:
"Genworth
Financial Inc. fell the most in a month as Chief Executive Officer
Tom McInerney said he was disappointed by lower profit from long-term
care coverage. Genworth dropped 3.2 percent to $8.88 at 9:53 a.m. in New
York. The shares have advanced about 18 percent this year."
LTC Comment:
Doesn’t the annual good news (18% increase) overshadow the monthly bad
news (3.2% decline)?
#############################
2/5/2013,
“Many
Relying on Home Equity for Retirement,” by Ann Carrns, New York
Times
Quote:
"Even though the housing market has not recovered, nearly half of older
working Americans expect to use equity in their homes to help finance
their retirement, a new survey finds."
LTC Comment:
You reckon reverse mortgages have a future?
#############################
2/5/2013,
“Baby
boomers sicker than parents' generation, study finds,” Bloomberg
News Service
Quote:
"Baby boomers have more chronic
illness and disability than their parents, as their sedentary habits and
expanding girth offset the modern medicine that enables them to live
longer, a new study says."
LTC Comment:
Now there's a headline that screams
"Buy LTCI."
#############################
2/5/2013,
“Long-Term
Care Protection May Be Toothless,” by Michelle Andrews, Kaiser
Health News
Quote:
"There aren’t many investments people make to protect themselves against
something that may happen 20 or 30 years down the road. Yet that’s exactly
what
long-term care insurance purchasers do. But a provision in those
policies that people rely on to help ensure their coverage will meet their
needs decades hence may do nothing of the kind."
LTC Comment:
If insurance carriers provide benefits which were not underwritten or
included in the policy, they become like government, promising future
benefits for which they’ll have no resources to pay. And yet, it is a
reasonable argument that old nursing-home-only policies designed to pay
for “intermediate care” should cover comparable assisted living benefits
which are the modern equivalent of the defunct ICF level of care.
#############################
2/5/2013,
“When
Does End Of Life Begin: Hospice Under Scrutiny,” by Joanne Faryon,
KPBS Radio News
Quote:
"For the vast majority of patients,
hospice is paid for by Medicare. In 2010, of all the people who died and
received Medicare benefits, 44 percent chose hospice, double the number in
the past decade. But while the number of hospice patients doubled, the
cost quadrupled [link].
That divergence has led the federal government to increase scrutiny of
hospice providers -- most notably San Diego Hospice, the largest in the
state -- by questioning the eligibility of those accepted into care."
LTC Comment:
Query: To what extent has hospice
become Medicare-financed LTC?
#############################
2/4/2013,
“Sen. Mark Kirk on how his stroke
made him a better senator - and a better man,” Washington Post [link]
Quote:
"I wanted to give up almost every day. I was indescribably fatigued. I
wanted to sleep all the time, a common desire in stroke sufferers. But I
was beginning to believe. I used the prospect of returning to work, of
climbing up the steps of the Capitol and walking the 50 paces to the
Senate floor, as motivation. With every swing of my leg on the treadmill,
I became more convinced I would do it.”
LTC Comment:
Imagine going through stroke recovery without a Senator's income and
benefits, without LTC insurance, and dependent upon whatever limited care
the government deigns (and can afford) to provide.
#############################
2/2/2013,
“National LTC Network and
3in4 Association Announce Strategic Partnership,” National LTC Network
[link]
Quote:
“The National LTC Network (NLTCN) and the 3 in 4 Association are pleased
to announce a new strategic partnership. About the National LTC Network (NLTCN):
The National LTC Network has been a national leader in long term care
insurance distribution for 18 years. Member firms include some of the most
well-respected and successful firms in the LTCi industry. Find Network
members at http://www.nltcn.com About The 3in4 Association The 3in4
Association operates as a nonprofit 501(c) (6) corporation and the 3in4
Need More campaign is a public service of the 3in4 Association. The
Association is dedicated to raising awareness about the importance of long
term care planning, and also provides education on products; services and
programs to consider during plan design. More at
http://www.3in4needmore.com.”
LTC Comment:
Congratulations to Center corporate member NLTCN and the 3 in 4
Association.
#############################
2/2/2013,
“In
Hard Economy for All Ages, Older Isn't Better ... It's Brutal,” by
Catherine Rampell, New York Times
Quote:
"Young graduates are in
debt, out of work and
on their parents’ couches. People in their 30s and 40s can’t afford to
buy homes or have children. Retirees are earning
near-zero interest on their savings. In the current listless economy,
every generation has a claim to having been most injured. But the Labor
Department’s latest jobs snapshot and other recent data reports present a
strong case for crowning baby boomers as the greatest victims of the
recession and its grim aftermath."
LTC Comment:
The Age Wave crests. When will it crash?
#############################
2/2/2013,
“America's Baby Bust: The nation's
falling fertility rate is the root cause of many of our problems. And it's
only getting worse,” by Jonathan V. Last, Wall Street Journal [link]
Quote:
"Forget the debt ceiling. Forget
the fiscal cliff, the sequestration cliff and the entitlement cliff. Those
are all just symptoms. What America really faces is a demographic cliff:
The root cause of most of our problems is our declining fertility rate."
"The nation's falling
fertility rate underlies many of our most difficult problems. Once a
country's fertility rate falls consistently below replacement, its age
profile begins to shift. You get more old people than young people. And
eventually, as the bloated cohort of old people dies off, population
begins to contract. This dual problem-a population that is
disproportionately old and shrinking overall-has enormous economic,
political and cultural consequences."
"If you want to see
what happens to a country once it hurls itself off the demographic cliff,
look at Japan, with a fertility rate of 1.3. In the 1980s, everyone
assumed the Japanese were on a path to owning the world. But the country's
robust economic facade concealed a crumbling demographic structure."
"Because of its
dismal fertility rate, Japan's population peaked in 2008; it has already
shrunk by a million since then. Last year, for the first time, the
Japanese bought more adult diapers than diapers for babies, and more than
half the country was categorized as 'depopulated marginal land.' At the
current fertility rate, by 2100 Japan's population will be less than half
what it is now."
LTC Comment:
It's the Birth Dearth as much as the Age Wave causing our demographic
problems. Thanks to Center premium member Romeo Raabe for pointing us to
this article.
#############################
2/1/2013,
“Gen
X, Gen Y Not Focused on Retirement Saving,” by Margarida Correia,
Financial Planning
Quote:
"In a new report, titled 'Sowing the Seeds for Retirement: Gen X and Gen Y
Markets,' LIMRA found that younger investors are not giving retirement the
attention it deserves. Less than half of Gen X consumers (46%) selected
retirement as their top reason for saving, with vacation and travel the
top choice for 38% of Gen Xers. Younger Gen Y consumers were even more
delinquent, selecting vacations over retirement as the single most
important reason to save. More than four in 10 Gen Y investors (41%) cited
traveling as the biggest motivating factor compared with 31% who were
saving primarily for retirement."
LTC Comment:
So much for relying on the smaller Gen X and Gen Y generations to support
the bigger Boomer generation’s entitlement benefits.
#############################
1/30/2013,
“Genworth
to suspend multi-life LTCI sales,” by Allison Bell, LifeHealthPRO
Quote:
"The units, Genworth Life Insurance Company and Genworth Life Insurance
Company of New York, have decided to stop accepting new applications for
the multi-life and LTC Business Solutions programs April 15, the company
said, according to the letter. The units will continue to sell individual
LTCI coverage, and they will continue to sell coverage in the large
employer group market, according to the letter."
LTC Comment:
More LTCI industry retrenchment.
#############################
1/27/2013,
“Long-term
care insurance about to set fees by gender,” by Terry Savage,
Chicago Sun-Times
Quote:
"'The issues of long-term care - custodial care, not medical care - are
not going away anytime soon and people need to take the responsibility on
their own to plan for this type of an event,' says Brian Gordon of MAGA
LTC, an insurance brokerage that specializes in long-term care insurance
says. 'Government cannot provide the kind of care you want for your
parents or yourself.'"
"According to Stephen
Moses of the Center for Long Term Care Reform, Americans spent $149.3
billion on nursing facilities and continuing care retirement communities
in 2011. The percentage of these costs paid by Medicaid and Medicare has
more than doubled in the past four decades to 56 percent of the total, as
people have relied on the government to take care of them.
"But just think about
the strains on state and federal budgets, which will grow as boomers need
care. Will you want to be in a state Medicaid-funded nursing home? I
thought not. So with even a partial policy that covers just half of the
projected costs, plus your Social Security, you will be able to buy your
way into much better care."
LTC Comment:
The Savage Truth, right again. Article quotes Brian Gordon of Center
corporate member MAGA LTC and Steve Moses.
#############################
1/26/2013,
“The insured and the unsure: Will Obamacare spur firms to drop workers'
health cover?,” The Economist [link]
Quote:
"Mr Obama does not want companies to dump their staff on his health
exchanges, so his health law will impose a fine of $2,000 per worker on
any employer that does not sponsor health insurance (employers with 50
workers or less are exempt). Some firms will simply opt to pay the fine,
however. A 2011 survey from McKinsey, a consultancy, found that 30% of
employers would ‘definitely or probably’ drop insurance in the years after
2014. Among those who actually understood health reform, a remarkable
feat, more than half said they would."
LTC Comment:
Ominous prediction from a prestigious source.
#############################
Updated, Monday, February 8, 2013,
11:00 AM (Pacific)
Seattle--
LTC BULLET: THE LTC
PROBLEM AND SOLUTIONS: THOUSAND BULLETS RETROSPECTIVE
LTC Comment:
Overview 15 years of the “LTC Problem and Solutions” after the ***news.***
*** TODAY'S LTC
BULLET is sponsored by Claude Thau, a General Agent whose proprietary
sales tools enable clients to make informed final decisions about buying
LTCi in 15-20 minutes, let you evaluate a client's real interest in a
combo product in a few minutes, and change work-site LTCi from a
proposal-delivery process to interactive consultation. Claude is the lead
author of the Milliman Broker World LTCi Survey, was named one of the 10
"Power People" in the LTCi industry by Senior Market Advisor in 2007 and
was Chairman of the Board of the Center for Long-Term Care Financing. Test
Claude by calling 800-999-3026, x2241 or email him at claudet@targetins.com
to ask questions or get references. ***
*** LTC COMMISSION
UPDATE. Appointments to the “Commission on Long-Term Care” created by the
“American Taxpayer Relief Act of 2012” are not exactly off to a propitious
start. So far, six people have been named to the Commission and all six
advocate government-dominated LTC financing. One appointee, Judith Stein,
Director of the Center for Medicare Advocacy, is actually a former
president of the National Academy of Elder Law Attorneys, the Medicaid
estate planners’ trade association! The rest of the people appointed so
far are listed
here. Still to make their appointments to the Commission are the
President (D), the Minority Leader of the Senate (R) and the Speaker of
the House (R). Let’s hope someone ends up on the LTC Commission who
understands and can explain how government-based LTC financing has hurt
long-term care and how market-based solutions are the only way to improve
it. ***
*** VOICE OF REASON.
As the following LTC Bullet documents, your Center for LTC Reform
has for nearly 15 years explained “how government-based LTC financing has
hurt long-term care and how market-based solutions are the only way to
improve it.” The LTC Commission needs to hear our message and we intend
to deliver it proudly, frankly, and often. Help us by getting involved.
Join the Center or upgrade your membership. All our membership levels and
benefits are described
here. Once the LTC Commission is appointed and staffed, we’ll be
conveying our message to it in many different ways. We’ll write letters,
op-eds, and articles. You can help by working with us to regale
Commission members and the politicians and academics who influence them
with hard evidence, solid reasoning, and irrefutable recommendations. To
join the Center or upgrade your membership, contact Damon at 206-283-7036
or
damon@centerltc.com. ***
LTC BULLET: THE LTC
PROBLEM AND SOLUTIONS: THOUSAND BULLETS RETROSPECTIVE
LTC Comment: Once a
week, usually on Fridays, we publish our LTC Bullet. The
Bullets are often policy pieces, sort of like op-eds. You can always
find the five latest Bullets
here and archives of all 988 Bullets (so far), by date
here and by topic
here. These nearly-1000 articles are a valuable historical resource.
Please make use of them. Search for key terms using Control-F on your
keyboard.
This year, in
celebration of the thousandth LTC Bullet (likely to be issued some
time in April) and the Center’s 15th anniversary (April 1), we
are releasing a retrospective of the most interesting and dramatic LTC
Bullets that we’ve published since the Center’s founding in 1998.
We’ll highlight one Bullet per year in each of seven major topics:
“The LTC Problem and Solutions”; “Reality Check: The Facts on LTCI”;
“Medicaid Planning”; “LTC Services”; “Politics and Legislation”;
“Demographics and Other Data”; and “CLTCR News.”
Today’s Bullet
is our “Thousand Bullets Retrospective” Number 1 covering “The LTC Problem
and Solutions.” Read our summary and check out the original at the link
provided. Enjoy this walk down memory lane.
#############################
September 8, 1998:
LTC Bullet: An Open Letter to the Medicare Commission. Appointing
commissions is the government’s way of dodging and postponing problems.
The new LTC Commission is unlikely to be an exception. Certainly “The
National Bipartisan Commission on the Future of Medicare,” created by
Congress in the Balanced Budget Act of 1997, solved nothing. In this
LTC Bullet, released by the then-only-five-months-old Center for
Long-Term Care Financing, Steve Moses addressed the Medicare Commission in
an open letter later published by LTC News & Comment: “Wouldn't it
be a big load off the Commission's back if the long-term care problem
really could be solved easily and inexpensively? Here's the answer in a
nutshell: America's long-term care difficulties are largely
self-inflicted. We have been trying to solve the wrong problem. Our
costly attempts to improve long-term care over the years have ironically
made the situation worse. Why?” He proceeded to explain the problem and
the solution in this
Bullet.
September 1, 1999:
Study Shows Most Can Afford LTC Insurance. “‘Most Americans can
afford private long-term care insurance and would buy it if
well-intentioned government programs didn't anesthetize the public to this
huge financial risk.’ With that statement, Stephen A. Moses, President of
The Center for Long-Term Care Financing in Seattle, WA released a white
paper today entitled ‘The
Myth of Unaffordability: How Most Americans Should, Could and Would
Buy Private Long-Term Care Insurance.’ According to Moses, ‘this report
explains why only 7% of seniors and virtually none of the critical
baby-boomer generation have purchased private long-term care insurance.
It shows that 70% to 80% of Americans could afford this coverage if they
felt the need to buy it. The report explains how easy access to
government-financed long-term care services has impeded the market for
private insurance, assisted living and home care. Finally, 'The Myth of
Unaffordability' offers a workable, cost-free, public policy
solution--called LTC Choice--that would improve access to quality
long-term care for rich and poor alike.’” Read this
Bullet and “The
Myth of Unaffordability.”
December 7, 2000:
LTC Bullet: LTC: What's Wrong, Who's to Blame, How to Fix. "America's
long-term care service delivery and financing system is a tragic mess. The
symptoms include widespread bankruptcies, collapsed stocks, scant capital,
scarce staffing, high costs, low government reimbursement, little private
insurance, declining quality, expanding litigation, skyrocketing liability
premiums, persistent institutional bias, and a growing generation of
overwhelmed family caregivers. Unfortunately, aging demographics signal
that the worst is yet to come. What's wrong? Who's responsible? What
should be done? Those are the questions this study set out to address."
With that statement, Stephen A. Moses, President of The Center for
Long-Term Care Financing in Bellevue, Washington released a report today
entitled
The LTC Triathlon: Long-Term Care's Race for Survival. Based on
telephone interviews with 119 of the leading private financiers, providers
and insurers of long-term care, The LTC Triathlon study is a
penetrating analysis and critique of long-term care public policy. Read
this
Bullet and “The
LTC Triathlon.”
May 11, 2001:
LTC Bullet: How to Avoid the Long-Term Care Trap. "LTC Bullets
readers often ask us for sample speeches from which they can draw ideas to
use in their own public addresses. We've obliged occasionally by posting
transcripts of lectures delivered by Center for LTC Financing President
Steve Moses on our website at www.centerltc.org. We've received so much
positive feedback on these postings that we have decided to add more of
Steve's talks to the site. The speech we are posting today is entitled
'How to Avoid the Long-Term Care Trap.' You can find the transcript at
www.centerltc.org/speakers/ltc_trap.htm. Steve delivered this talk on
March 10, 2001 to a consumer audience at 'Money Watch Live 2001' in New
Orleans. This annual financial planning mega-conference attracts 6,000 to
7,000 people and is well known as the premier event of its kind in the
U.S.” Read this
Bullet and “How
to Avoid the Long-Term Care Trap.”
October 24, 2002:
LTC Bullet--How To Save Medicaid LTC. “The following article by
Claude Thau, President of Thau, Inc. and Chairman of the Board of
Directors of the Center for Long-Term Care Financing, describes a key
aspect of the Center's
LTC Choice proposal: Through Medicaid, we do two wonderful things for
people who need long-term care (LTC). First, we all pay taxes so that
indigent people can get commercial LTC that they otherwise would not be
able to afford. We should all feel proud to contribute to that cause.
Secondly, we provide support to people who are NOT indigent. If people
were to sell their homes in order to pay for LTC, and then were to
recover, they would no longer have a home to return to. To avoid such an
undesirable result, we give loans to these people, advancing their LTC
costs, with the intention of recovering when their estate is settled
[through Medicaid estate recovery]. Not only do we pool our money to
provide a loan to such people, we provide that loan on an interest-free
basis! It is a long-term loan as it does not require repayment until the
care recipient dies. And, if the recipient's spouse is living in the
house, the loan does not have to be repaid until (s)he dies. If disabled
or minor children live in the house or if adult children who were
care-givers for a couple of years live in the house, the loan continues
until they die or sell the house. It is wonderful that we provide such
loans, but such loans should be provided OUTSIDE the Medicaid program.”
Read this
Bullet and the rest of Claude’s classic article.
March 12, 2003:
LTC Bullet: The Elephant, The Blind Men and Long-Term Care.
This article by Stephen A. Moses would be good advice to the newly
appointed members of the latest “LTC Commission.” “Three blind men
approached an elephant. One touched the elephant's trunk and exclaimed, ‘a
hose.’ The second grabbed the elephant's leg and said, ‘a telephone pole.’
The third reached for the elephant's tail and concluded, ‘a rope.’ The
allegory of the blind men and the elephant teaches us the folly of making
conclusions about any complex thing without comprehending its entirety.
What can we learn about long-term care from this ancient parable?
Long-term care is a complex subject comprised of many inter-related parts.
When people, even experts, analyze one facet of long-term care without
taking into consideration all of its aspects and inter-relationships, they
often reach wrong, incomplete or misleading conclusions. Who are the
‘blind men’ of long-term care? What mistaken suppositions do they tend to
make? And what can we learn if we remove our blindfolds and observe
long-term care in its fullness and complexity?” Read this
Bullet or a version published in National Underwriter of “The
Elephant, The Blind Men, and Long-Term Care.”
September 7, 2004:
LTC Bullet: The Realist's Guide to Medicaid and Long-Term Care. “The
Center for Long-Term Care Financing, a [then] nonprofit think tank and
public policy organization, released a new report today titled ‘The
Realist's Guide to Medicaid and Long-Term Care.’ The report explains
(1) how America's long-term care service delivery and financing system
became plagued by quality problems and bankruptcies, (2) why Medicaid, a
welfare program, dominates long-term care funding and causes institutional
bias, and (3) what must be changed in public policy to control explosive
Medicaid costs and improve access to quality long-term care for everyone.
‘The Realist's Guide to Medicaid and Long-Term Care’ also highlights ten
states, five of the worst and five of the best for long-term care
policy.” Read this
Bullet and “The
Realist’s Guide to Medicaid and Long-Term Care.” Book review:
"Steve Moses and the Center for Long-Term Care
Financing have established the knowledge base and foundation from which
the future of LTC and eldercare is emerging. As I have examined and
learned from their work over the years, I have found that their views have
always been insightful, bold, astute, and 'early!' I encourage everyone in
the field of aging to review the Center's new report 'The Realist's Guide
to Medicaid and Long-Term Care.'"
Ken Dychtwald, Ph.D.
President of Age Wave,
Author of Age Wave, Age Power and Healthy Aging
September 1, 2005:
LTC Bullet: Aging America's Achilles' Heel. “Following is the Cato
Institute's press release announcing publication of a new ‘policy
analysis’ titled
Aging America's Achilles' Heel: Medicaid Long-Term Care. ‘Medicaid
Long-Term Care Abuse Is Rampant. Study urges Congress to eliminate
loopholes for long-term care recipients. WASHINGTON -- Medicaid is a
fiscal crisis waiting to happen, warns a study released today by the Cato
Institute. In
Aging America's Achilles' Heel: Medicaid Long-Term Care, Stephen
Moses, president of the Center for Long-Term-Care Reform, exposes how
Medicaid is exploited to finance nursing home care for many seniors who
could have financed such care themselves. Moses explains that while
Medicaid's financial eligibility rules are relatively tight for poor women
and children, ‘for people over the age of 65 who have medical need for
nursing-home-level care, Medicaid's eligibility rules -- contrary to
conventional wisdom -- are very loose.’” Read this
Bullet and
Aging America's Achilles' Heel: Medicaid Long-Term Care.
November 16, 2006:
LTC Bullet: The Brave New World of Long-Term Care. "The Brave New
World of Long-Term Care" presented by Stephen A. Moses to the Notre Dame
Law School Symposium on Aging, Notre Dame, IN: Thank you for inviting me
to Notre Dame Law School. It is an honor to address you and to share the
podium with such distinguished co-presenters. . . . I chose ‘The Brave
New World of Long-Term Care’ as my topic today. But let me start by
describing the ‘Pusillanimous Old World of Long-Term Care,’ that is, the
status quo.” Read this
Bullet and “The
Brave New World of Long-Term Care.”
March 16, 2007:
LTC Bullet: Don't Mess With Texans' LTC--Fix It!. "Don't Tread on
Texans' Long-Term Care-Fix It! By Stephen A. Moses. If the nation isn’t
prepared for the aging baby boomers, it isn’t because the boomers sneaked
up on us. For some time, we have seen the warnings and been conscious of
the coming ‘age wave.’ The problem is that few have taken heed and been
moved to act thus far. While national leaders warn about the coming
collapse of Medicare and Social Security, state lawmakers grow
increasingly concerned about meeting the increasing demand and cost of
Medicaid long-term care as the boomers age. To stave off the coming
disaster, state lawmakers need to respond quickly to embrace every ounce
of the limited federal flexibility available. Read this
Bullet and “Don’t
Mess With Texans’ LTC—Fix it!.”
February 7, 2008:
LTC Bullet: Hillary on LTC.
“Hillary Clinton on LTC by Stephen Moses: Presidential candidate Senator
Hillary Clinton has promised a cornucopia of LTC benefits if elected.
Would our service delivery and financing system be better or worse if she
delivered? Hillary Clinton announced her plans for long-term care public
policy a few weeks ago. Let's give due credit: none of the other
presidential candidates have committed themselves to anything like such a
detailed plan. At least she's on the record, with lots of ideas, some of
which are very appealing. First a synopsis, then our comments . . ..”
Read this
Bullet and “Hillary
Clinton on LTC.”
April 15, 2009:
LTC Bullet: Do We Need an LTC Tea Party?. “Across the country today,
at 300 locations in all 50 states, citizens are staging ‘tea parties’ to
protest high taxes and explosive public spending. That got me thinking: Do
We Need an LTC Tea Party? Think about it. We have a new President, a new
administration, a new focus on fixing government, on helping those in
need, and on holding those in power accountable. So why not tackle the
utter inequities in our long-term care financing system? For example,
Medicaid is the dominant funder of long-term care. It's supposedly a
safety net for the poor. But in truth it pays for most expensive LTC for
nearly everyone, thus crowding out privately financed home care and LTC
insurance to pay for it. What's fair about that?” Read this
Bullet.
January 15, 2010:
LTC Bullet: "Doing LTC RIght" or The Medicaid Mouse that Roared. “The
State of Rhode Island took a daring leap into radical Medicaid reform last
year. The state requested and the Centers for Medicare and Medicaid
Services (CMS) granted a ‘global Medicaid waiver.’ Under this unique plan,
Rhode Island agreed to a cap on Medicaid matching funds for five years in
exchange for more flexibility to administer the program than federal law
and regulations otherwise allow. Among other objectives, the state is
using the global waiver to increase Medicaid-financed home and
community-based services while reducing nursing home utilization. Rhode
Island's gutsy move and noble goals are praiseworthy. But will they save
money or break the bank? Will offering more services people want (home
care) and fewer they'd rather avoid (nursing homes) swell Medicaid ranks?
How will home care providers fare with higher acuity patients? How will
nursing homes survive with fewer low-acuity (profitable) residents? Why
are low-acuity patients in expensive skilled nursing facilities in the
first place? Can private financing alternatives like insurance and reverse
mortgages grow if Medicaid LTC becomes more attractive than ever? Is Rhode
Island jumping from the fiscal frying pan into a financial firestorm? What
might the state do with its global Medicaid waiver authority to reinvent
and save the LTC safety net? Can Rhode Island get it right and become a
model for the rest of the country? Our new report, titled ‘Doing LTC RIght,’
released today in collaboration with the Providence-based Ocean State
Policy Research Institute, answers all these questions.” Read this
Bullet or “Doing
LTC RIght.”
January 5, 2011:
LTC Bullet: "Medi-Cal LTC: Safety Net or Hammock?" Report Released
“Today, the
Pacific Research Institute released our report on Medicaid and
long-term care financing in California titled ‘Medi-Cal Long-Term Care:
Safety Net or Hammock?’ PRI's press release follows below. Find links to
the full study and a longer version of the press release here:
http://www.pacificresearch.org/publications/medi-cal-long-term-care.
The report is also posted on the Center's website
here. Now, check out the ‘movie’ PRI prepared spoofing Medi-Cal's
egregious LTC eligibility loopholes as documented in the
report. We at the Center for Long-Term Care Reform wish to thank the
Pacific Research Institute and its staff for their thoughtful and creative
work to bring this report to publication and to promote it with ingenuity
and humor.” Read this Bullet and “Medi-Cal
Long-Term Care: Safety Net or Hammock.”
February 3, 2012:
LTC Bullet: How to Fix Long-Term Care. The Center for Long-Term Care
Reform’s late summer, early fall [2011] project in Washington, DC
produced seven important deliverables. As described in our project report
titled “Near-Term
Prospects for Long-Term Care Financing Reform,” these work products
included:
1.
"Pay
for the Doc Fix by Fixing Medicaid LTC"
2. “Save
Medicaid LTC $30 Billion Per Year AND Improve the Program"
3. & 4. Letters from members or committees of Congress to both the
GAO and the DHHS Inspector General requesting studies relevant to our
project's objectives.
5. "Medicaid
Long-Term Care Benefits: Friendly Fire in the Class War": Steve
Moses’s testimony published by Congress.
6. "Challenges
to Effective Long-Term Care: Cost and Affordability": Steve Moses’s
speech to the 13th annual Health Sector Assembly in Sundance,
UT.
7. Six “Briefing Papers” on “How to Fix Long-Term Care” with an “Overview”
linking to each.
Today’s LTC Bullet
conveys our “Overview” of “How to Fix Long-Term Care.” Subsequent
LTC Bullets will deliver each of our six Briefing Papers in serial
form. We hope that by reading this material you will gain a better
understanding of why America’s long-term care delivery and financing
system is so dysfunctional and what it will take to fix the problem.
Thanks for supporting the Center for Long-Term Care Reform.
Read this
Bullet and “How
to Fix LTC.”
#############################
Updated, Monday, February 4, 2013,
10:39 AM (Pacific)
Seattle--
DAY NUMBER MINUS
THREE AND LTC NEWS AND COMMENT
LTC Comment: By
law, the 15 members of the Commission on Long-Term Care created by the
American Taxpayer Relief Act of 2012 were supposed to be appointed by
February 1, 2013. So, if you’re counting, we are now at Day Number Minus
Three with no appointees named.
Wonder why the
foot dragging? That’s not hard to understand. The Commission must vote
on a “comprehensive and detailed report based on the long-term care plan”
it’s mandated to produce not later than six months after appointment of
the Commission members. So, the clock doesn’t start ticking on production
of the grand LTC plan until the Commissioners are appointed. No wonder
the appointments have not been made, there’s no news as to when they’ll be
made, and no one seems to know who is under consideration. Long-term care
remains the poor relative of social issues.
On another
subject but in a similar vein, consider the following exchange between a
state bureaucrat and the Center for LTC Reform’s Regional Representative
in Wisconsin. The state official’s letter grated on me but Romeo Raabe’s
tongue-in-cheek reply was right on target. See what you think:
From: Deignan, Monica A - DHS
Sent: Tuesday, January 29, 2013 11:40 AM
To: 'rrabe@thelongtermcareguy.com'
Subject: Your letter
to Gov. Walker about the Long Term Care Insurance Partnership Program
Dear Mr. Raabe:
I have been asked to
respond to your letter to Governor Walker suggesting that state government
should be doing more to promote the Long Term Care Insurance Partnership
Program (LTIP). The goal of the Department of Health Services and the
Office of the Commissioner of Insurance, which share state-level
responsibility for this program, is to provide fair and balanced
information to the public about this initiative. See
http://www.dhs.wisconsin.gov/em/ltcip/ltcip.htma and
http://www.oci.wi.gov/srissues/ltpartnership.htm.
As public agencies,
our job is not to promote insurance products but to give the public good
information including what we believe are salient considerations in making
a major financial decision to purchase and maintain qualifying long term
care insurance policies over a long number of years.
In Wisconsin we rely
heavily on our system of Aging and Disability Resource Centers to provide
information to all people about long term care, and about conserving their
own resources to pay for their own care as long as possible. The Board on
Aging and Long Term Care is another resource that provides objective
information to people who need to learn about options for funding long
term care.
Thank you for your
interest in our publicly-funded long term care system.
Monica Deignan,
Deputy Director
Office of Family Care Expansion
Division of Long Term Care
Wisconsin Department of Health Services
Phone: 608-261-7807
Fax: 608-266-5629
email: monica.deignan@wi.gov
Romeo Raabe’s reply:
I agree completely.
The state should not promote insurance of any kind. This would include
auto insurance (which is mandated) and life insurance (which the state
sells).
My practice is doing
just fine with the referrals from financial planners who recognize the
need and suggest their wealthier clients meet with me to investigate LTC
insurance. [The LTC] Partnership [Program] is meant to encourage those of
modest means to take some personal responsibility, and rewards them for
doing so in order to save Medicaid from paying for most if not all LTC.
Since the Medicaid
program in Wisconsin does not take up a significant portion of the state
budget, there is no need to consider ways to encourage personal
responsibility. Thus keeping this program hidden deep in the OCI website
(your first link does not work) is simply not a concern here unlike other
states who are concerned about the 10,000 baby boomers a day (nationwide)
who are turning 65 and lining up to apply for Medicaid to pay for their
LTC.
Fortunately, the
state does not encourage gambling either (also not the state's business),
which is why all the television spots about each new lottery game the
state pays for are only "informational" and definitely not advertisements.
Some of the ADRC's
[Aging and Disability Resource Centers] now print the DHS [Department of
Health Services] brochure on the partnership program as they often now
function as the first intake point for people seeking Medicaid. They
realize there is not enough money to pay for everyone's long term care.
However, first mentioning a program to prevent or limit Medicaid
expenditures long after the ship has sailed is not effective at all.
The only way I
participate in Medicaid is to pay for it through my taxes, and finding
ways for people to actually pay their bill (a novel concept today) without
using it. Attorneys find ways to hide money in order to collect Medicaid
sooner. They make big money doing so and the public flocks to them, making
our budget problems worse. We've got this program, other states promote it
to save money, perhaps we could consider saving money as well?
Romeo Raabe LUTCF,
LTCP
(920) 884-3030 (800) 219-9203
www.TheLongTermCareGuy.com
#############################
2/2/2013,
“Consumer
Interest in Long Term Care Insurance Surges: Interest in long term
care insurance grew 18.3 percent in January 2013 according to a report by
the American Association for Long-Term Care Insurance,” PR.com
Quote:
"Consumer interest in long term care insurance protection grew
significantly compared with a year ago according to a report issued today
by the director of the American Association for Long-Term Care Insurance."
LTC Comment:
It’s about time!
#############################
1/31/2013,
“Analysis:
Rate pressures on pensions wipe out billions in profits,” by Ben
Berkowitz, Reuters
Quote:
"Pension charges wiped out more than $20 billion in fourth-quarter
earnings at major American companies, as persistently low interest rates
leave some of those with the largest retiree burdens no choice but to
assume they need more money now to cover liabilities later."
LTC Comment:
American companies get it. They're putting more money into their pension
funds to ensure they'll meet future commitments. LTCI carriers get it.
They've raised premiums for the same reason. When will government get
it? Social Security and Medicare trust funds have already been spent and
Medicaid doesn't even have the pretense of a phony trust fund.
#############################
1/31/2013,
“Long
Term Care Insurance Agents Warned To Avoid Scam,” ExpertClick
Quote:
"'We have been getting an increasing number of calls from frustrated
insurance agents who have paid money for long term care insurance leads
and believe they have been ripped off,' explains Jesse Slome, executive
director of the American Association for Long-Term Care Insurance, the
national trade group. 'Because the company requires an electronic
transfer of funds, they have absolutely no recourse to recoup their
money.'"
LTC Comment:
Caveat emptor.
#############################
1/31/2013,
“As
America ages, senior care options flourish,” by Matthew Perrone,
Associated Press
Quote:
"Millions of families are beginning to grapple with the one major health
expense for which most Americans are not insured: long-term care. . . .
'The people who can really afford long-term care insurance often have
enough fixed income that they don't really need it,' says Bradley Frigon,
vice president of the National Academy of Elder Law Attorneys."
LTC Comment:
Such is the advice coming from the Medicaid planners' trade association
these days.
#############################
1/30/2013,
“Sandwich generation takes a hit supporting adult children and aging
parents,” by Carol Morello, Washington Post [link]
Quote:
"The findings reflect an evolution in the image of who makes up
the sandwich generation. In the past, the burden typically was
shouldered by a middle-aged woman who stayed at home caring for young
children and aging parents. During the recession and the slow recovery,
more adult children have returned home while they look for jobs. Even
the percentage of married couples living in a parent’s home has returned
to levels not seen since the turn of the 20th century."
LTC Comment:
It’s a club sandwich generation now.
#############################
1/29/2013,
“Nursing-Home Operators Turn to the U.S.: Federal Housing Agency Backs
More Loans as Banks Hesitate to Lend Amid Uncertain Health-Care
Environment,” by A.D. Pruitt, Wall Street Journal [link]
Quote:
"The Federal Housing Administration has come to the rescue of nursing-home
operators that are having a tough time obtaining traditional financing for
mortgage loans. Big banks are becoming more hesitant to make loans to
nursing homes because of the uncertain health-care environment. Lenders
are worried that nursing-home companies may face trouble repaying the
loans in the future if they are hit with cutbacks by state governments or
the federal Medicare program."
LTC Comment:
That isn't the half of it. Medicaid already pays nursing homes $7 billion
per year less than their cost to provide the care, $22 per bed day below
allowable costs. This shortfall in public financing of all levels of care
will get worse as 16 million new recipients join the program. Scary to
think the FHA will bail out victims of yet another government-caused
financial disaster. (Thanks to clipping-service-subscriber and Premium
Elite Center member Romeo Raabe for tipping me to this article.)
#############################
1/29/2013,
“When
Consumer Protection Isn't There,” by Kathleen O'Connor, The
O’Connor Report
Quote:
"Since June 2012 I have been trying to help this lovely woman with what I
thought would be an inadvertent oversight/error with a long-term care
insurance company. Instead she is out $40,000, and has few if any
alternatives or any recourse. There is not a regulation or law on the
books-federally or in our state-that can help her."
LTC Comment:
Do LTCI carriers bear responsibility when policy holders let their
policies lapse after failing to respond to several premium notices the
post office did not forward? The publisher of "The O'Connor Report"
thinks so and engenders more ill will toward the LTCI industry.
#############################
1/28/2013,
“Complimentary Webinar: The Real Choice Employers and Employees Are Making
About Long-Term Care Insurance,” [link]
Quote:
"Phyllis Shelton will explain why worksite opportunities with long-term
care insurance are greater than ever before despite rate increases,
carriers exiting the market and the tighter underwriting and repricing
strategies employed by most carriers. She will also relate the latest
happenings in long-term care insurance to the overall picture of health
care reform."
LTC Comment:
Worksite is catching fire.
#############################
1/28/2013,
“Most Americans Aren't Familiar with Long-Term Care Insurance and
Overstate its Cost, According to InsuranceQuotes.com,” WSJ MarketWatch
[link]
Quote:
"Fifty-six percent of Americans overestimated the cost,
InsuranceQuotes.com found. Twenty percent underestimated it and only 16%
correctly pegged it as somewhere between $2,000 and $3,000 per year."
LTC Comment:
That’s a lot of people who are just waiting for good news about the real
cost of LTCI.
#############################
1/28/2013,
“Advocates:
Insurance should cover Alzheimer's brain scan,” Employee Benefit
News
Quote:
"Advanced imaging that detects plaque in the brain should be covered by
Medicare and private insurers for select people with dementia to help
diagnose or rule out
Alzheimer's disease, advocates and doctors say."
#############################
1/26/2013,
“Murder-suicide
disturbing trend among the elderly,” by Diana Reese, Washington
Post
Quote:
"Murder-suicides
among people 55 and older have increased from 21 percent in 2002 to 25
percent in 2011 of the total murder-suicides in the United States,
according to the Violence Policy Center."
LTC Comment:
Another side effect of the Fed’s driving interest rates to zero? Lacking
adequate retirement income, maybe some folks decide to check out early.
#############################
1/25/2013,
“Judge
grants final approval of Jimmo settlement,” by Tim Mullaney,
McKnight’s LTC News
Quote:
"Marking another step toward guaranteeing Medicare coverage for nursing
home residents needing skilled services, a federal judge on Thursday
approved the October 2012
settlement agreement in Jimmo v. Sebelius. The high-profile
case involved a woman
denied Medicare coverage for treatment of her chronic,
diabetes-related conditions. As a result of the settlement with the
Department of Health and Human Services, individuals who need maintenance
care for conditions that are not improving can no longer be denied
Medicare coverage under an Improvement Standard."
LTC Comment:
The final shoe has dropped with the judge's approval of this settlement.
Medicare now will have no choice but to pay for skilled nursing and home
care in many situations where coverage was previously denied. The net
effect, beyond increasing Medicare expenditures, will likely be further
LTC denial on the part of consumers who have one more reason to believe
the government pays for long-term care.
#############################
Updated, Friday, February 1, 2013,
10:37 AM (Pacific)
Seattle--
LTC BULLET: BOOK
REVIEW: “TAKE THAT NURSING HOME AND SHOVE IT”
LTC Comment: This
new anti-nursing-home book disturbs and delivers on several levels. Read
our review after the ***news.***
*** LTC COMMISSION:
Today’s the deadline for appointments to the new Commission on Long-Term
Care created by the American Taxpayer Relief Act of 2012. According to
the law: “The Commission shall be composed of 15 members, to be appointed
not later than 30 days after the date of enactment of this Act . . . .”
That would be today, Friday, February 1, 2013, but so far no news
regarding appointments. Well, I suppose if the U.S. Senate can ignore
federal law by failing to pass a budget for four years, we shouldn’t be
too surprised if the President, Senate and House leaders miss this
deadline. In the meantime, we’re waiting impatiently for news. While
government commissions usually just delay tough decisions, this one at
least gives long-term care a level of public exposure and consideration it
hasn’t received in decades. Let’s make the most of it. Stay tuned for
our plans as, if and when this LTC Commission takes form. ***
LTC BULLET: BOOK
REVIEW: “TAKE THAT NURSING HOME AND SHOVE IT”
LTC Comment:
Gerontologist and elder law attorney Susan B. Geffen’s new
book--Take That Nursing Home and Shove It: How to Secure an
Independent Future for Yourself and Your Loved Ones—delivers better on
its sub-title than its crass lead.
Shove It
begins as a diatribe against nursing
home care. It’s a sad indictment to read. Examples of deficient care,
too few caregivers, bad smells, greedy owners, lawsuits, etc. abound.
Author Geffen sees the problems with nursing home care up close and
personal because she deals professionally with people and families in
crisis who have few choices about where and how to get the care they
need. So I don’t doubt her passion or honesty on the topic.
And certainly, this
book would help long-term care insurance salespeople sell their
“stay-out-of-a-nursing-home” product, which Ms. Geffen’s book heartily
endorses. Because waking people up to the need to plan for LTC risk and
cost is so important and really is the primary contribution of the book, I
won’t hesitate to recommend it with the following qualifications.
Take the book’s
bitter criticism of nursing homes with a grain of salt and consider the
following larger context. Nursing homes are a critical part of the
long-term care continuum. They provide excellent sub-acute and
rehabilitative care, for which they are well suited and amply compensated
by Medicare and private insurance. Most of the problems that Ms. Geffen
describes derive from the use of nursing homes to provide long-term
custodial care funded at parsimonious levels by a welfare program,
Medicaid.
The nursing home
industry has made and continues to make heroic efforts to improve care
quality. But the reality in this life is that you get what you pay for.
According to a recent study, Medicaid reimburses nursing homes $7 billion
per year less than the cost of providing the care, more than $22 per bed
day below “allowable costs.” As one author put it as far back as a 1988
article in the Journal of Health Politics, Policy and Law:
One way
to interpret the current market outcomes in the nursing home sector is to
say that, despite protest to the contrary, state Medicaid programs are
acting effectively to buy the services they wish to purchase for Medicaid
patients--a limited amount of relatively low-cost care of uncertain
quality.
For a few years, I
served as an expert witness in nursing home liability lawsuits. I saw
disgusting conditions described at great length with stomach-turning
detail in depositions against certain nursing homes. But I also saw the
exact same conditions described in identical boiler-plate language in case
after case by the same law firms. I became aware of highway billboards
inviting people to contact law firms about problems with nursing homes,
but only in states where liability laws made nursing homes easy to sue. I
came to wonder how much of the alleged poor care and abuse was real and
how much contrived for monetary gain by tort lawyers and their clients.
I also concluded that
care problems in nursing homes are not solely a problem of inadequate
Medicaid reimbursement. There is also the fact that too many--in fact
most--people who receive expensive institutional long-term care rely on
Medicaid. Why is that? Because contrary to conventional wisdom, Medicaid
nursing home care is easy to get. Income rarely stands in the way. And
virtually unlimited assets are exempt.
Making the problem of
over-reliance on Medicaid even worse is that Medicaid planning attorneys
use a magic legal wand to qualify affluent seniors for Medicaid nursing
home care. Medicaid compliant annuities, special trusts, early transfers,
promissory notes, reverse half-a-loaf strategies: these and many other
legal gimmicks divert Medicaid’s scarce resources to people who should pay
their own way instead of to the neediest poor, the program’s proper
clientele.
Unfortunately, I
found little in “Shove It” to explain why our country’s inadequate LTC
service delivery and financing system is the way it is. Bitter criticism
leaving the impression that evil people prey for profit on the helpless
adds only ill will and mistrust to a very complicated story. Far better
is to focus on how to correct the deficiencies by eliminating their cause.
So take the many
valuable parts of this book to heart. Plan early and responsibly for
long-term care risk and cost. Buy long-term care insurance or use home
equity as the author recommends. But realize that access to quality care
at the most appropriate level depends more than anything else on the
ability to pay privately for care. Private payers get red carpet
treatment because they pay half again as much for their care as Medicaid
does.
Bottom line, don’t
blame nursing homes or the good people in them who struggle to provide the
best care possible despite huge obstacles. Rather, put the blame where it
belongs: on poor government policy that trapped a generation of Americans
in underfunded, welfare-financed institutions.
Praise and empower
the good people who take personal responsibility and prepare to pay for
their own care if and when needed. They and the people who struggle to
wake them up to the risk and cost of long-term care, including the author
of this bi-polar book, are the real heroes of LTC.
#############################
Updated, Monday, January 28, 2013,
10:36 AM (Pacific)
Seattle--
HCBS SAVINGS
DUBIOUS AND LTC NEWS AND COMMENT
LTC Comment:
Today’s first story calls into question the cost-effectiveness of home and
community-based long-term care. The idea that home care could save
Medicaid money has been taken for granted for decades. We’ve always been
dubious. For our analysis of the subject, see “Briefing
Paper #4: Rebalancing Long-Term Care.” Now comes research sponsored
by the U.S. Department of Health and Human Services’ Agency for Healthcare
Research and Quality that concludes the HCBS model neither provides better
care nor saves money. Well, maybe that’s why Medicaid LTC expenditures
keep going up year after year despite the fact that “rebalancing” from
nursing home to home care has continued steadily throughout the country.
A better model
for Medicaid that would solve the problem is easily attainable. Stop
paying for most expensive LTC through Medicaid. Turn Medicaid into the
safety net program it is supposed to be by radically reducing the home
equity exemption, eliminating or reducing other gaping eligibility
loopholes, and strengthening lien and estate recovery programs that ensure
people with wealth pay their own way. With fewer recipients, Medicaid
could provide a full continuum of long-term care and pay providers
adequately to ensure quality at every level of care. Taxpayers get
relief; private payers get better access to higher quality care; and to
avoid high LTC costs, more people will buy private insurance. Everyone
wins.
#############################
1/27/2013,
“Is Community Care Better Than Nursing Homes? Survey Says: It's Hard to
Tell,” by Alyssa Gerace, Senior Housing News [link]
Quote:
"Home- and community-based services (HCBS), initially touted as a
cost-saving method of delivering long-term care compared to institutional
settings, may not actually be a significantly superior setting in which to
receive care, suggests a
report from the Agency for Healthcare Research and Quality (AHRQ).
AHRQ reviewed several studies comparing different long-term care models
and concluded there's not enough evidence to truly assess their relative
effectiveness in relation to each other. It may be more accurate to simply
consider HCBS as a preferred model among consumers, rather than one that
provides better care at a lower cost, the report's authors say."
LTC Comment:
Academics, policy makers, politicians and senior advocates have pushed the
idea for decades that home and community-based care saves Medicaid money.
We’ve always argued otherwise. Now finally comes research that shows no
evidence that HCBS saves money or improves outcomes. Nevertheless,
Medicaid financing of HCBS continues to skyrocket, crowding out private
financing alternatives.
#############################
1/27/2013,
“Medicaid
Funds 70% Of Births In N.M.,” by Olivier Uyttebrouck, Albuquerque
Journal
Quote:
"Of the 27,795 babies born in New Mexico in 2010, 19,863 births - or 71
percent - were paid for by the state and federally funded health insurance
program for the poor, according to a recent analysis by the state
Legislative Finance Committee."
LTC Comment:
Babies now; LTC later.
#############################
1/24/2013,
“Six
Ways to Save on Long-Term Care Insurance,” by Donna Fuscaldo, Fox
Business
Quote:
"Despite the challenges, experts say you can buy long-term care insurance
that will protect you and won't completely break the bank. Here are six
strategies to save."
LTC Comment:
The move toward “short and fat” policies bothers me because “long and
lean” better protects against the catastrophic risk, which is the primary
role for insurance.
#############################
1/24/2013,
“Northwestern
Mutual Announces 2012 Financial Results,” WSJ MarketWatch
Quote:
"Northwestern Mutual U.S. market share rankings based on most current
sales data provided by Life Insurance Market Research Association (LIMRA).
For the 12 months ended Sept. 30, 2012: first in individual life
insurance; second in individual disability income insurance; second in
individual long-term care insurance."
LTC Comment:
Congratulations.
#############################
1/24/2013,
“What
to expect in 2013 in voluntary long-term care insurance,” by Tom
Riekse Jr., Employee Benefit Adviser
Quote:
". . . 2013 should be a year of growth in LTC sales through the worksite.
Why? Instead of employers offering group policies to employees, they are
offering individual policies sold on a multi-life basis."
LTC Comment:
The year 2013 may start a turnaround for LTCI in several ways.
#############################
1/23/2013,
“How
to sell LTCI online,” by Margie Barrie, LifeHealthPRO
Quote:
"Amy Pollock, an LTC Specialist with LTC Financial Partners, has been
selling online since 2005. She finds that selling via a live meeting
with screen sharing is efficient and very well received. She uses a
private online website where prospects view her screen on their computers.
If they have a speaker phone, they can watch and listen hands-free.
Connectivity is simple."
LTC Comment:
They said it couldn’t be done: LTCI sales by phone or online. But I’ve
been hearing some pretty amazing stories from a few producers in recent
years.
#############################
1/23/2013,
“Avoid Coming Long-Term Care Insurance Rate Increases for Women,” WSJ
MarketWatch [link]
Quote:
"Women will soon pay between 20 and 40 percent more than men for long term
care insurance as leading insurers move to sex-distinct pricing. 'Women
have an opportunity to lock in lower rates but the window for significant
savings is closing,' declares Jesse Slome, director of the American
Association for Long-Term Care Insurance, and author of A Woman's Guide To
Long-Term Care Insurance Protection."
LTC Comment:
Another fire sale.
#############################
1/23/2013,
“Creating Realistic Long-Term Care Solutions as Part of the Entitlement
Reform Debate,” by Bruce Chernof, Health Affairs [link]
Quote:
"Why should we now address long-term care, you ask, since this issue has
been endlessly dissected by technocrats while generally ignored by most
policymakers? The answer is twofold. First, because in practical terms,
there is no meaningful way to fundamentally bend this country's health
care cost curve (currently at 18 percent of gross domestic product)
respective to Medicare and Medicaid expenditures without dealing directly
with long-term care needs that nearly all Americans will face one way or
another. Second - and in human terms more relevant - solving this problem
is really about aging with dignity, independence, and choice, which all
Americans want regardless of party affiliation. Policymakers who embrace
the long-term care challenge and the charge of the new Commission as an
opportunity will be rewarded for seeking to rationalize and humanize our
current long-term care pseudo-system, which right now is excessively
unresponsive and expensive."
LTC Comment:
There is very little about which I agree with SCAN president Bruce Chernof,
who naively states: "Once individuals find themselves in need of care and
have spent out their personal resources to maintain a dignified way of
life, Medicaid becomes the payer of last resort, leaving people to rely on
it for the rest of their lives." If that were true, everyone would be
buying LTC insurance. Nevertheless, Chernof's statement quoted above is
right on point. It's exciting that LTC is back on the public policy radar
screen. I'm encouraged by the reception my research, analysis and
recommendations are receiving. I'm very hopeful this could be the year
for a breakthrough.
#############################
1/23/2013,
“Medicare, Medicaid fight could take center stage after debt ceiling
extension,” by Tim Mullaney, McKnight’s LTC News [link]
Quote:
"Long-term care operators have a stake in any changes to Medicare and
Medicaid, which together pay for more than 70% of annual long-term care
costs, according to the SCAN Foundation."
LTC Comment:
The SCAN report referenced here is an eye-opener. But reality is even
worse. When you realize that half the 21.9% of LTC costs called "out of
pocket" are really just Social Security income of people already on
Medicaid, you see that over 80% of LTC expenditures in the US come from
sources other than asset spend down. No wonder people are not as worried
about LTC risk and cost as they should be; the government pays for the
vast majority of expensive LTC. When that stops, as it must, the poor
will suffer most; the affluent will pay their own way; spend down of home
equity to fund LTC will skyrocket; and demand for LTC insurance will
explode. Likely, interest rates will soar around the same time further
pinching government budgets and hopelessly undermining Social Security,
Medicare, and Medicaid, but unleashing LTCI profitability. Bank on it!
#############################
1/23/2013,
“LTC Connection Launches New Product, Offering A ‘Super Simple’ Solution
For Selling LTC Policies,” InsuranceNewsNet [link]
Quote:
"LTC Connection, the Long-Term Care insurance (LTCi) industry's leading
provider of mandatory LTC Certification training has just announced the
launch of their newest product, the ‘LTC Super Simple Interview’.
Developed by two of the top producers in the LTCi industry, Dr. Stana
Martin and Wendy Rinehart, LTC Connection has designed a proven, turn-key
way to help producers sell LTC policies."
LTC Comment:
Congratulations and good luck with it.
#############################
1/23/2013,
“For
LTC protection, look to annuities,” by Brad Tisdale, LifeHealthPRO
Quote:
"By presenting asset-based long-term care annuities as an option for
long-term care protection, you can explain to your clients that the assets
they've already accumulated can be leveraged to secure protection for
future long-term care expenses. A major point of emphasis and value on
these products is that, should long-term care never be needed, the cash
value of the annuity is not lost and can be passed along to a
beneficiary."
LTC Comment:
Hail the hybrids. The more choices for consumers the better.
#############################
1/22/2013,
“Women and Social Security Income
Planning: The Emerging Opportunity For Niche Financial Advisory
Stewardship”, by Martha Shedden, Life & Health Advisor [link]
Quote:
"Making a smart Social Security
income election decision may be one of the most important financial
decisions a woman makes in her lifetime. Since women have longer life
expectancies, often marry men older than themselves, and, therefore, are
usually the survivor of the two, the Social Security decision has a much
greater impact on them."
LTC Comment:
It behooves LTCI producers to
understand and advise clients about Social Security planning because it
parallels LTC planning so closely. Especially for women.
#############################
1/22/2013,
“Testing
brain pacemakers to zap Alzheimer's damage,” by Lauran Neergaard,
Associated Press
Quote:
“A dramatic shift is beginning in the disappointing struggle to find
something to slow the damage of this epidemic: The first U.S. experiments
with 'brain pacemakers' for Alzheimer's are getting under way. Scientists
are looking beyond drugs to implants in the hunt for much-needed new
treatments.”
LTC Comment:
What next?
#############################
1/21/2013,
“Listen
up: Dementia linked to hearing loss,” by Janice Lloyd, USA Today
Quote:
"Cognitive problems developed 30% to 40% faster when hearing declined to
25 decibels - mild hearing loss, according to the research online in the
JAMA Internal Medicine."
LTC Comment:
Say what?
#############################
1/14/2013,
“401(k)
breaches undermining retirement security for millions,” by Michael A.
Fletcher, Washington Post
Quote:
"A large and growing share of American workers are tapping their
retirement savings accounts for non-retirement needs, raising broad
questions about the effectiveness of one of the most important savings
vehicles for old age. More than one in four American workers with 401(k)
and other retirement savings accounts use them to pay current expenses,
new data show. The withdrawals, cash-outs and loans drain nearly a
quarter of the $293 billion that workers and employers deposit into the
accounts each year, undermining already shaky retirement security for
millions of Americans. With federal policymakers eyeing cuts to Social
Security benefits and Medicare to rein in soaring federal deficits, and
traditional pensions in a long decline, retirement savings experts say the
drain from the accounts has dire implications for future retirees."
LTC Comment:
Translation: expect more truly poor elderly in the future just when
government has fewer resources to support them meaning less public funding
of LTC, more personal responsibility, and a bigger LTCI market.
#############################
Updated, Friday, January 25, 2013,
11:27 AM (Pacific)
Seattle--
LTC BULLET: LTC GOOD
NEWS/BAD NEWS
LTC Comment: 2013 is
a year of danger and opportunity for long-term care financing policy.
Find out why after the ***news.***
*** ILTCI
CONFERENCE: The 13th Annual Inter-Company Long-Term Care
Insurance Conference is coming up March 3 to March 6 in Dallas, Texas.
Get all the details and register here:
http://www.iltciconf.org/. ***
*** HELP US fight the
good fight for rational LTC policy and responsible LTC planning in this
critical year of 2013. Join the Center if you’re not a member. Upgrade
to Premium Membership, Premium Elite Membership, or Regional
Representative status. Encourage your company to become a corporate
sponsor of the Center so you get all the benefits of membership at no
personal expense and your company gets all the benefits of corporate
membership. Find out all you need to know from our “Membership Levels and
Benefits” schedule here:
http://www.centerltc.com/MembershipLevelsandBenefits.htm. Contact
Damon at 206-283-7036 or
damon@centerltc.com to join or upgrade quickly and easily. ***
*** CLIPPING
SERVICE. The Center for Long-Term Care Reform’s “clipping service” is the
best way to stay abreast of critical professional news. Don’t waste your
valuable time and effort searching the internet and reading a lot of junk
just to locate what you really need to know. Steve Moses has to do that
anyway and he’ll save you the trouble, send you an average of three key
items to review per day, and provide a representative quote and a link to
the source so you can dig deeper if you wish. Premium members of the
Center and higher ($250+ per year) receive our clippings at no extra
charge. Corporate members receive one complimentary clipping service
subscription upon request and are eligible for additional subscriptions at
a discounted rate. For details, contact Damon at 206-283-7036 or
damon@centerltc.com. ***
LTC BULLET: LTC GOOD
NEWS/BAD NEWS
LTC Comment: The
American Taxpayer Relief Act of 2012, aka the “fiscal cliff” deal,
repealed the CLASS Act and
created a 15-member “Long-Term Care Commission” to design a LTC
service delivery and financing system for the United States.
The good news is that
long-term care is again on the country’s public policy radar screen to a
degree we’ve not seen since the
Pepper Commission in 1990. The bad news is the same as the good
news.
What if the new LTC
Commission—three members each to be appointed any day now by the
President, the Senate Majority and Minority Leaders, and the House Speaker
and Minority Leader—flubs this opportunity, recommends even worse policies
than already plague long-term care, and gets them passed?
That’s why the Center
for Long-Term Care Reform will keep a close eye on the LTC Commission’s
deliberations. We’ll do all we can to bring hard data, thoughtful
analysis, and irrefutable logic to its attention. For now, however,
here’s another perspective on the good news and bad news about long-term
care.
Following is an edited
transcript of a speech delivered by Center president Stephen Moses to an
audience of leading LTC insurance producers, distributors and carriers at
a conference on January 12, 2013 sponsored by
Long-Term Care Financial Partners.
Don’t miss the irony
in Steve’s speech. The good news for LTC insurance is actually very bad
news for the U.S. economy. The only way to reconcile this seeming
conflict is to resolve the LTC financing crisis in the right way. That’s
exactly what the Center for Long-Term Care Reform will recommend to the
LTC Commission.
#############################
“The Good News and Bad
News About Long-Term Care”
by
Stephen A. Moses
I have good news and
bad news.
I’ll spend one minute
on the bad news and the rest of my time on the good news.
The bad news is that
all the reasons consumers have been in denial about the risk and cost of
long-term care still apply and they are getting worse.
- Government programs
still pay for most expensive long-term care in the USA.
- Government LTC
benefits are much easier to get than most people realize.
- And the Federal
Reserve still forces interest rates to near zero which compels carriers
to raise premiums to compensate, making LTCI harder to sell.
OK. So much for the
bad news.
Here’s why LTC
insurance carriers, distributors and producers are in the catbird seat
primed to do well doing good for your clients and for your country.
First of all,
everything that makes LTC insurance necessary remains true and is becoming
more so. For example:
- 8,000 Americans
turn 65 every day and that will continue for the next 18 years.
- 70 % of people 65+
will need some LTC and 20% will need 5 years or more
- LTC is very
expensive: As of 2012, over $80,000 per year for a nursing home; over
$42,000 for assisted living; and over $60,000 for a home health aide on
a daily 8-hour shift
But we’ve known all
that since the inception of LTC insurance in the 1970s. Nothing new
there.
So what is new? Why
will the LTC insurance market explode within your career horizons and
probably during the current four-year presidential term?
In a nutshell, all the
obstacles to a strong LTC insurance market are about to come crashing
down.
Let me walk you
through them one by one.
- The demographic
bombshell of aging boomers is only now beginning to explode with the
first of the 77-million-strong generation becoming fully eligible for
Social Security last year and for Medicare the year before.
- Government programs
funding LTC are like Wylie Coyote in the Road Runner cartoon. They’ve
gone over the fiscal cliff still wearing a silly grin, but they’re about
to fall like an anvil. Why?
- Basic federal
government debt is $16.5 trillion, over $52,000 for every man, woman and
child in the country. Our debt to Gross Domestic Product ratio is 100
percent. We borrow 42 cents of every dollar the federal government
spends. Can you believe that? We go $1 trillion deeper in debt every
year. That can’t continue for long.
- Medicaid, which
crowds out 2/3 to 90% of the LTC insurance market according to Brown and
Finkelstein, has a terrible reputation for poor care and is bankrupting
the states. Easy access to Medicaid and its big loopholes will end.
- Social Security
pays for about 13% of LTC through Medicaid spend-through, but Social
Security has a $21 trillion unfunded liability. It can’t continue
funding LTC.
- Medicare pays
generously for nursing home and home care which enables LTC providers to
survive with most of their patients funded at less than cost by
Medicaid. But Medicare has a $39 trillion unfunded liability, so it
can’t continue either.
- All three –
Medicaid, Social Security and Medicare – will be means-tested. That
means they’ll be welfare programs, not social insurance, and most middle
class and affluent Americans will get less, if anything, from them.
- Home equity will
become a major source of funding for income security, health care and
long-term care in retirement. That’s good for the reverse mortgage
business in the short run and for LTC insurance in the long run as more
people realize they need coverage to protect their home equity.
- 65 million
Americans are unpaid caregivers, 7 of 10 of whom care for someone over
50 years of age. Those numbers will skyrocket as boomers age.
So what does this mean
for you?
We’re about to enter a
brave new world of long-term care. Keep doing what you’re doing and
before long prospects will be knocking on your door instead of vice versa.
The public’s been
asleep about LTC risk and cost because a government safety net has
softened the financial consequences of going without LTC insurance since
1965.
As I’ve explained,
that’s ending.
Already you see key
changes indicating the public is finally getting the message. The age of
purchase for LTC insurance has fallen by a decade from late ‘60s to late
‘50s.
You see and hear many
more media stories about the risk and cost of long-term care.
Businesses worry more
and more about absenteeism and “presenteeism” due to employees caring for
elderly parents or worrying about them instead of working. That means
you’ll sell many more group and multi-life policies.
Attorneys, financial
planners and accountants are getting more questions from their clients
about LTC. Just last week an estate planner called me to find out who
could help him protect his clients. I referred him to a major
distributor.
People are getting
scared. They hear the news about the federal debt and deficit and
unfunded entitlements. They’re caring for elderly loved ones in huge and
rapidly growing numbers. The public programs they’ve relied on no longer
instill confidence.
These trends develop
slowly over time. They grow and grow like blowing up a balloon. Then
they pop and all of a sudden everything is different. That’s what’s going
to happen.
You are in the
enviable position of being in the right place at the right time. Some of
you have been pioneers in long-term care insurance. We know you by the
arrows in your backs.
But your time has come
now.
Watch for this
scenario to play out.
- Assuming current
government policies stay the same, the American economy will continue to
lag.
- Domestic and
international financial pressures will force interest rates up in spite
of the Federal Reserve.
- Federal debt
service will skyrocket putting more financial pressure than ever on
government programs that fund LTC such as Medicaid, Social Security and
Medicare.
- Policy makers will
have no choice but to cut back on benefits, eligibility, and provider
reimbursements.
- The quality of
publicly financed LTC will continue to decline.
- It is true already
and will be more true in the future that access to quality long-term
care at the most appropriate level is assured only to those who can pay
privately.
You are the heroes who
will show the next generation how to avoid the pitfalls of publicly
financed long-term care.
One of the things I
love most about speaking with my many friends who have been selling
long-term care insurance for two decades or more, is to hear their stories
about clients who have gone on claim.
Those clients are so
appreciative that they elevate the producers who sold them their policies
to the status of demigods. How enormously proud that must make them . . .
you . . . feel.
And that’s what the
future holds for you if you stay on course. You are the last line of
defense between the people you meet and the dismal future that awaits them
if you allow their denial about LTC risk to prevail.
So my advice to you is
“Go forth with confidence and pride. Know that long-term care insurance
is good and people need it. Everyone you protect is one less person to
drag down the social safety net for the truly needy.”
Look forward in your
own old age to the warm appreciation of all the people you’ve helped. And
enjoy your own retirement someday with the windfall of renewals that are
coming your way.
Thank you.
Stephen A. Moses is
president of the Center for Long-Term Care Reform (www.centerltc.com).
Contact him at 206-283-7036 or smoses@centerltc.com.
#############################
Updated, Tuesday, January 22, 2013,
11:32 AM (Pacific)
Seattle--
LTC COMMISSION
AND LTC NEWS AND COMMENT
LTC Comment: As
always I have my ear to the ground but so far I’ve heard little about
appointments to the new “Long-Term Care Commission” created by the
American Taxpayer Relief Act of 2012 (ATRA ‘12). Its 15 members are
supposed to be appointed by the end of January. The American Academy of
Actuaries
called for an actuary, specifically Eric Stallard, to be assigned to
the Commission and a few rumors about recommendations from Congressional
offices have floated. But not much else. Anyone out there know what’s
happening? Let us know.
#############################
January 2013,
“Medicaid's Role in Meeting the Long-Term Care Needs of America's Seniors
[link],”
Kaiser Family Foundation
Quote:
"Given the high cost of long-term care services, few elderly people can
afford these services. For seniors with long-term care needs, Medicaid,
as a complement to Medicare, serves as an essential safety net for
institutional and community-based services not fully covered by Medicare
or private insurance."
LTC Comment:
A key principle in economic analysis is the difference between the seen
and the unseen. It's easy to see the benefits Medicaid LTC provides to
people who take advantage of it. What reports like the one cited here do
not identify or explain are the unseen negatives of Medicaid. Medicaid
distorts the LTC marketplace in critical ways. Easy access to
Medicaid-financed nursing home care crowded out markets for privately
financed home care, for home equity conversion to pay for LTC, and for
private LTC insurance. The result is our LTC system's institutional bias
and over-reliance on a bankrupt welfare program that pays LTC providers
less than their cost to deliver the care. Also unmentioned in the article
and unseen to most people is that Medicaid is easy to obtain for people
with substantial incomes and assets even without legal gaming. Abuse of
annuities and promissory notes that we've highlighted recently in Center
publications expand Medicaid access even to the rich, but they too go
unacknowledged. Ironically, these unseen aspects of Medicaid LTC are
ruining Medicaid as a safety net for the poor AND simultaneously
inhibiting private insurance as a resource for the middle class and
affluent. Double jeopardy. But the Kaiser Family Foundation hides this
reality by focusing only on the benefits easily seen and ignoring the
critical unseen deficiencies of Medicaid.
#############################
1/19/2013,
“Scams
targeting veterans on the rise,” by Elliot Raphaelson, Chicago
Tribune
Quote:
"One scam involves the VA's Aid and Attendance benefit. For certain
senior veterans who served during wartime and their spouses, this covers
unreimbursed medical expenses and in-home care. In order to qualify, a
veteran's assets are considered. While there is no hard and fast limit,
generally those with assets of more than $80,000 are excluded.
Unscrupulous advisers often make presentations 'educating' seniors who
are too well off to qualify about how to reposition their assets using an
annuity in an irrevocable trust in order to meet the program's threshold.
They tell senior vets that their assets will be safe and will pass to
their heirs when they die."
LTC Comment:
VA Aid and Attendance (A&A) has no transfer of assets proscription like
Medicaid, so advisors meet with families at assisted living facilities to
promote the idea of buying an irrevocable annuity to get rid of excess
assets. While that works to get A&A, it may disqualify the person for
Medicaid. Under consideration now in Congress is a proposal to close the
A&A asset transfer loophole.
#############################
1/18/2013,
“Saying
no to long-term care,” by Jennie Phipps, Fox Business
Quote:
"Buying long-term care insurance could do you more retirement planning
harm than good, says actuary Anna Rappaport, chair of the Committee on
Post-Retirement Needs and Risk for the Society of Actuaries and key author
of a new study on retirement security."
LTC Comment:
Terrible advice from an actuary who has been touted as an expert at LTC
insurance conferences. Her argument against LTCI is exactly why people
should buy the product. To wit: "[T]he likelihood you'll need it for a
significant period of time is relatively low." When catastrophic risk is
not low, it isn't insurable! The purpose of insurance is to replace the
small risk of a catastrophic loss with the certainty of an affordable
premium. That's what LTC insurance does and that's why people need it.
#############################
1/17/2013,
“Significant Financial Management and Fiscal Challenges Reflected in U.S.
Government's 2012 Financial Report [link],”
Government Accountability Office
Quote:
"The U.S. Government Accountability Office (GAO) cannot render an opinion
on the 2012 consolidated financial statements of the federal government
because of widespread material internal control weaknesses, significant
uncertainties, and other limitations."
LTC Comment:
Good grief! The federal government borrows 42 cents of every dollar it
spends and the accountants with the green eye shades at GAO can't even
figure out where it's going.
#############################
1/16/2013,
“Slowly
Dying Patients, an Audit and a Hospice's Undoing,” by Randy Dotinga,
Kaiser Health News
Quote:
"While hospices normally treat patients with fewer than six months to
live, San Diego Hospice often served people who had much more time left. .
. . Across the country, hospices with generous admissions policies may
find themselves on life support too. Medicare, which heavily funds hospice
programs, is cracking down on the industry's growing habit of embracing
those whose deaths aren't imminent."
LTC Comment:
More evidence that government is, and will have to continue, cutting back
on benefits that have—for decades—softened the financial blow of critical
illness and long-term care. As this reality penetrates the public
consciousness, demand for LTCI and CI coverage will increase
proportionately.
#############################
1/16/2013,
“Alzheimer's breakthrough: Vaccine may be on its way, researchers say [link],”
by Tim Mullaney, McKnight’s LTC News
Quote:
"Researchers say they've made a major breakthrough in the effort to
develop an Alzheimer's disease vaccine. . . . News of the potential
vaccine breakthrough comes shortly after a government panel delivered
recommendations to the Advisory Council on Alzheimer's Research, and
outlined ways to improve long-term care for individuals with dementia.
The panel said the Centers for Medicare & Medicaid Services should work
with Congress to update Medicare coverage to enable more comprehensive
care for those with Alzheimer's or other types of dementia."
LTC Comment:
Even as the government ratchets back hospice care (see preceding item), a
"government panel" urges more Medicare coverage for dementia care. One
foot on the brake; the other on the gas pedal. Typical of government’s
choppy LTC policy.
#############################
1/15/2013,
“Creating Realistic Long-Term Care Solutions as Part of the Entitlement
Reform Debate [link],”
Health Policy Forum
Quote:
"Today, Americans who want to plan for their needs as they age have few
viable options. The current private long-term care insurance market is
effectively broken, as it has never held more than 10 percent of the
potential market and many insurers have stopped offering these policies
altogether. Reasons for lack of uptake are many: lack of public
understanding and interest, high monthly premiums, and underwriting
standards that make it difficult to qualify for coverage."
LTC Comment:
This ridiculous statement by SCAN president Bruce Chernof displays a gross
misunderstanding of private long-term care insurance. Government policies
cause the low take-up of LTCI, including easy access to public financing
after LTC is needed and Federal Reserve measures that force interest rates
to levels that obviate the possibility of profit. Hopefully, we can wake
the new LTC Commission up to the real problems with LTC financing before
they undertake another misguided initiative like CLASS.
#############################
1/15/2013,
“Advanced Resources Marketing, a leader in Long-Term Care Insurance
announces New Office in Florida [link],”
by Aria Munro, eNewsChannels
Quote:
"Advanced Resources Marketing (ARM), one of the country's largest
distributors of Long Term Care Insurance (LTCi) announced today the
opening of a satellite distribution office in Tampa, Fla. This location
joins the main office in Boston, and satellite offices in Merion Station,
Pa., and McLean, Va., as a growing part of ARM's distribution network."
LTC Comment:
Hearty congratulations to Joe Pulitano, Henrik Larsen and their team at
ARM, a Bronze-level corporate member of the Center for LTC Reform.
#############################
1/14/2013,
“Medicaid
eligibility changes affect thousands,” by Anna Oakes, Watauga
Democrat
Quote:
"Thousands of residents in adult-care facilities across the state,
including the elderly, persons with mental illness and adults with
developmental disabilities, could soon be forced to move as a result of
new Medicaid eligibility rules. Effective Jan. 1, the state requires
persons who are reimbursed by Medicaid for personal care services to need
limited hands-on assistance with at least three of five qualifying daily
living activities: eating, dressing, bathing, toileting and mobility.
Persons can also qualify if they need assistance with two of those
activities in which one requires extensive assistance. The change raised
the bar on eligibility requirements - prior to Jan. 1, adult-care home
residents qualified for the Medicaid reimbursement if they needed
assistance with one daily living activity."
LTC Comment:
Another state Medicaid program (North Carolina following Minnesota’s lead)
goes to a three-ADL trigger for Medicaid LTC assistance. Because states
cannot restrict Medicaid eligibility based on financial resources due to
the Maintenance of Effort rule in ObamaCare, they turn to higher
restrictions based on medical need or disability. This has the effect of
denying assistance to the poor who desperately need help while still
allowing people with higher income and assets to get the care they could
have paid for themselves assuming they also meet the 3-ADL standard.
#############################
1/14/2013,
“In
the Index of Economic Freedom, Liberalization Slips,” by Terry Miller,
Wall Street Journal
Quote:
"The foundations of economic freedom are weakening around the world,
according to the 2013 Index of Economic Freedom, published today by the
Heritage Foundation and The Wall Street Journal. Particularly concerning
are the rise of populist 'democratic' movements that use the coercive
power of government to redistribute income and control economic activity.
. . . Surprisingly, ailing Europe made the most progress last year, while
the average economic-freedom score world-wide increased only a 10th of a
point. The threat of imminent collapse in the euro zone has prompted some
serious efforts to rein in government spending and taxation. Leading the
way in Europe are those countries that know firsthand the ravages of
socialism. Georgia, a former Soviet republic, showed the most improvement
in the 2013 index, with Estonia and Poland not far behind. Even Sweden,
the former poster child for democratic socialism, has adopted more
market-oriented policies promoting economic freedom. . . . The United
States, ranked only 10th most free in the world this year, joins Ireland
as the only advanced economies to have lost economic freedom five years in
a row."
LTC Comment:
Ominous trend.
#############################
1/14/2013,
“MedPAC calls for
permanent reauthorization of Medicare Advantage plan covering nursing home
residents [link],”
by Tim Mullaney, McKnight’s LTC
News
Quote:
“The Medicare Advantage special needs plan that enrolls nursing home
residents, set to expire at the end of 2014, will be permanently
reauthorized if Congress acts on recommendations proposed by the Medicare
Payment Advisory Commission (MedPAC). . . .
Dual-eligible issues are of
interest to long-term care operators, as LTC services account for a
majority of the $150 billion in
Medicaid spent on duals, a recent report showed.”
LTC Comment:
Dual eligibles (people on Medicare and Medicaid) are hugely expensive.
Great effort is being made to manage their care more efficiently and
cost-effectively. As important, but unaddressed, are ways to prevent
people from becoming Medicaid eligible (hence a dual because most are
already on Medicare) in the first place. That’s the focus of our report
titled “Briefing Paper #5: Dual Eligibles and Long-Term Care: How to
Save Medicaid LTC $30 Billion Per Year and Pay for the ‘Doc Fix’”:
www.centerltc.com/BriefingPapers/5.htm -- (PDF
for print).
#############################
1/13/2013,
“Documenting
a Generation's Fall,” by Michael Winerip, New York Times
Quote:
"One of the lasting effects of the Great Recession has been the economic
spiral downward of the American middle class, and no group has been harder
hit than the boomer generation, men and women in the prime of their
working lives."
LTC Comment:
The more this message permeates the media, the more people will realize
they're on their own, cannot count on the entitlement safety net, and need
to insure privately against growing risks.
#############################
1/13/2013,
“Genworth Stock Downgraded on Long-Term Care Insurance Risks [link],”
by Jason Oliva, Senior Housing News
Quote:
"Genworth Financial (NYSE: GNW) saw its stock rating downgraded from
‘Neutral’ to ‘Underperform’ this week in a report from global financial
services company Credit Suisse, related to continued uncertainty in the
long-term care insurance industry. The downgrade comes following the
recent rally in shares reached in late July to early August of more than
100% and over 50% since mid-November and reflects risks Genworth faces in
its long-term care insurance business."
LTC Comment:
Another blow to LTCI’s investment reputation which will soar again when
economic gravity finally takes hold, interest rates shoot up, and public
confidence in government LTC programs plummets.
#############################
Updated, Friday, January 18, 2013,
10:47 AM (Pacific)
Seattle--
LTC BULLET: SO WHAT
IF THE GOVERNMENT PAYS FOR MOST LTC?, 2011 DATA UPDATE
LTC Comment: Heads
up! We're about to explain why long-term care insurance sales have
disappointed, why people don't "use their homes to stay at home" and why
LTC providers who depend on public financing are at risk.
LTC BULLET: SO WHAT
IF THE GOVERNMENT PAYS FOR MOST LTC?, 2011 DATA UPDATE
LTC Comment: Once a
year around this time the Centers for Medicare and Medicaid Services (CMS)
report health care expenditure data for the latest year of record.
Recently, CMS posted 2011 statistics on its website at
http://www.cms.hhs.gov/NationalHealthExpendData/downloads/tables.pdf.
The current issue of
Health Affairs (Vol. 32, No. 1, pps. 87-99) contains a summary and
analysis of the new data titled “National Health Spending in 2011:
Overall Growth Remains Low, but Some Payers and Services Show Signs of
Acceleration." Registered
subscribers to Health Affairs can access the full text of that
article online at
http://content.healthaffairs.org/content/32/1/87.full.
Note that CMS changed
the definition of National Health Expenditure Accounts (NHEA) categories
in 2011, adding for example Continuing Care Retirement Communities (CCRCs)
to Nursing Care Facilities. This change had the effect of reducing
Medicaid's reported contribution to the cost of nursing home care from
over 40% in 2008 to under one-third (32.8%) in 2009. CMS also created a
new category called "Other Third Party Payers" (7.1%) which includes
"worksite health care, other private revenues, Indian Health Service,
workers' compensation, general assistance, maternal and child health,
vocational rehabilitation, other federal programs, Substance Abuse and
Mental Health Services Administration, other state and local programs, and
school health." For definitions of all NHEA categories, see
http://www.cms.gov/NationalHealthExpendData/downloads/quickref.pdf.
Following is our
annual analysis of the new nursing home and home health care data.
------------------
"So What If the
Government Pays for Most LTC?, 2011 Data Update"
by
Stephen A. Moses
Ever wonder why LTC
insurance sales and market penetration are so discouraging? Or why
reverse mortgages are rarely used to pay for long-term care? Or why LTC
service providers are always struggling to survive financially and still
provide quality care? Read on.
America spent $149.3
billion on nursing facilities and Continuing Care Retirement Communities
in 2011. The percentage of these costs paid by Medicaid and Medicare has
gone up over the past 41 years (from 26.8% in 1970 to 56.1% in 2011, up
29.3 % of the total) while out-of-pocket costs have declined (from 49.5%
in 1970 to 26.7% in 2011, down 22.8% of the total). Source:
http://www.cms.hhs.gov/NationalHealthExpendData/downloads/tables.pdf,
Table 15.
SO WHAT? Consumers'
liability for nursing home and CCRC costs has declined by 46% in the past
four decades, while the share paid by Medicaid and Medicare has more than
doubled, up 109%.
No wonder people
are not as eager to buy LTC insurance as they would be if they were more
at risk for the cost of their care!
No wonder they don't use home equity for LTC when Medicaid exempts up to
$802,000 of home equity. No wonder nursing homes are struggling
financially--their dependency on parsimonious government reimbursements is
increasing while their more profitable private payers are disappearing.
Unfortunately, these
problems are even worse than the preceding data suggest. Over half of
the so-called "out-of-pocket" costs reported by CMS are really just
contributions toward their cost of care by people already covered by
Medicaid! These are not out-of-pocket costs in terms of ASSET spend
down, but rather only INCOME, most of which comes from Social Security
benefits, another financially struggling government program. Thus,
although Medicaid pays less than one-third of the cost of nursing home
care (30.9% of the dollars in 2011), it covers two-thirds of all nursing
home residents. Because people in nursing homes on Medicaid tend to be
long-stayers, Medicaid pays something toward nearly 80 percent of all
patient days.
SO WHAT? Medicaid
pays in full or subsidizes almost four-fifths of all nursing home patient
days. If it pays even one dollar per month (with the rest contributed
from the recipient's income), the nursing home receives Medicaid's
dismally low reimbursement rate.
No wonder the
public is not as worried about nursing home costs as they would be if they
were more at risk for the cost of their care.
No wonder nursing homes are facing insolvency all around the United States
when so much of their revenue comes from Medicaid, often at reimbursement
rates less than the cost of providing the care.
Don't be fooled by the
8.3% of nursing home costs that CMS reports as having been paid by
"private health insurance" in 2011. That category does not include
private long-term care insurance. (See category definitions
here.) No one knows how much LTC insurance pays toward nursing home
care, because most LTCI policies pay beneficiaries, not nursing homes.
Thus, a large proportion of insurance payments for nursing home care gets
reported as if it were "out-of-pocket" payments because private payers are
paid by their LTC insurance policies and then they write the checks to the
nursing homes. This fact further inflates the out-of-pocket figure
artificially.
How does all this
affect assisted living facilities?
ALFs are 80% private pay and they cost an average of $42,600 per year
(Source: 2012 MetLife survey
here).
Many people who could afford assisted living by spending down their
illiquid wealth, especially home equity, choose instead to take advantage
of Medicaid nursing home benefits. Medicaid exempts one home and all
contiguous property (up to $536,000 or $802,000 depending on the state),
plus—in unlimited amounts—one business, one automobile, prepaid
burials, term life insurance, personal belongings and Individual
Retirement Accounts not to mention wealth protected by sophisticated asset
sheltering and divestment techniques marketed by Medicaid planning
attorneys. Income rarely interferes with Medicaid nursing home
eligibility unless such income exceeds the cost of private nursing home
care.
SO WHAT? For most
people, Medicaid nursing home benefits are easy to obtain without spending
down assets significantly and Medicaid's income contribution requirement
is usually much less expensive than paying the full cost of assisted
living.
No wonder ALFs are
struggling to attract enough private payers to be profitable.
No wonder people are not as eager to buy LTC insurance as they would be if
they were more at risk for the cost of their care. This problem has been
radically exacerbated in recent years because more and more state Medicaid
programs are paying for assisted living as well as nursing home care,
which makes Medicaid eligibility more desirable than ever.
The situation with
home health care financing is very similar to nursing home financing.
According to CMS, America spent $74.3 billion on home health care in
2011. Medicare (44.2%) and Medicaid (37.1%) paid 81.3% of this total and
private insurance paid 6.9%. Only 7.6% of home health care costs were
paid out of pocket. The remainder came from several small public and
private financing sources. Data source:
http://www.cms.hhs.gov/NationalHealthExpendData/downloads/tables.pdf,
Table 14.
SO WHAT? Only one
out of every 13 dollars spent on home health care comes out of the pockets
of patients and a large portion of that comes from the income (not assets)
of people already on Medicaid.
No wonder the
public does not feel the sense of urgency about this risk that they would
if they were more at risk for the cost of their care.
Bottom line, people
only buy insurance against real financial risk. As long as they can
ignore the risk, avoid the premiums, and get government to pay for their
long-term care when and if such care is needed, they will remain in denial
about the need for LTC insurance. As long as Medicaid and Medicare are
paying for a huge proportion of all nursing home and home health care
costs while out-of-pocket expenditures remain only nominal, nursing homes
and home health agencies will remain starved for financial oxygen.
The solution is
simple. Target Medicaid
financing of long-term care to the needy and use the savings to fund
education and tax incentives to encourage the public to plan early to be
able to pay privately for long-term care. For ideas and recommendations
on how to implement this solution, see
www.centerltc.com.
Note especially:
“How to Fix Long-Term
Care,” at
http://www.centerltc.com/BriefingPapers/Overview.htm
"Medi-Cal Long-Term
Care: Safety Net or Hammock?" at
http://www.centerltc.com/pubs/Medi-Cal_LTC--Safety_Net_or_Hammock.pdf;
"The LTC Graduate
Seminar Transcript" at http://www.centerltc.com/members/LTCGraduateSeminarTranscription112712.pdf
(requires password, contact
smoses@centerltc.com);
"Aging America's
Achilles' Heel: Medicaid Long-Term Care" at
http://www.centerltc.com/AgingAmericasAchillesHeel.pdf; and
"The Realist's Guide
to Medicaid and Long-Term Care" at
http://www.centerltc.org/realistsguide.pdf.
In the Deficit
Reduction Act of 2005, Congress took some small steps toward addressing
these problems. A cap was placed on Medicaid's home equity exemption and
several of the more egregious Medicaid planning abuses were ended. But
much more remains to be done. With the Age Wave starting to crest and
threatening to crash over the next two decades, we can only hope it isn't
too late already.
Stephen A. Moses is president of the Center
for Long-Term Care Reform in Seattle, Washington. The Center's mission is
to ensure quality long-term care for all Americans. Steve Moses writes,
speaks and consults throughout the United States on long-term care
policy. He is the author of the study "Aging America's Achilles' Heel:
Medicaid Long-Term Care," published by the Cato Institute (www.cato.org).
Learn more at
www.centerltc.com or email
smoses@centerltc.com.
#############################
Updated, Monday, January 14, 2013,
11:58 AM (Pacific)
Seattle--
LTC NEWS AND
COMMENT
LTC Comment:
Finally, long-term care policy is back in the national spotlight. Well,
maybe “spotlight” is too grandiose, but the new LTC Commission created by
the American Taxpayer Relief Act of 2012 at least shines a flashlight on
our issue. The Commission’s members will be appointed by the end of this
month and it’s mandated to report within six months. Already think tanks
and lobby groups are lining up their intellectual and financial firepower
to influence the Commission. Your Center for LTC Reform will present the
case for responsible LTC planning and rational, market-based policy. Let
the games begin!
#############################
1/8/2013,:
“House GOP Members Probe Medicaid Eligibility Problems in the States,
by Jane Norman,
CQ HealthBeat (gated)
Quote:
“As Congress sharpens its
focus on deficit reduction and health care spending, some GOP members of
Congress are taking a fresh look at how people shelter their assets in
order to qualify for Medicaid long-term care. The move revives a
long-running debate over whether Medicaid should be regarded as a
middle-class entitlement or an assistance program for the truly needy. It
also raises the question of whether 2005 changes in the law were effective
in ensuring that people with enough money to afford nursing home care
couldn't game the system.”
LTC Comment:
Following is my email to the author
of this article. Last
Friday's LTC Bullet compiled and analyzed in greater detail the
Governors' responses to this Congressional inquiry about Medicaid estate
planning abuses.
“Dear Ms. Norman:
Thanks for an excellent article on the Medicaid planning issue (and for
citing my 2011 Congressional testimony). A key point often missed is
that, as egregious as the strategies cited in your article are, the far
bigger problem is that, contrary to conventional wisdom that ‘individuals
over 65 generally qualify for Medicaid long-term care if they have assets
of less than $2,000 and an annual income of less than 74 percent of the
federal poverty level,’ the reality is very different. Income rarely
obstructs Medicaid LTC eligibility. It happened only twice in the history
of the Rhode Island Medicaid program as I reported in a study recently: “Doing
LTC RIght.” Medicaid exempts not only home equity (up to $802,000 in
some states) but also, in unlimited amounts, one business, one car,
prepaid burial expenses, term life insurance, personal belongings and
IRAs. This is why so few people plan for LTC costs and so many end up
dependent on Medicaid, leaving that program a poor safety net for the
truly needy. I'll attach my professional bio. Let me know if I can help
when you write on this topic in the future. Regards, Steve Moses.”
#############################
1/11/2013,
“Rob
Cohen Joins LTC Global, Inc. as Agency Sales Executive,”
Quote:
"LTC Global, Inc., a leading national distributor of senior market
insurance products, today announced that Rob Cohen has joined LTC Global's
main insurance agency subsidiaries, ACSIA Long Term Care, Inc. (ACSIA) and
United Insurance Group Agency, Inc. (UIG), as Executive Vice President -
Sales. In his new role, Cohen will manage the agent sales forces of ACSIA
and UIG."
LTC Comment:
Congratulations to Rob Cohen and LTC Global.
#############################
1/9/2013,
“Beta blockers could reduce risk of Alzheimer's, study indicates,”
McKnight’s LTC News [link]
Quote:
"Men taking beta blockers to treat high blood pressure may also be
benefiting from an unintended side effect: a reduced chance of brain
changes associated with Alzheimer's disease."
LTC Comment:
Cardio-vascular serendipity.
#############################
1/9/2013,
“Even
Fewer Geriatricians in Training,” by Paula Span, New York Times
Quote:
"The number of doctors enrolling in
the nation's fellowship programs to become geriatricians has dropped
again, to 251 this year from 279 last year. . . . People who think about
medical education have essentially given up on trying to train enough
geriatricians to care for the expanding over-70 population - 36,000, by
one estimate. We're simply too far in the hole, with fewer than 7,000 and
falling.”
LTC Comment:
We’ve warned about the forthcoming shortage of geriatricians for many
years. Unfortunately, it’s too late now to fix the problem before it
becomes a crisis.
#############################
1/9/2013,
“Alliance Seeks to Ease Shift to Senior Living and Long-Term Care,”
PRNewswire [link]
Quote:
"Today LTC Financial Partners, LLC (LTCFP) announces an alliance with
Alternatives for Seniors, the leading senior housing and services online
directory."
LTC Comment:
Congratulations, LTCFP.
#############################
1/8/2013,
“Long-term
care: 'The real cap will be £200,000, not £75,000',” by Chris Horlick,
The Telegraph
Quote:
"We are delighted that Andrew Dilnot's proposals have stimulated a debate
about how care should be funded. This is particularly important for the
41pc of elderly people in the care system who are 'self-funders' because
they have over £23,250 in assets including property (the limit in outside
England; the rules are different elsewhere). Many are not very wealthy
yet they are, in my opinion, among the most overlooked and underserved in
the care system."
LTC Comment:
England considers capping private LTC costs at around $120,000 with
government picking up costs over that amount in hopes that a private
insurance market will grow to pick up the capped upfront amount. That
approach has been proposed here in the USA before and will likely be one
of the ideas recommended again by the new LTC Commission created by the
American Taxpayer Relief Act of 2012 (the fiscal cliff deal). One more
reason to keep a close eye on that new LTC Commission.
#############################
1/7/2013,
“Long Term Care Insurance Association Website Achieves Milestone,” by
Jesse Slome, ExpertClicks [link]
Quote:
"More than half a million individuals visited the website of the American
Association for Long-Term Care Insurance in 2012, a significant increase
over the prior year according to the industry trade group. 'I think
people are finally getting the message that planning for the eventual risk
of needing long term care is essential,' declares Jesse Slome, executive
director of the American Association for Long-Term Care Insurance, the
national industry trade group headquartered in Los Angeles. ' As a result,
more individuals than ever are seeking information on how insurance works,
how much to buy and ways to reduce the cost of this important
protection.'"
LTC Comment:
Proof that interest in private LTC insurance is growing even as the
public’s confidence in government safety net programs declines.
#############################
1/7/2013,
“Growth
of Health Spending Stays Low,” by Robert Pear, New York Times
Quote:
"National health spending climbed to $2.7 trillion in 2011, or an average
of $8,700 for every person in the country, but as a share of the economy,
it remained stable for the third consecutive year, the Obama
administration said Monday. . . . Kathleen Sebelius, the secretary of
health and human services, said that 'the statistics show how the
Affordable Care Act is already making a difference,' saving money for
consumers. But a report issued by the Centers for Medicare and Medicaid
Services, in her department, said that the law had so far had 'no
discernible impact' on overall health spending."
LTC Comment:
To explain the latest available data, we'll publish our annual LTC
Bullet titled "So What If the Government Pays for Most Long-Term
Care?" on Friday.
#############################
1/7/2013,
“Leading Long Term Care Insurance Distributors Announce Merger,” by
National LTC Network, HeraldOnline [link]
Quote:
"The National LTC Network is pleased to announce the merger of two of its
member firms' Long Term Care insurance brokerage operations. Effective
January 1, 2013, Individual Commercial Brokerage, Inc. (ICB) and Gelbwaks
Executive Marketing Corp. (GEM) are combining their two award-winning and
nationally-recognized operations."
LTC Comment:
Congratulations to both industry stalwarts and Center supporters.
#############################
1/7/2013,
“Long-Term
Care Plan Gets Thrown Off the Fiscal Cliff,” by Mike Anthony,
MedicaidPlanning.org
Quote:
"Without the benefit of a guaranteed-issue government insurance, seniors
face their own Fiscal Cliff. The only way for the uninsured to
protect themselves is to seek refuge under Medicaid, but many
don't know how to minimize the sting of the Medicaid spend down. . . .
With the absence of the CLASS Act, Medicaid Planning becomes all the more
essential." [Emphasis in the original]
LTC Comment:
This is how LTCI's competition in the Medicaid planning bar is playing the
fiscal cliff deal and the demise of CLASS. Boils the blood!
#############################
1/6/2013,
“Deadbeat Illinois: Long-term care facilities feel state budget pinch,” by
Kevin Haas, State Journal-Register [link]
Quote:
"Organizations that provide long-term care for the elderly in Illinois
operate in a kind of business limbo, unsure of when they'll receive from
the state the Medicaid reimbursements they rely on to keep their doors
open. Right now, the payment backlog is about six months, forcing
organizations to find creative ways to manage without half of the annual
revenue that finances care for two-thirds of patients in nursing homes and
about 60 percent of those in assisted-living centers."
LTC Comment:
Expect more reports like this one in more states. We saw this coming when
we published the “Magic
Bullet: How to Pay for Universal Long-Term Care, A Case Study in
Illinois” way back in 1995.
#############################
1/6/2013,
“Use Health Savings Account to Pay Long Term Care Insurance Costs,” by
Jesse Slome, ExpertClicks [link]
Quote:
"The 14 million American individuals who have health savings accounts were
encouraged to use this benefit to pay for long-term care insurance
protection."
LTC Comment:
HSAs solve the acute health care financing challenge and they could go a
long way toward solving the LTC financing challenge.
#############################
1/5/2013,
“Social
Security: It's Worse Than You Think,” by Gary King and Samir S. Soneji,
New York Times
Quote:
"[T]he Social Security Administration underestimates how long Americans
will live and how much the trust funds will need to pay out - to the tune
of $800 billion by 2031, more than the current annual defense budget - and
that the trust funds will run out, if nothing is done, two years earlier
than the government has predicted."
LTC Comment:
Worse news, of course, is that there is nothing in the Social Security
“trust fund” in the first place. All that money has already been borrowed
and spent by the federal government. All that’s in the trust fund is IOUs
from Uncle Sam who is already borrowing 42 cents of every dollar he
spends. Sam’s not a rich uncle; he’s a poor relative.
#############################
12/28/2012,
“China
requiring people to visit their aged parents,” Associated Press
Quote:
"Visit your parents. That's an order. So says China, whose national
legislature on Friday, Dec. 28, 2012 amended its law on the elderly to
require that adult children visit their aged parents ‘often’ - or risk
being sued by them.”
LTC Comment:
Talk about "filial responsibility"!
#############################
12/2/2012,
“New
Limits on Veterans Pension Benefits,”
Marshall Elder and Estate Planning Blog
Quote:
"There is even more bad news on the way for future pension claimants.
Veterans can expect the next Congress to pass new legislation that will
penalize veterans who have made gifts that reduced their net worth. See
my earlier blog post GAO recommends changes to VA Pension Eligibility
Rules for more about these proposed transfer penalties. These changes will
make it both more complicated and more difficult for veterans to claim
pension benefits. The Government is looking to reduce the growing cost of
benefit programs, and many older veterans will feel the effects."
LTC Comment:
This blog post by an elder law attorney explains how the VA is clamping
down on veterans benefits including the likely requirement of a transfer
of assets penalty for "aid and attendance" similar to the one that applies
to Medicaid LTC eligibility. Just one more reason veterans should not
rely on the VA for future LTC expenses. See dozens more such reasons in
The Zone here: “Reasons Why Veterans Should Not Depend on VA Benefits for
Long-Term Care [link].”
#############################
Updated, Friday, January 11, 2013,
11:00 AM (Pacific)
Seattle--
LTC BULLET: STATES
DECRY MEDICAID LTC LOOPHOLES
LTC Comment: State
Governors complained about egregious Medicaid LTC loopholes in replies to
a Congressional inquiry. Details after the ***news.***
*** LTC COMMISSION:
The “American Taxpayer Relief Act of 2012,” aka the “fiscal cliff deal,”
was signed by President Obama on January 2. It creates a “Commission for
Long-Term Care” comprised of 15 members to be appointed by the end of
January who are mandated, within six months, “to develop a plan for the
establishment, implementation, and financing of a comprehensive,
coordinated, and high quality system that ensures the availability of long
term services and supports [LTC] for individuals in need of such services
and supports, including elderly individuals, individuals with substantial
cognitive or functional limitations, other individuals who require
assistance to perform activities of daily living, and individuals desiring
to plan for future long-term care needs.” The “Mission Impossible” theme
plays relentlessly in my head, but, hey, at least LTC is getting some high
level attention and, as we’ve said before, 2013, as the first year of a
new Congress and a new presidential term, bodes well for potential LTC
policy reform. At a minimum, the LTC Commission should address the
outrageous misuse of Medicaid highlighted in today’s LTC Bullet.
The Center for LTC Reform will redouble our efforts on behalf of
responsible long-term care planning and rational LTC public policy. We’ll
make sure our analysis and recommendations reach the LTC Commission early
and often.”
*** CONGRESSIONAL
QUARTERLY ON MEDICAID PLANNING ABUSE:
“House GOP Members Probe
Medicaid Eligibility Problems in the States,” by Jane Norman, CQ
HealthBeat Associate Editor in the Jan. 8, 2013 edition of
CQ HealthBeat News describes Governors’ replies to a Congressional
inquiry regarding Medicaid planning. The online version is only for
subscribers, but today’s Bullet contains much of the same
information. Quotes from the article: “As Congress sharpens its focus on
deficit reduction and health care spending, some GOP members of Congress
are taking a fresh look at how people shelter their assets in order to
qualify for Medicaid long-term care. The move revives a long-running
debate over whether Medicaid should be regarded as a middle-class
entitlement or an assistance program for the truly needy. It also raises
the question of whether 2005 changes in the law were effective in ensuring
that people with enough money to afford nursing home care couldn’t game
the system.” “Stephen A. Moses of the Center for Long-Term Care Reform .
. . said that there are too many exemptions and ‘income almost never
disqualifies anyone for Medicaid long-term eligibility.’” ***
LTC BULLET: STATES
DECRY MEDICAID LTC LOOPHOLES
Highlights:
North Dakota:
A couple with $700,000 in liquid assets qualified for Medicaid LTC by
purchasing a more expensive house and car and buying an annuity while
receiving $8,000 per month of income from pensions, Social Security,
annuity payments and oil lease money. Another couple had more than
$528,000, but qualified when the community spouse bought a new home, a new
car, and two annuities worth $240,000 and then applied for Medicaid to pay
the institutionalized spouse’s nursing home costs.
Wisconsin:
An ill spouse transferred $600,000 to the community spouse who refused to
sign the Medicaid application making the ill spouse eligible for Medicaid
LTC because “interspousal transfers are not considered divestment.”
New York:
Using promissory notes, immediate annuities, and spousal refusal, affluent
Medicaid LTC applicants qualify while retaining unlimited assets. Even
when the state has legal recourse: “Medicaid does not have sufficient
resources to pursue all these cases in court.”
Rhode Island:
A couple with $400,000 in a bond account became eligible in a month by
purchasing “a large single premium immediate annuity.” A single man
transferred $100,000 to his son but dodges half the transfer of assets
penalty using a promissory note to carry out a reverse half-a-loaf
strategy.
Virginia:
A man bought a $900,000 annuity in his wife’s name which paid her $89,000
per month, but “the Virginia Medicaid program could not count this income
for purposes of determining the husband’s Medicaid LTC eligibility.”
Read the answers
to question #4 below for more examples of how the wealthy qualify for
Medicaid LTC benefits without spending down personal wealth.
LTC Comment: In
LTC Bullet: The Medicaid Long-Term Care Reform Act of 2012 (October
5, 2012), we described legislation introduced by
Congressman Charles W. Boustany, Jr., MD
(R, LA) and others that called for the study and reform of Medicaid LTC
eligibility and estate recovery rules.
In the same Bullet,
we reported that the bill’s sponsors had sent a letter to state Governors
asking their opinion of the proposed legislation and requesting their
replies to four key questions about the appropriate role of Medicaid
long-term care financing.
Despite prodding from
the members of Congress, only 15 states replied to their letter. But in
those 15 replies, there is strong evidence that Medicaid eligibility and
estate recovery rules are subject to frequent and egregious abuses.
Following are typical
replies to each of the four questions:
1. Should the
federal government give states greater flexibility to consider assets,
including substantial home equity, when determining eligibility for
long-term care coverage through the Medicaid program? Why or why not?
New Mexico
Governor Susana Martinez: “I
agree that alternate policy options should be pursued to prevent state
Medicaid programs from becoming the default financier of long-term care
services for middle income individuals, and to protect the program as a
safety net for those who need it most.”
Wisconsin
Department of Health Services Secretary Dennis G. Smith
[Smith was Director of Medicaid at the
federal Centers for Medicare and Medicaid Services (CMS) for eight years
during the George W. Bush administration]: “Greater flexibility should be
provided to states regarding Medicaid eligibility policies, including
which assets should be considered for purposes of determining medicaid
eligibility. Increased flexibility will allow states to adopt changes to
their Medicaid programs in order to help ensure the long-term
sustainability of such programs for their residents most in need of
government assistance.”
Pennsylvania
Department of Public Welfare Secretary Gary D. Alexander:
“States should be given more flexibility to determine asset limitations
for Medicaid long-term care program eligibility. The economic climate of
states varies, as does their ability to raise revenues. What makes sense
in one state may not make sense in another. A $525,000 home exemption,
while better than the prior limitless exemption, does not address the
needs of state that are struggling to provide services to those who do not
have sufficient asset reserves. States should have the flexibility to
adjust asset limitations based upon their individual needs.”
Maine Governor
Paul R. LePage: “Yes, we
believe that States should be given greater flexibility to consider
assets.
- Medicaid requires
that we deny eligibility for Long Term Care (LTC) if the individuals
equity interest in their primary residence exceeds $525,000. This
appears to be an extremely high threshold.
- Medicaid
regulations should not allow the exemption of a primary residence when
it is determined that the individual is institutionalized and will not
be able to return to the home. . . .
- Federal
regulations make it too difficult to administer transfer of resource
penalties for individuals that do not meet the institutional level of
care. . . . Regulations should be simplified so that States can deny
Medicaid to all people who have transferred resources to become eligible
for Medicaid, not just for institutional level of care.”
New York Deputy
Secretary for Health James E. Introne:
“For states that are tied to the resource rules of the Supplemental
Security Income (SSI) program, federal Medicaid policy should be developed
separately for the treatment of annuities, promissory notes and individual
retirement accounts. These assets are most commonly encountered in
Medicaid and yet the rules regarding their treatment as an asset is
dependent on the rules of the SSI cash program.”
Tennessee Deputy
Director of Policy and Research Beth Tipps in the office of Governor:
“Taking substantial home equity and other assets currently exempt under
the law into account in determining eligibility for Medicaid reimbursement
of LTC would result in fewer people with substantial means qualifying for
Medicaid-reimbursed LTC until such time that those assets have been
exhausted, and target Medicaid reimbursement to those with the greatest
financial need. The effectiveness of any such policy would also likely
require adjustments to the look-back period for asset transfer.
“Persons who want to
protect assets would still be able to purchase a LTC Partnership policy
and protect assets up to the value of private insurance benefits
provided. This would encourage those who can afford LTC insurance to
purchase it in order to protect assets, and decrease dependency solely on
Medicaid for payment of LTC.”
Virginia Secretary
of Health and Human Resources William A. Hazel, Jr., MD:
“Giving states flexibility to change eligibility rules and expanding LTC
insurance coverage options for middle income individuals will help to
protect Medicaid LTC as a safety net for the low income Americans who need
it most.”
“Under current
federal requirements, states must exclude, at a minimum, approximately
$500,000 in home equity when determining the eligibility of an individual
for Medicaid LTC. If a qualifying individual (e.g. a spouse or dependent
child) is living in the house, the home equity exclusion can be even
higher. Virginia believes, in general, that states should have greater
flexibility to determine the level of assets can have and still be
eligible for Medicaid LTC.”
“Currently, the
repeal of the federal MOE provision would likely be the single most
effective way of providing Virginia with the flexibility needed to reform
LTC eligibility requirements and eliminate several loopholes that allow
individuals to shelter assets from the Medicaid program. These loopholes
allow individuals to shelter even more assets than those allowed under the
home equity exemption and still qualify for Medicaid LTC.
Georgia Governor
Nathan Deal: “Federal
restrictions fail to recognize significant variation across states. Home
values, household incomes, cost of living, demographics, and cost of
health care are factors that determine eligibility but are widely
different from place to place. States are better suited to establish
criteria which ensure their safety net programs better serve those for
which it is intended.”
2. Please provide
examples of barriers to effective Medicaid estate recovery programs and
tools that might help states in this area.
North Dakota Human
Services Department Interim Executive Director:
“State Medicaid programs have, by default, become the major form of
insurance for long-term care. Medicaid estate planning has increasingly
become a way for middle income Americans to impoverish themselves to the
point that they can become eligible for Medicaid. The current system is
consuming both state and federal budgets and is unsustainable. It is
imperative that states have the flexibility to pursue creative and
innovative options for state-appropriate solutions.”
Wisconsin
Department of Health Services Secretary Dennis G. Smith:
“There has been an increase in the number of beneficiaries age 65 and
older seeking disability determinations solely to place excess assets into
. . . pooled trusts. The trusts are preventing the state from recovering
medicaid costs in certain cases, and the extra requests for disability
determinations from persons over age 65 are straining the state’s
resources.”
“The prohibition
against filing a TEFRA lien prior to the outcome of a fair hearing has
been increasingly problematic because beneficiaries or their responsible
parties postpone hearing dates while attempting to sell the home. When
the home eventually sells prior to the hearing, no lien can be placed
because the beneficiary is no longer the owner. Many beneficiaries then
seek a determination of disability and, if granted, the sale proceeds are
placed into a . . . pooled trust and not available to pay for the cost of
care which then continues to be borne by Medicaid.”
Pennsylvania
Department of Public Welfare Secretary Gary D. Alexander:
“The underlying policy debate on estate recovery involves the very
character and purpose of Medicaid. Should the Medicaid long-term care
program be a strictly needs-based program for individuals who have no
ability to pay for their own care? Or should middle class individuals and
couples be permitted to qualify for benefits without losing the ability to
transfer wealth to their children? When the economy falters, allowing the
latter to occur places an increasing amount of stress on limited human
services budgets and requires policymakers to consider service
reductions.”
Hawaii Governor
Neil Abercrombie: “When a
Medicaid recipient dies while having only a life estate interest in the
property, the lien that was on the property must be released which results
in the loss of revenue. The federal statute should be amended to allow
recovery of up to the value of the life estate at the time of the
recipient’s admission to the facility.
“Reverse mortgages
are an emerging area of concern. Families are beginning to draw out the
equity in property before they have to pay back the lien. By leaving
little, if any, equity in the property prior to having to repay the lien,
families are effectively diverting this asset from its intended use as a
means to repay the government. We believe that this should be considered
a fraudulent diversion of assets, and states may have to file a civil
fraud complaint to recoup this money.”
“Currently, there are
loopholes because there is no definition of the term ‘medical
institution.’ There are certain types of facilities that are not
considered ‘medical institutions’ for the purposes of placing a lien. The
term ‘medical institution’ needs to be better defined in the federal
statute. An example of this is a Residential Alternative Community Care
facility.”
“There are no
standards or guidelines regarding whether or not a lien remains on a
property held in joint tenancy. When the Medicaid recipient passes away,
is the lien extinguished or does it continue even though the property
transferred to the surviving joint tenant? Perhaps the federal statute
should be amended to allow liens to continue on real property held in
joint tenancy after the Medicaid recipient passes away.
“Some families don’t
report the death of the medicaid recipient in a timely manner. Perhaps
there needs to be a requirement for the families to report the death of
the Medicaid recipient within a certain time frame. The delay in the
reporting is potentially costing the state millions of dollars.”
“By amending the
federal statute to include property held ‘just prior’ or ‘immediately
prior’ to death, real property held as a life estate or held in joint
tenancy would be included in a Medicaid recipient’s estate.”
New York Deputy
Secretary for Health James E. Introne:
“Although states are required by federal statute to pursue estate recovery
from all real and personal property and other assets within an
individual’s estate as provided by State law, states have the option of
expanding the probate definition of estate to include any other real and
personal property and other assets in which the individual had any legal
title or interest at the time of death. If the option to expand the
probate definition of estate for Medicaid estate recoveries were a
mandate, rather than an option, all states would be participating equally
in the effort to decrease Medicaid spending.”
Rhode Island
Governor Lincoln D. Chaffee:
“Medicaid estate recovery programs are problematic because of legal
options allowable under current State and Federal laws. People are
currently able to find refuge for assets in the form of life estates or
promissory notes.”
“The federal
government should not allow for the use of ‘Lady Byrd’ deeds; life estate
with special powers; or enforced life estate deeds. Currently, CMS does
not consider the use of such deeds to be a transfer of a resource because
the transferor retained the right to ‘sell, mortgage, hypothecate, etc.’
Medicaid, however, cannot recover from an estate when such a deed has been
executed. Therefore, homes or former homes may not be considered assets
under probate when the life estate holder dies and subsequently the State
cannot recover monies spend for medical costs.”
Tennessee Deputy
Director of Policy and Research Beth Tipps in the office of Governor:
“Estates must include real and personal property and other assets in an
estate as defined in state probate law. At the option of the state,
however, recoverable assets also may include any other real and personal
property, annuities, and other assets in which the person has legal title
or interest at the time of death, including assets conveyed to a survivor,
heir, or through assignment through joint tenancy, tenancy in common,
survivorship, life estate, living trust, or other arrangements. Thus,
assets (i.e., living trusts, life insurance policies, and certain
annuities), which may pass to heirs outside of probate, would only be
subject to Medicaid recovery if a state expanded its definition of
‘estate.’ These are the vehicles often used by Medicaid Estate Planners
to help people with more substantial wealth protect assets while still
qualifying for Medicaid reimbursement of LTC.”
Virginia Secretary
of Health and Human Resources William A. Hazel, Jr., MD:
“In addition to Virginia’s current broad estate recovery authority, we are
considering several other measures to increase recovery efforts, but these
are currently stalled due to the Affordable Care Act (ACA) maintenance of
eligibility (MOE) provision which precludes more restrictive eligibility
policy for adults enrolled in Medicaid until at least 2014.”
Virginia Secretary
of Health and Human Resources William A. Hazel, Jr., MD:
“In addition to Virginia’s current broad estate recovery authority, we are
considering several other measures to increase recovery efforts, but these
are currently stalled due to the Affordable Care Act (ACA) maintenance of
eligibility (MOE) provision which precludes more restrictive eligibility
policy for adults enrolled in Medicaid until at least 2014.”
3. Should state
and federal governments encourage middle-income Americans to anticipate
and plan for their future long-term care needs, instead of relying on
Medicaid, a safety net for the poor? Why or why not?
New Mexico
Governor Susana Martinez:
“Current policies have transformed the Medicaid long-term care program
from a safety-net for the financially and medically needy to an
entitlement for middle-income individuals, essentially changing its
original scope and intent. Estate planning for Medicaid discourages
individuals from engaging in meaningful financial planning that would
enable them to take greater personal responsibility for their future
long-term care needs.”
North Dakota Human
Services Department Interim Executive Director:
“The current lack of limitations on estate planning virtually eliminates
incentives for individuals to plan for their own future needs. While the
long-term care partnership act was enacted to encourage couples to plan
for their long-term care needs, the interpretation of the Medicaid act to
allow people to shelter an increasing number of assets makes the
allowances found in the long-term care partnership act a less desirable
option to assist a couple in retaining their assets.”
Wisconsin
Department of Health Services Secretary Dennis G. Smith:
“Wisconsin supports collaboration between states and the federal
government in order to encourage all Americans to anticipate and plan for
their future long-term care needs. Placing greater emphasis on future
planning, coupled with changes to eligibility requirements in order to
ensure that only those individuals who are in fact financially eligible
for Medicaid receive such coverage, will contribute greatly to ensuring
the long-term sustainability of Medicaid programs.”
Maine Governor
Paul R. LePage: “People would
be more inclined to purchase LTC plans if there were tighter rules around
transfers and greater incentives to purchase such policies.”
Rhode Island
Governor Lincoln D. Chaffee:
“Yes; using Medicaid as the primary source of funding for long-term care
is not sustainable.”
Virginia Secretary
of Health and Human Resources William A. Hazel, Jr., MD:
“State and federal governments should encourage middle income Americans to
anticipate and plan for their future LTC needs. Current reliance of
Americans on Medicaid financing for their LTC is simply not sustainable.
The Medicaid program is intended to be a payer of last resort; a safety
net for the truly needy. Allowing individuals who can afford to buy LTC
insurance to accumulate assets and shield those assets, enabling them to
qualify for a program intended to serve individuals with very low income,
is wrong.”
Georgia Governor
Nathan Deal: “Encouraging all
Americans to plan for their future needs is critical to ensuring our
Medicaid program is able to serve the most vulnerable citizens for which
it is designed. Personal responsibility is fundamental. . . . The
Medicaid program is a ‘welfare’ or ‘poverty’ program which was established
as a safety net program for the poor.”
4. Do you
consider Medicaid estate planning to be a significant problem that takes
resources from the truly needy in your state? Please explain and provide
examples.
Texas Governor
Rick Perry: “State Medicaid
programs have, by default, become the major form of insurance for
long-term care. Medicaid estate planning has increasingly become a way
for middle income Americans to impoverish themselves to the point that
they can become eligible for Medicaid. The current system is consuming
both state and federal budgets and is unsustainable. It is imperative
that states have the flexibility to pursue creative and innovative options
for state-appropriate solutions.”
North Dakota Human
Services Department Interim Executive Director:
“Shortly before going into the nursing home, the couple had liquid assets
worth about $700,000, not including the home or car. They were over
the Medicaid limit by more than half a million dollars. The
community spouse, on advice of an attorney, sold the home the couple had
lived in for years and bought one worth twice as much and sold the car
they had and bought a brand new one worth three times as much. The car is
completely exempt under Medicaid rules. The house also is completely
exempt under Medicaid rules, as long as the community spouse lives in the
house. After successfully sheltering those assets, the community spouse
took $400,000 cash, money that was available to be spent on the
institutionalized spouse’s care and instead, bough an annuity from their
attorney (an ‘investment’ which essentially returns the premium with a
very small return) in an effort to tie up the money to make the couple
appear to have fewer resources. The annuity is irrevocable,
non-assignable, and non-transferable. . . . The North Dakota Department
of Human Services was sued in federal court under a civil rights action
for denying Medicaid to this wealthy institutionalized spouse. . . . The
community spouse has successfully retained nearly all of the wealth the
couple had before the institutionalized spouse went into the nursing home
and the nursing home has not received one penny. The bill is nearly
$100,000 and the couple wants medicaid to cover it. The couple receives
nearly $8,000 a month from pensions, social security, the annuity
payments, and oil lease money. This couple is not needy and they are
simply not who the Medicaid program was or is intended to
cover.” [Emphasis in the original.]
“In another case, a
couple had nearly $600,000 available that could have been used for nursing
home costs. The 83-year old community spouse had beginning sighs of
dementia, and ‘invested’ $340,000 . . . into an irrevocable,
nontransferable, non-assignable annuity on the advice of his attorney in
an attempt to qualify the institutionalized spouse for Medicaid.”
“In another case, the
day the institutionalized spouse entered the nursing home, the couple had
more than $528,000. At that time, the couple represented to the nursing
home that they intended of be ‘self-paying,’ and in fact, paid for two
months of care. After learning of ways to exploit Medicaid laws, the
community spouse purchased not one, but two annuities from their attorney
after realizing the first one did not maximize the assets that could be
sheltered. The community spouse bought a new home, a new car, and an
annuity for $220,000 and the next day, a subsequent one for $20,000, and
then applied for Medicaid to pay the institutionalized spouse’s nursing
home costs.”
“In yet another case,
a couple had nearly $400,000 the day one spouse entered the nursing home.
An annuity for $125,000 was purchased to try to become eligible for
Medicaid.
“These scenarios are
being duplicated around the state, with an increase in the sales of these
types of annuities, and around the country in other states. Medicaid is
not intended for people who artificially impoverish themselves by
sheltering their wealth instead of using it to pay for nursing home care,
but these are the people who are fighting for it and winning – at the
expense of the taxpayers and those who legitimately need the assistance of
the Medicaid program.
“The North Dakota
Department of Human Services argues that annuities like these should be
treated as an asset available to pay the long-term care costs incurred by
either spouse.”
“Changing the federal
law to clarify that these annuities are assets or to allow states to
determine how to treat these annuities as assets would be a significant
first step in helping states determine appropriate limits of eligibility
for the medicaid program. This would help ensure that Medicaid funds
would be used by states for those who are the intended recipients rather
than being diverted to subsidize those who can and should pay for their
own care.”
Arizona Governor
Janice K. Brewer: “Spouses use
resources to purchase an annuity with high monthly payments being made to
the community spouse. The annuity is not considered a countable resource
and it is not considered a transfer so the applicant is eligible for
medicaid.”
Wisconsin
Department of Health Services Secretary Dennis G. Smith:
“The Medicaid program is designed to provide health care and long-term
care services to individuals and families who are financially eligible.
Unfortunately, some estate planners have created a ‘cottage industry’
aimed at sheltering or using assets or income in ways for individuals to
gain Medicaid eligibility despite having personal resources to pay for
their own long-term care needs. These loopholes continue to leave the
state at risk for people intentionally divesting their personal assets so
their health care and long-term care is paid for through taxpayer dollars,
rather than their own resources. Individuals should use their own
resources before asking their neighbors to pay their long term care
needs.”
“One example is
related to spousal impoverishment laws. More and more, institutionalized
spouses are transferring assets to community spouses who refuse to sign
the Medicaid application. . . . Interspousal transfers are not
considered divestment so Fred was able to maintain eligibility while
Bonnie was able to keep $600,000. This is over five times the maximum
Community Spousal Resource Allowance of $113,640. If the Department could
deny eligibility if a spouse refuses to sign the application, Fred would
have been able to cover at least six years of private pay nursing home
care using his own resources.”
Pennsylvania
Department of Public Welfare Secretary Gary D. Alexander:
“Medicaid estate planning is a common tool, but significant issues and
problems can arise because individuals and couples can transfer
substantial wealth to their children yet still qualify for federal and
state long-term care benefits. Annuities, promissory notes and the large
home equity exemption used in combination with a life estate/remainder are
all legal devices that applicants can use in the process of determination
of benefit eligibility. Further, short duration ‘Medicaid’ annuities have
been used to facilitate gifting of assets for Medicaid eligibility
purposes.
“Special needs trusts
are also used for disabled individuals. Yet some of these trusts raise
serious policy questions. For example, multi-million dollar personal
injury awards that include damages for future medical expense can be
placed into such trusts. This results in qualification (or continuing
eligibility) for Medicaid, and that program would pay future medical
expenses during the recipient’s lifetime. Although there is a ‘payback’
requirement for such trusts, the payback occurs only if assets remain in
the trust and only after the death of the individual, which can be decades
later. This delayed payback can result in a substantial monetary benefit
to the individual’s heirs.”
Maine Governor
Paul R. LePage: “Yes, much of
which is allowed under the current federal regulations. An example of
such abuse is in the purchasing of ‘Medicaid’ qualifying annuities. It is
clear that elder law attorneys use this loophole to shelter assets of
their clients. Federal law allows such annuities as long as they meet
certain provisions. It has become clear that the intent of Congress to
allow individuals to save for retirement through the purchases of
annuities has been abused and needs to be addressed. It was not intended
for individuals to purchase annuities so that they can become eligible for
Medicaid at the time they need LTC. . .
“Another form of
abuse is commonly referred to as the ‘half-a-loaf’ method. This allows
individuals to transfer resources and then get back half of what they
transferred to reduce their penalty, while still being able to transfer
half of what they gave away. Regulations can be fixed so that, unless the
individual gets back all of what they transferred, the entire penalty
remains.”
New York Deputy
Secretary for Health James E. Introne:
“Yes. Medicaid funds spent on the high cost of long-term care for
individuals who are financially able to pay for the cost of their own
long-term care needs, but choose to avail themselves of Medicaid through
estate planning techniques, increases the amount of state and federal
funds that must be apportioned to support the program. As a result, state
and federal funds may be restricted from funding programs for the truly
needy, e.g. programs for children, education and programs that assist the
elderly. Planning techniques such as promissory notes, immediate
annuities and spousal refusal continue to provide a mechanism for
individuals to access medicaid benefits rather than provide for their own
long-term care needs.
“Promissory notes,
even when made after an individual has been admitted to a nursing home,
preserve the ‘half-loaf’ strategy. This strategy allows an individual to
divest him/herself of assets (say $50,000 is transferred outright) and pay
for nursing home care during a penalty period with monies returned through
a promissory note (a second $50,000 loaned with repayments made at the
private pay nursing home rate -- which covers the transfer penalty). The
same strategy is employed using an immediate annuity. Money is
transferred and an immediate annuity is purchased to pay for nursing home
care for the number of months the person is subject to a transfer
penalty. With spousal refusal, all assets are put into the name of the
community spouse who then refuses to make the resources available for the
nursing home spouse. Medicaid must be provided if the institutionalized
spouse executes an assignment of support from the community spouse in
favor of the Medicaid office or the denial of medicaid would create an
undue hardship. Medicaid does not have sufficient resources to pursue all
these cases in court.”
Rhode Island
Governor Lincoln D. Chaffee:
“Trusts allow the wealthy to shelter assets. The more affluent have
access to better estate planning and thus, are more likely to have
properly crafted legal documents (i.e., trusts, promissory notes, life
estates with enhanced powers, caregiver contracts, etc.) In addition to
the use of annuities for married couples, and promissory notes for those
single individuals or married couples, the amount of monies paid for legal
advice is sizeable.
“Some examples:
“Mr. and Mrs. Smith
have $400,000 in a bond account. Mr. Smith needs to go into a nursing
home. After the spousal share has been determined, Mrs. Smith has excess
resources transferred to her ‘spouse to spouse’ and purchases a large
single premium immediate annuity paying her thousands per month. Mr.
Smith has less than $4000 and is found eligible for LTC in the next month.
“Mr. Jones is a
single individual with $100,000 in the bank. He goes into a nursing
home. He transfers the whole $100,000 to his son. Applies for LTC/MA,
meets a level of care due to his poor health and is ‘otherwise’ eligible
for LTC except for the prohibited transfer of $100,000. His son creates a
promissory note for $50,000 and pays him back monthly. This allows for
the father to pay privately for ½ of the time he would have paid
privately, except for this ‘Medicaid estate planning’ tool. (Assume the
promissory note is created with the correct DRA language.)”
Tennessee Deputy
Director of Policy and Research Beth Tipps in the office of Governor:
“Medicaid estate planning (‘elder law’) is a big business and allows
people with considerable income and assets to maximize their ability to
protect both while preparing to access Medicaid to pay for LTC
services.
“Restrictions on the
use of annuities, promissory notes and life estates would reduce the types
of financial vehicles available for protecting assets. In addition to
consideration of a longer look-back period, tighter penalties for
transferring assets for less than fair market value would likely deter
some people from making transfers.”
Virginia Secretary
of Health and Human Resources William A. Hazel, Jr., MD:
“Medicaid estate planning is a significant problem that negatively impacts
Virginia’s ability to provide LTC to the truly needy. Estate planning
allows individuals to take advantage of loopholes in Medicaid eligibility
rules which allow them to shelter their assets and avoid paying for their
LTC services. These services are among the most expensive services
provided by the Medicaid program. States are unable to afford the ever
increasing cost of the Medicaid program and are obligated to impose limits
on services, reduce provider compensation and, in some cases, stop
covering certain services. This has an adverse impact on LTC services, as
well as other Medicaid services, and directly impacts individuals who most
need Medicaid services.”
“The following are
examples of loopholes that the Virginia Medicaid program has wanted to
close, but has been unable to due to the federal MOE requirement in ACA:
- The ability to
count the value of life estates as a resource.
- The ability to
shelter assets for one year by purchasing savings bonds.
- The ability to
exclude as a resource the unpaid balance of an annuity.”
“Prior to applying
for Medicaid LTC services, an individual placed approximately $900,000
into an annuity and named his wife as the beneficiary of the annuity. The
annuity paid his wife $89,000 per month, but the Virginia Medicaid program
could not count this income for purposes of determining the husband’s
Medicaid LTC eligibility.”
#############################
Updated, Monday, January 7, 2013,
12:36 PM (Pacific)
Seattle--
CLASS GONE AT
LAST AND LTC NEWS AND COMMENT
LTC Comment:
Having taken some time off for the holidays, this is our first LTC
E-Alert in awhile. With a few notable exceptions, long-term care news
took some time off too. We’ll focus this week on highlights you may have
missed while your attention was turned to family get-togethers and holiday
celebrations.
*** 3IN4 NEED MORE
MEDIA SUCCESS: The
3in4 Need More program used $25,000 of its annual sponsorship dollars
in 2012 to create radio advertising about LTC planning that would have
cost over three million dollars to purchase. As a non-profit, 3in4
receives special concessions on public service announcements. Some key
stats:
* Investment Dollars
to Record and Distribute: $25,000.00
* Number of Hours Played: 633.18
* Impressions: 444,769,760
* Times played: 50,844
* Result: $3,047,800.00 in FREE radio play
Congratulations to
3in4 and its director Jonas Roeser ***
*** AMERICAN TAXPAYER
RELIEF ACT OF 2012: President Obama signed the “fiscal cliff” legislation
on Wednesday, January 2, 2013. Following is a link to the statute that
repeals CLASS and sets up a “Commission on Long-Term Care”:
http://www.gpo.gov/fdsys/pkg/BILLS-112hr8enr/pdf/BILLS-112hr8enr.pdf.
We’ll keep a close watch on that LTC Commission as its most likely
recommendation will be a new CLASS-like entitlement program but with
compulsory participation. Before even considering expensive new
government LTC programs, the Commission should propose ending Medicaid
loopholes that trap the middle class on LTC public assistance. Examples
of such loopholes include Medicaid’s $802,000 home equity exemption;
Medicaid-compliant annuities which allow applicants to hide hundreds of
thousands of dollars immediately before Medicaid qualification; and the
welfare program’s unlimited exemptions for personal belongings, a
business, prepaid funeral expenses, an automobile, and term life
insurance. ***
*** ILTCI
CONFERENCE: Early Bird Registration ends Thursday, January 10th, for the
Thirteenth Annual Intercompany Long Term Care Insurance Conference to be
held from March 3-6, 2013 at the Hilton Anatole, in Dallas, Texas.
Once again, the ILTCI conference will host and subsidize the cost for a
special 2-day pre-conference CLTC Master Class (only $95 extra). Harley
Gordon will personally conduct this class. If you are an agent selling
LTC (or other) insurance directly to consumers, you can apply
here for a Scholarship that will qualify you for a $295 Scholarship
rate (plus an additional $95 if attending the CLTC class). If you are a
government employee, register
here for the conference using the Government Employee rate of $95.
For those who have never attended ANY of the previous twelve annual
conferences, get a special rate of only $395 (instead of the $895 early
bird rate) and register
here before January 10th. The price of registration goes up $100
after that date. Make your Hotel reservations early for attractive rates
of only $129 (for the Hilton Anatole Hotel). The final few booths
available for exhibitors are going fast. Get all details at
http://www.iltciconf.org/. If you have any questions, contact Jim
Glickman at 818-867-2223. ***
#############################
1/4/2013,
“The
10 Best Countries to Retire to in 2013,” by Jacquelyn Smith, Forbes
Quote:
"Planning to retire overseas? Ecuador is the top spot for North American
retirees, according to InternationalLiving.com's newly-released Annual
Global Retirement Index 2013."
LTC Comment:
Distraught by the fiscal cliff deal and new oncoming crises? There's
always expat status. Medicaid planners, who seriously recommended
considering it, said LTC in Costa Rica was particularly good and only
$5,000 per year. Well, that was a decade ago, but I'll bet it's still
pretty reasonably priced. Nevertheless, isn’t that a long way to go to
visit Grandma? Planning ahead to pay privately for quality LTC at or near
home remains by far the best option.
#############################
1/4/2013,
“10
Retirement Resolutions for 2013,” by Emily Brandon, U.S. News &
World Report
Quote:
"Get your Social Security statement. Most workers will no longer receive
a paper Social Security statement in the mail. But now people age 18 and
older can access their Social Security statements online. Take a few
minutes to check that your earnings history has been property recorded and
familiarize yourself with your expected Social Security payout. 'Delaying
Social Security makes sense for most people if you can afford to do it,
because the payout escalates enormously for every year you wait between
ages 62 and 70,' says Chatzky. 'That's a return that is really hard to
beat by putting your own money to work.'"
LTC Comment:
Remember those Social Security statements we used to get in the mail each
year? They told us how much we'd get from the program if we retired at
62, 66 (or full retirement age) or 70. They warned ‘Without changes, in
2033 the Social Security Trust Fund will be able to pay only about 75
cents for each dollar of scheduled benefits.’ These hard-copy statements
stopped coming a few years ago. But they are available online now at
http://www.ssa.gov/mystatement/. This might be good information to share
with a prospect for LTC insurance who seeks confidence about his or her
ability to pay the premium in the future.
#############################
12/28/2012,
“Five
Big Retirement Mistakes,” by Ellen E. Schultz, Wall Street Journal
Quote:
"Low-balling elder-care costs. When planning for retirement, few people
think about how much they might end up spending to support elderly
parents. Inflation and longevity could erase the purchasing power of the
children's pension and savings, leaving them with too little to live on,
let alone cover medical expenses. . . . And even if elderly parents have
adequate financial resources, their retired offspring can incur
significant expenses when traveling to help them out."
LTC Comment:
The irony is that government entitlement programs like Social Security,
Medicare and Medicaid have desensitized the public to health and LTC risks
and costs so that just as the Age Wave crests those programs are going to
crash financially.
#############################
12/17/2012,
“Medicare
denials are rarely challenged by seniors, but appeals can succeed,”
The Washington Post
Quote:
"Murphy said less than 10 percent of the several hundred denials that her
organization handles each year for Connecticut residents are overturned in
the first and second levels of appeals. 'It's almost an automatic
denial,' she said. But at the third level of appeal, the center has won
roughly 60 percent of its appeals in the past three years. 'If people
knew that they are likely to lose at the first couple of levels, they
would stick it out until they got to a judge,' Murphy said."
LTC Comment:
I learned long ago from elder law attorneys that they win roughly
two-thirds of all the Medicare denials they appeal on behalf of clients.
Like Medicaid planning, this is another way people who can afford elder
law advice get more out of the social safety net than the citizens who
need help the most.
#############################
12/17/2012,
“Tax
strategy may affect Medicare premiums,” by Larry Swedroe, CBS
MoneyWatch
Quote:
"Under the Medicare law, if you have a high-enough income, you have to pay
extra for Part B and prescription drug coverage. The amount depends on
your modified adjusted gross income (MAGI), which is your adjusted gross
income plus tax-exempt income. These increases are based on your MAGI
from two years prior, meaning your 2012 MAGI may affect your 2014
premiums."
LTC Comment:
Two key points about this article. Medicare is no longer "social
insurance" where all pay the same premiums and all get the same benefits.
Rather, high income people pay more for the same benefits meaning
Medicare is now "means-tested," i.e., welfare. Secondly, this article
indicates that affluent people don't just pay higher taxes automatically
as government accountants are required by law to presume. Rather,
affluent people analyze tax policy consequences and reconfigure their
income and assets to minimize taxes and maximize after-tax investment
returns. That's why actual tax returns to government often fall below
estimates.
#############################
12/16/2012,
“Medicare
to Cover More Home Care,” by Anne Tergesen, Wall Street Journal
Quote:
"For years, Medicare recipients with chronic conditions have had
difficulty qualifying for home health services administered by nurses and
therapists. Now, a legal settlement between consumer advocates and the
federal government has paved the way for patients with chronic conditions
to receive such services both at home and in skilled-nursing and
outpatient facilities. . . . Medicare recipients with chronic conditions
don't have to wait for a federal judge to approve the settlement before
filing claims, says Ms. Stein [of the Center for Medicare Advocacy], who
expects Vermont Chief Judge Christina Reiss to sign off on the settlement
some time after a hearing to be held on Jan. 24, 2013. (The lead plaintiff
in the case lives in Vermont.)"
LTC Comment:
More Medicare for LTC bodes ill for the program’s solvency in the long run
and for the LTCI market in the short run.
#############################
12/15/2012,
“Healthcare
crisis: not enough specialists for the poor,” by Anna Gorman, Los
Angeles Times
Quote:
"With months-long waits for Medi-Cal patients to see specialists, some
turn to emergency rooms - exactly what healthcare reform is banking on
avoiding."
LTC Comment:
I've predicted that Medicaid's poor reputation for access and quality
would worsen dramatically. It's happening now, based on more and more
stories from all over the country, and just as "health reform" is about to
extend Medicaid to millions more people.
#############################
12/14/2012,
“States
face double fiscal whammy: Federal aid cuts and spiraling health-care
costs,” by Michael A. Fletcher, The Washington Post
Quote:
"Just as state governments are healing from the deep fiscal wound
inflicted by the Great Recession, they are confronted by the dual threat
of reduced federal help and ever increasing health-care costs, according
to a new report. Governors are bracing for substantial cuts in federal
aid in the immediate future, even if Washington policymakers agree on an
alternative to a series of budget cuts and tax increases set to go into
effect in January. Meanwhile, the spiraling costs of Medicaid, employee
health insurance premiums and retiree health care would make it nearly
impossible for states to fill the gap caused by expected federal cuts.
That means service cuts initiated during the recession would have to go
deeper, the report warned."
LTC Comment:
This is exactly why I think 2013 is the year to push for Medicaid reform
that saves states money, improves access and quality for the poor, and
incentivizes everyone else to buy LTCI. See
this LTC Bullet for more on our plans to take the Silver Bullet back
on the road for five special state-level studies.
#############################
12/13/2012,
“Getting the runaround on long-term care insurance: An insurance company
relies on corporate gibberish to build a smoke screen around a denial of
benefits [link],”
by David Lazarus, Los Angeles Times
Quote:
"Washington National appears to be acting in bad faith in dealing with a
longtime customer for no better purpose than to save itself some money.
If the company is so sure it's in the right, it shouldn't hesitate to
explain itself plainly, to Corwin if not to me. The fact that it chooses
to hide behind corporate gibberish suggests it knows perfectly well that
its actions are indefensible. Steven M. Stecher, who pulled down $2.1
million in total compensation last year as president of Washington
National, is more than welcome to prove me wrong."
LTC Comment:
The last time there was a big media hullabaloo about LTCI carriers not
paying claims it turned out under close scrutiny that failure to pay a
legitimate claim was a rare exception.
#############################
12/11/2012,
“Caregiver
lives rerouted yet enriched by aging parents,” by
Sarah LeTrent, CNN
Quote:
"According to
data from the National Alliance for Caregiving, an estimated 65
million people in the U.S. are unpaid family caregivers. Seven in 10 of
those caregivers take care of someone 50 years of age or older, according
to research done in conjunction with the AARP. Caregiving
for loved ones the 'new normal' for boomers "
LTC Comment:
Get used to it. Boomers are locked into caregiving responsibilities.
Take it from one whose mother just turned 100 years old. Stories like
this should help aging boomers and their progeny realize the growing need
for LTCI.
#############################
12/11/2012,
“Health
rankings: USA is living longer, but sicker,” by Michelle Healy, USA
TODAY
Quote:
"Americans are living longer, with fewer deaths from heart disease and
cancer, but more chronic illnesses, an annual snapshot of the USA's health
shows."
LTC Comment:
Solid evidence that private LTC insurance has a future, especially when
combined with news of the government LTC safety net’s dire fiscal
condition.
#############################
12/11/2012,
“MedPAC recommendations 'have no bearing on the realities' nursing homes
face, group says [link],”
McKnight’s LTC News
Quote:
"The Medicare Payment Advisory Commission has recommended a 4% reduction
in skilled nursing facility reimbursement for 2014, drawing the ire of the
Alliance for Nursing Home Reform in response."
LTC Comment:
As the fiscal vise closes on Medicare, MedPac-recommended cuts--which the
nursing home industry has fended off for years--are finally coming. And
when MedPac is replaced soon by the far-more-powerful Independent Payment
Advisory Board (IPAB), look out! The balance billing from traditionally
generous Medicare to offset parsimonious Medicaid reimbursements will end.
Nursing homes and Medicaid recipients will suffer, further alienating
consumers from publicly financed LTC.
#############################
12/10/2012,
“States Expand their Medicaid Community-Based Services but Their Benefits
Vary Widely [link],”
by Howard Gleckman, Forbes
Quote:
"Medicaid is the largest single payer of long-term supports and services [LTC],
funding almost half of all paid long-term care. It dwarfs the benefits
provided by private long-term care insurance or what people pay out of
pocket. But the Medicaid program, run by the states but jointly funded by
states and the federal government, is required to provide care only in
nursing facilities. . . . Most people who need supports and services [LTC]
want to get that care at home. And states say they want to deliver such
care in the community. But, as the Kaiser study shows, many states are
still reluctant to provide that assistance through Medicaid. Their home
and community-based programs exist on paper, but often are often
insufficient for the needs of the frail elderly and those younger people
with disabilities who are trying to stay at home."
LTC Comment:
And so it shall ever be. Medicaid funding of home care has hit its high
mark and will decline. True now and more so in the future: only private
payers are assured of access to quality LTC at the most appropriate level.
#############################
12/10/2012,
“Aiming for Medicaid, Clients Tell
Advisers 'Make Me Poor' [link],”
Reuters
Quote:
"Called 'Medicaid planning,' the goal is for the client to give away their
money to their kids in order to qualify for government assistance. It is
not a new strategy, but with the cost of healthcare rising, retirement
benefits shrinking and people living longer, it is increasingly on the
table."
LTC Comment:
I've seen several articles picking up on the survey by Nationwide that we
reported last week which showed half of financial advisers recommend
Medicaid planning. Of course, there is much more to Medicaid planning
than giving away money, including Medicaid-compliant annuities, life care
contracts, special trusts, the reverse half-a-loaf strategy, etc. The
mission to end these practices and encourage early, responsible LTC
planning continues here at the Center for LTC Reform.
#############################
December 2012,
“A Report on Shortfalls in Medicaid
Funding for Nursing Center Care [link],”
by ELJAY, LLC, for the American Health Care Association
Quote:
"Unreimbursed allowable Medicaid costs for 2012 are projected to exceed $7
billion. Expressed as a shortfall in reimbursement per Medicaid patient
day, the estimated average Medicaid shortfall for 2012 is projected to be
$22.34, which is 14.3 percent higher than the preceding year's projected
shortfall of $19.55."
LTC Comment:
I track this report every year. It shows that Medicaid reimburses nursing
homes less than the cost of providing the care! The situation is getting
worse and worse as is Medicaid's reputation for access and quality. You
get what you pay for and only what you pay for.
#############################
11/22/2012,
“Cash-strapped Pennsylvania nursing homes are increasingly on edge [link],”
by Bill Vidonic, TribLive
Quote:
"Across the state, counties that still own nursing homes are saying that
declining medical assistance payments have cut into revenue, while costs,
including pay and benefits for employees, continue to rise, requiring them
to make tough choices on whether to cut back service or find new sources
of money."
LTC Comment:
The crisis of LTC financing we warned was coming in
The Keystone of Long-Term Care: More Access to Better Care at Lower
Public Cost for Pennsylvanians has arrived and is on its way to most
other states soon.
#############################
Updated, Friday, January 4, 2013,
1:56 PM (Pacific)
Seattle--
LTC BULLET: LTC ALMANAC UPDATE
LTC Comment: We’ve updated the “Almanac of Long-Term
Care” in The Zone. More on the LTC Almanac and today’s update
after the ***news.***
*** AMERICAN TAXPAYER RELIEF ACT OF 2012: President Obama
signed the “fiscal cliff” legislation on Wednesday, January 2, 2013.
Following is a link to the statute that repeals CLASS and sets up a “Commission
on Long-Term Care”. We’ll keep a close watch on that LTC Commission
as its most likely recommendation will be a new CLASS-like entitlement
program but with compulsory participation. Before even considering
expensive new government LTC programs, the Commission should propose
ending Medicaid loopholes that trap the middle class on LTC public
assistance. Examples of such loopholes include Medicaid’s $802,000 home
equity exemption; Medicaid-compliant annuities which allow hiding hundreds
of thousands of dollars immediately before Medicaid qualification; and the
welfare program’s unlimited exemptions for personal belongings, a
business, prepaid funeral expenses, an automobile, and term life
insurance. ***
*** ILTCI CONFERENCE: Early Bird Registration ends
Thursday, January 10th, for the Thirteenth Annual Intercompany Long Term
Care Insurance Conference to be held from March 3-6, 2013 at the Hilton
Anatole, in Dallas, Texas. Once again, the ILTCI conference will host
and subsidize the cost for a special 2-day pre-conference CLTC Master
Class (only $95 extra). Harley Gordon will personally conduct this
class. If you are an agent selling LTC (or other) insurance directly to
consumers, you can apply
here for a Scholarship that will qualify you for a $295 Scholarship
rate (plus an additional $95 if attending the CLTC class). If you are a
government employee, register
here for the conference using the Government Employee rate of $95.
For those who have never attended ANY of the previous twelve annual
conferences, get a special rate of only $395 (instead of the $895 early
bird rate) and register
here before January 10th. The price of registration goes up $100
after that date. Make your Hotel reservations early for attractive rates
of only $129 (for the Hilton Anatole Hotel). The final few booths
available for exhibitors are going fast. Get all details at
http://www.iltciconf.org/. If you have any questions, contact Jim
Glickman at 818-867-2223. ***
#############################
LTC BULLET: LTC ALMANAC UPDATE
LTC Comment: Center members know and appreciate our "Almanac
of Long-Term Care" in
The Zone, our password-protected website.
*** SPECIAL. To celebrate the New Year of 2013, we are
making access to The Zone, including the "Almanac of Long-Term Care"
free for seven days—today through Friday, January 11, 2013. To access
this introductory peek into The Zone, go to
http://www.centerltc.com/members/index.htm and use the following
case-sensitive user name and password: UN: IntrotoZone / PW: FreeTrial.
Like what you see? Then join the Center for Long-Term Care Reform
here. Or contact Damon at 206-283-7036 or
damon@centerltc.com. ***
The LTC Almanac is divided into 11 sections:
Aging Demographics
International
Unfunded Liabilities--Social Security, Medicare, and Budgets
Long-Term Care
Caregiving
Long-Term Care Financing
Long-Term Care Insurance
Reverse Mortgages
Long-Term Care Providers
Medicaid
Medicaid Planning
Each section is
divided into sub-sections and under each sub-section we provide a list by
date of the most important reports and articles published on the topic,
usually with a few highlights and sometimes with analysis.
The
Almanac of Long-Term Care is a great way to find statistics you need
quickly or to get current on topics you need to know the latest
information about.
The Zone and the
LTC Almanac are for Center for Long-Term Care Reform members only,
except during the current free trial offer. Join the Center here:
http://www.centerltc.com/support/index.htm. Call or email Damon at
206-283-7036 or
damon@centerltc.com. He can give you a user name and password to open
up The Zone even before your annual dues payment arrives. Individual
annual memberships are $150. Premium memberships with access to our
“Clipping Service” start at $250. Premium Elite and “Regional
Representative” membership (if you qualify professionally) are $500.
Corporate memberships with many extra benefits start at $1,000. See our
"Membership Levels and Benefits" schedule
here.
Caveat: With time,
some hyperlinks go bad. In a huge document like the "LTC Almanac,"
we can't keep all the links current all the time. If you find a bad link,
but want to get to the material, contact us. We often have an electronic
copy of the document and we can usually find a current live link. We'll
also fix the link in the LTC Almanac so it will be current again
for others.
Suggestion: Read
through the following update to stay current on new resource materials.
Then browse the full LTC Almanac at your leisure. When you need a
quick fact or the latest research on a particular topic, you'll know right
where to go. Enjoy.
--------------
Chapter 3:
Unfunded Liabilities--Social Security, Medicare, and Budgets
Unfunded Liability
Estimates
“How Much Does the
Federal Government Owe,” NCPA 0612 URL:
http://www.ncpa.org/pdfs/st338.pdf
“This fiscal imbalance
is equal to the current debt held by the public plus the unfunded
| 
