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READ STEVE'S BIO.JPG)
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Updated, Monday, December 9,
2013, 1:20 PM (Pacific)
Seattle—
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ANNUITY ABUSE AND LTC NEWS AND COMMENT
LTC Comment: Today’s lead article is about an appeals court case
argued by Bill Browning, a former President of the National Academy of
Elder Law Attorneys whom I debated eleven years ago at one of Jesse
Slome’s national conferences:
“Listen to
"The Great Debate": Steve Moses v. NAELA (National Academy of Elder
Law Attorneys) President-Elect Bill Browning, held at the National LTCi
Producers Summit, November 18-19, 2002 - St. Louis, Missouri.”
The net result of Mr. Browning’s “win” in this case is that his client
diverted $175,000 from Medicaid spend down rules thus transferring the
cost to taxpayers at the expense of a program intended to help the poor.
In the greater scheme of annuity abuses, this one is small potatoes. I’ve
documented examples of $450,000 and $900,000 annuities in recent reports
available
here and
here. In fact, there is no limit on how much money can be divested
through Medicaid compliant annuities.
This is a quote from a Virginia Medicaid eligibility worker frustrated by
the problem of annuity abuse:
“Medicaid
is a program that pays for pretty much anyone who needs care and knows how
to get it, not just for the poor.”
(Source: Stephen A. Moses, “The Index of Long-Term Care Vulnerability: A
Case Study in Virginia,” The Thomas Jefferson Institute for Public Policy,
November 2013, p. 7; http://www.thomasjeffersoninst.org/files/3/LongTermCare.pdf.)
December 2013, “Community Spouse's Purchase of Annuity Before
Medicaid Determination Is Not Improper Transfer [link],”
ElderLaw Answers
Quote:
“In a case argued by Ohio ElderLawAnswers member attorney William
Browning, the U.S. Court of Appeals for the Sixth Circuit rules that an
annuity purchased by a community spouse before a Medicaid eligibility
determination is not an improper transfer and that the annuity does not
need to name the state as a remainder beneficiary.
Hughes v. McCarthy (6th Cir., No. 12-3765, Oct. 25,
2013).”
LTC Comment:
Waste, fraud and abuse are rampant in Medicaid’s long-term care financing
program, but the worst of these is abuse that is legal. Waste can be
fixed and fraud can be prosecuted, but legal abuse goes on and on unless
and until Congress acts. Yet, year after year, nothing happens to close
this gaping loophole and the Centers for Medicare and Medicaid Services
(CMS) remains silent about Medicaid annuity abuse.
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12/7/2013,
“Long Term Care Insurance Association Praises Virginia LTC Vulnerability
Report [link],”
by Jesse Slome, American Association for Long-Term Care Insurance
Quote:
"The Association director praised a new report researched and written by
Stephen Moses, president of the Center For Long-Term Care Reform and
presented by the Thomas Jefferson Institute. 'This is a very well prepared
look at the current environment that draws some very dire conclusions if
we continue to hide our heads in the sand,' Slome explains. 'Kudos to
Moses and the Center for another excellent look at the problem in an
extremely fair and balanced way.'"
LTC Comment:
Thanks to our friends at AALTCI for this endorsement.
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12/6/2013,
“Government
Role in Long-Term Care: It's Getting Old,” by Stephen A. Moses,”
Georgia Public Policy Foundation
Quote:
"Georgia should seek ways to return Medicaid to its original intent: a
long-term care safety net for people in need. Without that, Medicaid will
remain free inheritance insurance for relatively prosperous heirs,
deflating their sense of urgency about long-term care risk and cost, and
resulting in too many ending their lives on Medicaid for that program to
survive."
LTC Comment:
This is the op-ed I wrote for the Georgia Public Policy Foundation
announcing publication of our report titled “The Index of Long-Term Care
Vulnerability: A Case Study in Georgia [link].”
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12/6/2013,
“2014
Long Term Care Insurance Tax Guide Published by AALTCI,” by Jesse
Slome, American Association for Long-Term Care Insurance
Quote:
"Long term care insurance premiums remain one of the tax deductible
expenses few individuals are aware of according to the American
Association for Long Term Care Insurance. A new guide produced by the
organization explains the current rules and the new IRS tax deduction
limits for 2014."
LTC Comment:
Heed and lead.
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12/5/2013,
“Nursing
home $10,000 suicide fine upheld,” by Dave Surico, McKnight's LTC
News
Quote: "A federal appeals court has upheld a $10,000 fine against a
skilled nursing facility for leaving a suicidal patient unattended, who
then walked out of the facility and killed himself. The U.S. Court of
Appeals for the Ninth Circuit said the Department of Health and Human
Services' ruled that the decision (Del Rosa Villa v. Sebelius, 2013
BL 330965, 9th Cir., No. 12-71685, 11/26/13) to fine petitioner
Del Rosa Villa was supported by substantial evidence. The court denied a
petition to overrule decisions that led to the fine."
LTC Comment:
Care to make a guess whether this facility was mostly Medicaid or mostly
private pay?
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12/5/2013,
“Russian
diplomats charged in $1.5M Medicaid scheme,” by Associated Press,
Politico
Quote:
"More than three dozen Russian diplomats and their spouses enjoyed luxury
vacations and spent tens of thousands of dollars at the finest stores as
they lied about their incomes to get the government to pay their health
care bills, federal prosecutors in New York said Thursday."
LTC Comment:
Medicaid planning: it’s not just for elder law attorneys anymore.
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12/4/2013,
“How
is Medicare Advantage really doing?,” by Allison Bell,
LifeHealthPRO
Quote:
"Two witnesses painted completely different pictures of the state of the
Medicare Advantage program today at a House Energy & Commerce health
subcommittee hearing."
LTC Comment:
Who are you going to believe? An employee of a research firm that depends
on government grants or the former chief of the Congressional Budget
Office?
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12/4/2013,
“Nursing
homes lagging in palliative care, researchers say,” by Dave Surico,
McKnight's LTC News
Quote:
"Nursing homes have lagged in the area of palliative care, and need to
take a seat at the table, according to researchers in a Health Affairs
blog. The lack of intertwinement between nursing homes and palliative
care is due to a number of factors: regulations that favor rehabilitation,
inadequate staff education around palliative care, financial
disincentives, lack of reimbursement and misconceptions, write authors
Mary Ersek, Ph.D., RN,
David Stevenson, SM, Ph.D., and Justine Sefcik."
LTC Comment: All sorts of perverse incentives are built into
government financed long-term care which makes providers, instead of
patients, the customers.
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12/4/2013,
“Genworth
Says Higher Premiums Blunt Long-Term Care Errors,” by Dan Reichl,
Bloomberg
Quote:
"Genworth Financial Inc., the largest seller of long-term care coverage,
is counting on periodic rate increases of 2 percent to 4 percent to
maintain profit targets, after larger insurers retreated from the business
to limit risk. 'I don't think it's prudent to be in this business unless
you can, over time, re-rate policies to reflect the difference between how
actual reality played out versus your original assumptions,' Chief
Executive Officer Tom McInerney said today in an interview. 'You have to
ultimately have a return in the mid-teens range. If it's less than that,
on a risk-adjusted basis, investors shouldn't invest in the business.'"
LTC Comment:
“If at first you can’t succeed, try, try again.” The irony is that
government has set aside nothing to ensure it will be able pay its
entitlement promises. Yet the private sector is criticized for doing the
responsible thing, i.e., making sure reserves will suffice to pay
future claims.
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12/3/2013,
“Carriers slam Medicare Advantage moves: AHIP says carriers should be
able to cut MA networks [link],”
by Kathryn Mayer, BenefitsPRO
Quote:
"Because of the Patient Protection and Affordable Care Act, seniors
enrolled in Medicare Advantage plans are paying higher premiums and
experiencing a reduction in benefits and disrupted coverage. And that's
just the beginning. That's the dire message from America's Health
Insurance Plans, which predicts will hit seniors even harder over the next
two years."
LTC Comment:
Unfortunately, the insurance industry cozied up to the Administration to
help pass the Affordable Care Act (aka ObamaCare) and now we’re all living
with the disastrous consequences: higher premiums for worse coverage.
The private sector (Charlie Brown) never seems to learn that government
(Lucy) always offers a sweet deal (the football) and then reneges after
companies adapt to take advantage.
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12/3/2013,
“Post-hospital
care spending jumps,” by Dave Surico, McKnight's LTC News
Quote:
"Bundled payment experiments are growing while Medicare spending on
nursing homes continues to come under scrutiny, according to a
Kaiser Health News/Washington Post report. Widely varied care,
additional services and costs from state-to-state have drawn the attention
of regulators."
LTC Comment:
The risk is that cutting Medicare payments to nursing homes will undermine
access to and quality of care funded (at less than the facilities’ cost of
care) by Medicaid.
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12/3/2013,
“North
Dakota drafts short-term care insurance regs,” by Allison Bell,
LifeHealthPRO
Quote:
"The North Dakota Department of Insurance may add a section on short-term
care insurance (STCI) to the state administrative code."
LTC Comment:
Better some insurance than none.
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12/2/2013,
“NIH deposits first batch of genomic data for Alzheimer's disease [link],”
NIH News and Events
Quote:
"Researchers can now freely access the first batch of genome sequence data
from the Alzheimer's Disease Sequencing Project (ADSP), the National
Institutes of Health (NIH) announced today. The ADSP is one of the first
projects undertaken under an intensified national program of research to
prevent or effectively treat Alzheimer's disease."
LTC Comment:
One more step in a Sisyphean effort to conquer Alzheimer’s.
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12/2/2013,
“Doctors Face A 24% Pay Cut In Both Medicare And Medicaid Reimbursements [link],”
by Merrill Matthews, Forbes
Quote:
"In 1997 Congress passed legislation, known as the 'sustainable growth
rate' (SGR), to try and reduce Medicare spending. If Medicare spending
grew faster than a predetermined amount, doctors' Medicare reimbursements
would be cut the next year by enough to offset the overspending. Not
surprisingly, Medicare spending didn't hit the target rate, and, again not
surprisingly, Congress didn't want doctors to take the financial hit. So
Congress has passed legislation, known as the 'Doc Fix,' multiple times to
postpone the cuts and keep the reimbursement levels roughly the same. But
those postponed deficits keep piling up, and come January doctors will
see, on average, a 24 percent cut in Medicare reimbursement levels. And
here comes the double whammy: Medicaid reimbursements will face the same
24 percent cut."
LTC Comment:
The Center for Long-Term Care Reform proposed a solution to the “Doc Fix”
problem that would save $30 billion per year and solve the LTC financing
problem too. Read it
here.
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12/1/2013,
“Oversight
of nursing home trust funds limited,” by Peter Eisler, USA TODAY
Quote:
"Many states do not require criminal background checks on nursing home
staff who manage residents' trust funds, and few demand audits of those
accounts - a regulatory gap that contributes to scores of cases in which
the money is stolen or mismanaged. Nearly every state requires background
checks for nursing home staff in caregiving roles, but 20 states don't
apply that requirement to office workers who do not routinely have direct
patient contact, a USA TODAY review of state laws finds. Those office
employees typically manage the trust accounts that nursing homes must
maintain for residents who request that the facility safeguard their
money."
LTC Comment: And why must nursing homes maintain “trust accounts”
for residents? Because 2/3 of their residents are on Medicaid and the
nursing homes have to help ensure that Medicaid residents’ assets never
exceed $2,000 and throw them off the program that pays for their care.
Private-pay patients don’t need nursing home trust accounts and don’t have
to worry about crooked nursing home employees ripping them off.
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11/29/2013,
“Why
your clients need a care coordinator,” by Margie Barrie,
LifeHealthPRO
Quote:
"Q. The policies I’m selling contain a care coordinator
benefit. How can I explain the value of that benefit to clients? A.
Having hired a care coordinator for my mother, I am a big advocate of that
benefit. When I tell my mother’s story to clients, they really understand
how valuable a benefit caregiving is."
LTC Comment: Someone should do a study that compares the care
coordinator benefit in a private long-term care insurance policy with
whatever benefit, if any, is available under Medicaid.
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11/28/2013,
“Large discrepancies found in Medicare spending on post-hospital care [link],”
by Jordan Rau, Washington Post
Quote:
"After years of trying to clamp down on hospital spending, the federal
government wants to get control over what Medicare spends on nursing
homes, home health services and other medical care typically provided to
patients after they leave a hospital.”
LTC Comment:
Great idea except that the only thing enabling nursing homes to provide
custodial long-term care to two-thirds of their residents--who rely on
Medicaid at less than the cost of providing the care--is that Medicare has
paid very generously in the past. Take that away and the whole government
LTC financing scheme collapses.
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11/27/2013,
“Long-term
care: The silent Medicaid killer,” by Kathryn Watson, Watchdog.org
Quote:
"ALEXANDRIA, Va. — A silent threat to the commonwealth looms as the baby
boomer generation gets older — long-term care costs like nursing home
expenses, paid for by taxpayer-funded Medicaid.
“'Income, I found, is almost never an obstacle to qualifying for
Medicaid,' said Stephen Moses, a former Medicaid state
representative who is now president of the Center for Long-Term Care
Reform and recently
wrote a report on the state of long-term care in Virginia. [Emphasis
in the original]
"Moses said Virginians need to take personal responsibility to save and
find ways to finance nursing home care in the future, and lawmakers need
to put more restrictions on eligibility so long-term care doesn’t cripple
the system."
LTC Comment:
This article reviews and recommends the first of our three state-level
studies introducing a new analytical tool: “The Index of Long-Term Care
Vulnerability.” Watch for subsequent reports applying the index to
Georgia and New Jersey.
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11/26/2013, “Group
wants Virginia to tighten Medicaid rules,” by Chelyen Davis, The
Fredericksburg Star
Quote:
"A conservative think tank is advising Virginia to tighten its rules for
Medicaid coverage of long-term care to discourage reliance on the public
program. The Thomas Jefferson Institute for Public Policy, which advocates
for public policy 'based on a philosophy of limited government, free
enterprise and individual responsibility,' said in a report Tuesday that
Virginia is going to see big growth in the over-85 population in the next
40 years."
LTC Comment:
The Thomas Jefferson Institute, which published our report reviewed by
this article, is more accurately described as a libertarian, not as a
conservative, think tank.
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11/26/2013,
“Inspector
General Scrutinizes LTC Industry on Rehospitalizations,” by Jason
Oliva, Senior Housing News
Quote:
"Government inspectors say there's not enough attention being paid to the
readmissions problem in long-term care settings, specifically nursing
homes. A recent study by the Office of the Inspector General (OIG) found
that of the 825,765 Medicare residents who stayed in nursing homes for at
least one day in fiscal year 2011, 24.8% experienced hospitalizations."
LTC Comment:
Frail, infirm and elderly people need a lot of care, both acute and
long-term. It’s very hard to say how much is too much.
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11/26/2013, “How a toddler's brain may indicate if they'll get
Alzheimer's in old age: Children with a genetic risk have brains that
develop differently [link],”
by Anna Hodgekiss, MailOnline
Quote: "Toddlers who have a genetic risk from Alzheimer's have
brains that develop differently, new research suggests. Infants who carry
a gene associated with increased risk of the condition tend to have
differences in brain development compared to children without the gene.
The gene variant is called APOE-E4 - a known risk factor for late-onset
Alzheimer's - and researchers say this study shows some of the earliest
differences in people who have it."
LTC Comment: A whole new age demographic for the LTCI market to
target.
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Updated, Friday, December 6,
2013, 1:10 PM (Pacific)
Seattle—
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LTC BULLET: “THE INDEX OF LONG-TERM
CARE VULNERABILITY: A CASE STUDY IN VIRGINIA” PUBLISHED
LTC Comment: Can the Commonwealth of Virginia’s Medicaid-based long-term
care system survive? Hard questions asked, analyzed and answered after
the ***news***
*** SEND STEVE TO HEALTH CARE ROUNDTABLE in Richmond, VA. The
Thomas Jefferson Institute for Public Policy (TJI) published our major
report titled “The Index of Long-Term Care Vulnerability: A Case Study in
Virginia.” This study introduces the public policy world to our new
“Index of Long-Term Care Vulnerability” which enables analysts to answer
objectively the question: can LTC financing survive in its current and
tending form? TJI is sponsoring an important “Health Care Roundtable” on
December 12. Steve Moses will present our report’s findings and join the
discussion with some of the top health care policy analysts in the
country, including Grace-Marie Turner of the Galen Institute, Michael
Tanner of the Cato Institute and Bob Helms of the American Enterprise
Institute.
The Center for Long-Term Care Reform seeks to raise funds to support
Steve’s trip to give this presentation and contribute to this important
health policy conversation.
Special deal:
Pledge any amount $25 or above to support this important project and
we’ll comp you for a year of the Center’s
clipping service (usually $120 minimum; valid for new clipping service
subscribers only) at no extra charge.
Pledge $50 or more and we’ll upgrade your Center membership to the next
higher individual level, e.g. Regular membership ($150 per year) goes to
Premium Membership (usually $250 per year); Premium goes to Premium Elite
or Regional Representative ($500 per year, for those who qualify). Check
out our “Membership
Levels and Benefits” for details on all membership levels.
If you can help, let Damon know at
damon@centerltc.com or 206-283-7036. He’ll subscribe you to the
Clippings or upgrade your membership immediately, even while your check is
in the mail.
We’ll gladly make similarly attractive special offers to corporate donors
willing to pony up somewhat larger amounts. Just email Steve at
smoses@centerltc.com or call him at 425-891-3640 to discuss and
negotiate a bonus benefit most attractive to you and your company.
How to contribute:
Make your check out to Center for Long-Term Care Reform and send to: 2212
Queen Anne Avenue North, #110 / Seattle, WA 98109 -- Or contribute
online
here.
Our goal is to raise $1,500 to support this trip and opportunity.
Thanks in advance for your consideration and support. ***
*** IF YOU’RE NEAR RICHMOND, VA ON 12/12/13, YOU CAN ATTEND THE SAME EVENT
and join Steve’s cheering section (free registration required, see
below): Leadership Roundtable On Health Care Reform — Register
today for the next Leadership Roundtable hosted by the Thomas Jefferson
Institute for Public Policy! This Roundtable, on Health Care Reform, is
sponsored by Verizon-Virginia and will take place on Thursday morning,
December 12 in the Shenandoah Room of the SunTrust Building, (919 East
Main Street in Richmond), from 8:30 am until noon. The first half of the
session will cover an update on Obamacare and possible reforms; the second
half will discuss reforming or expanding Medicaid in Virginia. Among the
expert speakers confirmed –
Grace Marie Turner, President of the Galen Institute
Michael Tanner, Healthcare expert for the Cato Institute
Kevin Kuhlman, Manager of Legislative Affairs for the NFIB National
Office
Robert B. Helms, Resident Scholar, American Enterprise Institute,
and
Stephen Moses, Center for Long Term Care Reform (and author of a
new Jefferson Institute study
here)
Registration for this Leadership Roundtable is Free, but there is limited
space available. To register at no charge,
please click here. ***
*** PUBLICATION ANNOUNCEMENT: “The Index of Long-Term Care Vulnerability:
A Case Study in Virginia — Virginia is faced with a serious problem as are
all states: The aging population requires us to determine how to handle
the additional costs this will bring to government and personal budgets.
Long Term Care is one of the more important problems facing all parents,
as parents, siblings, aunts and uncles live longer and longer. What are
the costs today? What are the projections for these costs in the future?
And how should we consider restructuring this need for Long Term Care?
These are the questions and concerns examined by this new study on
Long-term care funded by Medicaid.
Read It Here!” ***
*** KEY NUMBERS UPDATED: The Centers for Medicare and Medicaid Services
(CMS) has updated the critical Medicare and Medicaid numbers for 2014.
For example, the home equity exemption for Medicaid increases from a
minimum of $543,000 ($500,000 in 2010) to a maximum of $814,000 ($750,000
in 2010). For all the new numbers, including the Community Spouse
Resource Allowance (CSRA) and the Minimum Monthly Maintenance Needs
Allowance (MMMNA) see our updated chart
here. It shows the year-by-year increases in all the key numbers as
adjusted annually for inflation going back two decades. You’ll need your
Center Member’s-Only User Name and Password. Need a reminder? Or want to
join the Center, receive our weekly publications and get access to The
Zone? Contact Damon at 206-283-7036 or
damon@centerltc.com. ***
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LTC BULLET: “THE INDEX OF LONG-TERM CARE VULNERABILITY: A CASE STUDY IN
VIRGINIA” PUBLISHED
LTC Comment: As ObamaCare doubles down on Medicaid for national
acute-health-care policy, the beleaguered welfare program continues to
undermine long-term care throughout the country.
After three decades of analyzing America’s long-term care financing system
and proposing policy solutions in dozens of national and state-level
studies
here, we realized it may be too late to avoid a catastrophic meltdown
of the system.
So we decided to ask a different question in three studies this year.
Instead of “What’s wrong and how can we fix it?,” we asked “What is the
probability today’s LTC system can survive the challenges it faces?”
Step one was to ask: What are the main challenges our long-term care
financing system(s) face? We broke them into seven key questions:
1. How many older people are coming in the next few decades? (The “Age
Wave”)
2. How sick will they be? (Morbidity)
3. How viable is Medicaid as a long-term care payer?
4. How reliable is federal revenue on which Medicaid mostly depends?
5. How reliable is state revenue on which Medicaid secondarily depends?
6. How much private-pay revenue is available to relieve LTC financing
pressure on
Medicaid?
7. How strong is dependency on public programs (i.e., the
entitlement mentality)?
To measure those challenges, we developed an “Index of Long-Term Care
Vulnerability.” The Index enables a user to assign percentage weights of
importance to each of the challenges and then to score and rank the
national and state levels of achievement on each of several sub-issues
within each challenge using objective metrics.
Not quite sure what we mean by that? Then take this opportunity to read
our first of three forthcoming reports that apply the Index of
Long-Term Care Vulnerability to specific state Medicaid and long-term
care financing systems. You’ll find a full explanation of our
methodology, a sample “Index” filled out by the author for Virginia, and
an Index worksheet you can use to assign your own weights, ranks and
scores to your own state.
The Thomas Jefferson Institute for Public Policy and the
Center for Long-Term Care Reform published “The
Index of Long-Term Care Vulnerability: A Case Study in Virginia” last
week. You can read it at
TJI’s website or the
Center’s.
To whet your appetite for the full report, what follows is the “Foreword,”
written by Michael Thompson, president of the Thomas Jefferson. You can
also read two media articles about our study
here and
here.
#############################
“Foreword”
by
Michael W. Thompson
Virginia is faced with a serious problem as are all states: the aging
population requires us all to figure out how to handle the “costs” that
this is going to bring to government and personal budgets.
Long Term Care is one of the more important problems facing all families
as parents, brothers and sisters and aunts and uncles live longer and
longer. What are the costs today, what the projections for these costs in
the future, and how should we consider restructuring this need for Long
Term Care in order for those who need it receive it, and that the burden
on government – on the taxpayers – is kept within reasonable bounds?
It is these questions and concerns that prompted the Thomas Jefferson
Institute to ask Stephen Moses of the Center for Long Term Care Reform to
look into our program and, with his expertise from doing similar work in
other states, to suggest what we ought to do here to prepare for this
growing need within our society. Four concerns popped out to me in this
study that need to be opening and frankly discussed. They are:
1) Long-term care is expensive, funded mostly by Medicaid (considered part
of our nation’s welfare program), heavily dependent on already strained
state and federal revenue, and facing an on-coming wave of aging boomers
who will test the adequacy of scarce public resources.
2) Virginia is one of only seven states in which the age 85 plus
population, the cohort most likely to need LTC, is projected to more than
quadruple between 2012 and 2050, up 307%! So financing long-term care in
Virginia will become a huge problem.
3) The Commonwealth has doubled down on its Medicaid-financed LTC system
by implementing major new programs to (a) “rebalance” services from
nursing home care to home care (making Medicaid more desirable) and (b) to
“manage” care by turning it over to large managed care organizations
(making Medicaid recipients more vulnerable to cost cutting and quality
problems).
4) While ramping up Medicaid for long-term care, Virginia has not done
enough to encourage private sources of LTC financing that could relieve
financial pressure on the tax-financed program. Asset spend down, estate
recovery, home equity conversion and private long-term care insurance
could and should contribute far more to financing quality LTC services.
This study, “The Index of Long-Term Care Vulnerability: A Case Study in
Virginia,” focuses on this problem and offers some policy alternatives. At
the end (in the Appendix) there is worksheet/an index process that policy
makers, policy influencers and others can use to determine long term care
needs depending on the variables outlined in this report. This is a
serious problem that needs to be confronted sooner than later.
Michael W. Thompson, President, Thomas Jefferson Institute for Public
Policy November 2013
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Updated, Wednesday, November 27,
2013, 11:13 AM (Pacific)
Seattle—
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ILTCI CONFERENCE NEWS, A NEW CENTER
REPORT AND LTC NEWS AND COMMENT
LTC Comment: Registration
is now open for the Fourteenth Annual Intercompany Long Term Care
Insurance Conference to be held from March 16-19, 2014 at the Rosen
Centre, in Orlando, Florida. Details and conference website
here.
Once again, the ILTCI
conference will be hosting and subsidizing the cost for a special 2-day
pre-conference CLTC Master Class (only $195 extra). Harley Gordon will
personally conduct this class on Saturday March 15 (8AM to 6PM) and Sunday
March 16 (8AM to 4PM).
If you are an agent selling
long term care (or other insurance) directly to consumers, you can apply
for a Scholarship. The Scholarship application is available at
www.ILTCIConf.org/Scholarship.htm. All Scholarship applications that are
approved, will qualify the attendee for the $295 Scholarship rate (plus an
additional $195 if you are attending the CLTC class).
If you are a government
employee, please go to https://LTCIDB.com/Registration-Government/ and
register for the conference using the Government Employee rate of $95.
For those who have never
attended ANY of the previous thirteen annual conferences, there is a
special new attendee rate of only $395 (instead of the $895 early bird
rate). Please go to https://LTCIDB.com/Registration-Introductory/ and
register before January 16th.
Next, ILTCIC strongly
recommends that you make your Hotel reservations by clicking on the "HOTEL
AND TRAVEL" button. The Hotel has very attractive rates of only $125 (for
the Rosen Centre Hotel). If the Hotel is already fully booked for a room
for any date that you want to stay at the hotel, please contact Jim
Glickman at 818-867-2223, so that you can be placed on a waiting list
(which usually clears) for those days.
If you have any questions,
please contact Jim Glickman at 818-867-2223.
*** CENTER REPORT
RELEASED. The Center for Long-Term Care Reform and the Thomas Jefferson
Institute (TJI) of Virginia released today a report titled “The
Index of Long-Term Care Vulnerability: A Case Study in Virginia.”
Center president Stephen Moses and TJI president Michael Thompson
participated this morning in a “tele-press conference” attended by 13
reporters to answer questions about the report’s findings and
recommendations. Read the new report
here. Experiment with the generic Index/Worksheet which enables you
to predict the likely survivability of LTC financing in your own state.
We’ll have much more to say about this report and two others we conducted
in Georgia and New Jersey in an LTC Bullet next week. ***
#############################
11/26/2013,
“NAIC
to consider LTCI market conduct forms,” by Allison Bell,
LifeHealthPRO
Quote:
"Top bodies at the National Association of Insurance Commissioners (NAIC)
have put three items related to private long-term care insurance (LTCI) on
their
agenda for the NAIC's upcoming fall meeting. The NAIC's executive
committee and its plenary -- a body that includes all voting NAIC members
-- plan to consider adopting the widely discussed
Long-Term Care Premium Rate Increase Model Bulletin at a joint
session Dec. 18."
LTC Comment:
Oh good, more help from the government.
#############################
11/25/2013,
“Pressure
ulcer treatments should be re-evaluated, expert says,” by Elizabeth
Leis Newman, McKnight's LTC News
Quote:
"Nursing home staff should adopt evidence-based approaches to pressure
ulcer prevention and treatment, and significantly more research is needed,
a geriatric medicine professor said Saturday.
'We don't know as much as we think we know,' said David Thomas, M.D., FACP,
AGSF, GSAF, CMD, a professor at the Saint Louis University School of
Medicine, where the
International Nursing Home Research Conference was held last
weekend. 'What we have been facing in the care of pressure ulcers in
nursing home is dogma. We desperately need people in nursing homes to do
clinical research.'"
LTC Comment:
Research is fine but the real solution to most problems with care in
nursing homes is adequate reimbursement, which means more private
financing and less dependency on Medicaid.
#############################
11/25/2013,
“The
$234 billion job that goes unpaid,” by Elizabeth Shell, PBS News
Hour
Quote:
"Nearly 9 in 10 Americans who need some form of long-term care (LTC) get
that assistance from family members or friends who volunteer their time.
More than a third of these 'informal' caregivers are taking care of an
aging parent, and assist with tasks like getting in and out of bed, going
to the bathroom, eating, housework and transportation."
LTC Comment:
The solution to this problem is not bigger government programs to pay
families for providing the care they give for free now. The solution is
to target scarce government resources to the truly needy and incentivize
middle-class and affluent people to insure privately. That’s the only way
we’ll ever relieve the huge and growing burden of elder caregiving on
families across the land.
#############################
11/25/2013,
“OIG promises more in-depth
anti-fraud efforts, further auditing of providers [link],”
by James M. Berklan, McKnight's LTC News
Quote:
"The Office of Inspector General may have delayed the announcement of its
detailed 2014 annual Work Plan from October until January, but providers
now know where the overall focus of investigative efforts will lie for the
next four years. The OIG has announced it is committing to maximizing
fraud recoveries and the protection of patient data for 2014-2018."
LTC Comment: Maybe the OIG should also pay attention to poor
estate recoveries by most state Medicaid programs. My report in 1988 for
the OIG laid out findings and recommendations, most of which were adopted
by Congress and President Clinton in the Omnibus Budget Reconciliation Act
of 1993. Medicaid Estate Recoveries: National Program Inspection
is still a useful manual for states seeking to increase non-tax revenue
from their estate recovery programs. You can still read the 25-year-old
report on the OIG’s website
here.
#############################
11/24/2013,
“Exploding Medicaid bills will
threaten budgets and health: So get ready for more Obamacare trouble [link],”
by Paul Howard and Stephen Parente, New York Daily News
Quote:
“While the persistent problems with Obamacare's health exchanges have
captured media headlines, a more troubling underlying story is the law's
historic and unsustainable expansion of Medicaid. For every one person
that has enrolled in private coverage under Obamacare to date, four have
enrolled in Medicaid. That portends an astronomical rise in Medicaid
spending in state and federal budgets - and worse health outcomes for
millions of Americans."
LTC Comment: Never mind the incident with the iceberg, let’s add
more deck chairs to the Titanic.
#############################
11/22/2013,
“Liability
costs climb for long-term care, analysis finds,” by Elizabeth Leis
Newman, McKnight's LTC News
Quote:
“A nursing home operator with 100 beds can expect $194,000 in liability
expenses in 2014, according to a new analysis from the American Health
Care Association and Aon Global Risk Consulting. Liability costs for
long-term care providers are expected to increase by 5% next year, while
claims frequency also is expected to climb, says the ‘2013 Long Term Care
General Liability and Professional Liability Actuarial Analysis.’
The projected national 2014 loss
ratio is $1,940 per bed.”
LTC Comment:
Low Medicaid reimbursement for most of their residents and lawyers lined
up to sue at any opportunity bode poorly for nursing homes’ liability
risk.
#############################
11/21/2013,
“When Mom And Dad Move In: The
'Granny-Flat Tax Exemption' For The Sandwich Generation [link],”
by Kelly Phillips Erb, Forbes
Quote:
"My brother and I understand that we will eventually become part of
the 'sandwich generation' – adults who are charged with taking care of
their parents while also taking care of their own children. That doesn’t
make us special: in fact, far from it. Accordingly to a recent study
published by the Pew Foundation, nearly half (47%) of adults in their
40s and 50s have a parent age 65 or older and are either raising a young
child or financially supporting a grown child (age 18 or older). And while
those numbers are creeping up just slightly, the financial and other
burdens associated with caring for parents and children are increasing
quickly.
"It’s an economic reality that takes some adjustment – and politicians are
just now beginning to feel the pressure from their constituencies to make
changes in the law to ease that burden. That’s exactly what just happened
this week in Jefferson County, Florida. Jefferson County is located in the
state’s panhandle, bordered by Georgia and the Gulf of Mexico. In terms of
age, it tracks pretty closely
with the nation as a whole with a median age of 39 while 14.50% of all
residents are age 65 years or older. With those demographics in mind, the
Jefferson County Commission recently passed a 'granny flat tax' – the name
for the law that makes it tax-exempt to build onto or remodel a home if
taking care of an elderly family member."
LTC Comment:
Now, how about a tax incentive for LTCI?
#############################
11/21/2013,
“CMS too burdened and focused on
cost to be the epicenter of long-term care reform, experts say [link],”
by Tim Mullaney, McKnight's LTC News
Quote:
"Most long-term care reforms rely on the Centers for Medicare & Medicaid
Services for implementation, but the overburdened agency cannot manage all
the needed changes in this area, according to a panel of experts."
LTC Comment: Why would we expect CMS to do a better job on LTC
reform than it’s done on ObamaCare implementation?
#############################
11/21/2013,
“Aging Baby Boomers And Higher
Health Care Costs To Impact Long-Term Care [link],”
by Partnership for Long-Term Care
Quote:
"University
of California, Berkeley researchers state in a new study that an
unprecedented increase in seniors over the next decade could nearly double
Medi-Cal
long-term care costs, from $6.6 billion to $12.4 billion annually by
2023."
LTC Comment:
To understand just how disastrous this news is read our California report
titled
Medi-Cal LTC: Safety Net or Hammock?
#############################
11/20/2013,
“Hospital admission rates show need
for new nursing home quality measure , OIG and CMS say [link],”
by Tim Mullaney, McKnight's LTC News
Quote:
"One in four nursing home residents on Medicare was hospitalized in 2011,
costing the program $14.3 billion, according to a new report from the
Department of Health and Human Services Office of Inspector General. In
light of its findings, the OIG has recommended a new quality measure to
track hospital admissions."
LTC Comment:
“Dual eligibles” are old, frail, infirm and extremely vulnerable to
hospitalization, especially because Medicaid pays less than the cost of
their care to LTC providers. This problem is endemic to
government-financed LTC.
#############################
11/20/2013,
“LTCI
deduction limits creep higher,” by Allison Bell, LifeHealthPRO
Quote:
“Taxpayers who can use the federal long-term care insurance (LTCI) premium
deduction in 2014 may still get substantial benefits from the deduction.
Analysts at
LTC Tree, an LTCI agency network, looked at how the latest LTCI
premium deduction limits might affect policyholders who own a policy that
provides a total of up to $219,000 in lifetime benefits with a 3 percent
automatic inflation increase."
LTC Comment:
Federal below-the-line LTCI deductions benefit few people unfortunately.
#############################
11/20/2013,
“Planning
for saving in the face of terminal illness,” by Paul Sullivan,
MarketPlace, New York Times
Quote:
"Patrick Skeldon, a commercial airline pilot, started having trouble
walking in the autumn of 2003. His doctor thought he had a vitamin
deficiency and prescribed supplements. When those didn't work, the doctor
referred him to a neurologist. The next year, he was told he had
amyotrophic lateral sclerosis, more commonly known as Lou Gehrig's
disease. He was 59.
"Through some shrewd financial planning, Mrs. Skeldon was able to continue
working for the United States Marshals Service and adding to her own
retirement while still getting care for her husband. Several years before
Mr. Skeldon was found to have A.L.S., the couple had purchased long-term
care insurance. They did so out of a fear that they might run out of
money, as her father had.
"To date, she said, the policy has paid $213,000 to cover a home health
care aide and still has $349,000 or five years left in benefits."
However:
"Depending on the state, there may be help short of running out of money.
New York, for one, has a generous program for home care.
LTC Comment:
There are mixed messages in this article. It begins with an LTCi success
story, but ends with a message encouraging long-term care planning
indolence. "Abandon all logic, ye who enter here." Indeed.
#############################
11/19/2013,
“Gaming
Medicaid has potential consequences for the aging,” by Kerry Peabody,
Portland Daily Sun
Quote:
"People trying to avoid the responsibility of providing for their own
long-term care by transferring assets as they age is a mine field of risk
not to mention a moral dilemma.
"Unfortunately, some people continue to game the system - attempting to
protect assets to benefit their family members while transferring the cost
of care to the taxpayers. Put another way, it is the practice of
engineering one's own poverty.
"With the federal debt now exceeding $17 trillion and the interest on that
debt absorbing evermore of our tax dollars, our government simply will not
have the ability to fund the crushing demand for these services. Based on
public policy discussions, means testing for all social services is likely
to become more aggressive and the threshold for eligibility will be
higher. Ultimately, the burden is ours to provide for our future. One
mechanism is long-term care insurance."
LTC Comment:
Hear, hear!
#############################
11/19/2013,
“'Self-reliance'
a key to long-term care financing reform, experts say,” by Tim
Mullaney, McKnight's LTC News
Quote:
"The United States is likely to favor an approach to long-term care
financing reform that values self-reliance but includes some form of
social safety net, according to a new report from a panel of experts."
LTC Comment:
Great, but the current system falls far short of that. It undermines
self-reliance by making the Medicaid LTC safety net available to people
who could, should and would insure privately otherwise.
#############################
11/19/2013,
“5
Financial Lessons from Retirees,” by Donna Fuscaldo, FoxBusiness
Quote:
"Whether it's not saving enough, or being too conservative with their
investments, people already in retirement make many mistakes that
adversely impact their lifestyle that can tarnish their so-called golden
years. But that doesn't have to happen to you. Before you let history
repeat itself, check out these five lessons financial planners and their
retired clients:"
LTC Comment:
Lesson #5 includes a strong recommendation to purchase LTC insurance.
#############################
11/18/2013,
“Watchful
Eye in Nursing Homes,” by Jan Hoffman
Quote:
"A pretty nightie, a new lipstick, a
fresh toothbrush: Doris Racher noticed that small things she had bought
for her 96-year-old mother, Eryetha Mayberry, a dementia patient at a
nursing home in Oklahoma City, had been disappearing. Ms. Racher assumed
the culprit was another resident who sometimes wandered into her mother's
room and fell asleep in her bed. So in 2012, Ms. Racher placed a
motion-activated camera in her mother's room. It looked like an alarm
clock, and Ms. Racher nearly forgot about it. About two months later, the
family decided to pore through the recordings."
LTC Comment: A new source of horror movies.
#############################
11/18/2013, “Most
People Misunderstand Long-Term Care Insurance Coverage, Costs [link],”
by Mark Chalon Smith, FoxBusiness
Quote:
"Most people are woefully unprepared to cope with long-term care needs and
expenses, according to a study released this week by a major insurer.
Northwestern Mutual's report, based on a Harris Interactive survey of more
than 2,000 people nationwide, found that 41% of those questioned admitted
they're confused about how to approach future long-term care challenges.
They are also failing to actively build a strategy for long-term care
needs, despite the possible personal and financial consequences."
LTC Comment: An open invitation to LTCI producers to fill the
information gap and provide the needed coverage.
#############################
11/18/2013, “It's
time frivolous lawsuit filers were held more accountable,” by John
O'Connor, McKnight's LTC News
Quote: "We live in a world where the luckiest among us get old and
sick before we die. Fortunately, senior living options exist to make the
endgame more comfortable and less painful than it otherwise would be. And
while it's one thing to hold operators responsible for bad care, it's
another to blame them for life's inescapable realities. Yet all too often,
that's the driving factor behind many cases that never should have been
filed."
LTC Comment: Such as the cases that come into vulture lawyers from
their highway billboards urging people to sue nursing homes. Sometimes
the same people who sue are ones who used the same lawyers to impoverish
their parents to qualify them for Medicaid. Low Medicaid reimbursements
for their parents’ care may have caused the problems they’re now suing to
correct. What a system!
#############################
11/17/2013,
“Survey:
Americans do not like to discuss finances,” by Annika McGinnis, USA
Today
Quote: "American families may not be saving enough for retirement
but even worse, they're not talking about it with each other, show the
findings of a new study out Monday. 'Family & Retirement: The Elephant in
the Room,' a representative survey of 5,400 adult Americans conducted by
Merrill Lynch and consulting firm Age Wave in August shows 70% over the
age of 25 have not had a discussion with their parents about retirement.
"Not discussing these emotionally delicate topics is preventing many
Americans from facing the facts together as a family. More than 90% say
they would not be prepared financially if an aging parent or close
relative needed long-term care. And just 37% of people age 50 or older
believe they'll need long-term care before they die. The reality: 70%
eventually will need the costly services, the new study says."
LTC Comment:
Moral of the story? Have “the talk” with aging parents.
#############################
11/7/2013,
“Doctors In Venezuela Say Their
Universal Health Care System In Collapse [link],”
by Dr. Susan Berry, Breitbart.com
Quote:
"Almost everything needed to mend and heal is in critically short supply:
needles, syringes and paraffin used in biopsies to diagnose cancer; drugs
to treat it; operating room equipment; X-ray film and imaging paper; blood
and the reagents needed so it can be used for transfusions."
LTC Comment:
So why am I sending you news about health care in Venezuela? My late wife
and I were Peace Corps Volunteers there from 1968 to 1970. It always
seemed ironic to me that the country's constitution guaranteed "free"
health care to all citizens . . . but free health care was virtually
unavailable to anyone. So much for "social health insurance."
#############################
Updated, Monday, November 18,
2013, 12:25 PM (Mountain)
Santa Fe, New Mexico—
#############################
MEDICARE RUN AMUCK AND LTC NEWS AND COMMENT
LTC Comment: Medicare has a $43 trillion unfunded liability. Yet, the
program eagerly encourages seniors to take maximum advantage of its wide
ranging benefits. Last week I received the following personal email
message from the Centers for Medicare and Medicaid Services (CMS):
“Happy Birthday from Medicare! We wish you well in the upcoming year and
want to remind you of the preventive services Medicare offers to help you
stay healthy. Our records show that you have not taken advantage of some
of the preventive services which are available to you now or in the future
and listed in the table below. Please talk with your doctor to decide
which ones are right for you.”
Here are some of the preventive services Medicare’s boilerplate email
urges me to use:
OBESITY COUNSELING
CARDIOVASCULAR
DISEASE (BEHAVIORAL THERAPY)
HIGH INTENSITY
BEHAVIORAL COUNSELING
ALCOHOL MISUSE
SCREENING
DEPRESSION SCREENING
ABDOMINAL AORTIC
ANEURYSM
I’m not obese. I
work out regularly. I don’t misuse alcohol. I’m not depressed. And last
time I saw a doctor, he told me biannual check ups would suffice. The
nurse marveled that, at 67 years of age, I didn’t use a single drug
prescription. But Medicare is looking after me and insists I should avail
myself of all eligible services whether I need them or not.
The message ended: “Remember, Medicare is your partner in health.
Sincerely, Centers for Medicare & Medicaid Services.”
As ObamaCare implodes, the commonest “solution” proposed is “Medicare for
all.” Out of the frying pan, into the fire.
#############################
11/15/2013,
“CBO
analyzes Medicaid caps to curb federal healthcare spending,” by Tim
Mullaney, McKnight's LTC News
Quote:
"The federal government could reduce its Medicaid contributions to states
as a deficit reduction measure, but the move likely would achieve savings
only by putting seniors at risk, according to the Congressional Budget
Office."
LTC Comment:
A better approach to Medicaid savings is to change the program's LTC
eligibility rules to prevent the non-poor from taking advantage of the
program and encourage them to plan early and responsibly for long-term
care.
#############################
11/14/2013,
“Better Medicaid managed care oversight needed to protect providers
serving high-risk populations: OIG [link],”
by Tim Mullaney, McKnight's LTC News
Quote:
"States are not doing a good job of monitoring how Medicaid managed care
enterprises handle providers serving high-risk populations, according to a
new government report."
LTC Comment:
Across the USA states are converting their fee-for-service long-term care
systems into managed care. They transfer the responsibility for providing
complicated care for vulnerable populations such as the aged, blind and
disabled, and in some states even the highest-risk "dual eligibles," to
giant managed care companies that have little or no experience delivering
such care to such groups. Senior advocates worry it's a disaster ready to
happen. The USDHHS Inspector General (my former employer) finds in this
report that states are not adequately monitoring managed LTC. Risks due
to Medicaid managed LTC conversions are a component of the Center for LTC
Reform's "Index of Long-Term Care Vulnerability," about which, more, in
future messages.
#############################
11/14/2013,
“Caring
For Elderly Parents Is A Daily Choice,” by Edgar B. Herwick III,
WGBH News
Quote:
"Ward, who lives in Rhode Island, said before his father died he did
something simple and extraordinary. 'My father began to realize at a
certain point that his health was declining, and he made a decision at
that point that he wanted to prepare for the fact that my mother was going
to outlive him,' he said. 'So he pulled us together and he gave us a task:
to be responsible and to take care of her.'"
LTC Comment: More aging Americans should do what Ward's Dad did
and more adult children should partially fulfill such commitments by
helping their parents obtain LTC insurance.
#############################
11/13/2013,
“LTC
community fights for attention: The silver tsunami,” by Allison Bell,
LifeHealthPRO
Quote:
"Insurance groups, insurance companies and insurance producers are trying
to tap Americans on the shoulder this month and remind them that long-term
care (LTC) planning is much more of a mess than acute health care
planning."
LTC Comment:
Long-Term Care Awareness Month is afoot!
#############################
11/13/2013,
“Price increases, not a larger senior population, are responsible for
exploding healthcare costs: analysts [link],”
by Tim Mullaney, McKnight's LTC News
Quote:
"Escalating healthcare costs in the United States cannot be pinned on an
aging population demanding more services for chronic conditions. Instead,
higher costs are primarily the result of price increases, according to a
new analysis in the
Journal of the American Medical Association."
LTC Comment:
The Age Wave has only begun to crest. It won't crash until boomers reach
the age when acute and long-term care risk peak. Then age-related health
expenditures will exceed and exacerbate "higher costs."
#############################
11/13/2013,
“Major insurers say they will hike premiums on long-term care policies,”
by Tim Mullaney [link],
McKnight's LTC News
Quote:
"A number of issues have necessitated the rate modifications, including
miscalculations about how many people would maintain their policies and
the true costs of claims, as people are receiving benefits longer than the
insurers anticipated when designing these products."
LTC Comment:
The other major reason, totally outside the control or reasonable
anticipation of the private insurance industry, is the Federal Reserve’s
policy of forcing interest rates down to near zero artificially.
#############################
11/12/2013,
“An
Alzheimer's reality check,” by Tim Mullaney, McKnight's LTC News
Quote:
"Alzheimer's researchers - or the public relations machines trumpeting
their work - should chill out. Frequent breathless reports about major
breakthroughs are giving false hope to anyone who believes the hype about
an imminent cure. . . . It's perhaps too easy to be cynical about
Alzheimer's research, thanks to how the results often are presented. In
addition to creating false hope, the hype around promising findings also
threatens to make people complacent, thinking that the Alzheimer's
research machine is well-oiled and firing on all cylinders. This new
report does a service by pointing out the huge challenges that remain.
Signing your name to the declaration might be a merely symbolic gesture,
but hopefully the report will remind everyone that Alzheimer's research
still needs - and merits - our attention and activism.”
LTC Comment:
Well said.
#############################
11/11/2013,
“None
Dare Call It...,” by John Goodman, National Center for Policy Analysis
Quote:
"But what threatens the foundations of a free society most of all is when
it is the government (and its allies in the private sector) who are doing
the attacking, and when the reason there is no response is that the
victims of the attacks have been threatened and bullied into silence. I
believe that is where we are today--not just with respect to health
insurance, but with respect to health care generally. I'm afraid other
industries are not far behind."
LTC Comment:
This is an excellent column on the current status of health policy
intimidation by the government and its ramifications.
#############################
11/11/2013,
“Nursing homes are the most dangerous workplaces in America, government
data shows [link],”
McKnight's LTC News
Quote:
"Last year's illness and injury incidence rate for private sector nursing
and residential care facilities was 7.3%, the BLS reported Thursday. This
was the highest overall, and it far eclipsed the illness and injury rates
for workplaces that might seem more dangerous. The rate for miners (except
oil and gas) was 2.7%, and the rate for construction was 3.6%. State-run
nursing homes are even riskier places to work, with a 13% incidence rate.
Of all the illness and injury rates
published by the BLS last week, this was the only one to reach double
digits."
LTC Comment:
Medicaid pays nursing homes less than the cost of providing the care and
nursing home caregivers are paid some of the lowest wages of any workers
in the country. Having the highest injury rates adds injury to insult.
#############################
11/9/2013,
“Blame
game as insurers dump doctors,” by Carl Campanile, New York Post
Quote:
"The nation's largest health insurer, UnitedHealthcare, claims the
Affordable Care Act is responsible for forcing it to boot doctors from its
Medicare Advantage program that serves thousands of elderly patients in
the New York metro region."
LTC Comment:
The ACA is from the government and it’s here to help you.
#############################
11/8/2013,
“Routine assessment predicts when Alzheimer's patients will need nursing
home care, researchers report [link],”
by Tim Mullaney, McKnight's LTC News
Quote:
"The variables include the patient's ability to take part in daily
activities, estimated time of symptom onset and level of rigidity. A
healthcare professional can gather this information in a single patient
visit, the researchers noted. They also said the assessment has proven
highly accurate even when not all 16 variables can be collected."
LTC Comment: Possibly a valuable new assessment worth adding to
the underwriting tool chest.
#############################
11/7/2013,
“How Social Security redistributes money from minorities to whites [link],”
by Brad Plumer, Washington Post
Quote:
"Specifically, for every $100 that white beneficiaries pay in taxes, they
receive $113 in benefits, blacks receive $89 and Hispanics receive $58.
The gap is particularly pronounced for retirement benefits, although the
Disability Insurance program narrows the gap somewhat. The disparity will
continue to widen in the next ten years. Whites will receive $120 in
benefits for every $100 they paid in taxes, while blacks will receive $91
and Hispanics $62."
LTC Comment:
Unintended consequences? One wonders, given how skewed Medicaid LTC
benefits are toward the middle class and affluent.
#############################
11/7/2013,
“Speaking
more than one language may delay dementia,” by Kim Painter, USA
Today
Quote:
"The latest evidence that speaking more than one language is a very good
thing for our brains comes from a study finding dementia develops years
later in bilingual people than in people who speak just one language."
LTC Comment:
Bueno, pues!
#############################
11/6/2013,
“New Study Examines Who's Really Living in Assisted Living Communities [link],”
by Alyssa Gerace, Senior Housing News
Quote:
"Small assisted living communities were nearly three times more likely to
house 'non-senior' residents under the age of 65, the study found, with
more than 21% of residents falling into that age group compared to about
7% in larger communities.
"However, the smallest communities were also more likely to house
residents with Alzheimer's disease or other memory care needs, at 53%,
compared to 41% of large communities, even though those conditions are
typically associated with the 'oldest old,' or seniors aged 85-plus.
"Still, larger assisted living communities were more likely to house
older, 'traditional' residents: nearly 85% were over the age of 75, while
more than half (56%) were older than 85."
LTC Comment:
Disturbing evidence that the most frail, infirm and vulnerable patients
are ending up in smaller care homes which may be less equipped to provide
quality care and much harder for quality control inspectors to reach.
#############################
11/6/2013,
“Young people becoming more realistic about future long-term care needs,
survey finds [link],”
by Tim Mullaney
Quote:
"Out of more than 2,000 people surveyed, about 30% said they were saving
for future long-term care needs. The number was highest (36%) for those
between 18 and 34 years old. Only 21% of people between the ages of 45 and
54 said they were saving."
LTC Comment:
Evidently caring for Grandma takes its toll on youthful complacency more
than on middle-aged anxiety.
#############################
11/5/2013,
“Why
it's time to embrace asset-based long-term care products,” by Chris
Coudret, LifeHealthPRO
Quote:
"With all the recent negative news, it would be easy and natural for the
financial services industry and the financial media to be sour on the
prospects of finding a worthy approach to funding long-term care. However,
the sustained growth of asset-based long-term care products indicates
there is a sea change occurring in the industry and a story that needs to
continue to be told."
LTC Comment:
A major benefit of private insurance vs. “social insurance” is that the
private market allows and encourages many different kinds of coverage.
Consumers can pick and choose what’s best for them. Social insurance
imposes a one-size-fits all program that usually fits no one especially
well.
#############################
11/5/2013, “Retirement:
Make long-term care coverage more affordable,” by Kimberly Lankford,
Chicago Tribune
Quote: "Until recently, people bought long-term-care policies to
cover 100 percent of the cost of care. But rates for new policies have
shot up and it has become a lot more difficult to qualify for coverage if
you have health issues. Fortunately, insurers are offering new options
that shift more risk to you but make policies less costly."
LTC Comment:
This Chicago Tribune article quotes Center-corporate-supporter
Claude Thau.
#############################
11/4/2013,
“The
Biggest Risk to Your Retirement,” by Shelly K. Schwartz, CNBC
Quote:
"You can create an additional financial safety net with long-term care
insurance. Such policies are designed to cover long-term services and
support, including assisted living, home care, adult day care and
hospice-things traditional health insurance doesn't cover. . . . Not
everyone requires assisted living in their later years, however, and
long-term care coverage does not come cheap. As such, it's important to
consider how much money you already have set aside for health-care costs
and purchase only the amount of coverage you actually need, according to
the Department of Health and Human Services."
LTC Comment:
Sound advice to insure only for LTC risk that exceeds your ability to pay
otherwise. Properly used, insurance replaces catastrophic risk with
affordable premiums rendering peace of mind to the insured and well-earned
profit for the insurer.
#############################
11/4/2013, “Long Term Care Insurance Applications Cost Insurers
Reports AALTCI [link],”
by Jesse Slome, Expert
Quote: "An individual applying for long term care insurance costs
the insurer between $400 and $600 even if they are not accepted according
to a study from the American Association for
Long Term Care
Insurance. The approximate cost to the industry was $200
million in 2012, AALTCI reports."
LTC Comment: Due diligence in establishing eligibility for
coverage and estimating the level of risk each insured brings to the risk
pool is a major benefit of private insurance over “social insurance.” The
latter lets everyone in, charges everyone the same and thus rewards poor
behavior, punishes good behavior, and becomes insolvent over time.
#############################
11/3/2013,
“We
need to stop coddling the elderly,” by Robert J. Samuelson,
Washington Post
Quote:
"No one wants to be against Grandma, who — as portrayed in the media — is
kindly, often suffering from some condition, usually financially
precarious and somehow needy. But projecting this sympathetic portrait
onto the entire 65-plus population is an exercise in make-believe and,
frequently, political propaganda. The
St. Louis Fed study refutes the stereotype. Examining different age
groups, it found that since the financial crisis, incomes have risen
for the elderly while they’ve dropped for the young and
middle-aged."
LTC Comment:
We're getting closer and closer to a time when views like Samuelson's will
prevail. Social Security, Medicare and the defacto entitlement Medicaid
LTC will be means-tested. The imbalance of government benefits flowing
from the young to the old will equalize. And private insurance will rise
again to fulfill its rightful role in retirement planning.
#############################
Updated, Friday, November 15,
2013, 12:48 PM (Mountain)
Santa Fe, New Mexico—
#############################
LTC BULLET: ANNUITY BLUES
LTC Comment: Medicaid
planners use annuities to disappear megabucks and they (the planners and
the annuities) drive the good Medicaid lawyers crazy. After the
***news.***
*** NOVEMBER IS
LONG-TERM CARE MONTH SEVEN TIMES OVER according to a press release today
highlighting these seven programs: Long Term Care Awareness Month,
National Home Care Month, National Family Caregivers Month, National
Hospice and Palliative Care Month, National Alzheimer's Disease Awareness
Month, Warrior Care Month and the 3 in 4 Need More campaign. LTC
Awareness month (November) gets all too little attention in the national
media. Thanks to
LTCFP for pushing these important programs into the limelight. ***
*** SEND STEVE TO
HEALTH CARE ROUNDTABLE in Richmond, VA. The
Thomas Jefferson Institute for Public Policy (TJI) is about to publish
our major report titled “Medicaid and Long-Term Care Financing: A Case
Study in Virginia.” This will introduce the public policy world to our
new “Index of Long-Term Care Vulnerability” which will enable analysts to
answer the question objectively: can LTC financing survive in its current
and tending form? TJI is sponsoring an important “Health Care Roundtable”
on December 12. They’d like Steve Moses to present our report’s findings
and join the discussion with some of the top health care policy analysts
in the country, including Grace-Marie Turner of the Galen Institute,
Michael Tanner of the Cato Institute and Bob Helms of the American
Enterprise Institute.
The Center for
Long-Term Care Reform seeks to raise funds to enable Steve to make this
trip, give this presentation, and contribute to the important health
policy conversation.
Special deal:
Pledge any amount
$25 or above to support this important project and we’ll comp you for a
year of the Center’s clipping service (usually $120 minimum; valid for new
clipping service subscribers only) at no extra charge.
Pledge $50 or more
and we’ll upgrade your Center membership to the next higher individual
level, e.g. Regular membership ($150 per year) goes to Premium Membership
(usually $250 per year); Premium goes to Premium Elite or Regional
Representative ($500 per year, for those who qualify). Check out our “Membership
Levels and Benefits” for details on all membership levels.
If you can help,
let Damon know at
damon@centerltc.com or 206-283-7036. He’ll subscribe you to the
Clippings or upgrade your membership immediately, even while your check is
in the mail.
We’ll gladly make
similarly attractive special offers to corporate donors willing to pony up
somewhat larger amounts. Just email Steve at
smoses@centerltc.com or call him at 425-891-3640 to discuss and
negotiate a bonus benefit most attractive to you and your company.
Our goal is to raise
$1,500 to support this trip and opportunity. Thanks in advance for your
consideration and support. ***
#############################
LTC BULLET: ANNUITY
BLUES
LTC Comment: I’m just
back from the 46th Annual Training and Continuing Education
Conference of the American Association of Public Welfare Attorneys. Dan
Hart, Assistant Attorney General from Iowa, and I presented a program
titled “Medicaid Eligibility for Long-Term Care: If You Build It, They
Will Come.” We explored the collateral damage done to the long-term care
safety net by aggressive Medicaid planning. Evidently we succeeded. Two
members of the audience came up to me afterwards to say they'll keep their
LTC insurance coverage after all, despite harboring recent doubts.
In the course of the
conference, I learned about extraordinary efforts some states have made to
curtail the abuse of one especially egregious Medicaid planning
technique.
Special
Medicaid-friendly annuities make hundreds of thousands of dollars
disappear from spend down scrutiny. While conducting state-level studies
of Medicaid and long-term care financing, I’ve frequently encountered
examples of this loophole. Search for “annuities” in any of our many
state reports
here and you’ll see what I mean. Here’s one example from our November
2012 study titled “The Maine Thing About Long-Term Care Is That Federal
Rules Preclude a High-Quality, Cost-Effective Safety Net [link].”
The
use of annuities to qualify affluent Mainers, even “millionaires”
according to eligibility workers interviewed for this study, is pervasive.
This technique is used in two ways. For married applicants, the couple’s
otherwise disqualifying wealth is transferred into an annuity for the
community spouse strictly in keeping with allowable federal guidelines,
which require actuarial soundness and making the state the beneficiary of
residual funds. Virtually any amount of money can be transferred into such
an annuity rendering the institutionalized applicant immediately eligible.
The annuity pays out to the community spouse within the life expectancy of
the institutionalized spouse, often in less than one year. Workers cited
one example of a $450,000 annuity which paid out at a rate of $17,000 per
month until all the sheltered funds were back with the community spouse
and hence uncounted, the eligibility determination having already been
made.
The
second way annuities are used to qualify otherwise ineligible applicants
for MaineCare involves single people with excess assets. The “reverse
half-a-loaf” strategy works as follows. The applicant gives away half his
or her disqualifying assets thus creating an eligibility penalty equal to
the amount of assets transferred for less than fair market value divided
by the average cost of a nursing home in Maine. With the other half of the
assets, the applicant creates an annuity in his or her own name and uses
the proceeds of the annuity to pay for care during the duration of the
penalty period. When the penalty period expires, the annuity runs out, and
the applicant is eligible for MaineCare LTC benefits having protected half
the original assets from MaineCare’s spend down requirement. (pps. 10-11,
footnotes omitted)
There is virtually no
limit to the amount of assets that can be divested in this way. But wait,
you demur. Didn’t the Deficit Reduction Act of 2005 (DRA ’05) fix the
Medicaid annuity problem? Well, yes, partially. It put some new
restrictions on the use of annuities to qualify for Medicaid long-term
care benefits. Here’s how I summarized the new provisions in a
contemporaneous “LTC
Bullet: The Brave New World of LTC Financing.”
ANNUITIES
AND OTHER LARGE TRANSACTIONS
* Medicaid recipients and community spouses must disclose annuities at
eligibility and recertification
* State must be named as remainder beneficiary
* State must notify annuity issuer of its status as remainder beneficiary
* States may require annuity issuer to report income or principal
withdrawals
* States may deny Medicaid eligibility based on such withdrawals
* Purchase of an annuity is a penalizable TOA unless state is listed as
remainder beneficiary in first position for at least total of Medicaid
payments or in second position to community spouse or minor or disabled
child
* Effective at enactment
So, how is it that
Medicaid planners can still use annuities to make huge amounts of assets
go poof? The method discussed at the conference depends on the difference
between Medicaid’s treatment of income and resources for married couples.
Spousal impoverishment rules protect a certain amount of a couple’s joint
assets for the healthy community spouse. But, as long as it is done
before the Community Spouse Resource Allowance (CSRA) is determined at the
time of Medicaid application, the rules also allow the transfer of an
unlimited amount of assets from an ill, institutionalized spouse to the
community spouse for the “sole benefit” of the community spouse.
So, to get around the
spousal impoverishment CSRA limits, Medicaid planners have their clients
do a sole benefit transfer before applying for Medicaid. Then they have
the community spouse purchase an annuity that meets all the federal
requirements delineated above. They argue this is not a penalizable
transfer of assets because fair market value, in the form of an income
stream from the annuity, has been received. Now, however, instead of
having resources which would be limited by the spousal impoverishment
rules, the community spouse has an income stream, which federal Medicaid
rules consider unavailable to the institutionalized spouse. At this
point, the ill spouse can apply for Medicaid with impunity having
transferred literally unlimited amounts of money into the sole ownership
of the healthy, community spouse.
Three states have
challenged such annuities in three different court cases. They argued
variously that such annuity machinations are really inappropriate asset
transfers or that they violate the letter and intent of the Medicaid law
in other ways. It seems to most stewards of the Medicaid LTC safety net
that for the wealthy to be able to shift a million dollars or more out of
the way of spend down requirements is a distortion and perversion of
Medicaid’s avowed purpose, to be a safety net for people genuinely in
need. But the courts did not agree. The law is the law, they said.
Efforts to persuade the Centers for Medicare and Medicaid Services to fix
the problem and appeals to Congress to fix it in statute have gone
nowhere. So the practice continues, rendering big fees to Medicaid
planners and diverting desperately needed public funds from the poor to
the affluent.
We at the Center for
Long-Term Care Reform see the annuity problem and many other abuses of
Medicaid’s loose eligibility rules day in and day out. Fighting for laws
and public policy that preserve scarce public resources for the needy and
encourage everyone else to plan responsibly for long-term care is our
stock in trade. It’s sad to see the highly qualified and superbly
competent attorneys who represent America’s public welfare programs
struggle in frustration to make those programs work to the benefit of
their rightful beneficiaries. I applaud their efforts and we’ll continue
to do what we can at the Center to support them with thoughtful and
persuasive public policy research and analysis.
#############################
Updated, Friday, November 8,
2013, 11:02 AM (Pacific)
Seattle—
#############################
LTC BULLET: PBS’S 6 LTC TIPS MISS
THE MARK
LTC Comment: What’s
wrong with the conventional wisdom about how to resolve America’s
long-term care crisis? After the ***news.***
|
 |
|
Here is the latest
from the president of LTC Consultants, Phyllis Shelton:
*** "I've been
saying since my 2010 Worksite and Combo Tour that Medicaid is the real
threat to our economy. May I say ‘I told
you so’ now with this Oct. 25th 2 1/2 minute
CBS
video?" ***
*** In "Why
Caregivers are an Endangered Species", US News & World Report
9/4/13 says: "The nation's bill for Medicaid is already projected
to rise substantially due to the expansion of health insurance under
Obamacare. Imagine what a caregiving crisis would do." Critical
related reading: "Why
Medicaid Could Be the Real Threat to Our Economy". ***
*** Cover Story:
Life Insurance Selling *** |
***
2014 LTC SUMMIT.
AALTCI has seemingly worked a miracle. Next year’s LTC Summit costs
only $69 to attend in person if you register by November 30. If you still
can’t afford to participate in person, you can watch the program streamed
live online. How can they do it? Check out the details
here. ***
*** CLTCR Premium
Membership -- Center for Long-Term Care Reform premium members
receive our full suite of individual membership benefits including: our
LTC Bullets and E-Alerts; access to our Members-Only
Zone website and Almanac of Long-Term Care; subscription to our
Clipping Service; and email/phone access to Steve Moses for 24-hour
turnaround queries. Our Premium Membership is designed to give you a
competitive advantage in your long-term care profession. Your increased
knowledge of the critical issues and challenges we face in the field of
long-term care service delivery and financing equals improved professional
success for you and better LTC services for your clients and for those who
have no choice but to rely on scarce public resources. Premium Membership
is $250 per year, paid up front or monthly by automatically recurring
credit card payments. Contact Damon at 206-283-7036 /
damon@centerltc.com to start your Premium Membership
immediately or go directly to our secure online subscription page and
sign up for as little as $21 per month. ***
#############################
LTC BULLET: PBS’S 6
TIPS FOR LTC MISS THE MARK
LTC Comment: Millions
watch the Public Broadcasting System’s NewsHour every night. So
when that show addresses long-term care it’s worth paying attention.
You can read about and view videos from a forum, titled "Global and
Regional Models for Long-Term Care: Can They Work Nationally?," that
MacNeil/Lehrer Productions (the NewsHour’s parent company) and the
SCAN Foundation sponsored on Monday.
But if you have better
things to do, such as advising consumers on how to protect themselves from
LTC risks and costs without depending on tottering government programs,
let me save you some time.
Following are quick
summaries of PBS’s “6 tips for averting America's looming long-term care
crisis” followed by our critique of each.
PBS Tip #1:
“Keep it Local” The Urban Institute’s Howard Gleckman says don’t seek a
“single answer.” Rather work from the bottom up with friends, neighbors
and families taking the lead. “To the degree that we can, government can
at least try to stay out of the way of those solutions . . ..”
LTC Comment:
Hear, hear! Finally something from this writer with which I can agree.
But true to form, he reverts to form a few sentences later, advocating
more and bigger government programs.
PBS Tip #2:
“Change the Financing” Former CMS Administrator Dr. Mark McClellan,
currently with the Brookings Institution, says “let people control how
[Medicaid] money is spent on their behalf. That's what's behind our ‘Money
Follows the Person’ [MFP] initiatives in states around the country . . ..”
LTC Comment:
Terrific. MFP programs are a vast improvement over the current LTC
financing system which makes providers--not patients--the program’s
customers. But “Money Follows the Person” still depends on payments
coming from an unsustainable welfare program. Making Medicaid more
attractive to more people is not a solution.
PBS Tip #3:
“Focus More on the Poor”
Dr. E. Percil Stanford, president of
Folding Voice and
the KIND Corporation, says “Unfortunately, considerable [LTC policy]
attention from the most well-intentioned institutions and organizations
has focused primarily on the middle and upper classes.” Instead, he says,
they should focus laser-like on the poor elderly.
LTC Comment:
Right on, but how? No answer from this source. Research shows Medicaid’s
LTC program benefits the middle-class and affluent as much or more than
the poor. The solution is to target scarce public benefits to the needy
and use some of the savings to incentivize early and responsible LTC
planning by more prosperous people.
PBS Tip #4:
“Build a Comprehensive National Strategy” AARP’s Debra Whitman wants us
to spend more government money to help family caregivers, grow Medicaid,
expand “affordable” housing and transportation, “integrate” health care
services, and eliminate LTC impoverishment.
LTC Comment:
Typical AARP eyewash. Not a word about where the money will come from to
pay for such wishful public program expansions. The federal government
already borrows a third or more of everything it spends. It forces
interest rates to near zero to make such borrowing feasible temporarily.
Watch out when this bubble bursts.
PBS Tip #5:
“Begin the Conversation”
Jennie Chin Hansen, CEO of
the American Geriatrics Society [AGS], thinks we should "chat and
chew" LTC issues with our friends and colleagues creating a "study group"
opportunity to “discuss the universal journey.” She says “Let's
proactively help each other build greater confidence, clarity and
capacity.”
LTC Comment:
Doesn’t that advice sound vacuous coming from the head of the AGS? We’ve
been jaw-boning long-term care for decades without addressing the real
problem, i.e. government pays for most high-cost LTC which
anesthetizes consumers to the risk and crowds out responsible LTC planning
and private financing.
PBS Tip #6:
“Make It a Human Right”
Dr. Laura Gitlin of the
Center for Innovative Care in Aging says “We need to grow a long-term
care system based on . . . [the] principle . . . that long-term care is a
basic right."
LTC Comment:
Of all the empty rhetoric in this program, the prize for thoughtless
irresponsibility goes to this proposal. If people have a basic human
right to long-term care whether or not they are able or willing to pay for
it, their “right” means someone else must provide LTC whether or not they
are compensated for their effort. That is the definition of slavery,
which is what this ostensibly caring academic actually advocates.
Closing LTC Comment: When I see the subterranean quality of LTC policy analysis displayed
in program’s like this one, I’m nearly ready to despair. The one thing
that keeps me going is that a few of you AMGs (altruistic, masochistic
geniuses) are still out there having truly valuable conversations with
real consumers about how actually to protect themselves from escalating
LTC risks and costs.
The whole wobbly Rube
Goldberg apparatus of government-financed LTC puts enormous obstacles in
your way. It gives away what you’re trying to sell. It makes your
product unprofitable by manipulating interest rates so that its programs
are artificially viable. It falsely assures citizens they’ll be taken
care of by bankrupt social programs already under-funded by trillions of
dollars. Yet you soldier on. Somehow.
Hail to the AMGs!
#############################
Updated, Monday, November 4, 2013, 11:08 AM (Pacific)
Seattle—
#############################
OBAMACARE STUMBLES AND LTC NEWS AND COMMENT
LTC Comment:
What a week for “ObamaCare.” Everything its critics predicted is
beginning to happen. It will get worse. We begin today’s LTC E-Alert
with this link to the best critique of the government health care take
over I’ve seen so far. It isn’t just the software, folks.
10/23/2013,
“Top Ten Obamacare Disasters to Come,” by Grace-Marie Turner, National
Review Online
Quote:
“[E]ventually, software can be fixed. Obamacare’s epic policy flaws can’t.
The problems increasingly are going to be up close and personal, as people
see for themselves the impact it has on their lives and pocketbooks. The
top ten debacles to come:
1.
Deductible shock . . . 2. Will people pay? . . . 3. Attracting the sickest
. . . 4. Less expensive plans vanish . . . 5. Families lose out . . . 6.
Repaying subsidies . . . 7. Public health-care costs are going to explode
. . . 8. More jobs lost . . . 9. Identity theft and fraud will explode . .
. 10. Federal-exchange subsidies eliminated? . . . If you thought
Healthcare.gov was bad, just wait. This article is available online at: National
Review Online.”
LTC Comment:
Read it and weep.
#############################
December 2013,
“How to Make Long-Term Care More Affordable: We help you navigate the maze
of choices to get the best deal [link],”
by Kimberly Lankford, Kiplinger
Quote:
"The average cost of a private room in a nursing home is now about $248
per day (or about $90,000 per year), and 12 hours a day of home care costs
even more, according to the MetLife Mature Market Institute. But for many
baby-boomers, it takes more than the threat of financial catastrophe to be
prodded into buying a long-term-care insurance policy."
LTC Comment:
Gee, wonder why, when the government pays for most expensive long-term
care after the insurable event occurs and without requiring spend down of
most assets. See
How to Fix Long-Term Care for more.
#############################
11/1/2013,
“IRS Announced Increased Tax Deductible Limits for Long Term Care
Insurance [link],”
by Jesse Slome, ExpertClick
Quote:
"November 1, 2013. The American Association for Long Term Care Insurance
announced today release of increased deductibility levels for long-term
care insurance policies purchased in 2014.
"'For taxable years
beginning in 2014, the limitations have been increased again,' explains
Jesse Slome, executive director of the American Association for
Long Term Care Insurance (AALTCI), the industry's trade
association. 'Tax advantaged long-term care insurance remains one of the
few remaining significant tax-savings benefits especially meaningful for
small business owners.'"
LTC Comment:
See our Members-Only Zone archives for LTCi tax deductibility limits for
each year dating back to 1997
here.
#############################
11/1/2013,
“Analyst
expects insurer loss on overhaul exchanges,” by Tom Murphy,
Bloomberg Business Week
Quote:
“Health insurers will lose money for the first couple years on business
they get from the health care overhaul's public exchanges, according to a
Goldman Sachs analyst. He says the hits won't be big enough to change
earnings forecasts, however.
"Borsch said a bigger
concern for health insurers will be rate cuts for Medicare Advantage
plans, the privately run versions of the federal government's Medicare
program. Insurers will receive less reimbursement next year for these
plans due to overhaul-mandated reductions."
LTC Comment:
And thus the Medicare Advantage plans favored by consumers will be forced
to subsidize ObamaCare’s expansion of high-cost coverage to subsidized
public dependents.
#############################
10/31/2013,
“Why
Art Therapy is Good for the Brain,” by Jennifer Wegerer, A Place
for Mom
Quote:
"Art therapy has proven a powerful tool for treating Alzheimer’s. More
than giving patients something pretty to look at it or an exercise to keep
them busy, it stimulates the brain. It stirs memories and can bring
language back into the life of someone who struggles to speak.
"Studies show that
art therapy gives back to Alzheimer’s patients, in some part, what the
disease has taken away. It stimulates the senses, can trigger dormant
memories and encourages conversation. Whether they’re viewing or creating
art themselves, Alzheimer’s patients can use it as a form of expression,
particularly individuals who can’t communicate verbally."
LTC Comment:
How much “art therapy” do you think Medicaid patients in nursing homes or
waivered home care programs receive? The best and most creative care will
always be available first and foremost to people who can afford to pay
privately.
#############################
10/31/2013,
“Advance Planning for Eldercare Saves Money, A New Study Shows [link],”
by Sally Abrahms, AARP Blog
Quote:
"When it comes to planning for
long-term care, the early bird does get the worm, according to a new study : The
report shows that families who anticipate their needs can save close to
$11,000 a year in out of pocket expenses by planning in advance instead of
waiting until a crisis."
LTC Comment:
Just be sure you aren’t trading poor care for savings by planning for
Medicaid eligibility by deliberately impoverishing yourself.
#############################
10/31/2013,
“Nursing home arbitration agreements force consumers to 'sign away legal
rights,' trial lawyers argue [link],”
by Tim Mullaney, McKnight's LTC News
Quote:
"Arbitration agreements in long-term care contracts are harming consumers
and eroding the U.S. civil justice system, according to a prominent
association of trial lawyers."
LTC Comment:
Maybe trial lawyers would have more credibility if they hadn’t abused
nursing home liability cases for so long. Have you seen the billboards in
Florida urging drivers to sue their parents’ nursing homes? First the
Medicaid planning attorneys take their cut by impoverishing the parent and
enriching themselves and their adult-children clients. Then the
litigators extract a fortune from the LTC financing system by suing
nursing homes that can’t afford to provide good care because they have too
many Medicaid recipients paying rates less than the cost of providing
their care. Yeah, these lawyers really have our best interests at heart.
#############################
10/30/2013,
“Social
Security benefits up just 1.5% in 2014,” by Chris Isidore, CNNMoney
Quote:
“Social Security benefits will rise only 1.5% next year, one of the
smallest increases ever in the program's annual cost-of-living adjustment.
The increase is down from the 1.7% increase for 2013. There was no
cost-of-living increase at all in 2010 and 2011 because prices fell in the
wake of the recession. A 3.6% adjustment in 2012 has been the only
significant rise in benefits in recent years."
LTC Comment:
And that little increase will likely be wiped out by increases in Medicare
costs.
#############################
10/30/2013,
“Healthcare Continues To Rank as Top
Financial Fear in Retirement in National Investor Survey [link],”
Press Release, Wall Street Journal
Quote:
"A new survey of investors who are currently working shows concerns about
rising health care costs, changes to Social Security and/or Medicare and
running out of money are among the greatest financial worries in
retirement, and the percentage citing them has increased since prior
surveys.
"'Though being able
to afford healthcare isn't a new issue, the fact that more affluent
workers are very worried about it than not, points to the value advisors
can provide to help clients develop strategies to manage it,' said Matt
Rigatti, vice president, Signator Investors, Inc. 'We've already seen
movement in the direction of tools that address healthcare,
specializations -- or including a healthcare finance-oriented specialist
on a client's team and I suspect we'll continue seeing growth in that
area.'"
LTC Comment:
Well, yes, and including a long-term care specialist.
#############################
10/29/2013,
“How
to transfer IRAs to LTC insurance Opinion,” by Brent Welch,
LifeHealthPRO
Quote:
"Nearly 10,000 baby boomers are turning 65 every day, and they will for
the next 16 years. Where will they get the money to purchase long-term
care insurance (LTCI)? Most LTCI owners are deeply concerned about the
shocking price increases in policies this past year. Forbes
reported that the increases in LTCI premiums may be between 45 percent and
85 percent in 2013 alone! The question I am asking you this month is: How
can one use IRA assets to pay for long-term care insurance? Is it really
possible to transfer IRA money into tax-free LTCI?"
LTC Comment:
Does this work and is it a good idea?
#############################
10/29/2013,
“Medicaid
enrollment surges ahead of ACA sign-ups,” by Jennifer Haberkorn,
Politico
Quote:
"HealthCare.gov may be limping along to full viability, but Medicaid is
flying off the shelves. New Medicaid enrollment is far outpacing new
insurance customers under Obamacare so far, a subtle sign that the program
could play a greater role in the law's coverage expansion than first
anticipated. Some people are signing up for the Medicaid expansion created
by the president's health law. Others were already eligible for their
state's current Medicaid program, but until this outreach campaign about
health coverage, they had never signed up."
LTC Comment:
There’s an old saying in the business world: “When you’re losing money on
every customer, you can’t make up for it with greater volume.” Welcome to
Medicaid, a bankrupt public welfare program that is crowding out health
care and LTC providers with dismally low reimbursements.
#############################
10/28/2013,
“Another
perspective on the Virtual Dementia Tour: Guest Column,” by
Lassie Pappas, McKnight's LTC News
Quote:
"Several years ago, I attended a seminar on how to decorate an Alzheimer's
unit in a skilled nursing facility. While fascinated by what patterns,
textures, and nuances should and should not be used in that situation, I
never really knew how the residents FELT about their surroundings. I
simply took the information as factual based on research, and moved
forward with an internal renovation. A recent experience at the American
Healthcare Association Convention really changed my perspective on how our
elderly population may view their environment, and how we as care givers
or visitors may unknowingly make them feel."
LTC Comment:
Read this for a vicarious sense of what being a dementia patient might be
like.
#############################
10/28/2013,
“What
the Voyager space program can teach you about preparing for long-term care,”
PBS News Hour
Quote:
"At first glance, comparing a 36-year-old, one-ton spacecraft hurtling
through interstellar space at about 37,075 miles per hour to the realities
of planning for our long-term care needs seems ... odd. But the more we
thought about it, it made sense. We brought together the wisdom of NASA
scientists and health experts to highlight 10 lessons the Voyager
spacecraft can teach us about planning for long-term care.
"Like the Voyager
engineers, make sure your plans have fallback options in case your
intended future doesn't materialize. Consider a long-term care insurance
policy in case investments and Social Security are not enough to cover
your medical needs after you retire. Understand the availability and kinds
of care options your state and local government provides, and make plans
should you need additional support."
LTC Comment:
Hmmm. Maybe those who preferred to call the Center’s “Silver
Bullet” a “space capsule” were right all along.
#############################
10/28/2013,
“Breakthrough study identifies 11 new genes linked to Alzheimer's disease
[link],”
FoxNews
Quote:
"Researchers have identified 11 new genes linked to an increased risk of
developing Alzheimer’s disease, Medical News Today reported. In a
study published in Nature Genetics, researchers from 145 academic
centers around the world collected genetic data from 74,076 people in 15
countries in an attempt to identify more genes linked to the
neurodegenerative disease."
LTC Comment:
The more we know about the “Big A” the better, but who needed 11 more
genes associated with Alzheimer’s Disease?
#############################
10/28/2013,
“The
real cost of (not having) LTCI: Sales strategy,” by Ed McCarthy, CFP,
LifeHealthPRO
Quote:
"Many clients who reject long-term care insurance (LTCI) or consider
dropping their coverage do so on the argument that it's too expensive. But
that attitude overlooks several important aspects of the costs of not
buying the coverage, including the financial and personal burdens imposed
on long-term care (LTC) recipients' families. We asked several LTCI
experts for their thoughts on the cost issue and how they approach it with
prospects and clients."
LTC Comment:
This article cites Premier Elite Center members Honey Leveen and Phyllis
Shelton. Well done!
#############################
10/25/2013,
“The
future of LTCI: Options, opportunities and urgency,” by Tom Riekse,
Jr., LifeHealthPRO
Quote:
"Luckily, in the United States, we have many private LTC insurance
solutions. Despite media perceptions, Americans have more opportunities
than ever to plan for LTC through insurance. Will baby boomers heed the
message and actually engage in planning? Financial professionals are the
most likely group to influence them.
"There are four key
types of coverage: traditional health-based LTC insurance, linked life/LTC
plans, life insurance with LTC or chronic care riders, and finally annuity
LTC plans. Let's look at the future of these product categories."
LTC Comment:
Congratulations on this fine article to long-time Center supporter Tom
Riekse, Jr., managing
principal of Center-corporate-member
LTCI Partners.
#############################
10/25/2013,
"Strokes
affect more young people, could double by 2030: study,” The Associated
Press, New York Daily News
Quote:
"The incidence of stroke in people aged 20-64 jumped by a quarter,
according to a new analysis of more than 100 studies published between
1990 and 2010. Stroke is the second-leading cause of death worldwide,
though the death rate from stroke is actually falling due to better
treatment options.”
LTC Comment:
As stroke is one of the leading causes of LTCI claims, this finding should
be a wake up call to younger prospects who now face a higher LTC risk.
#############################
10/25/2013,
“Greater family involvement in care improves resident outcomes but
increases guilt, researchers find [link],”
by Tim Mullaney, McKnight's LTC News
Quote:
"Programs to boost family involvement in caregiving can improve quality of
life for long-term care residents and decrease the burden on staff, but
might also increase family members' feelings of guilt, researchers have
found."
LTC Comment:
Caregiving is fraught with mixed emotions: pride and satisfaction for
doing what you can, but worry and guilt that you could and should have
done more. Very natural feelings.
#############################
10/24/2013,
“Medicaid
could be the next headache for Obamacare,” by Kyle Cheney, Politico
Quote:
"A new phase of the Obamacare launch is coming, this one involving
Medicaid. And it could be déjà vu all over again. On Nov. 1, the health
law's malfunctioning enrollment system is supposed to send reams of data
to states so they can begin placing thousands of people into Medicaid. But
state officials say that transfer system has barely been tested and could
be vulnerable to technical failures like those that have crippled the
broader Obamacare sign-up process.
"Under Obamacare,
millions of low-income uninsured people are expected to enroll in
Medicaid, which will be expanded significantly in about half the states on
Jan. 1. Plus, the health law's enrollment push is expected to bring out of
the woodwork people who are currently eligible but haven't already signed
up for Medicaid. Early data from states running their own enrollment
systems are reporting tens of thousands of new Medicaid enrollees so far
this month, a potential indicator of strong interest."
LTC Comment:
Solving America’s health care problems by placing millions more people on
Medicaid is like adding deck chairs to the Titanic after the
incident with the iceberg.
#############################
10/24/2013,
“Health-care help from an unlikely source: As clients' health costs rise,
financial advisers scramble to become Medicare experts [link],”
by Elizabeth O'Brien, WSJ MarketWatch
Quote:
"Most financial advisers spend years developing expertise in the likes of
asset allocation and investment fund selection. Until recently, they
barely addressed the second-largest budget item of their older clients:
health-related costs. This is beginning to change, though, as demand for
help with health-care planning drives more advisers to add another line to
their resume: Medicare consultant."
LTC Comment:
When will financial advisors get around to becoming “LTC consultants?”
More of them should advise their clients to consult genuine LTC insurance
experts.
#############################
10/23/2013,
“3
ways to pitch worksite LTCI,” by Jeff Sadler, LifeHealthPRO
Quote:
"Say what you will about the
Patient Protection and Affordable Care Act (PPACA), but it is having a
positive effect on the voluntary worksite marketplace. The majority of
Americans seem to feel that health insurance coverage will never be the
same and that future coverage will be less comprehensive and more costly.
This would continue a decade-long pricing trend where employers passed
more of the premium responsibility for health coverage on to the employee
even as deductibles and out-of-pocket costs were increasing. Concerned
that the underlying health care coverage may not be enough or even
affordable in the years to come, employees have embraced the supplemental
products employers are making available to them through both Section 125
cafeteria plans and payroll deduction. Whatever health insurance ends up
looking like post-2014, there will be ample opportunity for additional
supplemental sales to make up for whatever an employee feels the core
benefit package is lacking. Enter
long-term care insurance."
LTC Comment:
A dim silver lining at best, but any port in a storm.
#############################
10/22/2013,
“Survey:
Third of Americans expect to work until they drop,” by Eric Rosenbaum,
CNBC
Quote:
"You've heard the story about America's retirement crisis. Young people
don't save enough. Older people have to work longer. Public
pension
benefits are always on the verge of being
slashed, and Social Security's future is anyone's guess. And now it
has come to this: In its annual
retirement
study of middle-income Americans (income of $25,000 to $100,000), Wells
Fargo asked participants if they expect to work until they die. 'This is
the first time we asked if people thought they would work until they die
or become too sick,' said Laurie Nordquist, head of Wells Fargo
Institutional Retirement and
Trust.
Thirty-seven percent of middle-income Americans surveyed by Wells Fargo
said they have that expectation. ‘If 80
is the new 60, it's looking like six feet under is the new 65 for a
significant percentage of Americans.’”
LTC Comment:
The reality is that most people will not work until they die. They may
work until they need long-term care, but then they’ll “retire.” The bad
news is that traditional retirement is disappearing. The somewhat better
news is that more people will have higher incomes longer so they can
afford the LTC insurance they’ll need to gain access to better private LTC
services when that time comes.
#############################
10/22/2013,
“7
health insurance blogs you should know about,” by Lauren Jaeckel,
LifeHealthPRO
Quote:
"From
health care reform to
sales and marketing, the insurance landscape is constantly evolving.
Throughout every change, industry thought leaders provide essential tips
and insights into new policies and trends to keep us on top of our game.
Without further ado, here are seven of the industry’s most influential
insurance blogs that you should be following."
LTC Comment:
All good, but we scan everything and deliver the best of it to you in the
Center for Long-Term Care Reform’s “Clippings” and LTC E-Alerts.
Congratulations to Center supporters Honey Leveen (Premier Elite) and
Stephen Forman (Bronze Corporate) for publishing free public blogs that
made the list of the health care industry’s best!
#############################
10/21/2013,
“GAO
analysts eye Medigap effects,” by Allison Bell, LifeHealthPRO
Quote:
"Holders of Medicare supplement insurance who said they had health
problems spent an average of about $30,000 on care in 2010. The ailing
Medigap holders spent about 2.5 times as much on care that year as
consumers who said they had health problems but only had traditional
Medicare fee-for-service (FFS) coverage, without help from a Medigap
policy, a Medicare Advantage plan, or employer-sponsored retiree health
benefits."
LTC Comment:
Government ruined Medi-Gap insurance by forcing it into limited,
structured plans and eliminating most of the choices consumers used to
have for supplementing their Medicare coverage.
#############################
10/21/2013,
“The cost of not planning for long-term care: Study pinpoints financial
cost of caregiving [link],”
by Maria Wood, LifeHealthPRO
Quote:
"Numerous studies have underscored the physical and psychological strain
of taking care of an aging, ailing loved one. However, a recent study by
Genworth quantifies the
monetary loss that caregiving could entail without the benefit of
long-term care insurance (LTCI) or some form of pre-planning. The new
report, ‘Beyond Dollars: A Way Forward,’ calculated that, on average,
families would be able to save nearly $11,000 yearly in out-of-pocket
expenses if long-term care arrangements were made prior to a loved one
actually needing long-term care. Moreover, 53 percent of family members
that acted as the primary caregiver have lost income due to their
caregiving duties."
LTC Comment:
There’s more to LTC expenses than the cost of the patient’s care itself,
especially for caregivers.
#############################
10/21/2013,
“Report: Providers should prepare for managed care partnerships for dual-eligibles
services [link],”
by Tim Mullaney, McKnight's LTC News
Quote:
"Managed care organizations are set to play a bigger role in how long-term
care is provided for people currently eligible for both Medicare and
Medicaid, and providers should focus on having the right capabilities in
place for them, according to a new report. Released by merchant bank
TripleTree, it also identifies technology vendors enabling these
capabilities in the long-term and post-acute care settings."
LTC Comment:
Moving the aged, blind and disabled—even including the most frail, infirm
and expensive dual eligibles—into care managed by giant corporations that
are more accustomed to dealing with preventive and acute care of mostly
healthy people is a huge trend nationally. Advocates worry it will not
work even as well as the poor system already operated by Medicaid and
Medicare.
#############################
Updated, Friday, November 1, 2013, 1:06 PM (Pacific)
Seattle—
#############################
LTC BULLET: THE INSURANCE DILEMMA
LTC Comment: Why are we losing the benefits of insurance and suffering
the inevitable consequences of compulsory government benefit programs?
After the ***news.***
*** FREE LTCI CONFERENCE: Jesse Slome and the
American Association for Long-Term Care Insurance have announced that
key portions of their
May 2014 long-term care insurance solutions conference in Kansas City
will be streamed live for free to 5,000 virtual attendees. Read all about
it
here. You can watch two hours of sessions each day, including a
special one-hour workshop by
Corporation for Long-Term Care Certification president Harley Gordon.
Tweet questions to presenters. Says Slome: “Nothing can replace
face-to-face networking but technology will allow us to reach thousands of
professionals who can’t dedicate the time or expense involved with
attending a conference.” Congratulations to Jesse and AALTCI for another
creative effort to promote responsible LTC planning and to support the
producers who make it possible. ***
LTC BULLET: THE INSURANCE DILEMMA
LTC Comment: What a mess! The roll out of “health care reform,” AKA the
Affordable Care Act, AKA ObamaCare is almost universally panned in the
media. But most coverage misses the real story. Real insurance is
disappearing.
Insurance is a financial tool that allows purchasers to replace the small
risk of a catastrophic loss with the certainty of an affordable premium.
Because it spreads risk, insurers can sell the product to many vulnerable
customers, taking a loss on some and a profit on most. But insurance does
more than spread risk. It also prices risk. By actuarially estimating
the amount of risk each insured brings to the risk pool and pricing each
individual’s coverage accordingly, insurance ensures that reserves
collected from premiums will suffice to pay reasonably anticipated claims.
But pricing risk does something else of enormous importance. When smokers
pay more for life insurance than non-smokers, smoking is discouraged.
When poor drivers pay more for car insurance, bad driving is discouraged.
When older people pay for more long-term care insurance, failure to plan
early is discouraged. In other words, when insurance prices risk it
performs a valuable role for individuals and for society by
encouraging responsible behavior and discouraging irresponsibility.
Now consider the misnomer “social insurance.” Social insurance programs
such as Medicare and Social Security spread risk very effectively.
Everyone pays in and everyone receives benefits, equally in its pure
form. Thus social insurance does not price risk. It has no way to
determine what premiums are adequate to meet total claims in the future
and it entirely lacks the valuable benefit of rewarding responsible
behavior and discouraging irresponsible behavior.
In fact, how has social insurance played out in the United States and
elsewhere? Everywhere accumulated reserves are vastly inadequate
compared to reasonably anticipated future costs. Social Security has a
$23 trillion unfunded liability and Medicare a staggeringly irresponsible
$43 trillion shortfall. As bad or worse, the false hope that social
insurance will somehow provide future benefits has replaced the public’s
sense of personal responsibility with a widespread entitlement mentality.
It’s really pretty clear what is happening to the personal values of hard
work, self-reliance and individual responsibility that made this country
great in the first place. We’ve chipped away at them for decades and
we’re now about to pay a tragic price for the inevitable results of social
insurance. So, why not confront that reality, explain it clearly, and
advocate a return to true insurance?
Therein lies the insurance dilemma. Imagine what would happen to the
politician who advocates that insurance should price risk. You mean
people with pre-existing conditions should pay more? How cruel. Women
should pay higher premiums for health insurance and men, for life
insurance? How unfair. People who don’t want or can’t afford insurance
should remain uninsured? How socially irresponsible. Never mind that
everyone was better off when real private insurance prevailed. Forget
that everyone is and will be worse off as social insurance and the
entitlement mentality lead to their inevitably destructive outcomes.
Bottom line, social insurance requires responsible (insurable) people to
pay more to offset the cost of irresponsible (uninsurable) people.
Responsible people will not voluntarily pay more to support the
irresponsible, so government has to compel citizens to participate.
That’s why the Affordable Care Act forces citizens to buy insurance and
penalizes them if they do not. It substitutes personal responsibility
with a false hope of social security. Easy to see all around us.
Ah, but make that case and you’ll be reminded that social insurance not
only subsidizes the irresponsible, it helps the poor and unfortunate, who
may be in that condition through no fault of their own. Don’t you care
about them? How long will a politician survive without taking the needy
into account? Ironically, the poor fare much better in a society that
rewards personal responsibility and encourages freedom. Without the
economic drag of social insurance and compulsory wealth redistribution,
the economy would thrive and all, including the poor, would fare better.
Voluntary charity could and would provide for the needy better than
government dependency.
But that argument is complicated and difficult to make. Which is why few
politicians who understand and believe it actually try to convey it
publicly. Thus the opposing argument that government has to force
citizens to act against their own best interests prevails. Only strong
principles, grounded in human nature, could turn the tide. But it is
those principles of independence, self-reliance, personal responsibility
and hard work that have been corrupted over time.
Sadly, we may have to suffer the increasingly inevitable collapse of the
current system before better values can prevail again. Whether the USA
follows the dismal history of previous economic powerhouses or rises again
depends on whether or not and to what extent those fundamental values have
survived. In the meantime, the relentless political efforts to destroy
them, grounded in the threat of government force, continue apace.
For a more detailed account of the difference between social insurance and
real insurance, see Stephen A. Moses, “The
Inherent Individualism of Insurance,” Navigator, Vol. 5, Nos.
10-11, November-December 2002, pps. 10-12, 14-16, published in January
2003.
#############################
Updated, Friday, October 25, 2013, 11:15 AM (Pacific)
Corning, California—
#############################
LTC BULLET: THE LTC BLIND
LTC Comment: “There are none so blind as those who will not see.” That
proverb applies perfectly to a recent column about long-term care, after
the ***news.***
*** AALTCI: The American Association for Long-Term
Care Insurance has announced their 11th National Long-Term Care Solutions
Sales Summit will be held May 18-20, 2014 at the Westin Hotel in Kansas
City, MO. Over the past decade we’ve attended many of these conferences
and have always found them to be of high value in terms of professional
development through educational content and networking opportunities.
Early registration is only $69. See
http://www.aaltci.org/2014summit/index.html for further details and to
register. ***
*** CLTCR
Premium Membership -- Center for Long-Term Care Reform premium
members receive our full suite of individual membership benefits
including: our LTC Bullets and E-Alerts; access to
our Members-Only Zone website and Almanac of Long-Term Care; subscription
to our
Clipping Service; and email/phone access to Steve Moses for 24-hour
turnaround queries. Our Premium Membership is designed to give you a
competitive advantage in your long-term care profession. Your increased
knowledge of the critical issues and challenges we face in the field of
long-term care service delivery and financing equals improved professional
success for you and better LTC services for your clients and for those who
have no choice but to rely on scarce public resources. Premium Membership
is $250 per year, paid up front or monthly by automatically recurring
credit card payments. Contact Damon at 206-283-7036 /
damon@centerltc.com to start your Premium Membership
immediately or go directly to our secure online subscription page and
sign up for as little as $21 per month. ***
#############################
LTC BULLET: THE LTC BLIND
“There are two ways to be fooled. One is to believe what isn't true; the
other is to refuse to believe what is true.”
―
Søren Kierkegaard
LTC Comment: Case in point? A Forbes column last week by a
perennially insightless writer. Excerpts and our analysis follow.
#############################
Excerpts from “Americans Worry About Long-term Care Costs, See Insurance
and Government Solutions [link]”
by Howard Gleckman
“Americans have little idea how long-term supports and services are paid
for, according to a new poll by
Harris Interactive HPOL -0.51% and the medical publishers HealthDay.
Yet, they are worried about the cost, believe most people should buy
long-term care insurance, and also favor a new government program to pay
some or all of the costs of LTC.
“It is hard to make much sense of these results, although the public's
confusion in this poll seems consistent with past surveys.
“For instance, although Medicaid pays for as much as 60 percent of
long-term care costs, only about one in five of those surveyed believe the
program is the major payer of these services. One-third think Medicare is
the biggest funder, though the program pays for almost no LTC costs. Half
think individuals pay the most. In reality, families pay only about
one-fifth of the cost of paid services, though of course they do provide
the vast bulk of uncompensated care.
“When asked who should pay these costs, 29 percent said individuals and
their families while 27 percent said the federal government. Interestingly
only 9 percent thought state and local governments should pay even though
states are already a major payer through their share of Medicaid. Fully
one-third said they don't know who should pay. . . .
“The survey also asked if people were worried about the cost of long-term
supports and services. Overall, 68 percent said they were very or somewhat
worried. Women more much more likely to be concerned than men by 74
percent to 61 percent. By age, those least likely to be concerned were
18-24 (not surprising) and those 65 and older (very surprising). Those
most likely to worry were aged 40-49. . . .
“What's the take-away of all this? Americans recognize that long-term
supports and services are a major financial risk, yet they are deeply
uncertain about how long-term care is paid for today and what to do about
it. And they seem open to some sort of new government program to help,
perhaps one that is insurance-based in some way.”
#############################
LTC Comment: If the findings of this poll leave you stumped like the
Forbes columnist, you haven’t been reading your LTC Bullets.
Let’s review.
Survey after survey and poll after poll produce the same results:
Americans don’t know who pays for long-term care. Nevertheless, they do
know LTC is high risk and high cost. But they don’t do much about it,
such as buying LTC insurance.
Academics, pundits, policymakers and even some LTCI marketers scratch
their heads, throw up their hands and whine: “What’s wrong with the
American people? How can they be so dense? It must be denial,
self-delusion, or early onset Alzheimer’s.”
Guess what? The public has a better grasp of reality than the “experts”
who “refuse to believe what is true.” Here’s what’s true and why it
explains the poll findings that befuddle so many analysts.
(1) Americans don’t know who pays for long-term care because they haven’t
needed to know. Since 1965 Medicaid has paid for most expensive long-term
care. It still does. It pays after the insurable event occurs and
without significant income or asset limits as we’ve explained so many
times before. Ending up on Medicaid is a terrible outcome because of the
program’s access and quality problems, but consumers don’t confront that
reality until after it is too late to prepare responsibly. By then their
heirs are so relieved their inheritances are safe that they blank out
about their own need to plan for LTC risk.
(2) Americans know LTC is high risk and high cost? Of course. It’s been
drummed into them by newspapers, magazines, TV specials, “Own Your Future”
campaigns, and every altruistic, masochistic genius who’s ever survived
for more than a few weeks selling long-term care insurance. A truly
strange poll finding would be that Americans hadn’t gotten the message of
LTC’s high risk/cost and somehow thought long-term care was an emotional
and financial cakewalk.
Now, all you have to do is add paragraph one to paragraph two to get
paragraph three.
(3) When asked who pays for LTC, Americans either don’t know or say
“Medicare.” Well good guess, but the real payer is Medicaid. The only
thing that matters is that somebody pays, and Medicaid does. So, even
though people do know that LTC may hit them with huge costs, it’s all just
theory to them because in fact somebody really does pay if LTC becomes
high-cost. Why don’t they plan to save, invest or insure for LTC?
Simple. Consumers have many demands on their attention and finances.
They only focus on real risks and costs and they prioritize which risks
and costs on which to focus.
End result? You get the survey and poll findings that baffle deniers.
They refuse to acknowledge how Medicaid works in reality and cling to the
myths that (1) it requires impoverishment and (2) LTC wipes out life
savings nationwide. To resolve their conundrum is as easy as opening
their eyes and accepting reality. But they have clamped their eyes shut.
Want some good eye-openers? Read just about anything at
www.centerltc.com, especially our “Articles,
Speeches, and Reports.” We’ve provided the evidence to back up the
argument in this Bullet often and irrefutably. We’ll gladly debate
anyone publicly who disagrees.
#############################
Updated, Monday, October 21, 2013, 11:27 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #13-033: LTC NEWS AND COMMENT
LTC Comment: It was a slow news week for LTC, with reportorial and
editorial content aimed mostly at the debt ceiling and government shutdown
stories.
Coverage of the challenges facing ObamaCare will ramp back up now. That
won’t be pretty. Everything critics of the Affordable Care Act have
warned would happen is beginning. It will be entertaining political
theater.
We’ll stick to our knitting here with a focus on LTC news and policy, but
we won’t entirely neglect the bigger, acute care policy drama that is
unfolding. It does have a long-term care component, in that ObamaCare
pushes state Medicaid programs toward more home care (which increases
costs) and more managed care (which risks access and quality problems).
More on those issues will follow as we publish our three new state reports
over the next month and a half.
#############################
10/18/2013, “Family
caregivers live longer than their peers,” by C. E. Huggins, Reuters
Quote: "In a nationwide study, adults who provided care for a
chronically ill or disabled family member had a lower death rate than a
similar group of non-caregivers. The finding is something of a surprise.
In the past, researchers have found just the opposite - an increased risk
of death as well as poorer mental and physical health among caregivers."
LTC Comment: Seems counter-intuitive, but anyone who has cared for
a chronically ill loved one knows how personally rewarding the experience
can be . . . if it isn’t too hard and doesn’t go on too long.
#############################
10/17/2013, “PPACA
premiums, state-by-state Infographic,” by Nichole Morford,
LifeHealthPRO
Quote: "It's mid-October and
the exchanges have launched — clunkily, in most cases, and with many
unknowns still to be answered. One question that has been answered is an
important one: How much will health care cost under the
Patient Protection and Affordable Care Act (PPACA)?"
LTC Comment: And the answer is . . . it depends.
#############################
10/18/2013, “Common blood pressure drugs cut the risk of
Alzheimer's dementia by 50%, researchers find [link],”
by Tim Mullaney, McKnight's LTC News
Quote: "People older than 75 who had normal cognition and took
diuretics, angiotensin-1 receptor blockers (ARBs) and angiotensin-converting
enzyme (ACE) inhibitors demonstrated a 50% reduced risk of Alzheimer's
dementia, the researchers found. Among those with mild cognitive
impairment, diuretic use was associated with a 50% reduced risk."
LTC Comment: Almost makes you want high blood pressure.
#############################
10/17/2013, “Don't
Let Health Care Squeeze Your Retirement,” Military.com
Quote: "In 2012, 82% of all long-term care insurance policy buyers
were under age 65, according to the financial research organization LIMRA.
And, most likely because of longer life expectancy, women make up 57% of
long-term care insurance purchasers, according to a 2012 LIMRA study."
LTC Comment: USAA promotes LTC insurance for the "military
community."
#############################
10/16/2013, “Thefts
from nursing home trust funds target the elderly,” by Peter Eisler,
USA Today
Quote: "Thousands of residents in U.S. nursing homes and other
long-term care institutions for the aged and disabled have had their
personal savings raided or mismanaged after relying on the facilities to
safeguard the money in special trust fund accounts, a USA TODAY
investigation shows."
LTC Comment: Most people in nursing homes are funded by Medicaid.
Medicaid limits their cash assets to $2,000. Nursing homes manage those
assets in trust accounts to ensure they do not exceed $2,000 and cause the
resident to become ineligible for Medicaid. So, as new revenue comes into
the accounts, they spend money to keep the accounts below the limit.
Hopefully, the money is spent on the resident, but evidently that's not
always the case according to this article. Another big question,
unaddressed in this article, is what happens to the money in these
accounts when a resident dies. It should go to the state's Medicaid
estate recovery program to reimburse Medicaid for the cost of caring for
the resident. But that's not what happens often. Someone shows up,
claims to represent the deceased, and takes the money, leaving Medicaid
(and taxpayers) with the full cost of the departed's care.
#############################
10/15/2013, “Seniors Cautioned To Pay Close Attention To Details As
Enrollment Begins In Medicare Plans [link],”
by Susan Jaffe, Kaiser Health News
Quote: "The seven-week enrollment period for next year's Medicare
prescription drug and managed-care plans begins Tuesday, but seniors
shouldn't simply renew their policies and assume the current coverage will
stay the same. There's a likely payoff for those who pay close attention
to the details."
LTC Comment: Government makes everything so simple.
#############################
10/15/2013, “'Landmark' discovery brings a pill for Alzheimer's
closer to reality, researchers say [link],”
by Tim Mullaney, McKnight's LTC News
Quote: "In Alzheimer's and similar diseases, the brain responds to
the buildup of 'misfolded' proteins by shutting off production of new
proteins altogether, which leads to cell death. An orally administered
compound has been found to intervene in this process and restore protein
production in mice with neurodegenerative disease, according to
researchers at the Medical Research Council Toxicology Unit at the
University of Leicester."
LTC Comment: Another false hope or "this time is different?"
#############################
10/14/2013, “Beneficiaries
of Medicare Left Confused by Exchanges,” by Robert Pear, New York
Times
Quote: "Medicare
beneficiaries can sign up for private health plans starting Tuesday, but
federal officials fear that many of them, out of confusion, might go to
the new federal insurance exchange."
LTC Comment: How tangled the web of confusion becomes with
government in charge.
#############################
10/14/2013, “Most
Americans expect to work for pay in retirement, poll says,”
Associated Press
Quote: "Stung by a recession that sapped investments and home
values, but expressing widespread job satisfaction, older Americans appear
to have accepted the reality of a retirement that comes later in life and
no longer represents a complete exit from the workforce. Some 82 percent
of working Americans over 50 say it is at least somewhat likely they will
work for pay in retirement, according to a poll released today by the
Associated Press-NORC Center for Public Affairs Research."
#############################
10/13/2013, “Baby
boomers fueling wave of entrepreneurship ,” Associated Press
Quote: "Every passing month an unanswered resume dimmed
Jim Glay's optimism more. So with no job in sight, he joined a growing
number of older people and created his own. In a mix of boomer
individualism and economic necessity, older Americans have fueled a wave
of entrepreneurship."
LTC Comment: If there is a silver lining to the dark economic
clouds, it's that boomers working longer and becoming entrepreneurs will
be sensitized to the importance of preserving principal as they generate
income longer, which they can put to good use with LTCI.
#############################
Updated, Friday, October 18, 2013, 11:32 AM (Pacific)
Seattle—
#############################
LTC BULLET: WHY DON’T CHILDREN BUY LTCI FOR PARENTS?
LTC Comment: The Wall Street Journal says
professional kids should buy LTC insurance for their parents. It’s a
perfect solution. So why doesn’t it happen more often? The answer after
the ***news.***
*** LTC COVER UP: By hiking the debt ceiling and
reopening government yesterday without corrective action, Congress covered
up the underlying cause of America’s financial malaise: too much
spending; too much debt; too little private economic incentive. They
applied a band-aid to a suppurating malignant tumor. Long-term care is
part of the cover up because most expensive LTC in the USA is financed in
large measure by federal borrowing, money printing and deficits. As the
time approaches when this funny money finally runs out, we face huge
demographic challenges that legislators, policy makers, and bureaucrats
have ignored for decades. There is not much individuals and families can
do to protect themselves beyond maximizing personal savings, investments
and insurance. ***
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consuming it would be to keep up on LTC news without your LTC Alerts
and Bullets. You guys do a spectacular job.” -- Randy Gallas,
CLTC, LTCP, President, Long-Term Care Insurance Agency, LLC, Kettering,
OH
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subscribe to and support the Center for Long-Term Care Reform, and receive
their own ‘LTC-E-Alerts’... the minimum $150.00 annual membership is one
of the best ‘Business Expenses’ a serious LTCi professional should gladly
incur.” -- Robert A. Callanan, LTCP, CLTC, Senior Vice President, Borden
Hamman Agency, Dallas, TX
Find many more testimonials like these here:
http://www.centerltc.com/Testimonials.htm.
If you agree our LTC E-Alerts and LTC
Bullets are worth a modest investment of $12.50 per month, then
consider this. For an extra $100 per year, you can hear from us most days
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damon@centerltc.com or 206-283-7036. Find all our
Membership Levels and Benefits here:
http://www.centerltc.com/MembershipLevelsandBenefits.htm. As an extra
added bonus for Premier and Premier Elite members, we’ll forward articles
to you that are “gated” and otherwise unavailable to non-subscribers –
like the one discussed below – whenever you ask and we legally can. ***
#############################
LTC BULLET: WHY DON’T CHILDREN BUY LTCI FOR PARENTS?
LTC Comment: Yesterday’s Wall Street Journal
had an article titled “Protecting
a Family from Long-Term Care Costs.” It’s available
here to online WSJ subscribers. If you’d like a copy forwarded
to you, see the ***news*** above. Articles like this one, appearing in
national publications, are a godsend for the struggling LTC insurance
industry. Following are excerpts to give you a sense of the piece
followed by our commentary.
#############################
Excerpts from Austin Kilham, “Protecting
a Family from Long-Term Care Costs,” Wall Street Journal,
October 17, 2013 [link].
“The husband and wife were successful physicians in
their late 30s, but they were worried about the husband's parents, who had
saved only about $100,000 for retirement.
“The couple was especially concerned about the cost
of medical expenses falling to them should the parents' health
deteriorate. . . .
“The adviser [Ms. Horvath] realized that even though
her client's parents had relatively little saved for retirement, they
wouldn't be eligible for long-term care coverage through Medicaid, which
requires recipients to have less than $2,000 in assets. That meant that
even if they purchased LTC insurance, they would be responsible for
additional expenses once the policy ran out.
“But Ms. Horvath devised a solution that protected
the parents and their children from the high cost of long-term care, while
improving the parents' chances of qualifying for assistance from Medicaid.
“First, the adviser suggested that the parents
purchase LTC insurance from Georgia's Long-Term Care Partnership
program-one of 31 state partnership programs to encourage individuals to
buy LTC insurance. . . .
“Ms. Horvath found a policy with a $6,300 annual
premium and would pay up to $4,500 a month for long-term care for three
years. . . .
“But Ms. Horvath had a second part to her plan: The
son and daughter-in-law could pay the premiums on behalf of the parents.
Not only could the successful couple afford the payments, she showed them
how it might be less expensive than paying for long-term care down the
road.
“Above all, Ms. Horvath adds, both the children and
the parents are relieved to have a plan in place that addresses potential
long-term care needs without putting either couple's finances in
jeopardy.”
#############################
LTC Comment: Great plan. Slam dunk. That’s why
everyone’s buying LTCI for Mom and Dad, right? Hardly.
Adult children purchasing LTC insurance policies for
their parents is not unheard of, but it is rare. Why?
Most people don’t think about LTC protection until
they need it and then it’s too late.
Well, sure, but why don’t they think about it? After
all, the risk of needing LTC someday is high and the potential cost is
astronomical.
If the risk and cost is so high, why are most people
unconcerned? “They’re in denial,” you say. OK, true, but that explains
exactly nothing.
The key question is “What enables their denial?”
Do you really think most Americans would remain in
denial, oblivious of long-term care’s risk and cost, if one of every ten
families in the country were being wiped out financially by long-term
care?
No, there is a simple reason for this seemingly
peculiar circumstance that most people ignore long-term care until they
need it.
Since 1965, Medicaid and Medicare have paid most of
the cost of expensive long-term care. Sure, families provide huge amounts
of free care at considerable emotional and financial distress. But once
care costing thousands of dollars per month becomes necessary, public
funding kicks in.
Now, if the public funding didn’t start until
personal finances were wiped out, as most media coverage and academic
writing incorrectly assumes, then people would worry about LTC and plan
ahead.
But that’s not how it works in the real world.
Income doesn’t interfere with Medicaid LTC eligibility because people who
have too little income to pay privately for all their LTC and medical
expenses qualify based on income. Assets don’t interfere despite the
$2,000 limit, because people’s biggest assets are exempt, such as a home,
business, IRAs, term life insurance, an automobile, etc. Those who still
have too much wealth to qualify consult Medicaid planners. They make the
excess go away artificially and get their affluent clients into the nicest
facilities by holding back some “key money” to buy their way into the best
care.
Do you see why the LTC Partnership Program, promoted
in the article, has not attracted as many clients as it was expected to
do? People don’t buy insurance to avoid a catastrophic spend down
liability that does not actually exist. They don’t intentionally plan to
go on Medicaid. They just don’t plan or think about LTC at all. Their
denial is the logical outcome of nearly five decades of Medicaid’s
operating as a de facto LTC entitlement.
The Wall Street Journal article cited above
describes a situation in Georgia. The Center for LTC Reform recently
completed a study of Medicaid and LTC financing in “The Peach State.” Our
report, titled “The Index of Long-Term Care Vulnerability: A Case Study
in Georgia” will be published soon by the
Georgia Public Policy Foundation and the Center. It will provide a
much more detailed explanation than we have space for in this LTC
Bullet. Stay tuned.
#############################
Updated,
Monday, October 14, 2013, 12:11 PM (Pacific)
Seattle—
#############################
KING KONG, THE
DEBT AND LTC NEWS AND COMMENT
LTC Comment:
Last Friday’s LTC Bullet, titled “Shutdown
Irony,” pulled some compliments. Thanks.
But I’m not the
only analyst to see the key issues in the current political morass as the
debt (not the ceiling) and excessive government spending (not the
shutdown).
Today, editorial
cartoonist Glenn McCoy portrays a growling King Kong (labeled “debt”) atop
the Empire State Building. Kong grasps Uncle Sam in a choke-hold with
bi-planes circling. A frustrated elephant pilots one and the President
the other saying “Gorilla? What Gorilla?” Check it out
here.
Denial is not a
river in Egypt.
#############################
10/11/2013, “What's
the Deal with the Exchanges?,” by Greg Scandlen, John Goodman’s
Health Policy Blog
Quote: At e.Healthinsurance.com: “All you
have to do is enter your zip code to find out what is available in your
area and the world of choices opens up. You can see what the benefits and
costs will be. Only after you have made your selection do you have to
start filling out the paperwork. That is not how the ObamaCare exchanges
operate. You can't see any actual insurance plans until you first fill out
a whole lot of paperwork. Even Kentucky, the state with the best
performance so far, requires you to complete a form including your name,
address, phone number, and social security number, which must then be
verified by ‘public records and consumer credit information.’”
LTC Comment: Big Brother wants your personal
information before revealing subsidized health insurance options. Is this
about expanding health insurance or capturing email addresses and
increasing dependency?
#############################
10/10/2013, “Some
Good News About Saving For Retirement Health Costs,” by Ankita Rao,
Kaiser Health News
Quote: "A
new report from the Employee Benefit Research Institute found that
Medicare beneficiaries, who are 65 years or older, would need to save six
to 11 percent less in 2013 than they did in 2012. Men hoping for a
50-percent chance of having enough money saved for retirement health costs
would need an average of $65,000. For women, who have longer life
expectancies and related costs, the savings goal would be about $86,000. .
. . Even so, saving for retirement won’t necessarily be easier in coming
years. The report notes that its analysis doesn’t account for long-term
care expenses like nursing home care, or for costs incurred by those
who retire before they’re eligible for Medicare." (Emphasis added)
LTC Comment: Such a minor
oversight, not accounting for LTC expenses.
#############################
10/11/2013, “Strokes drastically reduce
quality of life, showing need for better care systems, researchers say [link],”
by Tim Mullaney, McKnight's LTC News
Quote: "They found that in
the five-year period after having a stroke, participants lost 1.71 years
due to earlier death and an additional 1.08 years due to reduced quality
of life, on average, totaling a loss of 2.79 ‘quality-adjusted life
years.’ Those who had severe strokes lost just over 4 quality years. . .
. Last month, the American Heart Association/American Stroke Association
issued a policy statement
calling for universal access to post-stroke skilled nursing and
rehabilitation services, regardless of how an individual is paying for
healthcare." (Emphasis added.)
LTC Comment: It always comes
down to funding in the end. Can you or your insurance pay for the care
you need or do you have to depend on government or charity?
#############################
10/9/2013, “A
New Way to Pay for Long-Term Care,” by Paula Span, New York Times
Quote: "I was visiting an assisted living
facility recently with my sister, whose disability made that a prudent
choice, when the marketing manager handed us a brochure. It asked, 'Did
you know a life insurance policy can pay for long-term care expenses?'”
LTC Comment: Life settlements come to the
attention of the New York Times.
#############################
10/9/2013, “Top
20 Most Expensive Inpatient Conditions,” by Bob Herman, Becker's
Hospital Review
Quote: “Here are the top 20 most expensive
inpatient conditions from 2011 across all payers, according to the AHRQ
brief.
1. Septicemia (except in labor) - $20.3 billion
2. Osteoarthritis - $14.8 billion
3. Complication of device, implant or graft - $12.9 billion
4. Liveborn (general childbirth) - $12.4 billion
5. Heart attack - $11.5 billion
6. Spondylosis, intervertebral disc disorders, other back problems - $11.2
billion
7. Pneumonia (except caused by tuberculosis and STDs) - $10.6 billion
8. Congestive heart failure - $10.5 billion
9. Coronary atherosclerosis - $10.4 billion
10. Adult respiratory failure - $8.7 billion
11. Acute cerebrovascular disease - $8.4 billion
12. Cardiac dysrhythmias - $7.6 billion
13. Complications of surgical procedures or medical care - $6.9 billion
14. Chronic obstructive pulmonary disease and bronchiectasis - $5.7
billion
15. Rehab care, fitting of prostheses and adjustment of devices - $5.5
billion
16. Diabetes mellitus with complications - $5.4 billion
17. Biliary tract disease - $5.1 billion
18. Hip fractures - $4.9 billion
19. Mood disorders - $4.8 billion
20. Acute and unspecified renal failure - $4.7 billion”
LTC Comment: And then comes long-term care.
#############################
10/9/2013, “ACSIA Long Term Care Leader Rob
Cohen Joins the 3in4 Association Advisory Board [link],”
DigitalJournal
Quote: "Today Rob Cohen, CPA, a long-term
care insurance leader with ACSIA Long Term Care, announced his commitment
to LTC education by accepting a position on the Advisory Board of the 3in4
Association. Rob has over 21 years of progressive experience in the LTC
industry, including running the largest division of a major national long
term care insurance carrier, founding a national LTC brokerage, and
testifying in his state Congress on consumer advocacy and advancing the
impact of the state LTC Partnerships."
LTC Comment: Congratulations, Rob.
#############################
10/8/2013, “Why
spouses should 'split up' for Medicare,” by Anne Tergesen, WSJ
MarketWatch
Quote: "Just a week before Medicare's annual
enrollment period is set to begin, here's something for married couples to
consider: Just because you were on the same health insurance plan during
your working years doesn't mean you should opt for the same coverage in
Medicare."
LTC Comment: This advice to “split up” to
choose the best Medicare plan for each spouse is a far cry from the advice
Medicaid planners give elderly couples to separate or divorce to
facilitate eligibility for welfare-financed LTC benefits.
#############################
10/8/2013, “Obamacaid: Democrats ask: Why not
expand the worst insurance in America? [link],”
Wall Street Journal editorial
Quote: "In reality, Medicaid is now mostly a
middle-class entitlement for nursing homes. Almost two-thirds of Medicaid
spending flows to the elderly, and 60% of people in long-term care
institutions are on the program.
"Some 20% of the people under 65 who are eligible for
the program today also haven't signed up. One reason might be the
scandalously poor quality of care as states squeeze down provider
reimbursements. Only this May an important randomized, controlled trial in
Oregon concluded that the program generates no discernible improvement in
health compared to being uninsured.
"If the sojourners for Medicaid were serious about
helping the least fortunate, they'd try to repair its current
dysfunctions. Start by prioritizing spending, and then give Governors
waivers to manage case loads and make operations more efficient.
"But the truth is that liberals view Medicaid as a
national model, not a national disgrace. Coverage on ObamaCare's nominally
private exchanges largely clones Medicaid's narrow networks of doctors and
hospitals, low reimbursements, limited patient choice and heavy federal
regulation. It might be more accurate to call it Obamacaid.
"Meanwhile, the Administration is closing off state
Medicaid experimentation with 'maintenance of effort' rules that guarantee
state costs are higher than they need to be. Most Governors, even
Republicans, are pragmatic about living with Medicaid, but the White
House's control-freak instincts are making it impossible for them to
participate."
LTC Comment: This excerpt from a Wall
Street Journal editorial is unusually accurate and perceptive about
the real nature of Medicaid. The rest of the piece is even more highly
political. You may not be able to click through to it without an online
subscription to the WSJ.
If you really want to read the whole editorial, just respond to this email
and I'll forward it to you, which the WSJ allows for one week or
so.
#############################
10/7/2013, “Costliest 1 Percent Of Patients
Account For 21 Percent Of U.S. Health Spending [link],”
by Sandra G. Boodman, Kaiser Health News
Quote: "Five percent of patients accounted
for 50 percent of all health-care expenditures. By contrast, the bottom 50
percent of patients accounted for just 2.8 percent of spending that year,
according to
a recent report by the federal Agency for Healthcare Research and
Quality."
LTC Comment: Dramatic findings and they
suggest that real, private insurance works, i.e., exchanging catastrophic
risk for affordable premiums. But that kind of insurance is disappearing,
replaced by "social insurance" that forces everyone to pay leveled
premiums so that anyone can collect benefits regardless of the risk they
bring to the pool. Hence articles like this one focus only on managing
care for the tiny minority of heavy health care users. Health care
financing will not step back from the fiscal cliff until public policy
focuses on preventing people from entering the high-risk, high-cost,
predominantly publicly financed category. The way to do that is to return
to the traditional principle of private insurance with a strictly
means-tested, welfare-based public safety net.
#############################
10/7/2013, “When it comes to paying for
long-term care, public and private options can both fail [link],”
by John O'Connor, Editorial Director, McKnight's LTC News
Quote: "Our lawmakers' incompetence leaves
many concerned about future Medicare and Medicaid funding, which just
happens to pay for most of our nation's long-term care services. But
before the privatize-everything crowd completely takes over, let's
remember this salient fact: The private sector doesn't always get payments
right either."
LTC Comment: Not a happy read and it contains
some errors about LTCI, but this editorial in a widely read LTC provider
magazine gives insight into how that industry views public and private LTC
financing.
#############################
10/4/2013, “The Employer Mandate of the
Patient Protection Affordable Care Act: An Alliance for Health Reform
Toolkit [link],”
by Bara Vaida, Alliance for Health Reform
Quote: "Fast Facts
“Employers with more than 50 full-time employees
(those who work 30 or more hours a week) must offer insurance to workers
beginning in 2015 or pay a $2,000 per employee penalty, if any worker gets
a coverage subsidy through a state health insurance exchange.
“Employer-provided insurance coverage must be
affordable and cost no more than 9.5 percent of the employee's income. If
it is more, the employee may seek coverage on the exchange and the
employer will pay a $3,000 penalty for each of those workers.
“The mandate was originally scheduled for
implementation in 2014, but the Obama administration in July 2013 delayed
it for one year to give employers more time to comply with the law.
“Small employers (those with fewer than 50 workers)
are exempt from the penalties.
“The percentage of individuals with employment-based
coverage was 55.1 percent in 2011, down from 55.3 percent in 2010, 56.1
percent in 2009, and 65.1 percent in 2000.”
LTC Comment: Anybody out there want to hire
your 50th “full time” employee? So much for a focus on job
creation!
#############################
Updated, Friday, October 11, 2013, 11:11 AM (Pacific)
Seattle—
#############################
LTC BULLET: SHUTDOWN IRONY
LTC Comment: Default gestalt hides reckless debt
bet.
LTC BULLET: SHUTDOWN IRONY
LTC Comment: How ironic that most government
shutdown news and analysis despairs about the consequences of default now,
but ignores the debt itself, its causes and the hugely greater risk of a
nearly inevitable, much bigger default later. Most media coverage focuses
on the symptoms, not the disease.
Writing this yesterday with the stock market soaring
over hopes of a temporary debt ceiling compromise, I knew it might be old
news by publication time today. But this morning, as I apply the
finishing touches, little has changed although “talks” with the White
House have begun.
While I mused about writing a Bullet on this
subject, I read an op-ed in yesterday’s Wall Street Journal that
did the job admirably for me: “David
Malpass: The Bigger Battle Behind the Shutdown” (gated). Following
are a few summary excerpts from what Malpass had to say followed by my
thoughts on the situation’s relevance to long-term care policy.
#############################
From “David Malpass: The Bigger Battle Behind the
Shutdown,” Wall Street Journal, October 10, 2013
"At its core, the shutdown is part of a much bigger
battle to restrain the federal government. It is spending $3.6 trillion
per year without a budget, and its expenditures are expected to increase
rapidly in the years ahead.
"Meanwhile, the government has piled up $17 trillion
in debt and $60 trillion more in unfunded spending promises. The Federal
Reserve will borrow $1.1 trillion in 2013 alone to buy bonds-and it
reserves the right to borrow unlimited amounts for future bond purchases
without congressional or presidential permission." . . .
"Much federal spending can't be justified. The
government shutdown is giving more insight into the problem-a staggering
$250 billion per month, 80% of spending, runs on autopilot without any
congressional involvement or control. So much for the Constitution's
bedrock principle that 'No Money shall be drawn from the Treasury, but in
Consequence of Appropriations made by Law.'" . . .
"Rather than discuss restraint, the administration
has increasingly turned to the Federal Reserve as a crutch. The Fed is
borrowing and spending $85 billion per month on bonds, and it claims the
legal authority to increase its debt at will. Wall Street is intensely
focused on supporting this profligacy and profiting from it." . . .
"The Fed is choosing to buy long-term bonds with
short-term debt. The result is a rapid shortening in the effective
maturity of the national debt that benefits current politicians but puts
taxpayers at risk. Like an adjustable-rate mortgage, the borrower, in this
case the government, gets a lower interest rate now but will have to
refinance at higher rates later." . . .
"The upside is clear: Growth, jobs, the dollar and
financial markets would surge if the shutdown leads to restraint."
#############################
LTC Comment: That’s the big picture. Now here’s our
focus on long-term care.
What Malpass calls “a staggering $250 billion per
month, 80% of spending, [that] runs on autopilot” includes government
spending on long-term care. Since 1965, Medicaid and Medicare have paid
for most expensive LTC with three major consequences. First, by paying
mostly for nursing home care, government created “institutional bias” and
crowded out a private market for home and community-based care. Second,
by making most expensive long-term care virtually free, government
discouraged responsible private LTC planning and impeded markets for
private insurance and home equity conversion products to fund LTC. Third,
by forcing interest rates to near zero, government (i.e., the Fed)
administered the coup de grace to market-based LTC financing and
delayed indefinitely the reckoning for government’s profligacy.
Now we all find ourselves on the edge of a fiscal
cliff. By hiding from financial reality for so long, public policy has
brought us to the cusp of a Hobson’s choice about long-term care. Back
off voluntarily from paying for most long-term care with non-existent (i.e.,
borrowed or printed) government funds now or be forced to do the same by
deteriorating economic and monetary conditions a little later. Take it or
leave it. The end game is the same and it’s getting nearer day by day.
To illustrate just how grave this situation is, the
Center for Long-Term Care Reform developed an “Index of Long-Term Care
Vulnerability.” We provided an outline of the Index in an
LTC Bullet last August. In the meantime, we’ve refined the index
and applied it to the United States and to three states: Virginia, New
Jersey and Georgia. The results are not encouraging. The country as a
whole and all states face staggering challenges to the sustainability of
their long-term care financing systems. We’ve summarized the demographic,
economic and social challenges in these seven questions:
- How many older people are coming in the next few
decades?
- How sick will they be?
- How viable is Medicaid as a long-term care payer?
- How reliable is federal revenue on which Medicaid
mostly depends?
- How reliable is state revenue on which Medicaid
secondarily depends?
- How much private-pay revenue is available to
relieve LTC financing pressure on Medicaid?
- How strong is dependency on public programs (i.e.,
the entitlement mentality)?
Stay tuned to LTC Bullets for answers. It may
already be too late for solutions short of public funding default
and market-based reconstruction.
#############################
Updated,
Tuesday, October 8, 2013, 4:01 PM (Pacific)
Seattle—
#############################
GOVERNMENT SHUT
DOWN AND LTC NEWS AND COMMENT
LTC Comment: The
government shut down and the shaky implementation of ObamaCare seem to
have sucked all of the journalistic oxygen out of the room. LTC-related
clippings were relatively sparse this past week. The shut down and
ObamaCare coverage, however, are a welcome reminder of the massive
problems that arise when parties do through politics what can only be done
well and efficiently through markets. The jury is out on whether
government failures, inevitably becoming much worse, will lead to a total
collapse or, by default, to market-based solutions. If to avoid
defaulting on debt payments, the feds were forced to cut popular programs,
the public would soon be forced to see hard choices for what they are.
Sooner or later, there’ll be no more monetary wool over their eyes.
Expect Congress- and fed-watching to become as entertaining and violent as
a demolition derby.
#############################
10/7/2013, “Your guide to Medicare: What
Medicare Advantage plan is best for you? [link],”
by Phyllis Furman, New York Daily News
Quote: "Medicare Advantage plans are on a
tear: Enrollment in Medicare Advantage plans has been growing at a 10%
annual clip for the last few years as seniors have warmed to their
convenience and potentially lower costs, while growing more comfortable
with the idea of managed care."
LTC Comment: Medicare Advantage sales help
support LTCI distributors who confront a more challenging market.
#############################
10/7/2013, “Shutdown update: DC cuts off
Medicaid payments, CMS confirms limited surveys [link],”
by Tim Mullaney, McKnight's LTC News
Quote: "'Due to the failure of the United
States Congress to pass a budget for fiscal year 2014 and the District's
resulting budget difficulties, at this time, the Department of Health Care
Finance is not in a position to pay the managed care organizations or
fee-for-service providers for the healthcare services delivered to the
District's Medicaid and Alliance beneficiaries,' the department stated
Friday."
LTC Comment: The nursing home industry is
accustomed to long delays in Medicaid reimbursement. How much of that
will giant managed care organizations put up with? We’re likely to find
out as managed care continues to spread into long-term care for aged,
blind and disabled Medicaid recipients, especially the highly vulnerable
and extremely expensive “dual eligibles.”
#############################
10/4/2013, “99%
of Obamacare applications hit a wall,” by Dan Mangan, CNBC
Quote: "As few as 1 in 100 applications on
the federal exchange contains enough information to enroll the applicant
in a plan, several insurance industry sources told CNBC on Friday. Some of
the problems involve how the exchange's software collects and verifies an
applicant's data."
LTC Comment: Anybody surprised?
#############################
10/4/2013, “Don't wait to plan long-term
care: Most of us will need help as we age. Here's what to do-and how to
pay for it [link],”
Orly Avitzur, M.D., ConsumerReports.org
Quote: "So unless you have ample savings to
cover prolonged care, it's worth considering at least partial coverage
through a long-term-care policy."
LTC Comment: A positive article on LTC
insurance in long-time basher Consumer Reports? Did Hades freeze
over?
#############################
10/4/2013, “Texas
Medicaid Law Could Transform Life Insurance Industry,” by Wm. Scott
Page, Huffington Post
Quote: "Texas dramatically changed its
Medicaid eligibility law recently, in a move that is already having a
profound effect on the life insurance industry -- yes, the life insurance
industry. Traditionally, to enroll in Medicaid, the state-run health
insurer of last resort, individuals needed to be nearly destitute. So to
qualify, many people spent down or surrendered their assets (including
life insurance) in order to become eligible for this needed medical
coverage.
The new law in Texas, however, enables individuals with a life
insurance policy to enter the Medicaid program provided they obtain a life
insurance settlement and use the proceeds specifically for long-term
care."
LTC Comment: Good for Medicaid, elders and
care providers. Not so good for life insurers who lose lapsers.
#############################
10/4/2013, “Health
Reform FAQs,” Kaiser Family Foundation
Quote: 189 "frequently asked questions" about
ObamaCare answered!
LTC Comment: And they say LTC insurance is
complicated.
#############################
10/4/2013, “CMS:
Medicare will not cover PET scans for Alzheimer's,” by Tim Mullaney,
McKnight's LTC News
Quote: "Seniors will not be able to receive
Medicare coverage for imaging scans to help diagnose Alzheimer's disease,
the Centers for Medicare & Medicaid Services recently announced. ... The
CMS decision has sparked criticism from some quarters. Opponents say it
contradicts an Alzheimer's action plan released earlier this year by the
Department of Health and Human Services itself, noted the Assisted Living
Federation of America."
LTC Comment: Government jerkily at work. One
foot on the brake and the other on the accelerator.
#############################
10/3/2013, “How
PPACA affects long-term care insurance,” by Tom Nawrocki,
LifeHealthPro
Quote: "PPACA eliminates an insurance
company's ability to impose a lifetime maximum on how much it can pay out.
That means that end-of-life medical issues will be more likely to be
covered, which eliminates part of the cost of long-term care. When your
clients are shopping for long-term care insurance, that's something
important to keep in mind."
LTC Comment: An interesting observation, but
I wonder to what extent it will prove true.
#############################
10/2/2013, “Long-Term Cognitive Impairment Too
Common After Critical Illness [link],”
Science Daily
Quote: "Patients treated in intensive care
units across the globe are entering their medical care with no evidence of
cognitive impairment but oftentimes leaving with deficits similar to those
seen in patients with traumatic brain injury (TBI) or mild Alzheimer's
disease (AD) that persists for at least a year, according to a Vanderbilt
study published in the New England Journal of Medicine."
LTC Comment: No wonder hospitals always leave
me feeling a little crazy.
#############################
10/2/2013, “Long-term statin use reduces
dementia risk by 30%, researchers discover [link],”
by Tim Mullaney, McKnight's LTC News
Quote: "Last year, the U.S. Food and Drug
Administration ordered that statin labels include a warning about memory
problems associated with short-term use. A research team from Johns
Hopkins Medicine found no evidence of this, based on their analysis of
prior studies. In addition, they found that statin use for longer than one
year reduced the risk of dementia by 29%."
LTC Comment: Hmmm. The FDA protects us from
problems that don’t exist and from solutions that do.
#############################
10/1/2013, “Long Term Care Insurance Leader,
Mark Goldberg Joins LTC Financial Partners As National Sales Manager [link],”
Sacramento Bee
Quote: "LTC Financial Partners, LLC (LTCFP)
https://www.ltcfp.com today announced the addition of Mark Goldberg, a
leader in the long-term care planning field, as new National Sales
Manager. For the past 8 months, Goldberg has held the role of Chief
Operating Officer for American Senior Services Incorporated (ASSI)
http://www.truefreedomhomecare.com, and will continue supporting
ASSI's efforts in a modified position as Senior Distribution Director."
LTC Comment: Congratulations, Mark.
#############################
10/1/2013, “Covering
Health Issues: A Sourcebook for Journalists: Fall 2013,” Alliance for
Health Reform
Quote: Table of Contents:
* CHAPTER 1 - PATIENT PROTECTION AND AFFORDABLE CARE
ACT (Updated: 10.03.2013)
* CHAPTER 2 - HEALTH CARE COSTS (Updated:
10.02.2013)
* CHAPTER 3 - HEALTH INFORMATION TECHNOLOGY
(Updated: 10.02.2013)
* CHAPTER 4 - QUALITY OF CARE (Updated: 10.02.2013
* CHAPTER 5 - INNOVATION AND DELIVERY SYSTEM
REFORMS (Updated: 10.02.2013)
* CHAPTER 6 - EMPLOYMENT-BASED HEALTH COVERAGE
(Updated: 10.03.2013)
* CHAPTER 7 - HEALTH INSURANCE EXCHANGES (Updated:
10.03.2013)
* CHAPTER 8 - MEDICARE (Updated: 10.02.2013)
* CHAPTER 9 - MEDICAID AND CHIP (Updated:
10.02.2013)
* CHAPTER 10 - DUAL ELIGIBLES (Updated: 10.02.2013)
* CHAPTER 11 - LONG-TERM SERVICES AND SUPPORTS
(Updated: 10.03.2013)
* CHAPTER 12 - DISPARITIES IN HEALTH AND HEALTH
CARE (Updated: 10.02.2013)
* CHAPTER 13 - MENTAL HEALTH AND SUBSTANCE ABUSE
(Updated: 10.03.2013)
* CHAPTER 14 - PUBLIC HEALTH AND PREVENTION
(Updated: 10.03.2013)
* GLOSSARY - GLOSSARY (Updated: 10.01.2013)
LTC Comment: This is a convenient source for
data on all aspects of health care financing including long-term care, or
as they prefer to call it "long-term services and supports," a real
mouthful. Take it with a grain of salt, though. The sources are heavily
biased against private financing alternatives, including insurance. The
list of experts for the LTSS section reads like a "who's who" of
government takeover advocates, with only a few more-objective,
“go-along-to-get-along” exceptions.
#############################
10/1/2013, “Government
shutdown will not cripple long-term care, leaders say,” by Tim
Mullaney, McKnight’s LTC News
Quote: "A shutdown could lead to dramatic
consequences, such as furloughs of up to half the staff at the Department
of Health and Human Services. However, it should not immediately impact
long-term care providers too severely. LeadingAge and the American Health
Care Association reassured members that Medicare and Medicaid
reimbursements should continue to flow, at least in the short term. . .
. The shutdown likely will lead to fewer initial and recertification
surveys for Medicare and Medicaid providers and interrupt the work of
healthcare fraud and abuse strike forces, wrote Barbara Gay, director of
governmental affairs at LeadingAge."
LTC Comment: Actually, the shutdown did stop
Medicaid payments in DC. The bigger problem long term, however, is the
hopelessly unfunded entitlement programs and the massive and rapidly
growing federal debt, compounded of course by huge, unfunded pension
liabilities. If shutting down the government leads to greater scrutiny of
those issues, it will be well worth the minor inconveniences that ensue.
#############################
9/29/2013, “When
to Recommend Medicaid,” by Elliot M. Kass, Financial Planning
Quote: "The difficult part, says Steve
Mathieu, a Manchester, New Hampshire-based financial and estate planner
specializing in clients age 55 and up, comes down to loss of control,
'Because once you go on Medicaid, the government dictates many aspects of
your life, including the level and type of care that you'll receive and
where you'll live.' 'Some people no longer care. They don't have any
assets to protect and they're okay with the government making all their
decisions,' Mathieu says. They may transfer ownership of what few assets
they have to a loved one in order to qualify for the program."
LTC Comment: He's right about losing control
when you go on Medicaid, but wrong about transferring those last few
assets to loved ones. That would create a transfer of assets penalty . .
. if done for the purpose of qualifying for Medicaid and if the
eligibility workers catch it.
#############################
Updated, Friday, October 4, 2013, 11:47 AM (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.***
*** LTC COMMISSION falls flat. As many predicted,
including LTC Bullets, the federally sponsored Commission on
Long-Term Care--created by the “fiscal cliff” legislation, oxymoronically
named “The American Taxpayer Relief Act”--came and went with barely a
ripple of interest. Amid universal laments that long-term care is a huge
personal and financial, private and public problem, the Commission could
not agree on the only thing that really matters: how to pay for quality
LTC for an aging population. We believe it’s time to change the focus of
LTC research. Instead of asking “What’s wrong and how can we fix it?”
it’s time to ask “How did we get into this mess and what can we do to keep
it from getting even worse?” In other words, the time has come to focus
on our Rube Goldberg LTC system’s vulnerability and unsustainability.
Keep an eye out for new research from the Center for LTC Reform that does
exactly that. ***
*** HE’S BACK. After four months on the road (in the
Silver Bullet) conducting field work in Virginia, New Jersey and
Georgia and another month hunkered down writing the reports on those
studies, Steve Moses is back at Center headquarters in Seattle. He says:
“I look forward to refocusing on our Clippings Service, LTC E-Alerts,
and LTC Bullets and I thank Damon for picking up the slack while I
was fully engaged in report writing.” Those three reports, titled “The
Index of Long-Term Care Vulnerability: Case Studies in Virginia, New
Jersey, and Georgia” have been submitted to the state think tanks that
commissioned them. We look forward to posting them and telling you more
about their findings soon.” ***
*** CLIPPING SERVICE subscribers receive news items
from us, individually and in real time, as short emails with a link, a
quote and occasionally some brief commentary. We 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 you don’t have to. By dividing the labor in this way, we all
work more efficiently. If you like what you read in our LTC
E-Alerts, please subscribe to our Clipping Service. It’s free to all
“Premium Members” ($250/year). Find all the details
here. Contact Damon at 206-283-7036 or
damon@centerltc.com to subscribe. ***
--------------
LTC BULLET: LTC ALMANAC UPDATE
LTC Comment: Center members know and appreciate our
"Almanac
of Long-Term Care" in
The Zone, our password-protected website.
*** SPECIAL: We are making access to The Zone,
including the "Almanac of Long-Term Care," free for seven
days—today through Friday, October 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 1:
Aging Demographics
United States
General Stats
“Rising Demand for Long-Term Services and Supports
for Elderly People”
CBO on LTC 0613
URL
“By 2050, one-fifth of the total U.S. population will
be elderly (that is, 65 or older), up from 12 percent in 2000 and 8
percent in 1950. The number of people age 85 or older will grow the
fastest over the next few decades, constituting 4 percent of the
population by 2050, or 10 times its share in 1950. That growth in the
elderly population will bring a corresponding surge in the number of
elderly people with functional and cognitive limitations. Functional
limitations are physical problems that limit a person's ability to perform
routine daily activities, such as eating, bathing, dressing, paying bills,
and preparing meals. Cognitive limitations are losses in mental acuity
that may also restrict a person's ability to perform such activities. On
average, about one-third of people age 65 or older report functional
limitations of one kind or another; among people age 85 or older, about
two-thirds report functional limitations. One study estimates that more
than two-thirds of 65-year-olds will need assistance to deal with a loss
in functioning at some point during their remaining years of life. If
those rates of prevalence continue, the number of elderly people with
functional or cognitive limitations, and thus the need for assistance,
will increase sharply in coming decades.” (p. 1)
See also “Methods for Analysis of the Financing and
Use of Long-Term Services and Supports”:
http://www.cbo.gov/publication/44370
Profile of Older Americans, 2012 AOA
URL
Highlights*
• The older population (65+) numbered 41.4 million in
2011, an increase of 6.3 million or 18% since 2000.
• The number of Americans aged 45-64 – who will reach
65 over the next two decades – increased by 33% during this period.
• Over one in every eight, or 13.3%, of the
population is an older American.
• Persons reaching age 65 have an average life
expectancy of an additional 19.2 years (20.4 years for females and 17.8
years for males).
• Older women outnumber older men at 23.4 million
older women to 17.9 million older men.
• In 2011, 21.0% of persons 65+ were members of
racial or ethnic minority populations--9% were African-Americans (not
Hispanic), 4% were Asian or Pacific Islander (not Hispanic), less than 1%
were American Indian or Native Alaskan (not Hispanic), and 0.6% of persons
65+ identified themselves as being of two or more races. Persons of
Hispanic origin (who may be of any race) represented 7% of the older
population.
• Older men were much more likely to be married than
older women--72% of men vs. 45% of women (Figure 2). 37% older women in
2012 were widows.
• About 28% (11.8 million) of noninstitutionalized
older persons live alone (8.4 million women, 3.5 million men).
• Almost half of older women (46%) age 75+ live
alone.
• In 2011, about 497,000 grandparents aged 65 or more
had the primary responsibility for their grandchildren who lived with
them.
• The population 65 and over has increased from 35
million in 2000 to 41.4 million in 2011 (an 18% increase) and is projected
to increase to 79.7 million in 2040.
• The 85+ population is projected to increase from
5.7 million in 2011 to 14.1 million in 2040.
• Racial and ethnic minority populations have
increased from 5.7 million in 2000 (16.3% of the elderly population) to
8.5 million in 2011 (21% of the elderly) and are projected to increase to
20.2 million in 2030 (28% of the elderly).
• The median income of older persons in 2011 was
$27,707 for males and $15,362 for females. Median money income (after
adjusting for inflation) of all households headed by older people rose by
2% (not statistically significant) from 2010 to 2011. Households
containing families headed by persons 65+ reported a median income in 2011
of $48,538.
• The major sources of income as reported by older
persons in 2010 were Social Security (reported by 86% of older persons),
income from assets (reported by 52%), private pensions (reported by 27%),
government employee pensions (reported by 15%), and earnings (reported by
26%).
• Social Security constituted 90% or more of the
income received by 36% of beneficiaries in 2010 (23% of married couples
and 46% of non-married beneficiaries).
• Almost 3.6 million elderly persons (8.7%) were
below the poverty level in 2011. This poverty rate is not statistically
different from the poverty rate in 2010 (8.9%). During 2011, the U.S.
Census Bureau also released a new Supplemental Poverty Measure (SPM) which
takes into account regional variations in the livings costs, non-cash
benefits received, and non-discretionary expenditures but does not replace
the official poverty measure. The SPM shows a poverty level for older
persons of 15.1% (more than 6 percentage points higher than the official
rate of 8.7%). This increase is mainly due to including medical
out-of-pocket expenses in the poverty calculations.
*Principal sources of data for the Profile are the
U.S. Census Bureau, the National Center for Health Statistics, and the
Bureau of Labor Statistics. The Profile incorporates the latest data
available but not all items are updated on an annual basis.
Chapter 3:
Unfunded Liabilities--Social Security,
Medicare, and Budgets
National Health Expenditures
“National Health Expenditure Projections, 2012-22:
Slow Growth Until Coverage Expands And Economy Improves”
National Health Expenditure 2012-2022
URL
“Expected growth for 2014 is 6.1 percent, with an
average projected growth of 6.2 percent per year thereafter. Over the
2012-22 period, national health spending is projected to grow at an
average annual rate of 5.8 percent. By 2022 health spending financed by
federal, state, and local governments is projected to account for 49
percent of national health spending and to reach a total of $2.4
trillion.” (p. 1)
“National Health Spending In 2011: Overall Growth
Remains Low, But Some Payers And Services Show Signs Of Acceleration” Health
Aff January 2013 32:187-99
NHS for 2011 URL: http://content.healthaffairs.org/content/32/1/87.full.pdf+html
“ABSTRACT In 2011 US health care spending grew 3.9
percent to reach $2.7 trillion, marking the third consecutive year of
relatively slow growth. Growth in national health spending closely tracked
growth in nominal gross domestic product (GDP) in 2010 and 2011, and
health spending as a share of GDP remained stable from 2009 through 2011,
at 17.9 percent. Even as growth in spending at the national level has
remained stable, personal health care spending growth accelerated in 2011
(from 3.7 percent to 4.1 percent), in part because of faster growth in
spending for prescription drugs and physician and clinical services. There
were also divergent trends in spending growth in 2011 depending on the
payment source: Medicaid spending growth slowed, while growth in Medicare,
private health insurance, and out-of-pocket spending accelerated. Overall,
there was relatively slow growth in incomes, jobs, and GDP in 2011, which
raises questions about whether US health care spending will rebound over
the next few years as it typically has after past economic downturns.” (p.
87)
Unfunded Liability Estimates
2013 Medicare Trustees Report URL:
http://downloads.cms.gov/files/TR2013.pdf
“From the 75-year budget perspective, the present
value of the additional resources that would be necessary to meet
projected expenditures, at current-law levels for the three programs
combined, is $39.6 trillion. To put this very large figure in perspective,
it would represent 4.2 percent of the present value of projected GDP over
the same period ($944 trillion).” (p. 228)
Chapter 4:
Long-Term Care
General
“Five Key Facts About the Delivery and Financing of
Long-Term Services and Supports”
KFF on 5 Key Facts on LTC 0913
URL
Fact #1: People of All Ages Require Long-Term
Services and Supports
Fact #2: Many People Who Need Long-Term Services and
Supports Rely on Unpaid, Informal Care
Fact #3: When Paid, Formal Care is Needed, Many
People Cannot Afford to Cover These Expenses
Fact #4: Medicaid is the Primary Payer for Long-Term
Services and Supports
Fact #5: With the Aging of America, the Demand for
Long-Term Services and Supports is Expected to Increase in the Coming
Decades
Chapter 6:
Long-Term Care Financing
General
“After CLASS: The Long- Term Care Commission's Search
For A Solution,” Health Affairs
Josh Wiener on the LTC Commission 0513 URL:
http://content.healthaffairs.org/content/32/5/831.full.pdf+html
“A heavy reliance on Medicaid has persisted, despite
deep unhappiness with rising costs, routine catastrophic out-of-pocket
costs that often leave people impoverished, the stigma that goes with a
means-tested program, the lack of Medicare or private long-term care
coverage, and the disconnect between acute and long-term care financing.”
(p. 831
Our critique of this article is in “LTC Bullet:
After CLASS and the LTC Commission,” Friday, May 10, 2013: http://www.centerltc.com/bullets/archives2013/998.htm
“The Long-Term Care Financing Crisis,” Diane R.
Calmus
Heritage on LTC Crisis 0213 URL:
http://www.insideronline.org/summary.cfm?id=19251
“Abstract. 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.” (p. 1)
Will HCBS Save Money? (See also similar section
under LTC Providers)
"How is the Affordable Care Act Leading to Changes in
Medicaid Long-Term Services and Supports (LTSS) Today? State Adoption of
Six LTSS Options"
KFF on ACA and LTC 0413
URL
“With the passage of the Affordable Care Act (ACA) in
2010, states are afforded a number of new and expanded opportunities,
including enhanced federal financing, to improve access to and delivery of
Medicaid long-term services and supports (LTSS). This policy brief
provides an overview of six key Medicaid LTSS options created or enhanced
by the ACA and state adoption of these options to date. To date, nearly
every state (47 states and DC) has taken steps forward with at least one
of the six options (Table 1). Many states are pursuing or plan to pursue
multiple new LTSS options. The most popular state options have been the
Money Follows the Person (MFP)demonstration grants (45 states and DC) and
financial alignment models for dual eligible beneficiaries (26states).”
(p. 1)
“Long-Term Care for Older Adults: A Review of Home
and Community- Based Services Versus Institutional Care” AHRQ on HCBS vs
NH 1112
URL
Conclusions. Determining whether and how the delivery
of LTC through HCBS versus NHs affects outcome trajectories of older
adults is difficult due to scant evidence and the methodological
limitations of studies reviewed. More and better research is needed to
draw robust conclusions about how the setting of care delivery influences
the outcomes and costs of LTC for older adults. (p. vii)
LTC Clipping January 27, 2013: http://seniorhousingnews.com/2013/01/27/is-community-care-better-than-nursing-homes-survey-says-its-hard-to-tell/
"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
money and gives people who need LTC what they want. 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.
Who Will Pay for LTC? (includes "Not the VA")
“Who Pays for Long-Term Care in the U.S.?
(Updated),” Fact Sheet • January 2013
SCAN on Who Pays for LTC 0113
URL
“Medicare, Medicaid fight could take center stage
after debt ceiling extension” - McKnight's Long Term Care News
URL
"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!
“National Spending for Long-Term Services and
Supports (LTSS), 2011”
LTC Spending 2011, 0211
URL
“Medicaid is the dominant source of payment for LTSS,
followed by out-of-pocket payments by individuals and families. Of all
U.S. spending on LTSS, the federal-state Medicaid program is the principal
payer. In 2011, Medicaid paid for 62.3 percent ($131.4 billion) of all
LTSS spending. Out-of-pocket spending by individuals and families
accounted for about 21.6 percent ($45.5 billion) of spending. Private
insurance and other private and public sources paid the balance (Figure
1).”
Chapter 7:
Long-Term Care Insurance
General and Data
American Taxpayer Relief Act of 2012
URL
From LTC Bullet #983, Friday, January 4, 2013
*** 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”:
URL. . . .***
Chapter 10:
Medicaid
Medicaid is the 800-pound gorilla of LTC
“Medicaid’s Role in Meeting the Long-Term Care Needs
of America’s Seniors”
KFF on Medicaid LTC 0113 URL: http://www.kff.org/medicaid/upload/8403.pdf
http://www.kff.org/medicaid/upload/8403.pdf
"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.
“How Much Will Medicaid Cost in the Future and Why?:
A Look At Federal Projections” 0813
URL
“Over the next decade, federal Medicaid expenditures
are expected to grow by an average annual rate of about 8% (including the
effects of the ACA), with acute care growing slightly faster than
long-term care.
“Medicaid enrollment is expected to grow from 71
million in 2012 to 91 million by 2023, an average annual rate of about 2%
per year. Enrollment for adults is expected to increase significantly due
to the expansion of Medicaid under the ACA. Over time, the elderly and
persons with disabilities will continue to account for the majority of
Medicaid spending.” (p. 1)
Medicaid Eligibility
“Medicaid Insurance in Old Age,” Mariacristina De
Nardi, Eric French, and John Bailey Jones_ June 13, 2013
Chicago Fed on Medicaid 1212
URL
“Abstract
“Medicaid was primarily designed to protect and
insure the poor against medical shocks. Yet, poorer people tend to live
shorter lifespans and incur lower medical expenses before death than
richer people. Taking these and other important dimensions of
heterogeneity into account, and carefully modeling key institutional
aspects, we estimate a structural model of savings and endogenous medical
expenses to assess the costs and benefits of Medicaid for single retirees.
“We show that even higher-income retirees benefit
from Medicaid, if they live long enough for their resources to be depleted
by medical expenses. We also find that all retirees value Medicaid
insurance coverage highly, compared to the value of the Medicaid transfers
that they actually receive on average.” (p. 1)
“Medicaid and the elderly”
Chicago Fed on Medicaid and the Elderly 0613
URL
“Although Medicaid is available only to ‘poor’
households, middle-income households with high medical expenses usually
qualify for assistance also. Given the ongoing growth in medical
expenditures, Medicaid coverage in old age is thus becoming as much of a
program for the middle class as for the poor (Brown and Finkelstein,
2008).” (p. 17)
“Medicaid Spend Down: Implications for Long-Term
Services and Supports and Aging Policy," Joshua M. Wiener, Wayne L.
Anderson, Galina Khatutsky, Yevgeniya Kaganova, and Janet O'Keeffe (RTI
International) and Anne Tumlinson, Eric Hammelman, and Elana Stair (Avalere
Health)
SCAN on Medicaid Spend Down 0313
URL
“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. For people who
have been independent all of their lives, transitioning to Medicaid means
depending on a means-tested welfare program for their health and long-term
care services. Moreover, people transitioning to Medicaid are a
substantial portion of state Medicaid expenditures. In an effort to avoid
exhausting their resources and relying on Medicaid, others depend on
unpaid family support or go without needed services.” (p. 1)
Our critique of this paper was published as “LTC
Bullet: SCAN the LTC Possibilities,” Friday, April 5, 2013: http://www.centerltc.com/bullets/archives2013/993.htm
"The Medicaid Medically Needy Program: Spending and
Enrollment Update"
KFF on Medically Needy 1212 URL: http://www.kff.org/medicaid/upload/4096.pdf
“In federal fiscal year 2009, there were 2.8 million
medically needy enrollees who spent a total of $36.7 billion. The
medically needy accounted for 5 percent of total Medicaid enrollment, but
11 percent of total Medicaid spending.
“Among the 34 states with medically needy programs,
there is variation between states. New York and California each provide
Medicaid coverage to over 700,000 medically needy individuals - one
quarter of the total medically needy population. Sixteen states do not
offer medically needy coverage.
“The elderly and individuals with disabilities
comprise 41 percent of medically needy enrollment, but make up nearly 88
percent of total medically needy spending. In contrast, non-disabled
children and adults comprise the majority (59%) of medically needy
enrollment, but only account for 12 percent of total medically needy
spending.
“Dual eligible beneficiaries account for 28 percent
of medically needy enrollees, but 68 percent of medically needy spending.”
Dual Eligibles
“Medicaid's Role for Dual Eligible Beneficiaries”
Medicaid's Role for Dual-Eligible Beneficiaries 0813URL
“Medicaid fills in the gaps in Medicare's benefit
package for many low-income Medicare beneficiaries. These "dual eligible"
beneficiaries are individuals who are entitled to Medicare and are also
eligible for some level of assistance from their state Medicaid program.
Such assistance ranges from help paying for Medicare's premiums and
cost-sharing to coverage of benefits not offered under Medicare, such as
long-term care and at state option, hearing, vision, and dental services.
Because dual eligible beneficiaries have significant medical needs and a
much higher per capita cost on average than other beneficiaries, they are
of great interest to both Medicare and Medicaid policymakers and to the
state and federal governments that finance and manage the programs.
“This brief provides an update on Medicaid enrollment
and spending attributable to dual eligible beneficiaries through fiscal
year 2010.” (p. 1)
Chapter 11:
Medicaid Planning
General
“Concepts and implications of altruism bias and
pathological altruism,” Barbara A. Oakley Pathological Altruism 0413 URL:
http://www.pnas.org/content/early/2013/06/04/1302547110.full.pdf
“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. A basic conceptual approach toward the quantification
of altruism bias is presented. Guardian systems and their over arching
importance in the evolution of cooperation are also discussed. Concepts of
pathological altruism, altruism bias, and guardian systems may help open
many new, potentially useful lines of inquiry and provide a framework to
begin moving toward a more mature, scientifically informed understanding
of altruism and cooperative behavior.” (p. 1)
Criticism of Medicaid Planning
“Billions of Federal Tax Dollars Misspent on New
York's Medicaid Program,” Committee Report, U.S. House of Representatives,
113th Congress, Committee on Oversight and Government Reform,
February 14, 2013
Oversight Report 0213 URL: http://oversight.house.gov/wp-content/uploads/2013/02/Bipartisan-Medicaid-Oversight-Report-ordered-reported-by-Committee.pdf
"The Committee has learned that Medicaid estate
planning is a long-standing practice and significant problem across the
nation and in New York State. The Committee has learned that relatively
affluent people in New York artificially impoverish themselves in order to
qualify for Medicaid and have taxpayers pick up the cost of their
long-term care services and supports. At least in Suffolk County, New
York, a relatively affluent part of the State, a legal technique called
spousal refusal, which is essentially when one spouse abandons all
financial care of a sick or disabled spouse and leaves him or her as a
ward of the State, is widely used." (p. 3)
####################
Updated:
Wednesday, October 2, 2013 2:04 PM (Pacific)
Seattle—
####################
LTC E-Alert #13-030: 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.
####################
09/30/2013,
“Survey
finds financial professionals lack focus on retirement income,”
IFAwebnews.com
Quote: "The latest quarterly edition of the Financial
Professional Outlook survey estimates that while retirement income has
become a core part of business for 73% of financial advisors, there is no
clear consensus on how to measure whether clients are on track to achieve
sustainable retirement income."
LTC Comment:
Retirement income is important. So is protecting against the devastating
and numerous risks and costs of long-term care.
####################
09/30/2013,
“Many
Americans Worry About Cost of Long-Term Care: Poll,”
by Amy Norton,
US News and World Report
Quote: "A new Harris Interactive/HealthDay poll released
Monday finds that more than two-thirds of Americans are anxious and
uncertain about how they'll meet nursing home or home care costs should
they need them. Most people were also wrong about how most of these costs
are covered under the current system. About half (49 percent) mistakenly
thought the bulk of the bill was paid by individuals, while one-third
guessed Medicare. Only 19 percent understood that the major funder of
long-term care is actually Medicaid, the government agency that covers
health services for the poor."
LTC Comment:
To the 19 percent mentioned above: How long do
you
think Medicaid can continue to be the primary funder of LTC services?
####################
09/26/2013,
“Long-term
care insurance and your taxes – TaxWatch,” by Bill Bischoff,
MarketWatch
Quote: "If you or a loved one turns out to need long-term care,
you don’t want to see a big chunk of hard-earned savings go down the drain
to pay for it. Long-term care (LTC) insurance can help. As a bonus,
qualified LTC policies deliver some tax breaks. Before getting to the tax
angles, let’s first cover the basics on LTC insurance."
LTC Comment:
Center members can click
here to access the latest deductibility limits for long-term care
insurance all the way back to 1997.
####################
Quote: "As a neurologist with patients who include those
affected by
Alzheimer’s disease, Parkinson’s disease, and strokes, I’m all too
aware that, like it or not, many of us will need help caring for ourselves
someday. And we can’t always predict when that day might come. I worry
about my older patients who need to move into
assisted living and lack the funds to do so. But I also worry about my
younger patients—those age 45 to 60—who might need help someday
(potentially very expensive help) and haven’t made any provisions for it."
LTC Comment:
This is relatively warm treatment of
LTCi for Consumer Reports. Please see our LTC Bullets
archives for these two reality checks: “Consumer
Reports Targets LTCI, Hits Self” and “More
Bad Advice from Consumer Reports.”
####################
09/25/2013,
“Suze
Orman's Advice On Managing Long-Term Care Costs,” by Sherri Snelling,
Forbes
Quote: "Suze Orman is one of the nation’s best-known,
most-trusted personal finance experts. A best-selling author and
award-winning TV personality, she’s become a guru for frugality and
planning, advising millions to save for retirement, get out of debt and
start a healthier relationship with money. And yet, Orman now confesses,
when it came time to become a caregiver for her late mother, she was as
unprepared, emotionally and financially, as the rest of us.
“'I filled out the paperwork on long-term care plans and gave it to my
mom on several occasions, but she never signed them,' Orman says. She
believes it’s typical for parents, especially mothers, not to want their
children to worry about them. But without robust savings or a good
long-term care plan, the financial burden will most likely fall to adult
daughters and sons.
“I spent $25,000 a month the last two years of my mom’s life to have
around-the-clock care for her,' Orman says. 'I was lucky because I was in
a position to afford the cost, something most Americans cannot do.'”
LTC Comment:
A Clippings Service subscriber reminded me that in an article from 2012,
Orman mentions trying to purchase an LTCi policy for herself, but was
denied due to health issues. She continues by making the connection that
if she would have applied for that policy one year earlier—before the
onset of her health issues—she may have been accepted for that policy.
This is just another example of the necessity of planning early.
####################
09/25/2013,
“Fewer
Medicare Advantage plans in 2014, analysis finds,”
by Elizabeth Leis Newman,
McKnight's Long Term Care News
Quote: "There will be fewer Medicare Advantage plans in 2014,
according to a new analysis. The number of plans will drop to 2,522, which
is around a 5% decrease, according to Avalere Health. Medicare Advantage
can cover skilled nursing stays, and
enrollment was up in 2012."
####################
09/24/2013,
“Genworth Financial Begins Filing For Premium Rate Increases On Certain
Privileged ChoiceR & Classic SelectR Policies [link],”
MarketWatch
Quote:
"Genworth Financial, Inc.
GNW +0.25%
announced today that it has begun filing for long term care
insurance in force premium rate increases on certain Privileged Choice®
and Classic Select® policies sold between 2003 and 2012. The premium rate
increases requested will range between six and thirteen percent on more
than $800 million in annualized in force premiums. Although these policies
have generated positive operating earnings to date, the premium rate
increase on these policies will help offset lower than priced-for returns,
primarily due to improvements in life expectancy and
lower-than-anticipated lapse rates. These premium rate increase requests
are being made in addition to the premium rate increase filings announced
in 2012 on certain older blocks of in force long term care insurance
policies."
####################
09/24/2013,
Forgetting Marie, by Bill Coffin, LifeHealthPro
Quote: "Here’s the thing, though. I don’t ever recall my grandparents
having
long-term care insurance.
If they had, I am certain I would have heard about it, especially during
my grandfather’s care. My mother had been given control of his finances,
and I watched as she had to sell her family’s home in order to pay for my
grandfather’s care. That was hard, seeing that old, historic house leave
the family’s hands. I had secretly nurtured a desire to live there one
day. As it was, my grandparents had enough resources to afford (barely)
their nursing home stays. They were Depression-era people who worked and
saved hard so they could give something to their children and their
grandchildren. In the end, what they gave us most was the understanding
that long-term illness is real, and you must prepare for it, or else those
long, final years might be the worst ones of your life, even if you can’t
remember the reasons why."
LTC Comment:
So many stories like this one.
####################
09/24/2013,
Five LTC commissioners issue full alternative report, by Tim Mullaney,
McKnight's Long Term Care News
Quote: "Five members of the Congressional Commission on
Long-Term Care have released a full report, providing an alternative to
the commission report released last week. The five commissioners split
with nine other panel members over that report, saying it should not be
presented to Congress as the broad agreement of the group."
LTC Comment:
See also: “LTC Commission final report provides Congress with a detailed
picture of challenges and potential solutions [link].”
####################
09/24/2013,
“New
Study Finds Boomers are Redefining Retirement Care Expectations,”
PR Newswire - The Sacramento Bee
Quote: "A majority of our country's middle-income Boomers
expect their retirement to be defined by greater mental stimulation, more
physical activity and more personal satisfaction than the retirement of
previous generations. However, they also anticipate their retirement to
include less retiree health insurance from former employers (60%), less
financial security (47%) and less care provided by family members (47%),
according to a latest study by the
Bankers Life and Casualty Company Center for a Secure Retirement
® (CSR)."
LTC Comment:
One of the greatest risks for Boomers who want to enjoy more satisfaction
in retirement is being hit with catastrophic long-term care expenses.
####################
09/23/2013,
“Closing
in on better LTCI close rates,” by Margie Barrie, LifeHealthPro
Quote: "Question: I want to improve
my closing rate for both face-to-face and Internet appointments. Plus, I
would like to increase my one-call closes. Help is desperately needed.
"Answer: Yes, this month’s question is from me. In the
14 years I have been writing this column, I have always used questions
from agents who have contacted me. Now it’s my turn.
"To answer my questions, I turned to Mary Ann DeKing, an agent with
ACSIA Long Term Care. She is one of the most successful agents I have ever
met."
####################
09/23/2013,
“Some personality types are more likely to receive nursing home care,
researchers find [link],”
by Tim Mullaney, McKnight's Long
Term Care News
Quote:
"Researchers from various institutions, including the University of
Rochester Medical Center Department of Public Health Sciences and the
University of Chicago,
examined data from 1,000 seniors participating in a Medicare
demonstration project. Based on a self-report questionnaire, these seniors
were classified under five personality traits: neuroticism, extraversion,
openness to experience, agreeableness and conscientiousness. These are
traits commonly used as a conceptual framework by psychologists.
"The findings support the idea that interventions tailored to different
types of people could reduce the use of unnecessary high-cost care, the
researchers stated."
####################
09/20/2013,
“Long-term
care is becoming primarily about dementia, report states,”
Tim Mullaney,
McKnight's Long Term Care News
Quote: "The number of people with long-term care needs is set
to triple by 2050, and dementia care will be increasingly at the forefront
for providers, according to a new report from Alzheimer's Disease
International. 'Long-term care for older people is, mainly, about care for
people with dementia,' the report states. Already, about half of all older
people who need care have some form of dementia, and 80% of older nursing
home residents have dementia, according to 'Journey
of Caring: An analysis of long-term care for dementia.'
"The report, released yesterday, takes issue with whether home care is
better. Current evidence suggests the 'subjective quality of life' for
those with dementia is about the same regardless of whether they are in a
facility or at home, and facility-based care is likely better for those
with advanced dementia, the report notes."
LTC Comment:
Long-term care may be becoming primarily about dementia, but good LTC has
always been about options.
####################
09/19/2013,
“With Alzheimer's rising, study says dementia strongest predictor of need
for nursing home care [link],”
The Washington Post
Quote: "David Hilfiker knows what’s coming. He was diagnosed
with Alzheimer’s so early that he’s had time to tell his family what he
wants to happen once forgetfulness turns incapacitating. 'When it’s time
to put me in an institution, don’t have me at home and destroy your own
life,' said the retired physician, who is still well enough that he blogs
about the insidious progress of the disease. 'Watching the Lights Go Out,'
it’s titled.
"This week, the U.S. National Institutes of Health announced $45
million in new Alzheimer’s research, with most of the money focused on
finding ways to prevent or at least delay the devastating disease. The
Obama administration had hoped to invest $100 million in new Alzheimer’s
research this year, a move blocked by the budget cuts known as the
sequester. Overall, the nation has been investing about $400 million a
year in Alzheimer’s research. But the disease’s financial toll is $200
billion a year in the U.S. alone, a tab expected to pass $1 trillion by
2050 in medical and nursing home expenditures — not counting unpaid family
caregiving. The world report puts the global cost at $604 billion."
####################
09/19/2013,
Long Term Care Insurance Solutions Conference Announced by AALTCI,
PR.com
Quote: "Plans to hold the 12th National Long Term Care
Solutions Sales Summit were announced today by the American Association
for Long-Term Care Insurance. The conference will take place May 18-20,
2014 in Kansas City, MO.
"'There has never been a better time for insurance professionals to see
what's new and different in the world of long term care solutions for
consumers,' declares Jesse Slome, executive director of the American
Association for Long-Term Care Insurance. 'It's very much a new world in
terms of finding prospects, selling insurance protection and in terms of
the many new products being introduced by insurers.'"
LTC Comment:
Always an excellent industry event.
Click
http://www.aaltci.org/2014summit/index.html for further details and to
register.
####################
09/19/2013,
Obamacare Won't Cover Long-Term Care, by Dan Caplinger,
Business Insider
Quote: "With the coming implementation of
Obamacare, many Americans believe that all of our health-care needs
will soon be taken care of. But the coverage mandated by the Patient
Protection and Affordable Care Act doesn't address one critical type of
health-care cost -- and could leaving you with a huge and expensive
challenge to deal with on your own."
####################
09/18/2013,
“LTC Commission final report provides Congress with a detailed picture of
challenges and potential solutions [link],”
by Tim Mullaney,
McKnight's Long Term Care News
Quote: "The Commission on Long-Term Care has issued its full
report to Congress, fleshing out recommendations that it released last
week addressing LTC service delivery, workforce issues and financing
systems. The 114-page document provides an in-depth assessment of
challenges facing the current U.S. long-term care system and offers a
broad array of potential solutions, based on public comments and hearings,
and the 15 members' expertise in the field.
"However, the commissioners were divided on the best ideas related to
financing for long-term services and supports, and rather than making
recommendations offered two different 'approaches.'”
LTC Comment:
See also: “Five
LTC commissioners issue full alternative report.”
####################
Updated:
Friday, September 27, 2013, 10:13 AM (Pacific)
Seattle—
####################
LTC BULLET: THE
TARNISHED NAME OF ASSISTED LIVING
LTC Comment: Our
guest columnist for today’s LTC Bullet is Liz Taylor. No, not that
one. Rather, the Liz Taylor who has raised the standards and written
wisely about long-term care for decades. After the ***news.***
*** AALTCI: The
American Association for Long-Term Care Insurance recently announced their
11th National Long-Term Care Solutions Sales Summit will be held May
18-20, 2014 at the Westin Hotel in Kansas City, MO. Over the past decade
we’ve attended many of these conferences and have always found them to be
of high value in terms of professional development through educational
content and networking opportunities. Early registration is only $69 and
ends October 31st. See
http://www.aaltci.org/2014summit/index.html for further details and to
register. ***
*** IN THE MEANTIME,
don’t forget about the Fourteenth Annual Intercompany LTCI Conference
scheduled for March 16 to March 19, 2014 at the Rosen Centre Hotel in
Orlando, FL. Check out the details here:
http://www.iltciconf.org/. And if you’re contemplating an Exhibit
Booth and/or a Corporate Sponsorship, act now! The early bird deadline
for those applications is October 4, 2013. Contact
Jim Glickman for that. ***
*** 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:
The Tarnished Name of Assisted
Living
LTC Comment: Today’s
guest columnist, Liz Taylor, has worked almost 40 years in the aging
field. As an author, former Seattle Times columnist, and public
speaker, she advocates for “aging deliberately,” having coined this phrase
to express the importance of planning ahead and maintaining control of our
lives as we age. She can be reached at
lizt@agingdeliberately.com.
“The Tarnished Name of
Assisted Living,”
by
Liz Taylor
The Frontline PBS television program about assisted living communities
that ran July 30 promised to be a barn burner. The media is at its best or
worst (depending on your point of view) when it shows blood and gore. From
advance clips, this was its intent.
I hate to sound jaded,
but where has the media been lo these last 50 years? In 1976, when I
headed up a federal investigation of the nursing home industry, images of
horrible bed sores, people tied in their wheelchairs screaming, and lack
of warm blankets and heat in winter were a dime a dozen – in nursing
homes. There were no other care options then; nursing homes were all we
had.
Levels of care…
The same poor care
exists today (though usually more muted). Then, and now, there are
exceptions to the rule — some nursing homes and some assisted livings do
extraordinarily good jobs. Further, some older people don’t need the kind
of extensive care that invites abuse. The less care you need, the less
you’re likely to run into trouble.
But the rule remains
the same: mediocre to poor care exists in far too many care facilities,
similar to a half century ago. The culprit is also the same: the
government says it’s in charge and tries to control quality from “the top
down” – through regulations. Over the years, nursing homes have become
one of the most highly-regulated industries in this country. We’ve seen
some quality improvement, but not nearly enough.
During my nursing home
inquiry four decades ago, we looked at the very best providers. We
figured, if we could find a few excellent nursing homes — when the country
was rife with awful ones — it was possible to do better. Since then I’ve
seen exceptional care providers at all levels — home care, retirement
communities, adult family homes, assisted livings and nursing homes. Most
providers don’t hold a candle to the good ones, though all are operating
under the same regulations and conditions.
Conditions Can be
Better
For at least ten
years, we’ve known how to make care better, a lot better. I wrote about
this in a dozen or so of my Seattle Times columns, giving real life
examples. If you’d like to receive a summary of their links, email me.
I believe that the
only way we’re going to get better eldercare is “from the bottom up” –
arming consumers with the information to help us make informed decisions,
showing us how to “kick tires” to get the care we need, alerting us to pay
attention and do our homework before there’s a crisis, and providing the
tools to do the job – with regulations as a back-up.
Imagine if the
computer industry had operated in lock-step to the dictates of the federal
government and 50 states for the last 30 years – where would it be today?
Well, that’s what we’ve done in eldercare. As consumers, WE have
to become educated and demand better services – the government will never
be able to do it for us.
So what happened to my
1970s nursing home investigation? The knee-jerk reaction then, as now, was
to demand more regulations. Instead we called for consumer education and
information to help consumers choose care wisely – to give older people
and their families huge amounts of information about their choices –
management track records, inspection reports, staffing ratios, consumer
complaints, staff turnover, and other important facts.
The reaction:
thunderous, widespread yawns. Consumer education? How boring!
Selecting good quality
eldercare is one of the most complicated, expensive and emotional
decisions most of us will ever make. As the PBS documentary made
clear, relying on lofty advertising promises is foolish. As is choosing a
place based on how pretty it is. We have to do our homework, as we would
for anything important – with tools that don’t exist now. As 80 million
baby boomers grow old, we need an entirely new way to deal with the entire
care industry.
####################
Updated:
Thursday, September 19, 2013, 3:18 PM (Pacific)
Seattle—
####################
LTC E-Alert #13-029: AALTCI Conference and LTC News and Comment
LTC Comment: The
American Association for Long-Term Care Insurance recently announced their
11th National Long-Term Care Solutions Sales Summit will be held May
18-20, 2014 at the Westin Hotel in Kansas City, MO. Over the past decade
we’ve attended many of these conferences and have always found them to be
of high value in terms of professional development through educational
content and networking opportunities. Early registration is only $69 and
ends October 31st. See
http://www.aaltci.org/2014summit/index.html for further details and to
register.
*** 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. ***
####################
9/17/2013,
“Relocate
Your Parents, or Get Them a Robot?,” by Megan McArdle,
Bloomberg
Quote:
"No matter the economic downsides of the world’s coming
demographic transition, one industry will boom: eldercare. Now that
mom is less likely to die at the age of 60 from pneumonia or a sudden
stroke, she’s more likely to require years of intensive care as time
slowly saps her ability to take care of herself. She's also less likely to
have multiple children who can chip in to provide that care."
LTC Comment:
“Relocate Your Parents, or Get Them a
Robot?” Set in place a plan to finance your long-term care needs long in
advance and your kids won’t have to.
#############################
9/17/2013,
“Most
are without a financial plan: Natixis,” by Paula Aven Gladych,
BenefitsPro
Quote:
"Fewer than half of investors have a
financial plan, while even those who do may be seriously underestimating
the amount of money they need to save for retirement, according to Natixis
Global Asset Management’s Global Investor Insights Survey.
"While investors may not be saving enough, they are thinking ahead
about potential costs in retirement, including long-term healthcare.
Americans expect they will need five years of long-term care and are
confident they will be prepared to meet these costs. Nevertheless, 40
percent of U.S. investors consider long-term care costs not covered by
insurance to be the biggest threat to their financial security in
retirement. According to those surveyed, long-term care costs not covered
by insurance is the top financial threat to their retirement, followed by
a reduction in retirement savings due to market conditions, insufficient
proceeds from retirement plans and unemployment."
#############################
9/17/2013,
“Long-Term
Care Panel Chief Speaks About Looming Crisis,” Forbes
Quote: "Roughly 70% of Americans who reach age 65 will need long-term
care for at least three years during their lifetimes and the cost
of this care — in nursing homes, assisted living facilities, at home
and elsewhere — can be staggering. (A private room at a nursing home costs
$81,030 a year, on average, according to the Genworth
2012 Cost of Care study.) Since the bipartisan federal
Commission on Long-Term Care just finished its 100-day assignment to
offer recommendations about this significant national concern, Next Avenue
interviewed the panel’s chair, Dr.
Bruce Chernof.
"An internist and president and chief executive of The
SCAN Foundation, a nonprofit based in Long Beach, Calif., that
focuses on 'improving the quality of health and life for seniors,' Chernof
discussed the commission’s takeaways for Americans receiving long-term
care, their children and their caregivers; why the panel couldn’t agree
about ways to pay for the high cost of long-term care and what needs to
happen next. The commission’s final report will be released Wednesday,
Sept. 18."
#############################
9/17/2013,
“Interest,
Social Security to Eat Up Increasing Share of U.S. Budget,” Michael S.
Derby, Real Time Economics, WSJ
Quote: "The government likely faces rising costs to fund the national
debt that will likely 'crowd out' a lot of its ability to spend on
military and social programs in coming years, a new report from the
Committee for a Responsible Federal Budget
warns.
"Given the projected path of interest rates and the level of government
debt over coming years, federal spending to finance government borrowing
will rise from 1.3% of GDP today, to 6.4% in 2050, the report said. This
projection is based on interest rates moving back toward 'historic
levels,' the group said in its report."
LTC Comment:
A reality check is in store for anyone who assumes they will be able to
live comfortably on Social Security in retirement, without further
financial planning.
#############################
9/16/2013,
“LTC
commission leaves 'em wanting more,” by Allison Bell, LifeHealthPro
Quote: "The federal
Commission on Long-Term Care is getting sympathetic but weak reviews
for an early version of its policy recommendations. Congress created the
15-member, bipartisan commission earlier this year. The commission is
supposed to send its recommendations to Congress in a few days and then
disband. In a preliminary set of recommendations released Friday, the
commission called for a longer-lasting committee to look at LTC financing.
"Jesse Slome, executive director of the
American Association for Long-Term Care
Insurance (AALTCI), said the commission had little hope of
resolving an issue as complex as LTC financing, given that Congress gave
the panel so little time to develop its recommendations and that the
commission has been operating in such a heated political climate. 'In
terms of long-term care insurance, those who were hoping the commission
might recommend a new social program must be disappointed,' Slome
said. 'The private marketplace will continue.'"
#############################
9/16/2013, “Germans
Export Grandma to Poland as Costs, Care Converge,”
by Naomi
Kresge, Bloomberg
Quote:
"Germany’s migrating seniors are an
early warning sign of a challenge of global proportions. As birth rates
drop, life expectancies increase and the baby boomer generation heads into
old age, the
United Nations estimates the world’s population of people older than
60 will more than
triple to almost 2 billion by 2050. Meanwhile, even for seniors
cushioned by
government aid in countries like Germany, the cost of nursing home
care is rapidly becoming prohibitive. German spending on long-term care
for seniors is expected to increase from 1.4 percent of gross domestic
product to 3.3 percent of GDP by 2060, the European Commission said in a
report last year."
LTC Comment:
Look deep into the archives of our LTC Bullets and you will find "Don't
Look to Germany for a Long-Term Care Model”
(2003) and “LTCI
in Germany” (2002).
#############################
9/16/2013, “Why
Obamacare Shouldn't Force Poor Seniors Into Medicaid,” by Scott
Gottlieb, Forbes
Quote: "Finding better ways to serve the needs of these ‘dually
eligible’ Americans has been a bi-partisan goal that’s eluded successive
administrations. Whenever the issue was broached, one of the questions was
whether these Americans would end up in Medicare or Medicaid — and which
program would better serve their needs. The Obama Administration is
betting heavily on states to take control of these patients. The states,
in turn, are looking to their Medicaid systems."
LTC Comment:
Medicaid reform is key to fixing our looming (and many would say current)
LTC financing crisis.
#############################
9/13/2013,
“LTC
commission eyes educational accounts,” by Allison Bell,
LifeHealthPro
Quote: "The federal
Commission on Long-Term Care seems to be leaving private long-term
care insurance (LTCI) out of a package of long-term care (LTC) system
recommendations it will be sending Congress."
LTC Comment:
To learn about the critical link between private financing and quality LTC
services (for all), see our recent LTC Bullet: “LTC
Services: Thousand Bullets Retrospective.”
#############################
9/13/2013, “Divided Congressional LTC Panel Will
Urge Modest Delivery Reforms, Deadlocks on Financing [link],”
by Howard Gleckman, Forbes
Quote: "A divided
congressional long-term care commission has adopted a package of
recommendations aimed at improving the nation’s long-term supports and
services. However, while a majority of the panel agreed on some modest
delivery and workforce reforms, it could not reach a consensus on
all-important financing solutions. In effect, the commission will
recommend changes that would effectively retain the current framework of
financing and delivering supports and services. Not surprisingly, it was
unable to agree on the fundamental restructuring of the nation’s supports
and services system that many believe is necessary."
LTC Comment:
It’s no surprise they couldn’t tackle the LTC financing challenge; it’s
complicated, to say the least. Your Center for Long-Term Care reform
recommends ensuring quality long-term care for all Americans by promoting
public policy that targets scarce public resources to the neediest, while
encouraging people who are young, healthy and affluent enough, to take
responsibility for themselves. Most of you know we have a vast website
full of thousands of articles, speeches and reports based on that
recommendation here
www.centerltc.com.
#############################
9/12/2013,
“Video
- Why You Need Long-Term Care Insurance” - WSJ.com
Quote: "Financial advisor Missy Spickler explains why you are
likely to get far more in benefits than you pay in premiums [in this
video]."
#############################
9/12/2013,
“Reluctant
states face Medicaid: Yes? No? Punt?,” by Kyle Cheney and Jason
Millman, POLITICO.com,
Quote: "Obamacare sign-up starts less than a month but a few
states are still answering a basic question: Are they in, or are they out
of the law’s massive expansion of Medicaid? Legislatures in pivotal swing
states like Ohio and Pennsylvania are dusting off their gavels from summer
recess and diving back into the high-stakes Medicaid debate over whether
to extend health coverage to hundreds of thousands of low-income
Americans. Others are looking at ballot measures to spur action because
lawmakers won’t convene again until next year. The prolonged uncertainty
stems from the Supreme Court’s 2012 decision to make Medicaid expansion
optional for states. Most have decided what to do, generally along
predictable partisan lines, but several are stuck."
LTC Comment:
More on this seemingly never-ending saga.
#############################
9/12/2013,
“Caregiving
Can Hurt Employee Health -- and Increase Employer Costs,” Stacy Lu,
HuffPost
Quote: "'Four in 10 adults in the U.S. are caring for an adult
or child with significant health issues, up from 30 percent in 2010,'
according to a
recent national survey by Pew Research Center. Given our aging
population, that number is almost certain to increase, with employers
taking a chunk of the burden, at least financially: A 2011 Gallup study
says full-time employee absenteeism due to caregiving duties
costs employers some $25 billion annually.
"Caregiving
measurably impacts employer health costs, too; according to a 2010
study of the MetLife Market Institute and the National Alliance for
Caregiving, health care costs for caregivers are roughly eight percent
more than non-caregiving employees, costing employers an estimated $13.4
billion per year extra."
LTC Comment:
More analysis on the heavy toll placed on family caregivers and how that
affects employers in terms of financial cost.
#############################
9/12/2013,
“Think
Social Security is guaranteed? Think again,” by
Dennis Miller,
MarketWatch
Quote: "Good financial planners use sophisticated computer
programs to help us set retirement savings goals. They input dozens of
variables based on assumptions about how the world works, and out pops a
number telling us how much we should save during our working years. That
number,
combined with Social Security
and any pension we're lucky enough to have, is supposed to be the Holy
Grail of retirement. Reach it and you're set for life. Not so fast. That
thinking can spell disaster. The assumptions that go into those programs
are just that, assumptions. They are educated guesses at best, but they
could be plain wrong. Your math isn't the problem, and neither is your
financial planner — it's the faulty assumption that
Social Security, your government
pension, or even your 'guaranteed' private pension is guaranteed."
LTC Comment:
Articles such as this abound in the media today. To be wary of Social
Security’s solvency is understandable and prudent, but it should be
mentioned that even if you are able to collect your full SS benefit, it
still would not be nearly enough to finance the cost of long-term care.
#############################
9/11/2013,
“Northwestern
MutualVoice: 5 Health Risks That Can Cost You,” Forbes
Quote: "You have a vision for retirement and a detailed budget
to help plan your finances. You also need to understand and prepare for
risks that could derail your plans. Watch for these health-related issues
and protect against the risks before and during retirement:
"Long-term Care – Nearly 70% of people will need some
form of long-term care during their lifetime, according to
the National Clearinghouse for Long-term Care Information. Since
Medicare does not cover long-term care costs, you need to understand the
costs involved with long-term care and create a game plan for managing
long-term care risk."
LTC Comment:
“Costs involved with long-term care” are myriad: emotional, physical,
psychological, professional (etc.) and, of course, financial.
#############################
9/11/2013,
“Gender-distinct
pricing,” by Claude Thau, LifeHealthPro
Quote: "Before 2013, insurers always charged the same long-term
care insurance (LTCI) price to males and females who were the same age; in
the same rating class and jurisdiction; and had the same marital status,
product design and association/work-site affiliations. Of course, for
decades, actuaries favored differentiating price by gender because women
use much more commercial long-term care (LTC) than do men. If you have any
doubt about that fact, just walk into any nursing facility other than a
Veterans Affairs home. Those who live in nursing facilities are
overwhelmingly female."
LTC Comment:
An interesting article on gender-distinct pricing by Claude Thau.
#############################
9/11/2013,
“5
reasons to buy long-term care insurance now,”
by Anisha Sekar
MarketWatch
Quote: "Some decisions can be put off until just before
retirement, when you're in your mid-60s. How you pay for long-term care is
not one them. Even if you're running marathons at 55, you should have
The Talk with your family and
your lawyer before it's too late. Here are five reasons you should start
planning for 30 years from now, today."
LTC Comment:
With longevity and long-term care costs on the rise, that 55-year-old
marathon runner—if they are a wise planner—should already have an LTC
financial plan in place.
#############################
Updated: Friday, September 13, 2013, 1:22
AM (Central)
Alpine, Texas--
#############################
LTC BULLET: GUEST COLUMN ON LINKED PRODUCTS
LTC Comment: What’s better? Traditional LTCI or
linked products? It depends, says guest columnist Shawn Britt after the
***news.***
*** TODAY IS FRIDAY, THE 13TH : Of
course, we’re scientific, not superstitious. But, hey, it never hurts to
be careful. ***
*** CONGRESSIONAL QUARTERLY Health Beat News
reported today that the federal LTC Commission has completed its
deliberations but deadlocked on long-term care financing recommendations.
According to an anonymous leaker: “With respect to
financing long-term care . . . some liberals on the commission favored an
approach involving new taxes and new government programs, while
conservatives pushed for incentives to encourage people to plan for their
own long-term care, such as promoting products combining life annuities
with long-term care insurance.” Bipartisan agreement was reached on some
unspecified recommendations related to LTC workforce issues. LTC Comment:
This is probably the best outcome we could have hoped for from this panel
which was stacked in favor of government financing advocates. It looks
like a new CLASS Act modified to make it compulsory, which we feared a
majority of the Commission would favor, didn’t make the cut. ***
*** THE GOOD MEDICAID LAWYERS: Thanks to an
anonymous grant from a staunch corporate supporter of the Center for
Long-Term Care Reform, Steve Moses is headed to the American Association
of Public Welfare Attorneys national conference in November. We made an
appeal for funds to support Steve’s participation in the event a few weeks
ago: “LTC
Bullet: Meet the Good Medicaid Lawyers.” Steve will share what’s
he’s learned about the latest techniques used by Medicaid planners to
impoverish their affluent clients artificially. Animated discussion will
likely ensue as the audience of lawyers who represent state Medicaid
programs share their experiences fighting against fraud and abuse of the
LTC safety net program. ***
*** SPOTLIGHT ON: Take our "virtual tour" of the
Center for Long-Term Care Reform's website
here. You'll learn how to navigate the Center’s indispensable
website. Get easy access to critical information--in our public website
and in our popular Members-Only Zone. Whether you are new to the Center
for Long-Term Care Reform or a seasoned Center member, you'll find a
wealth of valuable content on our website by taking this virtual tour.
Take this tour and if you find you need your user name and password, or
are not yet a member and would like to join, contact Damon at 206-283-7036
or
damon@centerltc.com.
***
LTC BULLET: GUEST COLUMN ON LINKED PRODUCTS
LTC Comment: There’s a lot of buzz lately about
linked or hybrid products for long-term care coverage. With all the
challenges traditional LTCI has faced, are these equity-based products a
better choice for consumers? As to any such question, the best answer is
“It depends.” The better question is “What is the most suitable
protection against long-term care risk and cost for each individual and
family?”
Shawn Britt of Nationwide Financial opined on this
topic one day in a telephone conversation. So, I asked her to write a
piece expressing her views. She submitted the following. LTC Bullets
will consider publishing replies of one 1000 words or less, especially if
they take a different point of view.
As we’ve reported before, I’m deeply in the throes of
writing four major reports on the studies we’ve been conducting all summer
long in Virginia, New Jersey, and Georgia. Damon’s at the helm in Seattle
doing our LTC Clippings, LTC E-Alerts, and LTC Bullets.
Publishing guest columns this week and possibly next week gives him and me
some breathing room. Thanks for your patience. – Steve Moses
And now, here’s Shawn Britt’s essay.
-----------
“Linked LTC Products – How They Provide Alternative
LTC Solutions”
by
Shawn Britt, CLU
I was recently challenged by a financial professional
who asked me why anyone would sell linked long-term care solutions
such as life insurance or annuities with a long-term care rider. He was of
the opinion that selling a single product with combined purposes creates
confusion - that life insurance and annuities should be used for the
purposes they were originally designed - and long-term care needs should
only be handled with dedicated LTC products.
I surmised he had the ideal set of clients – older
(but not too old), healthy and relatively affluent. And in a world of
perfect clientele, he might be right. However, I routinely speak to
financial professionals who have clients with objections and obstacles
pertaining to long-term care coverage, and they’re looking for solutions
their clients qualify for and/or are willing to purchase.
While traditional LTC policies do offer the most
comprehensive choices for coverage, and may be the best choice for many
people, there are common obstacles to these sales.
- “Use it or Lose It”, (loss of premium) is
one of the most common objections. The return of premium feature is
expensive and seldom elected.
- Potential price hikes. Falling interest
rates, unexpected high retention rates and increased claims have forced
LTC companies to continue to file for rate increases.
- Psychological block. Many people find it
difficult to purchase a product they hope never to use.
- Clients under age 40 are rarely open to making
such a purchase.
- Some clients do not qualify health wise
- Some clients have assets but lack disposable
income for annual premiums
There is now a growing marketplace of LTC solutions
attached to financial products, and these alternative products may be able
to address the concerns listed above.
Alternative LTC Solutions Linked to Financial
Products
Solutions that combine LTC coverage with a financial
product provide a way to avoid the “use it or lose it” (loss of premium)
objection since the premium paid, and usually more, will be recovered
either through use of the product for LTC benefits, a death benefit, or an
annuity income stream. Thus, these products may counter some of the
objections people have to a traditional LTC policy. While long-term care
solutions linked to life insurance require some form of underwriting,
there are a few solutions in the annuity space that do not, and provide a
possible answer for uninsurable clients. All of these alternative products
have similarities to traditional long-term care policies in the fact that
they pay LTC benefits by indemnity or reimbursement, and may have an
elimination period. Otherwise, the structure varies, and features are
generally not as customizable. The trade off to customization is cost
recovery that can be counted on.
Asset Based LTC (also known as a linked benefit)
– With this product line, choice of benefit periods vary two to eight
years (depending on the carrier), but one common choice of this type plan
is a 6-year benefit period sold as a “two plus four” option, which we will
illustrate here. The first bucket is an amount that is available for LTC
benefits, but any amount not used for LTC is paid as a life insurance
death benefit. This bucket lasts for two years when collecting the full
benefit amount and it must be exhausted first when going on LTC claim.
Once the first bucket is exhausted, the insured begins collecting from the
second bucket, which is only available as LTC benefits and lasts 4 years
when collecting full benefit. Any uncollected benefits from the second
bucket are forfeited, however, when the insured passes away. There is a
guaranteed residual death benefit that is paid to the beneficiary.
This solution avoids the “use it or lose it”
objection by offering a death benefit that is higher than the investment
that is collected via LTC benefits and/or death benefits. There is also a
guaranteed return of premium feature. While customization is limited,
there is the ability to purchase substantial LTC benefits with coverage
periods and inflation protection similar to traditional LTC policies.
These policies are typically paid for with a single premium (though 3, 5,
7 and 10 pays are available), so the product is a better fit for people
with assets to reposition, and who want LTC coverage in an amount closer
to a traditional policy, as well as some of the features such as inflation
protection. Such people are also looking for cost recovery and a
guaranteed return of premium should their needs change. This type of
product generally uses simplified underwriting for life insurance and
long-term care (including cognitive testing).
Life Insurance with LTC Rider (also known as
Living Benefits)
This solution is accomplished by adding a LTC rider
(for an additional charge) to a life insurance policy a person is
purchasing. The death benefit from the life/LTC combo product creates a
pool of money that can be used, while alive, to help pay for qualifying
LTC expenses. If LTC is never needed or only partially used, any remaining
death benefit is paid to the beneficiary. The benefit is normally paid
monthly and is a percentage of the death benefit, typically 2% of the
death benefit per month. Long-term care riders are generally offered on
permanent life insurance contracts and offer the following:
- Products with premium guarantees and death benefit
guarantees
- A wide array of premium schedules from single pay
options, life pay options and anything in between.
- No “use it or lose it” risk since premiums are
recovered though LTC benefits or death benefit
- Most products include an extra residual death
benefit if all funds are used up for LTC benefits
People who are typically interested in this type of
solution will vary. This may appeal to people with LTC concerns who have
excess assets they wish to use to create a tax efficient legacy. This
solution also appeals to people who voice the typical objections to stand
alone long-term care policies and like the idea that the entire benefit
pool will be paid to either the contract owner or beneficiary. Other
potential prospects come from younger clients not ready to discuss
purchasing full fledged LTC coverage.
Please keep in mind that these products are fully
underwritten for life insurance and long-term care and it is possible to
be offered the life insurance yet declined for the LTC rider.
Annuity/LTC Linked Solutions
Clients who lack the necessary LTC health
qualifications may have options through annuity products with LTC riders.
While these products generally offer less LTC coverage compared to other
solutions, they offer an alternative that may be welcome to certain
people. These products vary greatly, but generally, the contract value or
the guaranteed income is doubled (sometimes tripled) when the annuitant
qualifies for the LTC claim. And there are some companies offering
annuity/LTC linked products that don’t require underwriting. Instead,
there is an exclusion period in which the client will not be eligible to
file a claim. Depending on how rich the LTC benefits are, these exclusion
periods tend to run between two and seven years. Some of these products
qualify in their design to pay a tax free benefit for qualifying LTC
conditions (per provisions in the Pension Protection Act of 2006,
effective January 1, 2010).
The annuity/LTC linked solution may also appeal to
clients who lack liquid assets for annual premiums. The annuity will
provide either income for retirement or LTC benefits. For example, some
contracts will allow the client to start taking a guaranteed income, then
if qualifying LTC needs arise, the income is doubled. Be sure to inquire
how the LTC benefits will interact with the income benefits as provisions
vary greatly among companies and some LTC riders drop once income
commences. Also keep in mind that not all annuity solutions are designed
to qualify for tax free benefits. But when a person is in a position of
few choices for LTC coverage, the annuity can offer some assistance.
Summary
For those who believe product sales should remain
dedicated to the product category – that would be great in an ideal world
where all is black and white. But the world I work in sees a lot of grey,
and I am grateful linked solutions exist so we can still accommodate
objections and obstacles with a LTC solution that a people are willing and
able to put in place.
Shawn Britt, CLU is Director, Long-term Care
Initiatives, Advanced Consulting Group
Nationwide Financial. Reach her with feedback or
questions at britts@nationwide.com
#############################
Updated:
Thursday, September 12, 2013, 10:01 AM (Pacific)
Seattle, WA--
#############################
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.
#############################
9/10/2013,
Regulators consider LTCI lapse benefits, by Allison Bell,
LifeHealthPro
Quote: "Insurance regulators are trying to decide when
long-term care insurance (LTCI) policyholders should get 'contingent
benefits' as the result of a policy premium increase. An LTCI contingent
benefit proposal is part of a package of recommendations under discussion
by arms of the
Health Actuarial Task Force at the National Association of Insurance
Commissioners (NAIC)."
LTC Comment: We’ll keep you posted as this
story progresses.
#############################
9/10/2013,
Top 10 Most Important Features You Should Look For In An LTCI Policy
Quote: "A recent survey on long term care insurance agents
found the top ten features they recommend a policy should have. 76% of
respondents, however, answered that the ratings and reputation of the
insurance company is the most important."
LTC Comment: Important findings in this
survey—company reputation is key.
#############################
9/09/2013,
Nursing homes as human habitats, by
Jean Dobay, McKnight's Long Term Care News
Quote: "In 1975, the nursing home regulations came into play
and continued to become more and more stringent until the nursing home
industry was the most heavily regulated industry in the United States.
Suddenly, nursing homes looked and ran more like a hospital, elders came
to us sicker and sicker, and the medical model became the accepted
practice. Our nursing homes became sterile, institutional, and
regimented. Reimbursement became more complicated and the focus went from
caring for our elders to meeting state and federal regulations while still
jumping through all the hoops to be reimbursed. The 'Mom and Pop' homes
could no longer survive in the industry and sold out to the mega chains.
Caring for the elders became an industry where only the business savvy
could survive.
"Thomas
discovered that caring for the human spirit is far more important than
treating their medical ailment. He discovered that creating a human
habitat in a nursing home where plants, animals, and children surround
elders is vital to caring for the human spirit. Nursing homes should not
mimic their sister hospitals, but be the 'citadel of caring' where an
elder can continue to grow: A garden of compassion and caring."
LTC Comment: Anyone interested in receiving
long-term care in their home, or in a setting that could be described as a
“citadel of caring,” should set a financial plan in place to pay for this
care well in advance. Your Center for Long-Term Care Reform has been
publishing LTC Bullets covering the link between private financing
and quality LTC services for over 15 years. Read our
LTC Services: Thousand Bullets Retrospective for more information on
this important topic.
#############################
9/09/2013,
Big questions lurk in LTC's future, by Melanie Waddell,
LifeHealthPro
Quote: "Long-term care specialists are at odds over what they
believe the Long-Term Care Commission will submit to Congress on Thursday
as part of its first set of recommendations to better ensure LTC coverage
is available for the elderly and disabled."
#############################
9/07/2013, Book Offers
Readers “CliffsNotes For Obamacare”
Quote: “In her column for the
Washington Post (9/7, 4.53M), Michelle Singletary reviewed the ‘Color
of Money’ book club selection ‘The Best of ObamaCare Guide: For You, Your
Family and Your Business,’ published by Adams-Hall Publishing, and
Singletary says personal finance author Don Silver has avoided the
public-policy debates and written ‘a guide for what you’ll need to know
before open enrollment for the healthcare exchanges starts. Think of it as
CliffsNotes for Obamacare.’ To allow for the latest information, the book
is available for $7.95 only as an e-book from Amazon.”
#############################
9/06/2013,
Insurers Support Long-Term Care Consumer Awareness Effort by Association,
PR.com
Quote: "A national long-term care insurance awareness print ad
campaign made possible by John Hancock Insurance and Mutual of Omaha
Insurance Company will run during Long-Term Care Awareness Month
(November)."
LTC Comment: Kudos to AALTCI, John Hancock
and Mutual of Omaha for this crucial outreach.
#############################
9/05/2013, “8
Tips to Help 40-Somethings Manage Their Health Care Costs,”
by Selena Maranjian, DailyFinance
Quote: "5. Think about
long-term-care health insurance. It might sound crazy to
someone who's just 40-something, but its not too early to consider. Such
policies are designed to pay for home-care services or nursing home
expenses when needed. Sure, you aren't likely to need this coverage for
several decades, but eventually, the odds are good that you will. (Close
to
7 in 10 Americans will need long-term care
at some point after they turn 65.) And when you do, it can be extremely
expensive. In fact, it's getting so expensive that many older folks are
advised not to buy it, and to just try to put money aside for that purpose
instead. But since the coverage is much cheaper if you
buy it when you're young, it's
worth considering whether it makes sense for you, now or later. For
example, per a Genworth Financial (GNW)
calculator, a policy paying $100
per day for three years sold to a 49-year-old in Colorado would cost
around $950 annually, versus $2,990 for a 70-year-old."
LTC Comment: Planning for future long-term
care needs is critical to successfully financing a long and enjoyable
retirement.
#############################
9/05/2013, “Alzheimer's
extracts a high price on caregivers, too,” by
Linda Carroll, NBCNews.com
Quote: "Even his job as an emergency room nurse didn’t prepare
55-year-old Jim Crabtree for the overwhelming triple burden of caring for
a wife with Alzheimer’s, a father descending into dementia and a mother
with crippling arthritis. Those burdens are so great they can shave years
off the life of caregivers, experts say. In fact, one study showed that
compared to others, caregiver spouses aged 66 to 96 had a 63 percent
higher mortality rate, Ercoli said."
LTC Comment: Exploring the myriad costs of
Alzheimer’s, this article portrays the grim reality of the enormous toll
placed on family caregivers.
#############################
9/05/2013, “Top
10 Reasons to Get Long Term Care Insurance,” PRWeb
Quote: "ACSIA Long Term Care Inc. recently surveyed insurance
experts on what they think are the best reasons to get coverage for long
term care. Overwhelmingly, more than 95% responded with the top reason: to
protect your assets and hard-earned savings from the high costs of care in
the future."
LTC Comment: Medicaid eligibility rules are
generous enough that most people qualify without significantly spending
down—but for how long? See
Briefing Paper #2: Medicaid Long-Term Care Eligibility for
further information.
#############################
9/05/2013, “Mutual
of Omaha Launches Group Critical Illness Insurance,” Business Wire
Quote: "Mutual of Omaha, a leading provider of group benefits,
has announced a new Critical Illness product that allows employers to
enhance their benefits coverage, while providing employees and their loved
ones with added protection if a critical illness occurs."
LTC Comment: Critical Illness Insurance
continues to gain traction.
#############################
9/05/2013, “Study Finds Group Long Term Care
Insurance 15-36% More Expensive Than Individual [link],”
MarketWatch
Quote: "It can be tempting to buy the long term care insurance
plan offered at work: it's convenient and sounds like a sensible idea,
especially in midst of all the advertisement. Buyers may want to think
twice, though, says long term care insurance marketplace LTC Tree.
Examination of the latest policies and premiums shows that group plans
typically aren't the best deal on price or benefits.
"LTC Tree also analyzed how the adverse selection in long term care
insurance open enrollment periods at the workplace has led to consequences
later for some large group plans. The unhealthy people opt for the group
plans because they can't qualify for the individual and the healthy opt
for the less expensive individual plans. Many have been forced to raise
rates, some as high as 200%, in order to compensate for the increasing
cost of care for the higher risk group. When these increases occur, a
healthy person who was clumped in with these policyholders in the
beginning sees their rates raise again, at no fault of their own. Skipping
the group plan and choosing an individual plan if the person has
relatively good health will place them into a more stable rate class,
reducing the risk that their premium rates will increase later."
#############################
9/04/2013, “Kill inpatient eligibility
requirement for skilled care, former CMS chief Berwick says [link],”
by Tim Mullaney, McKnight's Long Term Care News
Quote: "The former head of the Centers for Medicare & Medicaid
Services has said the agency should scrap a rule requiring three days as a
hospital inpatient to qualify for Medicare coverage of skilled nursing
care. Long-term care advocates praised the statement. In a recent
interview with the Boston Globe, Donald Berwick, M.D., said he
considered eliminating the rule
during his tenure as acting administrator. However, other CMS officials
worried this would lead beneficiaries to check into nursing homes
unnecessarily, he said."
#############################
9/04/2013, “You
might live to 100. Will your money?,” by Danielle Andrus,
LifeHealthPro
Quote: "What would you do if you lived to be 100? Vanguard
asked that question in an interview with Olivia Mitchell, professor at The
Wharton School of the University of Pennsylvania and executive director of
its Pension Research Council, and Stephen Utkus, who directs Vanguard’s
Center for Retirement Research.
"Mitchell and Utkus stressed that in all the talk about crises —
retirement shortfalls, the end of Social Security or Medicare
— there are positives advisors and clients can focus on. People are living
healthier and longer, Utkus said, and Mitchell noted that there are more
jobs that are amenable to older people than there were 40 years ago — if
you have to keep working, at least you can.
"Utkus noted that being able to work longer will also be important
considering Social Security’s uncertain future. 'Not only is there a need
for people to consider working longer because of increased longevity, but
also the demographic changes, people’s increased life spans, are putting
pressure on the public retirement programs, such as Social Security and
Medicare.'"
LTC Comment: Living to 100 is generally a
very costly blessing. It’s critical to have a financial plan, including
long-term care, established long in advance.
#############################
9/04/2013, “Debunking
Long-Term-Care Myths,” by Ben Mattlin,
Financial Advisor Magazine
Quote: "Most of the news about long-term-care insurance has
been bad. Carriers dropping out! Premiums skyrocketing! Even a federal
long-term-care plan got scuttled as unfeasible. What’s been missing are
the success stories, or at least the hopeful signs. And there are some,
say people in the industry. 'Based on our almost 40 years of
[long-term-care insurance] experience, we have personally helped our
clients receive millions of dollars in benefits,' says Brian I. Gordon,
president of MAGA, a long-term-care specialist and broker in Riverwoods,
Ill. 'We can truly say that the carriers we’ve worked with have paid 100%
of all legitimate claims filed.'
"The underreported good news, then, is that this protection isn’t
exclusively a luxury item for the wealthiest of clients. In fact, says
Hamm, 'it’s easy to design [a long-term-care insurance] plan that fits a
range of personal budgets and benefit levels to fit personal needs. Having
some protection is better than having none—it doesn’t have to be an
all-or-nothing decision.'"
LTC Comment: Anybody reading this is familiar
with the challenges LTCi has had. Nevertheless, it’s still evolved to be
a critical component to long-term financial planning.
#############################
9/03/2013, “It
Takes a Family to Plan a Retirement,” by
Steve Cordasco,
TheStreet
Quote: "It is no secret that we have an aging population: Each
day 10,000 baby boomers turn 65 and start collecting Social Security and
Medicare benefits. This trend is expected to continue for the next 19
years. However, what's less well known is that the vast majority of
retirees are underfunded for retirement. The reasons for being underfunded
are many: lack of savings, poor
investment
choices, excessive spending or unforeseen expenses. No matter what the
cause, it is becoming clear that neither they nor we can rely on the
federal government to take ample care of our senior citizens.
"One of the biggest financial burdens of a
retiree
is long-term care, which can run around $100,000 a year with an average
stay of three years. Who is going to foot the bill? Who is going to manage
the parents' transition into a nursing home? With the right planning, the
next generation can provide the care needed without a slew of sudden
emergency expenses."
LTC Comment: Long-term care is a family
affair.
#############################
9/03/2013, “The
Cost of Long-Term Care,” by
Donna Fuscaldo,
Fox Business
Quote: "Dealing with a sick parent is emotionally draining, but
it can also be financially devastating for adult children making
health-care decisions. Whether children choose to put a parent in a
nursing home, hire in-home professionals or go it alone, there are host of
financial and emotional factors to consider.
"Long-term care, any way it’s dished out, can be expensive so the type
of care has to be balanced with the budget of the family. While finances
should play a role in the decision-making process, it shouldn’t be the
only factor. 'You never want to let budget alone determine the choice of
care because many aspects have emotional and mental tolls that can’t be
budgeted,' says Sun. 'You cannot put a price tag on family strain.'"
LTC Comment: This article addresses the cost
of long-term care in different settings, focusing not just on the
financial cost but the emotional toll on families as well.
#############################
9/03/2013, “Medical
directors push for LTC-specific physician training, quality measures,”
Tim Mullaney, McKnight's Long Term Care News
Quote: "Nursing facility medical directors should receive more
training specific to long-term care, according to the American Medical
Directors Association. Residents of long-term care facilities often
present particularly complex cases for clinicians, involving multiple
chronic conditions, cognitive and functional loss and other debilities and
illnesses. As a result, more investment is needed in training for medical
directors of these facilities and physicians practicing in the LTC
continuum, AMDA said in a letter to the Congressional Commission on
Long-Term Care."
#############################
Updated, Friday, September 6, 2013, 11:22 PM (Pacific)
Seattle, WA—
#############################
LTC Bullet: LTC Services: Thousand Bullets Retrospective
LTC Comment: Your
Center for Long-Term Care Reform continues to celebrate its publication of
over 1,000 LTC Bullets with this overview of 15 years of “LTC
Services” Bullets. Please enjoy this retrospective after these
messages:
*** 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:
LTC Services: THOUSAND BULLETS RETROSPECTIVE
LTC Comment: Once a week, usually on Fridays, we
publish our latest LTC Bullet. The Bullets are often policy
pieces, sort of like op-eds. You can always find the latest Bullets
here and archives of the rest of the 1,000 Bullets (so far), by
date
here and by topic
here. These 1,000+ articles are a valuable historical resource.
Please make use of them. Search for key terms using Control-F on your
keyboard.
This year, in celebration of the thousandth LTC
Bullet (published last May) 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 4 covering “LTC Services.” These “LTC Services”
Bullets highlight the link between private financing and quality
services. Read our summary and check out the original at the link
provided. Enjoy this walk down memory lane.
#############################
July 22, 1998:
Can NHs Make Gold Out of Straw?. “Evidence continues to mount that
anyone who expects quality long-term care must be able to pay privately
and avoid government financing.
The New York Times reported today that President Clinton will offer
legislation to improve the quality of care in
nursing homes. The legislation calls for new
criminal background checks, a national abuse registry, improved
nutrition and hydration training, and reauthorization of the Nursing Home
Ombudsman program.
“Unfortunately, quality care is not something nursing
homes can wish into existence. Quality costs money. Medicaid pays for 70
percent of all nursing home patient days, but reimbursement rates are
typically 80 percent of private-pay rates and often less than the cost of
providing the care. How can the government expect Medicaid dependent
facilities to deliver high quality care when the government won't pay for
it? It can't. The Administration should focus on encouraging private
financing alternatives to Medicaid if improving quality is the real goal.”
#############################
February 3, 1999:
Perils of Medicaid. “A reporter from a prestigious
financial planning publication contacted the Center for Long-Term Care
Financing yesterday. She asked us to provide evidence that Medicaid
nursing home care can be risky for consumers. Some Medicaid planning
attorneys had told her that clients they artificially impoverish to
qualify for the welfare program do not experience access and quality
problems. We thought our readers would appreciate seeing the same evidence
of potential Medicaid-related deficiencies gleaned from the gerontological
literature that we provided to the reporter. That information follows [in
this
LTC Bullet].”
#############################
June 14, 2000:
Shedding Tiers. “The following article was originally published in
the March 1992 issue of LTC News & Comment. Since then, some conditions of
the long-term care marketplace have changed. For example, private-pay
assisted living
facilities have co-opted nursing homes' light care residents.
Most factors covered in the article, however, have stayed the same or
gotten worse.
Medicare
cut-backs and Medicaid's parsimony have driven one in ten nursing home
beds into bankruptcy. Nevertheless, public expenditures for nursing home
care have increased ten percent in the past ten years, while out-of-pocket
expenditures are down ten percent. In the meantime, the public's
perception of nursing home quality has plummeted while litigation against
nursing homes has skyrocketed. In other words, everything is playing out
just as predicted in the article. That's why we think its argument needs
to be re-stated. The secret to universal access to top-quality long-term
care at the most appropriate level is to maximize private financing and
target public financing to the genuinely needy. The result will be better
care for rich and poor alike.”
#############################
January 11, 2001:
Triathlon Report Findings Resonate. “Based on 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. (See the full press release announcing
publication of the report at
www.centerltc.org/triathlon_release.htm.) Don't assume, however, the
opinions and insights of the largest LTC players covered in the report are
necessarily related to the scale of their organizations. Smaller players
are facing some of the very same challenges!”
#############################
July 24, 2002: New
CLTCF Speech: "Insurance: Private vs. Social." “Life is full of
uncertainties. Usually, that's a good thing. Who doesn't like a pleasant
surprise? But some uncertain events are very bad indeed. Heart attacks,
auto accidents, and house fires come to mind. Although unpredictable
individually, life's terrible shocks are thankfully rare and highly
predictable collectively. We cannot eliminate risk, but we can mitigate
its impact on our lives. Insurance prices, transfers, and softens risk so
we can relax and enjoy life. It replaces the small risk of a catastrophic
financial loss with the certainty of an affordable payment or premium.
Unfortunately, however, the many benefits of insurance are highly
susceptible to corruption and destruction by public officials with
altruistic, but counterproductive motives. This talk will explain how
private insurance empowers individuals to protect themselves and how you
can recognize and resist the damaging trends of community rating,
welfarization and ‘social insurance.’"
#############################
October 7, 2003: Medicaid, Nursing Homes, Quality
Problems and Insurance: How to Connect the Dots [link].
“Fire killed ten people last week in a nursing home that was
‘self-insured’ for liability. What's the connection between long-term care
reimbursement, quality of care, and private insurance?” Find out in this
LTC Bullet.
#############################
March 10, 2004:
LTCi Professional Liability for Financial Advisors. “What are the
professional liabilities for financial advisors who fail to advise clients
about long-term care risk, cost and solutions?” Read this critical LTC
Bullet and find out.
#############################
September 13, 2005:
Who Should Pay for Long-Term Care? “Here is a succinct explanation of
America's long-term care crisis: how it came to be, where it's headed,
and how to mitigate the damage.”
#############################
March 7, 2006: What
I Believe About Long-Term Care. “[W]hat follows is my [Steve Moses]
address to a session at the meeting called ‘Shaking the Money Tree’ which
was organized by LTCi veteran and MedAmerica Business Development Vice
President Gail Holubinka. Gail's idea was to have four speakers
representing different perspectives on the LTC financing issue describe
their vision of the topic. She asked us to explain our underlying beliefs
and to build from that foundation logically toward a description of our
proposed solutions to the LTC financing crisis.”
#############################
June 27, 2007:
The Brave New World of Long-Term Care. “On November 9, 2006, I [Steve
Moses] spoke at an ‘Aging America Symposium’ sponsored by the Notre Dame
Law School. My remarks, titled ‘The Brave New World of Long-Term Care,’
were published in the latest issue of the Notre Dame Journal of Law,
Ethics & Public Policy. To read the whole article, go to
http://www.centerltc.com/pubs/Articles/Brave_New_World_of_LTC.pdf.”
#############################
February 1, 2008: LTC
Tour Touches LTC Providers. “Nursing homes are heavily dependent on
Medicaid which pays them too little to ensure quality care. Home health
care providers are heavily dependent on Medicare which has whipsawed them
between generous and penurious coverage. Assisted living facilities are
90 percent private pay, but they're hurt by government subsidies of
nursing home care and tempted by Medicaid's low reimbursements for beds
that would otherwise remain empty. In a nutshell, the entire LTC provider
profession needs responsible LTC planning and rational long-term care
policy.”
#############################
October 6, 2009:
Medicare/Medicaid Meltdown Means More LTCI. “Following are recent
developments that suggest the end is near for near-universal government
financed long-term care. As you read these tales of woe, consider this
take-away: IT IS TRUE TODAY AND WILL BE MORE TRUE IN THE FUTURE THAT TO
ENSURE ACCESS TO QUALITY LONG-TERM CARE AT THE MOST APPROPRIATE LEVEL OF
CARE, CONSUMERS MUST BE ABLE TO PAY PRIVATELY. That simple truth, backed
up by abundant evidence, trumps every excuse for failing to plan for
long-term care.”
#############################
April 27, 2010:
Private LTC Insurance Vindicated. “The national media and
ideologically driven analysts love to bash LTCI based on anecdotes but
solid longitudinal data belie their criticism. New evidence [in this
LTC Bullet].”
#############################
June 21, 2011:
LTC Mixed Messages. “LTC financing wouldn't have to be complicated
except for the muddle public policy has made of it. Markets will prevail
in the end.”
#############################
April 20, 2012:
How RCFs and Duals Impact Medicaid and LTCI. “Vital new information
about residential care facilities and Medicaid/Medicare dual eligibles
[and what it means for the quality of LTC services in this LTC Bullet].”
#############################
January 18, 2013,
So What If the Government Pays for Most LTC?, 2011 Data Update, “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?” Steve Moses explains
in this LTC Bullet.
#############################
Updated,
Tuesday, September 3, 2013, 1:58 PM (Central)
Gulfport, Mississippi—
#############################
THE SAVAGE TRUTH
AND LTC NEWS AND COMMENT
LTC Comment:
Nationally syndicated Chicago Sun-Times financial columnist
Terry Savage writes often and well about the importance of long-term
care planning. Following is an expert from her September 1, 2013 e-letter
titled “Savage Truth: Personal
Finance Update.” Congratulations to Center supporters Claude Thau, as
well as Brian Gordon and Peter Florek of MAGA LTC, who are quoted in the
piece.
“Yes, I know that LTC insurance premiums on existing
policies have been rising. Insurers have admitted they set premiums too
low in the first place, not expecting the usage that has occurred. So
they've made some expensive premium adjustments. The good news is that we
can expect most of the increases are behind us. . . . except for this new
gender-based pricing, which most insurers will put in place starting in
September.
“Women live longer, and thus are more likely to need
care, and may be more likely to require a longer period of custodial care,
as they age. And women are less likely to have ‘free’ family help to
cover their needs, unlike men who may rely on their wives for an initial
period of care.
“Since women use more benefits from their long-term
care insurance policies, the insurance companies are deciding women who
buy policies in the future will have to pay more for their insurance. If
you're a single woman who is in the market for long-term care insurance,
here's a link to my article with some price quotes:
http://terrysavage.com/article_082613_long_term_care.html
“If you want to learn more, I highly recommend a
short, online ‘Brainshark’ -- a series of slides explaining the issue from
industry expert, Claude Thau of Target Insurance. Here's that link [link]
It's well worth ten minutes of your time.
“And if you don't know where to turn for help in
finding a policy, I suggest you go to
www.Magaltc.com, or call 800-533-6242 and ask for Brian Gordon or
Peter Florek -- two of the top independent LTC experts in the country.
You don't have to use my name, as I get nothing from this recommendation,
except the knowledge that you will be dealing with honest experts.”
#############################
8/30/2013, “Boomers
may benefit most from Obamacare,” by Matthew Heimer, WSJ
MarketWatch
Quote: "The Affordable Care Act could deliver
a major windfall to some boomers who are self-employed or unemployed, and
to early retirees, by sharply cutting the costs of their health insurance.
And a new report this week by Christopher Weaver and Louise Radnofsky of
The Wall Street Journal shows just how
big a price break some of those older consumers could get. Reviewing
filings by insurers in Ohio that reflect what they’ll charge in 2014, the
reporters find that, in some cases, older workers’ share of their
insurance premiums could plummet, leaving them paying less than younger,
healthier people with similar incomes."
LTC Comment: If those boomer savings are real
(highly dubious), we might have an idea what they could do with them,
right?
#############################
8/30/2013, “Congress should increase funding
for non-institutional care, link payment and performance, Medicaid
directors tell LTC commission [link],”
by Tim Mullaney, McKnight’s LTC News
Quote: "Congress should expand Medicaid
funding for care in home- and community-based settings (HCBS), the
National Association of Medicaid Directors stated in a letter dated
Tuesday. The organization referred to 'widespread support' for HCBS and
said states need more 'tools and resources' to shift seniors away from
facility-based care. 'One of the biggest barriers for states is that
under regular authority they cannot use federal Medicaid funding for even
limited room and board costs in a community-based residential alternative
setting, including housing,' the letter stated."
LTC Comment: While a laudable goal,
"rebalancing" from mainly institutional care to far more home and
community-based services does not save money, makes Medicaid more
attractive than ever for consumers, and, in the absence of stricter
eligibility controls and stronger estate recovery, further impedes the
markets for private home care and LTC insurance.
#############################
8/28/2013, “Why
Baby Boomers Are Facing A Caregiver Shortage,” by Howard Gleckman,
Forbes
Quote: "The math is brutal: The population in
the prime caregiving ages of 45-64 will grow by only 1 percent from 2010
to 2030 but the numbers of those 80 and over (who are most likely to need
care) will grow by nearly 80 percent."
LTC Comment: As usual this author completely
misses the key point. We have a shortage of paid caregivers because
Medicaid co-opted the market for private home care and forced
reimbursement rates down to dreadfully low levels. I interviewed a
caregiver association president in Georgia recently who told me Medicaid
pays $12.91 per hour for home care aides. To replace the declining
availability of family caregivers, we'll have to expand the market for
private-pay caregivers by reducing dependency on Medicaid. The only way
to do that is to get Medicaid out of the business of providing long-term
care to middle class and affluent people.
#############################
8/28/2013, “Bankers
Life: Medicare still has an LTCI image problem,” by Allison Bell,
LifeHealthPRO
Quote: "Consumers still think Medicare does
something that it does not actually do: Cover ongoing long-term care (LTC)
costs. A research arm of Bankers Life and Casualty Company has published
new data on that misunderstanding in a
report based on a Web-based survey of 1,299 U.S. residents ages 49 to
67. The survey participants had annual household income of $25,000 to
$75,000. Only 11 percent said they would expect their children to provide
care or pay for care, but just 13 percent said they had private long-term
care insurance (LTCI)."
LTC Comment: The public is only half wrong.
Medicare doesn’t pay for LTC, but Medicaid does. No wonder people are
confused about who pays for LTC and why they need LTCI.
#############################
8/29/2013, “Dementia
patients face higher risk of urinary incontinence,” by Ashley Carman,
McKnight’s LTC News
Quote: "Seniors with dementia are three times
more likely to have urinary incontinence and four times more likely to
have fecal incontinence, according to a new study. . . . The
investigators found 42 out of 1,000 men with dementia had a diagnosis of
urinary incontinence, compared to 20 out of 1,000 men without dementia.
Men with dementia also had significantly higher rates of fecal
incontinence. Among women with dementia, 34 in 1,000 had urinary
incontinence and 10 in 1,000 had fecal incontinence."
LTC Comment: What struck me about this data
is how low the incidence of incontinence is among seniors, with or without
dementia.
#############################
8/28/2013, “Nursing
homes beneficial for Medicare program, researchers find,” by Tim
Mullaney, McKnight’s LTC News
Quote: "After analyzing 2005 data for seniors
in seven states, the researchers determined that dual-eligibles had higher
medical costs - covered by Medicare - if they were living in a community
setting versus being in a nursing home. . . . Researchers hypothesized
that some nursing home residents may be receiving better nursing care than
dual eligibles in a community setting, or that nursing home residents are
less likely to receive hospital care."
LTC Comment: Whether rebalancing from
institutional care saves money is one question; whether it improves care
is quite another.
#############################
8/27/2013, “Elder
care planning: An important part of the long-term care message,” by
Shawn Britt, LifeHealthPRO
Quote: "Elder care planning is essentially a
comprehensive strategy that helps define a senior's wishes and assists
designated caregivers and/or advocates in handling the physical, personal
and financial affairs of a senior aging into the last phases of life.
Long-term care (LTC) is just one, very important segment of total elder
care planning."
LTC Comment: Every LTCI producer should know
enough about general elder care planning to recognize when other
professionals, products, or documents should be brought into the mix.
#############################
8/27/2013, “Boomer
Expectations vs. Reality of Adult Caregiving,” Bankers Life and
Casualty
Quote: "An overwhelming majority (88%) of our
nation's middle-income Boomer caregivers find caregiving for a parent or
spouse harder than they expected, requiring more emotional strength (57%),
patience (55%) and time (52%), according to a new study released by the
Bankers Life and Casualty Company Center for a Secure Retirement(r) (CSR).
The study, Retirement Care Planning: The Middle-Income Boomer Perspective,
which surveyed 505 adult caregivers ages 49 to 67 with an annual household
income of between $25,000 and $75,000, also found caregiving to cost more
(34%), impact their relationships (33%) and take more physical strength
(32%) than previously thought."
LTC Comment: Public policy offers a way out
from the strains of caregiving: hire an attorney, take an early
inheritance, and put Grandma in a Medicaid nursing home. Having made that
course the path of least resistance, policy makers should be unsurprised
how many people take it.
#############################
8/26/2013, “LIMRA
finds drop in LTCI sales,” by Allison Bell, LifeHealthPRO
Quote: "Annualized new premiums from U.S.
sales of individual long-term care insurance (LTCI) fell to $213 million
in the second quarter. The total is down 20 percent from the total for
the second quarter of 2012, according to
LIMRA. LIMRA based those figures on results from a survey of
insurers. The number of U.S. residents who bought individual LTCI fell 16
percent in the second quarter, to about 91,000, LIMRA said. But LIMRA
found that eight of the 16 carriers that were active in the individual
LTCI market reported an increase in sales, and that six report an increase
greater than 10 percent."
LTC Comment: In the meantime, unfunded
liabilities of Social Security, Medicare and Medicaid continue to rise
dramatically.
#############################
8/26/2013, “Regulators
see skepticism about LTCI actuaries,” by Allison Bell,
LifeHealthPRO
Quote: "Some state insurance regulators want
to develop a new, multiline definition of the term 'qualified actuary.'
The regulators cited questions about the value of long-term care insurance
(LTCI) actuarial projections as one example of the need for the project."
LTC Comment: Sure, give away LTC through
Medicaid after the insurable event occurs so few people buy LTCI, force
interest rates to zero so reserves yield returns too low for anyone to
have predicted, then blame the actuaries for missing the targets.
#############################
8/26/2013, “Huge
shortage of caregivers looms for baby boomers, report says,” by Tara
Bahrampour, Washington Post
Quote: "Americans should expect an enormous
shortage in caregivers for older people in the coming decades, with a
dearth of friends and family members available to care for the baby-boom
generation as it ages, according to a report released Monday by AARP."
LTC Comment: One more “drop in the bucket” to
convince boomers they’ll be on their own in old age without LTC
protection.
#############################
8/19/2013, “The
Work versus Welfare Trade-Off: 2013,” by Michael D. Tanner and Charles
Hughes, Cato Institute
Quote: "The current welfare system provides
such a high level of benefits that it acts as a disincentive for work.
Welfare currently pays more than a minimum-wage job in 35 states, even
after accounting for the Earned Income Tax Credit, and in 13 states it
pays more than $15 per hour. If Congress and state legislatures are
serious about reducing welfare dependence and rewarding work, they should
consider strengthening welfare work requirements, removing exemptions, and
narrowing the definition of work. Moreover, states should consider ways to
shrink the gap between the value of welfare and work by reducing current
benefit levels and tightening eligibility requirements."
LTC Comment: Is it any wonder the entitlement
mentality is commonplace and growing?
#############################
7/29/2013, “Prudential Report Reveals the
Impact of a Critical Illness on Financial Wellness [link],”
Prudential Financial, Inc.
Quote: "As the health care landscape
continues to evolve, Americans are grappling with ensuring their families
are financially protected from a medical crisis, according to a white
paper released today by Prudential Financial, Inc. (NYSE: PRU). The
report,
Critical Illness Protection: On the Road to Financial Wellness,
explores the role critical illness insurance can play in closing
health care coverage gaps."
LTC Comment: CI is getting more and more
coverage and interest.
#############################
Updated,
Friday, August 30, 2013, 1:22 PM (Central)
Lillian, Alabama—
#############################
LTC BULLET: MEDICAID AND LONG-TERM CARE FINANCING IN
GEORGIA
LTC Comment: We’ve just completed the field work for
our third state-level study this summer. Preliminary findings on Georgia
follow the ***news.***
|
*** TODAY'S LTC BULLET is sponsored by Claude
Thau, a GA whose insight into sex-based pricing can help you secure
referrals. His proprietary sales tools enable clients to make informed
final decisions about buying LTCi in 15-20 minutes, let you test a
client's interest in a combo product immediately, and change work-site
LTCi from a proposal-delivery process to interactive consultation. The
lead author of the Milliman Broker World LTCi Survey, Claude was named
one of Senior Market Advisor’s 10 "Power People" in LTCi in 2007 and
Chaired 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. *** |
*** R&R for SAM: As explained below, Steve’s been on
the road for four months and he has four major reports to write in
September. So he’s hunkering down on the Labor Day weekend for a much
needed rest. Then all this coming month will be devoted full time (and
then some, he says) to preparing our Virginia, New Jersey, Georgia and
“Index of LTC Vulnerability” reports for publication. While Steve’s
locked inside his “cave of composition,” Damon will fill in to do most of
our clippings service notices, LTC E-Alerts, and LTC Bullets
during the month of September. Thanks, Damon, for taking on the extra
workload. ***
*** 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: MEDICAID AND LONG-TERM CARE FINANCING IN
GEORGIA
LTC Comment: Steve Moses has been on the road in the
Silver Bullet of Long-Term Care since May 1 conducting studies of Medicaid
and long-term care financing in Virginia, New Jersey and Georgia. He’s
headed home now with the huge task to write reports on all three studies
before the end of September. As if that’s not enough, he’s decided to add
a fourth report on what we plan to call “The Index of Long-Term Care
Affordability.” See “LTC
Bullet: The Index of Long-Term Care Vulnerability” for more on that
new method to measure states’ potential to sustain their existing LTC
service and financing systems. For now, however, here’s a quick overview
of our findings regarding Georgia’s Medicaid and long-term care financing
system. We’ll have much more to come about all three states as the final
reports are written and published.
#############################
Preliminary findings of “How to Reduce Medicaid
Expenditures and Improve Long-Term Care,” a project conducted for the
Georgia Public Policy Foundation by The Center for Long-Term Care Reform,
August 29, 2013
Georgia has one of the tighter Medicaid long-term
care financial eligibility systems in the country, when enforced. For
example, it operates an “income cap” system meaning people with incomes
over $2,130 do not qualify for Medicaid-financed nursing home care. They
cannot deduct their medical and LTC expenses to “spend down” to the
Medicaid income eligibility limit as in more liberal “medically needy”
income eligibility systems. Georgians, however, can achieve the same
purpose by setting up Miller income diversion trusts or “Qualified Income
Trusts” (QIT). QITs allow people with excess income to qualify for
Medicaid LTC benefits by diverting the excess income into a special trust
designed for that purpose. We will explain how, why and how often this is
done in the final report.
Georgia has already implemented a managed care system
for most of its recipients (poor women and children) and intends to
implement managed care for the aged, blind and disabled. People eligible
for both Medicaid and Medicare (dual eligibles) may in time be included in
the managed care program, although there has been some political push back
from that objective. Georgia has already “rebalanced” its Medicaid
long-term care program from mostly nursing home care to nearly half home
and community-based care. It has made Medicaid long-term care more
attractive as a long-term care funding source and delivery system and is
continuing to do more of the same. Less planning has been done to prepare
for the reality that a huge new older generation will soon flood the
state’s social programs, of which Medicaid long-term care is one of the
most expensive. Our final report will develop this theme and suggest
corrective actions.
Georgia, like most states, runs the risk of Medicaid
long-term care crowding out other key state services, especially
education. Certain measures can be taken, however, to reduce this risk.
One such measure we’ll recommend is to enhance DCH’s [the Department of
Community Health contains Georgia’s Medicaid program] estate recovery
efforts both to generate non-tax revenue but also and especially to awaken
citizens that Medicaid LTC expenditures must be repaid after death.
Currently Georgia exempts the first $25,000 of deceased recipients’
estates from recovery. As average recoveries in successful estate
recovery programs are much lower than that, Georgia is leaving a large
amount of potential non-tax revenue unrecovered. Unless and until
Medicaid eligibility spend down requirements become much stronger, failure
to enforce estate recoveries aggressively turns the program into free
inheritance insurance for baby-boomer heirs who should instead be getting
the message that LTC is a personal responsibility for which they should
prepare.
Unsurprisingly, Georgia’s inconsistent enforcement of
Medicaid financial eligibility “spend down” rules, numerous Medicaid
planning firms helping affluent Georgians qualify, and lax estate recovery
enforcement seriously discourage early and responsible long-term care
planning. The state’s Long-Term Care Partnership program, which allows
purchasers of the product forgiveness of their Medicaid spend down
liability to the extent of the private coverage they actually use, goes
unpromoted. The state is moving toward a much more expensive Medicaid LTC
program in the future because of the approaching baby-boomer Age Wave at
the same time as it is making the program more attractive and
private-financing alternatives less likely to succeed. Georgia’s current
intention to avoid Medicaid expansion under the Affordable Care Act may
mitigate this risk somewhat, but some of our respondents indicated that
the state may choose to expand Medicaid after all following the
Gubernatorial election.
I believe our findings will be on point and very
timely. As Senator Renee Unterman told us in an interview “it is
imperative to do self analysis like your study” and this is a “sensitive
issue but a good time to deal with it.”
#############################
Updated,
Monday, August 26, 2013, 1:33 PM (Eastern)
Rome, Georgia—
#############################
GENWORTH CLAIMS
DATA AND LTC NEWS AND COMMENT
LTC Comment: We
received the following message from a Center member. Very interesting.
“If you missed Genworth's webinar on their claims history over the past 38
years, here are some interesting numbers:
Youngest claimant: 27 years old
Oldest claimant: 103 years old
Longest claim: 19.6 years
Most expensive claim (still ongoing): $1,300,000
71% of all claimants are females
29% of all claimants are male
51% went on claim due to dementia & cognitive issues
15% of all claims lasted more than 5 years
Average length of claims, if on claim more than 1 year: 3.9 years
71% of claims started with home care
13% of claims started with assisted living facilities
16% of claims started with nursing homes
50% of claims lasted less than 1 year (conversely, 50% lasted more than 1
year)
The reason claims closed:
61% death
28% Recovery
11% exhausted benefits
Average age of claimant: 79
Who goes on claim?
38% Single women
28% Married Women
10% Single men
24% Married men
Most expensive claims: Dementia & Parkinson's
LTC Comment: Some of the most interesting of
these findings to me are that 15% of claims lasted more than five years,
half lasted less than a year, and the average length of claim was 3.9
years. Does that mean people are well-served by “short and fat”
policies? Not if the purpose of insurance is to replace the small risk of
a catastrophic loss with the certainty of an affordable premium. “Long
and lean,” e.g., lifetime institution-only (ALF and SNF) coverage,
would better meet that definition, though unavailable or very scarce now.
On the other hand, the ability to pay privately for even a short time at
least provides “key money” for insureds to buy their way into nicer care
settings that Medicaid is likely to provide.
#############################
8/25/2013, “Tighter Rules for Reverse
Mortgages: Fewer borrowers will qualify and borrowing limits will drop [link],”
by Anne Tergesen, Wall Street Journal
Quote: "The rules governing reverse mortgages
are about to change, which could mean less money for borrowers. But it
also may help reduce the program's high default rate. Congress recently
gave the Federal Housing Administration, which insures virtually all
reverse mortgages, the authority to make sweeping changes to the federal
program for older homeowners. . . . Those who submit an application,
complete a reverse-mortgage counseling program, and receive a case number
by Oct. 1 will be able to qualify for the higher maximum amounts under the
current rules."
LTC Comment: When Medicaid finally has to
drop its half million dollar home equity exemption, reverse mortgages will
likely become a big payer for home and community-based care.
#############################
8/23/2013, “Gray
science: 4 lessons from LTCI research,” by Allison Bell,
LifeHealthPRO
Quote: "Many Americans who could buy
long-term care insurance (LTCI) don't. Why? Are the decisions a matter of
taste, the result of confusion -- or, perhaps, the result of a lack of
understanding that LTCI exists? The
SCAN Foundation, a think tank that aims to study and improve senior
care, recently tried to get answers by working with Gary Langer, the
former ABC director of polling, to do a survey with a little more depth
than many other long-term care (LTC) planning surveys."
LTC Comment: The worst possible way to find
out why people don't buy LTCI is to ask them. They don't know. The real
reason they don't buy requires some understanding and thought. You need
to understand that government pays for most expensive long-term care. You
need to think: if government pays, why would people worry about long-term
care until they need it? Voila. There's the answer for why polls don't
work, people don't know, and educating the public about "facts" that
aren't true has little effect on consumer behavior.
#############################
8/23/2013, “Long
Term Care Insurance Association Offers Bonus Sourcebook,” by Jesse
Slome, PR.com
Quote: "Insurance and financial professionals
seeking the latest data on long term care insurance can take advantage of
a special offer from the American Association for Long-Term Care
Insurance."
LTC Comment: The AALTCI “Sourcebook” is
always a welcome annual contribution to our understanding of the facts
about long-term care.
#############################
8/22/2013, “Medicare
Does Not Pay for Long-Term Care,” by Harriet Komisar, AARP Blog
Quote: "Many consumers and policymakers
mistakenly believe that Medicare—the federal health insurance program for
people age 65 and older and some younger people with disabilities—pays for
long-term care. It does not, as stated in the
official Medicare handbook. Millions of Medicare enrollees must pay
for long-term care services (such as personal assistance at home, assisted
living, and nursing home care) entirely from their own income and
savings."
LTC Comment: Medicare does not pay for LTC,
but Medicaid does. In fact Medicaid is the dominant payer of expensive
long-term care not only for the poor but for the middle class and affluent
as well. Denial of this reality by advocates like this author contributes
to the denial of LTC risk and cost by consumers.
#############################
8/22/2013, “Direct-care workers may be best
leaders of interdisciplinary senior care teams, expert tells LTC
Commission [link],”
by Tim Mullaney, McKnight’s LTC News
Quote: "Working on a
tight schedule, the commission has already
begun drafting its report to Congress, according to staff director G.
Lawrence Atkins, Ph.D. . . . Members will meet privately on Aug. 19 and
29 to discuss policy recommendations, and must conclude all commission
business by the end of September, Atkins said on a recent conference
call."
LTC Comment: One more commission, one more
report, likely one more misfire. This LTC Commission, like previous ones,
spent no time analyzing how the LTC service and financing system became so
messed up in the first place. Therefore, it’s no more likely to propose
helpful solutions than previous ones. Expect instead the only
recommendation such commissions ever muster: more government spending.
Which, ironically, is exactly what created the current mess.
#############################
8/21/2013, “LTCI
Watch: Publications, Opinion,” by Allison Bell, LifeHealthPRO
Quote: "Two publications of interest to
members of the long-term care insurance (LTCI) community also surfaced.
One is a DVD,
The Completely Understandable LTCI Buyer's Guide, by Craig McCormick.
It was published in 2012 and now needs an update, but it has great
information about the likelihood that an individual will need long-term
care (LTC) services, government LTC programs and even Veterans Affairs
Department LTC programs."
LTC Comment: I wrote the preface to this book
by Craig McCormick. It's very good to see the book receive some
well-deserved recognition.
#############################
8/21/2013, “Caregiver
asks for Medicare chronic care benefit,” by Allison Bell,
LifeHealthPRO
Quote: "Suzanne Mintz, the co-founder and
former president of the National Family Caregivers Association, talked
about health insurance and Medicare Tuesday during a meeting of the
federal Commission on Long-Term Care. The commission spent most of the
meeting talking about LTC delivery and workforce issues."
LTC Comment:
Adding a chronic care benefit now to Medicare’s $43 trillion unfunded
liability would be like adding deck chairs to the Titanic after the
incident with the iceberg.
#############################
8/21/2013, “County
nursing home woes reach critical stage in New York, report shows,” by
Tim Mullaney, McKnight’s LTC News
Quote: "County nursing homes customarily take
on a higher proportion of Medicaid residents than privately operated
facilities, and reimbursement rates have not kept pace with costs, the
report states. The shortfall can be as much as $100 per resident day."
LTC Comment: Nursing home interviewees always
tell me that source of payment makes no difference for access to and
quality of care. That's probably true in a given facility because of cost
shifting from private payers, but between 100% Medicaid nursing homes and
0% Medicaid nursing homes, there is nearly always a difference due to
Medicaid's low reimbursement rates.
#############################
8/20/2013, “Long-Term Care Insurance Industry
Leader Prepares to Serve Groundswell of New Clients as Claim Benefit
Payments Quadruple [link],”
Voluntary.com
Quote: "When today's 50 to 60-somethings turn
70 to 80-something, tens of billions of dollars per year will be paid to
holders of long-term care insurance policies and related financial
instruments. Will you be among them? Today LTC Financial Partners, LLC (LTCFP),
offers a five-fold path for participation."
LTC Comment: Conversely, just imagine the
financial hit to Medicare and Medicaid “when today's 50 to 60-somethings
turn 70 to 80-something.” Sustainable? Doubtful, which is one more
reason for people to plan for long-term care.
#############################
8/20/2013, “Obamacare's
Impact on Seniors: An Update,” by Alyene Senger, Heritage
Foundation Issue Brief #4019
Quote: "The Patient Protection and Affordable
Care Act (Obamacare) makes dramatic changes in the country's health care
system, especially in Medicare, that will seriously affect American
seniors. Indeed, much of the health law's new spending is financed by
spending reductions in the Medicare program."
LTC Comment: Maybe, but there sure has been a
lot of news lately about Medicare coverage of SNF and home care expanding.
#############################
8/20/2013, “Can
hybrid annuities solve the LTC insurance scarcity?: Opinion,” by
Robert Bloink and William H. Byrnes, LifeHealthPRO
Quote: "Fortunately, the product market is
evolving so that a relatively new method of securing tax-preferred
long-term care benefits has emerged.
Hybrid annuity products that combine the estate and income planning
features of an annuity with the protection of long-term care insurance are
becoming increasingly popular among clients looking for replacement
insurance. Because the available long-term care benefits under these
contracts are based on a percentage of the annuity premium value and often
offer optional inflation coverage, clients may need to triple their
initial investment to ensure long-term care needs are met, but with the
added bonus that those funds are not lost if care is never required."
LTC Comment: Every financial product has its
pros and cons, but the more products available, the better chance that
consumers’ differing needs are met.
#############################
8/20/2013, “The
Wild Card That Could Destroy Your Retirement,” by Frank Armstrong III,
Forbes
Quote: "I'd advise finding an agent that is
an expert in long-term care insurance and working with him/her. Your
average life agent may not have the necessary expertise. Look for an
insurance company with extensive experience in long-term care, a
commitment to that market and the financial resources to pay up when and
if you need it. There are still a half dozen great carriers in the market
that deserve your confidence. If you are in your forties to sixties, and
still in reasonably good health there's a good chance they can tailor
something to your needs."
LTC Comment: Sound advice.
#############################
8/20/2013, “Boomers
beware when caring for dying parents,” by Gwen Fitzgerald, USA
Today
Quote: "A recent legal ruling emerging from a
courtroom in rural Pottsville, Pa., could impact tens of millions of Baby
Boomers nationwide caring for their aging and dying parents. This
relatively obscure court's decision could chill good end-of-life medical
care and diminish legal options nationwide."
LTC Comment: One more burden for boomer
caregivers to carry.
#############################
8/20/2013, “CMS
rule tightens hospital guidelines on granting inpatient status,” by
Tim Mullaney, McKnight’s LTC News
Quote: "The Centers for Medicare & Medicaid
Services has issued a final rule on hospital inpatient status, which is
likely to boost the number of seniors receiving Medicare coverage for
skilled nursing services."
LTC Comment: More Medicare money for nursing
home care. With a $43 trillion unfunded liability, when does Medicare run
out of money?
#############################
8/19/2013, “Obesity indeed increases seniors'
risk of death, will be long-standing issue for LTC providers: study [link],”
by Tim Mullaney, McKnight’s LTC News
Quote: "Prior studies also indicated that
obesity is associated with a decreased mortality risk in seniors.
However, the so-called ‘obesity paradox’ is based on
studies that did not account for seniors living in nursing homes,
assisted living communities or other facilities, Masters told the Los
Angeles Times. He said his own research shows that mortality increases
sharply as obese people age."
LTC Comment: This finding comports better
with common sense.
#############################
8/19/2013, “Protein change explains why
pressure ulcers are 'not entirely preventable' among seniors, researchers
say [link],”
by Tim Mullaney, McKnight’s LTC News
Quote: "Elderly people's lack of protective
skin proteins makes pressure ulcer prevention difficult, according to
newly published research."
LTC Comment: Yet if pressure ulcers develop
even in spite of exemplary care, nursing home litigators are quick to sue.
#############################
Updated,
Friday, August 23, 2013, 1:28 PM (Eastern)
Stone Mountain, Georgia—
#############################
LTC BULLET: MEET THE GOOD MEDICAID LAWYERS
LTC Comment: Sponsor a conference, get publicity,
and send Steve Moses to address the “good Medicaid lawyers,” after this
message:
LTC BULLET: MEET THE GOOD MEDICAID LAWYERS
LTC Comment: The
American Association of Public Welfare Attorneys (AAPWA) has honored
Steve Moses with an invitation to speak at its 46th Annual National
Training and Continuing Education Conference. We seek a sponsor to
support the conference and send Steve to the meeting in Newport, Rhode
Island this November. Details follow at the end of this message.
According to their invitation letter: “The American
Association of Public Welfare Attorneys (AAPWA) is an organization of
attorneys who represent state and local human services agencies, including
most state Medicaid agencies.” In other words, these are the lawyers who
protect state Medicaid programs from all kinds of legal challenges.
Their letter continues: “As attorneys for state
Medicaid agencies, we share the Center for LTC Reform’s goal of targeting
scarce public resources to those most in need, and its concern with abuses
of Medicaid eligibility rules.” Clearly, these are allies in our struggle
to preserve Medicaid as a quality LTC safety net for people in need by
diverting those who are financially able to early LTC planning and private
payment alternatives.
That’s the good news. Here’s the bad news: “I must
warn you that we have no budget for speakers’ expenses. We have to rely
on speakers’ own funding sources.” Not too big a surprise. Anyone
fighting on behalf of Medicaid and the poor has trouble raising funds.
Your Center for Long-Term Care Reform is no
exception.
But here’s the best news. The AAPWA will earmark a
conference sponsorship contribution for Steve’s expenses. We estimate the
cost for Steve to attend and present at the AAPWA’s 2013 conference would
be approximately $2,000. That’s also the cost of a “Silver Sponsorship” of
the meeting which comes with the following benefits:
- One complimentary, full-conference registration
- Quarter-page advertisement on the conference
program USB drive distributed to each conference attendee
- Recognition of sponsorship at opening session
remarks and at Business Meeting later in conference
- Complimentary exhibit table in the vendor area of
the conference, with sponsorship recognition ribbon
You can find all the details and a “Sponsorship
Registration Form” here:
http://www.aphsa.org/conference/doc/2013/SponsorsAAPWA.PDF
Calling all friends of the Center for LTC Reform.
Can you help us with this special project? If so, fill out the
sponsorship registration form
here,
submit it as instructed on the form, and let us know at the Center that
you’re on board so that we can get your sponsorship earmarked for Steve’s
expenses. We’ll recognize you for your support with an LTC Bullet
sponsorship at no extra cost.
Don’t feel left out if you can’t sponsor the
conference officially. We’ll gladly accept special contributions to
the Center in any amount to support this speaking engagement. Just send
us an email with the subject line “Send Steve to the Medicaid Lawyers’
Podium.” Tell us the amount of your pledge and Damon will get in touch.
Your contribution will be acknowledged (unless you ask to remain
anonymous) in the LTC Bullets Steve authors to report on the
meetings where he presents.
Thanks as always for your support and encouragement.
#############################
Updated,
Monday, August 19, 2013, 12:38 PM (Eastern)
Atlanta, Georgia—
#############################
UPDATE ON STATE
STUDIES AND LTC NEWS AND COMMENT
LTC Comment: We’re experiencing interminable rain in
Atlanta where I’m conducting the field work for our study of Medicaid and
long-term care financing in Georgia. Interviews today with a state
legislator at the Capitol, an expert on home and community-based care, and
a nursing home association executive. In another week and a half, we’ll
wrap up the site work in Georgia, head home and start writing the reports
on Virginia, New Jersey and Georgia that are due by the end of September.
#############################
8/16/2013, “Reverse
Mortgages Can Benefit Retirees, Both Wealthy and Not,” by Kelly
Greene, Wall Street Journal
Quote: "Reverse mortgages aren't just for
people struggling to keep their homes anymore. The loans also can work
for well-heeled retirees looking for a buffer to keep them from selling
investments at the wrong time, according to academic researchers. And
Congress last month gave a boost to the type of reverse mortgage that
works best for that purpose."
LTC Comment: Reverse mortgages could
supplement income for people age 62+ so they can afford LTCI to protect
all of their assets including home equity. Strong regulations against
“cross selling” make it difficult, however, to use these products in
tandem that way.
#############################
8/16/2013, “New Texas Medicaid Law May be
Future of Life Settlements: A new horizon for seniors grappling with
mounting healthcare costs [link],”
by Stephen Terrell, Life & Health Advisor
Quote: "Many people in this country are
currently fighting a two-pronged battle between their serious medical
conditions and mounting hospital bills. Texas state legislators recently
made history by passing the country's first Medicaid life settlement law.
Texas House Bill 2383, which enables residents to use the proceeds of a
life settlement to help fund their long-term healthcare needs without it
barring them from enrolling in Medicaid, was voted into law last month.
The law also grants the authority to the state's Medicaid department to
inform and educate residents about their option to cash in their life
insurance policies through a life settlement plan. This is the beginning
of a new future for the life settlement industry, originally founded to
help individuals in deep financial straits, which is now once again
assisting Americans overwhelmed by seemingly insurmountable healthcare
costs."
LTC Comment: Is it a proper role of
government to compel private insurance carriers to pay life insurance
benefits before the insured dies?
#############################
8/16/2013, “Lack of information prevents
long-term care planning even for those with high incomes, SCAN report
finds [link],”
by Tim Mullaney, McKnight’s LTC News
Quote: "Among people earning more than
$100,000 a year, only about half say they have planned financially for
their long-term care needs, according to the report. And any planning
usually does not involve long-term care insurance, which has been
purchased by only 17% of this high earners group."
LTC Comment: But why do most affluent people
fail to seek information for LTC planning? Maybe because historically
many have been able to ignore the risk, avoid the premiums, and end up on
Medicaid while their heirs keep most of their money.
#############################
8/15/2013, “Who
will plan for long-term care?,” by Allison Bell, LifeHealthPRO
Quote: "Analysts at Langer Research
Associates have published . . . findings in a
report on LTC planning based on results from a recent telephone survey
of 1,019 adults ages 40 and older. The SCAN
Foundation, an organization created by SCAN
Health Plan, commissioned the survey."
LTC Comment: High income, well-educated
people are more likely to buy LTCI. Not exactly earth-shaking news.
#############################
8/15/2013, “5
Tips on a Long-Term Care Plan for Your Cat,” by Jane A. Kelley,
Catster
Quote: "Almost every day I see cats
surrendered to shelters because their owner died or had to go into
long-term care, and nobody knew what to do with the cat. But illness and
death don't just happen to old people: No matter how young and healthy you
are, you need to have a plan to make sure your cat will be taken care of
in case you become unable to do so."
LTC Comment: See, the LTC market IS
expanding.
#############################
8/15/2013, “Paying
for elder care, without insurance,” by Matthew Heimer, WSJ
MarketWatch
Quote: "Going uncovered amounts to a
calculated risk that may not be as reckless as it may sound. Some research
suggests that the number of people who will face really big nursing-care
costs is relatively small."
LTC Comment: This is sloppy thinking that
derives from corruption of the concept and principle of insurance. When
the probability of an event occurring is high, it is by definition
uninsurable. The purpose of insurance is to replace the small risk of a
catastrophic loss with the certainty of an affordable premium. Otherwise,
our car insurance could cover oil changes.
#############################
8/15/2013, “Long-term
care insurer Genworth hints at higher prices,” by Mark Miller,
Reuters
Quote: "Policyholders, as it turned out, were
smarter than the insurance companies thought. Once you buy one of these
policies, it makes sense to hang on to it for dear life. Insurance
companies have been forced to pay out more in claims than they expected.
But newer policies are being written with more realistic lapse rate
assumptions built into pricing from the start."
LTC Comment: Live and learn in the private
sector to survive. In the public sector, Social Security and Medicare go
on making the original promises and many new ones with no hope of keeping
them. Where are the regulators when you need them?
#############################
8/15/2013, “Do
the Rich Benefit from Medicaid?,” by Don Redfoot, AARP Blog
Quote: "Do the rich benefit from the
welfare-based Medicaid program? Not according to much of the testimony
presented at a recent hearing of the federal
Commission on Long-Term Care."
LTC Comment: Much more on this subject in
Friday’s LTC Bullet
here: “LTC Bullet: Do the Rich Benefit from Medicaid?”
#############################
8/15/2013, “How to Pay for Senior Care with
Limited Resources: Troubleshooting Health-Care Woes [link],”
by Chris Orestis, Life & Health Advisor
Quote: "'Many people who need long-term
care can't afford it, so they drop the [life insurance] policies they've
been paying on for years in order to qualify for Medicaid. The life
insurance companies profit from the fact that they get all those years of
premiums and never have to pay out a death benefit.' Orestis, who's been
lobbying state Legislatures - including Texas - to make the public aware
of their legal right to use this option, says seniors can instead sell
their policy for between 30 and 60 percent of its death benefit value. The
money can be put into an irrevocable fund designated specifically for
their care. He offers more tips for paying for a senior's health care:
Don't go straight to Medicaid. If your first thought is skipping right to
Medicaid, the government's health-care safety net for the very poor, then
you may be heading for a trap. Once you have Medicaid paying the bills,
you and your loved ones have little say in how you're cared for and by
whom. This policy conversion option allows you to live in a place where
you're happy and comfortable and it saves taxpayers millions of dollars
every year. Also, with 30 percent of the Medicaid population consuming 87
percent of Medicaid dollars spent on long-term care services, more
individuals will be forced to find their own resources to pay for those
needs.”
LTC Comment: Good for beneficiaries, Medicaid
and providers. Not so good for life insurers.
#############################
8/15/2013, “National dementia care guidelines
fall far short on ethics issues, researchers find [link],”
by Tim Mullaney, McKnight’s LTC News
Quote: "Scotland's national guidelines ranked
lowest, implicitly or explicitly addressing only 35% of ethical issues
examined, while the United Kingdom as a whole ranked highest, addressing
91%. However, the United States scored highest with regard to
recommendations on how to handle ethical issues, at 71%. Switzerland
scored lowest in that group, at 10%."
LTC Comment: The ethics of dementia care is
an important and difficult subject.
#############################
8/14/2013, “Watch
Out for Long-Term Care Policies That Will Cost You Double,” by Brian
O'Connell, The Street
Quote: "Data from the American Association
for Long-Term Care Insurance
says that huge price differentials by big insurance companies can
nearly double what Americans are charged for long-term care insurance,
which can
cost hundreds of dollars a year."
LTC Comment: Was that what you were intending
to convey, Jesse?
#############################
8/13/2013, “Do
your homework before buying long-term care,” by Clark Howard,
Atlanta Journal Constitution
Quote: "Long term care insurance is a smart
decision for many people. It helps pay for long-term nursing home care or
for health care assistance in your home when you get older. But far too
few people choose to buy it."
LTC Comment: I'm in Atlanta working on a
study of Medicaid and LTC financing in Georgia. Kelly McCutcheon,
president of the Georgia Public Policy Foundation (the study's sponsor)
brought this article to my attention. He says "Clark Howard is a very
well respected consumer advocate in Atlanta. He appears daily on the
number one radio and TV station in Atlanta."
#############################
8/13/2013, “Baby
boomers now the largest source of charity gifts,” by Heather Joslyn,
The Christian Science Monitor
Quote: "'Baby boomers are now the dominant
source of income for most nonprofits,' says Mark Rovner, a principal at
Sea Change Strategies and the study's primary researcher. Together with
the generation born before 1946, he says, they are responsible for the
vast majority of giving to charities. The study, which is based on
self-reported data, found that the two groups together are responsible for
nearly 70 percent of the estimated total annual giving to charities by
individuals."
LTC Comment: OK, so boomers and the "silent
generation" have the dough, but they're giving it away instead of buying
LTC insurance. Adding insult to injury, as long as they don't give away
their money "for the purpose of qualifying for Medicaid" it doesn't even
trigger a Medicaid transfer of assets penalty . . . not even if they give
it away within five years of applying for Medicaid.
#############################
8/13/2013, “Better staffing means better care,
new nursing home state rankings suggest [link],”
by Tim Mullaney, McKnight’s LTC News
Quote: "‘States whose nursing
homes staffed at higher levels ranked far better than those with fewer
staffing hours,’ said Brian Lee, executive director of FBC and
former Florida long-term care ombudsman. This finding supports what
many stakeholders have been saying for years, Lee noted."
LTC Comment: Better staffing
means better care? Well, yeah. But what allows better staffing?
Obviously, adequate revenue, which is not forthcoming from most residents
(who are on Medicaid) and is amply forthcoming from private payers (who
pay half again as much as Medicaid, but make up only part of the
difference.)
#############################
8/12/2013, “Poll:
Blacks, Latinos Worry Over Long-Term Care Crisis,” by Bruce Chernof,
MD, New American Media
Quote: "African Americans and Latinos were
especially worried. Well over half of blacks (57 percent) expressed
concern about being able to pay for needed care, compared to 45 percent of
Hispanics and 41 percent of whites. Also, half or more of African
Americans and Latinos said they worry about becoming a burden on their
families, in contrast to just over one in three whites. And almost half of
blacks surveyed were concerned that they may leave debts to family related
to long-term care, compared to just over one in four Hispanics and
whites. The prospect of ending up in a nursing home proved somewhat more
troubling for African Americans (57 percent) than for Hispanics (44
percent) and whites (40 percent)."
LTC Comment: Apparently "denial" is stronger
among whites than minorities. Interesting observation.
#############################
8/12/2013, “What's
Keeping You Up at Night: Affording Medical Bills,” by Gail Buckner,
FoxBusiness
Quote: "Thirty-seven medical conditions meet
the definition of ‘critical illness,’ according to the
Life Insurance Association .
They include ‘major’ cancers, heart attack, some (but not all) types of
stroke, severe burns, blindness, kidney failure and a host of other
illnesses you hope that you- or someone you love- never encounter. While
having health insurance certainly reduces the financial burden, a number
of expenses are either only partly covered, or not at all. According to
Sun Life, on a weighted average basis, a critical illness will set you
back $7,500. If you have a heart attack, or stroke your out-of-pocket cost
will double--even if you have health insurance."
LTC Comment: Good national exposure for CI.
#############################
8/12/2013, “Connecticut
rejects group LTCI rate change request,” by Allison Bell,
LifeHealthPRO
Quote: "The Connecticut Insurance Department
has rejected efforts by John Hancock Life Insurance Company to increase
rates on 1,800 long-term care insurance (LTCI) policies by an average of
about 58.1 percent."
LTC Comment: What if the real choice is
whether or not Hancock can pay claims when they come due? Not letting
them raise rates creates the same problem the government has caused with
Social Security and Medicare—unfunded liabilities which cannot be met and
will hurt millions.
#############################
8/12/2013, “Are
We Ready For A Massive Aging Population?,” by Celeste Headlee,
National Public Radio
Quote: "America's population is aging at a
rapid rate: 20 percent of the country will be 65 or older by the year
2050. Guest host Celeste Headlee talks with experts about how the aging
population will affect the American landscape."
LTC Comment: It's interesting that the age
wave is finally getting heavy national media attention . . . now that the
wave is about to crash and it may be too late to prepare. The same thing
happened when America's educational system was totally unprepared for the
tsunami of boomer babies reaching school age in the early 1950s. The
aging challenge is even worse as we had 65 years to get ready, but
didn't. Our country is famous for doing nothing until crises are upon us
and this one is no exception.
#############################
Updated,
Friday, August 16, 2013, 10:03 PM (Eastern)
Stone Mountain, Georgia—
#############################
LTC BULLET: DO THE RICH BENEFIT FROM MEDICAID?
LTC Comment: Biased reporting by AARP suggests the
answer to the title question is “no,” but solider peer-reviewed
scholarship says “yes.” Who’s right? After the ***news.***
*** PAUL FORTE, CEO of Long Term Care Partners, LLC,
which runs the federal long-term care insurance program, has submitted a
white paper to the LTC Commission titled “The American Long Term Care
Insurance Program (ALTCIP): A New Public-Private Model for Financing and
Delivering Long Term Care Services and Supports.” We’ll post it
temporarily so you can find it
here. Mr. Forte says: “This paper argues that a properly designed
voluntary insurance program could work. The ALTCIP combines simplified
benefits, streamlined administration, self-service portals, and
sustainable price. Hundreds of thousands—even millions—of Americans could
secure meaningful protection against potential future LTSS needs, thus
reducing the number of people who will rely on Medicaid to cover LTSS, a
major problem for federal and state government budgets alike.” Forte’s
thoughtful paper is well worth the attention of the LTC Commissioners. ***
*** MURRAY GORDON of Center-corporate-member MAGA
Ltd. reports: “Out of tens of thousands of professionals nationwide who
help consumers identify and purchase the best long term care insurance (LTCI)
plans for their specific needs, two LTCI professionals in Riverwoods, IL.
rank in the Top 10 nationally by the American Association for Long-Term
Care Insurance (AALTCI). Peter R. Florek, vice president of MAGA Ltd., a
family owned and operated insurance agency that focuses exclusively on
LTCI, ranked 3rd for traditional and 3rd for asset
based nationally on the AALTCI recently released 2013 sales achievement
listing. MAGA president, Brian I. Gordon, ranked 6th for
traditional nationally. The 12th annual awards program
recognizes leading LTCI professionals working to meet the needs of
consumers.” Congratulations, MAGA, Florek and Gordon! ***
#############################
LTC BULLET: DO THE RICH BENEFIT FROM MEDICAID?
LTC Comment: The obvious answer to that question
is: “Of course not. Medicaid is welfare. You have to be poor to
qualify. People must spend down their life’s savings for long-term care
before Medicaid will help.” That’s what everyone has been taught. It’s
what most of the popular media articles say. Even academics, who ought to
know better, repeat the litany in their publications. It’s even what I
believed many years ago.
Just one problem. It isn’t true. Here’s the puzzle
that got me started studying Medicaid and long-term care financing way
back in 1982. I was a federal Medicaid State Representative in the Health
Care Financing Administration’s Seattle Regional Office. My state was
Oregon. During a routine state assessment I came across a program called
Medicaid Estate Recoveries which purported to recover millions of dollars
from the estates of deceased Medicaid recipients. That really got me
thinking.
See the problem? If Medicaid requires
impoverishment, how could people qualify for the program, spend years in a
nursing home at enormous expense to the state and federal governments, and
when they died, a little state like Oregon recovered, back then $5
million, more like $20 million today, from their estates!?
It didn’t compute, so I set out to study Medicaid
long-term care financial eligibility. What I found three decades ago is
still true today despite statutory measures (that I successfully
advocated) to tighten eligibility rules. Income almost never interferes
with Medicaid LTC eligibility unless an applicant’s income is higher than
the cost of a private nursing home, $75,000 per year on average. Assets
held in exempt form are practically unlimited: up to $802,000 of home
equity goes uncounted, and with no limit at all, a business, a car, term
life insurance, personal belongings, home furnishings, IRAs if they pay
out a regular cash stream, and prepaid burial plans. Finally, if you
still have too much money to qualify, cadres of Medicaid planners are
eager to take thousands of dollars in fees to provide quick and easy
artificial impoverishment.
In other words, if middle class and affluent people
were NOT benefiting from Medicaid, that would be the surprise. The burden
of proof falls on those who claim Medicaid does not benefit the “rich.”
A couple weeks ago, the federal LTC Commission heard
testimony from several academics on this subject. Read it
here. Unfortunately, the Commission’s Vice Chairman, Mark Warshawsky,
who understands how Medicaid really works, was not present due to a death
in the family. So a key questioner was missing who could have brought
reason and understanding to the discussion.
According to an article by Don Redfoot of AARP
published yesterday, the argument about whether the rich benefit from
Medicaid was resolved in favor of the deniers. Think maybe AARP is a
little biased on the topic having advocated expanded government financing
of LTC for decades? Read Redfoot’s article
here and judge for yourself with the preceding and following content
for context. He says “Do the rich benefit from the welfare-based Medicaid
program? Not according to much of the testimony presented at a recent
hearing of the federal
Commission on Long-Term Care.”
On what is that conclusion based? Ellen O’Brien
testified that “There is little basis for the assertion that people with
substantial incomes or assets are becoming eligible for Medicaid by
improperly transferring their assets.” I’ve debunked such careless
conclusions for many years. See for example
here, and
here. The strategy of researchers with an ideological bias who seek
to obfuscate the issue is to focus only on asset transfers. Asset
transfers are significant, but they aren’t the major problem. The major
problem, as explained above, is that Medicaid’s basic LTC financial
eligibility rules are so generous that most people don’t have to transfer
assets to qualify. Simply buying exempt assets with otherwise countable
resources will suffice. People with much more money can consult Medicaid
planners who have many, more effective artificial impoverishment tools
than asset transfers. Such tools include Medicaid-friendly annuities,
reverse half-a-loaf strategies, life care contracts, systematically
purchasing large exempt assets, special trusts, etc. But the obfuscators
fixate on asset transfers as if showing the limited impact of a relatively
minor Medicaid planning technique proved their case.
The other argument against Medicaid benefits for the
affluent came from Richard Johnson of the Urban Institute who presented
data showing that most people who experience disabilities and need
Medicaid assistance not only had lower incomes and assets at the time they
needed assistance, but overwhelmingly also had relatively low incomes and
assets during their peak earning years. Well, hello, some people on
Medicaid are poor? What a surprise. The program is supposed to be a
safety net for people in need. That fact says exactly nothing about the
real tragedy that affluent people are consuming scarce public resources
that should go exclusively to help the poor.
Does this academic sleight of hand by ideological
prestidigitators get on your nerves? Then have a look at the more serious
presenters who testified the same day. Eric French, from the Federal
Reserve Bank of Chicago, showed that rich people really do benefit from
Medicaid . . . as much or more so than poor people. Jeffrey Brown of the
University of Illinois summarized his research findings that between
two-thirds and 90 percent of the market for private long-term care
insurance is crowded out by the availability of Medicaid LTC benefits.
Since poor people don’t buy LTCI, that means that well-heeled people are
also failing to buy because of easy access to Medicaid after the insurable
event occurs.
According to the Redfoot piece: “Chairman Bruce
Chernof said it best at the Commission hearing when he noted that he does
not know anyone who wants to be on Medicaid, as Medicaid is a poverty
program.” One hopes the Chairman is only naïve and not simply ignorant.
Medicaid planners lure their clients with the promise that they’ll get
great care on Medicaid because they can buy their way into the nicest
facilities. How? By retaining “key money” so they can pay privately for
awhile at rates half again as high as Medicaid’s. Financially starved LTC
providers roll out the red carpet for private payers. Once in, the lawyer
flips the switch, converts the client to Medicaid, and the facility is
stuck with another welfare patient paying less than the cost of the care
because state and federal laws prohibit expelling residents if their
source of payment changes.
Unfortunately, poor people don’t have “key money.”
They’re stuck with whatever Medicaid can afford which has been described
as “low cost care of uncertain quality.” That’s the net effect of
Medicaid’s covering too many people who could, should and would have
planned early and paid privately for long-term care if it were not for the
perverse incentives in public policy that academic obfuscators hide and
deny. Now they want the LTC Commission to double down on public financing
of long-term care which caused the problem in the first place.
Recent media stories indicate the LTC Commission has
already prepared the first two chapters of its report. It’s hard at work
on the final chapter which will include recommendations to Congress. We
can only hope against hope that objectivity, clarity and reason will
prevail. In the end, however, it likely won’t matter much anyway, because
bigger fiscal issues are about to capture lawmakers’ attention as the
fiscal cliff looms once again.
#############################
Updated,
Monday, August 12, 2013, 1:09 PM (Eastern)
Atlanta, Georgia—
#############################
FOURTEENTH ANNUAL
INTERCOMPANY LTCI CONFERENCE AND LTC NEWS AND COMMENT
LTC Comment: The Fourteenth Annual Intercompany LTCI
Conference will take place March 16 to March 19, 2014 at the Rosen Centre
Hotel in Orlando, Florida. Follow development of the agenda and watch for
registration details in November here:
WWW.ILTCIconf.org. If you want a booth in the exhibit hall, now’s the
time to check with Jim Glickman at 818-867-2223 or Jim.Glickman@LifeCareAssurance.com.
Here’s what the organizers have to say:
“Highlights of the 14th Annual Intercompany Long Term
Care Insurance Conference include • Keynote Speaker Chris Gardner, whose
life was the basis for the book and movie The Pursuit of Happyness • 48+
Educational Sessions, featuring a high level of education and access to
all the different components of the LTCI industry • Excellent mix of
content with 100+ exceptionally qualified speakers • Plenty of time to
network - meet and collaborate with more than 800 attendees and long-term
care industry experts • Pre and Post Conference Opportunities: CLTC
Master Class and SOA Professionalism Course • Connect with other
professionals and learn about the industry's challenges. The 14th Annual
Intercompany Long Term Care Insurance Conference also offers sponsorship
opportunities and a large exhibitor space where companies have the
opportunity to showcase and demonstrate their products and service
offerings to the diverse group of attendees.”
#############################
8/10/2013, “Long-term
Care Insurance Claim Payments to Quadruple,” by Jesse Slome, Kansas
City InfoZine
Quote: “The nation's long term care insurance
companies are expected to pay $15 Billion annually to policyholders a
decade from now and more than twice that amount in 2032 when today's 60
year olds reach their 80s.”
LTC Comment: Dramatic numbers for the future
as LTCI policies mature and claims increase. What happens after that
depends on public policy regarding Medicaid and interest rates.
#############################
8/8/2013, “More Bad News for Long-Term Care
Insurance: A Major Carrier Reassess the Business Amidst More Rate Hikes [link],”
by Howard Gleckman, Forbes
Quote: "Industry sources say [Genworth] could
withdraw from the market if it does not win regulatory approval for new
rate hikes on about 650,000 older, existing policies. A company spokesman
said the firm also needed states to approve changes that would allow the
company to sell policies that are more tightly underwritten and that
offer shorter benefit periods, lower daily benefits, and other changes."
LTC Comment: This author never misses a
chance to pounce with glee on any sign of difficulty in the LTCI market.
Yet he and his ilk are blind and silent regarding the government safety
net's massively bigger problems.
#############################
8/8/2013, “Is
critical-illness insurance worth the money?,” by Elizabeth O'Brien,
WSJ MarketWatch
Quote: "Now, more employers are offering a
product called critical-illness insurance that’s designed to fill some
coverage gaps for people with certain costly ailments. But is such
insurance the right financial solution for boomers?"
LTC Comment: Suitability is a good question
to ask about financial products for individuals and families, but as it
applies to broad groups like “boomers” the answer will always be “it
depends.”
#############################
8/8/2013, “LTCI
Watch: Bitterness, Opinion,” by Allison Bell, LifeHealthPRO
Quote: "One reason you could make an argument
that the federal government ought to consider trying to do something
for private LTCI, at least send a postcard, is that the government is
responsible for the low interest rates that are suffocating the private
LTCI carriers (and the pension plans, and the Medicare Part A
hospitalization plan trust fund.)"
LTC Comment: Hear, hear!
#############################
8/8/2013, “As
Resident Demographic Shifts, Assisted Living Adapts to Change,” by
Alyssa Gerace, ALFA Update
Quote: "As the assisted living resident
demographic changes toward higher age and acuity, senior living providers
are shifting care models with a clinical focus to accommodate emerging
needs. A majority of assisted living residents are female, 85 or older,
and need help with at least one activity of daily living (ADL), according
to the CDC’s 2010 National
Survey of Residential Care Facilities. Nearly 40% need help with three
or more ADLs."
LTC Comment: ALFs are accommodating higher
acuity residents at the same time they are serving more and more Medicaid
recipients. Higher care needs do not mix well with Medicaid’s lower
reimbursements, a bitter lesson nursing homes learned the hard way.
#############################
8/7/2013, “Lawsuit
Says CalPERS Misled Long-Term Care Policyholders,” California
Healthline
Quote: "On Tuesday, three law firms
filed a lawsuit against CalPERS on behalf of more than 125,000
long-term care policyholders alleging that the pension fund misled
beneficiaries by saying premium rates for such plans would be stable, the
Sacramento Bee reports (Kasler/Ortiz, Sacramento Bee,
8/7)."
LTC Comment: The sad saga of CalPERS’s foray
into private LTCI continues.
#############################
8/7/2013, “Study
Shows Reasons People Buy Long Term Care Insurance,” by Jesse Slome,
ExpertClick
Quote: "‘Planning for retirement or entering
retirement was the primary motivator for 52.1 percent of buyers,’ explains
Jesse Slome, executive director of the American Association for
Long Term Care Insurance. ‘More than a third (34.7%) were influenced
by an experience with a loved one who needed long-term care services.’"
LTC Comment: Both “primary motivators” for
buyers, i.e., retirement planning and LTC experience with a love
one, are on the increase for many years ahead.
#############################
8/6/2013, “Critical
illness cover turns 30 years old,” by Fiona Murphy, Mortgage
Solutions
Quote: "The insurance product initially
called 'Dread Disease' was developed as Dr. Barnard witnessed first-hand
the financial impact of illness on his patients. The original policy,
brought to market by Crusader Life Insurance, covered four conditions:
heart attack, cancer, stroke, and coronary artery surgery and was soon
adopted across the world."
LTC Comment: Dr. Marius Barnard, who invented
critical illness insurance, is a brother of Dr. Christiaan Barnard who
performed the first human-to-human heart transplant.
#############################
8/6/2013, “Live
to 120? No thanks, many say in new survey,” by Sharon Jayson, USA
Today
Quote: "More than two-thirds (69%) of a
nationally representative sample of 2,012 adults 18 and older say they'd
like to live to somewhere between 79 and 100; the median ideal age is 90.
That's about 11 years longer than the current U.S. average of 78.7 years
(81 for women, 76.2 for men)."
LTC Comment: Findings like these must reflect
the experience boomers are going through now with their frail, chronically
ill parents.
#############################
8/6/2013, “Leveen
speaks to Parkersburg Rotary Club about insurance,” by Brett Dunlap,
Parkersburg News and Sentinel
Quote: "The possibility of long-term care is
a topic many aging people are not prepared to discuss yet even though many
from the baby-boom generation are beginning to reach the age of 65, a
long-term care insurance expert told the Parkersburg Rotary Club Monday."
LTC Comment: This article is about Center
Regional Representative and clippings subscriber Honey Leveen of Houston,
Texas.
#############################
8/5/2013, “Testimony for the Long Term Care
Commission based on research by Mariacristina De Nardi: Federal
Reserve Bank of Chicago and University College London; Eric French:
Federal Reserve Bank of Chicago and University College London; and John
Bailey Jones: SUNY-Albany [link].”
Quote: “Rich people live longer. They do
receive Medicaid, especially when really old. When rich people receive
Medicaid transfers, they tend to be big.”
LTC Comment: After these researchers
published their peer-reviewed findings, I contacted them to explain how it
can happen that well-to-do people qualify easily for Medicaid. We carried
on an extended exchange of correspondence. Hopefully, Eric French's
testimony before the LTC Commission opened some eyes.
#############################
8/5/2013, “The Digital LTCi Sale: Have You
Gone Digital? Three Ways it Can Grow Your LTCi Sales Image [link],”
by Douglas Hamm, Life & Health Advisor
Quote: "If you think buying an ad in the
yellow pages, sending postcards and direct mailers, or other traditional
marketing methods sound a bit outdated, you're not alone. They may still
be popular in the industry and have some value, but buyers of all ages are
turning to the Internet to learn about financial products and make their
purchases, according to LIMRA's 2013 Insurance Barometer Study, which
found that the most important factors in actually purchasing insurance are
related to knowledge, and consumers are filling this education gap
online."
LTC Comment: Online LTCI sales are coming on
and some producers are having great success with tech savvy.
#############################
8/5/2013, “Emeritus will respond vigorously to
'sensationalized' Frontline documentary, company leaders say [link],”
by Tim Mullaney, McKnight’s LTC News
Quote: "Emeritus did provide extensive
information to the reporters, but 'they used almost none it,' Vice
President of Product Development and Communications Karen Lucas told
McKnight's. After being contacted in June 2012, Emeritus worked with
the Frontline reporters in a 'cooperative and supportive way,'
Lucas added. She said the report was 'sensationalized and lopsided' in
tone and singled out Emeritus due to its status as the largest assisted
living provider in the country."
LTC Comment: LTCI people can understand
Emeritus’s frustration having been the target themselves of many
“sensationalized and lopsided” media stories.
#############################
8/5/2013, “LTC
commission meets for marathon hearing, receives public comments,” by
Tim Mullaney, McKnight’s LTC News
Quote: "The Congressional Commission on
Long-Term Care convened for its third hearing last week, focusing on how
Medicare, Medicaid and long-term care insurance interact, and potential
ways to strengthen these payment mechanisms."
LTC Comment: We had some allies on these
panels including Gary Alexander, formerly Rhode Island Office of Health
and Human Services; Joseph Antos, American Enterprise Institute; Lane
Kent, formerly Univita; Eric French, Federal Reserve Bank of Chicago and
University; and Jeffrey Brown, University of Illinois. But the dominant
thrust of testimony came from advocates of more public financing of LTC.
#############################
8/4/2013, “Long
Term Care Insurance Association Director Appears on PBS,” PR.com
Quote: "The executive director of the
American Association for Long-Term Care Insurance appeared on PBS
television’s Nightly Business Report yesterday as part of a
three-part series exploring long term care."
LTC Comment: Nice work, Jesse.
##########################
Updated,
Friday, August 9, 2013, 3:30 PM (Eastern)
Stone Mountain, Georgia—
##########################
LTC BULLET: LTCI UPDATE
LTC Comment: Broker
World magazine has published its annual long-term care insurance
survey for 2013. Highlights after the ***news.***
*** DAMON’S BACK. Turns
out he was a jury “alternate” meaning he had to sit for all the
proceedings and testimony, but he’s excused during deliberation unless
needed to replace one of the regular jurors. Welcome back, Damon. ***
*** BACK ON SCHEDULE.
And now that Damon has returned, we’ll try to get back on our regular
publication schedule for LTC E-Alerts and LTC Bullets
starting with today’s Bullet. ***
*** IN THE MEANTIME,
Steve’s in Atlanta, near the famous Stone Mountain, living in the Silver
Bullet and starting the field work for our study of Medicaid and long-term
care financing in Georgia. We’re working on this project under the
auspices of the Georgia Public Policy Foundation (www.gppf.org.)
More to come as the project progresses. ***
##########################
LTC BULLET: LTCI UPDATE
LTC Comment: Every year
Broker World magazine publishes surveys of traditional and worksite
long-term care insurance. The surveys’ authors are well known LTCI
experts, Claude Thau, Dawn Helwig, and Allen Schmitz. We’ve culled a few
highlights from this year’s surveys below. Check out all the details in
the July and August issues of the magazine. Be sure to subscribe to
Broker World if you haven’t already.
It’s clear from the
following data that the private long-term care insurance industry
continues to face daunting challenges. On the other hand, it is equally
true that private LTCI is playing a bigger and bigger role in financing
extended care as its policies mature and claims increase. What the future
holds is anyone’s guess, but a likely scenario is that publicly financed
long-term care will face harder times, but pressure holding back LTCI will
retrench.
##########################
Excerpts from “2013
Long Term Care Insurance Survey,” Broker World, July, 2013
- “The 12 carriers that contributed
statistical data to this survey sold 190,353 policies for $466,167,460
of new annualized premium in 2012, plus 188 single premium policies with
$9.78 million of premium.”
- “We estimate that the entire
stand-alone LTCI industry, including insurers which discontinued sales,
sold 232,800 policies (0.7 percent more than in 2011) for $564.3 million
of annualized premium (5.0 percent more than in 2011).”
- “As of April 2013, 17 insurers sell
stand-alone LTCI in the United States (down from 20 a year ago), and
only one insurer (down from two a year ago) sells in the true group
guarantee issue market.”
- “Ten participants reported
individual claims for 2012 and two reported true group claims. Their
total claim payments rose to $3.035 billion in 2012, 18 percent higher
than their 2011 figures, whereas their total in-force premium rose only
5.8 percent, demonstrating the ‘tip of the iceberg’ nature of LTCI
claims. These insurers have paid more than $20 billion in LTCI claims
through 2012.”
- “The LTCI industry has made a much
bigger difference than the above numbers indicate because a lot of
claims are paid by insurers who no longer sell LTCI. According to the
NAIC’s report for 2011 (the most recent report available when this was
written), the industry incurred $6.8 billion in claims in 2011, boosting
the industry to $73.6 billion of claims incurred since 1991. Industry
incurred claims increased 9.0 percent in 2010 and 9.6 percent in 2011.”
##########################
Excerpts from 2013
Analysis of Worksite LTC Insurance, Broker World, August, 2013
- “In 2012, insurers reported sales
of 18,076 WS [worksite] policies for $35,556,483 of new annualized
premium.”
- “Of the seven carriers that
contributed WS sales for both 2011 and 2012, five increased sales in
2012 (by as much as 88 percent) and two experienced sales decreases (by
as much as 55 percent).”
- “Reported WS LTCI sales accounted
for 6.3 percent of the LTCI industry’s new annualized premium sold in
2012 and 7.8 percent of the number of policies sold.”
- “The nine insurers’ average WS
premium per policy was $1,967, down 3 percent from 2011. . . . The 2012
WS average size premium was 77 percent of the average size premium for
NWS [non-worksite] sales ($2,544) because the average age is younger and
there are some small core premiums.
- “Four insurers reported the average
number of policies per employer case, which ranged from 19 to 140.”
- “Issue age and maximum daily
benefit are considerably lower in the WS market, and 37.7 percent of the
WS policies (down from 48.6 percent in 2011) either did not have a
benefit increase feature or had a feature that would require significant
future premium increases.”
- “More than half (57 percent) of the
WS policies meet partnership qualifications, compared to 66 percent in
the NWS market. The executive carve-out WS market insures people who
generally don’t need or can’t benefit from the partnership programs. But
the rest of the WS market provides an avenue to reach people who are
more likely to benefit from partnership programs.”
##########################
Updated
Monday, August 5, 2013--
Seattle--
##########################
LTCI Sales Achievement Awards
Announced and LTC News and Comment
LTC Comment:
With Damon on jury duty for the past two weeks, we fell behind on our
weely LTC E-Alerts. Today we catch up with a longer-than-usual
compendium of LTC news and analysis since mid-July. Enjoy.
Jesse Slome at the
American Association for Long-Term Care Insurance
reports that "The complete listing of individual award recipients for
the 2013 Long Term Care Insurance Sales Achievement Awards can be accessed
via the Association’s website at
www.aaltci.org/2013awards."
The top-10 producers
based on individual long term care insurance placed premium during 2012
are:
1. Todd Stein, San
Francisco, CA
2. Mary Ann DeKing,
Darien, IL
3. Peter Florek,
Riverwoods, IL
4. Wayne Reynolds,
Concord, OH
5. Susie Caspar,
Dover, MA
6. Brian Gordon,
Northbrook, IL
7. Steve Elliott, San
Diego, CA
8 Richard Brief,
Warren, NJ
9. Paul LeWinter,
Miami, FL
10. Susan Sabella,
Issaquah, WA
Congratulations all!
##########################
8/2/2013,
“How
do we fix private LTCI?,” by Allison Bell, ProducersWeb.com
Quote:
"Should the Federal Commission on Long-Term Care say anything to Congress
about private
long-term care insurance (LTCI)? Some members of the commission were
asking that question recently at a hearing on efforts to strengthen public
and private support programs for people who need long-term care (LTC)
services."
LTC Comment:
Predictably, the LTC Commission is drifting toward recommending an
expansion of public LTC financing, exactly the strategy that caused the
mess we’re in.
##########################
7/31/2013,
“Genworth
conducting 'deep review' of LTCI business,” by Allison Bell,
LifeHealthPRO
Quote:
"Genworth Financial Inc. needs to improve the way it manages its long-term
care insurance (LTCI) business, according to Thomas McInerney, the
company's president. ‘We're conducting an intense, very broad and deep
review of all aspects of our [long-term care] insurance business,’
McInerney said during the company's second-quarter earnings call."
LTC Comment:
All LTCI carriers are doing the same. One wishes public LTC financing
programs would scrutinize their vulnerabilities and sustainability in the
same way.
##########################
8/1/2013,
“Planning
for long-term care can have a big payout,” by Bertha Coombs, CNBC
Quote:
"Though the price was steep-$140 a month-she didn't hesitate, and paid
$20,000 in premiums over 12 years. Now 85, Douglis has been collecting the
benefit since 2010, when she moved into an assisted living facility. ‘I
think more people should have it because they don't appreciate what's
going to happen to them.’"
LTC Comment:
Welcome positive coverage.
##########################
7/30/2013,
“How
to Prepare to Financially Support Aging Parents,” by Philip Moeller,
U.S.News & World Report
Quote:
"In taking the time to provide family care, MetLife said, working
Americans lose an estimated $3 trillion in lifetime wages, with average
losses of $324,044 for women and $283,716 for men. With these costs and
other money issues in mind, MMI researchers put together 10 things to
consider about the financial consequences of caregiving."
LTC Comment:
Buying LTCI for parents should be at the top of the list, but it isn’t on
the list at all, whereas “Learn about Medicare and Medicaid” is. Go
figure.
##########################
7/31/2013,
“Book
Review: Medicaid Planning: From A to Z,” ElderLawAnswers
Quote:
"Among other topics, the manual covers Medicaid’s medical, income and
asset qualification rules; the uses of trusts; planning ideas for the
home; post-DRA half-a-loaf strategies like gift and return gift and
annuity; converting IRAs to an annuity; and the taxation of trusts,
estates and gifts. The 2013 edition also includes a 40-page section
exploring Medicaid planning and attorney professional ethics, with case
studies and ethics resources."
LTC Comment:
"Medicaid planning and attorney professional ethics" is an oxymoron.
##########################
7/30/2013,
“John Hancock National Study Finds Long-Term Care Costs Continue to Climb
Across All Provider Options [link],”
WSJ Market Watch
Quote:
"To understand how long-term care costs are trending over time, John
Hancock calculated a five-year average based on a subset of common
providers from our 2008 and 2011 Cost of Care Surveys and our 2011 and
2013 Cost of Care Surveys. These five-year average annual increases are
summarized below:
-- The 2013 average
cost of a private nursing home room ($258 a day/ $94,170 annually) has
risen an average 3.6 percent per year -- The 2013 average cost of a
semi-private nursing home room ($227 a day/ $82,855 annually) has risen an
average 3.6 percent per year
-- The 2013 average
cost for a month in an assisted living facility ($3,427 a month/ $41,124
annually) has risen an average 2.0 percent per year
-- The 2013 average
cost of adult day care ($71 a day/$18,460 annually) has risen an average
of 1.6 percent per year
-- The 2013 average
cost for a home health aide ($19 hourly/$29,640 annually) has risen an
average 1.3 percent per year"
LTC Comment:
Center for Long-Term Care Reform members can always find the latest “cost
of care” surveys from all the companies that publish them as well as
archives of past years’ versions in The Zone
here.
##########################
7/30/2013,
“Frontline, ProPublica slam assisted living sector in documentary airing
tonight [link],”
by Tim Mullaney, McKnight’s LTC News
Quote:
"Loose regulations are endangering the growing number of assisted living
residents in the United States, according to a new Frontline documentary
that focuses on Emeritus Senior Living facilities. The program airs
Tuesday at 10 P.M. EST, and is accompanied by a series of reports
published this week on ProPublica."
LTC Comment:
We didn't start hearing about quality problems in assisted living until
that industry started taking Medicaid residents. That's what ruined
nursing homes which became dependent on Medicaid funding. Then the
government ratcheted down reimbursement rates over time to hopelessly
inadequate levels. Assisted living is following the same primrose path.
Cost shifting from private payers will drive up private rates but won't
make up the difference.
##########################
7/29/2013,
“Optimistic
Outlook For Long Term Care Insurance Companies Shared,” by Jesse Slome,
ExpertClick
Quote:
"A rise of one percent in investment return on fixed interest instruments
could generate an additional $100 million or more in annual revenue for
insurance companies with blocks of long term care insurance."
LTC Comment:
Likewise increasing interest rates will wipe out government programs that
give Americans a false sense of security about retirement income and
health. Look for the coming fiscal crisis to unleash the market for
private LTCI.
##########################
7/29/2013,
“More Doctors Steer Clear of Medicare, Some Doctors Opt Out of Program,
Frustrated With Payment Rates and Mounting Rules [link],”
by Melinda Beck, Wall Street Journal
Quote:
"The number of doctors who opted out of Medicare last year, while a small
proportion of the nation's health professionals, nearly tripled from three
years earlier, according to the Centers for Medicare and Medicaid
Services, the government agency that administers the program. Other
doctors are limiting the number of Medicare patients they treat even if
they don't formally opt out of the system."
LTC Comment:
The same trend plagues Medicaid and looks to increase as funding problems
for the two government behemoths mount.
##########################
7/26/2013,
“Regulators
eye effects of LTCI rate increase,” by Allison Bell, LifeHealthPRO
Quote:
"State regulators are talking about just what kind of pain long-term care
insurance (LTCI) companies should feel when they increase premiums on
in-force policies. The Senior Issues Task Force at the
National Association of Insurance Commissioners (NAIC) has been
looking at the allocation of rate increase pain in a draft LTCI rate
increase model bulletin."
LTC Comment:
Right, just what we need, more pain for private LTCI insurers while the
public LTC programs skate unchallenged toward insolvency.
##########################
7/25/2013,
“Government
striving to get the word out on long-term care,” by Bonnie Kraham,
Times Herald-Record
Quote:
"The best protection from long-term care costs is Plan A, long-term care
insurance, which is private insurance which pays for home care, assisted
living or nursing home costs without reliance on Medicaid rules or the
need to 'spend down' assets to qualify for Medicaid. The U.S. Department
of Health and Human Services is similarly hoping to remind families of the
value of long-term care insurance.
"If you don't have
adequate long-term care insurance, Plan B is the Medicaid Asset Protection
Trust (MAPT). After assets are in the MAPT for five years, they will not
go to the nursing home and Medicaid will pay for nursing home costs. Even
if you can only afford partial protection through long-term care
insurance, you may also, in a hybrid approach, create the MAPT. This way
you have the less expensive cost of home care provided for and, if you
need the more expensive nursing home care, you would qualify for Medicaid
benefits. This approach can reduce long-term care insurance premiums by up
to one-half."
LTC Comment:
This is typical of modern-day Medicaid planning. Pay lip service to LTC
insurance. You can't really afford it can you? Wink, wink. Then pivot
to shifting the risk and cost to public welfare.
##########################
7/24/2013,
“Long-Term
Care Delivery Hobbled By 'Outrageous' Deficiencies,” by Cyril Tuohy,
InsuranceNewsNet.com
Quote:
"Initial reports about the state of long-term care delivery in the U.S.
paint a picture of a fractured, overlapping hodgepodge of services
unevenly administered by states through federal insurance programs. In
addition, much of the long-term care that gets to the elderly is
unplanned, delivered with little structure and left to health aides
laboring in the trenches for minimum wage, according to long-term care
experts."
LTC Comment:
Government programs pay for most expensive long-term care and that quote
describes exactly what they’re buying. Even private payers, who pay half
again as much as Medicaid expends for care, can’t always avoid the
deficiencies because the government counts on cost shifting from them to
make up for shortfalls in public financing. It’s a house of cards about
to fall.
##########################
7/24/2013,
“Move
Over Nursing Homes - There's Something Different,” by Ina Jaffe,
National Public Radio
Quote:
"One thing just about everyone dreads as they age is the possibility of
ending up in a nursing home. We all think we know what that's like:
sharing a room with strangers, sitting slumped in a wheelchair all day,
rigid schedules, bad smells. And for more than 1 million Americans, this
is home. But there's an effort to change all that, and it's known as The
Green House Project."
LTC Comment:
OK, great, but why did nursing homes become the dominant venue for LTC if
they’re so bad? Because Medicaid made them virtually free in 1965
crowding out a private market for home and community-based care. America
would have had “Green Houses” and many other better LTC solutions decades
ago if government hadn’t made such alternatives economically infeasible.
##########################
7/22/2013,
“Boomer
Sex With Dementia Foreshadowed in Nursing Home,” by Bryan Gruley,
Bloomberg
Quote:
"At 8:30 p.m. on Christmas Day 2009, nurse Tiffany Gourley was called to a
room at the
Windmill Manor nursing home in Coralville,
Iowa. She found a 78-year-old male resident who
had just had intercourse with an 87-year-old woman. The man, a former
college professor, was divorced. The woman, a retired secretary, was
married. Both had dementia. What followed illustrates one of the most
complex and unexamined issues facing elderly care facilities as the Baby
Boom generation enters old age: How to determine if residents with
dementia have the mental capacity to consent to sex."
LTC Comment:
Whoever doubted that boomers, who ushered in “drugs, sex and rock ‘n’
roll,” would shake up LTC also?
##########################
7/19/2013,
“Are
You Overpaying for Your Parents' Care?,” by Kelly Greene, Wall
Street Journal
Quote:
"A child's work is never done—especially when it comes to caring for an
elderly parent. Time isn't the only cost. Families often spend a small
fortune even before their loved ones check into a long-term-care
facility."
LTC Comment:
A needful wake-up call.
##########################
7/19/2013,
“Alzheimer's panel gets LTCI update: Low lapse rates, low interest rates [link],”
by Allison Bell, LifeHealthPRO
Quote:
"Marc Cohen met with a combination of warm interest, confusion and
skepticism today when he gave a federal Alzheimer's panel a talk on the
state of private long-term care insurance (LTCI).
"The panel, the
Advisory Council on Alzheimer's Research, Care and Services is
supposed to help the U.S. Department of Health and Human Services (HHS)
coordinate a war against Alzheimer's disease and other forms of dementia."
"'Sales today are
below levels from the 1990s,' Cohen said.
"Dozens of insurers
have gotten out of the market, partly because they had a hard time making
a profit, but partly because they decided that they could earn much higher
returns from using the large amounts of capital needed to support an LTCI
operation to write other products, Cohen said.
"But LTCI carriers
have paid about $35 billion in claims over the years, they've paid about
95 percent of the claims they've received, and the policies they've sold
are covering about 70 percent of the cost of nursing home care and about
90 percent of the cost of home care for the insureds who've filed claims,
Cohen said."
LTC Comment:
Capital migrates to its highest and best use. Public policy has
substituted Medicaid and low interest rates for the free market in which a
private LTCI market would flourish.
##########################
7/19/2013,
“How
Medicaid life settlements can help senior clients,” by Robin S.
Weinberger and Peter N. Katz, LifeHealthPRO
Quote:
"There has been a great deal of news coverage about Medicaid life
settlements since
our article on that topic two months ago. During that time, Texas
became the first state to
enact such a law, and three more states — California, New Jersey and
New York — have taken up consideration of Medicaid life settlements. Based
on the inquiries and comments we have received regarding this news, there
appears to be a need to review the practical implications of these laws."
LTC Comment:
This trend bears watching as life settlements are not a substitute for
real LTCI protection.
##########################
7/18/2013,
“Researcher:
Set up ACOs that include long-term care,” by Allison Bell,
LifeHealthPRO
Quote:
"Policymakers could set up a volunteer ‘Caregiver Corps’ that would show
people how to provide care for their loved ones at home. Policymakers also
could try encouraging communities to set up accountable care organizations
(ACOs) that would coordinate long-term care (LTC) services and social
support services as well as medical care. Joanne Lynn, director of the
Altarum Center for Elder Care and Advanced Illness, gave those ideas for
improving LTC service delivery Wednesday at the second meeting of the
Federal Commission on Long-Term Care."
LTC Comment:
A "Peace Corps" for LTC? Add LTC to ObamaCare? Two meetings into
their two remaining months and this is what the LTC Commission is
hearing? Not hopeful.
##########################
7/18/2013,
“Long-Term
Care Commission seeking provider input,” by Ashley Carman,
McKnight’s LTC News
Quote:
"The 15-member committee met to hear recommendations regarding the topic
'Populations in Need of LTSS and Service Delivery Issues' and worker
issues. Experts from various medical facilities, universities and research
centers spoke."
LTC Comment:
With its report due in less than two months, the LTC Commission had its
second public meeting and posted a website:
http://www.ltccommission.senate.gov/.
##########################
7/17/2013,
“Costs
of Long-Term Care Rise While Payment Options Narrow,” by Howard
Gleckman, Forbes
Quote:
"It is a cruel paradox: As the
cost of long-term care rises and the number of people needing it
grows, traditional options for paying for these supports and services are
narrowing."
LTC Comment:
It boggles the mind how one writer can get so much wrong so often. Is LTC
insurance struggling? Yes. But that's because of easy Medicaid
eligibility after the insurable event occurs and interest rates forced to
zero--both are government policies and government's responsibility. Is
home equity rarely used to pay for LTC? Yes. But that's because Medicaid
exempts up to $802,000 worth of it. Is Medicaid bankrupt? Yes, because
it DOES NOT require impoverishment and IS the dominant payer of expensive
LTC not just for the poor but for the middle class and above also. As
long as analysts misdiagnose the problem, the hope for a solution will
elude them.
##########################
7/17/2013,
“Selling
LTCI online, part 1, Sales ideas,” by Margie Barrie, LifeHealthPRO
Quote:
"Selling online really works. I'm now doing it and loving it. Agreeing
with me is Katie O'Rourke, the managing partner of California Long Term
Care Insurance Services, and she agreed to provide some really helpful
tips to agents just starting to sell online."
LTC Comment:
Online sales are the future as the social safety nets fray and people
realize they need LTCI.
##########################
7/17/2013,
“Rate of dementia has declined
dramatically, but not in nursing homes, study finds [link],”
by Tim Mullaney, McKnight’s LTC News
Quote:
"Fewer people overall are going into
care settings, but the prevalence of dementia within these facilities
increased from 56% to 70% during the study period, the researchers found.
Some Alzheimer's researchers in the United States have embraced these
results, saying they are likely applicable to the U.S. population and show
recent predictions about dementia rates may be too dire,
The New York Times reported. However, other researchers
expressed reservations, citing methodological concerns with the British
study."
LTC Comment:
Interesting follow up to the
following story from the New York Times' front page.
##########################
7/16/2013,
“Dementia
Rate Is Found to Drop Sharply, as Forecast,” by Gina Kolata, New
York times
Quote:
"A new study has found that dementia rates among people 65 and older in
England and Wales have plummeted by 25 percent over the past two decades,
to 6.2 percent from 8.3 percent, a trend that researchers say is probably
occurring across developed countries and that could have major social and
economic implications for families and societies."
LTC Comment:
Great news if true, but dubious.
##########################
7/16/2013,
“A crisis for the very old: They're outliving their assets. Nearly half of
all Americans will die with practically no money at all. It's a problem
that policymakers and financial services firms must address [link],”
by Michael Hiltzik, Los Angeles Times
Quote:
"As if you haven't been scared enough by the projections that most
Americans haven't saved enough to maintain their lifestyles as they enter
retirement, here's something even more terrifying: Nearly half of all
Americans will outlive their assets, dying with practically no money at
all. Even more worrisome, that's true even among households that met the
traditional standards for secure retirement income. Economic factors and
changes in employer pensions and in economic reality have made it much
harder to stretch income and assets so they last, especially as people
live longer."
LTC Comment:
If you wanted another reason to doubt the social safety nets and take
personal responsibility, this is it.
##########################
7/16/2013,
“Where
Are Baby Boomers Going to Live?,” by Tom Sightings, US News and
World Report
Quote:
"There are many recommendations for the best places for baby boomers to
retire, including the healthiest places,
sunniest places, best places overseas, the most affordable places and
the
best places that you probably can't afford. But people are funny.
Sometimes they just don't do what the pundits tell them to do. So where
are baby boomers actually starting to retire? Here’s what the facts say
about where boomers are headed over the next 10 or 15 years."
LTC Comment:
Turns out boomers are staying put or moving to be near grandchildren or
relocating to less congested, more affordable areas or moving into senior
living facilities.
##########################
7/16/2013,
“Nursing home residents are allowed to designate organizations as
authorized representatives for Medicaid enrollment, final rule affirms [link],”
by Tim Mullaney, McKnight’s LTC News
Quote:
"After posting a proposed version of the regulation, CMS received 'a
number of comments' addressing who may serve as an authorized
representative. Some commenters called for organizations to be disallowed
altogether or for states to decide whether organizations can serve as
representatives, in the interest of better accountability and
transparency."
LTC Comment:
Lawyers and their para-legals frequently fill out Medicaid LTC
applications for their affluent clients. Now the door is open for
"organizations" to file on behalf of individuals. Which organizations and
what accountability?
##########################
7/15/2013,
“Prudential Group Insurance Offers Critical Illness Coverage Nationwide [link],”
Daily Finance
Quote:
"Prudential Group Insurance, a business of Prudential Financial, Inc. (NYS:
PRU) , today announced the addition of Critical Illness insurance to its
suite of products available through the workplace."
LTC Comment:
CI grows.
##########################
7/1/2013,
“Many
workers fear critical illness more than death,” by Warren S. Hersch,
LifeHealthPRO
Quote:
"When asked to identify their greatest concern in case of a critical
illness, 47 percent of survey participants named 'finances.' That's a
significantly higher percentage than the third (29 percent) who flagged
'dying' or the fifth (22 percent) who cited 'the emotional burden.' The
report adds that middle-aged workers ages 40 to 50 are twice as likely to
be more concerned with finances than with dying."
LTC Comment:
That could be why CI grows.
##########################
7/12/2013,
“Rules
for Reverse Mortgages May Become More Restrictive,” by Tara Siegel
Bernard, New York Times
Quote: "Because of the turmoil in the housing
market and because many borrowers in the program didn't have enough money
to pay their property taxes and homeowners insurance over the long term,
the F.H.A. wants to require borrowers to undergo a financial assessment.
It may also factor in borrowers' credit scores, something it has not done
in the past."
LTC Comment:
Home equity will fund LTC someday after Medicaid can no longer exempt up
to $802,000 while paying for most expensive extended care. That is, it
will if there is any home equity left when the time comes.
#############################
Updated,
Friday, August 2, 2013, 10:55 AM (Pacific)
Seattle—
#############################
LTC BULLET: THE INDEX OF LONG-TERM CARE VULNERABILIT
LTC Comment: Is America’s LTC services and financing
system sustainable? We propose a way to measure LTC vulnerability state
by state, after the ***news.***
*** MISS US? For the past couple weeks, you’ve heard
a little less from the Center for LTC Reform. We’ve skipped an LTC
E-Alert or two and this is our first LTC Bullet in two weeks.
That’s because Center VP Damon, who edits, formats, posts and sends all
our publications, is doing his civic duty, serving on a jury for a trial
expected to last three weeks. Center premium members ($250 per year and
above) continue to receive our “clippings” service uninterrupted because
those links to key articles and reports come directly from Steve’s laptop
wherever he is. We’ll endeavor to give you the best possible service
while Damon’s jury duty proceeds. In the meantime, we very much
appreciate your patience and support. ***
*** ON THE ROAD AGAIN., Have you watched our
datelines from recent publications? What do Alpine, Texas, New York City,
Cream Ridge, New Jersey, and Richmond, Virginia have in common? They’re
locations from which Steve Moses has reported since May. Steve’s
traveling in the Silver Bullet of Long-Term Care again. “Living on site
enables me to spend more time at each of our three study states,” he
says. “That means I can interview more people and get more documentary
evidence to support our analysis and recommendations.” Stay tuned for
Steve’s LTC Embed reports from the long-term care policy front in Georgia,
our next study state. ***
*** 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 chaff 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 INDEX OF LONG-TERM CARE
VULNERABILITY
LTC Comment: Your Center for Long-Term Care Reform
set out in May cross country toward the East (in the Silver Bullet) to
conduct three state-level studies of Medicaid and long-term care
financing. Target states are Virginia, New Jersey and Georgia. We’ve
completed our field work in the first two and I’m headed to Atlanta next.
But there’s a problem.
The Affordable Care Act, aka ObamaCare, has a
provision in it called “maintenance of effort” (MOE), which prevents state
Medicaid programs from tightening their LTC financial eligibility rules.
Targeting Medicaid to those most in need while diverting the middle class
and affluent toward private financing alternatives should be states’ most
important LTC priority. Unfortunately, the MOE rule prevents states from
implementing the critically needed corrective actions we’d likely
recommend.
Furthermore, most state Medicaid programs aren’t
cutting back on growing Medicaid expenditures. They’re doubling down.
Initiatives to make Medicaid more attractive by “rebalancing” from nursing
homes to home care are widespread. Efforts to shift recipients—even the
high-risk, high-cost Medicaid/Medicare “dual eligibles”—into care managed
by giant corporations are nearly universal. At the same time, most state
budgets remain over-stressed, pinched most of all by growing Medicaid
expenditures.
In the meantime, a huge age wave is rushing toward
state Medicaid programs which are unprepared and failing to plan
adequately for it. When the flood of frail and infirm boomers starts to
hit, what will happen? Which states are more prepared? Which less? What
are the key factors to consider? Can the current public programs such as
Medicaid and Medicare survive as the dominant LTC payers? What is the
potential for private financing alternatives like LTC insurance and home
equity conversion? These are some of the questions we’ve set out to ask
and answer in a new “Index of LTC Vulnerability.”
We’re still in the roughest draft phase of developing
the index. Your thoughts and suggestions are welcome. Here’s an outline
of the top line factors we’re beginning to consider for evaluating a
state’s ability to sustain its LTC services and financing system. Think
of it this way. How would your state score if it were ranked on each of
the following factors?
The Index of Long-Term Care Vulnerability
- Economy: The current LTC system is
predominantly publicly financed, so a state’s economy must generate
sufficient revenue to support LTC financing while maintaining other
critical state services.
a. Measures of
state economic potential:
i.
Rich States, Poor States ranks states on economic competitiveness.
ii.
Cato’s
Fiscal Policy Report Card ranks state governors on fiscal policy
b.
State budget shortfalls measure current fiscal duress
- Aging Demographics: AARP’s “Across
the States, Ninth Edition, 2012” gives state-by-state demographic
and health data plus predictions
a. Growth in 85+
population
b.
People age 65+ with
disabilities, 2010
c. Alzheimer’s onslaught
- Health Condition: AARP’s “Across
the States, Ninth Edition, 2012”
a. Residents with
dementia, 2010
b. Nursing facility
residents with low care needs, 2008
c. Quality &
Oversight of Nursing Facilities
- Medicaid: Kaiser Family
Foundation’s “StateHealthFacts”
website provides extensive data on state Medicaid programs including . .
.
a. Expenditure
trends
i.
Overall
ii.
Percent of state budget for Medicaid:
Distribution of State General Fund Expenditures (in millions)
iii.
Medicaid LTC spending for older people and adults with physical
disabilities (millions)
iv.
Medicaid nursing facility
spending (millions)
v. Medicaid HCBS (home and
community-based services) spending for older people and adults with
physical disabilities (millions)
vi.
Medicaid HCBS as a % of LTC spending, for older people and adults with
physical disabilities
b. FMAP (Federal
Medical Assistance Percentage): the percent of Medicaid expenditures
paid by the federal government
c.
Medicaid Expansion under ACA? States that expand Medicaid under
ObamaCare are vulnerable to higher future costs.
d.
Medicaid LTC Eligibility and Medicaid Planning: how generous are the
states Medicaid LTC financial eligibility rules?
See our state-level LTC studies.
e. Low reimbursement
vulnerability: How much below the cost of care are the state’s Medicaid
reimbursement rates? See
Eljay Medicaid Shortfalls Report.
f.
Dual eligibles vulnerability: See Briefing Paper #5:
Dual Eligibles and Long-Term Care: How to Save Medicaid LTC $30 Billion
Per Year and Pay for the “Doc Fix" -- (PDF
for print)
g.
Rebalancing vulnerability: the more states rebalance from nursing home
care (which most people will avoid) to home care (which most people want),
the more vulnerable they are to increased utilization and costs. See
Briefing Paper #4:
Rebalancing Long-Term Care -- (PDF
for print)
i. Family caregivers;
economic value of family caregivers likely to decline as Medicaid
HCBS expands
h. Managed care vulnerability: advocates
warn of impact on . . .
i. Access
ii. Quality
iii. Independence
- Private Pay Level
a. Spend down
lack: little spend down in lenient LTC financial eligibility programs
b. Estate recovery
lack: few states enforce estate recovery strongly: See
Maximizing Non-Tax Revenue from Estate Recoveries
c. Loss of home equity for LTC
financing: Medicaid exempts up to $802,000
d. Long-term care
insurance level
i. LTCI
market penetration?
ii. LTC
partnership?
iii.
LTCI tax incentives?
- Federal Government
a. Dependency on “provider taxes” used to leverage up FMAP
b. Social Security role in sustaining
Medicaid
c. Medicare role in sustaining Medicaid
For now, “The Index of Long-Term Care Vulnerability”
is just an outline. We plan to flesh it out with measureable ranking
factors and apply the index to each of the states in our three current
studies. After that a new goal will be to apply the index to all states
as a means to warn those with the lowest scores of their risk and to
recommend ways for them to sustain their long-term care social safety nets
in the future.
#############################
Updated,
Friday, July 19, 2013, 12:45 PM (Eastern)
New York, New York—
#############################
LTC BULLET: MEDICAID SPEND DOWN THAT ISN’T AND WHY
IT MATTERS
LTC Comment: Claiming “transitions” to Medicaid are
evidence of catastrophic LTC asset “spend down” misrepresents the truth
and should be publicly recanted. Who, what, when, where and why, after
the ***news.***
*** WORK ‘TIL YOU DROP to avoid dementia? "'For each
additional year of work, the risk of getting dementia is reduced by 3.2
percent,' said Carole Dufouil, a scientist at INSERM, the French
government's health research agency. . . . To rule out the possibility
that mental decline may have led people to retire earlier, researchers did
analyses that eliminated people who developed dementia within 5 years of
retirement, and within 10 years of it." Read the AP story
here. ***
*** Due to Damon getting selected for jury duty, your
Center for Long-Term Care Reform will take a brief hiatus from publishing
next week. But don’t worry: there are thousands of publications for you
to read online at
www.centerltc.com. We’ll be back soon. ***
*** FORBES COLUMNIST WRONG AGAIN. In “Costs
of Long-Term Care Rise While Payment Options Narrow,” Howard Gleckman
states “Traditional private long-term care insurance is
largely disappearing from the marketplace. Reverse mortgages, already
something of a niche product, are likely to become harder to
get–especially for those facing severe economic hardship. Medicaid, the
insurer of last resort for those who impoverish themselves, faces growing
financial pressures. And personal savings are falling behind the costs of
retirement.”
LTC Comment: It boggles the mind how
one writer can get so much so wrong so often. Is LTC
insurance struggling? Yes. But that's because of easy Medicaid
eligibility after the insurable event occurs and near-zero interest
rates--both are government policies and government's responsibility. Is
home equity rarely used to pay for LTC? Yes. But that's because Medicaid
exempts up to $802,000 worth of it. Is Medicaid bankrupt? Yes, because
it DOES NOT require impoverishment and is the dominant payer of expensive
LTC not just for the poor but for the middle class and above also. As
long as analysts misdiagnose the problem, any hope for a solution will
elude them. ***
*** DOUBT THE ARGUMENT in today’s LTC Bullet?
Here’s where you’ll find the evidence adduced and the argument articulated
in more detail: “How
to Fix Long-Term Care.” ***
#############################
LTC BULLET: MEDICAID SPEND DOWN THAT ISN’T AND WHY
IT MATTERS
LTC Comment: Does Medicaid long-term care spend down
catastrophically impoverish wide swaths of the American public? Do we
need government to swoop in and “solve” the problem as it tried to do for
retirement income (Social Security—unfunded by $21 trillion) and acute
elder health care (Medicare—unfunded by $43 trillion)? That’s what many
analysts, public officials, legislators and reporters believe.
Their arguments and advocacy hang on the assumption
that Medicaid really does require impoverishment. But anyone who
understands Medicaid LTC eligibility knows that Medicaid spend down is a
myth. Income rarely obstructs eligibility because Medicaid deducts
private LTC and other medical costs from income before applying its income
test. Assets are not a problem for most middle class people because
exempt resources are virtually unlimited and countable assets are easily
converted to exempt status. Affluent people with income and assets above
these generous levels hire Medicaid planners to make their wealth
disappear prematurely into the hands of premature heirs.
There is no empirical evidence of widespread Medicaid
LTC spend down. Every time the usual suspects, i.e., researchers
pushing for more government financing of LTC, try to prove Medicaid spend
down devastates huge numbers of people, they come up short. They tried in
the late 1980s and early 1990s and proved the opposite. They found that
only 15% to 20% of people in Medicaid long-term care started as private
payers and converted to Medicaid. The rest were eligible for Medicaid
from the start. Furthermore, these researchers didn’t bother to ask
whether the few people who converted to Medicaid did so by actually
spending money on their health or long-term care. Maybe they used
countable assets to purchase exempt resources or hired a Medicaid
planner. Who knows? They didn’t ask. As low as the percentage of people
who transitioned to Medicaid was, the researchers assumed without evidence
that they spent down to qualify.
Today, we see another example of this intellectual
sleight of hand regarding Medicaid spend down. Josh Wiener of RTI
International and his co-authors published articles recently that purport
to prove Medicaid spend down is devastating large numbers of people. Read
those articles
here and
here. They’re titled “Medicaid Spend Down: New Estimates and
Implications for Long-Term Services and Supports Financing Reform” and
“Medicaid Spend Down: Implications for Long-Term Services and Supports and
Aging Policy,” respectively. Do you get the idea from those titles, not
to mention the articles’ content, that they have something to do with
spending down money on long-term care before qualifying for Medicaid?
That would be a reasonable assumption, but it would
be wrong. What these papers call “spend down” is nothing more than
“transition” from non-Medicaid status to Medicaid eligibility. Neither
the articles nor the research they report contain any measurement whatever
of money actually spent for health care, long-term care or anything else.
I pointed this fact out when I served on an American Enterprise Institute
panel recently with Dr. Wiener. (Watch C-Span coverage
here.) Evidently, he took notice. He titled a recent presentation on
the same research “What the Long-Term Care Commission Needs to Know about
Transitions to Medicaid.” Note the change: “transitions,” not “spend
down.” Check out slides from that recent presentation to the DC-based LTC
Discussion Group
here. You’ll find both terms (spend down and transitions) used
interchangeably, so we haven’t carried the day completely yet, but the
change from misrepresenting the facts to presenting them accurately is at
least underway.
Why does this matter? Consider some of the claims
made in that presentation to the LTC Discussion Group last week. (NB: I
attended that meeting, but I cannot report on what was said because the
Group’s policy embargoes reportage in order to encourage presenters to
speak candidly. I do have permission, however, to reference the slides
which are in the public domain
here.) For example:
Slide #3: “High cost of long-term services
and supports results in routine catastrophic out-of-pocket costs” and
“People who have been independent all of their lives are impoverished and
must depend on welfare”
LTC Comment: Oh? Where’s the evidence?
There is none. Wiener cites the high cost of nursing home and home care,
but only assumes people are spending their own money for such services.
The facts are that private-pay nursing home care is almost extinct;
Medicare pays for most home care; and other assisted living and home care
expenses are paid mostly from income, not assets. See “LTC Bullet: So
What if the Government Pays for Most Long-Term Care, 2011 Data Update [link].”
Slide #4: “Study goals . . . Track
transitions to Medicaid -- Not Medicaid spend down in technical sense,
which relates to depletion of assets.”
LTC Comment: Aha! There’s the confession
finally. Despite insisting that catastrophic out-of-pocket costs
routinely impoverish people who were independent all their lives making
them dependent on welfare, this research has nothing to say about
“depletion of assets.” So why imply and insist that it does? The only
reason is to advance the ideologically biased objective to expand public
financing of LTC and curtail private financing alternatives.
Slide #15: “Policy Implications . . .
Medicaid spend down deserves to be higher on LTSS reform agenda”
LTC Comment: Well, yeah! I couldn’t agree
more. But how about actually studying spend down instead of transitions?
How about analyzing actual expenditures for long-term care instead of
pretending that everyone who transitions to Medicaid had to do so by
spending down assets? How about looking at the Medicaid financial
eligibility rules that allow people with substantial income and assets to
qualify? How about considering the vast literature on Medicaid planning?
Blank out!
Slide #16: “Policy Implications . . . Few
people who transition to Medicaid are likely to be able to afford private
LTC insurance without large subsidy”
LTC Comment: This research proves nothing of
the kind. It excludes “IRAs.” It does not identify actual spend down.
It completely ignores the myriad ways people can shelter or divest
assets. It does not consider the fact that people could and would buy LTC
insurance when they’re younger and it’s less expensive if it were not for
the perverse incentive to ignore LTC risk and cost created by easy access
to Medicaid LTC after the insurable event occurs.
Unless and until the research community stops
obfuscating and misrepresenting the reality of Medicaid LTC eligibility,
it’s unlikely the LTC Commission or anyone else will make much progress
toward solving the LTC financing problem.
We know Medicaid LTC eligibility does not require
significant asset spend down. Why pretend that it does?
We know from Brown and Finkelstein that Medicaid
crowds out two-thirds to 90% of the potential market for private LTC
insurance. Why pretend it doesn’t?
We know from the Chicago Fed that affluent people
gain as many or more benefits from Medicaid LTC as the poor. Why ignore
such facts?
The only explanation I discern is that researchers
who hide from the facts are viscerally opposed to private market-based
solutions. They cling to the same government-based interventions that
created the problems of poor access, low quality, stingy reimbursement,
institutional bias and excessive cost in the first place. They bend over
backwards to force facts into their models instead of building accurate
explanations from evidence.
Consequently, they’re exacerbating our long-term care
problems, not contributing to their solution.
#############################
Updated,
Monday, July 15, 2013, 12:40 PM (Eastern)
New York, New York—
#############################
O’CARE HEADED FOR
THE GARAGE AND LTC NEWS AND COMMENT
LTC Comment:
News about health reform implementation seems to be dominating and
crowding out other news. Hence sparse clippings on LTC lately. We don't
usually cover the day-to-day battles over "ObamaCare," but this cartoon
pretty much sums it up. Readers may be ready for a little humor at this
stage:
http://www.kaiserhealthnews.org/Cartoons/2013/July/Fixer-Upper.aspx.
***
AMERICAN INDEPENDENT MARKETING has announced a series of webinars for
LTC specialists. Check out a list and calendar here:
http://whyaim.com/news-events/. Topics include “LTC Multi-Life,”
“American General CI Product,” “Medicare Supplements,” “Innovative LTCI
Plan Designs,” and many others in July and coming months. Note that Steve
Moses will be a guest speaker for the July 30 webinar with an update on
the federal Long-Term Care Commission. ***
#############################
7/14/2013, “Have 'The Talk' With Mom and Dad
About Their Finances; Get over the awkward feelings and start the
conversations [link],”
by Tom Lauricella, Wall Street Journal
Quote: "We are always our parents' children.
That's especially the case when it comes time to talk to them about their
finances and planning. When an older generation starts needing help, the
role reversal can be difficult for all to stomach. But it's crucial to get
over the awkward feelings, and have the important conversations ahead of
time."
LTC Comment: More talk about the “The Talk”
below.
#############################
7/12/2013, “Can
critical illness sellers be navigators?,” by Allison Bell,
LifeHealthPRO
Quote: "The Obama administration has come up
with a new batch of rules for the people who are supposed to help
consumers and employers use the Patient Protection and Affordable Care Act
(PPACA) health insurance exchange program. In the new final
rule, ‘Patient Protection and Affordable Care Act; Exchange Functions:
Standards for Navigators and Non-Navigator Assistance Personnel; Consumer
Assistance Tools and Programs of an Exchange and Certified Application
Counselors’ (CMS-9955-F), HHS sets rules for navigators -- independent
PPACA exchange ombudsmen."
LTC Comment: What a tangled web they weave.
#############################
7/11/2013, “In
Grandmother's Alzheimer's, Another Lesson in Family,” by Jeanine
Grimaldi, New York Times
Quote: "My grandmother is one of more than
five million Americans who have Alzheimer's disease. Sometimes these
patients experience sun-downing, a period of increased confusion and
restlessness toward the end of the day, and my grandmother was having one
of these episodes. It is hard to know how to handle these situations, but
it is best to have family around because patients can say upsetting things
or even become physical."
LTC Comment: As the Age Wave crests, these
lessons are touching more people faster and a perfect storm of LTC is
coming.
#############################
7/11/2013, “Making
Peace with the End of Life,” by Susan Ann Darley, Huffington Post
Quote: "As a society, we are now confronted
with complex end-of-life challenges. Personal financial concerns, soaring
medical costs, extension and quality of life issues, loss of independence
and over-medicating, to name a few. And the recession's lingering
aftermath is affecting both the elderly and the young dramatically."
LTC Comment: Get used to it. Ironically, it
won’t get better until government stops trying to solve the problem by
taxing everyone to subsidize irresponsibility.
#############################
7/11/2013, “British
health official: Cure for dementia could come by 2020,” by Ashley
Carman, McKnight’s LTC News
Quote: "Advances in genetics and
pharmaceuticals could lead to a cure for dementia by 2020, according to
United Kingdom Secretary of Health Jeremy Hunt."
LTC Comment: Optimistic predictions like this
one may further de-sensitize the public to real LTC risk.
#############################
7/10/2013, “The
new solution for coping with critical illness,” by Kenneth J. Smith,
LifeHealthPRO
Quote: "The question of protecting our
clients in the event of cancer, heart attack and stroke is the same as a
generation ago, but now the answer is different. Today, the answer is both
life insurance and critical illness protection. With the advent of
critical illness insurance, there is now financial relief to aid patients
and their families who are coping with recovery. Yet many people today
aren't even aware that critical illness protection exists."
LTC Comment: CI advances.
#############################
7/10/2013, “Unable
to Cope, Unwilling to Accept Aid,” by Judith Graham, New York Times
Quote: "It is a surprisingly common problem
in older adults; self-neglect is believed to account for nearly 40 percent
of all cases of abuse and neglect in the elderly. . . . Once, elderly
adults of this sort were considered eccentric or alarmingly idiosyncratic.
Today, researchers believe they have
underlying medical or mental health issues — depression, dementia and
delirium top the list — that compromise their ability to function and care
for themselves, according to a recent panel sponsored by the Institute of
Medicine."
LTC Comment: It's hard to imagine anyone who
has planned ahead for long-term care ever ending up like the examples in
this column. But it isn't hard to understand at all how normal,
middle-class, otherwise responsible people who don't plan for LTC might
end up alone, without caregivers, demented, and behaving "eccentrically.”
-----------------
7/9/2013, “When
to Buy Long-Term Care Insurance,” by Dave Ramsey, FOXBusiness
Quote: "My advice, Toni, is to buy long-term
care insurance. I believe in having this type of coverage, even if you can
afford to pay for care out of pocket. It takes a lot of stress and worry
out of growing older.”
LTC Comment: Good advice but later in the
article he suggests waiting until age 60 to buy, not such good advice.
#############################
7/9/2013, “Column:
Long-term care clock ticking for U.S. Congress,” by Mark Miller,
Forbes
Quote: "Eighty-four days and counting. That's
the time remaining that a new Congressional commission has to come up with
solutions for one of the country's most vexing problems: how to properly
fund long-term care."
LTC Comment: I've corresponded with the LTC
Commission Vice-Clair to recommend potential witnesses and have been
assured that my name will be put forward also.
#############################
7/9/2013, “Financial Disconnect Among Seniors
A Harsh Reality Seven in 10 Have Difficulty Discussing Finances, Aging [link],”
Life & Health Advisor
Quote: "Nearly every family in America has
dealt with mental aging issues, from someone forgetting to pay a bill to
experiencing the devastating fallout from Alzheimer's disease. Yet,
despite the vivid reminders of what happens as we age, many avoid talking
to their children and families about planning for what they hope will
never happen. A survey by the National Endowment for Financial Education(r)
(NEFE(r)) and conducted online by Harris Interactive in November 2012
among 2,059 U.S. adults, finds that seven in 10 say major barriers are
preventing their families from openly communicating about who will make
financial decisions on behalf of an aging family member if they become
unable to."
LTC Comment: Expect many more stories like
this one about “The Talk” adult children should have with their parents
about finances and aging.
#############################
7/9/2013, “Reading
and writing later in life wards off dementia, research says,” by
Ashley Carman, McKnight’s LTC News
Quote: "Nearly 300 older adults were given
annual memory and thinking tests for about six years, or up until their
deaths, which averaged out at around age 89. The adults also answered
questions about whether they read, wrote and participated in other
mentally stimulating activities during childhood, adolescence, middle age
and at their current age. Once they died, researchers examined their
brains for physical signs of dementia, such as lesions, plaques and
tangles. Participants who stimulated their minds throughout showed less
tangible signs of memory decline than those who did not, the researchers
found."
LTC Comment: Is this cause or correlation?
Isn't it just as likely that people who read and write less in old age do
so because they're experiencing early signs of dementia?
#############################
7/8/2013, “A
downside of living longer: Oldest often disabled in last months,” by
Eryn Brown, Los Angeles Times
Quote: "Don't expect old age to be all golf
and cruises: As Americans live longer and longer, more of us should expect
to suffer some sort of independence-threatening disability in the final
phase of life, two new studies published online Monday suggest."
LTC Comment: Very disturbing wake up call
that all Americans should heed: "The older the subject was when he or she
died, the more likely he or she was to wind up disabled in activities of
daily living in the last two years of life -- needing help with at least
one of six activities: dressing, bathing, eating, getting in and out of
bed, walking across a room or using the toilet. The team wrote that half
the people who die at 90 or older are disabled two years before their
death; the prevalence of disability in people 70 or younger at the time of
death was at least 35% lower than that of the oldest in the study, at all
points in the final two years of life.".
#############################
7/8/2013, “Are
We Underestimating How Much Help Aging Parents Need At Home?,” by
Carolyn Rosenblatt, Forbes
Quote: "Long term care insurance is the only
private benefit that covers home help with activities of daily living, the
kind of help most elders need. But most people in the U.S. don’t have it.
The Congressional Budget Office report cites statistics from America’s
Health Insurance Plans, Who Buys Long-Term Care Insurance in 2010–2011
(report prepared by LifePlans, March 012), www.ahip.org/ WhoBuysLTCInsurance2010-2011/.
Among the adult U.S. population only about 3 percent had LTC insurance in
2011."
LTC Comment: Efforts to rebalance Medicaid
from institutional to home care will not survive the coming Age Wave, but
are the main impediment to private financing alternatives like LTC
insurance and home equity conversion.
#############################
7/8/2013, “As U.S. Population Ages, ER Visits
Will Lengthen And hospitalizations stemming from these visits will rise,
study predicts [link],”
HealthDay
Quote: "The researchers were surprised to
find their analysis showed that the number of ER visits would increase at
the same rate -- not higher -- as the population increased. However, the
length of time that patients spend in ERs will rise 10 percent faster than
population growth, and hospital admissions from the ER will rise 23
percent faster."
LTC Comment: Ominous.
#############################
7/8/2013, “'Scary'
front-page story gave scant attention to benefits of long-term care
insurance, industry group says,” McKnight’s LTC News
Quote: "Long-term care insurance has
benefited policyholders more than a recent Wall Street Journal
front-page story indicates, according to the nation's largest LTC
insurance trade group."
LTC Comment: Jesse Slome and AALTCI fighting
the good fight.
#############################
Updated,
Friday, July 12, 2013, 12:56 PM (Eastern)
Cream Ridge, New Jersey—
#############################
LTC BULLET: WISCONSIN TACKLES MEDICAID PLANNING
LTC Comment: Easy access to Medicaid LTC benefits
after care is needed and without spend down or estate recovery overloads
the safety net and minimizes responsible LTC planning. Wisconsin is
trying to fix that problem, but Medicaid planners object, after the
***news.***
***
AMERICAN INDEPENDENT MARKETING has announced a series of webinars for
LTC specialists. Check out a list and calendar here:
http://whyaim.com/news-events/. Topics include “LTC Multi-Life,”
“American General CI Product,” “Medicare Supplements,” “Innovative LTCI
Plan Designs,” and many others in July and coming months. Note that Steve
Moses will be a guest speaker for the July 30 webinar with an update on
the federal Long-Term Care Commission. ***
*** 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 chaff 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. ***
*** 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
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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 ($500 for Elite Premium Members or
Regional Representatives), 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: WISCONSIN TACKLES MEDICAID PLANNING
LTC Comment: Twenty-one years ago I wrote the
following in “The Senior Financial Security Program: A Plan for Long-Term
Care Reform in Wisconsin [link].”
Medicaid nursing home eligibility is so
generous in Wisconsin that most seniors who need long-term care qualify
financially even without sophisticated legal planning. Anyone else can
qualify quickly, often overnight, by using techniques such as joint
accounts, trusts, purchase of exempt assets, or multiple divestment.
Estate recovery is easy to avoid using joint tenancy with right of
survivorship and other techniques. Formal, lawyer-assisted Medicaid estate
planning is still fairly limited in Wisconsin, but it is growing rapidly.
Predictably, private long-term care insurance is stunted. (p. 1)
Despite Wisconsin’s having adopted some of the
corrective actions we recommended in that report, the fundamental problem
still exists. Easy access to Medicaid LTC benefits without significant
spend down or estate recovery continues to plague the Badger State. Now,
however, Wisconsin is trying to do something about it.
Following are quotes from a Wisconsin Medicaid
planner’s essay. She laments actions taken by the state to (1) ensure
that scarce public resources go to the needy and (2) encourage affluent
people to pay their own LTC expenses. We provide our “LTC Comment” after
each of her remarks.
#############################
Quotes from “What
the New Budget Bill Does to Elderly and Disabled Families,” by
Attorney Carol Wessels.
Medicaid planner: "On Sunday, June 30th,
2013, Governor Walker signed Wisconsin's 2013-2014 Budget into law. The
New Budget Bill has changes to the Medicaid program that create severe
consequences for the elderly and disabled, and for family businesses and
farms."
LTC Comment: The need for expensive long-term
care IS a severe consequence for which people should plan, save, invest
and insure. They should not ignore the potential risk and cost until they
seek indemnification from Medicaid. What does the new Wisconsin budget
do?
Medicaid planner: "Prevents families from
transferring family business or the family farm, if original owner needs
Medicaid. . . . If he transfers it for nothing, or for less than fair
market value, he will be penalized and disqualified from receiving
Medicaid for a period of time for up to five years following the transfer.
If the business stays in Joe's name, when he dies the state will be able
to recover up to the amount paid out in Medicaid, as a lien on the
business or from the proceeds of the sale. Elder Law Attorneys believe
this provision is contrary to federal law."
LTC Comment: Is the purpose of Medicaid to be
a long-term care safety net for the needy or free, publicly financed
insurance for business owners and their families?
Medicaid planner: "Prevents the spouse
('community spouse') of a person in a nursing home or on Family Care
('institutionalized spouse'), from transferring the community spouse's
assets to anyone else until the institutionalized spouse has been on
Medicaid for five years. If the community spouse transfers assets in the
first five years after an institutionalized spouse is receiving Medicaid,
then the institutionalized spouse will be penalized."
LTC Comment: Did you know that under current
federal law, the community spouse can give away everything, including the
home, with impunity preventing Medicaid estate recovery? That’s what
Wisconsin is apparently trying to avoid.
Medicaid planner: "Provides that any property
that was marital property within five years before the time that a spouse
applied for nursing home Medicaid or Family Care, can be subjected to
estate recovery. Where the state pursues estate recovery from the
surviving spouse, there is no 'hardship waiver'. Hardship waiver is the
process where a person can request that estate recovery provisions not be
enforced due to circumstances that would cause a hardship. This provision
is required by federal law but yet, Wisconsin's new budget eliminates it
in certain cases."
LTC Comment: How could anyone consider
deliberate self-impoverishment to be a “hardship” tax payers should
compensate?
Medicaid planner: “Prevents a community
spouse from transferring assets free and clear upon death of the community
spouse. These assets will be subject to estate recovery first.”
LTC Comment: That is the purpose of the
estate recovery mandate added to Medicaid in 1993. The principle is that
Medicaid LTC benefits received while preserving substantial assets for a
surviving spouse should be repaid to Medicaid when the surviving spouse
dies and no longer needs the wealth. Otherwise, the money passes to heirs
and becomes a reward for failing to plan for long-term care.
Medicaid planner: “Puts very restrictive
requirements on trustees of living trusts, where a grantor received
Medicaid benefits. The trustee must provide specific notice prior to
distributing any trust property, and must distribute assets to estate
recovery within specific deadlines if a claim is made.”
LTC Comment: Medicaid planning abuse of
trusts is a loophole properly closed.
Medicaid planner: “Makes trustees of ‘Special
Needs Trusts’ personally liable if they fail to follow the proper
procedures for estate recovery.”
LTC Comment: So improper trust management is
OK? Come on.
Medicaid planner: “Allows estate recovery
from living trusts, life insurance, POD [pay on death] accounts of either
the Medicaid recipient or the surviving spouse.”
LTC Comment: Did you know people could evade
estate recovery using those financial products? Other states have already
closed that loophole.
Medicaid planner: “Penalizes families who
have loaned (not gifted) funds to other family members.”
LTC Comment: The purpose of such loans is to
dodge spend down requirements using a complicated technique called the
“reverse half-a-loaf” designed to evade measures in the Deficit Reduction
Act of 2005 (DRA ‘05) intended to prevent the “half-a-loaf” divestment
gimmick.
Medicaid planner: “Prevents a return of funds
that have been gifted by maintaining all divestment penalties unless the
full gifted amount is returned, which in many cases is not possible.”
LTC Comment: Ditto the LTC Comment
immediately above.
Medicaid planner: “Creates very complicated
procedures regarding transfers of real estate where a Medicaid recipient
is involved. Allows the state to go so far as to void a transfer under
certain circumstances. These changes will make it very complex for people
on Medicaid to transfer real estate, give clear title, etc.”
LTC Comment: Taking measures to prevent asset
transfers for the purpose of self-impoverishment to qualify for Medicaid
is not a problem. It is a solution.
Medicaid planner: “What this means . . . :
It will be extremely important for couples to plan well
ahead of the need for care, if the ability to leave anything to their
families – or to maintain adequate financial resources for the spouse in
the community - is important to them.”
LTC Comment:
We agree this means people need to plan early for long-term care. We
disagree that the way to plan is to use a Medicaid planner to dodge rules
intended to preserve the Medicaid safety net for people in need.
I’ve been fighting the Medicaid
planners’ self-serving arguments like those above for 30 years. We’ve had
major successes in federal law including OBRA ’93 and DRA ’05, but clearly
there is more to do. Thanks and kudos are due Wisconsin for taking action
to discourage Medicaid dependency and encourage responsible LTC planning.
#############################
Updated,
Monday, July 8, 2013, 12:22 PM (Eastern)
Cream Ridge, New Jersey—
#############################
CENTER STUDIES IN
VA, NJ AND GA AND LTC NEWS AND COMMENT
LTC Comment: We
have completed our initial field work on the Center for Long-Term Care
Reform’s study of Medicaid and long-term care financing in Virginia. Our
interim progress report has been submitted. At the end of July, we’ll
pass back through Richmond, conduct the remaining interviews, and begin to
write the final report.
For now, Steve
Moses and the Silver Bullet are near Trenton, New Jersey, about to begin
our latest study of Medicaid and LTC financing. New Jersey is an
interesting challenge as we conducted a similar study of the state in
1996, seventeen years ago. What’s changed? Did the state heed our
recommendations back then? If so? If not? What is the current state of
long-term care? That will be the theme of the new study and report.
Following our New
Jersey study, we head south to Georgia. But that will not be until
August. Late August and throughout September we’ll be writing and
publishing all three final reports, just in time for the November
elections. It’s good to be on the road again. Click
here for a short video synopsis of the Silver Bullet’s earlier
adventures.
#############################
7/5/2013, “LTCI
rate wiggle room: How much is enough?,” by Allison Bell,
LifeHealthPRO
Quote: "Regulators, outside actuaries and
others talked about possible LTCI rate margin requirements and other rate
stability proposals recently during a
Senior Issues Task Force LTCI issues meeting that took place recently
in Reston, Va."
LTC Comment: They should be talking about
getting the monkey of government interference off the back of LTCI.
Target Medicaid only to the poor and let a free market determine interest
rates. That’s all it would take to save LTC insurance.
#############################
7/3/2013, “Nursing
Home Use by Medicaid Seniors is Plunging,” by Howard Gleckman,
Forbes
Quote: "It is a remarkable story: Long-stay
nursing home care by seniors enrolled in Medicaid has been plummeting for
15 years. It is not clear exactly why, but there are probably several
reasons. First, state Medicaid programs have been shifting care from
nursing facilities to home and community-based settings-a step that
seniors themselves favor and one that may save money in the long-run. . .
. The second reason . . . is that seniors' enrollment in Medicaid is
growing very slowly even though the overall older population is growing
rapidly. . . . A third reason may be that nursing homes themselves would
rather provide post-acute and rehabilitation services instead of long-stay
care."
LTC Comment: The reason fewer seniors use
Medicaid nursing homes for long, custodial stays is no mystery. Medicaid
made nursing home care free in 1965 which killed any market for private
home care and crowded out private LTC insurance. In time Medicaid nursing
home care became so expensive and reimbursement rates were cut so far as
to impede quality and ruin nursing homes' reputation. It got so bad that
people became willing to spend their own money for assisted living and
that's why that care level has grown to replace “intermediate care”
nursing homes. Medicaid tried to save money by "rebalancing" from nursing
homes to home care on the mistaken assumption that doing so would save
money. It didn't; it won't; and Medicaid's reputation for poor access and
quality is now expanding to its home and community-based programs. This
is what well-intentioned but poorly designed programs containing perverse
incentives to ignore LTC risk and cost have wrought.
#############################
7/3/2013, “Wall
St. Journal Didn't Go Deep Enough,”
by Phyllis Shelton
Quote: "The July 1, 2013 WSJ article
about long-term care insurance rate increases entitled
"Long-Term Care Insurance Gap Hits Seniors" throws the baby out with
the bath water. It overlooks three important areas:
- How to evaluate a rate increase
- There are long-term care insurance policies that
allow the policyholder to buy less expensive coverage and protect assets
if the insurance isn't enough and they have to turn to Medicaid for
help.
- The impact of discouraging people from buying
long-term care insurance is to leave them with Medicaid as their only
option to pay for long-term care, which takes dollars out of the state
budget that could have gone to education and other vital services that
we all need."
LTC Comment: This is Phyllis Shelton's
response to the July 1 Wall Street Journal article that criticized
LTC insurance.
#############################
7/2/2013, “Low
Interest Rates Are Crippling Long-Term-Care Insurance,” by Kelly
Greene, Wall Street Journal
Quote: "In addition to the problems chronicled in today’s Page
One story “Long-Term-Care
Insurance Leaves Customers Groping,” there’s another big
culprit: long-term low interest rates. As the Federal Reserve has sought
to rev up the economy, the slide in rates has hammered insurers’
investment returns, which are needed to help cover payouts to
policyholders."
LTC Comment: My comment follows the above Wall Street
Journal article online:
“Interest rates didn't just ‘decline’ of their own accord as in a free
market. Interest rates were forced down to near zero by the Federal
Reserve. The big story, totally missed in this and yesterday's article,
is that the private sector insurance carriers are preparing to be able to
pay future claims despite the government-induced low interest rates, but
the government is leaving everyone unprotected by its ‘social insurance’
programs. Medicare has a $43 trillion unfunded liability and Social
Security is underfunded by $21.5 trillion. Of course, Medicaid, the
dominant payer of long-term care in the USA due to eligibility criteria
that allow affluent people to take more benefits from it than the poor,
Medicaid doesn't even have a phony trust fund (filled with IOUs from
future taxpayers) to pretend it's solvent. Criticizing the mote in the
eye of LTC insurance without acknowledging the log of irresponsibility in
government is a terrible disservice to the WSJ's readers.”
#############################
7/2/2013, “Exchanging
Medicaid for a Better Option,” National Center for Policy Analysis
Quote: "Consider this: nationally, less than
one-third of physicians accept new patients enrolled in Medicaid. This is
nearly double the rate of doctors who have closed their practices to new
Medicare patients (17 percent) and to new privately insured patients (18
percent). Physicians are four times more likely to turn away new Medicaid
patients than those with no insurance (31 percent versus 8 percent)."
LTC Comment: Relying more and more on
Medicaid is not going to end well.
#############################
7/2/2013, “Study links poor financial
performance and 'de facto' nursing home segregation; raises questions
about admissions [link],”
by Tim Mullaney, McKnight’s LTC News
Quote: “Nursing homes with a
high proportion of black residents tend to underperform financially,
according to recently published research that raises difficult questions
about admissions practices and healthcare disparities. . . . Previous
studies have found that minorities rely on Medicaid in greater numbers
than other demographic groups, so nursing homes that primarily serve
minorities see bottom-line impacts . . . Financial strain on a facility
is associated with lower-quality care, as measured by indicators such as
bedsore prevention and total catheter use, the researchers found. Other
studies have concluded black residents are
less likely to get a flu shot and are more likely to
be hospitalized,
develop bedsores, and
need help with activities of daily living. . . . Some facilities
simply must maintain a certain proportion of private pay residents to
remain solvent, Smith said. Race may not be a consideration in the
admissions process for these facilities, but the net result is having
financially stronger facilities that are not diverse.”
LTC Comment: Medicaid pays
nursing facilities substantially less than the cost of providing the care
as we often report. High Medicaid census leads to deficient care.
Minorities are more likely to rely on Medicaid. Not too hard to connect
those dots, but it has amazed me for decades how few analysts do.
#############################
7/1/2013, “Long-Term-Care
Insurance Gap Hits Seniors,” Kelly Greene and Leslie Scism, Wall
Street Journal
Quote: "The long-term-insurance industry now
is shrinking, premiums are soaring and there is no fix in sight. At the
same time, government safety-net programs, already under cost-cutting
pressure, are bracing for demand from more of the 77 million aging baby
boomers. . . . But insurers underestimated how fast medical costs would
rise, and how many seniors would actually use the benefits. And they
underpriced the insurance premiums. . . . Most of the actuarial
assumptions made by insurers years ago turned out to be overly optimistic.
, . . And many state regulators erred by routinely signing off on the
premium on the new products and subsequent rate increases without
questioning the companies' pricing assumptions, some officials say. . . .
'We have no way of knowing if these policies will self-destruct in the
future,' cautions Mary Ahearn, a financial planner in Arizona."
LTC Comment: A formerly accurate and balanced
reporter on long-term care issues wrote this biased and mistaken
front-page article in today's Wall Street Journal. She and it fail
to mention the real reasons LTC insurance is struggling. That is, that
government took away the market by providing LTC through Medicaid after
the insurable event occurs and took away the profits by forcing interest
rates down to nothing. In truth, although they missed on lapse rates,
actuaries got much more right than wrong about LTC utilization. Carriers
are doing the responsible thing now, correcting for government-caused
shortfalls in reserves by raising premiums. Government, which faces a
hopelessly huge wave of aging Americans, is not doing the responsible
thing to prepare. Entitlement "trust funds" are empty already and will
never pay the "claims" it currently promises. Many people, especially the
poor, will suffer when the public programs implode. But the people today
biting the bullet, sticking with private insurance, and compensating for
government's irresponsibility by paying higher premiums for their LTCI
policies will come out all right.
#############################
7/1/2013, “Government report: Family size,
obesity rate among question marks as long-term care spending surges [link],”
by Tim Mullaney, McKnight’s LTC News
Quote: "Medical advances and declining
obesity rates could help control costs by limiting seniors' functional
impairments. However, smaller average family size could drive costs up, as
there will be fewer people to provide informal care to elders, who will go
into facilities. Informal care accounted for 55% of the LTSS market ($234
billion) in 2011, and institutional care accounted for 31% ($134 billion),
according to the CBO report."
LTC Comment: Declining obesity? Since when?
A perfect LTC storm is brewing.
#############################
6/29/2013, “The Cost of Cashing Out Life
Insurance Selling a policy to a third party has tax and other
implications [link],”
by Tom Lauricella, Wall Street Journal
Quote: "It seems like a simple solution to a
big problem: Families struggling to meet the high costs of long-term care
or other medical bills can sell unwanted life-insurance policies and
instantly raise large chunks of cash. But going the route of a so-called
life-settlement arrangement is a complex decision that shouldn't be made
lightly or alone."
LTC Comment: The idea to tap life insurance
benefits to help pay for LTC and to relieve fiscal pressure on Medicaid
has taken hold recently. Texas passed a law to encourage the practice and
other states have similar laws in their legislative hoppers. Thus, the
media is taking an interest. Expect more such coverage.
#############################
6/27/2013, “The
Real Cost of Long-Term Care (INFOGRAPHIC),” Huffington Post
Quote: "While the costs and the means to pay
for long-term care can be daunting to think about, the one thing that can
put one's mind at ease is preparedness. In the infographic below, you'll
get some of the facts about actual costs, your options for long-term care,
and tips on how you can prepare now."
LTC Comment: Unfortunately, this "infographic"
is very difficult to read, even when expanded.
#############################
6/27/2013, “Two
Web Sites to Visit,” by Paula Span, New York Times
Quote: "LongTermCare.gov, well designed and
clearly written, serves as a useful primer, an introduction to the basics.
"It’s been around since 2005, so ‘it was time for a
refresh,’ said Hunter McKay, program manager for the administration. ‘We
wanted to make the content digestible and manageable.’
"Now, the site has a pathfinder tool that allows you
to enter your age or your parent’s; it then tailors content according to
whether a person needs long-term care right now or probably will in the
future. You’ll find a glossary of common terms, sections on advance care
planning and information on how to pay for help, including long-term care
insurance and reverse mortgages.
"Past traffic showed that consumers want to know
about Medicaid, so you’ll find a section that explains eligibility and
benefits."
LTC Comment: Anything about private long-term
care insurance and responsible LTC planning on that government website
that points people to Medicaid?
#############################
6/27/2013, “A Surprising Health Insurance
Option For Those Who Refuse ObamaCare [link],”
by Merrill Matthews, Forbes
Quote: "The customer buys a life insurance
policy that pays up to $250,000 upon death, which I believe is the current
maximum available for this kind of policy.
"Along with life insurance coverage the policy
includes what's called a 'critical illness' component. If the
policyholder needs, say, surgery, the insurer writes the policyholder a
check based on a schedule. Let's say, for example, it's $10,000.
"The policyholder has $10,000 in hand to pay for the
medical care - or, frankly, anything else since the money belongs to the
insured - but the value of his life insurance benefit is reduced by the
same amount, to $240,000. Thus the critical illness component simply
accelerates the benefit payout.
"One existing policy pays 100 percent for heart
attack, stroke, life-threatening cancer, major organ transplant, kidney
failure, Alzheimer's and paralysis, among other medical conditions."
LTC Comment: This article is written from the
polemical perspective of "how to avoid ObamaCare," but it's interesting as
it relates to the CI market.
#############################
6/27/2013, “Supreme Court's DOMA ruling
expands long-term care insurance options in California [link],”
by Tim Mullaney, McKnight’s LTC News
Quote: "California same-sex couples who wed
in 2008 did not receive all the same benefits as heterosexual couples, due
to the federal Defense of Marriage Act. For example, gay couples were not
allowed to receive long-term care insurance through the California Public
Employees Retirement System (CalPERS), which is governed by federal tax
laws. This
led to a lawsuit filed last year by a nurse seeking coverage for his
husband. Under Wednesday's 5-4 decision, the federal government must grant
full marriage benefits to same-sex couples in states that allow gay
marriage. This means CalPERS will begin to offer its long-term care
coverage to same-sex couples, the fund confirmed to the
Sacramento Bee."
LTC Comment: Guaranteed issue and spousal
discounts are the main issues?
#############################
6/26/2013, “AHIP
touts strong enrollment in plans with health savings accounts,” by
Elise Viebeck, The Hill
Quote: "Enrollment in health savings account
(HSA)-eligible insurance plans has reached nearly 15.5 million, growing by
almost 15 percent since last year. . . . Authorized by Congress about 10
years ago, HSAs allow consumers to put away money for medical expenses
without paying income tax on those savings."
LTC Comment: HSAs could solve the acute
health insurance problem and ameliorate the LTC insurance problem by
putting consumers back into the health care market and letting them
accumulate savings for LTC premiums.
#############################
6/26/2013, “Retirement
savings $14 trillion below threshold,” by Steve Vernon, CBS
MoneyWatch
Quote: "The study found that Americans of all
ages are falling well short of the savings amount they need to secure
their retirement. Still worse, 45 percent of working-age Americans have no
retirement savings at all! The estimated gap in needed savings totals $14
trillion if you count only savings set aside specifically for retirement;
the gap declines to $6.8 trillion if you consider total net worth, the
largest item being home equity."
LTC Comment: Warning; brick wall of fiscal
reality directly ahead!
#############################
6/25/2013, “Medicaid
for prisoners: States missing out on millions,” by Christine Vestal,
USA Today
Quote: "Only a dozen states have taken
advantage of a long-standing option to stick the federal government with
at least half the cost of hospitalizations and nursing home stays of state
prison inmates. The other states have left tens of millions of federal
dollars on the table, either because they didn't know about a federal rule
dating to 1997 or they were unable to write the laws and administrative
processes to take advantage of it."
LTC Comment: Heaven forbid that anyone misses
a chance to stick it to Uncle Sucker.
#############################
6/24/2013, “Elder
Fraud Epidemic: How Banks Are Failing Seniors,” by Robert McGarvey,
TheStreet
Quote: "'It's bank employees, caregivers, in
many cases it is family members who are stealing from the elderly,' said
Tod Burke, a professor of criminal justice at Radford University in
Virginia."
LTC Comment: Add Medicaid planners to that
list. They impoverish frail and infirm elders, enrich their clients the
heirs, and take big fees in the process, leaving the elders dependent on
public welfare.
#############################
6/23/2013, “Living
Long but Not Prospering,” by Joshua Gotbaum and Dallas Salisbury,
Wall Street Journal
Quote: "The long-term-care private-insurance
market is essentially collapsing. All of the major carriers that built
long-term-care practices over the past 20 years are exiting the
marketplace."
LTC Comment: A Center member bcc'd me on his
letter bringing up short the president of EBRI for such a ridiculous
quote:
"Mr. Salisbury: In today's WSJ (R5 - Living Long But
Not Prospering) you said 'The long-term-care private-insurance market is
essentially collapsing. All of the major carriers that built
long-term-care practices over the past 20 years are exiting the
marketplace.' The truth is John Hancock, MassMutual, Northwestern,
Transamerica, Mutual of Omaha and Genworth all still actively sell LTCi.
How can the President and CEO of the Employee Benefit Research Institute
be so misinformed?"
#############################
Updated,
Friday, June 28, 2013, 12:52 PM (Eastern)
Washington, DC—
#############################
LTC BULLET: LTC EMBED REPORT FROM THE FIRST LTC
COMMISSION PUBLIC MEETING
LTC Comment: The first public meeting of the LTC
Commission involved less wishful thinking and more hopeful signs than I
expected. Details and highlights after the ***news.***
*** STUDIES. The Center for LTC Reform has completed
our field work in Virginia. We’re headed next to begin a study in New
Jersey and finally to Georgia in August. Our interim report on Medicaid
and long-term care financing in Virginia will be ready soon. Final
reports on all three projects will be released sometime this Fall before
the November elections. All three studies will provide evidence and
reasoning to support our recommendations to the new LTC Commission, whose
first meeting is the topic of today’s LTC Bullet. Commission
members are welcome to ride shotgun with me as we interview front line
experts in each state about how Medicaid eligibility really works. For
examples of our reports on similar studies in many other states, including
California, New York, Pennsylvania and Maine, go to
http://www.centerltc.com/reports.htm. ***
*** MEDICAID PLANNING. Center member Ross Schriftman
forwarded an elder law article to us titled “Not Knowing How Medicaid
Annuities Work Will Get Advisors into Hot Water!,” by Mike Anthony, JD. I
couldn’t find the piece online but its message is that Medicaid-compliant
annuities succeed: “There are plenty of good ways to use annuities and
other insurance products to proactively help a potential Medicaid
patient.” Schriftman had this to say about the Medicaid planning example
in the article:
Dear Steve,
These guys really gall me. The "ethical" thing to do
is having the son keep $250,000 AND stick you and me with the cost of the
mom's long term care? [Hardly.]
Here is the more ethical thing to do. Son buys his
Indiana mom a long term care insurance policy when she is 70 and still
generally in good health. He pays $584 per month out of his own money to
protect his inheritance. Mom's care is paid for by her policy. Son picks
where, who and how she gets care; not the government. Son inherits
$250,000 minus his cost for the premiums. Assuming he pays $584 per month
for 10 years he nets $180,000.
(70 year old select rate for Mutual Care Plus $170
per day, 4 year benefit, 90 day EP,3% compound inflation)
Sincerely,
Ross Schriftman
Tel. 215-682-7075
Thanks, Ross. That example struck home. Knowing
every Medicaid planning trick in the book, I chose instead to buy and pay
for private LTC insurance for my parents in 1987. Today, my mother is 100
years old and receives benefit payments from her first-AMEX, then-GE, now-Genworth
policy. ***
LTC BULLET: LTC EMBED REPORT FROM THE FIRST LTC
COMMISSION PUBLIC MEETING
LTC Comment: This is how the meeting
announcement read:
Federal Commission on Long-Term Care Announces
First Public Hearing for June 27th
Fifteen member commission created by fiscal cliff
law tasked with advising Congress on long-term care reform
Washington, DC – The newly created federal
Commission on Long-Term Care will have its first public hearing on
Thursday, June 27th at 2:00 pm EDT in the Rayburn House Office Building,
Room 2322. The title of the hearing is "The Current System for Providing
Long-Term Services and Supports.”
The Commission will hear testimony from the following
expert witnesses:
• Anne Tumlinson, Senior Vice President, Avalere
Health
• Kirsten Colello, Specialist in Health and Aging
Policy, Congressional Research Service
• G. William Hoagland, Senior Vice President,
Bipartisan Policy Center
• Marc Cohen, Chief Research and Development Officer,
LifePlans, Inc.
The Commission was created by the American Taxpayer
Relief Act – the so-called “fiscal-cliff” law – to advise Congress on how
long-term care can be better provided and financed for the nation’s older
adults and people with disabilities, now and in the future.
The bi-partisan commission consists of 15 appointees
– nine members appointed by Democratic Congressional leadership and the
White House and six members appointed by Republican leadership. The
Commission is charged by statute to report with 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.”
LTC Comment: When I saw that announcement, I
said to myself “I have to be there. Center members will want to know what
happens.” So I did a couple interviews for our Virginia long-term care
financing study by phone instead of in person and hustled myself to the
nation’s capital arriving at the hearing room in the nick of time.
The first public meeting of the LTC Commission lasted
a full three hours. Four panelists gave yeomanlike presentations on aging
demographics, the ABCs of LTC, the government’s budget crisis and the
current state of the long-term care insurance industry.
Two presenters and their presentations stood out.
One was Marc Cohen’s explanation of LTC insurance. He presented the usual
information familiar to people who know the LTCI industry: who buys, who
doesn’t, why, why not, and how has that changed over the years. Committee
members addressed most of their questions to Marc and at least one praised
him for his clarity and synthesis.
The presentation that blew me away, however, was by
G. William Hoagland, Senior Vice President, of the
Bipartisan Policy Center, which is “a non-profit
organization that drives principled solutions through rigorous analysis,
reasoned negotiation and respectful dialogue” that was founded by former
Senate Majority Leaders Howard Baker, Tom Daschle, Bob Dole and George
Mitchell. Hoagland’s message was couched in polite, almost apologetic
terms, but I would translate it thus:
“If you think you’re going to find
more government money to improve long-term care, you are out of your
minds. Social Security, Medicare and Medicaid are already in deep
financial trouble; they’re sinking fast; and you will have to find some
way to divert most people to private LTC financing in the future.”
Hoagland emphasized that LTC spending
went from mostly out-of-pocket personal expenditures in 1970 to mostly
Medicaid and Medicare spending now. He left the Commission with two major
“take aways.”
1. Medicare and Medicaid have become the major LTC
funding sources but cannot continue so payment reforms are necessary and
alternatives must be found for financing LTC.
2. By making access to LTC available after the insurable event has
occurred, Medicaid and Medicare have ended up paying for the most
expensive care and cannot afford to do so going forward.
Hoagland concluded that well-intentioned, commendable
intent has left America with a current system that discourages long-term
care planning, overwhelms state/federal budgets, and limits care available
to people who need it. His arguments were in perfect synch with ones
we’ve made year after year in our annual “LTC Bullet: So What if the
Government Pays for Most Long-Term Care? [link]”
What I didn’t hear a lot of at yesterday’s LTC
Commission meeting were the usual bleating calls for more public spending
on long-term care. Even the strongest advocates for a government takeover
of long-term care restrained their fire. They were brought up short by
the hard budget realities.
What I did hear a lot more about than I expected were
puzzled queries about Medicaid “spend down.” If Medicaid requires
impoverishment, how come Medicaid pays for most expensive LTC? Why do
studies show Medicaid crowds out most of the LTC insurance market? What
accounts for recent studies that prove the affluent get as much or more
from Medicaid than the poor?
Simplistic dodges of these questions gained no
traction. The obvious observation that people don’t know who pays for LTC
and so they can’t be deciding not to buy private insurance because they’re
planning to go on Medicaid answers nothing. That’s not how it works.
Rather, Medicaid has paid for most expensive LTC for nearly 50 years which
has desensitized the public to LTC risk and cost. It’s not that they are
planning to go on Medicaid. It’s that their denial of LTC risk has been
enabled by the reality that Medicaid has paid and continues to pay for
most expensive care.
If the LTC Commission stays on its current course of
acknowledging the fiscal crisis, demanding an explanation about how and
whether Medicaid spend down really works, and refusing to gaze
thoughtlessly at the chimera of Medicare Part X or mandatory government
LTC insurance, there is maybe some hope their deliberations will bear
meaningful fruit.
In the meantime, if they’d just read the six succinct
briefing papers in “How
to Fix Long-Term Care,” they’d be off to an even better start.
#############################
Updated,
Monday, June 24, 2013, 12:41 PM (Eastern)
Richmond, Virginia—
#############################
MR. LONG-TERM
CARE AND LTC NEWS AND COMMENT
LTC Comment: Do
your friends or clients ever doubt the ravages of long-term care? Martin
Bayne was a successful LTCI broker when he was ravaged by early-onset
Parkinson’s. He styled himself Mr. Long-Term Care. Today’s lead article
from The Philadelphia Inquirer’s philly.com tells his story.
6/23/2013, “From
the front lines, a fight for aging boomers,” by Michael Vitez,
Philadelphia Inquirer
Quote: "He had foresight to buy a
long-term-care policy at age 40, for a $1,000 annual premium, which would
pay up to $231 a day for life. His policy, he said, has paid about 80
percent of his $750,000 in long-term-care costs."
LTC Comment: Martin Bayne had care options
because he had long-term care insurance. Read this article with that in
mind.
#############################
6/21/2013, “Ask Farnoosh: What Do You Do After
Maxing Out Your 401(k) and IRA? [link],”
by Farnoosh Torabi, Yahoo Finance
Quote: "Finally,
long-term care is proving helpful for seniors who need to fill the
gaps not covered by Medicare or health insurance.”
LTC Comment: LTC insurance shouldn't be a
last resort, but better then than never.
#############################
6/21/2013, “Hybrid
Long Term Care Insurance Solutions Explored by Trade Group,” by Jesse
Slome, AALTCI
Quote: "Two audios exploring hybrid long term
care insurance options were made available to insurance professionals by
the American Association for Long-Term Care Insurance."
LTC Comment: AALTCI’s extensive educational
resources continue to grow.
#############################
6/21/2013, “2013
Critical Illness Insurance Forum,” LIMRA/LOMA
Quote: “Join us this September 16-18, 2013,
in Fort Lauderdale, Florida, where we will discuss how critical illness
products are evolving into one of the most important products in the
supplemental health insurance portfolio. Plan to attend and learn
strategies to help shape your company's success in the years ahead.”
LTC Comment: Click the link to reach the
conference announcement and details.
#############################
6/20/2013, “How
much should you save for long-term care?,” by Chris Farrell,
Marketplace Morning Report
Quote: "Long-term care. It's an economic
consequence of an aging America that doesn't get nearly as much attention
as Social Security. Nursing homes can run around $100,000 a year, and many
aging boomers will not have the money. Marketplace Economics
Correspondent joins Morning Report's Mark Garrison to discuss."
LTC Comment: The bottom line of this podcast
is "learn about LTC insurance.
#############################
6/20/2013, “Gen
X most at risk to burn through retirement savings early,” by Gillian
Roberts, Employee Benefit Adviser
Quote: "Generation X is currently most at
risk for financial hardship in retirement. PricewaterhouseCoopers released
results of an employee financial wellness study this week and found of
employees in the generation born in the early '60s through early '80s say
they're likely to tap into their retirement savings. This number was
higher than both surrounding generations, the Baby Boomers and Millennials.
In fact, 30% of them admit to already having withdrawn from a retirement
account."
LTC Comment: Oh what public policy has
wrought by tipping all the benefits toward older generations for so long.
When will the entitlement bubble burst?
#############################
6/20/2013, “Living Longer + Lack of Lifetime
Income = Risky Business: Actuaries express the mission of financial
services today: Income [link],”
Life & Health Advisor
Quote: "A new discussion paper, 'Risky
Business: Living Longer Without Income for Life,' developed by the
American Academy of Actuaries' Lifetime Income Risk Joint Task Force,
explores the difficulties awaiting people in retirement who lack a plan
for lifetime income, offers steps individuals can take to prevent
shortfalls in retirement income, and discusses public policy options and
education initiatives aimed at addressing the problem of inadequate
lifetime income."
LTC Comment: And whom do we have to thank for
this problem? Yes, government again. The Federal Reserve has forced
interest rates down to almost nothing ruining sources of lifetime income
not to mention handicapping the LTCI market.
#############################
6/19/2013, “More
in U.S. caring for someone with health issues, study finds,” by Emily
Alpert, Los Angeles Times
Quote: "A rising share of Americans is caring
for someone with health issues, often juggling the task with a job and
family, the Pew Research Center found in a newly released survey.
Researchers found that 39% of U.S. adults surveyed said they were caring
for an adult or child with significant health challenges in 2012, compared
with 30% who said the same in 2010."
LTC Comment: The Age Wave crests and its
ripples grow bigger.
#############################
6/19/2013, “Perceived Risk of Critical Illness
Diagnosis High Among Middle-Income Americans [link],”
Life & Health Advisor
Quote: "A recent study finds middle-income
Americans on average give themselves about a 1-in-5 chance of being
diagnosed with a critical illness in the next three years and a 1-in-2
chance of being diagnosed with a critical illness within the next 20
years."
LTC Comment: Such perceptions are bound to
enhance the market for Critical Care Insurance.
#############################
6/19/2013, “New
approach to Alzheimer's treatment might be key to a cure,” by Ashley
Carman, McKnight’s LTC News
Quote: "Alzheimer's treatment often begins
after symptoms are already apparent, such as memory loss. However,
medications targeting the dementia-inducing disease's signature plaques
and tangles have had
little success in reversing symptoms. So doctors and investigators are
developing an alternative approach: treatment before the disease takes
over."
LTC Comment: Well, OK, but how do you know
whom to treat? Everyone? Who will pay?
#############################
6/18/2013, “Boomers Greatly Underestimate Cost
of Long-Term Care, Retirement Style [link],”
Life & Health Advisor
Quote: "A new Nationwide Financial consumer
survey found that boomers’ beliefs on the cost of long-term
care (LTC) and the time they will spend in retirement do not match
reality. In fact, Americans aged 50 and older underestimate the annual
costs of LTC by more than three times the actual cost."
LTC Comment: Well, now, why do you suppose
that is? Could it be the same reason most people have no idea what their
medical care costs? That is to say: government pays for most medical
care and even more so for LTC, thus desensitizing the public to the actual
costs and risks.
#############################
6/18/2013, “Tight timeline forces LTC
commission to narrow its ambitions, member says [link],”
by Tim Mullaney, McKnight’s LTC News
Quote: "With its report due by the end of
September, the Congressional Long-Term Care Commission is setting its
sights on what can be accomplished in an 'extraordinarily short
time-frame,' according to member Judith Stein, executive director of the
Center for Medicare Advocacy."
LTC Comment: Friday’s LTC Bullet
provided our recommendations to the LTC Commission on how to prioritize
their work. See “LTC
Bullet: What Should the LTC Commission Do?,” Friday, June 21, 2013.
#############################
6/17/2013, “How
We Became International Senior Gypsies In Retirement,” by Lynne
Martin, Huffington Post
Quote: "At 72 and 67, we have been home free
for two-and-a-half years, lived in nine countries, and we have never been
healthier or happier! Buenos Aires, Argentina, San Miguel de Allende,
Mexico, Paris, Florence, Istanbul, London, Dublin, Marrakech, Morocco, and
California's Central Coast have been our temporary homes for anywhere from
two weeks to three months at a time.”
LTC Comment: We've known for a long time that
boomers would not retire the old-fashioned way. Well, now it's
happening. Put on your thinking caps, marketers. There must be some
brand-new, creative ways to reach people like these with the LTC insurance
solution.
#############################
6/16/2013, “States
Ease Use of Life Policies for Elder Care,” by Kelly Greene, Wall
Street Journal
Quote: "State lawmakers are encouraging
elderly residents to use life insurance as a way to pay for long-term
care-and lower the Medicaid tab in the process. The strategy marks a
tacit endorsement of so-called life settlements, a practice in which
policyholders sell their policies at a discount in the secondary market
and the buyer takes over premiums and consequently collects the death
benefit."
LTC Comment: Does the possibility of a life
settlement to fund LTC impair the market for traditional LTCI products by
giving consumers a false sense of security? We’ve heard from Center
members on both sides of that question.
#############################
6/14/2013, “Only 5 percent of new doctors head
to rural areas, researchers find [link],”
HealthDay
Quote: "Fewer than 25 percent of new doctors
in the United States go into primary care, and only about 5 percent open
offices in rural areas, according to a new study."
LTC Comment: Another unintended and very
dangerous consequence of government interference in the medical
marketplace.
#############################
6/13/2013, “Why the Government Needs to Budget
Over the Infinite Horizon [link],”
by Laurence Kotlikoff, Yahoo! Finance
Quote: "For the U.S. government as a whole,
the infinite horizon fiscal gap is a whopping $222 trillion. Its
elimination requires not a 32 percent immediate and permanent tax hike in
Social Security FICA taxes or a 22 percent immediate and permanent cut in
Social Security benefits, but either a 64 percent immediate and permanent
tax hike in all federal taxes or a 40 percent immediate and permanent cut
in all expenditures apart from servicing official debt."
LTC Comment: The 2013 Social Security and
Medicare Trustees Reports show infinite-horizon unfunded liabilities of
the two programs rising to $23.1 trillion and $43 trillion respectively.
When will America’s debt bubble burst?
#############################
Updated,
Friday, June 21, 2013, 9:53 AM (Pacific)
Seattle—
#############################
LTC BULLET: WHAT SHOULD THE LTC COMMISSION DO?
LTC Comment: How should the LTC Commission
prioritize its work and recommendations? Some thoughts after the
***news.***
*** SUMMER SOLSTICE. Happy first day of Summer! The
days are long, today the longest, and that’s good because the new LTC
Commission needs all the waking hours it can get. ***
*** SINKING FEELING. The 2013 Social Security and
Medicare Trustees Reports show infinite-horizon unfunded liabilities of
the two programs rising to $23.1 trillion (up from $20.5 trillion last
year) and $43 trillion (up from $38.6 trillion), respectively. Why is it
important to examine the entitlement programs’ unfunded liabilities
through all of the future instead of only the 75-year window usually
analyzed? See economist Laurence Kotlikoff’s “Why
the Government Needs to Budget over the Infinite Horizon.” ***
#############################
LTC BULLET: WHAT SHOULD THE LTC COMMISSION DO?
When the
American Taxpayer Relief Act of 2012 (ATRA ’12) repealed
CLASS it offered a consolation prize, a special commission to study
long-term care services and financing. The new commission was directed to
form quickly, deliberate rapidly, and present its recommendations for
long-term care reform within six months. Months have gone by with no
action, but the LTC Commission has finally appointed a Chair (SCAN’s Bruce
Chernof) and Vice-Chair (Towers Watson’s Mark Warshawsky) and scheduled
its first meeting for this coming Thursday, June 27.
With only three months of its original six remaining,
where should the commission start? What should its priorities be? Where
can it get the biggest reform bang for its deliberative buck?
The problem with long-term care is that people don’t
worry about it or plan until they need it. That condition exists because
Medicaid made nursing home care virtually free in 1965, created an
institutionally biased LTC system, impeded a private market for home and
community-based care, and crowded out home equity conversion and private
LTC insurance from helping to finance long-term care. The result is that
a safety net program intended to help only the poor has become the
dominant payer of long-term care for everyone.
Throwing more government money at long-term care or
forcing Americans into another unfunded entitlement program like Medicare
would only make the situation worse. You don’t put out a fire by dowsing
it with gasoline. The right way to approach reform is to return Medicaid
LTC to the needy and redirect the affluent and middle class toward early
LTC planning and private LTC financing. That’s how a safety net for the
poor can be preserved while attracting private-sector funding to relieve
the hopelessly heavy and about-to-explode fiscal burden on government.
To achieve that goal, these should be the LTC
commission’s priorities:
1. Eliminate or vastly reduce Medicaid’s home equity
exemption from a minimum of $536K and a maximum of $802K now to something
more reasonable, like $50K or less. This would redirect people to reverse
mortgages to fund home care, discourage a common planning gimmick of
investing otherwise countable assets in exempt homes, and encourage
families to help elders prepare for private LTC financing as a way to
protect their own inheritances. Simultaneously the look-back period for
transfers of real property should be extended from 5 years to 10 years or
even 20 years to discourage divestment of the home. Longer lookbacks for
real property are no administrative burden because all real estate
transfers are recorded and easy to track, often online these days.
2. The next biggest potential savings to Medicaid is
reducing or eliminating the currently unlimited exemption for prepaid
funeral expenses. Eligibility workers in a couple dozen states where I've
conducted my studies have told me 80% to 90% of all Medicaid LTC
recipients have prepaid burial plans averaging $8,000 to $12,000. I'm
told very few non-Medicaid-LTC recipients purchase such plans. Medicaid
planners say “Prepaying a burial may not be a timely investment in many
cases since it returns no interest or dividends, but purchasing an
irrevocable burial plan is an important part of the Medicaid spend down.”
(ElderLaw
Answers). Annually, this exemption amounts to scores of billions
of dollars diverted from private financing of LTC to Medicaid asset
shelters nationally. Wonderful windfall for the funeral industry and
heirs but a huge cost to Medicaid and taxpayers.
3. Medicaid-friendly annuities are a gigantic
problem that would be simple to fix if CMS would just take the travesty
seriously. They're used in two ways. First, a Medicaid LTC recipient
transfers all his assets to a community spouse which interspousal transfer
is allowed anytime without limit. Now the spouse has the whole estate in
her name, buys an immediate annuity which meets requirements of the
Deficit Reduction Act of 2005 (DRA ’05), such as paying out within the
actuarial life expectancy of the Medicaid spouse, and collects all the
money back in her own name but outside Medicaid consideration in as little
as a year. Maine gave me the example of a $450,000 annuity that paid out
$17,000 per month to the community spouse until she had the whole amount,
less the agent's commission, in her exclusive ownership. Maine provided a
letter New Jersey sent to CMS requesting closure of this loophole to which
they said CMS never formally responded. The second way annuities are used
is as a means to return half of a penalized asset transfer in a
"reverse-half-a-loaf" method that could also be done using a promissory
note for the purpose of qualifying an unmarried applicant for Medicaid LTC
in half the time. (That technique is too complicated to explain briefly
here, but for a full explanation and documentation of the annuity problem,
see “The Maine Thing About Long-Term Care is That Federal Rules Preclude a
High-Quality, Cost-Effective Safety Net [link].”)
4. Any assets that are only exempted and not
divested should be available for estate recovery. Otherwise, Medicaid
operates as free inheritance insurance for heirs. The Omnibus Budget
Reconciliation Act of 1993 (OBRA ’93) tightened eligibility, encouraged
liens, and made estate recovery mandatory with the intent to encourage
people to save, invest or insure privately for long-term care, but to make
sure, if they don’t plan responsibly, that they must pay back the cost of
their care out of their estates. Unfortunately, states didn't implement
estate recovery well; the feds don't enforce it aggressively; the media
doesn't publicize it; and the public is unaware of it. The last time the
federal government even bothered to measure and publish estate recoveries
was in 2005 based on 2004 data. Estate recovery is very easy to avoid
with legal advice, and that's a routine part of the advice all Medicaid
planners give their clients. For details and a current status report on
Medicaid estate recoveries, see our recent report “Maximizing
NonTax Revenue from MaineCare Estate Recoveries.”
The Center for Long-Term Care Reform’s two recent
reports cited above explain in full what must be done to wean the middle
class and affluent off Medicaid, return the program to the poor as a
quality long-term care safety net, and prepare the LTC financing system to
meet the growing Age Wave challenge that will overwhelm long-term care
otherwise. For a quick read that explains how America evolved into a
welfare-financed, nursing-home-based LTC system and what to do to fix it
so that people can get the care they need in the settings they prefer, see
our six briefing papers titled “How
to Fix Long-Term Care.”
Unfortunately, no changes to Medicaid LTC eligibility
rules are easy politically. Every imaginable interest group has a stake
in the status quo. Needed eligibility changes are even more difficult for
the time being because of the “Maintenance of Effort” rule in the
Affordable Care Act of 2010 (ACA ’10) which prevents states even from
reducing their easy eligibility rules (e.g., $802,000 home equity
exemption) to the tighter rule otherwise allowed (e.g., $536,000).
So fixing this system isn’t easy. But it is not impossible either, as our
victories (documented
here) at the federal and state level over the years demonstrate.
I think the best argument for the right kind of
reform is this: we have a moral and fiduciary responsibility to ensure
that Medicaid's scarce resources go first to the truly needy and that
taxpayers' money is not used to subsidize the boomers' failure to plan
responsibly for long-term care. If the LTC Commission applies that
principle, it may make a positive contribution.
#############################
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 “ | 
