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Updated Monday, May 16, 2025, 10:03 AM (Pacific)

Seattle—

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LTC BULLET: UNDERSTANDING STRUCTURAL LONG-TERM CARE RACISM

LTC Comment: Is Medicaid LTC set up to hurt the poor, underprivileged, and marginalized while inordinately benefiting the affluent and middle class? Answers after the ***news.***

*** GENWORTH/CARESCOUT LTC SYMPOSIUM: On May 7, 2025 Genworth and CareScout convened a symposium in Washington, DC on “Sustainable Solutions: The Future of Long-Term Care Financing.” Read all about it on the program’s “landing page” here. Genworth CEO Thomas McInerney welcomed the attendees. Congressman Tom Suozzi, author of the WISH Act, keynoted the program. Four panels followed focused on LTC financing policy and reform. I joined the fourth panel, titled "Better Together..." – Public + Private Collaboration, moderated by CareScout President and CEO Lynn White, along with fellow panelists Stephanie Moench from Oliver Wyman and Susan Coronel from AHIP. The end result of the half-day program was a long-sought, final solution to the LTC financing crisis! Well, maybe not, but a sincere effort toward that objective was made by all. Kudos to Genworth/CareScout for underwriting and producing this program. ***

*** STOP THE PRESSES: I was just informed that a “2025 Long-Term Care Symposium Recap” has been posted here with this announcement: “On May 7, Genworth & CareScout hosted our 2025 Long-Term Care Symposium. We convened leaders, advocates, policymakers, and other stakeholders from the public and private sectors to discuss how we can meaningfully progress toward solving our country’s long-term care financing challenges. Take a look at the replays and photos from the event, information about our panelists, supplementary videos highlighting the perspectives of caregivers, and additional resources … .” Check out panel #4, on which I served, here. ***

LTC BULLET: UNDERSTANDING STRUCTURAL LONG-TERM CARE RACISM

LTC Comment: A couple years ago I began reading what has become a vast, peer-reviewed literature about structural long-term care racism. Peer-reviewed articles, many cited in the paper that follows, claim that underprivileged, marginalized, often racial minority groups receive less and lower quality long-term care than members of the more affluent demographic majority. The authors make a compelling case for the discrepancies they identify. They uniformly place the blame on Medicaid, especially that welfare program’s deficient reimbursement rates that undercut access and quality. What they fail to do, however, is to identify and explain the “laws, policies, institutional practices, and entrenched norms” that disempower racial and ethnic minorities and cause the care disparities they list. That is what I’ve attempted to do in the following paper posted today to the Center for LTC Reform’s website.

My paper explains how Medicaid LTC financial eligibility policy affects the poor and the affluent differently. It crushes the poor with stringent income and asset spend down rules that impoverish them, often immediately. But it treats the affluent and middle class very differently. They can have virtually unlimited incomes as long as their health and LTC expenses are high enough as they usually are for people who need expensive LTC. The affluent can also retain virtually unlimited assets because seniors hold most of their wealth in resources Medicaid considers exempt, such as home equity. Even the very wealthy qualify for Medicaid by using special trusts, annuities and other Medicaid planning techniques. Bottom line, the affluent and middle class qualify for Medicaid LTC benefits almost as easily and quickly as the poor.

But why would the well-to-do choose Medicaid, with all its well-known deficiencies, when they could afford quality care in the private market? The answer to that question is the underlying cause of LTC racism. Prosperous people gain access to the best care available from Medicaid. They are routinely advised to hold back “key money” so they can pay privately for a while before applying for Medicaid. This buys them access to the best nursing homes and LTC providers who are desperate to attract private payers even for short initial stays at 1.5 times the Medicaid reimbursement rate. The poor and underprivileged, lacking any private funds after spending down their meager incomes and assets to qualify for Medicaid, have access only to the mostly Medicaid nursing homes and home care providers that receive so much bad publicity about poor access and quality. The net effect is that people with wealth receive the best Medicaid has to offer while the less fortunate receive the worst.

That is the root of structural LTC racism. Read the following paper for details and see if you agree.

Title: Understanding Structural Long-Term Care Racism

By: Stephen A. Moses

Abstract: Socioeconomically marginalized groups, including racial minorities, receive lower quality long-term care (LTC) in the U.S. compared to the more affluent majority. Disparities include sub-standard nursing home care, impaired access to assisted living or home care and reduced or inferior medical treatments. Medicaid causes these deficiencies because it dominates LTC financing, but pays too little to ensure quality. Many scholars conclude the system is structurally racist. This paper examines the laws, regulations and policies that produce racially prejudiced LTC outcomes. Medicaid’s financial eligibility rules devastate the poor but enable higher income individuals to qualify and preserve substantial exempt wealth. By retaining “key money” to pay privately at market rates before converting to Medicaid, the financially able access better facilities and services than are available to enrollees unable to pay. By indemnifying the nonneedy against LTC risk, Medicaid created a moral hazard that discouraged LTC planning and left most people dependent on public assistance when they face catastrophic care costs. The solution to structural LTC racism is to eliminate Medicaid’s laws and regulations that benefit the affluent and disfavor minorities.

Main Text: Long-term care (LTC), also known as long-term services and supports, encompasses medical and custodial care in residential or institutional settings for people in need of assistance with activities of daily living due to frailty, disability or cognitive impairment. Socially and economically marginalized groups face impaired access to quality LTC in the United Sates. A rapidly expanding academic literature documents disparities of many kinds.

Blacks tend to reside in nursing homes that have “serious deficiencies, lower staffing ratios, and greater financial vulnerability.”[1] Besides dubious nursing homes, the range of deficiencies experienced disproportionately by Black, Indigenous, and persons of color (BIPOC) includes segregation;^1,[2] reduced access or deficient home and community-based care,[3]^,[4]^,[5] assisted living,[6] mental health services,[7] pain medication,[8] influenza vaccinations,[9] hospital and hospice care[10] and ADRD (Alzheimer’s Disease and Related Dementias) care;[11] more physical restraints[12] and pressure ulcers;[13] and higher COVID-19 incidence, hospitalization and death counts.[14]^,[15]

Structural LTC Racism

What accounts for these inequities? The common denominator is Medicaid dependency.[16] Due to its dominance of LTC financing, contributing over half of the $438 billion the U.S. spent on LTC in 2022,[17] and its low reimbursement rates, far below private-pay levels and often less than the cost of providing the care,[18] Medicaid is responsible for most of the deficient access and quality that BIPOC patients receive. Because the long-term care system itself causes racial disparities, many sources attribute the problems to “systemic, structural or institutionalized racism.”[19]^,[20] Structural racism “operates through laws and policies that allocate resources in ways that disempower and devalue members of racial and ethnic minority groups, resulting in inequitable access to high-quality care.”[21]

Residential segregation and poverty cause BIPOC LTC users to live disproportionately in poor neighborhoods. People with lower economic status who live in relatively impoverished neighborhoods with nursing homes that rely most heavily on Medicaid’s meager reimbursements tend to be the ones who suffer most from structural LTC racism. Whites who depend on Medicaid are not immune to the same deficiencies afflicting marginalized enrollee groups. But Whites on the margin are more prosperous and less dependent on Medicaid. They tend to live in areas with better private-pay LTC options, such as home care and assisted living, and with nursing homes that are less Medicaid dependent.[22]

Proposed Solutions for Structural LTC Racism

Proposals to eliminate or mitigate structural LTC racism center on improving Medicaid with better policies and more funding. One source calls for a multi-prong effort to add “disproportionate-share payment adjustments to nursing homes with a higher proportion of Medicaid residents” and to equalize “Medicaid and private-pay payments.”¹ Another would “increase Medicaid and Medicare reimbursement rates, especially for providers serving high proportions of Medicaid-eligible and BIPOC older adults” and “expand access to Medicaid-waivered HCBS services.”²⁰ These are worthy goals, but simply pouring more resources into Medicaid without eliminating the conditions that favor Whites over BIPOC patients would only deliver a better funded, but still structurally racist program.

Absent from the large body of peer-reviewed articles on structural LTC racism is much discussion of the specific “laws, policies, institutional practices, and entrenched norms” that disempower racial and ethnic minorities and cause the care disparities.[23] If Medicaid dependency triggers the LTC system’s inequities and deficiencies, then the laws and policies governing Medicaid LTC eligibility should be a crucial topic for analysis. What are those laws and policies? What role do the rules governing access to Medicaid LTC benefits play? Do they benefit some and disadvantage others? If so, how are marginalized groups disempowered and devalued? Do prosperous people benefit disproportionately from Medicaid? If so, how?

Medicaid and Structural LTC Racism

Income and Asset Eligibility Rules

The most common statement about Medicaid LTC eligibility in both the popular and academic literature is that qualification requires low income and assets. Sources explain that income above $943 per month ($967 as of 2025) or assets exceeding $2,000 renders someone ineligible for the program. Applicants must “spend down” privately for care to those levels before they become financially eligible. In fact, however, Medicaid LTC financial eligibility is much less stringent.

Income is rarely an obstacle to eligibility because state Medicaid programs either deduct private health and LTC expenses before applying the low income standard or they permit applicants to divert excess income into trusts. Most states (34) use the “medically needy” income eligibility method.[24] They deduct private medical and LTC expenses from income before determining eligibility, enabling people to qualify despite having incomes well above categorical eligibility limits. Other states use an “income cap” method, allowing income up to 300 percent of the Supplemental Security Income monthly limit. People with much higher incomes can still qualify for Medicaid in income cap states by diverting excess income to an income diversion trust, also known as a “Miller” or “Qualified Income Trust.”[25] A rule of thumb is that income below the monthly cost of a nursing home, easily $8,000 or $9,000, relatively high income, is not disqualifying.

Likewise, most large resources seniors own are exempt from Medicaid’s asset limit. Exempt wealth includes a home and all contiguous property up to a minimum of $713,000 ($730,000 as of 2025) everywhere and a maximum of $1,071,000 ($1,097,000 as of 2025) or more in nine states,[26] but also, without any dollar limit, one vehicle, prepaid burial funds, a business including its capital and cash flow, personal belongings and household furnishings, even IRAs if they are in payout status as is usually true for elders in need of LTC.²⁵

Medicaid Financial Eligibility and Structural LTC Racism

How do these facts about Medicaid LTC income and asset eligibility relate to structural LTC racism? Most low income, asset-poor people qualify for Medicaid LTC benefits quickly. They have little income and countable wealth to spend down and what they do have is consumed rapidly by private health and LTC expenditures. Medicaid LTC financial eligibility policy devastates people on the lowest rung of the wealth ladder.

Less understood is that many people with substantially greater wealth also qualify quickly and with little or no asset spend down required. Their biggest assets, such as home equity, are exempt already and their countable resources are easily converted to exempt status. They can “spend down” countable assets simply by purchasing a new car, home improvements or any other item on long lists of exempt assets available online,²⁵ or from attorneys specializing in Medicaid planning.[27]

Medicaid planners routinely qualify even wealthy clients for Medicaid LTC benefits by means of legal spend down avoidance strategies such as Medicaid asset protection trusts used “to protect assets from being counted for Medicaid eligibility;”[28] Medicaid-compliant annuities that convert “excess funds into an income stream with no cash value” to accelerate “Medicaid eligibility, while protecting your client’s assets;”[29] life estates “to preserve your residence and increase your Medicaid eligibility,”[30] or half-a-loaf methods. “Half a Loaf, Reverse Half a Loaf, and Modern Half a Loaf are Medicaid gifting strategies (also called transfer strategies) … used for the purpose of reducing countable assets to qualify for Medicaid. These strategies can also preserve some of the Medicaid applicant’s assets for their family members.”[31] California’s Medi-Cal program recently eliminated its limit on countable assets altogether making LTC benefits available regardless of wealth and obviating the need for sophisticated legal spend down strategies.[32]

One effect of this system is that middle-class and affluent people qualify for Medicaid LTC benefits as easily as the poor and with less financial disruption. Once qualified, all use Medicaid’s LTC benefits. When people of moderate or substantial wealth qualify for Medicaid, they consume scarce resources that would otherwise have benefited people of lesser means. Such expanded coverage depletes Medicaid’s scarce resources and reduces the range and quality of care available to others on the program, especially BIPOC enrollees.

But why would people who could purchase high quality LTC in the private market prefer to qualify for Medicaid instead? Is it only to save money? Or could they somehow capture the best care Medicaid has to offer to the exclusion of more disadvantaged enrollees? How biased is Medicaid-based structural LTC racism?

Key Money[33]

It seems counter-intuitive that individuals and families with significant wealth would choose to use Medicaid even when that path is legally available to them given the program’s reputation for substandard access and quality. The reason they do is one of the many ways structural LTC racism manifests in the LTC marketplace.

Some nursing homes have relatively few Medicaid beds. Such facilities often have supplemental philanthropic funding and comparatively high private-pay or Medicare resident census.¹ They enjoy the higher financial margins that come from those sources’ relatively more generous reimbursements. Such facilities often provide better care and services because of their higher revenue and lesser dependency on low Medicaid rates. This two-tier system benefits those who can access it, but disadvantages any, including many BIPOC enrollees, who cannot.¹⁶

Because the Medicaid reimbursement rate for nursing home care is approximately 70 percent of what private payers pay,[34] skilled nursing facilities eagerly seek out new admissions who can pay privately from day one and for at least some period of time before they convert to Medicaid.¹ Medicaid planners encourage their affluent clients to hold back enough countable wealth, so-called “key money,” from the Medicaid spend down process so they will be able to pay privately for care at the start “to facilitate the admission of the Medicaid applicant to the best long-term care facility available.”[35] Once admitted, nursing homes cannot evict patients simply because their source of payment changes from private pay to Medicaid.[36]^,[37]

Because socioeconomically disadvantaged groups lack key money, they end up in the less desirable Medicaid-only or mostly Medicaid facilities. More prosperous White enrollees tend to live in areas with the best LTC facilities and they possess the key money to buy their way in. This result is unfair, unethical, and structurally racist, but commonplace.[38]

Moral Hazard

Beyond consuming Medicaid resources that could have gone to economically marginalized people, the availability of Medicaid LTC benefits to individuals of higher financial means has another negative, systemic consequence. In effect since Medicaid began operating in 1966, this system created a moral hazard—“a situation in which people or organizations do not suffer from the results of their bad decisions, so may increase the risks they take.”[39] The result of making Medicaid LTC eligibility available late in life while allowing significant wealth to be divested or retained in exempt form is that too many people fail to plan for LTC.[40] They end up consuming Medicaid resources instead. Why save, invest or insure early in life against needing LTC someday in old age when the government covers catastrophic costs if such care is needed and reserves the best publicly financed care for the most economically well-off people? This harmful incentive discourages early, responsible LTC planning by relatively prosperous people. It underwrites structural LTC racism.

Roots of Structural LTC Racism

Medically Needy Eligibility

From the beginning, Medicaid LTC benefits were available not only to the financially destitute, those meeting the strict financial qualifications for state welfare payments or Supplemental Security Income (SSI), but also to the medically needy. The medically needy are people with too little income to pay for institutional or home-based LTC, but with too much income to qualify for cash assistance. These higher income people are not excluded from Medicaid eligibility based on income if their private health and LTC expenses are high enough or they use an income diversion trust. The result is that people with significant incomes end up relying on Medicaid. The same people preserve wealth in the form of exempt assets. While such assets are vulnerable to mandatory estate recovery, few states enforce that requirement effectively and the liability is easy to avoid with some early legal planning.[41]

Law makers’ well-intentioned plan to help more people with LTC disinclined everyone to prepare personally for LTC risk and overloaded the public assistance program with enrollees. Medicaid LTC tried to do too much for too many so it does too little for most, especially for BIPOC enrollees with the greatest need. That is the root of structural LTC racism.

LTC Financing and Racism

Medicaid LTC enrollees are required to contribute most of their income to offset the program’s cost for their care. As Medicaid reimbursement rates are only about two-thirds of private-pay rates, enrollees get a substantial discount on their care.³⁴ But LTC providers are short-changed. They receive only the Medicaid rate, often less than the cost of the care, instead of the higher private-pay rate even though enrollees are paying “out-of-pocket” from their incomes, largely from their Social Security benefits. It sometimes happens that enrollees’ incomes are higher than Medicaid’s rate for their care. In those cases, Medicaid pays nothing; the enrollee pays all; and the LTC provider struggles financially with most of its revenue coming from the lowest payors’ rate. As the structural LTC racism literature often observes, low Medicaid reimbursements cause care deficiencies and inequities. These occur because of the laws and policies that govern Medicaid LTC eligibility and financing.

A Solution for Structural LTC Racism

If the cause of structural LTC racism is too many enrollees with sheltered or divested wealth overwhelming Medicaid’s ability to pay for quality care, then the solution must lie in diverting more prosperous people away from Medicaid dependency, enabling them to pay privately for LTC, and thus empowering Medicaid to afford better care for those most in need who remain eligible. But that is a tall order. It presents two major challenges: (1) how to keep people with significant wealth off Medicaid so more program resources reach the people currently shortchanged by structural LTC racism, and (2) how to prepare the middle class and affluent to pay for their own LTC when they need it after Medicaid is no longer available to pay for their care and preserve their wealth as now.

Re-targeting Medicaid to end structural LTC racism

Knowing how to exclude higher-income/higher-asset people from Medicaid LTC so that more program resources reach the disadvantaged is not difficult. Simply repeal the Medicaid laws, regulations and policies that permit them to qualify. Medically needy income eligibility rules that allow higher income people to qualify if their private health and LTC expenses are high enough should end. Practically unlimited asset exemptions, such as for home equity, that permit people with any amount of wealth to qualify must go. Spending down by purchasing exempt assets instead of paying for care should cease. Medicaid strategies such as special trusts, annuities, spousal refusal, and life estates—legal gimmicks that enrich lawyers and their affluent client heirs—must stop as well. Easing the path to Medicaid’s best LTC options by means of key money should end. Stopping structural LTC racism cannot be achieved until Medicaid is preserved exclusively for the most disadvantaged, whom its laws and policies have hurt the most historically.

But these needed changes are much more difficult to achieve politically than they are to identify and list. People who benefit from the status quo will fight to preserve and expand the current system and structure. These interested parties include (1) most Americans who remain oblivious to LTC risk and cost because easy access to Medicaid LTC late in life has enabled their denial; (2) elder law attorneys and financial planners who profit from transitioning prosperous clients to the best of Medicaid-financed care; (3) politicians who garner votes by promoting easy access to Medicaid LTC benefits; (4) LTC analysts and economists who ignore the extensive legal literature on Medicaid planning and pretend the practice of artificial impoverishment does not occur, and (5) the state and federal health and human services bureaucracies that have strived to expand Medicaid LTC to everyone, especially the White middle class, instead of targeting it to the victims of structural LTC racism. These are the people and the reasons that sustain the LTC status quo and stand in the way of reform, consistently protecting structural LTC racism whether consciously and intentionally or not.

Conclusion

Structural LTC racism causes reduced access to quality LTC for marginalized groups. It is grounded in Medicaid LTC eligibility law, regulations and policies. By enabling middle class and affluent people to access Medicaid LTC late in life, and preserve exempt wealth, the program became overloaded with people who should, could and would otherwise have prepared privately for LTC risk and cost. Medicaid covered too many enrollees with too many benefits ensuring that those most vulnerable financially would receive the program’s deficient care, while others more privileged, in possession of key money, would gain access to the best care the program offers.

The good news is that this condition is reversible. Lawmakers should end access to wealth-preserving Medicaid LTC benefits late in life. Instead, offer creative methods for families in mid-life to prepare responsibly to pay privately when and if they ever need expensive extended care. Some possibilities include allowing individuals and families to meet individually set LTC saving goals by carving out portions of other wealth they are accumulating, such as from retirement savings, home equity, life insurance or estate planning. Implement such measures and enormous, desperately needed private funds will flow immediately into the LTC service delivery system ensuring better access to higher quality care for everyone. Relieved of financing LTC for the middle class and affluent, Medicaid will be able to pay adequately to ensure quality care for all enrollees, ending the long-standing system of structural LTC racism.

Why this goal is realistic and how to achieve it are topics for another paper.

[1] Smith DB, Feng Z, Fennel ML, Zinn JS, Mor V. Separate and unequal: racial segregation and disparities in quality across U.S. nursing homes. Health Aff 2007;26:1448—1459.

[2] Rahman M, Foster AD. Racial segregation and quality of care disparity in US nursing homes. J Health Econ 2015;39:1—16.

[3] Fabius CD, Ogarek J, Shireman TI. Racial disparities in Medicaid home and community-based service utilization among White, Black, and Hispanic adults with multiple sclerosis: implications of state policy. J Racial Ethn Health Disparities 2019;6:1200—1207.

[4] Zhanlian F, Fennell ML, Tyler DA, Clark M, Mor V. Growth of racial and ethnic minorities in US nursing homes driven by demographics and possible disparities in options. Health Aff 2011;30:1358—1365.

[5] Gorges RJ, Sanghavi P, Konetzka RT. A national examination of long-term care setting, outcomes, and disparities among elderly dual eligibles. Health Aff 2019;38:1110—1118.

[6] Morales MJ, Robert SA. Black–White Disparities in Moves to Assisted Living and Nursing Homes Among Older Medicare Beneficiaries. J Gerontol Soc Work 2020;75:1972—1982.

[7] Rivera-Hernandez M, Kumar A, Epstein-Lubow G, Thomas KS. Disparities in nursing home use and quality among African American, Hispanic, and White Medicare residents with Alzheimer’s disease and related dementias. JAH 2019;31:1259—1277.

[8] Mack DS, Hunnicutt JN, Jesdale BM, Lapane KL. Non-Hispanic Black-White disparities in pain and pain management among newly admitted nursing home residents with cancer. J. Pain Res. 2018;11:753-761.

[9] Travers JL, Schroeder KL, Blaylock TE, Stone PW. Racial/ethnic disparities in influenza and pneumococcal vaccinations among nursing home residents: a systematic review. Gerontologist 2018;58:205—217.

[10] Zheng NT, Mukamel DB, Caprio T, Cai S, Temkin-Greener H. Racial disparities in in-hospital death and hospice use among nursing home residents at the end-of-life. Med Care 2011;49:992-998.

[11] Rivera-Hernandez M, Kumar A, Epstein-Lubow G, Tomas KS. Disparities in nursing home use and quality among African American, Hispanic, and White Medicare residents with Alzheimer’s Disease and Related Dementias. J Aging Health 2019;31:1259—1277.

[12] Cassie KM, Cassie W. Racial disparities in the use of physical restraints in U.S. nursing homes. Health Soc Work 2013;38:207—213.

[13] Cai S, Mukamel DB, Temkin-Greener H. Pressure ulcer prevalence among Black and White nursing home residents in New York state: evidence of racial disparity? Med Care 2010;48:233—239.

[14] Gorges RJ, Konetzka RT. Factors associated with racial differences in deaths among nursing home residents with COVID-19 infection in the US. JAMA Netw Open 2021;4:e2037431.

[15] Khazanchi R, Evans CT, Marcelin JR. Racism, not race, drives inequity across the covid-19 continuum. JAMA Netw Open 2020;3:1—3.

[16] Mor V, Zinn J, Angelelli J, Teno JM, Miller SC. Driven to tiers: socioeconomic and racial disparities in the quality of nursing home care. Milbank Q 2004;82:227—256.

[17] Rudowitz R, Tolbert J, Burns A, et al. Medicaid 101. KFF, 2024 https://www.kff.org/health-policy-101-medicaid/. Accessed July 13, 2024.

[18] Gruneir A, Miller SC, Feng Z, Intrator O, Mor V. Relationship between state Medicaid policies, nursing home racial composition, and the risk of hospitalization for Black and White residents. Health Serv Res 2008;43:869—881.

[19] Jones CP. Levels of racism: a theoretic framework and a gardener’s tale. Am J Public Health 2000;90:1212—1215.

[20] Shippee TP, Fabius CD, Fashaw-Walters S, Bowblis JR, Nkimbeng M, Bucy TI, et al. Evidence for action: addressing systemic racism across long-term services and supports. J Am Med Dir Assoc 2022;23:214—219.

[21] Yearby, R, Clark B, Figueroa JF. Structural racism in historical and modern US health care policy. Health Aff 2022;41—187-194.

[22] Sloane PD, Yearby R, Konetzka RT, Li Y, Espinoza R, Zimmerman S. Addressing systemic racism in nursing homes: a time for action. J Am Med Dir Assoc 2021;22:886—892.

[23] Braveman PA, Arkin E, Proctor D, et al. Systemic and structural racism: definitions, examples, health

damages, and approaches to dismantling. Health aff 2022;41:171—178.

[24] Musumeci MB, Chidambaram P, Watts MO. Medicaid financial eligibility for seniors and people with disabilities: findings from a 50-state survey. KFF 2019 LINK. Accessed July 13, 2024.

[25] American Council on Aging. Spending down assets to become Medicaid eligible for nursing home/long term care. LINK. Accessed July 13, 2024.

[26] American Council on Aging. Impact of home ownership on Medicaid eligibility considering marital status & Medicaid type. LINK. Accessed July 13, 2024.

[27] American Council on Aging. Medicaid planning: definition, costs & types of planners, LINK. Accessed July 13, 2024.

[28] Law Offices of Stephen J. Silverberg. What is a Medicaid asset protection trust (MAPT). LINK. Accessed July 13, 2024.

[29] Krause Financial Services. Medicaid compliant annuity. LINK. Accessed July 13, 2024.

[30] The Retirement Group. Residence Transfer Subject to Life Estate: Medicaid Planning for Merck Employees and Retirees. LINK. Accessed July 13, 2024.

[31] American Council on Aging. How the modern half a loaf strategy helps families become Medicaid eligible and preserves assets. LINK. Accessed July 13, 2024.

[32] California Health Advocates. Medi-Cal’s asset limit is now eliminated. LINK. Accessed July 13, 2024.

[33] Kenton W. Key money: what it is, how it works, in practice. LINK. Accessed July 13, 2024.

[34] American Council on Aging. 2021 nursing home costs by state and region, understanding the difference between private pay and medicaid reimbursement. LINK. Accessed July 13, 2024.

[35] JD Supra. Top Tips For A Successful Medicaid Spend Down. https://www.jdsupra.com/legalnews/top-tips-for-a-successful-medicaid-67619/. Accessed July 13, 2024.

[36] Elder Law Answers. Fighting nursing home discrimination against Medicaid enrollees. LINK. Accessed July 13, 2024.

[37] California Advocates for Nursing Home Reform. Overview of Medi-Cal for long term care. LINK. Accessed July 13, 2024.

[38] Warshawsky MJ. Steps to make long-term care financing fairer and more sustainable. Tax Notes Federal 2022;176:973—988.

[39] Cambridge Dictionary. LINK. Accessed July 13, 2024.

[40] Brown JR, Finkelstein A. Insuring Long-Term Care in the United States. JEP; 2011: 119-142.

[41] Super Lawyers. Avoiding pay back: Medicaid planning and estate recovery: protecting your assets from state reimbursement for nursing home care costs. LINK. Accessed July 13, 2024.

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Updated Monday, May 12, 2025, 10:03 AM (Pacific)

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LTC E-ALERT #25-017: LTC NEWS AND COMMENT

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

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

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

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

Suozzi Looks To Trim Costs Of His Public Long-Term Care Insurance Plan
Employees with higher incomes, education levels more likely to anticipate need for long-term care
Skilled nursing workers more prone to violence, injuries than any other healthcare sector: study
Elder Law Planning: Safeguarding Your Assets And Securing The Best Care
2 in 7 say low pay will be the reason they leave senior care sector: study
The age-old problem of long-term care
More than 1 in 5 Medicare home health users have unreported dementia, study finds
Americans with Alzheimer’s tops 7 million, new report shows
Fate Worse Than Death: Many Long-Term Care Residents Lose All Independence, Study Says
VA Nursing Home Care: Opportunities Remain to Enhance Oversight of State Veterans Homes

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

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Updated Monday, May 2, 2025, 10:03 AM (Pacific)

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LTC Bullet: Five Things You Probably Don’t Know about Long-Term Care

LTC Comment: What if most of what we think we know about long-term care is wrong? Let’s explore some possibilities after the ***news.***

*** WEDNESDAY, I participated in an “Alliance for Health Policy” event in Washington, DC. The Alliance’s annual Signature Series addresses challenging issues in health policy “by convening cross-sector dialogue with experts in both policy and practice” to “critically examine and identify what’s at stake, as well as key areas of opportunity.” Last year’s theme focused on the transformative power of Artificial Intelligence (AI) in health care and health policy. This year’s theme is “aging.” Participants imagined what it would be like to be 80 years old (easy for me) and considered what challenges being that age could bring to various demographic scenarios.

I’ll be back in DC next week for Genworth and CareScout’s Symposium on “Sustainable Solutions: The Future of Long-Term Care Financing.” Check out the program’s landing page here, where you can read about each of the four panels and review the panelists’ bios. Join us virtually for the Symposium here. I’ll be on Panel #4: "Better Together..." – Public + Private Collaboration. Expect some spirited discussion. ***

LTC BULLET: FIVE THINGS YOU PROBABLY DON’T KNOW ABOUT LONG-TERM CARE

LTC Comment: Will Rogers is famously quoted as saying, "It isn't what we don't know that gives us trouble, it's what we know that ain't so." No truer words have been spoken about long-term care. Here are some thoughts and considerations on that theme. I may develop these notes into a paper, but for now just see what you think and feel free to offer feedback to smoses@centerltc.com.

“Five Things You Probably Don’t Know about Long-Term Care”

Stephen A. Moses

Very little private wealth funds LTC

a. $97 trillion wealth in …

i. Retirement savings ($40T),

ii. Home equity ($35T)

iii. Life insurance ($22T)

b. LTC spending: $629.3B

i. Medicaid: $278.3B, 44.2%

ii. Medicare: $100.3B, 15.9%

iii. Private insurance and other public payers: $169.0, 26.9%

iv. Out of pocket: $81.7B, 12.9%

1. Half is income of people already on Medicaid

a. Mostly Social Security income

b. But pension and other private income too

2. Only half could be spend down of savings

a. $40.9B, 6.5%

b. $1 out of $15 spent on LTC

Medicaid is good for the affluent, bad for the poor

a. Medicaid treats the affluent well

i. High income people qualify (medically needy)

ii. High asset people qualify (exempt wealth)

iii. Affluent people get the best Medicaid offers

1. Key money

iv. Medicaid is a windfall for affluent heirs

1. Big exemptions

2. Little estate recovery

b. Medicaid treats the poor poorly

i. Few assets wiped out quickly

ii. Lack key money, so …

1. Shunted to the worst, high-Medicaid nursing homes and home care providers

iii. Victims of “LTC racism”

Medicaid no longer prioritizes the poor aged, disabled and dual eligibles (“How the Wealthy Stole Medicaid”)

a. Since ACA, Obama Care, in 2010

i. 90% federal match; $9 federal for every $1 state

ii. Covers working age adults with incomes up to 138 percent of the federal poverty level

iii. Mostly single, often unemployed, childless people incentivized to remain so and to attract others to the same generous benefit

b. Expansion population grew from nothing to 20% of Medicaid dollars

c. Aged and disabled

i. Went from 25% of enrollees and 69% of expenditures (2003)

ii. To 20% and 50%, respectively (2023)

d. Dual eligibles

i. From 14% and 42% (2005) to 14% and 32% (2023)

LTC financing is schizophrenic

a. Diametrically contradictory public policies

i. Reward accumulation of wealth, such as tax-favored IRAs and 401(k)s that build nest eggs; subsidized mortgages and mortgage-interest tax deductions that grow home equity; and tax-deferred growth and tax-free death benefits that boost life insurance cash value.

ii. Medicaid eligibility policies that discourage spending for LTC

1. Punish the poor

2. Reward the affluent.

b. Results

i. Plenty of private funds in the economy lie fallow for LTC financing

1. Less full price revenue for LTC providers

2. LTC access and quality suffer

ii. As those funds are not at risk, LTC insurance market to protect them lags

1. People ignore LTC until they need it

2. Then qualifying for Medicaid is the path of least resistance

iii. Too many people rely on Medicaid, with dire consequences

1. Poor reimbursements

a. Caregiver shortages

b. Deficient care

c. Too little HCBS

d. Nursing home closures

2. Institutional bias

a. Decades warehousing elderly in nursing homes

b. Still problem in rural areas

3. Discrimination

a. In favor of private payers

i. Key money

ii. Access to best institutional and home-based care

b. Against Medicaid recipients

i. LTC racism

ii. Condemned to high-Medicaid, poor quality care

4. Moral hazard

a. Easy access to Medicaid caused …

b. Complacency, resulting in …

c. Failure to plan, save, invest or insure in LTC

A public/private LTC solution does not require a big, new, compulsory, payroll-funded entitlement and trust fund

a. Medicaid must pay market rates

i. Eliminate discrimination against poor and for affluent

ii. LTC providers pay adequate wages

1. Solves caregiver shortage

2. Ensures caregiver quality

iii. Competition

1. For private payers

2. Instead of begging for more Medicaid

iv. But Medicaid cannot pay market rates with so many on the program

1. Must reduce Medicaid census

2. Increase private financing

a. Put $97 trillion private wealth to work

b. Attract LTC insurance to protect the wealth

b. Solutions to reduce Medicaid dependency and attract private wealth to LTC

i. Keep Medicaid treatment of income the same

1. Continue to require income spend down for care (medical or LTC)

2. Excess Social Security, pension and other private income offsets Medicaid costs

3. But LTC providers receive market rates, not Medicaid’ previous below-cost rates

ii. Stop allowing spend down by purchasing exempt assets (“Medicaid's $100+ Billion Leak”)

1. Asset spend down does not have to be for care costs currently

a. Unlike income spend down

b. Allows conversion of unlimited countable wealth to exempt status

2. So make them the same

a. Potential savings of $100+ billion per “class” of elders

i. New “class” of infirm elders every two or three years

iii. Eliminate or radically reduce Medicaid’s huge home equity exemption

1. Let seniors’ $14 trillion of home equity flow into LTC financing

2. Vast new revenue potential for LTC providers

3. Better access and quality

4. Strong incentive to insure home equity early against LTC cost

iv. End abusive Medicaid planning methods that benefit only the affluent

1. Irrevocable trusts

2. Medicaid compliant annuities

v. Extend Medicaid’s five-year lookback to 10 years or 20

1. Easy to check through assessors and recorders

2. Discourages early planning for Medicaid LTC

vi. End systemic LTC racism

1. When all funders, including Medicaid, pay market rates …

2. Discrimination based on payment source will end, and

3. LTC racism will disappear.

vii. End Obama Care preference for able-bodied, working-age adults

1. Stop 90% match for “expansion” population

2. Give Medicaid back to the vulnerable poor, aged and disabled people it was intended to serve

viii. Let states experiment

1. Block grants

a. Accept less federal money

b. Receive more policy flexibility

2. Experiment with creative ways to do more with less

a. States as laboratories of federalism

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Updated Monday, April 28, 2025, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #25-016: LTC NEWS AND COMMENT

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

Baby Boomers Are No Longer Concerned About Their Kids Future-Here’s Why
The Care Dividend Why and How Countries Should Invest in Long-Term Care
Personal savings goals out of reach for most Americans: survey
Why should societies invest in long-term care? New evidence makes the case for action
In policy shift, Medicare makes family caregivers part of medical reimbursement system
Medicaid Reform Goals + Paragon’s Latest on Reducing Medicaid and Exchange Waste
Long-Term Care: Affording it Without Losing the Farm
Long-term care insurance crisis: Soaring premiums, policy buyouts, and ‘deceptive’ tactics

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Updated Monday, April 21, 2025, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #25-015: LTC NEWS AND COMMENT

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

Americans plan to save less for retirement, even though it won’t be enough, survey finds
An untapped resource: How family caregivers provide value for home care
History Repeats? Faced With Medicaid Cuts, States Reduced Support For Older Adults And Disabled People
Without support, seniors aging in place may elect facility-based care, study finds
Medicare Advantage And Supplemental Long-Term Services And Supports: A Small Step In The Right Direction
Hospital visits for cannabis use linked to higher dementia risk
Unpacking dysfunction in long-term care insurance
How cutting Medicaid would affect long-term care and family caregivers

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Updated Monday, April 18, 2025, 10:03 AM (Pacific)

Seattle—

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LTC BULLET: HOW THE WEALTHY STOLE MEDICAID

LTC Comment: Private wealth sits on the sidelines as Medicaid shifts from helping the poor and vulnerable to subsidizing the middle class and affluent. Facts and analysis follow the ***news.***

*** TODAY'S LTC BULLET is sponsored by Claude Thau (BackNine Insurance). BackNine gives you a free personalized website at no cost. Your clients (& family & friends) can, with as little or as much of your involvement as you or they want, buy life insurance and LTCi, and can speed issue by scheduling a paramed and uploading medical records immediately. We quote stand-alone LTCi, linked-benefit and life with a LTC rider side-by-side. Claude is the lead author of Milliman’s annual Broker World LTCi Survey & a past Chair of the Center for Long-Term Care Financing. Contact him at 913-707-8863 or claude@back9ins.com to learn about more great BackNine features and services. ***

*** MCKNIGHTS LTC NEWS COLUMNS by Steve Moses. From time to time, we point LTC Bullets readers to columns I’ve published in McKnights LTC News. McKnights is the leading publisher of news about the LTC provider industry with separate publications focused on nursing homes, senior living and home care. I think it is very important for people working in the LTC financing side of the business to understand the challenges people working in the provider side of the business face and vice versa. These columns published in the past year are my way to reach out and encourage mutual understanding between our professional silos. I invite your feedback to smoses@centerltc.com. If you find value in this work, remember it is part of what you support when you join the Center for Long-Term Care Reform. Please do that here. Check out all our membership levels and benefits here. Let’s fix long-term care together.

Are We LTC Suckers, April 11, 2025
Disrupt LTC Now, February 26, 2025
Where Did the Private Payers Go?, January 17, 2025
What’s Next for Long-Term Care?, December 2, 2024
Long-term care policies matter, October 28, 2024
What if Medicaid Paid Market Rates?, September 16, 2024
How Medicaid cripples SNFs, August 12, 2024
What Assisted Living Needs Versus What It Gets, July 8, 2024
The Medicaid LTC snafu, April 15, 2024 ***

LTC BULLET: HOW THE WEALTHY STOLE MEDICAID

Last week, the Paragon Health Institute published “Medi-Cal-amity: California’s Reckless Expansion of Medicaid Long-Term Care to the Affluent.” In that policy brief, I explained how Medi-Cal eliminated its asset eligibility test making even the richest Californians eligible for the Medicaid program’s most expensive long-term care (LTC) benefits. Unfortunately, that egregious misuse of the public welfare program in the Golden State is only the tip of the iceberg nationally.

Medicaid has transitioned for decades from a means-tested program intended to help the poor and vulnerable into an entitlement for the middle class and affluent. For example, the aged and disabled were 25 percent of enrollees in 2003, when they consumed 69 percent of total Medicaid expenditures. By 2023, they had declined to 20 percent of enrollees receiving only 51 percent of total spending. The poorest of the poor, “dual eligibles” who qualify for both Medicaid and Medicare, were 14 percent of Medicaid enrollees in 2005 and accounted for 42 percent of total program expenditures. By 2023 they remained 14 percent of enrollees but they garnered only 32 percent of spending. Why are Medicaid’s most vulnerable recipients getting such short shrift lately?

The 2010 Affordable Care Act, aka Obama Care, created a new category of Medicaid recipients: working age adults with incomes up to 138 percent of the federal poverty level. State Medicaid programs receive a 90 percent federal funds matching rate for services provided to this new group of enrollees. Compared to the average match rate for other Medicaid eligibility groups of 50 to 77 percent depending on the state, this special, extremely high level makes this “expansion” population very attractive. States need to put up only $10 to receive $90 from the federal government. Responding to this incentive, states have added 21 million recipients to Medicaid enrollment nationally. These new, young, able-bodied recipients now consume 20 percent of total Medicaid expenditures, 18 percent from federal funds and two percent from states.

It is easy to see, therefore, why the resources Medicaid formerly reserved for the poor elderly and disabled are going instead to mostly single, often unemployed people incentivized thereby to remain so and to attract others to the same generous benefit. But there is another, possibly even more important way, that Medicaid’s neediest and most vulnerable recipients are being crowded out from access to the best care.

Over the years, by a kind of eligibility bracket creep, more and more well-to-do people have gained access to Medicaid LTC benefits without the inconvenience of spending down their savings to pay privately for nursing home or home care first. High income people qualify because Medicaid deducts their private health care expenditures from their income before applying an income test. Most elderly people in need of LTC have high private health costs so they qualify easily based on income. For example, if a private nursing home costs $10,000 per month, a Medicaid applicant with that much income would qualify for Medicaid, transferring the cost of the nursing home and other medical expenses to the program. While the patient’s income would still go to the nursing home to offset Medicaid’s cost for the care, the facility would receive only Medicaid’s below-cost reimbursement rate instead of the much higher private pay rate. The Medicaid rate, at about two-thirds of the private pay rate, severely inhibits the facility’s ability to provide quality care for LTC patients on the program.

Likewise, people with high assets routinely qualify for Medicaid LTC benefits, even when countable assets are officially limited to $2,000 as in most states, because nearly all of the elderly’s large assets are exempt from any spend down requirement. Such exempt resources include most home equity, up to $1,097,000 in some states but never less than $730,000 in any state except California, which eliminated the asset test altogether making the home equity limit moot. Also exempt, in unlimited amounts, are one business, tax-favored retirement savings, a vehicle, prepaid burial funds, personal belongings and home furnishings. As few states enforce mandatory estate recovery, most of these exempt resources pass unencumbered to heirs who reap a windfall from funds Medicaid protected from their parents having to pay privately for their own LTC.

The two trends in Medicaid policy just described—new able-bodied, working-age adults capturing one-fifth of the program’s spending in the past 15 years while high income and high asset people increasingly qualify easily for LTC without first spending down their wealth—are converting Medicaid from a safety net for the needy into an entitlement for the indolent and affluent. There should be little wonder why few people take the risk and cost of future LTC seriously enough to save, invest or insure in preparation. Nor should we be surprised that so little private spending goes to pay for LTC as this table of National Health Expenditure data shows:

Only 12.9 percent of total LTC spending comes “out of pocket.” But even that low amount is deceiving as it includes income people on Medicaid must contribute to offset the program’s cost for their care. Removing that income, mostly from Social Security benefits, we find that only about 6.5 percent of total LTC spending, $1 out of $15, could come from asset spend down. No wonder people don’t worry about LTC until they need it and gravitate quickly to Medicaid when costs of care escalate.

For these reasons, America’s LTC financing system is rapidly spiraling into an inadequately funded, welfare-based, centrally planned, government-run failure that serves no one well, and especially not the neediest aged and disabled recipients it is supposed to have served primarily. How can we reverse this process of collapse? Step one is to remove the ACA expansion group from Medicaid eligibility or, short of that, to radically reduce their federal matching rate so that states have no special incentive to add them compared to supporting traditional coverage groups such as poor women, children, the aged and disabled. Step two is to divert the middle class and affluent toward early planning for LTC and away from eventual dependency on Medicaid. Achieving that objective requires tightening Medicaid LTC financial eligibility rules, enforcing mandatory estate recovery, and prohibiting the use of special trusts and annuities to qualify while sheltering large sums of wealth. For details on how to do that, see the Paragon Health Institute’s “Long-Term Care: The Problem,” “Long-Term Care: The Solution,” and Medicaid's $100+ Billion Leak.

If we give Medicaid back to truly needy poor women and children, the aged and disabled, what can we expect to happen? Medicaid census will plummet. Covering many fewer genuinely eligible recipients, the program will be able to pay market rates for services across the LTC spectrum: home care, assisted living and nursing home care. That will end the discrimination against Medicaid recipients that occurs because LTC providers are desperate to attract private payers at 1.5 times the rate Medicaid pays. It will end the “LTC racism” that occurs when the needy are crowded out from the best nursing home and home care services because they lack “key money” to pay privately for a while which opens doors to the best care for the affluent.

But where will the money come from to pay private rates to LTC providers across the care spectrum? Money in the U.S. economy for this purpose is not in short supply. It is simply diverted from funding LTC by Medicaid financial eligibility policies that discourage its use. In fact, Americans own $97 trillion in retirement savings ($40T), home equity ($35T), and life insurance ($22T) that could go to pay for their LTC when needed if it were not diverted from that purpose by generous Medicaid income and asset eligibility rules. More importantly, if and when that wealth becomes liable for LTC funding due to changing Medicaid rules as recommended above, the public will act early and responsibly to protect it against LTC risk and cost thereby unleashing a long dormant market for private LTC insurance.

All that is needed is to resolve the glaring contradiction in public policies that on the one hand reward accumulation of wealth, such as tax-favored IRAs and 401(k)s that build nest eggs, subsidized mortgages and mortgage-interest tax deductions that grow home equity, and tax-deferred growth and tax-free death benefits that boost life insurance cash value, and on the other hand divert those private assets from LTC spending by making Medicaid financial eligibility so easy to achieve while preserving wealth. The secret to fixing LTC is to keep those public policies that grow wealth, but to repeal the policies that divert that wealth from paying privately for LTC. Doing that will flood the LTC service delivery system with desperately needed market-rate revenue and unleash the suppressed potential of private LTC insurance. Everyone will be better off including the genuinely needy who will receive better care from Medicaid and most Americans who will access better care as private payers.

Changes of this nature and magnitude are a big ask, but they are based on evidence and sound reasoning. Nothing ventured, nothing gained.

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Updated Monday, April 14, 2025, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #25-014: LTC NEWS AND COMMENT

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

Administration’s deregulation push gives skilled nursing providers an extra chance to shape the rules
Are We LTC Suckers
LTCi becoming more of a target for fraud
Medicare Advantage Payments to Increase Again
Getting Serious About Medicaid Reform + Several Biden Health Policies Fall
A fifth of Americans are on Medicaid. Some of them have no idea.
BREAKING: Judge tosses nursing home staffing rule
Study shows need for paid caregivers: 86 percent of people living with dementia lack formal support
Medicaid Eligibility Levels for Older Adults and People with Disabilities (Non-MAGI) in 2025

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Updated Monday, April 7, 2025, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #25-013: LTC NEWS AND COMMENT

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

Senior living giant Pacifica files for Chapter 7 bankruptcy
Home care aides largest occupation in US as of last May, BLS reports
Retirement becoming ‘moving target’ as older adults wrestle with debt
CareScout Partners with Dr. Judy Benjamin on Her Walk Across America
Family Caregivers Need Help. These Are the Policies They Say Would Make the Biggest Difference
Is it time for the federal government to become more involved in assisted living?
Long-Term Care Planning: What Gen X Needs To Know Now
Memory Lane Games

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Updated Monday, April 4, 2025, 10:03 AM (Pacific)

Seattle—

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LTC BULLET: CARESCOUTING LTC

LTC Comment: This year’s Genworth/CareScout cost of care survey is a marvelous tool. Details after the ***news.***

*** MORE CARESCOUT NEWS:

4/3/2025, “CareScout Partners with Dr. Judy Benjamin on Her Walk Across America,” Genworth/CareScout

Quote: “On Saturday, April 5, Judy Benjamin, PhD, a National Board-Certified Health and Wellness Coach, will take her first steps on the more than 3,000-mile journey across the country to raise awareness for alternative ways to stay healthy at any age. Over five months, she will walk from San Diego, California, to St. Augustine, Florida, following the Adventure Cycling Association Southern Tier route. … CareScout, a leader in long-term care and aging solutions, is proud to partner with and support Dr. Benjamin on this journey. This collaboration reflects and reinforces CareScout’s commitment to empowering individuals and families with the knowledge and resources to plan for aging with confidence and dignity.”

LTC Comment: Go Judy! Go CareScout! ***

LTC BULLET: CARESCOUTING LTC

LTC Comment: The Boy Scouts’ motto is “Be Prepared.” When it comes to long-term care (LTC) planning, there is one tool all consumers should study carefully to become prepared. Genworth and CareScout (Center-corporate-members) released their 2024 Cost of Care Survey results on March 4, 2025. This is the survey’s 20th annual iteration and it has evolved to be a highly valuable interactive tool.

As always, CareScout gives us the latest account of care costs by type showing the traditional categories as below. (I’m intentionally not focusing here on the data. Go to the source for that. For now, just consider how vast and valuable the extractable information is.)

In-home care

Homemaker services

Home health aide

Community and assisted living

Adult day health care

Assisted living community

Nursing home care

Semi-private room

Private room

How do you want to see the cost of care displayed? Hourly? Daily? Monthly? Annually? One click displays the relevant data however you want to read it.

Want to check costs in your state of residence? Simple. Just click your state on the U.S. map. Then, again, choose hourly, daily, etc.

Maybe your big concern is the trend in care cost. Scroll down to find a table showing 2024 and 2023 national median values for hourly home care, daily adult day health, and monthly assisted living and nursing home costs followed by their annual percent change (increase). None of these categories went down in cost. Some went up dramatically, such as hourly homemaker services (10 percent), monthly assisted living (10 percent) and monthly nursing home for a semi-private room (the level that Medicaid funds) (7 percent).

Keep scrolling down to find charts showing the increase in all the categories over the past two years. If that doesn’t scare you enough, try this …

Go back almost to the top of the website and look for “Calculate Future Cost.” Now pick any decade from 2024 to 2074 and click for the estimates of future costs from CareScout’s crystal ball. Want to fine tune even more? You can pick any year in between. On top of that, you can still choose whether to see hourly, daily, monthly or annual data!

But wait, there’s more! (I feel like a pitchman.) CareScout lets you choose your expected rate of inflation from one to five percent. Given that some care categories are rising in cost faster than five percent already, 1 to 5 percent, may be too conservative, so that should be taken into account.

By now, CareScout surely has your attention. But maybe it’s too late for these numbers to scare you straight into searching for a LTC insurance policy. In that case, CareScout offers a link to “Find Quality Care.” There you’ll find “726 CareScout Quality Network Providers.”

Your Center for Long-Term Care Reform has posted links to the annual Genworth/CareScout cost-of-care surveys on our members-only website (The Zone) every year since 2004. Click here to join the Center and get your own user name and password. You’ll find tons of useful information in The Zone and you’ll receive our weekly LTC E-Alerts and bi-weekly LTC Bullets. Want daily insights about everything happening in LTC? Become a premium member to receive our daily LTC Clippings. Find all our individual and corporate “Membership Levels and Benefits” here.

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Updated Tuesday, April 1, 2025, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #25-012: LTC NEWS AND COMMENT

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

Nursing homes fear states will be unable to fill Medicaid 'hole' without provider taxes
Major job cuts, restructuring at HHS raises many questions, industry group says
Can you use home equity to pay for long-term care?
A closer look at who relies on Medicaid
New Report: Addressing Medicaid Money Laundering
Aging farmers face long-term care challenges: OSU Extension offers planning tools
Another shot at redemption?
Red States Are Paying For California’s Illegal Aliens’ Health Care

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Updated Monday, March 24, 2025, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #25-011: LTC NEWS AND COMMENT

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

What Potential Federal Medicaid Cuts Could Mean for States and Their Residents
Wave of long-term care insurance claims growing faster than age wave, expert says
The Big Secret About Medicaid: It’s a Middle-Class Benefit
MedPAC Members Will Hear Out Agents, Brokers After Slamming ‘Flawed System’
California’s Medi-Cal shortfall hits $6.2 billion with ‘unprecedented’ cost increases
U.S. Short-Term Care Insurance Market to Reach $110.1 Billion by 2033 | Persistence Market Research Report
American Voters Want Commonsense Medicaid Reforms
Opinion: Households [sic] plans for long-term care, but those plans may not reflect reality

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Updated Friday March 21, 2025, 10:03 AM (Pacific)

Seattle—

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LTC BULLET: ILTCI ’25 VIRTUAL VISIT

LTC Comment: ILTCI ’25 was another successful industry convocation. Your “virtual visit” to the conference follows the ***news.***

*** 3/6/2025, “Milliman’s annual U.S. industry LTCI claims projection,” by Rachel Marsiglio, Juliet Spector, and Robert Eaton, Milliman
Quote: “Long-term care insurance (LTCI) is almost 50 years old. In the 1990s, more than 100 companies were selling policies to individuals and to groups. In 2003, the pattern of annual increases in sales came to an abrupt end and LTCI policy sales began to decline rapidly. Between 2003 and 2009, individual policy sales declined by 9% per year. Fewer than 15 carriers remain in the market.As the U.S. population ages, the market for hybrid life and LTCI policies has been growing. In addition, we see new standalone LTCI products filed in 2025 from insurers that had previously ceased most sales.”
LTC Comment: Click through for fascinating details including “the expected benefits (paid claims) that long-term care (LTC) insurers will provide over the remaining life of the policies as of year-end 2023.” ***

*** TWILIGHT WISH: Every year the ILTCI Conference supports a charity by donating funds and matching attendees’ gifts. Twilight Wish was this year’s recipient. Twilight Wish Foundation is a nonprofit organization dedicated to granting wishes to seniors aged 68 and older who live at or below the poverty level or reside in nursing facilities. Their mission is to honor and enrich the lives of deserving seniors through wish-granting celebrations that connect generations, aiming to make the world a "nicer place to age, one wish at a time." ILTCI reminds attendees: If you forgot to donate, or attempted to donate to Twilight Wish Foundation but experienced some internet issues, please use the link below to donate to this year's charity Twilight Wish so we can support the amazing work they do! Donate here.” I’m sure contributions from non-attendees would be equally welcome. ***

*** ILTCI CONTEXT: For the history of long-term care insurance conferences through 2021, go here. But that’s 80 pages, so for a quick overview and analysis, check out this ten-minute “podcast.” If you’d like to see our most recent virtual visits to ILTCI conferences, go here for 2023, and here for 2024. ***

LTC BULLET: ILTCI ’25 VIRTUAL VISIT

LTC Comment: The 2025 Intercompany Long-Term Care Insurance Conference convened March 9-12 in Philadelphia at the Marriott Downtown. This year’s theme was “Getting Stronger.” Over 1000 registrants participated representing all aspects of the LTCI business and related fields.

This “virtual visit” to the conference is intended to give those who were unable to attend, especially the LTC insurance producers doing the hard sales work out in the commercial trenches, some idea of the content and mood of the meeting.

Exhibit Hall Opening Reception

The opening reception, Sunday night, March 9, was an excellent kick off. Free drinks and ample food sparked conversation and networking between participants, and with exhibitors and sponsors. Philly cheesesteak sandwiches, mussels in a garlic butter sauce, and a wide selection of Mediterranean food pleased palates.

Opening Session

The opening general session led by conference chair Jeff Levin of OneAmerica, began at 8am Monday morning, March 10, immediately after an excellent buffet breakfast. Levin recognized former leading lights of the industry by name and talked about how LTCI has grown, shrunk, and expanded again, getting better all the time. This year’s program included 219 speakers, 34 sponsors and 49 exhibitors. Mr. Levin observed that volunteers make the meeting happen and he recognized them. He graciously thanked conference staff Diane Fulton and Christi Trimble for their organizational work. This year ILTCI partnered with Twilight Wish, a charity to make wishes come true for seniors. ILTCI matched contributions to the charity by conference attendees. A drawing for a $1,000 gift card was in play for attendees who filled their “bingo cards” with stamps from each of the exhibit hall booths.

After Conference Chari Levin announced that Gina Betz of illumifin will be next year’s conference chair, she invited everyone to ILTCI ’26 that will be held in Orlando, FL at the beautiful Rosen Shingle Creek Resort, about which a marketing video for the property teased audience interest.

Next came the announcement of this year’s ILTCI Recognition Award recipients. Carroll Golden, Executive Director of NAIFA Specialty Centers and Denise Liston, Senior VP at illumifin received the honor this year. Both delivered thoughtful remarks in thanks for the recognition, the trophy and the honorarium. They join a proud group of former award recipients including Marc Cohen (2018), Stephen Moses (2019), and Ron Hagelman, Peter Goldstein and the company LTCI Partners (2024, after a five year hiatus without the award being granted).

Keynote Speakers

This year’s “keynote address” followed. It was unique. Instead of the usual motivational speaker, we were presented a series of video clips from a forthcoming Public Broadcasting System documentary highlighting the challenges of caregiving. The two-hour program, Caregiving, will air on 330 PBS stations across the country in June. Care Scout sponsored the keynote and CEO Samir Shaw introduced a panel of speakers who discussed the origin, planning and challenging creation of the program. This groundbreaking public media documentary delves into the personal stories of caregivers, shedding light on the challenges they face in providing short and long-term care, as well as palliative and end-of-life care for individuals of all ages. The four-person panel representing creators of the documentary and including one caregiver, whose story was especially moving, described how the program was conceived, how caregivers willing to tell their stories were found, and how they completed the project.

In the Q&A session that followed, the panel was asked how many of them own LTC insurance. Answer: Not one. That admission revealed the LTCI industry’s fundamental challenge, getting people, even those touched by the challenge of caregiving, to take concrete measures to prepare for the risk and cost of needing care one day themselves. On that issue, I have something to say in the Closing LTC Comment below.

Breakout Sessions

This year’s breakout sessions were presented in seven substantive tracks: Advisors, Agents, & Agencies; Actuarial & Finance; Claims & Underwriting; Legal, Compliance & Regulatory; Marketing, Engagement, & Research; Management & Operations; and Wellness & Aging in Place Solutions. Following are summaries of each of the breakout sessions I attended.

10:45am, March 10: “How Can Behavioral Economics Change LTCI (For the Better)?”
Marketing, Engagement, & Research Track

Moderator: Jodi Anatole, Endeavour Consulting
Speakers:
Andy Freedman, Assured Allies
Richard Mathera, Irrational Labs
Monika Shvetz, Mindful Marketing Solutions LLC

Session description: Behavioral economics combines elements of economics and psychology to understand how and why people behave a certain way - and can be used to change behavior to create better outcomes. Learn the principles of behavioral science, examples from other industries, and how they can be applied to improve the experience for LTCI - for carriers, producers, and policyholders. Specifically: How do you capture attention and motivate people to make decisions? How do you communicate more effectively? What is the reaction when something doesn’t cost anything? What is a “Nudge”? And ways to adopt this concept into what we do. This will be an interactive session where the audience will have a chance to pose their challenges and experiences where adoption of behavioral economic principles have made an impact.

LTC Comment: I found this session fascinating. Richard Mathera explained the many ways people behave irrationally and how to recognize and adapt to those human foibles. Bottom line: Design for clients’ unique needs; reduce uncertainty. That’s how to think about behavioral science. Freedman of Assured Allies explained how his company employs behavioral strategies to help LTCI carriers reduce risk, bring solutions to policyholders, and help people stay at home longer. Behavioral insights helped his company go from “asking people to contact to us to concentrating on specific challenges like how to get dressed.” Monika Shvetz focused on behavioral psychology in advertising. She said “Know your customer is Rule 1. Rule 2 is you can’t be everything for everyone. Develop “mindful marketing strategies.”

2:00pm, March 10: “The Heavyweight Champions of LTC Planning Strategies”
Advisors, Agents, & Agencies Track.

Moderator: Elena Castor, AdvisorEdge Solutions
Speakers:
Zack Derryberry, ACSIA Partners
Jamie Mueller, OneAmerica Financial
Shawn Britt, Nationwide

Session description: Sit ringside for an exciting exhibition of Advanced LTC Planning Strategies. This three round event will spotlight the successful use of IRAs and Qualified assets in LTC Planning, Pension Protection Act (PPA) Qualifying LTC Annuities, and Small Business Owner and Carve-Out Planning. Tax savings and LTC planning are the ultimate ‘one-two’ punch combination; together they’re a knockout. See how these strategies incorporate protection and tax savings to produce 2X the planning value for your LTC prospects while opening an entirely new LTC premium resource.

LTC Comment: This session was a revelation to me. I had no idea how vital tax planning is to LTC financing strategy. Mueller from OneAmerica explained how non-qualified annuities and the Pension Protection Act “let us help people with these widely owned annuities.” ACSIA Partners’ Derryberry focused on how IRAs and Qualified Assets magnify the benefits of planning for LTC. He observed that, ironically, the SECURE Act may create greater taxation for an IRA beneficiary than if funds were withdrawn by the original IRA owner. “Using qualified assets and IRAs for premium dollars can be a more efficient IRA distribution strategy compared to ‘defer and die’ where the IRA is transferred at death.” Shawn Britt of Nationwide explained the tax advantages of long-term care insurance for Business owners and employees. She showed charts of allowable tax deductions by decade of age. Use LTCI to “recruit, retain, reward.”

3:45pm, March 10: “Rumble in the Breakout Jungle! Short-Term Care v. Long-Term Care”
Advisors, Agents, & Agencies Track.

Moderator: Stephanie Moench, Oliver Wyman
Speakers:
Erin Bueltel, Wellabe
Corri Campbell, Mutual of Omaha
Kent Little, New York Life
Dennis Rinner, GoldenCareUSA an Integrity Company

Session description: If they were boxers, the short-term care insurance industry and the long-term care insurance industry would probably notice each other training in the same gym. While they would likely be in slightly different weight classes, they would share many of the same attributes, have similar goals, and ultimately their personal battles would occur in the same ring. As the extended care market evolves, the relationship between these two competitors may be changing. Are the long-term care insurance and short-term care insurance industries going to become sparring partners who make each other stronger? Will they start to compete head-to-head more often? Like Apollo Creed, will long-term care insurance be forced to reckon with a scrappy, humble, and strong short-term care insurance industry that has the potential for mass appeal? Or, like Rocky and Adrian, will the two industries embrace, express their love for each other, and walk hand in hand into the streets of Philadelphia? During this session, we’ll go to the canvas with an excellent panel of insiders and do a fresh weigh-in on these questions.

LTC Comment: As the session description explains, this program compared the roles, strengths and weaknesses of short-term care insurance (STCI) vs. long-term care insurance (LTCI). Moderator Moench of Oliver Wyman clarified key differences between STCI and LTC, such as STCI covers no more than 360 days and is often employed as gap coverage for Medicare. Presenters discussed the question “Can STC and LTC co-exist?” They observed that it is more important to talk about goals and solutions, rather than about types of insurance. STCI can be an alternative for LTCI declines. Most people think of STCI as short term health insurance. It is not short-term major medical. LTCI’s Achilles’ Heel is affordability. The more options producers and prospects have, the better. There is an option for everybody. STCI is not available in every state. Compared to questions that really matter; the choice between STCI or LTCI is not one of them.

9:00am, March 11: “Innovation in Long Term Care Insurance – A Regulatory Perspective”
Legal, Compliance & Regulatory track.

Moderator: Nolan Tully, Faegre Drinker
Speakers:
Shannen Logue, Pennsylvania, Department of Insurance
Ben Veghte, Washington State Department of Social and Health Services
Tomasz Serbinowski, Utah Insurance Department

Session description: This session will be a moderated panel discussion focused on putting forward the regulatory viewpoint on various existing and future innovations in long term care insurance. What do key regulators think about pre-claim wellness programs, new products aimed at continued engagement with policyholders, opportunities that might come from state based public insurance programs and other cutting-edge issues? Come to this session to find out!

LTC Comment: Shannon from PA-DOI opened the discussion with a poignant observation: after all these years, we’re still talking about same problems, such as affordability; new products, high care costs, adding LTCI to this, that and the other thing. Tomasz from the Utah ID observed that regulators are not natural innovators so this is not a natural place to look for innovation. That comment encapsulated my impression of this session. The old questions about how to reach the middle market; the regulatory quagmire; the fruitless search for a government program to solve all; and the unsatisfying fall back to identify a public/private combination; all these signal the absence of innovation. Veghte from WA Cares represented the best this kind of thinking can deliver, one more example of a compulsory, payroll-funded, centrally planned, dubiously financed entitlement program. Innovation is needed, but it does not look like we should expect much of it from regulators or government bureaucrats.

10:45am, March 11: “Thinking in the Middle: How do we serve the Underserved Middle-Income Market?”
Marketing, Engagement, & Research Track

Moderator: Eileen Tell, ET Consulting, LLC
Speakers:
Liz Christofer, HCG Secure
Chris Giese, Milliman, Inc.
Beth Ludden, CareScout
Dustin Plotkin, Oliver Wyman

Session Description: After decades of product innovation and industry effort, LTC insurance still remains a product largely purchased by a small segment of the more affluent Americans. There is large untapped market potential and great need for financial protection among the middle-class. Using data from a recent survey of middle-income consumers, this session will shed insights on the size and nature of demand of LTC coverage within this market segment, discuss some of the barriers to purchase and ways to overcome them. After a brief panel discussion, the audience will get creative and help evaluate, reject, or re-design four new product prototypes intended for appeal to middle-income consumers.

LTC Comment: Surveys to understand the LTCI middle market relative to the affluent market show, no surprise, that affordability is key. They indicate better education is needed. Middle income people are less likely to save or insure for LTC than others who are more prosperous. Two reasons: lack of awareness and misunderstanding. They are less likely to believe they will need LTC one day. What might incentivize the middle class to take LTC more seriously? The most important incentive is financial benefits. Middle income people place a high value on advice from personal advisors. So, bring financial advisors more into the mix.

After the opening general discussion, this session broke into smaller work groups to consider and evaluate different product models in terms of how they might behave given the challenges and concepts identified in the general session. I missed this portion of the program due to a previously scheduled networking appointment.

My impression is that experts have studied LTCI buyers and non-buyers six ways to Sunday for decades. What they rarely explore is the market context in which LTCI sales occur. That market is dominated by the primary LTC payers, Medicaid (44%) and Medicare (16%). Without addressing those elephants in the room, all the detailed research and analysis lead nowhere, beyond being very interesting and stimulating intellectually.

2:00pm, March 11: “Carrier Perspective: The State of our LTC Industry”
Marketing, Engagement, & Research Track

Moderator: Ramona Neal, Living Benefit Review
Speakers:
Joe Laskowski, CareScout
Scott Limes, Nationwide
MacKenzie Madsen, Lincoln Financial Group
Larry Nisenson, Assured Allies
Ryan Bivins, John Hancock
Brian Kendall, OneAmerica Financial

Session description: State of the LTCi industry. Taking a macro view of our industry - where is it today and where is it headed?

LTC Comment: The panel included representatives of “pure,” traditional LTCI on the left, mixed LTCI (hybrids) in the middle and mostly life insurance products on the right. Moderator Neal complained “we need one name for the middle category,” which she called “MoneyGuard” to some objection. Larry Nisenson of Assured Allies had several observations about the past, present and future of traditional LTCI. It’s left a “bad taste in the mouth of clients and producers,” “has a history to overcome,” flagging sales say it all. Wellness and annuities offer a path forward. “Innovation is the root of all opportunity.” MacKenzie Madsen of Lincoln Financial Group spoke about the evolution of the hybrid marketplace, starting 35 years ago with Golden Rule, then OneAmerica, looking for younger customers and more affordability. The products need to simplify, offer more value. Joe Laskowski from CareScout opined how career agents dominated early on. Distribution is adapting away from “one size fits all” to “bespoke” products fitting specific clients’ unique needs and preferences. Brian Kendall of OneAmerica Financial observed “we have so many ways now to meet needs. We need to be more open- minded to nontraditional ways of doing things. Hear, hear!

3:45pm, March 11: “The Title Fight: The Good, the Bad, and the Knockout AI Tactics to Boost Marketing, Research, & Engagement”
Marketing, Engagement, & Research Track

Moderator: Winona Berdine, Continental General
Speakers:
Emilie Ansel, Private Health News
Aashima Kapoor, Homethrive

Session description: Participate in this this high-energy session where industry experts will coach you on how to transform your business approach using real-world AI tools and techniques. Learn how to work smarter, not harder, by making AI the foundation of your strategies. Discover how to avoid reinventing the wheel, how to ask the right questions (and what NOT to ask), how to tame the skeptics, and tap into AI's potential to simplify marketing, enhance content creation, and drive customer engagement. Whether you're new to AI or looking to expand its use, this session will empower you with actionable insights and takeaways to grow your revenue and audience effectively.

LTC Comment: This was a fascinating session unveiling a plethora of ways to put Artificial Intelligence (AI) to work in our professional lives. For example: using AI to answer questions for prospects and clients. Pointing them to specific ways to fill their needs. Ask yourself: “Where am I not using AI?” Then use it in those areas because AI is applicable virtually everywhere. In terms of how to use AI; ask for exactly what you want; provide context; give specific instructions; explain how you’d like the answer printed out. The more guidelines you specify the better results you’ll receive.

Here’s my two cents worth. I asked AI to read my 80-page “History of LTC Insurance Conferences,” summarize it, and present the results in the form of an interview. It took Google Illuminate 30 seconds to produce this 10-minute podcast. As Arthur C. Clarke said: "Any sufficiently advanced technology is indistinguishable from magic."

Closing LTC Comment: The most telling and unfortunate occurrence of ILTCI ’25 was when the PBS producers of their moving story about caregivers acknowledged that none of them owned LTC insurance. That put the conference’s main shortcoming into stark relief. In none of the general and breakout sessions I attended, and I expect in few if any of the sessions I missed, was attention given to the broader market in which LTC insurance is sold. Medicaid and Medicare dominate that market, but were barely mentioned. I heard nothing about how easy access to Medicaid LTC benefits after care is needed anesthetizes future generations to LTC risk and cost. This reality crowds out demand from the same middle-market prospects LTCI marketers find so elusive. Nor was there any focus on the needs of LTC providers, such as nursing homes, assisted living facilities, and home health providers. They are desperate for private financing sources that pay market rates to relieve their excessive reliance on low Medicaid reimbursements that hamper care quality. Until the LTCI industry wakes up and addresses these public policy issues, no amount of surveys, focus groups, brainstorming, or WISHful Thinking for an easy government solution will succeed.

Another reality I found unaddressed at the conference was any recognition of the political and economic turmoil going on in America right now. Whether you like it or hate the current disruption, it is a time—the first time in at least two decades—when substantive change to the policies and rules governing Medicaid LTC eligibility and LTCI marketability is possible. Republicans want to cut $880 billion from Medicaid. Democrats want to protect low-income enrollees. Neither goal is wrong. Both are achievable. But not without more creative thinking and stronger political advocacy. I proposed a way to proceed in a recent column: “Disrupt LTC Now.” I welcome your feedback at smoses@centerltc.com.

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Updated Tuesday, March 18, 2025, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #25-010: LTC NEWS AND COMMENT

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

Medicaid Improper Payments Are Not a Measure of Fraud or Abuse
Life Insurance Products Could Slash Billions in Government Spending, Report Finds
California Borrows $3.4 Billion for Medicaid Overrun as Congress Eyes Steep Cuts
Medicaid’s True Improper Payments Double Those Reported by CM
More Than Two-Thirds Of Women Investors' Careers Impacted By Caregiving Responsibilities
California’s Insurance Tax Shuffle: How Federal Money Ends Up Paying for Medicaid for Illegal Immigrants
Representatives reintroduce bills supporting Medicare OT at home, long-term care catastrophic care fund
Milliman’s annual U.S. industry LTCI claims projection
Do older adults understand healthcare risks?

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Updated Monday, March 10, 2025, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #25-009: LTC NEWS AND COMMENT

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

The EINSTEIN Option reimagines long-term care
illumifin CEO Peter Goldstein Joins Alzheimer’s Association Board of Directors
Costs increase across long-term care in 2024, with homemaker and assisted living taking lead, Genworth report finds
Genworth and CareScout Release Cost of Care Survey Results for 2024
As baby boomers turn 80, there aren’t enough doctors to treat ‘emergency levels’ of dementia patients
Alzheimer's May Develop Differently in Women
Is the ‘Age Wave’ a retirement tsunami? — With Ken Dychtwald
Dementia risk in the U.S. after age 55 higher than previously thought, study finds
California Has a Lot to Lose If Trump Slashes Medicaid
How would Medicaid cuts impact seniors in nursing homes?

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Updated Friday March 7, 2025, 10:03 AM (Pacific)

Seattle—

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LTC BULLET: LTCI CONFERENCES ILLUMINATED

LTC Comment: On the eve of the 2025 ILTCI Conference, we celebrate the distinguished history of long-term care insurance conferences, after the ***news***

*** DON’T MISS this extraordinary AI-generated “podcast” recounting the history of LTC insurance conferences. Click here and listen to 10 minutes of commentary summarizing and analyzing a quarter century of professional LTC insurance meetings. ***

*** ILTCI ’25 convenes in Philadelphia March 9-12. Attendees can access the meeting’s mobile app here. Directions to the Philadelphia Marriott Downtown and parking information are available here. If you haven’t registered already, do so here. Hope to see you there. ***

*** 3/3/2025, “Genworth and CareScout Release Cost of Care Survey Results for 2024,” Genworth and CareScout
Quote: “The cost of long-term care services increased across all care types, according to the 2024 Cost of Care Survey conducted by Genworth and CareScout. While homemaker and assisted living community costs increased the most at 10%, the increase for most care types continued to outpace inflation.”
LTC Comment: Click through for the startling details and go here for the full report. As we do every year, we’ve posted the annual Genworth/CareScout LTC cost-of-care report in the Center’s members-only website (The Zone) for easy access anytime. ***

LTC BULLET: LTC CONFERENCES ILLUMINATED

LTC Comment: Today’s LTC Bullet is our 1400^th since the Center for Long-Term Care Reform’s founding in April 1998. During those years we reported on every major LTC insurance conference. In April 2021, in the throes of the pandemic and shortly after a “virtual” conference replaced that year’s cancelled in-person gathering, we published a “History of LTC Insurance Conferences.” We encourage you to browse that history and remember (for those who lived them) or learn (for those new to the business) the extraordinary challenges, victories, defeats and progress we’ve shared. While you’re at it, check out a few photos of LTCI leaders, many of whom are still around, though maybe a little longer in the tooth.

To get you off to an easy start, listen to this 10-minute interview, generated by Google Illuminate, discussing the “History of LTC Insurance Conferences.” I think you’ll agree it’s pretty amazing what Artificial Intelligence can do in 30 seconds with an 80-page document that could take you several hours to read carefully and many more to analyze thoughtfully. See if you agree with the robots’ summary and analysis.

For my part, I attended and reported on almost every one of the LTC insurance conferences starting in 1991. You can find the Center’s real time coverage of the meetings, often called “LTC Embed Reports” or “Virtual Visits,” going back to January 2000, by searching for the word “conference” here. I watched the early “Private LTC Insurance Conferences” gradually co-opted by advocates of public LTC financing and eventually replaced by the Intercompany LTC Insurance Conferences (ILTCI) sponsored by the Society of Actuaries and honchoed by Jim Glickman. Among my favorite meetings over the years were the ones aimed at educating and inspiring LTCI producers. Thank Jesse Slome and Greg Luque for making those agent-oriented conferences happen. They’re included in the history.

I haven’t always been thrilled with the LTCI conferences’ evolution. In the early years, they took more notice of how private insurance fits into the broader LTC industry. Efforts were made to reach out to LTC providers such as nursing homes, assisted living and home care companies. There was great potential in linking the interests of businesses that supply LTC insurance with others that benefit from funding LTC privately. But that relationship never matured. Nor did an early focus on understanding, adapting to and changing public LTC financing policy for the better. After progress in the Deficit Reduction Act of 2005 (a cap on Medicaid’s home equity exemption, longer and stronger transfer of assets restrictions, and unleashing the LTC Partnership Program), further Medicaid reform and stronger LTCI tax incentives were never achieved. Nowadays, we see a very positive focus on wellness initiatives, but otherwise the emphasis is on technical issues and marketing, important but not necessarily transformational topics. Still, the surviving ILTCI meetings are a great place to meet, network, and learn. Hope to see you in Philly.

To close, here are some highlights culled from the “History of LTC Insurance Conferences” selected for you by the Center’s Vice President for Administration, Damon Moses. He’ll be in Philly too, so say hello.

2001, Miami, FL: ILTCI #1

“John Hancock featured a guest celebrity, knuckleball pitcher Phil Niekro, signing baseballs for a line of fans stretching all the way out into the hallway. CHCS had perhaps the most unique hospitality suite. They created the illusion for each participant of an old age infirmity, such as smeared glasses to imitate cataracts, and then in true Florida style, let them try their luck at completing a punch card voter ballot with the correct answers to a delayed word recall test.”

“Steve Moses gave this talk [‘Long-Term Care's Race for Survival’] to the First Annual Society of Actuaries Intercompany LTCI Conference in Miami, Florida on January 23, 2001. In it, he summarizes the Center's recently published LTC Triathlon study. He diagnoses the malaise in America's long-term care service delivery and financing system. And he makes an appeal for greater communication and cooperation between the private sector financiers, providers and insurers of long-term care.

2002, Beverly Hills, CA

According to conference organizers: “A LONG, HARD LOOK at long-term care insurance reveals a product on the cusp of widespread acceptance. However, as LTCI has come of age, so too have the challenges facing insurers: the internet's effect on underwriting, claims practices, pricing assumptions, population eligibility, profitability management, and legislative initiatives, to name a few.”

2003, Las Vegas, NV

Unless LTCI specialists understand what nursing homes, home health companies, and assisted living facilities are up against, they cannot fathom why LTC providers (and the public) mostly ignore long-term care insurance and cling to government financing alternatives. For example, the conference offered no educational sessions on public policy, on long-term care service delivery, on competition from the 800-pound gorillas of long-term care (Medicaid and Medicare), on the Medicaid-driven fiscal crisis in the state and federal governments which practically begs for help from private insurance, on the drought in debt and equity capital facing long-term care providers, nor on the huge tort liability and liability insurance crisis facing LTC providers. …

“Monday, January 27, 2003: "Rate Stabilization - What Does it Mean to Me?" Moderated by David Benz of Thrivent Financial for Lutherans (see picture below). Panel: Al Schmitz of Milliman USA; Peggy Hauser of the LTC Group; and Dennis O'Brien of New York Life. This session anguished over rate stability challenges: What went wrong? Why are rates going up?

How can the industry set rates properly? What is the proper interaction between management, actuaries and regulators? …

2003, San Antonio, TX

The 16th Private Long-Term Care Insurance Conference: "Shaping the Future." This meeting convened at the Marriott Rivercenter Hotel in San Antonio, Texas from February 12 to 14, 2003. The Private Long-Term Care Insurance Conference was the grand-daddy of industry meetings in the LTCI field. Some say its name is a misnomer, because this conference catered as much to advocates of government long-term care financing as to manufacturers and purveyors of private LTC insurance. People still complain about its 1993 conference in Baltimore (during an ice storm) when Congressman Pete Stark bashed long-term care insurance agents and insulted the industry in an over-the-top "keynote" address. Check out all the details including many contemporaneous pictures of LTCI’s leading lights in The Zone here.

2003, New Orleans, LA

The National LTCi Producers Summit

Presented by LTCi Sales Strategies magazine, this 2½-day conference boasted a sold-out attendance of over 700 people, and featured 25 sessions, 50 LTC expert speakers, ample networking opportunities, over 100 exhibitors, cocktail receptions, breakfasts and lunches, the LTCI Sales Idol contest, the top 10 producers contest, and even optional sight-seeing tours.

The Next Financial Boom: Reverse Mortgages & LTC Protection. Presented by Peter Bell, President, National Reverse Mortgage Lenders Association, Washington, D.C. In this session Peter explained how reverse mortgages can be used as an LTCi financing sales strategy to offer to prospects that are house rich and cash poor.

The following are brief "man-on-the-street" type of interviews. [Damon Moses] asked eight registered attendees two questions: 1.) why don’t more people buy private long-term care insurance; and 2.) what percentage of total nursing home and home health care expenditures are paid out of people’s assets (as opposed to any other source of funding, such as Medicaid, Medicare, personal income, etc.)?

The purpose of asking these two questions together is to illustrate one point: that the majority of LTC services are not paid for by consumers, they are paid for by the government. If a relatively small percentage of total nursing home and home health care expenditures are paid out of people’s assets, then why would the average person save for and then buy long-term care insurance? Why would people buy something that the government is giving away? The answer is that they wouldn’t unless their assets were at risk. Here are the questions again:

1.) Why don’t more people buy private long-term care insurance?

2.) What percentage of total nursing home and home health care expenditures are paid out of people’s assets (as opposed to any other source of funding, such as Medicaid, Medicare, personal income, etc.) ?

To read these interviews and see the pictures of interviewees, check out our Virtual Visit to this conference. [This content is in the Center’s members-only content (The Zone.) You will need your user name and password, for which contact Damon@centerltc.com.

2004, Houston, TX

“The great thing about this conference is that it brings together all components of the long-term care insurance industry in a setting that encourages cross training and mutual understanding.

That's as opposed to the more adversarial settings that actuaries, marketing people, underwriters and management often find themselves in, fighting to discover the right balance between price and salability of a complicated, deeply conceptual product.

“Unfortunately, there is a slight pall on the conference. Everyone knows the long-term care insurance industry faces daunting challenges. In the past years, and especially recently, we've seen consolidation, companies exiting the business, level or declining sales, rate stability concerns, disappointing profitability, etc. Industry analysts have painted a less-than-bright and hopeful picture of the business for the immediate future. But, at least at this meeting, I find a strong sense of optimism and renewed commitment that trumps the downbeat perspectives and worries.”

“A long-term care producer with insight into the back-office aspects of the LTCi business opined that ‘This industry has seen some hard times, but the worst is behind us. Pricing is improving; public awareness is increasing; and the same promising demographics are still out there. Industry consolidation and belt tightening will prove to have been healthy and beneficial in the long run.’

Steve Moses made the case for private LTC financing while Dr. Judith Feder, then Professor and Dean of Public Policy at Georgetown University appealed for public financing in a session at the Fourth Annual Society of Actuaries Long-Term Care Insurance Conference in Houston, Texas on February 10, 2004.

2005, Orlando, FL

“Today's alert comes to you from the fifth annual Society of Actuaries Long-Term Care Insurance Conference in Orlando, Florida. The SOA-LTCi meeting has evolved into the premier industry event for executives involved in the nuts and bolts of long-term care insurance. We realize many of you can't or won't attend, so as we did last year from Houston, here's a brief report on the proceedings from Steve Moses on site. … LTC Bullet: Clueless in Orlando

2006, Anaheim, CA

Attendees heard a report on the "Medicaid Commission’s” findings. Like most commissions, it achieved nothing of consequence. Steve Moses delivered a speech titled "What I Believe About Long-Term Care." The Center's Vice President for Administration, Damon Moses, circulated at the conference interviewing attendees. Interview Question: What effect do you think the new Deficit Reduction Act will have on the marketability of private long- term care insurance? Can you put a percentage on that? Check out our Virtual Visit for answers.

2007, Dallas, TX

ILTCI #7 opened to a body blow from the New York Times: “Aged, Frail and Denied Care by Their Insurers,” by Charles Duhigg, March 26, 2007. We responded immediately. Read our response and more about this conference in our virtual visit titled LTC Bullet: Sucker Punched in Dallas, Tuesday, April 10, 2007.

2008, Jacksonville, FL

A distinctive feature of this year’s conference was the presence, at the venue’s front door, of a small Airstream trailer emblazoned with the decals of companies sponsoring the Center for

Long-Term Care Reform’s 2008 “National Long-Term Care Consciousness Tour.” Read all about it in LTC Bullet: The Jacksonville LTCI Conference. Enjoy this musical reminder of tour highlights.

2009, Reno, NV

The Silver Bullet of Long-Term Care again graced the entrance to the 9^th Annual Inter-Company Long-Term Care Insurance Conference. We published one LTC Bullet and three LTC E-Alerts (here, here, and here) about the meeting.

2010, New Orleans

Gail Sheehy keynoted the conference, but later dissed LTCI on NPR. Despite some very strong panelists speaking on behalf of logic, evidence and actuarial sanity (Steve Schoonveld of LifePlans; Malcolm Cheung of Prudential; and Al Schmitz of Milliman), everyone seemed to be bending over backwards to give CLASS the benefit of the (clearly overwhelming) doubt.

2011, Atlanta, GA

Four breakout sessions focused on the CLASS Act including Steve Moses and John Greene debating CLASS with Connie Harner and Rhonda Richards (AARP). Find summaries of all four CLASS sessions and several other sessions in our Virtual Visit to the conference here. During the lunch break on the second day, the 3in4 Need More campaign had a press conference to introduce the LTCI industry's answer to dairy's "Got Milk" message. Spotted at the 3in4 Need More event and throughout the ILTCI conference was Glenn Ruffenach of the Wall Street Journal. Maybe there's hope for some good publicity for LTCI now.

2011, Las Vegas, NV

Here’s another non-ILTCI conference to remember. The 9th LTC Insurance Producers Summit, held April 3-5, 2011 in Las Vegas, had the theme "Get Over It!" Get over lagging sales, disappearing carriers, premium increases, and bad publicity. Get over it and, one might add based on the content of the conference: Get On With It! Proceedings got underway with a standing-room-only crowd for the "3 in 4 Need More" campaign's second press conference.

Cameron Truesdell, CEO of Long-Term Care Financial Partners, delivered the "Keynote Address." He pointed out the desperate need for responsible long-term care planning and insisted: It's up to us to make it happen. Echoing a patriotic appeal, he asked "If not us, who? If not now, when?

2012, Las Vegas, NV

For a full account of the conference’s highlight event, the “Clash of Titans” debate between Harley Gordon and Steve Moses, check out LTC Bullet: LTC Embed Report from the ILTCI Conference in Las Vegas.

Now to recount the most fun that was had at the conference. In the afternoon of DAY ONE, a great debate ensued titled “Clash of the Titans: Moses vs. Gordon on Medicaid and Other Dark Matter.” Ably produced and moderated by Federal Long-Term Care Insurance Program CEO Paul Forte, the program included a dramatic “fight poster” inviting the audience to attend, slides featuring great debates of the past, e.g. Lincoln/Douglas, etc., and a dual-podium presidential-style debate format.

Moses and Gordon each began with 3-minute opening statements. (Find a transcript of the “fable” I began with at the end of today’s Bullet.) After a coin flip to see who would get the first question, Forte pummeled the combatants in turn with six queries ranging from why the LTCI market languishes to what they’d advise presidential candidates to say about LTC financing. Answers were strictly enforced to no more than two minutes, with a one-minute rebuttal, and a final 30-second “re-direct” by the original answerer.

The program moved fast with lots of humor and more than just a little gentlemanly confrontation. In the second phase of the debate, the participants asked each other questions, with the same time limits applying. Neither knew what the other would ask so the questions and responses were totally spontaneous. Finally, the audience submitted written queries pinning down the debaters with new and different viewpoints. Bruised, bloodied, but upright, Moses and Gordon shook hands at the end and affirmed they remain friends. They look forward to continue pursuing their different paths toward the common goal to improve long-term care for all.

Who won? Just between you, me and the lamppost, here’s how LTCI producer and author Craig McCormick, a former college debater himself, scored the matchup: 13 to 4, for Moses. Now, I acknowledge that Mr. McCormick may have a bias in my favor. So I invite any of you faithful readers out there who may have attended the debate to weigh in with your own scoring of the event. I’d particularly like to hear from anyone who gave the win to Harley instead of me.

Well, I want to hear from anyone except you, Harley! I’ll publish any thoughtful comments or analysis of the debate in a future LTC Bullet. Let us hear from you.

The last session I attended was a post-mortem on CLASS titled “Meeting the Needs that CLASS Intended,” moderated by Prudential’s Malcolm Cheung with presentations by Bob Yee, lately CLASS’s actuary; Yair Babab from the University of Illinois, Chicago; and Mark Meiners, the father of the LTC Partnership Program. I came away convinced less-than-ever that anything about CLASS is salvageable and more convinced than ever that LTC financing solutions must come from reducing government interference in the market, not increasing it. Stop giving away LTC to people who should, could and would buy LTCI and the market will work its magic.

2013, Dallas, TX

Overall, the mood of the conference was one of optimism and motivation. In reference to this, Sally Leimbach states: “Several Exhibitors seemed to me to be relatively small providers vying to become a part of the process of underwriting LTCi or providing services at time of claim. To me, that showed optimism about the growth of the market among providers.” Sally continues by mentioning she encountered “[m]ore optimism than expected. It rubbed off. I have come back reenergized for educating people to plan for LTC and selling to assist to meet the ever important need.” What an excellent reminder of why events like this are so important to the industry.

Many conference attendees in Dallas expressed high satisfaction with the value of networking opportunities with industry professionals as well as the quality of educational content. Honey Leveen states:

For marketing people like me, the SOA [ILTCI conference] is valuable. I gain insight into the LTCi product, its actuarial, underwriting, and other elements I would otherwise not learn about. I learn about the latest LTCi sales approaches, both from the sessions and from colleagues. I learn about upcoming LTCi products. Also, I get breaking news on LTCi national politics. I feel my attendance at SOA conferences definitely gives me a competitive edge.

2014, Orlando, FL

The 14^th Annual Inter-Company Long-Term Care Insurance Conference convened in Orlando, Florida at the Rosen Centre Hotel from March 16-19, 2014.

We asked conference founder Jim Glickman for his highlights of the meeting. He responded:

1. The 14th Annual Intercompany LTCi Conference in Orlando, FL (co-sponsored by the LTC Section of the Society of Actuaries) had over 900 attendees, an all-time record surpassing the 855 attendees in Jacksonville, FL in 2008. [NB: the Silver Bullet of Long- Term Care was parked outside the conference venue in Jacksonville as we were well underway with the Center’s 2008 “National Long-Term Care Consciousness Tour.”]

2. As usual, the largest representation from the 10 tracks (Actuarial, Claims, Compliance, Field Marketing, Group, Home Office Marketing, Management, Operations, Policy and Providers, and Underwriting) was from Field Marketing, followed closely by Actuarial and then Management).

3. For the first time in several years, there were attendees from multiple insurance companies not currently participating in the LTCi marketplace, together with most of the larger companies, who have at least temporarily, stepped away from issuing new business.

4. Also in attendance were several reinsurers not currently in the LTCi marketplace together with several representatives of the private equity world, apparently looking for new opportunities to consider.

5. The two full days and two half days featured over 45 educational sessions, together with more than 20 hours of organized networking.

6. The Exhibit Hall featured 54 Exhibitors, displaying all the latest innovations for insurance company home offices and their agents.

2015, Colorado Springs, CO

The 15^th annual Intercompany Long-Term Care Insurance Conference convened March 22-25, 2015 at The Broadmoor resort in Colorado Springs, Colorado. The annual Inter-Company Long-Term Care Insurance Conferences are always something special. But this year’s meeting exceeded all that came before. It exceeded by breaking past records: over 1100 attendees, up from the 900s; 72 vendors, up from 56; 44 sponsors and 170 speakers. It exceeded by offering new programs including: demonstration rooms where exhibitors could make scheduled presentations; a “social media” room with Twitter feeds; a “future leaders” program; a new Sales and Distribution combination track; and a new “Alternative Solutions” track, honchoed by Eileen Tell and John O’Leary, which replaced Policy and Providers, and captured me for all seven break-out sessions on the agenda.

2016, San Antonio, TX

The conference’s closing general session was It's Not Me, It's You; A Consumer View on LTCI. Behavioral economist Jeremy Pincus and consumer insight expert Luisa Uriarte delivered new information about how our current approach and sales and marketing techniques are actually standing in the way a broader appeal for long-term care insurance. These fascinating presentations challenged everything we thought we knew about LTCI marketing, such as-- explain the problem, price the risk, scare the pants off ‘em and they’ll buy. Well, no, turns out that just drives people away. What’s needed is an approach that generates good feelings and makes people positive about preparing for what’s coming. Interestingly, this session was a perfect bookend for the conference, by providing evidence from behavioral research for some of the same insights about human behavior shared by the opening general session speaker about the turnaround he led at Harley Davidson.

2017, Jacksonville, FL

THE 17^TH ILTCI CONFERENCE convened March 26-29 at the Hyatt Regency in Jacksonville, Florida, with the theme “Navigating the Future.” What follows are some quick impressions of the sessions I attended. These are not a representative sample of the conference content as I visited almost exclusively the program’s “Alternative Solutions” track. Special thanks to Eileen Tell and John O’Leary for the hard work they expended to put together the sessions comprising the Alternative Solutions Track. The other tracks were Actuarial & Finance; Claims & Underwriting; Combination Products; Legal, Compliance & Regulatory; Management, Operations & Technology; and Marketing & Distribution. The conference also featured a vast exhibit hall and special “demo rooms” where companies could present their products and answer questions.

This year’s keynote speaker, sponsored by Genworth, was Anat Baron, former head of Mike's Hard Lemonade, a change strategist and “disruptor.” Her bio calls her a “force of nature” and states “she spent her illustrious career moving at warp speed while shaping and defining the trends that form today's business world.” She turned around Mike’s Hard Lemonade by aiming its marketing at women who wanted something to drink out of a bottle while guys were quaffing beer. Her message to the LTCI industry? “Disrupt or Die: Reinvention in an Ever Changing World.” We live in a time of huge and rapid change. Facebook, Twitter, Skype, the Cloud, etc., are barely a decade old. Yet they’ve changed the world and how we survive, prosper or not in it. Social networking rules. Master it or expect failure and embarrassment (such as being identified in the audience as a flip-phone user or a non-texter.) Ms. Baron’s session was entertaining and interesting, but would have benefited from more effort on her part to apply her observations and analysis to the LTC insurance business and its challenges.

2018, Las Vegas, NV

The 18^th Annual Intercompany Long-Term Care Insurance Conference was held March 18-21, at the Paris Hotel & Casino in Las Vegas, NV. Attendance was high at over 1,000 attendees, 60+ exhibitors and nearly 40 sponsors.

Every year the Intercompany Long-Term Care Insurance Conference takes the pulse of the LTCi industry and offers direction forward. To that end, “A Matrix of Opportunities” was the tagline for this year’s conference and that optimism filled the agenda. According to the conference website’s homepage:

A quiet revolution is taking place in the long-term care insurance industry. More interest than ever is being focused on private sector solutions to the growing societal issues pertaining to long- term care. Planning choices for consumers are growing at a rapid pace. Insurance companies are developing new innovative approaches to providing long-term care liquidity at various life stages and insurance agents and financial advisors are showing renewed interest in talking to consumers about their long-term care planning needs.

With entitlements and social programs strained, longevity and healthcare costs increasing, caregiver supply decreasing and the age wave cresting, how we finance long-term care now and in the future is a demographic, political and fiscal Rubik's Cube. This year’s ILTCI conference contributed to solving that multi-dimensional puzzle by hosting the innovators who are offering new directions and products designed to save people from the risk and cost of long-term care.

2019, Chicago, IL

The 19^th Annual Intercompany Long-Term Care Insurance Conference convened at the Sheraton Grand Hotel in Chicago, Illinois from March 24 to 27, 2019. Today’s LTC Bullet offers you a virtual visit to that event, the biggest of its nearly two-decade history.

My Million Dollar Mom, about Ross Schriftman’s movie he wrote and produced about caring for his mother through her Alzheimer’s Disease.

First order of business was presentation of the “ILTCI Recognition Award” to “a person(s) or organization that has made a significant, long-term contribution towards the attainment of the ILTCI vision” which is “to create an environment for aging in America that includes thoughtful, informed planning that takes into account the most effective and efficient use of resources in addressing the risks and costs of long term care for all levels of American society.” Steve Moses, president of the Center for Long-Term Care Reform, acknowledged the honor saying

I like to think my stuff is kind of edgy, so I was afraid the ‘boos’ might overwhelm the cheers after this announcement, but they didn’t, so thank you. I want to thank the nominators, the board for selecting me, all our wonderful friends and financial supporters. There are too many to list, so I’ll only mention one by name, my son, Damon, whom many of you know. I’ve heard this honor called a “lifetime achievement” award. That sounds like you’re putting me out to pasture. So, to my friends, let me assure you I’m not going anywhere. To those who disagree with me, don’t think this will stop me. Thanks again to all.”

Tue, March 26th, 7:30 PM - 9:00 PM

Whirled News Tonight Improv Show
General Conference Session

Our Tuesday evening entertainment will feature performers from Chicago’s Best Improv Comedy Theater – Improv Olympic! Improv Olympic will be bringing a seven person cast of performers to entertain the attendees of the ILTCI. The performance will be approximately 60 – 80 minutes in length. “ iO” is recognized as the birthplace of “long-form” improv and is home to some of the best improv comedy shows in the country. They have helped to train and develop an entire generation of America’s best and brightest comedic entertainers for over 30 years. Alumni include past and present cast members of Saturday Night Live and stars of some of your favorite small screen prime-time comedy and late-night shows – along with others who have gone on to write, direct and produce blockbuster Hollywood movies. This interactive show will include performance pieces including musical games, scenes that solve the audience’s problems and their signature piece, THE DREAM, based on the day in the life of one of the audience members. To learn more about iO, visit https://www.ioimprov.com/ It will be a improve show of Olympic proportions…we hope to see you there!

LTC Comment: And a good time was had by all at this closing session of the conference. Stay tuned to LTC Bullets for information about the 20the ILTCI Conference in Denver, Colorado March 29 to April 1, 2020 as it becomes available.

2020: Cancelled because of the pandemic

2021

LTC BULLET: 2021 ILTCI VIRTUAL CONFERENCE WRAP UP

LTC Comment: The 2021 Intercompany Long-Term Care Insurance (Virtual) Conference is history. Organizers Barry Fisher and Vince Bodnar eased potential participants into the idea of a virtual conference with weeks of advanced notice and guidelines. They recruited sponsors for the overall meeting, for each track and even for each session. Virtual exhibitors were encouraged to sign and pay up. Somehow, Fisher and Bodnar managed to fund the effort, because beginning Tuesday, April 13, 2021, it kicked off successfully.

After an Opening General Session on the 13^th, two different educational sessions began on the hour each Tuesday and Thursday for three weeks from 12pm – 4pm EDT and ran for 50 minutes each, followed by 10-minute breaks. Find the agenda here. Sessions were recorded and are available to any and all through June 2021 using the password ILTCI*2021.

Here’s how to access those recordings: Open the ILTCIConf.org screen. Click “Schedule” on the navigation bar at the top of the page. Click the track name of the session you want to watch. Then find and click the session you’re looking for in the list of track sessions. Find and click the “Access Recording” button at the bottom of the session description. Fill out the information to identify yourself, click “I am not a robot” and you’re in … hopefully.

As might be anticipated with a complicated virtual conference, the outcome was not electronically flawless. The opening session was to be a talk by futurist Anders Sörman-Nilsson, who was actually in Australia speaking at 2am local time the next day. Interruptions and sound difficulties caused that session to be cancelled in the middle, but organizers expect a recording of it, done without the long-distance complications, will be available.

Session Title: The WISH Act: Addressing the Financing and Regulatory Needs Within LTC Public/Private Solutions
Track: Legal, Compliance, & Regulatory
Presenters: Peggy Hauser (PwC), Steve Schoonveld (Moderator, Lincoln Financial Group), Tom Suozzi (NY State)
Comments: This session discussed the implications of a proposed federal catastrophic long-term care program, the WISH Act. The session focused on the benefit to consumers, the financial soundness of the proposed program and the regulatory steps necessary to achieve the desired public/private insurance program goals.

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Updated Monday, March 3, 2025, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #25-008: LTC NEWS AND COMMENT

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

Older households at risk of not being able to afford long-term care, analysis finds
Unum Finds Reinsurer for Block of Individual Long-Term Care Policies
Generation X is ready for senior living. Here’s what they want
Why the Medicaid 'chainsaw' will come for your home
Disrupt LTC now
Capping Per Enrollee Spending Could Reduce Federal Medicaid Expenditures by $532 billion to Nearly $1 Trillion Over 10 Years Depending on How States Respond and Result in as Many as 15 Million People Losing Medicaid Coverage by 2034; Eliminating the Medicaid Expansion Match Rate at the Same Time Could Push Federal Medicaid Spending Declines to as Much as $2.1 Trillion and Cause 30 Million to Lose Medicaid Coverage
Medicaid’s Cost Growth + Trump Health EOs
GAO’s High Risk List Highlights Ways to Save Billions and Help Agencies Work Better
Is The American Dream In Crisis?
Stressed and confused, the new normal

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Updated Monday, February 24, 2025, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #25-007: LTC NEWS AND COMMENT

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

Residents to recover 25 percent of entrance fees as judge approves $86M sale of bankrupt CCRC
Trump Opponents Get Ready to Pounce on Medicaid Cuts
House budget resolution could cut up to $880 billion in Medicaid
100-year lives – how age impacts the insurance industry
Nursing home quality ratings drop after new measures revealed
Young-onset dementia surges from 1990 to 2021 globally, data shows
10 Things to Know About Medicaid
US healthcare spending hits record highs, led by senior care costs
What Recent Changes In MA Mean For Affinity Plans And Supplemental Benefits
Retirement Community Living: How to Pay for Your Next Chapter

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Updated Friday February 21, 2025, 10:03 AM (Pacific)

Seattle—

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LTC BULLET: LTC CENTER STANDING GUARD, NOW MORE THAN EVER

LTC Comment: The current turmoil in U.S. politics and economics has made change for the better more hopeful than in the past two decades. Some ways we’re helping to improve LTC financing policy, after the ***news.***

*** THE 2025 ILTCI CONFERENCE session matrix is now available online! The Mobile App sponsored by Nationwide just went live also. Attendees will have received a notification on how to download the app and use its networking features. The meeting convenes March 9-12 in Philadelphia. Register here. Book lodging here. See you there! ***

*** GOOGLE ILLUMINATE is a program that can take an online document and turn it into a podcast. I experimented by asking Illuminate to analyze and report on “LTC Bullet: So What If the Government Pays for Most LTC, 2023 Data Update” that we published January 10, 2025. Check out the six-minute result by double clicking here. I expect listeners will find the result as illuminating or more so than reading the original Bullet which was full of data and technical analysis. ***

LTC BULLET: LTC CENTER STANDING GUARD, NOW MORE THAN EVER

LTC Comment: The Center for Long-Term Care Reform will celebrate the start of our 28th year in April. In that quarter century plus, we’ve analyzed, criticized and rebutted just about every study, report, article or commission that attacked private funding or promoted compulsory government financing of long-term care. We’ve identified ideological bias by scholars, think tanks, government agencies, advocacy organizations and the media. We’ve denounced their confirmation bias when they ignore evidence contradicting their preconceptions. We’ve refuted fallacies in their logic. Today’s LTC Bullet includes links to 119 LTC Bullets we’ve published taking these groups and individuals to task:

Media: Consumer Reports, National Public Radio (NPR), Public Broadcasting System (PBS), New York Times, Wall Street Journal, Washington Post, Dow Jones MarketWatch, Health Affairs, National Affairs

Organizations: National Academy of Elder Law Attorneys (NAELA, Medicaid planners’ trade association), AARP, Alzheimer’s Association, Leading Age (formerly American Association of Homes and Services for the Aging, LTC provider trade association)

Think tanks or companies: Kaiser Family Foundation (KFF), Georgetown Long-Term Care Financing Project, Urban Institute, Avalere, SCAN, Employee Benefit Research Institute (EBRI), Bipartisan Policy Center (BPC), Center for Retirement Research at Boston College, LTC Collaborative, Milken Institute, American Enterprise Institute, AI (Artificial Intelligence)

Government Agencies, Commissions and Politicians: Government Accountability Office (GAO), the Medicaid Commission, the Long-Term Care Commission, Congressional Research Service (CRS), Congressional Budget Office (CBO), Medicare Trustees, Centers for Medicare and Medicaid Services (CMS), Washington State’s “Long-Term Services and Supports Trust Act (Trust Act),” Medicaid and CHIP Payment and Access Commission (MACPAC), Representative Thomas Suozzi (D-NY), WA Cares Fund and Washington State politicians, Medi-Cal and California Governor Newsom

Scholars: Ellen O'Brien, Peter Kemper, Harriet L. Komisar, Lisa Alecxih, Timothy Waidmann, Korbin Liu, Judith Feder, Richard W. Johnson, Joshua Wiener, Mark Merlis, Lee Shirey Thompson, Anne Tumlinson, Christine Aguiar, Molly O'Malley Watts, Diane Rowland, David G. Stevenson, Marc A. Cohen, Janemarie Mulvey, Sudipto Banerjee, Richard G. Frank, Neale Mahoney, Howard Gleckman, Leora Friedberg, Wenliang Hou, Wei Sun, Anthony Webb, Gretchen Jacobson, Shannon Griffin, Tricia Neuman, Karen Smith, Norma B. Coe, Melissa M. Favreault, David C. Grabowski, Stephanie Kelton, Stuart Butler, The InLTCgentsia and The LTC Anointed, Robert P. Saldin, Laura Benzing, Hannah Godlove, and Megan R. Burke, Eileen Tell.

LTC Comment: Speaking truth to power is a mostly thankless job. Please review the efforts we’ve made to correct attacks on you for supporting responsible long-term care planning. Browse the following LTC Bullets’ titles and teasers. Pick a few to download and read in full. Then, if you find value in our work, please support the Center for Long-Term Care Reform by becoming a member or making a contribution. Become a member here or contact Steve at smoses@centerltc.com or 425-891-3640 or Damon at damon@centerltc.com or 206-283-7036 to join our fight for rational long-term care financing policy.

LTC Bullets Standing Guard

(The following Bullets are listed in descending chronological order beginning with the most recent. If you prefer to start from the beginning, just scroll to the bottom and work your way back up.)

LTC Bullet: LTC Data Manipulation II, January 27, 2025
LTC Comment: “Statistics don’t lie, but liars use statistics.” Still!

LTC Bullet: Catastrophic LTC Irony, October 25, 2024
LTC Comment: Another report insists we need a big new federal program to cover catastrophic LTC costs. Ironically, we already have one that makes a new one impossible to achieve. We explain.

LTC Bullet: More KFF Data Misinformation, September 13, 2024
LTC Comment: Does KFF misunderstand, misinterpret, or misrepresent LTC insurance data? All three? See what you think.

LTC Bullet: LTC Data Manipulation, August 30, 2024
LTC Comment: “Statistics don’t lie, but liars use statistics.” We explain how KFF distorts National Health Expenditure data to promote ideological conclusions.

LTC Bullet: There Is No “LTSS Gap”, August 9, 2024
LTC Comment: This Health Affairs article offers a solution without a problem. We provide a rebuttal.

LTC Bullet: KFF Hoisted Again, June 28, 2024
LTC Comment: A series of KFF “issue briefs” intended to show how poor Medicare beneficiaries are prove the opposite.

LTC Bullet: Progressive Bias Produces Regressive Policy, February 2, 2024
LTC Comment: Public officials and their advisers prefer government solutions to social problems, so their policies often produce deficient outcomes.

LTC Bullet: “Dying Broke” Was Dead Wrong, December 15, 2023
LTC Comment: Who knows more about long-term care (LTC) than KFF and the New York Times? Answer: anyone who deals in facts and logic instead of anecdotes and ideology.

LTC Bullet: You Pay for California’s LTC Profligacy and Structural Racism, August 25, 2023
LTC Comment: California’s Medicaid program (Medi-Cal) says come one, come all for free LTC, sends the bill to federal taxpayers, and institutionalizes structural LTC racism. What’s happening?

LTC Bullet: The LTC Narrative, June 30, 2023
LTC Comment: The dominant long-term care narrative crowds out inquiry, critical reasoning and creativity leaving conformity and groupthink. We explain.

LTC Bullet: AI on LTC, May 5, 2023
LTC Comment: Artificial intelligence (AI) is all the rage these days. Does it help or hurt long-term care planning? We ask; AI answers; and we respond.

LTC Bullet: WA Cares Repercussions, October 28, 2022
LTC Comment: Washington State politicians and bureaucrats think they can do LTC insurance better than private sector professionals. What could possibly go wrong?

LTC Bullet: LTC Strawman, September 30, 2022
LTC Comment: Disproving a claim no one has ever made contributes nothing to a crucial conversation about who should qualify for Medicaid LTC benefits, when and under what circumstances. We critique Marc A. Cohen and Jane Tavares: “Are Wealthy Older Adults who use Medicaid Opportunistically Accessing the Program?,” Journal of Aging & Social Policy.

LTC Bullet: Biased LTC Scholarship Misinforms Policymakers, September 2, 2022
LTC Comment: Government-funded, ideologically biased research causes bad policy decisions, as we explain with this critique of Richard W. Johnson and Melissa M. Favreault, “Economic Hardship and Medicaid Enrollment in Later Life: Assessing the Impact of Disability, Health, and Marital Status Shocks,” published by the U.S. Department of Health and Human Services Office of the Assistant Secretary for Planning and Evaluation, January 31, 2021, https://aspe.hhs.gov/reports/economic-hardship-medicaid-enrollment-later-life#results.

LTC Bullet: Begging the LTC Question, May 27, 2022
LTC Comment: Long-term care analysts routinely ignore, diminish and/or misrepresent the impact of Medicaid planning (artificial self-impoverishment to qualify for benefits) on the long-term care market. Here’s an example taken from Richard W. Johnson and Melissa M. Favreault, “Economic Hardship and Medicaid Enrollment in Later Life: Assessing the Impact of Disability, Health, and Marital Status Shocks,” HHS/ASPE/BHDAP, January 31, 2021.

LTC Bullet: Moses vs. Grabowski on Long-Term Care, February 25, 2022
LTC Comment: David C. Grabowski, PhD, is Professor of Health Care Policy in the Department of Health Care Policy at Harvard Medical School. Professor Grabowski is omnipresent in the news about long-term care. Stephen A. Moses is president of the Center for Long-Term Care Reform. His media megaphone is more subdued. But both were featured yesterday in McKnight’s Long-Term Care News. Their differing views on what ails long-term care services and financing provide food for thought about this complicated topic.

LTC Bullet: Long-Term Care’s Fundamental Fallacy, February 18, 2022
LTC Comment: We explain the fundamental fallacy that leads LTC analysts and policy makers astray.

LTC Bullet: The InLTCgentsia, September 3, 2021
LTC Comment: Should LTC intellectuals, politicians and bureaucrats who pay no price for being wrong direct long-term care financing reform? Considerations follow.

LTC Bullet: WISHful Thinking, August 20, 2021
LTC Comment: Hope springs eternal among the LTC anointed that one more government program forced on the public at the expense of the productive economy can reduce the damage done by its many failed predecessors. Analysis of the WISH Act follows.

LTC Bullet: Milken Groupthink Fumbles LTC Financing, April 16, 2021
LTC Comment: You might expect innovative ideas from the Milken Institute, but when it comes to long-term care financing, all you get is ideological retreads.

LTC Bullet: MACPAC Captured, April 2, 2021
LTC Comment: Signs in the Medicaid and CHIP Payment and Access Commission’s (MACPAC’s) estate recovery report point to its capture by the Medicaid planning bar.

LTC Bullet: The Key to LTC, March 19, 2021
LTC Comment: Solving the long-term care financing crisis isn’t so hard if you avoid ideology and take human nature into account. A better public/private partnership is an easy and available solution.

LTC Bullet: Social Insurance is an Oxymoron, February 5, 2021
LTC Comment: Insurance is individualistic, so “social insurance” is a contradiction in terms. Meaning and consequences explained.

LTC Bullet: Spousal Impoverishment, Then and Now, January 22, 2021
LTC Comment: The myth that access to Medicaid LTC benefits requires impoverishment is pervasive. A dose of reality concerning spousal impoverishment specifically follows.

LTC Bullet: Is Medicaid the LTC Solution or the Problem?, December 4, 2020
LTC Comment: Will more Medicaid funding and regulation help (short-term) and harm (long-term) America’s fragile long-term care system? Answers follow.

LTC Bullet: Modern Monetary Theory and Long-Term Care, October 23, 2020
LTC Comment: Finally, a solution for the long-term care financing crisis. Or not? Explanation follows.

LTC Bullet: The Keystone Kops of LTC Insurance, October 9, 2020
LTC Comment: What happens when the Keystone Kops design a long-term care insurance plan? Answer: Washington State’s “Long-Term Services and Supports Trust Act (Trust Act),” enacted in 2019.

LTC Bullet: How Not to Redesign Long-Term Care, June 12, 2020
LTC Comment: Do we really need more government money and regulation for long-term care, as this Forbes columnist insists? Analysis and better choices follow.

LTC Bullet: Where Long-Term Care Went Wrong and How to Fix It, January 3, 2020
LTC Comment: Officials and analysts attack the symptoms of long-term care dysfunction (exploding costs, nursing home bias, and poor quality) without addressing the cause (easy access to Medicaid for consumers and strong incentives for states to maximize federal Medicaid matching funds). Everything follows from that observation.

LTC Bullet: The Battle Lines Are Drawn, October 25, 2019
LTC Comment: Two sides advocate diametrically opposite solutions for the long-term care crisis. Who are they? What do they want? Which will win? Answers follow.

LTC Bullet: To Fix Long-Term Care, Redefine the Problem, September 27, 2019
LTC Comment: Recent research suggests long-term care is not the gargantuan crisis previously thought. So, private sector solutions, including LTC insurance, may be far more effective than commonly believed.

LTC Bullet: Why Too Little Home Care?, June 28, 2019
LTC Comment: Why is home care so unaffordable and hence unavailable to so many? Two views follow: more government money or better directing what we already spend to encourage more private financing.

LTC Bullet: Middle Market Mayhem, June 7, 2019
LTC Comment: LTC analysts, advocates, and providers are wringing their hands about the middle market’s future inability to afford senior living. We mitigate the problem and re-offer a 25-year-old solution.

LTC Bullet: Remember the Middle, Friday, May 10, 2019
LTC Comment: A recent Health Affairs article accurately assessed the plight of middle-income seniors whose resources will be inadequate to fund their senior living and long-term care. But the article proposed interventions that would exacerbate the problem.

LTC Bullet: Amplify LTC Sanity, February 13, 2019
LTC Comment: In today’s echo chamber of irresponsible fiscal and monetary advocacy, a voice for responsible LTC planning and policy is more critical than ever. Join us!

LTC Bullet: How and How Much Medicaid Reduces Lifetime Medical Spending for Affluent Retirees, October 10, 2018
LTC Comment: Medicaid is welfare, so of course it reduces lifetime medical spending of the poor. But here’s evidence Medicaid radically reduces medical spending by the affluent, especially for those savvy enough to maximize “Medicaid planning.”

LTC Bullet: The New Fallacy of Impoverishment, June 29, 2018
LTC Comment: Government should declare success in the War on Poverty and eliminate policies that discourage personal responsibility and work.

LTC Policy Blinders, May 25, 2018
LTC Comment: We explain why and how LTC policy analysts evade facts that contradict their predisposed positions in favor of compulsory government LTC insurance.

Feder/Cohen Proposal Ignores LTC Problems’ Cause, May 18, 2018
LTC Comment: We explain how government intervention caused the dysfunctions in long-term care that Feder/Cohen seek to correct with more government intervention, including institutional bias, poor access and quality, excessive dependency on family caregiving, inadequate financing, and lack of insurance.

LTC Evasion, May 11, 2018
LTC Comment: We explain what LTC scholars evade and why.

Feder Fantasy Fatally Flawed (Cohen Contribution Notwithstanding), May 4, 2018
LTC Comment: A new Feder/Cohen proposal would take long-term care out of the frying pan into the fire.

LTC Bullet: Retirement Confidence and Asset Spend Down, April 27, 2018
LTC Comment: Two new EBRI studies shed light on how workers/retirees’ expectations and behavior differ.

LTC Bullet: Have Your Cake Until It Eats You, March 23, 2018
LTC Comment: Americans want to have their cake (entitlements) and eat it too, but trends show this cake will eat our economy first. Scary evidence follows.

LTC Bullet: Is it Spend Down or Medicaid Planning?, July 14, 2017
LTC Comment: A lot of what passes for Medicaid “spend down” in the scholarly literature is really Medicaid planning. We explain and give examples.

LTC Bullet: Medicaid, Home Ownership and Long-Term Care Financing, July 7, 2017
LTC Comment: Medicaid’s estate recovery requirement induces aging Americans to reduce home ownership, decrease home equity and set up trusts in order to qualify for Medicaid long-term care benefits.

LTC Bullet: Home Equity and LTCI Demand, June 30, 2017
LTC Comment: We explore the Professor Thomas Davidoff’s thesis that home equity “substitutes” for long-term care insurance demand and suggested instead that Medicaid’s large home equity exemption obviates LTCI demand by eliminating home equity’s liability for long-term care costs.

LTC Bullet: Is it Really Hopeless to Reduce Medicaid LTC Costs?, June 23, 2017
LTC Comment: Kaiser Family Foundation researchers despair of reducing Medicaid LTC expenditures, but their “literature review” is incomplete, misleading and risky.

LTC Bullet: The Broken Rhythm of Long-Term Care Reform, May 19, 2017
LTC Comment: Why did Medicaid long-term care eligibility reforms quickly follow economic recessions until the year 2000, but no longer? The answer follows.

LTC Bullet: Hoist with its Own Petard , April 28, 2017
LTC Comment: This Kaiser Family Foundation “Issue Brief” blows up its own argument. We explain.

LTC Bullet: What’s Wrong with Bundled and Value-Based LTC Payments? January 20, 2017 LTC Comment: Big changes are afoot in government financing of post-acute and long-term care--changes that will rattle private LTC financing options as well. We present the big picture.

LTC Bullet: Medicaid LTC Data Insights, October 14, 2016
LTC Comment: What’s happening with Medicaid LTC financing and why it matters.

LTC Bullet: How Fiscal and Monetary Malfeasance Will Ruin Long-Term Care, October 7, 2016
LTC Comment: Fiscal malfeasance ($20 trillion federal debt) enabled by monetary malfeasance (artificially low interest rates) bode ill for the economy and for Medicaid LTC financing. Here’s why and how.

LTC Bullet: Behind AHEAD, September 2, 2016
LTC Comment: The people and organizations advocating a new, compulsory, payroll-financed government program to fund catastrophic LTC expenses base their arguments on dubious sources and reasoning. Details follow.

LTC Bullet: Half a Century of Bad Medicaid LTC Policy, August 5, 2016
LTC Comment: Medicaid long-term care policy is a classic story of good intentions leading to unfortunate consequences.

LTC Bullet: How the Government Ruined LTC (and We’ll Fix It), June 10, 2016
LTC Comment: Government interference in the LTC marketplace since 1965 caused harmful unintended consequences that only clear analysis and bold action can fix.

LTC Bullet: LTC at a Crossroads, June 3, 2016
LTC Comment: Long-term care financing policy is at a critical crossroads and may take a wrong turn. We explain.

LTC Bullet: Losing Principles, April 29, 2016
LTC Comment: What’s happening to the basic principles of personal responsibility and self-reliance that validate private insurance? We reflect.

LTC Bullet: LTCI Defeatism, April 1, 2016
LTC Comment: LTC insurance leaders should not surrender to government-financed long-term care based on ideologically biased policy analysis grounded in misleading data and fallacious arguments. We say “Revolt!”

LTC Bullet: Three Cheers (But Two From the Bronx) for New BPC-LTC Recommendations, February 5, 2016
LTC Comment: The Bipartisan Policy Center’s new report on long-term care leads with LTCI (hear, hear!), but makes Medicaid even more tempting (boo!) and adds a new, expensive, mandatory government program (boo!) based on faulty premises. Our analysis and critique follow.

LTC Bullet: The Arrogance of LTC Analysts' Elitism," December 4, 2015
LTC Comment: Arrogance, ideological bias and elitism spoil the recent research of abundantly endowed LTC analysts. We explain.

LTC Bullet: The Future of Long-Term Care Seen Through the Prism of History, November 13, 2015
LTC Comment: Big changes are afoot in government financing of post-acute and long-term care--changes that will rattle private LTC financing options as well. We cover the big picture.

LTC Bullet: A New Revolution in Long-Term Care Financing . . . by Government, November 6, 2015
LTC Comment: Radical, disruptive changes in how government pays for long-term care are advancing rapidly. We provide background.

LTC Bullet: Another LTCI Hit Job?, October 9, 2015
LTC Comment: What shall we make of this new attack on private long-term care insurance? Answers follow.

LTC Bullet: Pandora Meets Rosy Scenario in CMS Projections, July 31, 2015
LTC Comment: The aging demographic evils in Pandora’s “box” don’t find their way into CMS actuaries’ health expenditure estimates for the coming decade. Quotes and our comments follow.

LTC Bullet: New Data on LTC Incidence, Duration, Cost and Financing Sources, July 24, 2015 LTC Comment: New numbers, better than the old numbers, but they require further clarification and explanation.

LTC Bullet: Holding CMS’s Feet to the Fire, February 6, 2015
LTC Comment: When a federal agency fails to enforce the law hurting the poor it’s supposed to help and costing tax payers billions of dollars, bureaucratic heads should roll. Background and details follow.

LTC Bullet: When Bad Models Happen to Good People, January 16, 2015, guest Bullet by Stephen D. Forman
LTC Comment: We offer the last word on that Boston College fiasco of poor scholarship and bad economics.

LTC Bullet: How Careless Economists Boosted LTC Risk, December 12, 2014
LTC Comment: We explain how Boston College economists generated poor long-term care planning advice that national media unfortunately amplified.

LTC Bullet: IG Report Reveals Medicaid Estate Recovery Weakness, December 5, 2014
LTC Comment—A newly released USDHHS Inspector General report shows few states do Medicaid estate recoveries well resulting in a potential annual loss, we infer, of $2.5 billion. Details, numbers, and why it matters follow.

LTC Bullet: IG Report Reveals Costly Medicaid Enforcement Failures, November 21, 2014 LTC Comment--The USDHHS Inspector General reports that many states failed to implement mandatory provisions in OBRA ’93 and/or DRA ’05 designed to discourage abuse of Medicaid LTC benefits. Details follow.

LTC Bullet: Does Medicaid Solvency Matter?," October 31, 2014
LTC Comment: CMS says Medicaid solvency “is not an issue.” We beg to differ.

LTC Bullet: CMS Health Expenditure Data Mask LTC Cost Growth, September 5, 2014
LTC Comment: CMS actuaries’ estimates of health expenditures for 2013-2023 downplay the big story, snowballing LTC costs. We explain.

LTC Bullet: Entitlement Double Talk, August 1, 2014
LTC Comment: To read the major media coverage of the 2014 Medicare Trustees report, you’d think things are looking up for the 49-year-old mega-program. Think again.

LTC Bullet: GAO Punts on Medicaid Planning, July 3, 2014
LTC Comment: Another GAO report underplays dramatic findings about the role, methods and extent of Medicaid planning and loose LTC eligibility rules.

LTC Bullet: Will Bipartisan LTC Policy Be Better?, April 11, 2014
LTC Comment: Heads up! Consensus is coalescing around a bipartisan long-term care financing solution. Let’s be hopeful, but wary.

LTC Bullet: Who Gets Medicaid LTC?, March 28, 2014
LTC Comment: Is Medicaid a long-term care safety net for the poor, the middle class, even the affluent, all of the above? Questions remain, but answers abound.

LTC Bullet: WSJ Misfires on LTC Insurance, February 14, 2014
LTC Comment: We dissect and correct a misbegotten column in the Wall Street Journal.

LTC Bullet: PBS’s 6 LTC Tips Miss the Mark, November 8, 2013
LTC Comment: What’s wrong with the conventional wisdom about how to resolve America’s long-term care crisis?

LTC Bullet: The LTC Blind, October 25, 2013
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 by the Urban Institute’s Howard Gleckman.

LTC Bullet: Medicaid Spend Down that Isn't and Why it Matters," July 19, 2013
LTC Comment: Claiming “transitions” to Medicaid are evidence of catastrophic LTC asset “spend down” misrepresents the truth and should be publicly recanted. We answer who, what, when, where and why.

LTC Bullet: What Should the LTC Commission Do?, June 21, 2013
LTC Comment: How should the LTC Commission prioritize its work and recommendations? Some thoughts follow.

LTC Bullet: SCAN the LTC Possibilities, April 5, 2013
LTC Comment: SCAN is a fountainhead of ideas about long-term care financing, but are those ideas potable? We analyze.

LTC Bullet: Nursing Home Spend Down Misunderstood and Late-Breaking LTCI Industry News, July 20, 2012
LTC Comment: A recent EBRI study that claims nursing home stays are wiping out Americans’ savings is based on a fallacy and mistaken. What’s really happening?

LTC Bullet: Moses Replies to Congressman's Questions (LTC Embed Report #11), October 13, 2011
LTC Comment: House Oversight and Government Reform Healthcare Subcommittee ranking member Danny Davis (D, IL) asked me some questions in writing after the 9/21 hearing on "Examining Abuses of Medicaid Eligibility Rules." His questions and my answers follow.

LTC Bullet: Friendly Fire in the Class War (LTC Embed Report #6), September 22, 2011
LTC Comment: Steve Moses's Congressional testimony on Wednesday was well-received except for an ad hominem attack, "friendly fire" in the class war. An explanation, witness testimonies, and a video of the hearing follow.

LTC Bullet: CLASSless Journalism, September 21, 2010
LTC Comment: Reporting only the CLASS program's dubious benefits and none of its inevitable detriments is negligent journalism. An example follows.

LTC Bullet: New LTCI Report: Research or Propaganda?, June 8, 2010
LTC Comment: Is a newly updated report on LTC insurance by the Congressional Research Service really research, or CLASS Act propaganda? You decide.

LTC Bullet: The Enemy of LTC Truth, February 8, 2010
LTC Comment: Albert Einstein said "Unthinking respect for authority is the greatest enemy of truth." See how this principle applies to long-term care.

LTC Bullet: CLASS Consciousness, October 21, 2009
LTC Comment: To hear Kaiser Family Foundation speakers, the CLASS Act is a no-brainer for passage and implementation. We offer a wake-up call.

LTC Bullet: We Reply to Washington Post Blast at Federal LTCI, August 14, 2009
LTC Comment: Read our reply to the Washington Post's "Federal Diary" criticism of Federal LTCI's premium increase.

LTC Bullet: How Much More Wrong Can They Get It?!, July 21, 2009
LTC Comment: Another "report" from the usual suspects gets long-term care advice dead wrong.

LTC Bullet: KFF Misfires on LTCI, June 9, 2009
LTC Comment: A new study of private long-term care insurance published by the Kaiser Family Foundation fails in the usual, predictable ways. Details follow.

LTC Bullet: LTC Clueless, May 26, 2009
LTC Comment: Consumers' denial of LTC risk and cost is nothing compared to the naiveté of professionals who should know better.

LTC Bullet: New LTC Financing Study Uninterpreted or Misinterpreted, March 24, 2009
LTC Comment: A new report on LTC financing by Avalere Health was reported uncritically by many and mistakenly by one source.

LTC Bullet: We Critique WSJ on Medicaid Planning, January 16, 2009
LTC Comment: Within 24 hours, we replied to a Wall Street Journal column that promoted Medicaid planning for long-term care.

LTC Bullet: NYT Asks Medicaid Planner to Advise on LTCI, July 18, 2008
LTC Comment: The New York Times added insult to injury by inviting a notorious Medicaid planner to advise readers on private long-term care insurance. We respond.

LTC Bullet: WSJ Attacks LTCI, We Respond, February 26, 2008
LTC Comment: Today's front-page Wall Street Journal article criticizing long-term care insurance was as one-sided and misguided as a similar piece published by the New York Times also during a major industry conference. We reply, same day, as follows.

LTC Bullet: Hillary Clinton on LTC, January 3, 2008
LTC Comment: Presidential candidate Senator Hillary Clinton has promised a cornucopia of LTC benefits if elected. Would our service delivery and financing system be better or worse if she delivered? We comment.

LTC Bullet: The NY Compact: Analysis, Conclusions, and Recommendations, July 31, 2007
LTC Comment: Is the New York Compact the future of long-term care financing or the last gasp of an old, failed system?

LTC Bullet: Medicaid Estate Recover. . .up, July 5, 2007
LTC Comment: Medicaid estate recovery could be a major source of non-tax revenue for the ailing LTC safety net for the poor, but AARP would tie the program in bureaucratic knots.

LTC Bullet: GAO on LTCI Partnerships, June 20, 2007
LTC Comment: GAO drops the ball again on the issues of Medicaid, long-term care financing and private insurance.

LTC Bullet: GAO AWOL on LTC TOA, May 2, 2007
LTC Comment: The Government Accountability Office has again displayed stunning miscomprehension of the Medicaid eligibility, Medicaid planning and transfer of assets issues.

LTC Bullet: Take Georgetown's Facts With a Big Grain of Salt, February 15, 2007
LTC Comment: Three new "fact sheets" from the Georgetown LTC Financing Project are spoiled by ideological bias. This Bullet critiques Medicaid's Spousal Impoverishment Protections (February 2007) , Medicare and Long-Term Care (February 2007) and National Spending for Long-Term Care (February 2007)

LTC Bullet: The DRA Bullets, January 9, 2007
LTC Comment: Two Medicaid planners lament the DRA we praised and defended in 21 LTC Bullets last year. Their whining, our replies plus links to all the DRA Bullets follow.

LTC Bullet: Medicaid Commission Errs by Omission, August 9, 2006
LTC Comment: The national Medicaid Commission, appointed last year to fix Medicaid (including its dysfunctional LTC component) before the welfare program implodes financially, is way off track.

LTC Bullet: Kaiser Cover-Up Continues," April 27, 2006
LTC Comment: Urban Institute "scholars," aided and abetted by the Kaiser Family Foundation, employed an underhanded straw man argument in the foundation's latest unsuccessful attempt to debunk the impact of Medicaid planning abuse.

LTC Bullet: Microsimulate This!, March 28, 2006
LTC Comment: The fundamental things apply as time goes by--like "garbage in, garbage out." Take for example a recent Inquiry article that estimates future public and private LTC costs. Our critique follows.

LTC Bullet: LTC Victory, February 2, 2006
LTC Comment: The Deficit Reduction Act of 2005 passed yesterday curbing Medicaid abuse and unleashing LTC Partnerships. Celebrate? Sure. But don't take a victory lap until you consider what can go wrong.

LTC Bullet: Georgetown, GAO and Kaiser: The Bermuda Triangle of Good LTC Policy, January 25, 2006
LTC Comment: LTC doubletalk is not the exclusive province of Medicaid planners and AARP lobbyists. Otherwise often reliable analysts get long-term care policy wrong too.

LTC Bullet: NPR Defends Medicaid Planning, Attacks Messenger, January 4, 2006
LTC Comment: National Public Radio's "All Things Considered" show took a slanted swipe at responsible Medicaid reform yesterday while defending Medicaid planning abuse. Hear the broadcast version, followed by our side of the story.

LTC Bullet: GAO on TOA Underwhelms, October 5, 2005
LTC Comment: The Government Accountability Office's new report on Medicaid asset transfers asks the wrong questions, uses the wrong data, and so provides few helpful answers.

LTC Bullet: Alzheimer's Association Shortsighted on LTC Financing, July 6, 2005
LTC Comment: The Alzheimer's Association's public position on Medicaid reform and long-term care financing is a classic example of how good intentions invite unintended consequences.

LTC Bullet: LTC Bombshell, June 29, 2005
LTC Comment: Results from a poll of state Medicaid programs by a Congressional office with subpoena power may blow the lid off a carefully orchestrated cover-up of Medicaid planning abuses. Lists, summarizes and analyzes studies that pooh-pooh Medicaid planning.

LTC Bullet: Where There's Smoke, There's Fire, May 18, 2005
LTC Comment: Our critique follows of "Medicaid's coverage of nursing home costs: Asset shelter for the wealthy or essential safety net?" by Ellen O'Brien of the Georgetown Long-Term Care Financing Project.

LTC Bullet: Medicaid Planners Confess, October 2, 2003
LTC Comment: A survey intended to exonerate Medicaid planners is actually the strongest indictment of artificial impoverishment yet.

LTC Bullet: "Nursing Home Care Virtually Free For Life," Tuesday, May 7, 2002
LTC Comment: What follows is a transcription of excerpts from a professionally produced and mass-distributed videotape from a man and his company who promise lifelong free long-term care.

LTC Bullet: They're Baaaack . . . Medicaid Planners Rise Again, April 25, 2001
LTC Comment: 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. No longer.

LTC Bullet: More Bad Advice from Consumer Reports, November 15, 1999
LTC Comment: Individuals and organizations most critical of private long-term care insurance are usually the ones lining their pockets with Medicaid estate planning profits.

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Updated Monday, February 17, 2025, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #25-006: LTC NEWS AND COMMENT

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

The Biggest Health Policy Decisions Now Facing the Trump Administration
Reverse mortgages could be ‘practical’ long-term care funding option
Responsible Governing Involves Making Tough Decisions – Here’s a Guide
Think Bigger: Meaningful Health Reform
US voters overwhelmingly support caregiver tax credit: survey
Report: Prevalence of older Americans without disabilities rose between 2008 and 2017
Sneak Peek of Long Term Care Success
How to Avoid Medicaid Estate Recovery
The Health Wonk Shop: What’s Next for the Affordable Care Act?
ILTCI Session Matrix

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Updated Monday, February 10, 2025, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #25-005: LTC NEWS AND COMMENT

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

Losing Focus: How the ACA’s Medicaid Expansion Left Traditional Enrollees Behind
Number of family caregivers helping older adults with dementia surged over 11-year span: study
The care crisis: Eldercare collides with childcare
Lawmakers push Trump to block Medicaid 80/20 rule
ILTCI Conference to Screen Powerful Caregiving Documentary at 2025 Keynote
The Nation's Fiscal Health: Strategy Needed as Debt Levels Accelerate
U.S. Short-Term Care Insurance Market to Reach $110.1B by 2033
New report details financial, emotional toll of Parkinson’s on family caregivers

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Updated Friday, February 7, 2025, 10:03 AM (Pacific)

Seattle—

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LTC BULLET: MEDI-CAL’S ASSET TEST ELIMINATION

LTC Comment: We explore the topic of California’s Medicaid program (Medi-Cal) eliminating the asset test for long-term care benefit eligibility after the ***news.***

*** ILTCI ’25 Conference announced a special screening of excerpts from Caregiving, a compelling, two-hour documentary executive produced by Bradley Cooper and produced by Lea Pictures, Ark Media, and WETA, scheduled to air in primetime on more than 330 PBS stations nationwide in June 2025. This groundbreaking public media documentary delves into the personal stories of caregivers, shedding light on the challenges they face in providing short and long-term care, as well as palliative and end-of-life care for individuals of all ages. Join us March 10, 2025, from 9:00 - 10:15 am ET for the Caregiving Keynote Presentation, Sponsored by CareScout. ***

*** DOGE (the ad hoc, but influential “Department of Government Efficiency”) claims to have already cut over $64 billion according to the National Debt Clock. GAO says more is needed to address “our unsustainable fiscal path” as we reported in this LTC Clipping. Center for LTC Reform premium members receive LTC Clippings by email in real time. Regular members receive the same content compiled in weekly LTC E-Alerts. Join the Center, receive these publications, and help us change LTC financing policy for the better.

2/5/2025, “The Nation's Fiscal Health: Strategy Needed as Debt Levels Accelerate,” by GAO, GAO-25-107714

Quote: “The federal government is on an unsustainable fiscal path that poses serious economic, security, and social challenges.

We reported that:

As of September 30, 2024, publicly held debt was $28.2 trillion, or 98% of the size of the economy
Publicly held debt is projected to grow more than twice as fast as the economy, reaching 200% of the size of the economy by 2047
Government spending on net interest in FY 2024 exceeded federal spending on Medicare and national defense, and is projected to keep growing

We continue to recommend that Congress develop a strategy to inform the difficult policy choices in addressing our unsustainable fiscal path.

For more information on federal debt, see our resource: How Could Federal Debt Affect You?”

LTC Comment: Another dire warning from the Government Accountability Office (GAO). Likely to have the same impact as all the previous ones. Namely, none. Can the unofficial Department of Government Efficiency (DOGE) do better? According to the National Debt Clock, DOGE has already cut over $60 billion. As Reagan said, “Trust, but verify.” We’ll see what’s real, if anything, in time.***

LTC BULLET: MEDI-CAL’S ASSET TEST ELIMINATION

LTC Comment: I’m researching Medi-Cal’s elimination of the asset test for LTC benefit eligibility. Before I put all the pieces together into an organized analysis, I thought readers might like to see some of the information I’m turning up. Following is a sampling with sources linked. Click through for eye-opening insights into the mind-boggling, budget-busting ideology behind this momentous policy change.

“As of January 1, 2024, Medi-Cal will no longer count assets to determine eligibility. This means that anyone, regardless of how much they own, may receive Medi-Cal benefits, including:

Individuals in skilled nursing or intermediate care facilities or those who qualify for home and community based services
People who are 65 or over, blind or disabled
Low-income persons with dependent children
Children under 21
Pregnant women

“SSI and other categorically-related recipients are also automatically eligible for Medi-Cal.”
(Overview of Medi-Cal for Long Term Care by California Advocates for Nursing Home Reform, emphasis added)

“Asset Elimination Overview
• Assembly Bill 133 (Chapter 143, Statutes of 2021) was signed into law by the Governor on July 27, 2021. This law included a two-phased approach to eliminating the asset test used to determine eligibility for NonModified Adjusted Gross Income (Non-MAGI) Medi-Cal Programs.
• Phase I, implemented on July 1, 2022, increased asset limits for all NonMAGI programs to $130,000 per individual and $65,000 for each additional household member (up to 10).
• Phase II, effective on January 1, 2024, will eliminate the asset test entirely for Non-MAGI “Medi-Cal programs, including Long-Term Care and Medicare Savings Programs.”
(From webinar for “advocates”)

“Q: For which Medi-Cal programs will the asset limit be eliminated?
All non-expansion Medi-Cal programs, including Aged, Blind, and Disabled, Medi-Cal with a Share of Cost, 250% Working Disabled Program, long-term care, and Medicare Savings Programs (MSPs). MSPs include four specific programs: Qualified Medicare Beneficiary (QMB), Specified Low-Income Medicare Beneficiary (SLMB), Qualified Income (QI), and Qualified Disabled Working Individual (QDWI) programs. The MSPs help low-income Medicare enrollees pay for Medicare out-of-pocket expenses including premiums and cost-sharing. (Note: those enrolled in Medi-Cal expansion already do not have an asset limit).”
(Justice in Aging)

“As Medi-Cal coverage is an essential lifeline in providing for the health care needs for millions of beneficiaries (including dental, vision, hearing, transportation, and long-term care), this win [elimination of the asset test] greatly increased the quality of life, health and economic wellbeing of tens of thousands of people.” (California Health Advocates, emphasis added)

“Starting January 2024, there will no longer be an asset limit for Medi-Cal eligibility. This change has significant implications, as it means that more individuals can now qualify for Medi-Cal and access home care services through the In-Home Supportive Services Program.” (Bet Tzedek, emphasis in the original)

“Some 36% of Californians are covered by Medicaid, compared with 19% of Floridians and 15% of Texans. The federal share of the Golden State’s Medicaid spending—nearly $120 billion—is more than Florida’s entire budget.” (WSJ column)

“Consider California, where 37% of residents are covered by Medicaid. The state has extended Medicaid to undocumented immigrants and waived asset limits for beneficiaries. Mr. Newsom’s budget forecasts some $190 billion in Medicaid and other health spending this year, $119 billion of which will be picked up by the feds. The latter amount is greater than Florida’s annual budget.” (Wall Street Journal editorial, 1/24/25)

“A [transfer of assets] lookback period will no longer apply to transfers made on or after January 1, 2024.” (Overview of Medi-Cal for Long Term Care by California Advocates for Nursing Home Reform)

“Medi-Cal applicants, beneficiaries and their spouses should always be aware of the Medi-Cal Recovery rules and plan ahead if they want to avoid recovery on their home or other assets. For detailed information on the Medi-Cal Recovery program, see CANHR’s consumer booklet on Medi-Cal Recovery, https://canhr.org/wp-content/uploads/Medi-Cal_Recovery.pdf”
(Overview of Medi-Cal for Long Term Care by California Advocates for Nursing Home Reform)

“A new report from the Kaiser Family Foundation finds that nursing home staffing has decreased from 2015-2024 and the number of federal deficiencies assessed per facility has increased. The KFF data show that staffing in California nursing homes has decreased from 4.54 hours of nurse staff per resident per day to 4.39 while the number of deficiencies per facility has risen from 10.5 to a whopping 16.7. Also from 2015 to 2024, the percentage of California nursing homes receiving a deficiency for actual harm or jeopardy nearly doubled, from 14% to 27%.”
(Staffing Down, Deficiencies Up in Nursing Homes Throughout the U.S.)

“Recent Surge in Senior Caseload Driving Increase in Costs. From January 2024 through July 2024, we have observed a sharp increase in Medi-Cal enrollment among the senior population. Specifically, monthly growth averaged about 14,500 people, notably higher than the previous six months (averaging 1,600) or even during the continuous coverage period (averaging 6,200), when the state temporarily paused redeterminations of enrollee eligibility. We assume that the key driver of this caseload surge is the recent (January 1, 2024) full elimination of the asset limit test. (In addition to specific income limits, prior to July 2022, seniors and persons with disabilities faced strict asset limits for eligibility. Specifically, nonexempt assets could not exceed $2,000 for individuals and $3,000 for couples. The 2021 budget package raised the asset limit to $130,000 for individuals and $195,000 for couples effective July 2022, and fully eliminated the asset test as of January 1, 2024.)” (From November 20, 2024, The 2025‑26 Budget: Medi-Cal Fiscal Outlook)

“As a result of the terms of the ACA’s expansion of Medicaid, the federal government currently discriminates against traditional Medicaid enrollees. With expansion, Medicaid resources have been diverted from children and individuals with disabilities to able-bodied, working-age adults. And existing Medicaid enrollees have a harder time obtaining health care appointments after expansion, with a large increase in emergency department use for non-emergency services.” (Source)

“Skilled nursing facility residents must agree to pay the facility a portion of their income each month. This is called the monthly resident cost and is treated much like rent. The resident is responsible for paying their monthly resident cost to the facility, and Medi-Cal will then cover the remaining costs for the month. …

“For example, under a legal settlement, Hunt v. Kizer, recipients may use old, unpaid medical bills that they have to reduce the monthly Medi-Cal resident cost. Original documentation showing the billing statement is an outstanding balance should be provided to the County eligibility worker. … The monthly resident cost will be adjusted to reflect the cost of the outstanding balance, which could, for example, mean no monthly resident cost until the old, unpaid bills are paid off. This is not automatic and should be discussed with the Medi-Cal county eligibility worker.

“Under the Johnson v. Rank settlement, recipients may use their monthly resident cost to pay for medically necessary supplies, equipment or services not covered under the Medi-Cal program. This deduction is only applicable to long term care residents.”
(Overview of Medi-Cal for Long Term Care by California Advocates for Nursing Home Reform)

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Updated Monday, February 3, 2025, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #25-004: LTC NEWS AND COMMENT

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

Spending on home healthcare grows twice as fast as total personal healthcare spending over past 18 months
Dealing with our Dickensian long-term care system
Waterlily, a startup using AI to predict long-term care needs, clinches $7M in seed round
The U.S. Has Reached The Peak Of Peak 65
Providers shaken by flip-flops, uncertainty as White House attempts broad freeze on federal spending
CMS goes after nursing homes’ third-party pay policies with updated guidance
Crisis in Long-Term Care Insurance: Financial Situation Reaches Critical Levels
People with family who need long-term care more likely to plan for their own potential assisted living expenses, survey finds
Long-term care continues to lead in healthcare bankruptcies
U.S. Short-Term Care Insurance Market to Reach USD 110.1 Billion by 2033 - Persistence Market Research
Medicare Advantage Enrollment Has Surged. Big Savings for Beneficiaries Help Explain Why
Revisions to WA Cares: What SB 5291 gets right and what it misses
Ask the Hammer: Secure Act 2.0: New Long-Term Care Funding Option
Medicaid Applicants: Protecting Your Healthy Spouse in 2025

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Updated Monday, January 27, 2025, 10:03 AM (Pacific)

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LTC Comment: “Statistics don’t lie, but liars use statistics.” Still! We explain after the ***news.***

*** ICYMI: Read this latest of our 23-year annual series as context for today’s LTC Bullet: “SO WHAT IF THE GOVERNMENT PAYS FOR MOST LTC, 2023 DATA” ***

*** 1/17/2025, “Where did the private payers go?,” by Stephen A. Moses, McKnights LTC News

Quote: “Bottom line, CMS sold LTC providers a bill of goods. Medicaid demands Ritz Carlton care but pays Motel 6 rates. It converts profitable private pay revenue into reimbursements too low to sustain providers, much less finance quality care. The major trade associations representing nursing homes should mobilize to demand market-based payment rates from Medicaid. That would eliminate both the current inadequate Medicaid rates and the excessively high private rates required now to compensate for Medicaid losses. It would also end the caregiver shortage by enabling providers to pay competitive wages.”

LTC Comment: The current, Medicaid-based financing system for nursing homes is unconscionable. Nothing is being done to fix it. Most of the usual proposals for LTC financing reform would only make the situation worse. Some of us are working on a new approach to revolutionize the LTC market. Stay tuned. ***

LTC BULLET: LTC DATA MANIPULATION II

LTC Comment: We published “LTC Bullet: LTC Data Manipulation" on August 30, 2024. In the meantime, new 2023 data have become available that make our point about KFF’s and CMS’s misinterpretation and manipulation of LTC data even more forcefully. So we offer the same analysis again below, but using the latest 2023 NHE data

National Health Expenditure data on long-term care (LTC) spending seem straight forward. Three NHE tables cover expenditures for Nursing Facilities and Continuing Care Retirement Communities (CCRCs) (Table 15), Home Health Care Services (Table 14) and Other Health, Residential and Personal Care Services (Table 13). Endnotes 1, 2, and 3 below describe those categories, respectively. We provide summary tables following our commentary that include all these spending sources for 2023 and 2022 data. They cover the LTC waterfront, but KFF (Kaiser Family Foundation) says they need some adjustments.

For example, in “10 Things About Long-Term Services and Supports (LTSS),” published July 8, 2024, KFF explains that it “excludes spending from certain payers.” These excluded sources include “Medicare spending [$100.3B in 2023], most of which is post-acute care, but some of which is home health spending that might be considered LTSS.” Also “excluded is spending from private insurance [$59.7B in 2023] because much of those expenditures are for rehabilitation and not LTSS.” Private long-term care insurance is excluded “in most cases” because it “reimburses people for the expenses they pay out-of-pocket and would be classified as out-of-pocket spending in the NHE data.”

Backing out those sources has the effect of reducing total LTC spending in 2023 from the $629.3 billion reported by NHE to KFF’s $469.3 billion, 25 percent less. Let’s ask two questions. First, is there a rationale for leaving those sources in the total instead of excluding them? Yes. Take Medicare’s $100.3 billion for example. Of course Medicare doesn’t pay for LTC, but it is critical to America’s LTC financing system. LTC providers are heavily dependent on Medicaid which pays them 70 percent of private-pay rates on average and often less than the cost of providing the care. They survive financially only because Medicare pays more generously for a much smaller number of sub-acute and rehabilitation patients. Remove Medicare’s $100.3 billion and the whole financing system collapses. To see the complete LTC financing picture accurately, Medicare must be included in the total.

What about private insurance, including LTC insurance? True, some health insurance benefits, such as major medical coverage, go for rehabilitation, not LTC. But as in the case of Medicare, those payments help sustain a rickety LTC service delivery system, so they should not be excluded. For private LTC insurance specifically, isn’t it interesting that it gets lumped into the “out-of-pocket” bucket. Why might that be? That brings us to our second question.

Why do analysts and policymakers define LTC spending in some ways and not in others? What effect do the exclusions just described have on the big picture of LTC spending? Backing out Medicare and private insurance raises Medicaid’s contribution to total LTC costs from 44.2 percent in the table to 59.3 percent based on KFF’s reasoning. It increases out-of-pocket spending from 12.9 percent in the table to KFF’s 17.4 percent. In other words, these exclusions make Medicaid and out-of-pocket expenditures appear much higher. Giving that impression supports a specific policy agenda, what I’ve called the LTC Narrative. Specifically, that narrative is that LTC costs are impoverishing people all across America and driving up Medicaid expenditures excessively which is why, according to the narrative, we need a new, compulsory, payroll-funded LTC entitlement program.

KFF isn’t the only group pushing that agenda by tinkering with the data. In 2011, the Centers for Medicare and Medicaid Services (CMS) changed the definition of NHE categories to combine CCRCs with nursing homes. That created an apples/oranges problem. Nursing homes rely mostly on Medicaid and have few private payers. CCRC’s include mostly private payers for independent and assisted living. They have fewer nursing home residents and very little Medicaid. So this definitional change had the effect of dropping Medicaid’s share of spending for the category from over 40 percent in 2008 to under one-third (32.8 percent) in 2009. Back then, cutting costs was a priority. Likewise, this change drove out-of-pocket expenditures up to over one-quarter, below what they would be for CCRCs but far above what they would be for nursing homes. Making out-of-pocket expenditures look high supports the narrative of widespread catastrophic spend down and the demand for more government funding and regulation.

The tables below give a more accurate rendering of the LTC financing landscape. They show that when we leave in the funding sources KFF excludes, out-of-pocket costs clock in at only 12.5 percent in 2022, 12.9 percent in 2023. But those figures still overstate the impact of out-of-pocket LTC funding. Half of it is spend down of income, mostly from Medicaid recipients’ Social Security benefits. Only half, or about six percent, could come from savings. The vast majority of all LTC financing comes from third-party payors, mostly government. Out-of-pocket costs are nominal despite the widespread belief that Medicaid requires impoverishment and families across the country are being devastated by LTC costs. That lie is the real reason most people do not think about or plan for LTC and end up on public assistance. It is no reason to compound the error of relying too heavily on government funding and regulation by adding more of the same with a big new entitlement program.

There is much more to this story. To understand what is really wrong with LTC and what needs to be done to fix it, read the Paragon Health Institute’s “Long-Term Care: The Problem” and “Long-Term Care: The Solution,” watch this “virtual LTC event” featuring age wave visionary Ken Dychtwald and leading LTC researchers and check out “Medicaid's $100+ Billion Leak.”

Source: National Health Expenditures*

2023 (Billions)

Total

Medicaid

Medicare

Priv Insur

OOP

Other Payers

NH + CCRC

211.3 +10.5%

100%

64.2 +9.7%

30.4%

44.0 +4.3%

20.8%

20.6 +13.2%

9.7%

55.1 +14.1%

26.1%

27.4 +13.7%

13.0%

147.8 +11.2%

100%

51.2

34.6%

51.8

35.0%

21.5

14.5%

17.7

12.0%

5.6

3.8%

Other

270.2 +9.6%

100%

162.8

60.3%

4.5

1.7%

17.6

6.5%

8.9

3.3%

76.3

28.2%

Total

629.3 +10.3%

100%

278.2 +9.2%

44.2%

100.3 +6.8%

15.9 %

59.7 +13.3%

9.5%

81.7 +14.3%

12.9%

109.3 +11.6%

17.4%

2022 (Billions)

Total

Medicaid

Medicare

Priv Insur

OOP

Other Payers

NH + CCRC

191.3

100%

58.5

30.6%

42.2

22.1%

18.2

9.5%

48.3

25.2%

24.1

12.6%

132.9

100%

46.9

35.3%

47.5

35.8%

18.6

14.0%

15.4

11.6%

4.5

3.5%

Other

246.5

100%

149.3

60.8%

4.2

1.7%

15.9

6.4%

7.8

3.2%

69.3

28.1%

Total

570.7

100%

254.7

44.6%

93.9

16.5%

52.7

9.2%

71.5

12.5%

97.9

17.2%

* Note that CMS changed the definition of National Health Expenditure Accounts (NHEA) categories in 2011, adding for example Continuing Care Retirement Communities (CCRCs) to Nursing Care Facilities. This change had the effect of reducing Medicaid's reported contribution to the cost of nursing home care from over 40% in 2008 to under one-third (32.8%) in 2009. CMS also created a new category called "Other Third Party Payers" (7.1%) which includes "worksite health care, other private revenues, Indian Health Service, workers' compensation, general assistance, maternal and child health, vocational rehabilitation, other federal programs, Substance Abuse and Mental Health Services Administration, other state and local programs, and school health." For definitions of all NHEA categories, see http://www.cms.gov/NationalHealthExpendData/downloads/quickref.pdf.

1 Nursing Care Facilities and Continuing Care Retirement Communities:
Covers nursing and rehabilitative services provided in freestanding nursing home facilities. These services are generally provided for an extended period of time by registered or licensed practical nurses and other staff. Care received in state & local government facilities and nursing facilities operated by the U.S. Department of Veterans Affairs are also included. These establishments are classified in NAICS 6231-Nursing Care Facilities and NAICS 623311-Continuing Care Retirement Communities with on-site nursing care facilities.

2 Home Health Care:
Covers medical care provided in the home by freestanding home health agencies (HHAs). Medical equipment sales or rentals not billed through HHAs and non-medical types of home care (e.g., Meals on Wheels, chore-worker services, friendly visits, or other custodial services) are excluded. These freestanding HHAs are establishments that fall into NAICS 6216-Home Health Care Services.

3 Other Health, Residential, and Personal Care:
This category includes spending for Medicaid home and community based waivers, care provided in residential care facilities, ambulance services, school health and worksite health care. Generally these programs provide payments for services in non-traditional settings such as community centers, senior citizens centers, schools, and military field stations. The residential establishments are classified as facilities for the intellectually disabled (NAICS 62321), and mental health and substance abuse facilities (NAICS 62322). The ambulance establishments are classified as Ambulance services (NAICS 62191).

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Updated Tuesday, January 21, 2025, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #25-003: LTC NEWS AND COMMENT

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

Feds reject providers’ claims of ‘impossible’ standards in last push to defend nursing home staffing mandate
As Congress Looks to Reduce Federal Spending, Medicare and Medicaid Remain Broadly Popular, and At Least Twice as Many People Want to Increase Spending Rather Than Cut It
Protecting What Matters
Where did the private payers go?
Study: Medicare Advantage users largely in the dark about dental, vision, hearing benefits
Baby boomers aim to stay put as political climate drives others to contemplate moving in 2025
How do Medicaid Home Care Programs Support Family Caregivers?
GAO Cites Overlap, Fragmentation of Agency Programs for Older Adults
Combating rising premiums by addressing social determinants of health
Under Trump, Medicaid Faces a 'Reset Moment'

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Updated Monday, January 13, 2025, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #25-002: LTC NEWS AND COMMENT

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

CMS proposes MA payment increase of 4.3 percent for 2026
Here's How Many Years You Can Expect to Live After Dementia Diagnosis
Trump presidency brings ‘mixed bag’ of regulatory wins, payment fears: McKnight’s 2025 Outlook, Part 3
[Updated] CMS program to offer RNs up to $50K each to work in nursing homes
National Health Expenditure Projections, 2023–32: Payer Trends Diverge As Pandemic-Related Policies Fade
Slowdown in household growth, housing demand anticipated, except for those 80+
What We’ve Learned About Dementia’s Toll on Family Finances
Senior living represented among 300+ groups imploring Congress to protect Medicaid as ‘backbone’ of health system

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Updated Friday, January 10, 2025, 10:03 AM (Pacific)

Seattle—

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LTC BULLET: SO WHAT IF THE GOVERNMENT PAYS FOR MOST LTC, 2023 DATA UPDATE

LTC Comment: Heads up! We're about to explain why long-term care insurance sales have disappointed, why people don't "use their homes to stay at home" and why LTC providers who depend on public financing are at risk. Details after the ***news.***

*** 2025 ILTCI RECOGNITION AWARD nominations are open here. Organizers announced: “Now is your chance to nominate a person(s) or organization that has made a significant, long-term contribution towards the attainment of the ILTCI vision. Help us showcase the best of our industry and acknowledge their contributions. Nominees must have worked within the long term care insurance industry in some capacity for minimum of five years to qualify. Submissions will be accepted through February 1, 2025. More info is available on the Recognition Award page online, and through the nomination link.”
Prior Award Winners:
2024 Award Recipients: Ron Hagelman, President, Hagelman Consulting; Peter Goldstein, CEO, illumifin; LTC Partners
2019 Award Recipient: Stephen Moses, President of the Center for Long Term Care Reform (http://www.centerltc.com/)
2018 Award Recipient: Dr. Marc Cohen, Clinical Professor, Department of Gerontology and Director, Center for Long-Term Care Services and Supports at the University of Massachusetts (https://www.linkedin.com/in/marc-cohen-2487343/) ***

*** SPOUSAL IMPOVERISHMENT UPDATE: Center for LTC Reform members received the following update on 12/25/24. If you are not a Center member, join here. Find our membership levels and benefits here. We have the best opportunity in twenty years immediately ahead to change and improve LTC financing policy. Join the fight for better LTC!

11/15/2024, “2025 SSI, Spousal Impoverishment, and Medicare Savings Program Resource Standards,” Center for Medicaid and CHIP Services (CMCS)

Quote: “This CMCS Informational Bulletin provides an update on the 2025 Supplemental Security Income (SSI) and Spousal Impoverishment Standards as well as the 2025 resource standards for the Medicare Savings Program (MSP) groups.”

LTC Comment: Here are the highlights:

The Medicaid home equity limit for 2025 is $730,000 in most states and $1,097,000 in nine others. There was no limit on home equity until the Deficit Reduction Act of 2005. The DRA ‘05 established a home equity limit of $500,000, but allowed states to go as high as $750,000. Both limits increase annually with inflation. The median home equity of U.S. seniors is only $250,000, so the Medicaid limit is largely ineffectual in blocking eligibility for house-rich recipients who could have used their home equity to purchase LTC in the private market.
The Monthly Maintenance Needs Allowance is the amount of the institutionalized spouse’s income that can be transferred to the community spouse. It ranges in 2025 from a minimum of $2,555 to a maximum of $3,948.
The Community Spouse Resource Allowance is one-half of the couple’s joint assets not to exceed $157,920.00 but it guarantees a minimum allowance of $31,584. The CSRA is the amount the community spouse can retain of the couple’s joint assets without disqualifying the institutionalized spouse.

The Medicare Catastrophic Coverage Act of 1988 created these “spousal impoverishment” protections to prevent community spouses of institutionalized Medicaid recipients from experiencing destitution due to the Medicaid income and asset limits previously in effect. Although well-intentioned, these spousal impoverishment protections had the effect of removing another reason for families to take the cost of LTC seriously and to plan, save, invest or insure for the risk. ***

LTC BULLET: SO WHAT IF THE GOVERNMENT PAYS FOR MOST LTC, 2023 DATA UPDATE

LTC Comment: Once a year around this time the Centers for Medicare and Medicaid Services (CMS) report health care expenditure data for the latest year of record. Recently, CMS posted 2023 statistics on its website here. Click on this link NHE Tables (ZIP) to download the tables. Then, click on the ones of interest, Tables 13, 14 and 15 for our purposes here.

Health Affairs has published a summary and analysis of this new data titled “National Health Expenditures In 2023: Faster Growth As Insurance Coverage And Utilization Increased." The article is “open access” so available free here. Unfortunately, the Health Affairs article has nothing to say about long-term care beyond the raw data, so read on to get that story.

Following is our annual analysis of the latest long-term care expenditure data. Note that we added Table 13, “Other Health, Residential, and Personal Care Expenditures,” to our analysis starting last year. This category includes Medicaid home and community based waivers and care provided in residential care facilities, so it is a vital part of the LTC marketplace. We focused only on nursing home* and home health expenditures before.

Heads Up: This may be the most important LTC Bullet we publish all year. It is the twenty-third in a row we’ve done annually to analyze the federal government’s enormous, and we argue, often detrimental, impact on long-term care financing. If you'd like to see the earlier versions, go here and search for “So What if the Government Pays.” You’ll find our yearly analyses of the data going all the way back to "So What If the Government Pays for Most LTC, 2002 Data Update."

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"So What If the Government Pays for Most LTC, 2023 Data Update"

Stephen A. Moses

Ever wonder why LTC insurance sales and market penetration are so discouraging? Or why reverse mortgages are rarely used to pay for long-term care? Or why LTC service providers are always struggling to survive financially and still provide quality care? Read on.

Nursing Homes

America spent 211.3 billion on nursing facilities and continuing care retirement communities in 2023, a 10.5% increase compared to 2022. The percentage of these costs paid by Medicaid and Medicare has gone up over the past half century (from 26.8% in 1970 to 51.2% in 2023, up 24.4 % of the total) while out-of-pocket costs have declined in the same period (from 49.2% in 1970 to 26.1% in 2023, down 23.1% of the total). Source: Table 15: Nursing Care Facilities and Continuing Care Retirement Communities Expenditures; Levels, Percent Change, and Percent Distribution, by Source of Funds: Selected Calendar Years 1970-2022.

So What? Consumers' liability for nursing home and CCRC costs has declined by almost half, down 47.0% in the past five decades while the share paid by Medicaid and Medicare has nearly doubled, up 91.0%.

No wonder people are not as eager to buy LTC insurance as they would be if they were more at risk for the cost of their care! No wonder they don't use home equity for LTC when Medicaid exempts at least $730,000 and in some states up to $1,097,000 of home equity (as of 1/1/25). No wonder nursing homes struggle financially—their dependency on parsimonious government reimbursements is increasing while their more profitable private payers are disappearing.

Unfortunately, these problems are even worse than the preceding data suggest. Over half of the so-called "out-of-pocket" costs reported by CMS are really just contributions toward their cost of care by people already covered by Medicaid. These are not out-of-pocket costs in terms of ASSET spend down, but rather only INCOME, most of which comes from Social Security benefits, another financially struggling government program. Thus, although Medicaid pays less than one-third of the cost of nursing home (and CCRC) care (30.4% of the dollars in 2023), it covers over two-thirds (67.0%) of all nursing home patient days.

So What? Medicaid pays in full or subsidizes nearly two-thirds of all nursing home patient days. Even if Medicaid pays nothing, with the entire amount due contributed from the recipient's income, the nursing home receives Medicaid's dismally low reimbursement rate.

“We found that Medicaid payment rates for the average or median nursing home covered about 82 cents per every dollar of reported cost nursing homes incurred caring for Medicaid residents. For approximately 40% of nursing homes, Medicaid per diem payments covered 80% or less of their estimated per diem Medicaid costs." (Source: “In Case You Missed It: New HHS Report Reveals Significant Medicaid Shortfall For Nursing Homes,” AHCA/NCAL, October 22, 2024)

Private Health Insurance

Don't be fooled by the 9.8% of nursing home costs that CMS reports as having been paid by "private health insurance" in 2023. That category does not include private long-term care insurance. (See category definitions here.) No one knows how much LTC insurance pays toward nursing home care, because “In most cases, private long-term care insurance reimburses people for the expenses they pay out-of-pocket and would be classified as out-of-pocket spending in the NHE data.” (Priya Chidambaram and Alice Burns, “10 Things About Long-Term Services and Supports (LTSS),” KFF, July 8, 2024) Thus, a large proportion of insurance payments for nursing home care gets reported as if it were "out-of-pocket" payments. This fact further inflates the out-of-pocket figure artificially.

Assisted Living

How does all this affect assisted living facilities? According to the Genworth Cost of Care Survey for 2023, median ALF cost was $64,200 per year ($5,350 per month), up 1.4% from 2022, but up 24.4% since 2020. Although assisted living facilities remain mostly private pay, almost half of ALFs were “authorized or certified” to participate in Medicaid and only “a small minority of state Medicaid programs do not cover services in assisted living.” Furthermore, “Almost 1 in 5 residents relies on Medicaid to pay for daily services (18%).” (Find these latter two quotes under the source’s “Finance” tab.) Over time, assisted living facilities have followed nursing homes down the primrose path of accepting more and more revenue from Medicaid.

Many people who could afford assisted living by spending down their illiquid wealth, especially home equity, choose instead to take advantage of Medicaid nursing home benefits. Medicaid exempts one home and all contiguous property (up to $730,000 or $1,097,000 depending on the state), plus—in unlimited dollar amounts—one business, one automobile, prepaid burials, term life insurance, household furnishings, personal belongings and Individual Retirement Accounts not to mention wealth protected by sophisticated asset sheltering and divestment techniques marketed by Medicaid planning attorneys. Income rarely interferes with Medicaid nursing home eligibility unless such income exceeds the cost of private nursing home care.

So What? For most people, Medicaid nursing home benefits are easy to obtain without spending down assets significantly and Medicaid's income contribution requirement is usually much less expensive than paying the full cost of assisted living.

No wonder ALFs are struggling to attract enough private payers to be profitable. No wonder people are not as eager to buy LTC insurance as they would be if they were more at risk for the cost of their care. This problem has been radically exacerbated in recent years because more and more state Medicaid programs are paying for assisted living as well as nursing home care, which makes Medicaid eligibility more desirable than ever.

Home Health Care

The situation with home health care financing is very similar to nursing home financing. According to CMS, America spent $147.8 billion on home health care in 2023, 11.2% more than in 2022 ($132.9). Medicare (35.0%) and Medicaid (34.6%) paid 69.6% of this total and private health insurance (not LTC insurance) paid 14.5%. Only 12.0% of home health care costs were paid out of pocket. The remainder came from several small public and private financing sources. Data source: Table 14: Home Health Care Services Expenditures; Levels, Percent Change, and Percent Distribution, by Source of Funds: Selected Calendar Years 1970-2022.

So What? Only one out of every eight dollars spent on home health care comes out of the pockets of patients and a large portion of that comes from the income (not assets) of people already on Medicaid.

No wonder the public does not feel the sense of urgency about this risk that they would if they were more personally at risk for the cost of their care.

Other Health, Residential, and Personal Care

Americans spent $270.2 billion on these services in 2023, up 9.6% from $246.5 billion in 2022.

Medicare (1.7%) and Medicaid (60.3%) paid 62.0% of that total; private health insurance and other third parties contributed 34.7%; out-of-pocket expenditures amounted to only 3.3%. Data Source: Table 13: Other Health, Residential, and Personal Care Services Expenditures: Levels, Percent Change, and Percent Distribution, by Source of Funds: Selected Calendar Years 1970-2022

So what? Only one dollar out of $33 spent on these important LTC services comes out of the pocket of a private payer.

No wonder the public feels so little sense of worry about planning, saving, investing or insuring for long-term care.

Summary:

2023

(Billions) Total

Medicaid

Medicare

Priv Insur

OOP

Other Payers

NH + CCRC

211.3 +10.5%

100%

64.2 +9.7%

30.4%

44.0 +4.3%

20.8%

20.6 +13.2%

9.7%

55.1 +14.1%

26.1%

27.4 +13.7%

13.0%

147.8 +11.2%

100%

51.2

34.6%

51.8

35.0%

21.5

14.5%

17.7

12.0%

5.6

3.8%

Other

270.2 +9.6%

100%

162.8

60.3%

4.5

1.7%

17.6

6.5%

8.9

3.3%

76.3

28.2%

Total

629.3 +10.3%

100%

278.2 +9.2%

44.2%

100.3 +6.8%

15.9 %

59.7 +13.3%

9.5%

81.7 +14.3%

12.9%

109.3 +11.6%

17.4%

Across all three kinds of LTC services out-of-pocket expenditures account for only $1 in $7.75 spent. Half of this spending comes from income of people already on Medicaid. Thus only 6.45%, or $1 in $15.50 could have come from spend down of savings.

Bottom line, people only buy insurance against real financial risk. As long as they can ignore the risk, avoid the premiums, and get government to pay for their long-term care when and if such care is needed, they will remain in denial about the need for LTC insurance. As long as Medicaid and Medicare are paying for a huge proportion of all nursing home and home health care costs while out-of-pocket expenditures remain only nominal, nursing homes and home health agencies will remain starved for financial oxygen.

The solution is simple. Target Medicaid financing of long-term care to the needy and use the savings to fund education and tax incentives to encourage the public to plan early to be able to pay privately for long-term care. For ideas and recommendations on how to implement this solution, see www.centerltc.com.

Note especially:

“Medicaid’s $100 Billion Plus Leak” (2024)

“Long-Term Care: The Solution” (2023) with the Paragon Health Institute at https://paragoninstitute.org/research-paper-page-moses-ltc-solution-20231002/

“Long-Term Care: The Problem” (2022) with the Paragon Health Institute at https://paragoninstitute.org/long-term-care-the-problem/

“Medicaid and Long-Term Care” (2020) at http://www.centerltc.com/pubs/Medicaid_and_Long-Term_Care.pdf

“How to Fix Long-Term Care Financing” (2017), at http://www.centerltc.com/pubs/How-To-Fix-Long-Term-Care-Financing.pdf

In the Deficit Reduction Act of 2005, Congress took some significant steps toward addressing these problems. A cap was placed for the first time on Medicaid's home equity exemption and several of the more egregious Medicaid planning abuses were ended. But much more remains to be done. With the Age Wave cresting and threatening to crash over the next two decades, we can only hope it isn't too late already.

Stephen A. Moses is president of the Center for Long-Term Care Reform in Seattle, Washington. The Center's mission is to ensure quality long-term care for all Americans. Steve Moses writes, speaks and consults throughout the United States on long-term care policy. Learn more at www.centerltc.com or email smoses@centerltc.com.

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Updated Monday, January 6, 2025, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #25-001: LTC NEWS AND COMMENT

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

Long prior authorization waits for HCBS erode trust in healthcare system, study finds
Advocates score ‘win-win-win’ with new law setting up test program of assisted living for veterans
Cut swing-bed pay rates to match skilled nursing reimbursement and save billions, OIG tells CMS
In pivotal case, federal court rules in favor of HCBS for people with disabilities
Minimum wage increases in 21 states
Alzheimer’s Association releases new dementia diagnosis guidelines

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Updated Monday, December 30, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-047: LTC NEWS AND COMMENT

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

Act Now, Say Americans On Social Security Shortfalls
2025 SSI, Spousal Impoverishment, and Medicare Savings Program Resource Standards
The business case for selling LTC insurance to small-business owners
The symptoms of dementia families are being urged to look out for this Christmas
Washington State Voters Keep Long-Term Care Tax
Nursing home, CCRC spending increases 9.5 percent, CMS says
Home health visits, admissions fall nationwide, industry report finds
Nine in 10 direct care HCBS providers grappling with staffing shortages: report
AHCA, LeadingAge make final argument in legal fight over staffing mandate
The cost of long-term care in America has grown — here's how you can prepare

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Updated Monday, December 16, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-046: LTC NEWS AND COMMENT

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

MedPAC advises cutting home health payments by 7 percent, freezing hospice payments in ’26
HCBS now offered by more than 60 percent of CCRCs: survey
Expanding Medicare Advantage co-pays may leave nursing homes without cash they’ve earned
MedPAC again presses for 3% nursing home cut, despite increasing Medicare Advantage pressure
Legislation would help WA Cares be less bad for some
Antipsychotic meds worsen behavior, study shows; MDs defend, call for alternatives
Number of nursing homes declines 5%, while penalties skyrocket
Planning ahead with Medicaid

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Updated Friday, December 13, 2024, 10:03 AM (Pacific)

Seattle—

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LTC BULLET: PUBLIC POLICY PRINCIPLES FOR LONG-TERM CARE

LTC Comment: What matters most for long-term care and how to achieve it, after the ***news.***

*** ILTCI ’25 PHILLY is just around the corner (March 9-12). Register here now to lock in early-bird attendee discounts. Organizers report you can find “the working titles for all sessions currently proposed for ILTCI 2025” here. They’ll release the final schedule soon and the mobile app for attendees in late January. ***

LTC BULLET: PUBLIC POLICY PRINCIPLES FOR LONG-TERM CARE

LTC Comment: Your Center for Long-Term Care Reform closes 2024 with a new report. The paper’s Abstract follows. Find the full text here and the entire reports archive here.

Thank you for supporting the Center for nearly 27 years. We invite you to redouble your support for our work in 2025 as the challenges and opportunities are greater than ever before. Real public policy change for the better is more realistically possible right now than it has been for two decades. Seize the moment.

“Long-Term Care: Principles, Policies, Proposals, and Petitions”

Abstract: The challenge to provide and fund long-term care (LTC) for a rapidly aging population confounds scholars and policymakers. America’s current LTC system is expensive, dominated by public financing, and heavily regulated, but it fails to deliver the kinds and quality of care consumers prefer. Unintended consequences of well-intentioned public policies account for this poor outcome. In 1965, Medicaid funded LTC for everyone “whose income and resources are insufficient to meet the costs of necessary medical services … .” This open-ended LTC funding source caused excessive utilization of Medicaid LTC benefits, unleashed explosive public spending, obviated the need for people to plan for LTC risk and cost, led to cost control measures that caused access and quality problems, resulted in low provider reimbursements that created caregiver shortages, and impeded the development of the home and community-based services options consumers prefer. To reverse these negative outcomes and deliver an affordable LTC system that provides the care people want in the venues they prefer, Medicaid must (1) pay LTC providers market rates, (2) limit eligibility to the needy who have actually spent down private income and resources for medical or LTC expenses, (3) cover the full range of LTC services and venues, (4) ensure access and quality across the care continuum, (5) regulate minimally relying primarily on market competition to ensure quality, and (6) focus LTC spending back onto the aging and disabled instead of the young and able. Reconfiguring Medicaid around these public policy objectives will achieve the positive results described and explained below.

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Updated Monday, December 9, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-045: LTC NEWS AND COMMENT

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

Medicare spending jumps 27 percent when patients leave Medicare Advantage plans
Legislative leaders differ on causes of and solutions to Washington budget hole
Reintroduction of bill to cover catastrophic long-term care needs gets support from senior living advocates
Federal judge: Congressional action gives providers ‘legitimate argument’ against nursing home staffing mandate
Nursing Home Industry Wants Trump To Rescind Staffing Mandate
Homebound Seniors Living Alone Often Slip Through Health System’s Cracks
Lifestyle factors can predict dementia risk decades before diagnosis, study finds
What’s next for long-term care?

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Updated Friday, December 6, 2024, 10:03 AM (Pacific)

Seattle—

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LTC BULLET: MY LTC POLICY WISH LIST

LTC Comment: WA Cares survived but national politics is upside down. What’s happening and how can we make the most of it? My wish list after the ***news.***

*** REGISTRATION IS OPEN for ILTCI ’25. The Inter-Company LTC Insurance Conference will convene March 9-12, 2025 at the Philadelphia Marriott Downtown in Philadelphia, PA. Register here. Organizers say “Our agenda includes numerous educational sessions over two days across seven tracks with ample time for networking and reconnecting with colleagues. We still have room for exhibitors and sponsors! Please contact us at info@iltciconf.org if you are interested in either opportunity to showcase your products and services to our attendees.” ***

*** 12/2/2024, “What’s next for long-term care?,” by Stephen A. Moses, McKnights LTC News

Quote: “Most of long-term care’s problems — including impaired access and quality, institutional bias, interminable home-care waits, paid caregiver shortages, and excessive dependence on unpaid family and friends — are the direct result of too much reliance (61% of $400 billion in 2022 LTC spending) on Medicaid’s parsimonious reimbursements (70% of private-pay rates) and the Centers for Medicare & Medicaid Services’ overbearing regulation (such as uncompensated staffing mandates). This LTC market status quo has pertained for decades. But America is experiencing a political inflection point. A rare opportunity looms to move away from central planning toward freer markets, from government dependency toward individual responsibility, and from heavy-handed regulation toward unfettered competition. What would a LTC marketplace reflecting the full implementation of those changes look like?”

LTC Comment: Click through and read on for my formula to fix long-term care once and for all. ***

LTC BULLET: MY LTC POLICY WISH LIST

LTC Comment: As we close out 2024, like it or lump it, big changes are afoot. Reminds me of the definition of “crisis” that JFK popularized: “danger and opportunity.” As we enter a tumultuous period of political and economic change, it seems like a good time to imagine (1) what we would like long-term care (LTC) to look like in the future and (2) how we might achieve that vision.

Imagining the ideal LTC service delivery and financing system is the easy part. We envision every aging American having affordable access to high quality extended care in the venue of their choice—home care, assisted living, or a well-staffed nursing home when medically necessary. The sad fact is that today’s LTC looks nothing like that ideal. See “Long-Term Care: The Problem” for details.

The tough part of achieving our LTC vision, the part that has eluded scholars, think tanks, and special commissions for decades, is to reconfigure incentives in the LTC marketplace so that most people place a high enough priority on LTC planning and they prepare early to be able to pay privately for care when they need it. Long-Term Care: The Solution” explains how to make that happen.

Today, I want to address a different question. What would the LTC marketplace need to look like to achieve the elusive ideal LTC service delivery and financing system? Let’s take it step by step.

First and foremost, everyone should pay the same market-based price for LTC. No more Medicaid rates below the cost of care that have to be balanced by (i.e., cost-shifted into) exorbitant private-pay rates that regular people cannot afford. That single distortion ramifies through the whole LTC market causing access and quality problems and caregiver shortages due to inadequate compensation. It causes excessive reliance on institutional care (which people would rather avoid) to save the government money instead of the home care people prefer, but which Medicaid cannot afford (without long waiting lists). So, let Medicaid pay market rates for LTC. That would relieve the many problems the program’s meager reimbursement rates have caused.

But, “whoa,” all the experts will respond. Where will Medicaid come up with all the extra money to pay market rates? I say “no extra money is needed. Less will suffice in fact.” The problem is not that Medicaid spends too little, but that it covers too many enrollees. That’s not fixable overnight, but it is fixable. Here’s the underlying problem. The Social Security Act authorized Medicaid to provide LTC to individuals “whose income and resources are insufficient to meet the costs of necessary medical services … .” That open-ended mandate to fund LTC for anyone who cannot afford it overwhelmed Medicaid with too many recipients and created a moral hazard by desensitizing the public to LTC risk and cost. Thus, few people plan early for LTC and most depend on Medicaid if they encounter high LTC costs late in life.

From the start, Medicaid defined the inability to afford LTC in such a way that no one could afford it and nearly everyone qualified for assistance. High income was no problem because Medicaid deducts private medical and LTC costs from income before applying a “low-income” limit. High assets don’t interfere because most large assets, such as home equity and IRAs, are exempt. Any remaining countable assets are easily removed by using them to purchase exempt assets as explained in Medicaid's $100+ Billion Leak.

So, Medicaid policy sent the message that “you don’t need to worry about LTC. If you ever need it, government will provide.” That message was never explicit. In fact, consumers were urged to insure for LTC so they would not lose their life savings to the cost of LTC. But because that risk was never real and most people ended up receiving paid care if and when needed, the thoroughly deficient Medicaid-dominated system prevailed and private LTC planning languished.

Here’s what needs to change to end this vicious downward cycle. We must eliminate the ways middle class and affluent people qualify for Medicaid LTC benefits while preserving wealth. These are the most critical measures to pursue:

Stop allowing the purchase of exempt assets to spend down unlimited resources artificially. Instead, treat asset spend down the same as income spend down, which is limited to deducting actual, documented private medical or LTC expenditures.

Bring seniors’ $14 trillion of home equity into the LTC financing system by eliminating or vastly reducing Medicaid’s home equity exemption. At its current level between $713,000 and $1.071,000, Medicaid’s misplaced generosity diverts nearly all home equity away from LTC funding, enough alone to solve most of LTC’s many access and quality problems.

Stop Medicaid Asset Protection Trusts and Medicaid Compliant Annuities from diverting vast sums of private wealth from LTC spending into taxpayer-financed Medicaid expenditures. These legal gimmicks, used exclusively by the affluent clients of Medicaid planning specialists, should be illegal.

Medicaid’s 5-year asset transfer look-back is too short to discourage intentional self-impoverishment to qualify for LTC benefits. Expand it to 20 years. As home ownership and transfers are publicly recorded by county assessors and recorders, a 20-year look back rule would be easily administered. It would end one of the most commonly recommended early LTC planning methods.

End systemic LTC racism. Today, affluent Medicaid planners’ clients access the best Medicaid facilities and services to the exclusion of needier groups, including racial and socio-economic minorities, by using “key money” to purchase red-carpet access the less privileged cannot afford.

Give Medicaid back to the vulnerable aged and disabled by reversing the program’s new focus on able-bodied, working-age adults—with a much higher federal reimbursement percentage for these enrollees.

Inform the public about the loss of Medicaid as a late-life wealth preserving safety net for the middle class and affluent. Establish and promulgate new LTC planning goals for consumers to achieve no later than age 65 as a condition for later Medicaid help with catastrophic costs.

Allow states to experiment with creative ways to do more with less by encouraging and approving waivers that exchange federal matching fund limits for more state-level LTC policy flexibility.

Closing LTC Comment: Achieving the ideal LTC service delivery and financing system is not as difficult as most believe. All that’s needed is to give LTC the priority it deserves. Eliminate Medicaid as a late-life wealth preserving welfare-based safety net. That will incentivize people to draw on sources of wealth they are accumulating anyway—home equity, retirement savings and life insurance—to fund LTC if needed. With those sources of wealth at risk for the first time, private LTC insurance in all its many forms will revive as a major source of LTC financing. Vast new sums of private funding for LTC at market rates will revitalize the system. To fix LTC once and for all this is what must be done.

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Updated Monday, December 2, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-044: LTC NEWS AND COMMENT

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

New video series profiles struggles, successes of family caregivers
Affordability of long-term care systems in times of rapid population ageing
Planning for Long-Term Care: A Survey of Midlife and Older Women
Measuring income of the aged in household surveys: evidence from linked administrative records
DHS to offer nearly 65K additional visas for FY 2025, aiding long-term care
Larger nursing home chains linked to lower staffing

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Updated Monday, November 25, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-043: LTC NEWS AND COMMENT

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

Senior living groups pledge to educate incoming administration on importance of federal programs to older adults
Half of Americans in survey concerned about becoming a burden to loved ones
BREAKING: Trump taps Dr. Oz to head CMS
Study: Medicaid Reimbursements Don’t Meet Care Costs
More than 80% of US adults may be obese, overweight by 2050, study forecasts
Suspension on long-term care insurance enrollments will last until at least 2026
Confusing initiative titles should not be a thing
Report: Dementia deaths fell in nursing homes, rose in private homes from 2018 to 2022
Trump administration likely to kill Medicaid 80/20 rule, expert predicts
MA plans shed sickest patients in their final year of life, shifting costs back to government
WA Cares survives vote, but ‘work to be done’ on LTC program
Can I Protect Assets After My Mother is Admitted to a Nursing Home?
Medicare Part B Premium to Climb 5.9% in 2025

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Updated Monday, November 11, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-042: LTC NEWS AND COMMENT

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

CMS gives nursing homes months more to complete onerous revalidation process
Unrecognized cognitive impairment in vulnerable older adults is ubiquitous, says study
Genworth Begins to File New Long-Term Care Insurance Policy
Nursing home staffing mandate ‘dead’ with Trump win, but workforce, pay challenges persist
Initiative to roll back Washington’s long-term care program fails
PHE Funds Wind-Down Raises Concerns of ‘Severely Restricting’ Access to Nursing Homes
Study: People with dementia more apt to be admitted to nursing homes with lower star ratings
Unhappy Medicare Plan Issuers Zero Out Agent Commissions
This long-term care provider has turned on an overseas golden spigot to fill its nursing ranks
Controlling your destiny

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Updated Friday, November 8, 2024, 10:03 AM (Pacific)

Seattle—

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LTC BULLET: WA CARES STALKING HORSE SURVIVES

LTC Comment: Washington State ballot Initiative 2124 failed. So what? We opine below.

LTC BULLET: WA CARES STALKING HORSE SURVIVES

LTC Comment: All of a sudden long-term care (LTC) is politically relevant. Both Presidential winner Donald J. Trump and loser Kamala Harris promised to help struggling families care for their aging, frail or infirm loved ones. But the growing challenge to provide and fund LTC is nothing new.

For decades, policymakers sought to control the rising costs of LTC, which reached $400 billion in 2022, with Medicaid accounting for 61% of this amount. Innumerable analysts, commissions, and think tanks have proposed a variety of solutions. But nearly all of them gravitate in one direction.

The most common LTC policy recommendation is to add this service to Medicare or create a new mandatory, payroll-funded entitlement program similar to Social Security. While such a proposal is where most studies end up, the plan has never garnered much national political support.

Out of frustration with this federal-level dead end, several states began working on plans of their own. So far, only Washington state has implemented a statewide LTC program based on collecting compulsory payroll deductions. Under WA Cares, workers contribute 0.58% of their paychecks and may receive up to $36,500 in benefits if they need assistance with three or more activities of daily living, such as transferring, dressing, or bathing.

Advocates say WA Cares would relieve families of some of the LTC burden and save Medicaid money. Critics claim the program’s benefits are too small to make a difference and that Washingtonians need their incomes now, not in the form of another government promise of aid in the distant future.

WA Cares was on the ballot in Washington this year. Initiative 2124 proposed to make the program voluntary. Actuaries and LTC experts believe that would plunge the program into a fiscal death spiral. As the election approached, polls predicted diametrically opposite results.

A survey of voters in July indicated approval of the initiative, thus dooming the program. A more recent poll found voters appeared more likely to reject the initiative, hence supporting the program as is. Another October poll showed 45% in favor of the initiative making the program optional, effectively killing it, 33% preferring to keep it as is, and 22% undecided.

We now know the outcome. Voters rejected Initiative 2124. WA Cares will remain a compulsory program to which workers must contribute regardless of their preference. Likely the program will encourage other states to follow a similar course and it could revitalize calls for a national-level program of the same kind.

Voters rejected WA Cares at the ballot box twice (Advisory Vote 20 and SJR 8212) after the state legislature and Governor Jay Inslee imposed it on them in 2019. Now they’ve changed course acceding to this partial socialization of LTC risk and cost.

One thing is certain, WA Cares is a trial run for progressives’ favored solution to socialize LTC risk and cost. On the positive side, we will now have a state-level test of this kind of program. Whether it succeeds or fails could have much wider ramifications for the prospects of such a program nationally.

Stephen A. Moses is president of the Center for Long-Term Care Reform, a visiting fellow with the Paragon Health Institute and the author of Paragon’s “Long-Term Care: The Problem” and “Long-Term Care: The Solution.”

LTC Comment: Here’s some post-election commentary from thoughtful analysts we follow.

Elizabeth New, Policy Analyst, Director, Centers for Worker Rights and Health Care, Washington Policy Center. Ms. New observed that people were confused about how to vote on 2124 if they wanted the tax to be optional. They would say to her "Yes! Vote no on this initiative. Get rid of WA Cares!" She tried to explain that a "yes" vote made the tax optional, thus dooming the program.
LTC Comment: Who knows how much of the final result was simply misunderstanding the options?

Stephen D. Forman, Senior Vice-President, Long Term Care Associates shared the following:

• “WA Cares was designed to meet the needs of, at most, 2 out of 10 Washington adults. So, for the other 8 out of 10 residents who are not well-served by WA Cares, what’s your LTC plan?”

• “As I wrote in my last piece [LTC Bullet: Guest Column, "Yes on I-2124"], an impressive cadre of organizations—including the state itself—emerged over the summer to evangelize about the value of LTC insurance—great! I hope they’ll keep the momentum going for LTC Awareness Month and beyond since, even with WA Cares, the majority of Washingtonians lack a plan for long-term care.”

• “If WA Cares is going to be with us for the long-term, then it’s time for Washington to commit to basic consumer protections which have been lacking. Not only do consumers deserve better when it comes to transparency and disclosure regarding rates, limitations and exclusions, triggers, inflation, etc., but—given the quality of information I’ve encountered during hearings and forums—I’d recommend requiring LTC training of consumer-facing WA Cares representatives, if not the entire LTSS Trust Commission.”

“Why do I say WA Cares meets the needs of at most 2 out of 10 adults? The WA population is about 8 million, of whom 6 million are adults. Milliman shows as few as 2.7 million covered to as many as 3.4 million. The latest Fiscal Note shows 3.9 million enrolled. At the lowest estimate, 2.7/8.0 = 34% of all Washingtonians are covered. At the highest, 3.9/6.0 = 65% of all Washingtonians. In either event, WA Cares says its 1-yr benefit period is adequate to cover about 1/3rd of claims, and that 2/3rds of beneficiaries will need additional coverage. So… .33 * .34 = 1 out of 10 whose needs are fully met (low end), and .33 * .65 = 2 out of 10 whose needs are fully met (high end).

One other interesting note about I-2124. The last poll before the election showed 45% voting yes, 33% no, and 22% undecided. In the end, ALL of those undecided voted no. They broke 100% no. I suspect this had something to do with the massive amount of special interest money (SEIU primarily) that resulted in unavoidable and ubiquitous ads over the past few weeks. The $8 – 9 million contributed by the NO campaign would’ve ranked it among the larger standalone LTC insurers by new business premium (!)

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Updated Monday, November 4, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-041: LTC NEWS AND COMMENT

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

13 percent of direct care workers work in residential care settings such as assisted living: analysis
MA recipients have fewer unnecessary medical services compared with traditional Medicare beneficiaries: study says
Medicaid HCBS wait lists are getting longer: report
When LTC planning takes an unexpected turn
Majority of Gen X, baby boomers anticipate needing at least as much in retirement as current earnings
Amid Workforce Shortages, KFF Examines Characteristics of Direct Care Workers and Shares Their Perspectives
LeadingAge: Diverting patients from SNF to home health does more harm than good
LeadingAge CEO blasts ‘irresponsible’ political leaders, urges ‘courage’ to fix long-term care system
2024 Election: 3 weeks out
Long-term care policies matter
Study links for-profit hospice with major savings for Medicare

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Updated Monday, October 28, 2024, 10:03 AM (Pacific)

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LTC E-ALERT #24-040: LTC NEWS AND COMMENT

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

Washington's statewide initiatives saw big shift in support. What happened?
New Report Reveals U.S. Family Caregivers Perform Equivalent of a Staggering $873.5 Billion Worth of Labor, Would Surpass Revenue of Top Global Companies
My 74-year-old husband will likely go into a nursing home within the next 5 years or so — is it immoral to put our assets into a trust ASAP and protect them from the US government?
Boomers beware: Tapping home equity to pay for long-term care carries serious risks
Only 17 percent of older adults feel confident about their long-term care plans: study
1-in-2 working Americans underestimates their life expectancy by 5-plus years, resulting in skewed retirement income goals — how to make your money last in later life
Over Half Of Americans Choose Their Benefits By Price During Open Enrollment
Should WA Cares be Optional? The case for YES on I-2124 - YouTube

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Updated Friday, October 25, 2024, 10:03 AM (Pacific)

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LTC BULLET: CATASTROPHIC LTC IRONY

LTC Comment: Another report insists we need a big new federal program to cover catastrophic LTC costs. Ironically, we already have one that makes a new one impossible to achieve. We explain after the ***news.***

*** LTC CLIPPING SERVICE. Damon highlighted this feature of the Center for LTC Reform’s suite of benefits in Long-Term Care News and Analysis, September 27, 2024. Here’s one more reason to subscribe as a premium member of the Center. Catch revealing articles like this one in real time.

9/11/2024, “Welfare Is What’s Eating the Budget,” by Phil Gramm and Jodey Arrington, Wall Street Journal (WSJ has a pay wall but this link goes to a free version of the article on the AEI website)
Quote: “Since funding for the War on Poverty ramped up in 1967, welfare payments received by the average work-age household in the bottom quintile of income recipients has risen from $7,352 in inflation-adjusted 2022 dollars to $64,700 in 2022, the last year with available household income data. This 780% increase was 9.2 times the rise in income earned by the average American household. … After counting all transfer payments as income to the recipients and taxes as income lost by taxpayers, and adjusting for household size, the average households in the bottom, second and middle quintiles all have roughly the same incomes—despite dramatic differences in work effort. With the explosion of means-tested transfer payments, the portion of prime work-age persons in the bottom quintile who actually work has fallen to 36% from 68%. In the second quintile, households with a work-age adult who actually works have declined to 85% from 90%. While work effort fell in the bottom two quintiles, the percentage of middle-income households with a prime work-age person who works has risen to 92% from 86%. … Demand for reform would be even stronger if the public understood how generous social-welfare benefits are. In reporting household income, the Census Bureau doesn’t count 88% of transfer payments made to households that are defined as being poor. The census doesn’t count refundable tax credits (for which the beneficiary receives a check from the Treasury), food-stamp debit cards, free medical care through Medicaid, or benefits from about 100 other federal transfer payments as income to welfare recipients. When those benefits are counted as income, 80% of those who are today counted as being poor are no longer poor, and almost half have incomes equivalent to American middle-income earners.” (Emphasis added)
LTC Comment: Don’t miss this extraordinary article. When the bottom three income quintiles have the same income after counting welfare benefits, but the middle quintile works and pays taxes while the bottom quintile mostly receives welfare, is it any wonder the two bottom quintiles’ work ethic is disappearing? ***

*** REPRESENTATIVE TOM SUOZZI (D-NY) plans a long-term care conference for this spring. He wants wide participation to create and enact legislation to address the LTC needs of the US population. His previous legislation, the WISH Act, would have created a public-private partnership, with the federal government responsible for 'catastrophic' costs. We thank Stephen D. Forman of Center-corporate-member LTC Associates for tipping us to this item. We can only hope the forthcoming conference attendees will consider the content of today’s LTC Bullet. ***

LTC BULLET: CATASTROPHIC LTC IRONY

LTC Comment: Kudos to Eileen Tell for writing and the Jewish Federations of America for publishing “A Dynamic Campaign to Educate and Engage Constituencies for a Federal Catastrophic Long-Term Care Insurance Program.” This final report published in December 2023 and circulated last month by Leading Age's LTSS Center does a worthy job of summarizing the challenges facing America’s LTC service delivery and financing system. It seeks consensus of “stakeholders” around a proposed new LTC program based on private sector solutions for the front-end LTC risk and a new government program to cover the back-end, catastrophic risk. This approach to the LTC challenge is not new, but may finally be getting some traction.

Marc Cohen and Judith Feder did early research proposing such a plan with financing to come from compulsory payroll deductions. In May 2018, we critiqued their proposal in Feder Fantasy Fatally Flawed (Cohen Contribution Notwithstanding), LTC Evasion and Feder/Cohen Proposal Ignores LTC Problems’ Cause. Nevertheless, then (and now again) New York Congressman Tom Suozzi introduced “The WISH—Well-Being Insurance for Seniors to be at Home Act,” largely embodying the Feder/Cohen catastrophic plan. That bill went nowhere but Suozzi, having returned to Congress after a failed run for NY governor, will likely reintroduce it. So it is important to remind ourselves what’s wrong with the approach.

To do that, we’ll pull a few quotes from the Tell report and respond with our “LTC Comments.”

Tell Report: “For the many reasons that will be discussed in this report, the current system of a separate private market for the few that can afford it and qualify for coverage and the option of spending down life savings to qualify for an already over-burdened public Medicaid program for the balance of those who cannot afford private financing fails everyone.” (p. 2)

LTC Comment: This is the first hint of what’s wrong with the analysis. The report presumes and repeatedly states that people must “spend down” their life savings for LTC before becoming eligible for Medicaid benefits. If that were true, people would worry about and plan for LTC. But it isn’t true and they don’t plan. For a full explanation, see “Long-Term Care: The Problem” and “Long-Term Care: The Solution.” Bottom line: people qualify for Medicaid LTC regardless of income level if their medical and LTC expenses are high enough as they usually are for seniors in need of expensive LTC. They qualify based on assets if they hold their wealth in exempt form. Most large assets seniors own are exempt, including home equity, one business, a vehicle, prepaid burial expenses, IRAs in payout status, etc. Countable assets are easily reduced by using them to purchase exempt resources. See Medicaid's $100+ Billion Leak. Thus, the Tell report’s appeal for a new catastrophic LTC program is based on a false premise.

Tell Report: “Removing the catastrophic risk component would make plans less expensive and might enable more relaxed underwriting for certain kinds of risks. … A vibrant set of private sector product options that could serve consumers well during the non-catastrophic ‘waiting period’ within the context of a Federal Catastrophic program were identified.” (p. 2)

LTC Comment: This thinking is folly. Dumping the expensive catastrophic LTC risk on government, which is already hopelessly in debt (nearly $36 trillion) and beholden to huge unfunded liabilities for current entitlement programs, is fiscally suicidal. Furthermore, insurance is inherently private and individual, not social and collective. The purpose of private insurance is to inform people of the cost of the risk they are taking. So, when government eliminates catastrophic flood risk, people build irresponsibly on flood plains and in the path of hurricanes, unaware or uncaring about risk and cost. For the same reason, people ignore LTC risk and cost that government has removed. The role of insurance is to replace the small risk of catastrophic loss with the certainty of an affordable premium. That is properly a private sector role. Turning over the smaller, front-end, waiting-period LTC risk to the private sector obviates the value of private insurance. It turns LTC insurance into a clone of Medicare supplemental policies, similar to using car insurance for routine service instead of for crashes.

Tell Report: “Not only is there the matter of the program cost, but how it will be paid for. The ‘pay for’ is likely of paramount importance to gaining consensus. The political challenge is best characterized as opposition among Republicans to creating a new government entitlement, and broad opposition among both parties to a tax increase, despite the large and growing costs to all sides of ‘doing nothing.’”

LTC Comment: Well, yeah. That’s the history of LTC financing reform since Claude Pepper tackled the issue in 1990. Why expect anything different today when the debt and unfunded entitlement liabilities are so much higher? Looking for a new LTC funding source without asking and answering why LTC financing is so inadequate in the first place is a fool’s errand. Yet there is nothing in this report or in most of the legions of similar studies produced by interest groups, think tanks, commissions, committees and politicians to answer that question.

Tell Report: “LTC costs are not covered, unless you are poor or become poor paying for care. Even though it is there as a safety net, Medicaid has strict eligibility rules, and limited or no access to some of the more desired, and in many cases the most appropriate types of care (e.g., assisted living or in-home care). … Only 25% of people ages 40-69 said they had done any kind of planning for LTC (where even just talking to your family or doing research on-line counted as ‘planning’ steps.)” (p. 3)

LTC Comment: Here’s the reason this report misses the essence of both the LTC problem and its solution. Do people have to become poor by paying for care before Medicaid helps? That’s the “fallacy of impoverishment” I explained 34 years ago in The Gerontologist. Poor people qualify, but so do high-income and high-asset people. There is no systematic evidence that wide swaths of the aging public spend down their savings for LTC. The myth of Medicaid spend down relies only on anecdotes. Basing the need for a big new government LTC program on that false premise is unwise. Instead of searching for an elusive “pay for” as these analysts do, it makes much more sense to look at the potential LTC funding sources that are right in front of their eyes. There is more than enough wealth currently exempted by Medicaid in home equity ($14 trillion), retirement savings ($35.4 trillion) and life insurance ($21.2 trillion) to fund LTC for most people and relieve the fiscal strain on Medicaid. The solution is for Medicaid to stop protecting that wealth from LTC risk so that people have a stronger reason to plan, save, invest and insure for LTC while they are still young, healthy and affluent enough to prepare. For all the details on how to achieve this objective practically and flood the LTC service delivery system with desperately needed private financing read the Paragon Health Institute’s “Long-Term Care: The Problem” and “Long-Term Care: The Solution” and watch this “virtual LTC event” featuring age wave visionary Ken Dychtwald and leading LTC researchers. To find enormous sources of private funds for LTC, check out Medicaid's $100+ Billion Leak.

WISHing for elusive/illusive “pay-fors” with no comprehension of the LTC problem’s cause leads nowhere … just as it has through decades of the same academic wild-goose chases.

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Updated Monday, October 21, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-039: LTC NEWS AND COMMENT

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

My sisters want to hide $170,000 of our mother’s money from Medicaid by adding their names to her bank account. What should I do?
Key Facts About Medigap Enrollment and Premiums for Medicare Beneficiaries
The Truth About Your Future
UnitedHealth, CVS and Humana increasingly deploy AI and deny post-acute care claims, Senate report finds
Millions of Aging Americans Are Facing Dementia by Themselves
WA voters poised to reject two initiatives, accept other two
Most seniors with cognitive impairment unable to access home care, researchers find
Prevention Is the Best Long-term Care Planning Strategy
Catching Up on Key Policy Developments
Report reveals how Medicaid payments stack up against nursing homes’ cost of care
KFF Examines Vice President Harris’ Proposal to Broaden Medicare Coverage of Home Care Services
Home health referrals increase but acceptances decline, report finds

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Updated Monday, October 14, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-038: LTC NEWS AND COMMENT

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

Long-Term Care Out of Reach for 6.5 Million 'Near Dual' American Seniors
A Bad Policy Proposal from Kamala Harris: Home Health Care Benefits in Medicare
Harris Home Care Plan: Right Problem, Wrong Solution
Distrust of assisted living helps drive older adults’ desire to age in place
Who Will Pay For Ms. Harris’s Long-Term At-Home Care Proposal?
This Surprising Hobby May Help Keep Your Brain Sharp Later in Life
LTCR Joins LTC Global
Prevention Is the Best Long-term Care Planning Strategy
Harris Wants Medicare to Cover Home Care for More Seniors

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Updated Friday, October 11, 2024, 10:03 AM (Pacific)

Seattle—

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LTC Comment: Today’s special Guest Column brings us Stephen D. Forman, Senior Vice-President of LTC Associates, who weighs in on Washington State’s currently-compulsory public long-term care insurance program, after this ***message.***

*** CLTCR Premium Membership -- Center for Long-Term Care Reform premium members receive our full suite of individual membership benefits including:

All LTC Bullets and E-Alerts
Access to our Members-Only Zone website and Almanac of Long-Term Care
Subscription to our Clipping Service
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.

Stay on the forefront of professional knowledge and help us fight for rational long-term care policy reform by contacting Damon at 206-283-7036 / damon@centerltc.com to start your Premium Membership immediately or go directly to our secure online subscription page and sign up for as little as $21 per month. ***

LTC Bullet: Guest Column, "Yes on I-2124"

LTC Comment: The fate of Washington State’s WA Cares Fund hangs in the balance as voters will soon decide whether to make participation in the State’s long-term care insurance plan voluntary, putting at risk its long-term financial viability. Could WA Cares Fund go the way of the CLASS Act? For thoughtful analysis of such issues, we often turn to Washington State resident, author and long-term care insurance expert, Stephen D. Forman. For previous installments on the WA Cares Fund’s saga by Mr. Forman, see also: “LTC Bullet: The WA Cares Fund Gets a Bad Wrap” and “LTC Bullet: Kill or Cure WA Cares?.” In the meantime, here’s his latest.

"Yes on I-2124"
by
Stephen D. Forman

Spend any time listening to opponents of ballot Initiative 2124 [1]—that is, those who are fighting to maintain mandatory employee participation in WA Cares—and a powerful message comes through. They believe passionately in long-term care insurance.

“Our loved ones can’t afford to lose our long-term care benefits,” says this ad.

“By ending our long-term care insurance program, I-2124 will take away help from family caregivers who help their older parents, spouses, and other loved ones remain in their homes for as long as possible, where they consistently tell us they would rather be,” says AARP of WA.

These WA Cares supporters not only love LTC insurance, but evangelize as if they always have, and already fear losing a benefit that’s not available until July, 2026. But if this is true, why haven’t these true believers been taking our calls?

Many would love insurance all right—just not from us. These consumers have no desire to buy from, or work in partnership with, Big Insurance, a market they’ve been told to distrust. One can take the temperature of the room from this paper-cliché villainizing “for profit insurance companies.”

But wanting is not the same as valuing.

Our profession has learned from decades of AHIP Buyer vs Non-Buyer surveys that non-buyers undervalue LTC insurance, just one-quarter of whom would be willing to spend what a policy actually costs. Most have some appreciation, but when shown the actual price, non-buyers backpedal: “Oh, in that case, I don’t value it that much.”

For most proponents—but not an insignificant minority we’ll get to in a moment—this has been their WA Cares dynamic.

Because an employee’s premium rises with income, most who’ve so far chosen not to contribute to WA Cares earn roughly 3.9x the median wage: $194,000/yr on average.[2] If more employees were given the opportunity to opt-out, and remaining insureds were asked to pay an unsubsidized rate—that is, would they still value WA Cares—I-2124 opponents seem convinced the answer would be, “Not at that price!”

Heck, here are I-2124 opponents in their own words: “It’s very difficult for any of us to imagine NEEDING [sic] services or support at home after an illness or injury so we will be tempted to not pay the premium.”

If I-2124 were to pass and WA Cares to become voluntary, you’ve been led to believe the sky will fall. You’ve been warned of an “insurance rate spiral.” But I find a measure of reassurance in Milliman’s modeling of a fully voluntary program. WA Cares could lose nearly 75 percent of its participants, and the resulting premium assessment might only need to double, to 1.14%[3].

The STC [short-term care] insurance market has been very rate stable, and their appropriately-rated blocks have tended to produce profits, not rate spirals.

Are there 775,000 motivated employees in Washington—25 percent of the original 3.1m—who value WA Cares sufficiently that they’d be willing to shell out—not 0.58%—but a 1.14% payroll tax—an average premium of $582 per year? Could WA Cares still command these glowing testimonials?

According to Ben Veghte, we may never know: “There’s no appetite in the Legislature to increase the premiums right now. And I don’t know if there will ever be.”

Perhaps I-2124 opponents are right to fear a voluntary program and its inability to lure even 775,000 people. After all, WA Cares already has a 100% voluntary program—the self-employed market. The state assumed that 40,000 self-employed would voluntarily opt-in during the first year, then another 25,000 every year thereafter. The last cumulative total I saw in April, 2024 had reached 620 volunteers.

Call me an optimist, but I actually think in a post-I-2124 world WA Cares could command a lot of voluntary interest—even 775,000 participants. The reason owes to that “not insignificant minority” I mentioned earlier. These are non-buyers with a quite understandable reason for “waiting” for WA Cares:

They’re commercially uninsurable.

The coalition against I-2124 has added groups such as the National Multiple Sclerosis Society and ALS Association to its roster, while making the point that it’s not about money: “Medical underwriting limits access to insurance regardless of the affordability of the policies.”[4]

On the other hand, “WA Cares covers all pre-existing conditions. That means that the 57% of non-elderly adults with pre-existing conditions can now get long-term care benefits if we need it, when we’d otherwise be stuck without an option.”

There’s no denying WA Cares’ guaranteed insurability is its winningest proposition. The upshot is that—speaking in broad strokes—the individuals who are most vocally defending WA Cares are those who expect to file a claim on the first day they can, and to use the entire benefit. This is hardly breaking news: in the actuarial graphs it looks like a double black-diamond ski slope of claims.

Intuitively, it makes sense that if you removed most of the healthy insureds and left behind mostly claimants—and paid out $36,500[5] on each of them without even much time to earn interest—you’d soon have a problem on your hands. For context, the state anticipates paying out $1.87b in claims in FY 2027.

That’s why things couldn’t remain as they are if I-2124 passes: you’d have to take countermeasures. We’ll learn what contingencies the state has planned just six days before the election, on October 30^th. I expect the LTSS Trust Commission will revisit the vesting provisions. The “3 of the last 6 years” rule has always felt like it was courting disaster, and lengthening the vesting period is one of the steps explicitly advised to counteract a rate spiral.

I exaggerate by saying everyone would file a claim immediately, of course, and as time goes on every new participant’s “immediately” can occur no sooner than three years after making their first premium assessment. Obviously, the longer the vesting period, the more defense against adverse selection. The part-time work requirement is another underwriting trick, borrowed from group/multi-life LTC.

As it is, not everyone agrees that rate spirals are inevitable, since not everyone agrees that we are good judges of our own future risk and need for care. Besides, the pool of money is not very substantial. To put the WA Cares benefit in perspective, it’s just 1/3^rd the size of the maximum pool of money Penn Treaty was selling in WA eighteen years ago under its impaired risk policy series.[6] Some readers are allergic to the mention of Penn Treaty, but that policy series has had only a 20 percent rate increase, and its $263,525 benefit (2024, for those who bought inflation protection) is fully backed by the Washington Life & Disability Guaranty Association.[7] WA Cares is vulnerable to change every time the legislature meets, and nothing is guaranteed from year to year, not even so-called “vested” benefits, which the state could unwind prior to July, 2026.

I can’t tell you what will happen at the ballot box this November, when we celebrate the 24^th LTC Awareness Month. No matter what happens, I say to our new friends, “Better late than never!” I hope neither the state, its agencies, nor WA Cares surrogates lose their passionate belief in long-term care insurance.

(Many thanks to CLTCR friend Stephen D. Forman and corporate member Long Term Care Associates for this latest contribution to LTC Bullets.)

[1] The Fiscal Note for I-2124 can be found here.

[2] “Using the new ESD data, trended to 2022 levels, we project the average wages for the individuals opting out to be approximately $194,000 (as seen in Figure 3).”

[3] This represents the “full adverse selection” scenario: “To provide a specific example, take a 25% participation rate scenario. Under a 25% participation rate, for the high end of our results range, we assumed the individuals with both the 25% lowest wages, as well as the 25% poorest health status would be the only individuals to participate.”

[4] Some who think they are uninsurable may be mistaken: “If you have a pre-existing condition, such as cancer or diabetes, private insurers will not provide coverage.”

[5] “So $36,500 paid out on day one and we saw the tax, the the premium assessment, would need to be increased by 2 basis points… So changing the reimbursement on a daily level, we're just not seeing that moved the needle a significant amount since in general we're assuming that many beneficiaries will use the $36,500 benefit in total.” Annie Gunnlaugsson, March 21^st, 2024.

[6] “We have also added a 3 Year Lifetime Maximum Benefit Period. You can still write up to a $100 a day in benefits and the same great Underwriting applies!” (August 1, 2006)WA-SR400(Rev)(7-06)

[7] SERFF Tracking LTCG-131225787, SERFF Tracking LTCG-131707810, SERFF Tracking LTCG-132437501

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Updated Monday, October 7, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-037: LTC NEWS AND COMMENT

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

After recent increases, senior living resident fees projected to decline: Ziegler
Want to Retire on a Budget? Consider these U.S. Destinations with Affordable Health Care
Bipartisan bill would ease long-term care workforce shortage, advocates say, but ‘there’s more to be done’
Long-term care costs continue to rise, regardless of politics
Regulators Eye Rules for 600% Long-Term Care Insurance Rate Increases
Initiative 2124 would make WA Cares insurance program tax optional
Long-term care insurance: From crisis to opportunity
Nebraska woman spends $240K/year on care for husband with Alzheimer's - twice the cost of a private room in a nursing home facility. How aging at home is crushing Americans' finances

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Updated Monday, September 30, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-036: LTC NEWS AND COMMENT

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

Employees Desire Supplemental Health Benefits Amidst Rising Healthcare Costs, New York Life Survey Finds
1-in-2 working Americans underestimates their life expectancy by 5-plus years, resulting in skewed retirement income goals — how to make your money last in later life
The Keys to Aging at Home? Frank Conversations and Financial Planning
3 insurance types experts say seniors should buy now
America's Best Nursing Homes 2025
Expert says Medicaid, Medicare reform is critical and can save $2.1 trillion
6 Key Retirement Changes Under SECURE 2.0 Act
What are the options for covering long-term care?
Nearly two-thirds of Americans fear Medicare will not be there when they need it

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Updated Friday, September 27, 2024, 10:03 AM (Pacific)

Seattle—

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LTC Bullet: Long-Term Care News and Analysis

LTC Comment: Center for Long-Term Care Reform Premium members have the option to receive our LTC Clipping Service and weekly LTC E-Alerts newsletters. Today, we’d like to share a sample of these members-only services with a wider audience. Our topic is the news this week, so we’ll skip our usual ***news*** section and dive straight in.

LTC Bullet: Long-Term Care News and Analysis

Many Center for Long-Term Care Reform Premium members are familiar with our LTC Clipping Service, and from what we hear, get great value from this benefit of Premium membership.

For those who don’t already know, our LTC Clipping Service is an excellent way to stay on top of current and critical long-term care news without having to spend hours a day researching on the internet. We send our Clipping Service subscribers an average of 2-3 emails per workday with a must-read-article link, a pull quote and some brief analysis. We’re sensitive to the fact that we all receive too many emails, so we’re very careful to send along only the most important LTC news items.

If you’re reading this, chances are you play a valuable role in protecting people from the risk and cost of long-term care and to that end we think the Clipping Service allows our subscribers to be more effective doing so. Based on their feedback, we think our subscribers feel the same. For example:

In my entire 24- year career in the long term care insurance industry I have never seen such a spate of articles in popular media – including print, digital, radio, TV - highlighting long term care as one of the top worries of aging Americans facing retirement. As a supporter of the Center for Long Term Care Reform and a subscriber to “LTC Clippings” I have been kept completely “in the loop” and fully up to date on the vastly increasing information flow about the need for LTC planning. I can not only see what my prospects and clients are reading and hearing about the industry but also have good quality information to share with the “centers of influence” that depend on me for information. The “clipping service” is just one of many benefits provided by the Center and I am grateful to Stephen and Damon Moses for providing a tool that has been so important over the years to the success of Franklin & Associates and Franklin Funding Reverse Mortgages. -- Barbara Franklin, CEO

Your clipping service is the best. I seldom give out insurance company brochures to prospects, much preferring the third party endorsement of published articles that are far more believable than an insurance company brochure. The news does a great job of creating urgency to act as well. You bundle them and send to my inbox for me to use, wonderful! I’m speaking to a group at lunch today and will be handing out an article that was published two days ago that you alerted me to. Keep up the good work, saves me time, and makes me money. -- Romeo Raabe, www.TheLongTermCareGuy.com

Please find below a sample collection of clippings we’ve sent to our Clipping Service subscribers over the past few months. Read through them and if you think that receiving news items like these in real time would be valuable to you, please consider subscribing at the Premium membership level. By doing so, you can stay on the forefront of professional knowledge and help us fight for rational long-term care policy reform.

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.

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9/23/2024, “Nearly two-thirds of Americans fear Medicare will not be there when they need it,” by Nationwide, PRNewswire

Quote: “Americans are increasingly concerned about the future of Medicare, with nearly two-thirds (63%) fearing the program will not be there when they need it, according to the annual Nationwide Retirement Institute^® Health Care Costs in Retirement survey. When asked about their biggest retirement planning stressor, one in five (20%) selected Medicare running out of money.”

LTC Comment: Many people rely on the solvency of Medicare, but one particularly vulnerable group--nursing homes (and their residents)--depend on it to make up for low Medicaid reimbursements. Furthermore, the questionable financial viability of America’s entitlement programs is all the more reason to save, invest or insure for future healthcare and long-term care needs.

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9/22/2024, “You say you want a resolution?,” McKnights Long-Term Care News, by John O’Connor

Quote: “It’s clear the long-term care field is in a tough spot. At a time when worker shortages have never been more severe, regulators are pushing for minimum staffing benchmarks.

“One proposed response was a resolution to overturn the directive. But Republicans have now announced they won’t pursue that option, as it would face a certain veto from the Biden administration.

“The nursing home industry needs more than just regulatory demands — it needs real, targeted action. That means new policies where you invest in building a stronger long-term care workforce and ensure providers aren’t shortchanged by inadequate reimbursement.

“The stakes are too high to rely on mandates that don’t address the core issues. What’s needed is a comprehensive, strategic plan to strengthen the long-term care industry — before things get really ugly.” (Emphasis added)

LTC Comment: One core issue that should be addressed is limiting access to Medicaid resources to those who truly have no other options and requiring those who can save, invest or insure for their long-term care needs to do so. This would divert many people away from overburdened and under-funded nursing homes and into care setting they prefer, thereby targeting scarce Medicaid resources to those who truly need it and improving conditions for all.

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9/19/2024, “Longer lives, divorces, smaller families mean more older adults are living alone,” Kathleen Steele Gaivin, McKnights Senior Living

Quote: “More older Americans are living alone, either by choice or by circumstances, than 50 years ago, according to the US Census Bureau.

“As of 2023, about 28% of people aged 65 and older lived by themselves, the agency said. That’s up from about 10% of older adults living alone in 1950.”

LTC Comment: The fraying of the familial safety net, combined with the demographic challenges brought by the cresting age wave, leaves LTCi poised as an even more valuable resource.

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9/16/2024, “What if Medicaid paid market rates?,” by Stephen A. Moses, McKnights LTC News

Quote: “Most of long-term care’s problems boil down to heavy dependency on low Medicaid reimbursement rates. The program paid 61% of total U.S. LTC spending in 2022 at about 70% of private-pay rates. Economists explain that government price fixing causes market disruptions. Set prices too low, and shortages occur.

“Providers are forced to compensate by compromising on services. Most complaints about questionable LTC quality, high cost, inadequate staffing, caregiver shortages, too much nursing home and too little home care, all the big challenges would improve or disappear entirely if Medicaid paid market rates.

“But something else will happen. Cost shifting to private payers in order to compensate for low Medicaid rates will no longer be necessary. The market rate for LTC will settle substantially below the private pay rate but well above the current Medicaid rate. Everyone, including private payers and Medicaid, will pay that market rate infusing the LTC service delivery system with desperately needed revenue and resolving most of the problems challenging LTC today.”

LTC Comment: Read this concise explanation of America’s LTC problem, and what to do about it, in Steve’s latest “Guest Column” for McKnights LTC News.

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9/12/2024, “The States Are Dangerously Dependent on Medicaid-Expansion Dollars,” by Gary D. Alexander, National Review

Quote: “A recent study by the Paragon Health Institute points out that a fundamental flaw with Medicaid expansion is its inequitable distribution of federal funds. As currently implemented, the program has the federal government covering 90 percent of the medical costs of able-bodied adults but only 50 to 75 percent of the costs of elderly, disabled, and child recipients — populations that tend to require the most expensive and intensive care. This creates a perverse incentive for states to prioritize the coverage of healthy adults, who are cheaper to care for, while the truly vulnerable are left underfunded. This imbalance isn’t just fiscally irresponsible — it’s morally wrong. The system effectively rewards many individuals who could seek insurance through other means, while it forces states to bear a heavier financial burden for those who genuinely depend on Medicaid for survival.”

LTC Comment: Upside down ethics and perverse incentives infect Medicaid in so many ways as we point out often here. Kudos to my Paragon Health Institute colleague Gary D. Alexander for shining the light of scrutiny on this example.

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9/2024, “Beyond the Numbers: Assisting Clients with LTC Concerns,” by Danielle Andrus, Journal of Financial Planning

Quote: “There are a lot of statistics that planners can employ to illustrate the risk that their clients will face regarding future care needs. A common one is that 70 percent of people who live to age 65 will need paid long-term care at some point. Bill Comfort, owner of Comfort Long-Term Care and director of training for the Certification in Long-Term Care (CLTC) designation and continuing education program, believes this overstates the true risk of needing care. ... Margie Barrie, a long-term care insurance specialist with ACSIA Partners, believes that whether you buy an insurance policy or not, everyone needs to have a plan for long-term care.”

LTC Comment: This article by the editor of the Journal of Financial Planning cites LTCI industry experts Bill Comfort and Margie Barrie at length. Click through to see what they have to say.

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8/28/2024, “I don't have a spare $150,000, so long-term care insurance is absolutely worth the cost,” by Angie Chapman, Business Insider

Quote: “With lifespans longer and families more spread out, it's essential that I think about long-term care. Long-term care insurance comes in many forms at many costs, including as part of a life insurance policy. I hope to have a long, comfortable life, but I'm preparing for whatever is ahead.”

LTC Comment: Short, sweet and to the point. And in a business magazine!

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8/25/2024, “Long-term care is in trouble,” by John O’Connor, McKnights LTC News

Quote: “The American Health Care Association/National Center for Assisted Living released some updated supply and demand numbers last week. To say they are concerning would be an extreme understatement. In a nutshell: Since the onset of COVID-19, nearly 800 nursing homes have closed, displacing almost 30,000 residents. ‘It’s not hyperbole to say access to care is a national crisis,’ said Mark Parkinson, the organization’s president and CEO. He’s right. Nursing homes are closing faster than new ones can open, and the challenges aren’t just logistical. They’re existential.”

LTC Comment: John O’Connor has edited McKnights’ LTC newsletters for decades. When he’s this worried about America’s nursing homes, we all should be. To make sense of what ails LTC, read the Paragon Health Institute’s “Long-Term Care: The Problem” and “Long-Term Care: The Solution” and watch this “virtual LTC event” featuring age wave visionary Ken Dychtwald and leading LTC researchers.

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8/2/2024, “Listen to Ken Dychtwald on the Georgetown CRI Podcast,” Age Wave

Quote: “Age Wave is delighted to have partnered with the Georgetown Center for Retirement Initiatives for two events this year. In June, Ken Dychtwald delivered a keynote presentation at their 2024 Policy Innovation Forum in Washington DC. He also just appeared on their podcast "The State of Retirement: Shaping the Future," where he was interviewed about ‘What is the New Retirement in an Age of Longevity?’”

LTC Comment: Click through for more insights from the inimitable Ken Dychtwald. ICYMI, check out the Paragon Health Institute’s “virtual LTC event” hosted by Ken Dychtwald and featuring yours truly.

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7/24/2024, “How States Can Support Individuals In The Long-Term Services and Supports Gap,” by Laura Benzing, Hannah Godlove and Megan R. Burke, Health Affairs

Quote: “But what about the large population of middle-income Medicare beneficiaries nationwide who do not qualify for Medicaid and cannot afford to hire a home health aide? These individuals fall into an ‘LTSS gap’ where care is difficult, if not impossible, to access. … Near Medicaid-eligible individuals who fall into the LTSS gap experience higher rates of disability and less access to potential family caregiver support compared to Medicare beneficiaries with higher incomes. … State policy makers can consider opportunities to address the LTSS gap under existing authorities including expanding Medicaid eligibility and State Plan Amendments, Section 1115 Demonstrations, Older Americans Act funding, and other state-driven initiatives.”

LTC Comment: Health Affairs published my comment on this article. It begins: “Respectfully, there is no ‘LTSS Gap’.” It continues to explain how high-income and high-asset people routinely qualify for Medicaid LTC benefits, crowding out needier people from better care. Click through to read the article and my comment. Next Friday’s LTC Bullet will include a more detailed critique of the article and why its recommendation—ever more government spending on LTC—is exactly the wrong prescription for what ails LTC.

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7/12/2024, “States Set Minimum Staffing Levels for Nursing Homes. Residents Suffer When Rules Are Ignored or Waived.,” by Jordan Rau, KFF Health News

Quote: “An acute shortage of nurses and aides in the nation’s nearly 15,000 nursing homes is at the root of many of the most disturbing shortfalls in care for the 1.2 million Americans who live in them, including many of the nation’s frailest old people. They get festering bedsores because they aren’t turned. They lie in feces because no one comes to attend to them. They have devastating falls because no one helps them get around. They are subjected to chemical and physical restraints to sedate and pacify them. … Now the Biden administration is trying to guarantee adequate staffing the same way states have, unsuccessfully, for years: with tougher standards. Federal rules issued in April are expected to require 4 out of 5 homes to boost staffing. The administration’s plan also has some of the same weaknesses that have hampered states. It relies on underfunded health inspectors for enforcement, lacks explicit penalties for violations, and offers broad exemptions for nursing homes in areas with labor shortages. And the administration isn’t providing more money for homes that can’t afford additional employees.”

LTC Comment: Nursing homes are caught between the rock of inadequate reimbursement and the hard place of mandatory quality. Compulsory staffing levels won’t help any more than wage and price controls fix market imbalances. The fundamental problem is excessive government interference, i.e. funding and regulation, in the long-term care market. The only way progress will ever be made is to identify what causes the problem and address it with real market-based solutions. That’s what the Paragon Health Institute did in two reports: “Long-Term Care: The Problem” and “Long-Term Care: The Solution.”

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7/2/2024, “Older adults’ home equity tops $13 trillion in first quarter,” by Kathleen Steele Gaivin, McKnights Senior Living

Quote: “Homeowners aged 62 or more years saw their housing equity grow by $328.5 billion in the first quarter, according to data released Friday by the National Reverse Mortgage Lenders Association. The increase brings older adults’ housing equity to a record $13.19 trillion, according to NRMLA. Housingwire reported that the increase marks ‘a recovery after decreases observed over the past year.’”

LTC Comment: Good news indeed because home equity is America’s true LTC safety net when Medicaid, Medicare and Social Security fail.

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6/27/2024, “Battle Flares Over Long-Term Care Insurance Rate Hike Rules,” by Allison Bell, ThinkAdvisor

Quote: “Some regulators want special rules for the oldest insureds and phase-ins of big increases. Trade groups said regulators should stick with rules meant to keep insurers in business. Genworth said some moves to soften rate increase blows may create confusion or lead to bigger total increases. … ‘Deviating from actuarial principles may lead to inadequate premiums, jeopardizing insurer stability and consumer protection,’ according to a letter to the LTC Actuarial Working Group signed by Jan Graeber of the American Council of Life Insurers and Ray Nelson of America’s Health Insurance Plans.’”

LTC Comment: “Deviating from actuarial principles may lead to inadequate premiums?” Well, yeah. That’s exactly what’s happened to America’s big entitlement programs which are underfunded to the tune of many trillions of dollars. When the time comes to pay benefits, private LTCI carriers will be able to pay if regulators don’t hamstring them with un-actuarially-based requirements. Hard to imagine the government entitlements will be able to pay benefits, except in vastly deflated dollars.

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6/21/2024, “Protecting and Preserving Property When Paying for Long-Term Care,” by Christine A. Barone, The National Law Review

Quote: “‘I have to sell my house to pay for my nursing home care.’ This is a common misconception among persons requiring skilled nursing home care and/or their family members. Oftentimes a person requiring long-term care in a nursing home will require Medicaid benefits to pay for that care as nursing homes costs can average anywhere from $10,000 to $15,000 monthly. Selling one’s home and using the proceeds to pay the nursing home is not the only option in these cases. A proper long-term care and asset protection plan, even if your only asset is your home, can protect the value of your property for your loved ones and/or for your supplemental needs and care. … As such, it is important to meet with a qualified elder law attorney to discuss your options in regards to property and qualification for Medicaid benefits for long-term care.”

LTC Comment: Between this shyster and the hard-working LTC insurance agent, who do you think will make the sale? Still wonder why so few people pay premiums to get the coverage lawyers and Medicaid give away? Shame on The National Law Review.

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6/11/2024, “Revenue pressures driving home care consolidation, private equity’s growing influence, provider group says,” by Adam Healy, McKnights Home Care

Quote: “Pressures such as insufficient government reimbursement and rising Medicare Advantage penetration are contributing to consolidation in home care and hospice, LeadingAge told regulators last week in response to a February request for information surrounding healthcare market competition.”

LTC Comment: Crowding out small providers and commoditizing home health care does not bode well. The growing cozy alliance between big government and big business subverts the potential benefits from a freer LTC marketplace.

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6/8/2024, “Soaring premiums, denied benefits, delayed payments show crisis in long-term care insurance,” by Jeremy Olson, Star Tribune

Quote: “The Minnesota Department of Commerce has to approve any rise in premiums, but it's proving impossible for the agency to balance its goals of protecting consumers from massive monthly bills and keeping private insurers in business. … A key miscalculation by insurers: They didn't anticipate the five-year rise in U.S. life expectancy since 1980, so they underestimated the number of people surviving long enough to need long-term care. Many plans also came with inflation adjustments that exponentially increased the value of their benefits, especially as policyholders outlived projections. Insurers also overestimated the proportion of policyholders who would cancel their plans. … Policyholders can cut premium increases by agreeing to reduced benefits — waiving future inflation growth or capping the dollar amount of benefits or the number of years they can be used. … Denials of benefits are increasingly common as policyholders beset with disabilities or dementia — or adult children taking on new care-giving roles — struggle with insurance paperwork.”

LTC Comment: Hit pieces on LTC insurance are nothing new. I remember one especially virulent article that the New York Times brought to press on opening day of the 7^th annual Intercompany LTC Insurance Conference in Dallas (LTC Bullet: Sucker Punched in Dallas, April 10, 2007). Just once, it would be nice to find some balance in media coverage. Maybe compare how miserably Medicaid and Medicare have done in managing LTC financing. Or mention the Federal Reserve artificially dropping interest rates to zero and crushing returns on carriers’ reserves. Or how about recognizing how well and creatively the LTC insurance industry has managed its challenges, creating new hybrid products and dealing with premium increases responsibly, unlike the government programs that cannot pay future claims but have done nothing to adjust. It would be nice to see some recognition that the vast majority of complaints about failure to pay claims turn out to be specious, based on expecting carriers to pay when contractual policy conditions are unmet. Don’t hold your breath. But do soldier on fellow fighters for LTC reform!

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6/6/2024, “Ageless Aging: A Woman’s Guide to Better Healthspan, Brainspan, and Lifespan,” by Maddy Dychtwald, Age Wave

Quote: “Ageless Aging presents a pioneering new way for women to feel energetic, purposeful. and vital while gaining the upsides of aging, including more happiness, wisdom, and resilience. It provides a holistic action plan based on cutting-edge research that helps women take advantage of the scientific, medical, psychological, and spiritual tools, tips, and advice available to help women live better longer. It’s available wherever books, ebooks, and audiobooks are sold. You might enjoy some of Maddy’s recent interviews where she addresses many of the themes in her book: LA Times ‘Want to live to 100? That May Depend on Your Sex,’ MarketWatch ‘Women Live Longer than Men, but there’s a ‘Dark Side,’ and Barron’s ‘Women’s Guide to Retirement and Aging.’”

LTC Comment: Another fine offering from the Dychtwalds, this time from Ken’s wife, Maddy.

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5/31/2024, “The Costs of the Rising Cost of Long-Term Care,” by Lee Pruitt, ElderLawAnswers

Quote: “Do you have a family member who is receiving some form of long-term care? If you don’t, the chances are good that someday you will – and that day may not be too far away. … Long-term care insurance offers a way to safeguard against the high costs of long-term care, providing financial protection, choice, and peace of mind. However, it’s essential to carefully consider the cost, benefits, and your unique circumstances before purchasing a policy. Consulting with an elder law attorney, financial advisor, or insurance specialist can help in making an informed decision tailored to individual needs and financial situations. Contact an experienced elder law attorney near you today to talk further about your options for affording long-term care. They can walk you through the options that may be available to you and help you understand the benefits and costs.”

LTC Comment: More Medicaid planner double talk. They used to pooh-pooh LTC insurance because it competes with their cash cow, Medicaid planning. But when putting affluent people on welfare got too much negative publicity, they changed their tune. Now they say, LTC insurance is wonderful, so come to us so we can tell you how expensive it is and that you should rejigger your income and assets to qualify for Medicaid. Legal fees are much less than insurance premiums.

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Updated Monday, September 23, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-035: LTC NEWS AND COMMENT

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

You say you want a resolution?
House Committee Advances Important Bills For Nursing Home Workforce, Telehealth Flexibilities
Best Long-Term Care Insurance Companies of 2024
Longer lives, divorces, smaller families mean more older adults are living alone
Biden-Harris Administration Announces Nearly $100 Million to Grow the Health Workforce
Survey reveals knowledge gap in long-term care planning among income groups
Warning From Older Adults: Care for Aging in America Needs Urgent Rethinking
What if Medicaid paid market rates?

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Updated Monday, September 16, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-034: LTC NEWS AND COMMENT

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

· Millennial sparks important discussion by admitting he can't take care of his mom in her old age

· What is Medicaid Estate Recovery?

· 13 things to know about long-term care planning

· Welfare Is What’s Eating the Budget

· The States Are Dangerously Dependent on Medicaid-Expansion Dollars

· You Aren’t as Sick as Government Claims

· Half of home care workers have seen, experienced workplace violence, report finds

· Massachusetts Long-Term Care Bill Passes After Efforts by Elder Advocacy Groups

· Why home equity should be in the long-term care conversation

· Report: More than one-third of nursing homes don’t have required medical director

· Beyond the Numbers: Assisting Clients with LTC Concerns

· The cost of senior care: Why aging farmers fear the nursing home

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Updated, Friday, September 13, 2024, 10:03 AM (Pacific)

Seattle—

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LTC BULLET: MORE KFF DATA MISINFORMATION

LTC Comment: Does KFF misunderstand, misinterpret, or misrepresent LTC insurance data? All three? See what you think after the ***news.***

*** ILTCI ’25 in Philly next March wants to hear from you. “Call for Speakers/Producers & Session Ideas or Topic Requests. The ILTCI Board and the Program and Education Committee are already working on bringing our attendees the best conference ever for 2025! Session development is just beginning now. If you have any topic requests, session ideas, or if you'd like to help by producing or speaking at a session this year, then now is your time! Please use this link for submissions. Registration for ILTCI 2025 will open sometime in October. We're now accepting applications for exhibitors and sponsors! See you in Philly in March!” ***

*** JOIN the Center and receive all our LTC Bullets and LTC E-Alerts. Become a premium member and get our daily LTC Clippings as well. Your Center for Long-Term Care Reform exists to promote policies that deliver quality LTC to all Americans. We conduct research and pursue advocacy toward increasing private financing and relieving public LTC spending with the goal to improve funding and quality for all levels and venues of long-term care. Join our campaign here. Check out all the individual and corporate membership options here. Read our 1384 LTC Bullets, organized by topic and chronologically, here. Following are sample LTC Clippings. Help continue the good fight. Support the Center for Long-Term Care Reform.

*** LTC CLIPPING SAMPLES:

9/4/2024, “You Aren’t as Sick as Government Claims,” by Charles Silver and David Hyman, Wall Street Journal
Quote: “Criminals and legitimate providers—hospitals, physician groups, drug manufacturers, pharmacy benefit managers and insurers—raid the Treasury in other ways too. Within the past few weeks, it was reported that crooked brokers and insurers are helping five million ObamaCare enrollees enjoy $20 billion a year in premium subsidies by misrepresenting their incomes, and that half or more of Medicaid’s annual $217 billion budget for long-term care goes to people wealthy enough to cover their bills.”
LTC Comment: My July 1 “Paragon Prognosis” titled Medicaid’s $100+ Billion Leak was the source for this Medicaid reference.

9/2024, “Beyond the Numbers: Assisting Clients with LTC Concerns,” by Danielle Andrus, Journal of Financial Planning
Quote: “There are a lot of statistics that planners can employ to illustrate the risk that their clients will face regarding future care needs. A common one is that 70 percent of people who live to age 65 will need paid long-term care at some point. Bill Comfort, owner of Comfort Long-Term Care and director of training for the Certification in Long-Term Care (CLTC) designation and continuing education program, believes this overstates the true risk of needing care. ... Margie Barrie, a long-term care insurance specialist with ACSIA Partners, believes that whether you buy an insurance policy or not, everyone needs to have a plan for long-term care.”
LTC Comment: This article by the editor of the Journal of Financial Planning cites LTCI industry experts Bill Comfort and Margie Barrie at length. Click through to see what they have to say.

9/3/2024, “The cost of senior care: Why aging farmers fear the nursing home,” by Juliana Kim and Tim Evans, NPR
Quote: “Long-term care insurance exists, but it's deeply unpopular with older Americans. So, many seniors dip into their retirement or savings to get the care they need, while others apply for Medicaid, which has its own challenges. … Long-term care insurance is rife with its own problems, from complex underwriting to rising premiums. … Short-term care policies are a newer alternative to long-term care insurance, said Lance Boyer, a sales director at Farmers Union Insurance in North Dakota. But their benefits usually last no more than a year. … Another option is Medicaid, which is the largest single payer for long-term care in the U.S. In North Dakota, while the program completely covers nursing home costs, enrollees can only have a few thousand dollars to their name. They can keep some additional cash and their home and car if it's in their spouse's name, but generally no other property. That’s especially troubling for farmers, whose livelihood and families are often intertwined with their land.”
LTC Comment: This article is a confusing muddle. Here’s the truth. Medicaid exempts the home and the farm business, including its capital and cash flow. That’s how farmers paid for LTC since 1965. That’s also why so few of them purchased LTC insurance. While estate recovery is a concern for some, it is easily avoided by a Medicaid planning attorney. The big LTC problem for farmers nowadays is getting access to any care as Medicaid-dependent nursing homes go out of business and care of any kind becomes difficult to find anywhere nearby. So more and more care falls on unpaid families and friends. The whole sad, worsening mess derives from government trying to help and ruining the LTC market.

LTC BULLET: MORE KFF DATA MISINFORMATION

LTC Comment: Our most recent LTC Bullet, titled “LTC Data Manipulation,” analyzed KFF’s publication “10 Things About Long-Term Services and Supports (LTSS).” We concluded KFF distorted National Health Expenditure data in service to an ideologically biased LTC Narrative. To wit: Medicaid and out-of-pocket LTC expenditures appear bigger when you exclude Medicare and private insurance from the data, which supports the mistaken conclusion that catastrophic LTC spend down is widespread and, therefore, America needs a big new, compulsory, payroll-funded LTC entitlement program.

Our essay triggered another analyst to opine further about faults in the same KFF publication. So we invited Stephen D. Forman, CLTC, Senior Vice President of Long Term Care Associates, Inc., to share his thoughts in today’s “Guest Bullet.” Following are quotes from the “10 Things About Long-Term Services and Supports (LTSS)” article followed by Stephen’s “LTC Comments.”

KFF: “In 2021, just 80,000 people filed claims for private long-term care insurance benefits.”

LTC Comment: KFF seems perplexed by what they perceive as a low number of claimants. It’s not clear what the right number should be, but KFF does not believe the industry is paying much of a share.

KFF: “In 2021, about 7.1 million people nationwide paid premiums for private long-term care insurance (LTCI), including standalone LTCI and also an array of products that pair life insurance or an annuity with some long-term care coverage (Figure 6). The age and other demographics of those people are unknown.”

LTC Comment: I don’t always have the latest data, but I usually know someone who does (or knows someone who does). So if I can locate “the age and demographics of those people,” then KFF, which bills itself as “the independent source for health policy research, polling, and news,” can. Between BrokerWorld Magazine’s 2024 Survey, AHIP’s 2017 “Who Buys Long-Term Care Insurance?,” or AALTCI’s Fast Facts (2022) I think they can work it out.

KFF: “While those premiums may sound low relative to private health insurance premiums or to the costs of LTSS, LTCI is purchased before a person develops a need for LTSS and most people pay premiums for many years without using any benefits.”

LTC Comment: The idea that insurance is to be purchased before someone needs to file a claim is so obvious as to beggar belief what it’s doing here. What about the idea that “most people pay premiums for many years without using any benefits?” First, I’ve personally never liked this framing since I don’t subscribe to the belief that you have to file a claim to receive a benefit. The benefit is transferring risk and not being liable during the period covered, liberating money which would have otherwise been tied up. But I know most people don’t view insurance that way. I can’t tell if KFF conceptualizes LTC insurance as analogous to health insurance, and expects the product to behave the same. I do know that most people also pay taxes for many years without using particular benefits, for example Medicaid. Why KFF makes a big deal about the former, but not the latter is anyone’s guess.

KFF: “…most people pay premiums for many years without using any benefits. That is one of the reasons that only around 80,000 people filed a claim for LTCI benefits in 2021.” (Emphasis added.)

LTC Comment: That is not a reason, it is just making the same point twice.

KFF: “It is not uncommon for people to die without using benefits or to let their coverage lapse in response to rising premiums.”

LTC Comment: Not so fast—it’s not low lapse rates that have challenged assumptions, but high lapse rates. Here’s the NAIC: “A consequence of the limited data was that insurance companies overestimated lapse rates, or the number of policyholders who would voluntarily drop their policies.” (pages 18 – 19) In any event, I’m not sure how many insureds are forfeiting a benefit by lapsing in 2024. In the NAIC’s latest consumer research regarding how consumers would respond to a rate increase, “lapse” wasn’t even an option since people could receive either contingent nonforfeiture or a cash buyout.

KFF: “There are a number of limitations of LTCI. Many policies don’t have inflation protection, limit eligibility for services, do not cover all expenses, and have lifetime limits.”

LTC Comment: Here we go again. Medicaid has limitations, so does WA Cares. If “many” policies don’t have inflation protection, it’s because individuals chose not to add that mandatorily-offered option. If “many” policies have lifetime limits, others do not, and consumers can choose what they want. What does this even mean?

KFF: “Insurers could also go out of business before coverage is needed…”

LTC Comment: And programs like CalPERS and WA Cares can jeopardize the credit rating of their respective states, which is why we plan ahead. In the case of the private LTC insurance market—which has seen precious few insurers “go out of business,” consumers are protected by state insurance guaranty funds. It’s not a perfect system, but it’s one that insurers and producers are legally discouraged from promoting, although KFF is not. They could’ve done a service by explaining how this FDIC-like backstop functions.

Closing LTC Comment by your editor, S. Moses: We thank Mr. Forman for his thoughtful observations. KFF’s dismissive attitude about private LTC insurance displays ignorance and ideological bias unworthy of an objective source. We can’t help but wonder how careless KFF is about other topics in the health care policy sphere. When market-based analysis and solutions are ruled out thoughtlessly, we’re left with more of what we already have—a government-dominated LTC system that fails everyone.

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Updated Tuesday, September 03, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-033: LTC NEWS AND COMMENT

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

· Caregivers score worse than non-caregivers on most health measures, CDC finds

· The impact of Medicaid Estate Recovery

· I don't have a spare $150,000, so long-term care insurance is absolutely worth the cost

· Assisted living edges out home care, nursing home as paid long-term care choice for middle class

· ‘A devastating effect’: Aging care stakeholders warn of drastic repercussions of proposed home health rule

· Year-over-year health spending growth highest ‘by far’ for home healthcare

· Play on, Picklers! The health benefits of pickleball

· Workforce participation expected to continue to decline, report finds

· Long-term care is in trouble

· Hi, Kids! We're Moving In

· Study Reveals Long-Term Care Insurance Reduces Hospital Costs and Improves Care

· Medicare Advantage Plans Get High Marks from Customers

· More Annuity Owners Are Buying Their Contracts From Issuers

· Here's Why Consumers Accept Hikes in Long-Term Care Insurance Rates

· Study finds differences in home health usage between MA, traditional Medicare beneficiaries

· No quick fix, but quality concerns demand nursing home reform: experts

· Long-Term Care Costs Emerge as a Top Issue for Older Americans

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Updated, Friday, August 30, 2024, 10:03 AM (Pacific)

Seattle—

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LTC BULLET: LTC DATA MANIPULATION

LTC Comment: “Statistics don’t lie, but liars use statistics.” We explain after the ***news.***

*** 2024 LTC SURVEY. The current July/August issue of Broker World contains the 2024 Milliman Long Term Care Insurance Survey. This annual compilation of findings authored by Claude Thau, Nicole Gaspar and Chris Giese is the 26^th consecutive review of stand-alone long-term care insurance published by the magazine. Check it out here. If you don’t already subscribe, definitely do so here. ***

*** ILTCI ’25, the Inter-Company Long-Term Care Insurance Conference, to be held March 9-12, 2025 in Philadelphia, has announced that Exhibitor & Sponsor Applications for ILTCI 2025 are Now Available! (With Early Bird Pricing) Get the Exhibitor & Sponsor Prospectus and the Exhibitor & Sponsor Form now. We’ll keep you posted as more information about the big industry conference becomes available. ***

*** SO WHAT IF THE GOVERNMENT PAYS FOR MOST LTC, 2022 DATA UPDATE: Read this latest of our 20-year annual series as context for today’s LTC Bullet. ***

LTC BULLET: LTC DATA MANIPULATION

LTC Comment: National Health Expenditure data on long-term care (LTC) spending seem straight forward. Three NHE tables cover expenditures for Nursing Facilities and Continuing Care Retirement Communities (CCRCs) (Table 15), Home Health Care Services (Table 14) and Other Health, Residential and Personal Care Services (Table 13). Endnotes 1, 2, and 3 below describe those categories, respectively. The following table includes all these spending sources. They cover the LTC waterfront, but they need some adjustments according to KFF (Kaiser Family Foundation).

For example, in “10 Things About Long-Term Services and Supports (LTSS),” published July 8, 2024, KFF explains that it “excludes spending from certain payers.” These excluded sources include “$94 billion in Medicare spending, most of which is post-acute care, but some of which is home health spending that might be considered LTSS.” Also “excluded is spending from private insurance [$52.7 billion] because much of those expenditures are for rehabilitation and not LTSS.” Private long-term care insurance is excluded “in most cases” because it “reimburses people for the expenses they pay out-of-pocket and would be classified as out-of-pocket spending in the NHE data.”

Backing out those sources has the effect of reducing total LTC spending in 2022 from the $571 billion NHE total in the table to KFF’s $415 billion. Let’s ask two questions. First, is there a rationale for leaving those sources in the total instead of excluding them? Yes. Take Medicare’s $94 billion for example. Of course Medicare doesn’t pay for LTC, but it is critical to America’s LTC financing system. LTC providers are heavily dependent on Medicaid which pays them 70 percent of private-pay rates and often less than the cost of providing the care. They survive financially only because Medicare pays more generously for a much smaller number of sub-acute and rehab patients. Remove Medicare’s $94 billion and the whole financing system collapses. To see the complete LTC financing picture accurately, Medicare must be included.

What about private insurance, including LTC insurance? True, some health insurance benefits, such as major medical coverage, go for rehabilitation, not LTC. But as in the case of Medicare, those payments help sustain a rickety LTC service delivery system, so they should not be excluded. For private LTC insurance specifically, isn’t it interesting that it gets lumped in the “out-of-pocket” bucket. Why might that be? That brings us to our second question.

Why do analysts and policymakers define LTC spending in some ways and not in others? What effect do the exclusions just described have on the big picture of LTC spending? Backing out Medicare and private insurance raises Medicaid’s contribution to total LTC costs from 44.6 percent in the table to the 61 percent KFF reports. It increases out-of-pocket spending from 12.5 percent in the table to KFF’s 17 percent. In other words, these exclusions make Medicaid and out-of-pocket expenditures appear much higher. Giving that impression supports a specific policy agenda, what I’ve called the LTC Narrative. Specifically, that narrative is that LTC costs are impoverishing people all across America and driving up Medicaid expenditures excessively which is why we need a new, compulsory, payroll-funded LTC entitlement program.

The table below gives a more accurate rendering of the LTC financing landscape. It shows that when we leave in the funding sources KFF excludes, out-of-pocket costs clock in at only 12.5 percent. But that figure still overstates the impact of out-of-pocket LTC funding. Half of it is spend down of income, mostly from Medicaid recipients’ Social Security benefits. Only half, or about six percent, could come from savings. The vast majority of all LTC financing comes from third-party payors, mostly government. Out-of-pocket costs are nominal despite the widespread belief that Medicaid requires impoverishment and families across the country are being devastated by LTC costs. That lie is the real reason most people don’t think about or plan for LTC and end up on public assistance. It is no reason to compound the error of relying too heavily on government funding and regulation by adding more of the same with a big new entitlement program.

Source: National Health Expenditures*

2022 (Billions)

Total

Medicaid

Medicare

Private Insurers

OOP

Other Payers

NH + CCRC[1]

191.3

100%

58.5

30.6%

42.2

22.1%

18.2

9.5%

48.3

25.2%

24.1

12.6%

HH[2]

132.9

100%

46.9

35.3%

47.5

35.8%

18.6

14.0%

15.4

11.6%

4.5

3.5%

Other[3]

246.5

100%

149.3

60.8%

4.2

1.7%

15.9

6.4%

7.8

3.2%

69.3

28.1%

Total

570.7

100%

254.7

44.6%

93.9

16.5%

52.7

9.2%

71.5

12.5%

97.9

17.2%

[1] Nursing Care Facilities and Continuing Care Retirement Communities:
Covers nursing and rehabilitative services provided in freestanding nursing home facilities. These services are generally provided for an extended period of time by registered or licensed practical nurses and other staff. Care received in state & local government facilities and nursing facilities operated by the U.S. Department of Veterans Affairs are also included. These establishments are classified in NAICS 6231-Nursing Care Facilities and NAICS 623311-Continuing Care Retirement Communities with on-site nursing care facilities.

[2] Home Health Care:
Covers medical care provided in the home by freestanding home health agencies (HHAs). Medical equipment sales or rentals not billed through HHAs and non-medical types of home care (e.g., Meals on Wheels, chore-worker services, friendly visits, or other custodial services) are excluded. These freestanding HHAs are establishments that fall into NAICS 6216-Home Health Care Services.

[3] Other Health, Residential, and Personal Care:
This category includes spending for Medicaid home and community based waivers, care provided in residential care facilities, ambulance services, school health and worksite health care. Generally these programs provide payments for services in non-traditional settings such as community centers, senior citizens centers, schools, and military field stations. The residential establishments are classified as facilities for the intellectually disabled (NAICS 62321), and mental health and substance abuse facilities (NAICS 62322). The ambulance establishments are classified as Ambulance services (NAICS 62191).

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Updated, Monday, August 19, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-032: LTC NEWS AND COMMENT

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

Long-Term Care Costs Emerge as a Top Issue for Older Americans
The Overextended Retirement State
CMS: Nursing Home Medicare Spending and Discharge Rates Vary Widely by Dual Enrollment Status, Race
Senior care leads in healthcare bankruptcies
Study shows LTC costs are seniors’ No. 1 health concern, but expert says no help in sight
MA penetration expected to top 64% by 2034, analysis finds
Homebound MA beneficiaries have higher readmission, mortality risk, study finds
Medicare Advantage Hits 32.8M Enrollees, 54% of Spending
How Medicaid cripples SNFs

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Updated, Monday, August 12, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-031: LTC NEWS AND COMMENT

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

House Bill Could Create an Unlimited LTCI Premium Deduction
Letter: Long-term care — my modest proposal
CDC releases new profile of assisted living residents
Medicare Advantage in 2024: Enrollment Update and Key Trends
As $90 Trillion "Great Wealth Transfer
How 'Home-Based Planning' Can Address Long-Term Care Costs
Researchers doubt Alzheimer’s drugs will make a dent in dementia reduction
Coffee-Dementia Link Continues to Unfurl
A fourth of Americans over age 50 are caregivers for family, friends
Government support of dementia caregiving across the continuum important: poll
Families headed by someone at or near retirement have more debt than in decades past

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Updated, Friday, August 9, 2024, 10:03 AM (Pacific)

Seattle—

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LTC BULLET: THERE IS NO “LTSS GAP”

LTC Comment: This Health Affairs article offers a solution without a problem. We explain below.

LTC BULLET: THERE IS NO “LTSS GAP”

LTC Comment: A new Health Affairs “Forefront” article proposes solutions for a problem that does not exist. We offer the following rebuttal as part of our “Standing Guard” series. Those 101 LTC Bullets (to date) correct errors in “peer-reviewed” journal articles that occur because scholars ignore how Medicaid LTC actually works in practice. They cling instead to myths sustained by a short-sighted literal reading of the law and regulations. They ignore real-world evidence from outside their academic echo chamber. Here’s the latest example.

Laura Benzing, Hannah Godlove, and Megan R. Burke. "How States Can Support Individuals In The Long-Term Services and Supports Gap." Health Affairs Forefront, July 24, 2024. DOI: 10.1377/forefront.20240723.226615. You can find my comment on this article below it on the Health Affairs and at the end of today’s LTC Bullet.

Following are quotes from the LTSS Gap article followed by our LTC Comments.

LTSS Gap: “If your income is low enough, you might qualify for support in your home and community or a nursing facility through Medicaid, the primary payer of LTSS [long-term services and supports]. … But what about the large population of middle-income Medicare beneficiaries nationwide who do not qualify for Medicaid and cannot afford to hire a home health aide? These individuals fall into an ‘LTSS gap’ where care is difficult, if not impossible, to access. Today, nearly 40 million unpaid family caregivers provide 36 billion hours of care, but this is an unsustainable model as family members live further apart and balance multiple demands.”

LTC Comment: This article begins by describing how hard it is for Americans to get assistance with activities of daily living. Medicare won’t pay for LTSS. Private care is excessively expensive. Low-income individuals turn to Medicaid. But middle-income people are presumed to be ineligible. Nor can they afford a private home health aide. Alas, they fall into an “LTSS gap.” Either they go without needed care or they become a burden on millions of unpaid family caregivers. Everything in this opening assessment is either completely wrong or misunderstood and misinterpreted as explained below.

LTSS Gap: “State Medicaid income eligibility for the aged, blind, and disabled population varies across states from 75 percent to 138 percent of the federal poverty level. Because 138 percent of poverty is the top of the threshold, we define ‘near Medicaid eligibility’ as individuals who have incomes between 139 percent and 221 percent of poverty. We use 221 percent as the upper bound because, among states offering a ‘special income pathway’ to home- and community-based services (HCBS) for individuals with an institutional level of care need, the 300 percent federal benefit rate (which translates to approximately 221 percent of poverty) is a common income eligibility limit.”

LTC Comment: What’s wrong with this description of Medicaid’s ostensibly draconian income eligibility standard? It seems to come right out of federal and state laws and regulations. But it ignores how the system actually works in practice. Most state Medicaid programs allow applicant/recipients (ARs) to subtract their personal medical or LTC expenses from their income before applying a low-income standard. Other states cap income at 300 percent of the SSI monthly limit but allow ARs to shift excess income into diversion trusts, making them eligible despite having large incomes. The bottom line is the same everywhere. There is no firm upper limit on income. As a rule of thumb, income up to the monthly cost of a nursing home, often $8,000 to $10,000, rather high income, is not disqualifying. The article’s assertion that Medicaid LTC eligibility is limited to people with 75%, 138%, 221% of the poverty level … or any other set amount is wrong and worse, misleading.

LTSS Gap: “Some individuals may meet Medicaid income eligibility criteria but do not qualify for Medicaid because of the asset limit, which, in many states, means an individual can retain a minimal amount of personal assets (usually about $2,000).”

LTC Comment: Medicaid ARs are limited to $2,000 of countable assets. But most large assets held by the middle class are exempt, such as a minimum of $713,000 and a maximum of $1,071,000 of home equity depending on the state. Furthermore, an unlimited amount of countable assets can be converted easily to exempt status by purchasing any of a long list of exempt assets available from financial advisors or online. These non-countable assets include one vehicle, a business, prepaid burial plans, IRAs in payout status, home furnishings and all personal belongings. In 2014, the Government Accountability Office (GAO) found that 74 percent of its sample “owned at least some resources that were not countable as part of their financial eligibility determination … .” Reasonably $100 billion or more could be diverted from private LTC spending to a Medicaid liability nationwide in this way. For practical purposes, there is no limit to how much wealth Medicaid ARs may retain in or convert to exempt status.

LTSS Gap: “Individuals near Medicaid eligibility are unlikely to qualify for Medicaid or be able to afford LTSS out of pocket. … The literature refers to this broad population who cannot always afford LTSS as ‘the forgotten middle’ or ‘middle income.’ Understanding the characteristics and needs of individuals near Medicaid eligibility is the first step to addressing the LTSS gap.”

LTC Comment: Neither high income nor high assets prevent upper-middle-income people from qualifying for Medicaid LTC benefits. The “forgotten middle” is a fallacy. At most, there remain only some “forgotten wealthy,” people with so much income and resources, they would not qualify in spite of Medicaid’s very generous financial eligibility rules. The problem is not too few people on Medicaid, but too many. By making government LTC benefits so easy to obtain late in life while preserving exempt wealth, Medicaid desensitized the public to LTC risk and cost leaving most Americans dependent on public assistance when they confront catastrophic LTC costs. By covering too many people, Medicaid’s resources became inadequate to ensure access to quality care, especially in the home and community-based settings citizens prefer. But the situation is even more tragic and ironic than that. Medicaid hurts most the very same people who need it most.

LTSS Gap: “Older adults of color are disproportionately represented in the near Medicaid-eligible population, potentially furthering disparities in care.”

LTC Comment: If there is a near-Medicaid-eligible population with low income and assets, it primarily includes socioeconomically marginalized groups, including racial minorities. Medicaid financial eligibility rules devastate such individuals and families. They lose everything quickly to sky-high private LTC costs. They tend to live in neighborhoods with nursing homes and home care providers that rely heavily on Medicaid’s low reimbursement rates and lack supplemental philanthropic funding. They receive the low-cost care of uncertain quality that Medicaid is reputed to provide.

Compare affluent people, who qualify for Medicaid as easily and with less financial disruption because they can reconfigure their income and assets. As they “spend down” by purchasing exempt assets, they retain “key money” so they can pay privately initially for care. Key money enables them to gain admission to the best nursing homes and other LTC providers that are desperate for private payers at rates 1.5 times what Medicaid pays. They co-opt the best care Medicaid offers to the exclusion of poor people who lack the private funds to buy their way into the better care. This reality is the root and cause of the “structural LTSS racism” widely reputed in the peer-reviewed academic literature to be endemic in America’s long-term care service delivery and financing system.

LTSS Gap: “As the first state to eliminate the asset test starting in 2024, California’s Department of Health Care Services used a mix of Section 1115 Demonstration authority and the State Plan authority granted to states by the Social Security Act (note 2).”

LTC Comment: By eliminating its asset test for Medi-Cal LTC eligibility, California threw the public welfare gates wide open for wealthy people to access and appropriate scarce resources formerly, and more appropriately, preserved for people in need. This policy reduces the incentive for people with substantial wealth to plan ahead and pay privately for long-term care. It exacerbates the problem of structural LTC racism by further crowding out socioeconomically marginalized groups from Medicaid’s better care options.

LTSS Gap: “State policy makers can consider opportunities to address the LTSS gap under existing authorities including expanding Medicaid eligibility and State Plan Amendments, Section 1115 Demonstrations, Older Americans Act funding, and other state-driven initiatives.”

LTC Comment: Solving an “LTSS gap” that does not exist in the first place makes no sense. In fact state Medicaid programs have pushed such “solutions” to the limit of their ability to pay for them already. Medicaid nursing home and home care expenditures continue to rise annually. Home care options that were supposed to save money have not. Medicaid home care waiting lists approach 700,000 and people who receive home care often need institutional care eventually anyway.

LTSS Gap: “One strategy for meeting the LTSS needs of individuals near Medicaid eligibility is to adjust Medicaid requirements so more people can access Medicaid. States could make Medicaid accessible to more individuals by increasing income limits, increasing or eliminating asset limits, or implementing medically needy programs through State Plan and 1915 Waiver authority.”

LTC Comment: Loading up Medicaid with more high-cost LTC enrollees is the worst possible idea. It would vastly worsen the already serious problem of structural LTC racism. Far better to retarget Medicaid LTC benefits to those who need them most and redirect the middle class and affluent to early LTC planning to become private payers eventually. For a complete analysis of why that solution is best and how to achieve it, see the Paragon Health Institute’s “Long-Term Care: The Problem” and “Long-Term Care: The Solution.”

Following is my reply to the Health Affairs article "How States Can Support Individuals In The Long-Term Services and Supports Gap” Although posted 10 days ago, none of the article’s authors have replied to my criticism.

Stephen Moses

Respectfully, there is no “LTSS Gap.” The income and resource limits cited in this paper do not prevent affluent people from qualifying for Medicaid LTSS benefits. Most state Medicaid programs deduct private medical and LTSS expenses from income before applying a low-income standard. The others allow income diversion trusts to enable higher income people to qualify. A good rule of thumb: income below the cost of a nursing home, easily $8,000 to $10,000 per month, rather high income, is not disqualifying.

Likewise, the $2,000 resource limit cited in the article applies only to countable assets. But most wealth held by middle class and affluent people is exempt, including most home equity, a vehicle, a business, prepaid burial plans, IRAs in payout status, home furnishings and all personal belongings. Medicaid LTSS eligibility rules place no limit on exempt assets. All countable resources are easily converted to exempt status by using the former to purchase the latter. That method of spending down may account for $100 billion or more of excess Medicaid LTSS spending.

The real LTSS problem is not that too few people qualify for Medicaid, but rather too many do. By making LTSS benefits so easily available late in life for middle-class people, Medicaid created a moral hazard. It enabled the public to ignore LTSS risk and cost, avoid the necessity to save, invest or insure to prepare for extended care in old age, and still receive care when needed while preserving substantial exempt wealth. Consequently, few people prepare ahead for LTSS and most turn to Medicaid when they require care.

The tragic irony is that this system overloads Medicaid with too many enrollees causing scarce resources to be spread too thinly. Medicaid’s reputedly low-cost care of uncertain quality harms the program’s neediest enrollees most. Socioeconomically marginalized people, including racial minorities, tend to live in neighborhoods with nursing homes and other LTSS providers that are heavily dependent on Medicaid’s low reimbursements and unlikely to have supplemental philanthropic funding. Poor people receive the dregs of Medicaid LTSS care.

More affluent Medicaid enrollees live in nicer neighborhoods with better LTSS providers that are less dependent on Medicaid’s low reimbursements and more likely to have philanthropic support. As they “spend down” to Medicaid’s resource limit by purchasing exempt assets, these more financially comfortable applicants hold back “key money” so they can pay privately at admission. Because LTSS providers are desperate to attract private payers at 1.5 times what Medicaid pays, this key money ensures these better off enrollees have access to the best LTSS care Medicaid has to offer.

A large and growing peer-reviewed literature on “structural LTSS racism” reflects this system’s inequitable effects, hurting the economically disadvantaged while significantly benefiting more prosperous people. California’s unusually lenient financial eligibility system, including its recent elimination of any asset test for Medi-Cal (Medicaid), is the most egregious example of this problem. Nothing will change until scholars take into account how Medicaid LTSS financial eligibility really works in practice. They should stop assuming incorrectly that ostensibly strict rules in the statute and regulations actually prevail.

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Updated, Monday, August 5, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-030: LTC NEWS AND COMMENT

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

Listen to Ken Dychtwald on the Georgetown CRI Podcast
Reports reveal best, worst states for retirement, falls among older adults
Nearly half of dementia cases could be avoided or delayed by tackling 14 risk factors
How States Can Support Individuals In The Long-Term Services and Supports Gap
Just The Facts: Federal Staffing Mandate For Nursing Homes Threatens Access To Care For Americas Seniors
Nearly half of beneficiaries don't know the difference between Medicare and MA: survey
Study: Professional medication review is a must when older adults want to scale back meds
Nursing home employees among most likely to carry medical debt, related burdens: study

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Updated, Monday, July 29, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-029: LTC NEWS AND COMMENT

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

The Hidden Crisis in Long-Term Care
Gen X’s retirement woes may give rise to a generation of ‘silver squatters’
Medicaid Financing Reform: Stopping Discrimination Against the Most Vulnerable and Reducing Bias Favoring Wealthy States
Lawsuit slams staffing rule
Find long-term funding solution for Social Security now, 87 percent of respondents to survey say
New York City’s Biggest Job Engine Has Become a ‘Racket,’ Hochul Says
New poll sees if WA cares about payroll tax to fund WA Cares program
Stop Talking About Nursing Homes
Dementia rate decline accelerates during COVID-19 pandemic
Paragon Prognosis: Housing Isn’t Health Care
Who is eligible for both Medicare and Medicaid?

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Updated, Friday, July 26, 2024, 10:03 AM (Pacific)

Seattle—

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LTC BULLET: WHAT IF THE LTC MARKET WERE FREE?

LTC Comment: Government dominates long-term care services and financing in the U.S. What if it were otherwise? Reflections after the ***news.***

*** JOIN THE CENTER. If you receive today’s LTC Bullet from a friend or colleague, please consider joining the Center for LTC Reform in your own right. You’ll receive our bi-weekly LTC Bullets and our weekly summaries, LTC E-Alerts, of our daily LTC Clippings. There is no better way to stay abreast of everything happening in the LTC policy space. On top of that, you will support and be part of our mission to reform LTC public policy. Our goal is to encourage responsible LTC planning instead of rewarding consumers’ denial that leads to excessive reliance on Medicaid. Find all the membership options here. Join and contribute here. ***

*** PREMIUM Center members also receive our daily LTC Clippings. Steve Moses scans the academic and popular media. He identifies the reports, data, and articles you need to see to stay at the forefront of professional expertise. He sends an email with the title, author, a link and a key quote followed by his brief analysis of its meaning. Here are some examples:

7/24/2024, “Medicaid Financing Reform: Stopping Discrimination Against the Most Vulnerable and Reducing Bias Favoring Wealthy States,” by Brian Blase, PhD and Drew Gonshorowski, Paragon Health Institute
Quote: “The Affordable Care Act (ACA) created a new eligibility category for Medicaid—able-bodied, working-age adults—with a much higher federal reimbursement percentage for these enrollees. This has led to a host of problems, including 1) a diversion of resources away from traditional Medicaid enrollees, particularly low-income children, and people with disabilities, that has reduced their access to health care services; 2) a near quadrupling of Medicaid’s improper payments; and 3) a surge of spending that has significantly contributed to large and growing federal deficits.”
LTC Comment: The ACA tipped the Medicaid scales against traditional aged, blind and disabled enrollees in favor of new, younger, able-bodied recipients, simultaneously causing expenditures and error-rates to rise perilously. Don’t miss this informative study by my colleagues at the Paragon Health Institute.

7/23/2024, “Lawsuit slams staffing rule,” by Josh Henreckson, McKnights LTC News
Quote: “A federal lawsuit filed by providers seeks to throw out the national nursing home staffing mandate, charging that it exceeds the authority of the Centers for Medicare & Medicaid Services and ‘creates impossible-to-meet standards that will harm thousands of nursing homes and the vulnerable Americans they serve.’ Some industry and legal experts have boldly predicted a straightforward provider victory.”
LTC Comment: It’s been decades since the nursing home business put up a real fight against bureaucratic government over-reach. Thanks to the recent Supreme Court Chevron decision, they have a shot. But, alas, the bureaucracy is fighting back: “Bill Introduced In Senate To Override Supreme Court’s Ruling On Chevron Doctrine.” We’ll watch and report to you as this plays out.

7/23/2024, “New poll sees if WA cares about payroll tax to fund WA Cares program,” by Claire Withycombe, The Seattle Times
Quote: “For about a year, many Washington workers have paid a 0.58% tax on their wages to fund a first-in-the-nation long-term care insurance program, an attempted antidote to the looming cost of caring for an aging population. But a new statewide poll suggests a narrow majority of likely voters, 52%, would support a ballot initiative making the tax optional, while 27% said they were certain to vote no and 22% of voters said they were undecided.”
LTC Comment: Voters who rejected WA Cares twice before when asked are likely to do it again. Will the politicians finally get the message? Compulsory, payroll-funded, financially vulnerable entitlement programs are so 20^th century.

***

LTC BULLET: WHAT IF THE LTC MARKET WERE FREE?

Free markets with unencumbered exchange between willing buyers and sellers generate price data that reflect preferences such as how much of which kind of a good or service people want and what the price should be to deliver the optimal supply for any given demand. When government tips the scale to encourage certain preferred outcomes, unforeseeable consequences, often undesirable, invariably occur.

LTC in a Free Market

What would the LTC market be like with no government regulation or funding? Certainly people would take the risk and cost of expensive extended care late in life more seriously than they do now. Without Medicaid to pick up the tab for catastrophically expensive nursing home or long-term home care while protecting practically unlimited exempt assets, planning for LTC would become a personal finance priority on a par with life, health, auto and fire insurance.

Without government limiting LTC providers and consumers to nursing homes or home care with 7000-person-long waiting lists, entrepreneurs would offer amazing new venues and practices for LTC service delivery. Home and community-based care would dominate because that’s what people want and people can demand what they want when they’re spending their own money or their insurer’s with no government bureaucrats intervening.

Of course, in a free market, you must pay for what you get. No more gaming Medicaid to access free or subsidized care while holding back “key money” to buy your way into the best nursing homes and home care to the exclusion of the needier people Medicaid was supposed to help. It won’t be cheap, but it will be a lot less expensive than private-pay LTC is now when Medicaid pays too little and private payers have to make up the difference by paying much more.

In a free market the cost of LTC will be as high as needed to clear markets. That is, prices will rise until they suffice to support enough providers at sufficient wages to meet the LTC needs of individuals and families. Caregiver shortages will therefore disappear. On the other hand, prices will decline to reach a balance reflecting market competition. Capitalism’s creative destruction removes inefficient, high-cost providers leaving only the most efficient, lower-cost operators.

So much for the rosy scenario. What about “market failure?” Capitalism and free markets harm the poor, don’t they? What happens to people who cannot afford the great new LTC choices the free market provides? What about the bad actors who overcharge for poor care. They’ll emerge without government regulation, right?

Those problems arise because, not in spite of, government funding and regulation as explained below. With a free LTC market in place, most people will prepare to pay for their own LTC. Few will remain in need of outside help from government or private charity. Without government to co-opt natural generosity, private philanthropy will revive and thrive. Private individuals and organizations will fill in to provide a better safety net than government welfare ever did.

LTC with Government Involvement

America has never had a long-term care system remotely approaching a free market. But there was a time long ago when left to its own devices a system more like the one described above might have developed. Instead, little by little, government intervened with more and more funding and regulation. You see the depressing results all around you today.

As people lived longer and longer in the 20^th century, they died slower and slower, often with debilitating chronic illness, physical frailty or cognitive impairment. Families, who formerly provided most care for their own elders, could no longer manage. Mom and Pop residential care supplemented, but did not become a huge corporatized nursing home industry until public financing flooded the market with capital.

Many people could not afford care. Available care was often dubious as a nascent private LTC market floundered. Instead of letting the market find its way over time, government stepped in to “fix” it. Early well-intended financial infusions and regulatory interventions snow-balled into the current overweening state and federal government behemoth.

It started with money. State and federal funds poured in, enabling people to pay for residential care, which quickly supercharged the nursing home industry. In 1965, that trend vastly increased as Medicaid made LTC available to anyone unable to afford it. Medicaid did not require poverty or catastrophic spend down as often claimed. It made free or subsidized LTC available to anyone with too little income and too few resources to pay private market rates.

Medicaid chose winners and losers. It paid exclusively for nursing home care, which unleashed that sector. It paid nothing for home and community-based care, which suppressed the care venue the public prefers. Later efforts through “waivers” to rebalance from institutional to home-based care exacerbated Medicaid’s exploding cost. It turned out that home care did not save money, despite expectations that it would, because too many people who received care at home ended up needing a nursing home eventually anyway.

Having pumped virtually unlimited state and federal funding into the nursing home industry and having made that high-cost care available to anyone who could not afford it otherwise, Medicaid became fiscally unsound. It could not afford to pay adequately to ensure quality nursing home care, much less home and community-based care. Quality deteriorated becoming a crisis by 1987 when the Nursing Home Reform Act mandated better care and more caregivers but without increasing reimbursements.

Easy Medicaid LTC eligibility enabled the public to ignore LTC risk and cost, leaving them dependent on public financing when stricken. Decades of relying on Medicaid if and when catastrophic care costs occurred deflated demand for private insurance to cover such costs. Publicly financed nursing home care delayed development of care options such as assisted living and impaired the private market for home care.

Government tried to ameliorate the damage easy access to Medicaid did by closing financial eligibility loopholes, imposing transfer of assets restrictions and mandating estate recoveries. But nothing worked. A cottage industry of private Medicaid planning attorneys always found creative ways around such efforts. High-income and high-resource people not only qualified for Medicaid, they could access the best care the program offers by holding back “key money” to buy their way into the best facilities and providers. That inequity crowded out the poor from Medicaid’s best care condemning them to the worst care often highlighted in media exposes and giving rise to widespread accusations of “structural LTC racism.”

Today, the LTC system government created is a total mess. Few people worry or plan for LTC. When they need it they qualify easily for Medicaid. But the available system pays too little to ensure quality care, leaving them with very limited options. They can pay privately for good care in preferred venues, which few can afford; or rely on Medicaid’s deficient choices; or burden their friends and families with unpaid, unprofessional care. Unable to tax or spend more to better fund the system it created, government continues to mandate better care and more caregivers without providing adequate funding.

Bottom line, America’s government-dominated LTC system is tragically dysfunctional. A free or freer LTC market would likely produce much better results. We will probably find out by default when the public system collapses and we have nowhere to turn but to a freer market. It would be so much better to experiment with alternatives on purpose.

If you find anything in this short essay dubious or if you want more evidence and detail, please read the Paragon Health Institute’s “Long-Term Care: The Problem” and “Long-Term Care: The Solution” and watch this “virtual LTC event” featuring age wave visionary Ken Dychtwald and leading LTC researchers.

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Updated, Monday, July 22, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-028: LTC NEWS AND COMMENT

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

Home health sees spending, utilization decline as hospice equivalents grow, MedPAC reports
CDC report: Cognitive disability tops list of disabilities in US adults
My Dad Was Diagnosed With Dementia. Medicare's 7-Word Response Baffled Me
Home care spending outpaces nursing home spending ‘by far’
Biden Administration Backs Off From Medicare Agent Pay Fight
How Likely Are You to Need Long-Term Care?
A New Way to Pay for Long-Term Care Insurance

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Updated, Monday, July 15, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-027: LTC NEWS AND COMMENT

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

Trump shooter worked at nursing home
Genworth launches first LTC insurance plan in 5 years as Washington state residents consider ‘crazy’ plan that could end mandatory program
GOP calls for agency regulation review in wake of Supreme Court overturning of Chevron doctrine
States Set Minimum Staffing Levels for Nursing Homes. Residents Suffer When Rules Are Ignored or Waived.
Biden’s condition? It’s called aging, folks
LTSS increasingly expensive, with fewer guardrails and more demand to come: new KFF analysis
Genworth Unit Moves to File New Long-Term Care Policy
What nursing homes need, versus what they get

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Updated, Friday, July 12, 2024, 10:03 AM (Pacific)

Seattle—

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LTC BULLET: UNDERSTANDING MEDICAID SPEND DOWN

LTC Comment: To fix long-term care you must understand Medicaid spend down. We explain after the ***news.***

*** TWO BIRDS, ONE STONE. McKnights is a national news brand specializing in institutional long-term care, senior living and home care. This week McKnights published the same column I wrote about senior living with different titles in two of its venues. You can read “What assisted living needs versus what it gets” in McKnights Senior Living or “What nursing homes need, versus what they get” in McKnights LTC News depending on your interest. Same piece. Thanks to McKnights for this unique dual coverage. The Paragon Health Institute republished the article making it a trifecta. ***

*** AI TOLD YOU SO. Today’s LTC Bullet claims people can qualify for Medicaid LTC benefits without spending down assets for medical or long-term care expenses. If you don’t believe me, then consider this reply from Perplexity.ia to my query.

Question: “How do people spend down to qualify for Medicaid LTSS benefits without spending wealth on medical or LTSS expenses?”

Answer from Perplexity.ia: “People can spend down to qualify for Medicaid long-term services and supports (LTSS) benefits through several methods that do not involve directly spending wealth on medical or LTSS expenses:

Purchasing exempt assets: Individuals can convert countable assets into exempt assets that are not counted towards Medicaid eligibility. Common examples include:

Paying off the mortgage on a primary residence
Making home improvements or modifications
Purchasing a new vehicle
Buying household goods and personal effects
Prepaying funeral and burial expenses

Gifting assets: Some people choose to gift assets to family members or others. However, this strategy must be done carefully, as Medicaid has a ‘look-back’ period (typically 5 years) during which gifts can result in transfer penalties.
Establishing trusts: Certain types of irrevocable trusts can be used to protect assets while still qualifying for Medicaid. These may include special needs trusts or pooled income trusts.
Spending on non-medical necessities: Using funds for travel, entertainment, or other personal expenses that improve quality of life but are not directly related to medical care or LTSS.
Paying off debts: Reducing or eliminating outstanding loans, credit card balances, or other debts.
Purchasing long-term care insurance: Some states have partnership programs that allow individuals to protect more assets if they purchase qualifying long-term care insurance policies.
Spousal transfers: In cases where one spouse needs LTSS and the other does not, transferring assets to the community spouse can help protect those assets while allowing the institutionalized spouse to qualify for Medicaid.

It's important to note that Medicaid eligibility rules are complex and vary by state. Additionally, some spend-down strategies may have tax implications or affect future eligibility for other benefits. Individuals considering spending down to qualify for Medicaid LTSS should consult with elder law attorneys or financial advisors familiar with Medicaid planning in their state to ensure compliance with all regulations and to develop an appropriate strategy for their specific situation.” ***

*** ARTIFICIAL SPEND DOWN. For more on the damage done by widespread practice of qualifying for Medicaid by purchasing exempt assets, read this “Paragon Prognosis” I wrote for the Paragon Health Institute: “Medicaid’s $100+ Billion Leak.”

LTC BULLET: UNDERSTANDING MEDICAID SPEND DOWN

LTC Comment: The Social Security Act says Medicaid’s role in long-term care (LTC) is “to furnish (1) medical assistance on behalf … of aged, blind, or disabled individuals, whose income and resources are insufficient to meet the costs of necessary medical services, and (2) rehabilitation and other services to help such … individuals attain or retain capability for independence or self-care … .”

In plainer language, Medicaid’s LTC job is to provide medical assistance, rehabilitation and related services to individuals “ … whose income and resources are insufficient to meet the costs of necessary medical services … .” Note there is no requirement, as so often claimed, that people become “destitute” or “impoverished” to qualify. Anyone is eligible for Medicaid’s help who faces private medical or LTC expenses, but has too little income and resources to pay for them.

How does Medicaid decide whether an applicant for LTC benefits has insufficient income and resources to pay privately?

On the income side, most state Medicaid programs (34) require applicant/recipients (ARs) to prove that they spent down nearly all of their income for private medical or LTC expenses. Other states cap total income but permit higher-income applicants to divert their excess income into special trusts. Under either system there is no upper limit on how high starting income can be as long as documented private medical and LTC expenditures suffice or an income diversion trust is used. A good rule of thumb is that income below the cost of a nursing home, $8,000 or $9,000 per month, fairly high income, is not disqualifying.

Medicaid’s procedure to determine whether ARs have insufficient resources to pay privately for care is entirely different. Unlike for income, Medicaid requires no evidence that people spend down their resources for private medical or LTC expenses. They can expend their wealth on anything they wish, including products or services that Medicaid considers exempt from its very low resource limit, usually only $2,000. Because most large assets seniors own are exempt, such as home equity, a business, a vehicle, IRAs in payout, etc., and remaining countable assets are easily convertible to noncountable by purchasing exempt resources, such as home improvements, a new car, personal belongings or home furnishings, there is no upper limit on how much wealth Medicaid ARs can retain. For an estimate of how much value is diverted from private LTC spending into a Medicaid expenditure by means of purchasing exempt assets, see “Medicaid’s $100+ Billion Leak.”

Thus, despite its reputation as a program for the poor that requires spend down into impoverishment, Medicaid actually places no upper limit on how much income and resources ARs may retain. Bottom line, financial eligibility for Medicaid LTC benefits is not difficult to achieve. Beyond their income, which is Medicaid’s co-insurance, consumers have little “skin in the game.” This reality has terrible consequences for America’s foundering LTC services and financing system.

Financial Consequences

Nearly six decades of easy access to Medicaid LTC with the added benefit of preserving wealth created a moral hazard. It enabled the public’s denial of LTC risk and cost. Fewer people, in fact hardly any, plan early to save, invest or insure for LTC. Why bother when Medicaid has bailed out generations of elders when they face catastrophic LTC costs? As a result, we see spiraling dependency on Medicaid, with generations of adult children ignoring LTC planning as their inheritances are protected by Medicaid’s paying for their parents’ LTC.

Excessive reliance on government funding and regulation delivered a dysfunctional LTC system based on too much central planning. Heavy regulation by the Centers for Medicare and Medicaid Services (CMS) hamstrings LTC providers. It demands Ritz Carlton care but pays only Motel 6 rates. Government micromanagement, such as a recent staffing mandate without commensurate compensation, deflates morale as it exacerbates providers’ dilemma, pinched between the rock of inadequate reimbursement and the hard place of mandatory quality. Lacking market incentives to experiment with new care strategies, LTC providers offer only those care options for which the government will pay.

Access and Quality Consequences

Because Medicaid LTC benefits are so easy to qualify for financially, too many people rely on the program for its most expensive service. State and federal Medicaid LTC budgets are spread so thin and program resources are so limited that reimbursement levels for LTC providers must be kept notoriously low, often less than the cost of delivering the care. Low wages cause caregiver shortages. Care access and quality suffer, especially for the neediest recipients. The financial strain on institutional and home care providers reduces profitability and discourages private investment in LTC.

Medicaid’s long-standing institutional, i.e. nursing home, bias lingers despite decades of efforts to rebalance toward home care for two reasons. The public’s aversion to nursing home care helps restrain growing Medicaid expenditures. The hope that home care would save money did not prove out because too many people who receive home care end up needing a nursing home eventually anyway. Long waiting lists, upwards of 700,000, for Medicaid’s waivered home and community-based services (HCBS) further exacerbate access problems. Desire to avoid Medicaid’s low cost care of uncertain quality leads to excessive reliance on unpaid caregivers, severely stressing families and friends financially and emotionally.

Ethical Consequences

Perhaps most tragic of all is the structural LTC racism Medicaid causes. The program’s deficient access and quality is well known. Everyone who depends on the program suffers. But some suffer more than others. Marginalized, socioeconomic groups, including racial minorities, are quickly impoverished by Medicaid’s financial eligibility rules. They are already Medicaid dependents when they seek nursing home care or HCBS. More affluent people, who also qualify easily as explained above, are able to pay privately for a while before applying for Medicaid. That is important because revenue-starved LTC providers are desperate to attract market-rate private payers who contribute half again as much revenue per person as Medicaid provides.

What this means is that more affluent people who qualify for Medicaid have first access to the best care Medicaid provides. They tend to live in nicer neighborhoods where the best nursing homes and home care providers are found. LTC providers that are less dependent on Medicaid’s low reimbursement rates and that have greater philanthropic funding and higher Medicare and private pay census are known to provide the best care. Lacking the “key money” to buy their way into such care providers and tending to live in neighborhoods with fewer of the best providers, the poor, including racial minorities, have access only to the least desirable Medicaid-financed care. For these reasons, a large and growing academic literature condemns Medicaid as a primary cause of structural LTC racism.

Bottom Line

By funding most LTC, not only for the poor but for the middle class and affluent as well, Medicaid is the direct cause of most of America’s LTC problems. By covering everyone who is unable to pay privately for LTC, the program crowded out personal planning and responsibility, became the dominant payor for LTC, is unable to pay adequately to ensure good access and high quality, and favored the affluent over the needy whom it should have benefited most.

To improve LTC, Medicaid’s scarce resources should be re-directed to the needy and away from others who can and should pay for their own care. That policy change will quickly incentivize those who are able to plan early and take personal responsibility for LTC risk and cost. For more detailed analysis and a full explanation of how to achieve these goals see, the Paragon Health Institute’s “Long-Term Care: The Problem” and “Long-Term Care: The Solution.”

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Updated, Monday, July 8, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-026: LTC NEWS AND COMMENT

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

What assisted living needs versus what it gets
Federal Court Blocks Medicare Agent Pay Cap Regulations
Medicaid Efforts to Address Racial Health Disparities
Medicaid’s $100+ Billion Leak
Supreme Court Decision Limiting the Authority of Federal Agencies Could Have Far-Reaching Impacts for Health Policy
Older adults’ home equity tops $13 trillion in first quarter

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Updated, Monday, July 1, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-025: LTC NEWS AND COMMENT

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

Medicaid's 80/20 Rule: New Restrictions on Funding for Home and Community Based Services
BREAKING: Supreme Court’s Chevron ruling could defang CMS
Battle Flares Over Long-Term Care Insurance Rate Hike Rules
Medicaid Long-Term Care: Future And Current Retirees Need To Prepare
Keep an eye on Washington state initiative, long-term care insurance expert cautions
‘Deteriorating’ outlook for CCRCs to continue for rest of year: Fitch
How much long-term-care insurance do I need?
Is this the end of the line for nursing homes?

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Updated, Friday, June 28, 2024, 10:03 AM (Pacific)

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LTC BULLET: KFF HOISTED AGAIN

LTC Comment: A series of KFF “issue briefs” intended to show how poor Medicare beneficiaries are prove the opposite. We explain after the ***news.***

*** JOIN the Center and receive all our LTC Bullets and LTC E-Alerts. Become a premium member and get our daily LTC Clippings as well. Your Center for Long-Term Care Reform exists to promote policies that deliver quality LTC to all Americans. We conduct research and pursue advocacy toward increasing private financing and relieving public LTC spending with the goal to improve funding and quality for all levels and venues of long-term care. Join our campaign here. Check out all the individual and corporate membership options here. Read our 1384 LTC Bullets, organized by topic and chronologically here. Following are sample LTC Clippings. Help continue the good fight. Support the Center for Long-Term Care Reform.

*** LTC CLIPPING SAMPLES:

6/27/2024, “Keep an eye on Washington state initiative, long-term care insurance expert cautions,” by Kathleen Steele Gaivin, McKnights Senior Living
Quote: “As the one-year anniversary of the effective date of the country’s first publicly operated, tax-based long-term care insurance program approaches July 1, voters in Washington state ‘are being given the choice to make the program optional, and early polling shows that’s very likely to happen,’ Jesse Slome, director of the American Association for Long-Term Care Insurance, said Wednesday.”
LTC Comment: It looks like WA Cares will follow the Pepper Commission, CLASS, and a series of Medicaid and LTC Commissions into the sinkhole of failed compulsory government takeover plans.

6/25/2024, “How much long-term-care insurance do I need?,” Dow Jones
Quote: “The way to get a more accurate figure is to look closely at the sick person's family history and current medical circumstances, and also their financial situation. This is not something you can do in a back-of-the-envelope way or even with a spreadsheet. Waterlily said it is able to help by crunching through decades of case studies to more accurately pinpoint the length of care needed, and also the range above and below that number to create a cushion. The service mostly is available through advisers, insurance companies and care facilities to help clients, rather than directly to consumers. With the help of an adviser, a family can then take the data and map out the costs of various care options against that time frame. Chen converts the future dollar amount to the value that has to be saved today, using the standard formulas of financial planners; then he can tell them how much they need to earmark and invest.”
LTC Comment: Intriguing idea. If you want to learn more, check out the forthcoming LTC Discussion Group meeting focused on this topic. “Using Data Science to Predict Individual LTC Needs and Identify Solutions,” Thursday, June 27, 2024, 1:00 PM 2:00 PM. The Group requires pre-registration. Learn more at www.ltcdiscussiongroup.org. ***

LTC BULLET: KFF HOISTED AGAIN

LTC Comment: To set the stage, read “LTC Bullet: Hoist with Its Own Petard,” April 28, 2017. In it we critiqued KFF’s April 2017 “Issue Brief” titled “Income and Assets of Medicare Beneficiaries, 2016-2035.” KFF argued that “Medicare beneficiaries are so poor that it behooves policymakers not to consider ‘decreasing federal Medicare spending’ when they are ‘addressing the federal debt and deficit.’” We explained that “what they inadvertently prove instead is that most Medicare beneficiaries are actually quite well off” and “what they miss entirely is that affluent [Medicare] beneficiaries capture a disproportionate share of Medicaid’s long-term care benefits.” Neither income, assets nor home equity stand in their way.

We concluded: “This KFF issue brief tries to sidetrack policymakers from addressing Medicare’s fatal fiscal flaws by focusing on beneficiaries below the financial median. But, contra the KFF argument and conclusions, most Medicare beneficiaries are doing quite well financially. Furthermore and ironically, with tragic consequences for the genuinely needy half of beneficiaries, the better off group is co-opting desperately needed long-term care resources that should go to the needier group. The fact that affluent whites live longer than poor minorities, consume a disproportionate share of Medicaid’s scarce resources, and plan for that eventuality as a result of incentives created by existing policies raises serious ethical questions—not because Medicaid forces people into impoverishment as usually assumed, but for precisely the opposite reason.”

That’s where we left the matter seven years ago. But KFF is back again with another issue brief promoting the same mistaken views: “Income and Assets of Medicare Beneficiaries in 2023,” by Alex Cottrill, Juliette Cubanski, Tricia Neuman, and Karen Smith, published February 5, 2024. Here’s a quote from the press release for that publication: “A new KFF analysis shows that most Medicare beneficiaries live on relatively low incomes and have modest financial resources for retirement – posing a risk to their economic well-being, particularly if they were to have a major, unanticipated expense, such as a need for long-term nursing home care. The financial picture is especially bleak among Black and Hispanic Medicare beneficiaries, who tend to have lower incomes, savings, and home equity than White beneficiaries, the analysis shows. Women have lower incomes and less savings than men, and beneficiaries’ income and savings tend to decline with age. … Some Medicare beneficiaries may be eligible for additional support from Medicaid, including those with very low incomes and limited savings, and others who spend down their assets to pay for their medical or long-term care costs. Medicaid offers coverage for nursing home care and other long-term care services and supports that are not generally covered by Medicare. However, for lower and middle income beneficiaries who do not qualify for Medicaid, the high cost of unanticipated medical and long-term services and supports may simply be unaffordable.”

This is cock-eyed analysis. The truth is that most Medicare beneficiaries are eligible for Medicaid LTC benefits. They do not have to have “very low incomes and limited savings” and they do not have to “spend down their assets to pay for their medical or long-term care costs.” Medicaid does not require applicants/recipients to spend down assets for care. They can reduce wealth to the countable level allowed, usually $2,000, by purchasing anything. As long as what they purchase is something Medicaid considers exempt, their eligibility is unobstructed and their net worth undiminished. What does Medicaid exempt? Almost every large asset the affluent elderly possess, including most home equity, home repairs and updates, a business, a car, prepaid funeral expenses for the whole family, and many more listed on websites and provided by Medicaid planning attorneys.

To make sense of what’s really wrong with LTC in the USA, read the Paragon Health Institute’s “Long-Term Care: The Problem” and “Long-Term Care: The Solution” and watch this “virtual LTC event” featuring age wave visionary Ken Dychtwald and leading LTC researchers.

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Updated, Monday, June 24, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-024: LTC NEWS AND COMMENT

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

Protecting and Preserving Property When Paying for Long-Term Care
New Resident Health Data Show Value of Senior Living to CMS, Medicare Advantage Payers
What Long Term Care Professionals See as the Greatest Operational Risks
Financing Long-Term Care
Poll indicates voter support for three initiatives on Washington’s fall ballot
Medicaid Eligibility and Enrollment Policies for Seniors and People with Disabilities (Non-MAGI) During the Unwinding
Director’s Statement on the Updated Budget and Economic Outlook for 2024 to 2034
Ensuring Sustainability in Long-Term Care: Challenges and Strategies for the European Union
Nation’s older adult population changing, federal report shows

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Updated, Monday, June 17, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-023: LTC NEWS AND COMMENT

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

Medicare will recalculate quality ratings of Medicare Advantage Plans, WSJ reports
4 percent of those aged 65+ have dementia diagnoses: report
CMS: Home healthcare spending estimated to grow by 7.1 percent from 2025 to 2026, surpassing other sectors
US healthcare spending for NFs and CCRCs to reach $337.4 billion by 2032, CMS says
MACPAC wants Congress to force states to disclose Medicaid financing streams
Congress takes aim at White House nursing home staffing quotas
Revenue pressures driving home care consolidation, private equity’s growing influence, provider group says

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Updated, Friday, June 14, 2024, 10:03 AM (Pacific)

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LTC BULLET: REIMAGINING LTC FINANCING

LTC Comment: See long-term care financing more clearly through a new theoretical lens, after the ***news.***

*** JOIN the Center and receive all our LTC Bullets and LTC E-Alerts. Become a premium member and get our daily LTC Clippings as well. Your Center for Long-Term Care Reform exists to promote policies that deliver quality LTC to all Americans. We conduct research and pursue advocacy toward increasing private financing and relieving public LTC spending with the goal to improve funding and quality for all levels and venues of long-term care. Join our campaign here. Check out all the individual and corporate membership options here. Read our 1383 LTC Bullets, organized by topic and chronologically here. Following is a sample LTC Clipping in which we take poor, biased reporting on LTC insurance to task. Help continue to good fight. Support the Center for Long-Term Care Reform.

*** LTC CLIPPING SAMPLE:

6/8/2024, “Soaring premiums, denied benefits, delayed payments show crisis in long-term care insurance,” by Jeremy Olson, Star Tribune

LTC Comment: Hit pieces on LTC insurance are nothing new. I remember one especially virulent article that the New York Times brought to press on opening day of the 7^th annual Intercompany LTC Insurance Conference in Dallas (see LTC Bullet: Sucker Punched in Dallas, April 10, 2007). Just once, it would be nice to find some balance in media coverage. Maybe compare how miserably Medicaid and Medicare have done in managing LTC financing. Or mention the Federal Reserve artificially dropping interest rates to zero and crushing returns on carriers’ reserves. Or how about recognizing how well and creatively the LTC insurance industry has managed its challenges, creating new hybrid products and dealing with premium increases responsibly, unlike the government programs that cannot pay future claims but have done nothing to adjust. It would be nice to see some recognition that the vast majority of complaints about failure to pay claims turn out to be specious, based on expecting carriers to pay when contractual policy conditions are unmet. Don’t hold your breath. But do soldier on fellow fighters for LTC reform! ***

LTC BULLET: REIMAGINING LTC FINANCING

LTC Comment: People are living longer often in need of extended help with basic activities of daily living due to frailty, chronic illness or cognitive impairment. Such care is expensive. Most people cannot afford it. Currently, Medicaid, a means-tested public assistance program, is the dominant LTC payer.

If Medicaid’s means test really required people to pay their own way before relying on the public program, it would operate in keeping with wholesome principles of independence and personal responsibility. But that is not how Medicaid LTC benefits work.

Income rarely prevents Medicaid LTC eligibility because private medical and LTC expenses are deducted from income before a low income standard is applied. Nor do large resources obstruct eligibility because most big assets, such as home equity and IRAs, are exempt from spend down requirements.

Easy access to Medicaid LTC benefits while preserving personal wealth for heirs created a moral hazard that discouraged early and responsible planning for LTC risk and cost. Medicaid’s availability for most Americans’ LTC needs over decades enabled their denial of personal responsibility.

The resulting excessive dependency on Medicaid caused LTC’s deficiencies, including nursing home bias, insufficient home care, and poor provider reimbursements that led to caregiver shortages, access and quality problems. Understanding what caused these dysfunctions is the key to fixing them.

That key is to remove Medicaid as the dominant LTC payer and replace it with private financing at market rates. That will enable and incentivize nursing homes and home care agencies to supply the kind and quality of care consumers prefer and will demand when they pay their own way. How can we achieve that objective?

Theoretically, this is the easy part. Eliminate all Medicaid rules that enable people with high incomes and assets to qualify for benefits. But politically, that’s the hardest part. Although it will save Medicaid for the poor, enabling the program to pay market rates for more and better care, it would leave the middle class and affluent with huge LTC liabilities that Medicaid no longer alleviates.

The political challenge therefore is to show prosperous people how they are better off without the option to ignore LTC and rely on a poverty program. On the plus side, if they pay privately at market rates, they will have better access to higher quality care in the venue—home care, assisted living or nursing home—that best satisfies their need and preference.

But that is small consolation if they must pay out of pocket for services that Medicaid financed before. Most cannot afford that now and they lack the incentive to safe, invest or insure against the future risk and cost. But with Medicaid removed as an option, that incentive will develop far stronger than ever before.

So the essential ingredient is to give people a reason and a way to save, invest or insure for LTC early in life at a time when LTC planning competes with other priorities. How can families keep up with car and house payments, save for children’s education and their own retirement, and still prepare for LTC?

Some creative public policy changes could replace the current slippery slope onto Medicaid dependency with positive incentives to prepare for LTC. Step one is to set the planning goal at an achievable level. Instead of expecting people to prepare against the small risk of a catastrophically expensive LTC cost, set the expectation on each to meet their average risk. For the average American, setting aside $70,000 by age 65 would suffice according to recent research.

How could people meet that new, lower level of preparation? In “Long-Term Care: The Solution” we identified seven “LTC Choices” that public policy might offer to ease the way. These include … lower premium LTC insurance policies covering reduced average risk; new, tax-advantaged savings accounts; and especially, creative methods to carve out funds for LTC from other savings, such as home equity, retirement savings, life insurance, and estates, if and only if LTC becomes necessary.

With Medicaid removed as a late-life LTC financing source, people will plan early to prepare for LTC risk and cost. With new LTC Choices, they will be able to meet their expected LTC risk and cost without having to come out of pocket at a time when other financial responsibilities are pressing. When the time comes that they do need LTC, they will have the resources to purchase the kind of services they prefer in the private market.

If and when their LTC needs do exceed their funds available, the genuine Medicaid safety net, relieved of covering too many people, will be available to provide services of equal quality. With all their revenue coming at market rates, both for private and Medicaid patients, LTC providers will be relieved of the caregiver shortages caused by low reimbursements.

LTC Comment: For a fuller development of these ideas, see the Paragon Health Institute’s “Long-Term Care: The Problem” and “Long-Term Care: The Solution.”

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Updated, Monday, June 10, 2024, 10:03 AM (Pacific)

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LTC E-ALERT #24-022: LTC NEWS AND COMMENT

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

Soaring premiums, denied benefits, delayed payments show crisis in long-term care insurance
Medicare among top voting issues for Gen Xers, millennials, report finds
Ageless Aging: A Woman’s Guide to Better Healthspan, Brainspan, and Lifespan
HHS Delivers Strategic Framework for National Plan on Aging
More older Americans worried about Medicare future: Survey
Is Mom late on bills? Could be sign of dementia, report finds
Emerging Opportunities for Hospitals in the Long Term Care Sector: Structuring Models and Key Considerations
‘A Troubling Trend’: Sudden Closures, Bankruptcies, Displaced Residents in State Put Extra Pressures on Nursing Homes

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Updated, Monday, June 3, 2024, 10:03 AM (Pacific)

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LTC E-ALERT #24-021: LTC NEWS AND COMMENT

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

After A Settlement, Steady Sales For LTC
Insights from a Certification For Long-Term Care (CLTC) webinar
The Costs of the Rising Cost of Long-Term Care
KFF Introduces Health Policy 101—A Primer on U.S. Health Policy
Medicaid HCBS utilization linked to reduced SNF use, study finds
The Perils of Self-Funding Long-Term Care
ACL Releases 2023 Profile of Older Americans
‘Daunting’ concerns about nursing home cost escalation dominate 2025 pay rule comments

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Updated, Tuesday, May 28, 2024, 10:03 AM (Pacific)

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LTC E-ALERT #24-020: LTC NEWS AND COMMENT

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

BREAKING: AHCA files lawsuit to dismiss nursing home staffing rule
Black Americans are underrepresented in residential care communities, AP/CNHI News analysis finds
California takes top spot as worst state for retirees
Improvements in socioeconomic status associated with dementia-free years over lifespan, study finds
Ultra-processed foods linked to cognitive decline, stroke
Insurance on Insurers: How State Insurance Guaranty Funds Protect Policyholders
In 45 States, Fewer Than Half of Nursing Facilities Have Enough Staff to Meet New Federal Requirements
Senior living referral site accused of using manipulated reviews, listing communities providing substandard care
More boomers favor renting, with little interest in buying homes: report

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Updated, Friday, May 24, 2024, 10:03 AM (Pacific)

Seattle—

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LTC BULLET: HOW MEDICAID HELPS THE AFFLUENT AT THE EXPENSE OF THE POOR

LTC Comment: How does a “poverty program” divert billions of parents’ long-term care costs to their affluent heirs at taxpayers’ expense? Answers after the ***news.***

*** BELATED HAPPY BIRTHDAY. On April 1^st the Center for Long-Term Care Reform celebrated 26 years in operation. No fooling! To date, the Center and Steve Moses have published 1,382 LTC Bullets, provided a continuous supply of LTC E-Alerts, conducted many state and national studies and educated through countless speeches, media interviews, and articles. Most recently, Steve published “Long-Term Care: The Problem” and “Long-Term Care: The Solution” with the Paragon Health Institute, which also produced this “virtual LTC event” covering those papers’ issues in depth. All of this while remaining only a phone call or email away to answer questions about why long-term care faces mounting challenges in the U.S. and what to do about it. This work has been in service of our mission: to ensure 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. To our many supporters, both financial and “moral,” individual and corporate, thank you for ensuring our longevity to this point. We would not be here without you. For anyone looking to become a new member or to renew a membership, please consider doing so and help us continue our work. You’ll find our membership schedule here. Join the Center and show your support here. Please contact Damon at 206-283-7036 or damon@centerltc.com with any questions. Thank you so much. ***

LTC BULLET: HOW MEDICAID HELPS THE AFFLUENT AT THE EXPENSE OF THE POOR

LTC Comment: We covered this same topic a decade ago in “LTC Bullet: GAO Punts on Medicaid Planning,” July 3, 2014. That Bullet linked to four others which describe GAO
“studies that downplay the impact of Medicaid’s loose and easily manipulated long-term care eligibility rules.” Specifically:

LTC Bullet: GAO on LTCI Partnerships, June 20, 2007: GAO drops the ball again on the issues of Medicaid, long-term care financing and private insurance.
LTC Bullet: GAO AWOL on LTC TOA, May 2, 2007: The Government Accountability Office has again displayed stunning miscomprehension of the Medicaid eligibility, Medicaid planning and transfer of assets issues.
LTC Bullet: Georgetown, GAO and Kaiser: The Bermuda Triangle of Good LTC Policy, January 25, 2006: LTC doubletalk is not the exclusive province of Medicaid planners and AARP lobbyists. Otherwise often reliable analysts get long-term care policy wrong too.
LTC Bullet: GAO on TOA Underwhelms, October 5, 2005: The Government Accountability Office's new report on Medicaid asset transfers asks the wrong questions, uses the wrong data, and so provides few helpful answers.

Why would an agency charged with ensuring “accountability of the federal government for the benefit of the American people” dodge key issues and downplay its own findings? Could it be that affluent people vote more than poor people do? So benefiting the affluent is more expedient politically. Whatever the reason, the evidence is overwhelming. Government stacks the LTC deck against the needy and GAO is complicit.

Here’s one more example:

“How Medicaid Helps the Affluent at the Expense of the Poor”
by
Stephen A. Moses

Medicaid spends huge sums on long-term care (LTC), $217 billion for 5.6 million recipients in 2020. Reputed to be a program for the poor, Medicaid still allows affluent people to shelter billions while consuming its LTC benefits. Arguably half or more of what Medicaid spends on LTC protects uncounted wealth retained by recipients, exempt from asset spend down.

Medicaid LTC applicants and recipients can usually have no more than $2,000 in countable assets. Countable assets are cash or anything else easily convertible to cash. But most large assets seniors own are not countable. Such exempt assets include most home equity, one vehicle, a business, prepaid burial expenses, personal care contracts, annuities, and others.

Countable assets are easily made non-countable by purchasing exempt assets. Medicaid planners, who help their clients qualify for Medicaid without spending down for medical or long-term care, provide them extensive lists of exempt assets to purchase. Books and the internet offer similar advice.

We know little about how much wealth that could have been used to purchase LTC privately has been converted to become a Medicaid cost and a taxpayer liability. No systematic study has ever been done. In 2014, however, four members of Congress asked the Government Accountability Office (GAO) to examine methods people use to reduce countable assets in order to qualify.

GAO responded with a report full of intriguing facts and potentialities. For example: GAO found that14 percent of approved Medicaid applicants … had over $100,000 in total resources; 75 percent owned noncountable resources with a median amount of $12,530; 31 percent owned homes with a median value of $68,350; 3 percent owned real property other than their primary residence with a median value of $47,300.

GAO explained that these findings were based on a small sample of cases in only three states and were not generalizable. GAO did not stress the findings’ significance, seeming rather to downplay their importance. But what if we imagine these results actually were generalizable nationwide? Would they justify further study to find out for sure?

Medicaid covered 5.6 million LTC recipients in 2020. If 14 percent of them had over $100,000 in resources, then $78.4 billion went unused for private LTC financing at Medicaid’s expense. That’s a lot of wealth for a poverty program to protect, fully 36.1 percent of the total $217 billion Medicaid spent on LTC.

If 75 percent of LTC recipients owned a median average of $12,530 each, then $52.6 billion found its way into sheltered wealth, largely as prepaid burial expenses. That is a giant subsidy for the funeral industry at the expense of LTC financing for the poor, fully 24.2 percent of total LTC expenditures.

If 31 percent of 5.6 million Medicaid recipients owned homes with a median value of $68,350, then $118.7 billion of real estate value was diverted from private LTC financing. Given that Medicaid exempts a minimum of $713,000 up to a maximum of $1,071,000 in home equity, it is evident that Medicaid replaces practically all potential LTC liability from personal home equity. The loss to Medicaid equals 54.7 percent of what it spends on LTC.

If 3 percent of recipients own real property other than their primary residence, such as vacation homes, with a median value of $47,300, then $7.9 billion is diverted from private LTC financing into a Medicaid liability while preserving a personal luxury. That’s where 3.6 percent of Medicaid LTC expenditures go.

We have no way to know how realistic GAO’s state-level estimates are. But we can say they are probably very conservative. GAO acknowledged that its results were based solely on information in case records none of which they verified independently. GAO made no attempt to interview recipients’ families or to analyze outside bank or tax records. Nor were assessors’ offices checked for ownership records or recorders’ offices for property transfers. A thorough analysis of their sample employing these tried and true investigative methods would surely have identified substantially more sheltered wealth.

Even though GAO’s findings are not generalizable, aren’t they significant enough to suggest we ought to investigate further? It is long past time to conduct a study based on a valid random sample of Medicaid LTC cases large enough to generalize to the whole United States. Whatever such a study would show, it is already incontrovertible that Medicaid diverts billions of dollars from private LTC financing into heirs’ inheritances.

There is no better reason than that to support mandatory Medicaid estate recoveries. They recoup at least some of this lost wealth to support the program’s truly needy recipients. Proposals to repeal or restrict Medicaid estate recoveries only redound to the benefit of more prosperous others. They reward failure to take responsibility privately for LTC.

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Updated, Monday, May 20, 2024, 10:03 AM (Pacific)

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LTC E-ALERT #24-019: LTC NEWS AND COMMENT

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

House Republicans introduce measure to overturn nursing home staffing rule
All important questions and answers: Why a bankruptcy of nursing care insurance affects us all
Premiums for long-term care insurance rise 3.5% for elderly
Task force recommends state reduce reliance on nursing homes
The War on Prices: How Popular Misconceptions about Inflation, Prices, and Value Create Bad Policy
Ageless Aging: A Woman’s Guide to Increasing Healthspan, Brainspan, and Lifespan
A solution to the crisis in long-term care? The Big Story

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Updated, Monday, May 13, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-018: LTC NEWS AND COMMENT

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

Paragon Prognosis: Nursing Bad Policy
Nursing homes wield pandemic immunity laws to duck wrongful death suits
Program standard for income and resources
Long-term care: Options and considerations
Staffing mandate costs estimated at $6.5B annually, with 1 in 4 residents at risk of displacement, AHCA warns
IRS Releases 2025 Contribution Limits for HSAs
Why supporters of Washington’s long-term care program are worried
Growing Cost of Obamacare, Dire Medicare Trustees Report, and More
A gene long thought to just raise the risk for Alzheimer’s may cause some cases
Letting Heirs Bilk Medicaid Is Bad Policy
Social Security, Medicare solvency improves slightly, but ‘significant financing issues’ remain: reports

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Updated, Friday, May 10, 2024, 10:03 AM (Pacific)

Seattle—

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LTC BULLET: CUI BONO LTC?

LTC Comment: Who benefits from Medicaid LTC? Ironically, not the poor, but instead, the affluent. We explain after the ***news.***

*** JOIN the Center. If you receive today’s LTC Bullet from a friend or colleague, please consider joining the Center for LTC Reform in your own right. You’ll receive our bi-weekly LTC Bullets and our weekly summaries, LTC E-Alerts, of our daily LTC Clippings. There is no better way to stay abreast of everything happening in the LTC policy space. On top of that, you will support and be part of our mission to reform LTC public policy. Our goal is to encourage responsible LTC planning instead of rewarding consumers’ denial that leads to excessive reliance on Medicaid. Find all the membership options here. Join and contribute here. ***

5/7/2024, “Letting Heirs Bilk Medicaid Is Bad Policy,” by Stephen Moses and Brian Blase, National Review
Quote: “More than a dozen members of the House of Representatives have introduced legislation that would increase federal Medicaid spending by ending “estate recoveries.” The proposal, which was discussed at an Energy and Commerce Committee legislative hearing on April 30, would let individuals secure their inheritances by putting their parents on Medicaid and forcing taxpayers to fund their long-term care (LTC).”
LTC Comment: Repealing Medicaid estate recoveries would be terrible public policy as we explained recently in “LTC Bullet: The Fiscal Imperative and The Moral High Ground of Medicaid Estate Recoveries,” April 26, 2024. Hopefully, this piece in National Review will help to quell that idea once and for all. ***

LTC BULLET: CUI BONO LTC?

LTC Comment: Cui bono, “who benefits?,” is a Latin term with two related meanings: 1: a principle that probable responsibility for an act or event lies with one having something to gain; and 2: usefulness or utility as a principle in estimating the value of an act or policy. When it comes to long-term care (LTC), cui bono?

Medicaid dominates America’s LTC service delivery and financing system. Ostensibly, Medicaid benefits the poor and under-privileged most. It has a means test with limits on applicants’ and recipients’ incomes and assets. People with wealth exceeding these limits are supposed to pay for their own LTC until they “spend down” to Medicaid’s low income ($943 per month) and asset ($2,000) standards.

The often stated intent of this system is to ensure that the scarce resources of this Great Society poverty program go primarily to its intended, neediest beneficiaries. But it has another objective as well: to incentivize more affluent people to plan ahead for LTC risk and cost. Surely most people would rather save, invest or insure for LTC than to be forced to expend their incomes and savings until they become impoverished and eligible for Medicaid.

But is this how the system really works? Cui bono? Whom does this system benefit and whom does it hurt the most?

Ironically, Medicaid hurts the poor, its intended beneficiaries, most. They have low incomes and assets at the start. High LTC costs consume what little they have very quickly. Poor people usually lack the advice of lawyers and financial experts. So they do not learn about ways to protect and preserve what they have by circumventing the spend down rules. Once on Medicaid, they tend to receive nursing home care in the least desirable facilities, have reduced access to home and community-based services, and suffer many other deficiencies compared to private-pay patients.

Why is this true? Is Medicaid underfunded? Does it lack the resources to provide care access and quality comparable to what is available to people who pay privately for LTC? I don’t think so. Medicaid LTC is enormously expensive and its expenditures continue to grow steeply every year. What else could explain why such a richly funded program does such a poor job for the people who need it most?

The answer lies in understanding who really benefits most from Medicaid LTC. Medicaid’s supposedly draconian income and asset limits are a myth. Income rarely obstructs eligibility because states either subtract private medical and LTC expenses before they apply a low income standard or they allow income diversion trusts to achieve the same outcome. Nor do assets stand in the way of eligibility for the affluent. Most large assets, such as home equity, a business, and IRAs, are exempt. So people with big incomes and assets actually qualify for Medicaid LTC more easily and with less financial disruption than the poor.

But why would they? Why would people with substantial wealth choose to take advantage of Medicaid’s financial eligibility loopholes to qualify for a welfare program widely considered to be deficient in so many ways? Financial and legal advisers show them how to preserve their wealth, evade “mandatory” Medicaid estate recovery, and gain access to the very best LTC providers, the ones to which poor people have little or no access.

How can they do that? Restructuring high income and assets to qualify a prosperous client for Medicaid LTC and to avoid estate recovery is easy and routine. Getting the same client access to the best LTC Medicaid has to offer requires a second step. Instead of going directly onto Medicaid, the affluent applicant is advised to hold back enough money to pay privately for at least a few months. This “key money” gains access to the best nursing homes and home health providers, who have relatively few Medicaid “beds.” They are less dependent on Medicaid’s extremely low reimbursements, so they are able to provide better care. But they are desperate for private payers at much higher rates than Medicaid pays to make up the difference. So the best facilities welcome all private payers to the exclusion of poor people already on Medicaid. Once in a good facility, federal and state laws prevent residents’ expulsion based solely on a change of payment source from private to Medicaid.

So, bottom line, cui bono from Medicaid LTC? Not the poor. They lose everything quickly. They are shunted into the worst facilities and services Medicaid provides. The affluent get the best of what Medicaid offers. That has been true since Medicaid came on the scene in 1965. It is why so few prosperous people plan early for LTC.

Medicaid tries to do too much for too many and ends up doing worst for the poor and best for the affluent who take advantage. The system is upside down and backwards, but easily fixed by understanding what’s wrong (see “Long-Term Care: The Problem”) and changing policies in ways that follow logically (see “Long-Term Care: The Solution.”)

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Updated, Monday, May 6, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-017: LTC NEWS AND COMMENT

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

‘No time to mislead the public’ on nursing homes, Biden told; experts offer solutions
Government shouldn’t micromanage nursing homes
Genworth's CEO Aims for 2025 Long-Term Care Insurance Launch
Brain function of older adults catching up with younger generations, finds study
Restraining Medicaid’s Budget-Busting Waivers
State panel approves nursing home worker minimum wages, including $24 hourly for CNAs
The Coming Elder Care Crisis
US long-term care costs are sky-high, but Washington state’s new way to help pay for them could be nixed

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Updated, Monday, April 29, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-016: LTC NEWS AND COMMENT

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

Promoting WA Cares is unnecessary, questionable
The Path Bill Gates Sees to Overcoming Alzheimer’s Biggest Remaining Challenges
Dementia care comes with ‘catastrophic’ costs for older adults, families, study finds
Nursing Homes, HHS on Collision Path Over Staffing Mandate
Analysis finds 4 in 5 nursing facilities don’t meet staffing requirements
Medi-Cal Now Considers Income, Not Assets, of Enrollees
States lack resources to support new Medicaid waiver programs, association asserts
BREAKING: CMS increases hours to 3.48 in final staffing rule

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Updated, Friday, April 26, 2024, 10:03 AM (Pacific)

Seattle—

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LTC BULLET: THE FISCAL IMPERATIVE AND THE MORAL HIGH GROUND OF MEDICAID ESTATE RECOVERIES

LTC Comment: The affluent qualify easily for Medicaid LTC benefits. So recovering the cost of their care from their estates is necessary to discourage excessive use of the program by the non-poor, protect scarce resources for the needy, incentivize responsible LTC planning, and prevent taxpayer financed windfalls for heirs who put their parents on welfare. More after the ***news.***

*** March 2024, “Data-Driven Pre-Claim Wellness Programs Bend the LTCI Claims Cost Curve: The Numbers Are In.,” by Assured Allies and Faegre Drinker

Quote: “With the average age of nearly 7 million long-term care insurance policyholders above 80 and the rising cost of care, insurance carriers and regulators must work together to offer solutions that bend the claims cost curve. This report presents the groundbreaking success of one such solution—designed and executed by Assured Allies—based on the findings from an analysis of its program deployed with five long-term care carriers and 135K lives for over three years.

“The results of our analysis show that the program delivered not only consistent claim reduction patterns across all five carrier program deployments but also an impressive ~10% overall reduction in claims payments in our longest-running program.

“In addition to the financial impact of the program, the policyholder benefit has been overwhelmingly positive, both measured by customer satisfaction (average Net Promoter Score of 50+) and strong clinical outcomes measured by Patient Reported Outcome Measures (PROMs).”

LTC Comment: Click through for all the details in this ground-breaking report. It documents Center-corporate-member Assured Allies’ data-backed success enhancing policyholder satisfaction while reducing claims ten percent. Remarkable! ***

*** BARRY FISHER RADIO: On April 23, 2024, Steve Moses appeared on “Protecting What Matters with Barry Fisher” on KPRL, Paso Robles, CA, 12:25 – 1:00pm

Listen to a recording of the show here.

Stephen Moses, President, Center for Long-Term Care Reform: Topics

Why and how current methods of paying for long-term care cannot continue.
Saving Medicaid/Medi-Cal for the truly needy.
Commonsense solutions for America’s aging population.

“Protecting What Matters, is the broadcast that helps you become better shoppers & buyers of services and products to protect various aspects of your life, health and property. We also explore current events, our history, community, institutions and local treasures that are notable and worth preserving.”

Barry invited Steve to do quarterly updates as a “regular” on the show. Stay tuned! ***

LTC BULLET: THE FISCAL IMPERATIVE AND THE MORAL HIGH GROUND OF MEDICAID ESTATE RECOVERIES

LTC Comment: I got my start in long-term care analysis with a study for the Health Care Financing Administration in 1985. HCFA suppressed that work, but the USDHHS Inspector General and the General Accounting Office did national studies based on it. I conducted the IG’s study, wrote its report and consulted on GAO’s review. In the Omnibus Budget Reconciliation Act of 1993, most of our recommendations in those reports became federal law. OBRA ’93 made Medicaid estate recoveries mandatory. But it also made qualifying for Medicaid LTC benefits a little harder to achieve and it discouraged divesture of assets to quality. The plan behind these studies and the legislation they inspired was to keep Medicaid eligibility generous but to encourage the public to plan early for LTC and avoid Medicaid dependency. This “kinder and gentler” approach to encourage private LTC planning and preserve Medicaid resources for the needy is under attack again. So we need to revisit the issue and explain why estate recoveries are even more necessary today than they were 30 years ago.

The Center for Long-Term Care Reform has published 14 LTC Bullets about and defending estate recoveries since 1998.

Here’s our latest appeal for rational public policy on LTC based on keeping the affluent off Medicaid and recovering from their estates when they do take advantage of the program.

“The Fiscal Imperative and The Moral High Ground of Medicaid Estate Recoveries”
by
Stephen A. Moses

State officials are "picking the bones of the elderly."

That's how one critic described "estate recoveries," the mandatory recoupment of benefits legally paid by Medicaid from the estates of deceased recipients.

This vital revenue source is periodically under attack, and now again. Calls for repeal have failed before and are being proposed again.

But, like most things in life, this issue is complicated. Here's a primer and fair warning about a government program that is almost certain to touch you or a loved one sooner or later . . . unless you take the proper financial planning steps to avoid it.

Medicaid is a means-tested, public assistance program. In a word, welfare. It is very expensive. Nationally, Medicaid cost over $805 billion in 2022, almost as much as Medicare ($944 billion).

At the state level, Medicaid is the second largest spending category after primary and secondary education. States must balance their budgets, so they need more, not less, estate recoveries. Undue hardship waivers protect the truly needy while these recoveries help fund benefits for all.

Medicaid is a critical health care safety net for poor women and children. But the program is also the primary payor for long-term care (LTC), the mostly custodial assistance critically needed by frail or infirm elderly and disabled people.

LTC consumes a disproportionate share of Medicaid expenditures. While 79% of Medicaid recipients are low-income children or adults, they consume only 44% of the program's costs. Just 21% of Medicaid recipients are aged, blind or disabled, but they consume 55% of Medicaid expenditures, mostly for long-term care.

Why should you care? Many reasons, the first and foremost of which is: you are paying for Medicaid long-term care with your state and federal taxes. You can feel good about that. After all, Medicaid is America's safety net ensuring access to long-term care for the vulnerable poor.

But, Medicaid has become much more than that. It is the principal payor of long-term care for nearly everyone, including many of the well-to-do. How can that be true if Medicaid is welfare?

Over the years, Medicaid eligibility "bracket creep" has expanded the program to cover even upper-middle-class people whom it was never intended by Congress to serve.

For example, income is rarely an obstacle to Medicaid long-term care eligibility because all medical expenses, including expensive nursing home costs, are deducted from people's income before Medicaid’s “low income” standard is applied.

Assets are limited to $2,000 except that home equity, one business, an automobile, prepaid burial costs, term life insurance and IRAs are exempt in unlimited amounts. Many additional assets are exempt within limits.

On top of all that, thousands of attorneys and financial planners specialize in sophisticated techniques to impoverish their affluent clients artificially to qualify them for Medicaid LTC benefits.

Bottom line, there is no limit on how much income or assets people can have while receiving Medicaid LTC benefits as long as their medical expenses are high enough, their assets are held in exempt form, or they hire a "Medicaid planner."

Maybe you're thinking: "You mean I can ignore the huge potential risk and cost of long-term care, avoid the premiums for private insurance, keep most of my wealth, and the government will pay if I ever need care? Sounds pretty good to me."

Not so fast. Leaving aside the critical fact that Medicaid has a dismal reputation for problems of access, quality, reimbursement, discrimination and institutional bias, there are other critical downsides for you to consider.

Ever since 1993, the federal government has required state Medicaid programs to recover the cost of their care from the estates of deceased recipients. Most states have not pursued these "estate recoveries" aggressively before, but that will surely change as Medicaid's enormous fiscal pressure on the state and federal coffers continues to mount.

Expect government at all levels to constrain Medicaid eligibility and to pursue estate recoveries far more aggressively in the future. Their goal is to make sure Medicaid survives as a safety net for the poor without bankrupting taxpayers and the economy. Over time, everyone with any significant wealth will be expected to plan early for long-term care; save, invest or insure against that risk; and pay their own way when the time comes.

When the massive baby boom generation finally needs long-term care, Medicaid will not be an option for any but the most needy, if it survives at all. In the future, the only way to obtain quality long-term care, especially in the preferred settings of one's own home or an assisted living facility, will be to pay privately. The only way to pay privately will be to spend your own wealth including your home equity or to own private long-term care insurance.

So, here's the bottom line about Medicaid estate recoveries.

First: estate recoveries are a fiscal necessity to preserve Medicaid as America's long-term care safety net for the poor as long as possible.

Second: if you want to preserve your own wealth against the cost of long-term care, don't expect a free ride on the public welfare system. Plan to use your savings, home equity or buy private long-term care insurance.

The question to ask yourself about estate recoveries is this: should Medicaid help the needy with LTC costs or give heirs a windfall for placing their ailing parents on public assistance?

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Updated, Monday, April 22, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-015: LTC NEWS AND COMMENT

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

CMS finalizes controversial 80/20 rule
Here's Why Extended Care Planning Remains Critical for Women
Medicare’s push to improve chronic care attracts businesses, but not many doctors
Routine jobs raise the risk of cognitive decline by 66% and dementia by 37%, study says
Data-Driven Pre-Claim Wellness Programs Bend the LTCI Claims Cost Curve: The Numbers Are In
Democrats push new LTC workforce bill as offset to nursing home mandate
Setting the Record Straight on Long-Term Care Policy
Bill would end federal mandate for states to recoup Medicaid costs for HCBS, care
Rethinking Insurance for an Aging Population

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Updated, Tuesday, April 16, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-014: LTC NEWS AND COMMENT

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

The Medicaid LTC snafu
Home care sees largest price jump in history, BLS report finds
Setting the Record Straight on Long-Term Care Policy
Health advocates decry changes to long-term home care program
Home healthcare for elderly sees largest price increase ever
Working conditions, not personal reasons, causing nurses to leave long-term care: study
Immigration reform needed to solve caregiver shortage: Brookings
Calif. consumer group asks NAIC to lead on U.S. long-term care financing issue
California’s senior living and care sector at ‘critical juncture’

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Updated, Friday, April 12, 2024, 10:03 AM (Pacific)

Seattle—

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LTC BULLET: LONG-TERM CARE DISPARITIES: ARE THEY RACISM OR ONLY ECONOMIC INEQUITY?

LTC Comment: Are LTC disparities due to racism, economic inequity, or both? We address this sensitive, but compelling question after the ***news.***

*** JOIN the Center; SUBSCRIBE to LTC Clippings. Join the Center for Long-Term Care Reform and receive our bi-weekly LTC Bullets and weekly LTC E-Alert summaries of our daily LTC Clippings. For a little extra, get the Clippings by email in real time. Check out our “Membership Levels and Benefits” schedule for all the details or contact Damon at 206-283-7036 or damon@centerltc.com. If you’re not a member yet, here are the subjects of the Clippings you missed last week. Each Clipping included the following information plus a representative quote from the source and Steve Moses’s brief analysis of why it matters.

4/5/2024, “Report: Medicaid Payment Variability Hinders Access To Home- and Community-Based Services,” by Patrick Filbin, Home Care News

4/5/2024, “Researchers call to reform long-term care as Israelis live longer,” Jewish News Syndicate

4/3/2024, “Medicare, Medicaid authorized $100B in improper payments last year, GAO reveals,” by Adam Healy, McKnights Home Care

4/2/2024, “Changing Perspective Part 1: My Day as a Post Acute Care Resident,” by Doug Farmer, Provider

4/1/2024, “Can a Nursing Home Take Our Savings? We Have $350,000 in IRAs,” by Mark Henricks, Yahoo!Finance

4/1/2024, “Aging In Place: The New American Dream,” by Larry Nisenson, Advisor Magazine

4/1/2024, “Senior Housing Rebounds as Boomers Move In,” by Peter Grant, Wall Street Journal (pay wall)

Your Center for Long-Term Care Reform membership will get and keep you up to speed on everything happening in LTC services and financing. Join now! ***

LTC BULLET: LONG-TERM CARE DISPARITIES: ARE THEY RACISM OR ONLY ECONOMIC INEQUITY?

LTC Comment: Last summer I came across a webinar titled “A Matter of Justice: Racism as a Fundamental Cause of LTC Inequities.” Dubious, but intrigued, I watched this well-organized and documented presentation by Professor Shekinah Fashaw-Walters of the University of Minnesota’s School of Public Health. Afterwards, I followed the links she provided to scholarly articles on the topic. Those sources led me to many more. I’m working on a paper, provisionally titled “Structural Long-Term Care Racism: The Cause and the Solution.” In the meantime, facing criticism that “it’s not racism, but only economic inequity,” I decided to think through that distinction. This essay is the outcome of that reflection.

“Long-Term Care Disparities: Are They Racism or Only Economic Inequity?”
by
Stephen A. Moses

Imagine if Jim Crow were a state Medicaid director today. We would not be surprised to see this quote about racial disparities in his domain.

[B]lacks are much more likely than whites to be located in nursing homes that have serious deficiencies, lower staffing ratios, and greater financial vulnerability.[1]

We might also expect that deficiencies experienced disproportionately in Crow’s state by “Black, Indigenous, and persons of color (BIPOC)” users would include segregation;[2] less access to HCBS,[3] assisted living,[4] mental health services,[5] pain medication,[6] influenza vaccinations,[7] hospital and hospice care[8] and ADRD care;[9] more physical restraints;[10] higher COVID-19 incidence, hospitalization and death counts;[11] and more pressure ulcers.[12]

We would reasonably attribute these disparities in long-term care access and quality to blatant racism by the authority in charge. That is, to Medicaid Director Crow and his racially prejudiced minions.

Thankfully, no current state Medicaid program to my knowledge is run by a blatant racist. But every one of those race-based disparities listed above persists in America today according to the peer-reviewed academic journals cited.

Is it racism? If not, what else is at work? The obvious answer is that socially and economically marginalized groups, regardless of their racial make-up, suffer poor care disproportionately. But that is a distinction without a difference. Racial minorities are often among socially and economically disadvantaged groups.

So the question becomes: why are economically disadvantaged people, including racial minorities, treated less well in terms of medical and long-term care? Is it deliberate animus? Hatred of the poor? Racism?

An explanation has evolved in the literature that blames entrenched laws, regulations and policies without holding contemporary individuals culpable for deliberate bias. It goes by different names—institutional, systemic or structural racism—each term having nuanced differences, but the basic idea is this.

Structural racism operates through laws and policies that allocate resources in ways that disempower and devalue members of racial and ethnic minority groups, resulting in inequitable access to high-quality care.[13]

Could it actually be that disparities in long-term care are unintended consequences of well-intentioned, even noble objectives of fundamentally good, certainly non-racist individuals? Consider one example among many possible involving Medicaid long-term care eligibility.

Medicaid is designed presumably to benefit the poor and underprivileged, including racial minorities, most. Income must be very low ($943/month) and assets $2,000 or less. Clearly the intent of these rules is to ensure that scarce public resources go to those most in need.

But there are other benevolently intended rules that have the opposite effect. People with much higher incomes and assets also qualify for Medicaid LTC benefits. That’s because Medicaid deducts personal medical and LTC expenses before applying its low income cap and most larger assets, such as home equity, are exempt.

The net effect of Medicaid LTC law, regulations and policies is that the poor, middle class, and even the affluent qualify for benefits. In fact, Medicaid planning experts specialize in artificially impoverishing even the wealthy so they too can take advantage of the public assistance program ostensibly targeted to the poor.

The obvious consequence of these laws and policies is that more people rely on Medicaid than would be the case if the program were only available to the neediest. That means fewer resources are available to help those most in need. The result: low provider reimbursements, caregiver shortages, nursing home bias, access and quality problems.

While these deficiencies affect everyone dependent on Medicaid, they impact the underprivileged and racial minorities most. That is because more affluent people, including the racial majority, are able to get the best care Medicaid has to offer, essentially crowding out recipients with less money and influence.

For example, affluent families can subsidize a relative’s Medicaid-funded care by paying extra directly to a nursing home to purchase special meals or a private room. Prosperous people tend to reside in upscale neighborhoods where the better LTC providers are. So, when they qualify for Medicaid, they have immediate access to the best facilities that are least dependent on low Medicaid reimbursements. People with “key money” are often advised to pay privately for a while before converting to Medicaid. That assures them access to the best institutional and home care providers who are desperate to supplement meager Medicaid funding with private payers at market rates.

Bottom line, Medicaid policies try to do too much for too many and end up doing too little for the people who need the help most. That’s where the egregious discrepancies in care access and quality that hurt underprivileged people including racial minorities most, come from.

Is it racism? Not in the Jim Crow or Bull Connor sense. But the consequences may be indistinguishable from the structural long-term care equivalent.

End Notes

[1] David Barton Smith, Zhanlian Feng, Mary L. Fennel, Jacqueline S. Zinn, and Vincent Mor, “Separate and Unequal: Racial Segregation and Disparities in Quality Across U.S. Nursing Homes,” Health Affairs, 26, no. 5, (September/October 2007), p. 1448, https://www.healthaffairs.org/doi/10.1377/hlthaff.26.5.1448.

[2] Momotazur Rahman and Andrew D. Foster, “Racial Segregation and Quality of Care Disparity in US Nursing Homes,” Journal of Health Economics, 39, (January 2015), p. 3, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4293270/.

[3] Chanee D. Fabius, Jessica Ogarek, and Theresa I. Shireman, “Racial Disparities in Medicaid Home and Community-Based Service Utilization among White, Black, and Hispanic Adults with Multiple Sclerosis: Implications of State Policy,” Journal of Racial and Ethnic Health Disparities, 6, (December 2019), https://pubmed.ncbi.nlm.nih.gov/31359384/.

Zhanlian Feng, Mary L. Fennell, Denise A. Tyler, Melissa Clark, and Vincent Mor, “Growth of Racial and Ethnic Minorities in US Nursing Homes Driven by Demographics and Possible Disparities in Options,” Health Affairs, 30, no. 7, (July 2011), https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2011.0126.

Rebecca J. Gorges, Prachi Sanghavi, and R. Tamara Konetzka, “A National Examination of Long-Term Care Setting, Outcomes, and Disparities Among Elderly Dual Eligibles,” Health Affairs, 38, no. 7, (July 2019), https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2018.05409.

[4] Meghan Jenkins Morales and Stephanie A. Robert, “Black–White Disparities in Moves to Assisted Living and Nursing Homes Among Older Medicare Beneficiaries,” Journals of Gerontology: Social Sciences, 75, no. 9, 2020, https://academic.oup.com/psychsocgerontology/article/75/9/1972/5610255.

[5] Maricruz Rivera-Hernandez, Amit Kumar, Gary Epstein-Lubow, and Kali S. Thomas, “Disparities in Nursing Home Use and Quality Among African American, Hispanic, and White Medicare Residents With Alzheimer’s Disease and Related Dementias,” Journal of Aging and Health, 31, no. 7, (August 2019), https://journals.sagepub.com/doi/abs/10.1177/0898264318767778.

[6] Deborah S. Mack, Jacob N. Hunnicutt, Bill M. Jesdale, and Kate L Lapane, “Non-Hispanic Black-White disparities in pain and pain management among newly admitted nursing home residents with cancer,” Dove Press Journal of Pain Research, 11, (2018), https://pubmed.ncbi.nlm.nih.gov/29695927/.

[7] Jasmine L. Travers, Krista L. Schroeder, Thomas E. Blaylock, and Patricia W. Stone, “Racial/Ethnic Disparities in Influenza and Pneumococcal Vaccinations Among Nursing Home Residents: A Systematic Review,” The Gerontologist, 58, no. 4, (2018), https://pubmed.ncbi.nlm.nih.gov/28329831/.

[8] Nan Tracy Zheng, Dana B. Mukamel, Thomas Caprio, Shubing Cai, and Helena Temkin-Greener, “Racial Disparities in In-Hospital Death and Hospice Use Among Nursing Home Residents at the End-of-life,” Medical Care, 49, no. 11, (November 2011), https://pubmed.ncbi.nlm.nih.gov/22002648/.

[9] Rivera-Hernandez, et al., “Disparities in Nursing Home Use and Quality Among African American, Hispanic, and White Medicare Residents With Alzheimer’s Disease and Related Dementias.”

[10] Kimberly M. Cassie and William Cassie, “Racial disparities in the use of physical restraints in U.S. nursing homes,” Health & Social Work, 38, no. 4, (November 2013), https://pubmed.ncbi.nlm.nih.gov/24432487/.

[11] Rebecca J. Gorges and R. Tamara Konetzka, “Factors Associated With Racial Differences in Deaths Among Nursing Home Residents With COVID-19 Infection in the US,” JAMA Network Open, 4, no. 2, (February 2021), https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7876590/.

Rohan Khazanchi, Charlesnika T. Evans, and Jasmine R. Marcelin, “Racism, Not Race, Drives Inequity Across the COVID-19 Continuum,” JAMA Network Open, 3, no. 9, (September 2020), https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2770954.

[12] Shubing Cai, Dana B. Mukamel, and Helena Temkin-Greener, “Pressure ulcer prevalence among Black and White nursing home residents in New York State: Evidence of racial disparity?,” Medical Care, 48, no. 3, (March 2010), https://pubmed.ncbi.nlm.nih.gov/20182267/.

[13] Ruqaiijah Yearby, Brietta Clark, and José F. Figueroa, “Structural Racism in Historical and Modern US Health Care Policy,” Health Affairs, 41, No. 2, (February 2022), p. 187, https://www.healthaffairs.org/doi/10.1377/hlthaff.2021.01466.

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Updated, Monday, April 8, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-013: LTC NEWS AND COMMENT

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

Report: Medicaid Payment Variability Hinders Access To Home- and Community-Based Services
Medicare Advantage Program to Restructure Agent, Broker Pay
Researchers call to reform long-term care as Israelis live longer
Medicare, Medicaid authorized $100B in improper payments last year, GAO reveals
Changing Perspective Part 1: My Day as a Post Acute Care Resident
Can a Nursing Home Take Our Savings? We Have $350,000 in IRAs
Aging In Place: The New American Dream
Senior Housing Rebounds as Boomers Move In

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Updated, Monday, April 1, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-012: LTC NEWS AND COMMENT

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

The seven most important questions about Medicaid
The Long-Term Care Planners' Club Meeting
Americans Reducing Retirement Savings And Taking On Debt Due To Inflation
Providers applaud long-awaited update to Older Americans Act programs
Rates for nursing homes, in-home care down: report
State is gathering stories about long-term care
Why the New Old Age Could Be Different
‘Money Out of Our Pockets’: $274.9M in Nursing Home Revenue Lost For Every Percentage MA Plans Grow
It's Late, You're Tired, and All You See Are No Vacancy Signs
2 senior living companies file for Chapter 11 bankruptcy protection
SNF, home care spending outpaced by overall personal healthcare spending

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Updated, Friday, March 29, 2024, 10:03 AM (Pacific)

Seattle—

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LTC Comment: ILTCI ’24 was another successful industry convocation. Your “virtual visit” to the conference follows the ***news.***

*** OUR OBJECTIVE in offering these “virtual visits” to the conference is to give those who did not attend some of the flavor of the experience. We’ve published dozens of these reports over the years. You can find many of them by going here and searching for “virtual visit.” Check out our History of LTC Insurance Conferences (2021) for an overview of LTCI industry conferences going back to ILTCI #1 in January 2001 at the Hyatt Regency in Miami, Florida. If you know some of the leading lights in the industry, you’ll recognize their younger selves in several pictures. Happy reading! ***

LTC BULLET: ILTCI ‘24 VIRTUAL VISIT

LTC Comment: The 2024 Intercompany Long-Term Care Insurance Conference convened March 17-20 at the Town & Country resort in San Diego, California. This year’s theme was “We’re Up to Something Good” and the program delivered in full measure.

For me, the meeting kicked off on Sunday, the 17^th with a visit to the Society of Actuaries Long-Term Care Section meeting.

Discussion of the section’s 2024 initiatives covered their planned webcasts on international LTC programs, standalone or combo products, and/or an update on state LTC programs. Other topics included podcasts, past and future, and a proposal for a Medical LTC Symposium, presented by Sally Leimbach.

The opening reception Sunday night from 5pm to 7pm featured ample food and drink provided by conference sponsors that fueled amiable networking, allowing participants to renew old friendships and make new professional contacts.

The conference opened in earnest on Monday morning, March 18. Karen Smyth, 2024 Conference Chair, welcomed the 950 attendees. She recognized and thanked the many staff, volunteers and sponsors who planned and executed the program.

ILTCI Recognition Award

A highlight of the 2024 conference was the renewed offering of the ILTCI Recognition Award to “showcase the best of our industry and acknowledge their contributions.” The honor was bestowed on Marc Cohen in 2018 and Stephen Moses in 2019, but had not been awarded since, due to pandemic disruptions. To make up for those lost years, two individuals and one company received the award, including a $1,000 honorarium and a trophy. Receiving the ILTCI Recognition Award this year were:

Ronald R. Hagelman, “a teacher, cattle rancher, agent, brokerage general agent, corporate consultant, and home office executive” as well as the author of a long-running monthly column in Broker World.

Peter Goldstein of illumifin received and acknowledged the award, presented a $10,000 donation check to the Alzheimer’s Association, and introduced the meeting’s keynote speaker.

LTCI Partners received the company award. Managing Director Tom Riekse acknowledged the award on behalf of the company.

These exceptional individuals and companies are a tribute to ILTCI and represent the achievement of its “vision.” The Intercompany Long Term Care Insurance Conference Association’s (ILTCI) vision is to create an environment for aging in America that includes thoughtful, informed planning that takes into account the most effective and efficient use of resources in addressing the risks and costs of long-term care for all levels of American society.

Keynote Speech

Peter Goldstein introduced keynote speaker: Dr. Maria Carrillo, chief science officer of the Alzheimer’s Association. She delivered a highly relevant and meaningful update on the state of scientific research on Alzheimer’s disease, a welcome change from more general motivational speakers in the past. Her key message was that research considered only “hopeful” and “futuristic” as recently as a few years ago is now a reality. Alzheimer’s is a disease, not normal aging, we can do something about it. There are modifiable and non-modifiable risk factors. Focus on risk reduction. Forty percent of cases could be prevented or delayed by targeting modifiable risk factors. Onset is earlier and slower than previously believed. Exercise, nutrition brain exercise, aggressive cardio vascular activity are critical. There is no ROI (return on investment) so big pharma won’t take this part on. Can diagnose Alzheimer’s before death now. So much happening in this space. Blood tests. New approvals for new drugs. Outcomes: slowing disease progression; being able to do what I want longer. Only a beginning. But Alzheimer’s research is on the move. Finally, there is reason to hope for real progress.

March 18 Breakout Sessions

The first I attended was 10am: “Data Science and AI in Action: Driving Modernization and Enhanced Outcomes.”
Presenters: Joe Long; Doug Elfers; Dan Marsh; and Paddy Horan
Discussion: The use of data science and AI, including machine learning [ML] and innovative data sources, to improve outcomes in the long-term care insurance industry.
Insights: What AI means to them. Everyone psyched up. Broad terms, lot of different methods. Neural networks. Background of AI umbrella. What’s out there? New products and different ideas. Machine learning models. Around for a long time. More data, cheaper costs. Building a model. AI about using a model. Trying to find associations; optimizing outcomes. Supervised vs. unsupervised learning. Generative AI generates new content that is similar to but not identical to data it has been trained on. How can data science leverage AI/ML to improve outcomes of wellness programs in the LTC industry? Get wellness programs to the right people. How ML can optimize LTC insurance claim processes such as eligibility or recertification. How can LTC actuaries use predictive models to expand their analytic capabilities and improve their methods. Policy holder experience side. Cost savings vs. customer experience. Don’t let chatbot interfere with customer experience.

11:15am “Recent Research Findings”
Presenters: Matt Majewski; John O’Leary; Celeste Cobb; Trish Shuhilo; Vince Bodnar moderated.
Discussion: Panel of experts shared findings from four recent studies that cover emerging consumer sentiments about long-term care, long-term care insurance, and the burdens of family caregiving.
Insights: Best research of the past year. 10 minutes each. Matt from Lincoln. Trying to understand consumers; help them overcome obstacles. Motivate advisors. Cost is main obstacle. Consumers underestimate the risk of LTC to retirement savings. Medical and care costs on the rise. More referrals from women 1.5X. Pandemic brought LTC more attention. Consumers want to plan but need help. Family members in conversation is win-win-win. Top barrier to purchase is affordability. Take aways: hard to pinpoint when to bring to client. No life stage. When to have need. Impact on portfolio. Think about emotional sale.
Celeste Cobb from Insurance Marketing Solutions. 2022 industry studies. Survey focusing on caregivers. How caregiving influences decisions. Does caregiving induce future planning? Yes, 93%. What future planning are they most likely to do. These are caregivers. Deferment insight. 62% said take care of it themselves. 32% said talk to financial planner or look into LTCI. Traits of caregivers who say they’ll do future planning. Sandwich generation; owning a home; having planner; financial products; higher education; familiarity with LTCI; assets to protect. Caregivers more likely to consider buying LTCI: Men. Married. Higher income. Homeowner. Higher education. Why hasn’t caregiving motivated caregivers to plan? In a word. Denial. Message. People don’t get it. Most people think health insurance will pay. Comes back to education. Traits of people not interested in LTCI: Female, divorced, no children, retired, no life insurance. Next study, middle America vs. affluent America. Education is end all and be all.
Patricia Shuhilo from One America. Paying for LTC. 1. Cost of LTCI; 2. Medical support for LTC; 3. Not believe they’ll need it. Only 23% said LTCI for payment source. More: self-fund; medicare. Biggest gap, only 18% worked with a financial professional. Only 54% of financial professionals talking about LTC. 25% said used to talk about it but don’t anymore.
John O’Leary’s from O’Leary Management Associates. Unfortunately, I had to leave this session before John presented.

12:30pm “Center for Long-Term Care Reform”
Presenter: Stephen Moses
Discussion: Stephen Moses (Center for LTC Reform president) presented findings from two papers: “Long-Term Care: The Problem” and “Long-Term Care: The Solution” (both published by the Paragon Health Institute. He explained why LTC financing reform has languished since the Great Recession, but will flourish anew soon. He previewed his forthcoming paper “Ending Structural Long-Term Care Racism.”
Insights: This presentation provided a retrospective on what went wrong with LTC services and financing in the U.S. and a forecast of what is likely coming next.

2pm “Projecting the 5^th Decade of LTC Insurance from its First 40 Years”
Presenters: Al Schmitt, Jim Glickman, Claude Thau, Bruce Stahl
Discussion: A lively discussion from industry experts sharing thoughts of where the industry has been, where we are currently, and what the future holds form an actuarial lens.
Insights: Advice to a new CEO? Bruce: always disagree. Claude: avoid gotcha claims provisions. Don’t use provisions that sound better than they are. Challenge staff to explain how product remains good if interest rates go up. Assumption settings, missteps of past. How to train actuaries. Claude has concern about genetic testing. Underwriting: What learned over years: Jim: Doing rate increases. How to get into the middle market. 25% miss rate both ways. Distribution: Past v. future. Claude: Coming back to specialists. Too complicated for financial planners. Liability. Paperwork. Variety of products compounds problem.

3:30pm “LTCI 101 Family Feud”
Presenters: Steve Serfass, Karen Smyth, Sandra Jones and others.
Discussion: Modeled after America’s hottest game show, this session featured Steve Serfass reprising the role of Richard Dawson as two families showed off their LTC knowledge. Karen Smyth led the ILTCI Board Member family facing off against a family populated by audience participants led by Sandra Jones.
Insights: Questions and answers were derived from responses to surveys completed by ILTCI attendees. A good time was had by all.

March 19, 2024 Breakout Sessions

8:45am “LTC Legislative Update”
Presenters: Diane Boyle (NAIFA), Leah Walters (ACLI), Carroll Golden (NAIFA Limited and Extended Care)
Discussion: This polling-format session looked at Federal and State LTC legislation and other initiatives, including wellness programs and the use of external consumer data and information sources.
Insights: Leah: important to understand the states. Governor, legislature, run by one party. Only 10 states with divided government. 80% of country lives in one-party state. 25 insurance commissioners have 3 years of experience or less. Can’t get their attention. 11 elected; 31 appointed. 80% of all legislators up for election in November. Lot of turnover. Have to go in and educate. Background.
Diane: Little done in LTC space. Congress, Medicare for all has greatest interest. 113 members and 14 senators signed on. Introduced. All democrats. Divided government; hard to get anywhere. Other proposals not getting any traction. The last time we had comprehensive legislation: Tom Suozzi. CLASS act before that. Actuaries found would not work. Suozzi is back. Maybe LTC will get traction. But he got Homeland for committee. No groundswell. Bad news on federal side that anything will get done.
Leah: WA Cares. Collections started July 1. Initiative to make optional. Hot issue for Rs and Ds in WA. Keeping lists of who supports and opposes. Don’t want to be on that list. Initiative to make optional expected to pass. Many other states looking at what WA is doing. CA well along. Doing actuarial study. 5 or 6 other states, CT, MD, PA. Not moving. Seeing more studies.
Diane: 64 bills in 29 states. Garnering interest.
Leah: should be actuarially sound, not depend on interest groups.
Diane: Some general health care bills that would include LTC. Wellness programs:
Leah: Consumers want more direct, electronic access to life insurance.

10am “State Tax Mandates: Selling LTC in Face of Legislation”
Presenters: Stephen Forman, Gary Forman, Tom Riekse, Carolyn Olson
Discussion: What does it mean to you and your clients that states are exploring publicly financed LTC solutions? Topics included: talking points for client conversations; can the industry work with states to develop supplemental products; what about a public/private partnership?
Insights: Gary Forman introduced the topic. Tom Riekse: how do you want to position? Get in touch with associations. We didn’t know what reaction would be for opt out. Details fuzzy. Didn’t know how to prepare. Had relationships with brokers. Carolyn, first learned in 2019. Had to get ready. Changed business model to get more people interested. Adjusted as things happened. Had infrastructure to handle it. “Went to town.” Positioned website. Gary: spread like wildfire. Much preparation. Tom: just laid out the facts. Kept our team informed. Steve: Approached carriers. Told them this coming. In couple years, things are going to get crazy. This will be tax avoidance driven. People looking for smallest possible policy. You need systems in place to handle volume. You can do this in other states coming up. Get in front of state legislators. What opt out provision? Look around. If don’t have a seat at the table, you’re on the outside looking in. We spent a lot of time trying to educate. Try to be good educators. Get ahead of the process. Tried to be in front of WA Cares. They were putting out notoriously wrong information. We were getting more traffic to our information than the state. That’s something you can do in other stages. Tom, tried to show people better options. Look at more comprehensive plan. People looking a smaller plans. How much of million dollars place still in force. Carolyn: 1200 cases. 9% have cancelled. $76K premium gone away. Gone back to people and upgraded 8%. Tom, above average drop off. Gary: we work in regulated world. Politicians back into decisions. Legislative process. Steve: WA removed the cap on income. Very small group of high earners responsible for supporting the program. High tech industry, all opted out. CA says we can’t do that.
From audience, Joe Pulitano asked: what will happen with initiative. Switch to voluntary program. Fear is would undermine solvency. Milliman: death spiral. What we’ve heard. Scrap program flat. Sense on the ground; overestimated popularity; tremendous opposition; genuine expectation leaning toward passing. WA Cares goes down in flame. Lot can happen between now and November. Could change. Gary: ship has sailed, nothing happens in the other states. How did you talk about uncertainty? Carolyn: acknowledged didn’t know. Tried to be logical about it.
Steve: look at what these states are doing. Let me tell you what’s happening and why you should be aware. All the urgency things apply. It could be too late. Started 2019 in WA but constant changes. Steve: great publicity. Everyone knows benefit not enough. So shows public need to think about LTC. State of WA puts out information. That is awareness we can’t afford to buy. People call us. Basic strategies. Sell with intention of exempting yourself. Cooperate with us, need something in addition. Maybe if own something at least get a break on the tax. Steve: CA much more vigorously researched. WA eschewed the help of experts. Original sin of WA was not accepting help from experts. Now they’re paying for it. CA learned from that. Lots of creative ideas. Legislators can do anything. Things take so long because elections happening all the time. Whole new crop of legislators.

11:15am “Can WE Chat (GPT) Using AI and Predictive Modeling to Engage with Customers”
Presenters: Robert Eaton, Doug Elfers, Karan Chawla
Discussion: How can we tap into the intersection of artificial intelligence, predictive modeling and personalized experiences to ethically and wisely improve engagement and ROI?
Insights: Robert: Large language model predicting next word in a sentence. Generative AI does more. Using data, multimodal models. Fill in the gaps, pictures, etc. Using models to predict the next thing. Computer based. Chatbots engaging in conversation. Predictive Analytics. Likelihood of future outcomes.
Karan: Customer experience. AI makes like talking to a social worker.
Robert: We use AI to develop machine learning models. Perplexity.ai is one of the best. Gets articles about a subject and summarizes them. How were we 10 years ago vs. now.
Karan: Evolution of what we’re thinking. More simplistic before. At one time, not having to do long form division was amazing. But now can do so much more. Big data sources. Automation. Seeing now where it is going.
Robert: 2014 starting to see new actuarial models. Segmented many ways. Morbidity. Models now much more complicated. More insight into the data. Needed more computer power.
Why be optimistic?
Karan: Only going to make the world more efficient. Make better outcomes for customers.
Robert: A lot of skepticism. He asked for a poem about superhero actuary. Not copying, creating. Marketing LTCI, telling better stories. Easier to get. Power of words. All going to have more access. Using these tools opens new problems and solutions. Very optimistic.
Concerns? Legitimate. Misuse.
10 years ahead? Hard to think in years when changes are weekly.
Robert: All robots.

12:45pm, “Building LTC State Reform Proposals for Collaborative Success”
Presenters: Stephanie Moench (Oliver Wyman) and Steve Schoonveld (FTI Consulting)
Discussion: A brief “think tank” for LTC enthusiasts to speak their minds and generate creative public/private LTC financing solutions.
Insights: Steve: Put CA and MN together. Want to be part of the solution. Data. No names. What is needed; who are eligible? What are current coverage options? Where gaps? Medicaid, Alternative care, out-of-pocket costs, private insurance. By income. All based on supposition of cost of care. High level ball park estimates. Looking at projections of Medicaid use and payments. 10 year time horizon. Costed services and projected increases. Nursing facilities going higher and faster. HCBS and ALF are potential cost savings. Simulate changes in population and other factors. What is new normal after Covid?
Second panel: CA and MN combined. Emily Smith; Stephanie Moench; Peterson; John O’Leary
State approaches to innovation. Steve question: federal vs. state role. Middle income reliant on Medicaid. More affordable financing options for the middle class. John: systematic reforms. Stephanie, culturally competent. Value proposition for all income levels. How to evaluate options. Collaboration of groups in LTC space. John, stakeholder input. Everyone citizen of MN. Expert witnesses too. Interaction between, input process. Integrate data into discussion. WA threw something at the wall and some stuck. Took more time with it in CA. How to evaluate impact of proposals? Funding less of a problem than care navigation. Some states are unprepared. Resistance to change. MN high LTCI penetration. What is the value proposition? What are people expecting? Provide quality LTSS. People don’t want to have to spend down. Go through their assets. How to make it more equitable or all. Educating. Consumer expectations are very low. Don’t think about until personal experience in family.

3:30pm “Live Focus Group Session: Engaging with LTC Policyholders”
Presenters: Winona Berdine, Rachel Kudler
Discussion: Watch a live focus group session of persons aged 75 to 85. Learn what it takes to engage with them on wellness, care coordination and caregiver support programs. What services are they interested in? What messaging resonates with them? How do they prefer to be reached? How do they prefer to interact with us? This is the only session we have a recording of from the conference this year. [Strongly recommended session; link to the recording here.]
Insights: Several LTCI policy holders answered questions about their experiences with caregiving, why they purchased LTCI, what their experience has been as policyholders, what they would like the industry to do to improve the product. Typical responses: bought because of own parents’ asset spend down; premiums way up; would like more communication from carrier, but not clear about what; all trying to stay active and healthy; their own challenging experiences with caregiving; frustration with nursing homes, assisted living and caregivers; one respondent had great experience with LTC in France; regarding wellness programs: very little interest, even if free, carriers should stick to their knitting, focus on good coverage, getting care when needed, many other sources for “wellness,” marketed as free, but premiums already high and this will increase them; no phone calls, no texts, rather prefer email or hard copy; information needed about what to do, where to go to find and manage care; no contact from agents after sale.

LTC Comment: I strongly recommend watching the video of this session. It provides clear insights into what this group of policyholders think and feel about their experience with the coverage. What struck me most is their lack of interest in the kinds of wellness programs the industry is promoting. Most of the respondents felt that the carriers should stick to improving the product and reducing premiums rather than promoting ancillary services that are available elsewhere and would only add to costs if provided by the carriers. Industry leader, actuary Vincent Bodnar shared this thought: “A good analogy that I've shared with other attendees: The industry is like an estranged father now wanting to have a relationship with his child after being gone for decades. Based on the recording and other interactions I listened to, the policyholders do want a relationship with the insurers, but it will take time to gain trust. So far, all they've received from insurers is rate increase notices. New efforts need to start with little things and win over that trust over time. After the industry regains trust, policyholders will be open to these programs.”

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Updated, Monday, March 25, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-011: LTC NEWS AND COMMENT

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

There’s a huge Medicaid problem in California: Most doctors just won’t see those patients
Long-Term Care Insurance Association Releases 2024 Short-Term Care Price Index
First-time grants will help connect new Americans with long-term care careers
State Medicaid offices target dead people’s homes to recoup their health care costs
Ensuring Families Have the Resources To Care for Older Adults
CMS delivers providers payment lifelines in the wake of Change Healthcare outage
Personal care workers received most Medicaid fraud convictions in 2023: OIG
Poor neighborhoods tied to higher dementia risk, faster brain aging
Private equity sets sights on home care, hospice, new report finds
Older adults’ net worth surges following pandemic
Long-term care rates up 1 to 10 percent: survey
Proposal would add Kentucky to mix of states trying to address long-term care financing
Genworth Releases Cost of Care Survey Results for 2023: Twenty Years of Tracking Long-Term Care Costs

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Updated, Friday, March 15, 2024, 10:03 AM (Pacific)

Seattle—

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LTC BULLET: YOUR LTC QUESTIONS ANSWERED

LTC Comment: Center for Long-Term Care Reform president Stephen Moses will speak at next week’s ILTCI conference in San Diego. Find some of the questions he’ll answer, after the ***news.***

*** 2024 ILTCI CONFERENCE convenes March 17-20 in San Diego. Check out the general schedule here and print the full session matrix here. CLTC offers its Masterclass at a reduced rate ($700) on Sat. and Sun. before the conference kicks off (register online). The Center for Long-Term Care Reform will cover the meeting for LTC Bullets. So if you cannot attend yourself, watch for our LTC Bullet “Virtual Visit” to the conference the following week. Steve Moses will speak on Monday, March 18 from 12:30 to 1:30pm in Room D. To all 2024 ILTCI attendees, he says: “Come listen and say hello.” (View the event invitation.) ***

*** GENWORTH publishes 20^th annual cost-of-care summary and the results, especially for home-based care, are stunning:

3/13/2024, “Long-term care rates up 1 to 10 percent: survey,” by Kathleen Steele Gaivin, McKnights Senior Living
Quote: “Year-over-year rate increases in long-term care ranged from 1% to 10% across setting types, according to the results of Genworth’s Cost of Care Survey 2023, published Tuesday. …The average national rate for a private nursing home room inched up 4.9% to $116,800 a year, which equates to $9,733 per month or $320 per day, in 2023. The rate for a semi-private room rose 4.4% to $104,025 annually, which equals $8,669 per month or $285 per day. The average hourly rate for home health aide services has risen by 15.38% year over year to approximately $33, according to the data. Homemaker services average $30 per hour. … State-by-state information and other details of the report can be found using the Genworth online tool.”
LTC Comment: More on Genworth’s 20^th annual cost-of-care survey that we reported yesterday. Center members can always find the latest Genworth survey here. If you need your user name and password, contact us at damon@centerltc.com. ***

LTC BULLET: YOUR LTC QUESTIONS ANSWERED

LTC Comment: Long-term care services and financing policy in the United States has a long and mostly failed history. Nursing home bias still dominates despite consumers’ preference for home care. Access and quality problems persist despite the ready availability of outstanding services for people who can pay. Medicaid (i.e., welfare) financing dominates LTC despite trillions of dollars lying fallow in the economy that could fund high quality private home-based LTC. Perverse incentives in public policy still discourage responsible planning for LTC risk and leave most Americans unprotected and dependent on Medicaid if they need expensive LTC. Neither policies to target Medicaid to the needy nor campaigns for a big new LTC social insurance entitlement program have succeeded.

To understand why these conditions persist and show no signs of improving in the third decade of the 21^st century, certain questions must be asked and answered. That’s what Steve Moses will do at a special session on Monday, March 18, 2024 from 12:30 to 1:30pm PDT in Room D at the Intercompany Long-Term Care Insurance Conference in San Diego. For answers, come to the presentation. If that’s not possible, consult last week’s “LTC Bullet: What Happened to Long-Term Care?,” read the Paragon Health Institute’s “Long-Term Care: The Problem” and “Long-Term Care: The Solution” and watch this “virtual LTC event” featuring age wave visionary Ken Dychtwald and leading LTC researchers. Here are some of the questions Steve will tackle. How fitting to discuss long-term care’s life or death struggle on the Ides of March.

What was long-term care like in 1982?

Why did nursing homes dominate although consumers preferred home care?

How did a welfare program with a terrible reputation for access and quality come to dominate LTC services and financing?

Why was private LTC insurance so slow to develop? What holds it back still?

When did Medicaid stop allowing people to give away assets to qualify for LTC?

When did Medicaid start requiring estate recoveries?

Why did efforts to target Medicaid LTC to the needy fail?

How do affluent people qualify for Medicaid LTC benefits while preserving wealth?

How did economic recessions affect LTC financing policy reform?

When did assisted living and private home care finally become available and why did it take so long? What holds them back still?

What is “Medicaid planning” and why is it so widespread despite Medicaid’s flaws?

What is “structural LTC racism?” Is it real? What can be done about it?

What has to happen for LTC services and financing to improve?

Will a big new government social insurance program or many, smaller, state-level, tax-based programs succeed?

What is the fatal flaw that dooms all social insurance plans to eventual failure?

What happened since the dot.com bust and the Great Recession to hold back progress toward better LTC policy?

LTC Comment: Tough questions? To be sure. But until they’re asked and answered by the powers-that-be, little or no progress will be made to improve LTC services and financing. Fortunately, these and more questions are asked and answered in the Paragon Health Institute’s “Long-Term Care: The Problem” and “Long-Term Care: The Solution” papers as well as in this “virtual LTC event.”

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Updated, Monday, March 11, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-010: LTC NEWS AND COMMENT

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

More than half of nursing home workers caught in ‘vicious cycle’ of workplace violence, burnout
Older Adults With Moderate Income Cannot Afford The Dual Burden Of Housing And Care
Group Asks White House to Stop Picking on Medicare Agents
12-facility strike raises stakes as workforce board gets to work on wages
HCBS needs better Medicaid funding to bolster workforce, reduce waitlists, ANCOR report finds
Wisconsin seniors face housing upheaval as assisted living homes reject Medicaid
Study proving longevity benefits of senior living is something for operators to ‘jump up and down’ about
Scary ‘state’: Two-thirds of nursing home operators fear closure without staffing relief
Genworth’s CareScout Hopes Home Care Networks Will Help Consumers Cut Through ‘Noisy, Fragmented’ System
Containing Medicaid Costs at the State Level

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Updated, Monday, March 4, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-009: LTC NEWS AND COMMENT

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

Fact Check: Will making WA Cares optional force seniors into poverty?
Workforce improvement No. 1 target in final OIG report on nursing home pandemic effects
‘Real Heartache’: Medicaid Redetermination Post-PHE Causing Nursing Homes Serious Cash Flow Problems, Anxiety
Report: Dementia comes with a high price tag that’s only rising
FedPoint announces retirement of longtime CEO Paul Forte
Assisted living? No thank you, investors and developers say
Transamerica Wins Long-Term Care Benefits Appeal
Nursing Home Reimbursement Pressure ‘Flat Out Profound,’ Necessitating Innovative Models

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Updated, Friday, March 1, 2024, 10:03 AM (Pacific)

Seattle—

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LTC BULLET: WHAT HAPPENED TO LONG-TERM CARE?

LTC Comment: I’ve watched our country struggle to improve long-term care since 1982. Observations after the ***news.***

*** ILTCI NEWS: The 2024 Inter-Company Long-Term Care Insurance Conference convenes in San Diego, CA – March 17-20, 2024 – at the newly renovated Town & Country Resort. This year’s keynote speaker is Dr. Maria C. Carrillo, Chief Science Officer of the Alzheimer’s Association. The program includes 58 educational sessions, the most ever; scores of exhibitors and dozens of sponsors. Late breaking: Lifeline Screening will offer hypertension and osteoporosis risk screenings to all attendees from 8:00am, to 6:00pm on Monday, March 18, and Tuesday, March 19, 2024 at their exhibit booth in the Golden State Ballroom. On Monday, March 18 at 12:30pm, Center for Long-Term Care Reform president Steve Moses will present two papers and preview a third, recounting LTC’s past and forecasting its future. Last year’s conference chair, Steve Schoonveld invites attendees to a discussion on “Building LTC State Reform Proposals for Collaborative Success” on Tuesday, March 19 at 12:30pm. Finally, suspense is building! Who will receive the 2024 ILTCI Recognition Award? The winner will be announced at the San Diego meeting. Organizers say “If it’s happening in LTC… It’s happening at the ILTCI Conference!” Hope to see you there. ***

LTC BULLET: WHAT HAPPENED TO LONG-TERM CARE?

I’ve followed long-term care since 1982. Back then nearly all formal, paid LTC services were provided in nursing homes. Medicaid was the dominant payor, but paid too little to ensure quality care. Nicer private-pay options like assisted living were becoming available, but most people could not afford them. A budding new product, LTC insurance was gaining traction slowly but was constrained by the dominance of subsidized Medicaid nursing home care. Much of the care burden fell on unpaid family members by default.

Before 1980 the Medicaid program allowed unlimited asset transfers to qualify. People ignored LTC risk and cost until care became necessary and then moved seamlessly onto public assistance. Medically needy eligibility rules allowed high income people to qualify by deducting their private medical and LTC expenses, enabling them to become “low income.” Despite its dismal reputation for poor access and quality, Medicaid nursing home care was the path of least resistance for people needing expensive long-term care. Its availability impeded the development of home-based care options and private-pay alternatives like insurance.

At the time, I was working for the Health Care Financing Administration (HCFA), the predecessor of the current Centers for Medicare and Medicaid Services (CMS). As I analyzed the LTC marketplace in the early 1980s, I concluded that easy access to Medicaid nursing home benefits trapped elders in underfunded nursing homes, discouraged service delivery and financing alternatives, and would bankrupt the economy as the age wave crested and crashed over time. Something had to be done to break this cycle of perverse incentives leading to bad outcomes. Why prepare for LTC when you could ignore the risk, avoid insurance premiums, and get the government to pay if and when you needed care?

I conducted a study and wrote a paper for HCFA in 1985 suggesting that Medicaid LTC income and asset eligibility criteria should be stricter, liens and estate recoveries should be mandatory, and consumers should be urged to buy private LTC insurance. The insurance would give them access to quality care of their choice and enable them to avoid Medicaid dependency with its newly required payback from estates. No longer would Medicaid provide a windfall for heirs by protecting their inheritances. Families would instead work together to avoid Medicaid and protect their legacies.

HCFA management suppressed that paper. They didn’t think a mid-level Seattle regional office staffer should be writing national policy papers. But the Inspector General of the Department of Health and Human Services (IG) and the Government Accountability Office (GAO) both picked up on my paper and conducted national studies from the same analytical perspective. The IG hired me out of HCFA to conduct their study and write its 1988 report. I also consulted on GAOs 1989 report. Both national studies recommended tightening Medicaid financial eligibility rules and requiring estate recoveries as a means to reduce expenditures and encourage private LTC financing alternatives.

At first, it looked like this strategy would succeed. Federal legislation passed year after year to target Medicaid LTC to the needy while encouraging the affluent to plan early and avoid public assistance. COBRA ’85 prohibited “Medicaid qualifying trusts”; MCCA ’88 required states for the first time to penalize asset transfers for the purpose of qualifying for Medicaid; OBRA ’93 made estate recoveries mandatory. So by the mid-1990s the key elements were in place to revolutionize LTC policy, eliminate the perverse incentive trapping elders in nursing homes on Medicaid, and breathe new life into the private home care and LTC insurance markets.

Alas, history did not play out as we hoped. The states didn’t implement the new rules fully or aggressively; the federal government didn’t enforce the tighter eligibility and mandatory estate recovery measures; the media didn’t cover the new system’s incentives to plan for LTC and avoid Medicaid; and elder law Medicaid planners found evermore creative ways to circumvent the rules. So consumer behavior didn’t change. People continued to ignore LTC risk and cost, waiting to see if they would ever need expensive LTC, and then turning to Medicaid when high cost care became necessary. That common result relieved the LTC financial burden on heirs further entrenching their tendency to ignore LTC until needed and then rely on Medicaid.

A Republican Congress and President Clinton became so frustrated by skyrocketing Medicaid LTC costs benefiting the affluent as much as the poor that they made it a crime to transfer assets to qualify for Medicaid in HIPAA ‘96. Outrage at this “Throw Granny in Jail” law led to its repeal by BBA ’97 and replacement with the “Throw Granny’s Lawyer in Jail” law. The latter did not survive judicial scrutiny as it was deemed unenforceable to hold attorneys legally culpable for recommending a practice (asset transfers) that were no longer illegal. Nothing more happened to target Medicaid to the needy and incentivize LTC planning by the affluent until a last gasp effort in DRA ’05, which capped Medicaid’s home equity exemption for the first time ever.

Every one of these beneficial federal statutes achieved during the preceding years occurred after and in response to an economic recession. When federal and state budgets were tight during recessions, politicians and policy makers were forced to look for ways to constrain Medicaid expenditures while preventing care access and quality from deteriorating. That’s when the measures recounted above to lengthen and strengthen asset transfer penalties, enforce estate recoveries, and encourage private LTC insurance gained traction. “LTC Partnerships” and LTC insurance tax deductions were also passed in those years and for those reasons. But once the recessions ended, and budget constraints relaxed, the pressure for wiser policies receded, and higher spending to mollify advocacy groups returned.

Then came the Great Recession of 2007-2009 and all progress stopped. This big recession did not lead to beneficial legislation as in the past. Why? Starting a few years before, but accelerating after the Great Recession, the Federal Reserve began pushing interest rates down toward zero. The resulting artificially low interest rates distorted incentives throughout the economy including in the LTC market. Deficits and debt didn’t matter so much when the cost of servicing the debt was nominal because interest rates were negligible. Pressure to control Medicaid LTC expenditures abated and costs grew with few constraints. Medicaid expanded to provide more desirable home and community based services making it more attractive to consumers. The LTC insurance market suffered as carriers could not obtain anticipated returns on their reserves and were forced to raise premiums, thus angering current insureds and alienating prospects.

These conditions continued and worsened until a government spending blow out during the Covid pandemic caused deficits and debt to skyrocket and inflation to spike. A return to artificially low interest rates and continued unbounded spending is unlikely. The national debt currently exceeds $34.3 trillion, a six-fold increase since 2000 and up $200 billion in just the past month. The interest rate to service the national debt doubled between January 2022 (1.56%) and January 2024 (3.15%). Debt service cost is already 18% of total federal spending and 2.4% of GDP. It will increase in tandem with the rising debt. The U.S. government will soon spend more on interest payments than defense. Social Security, Medicare, Medicaid, Obamacare, and other federal health care programs consumed 46% of all federal spending in 2022. These costs will continue to rise at least until statutory entitlement cutbacks begin in the late 2020s and the 2030s. The staggering unfunded liabilities of Social Security ($26.6T) and Medicare ($40.9T) alone guarantee these programs will encumber the productive economy for decades ahead. On top of everything, boomers start turning 85, their age of greatest medical and LTC need, in 2031.

To paraphrase the late economist Herbert Stein, “Trends that can’t continue, won’t.” The price of irresponsible fiscal and monetary policy that characterized the first two decades of the 21^st century is coming due. State and federal budgets will have to be set again and met. Challenging economic conditions, especially during and after recessions, will compel serious attention to Medicaid LTC spending as they did before the Great Recession. The time is coming again when politicians and policymakers will have to listen to proposals that constrain spending while enhancing LTC access and quality.

Coming up with those policy proposals is the task before us. But we can’t continue doing more of the same. Keeping Medicaid LTC financial eligibility generous, allowing big income and asset exemptions, and threatening estate recovery to persuade the public to plan and insure for LTC did not work. Government gave the carrots but withheld the sticks, so consumers ignored LTC until they needed it and then turned to Medicaid. Consequently LTC services and financing in the U.S. are as bad or worse today as they were in 1982. Long-term care in America remains broken, marked by nursing home bias, too little home care, dubious access and quality, inadequate funding, caregiver shortages, stressed out unpaid family caregivers, and growing complaints of structural racism. A radical new approach to LTC financing policy is needed.

My October 2022 paper for the Paragon Health Institute (PHI) titled “Long-Term Care: The Problem” offered this diagnosis. Easy access to Medicaid LTC benefits after the insurable risk occurs while retaining wealth created a moral hazard that discouraged early and responsible LTC planning and left most Americans dependent on public assistance by default. My October 2023 paper for PHI titled “Long-Term Care: The Solution” proposed a radical change. Eliminate the moral hazard by ending all Medicaid rules that enable people to receive Medicaid LTC benefits while retaining wealth. In other words, turn Medicaid into the program for the poor most believe it was originally intended to be and many believe it still is. What does that mean specifically?

Medically needy income eligibility, which allows high income people to qualify for Medicaid if their medical and LTC expenses are high enough, must end. Likewise Miller income diversion trusts, that achieve the same purpose in states that do not use the medically needy income system, should not be allowed. Such policies divert Medicaid funds that should support the underprivileged to people who could pay a portion, often a large portion, sometimes their entire LTC bill privately. Medically needy policies also mean that nursing home and home health providers receive their revenue at notoriously low Medicaid rates instead of at market rates that are half again as high on average. This heavier dependency on Medicaid impedes care access and quality for the affluent as well as the poor.

Another income policy that needs to end is the requirement people on Medicaid contribute nearly all their income, including their Social Security benefits, to offset Medicaid’s cost for their care. This policy makes Medicaid vulnerable to Social Security’s precarious financial condition. When statutorily required 23% benefit cuts occur in the 2030s, state Medicaid programs and the already financially strained LTC providers they support will be devastated. A better policy is to have all people pay LTC providers at the market rate up to their ability to do so and for Medicaid to make up the difference when recipients fall short. That will ensure higher revenue for LTC providers allowing them to improve care and alleviating caregiver shortages as they are able to pay higher wages.

Asset eligibility rules also need to change. Current rules allow applicants to reduce their countable wealth by purchasing exempt assets. Because exempt assets, including home equity, IRAs, a business, a vehicle, home furnishings, personal belongings, etc. are virtually unlimited, countable assets in any amount are easily eliminated in this way. Medicaid should require that asset spend down be for medical or LTC expenses in order to count as it does for income spend down now. The huge Medicaid home equity exemption, $731,000 in every state where it isn’t $1,071,000, should end. Home equity is easily converted to liquid cash flow to purchase top quality LTC in the private market. Obviously, abusive Medicaid Asset Protection Trusts and Medicaid friendly annuities, that allow even the wealthiest families to co-opt Medicaid to fund their LTC, should end.

Once all income and asset exemptions are eliminated, Medicaid LTC benefits will be available only to the truly needy. More affluent people will pay their own way. The extra private revenue flowing through the system will improve care for everyone and eliminate the caregiver shortage by paying higher wages. Faced with a real spend down requirement, that has never existed in the U.S. before, consumers will take the risk and cost of LTC seriously for the first time. Many will plan early and save, invest or insure for LTC. Others, if they continue to ignore LTC will face serious consequences if they need LTC later in life. These consequences will signal to others that planning for LTC is imperative because the costs of failing to do so are too great.

But isn’t this plan too draconian? Can a humane society really refuse to provide long-term care unless and until people have used up all their own income and assets paying privately? Yes, but only if we reconceptualize LTC and reprioritize it among life’s necessities. As I explained in “Long-Term Care: The Solution,” LTC risk and cost are not as great as we once thought. For example, nearly half of Americans turning 65 will never need paid care. See the paper for more on this point. Likewise, it turns out that aging Americans have much more wealth they could use for LTC if they had a reason to do so, including $12 trillion in home equity, $35 trillion in retirement savings, and $21 trillion in life insurance. See the paper on this point too. LTC is the single biggest financial risk aging Americans face, but it has been treated as an afterthought, easy to ignore, because Medicaid was always there to cover the cost if and when expensive care became necessary. With Medicaid gone as an asset-protecting, long-term care fail safe, people will put a much higher priority on planning for the risk.

So, having created the necessity for people to plan ahead for LTC, what is needed is a way for them to do so without being devastated financially at a time of their lives when other financial responsibilities, such as raising children and making car and mortgage payments, have always taken precedence. In the LTC Solution paper I proposed seven LTC Choices designed to enable people to prepare for future LTC expenses without impinging excessively on their current cash flow. The basic ideas are (1) to focus on preparing people to pay for their average expected LTC liability, instead of their having to plan for the unlikely, but devastating catastrophic cost if the worse happens and (2) to allow savers to earmark a portion of the wealth they are already accumulating to be used for LTC if and only if such care becomes necessary.

So here are the seven LTC Choices in their barest form. See the paper for details. (1) Buy less LTC insurance at lower premiums to cover average LTC risk instead of the full catastrophic risk as now. (2) Establish a new tax-favored account for long-term care. Carve out enough retirement savings (3), home equity (4), life insurance (5), or estate wealth (6) to cover average LTC risk. (7) Incentivize younger people to start LTC planning earlier with easier goals reflecting their longer time to prepare. Each of these LTC Choices is intended to make it easier for people to cover their expected lifetime LTC risk and cost. Private organizations or companies, similar to Underwriters Laboratories (UL), should evolve to help consumers define their average LTC risk and to set goals to achieve it.

With the moral hazard of easy access to Medicaid gone; with consumers expected only to cover their average LTC risk; and with the ability to tap existing sources of funds established, most people will prepare privately for LTC. Private revenue at market rates flowing to LTC providers will improve LTC access, quality and choice. With most people prepared to pay for care, families will be relieved of providing the heaviest and most intimate kinds of LTC. They will be able to focus on giving love and support. Caregiver shortages will disappear as wages for the profession rise from bare minimums now to private market rates. Medicaid LTC expenditures will decline radically as the program refocuses on helping only the remnant who have no other means to pay for private care. With Medicaid program resources relieved, it should pay market rates for care thus improving access, quality and choice for the smaller number of remaining recipients.

An additional benefit of refocusing Medicaid LTC on the needy in this way is that it will end the problem of structural LTC racism. In its current form, Medicaid benefits the affluent to the detriment of the underprivileged. Prosperous people gain access to Medicaid’s best LTC providers by holding back “key money” when they spend down assets to qualify. This key money enables them to pay privately for a time. Nursing homes and home care providers are desperate for private payers, so they roll out the red carpet for anyone who can pay privately even for a while. Poor people don’t have key money. Their scarce savings are quickly consumed. They only have access to the mostly Medicaid facilities and services that have the worst reputations for care. By diverting affluent people to private pay, Medicaid will be able to provide better care to people in need thus eliminating the structural racism that pervades the system now.

The many deficiencies of today’s LTC service delivery and financing system have been self-inflicted by perverse incentives in public policy. Whether well-intentioned or simply unintended, policies that invited prosperous people to ignore LTC until they need it and then qualify for public assistance distorted the LTC marketplace. Efforts to change policy to encourage responsible planning failed. They will always fail as long as consumers can ignore LTC, get government to pay, and retain wealth for inheritances. “Long-Term Care: The Problem” and “Long-Term Care: The Solution” explain what’s wrong and how to fix it in greater detail.

What will it take to achieve this radical transformation of LTC policy and Medicaid eligibility? Most likely it will take a commensurately radical downturn in the economy. Only desperate measures to make budget ends meet will compel change of the magnitude needed. But such measures may soon become unavoidable as servicing the national debt at ever increasing interest rates becomes impossible; more deficit spending, money printing and borrowing further increase the debt relentlessly; and the resulting inflation finally shows the public how it is forced to pay for decades of irresponsible fiscal and monetary policy. As these pressures grow, the oncoming crisis of unfunded entitlement liabilities will hit just as the boomer generation’s greatest medical and LTC need arises in the 2030s, making that decade as bad or worse than the 1930s.

As bleak as the current situation is, it will improve. As economic conditions deteriorate, policymakers will either respond with thoughtful changes along the lines described above. Or economic reality will compel such changes by making the current system fiscally unsustainable and such changes therefore unavoidable. The only remaining question is whether America can fix Medicaid LTC by returning the program to its roots as LTC protection for the needy or whether the current system has to collapse before that happens anyway by default. When and how will this process play out? In the same way Hemmingway described going bankrupt: gradually at first, then suddenly.

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Updated, Monday, February 26, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-008: LTC NEWS AND COMMENT

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

Older adults receiving home care are missing out on palliative care: study
LTC Bullet: Guest Column, ‘Real Sleight of Hand’
What long-term care looks like around the world
Examining the Impact of Long-Term Care Insurance on the Care Burden and Labor Market Participation of Informal Carers: A Quasi-Experimental Study in China Get access Arrow
Redesigning Retirement
Nursing homes sue state Medicaid program, claiming massive underfunding
WA Cares is not the solution for the state’s graying population
Voters To Decide On Washington’s Public Long-Term Care Insurance Program
Spending on nursing home, home healthcare growing fast

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Updated, Tuesday, February 20, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-007: LTC NEWS AND COMMENT

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

Proposed HCBS rule could diminish service access, hamper provider retention efforts, 11 senators tell CMS
‘Elephant in the Room’: Medicare Advantage a Huge Factor in CCRC Decision Making Around Nursing Home Services
New Eligibility Rules Are a Financial Salve for Nearly 2 Million on Medi-Cal
Inside the Rash of Abrupt Nursing Home Closures: The Key Factors at Play
Reduced federal share may force state Medicaid programs to cut services, HCBS expert says
People on Both Medicare and Medicaid Should Get Better Care, But They Don’t
CareScout, a Genworth Company, Aims to Redefine Quality and Build Trust in Long-Term Care
Dementia care costs lowest for patients living in home care settings, study finds
Medicare home care eligibility standards unfairly burden family caregivers, think tank argues
About 30 percent of older adults who need care are caring for another
Some State Legislators Race to Add Funding as ‘Nursing Home Deserts’ Expand

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Updated, Friday, February 16, 2024, 10:03 AM (Pacific)

Seattle—

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LTC BULLET: HOW MEDICAID SUBSIDIZES THE FUNERAL INDUSTRY

LTC Comment: Medicaid channels billions of dollars to the funeral business that could pay for better long-term care for the needy. Evidence and consequences after the ***news.***

*** ILTCI 2023: Last year’s Intercompany Long-Term Care Insurance Conference was a huge success! Over 950 attendees from across the US attended. Organizers say: “We look forward to bringing you another amazing conference in 2024. Here’s how our attendees self-identified the area of the industry they work in:

Sales, Marketing, Distribution 26%
Actuarial & Finance 25%
Management & Operations 17%
Claims & Underwriting 12%
Aging in Place/Eldercare Solutions 11%
Legal, Compliance & Regulatory 9%

Check out the schedule here. Review session titles here. Register here. See you there. “Stephen Moses (Center for LTC Reform president) will present two new papers ‘Long-Term Care: The Problem’ and ‘Long-Term Care: The Solution.’ He will explain why LTC financing reform has languished since the Great Recession, but will flourish anew soon. Steve will also preview his forthcoming paper ‘Ending Structural Long-Term Care Racism.’ Don’t miss this review of the past and forecast of the future by the 2019 ILTCI Recognition Award recipient.” ***

*** MUD SLIDE: We thank Center corporate member Long Term Care Associates for bringing this story to our attention. Here it is verbatim as they explained the situation. Some of the links are broken but you can see pictures at the GoFundMe site. The Center for LTC Reform made a contribution to the GoFundMe to help and we encourage others to do the same. Here’s the story as LTCA told it:

“Many readers and colleagues know Rich Wierman, an LTCA producer for over 20 years. The Baldwin Hills, CA home [buried in mud] belongs to his daughter Kristy and son-in-law Matt, who find themselves overwhelmed after ‘nearly every room of their home is filled with about 4 feet of mud.’ [LTCA’s Steve Forman] asked Rich if [he] could share their story in his words:

Shock: "This tragedy is huge and hard to believe. This home in LA was Matt and Kristy’s first home, an extensive fixer-upper they poured their lives into. They finished the last remodel last year and it was beautiful. Matt was there all last week and I picked him up from the [Seattle] airport Friday night and he mentioned he was concerned about the torrential rains coming that weekend. Sunday night at 10:30pm, their cameras and alarms went off on their phones. Then they went dark, and a neighbor confirmed their fears. Kristy called me at 11:00pm and told me the house was destroyed. Matt flew there in the morning and has spent all week assessing the damage, clearing the house, and trying to determine what to do next. It was confirmed that insurance does not cover natural disasters like this. What a huge shock and disappointment!"

Rebuild: “I hope you'll visit Kristy and Matt's GoFundMe page and help in their time of need. Thank you for your generosity! ***

LTC BULLET: HOW MEDICAID SUBSIDIZES THE FUNERAL INDUSTRY

LTC Comment: Medicaid is the biggest long-term care (LTC) payer in the United States. It contributed 43% of the $530 billion Americans spent on LTC in 2021. Eligibility for Medicaid is means-tested. Recipients are allowed to retain no more than $2,000 in countable assets on average. Wealth in excess of that amount is supposed to be spent down.

But Medicaid does not require that excess assets be spent down for medical or long-term care. Program applicants may instead reduce their wealth to the usual $2,000 qualifying level by converting countable into exempt assets. Exempt assets are virtually unlimited. They include most home equity, tax-favored retirement accounts, a vehicle, a business and many more.

But Medicaid recipients hold one exempt asset more than all the others combined. According to ElderLawAnswers: “By purchasing a prepaid funeral contract, you can turn available assets into exempt assets that won't affect your eligibility.” Which final expenses can applicants prepay with a funeral trust to achieve Medicaid financial eligibility more quickly and easily?

According to the American Council on Aging, funds in a funeral trust can cover “funeral home usage, service charge of funeral director and staff, clergy fee, musicians for service, death certificate, printed death notices, embalming, casket/burial vault, burial plot, headstones/ monuments, cemetery fees, hearse/limousines, dressing and casketing, clothing, makeup and hairstyling, cremation, urn” and in some but not all states, flowers and “travel expenses for relatives to come to the funeral.”

How much do funerals cost and how much of that expense can Medicaid applicants use to facilitate and expedite their spend down? USA Today reports: “The median cost of a funeral is $7,848, according to a recent study conducted by the National Funeral Directors Association. The median cost of a funeral with cremation comes in at $6,970.” How does the average value of a funeral trust purchased to achieve Medicaid eligibility compare with the average cost of a funeral? Roughly double.

Irrevocable Funeral Trusts [IFTs] can be established for each spouse. Typically, an elderly couple applying for Medicaid, would establish two trusts, each for around $10,000 – $15,000. These trusts would lower the couple’s countable assets for Medicaid purposes by $20,000 – $30,000. Furthermore, some states allow IFTs to be established for one’s adult children. Some of these states include Arizona, Colorado, Illinois, Missouri, and Oregon. (American Council on Aging)

That is a lot of money diverted from private long-term care spend down to funeral expenses. But how prevalent is this practice? Very little evidence exists about the level of non-countable assets retained by Medicaid LTC recipients. More studies are needed. One Government Accountability Office (GAO, 2014) analysis did address the question head on ten years ago.

“GAO identified four main methods used by applicants to reduce their countable assets—income or resources—and qualify for Medicaid coverage” including “spending countable resources on goods and services that are not countable towards financial eligibility, such as prepaid funeral arrangements.” (GAO, 2014, “Highlights” page). GAO concluded “Nearly 75 percent of applicants owned some non-countable resources, such as burial contracts; the median amount of non-countable resources was $12,530” (Ibid.).

These findings were based on a small sample in only three states. They are not generalizable to the entire population of Medicaid recipients. But they do dramatically suggest the need to conduct more studies that are applicable to the broader base. Just assume for a moment that three-fourths of all Medicaid recipients divert $12,530 from private spending to prepay funeral costs. How much money are we talking about?

“KFF estimates that nearly 6 million people receive Medicaid long-term services and supports …” (KFF, 2023). If 4.5 million Medicaid recipients (75%) protect $12,530 each from Medicaid spend down requirements by purchasing prepaid funeral contracts, the total comes to $56.4 billion. That is 10.6% of the $530 billion Americans spent on LTC in 2021 and 24.9% of Medicaid’s total $226.7 billion LTC expenditures in that year.

KFF states that 12.5 million are jointly enrolled in Medicare and Medicaid. “In 2019, combined Medicare and Medicaid spending on dually eligible beneficiaries totaled $440.2 billion of which Medicaid accounted for $164.3 billion (37 percent).” (MACPAC) These “dual eligibles” are the two programs’ most expensive enrollees. If 9,375,000 dual eligibles (75%) protect $12,530 each using prepaid funeral contacts, the total comes to $117.5 billion or 26.7% of the entire cost of dual eligibles for both programs and 71.5% of Medicaid’s share.

Medicaid’s policy of allowing applicants to avoid spending down assets for long-term care by purchasing prepaid funeral contracts is ethically dubious. It reduces market-rate compensation to LTC providers, replacing it with Medicaid reimbursements that are notoriously low, often less than the cost of the care provided. Inadequate revenue translates into access and quality problems, caregiver shortages due to poor compensation, and excessive residual caregiving for unpaid family members. The policy harms Medicaid, Medicaid recipients, and taxpayers while it benefits the funeral industry, which has a less than stellar reputation. According to the Wall Street Journal: “Unethical funeral homes have exploited grieving customers for decades.”

Subsidizing the funeral industry at the expense of LTC for the needy is only one of many ways current Medicaid eligibility policy impairs care access and quality. To make sense of what is wrong with LTC and why, read the Paragon Health Institute’s “Long-Term Care: The Problem” and “Long-Term Care: The Solution” and watch this “virtual LTC event” featuring age wave visionary Ken Dychtwald and leading LTC researchers.

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Updated, Monday, February 12, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-006: LTC NEWS AND COMMENT

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

Student loan debt is negatively affecting worker retirement saving, experts say
KFF Reports on Financial Situation of Medicare Beneficiaries in 2023
Great Recession Saved Lives: Research
Halfway Through ‘Unwinding,’ Medicaid Enrollment Is Down About 10 Million
Proposed initiative effectively would kill long-term care payroll tax program
Income and Assets of Medicare Beneficiaries in 2023
Impossible expectations are undermining nursing home care
Decoding Medicaid for your long-term care needs

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Updated, Monday, February 5, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-005: LTC NEWS AND COMMENT

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

Initiative 2124 asks voters to make WA Cares an opt-in, rather than mandatory, program
Spending in home care outpaces other healthcare sectors
ILTCI Recognition Award
Timely dementia diagnosis, specialized long-term care limited for members of minority groups: study
10 Reasons Why Medicare Advantage Enrollment is Growing and Why It Matters
More Americans support government assistance for care of older adults
When a Long-Term Care Insurance Insider Is the Caregiver
Moody's: Why Medicare Advantage's profitability may be on the decline
Navigating insurance for those with dementia a major challenge for family caregivers
Silver lining: The U.S. workforce has more employees over 65 than ever before and it could mean great things for the bottom

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Updated, Friday, February 2, 2024, 10:03 AM (Pacific)

Seattle—

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LTC BULLET: PROGRESSIVE BIAS PRODUCES REGRESSIVE POLICY

LTC Comment: Public officials and their advisers prefer government solutions to social problems, so their policies often produce deficient outcomes. We explain after the ***news.***

*** ILTCI RECOGNITION AWARD nominations due by February 9: “The Intercompany Long Term Care Insurance Conference Association’s (ILTCI) vision is to create an environment for aging in America that includes thoughtful, informed planning that takes into account the most effective and efficient use of resources in addressing the risks and costs of long-term care for all levels of American society. It is the desire of the ILTCI to recognize people and organizations that have made significant, long-term contributions in attaining the ILTCI vision. Do you know someone deserving of recognition? Read on for more…

To be eligible for this award, candidates must

Be engaged in the long-term care field, such as a long-term care service provider or financier, as a regulator or legislator involved in governance of long-term care or these entities, or as a research or policy expert in long-term care issues and
Exhibit an extraordinary commitment to the industry through ingenuity, length of service and dedication.

Winner(s) chosen for this award will be recognized at the Intercompany Long Term Care Insurance Conference in San Diego at the Town & Country Resort, March 17 – 20, 2024.

Entries must be submitted by February 9, 2024 for Board of Directors consideration.

Prior Award Winners:
2019 Award Recipient: Stephen Moses, President of the Center for Long Term Care Reform (http://www.centerltc.com/)
2018 Award Recipient: Dr. Marc Cohen, Clinical Professor, Department of Gerontology and Director, Center for Long-Term Care Services and Supports at the University of Massachusetts (https://www.linkedin.com/in/marc-cohen-2487343/)”

Only one more week left to submit your nomination for the 2024 ILTCI Recognition Award. Don’t miss the February 9 deadline for nominations. Nominate Now. ***

*** TO MAKE SENSE of what ails LTC, read “Long-Term Care: The Problem” and “Long-Term Care: The Solution.” Then watch this “virtual LTC event” featuring age wave visionary Ken Dychtwald and leading LTC researchers. Or reverse the order. But do it! ***

LTC BULLET: PROGRESSIVE BIAS PRODUCES REGRESSIVE POLICY

LTC Comment: Progressive bias is rife in long-term care (LTC) data, policy and analysis. Examples abound:

Only 6% of LTC expenditures come from patients’ assets, but advocates claim LTC impoverishes aging Americans, so they demand a vast new LTC entitlement.
CMS combines data on Continuing Care Retirement Community (CCRCs are mostly private pay) and nursing homes (mostly Medicaid) to make Medicaid spending seem lower and out-of-pocket costs (OOPs) look higher.
Researchers are complicit in making OOPs look artificially bigger when they count non-LTC assisted living and residential room and board costs as though they were LTC.
CMS makes Medicaid costs appear smaller and condemns LTC providers to meager rates by requiring recipients to contribute income (mostly Social Security) to offset costs.
Medicare props up Medicaid LTC by paying generous reimbursements for a minority of patients which enables Medicaid to pay less than cost for the majority.
Government defines poverty to exclude in-kind contributions like Medicaid LTC supporting the mistaken impression that LTC OOPs cause widespread impoverishment.

Another example of progressive bias in government data and researchers’ analysis is their proclivity to search strenuously for proof of LTC spend down, but completely ignore evidence of Medicaid planning, artificial self-impoverishment, to qualify. When economists and health policy analysts claim that older people approaching the need for long-term care retain few assets and spend down rapidly, they generally draw their evidence from survey data provided by the Health and Retirement Study (HRS) and its auxiliary, the Asset and Health Dynamics among the Oldest Old (AHEAD) study. These sources say nothing about how assets are spent, but analysts routinely assume this data proves spend down for medical or long-term care. It does not. It merely documents transitions to Medicaid without explaining how assets were decumulated to achieve eligibility. What might be happening other than spend down for care?

There are many possibilities, such as egregious Medicaid trusts, annuities, and artificial spend down strategies. But I think the big one that goes almost entirely unnoticed is the purchase of exempt assets. In a 2020 paper titled “Medicaid and Long-Term Care,” I explained how the Government Accountability Office (GAO) both documented the importance of this Medicaid planning technique and downplayed its findings in the same report (Government Accountability Office. 2014. “MEDICAID: Financial Characteristics of Approved Applicants and Methods Used to Reduce Assets to Qualify for Nursing Home Coverage. GAO-14-473. May). Here is that explanation as a final example of progressive bias and the damage it does in government LTC data and analysis.

Excerpt from Stephen A. Moses, “Medicaid and Long-Term Care,” Center for Long-Term Care Reform, 2020, pages 53-59.

Unfortunately, hard empirical evidence of Medicaid long-term care asset spend down avoidance is sparse. Most researchers have preferred to scan big data bases looking for evidence to the contrary instead of examining actual Medicaid long-term care cases. In May 2014, however, the Government Accountability Office published results of the only study to date of a sample of such cases for this purpose. They found dramatic results, but for some reason downplayed their own findings.

GAO identified four main methods used by applicants to reduce their countable assets—income or resources—and qualify for Medicaid coverage: 1. spending countable resources on goods and services that are not countable towards financial eligibility, such as prepaid funeral arrangements; 2. converting countable resources into noncountable resources that generate an income stream for the applicant, such as an annuity or promissory note; 3. giving away countable assets as a gift to another individual—such gifts could lead to a penalty period that delays Medicaid nursing home coverage [N.B.: but only if discovered]; and 4. for married applicants, increasing the amount of assets a spouse remaining in the community can retain, such as through the purchase of an annuity (GAO, 2014, unnumbered “GAO Highlights” page).

Those methods of qualifying for Medicaid without spending down resources for care are exactly in line with the techniques and procedures recommended by the popular and professional literature on the topic discussed above [Medicaid planning].

GAO analyzed a random, but non-generalizable, sample of 294 Medicaid nursing home applications in two counties in each of three states: Florida, New York, and South Carolina. They found “Nearly 75 percent of applicants owned some non-countable resources, such as burial contracts; the median amount of non-countable resources was $12,530” (Ibid.). That seems significant, but GAO does not draw out the implications in its report. A back-of-the-envelope estimate finds that if those results could be projected to the total of all Medicaid nursing home residents nationally—which they cannot, suggesting a study that could provide generalizable results is needed—665,700 Medicaid nursing home residents sheltered over $8.3 billion in non-countable resources or 42.4 percent of the $19.7 billion Medicaid paid for their nursing home care in 2009, the most recent data available at the time of the GAO study’s publication (Houser, Fox-Grage and Ujvari, 2012[1]). That is a lot of money to divert from private long-term care financing liability.

GAO found “Eligibility workers in 10 of the 12 counties interviewed stated that purchasing burial contracts and prepaid funeral arrangements, which are generally noncountable resources, was a common way applicants reduced their countable assets; and eligibility workers from one state said they recommend making such purchases to applicants” (GAO, 2014, 25). In fact, 39 percent of GAO’s sample owned “Burial contracts and prepaid funeral arrangements” with a median value of $9,311. If that proportion holds for the country as a whole, $3.2 billion or 6.3 percent of total Medicaid nursing home expenditures are diverted from funding long-term care to relieving families of the final expenses for their loved ones. This matters because funeral and burial pre-planning to expedite Medicaid eligibility is big business in the United States. Heavy use by Medicaid families of prepaid burial plans to shelter otherwise countable assets has the effect of shifting scarce program resources from purchasing long-term care services for the poor to subsidizing the funeral industry and indemnifying often affluent adult children from the cost of burying their parents.

GAO found “. . . 44 percent of approved applicants—129 applicants—had between $2,501 and $100,000 in total resources, and 14 percent of approved applicants—42 applicants—had over $100,000 in total resources” (Ibid., p. 14). Pretending again that GAO’s findings are representative of all Medicaid nursing facility recipients, how much wealth would that mean Medicaid is sheltering from private long-term care financial liability nationwide? 887,598 nursing home residents receive Medicaid. If 14 percent of them, or 124,264 recipients, possessed $100,000 or more in non-countable resources, that is at least $12.4 billion or 3.4 times the $3.7 billion Medicaid spent for their nursing facility care. Yet, again, GAO does not draw out the implications.

GAO found: “For the 51 applicants for whom we were able to determine the equity interest in the home, the median home equity was $50,000, and ranged from $0 to $700,000” (Ibid., p. 20). Most home equity (equity, not value) is non-countable, up to as much as $893,000 in some states as of 2020. GAO found median home equity to be $50,000 among the 51 applicants (out of 91 total homeowners or 31 percent of the sample) for whom they were able to determine it. Thus 100 percent of their sample’s home equity was non-countable. Keep in mind that $50,000 is a median home equity value, meaning as many exempt homes were higher in home equity value as were lower, and meaning that the average or mean home equity value could be significantly higher. If 31 percent of 887,598 Medicaid nursing home recipients nationwide or 275,155 recipients own homes with a median equity value of $50,000, then at least $13.8 billion worth of their home equity is non-countable, a figure that is 1.7 times the annual $8.1 billion cost of their care. Did it not behoove GAO to dig a little deeper? How much money could Medicaid save by making nursing facility care available only after home equity is spent down by means of private or commercial home equity conversion methods?

GAO found: “Among the Medicaid application files that we reviewed in selected states, 16 of the 294 approved applicants (5 percent) had a personal service contract—all of which were determined to be for FMV [fair market value]. The median value of the personal service contracts was $37,000; the value of the contracts ranged from $4,460 to $250,004” (Ibid., p. 26). What if GAO’s findings were valid nationwide? If 5 percent of Medicaid nursing home recipients (44,380 recipients) sheltered a median value of $37,000 each in personal service contracts, the total diverted away from private long-term care financial liability would be $1.6 billion or 3.4 percent of total Medicaid nursing home expenditures nationally in the same year. That’s a very large subsidy to family members for taking care of their loved ones. Personal service contracts are a technique that is available mostly to savvier, more affluent families who seek legal advice on how to shelter assets. Commonly, the poor lose what little wealth they have to long-term care expenses without learning the often technical and complicated legal methods of artificial self-impoverishment.

GAO found: “Of the 70 married approved applicants whose files we reviewed, 13 had applications that contained a claim of spousal refusal. . . . These 13 applicants resided in two states and the community spouse retained a median value of $291,888 in non-housing resources; two of the community spouses were able to retain over $1 million in non-housing resources” (Ibid., p. 31). Spousal refusal is based on a bizarre interpretation of federal law commonplace in only two states (New York and Florida, both of which were included in GAO’s three-state sample for this study) by which spouses of institutionalized Medicaid recipients are allowed to refuse to contribute financially toward the cost of their spouse’s Medicaid-financed care—with impunity and in direct contradiction of the federal statute. The GAO report does not challenge this practice, nor has CMS taken action to curtail or end it. The spousal refusal cases GAO identified had a median value of nearly $292,000 in non-housing resources, but as they also found, some spousal refusal cases involve a million dollars or more. Why exactly is this allowed? Why doesn’t GAO question the practice? Where is CMS? The report makes no comment.

GAO found: “State Medicaid officials, county eligibility workers, and attorneys who provided information on the value of annuities for the community spouse reported average values ranging from $50,000 to $300,000. Officials from one state reported seeing annuities for the community spouse worth more than $1 million. Medicaid officials from one state indicated that they have seen annuities that disbursed all of the payments to the community spouse shortly after the annuity was purchased, while officials from another state said that annuities can have large monthly payments for the community spouse, such as $10,000 per month” (Ibid., p. 32). Spousal annuities are a huge loophole that allows many millions of dollars to be diverted from private long-term care financing into the pockets of affluent Medicaid nursing home recipients’ spouses. Yet GAO does not call for closing the annuity loophole nor has CMS done anything about it.

GAO found: “Among the 294 approved applicants whose files we reviewed, we identified 5 applicants (2 percent) who appeared to have used one of the ‘reverse half-a-loaf’ mechanisms; 4 of the applicants appeared to use the mechanism that involved creating an income stream through a promissory note to pay for nursing home care during the penalty period. These 4 applicants gifted between $20,150 and $227,250 worth of resources, and had penalty periods of between 2 months and 22 months” (Ibid., p. 29). Again, GAO gives only glancing attention to the reverse half-a-loaf technique often employed by Medicaid planners to reduce their affluent clients’ Medicaid spend down liability by half. The incidence of this technique’s use as identified by GAO—only 2 percent—seems small, but keep in mind that it is only used for people with substantial assets. Otherwise, it would hardly be worth the cost in attorneys’ fees to set up the complicated procedure. Public officials should ask about this and all the other techniques downplayed in the GAO report “how much public spending is being wasted?” and “why are such abuses allowed to continue?”

One final point about this study: GAO says “Our analysis was limited to information included in the application files, which states used to make their eligibility determinations. We did not independently verify the accuracy of this information (Ibid., pp. 4-5).” That single admission obviates any value or credibility this report might otherwise have. Federal quality control audits have found that state welfare eligibility determinations are wrong in a third to a half of all cases even after state quality control reviews have confirmed the original determinations by state or county workers. We will never know the true extent of Medicaid asset shelters, transfers and other artificial self-impoverishment techniques until someone reviews a valid random sample of long-term care cases that is generalizable statewide and nationwide and goes beyond the extremely limited information available in case records for purposes of verification.

The Government Accountability Office or the DHHS Inspector General or any serious researcher or organization should review a generalizable sample of Medicaid long-term care cases to establish once and for all how much money is being lost to Medicaid financial eligibility rules that divert the programs scarce resources from the needy to the affluent.

Closing LTC Comment: It is safe to conclude that government officials and LTC researchers routinely ignore evidence of Medicaid planning, while they search persistently for non-existent evidence of catastrophic LTC spend down. This progressive bias impairs LTC service delivery and financing.

[1] Calculations in this section are based on figures for Medicaid nursing home expenditures, number of Medicaid nursing home residents, etc., as reported in AARP’s Across the States, 2012 publication. Detailed computations by the author are available upon request.

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Updated, Monday, January 29, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-004: LTC NEWS AND COMMENT

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

‘Crying wolf’ or dying breed? Incentives often ignore plight of rural skilled nursing operators
Senate Probes the Cost of Assisted Living and Its Burden on American Families
Long-Term Care: The Problem and The Solution
End-of-life patterns emerge in one-year analysis
Living longer is great! But we need reforms to reduce dependency – Long Term Care solutions
2024 Long-Term Care Insurance Facts - Prices - Data - Statistics - 2024 Reports
Record-Breaking $14.1 Billion Paid in Long-Term Care Insurance Benefits by Top Insurance Companies in 2023
Medicaid and State Financing: What to Watch in Upcoming State Budget Debates

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Updated, Monday, January 22, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-003: LTC NEWS AND COMMENT

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

Woman Sues Genworth Over LTCI Survivorship Benefit
Data shows nursing home closure often linked to care issues
Your Healthspan Is as Important as Your Lifespan—and It’s Declining
Preserving long-term Medicaid for the poor
US Senate launches investigation of assisted living after lay media reports about safety, staffing, pricing
Medicaid should not be for the middle class | Opinion
Easy Medicaid Access Discourages Long-term Care Planning
Hospital study on AI identifies patients with undiagnosed dementia coming from LTC
Dr. Marilyn D. Singleton Interviews Stephen Moses on Long-Term Care Solutions

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Updated, Friday, January 19, 2024, 10:03 AM (Pacific)

Seattle—

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LTC BULLET: PARAGON’S VIRTUAL LONG-TERM CARE EVENT

LTC Comment: For a scintillating 75-minute virtual LTC event, go here and read on for a transcript of the program’s opening commentary, after the ***news.***

*** MEDIA COVERAGE of the Paragon Health Institute’s January 9, 2024 “virtual LTC event” and related issues is notable. Following are links to and LTC Clippings about this coverage.

1/9/2024, “Qualifying for Medicaid LTC Benefits Could Get Tougher,” by Allison Bell, ThinkAdvisor - LINK to LTC Clipping

1/12/2024, “Public policy must address flaws in long-term care financing, experts say,” Kathleen Steele Gaivin, McKnights Senior Living and McKnights Business Daily - LINK to LTC Clipping

January 2024, “Easy Medicaid Access Discourages Long-term Care Planning,” by Kevin Stone, Health Care News - LINK to LTC Clipping

1/15/2024, “Preserving long-term Medicaid for the poor,” by Gary D. Alexander, Washington Times - LINK to LTC Clipping

1/16/2024, “Medicaid should not be for the middle class | Opinion,” by Sally Pipes, PENNLIVE.com - LINK to LTC Clipping

1/16/2024, “Medicaid should not be for middle class,” by Sally C. Pipes, TribLive
No LTC Clipping

*** ILTCI ’24 seeks exhibitors and sponsors for this year’s conference in San Diego. See the current sponsor list here. Inquire about and/or request exhibit space here. Register here. Register now to capture the $100 Early Bird Discount which ends today, January 19. This year’s meeting convenes March 17 to 20 at San Diego’s newly renovated Town & Country Resort. This is the big one with the best LTCI content and networking you’ll find anywhere. I’ll host a special session: “Stephen Moses (Center for LTC Reform president) will present two new papers “Long-Term Care: The Problem” and “Long-Term Care: The Solution.” He will explain why LTC financing reform has languished since the Great Recession, but will flourish anew soon. Steve will also preview his forthcoming paper ‘Ending Structural Long-Term Care Racism.’ Don’t miss this review of the past and forecast of the future by the 2019 ILTCI Recognition Award recipient.” ***

*** ILTCI RECOGNITION AWARD: The ILTCI Conference is reviving this tradition. Marc Cohen was the ILTCI Recognition Award’s first recipient in 2018. Steve Moses received the honor in 2019. After the 2020 conference was cancelled due to Covid, the ILTCI Recognition Award was not announced or bestowed for the 2021 to 2023 conferences. But kudos to 2024 ILTCI Conference Chair Karen Smyth and the organization’s Board of Directors for restoring the tradition in 2024 with this announcement: “Now is your chance to nominate a person(s) or organization that has made a significant, long-term contribution towards the attainment of the ILTCI vision. Help us showcase the best of our industry and acknowledge their contributions. Nominees must have worked within the long term care insurance industry in some capacity for minimum of five years to qualify. Submissions will be accepted through February 1, 2024.” Find the nomination form here. Act soon as the deadline is only 12 days away! ***

*** STOP. Go back one item. Don’t skip over this chance to nominate an organization or person who has made a “significant, long-term contribution towards the attainment of the ILTCI vision.” The ILTCI vision is “to create an environment for aging in America that includes thoughtful, informed planning that takes into account the most effective and efficient use of resources in addressing the risks and costs of long term care for all levels of American society.” Nominate someone for the ILTCI Recognition Award here now. ***

LTC BULLET: PARAGON’S VIRTUAL LONG-TERM CARE EVENT

LTC Comment: On January 9, 2024, the Paragon Health Institute sponsored and hosted a 75-minute virtual LTC event. Check out a video recording of the proceedings here.

Paragon president Brian Blase opened and closed the program with summary remarks. Age wave visionary Ken Dychtwald moderated the discussion and explained how LTC fits into the broader cultural, demographic, and gerontological context. He asked the participants many provocative questions. Steve Moses briefly summarized findings from two Paragon reports—“Long-Term Care: The Problem” and “Long-Term Care: The Solution.” Two discussants reacted: Richard Johnson from the Urban Institute and Mark Warshawsky from the American Enterprise Institute. Over 100 people attended via Zoom. They asked an unusually large number of questions (34) for such a brief program, some of which were answered live and others are addressed in the Paragon reports.

Steve set the stage with a 12-minute presentation, the text of which follows below. Rich and Mark had six minutes each to respond. Their feedback and their answers to questions reflected substantial agreement, but also many insightful diverging views. Do click through to watch the whole program and see for yourselves. In the meantime, here’s how Steve set the stage:

Welcome and thank you for participating in today’s discussion.

Long-term care in America is broken, marked by nursing home bias, too little home care, dubious access and quality, inadequate funding, caregiver shortages, stressed out unpaid family caregivers, and growing complaints of structural racism.

Everyone bewails these problems, but few ask or explain their cause. Most jump to “solutions” that involve more government money and regulation. But, arguably, government money and regulation caused these problems. Certainly, Medicaid is at their root.

Medicaid reimburses providers 70% of market rates, too little to ensure access and quality. Resulting low salaries cause caregiver shortages and worsen the burden on families. Federal law underwrites Medicaid’s nursing home bias and impedes home care alternatives.

Medicaid’s impact is much greater than its 42% contribution to LTC spending implies. By requiring recipients to contribute their incomes, Medicaid shifts costs to the private sector. It relies heavily on recipients’ Social Security income, and on Medicare, which pays higher reimbursements, enabling Medicaid to pay often less than care costs.

This arrangement is unsustainable. The boomer generation starts turning 85 in 2031, when their LTC need is greatest, just as Medicare and Social Security face statutory cuts. With higher caseloads, less revenue from Social Security, and reduced Medicare payments, rising Medicaid expenditures will constrict budgets, further impairing providers’ ability to deliver good care.

What caused Medicaid’s dominance that created these problems? Policy makers sought to provide a safety net for the needy, but they created a financial fail safe for the elderly instead. A program reputed to help only low income people who have spent down their savings for care is actually available to higher income people who preserve most of their wealth.

As a rule of thumb, monthly income below the cost of a nursing home is not disqualifying; most large assets, such as home equity, are exempt; any remaining countable wealth is removable by purchasing exempt assets; and if eligibility is still out of reach, legal advisers extend it to affluent clients by means of trusts, annuities, and other financial strategies.

What has this system wrought? By giving publicly financed LTC to the middle class and affluent late in life and allowing them to preserve wealth, it encouraged consumers to ignore this risk early in life. It indemnified them against the worst consequences of failing to prepare. In other words, Medicaid created a “moral hazard” that discouraged early and responsible LTC planning.

Despite constant warnings that aging Americans are “Dying Broke,” few people plan for LTC. Private insurance languishes. The high “out-of-pocket” costs that CMS reports are deceptive. Most are payments from income, not assets, toward the cost of care for people already on Medicaid. If you back out all other LTC payment sources, what remains that could come from personal savings is only 6%.

Taking all this into account, we concluded that to end LTC’s problems would require ending Medicaid as a late-life, wealth-preserving funding source for all but the truly indigent. The solution is to convert Medicaid into the program most think it was originally intended to be and many claim it still is, a safety net for people actually impoverished by private LTC costs.

To achieve that objective, we propose to end all Medicaid rules that enable people with substantial incomes and assets to qualify. On the income side, that means eliminating the “medically needy” method of determining income eligibility and stopping the use of income diversion trusts in “income cap” states. All private income would remain in the private-pay system instead of coming to providers at harmfully low Medicaid rates as now.

On the asset side, we propose to eliminate the ways people qualify for Medicaid benefits while preserving wealth. Purchase of exempt assets to reduce countable resources is the biggest of these and the least understood. The home equity exemption, over $1 million in some states, should disappear entirely. The look-back period for asset transfer penalties should be 20 years instead of five. Legal schemes to remove wealth from LTC spend down should end.

Phase these changes in gradually. Exempt everyone too old or infirm to adapt and prepare. People 55 or older and younger people with chronic disability or early onset dementia would be unaffected. Tell others that Medicaid eligibility rules have changed; there is no way to fund LTC and preserve estates going forward without taking personal responsibility; so they should prepare now in case they need care later. Private firms can estimate individuals’ risk levels actuarially giving each a planning goal to achieve by a date (or age) certain. People who prepare for LTC risk at younger ages could have a lower goal set.

Is this plan draconian? No more so than the way Medicaid is described today as requiring “catastrophic” spend down into total “impoverishment.” Consider the plan’s benefits. Consumers would prepare for LTC instead of ignoring that risk until they need care. Fewer would rely on Medicaid, substantially reducing numbers of high cost “dual eligibles.” Reduced Medicaid budgets could pay providers market rates, which would improve quality and relieve caregiver shortages. Families would mobilize to help elders plan and protect inheritances by avoiding Medicaid instead of taking advantage of it. With most LTC funded privately, families could turn over the heaviest and most intimate personal care to paid caregivers. Nursing homes would provide sub-acute and rehab care but long-term custodial care would devolve naturally toward home care as market-based consumer preferences prevail.

The challenge to achieve these benefits may not be as great as we once thought. Research, by one of today’s interlocutors, Dr. Johnson, found that while 56% of people turning 65 will need LTC, 44% will not. The average $121,000 cost for those who do need care, 43% of which Medicaid pays today, could be financed by setting aside the “present discounted value” (PDV) of $70,000 at age 65. Starting earlier, less would be needed.

We also identified substantial wealth held by aging Americans that is untapped for LTC. It is locked up in home equity ($12 trillion), retirement savings ($35 trillion) and life insurance ($21 trillion). By mobilizing this wealth to fund LTC, reliance on Medicaid could be drastically reduced and access to quality care vastly increased. But that objective faces two obstacles.

First: that wealth already supports other worthy goals such as estate planning, retirement savings, and life insurance. Second: young families saving for retirement while making car and mortgage payments cannot assume the added burden of LTC planning. We resolve those two challenges by reprioritizing LTC among life’s risks and offering ways for people to meet their planning objective more easily.

LTC is the biggest financial risk aging people face, but Medicaid obscured that fact. Granting LTC top priority, public policy should allow people to meet their planning responsibility by earmarking wealth they are already accumulating for other purposes to be used first for LTC if needed. We propose seven “LTC Choices” to help them do that.

LTC Choice #1 recognizes private insurance would be more affordable covering only average risk. Choice #2 proposes a new tax-favored account for LTC. Numbers 3, 4 and 5 would enable people to earmark part of their home equity, retirement savings, and life insurance for LTC if and only if needed. LTC Choice #6 does the same for estates and #7 favors people who start younger with more easily attainable goals.

With average LTC risk and cost handled in the private market, the burden on Medicaid will decline substantially, but not disappear. Medicaid for catastrophic coverage will remain but only for the truly indigent whose savings have actually been consumed by private LTC expenditures.

Exploding Medicaid costs and the service delivery and financing dysfunctions they caused are undesirable and insupportable. What could be more reasonable than to solve them by converting Medicaid into the program most people think it already is?

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Updated, Tuesday, January 16, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-002: LTC NEWS AND COMMENT

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

Cost of linked-benefit LTC insurance drops by up to 27 percent from last year
Public policy must address flaws in long-term care financing, experts say
New Paragon research on Medicare clinician payments, Medicaid expansion, long-term care, and the CDC
Long-Term Care: The Problem and The Solution
Qualifying for Medicaid LTC Benefits Could Get Tougher
States Begin Tapping Medicaid Dollars to Combat Gun Violence
Researchers dissect LTC’s immigrant workforce, push for even more
Home health is fastest-growing component of national health spending
California is robbing America’s poor to fund Medicaid for its rich
HCBS staffing shortages lead to severe cuts to programs, services, new report finds
Financial hardship drives unhappiness in people living with dementia, study finds
Fines suspended for nursing homes that violate minimum staffing law
What is the Centers for Medicare and Medicaid Services’ New AHEAD Model?

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Updated, Friday, January 5, 2024, 10:03 AM (Pacific)

Seattle—

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LTC BULLET: SO WHAT IF THE GOVERNMENT PAYS FOR MOST LTC, 2022 DATA UPDATE

*** VIRTUAL LTC EVENT on January 9, 2024: Register now for this timely, provocative discussion sponsored by the Paragon Health Institute. Steve Moses will present findings from two Paragon papers: “Long-Term Care: The Problem” and “Long-Term Care: The Solution.” Responding will be Richard W. Johnson, Senior Fellow and Director of the Program on Retirement Policy at the Urban Institute and Mark J. Warshawsky, Senior Fellow at the American Enterprise Institute and Former Deputy Commissioner for Retirement and Disability Policy at the Social Security Administration. Ken Dychtwald, Ph.D., Founder and CEO of Age Wave will moderate the discussion and Q&A. Brian C. Blase, Ph.D., President of Paragon Health Institute hosts and oversees the event. Please forward today’s LTC Bullet and this invitation to everyone you think might be interested. Thanks. See you on the Zoom screen January 9. ***

*** ILTCI KEYNOTER announced: Maria C. Carrillo, Ph.D., Chief Science Officer of the Alzheimer's Association, will deliver the keynote address at the 2024 Inter-Company Long-Term Care Insurance Conference in San Diego. Register now for the March 17-20, 2024 meeting at the Town and Country Resort. Early bird registration discounts end January 18, so act soon to save $100. ***

LTC BULLET: SO WHAT IF THE GOVERNMENT PAYS FOR MOST LTC, 2022 DATA UPDATE

LTC Comment: Once a year around this time the Centers for Medicare and Medicaid Services (CMS) report health care expenditure data for the latest year of record. Recently, CMS posted 2022 statistics on its website here. Click on this link NHE Tables (ZIP) to download the tables, unzip them, and then click on the data tables of interest, Tables 13, 14 and 15 for our purposes here.

Health Affairs has published a summary and analysis of this new data titled “National Health Care Spending In 2022: Growth Similar To Prepandemic Rates." The article is “open access” so available free here. Unfortunately, the Health Affairs article has little to say about long-term care, so read on to get that story.

Heads Up: This may be the most important LTC Bullet we publish all year. It is the twenty-second in a row we’ve done annually to analyze the federal government’s enormous, and we argue, often detrimental, impact on long-term care financing. If you'd like to see the earlier versions, go here and search for “So What if the Government Pays.” You’ll find our yearly analyses of the data going all the way back to "So What If the Government Pays for Most LTC, 2002 Data Update."

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"So What If the Government Pays for Most LTC, 2022 Data Update"
by
Stephen A. Moses

Nursing Homes

America spent $191.3 billion on nursing facilities and continuing care retirement communities in 2022, a 5.6% increase compared to 2021. The percentage of these costs paid by Medicaid and Medicare has gone up over the past half century (from 26.8% in 1970 to 52.7% in 2022, up 25.9 % of the total) while out-of-pocket costs have declined in the same period (from 49.2% in 1970 to 25.2% in 2022, down 24.0% of the total). Source: Table 15: Nursing Care Facilities and Continuing Care Retirement Communities Expenditures; Levels, Percent Change, and Percent Distribution, by Source of Funds: Selected Calendar Years 1970-2022.

So What? Consumers' liability for nursing home and CCRC costs has declined by over half, down 51.2% in the past five decades while the share paid by Medicaid and Medicare has nearly doubled, up 96.6%.

No wonder people are not as eager to buy LTC insurance as they would be if they were more at risk for the cost of their care! No wonder they don't use home equity for LTC when Medicaid exempts at least $713,000 and in some states up to $1,071,000 of home equity (as of 1/1/24). No wonder nursing homes struggle financially—their dependency on parsimonious government reimbursements is increasing while their more profitable private payers are disappearing.

Unfortunately, these problems are even worse than the preceding data suggest. Over half of the so-called "out-of-pocket" costs reported by CMS are really just contributions toward their cost of care by people already covered by Medicaid. These are not out-of-pocket costs in terms of ASSET spend down, but rather only INCOME, most of which comes from Social Security benefits, another financially struggling government program. Thus, although Medicaid pays less than one-third of the cost of nursing home (and CCRC) care (30.6% of the dollars in 2022), it covers nearly two-thirds (65.1%) of all nursing home patient days.

No wonder the public is not as worried about nursing home costs as they would be if they were more at risk for the cost of their care. No wonder nursing homes risk insolvency when so much of their revenue comes from Medicaid, often at reimbursement rates less than the cost of providing the care. “Medicaid, the primary payer for nursing homes, covers more than 60 percent of all nursing home residents and approximately 50 percent of costs for long term care services. Medicaid reimbursements, on the other hand, only cover 70 to 80 percent of the actual cost of care.” (Source: AHCA/NCAL, “Financial Challenges Continue To Affect Nursing Homes, Emphasizing Need For Higher Medicaid Reimbursement Rates,” October 14, 2020)

Private Health Insurance

Don't be fooled by the 9.5% of nursing home costs that CMS reports as having been paid by "private health insurance" in 2022. That category does not include private long-term care insurance. (See category definitions here.) No one knows how much LTC insurance pays toward nursing home care, because many LTCI policies pay beneficiaries who then pay the providers. Thus, a large proportion of insurance payments for nursing home care gets reported as if it were "out-of-pocket" payments. This fact further inflates the out-of-pocket figure artificially.

Assisted Living

How does all this affect assisted living facilities? According to the Genworth Cost of Care Survey for 2021, ALFs cost an average of $54,000 per year, up 4.7% from 2020. Although assisted living facilities remain mostly private pay, “61% of ALFs are Medicaid certified” and only “a small minority of state Medicaid programs do not cover services in assisted living.” (Find these quotes under the source’s “Finance” tab.) Over time assisted living facilities have followed nursing homes down the primrose path of accepting more and more revenue from Medicaid.

Many people who could afford assisted living by spending down their illiquid wealth, especially home equity, choose instead to take advantage of Medicaid nursing home benefits. Medicaid exempts one home and all contiguous property (up to $713,000 or $1,071,000 depending on the state), plus—in unlimited dollar amounts—one business, one automobile, prepaid burials, term life insurance, personal belongings and Individual Retirement Accounts not to mention wealth protected by sophisticated asset sheltering and divestment techniques marketed by Medicaid planning attorneys. Income rarely interferes with Medicaid nursing home eligibility unless such income exceeds the cost of private nursing home care.

Home Health Care

The situation with home health care financing is very similar to nursing home financing. According to CMS, America spent $132.9 billion on home health care in 2022, 6.0% more than in 2021 ($125.4). Medicare (35.8%) and Medicaid (35.3%) paid 71.1% of this total and private health insurance (not LTC insurance) paid 14.0%. Only 11.6% of home health care costs were paid out of pocket. The remainder came from several small public and private financing sources. Data source: Table 14: Home Health Care Services Expenditures; Levels, Percent Change, and Percent Distribution, by Source of Funds: Selected Calendar Years 1970-2022.

So What? Only one out of every nine dollars spent on home health care comes out of the pockets of patients and a large portion of that comes from the income (not assets) of people already on Medicaid.

No wonder the public does not feel the sense of urgency about this risk that they would if they were more personally at risk for the cost of their care.

Other Health, Residential, and Personal Care

This category includes a lot of long-term care spending that is not encompassed by the nursing home and home health NHE categories, such as Medicaid home and community based waivers and care provided in residential care facilities. The trends are very similar. Americans spent $246.5 billion on these services in 2022, up 9.7% from $224.7 in 2021. Medicare (1.7%) and Medicaid (60.6%) paid 62.3% of that total; private health insurance and other third parties contributed 34.5%; out-of-pocket expenditures amounted to only 3.2%. Data Source: Table 13: Other Health, Residential, and Personal Care Services Expenditures: Levels, Percent Change, and Percent Distribution, by Source of Funds: Selected Calendar Years 1970-2022

So what? Only one dollar out of $29 spent on these important LTC services comes from a private payer.

No wonder the public feels so little sense of worry about planning, saving, investing or insuring for long-term care.

Summary:

Service	Total	OOP	OOP %

Nursing home	191.3	48.3	25.2%
Home health	132.9	15.4	11.6%
Other health, residential and personal care	246.5	7.8	3.2%

TOTAL	570.7	71.5	12.5%

Across all three kinds of LTC services out-of-pocket expenditures account for only $1 in $8 spent. Half of this spending comes from income of people already on Medicaid. Thus only 6.25%, or $1 in $16, could have come from spend down of savings.

Note especially:

“Long-Term Care: The Solution” (2023) with the Paragon Health Institute at https://paragoninstitute.org/research-paper-page-moses-ltc-solution-20231002/

“Long-Term Care: The Problem” (2022) with the Paragon Health Institute at https://paragoninstitute.org/long-term-care-the-problem/

“Medicaid and Long-Term Care” (2020) at http://www.centerltc.com/pubs/Medicaid_and_Long-Term_Care.pdf

“How to Fix Long-Term Care Financing” (2017), at http://www.centerltc.com/pubs/How-To-Fix-Long-Term-Care-Financing.pdf

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Updated, Tuesday, January 02, 2024, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #24-001: LTC NEWS AND COMMENT

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

Investors predict senior living rent increases of 3 to 7 percent
Bold Changes Are in Store for Medi-Cal in 2024, but Will Patients Benefit?
Let’s Go Washington turns in over 2.6 million signatures for all six landmark initiatives
Negative Wealth Shock and Cognitive Decline and Dementia in Middle-Aged and Older US Adults
‘Tougher Every Day’: Nursing Home Operators, CCRCs Weigh in on Future of Skilled Nursing
Americans Over 70 Hold More Than 30% of the Country’s Wealth
Aging Into Uncertainty: How will we navigate the looming long-term care crisis?
Senior-held home equity rises for second consecutive quarter

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Updated, Monday, December 18, 2023, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #23-037: LTC NEWS AND COMMENT

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

Demographics drive retirement saving disparities
Closing the Medicaid Gap Is Just the First Step, as Nursing Homes Fight for Predictable Reimbursement
Who Uses Medicaid Long-Term Services and Supports?
Nursing home, CCRC-related spending tops $191 billion, CMS says
New Poll Finds Older Americans Believe Medicare Should Cover Weight-Loss Drugs
Naked
Global Atlantic, John Hancock Strike Biggest LTCI Reinsurance Deal Ever
Home care largely unaffordable, especially for middle-class seniors, Harvard research shows
Views Washington state long term care tax offers lessons for everyone
Forced to work in a vacuum, MedPAC recommends another Medicare cut
Researchers find a way to predict which of our organs will fail first

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Updated, Friday, December 15, 2023 10:40 AM (Pacific)

Seattle—

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LTC BULLET: “DYING BROKE” WAS DEAD WRONG

LTC Comment: Who knows more about long-term care (LTC) than KFF and the New York Times? Answer: anyone who deals in facts and logic instead of anecdotes and ideology. We explain after the ***news.***

*** REGISTER NOW for the 2024 Intercompany Long Term Care Insurance Conference! Plan now for the March 17 - 20, 2024 convocation at the Town & Country Resort in San Diego, CA. Organizers say the “agenda includes numerous educational sessions over two days across seven tracks with ample time for networking and reconnecting with colleagues. Contact them at info@iltciconf.org if you’d like to exhibit or sponsor. Go here to register and here to book your hotel. The host hotel room block is almost full, so get this done soon. I’ll attend the meeting, cover it for media, and regale anyone interested with the findings and recommendations from two new studies: “Long-Term Care: The Problem” and “Long-Term Care: The Solution.” ***

*** THE NAKED TRUTH about long-term care:

12/2023, “Naked,” by Ron Hagelman, Broker World
Quote: “Stephen has laid out a blueprint that attacks the problem at its core. …
Step One: Eliminate the Moral Hazard. Shut down all planning tools used to avoid personal responsibility—to include purchase of exempt assets, eliminate home equity exemptions, prohibit asset protection trusts and Medicaid compliant annuities. And perhaps most importantly extend the look back period to 20 years and then ‘monitor and enforce compliance.’
Step Two: Publicize the now exposed true risk.
Step Three: Reconceptualize the actual size of the risk.
Step Four: Proselytize affordable planning at younger ages.”
LTC Comment: I thank my friend, Broker World columnist and all-around LTC advocate, Ron Hagelman, for this thoughtful summary and exposition of key facts and recommendations (“the naked truth”) in the Paragon Health Institute’s “Long-Term Care: The Problem” and “Long-Term Care: The Solution.” Read Ron first and then the papers to see for yourself.

*** JOIN AND SUBSCRIBE. Center members receive our LTC Bullets and LTC E-Alerts. Center president Steve Moses reads everything relevant to LTC in the popular and academic media. He distills the essence of all important articles and reports in LTC Clippings. He gives you the date, title, author, a representative quote and his interpretation of the publications’ meaning and significance. You get one or two extra emails daily, but you save time you’d otherwise spend researching issues and client questions on your own. All members receive a compilation of the week’s LTC Clippings every Monday in our LTC E-Alert. Premium members receive the Clippings in real time. Check out our Membership Levels and Benefits here. Learn about our “Members-Only Zone” here. You’ll be amazed how economical joining the Center and gaining access to all our online content is. We’re fighting the good fight for rational LTC financing policy. Join our team here. Still undecided? Contact damon@centerltc.com or smoses@centerltc.com. ***

LTC BULLET: “DYING BROKE” WAS DEAD WRONG

LTC Comment: The New York Times and KFF (formerly the Kaiser Family Foundation) partnered to examine “the ways in which the financial and emotional toll of providing and paying for long-term care are wreaking havoc on the lives of millions of Americans.” Their investigative series, titled “Dying Broke,” began with an alarming article: “Facing Financial Ruin as Costs Soar for Elder Care.” Like so much of what passes as investigative journalism in the LTC services and financing field, this report bewails the dismal conditions currently, warns of an aging onslaught that will make everything worse, and laments inadequate LTC funding from public and private sources, but says nothing about what caused these problems nor what to do about them, other than asking government to spend more.

The Paragon Health Institute has published two reports that address both the cause of these problems (“Long-Term Care: The Problem”) and how to solve them (“Long-Term Care: The Solution”) without spending more government money. The following applies insights from those Paragon papers to explain what’s wrong with the KFF/NYT’s findings and analysis. Our perspective follows these quotes from “Dying Broke.”

KFF/NYT: “Millions of families are facing such daunting life choices — and potential financial ruin — as the escalating costs of in-home care, assisted living facilities, and nursing homes devour the savings and incomes of older Americans and their relatives.”

“‘People are exposed to the possibility of depleting almost all their wealth,’ said Richard Johnson, director of the program on retirement policy at the Urban Institute.”

LTC Comment: Are LTC costs truly devouring the savings and incomes of aging Americans and their families? Dying Broke offers anecdotes and asserts that people are vulnerable to catastrophic LTC spend down, but it provides zero evidence that such devastating expenditures actually happen. Our study, “Long-Term Care: The Problem,” explains that government, mostly Medicaid and Medicare, funds the vast majority of all formal paid LTC. Private LTC financing has dwindled from around half in 1970 to a quarter today, most of which is income, not assets, that people already on Medicaid have to contribute. If so many peoples’ savings are devastated by catastrophic LTC costs, shouldn’t that fact show up in the data?

KFF/NYT: “The prospect of dying broke looms as an imminent threat for the boomer generation, which vastly expanded the middle class and looked hopefully toward a comfortable retirement on the backbone of 401(k)s and pensions. Roughly 10,000 of them will turn 65 every day until 2030, expecting to live into their 80s and 90s as the price tag for long-term care explodes, outpacing inflation and reaching a half-trillion dollars a year, according to federal researchers.”

LTC Comment: The oft-reported datum that 10,000 boomers turn 65 daily is rarely balanced by the fact that about 5,700 of them die each day and a third are already dead and free of future LTC risk or cost. Of that half-trillion dollars per year spent on LTC, Medicaid pays 44%; Medicare, 20%; other public sources, 7%; private insurance, 8%; and other private sources (mostly philanthropic), 7%; making a total of 86% that people do not pay out of their own pockets. Of the remaining 14% that the government reports as “out-of-pocket” LTC spending, half or more comes from Social Security and other income that people already on Medicaid are required to contribute to offset the cost of their government-funded care. In other words, only 7% of LTC expenditures nationwide could possibly come from people’s savings. Hardly devastating and certainly not a mandate for more government deficit spending.

KFF/NYT: “The United States has no coherent system of long-term care, mostly a patchwork. The private market, where a minuscule portion of families buy long-term care insurance, has shriveled, reduced over years of giant rate hikes by insurers that had underestimated how much care people would actually use. Labor shortages have left families searching for workers willing to care for their elders in the home. And the cost of a spot in an assisted living facility has soared to an unaffordable level for most middle-class Americans. They have to run out of money to qualify for nursing home care paid for by the government.”

LTC Comment: This paragraph combines a lot of truth, misunderstanding and falsehood. It’s true America’s LTC services and financing system is an incoherent mess, that too few families own private LTC insurance, that we face a dire shortage of caregivers and that care costs are going through the roof. What matters, however, is why these conditions persist. On that, KFF and NYT blank out. The answer lies in correcting the falsehood that people “have to run out of money to qualify” for government LTC financing. If that were true, more people would worry and plan for LTC, more would buy private insurance, and more would pay privately at market rates for home and community-based care resolving the worker shortages as competitive market forces contain costs.

KFF/NYT: “Medicaid, the federal-state program, covers long-term care, usually in a nursing home, but only for the poor. Middle-class people must exhaust their assets to qualify, forcing them to sell much of their property and to empty their bank accounts.”

Paragon: Archimedes said “Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.” The “fallacy of impoverishment,” the idea that Medicaid requires catastrophic impoverishment to qualify for LTC benefits, is the lever long enough and the fulcrum strong enough to explain all of the problems with LTC and to plot a course to a solution. If people really had to “exhaust their assets to qualify,” if generations of Americans had been wiped out financially by LTC costs, we wouldn’t be in the mess we’re in. People would have quickly taken the risk and cost of LTC seriously and prepared. But the truth is that Medicaid allows practically unlimited income and assets to remain with people who receive its publicly financed LTC benefits. How and why that is true and the dire ramifications for the LTC services and financing system, we explain in “Long-Term Care: The Problem” and “Long-Term Care: The Solution.”

KFF/NYT: “The only true safety net for many Americans is Medicaid, which represents, by far, the largest single source of funding for long-term care.

“More than 4 in 5 middle-class people 65 or older who need long-term care for five years or more will eventually enroll, according to an analysis for the federal government by the Urban Institute. Almost half of upper-middle-class couples with lifetime earnings of more than $4.75 million will also end up on Medicaid.

“Qualifying for a slot in a nursing home paid by Medicaid can be formidable, with many families spending thousands of dollars on lawyers and consultants to navigate state rules. Homes may be sold or couples may contemplate divorce to become eligible.”

LTC Comment: There you have it. Just about everyone who has high LTC expenses eventually ends up on Medicaid. But have they really impoverished themselves to qualify? That’s what KFF/NYT assume. They cite the “Health and Retirement Study” (HRS), but the HRS says nothing about how much people spend on health and LTC expenses before they become eligible for Medicaid. HRS only records “transitions” to Medicaid. As we explain in “Long-Term Care: The Problem” and “Long-Term Care: The Solution,” most people can easily qualify financially for Medicaid LTC benefits because private health and LTC expenses are deducted from income before the “low-income” criterion is applied (or in some states income diversion trusts achieve the same purpose) and most assets seniors own are exempt from eligibility limits or can be easily converted to exempt form. On top of that, Medicaid planners, including specialized lawyers and other financial professionals, qualify even high net worth clients using special trusts and annuities, while holding back “key money” to ensure their affluent clients have access to the best facilities and care available through Medicaid. Poor people Medicaid is supposed to serve don’t have key money so they end up in the least desirable care Medicaid offers.

In summary:

“‘Dying Broke’ Was Dead Wrong”
by
Stephen A. Moses
<656 words>

Who knows more about long-term care (LTC) than KFF and the New York Times? Answer: anyone who deals in facts and logic instead of anecdotes and ideology.

KFF and NYT joined forces to frighten the public about LTC risk and cost. Their article series Dying Broke, begins with “Facing Financial Ruin as Costs Soar for Elder Care.” If those titles sound familiar it is because the media barraged the country with the same warnings for decades.

If LTC is such a huge risk and cost, if people are being impoverished in large numbers by its cost, if families are buckling under the strain of providing care the government funds inadequately, then why hasn’t something been done? Why the hand-wringing without action or change?

The answer lies in elites’ misunderstanding of the LTC problems’ cause. They believe poor care access and quality, nursing home bias, caregiver shortages, and excessive reliance on over-stressed family caregivers come from too little government spending for LTC. Ironically, the exact opposite is true.

Government spent too much for LTC and in the wrong ways. Medicaid made nursing homes the dominant venue of care by paying for them exclusively. Medicaid crowded out private savings and LTC insurance by enabling people to preserve wealth and receive publicly funded care late in life. Medicaid reimbursed providers too little to fund quality care or attract paid caregivers.

What makes KFF/NYT cling to the simplistic explanation that government spends too little and ignore the obvious, but more complicated cause? A progressive “LTC Narrative” dominates their thinking and obscures reality. Here are some examples from Dying Broke.

According to “Facing Financial Ruin as Costs Soar for Elder Care,” “Millions of families are facing … daunting life choices — and potential financial ruin — as the escalating costs of in-home care, assisted living facilities, and nursing homes devour the savings and incomes of older Americans and their relatives.” Shouldn’t we expect evidence to support such a dire statement? None is offered.

The article continues “Medicaid, the federal-state program, covers long-term care, usually in a nursing home, but only for the poor. Middle-class people must exhaust their assets to qualify, forcing them to sell much of their property and to empty their bank accounts.” That is certainly the conventional wisdom about Medicaid, but is it true? Blank out.

And still: “The only true safety net for many Americans is Medicaid, which represents, by far, the largest single source of funding for long-term care. More than 4 in 5 middle-class people 65 or older who need long-term care for five years or more will eventually enroll, according to an analysis for the federal government by the Urban Institute. Almost half of upper-middle-class couples with lifetime earnings of more than $4.75 million will also end up on Medicaid.”

So, this is the narrative: LTC wipes out the savings of millions because the main funder, Medicaid, requires impoverishment causing even upper-middle-class couples with millions in savings to qualify for public welfare. But what happens to that narrative if none of this is true?

What if Medicaid does not require low income or exhausting assets to qualify for LTC benefits? What if there is no evidence of widespread catastrophic spend down caused by LTC costs? What if millionaires qualify for Medicaid without spending down and while retaining their wealth for heirs? If all that’s true, it throws the LTC narrative into a cocked hat and invites an entirely different analysis leading to radically different recommendations.

The Paragon Health Institute’s October 2022 paper “Long-Term Care: The Problem” substantiates those unconventional points and explains how Medicaid caused LTC’s problems. Its October 2023 paper “Long-Term Care: The Solution” proposes new public policy to save Medicaid for the neediest and uplift LTC services with an infusion of private financing.

Discard the LTC narrative; focus on facts; think clearly about public policy incentives; and real change becomes possible, even likely.

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Updated, Monday, December 11, 2023, 10:03 AM (Pacific)

Seattle—

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LTC E-ALERT #23-036: LTC NEWS AND COMMENT

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

Retirement planning, true life expectancy not on most adults’ radar, increasing the risk of outliving resources
The needs of middle-class Americans over 55 often go unmet: SCEPA
Medicaid consultant used nursing home meetings to fleece residents: AG
Event Recording Available
Fitch offers bleak outlook for life plan communities for 2024
Models can predict when older adults with dementia may need nursing home care
Medi-Cal Senior Care Change Will Pressure California’s State Budget
US Is Unprepared to Provide Housing and Care for Millions of Older Adults
Government must encourage personal responsibility, prohibit easy access to Medicaid

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

Seattle—

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

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

2024 SSI, Spousal Impoverishment, and Medicare Savings Program Resource Standards
Americans are tapping retirement nest eggs to pay for every day, emergency expenses
New insurance rider aims to be solution for LTSS funding
A Look at Waiting Lists for Medicaid Home- and Community-Based Services from 2016 to 2023
How Medicaid Waivers Have Affected Nursing Home Utilization – And Why the Staffing Proposal May Further This Trend
U.S. Long-Term Care Insurance Users Average $1.4M in Household Wealth: Study
The Own Your Future LTSS Funding and Services Initiative: Options to Increase Access to Long-Term Care Financing, Services, and Supports in Minnesota
State Medicaid expenses to grow as federal dollars wane in FY 2024

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

Seattle—

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

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

*** TODAY'S LTC BULLET is sponsored by Claude Thau with BackNine Insurance. Back9 gives you a free personalized website at no cost. Your clients (& family & friends) can, with as little or as much of your involvement as you or they want, buy life insurance and LTCi, and schedule parameds and upload their medical records to speed the process. We quote stand-alone LTCi, linked-benefit and life with a LTC rider side-by-side and provide a sales track with video support. Claude is the lead author of Milliman’s annual Broker World LTCi Survey & a past Chair of the Center for Long-Term Care Financing. Contact him at 913-707-8863 or claude@back9ins.com discuss how he might help you. ***

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

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

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

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

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

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

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

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

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

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

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

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

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

[Box Insert] Poverty Reconceptualized:

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

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

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

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

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

[End box insert]

Managing the Back End

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

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

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

Why Not Social Insurance Instead?

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

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

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

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

Summary and Conclusion

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

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

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

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

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

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

Quintiles	0-20%	21-40%	41-60%	61-80%	81-90%	91-100%
Total household income (median)	$16,989	$27,240	$40,000	$52,229	$71,135	$109,092
Net value [home equity] of primary residence (median)	0	$45,000	$115,000	$220,000	$300,000	$400,000
Household value of financial assets (non-housing, median)	0	$2,000	$16,300	$130,000	$480,000	$1,331,254

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[67] Phil Gramm, Robert Ekelund, and John Early, The Myth of American Inequality: How Government Biases Policy Debate (Lanham, MD: Rowman and Littlefield, 2022).

[68] John F. Early, “Reassessing the Facts about Inequality, Poverty, and Redistribution,” Cato Institute, April 24, 2018, p. 1, https://www.cato.org/policy-analysis/reassessing-facts-about-inequality-poverty-redistribution.

[69] Early, “Reassessing the Facts,” p. 2.

[70] Early, “Reassessing the Facts,” p. 4.

[71] Early, “Reassessing the Facts,” 21.

[72] Rachel Sheffield and Robert Rector, “Air Conditioning, Cable TV, and an Xbox: What Is Poverty in the United States Today?,” Heritage Foundation, July 19, 2011, https://www.heritage.org/poverty-and-inequality/report/air-conditioning-cable-tv-and-xbox-what-poverty-the-united-states.

[73] John F. Early, “The Myth of American Income Inequality,” Cato Institute, September 20, 2022, https://www.cato.org/study/myth-american-income-inequality.

[74] Phil Gramm and John Early, “Income Equality, Not Inequality, Is the Problem,” Wall Street Journal, August 29, 2022, https://www.wsj.com/articles/income-equality-not-inequality-is-the-problem-labor-force-participation-income-taxes-transfer-payments-middle-bottom-rich-household-size-census-11661781351.

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

[76] “Most older adults could finance a substantial amount of paid home care out of pocket. About three-quarters of non-Medicaid, community-dwelling adults ages sixty-five and older could cover at least two years of moderate amounts of paid home care—the median duration among recipients—with their available resources, and about two-thirds could fund that amount of care using only their income and financial assets.” Johnson and Wang, “The Financial Burden of Paid Home Care on Older Adults,” p. 999.

[77] LTC researchers often claim that spend down for high LTC costs plunge wide swaths of older Americans into impoverishment, leaving them dependent on Medicaid. That presumption has become conventional wisdom as well. But proof for this “fallacy of impoverishment” is never offered. Researchers claim data from the HRS and AHEAD surveys substantiate spend down. But those sources only document “transitions” to Medicaid. Such transitions could occur due to spend down. But they are as likely or more so to happen as a result of Medicaid planning, artificial self-impoverishment, conducted much earlier in anticipation of future LTC need. Certainly, spend down of assets on health or LTC expenses is not required to achieve Medicaid LTC financial eligibility as explained in Long-Term Care: The Problem and above.

[78] See https://www.brainyquote.com/quotes/albert_einstein_385842.

[79] Rocki Basel et al., “The Continued Toll of Financial Insecurity in Retirement,” National Council on Aging and LTSS Center, February 2023, https://ncoa.org/article/addressing-the-nations-retirement-crisis-the-80-percent-financially-struggling. Cited 9/4/23.

[80] Basel et al., “The Continued Toll of Financial Insecurity in Retirement.” Emphasis in original.

[81] Basel et al., “The Continued Toll of Financial Insecurity in Retirement.”

[82] Most states (34) use the “medically needy” income eligibility method. They deduct private medical and LTC expenses from income before determining eligibility, enabling people to qualify despite having incomes well above categorical eligibility limits. Other states use an “income cap” method, allowing income up to 300 percent of the Supplemental Security Income monthly limit. People with much higher incomes can still qualify for Medicaid in income cap states by diverting any excess income to an income diversion trust, also known as a “Miller” or “Qualified Income Trust.” For an explanation of the medically needy and income cap pathways to Medicaid income eligibility, see American Council on Aging, “Income Spend Down,” updated December 14, 2022, https://www.medicaidplanningassistance.org/medicaid-spend-down/.

[83] American Council on Aging, “Spending Down Assets to Become Medicaid Eligible for Nursing Home/Long Term Care,” updated December 14, 2022, https://www.medicaidplanningassistance.org/medicaid-spend-down/.

[84] Many are quoted in Center for Long-Term Care Reform state-level reports accessible here: http://www.centerltc.com/reports.htm.

[85] Jane Bryant Quinn, “Do Only the Suckers Pay?,” Newsweek, December 18, 1989.

[86] Centers for Medicare and Medicaid Services (CMS), National Health Expenditure Data, Table 15, https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsHistorical. To access Table 15, open and unzip NHE Tables (ZIP).

[87] National Investment Center, “Monthly Skilled Nursing Data Report,” February 2023, https://info.nicmapvision.com/nic-map-skilled-nursing-data-monthly-report.html.

[88] CMS, National Health Expenditure Data, Table 14. To access Table 14, open and unzip NHE Tables (ZIP).

[89] American Health Care Association and National Center for Assisted Living, “Facts and Figures,” https://www.ahcancal.org/Assisted-Living/Facts-and-Figures/Pages/default.aspx. Find these quotes under the source’s “Finance” tab.

[90] Basel et al., “The Continued Toll of Financial Insecurity in Retirement.”

[91] “An estimated 41 percent...of out-of- pocket spending for nursing home care was received as income by patients or their representatives from monthly social security benefits.” Helen C. Lazenby and Suzanne W. Letsch, “National Health Expenditures, 1989,” Health Care Financing Review 12, no. 2 (1990), p. 8, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4193104/. Later research confirmed that Social Security spend-through is almost half of nursing home out-of-pocket costs. Nelda McCall, ed., Who Will Pay for Long Term Care? Insights from the Partnership Programs (Chicago: Health Administration Press, 2001), p. 19.

[92] The Centers for Medicare and Medicaid Services changed the definition of National Health Expenditure Accounts categories in 2011, adding CCRCs to Nursing Care Facilities. This change had the effect of reducing Medicaid’s reported contribution to the cost of nursing home care and increasing the amount reported as “out of pocket” expenditures, because CCRCs, like assisted living facilities, are mostly private pay.

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

Seattle—

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

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

A Long-Term Solution To America's Long-Term Care Crisis
10 Things You Should Know About Long-Term Care Insurance
Brian Blase Discusses Affordable Care Act Enrollment
The way we pay for long-term care needs a fundamental rethink
Does It Make Sense to Self-Fund Long-Term Care Expense?
Why long-term care in America is a long-term problem
When You Go Home for Thanksgiving
Why Long-Term Care Insurance Falls Short for So Many
Americans would have difficulty paying for a year of long-term care: survey
Federal, lender support needed for assisted living operators to lower rates, leader says
Nursing home care continues to outpace most categories of national health spending: Altarum

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

Seattle—

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

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

Can a Nursing Home Take Our Assets? We Have a $1 Million IRA and a Trust to Protect Us
Why High Interest Rates Are Good News for Long-Term Care Insurance
Facing Financial Ruin as Costs Soar for Elder Care
The Affordability of Long-Term Care and Support Services: Findings from a KFF Survey
The Biden Administration Is Slow to Act as Millions Are Booted off Medicaid, Advocates Say
Can I Be Compensated for the Care I Give to My Elderly Parents?
Don't be afraid of too many LTC Insurance Choices!
Genworth Moves Ahead With Long-Term Care Reboot
Removing Medicaid Loopholes to Improve Long-Term Health Care
12 Ways Long-Term Care Risk Eats Your AUM
Worried About Long-Term Care Expenses? Let’s Do Something About It

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

Seattle—

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

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

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

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

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

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

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

Changing Course: From Failed Threats to Stronger Incentives

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

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

Step One: Eliminate Moral Hazard

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

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

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

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

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

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

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

How These Policy Changes Would Impact the LTC Market

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

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

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

Step Two: Publicize LTC Risk and Cost

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

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

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

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

Step Three: Reconceptualize the LTC Challenge

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

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

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

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

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

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

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

Step Four: Show Younger People a Better Way

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

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

Methods to Satisfy Individual LTC Responsibility

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

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

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

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

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

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

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

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

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

[29] For purposes of income spend down, as opposed to asset spend down, Medicaid does require that monthly income be expended for health or LTC expenses to qualify as a cost under medically needy income eligibility rules. Analysts often confuse this distinction and assume incorrectly that assets must be, and usually are, spent for health-related costs as well. There is no evidence that people decumulate assets due to health or LTC expenses, despite analysts’ typical assumption that they do. They ignore the possibility that assets could be divested by other means, such as Medicaid planning techniques.

[30] States apply exempt asset rules inconsistently, and the federal government enforces them inconsistently.

[31] For example: “The real goal, though, is to work with your parents on an asset-shifting plan that will allow them to have Medicaid pick up the tab for their long-term care if need be.… One way to do this is by turning assets that aren’t exempt from Medicaid into those that are. Money in the bank or a certificate of deposit could be spent on a prepaid funeral or a more extravagant engagement ring, for example; both are exempt assets” (Smart Money, October 1997, pp. 134-36).

“Another sheltering strategy is to convert available, countable assets into non-countable exempt assets. For example, money in checking or savings accounts may be used, without creating a period of ineligibility, to purchase or improve a home, pay off a mortgage, buy a cemetery lot, pre-pay funeral services, pre-pay residence-related taxes and insurance, or even pay outstanding bills, including legal fees” (Hal Fliegelman and Debora C. Fliegelman, “Giving Guardians the Power to Do Medicaid Planning,” Wake Forest Law Review 32, no. 2 [Summer 1997], pp. 341-42, 359, 362-64, 373).

“Viatical settlements may provide an opportunity for families that include a senior in need of long-term care, to meet financial obligations without disqualifying the senior for Medicaid benefits…. Viatication affords a policyholder the means by which to convert a ‘non-exempt’ asset (i.e., a life insurance policy) to an ‘exempt’ asset for purposes of Medicaid regulation…. Possible uses of viatical settlement proceeds to create an ‘exempt’ asset include: (a) paying off a home mortgage; (b) making major home repairs or improvements; (c) paying off outstanding medical bills; (d) prepaying tax obligations, including real estate taxes; (e) purchasing or replacing a car; (f) creating a burial fund or making prepayments for funeral costs; and (g) purchasing a long-term care policy for a spouse. These alternative uses permit viators to put viatical proceeds to good use and still retain their Medicaid eligibility or the Medicaid eligibility of their spouses” (NAELA, 1996 conference proceedings, Session 11, pp. 18-19, 21-23).

[32] Enforcement of this requirement should be as routine as enforcement of the existing rule that income spend down for medically needy eligibility must be for health-related costs.

[33] Law Offices of Stephen J. Silverberg, “What Is a Medicaid Asset Protection Trust (MAPT)?,” https://www.sjslawpc.com/practice-areas/what-is-a-medicaid-asset-protection-trust-mapt/.

[34] Krause Financial Services, “Medicaid Compliant Annuity,” https://www.medicaidannuity.com/products/medicaid-compliant-annuity/.

[35] On September 14, 2012, four congressional sponsors of the Medicaid Long-Term Care Reform Act (H.R. 6033) queried state governors “on policies to strengthen program integrity and make Medicaid more sustainable for state and federal budgets.” The questions they asked and the responses they received, including the Medicaid compliant annuity examples cited above, are summarized in Stephen A. Moses, “LTC Bullet: States Decry Medicaid LTC Loopholes,” Center for Long-Term Care Reform, January 11, 2013, http://www.centerltc.com/bullets/archives2013/984.htm; and Stephen A. Moses, “LTC Bullet: The Medicaid Long-Term Care Reform Act of 2012,” Center for Long-Term Care Reform, October 5, 2012, http://www.centerltc.com/bullets/archives2012/973.htm.

[36] The ineligibility penalty is the number of months of delayed eligibility equal to the amount of assets transferred for less than fair market value for the purpose of qualifying for Medicaid divided by the average cost of a nursing home in the state.

[37] “Median time from recorded diagnosis until institutionalization and until death for people with dementia was 3.9 and 5.0 years, respectively” (Karlijn J. Joling et al., “Time from Diagnosis to Institutionalization and Death in People with Dementia,” Alzheimer’s and Dementia 16, no. 4 [April 2020], https://pubmed.ncbi.nlm.nih.gov/32072728/).

[38] A partial annotated bibliography of Medicaid planning publications is available in Stephen A. Moses, “How to Fix Long-Term Care Financing,” Center for Long-Term Care Reform, July 26, 2017, pp. 34-65, http://www.centerltc.com/pubs/How-To-Fix-Long-Term-Care-Financing.pdf.

[39] “Spousal Refusal, which has been dubbed, ‘just say no,’ is when a non-applicant spouse of a long-term care Medicaid applicant refuses to help pay the cost of long-term care for their spouse. While spouses are legally obligated to financially support one another, Medicaid cannot legally deny care if a non-applicant spouse refuses to contribute towards the cost of care of their spouse” (American Council on Aging, “How Spousal Refusal Works as a Strategy to Medicaid Eligibility,” updated May 31, 2023, https://www.medicaidplanningassistance.org/spousal-refusal/).

Note that spousal refusal is clearly illegal under federal law, but it is routinely permitted in New York and Florida and sporadically in some other states.

Life estate: “A common dilemma that our Fortune 500 clients run into is how to preserve their homes while also gaining Medicare [sic] eligibility. A transfer subject to a life estate may be used to preserve your home and facilitate your eligibility for Medicaid. With this planning tool, you transfer the ‘remainder interest’ in your house to your children (or other beneficiaries), and keep a ‘life estate’ for yourself. As a practical matter, you deed the house to the remainder beneficiaries and incorporate language in the deed to retain your life estate. The life estate gives you the legal right to live in the house for life” (Kevin Won, “Residence Transfer Subject to Life Estate: Medicaid Planning for Fortune 500 Employees and Retirees,” The Retirement Group, October 29, 2020, link).

“Half a Loaf, Reverse Half a Loaf, and Modern Half a Loaf are Medicaid gifting strategies (also called transfer strategies) that have been or are currently used for the purpose of reducing countable assets to qualify for Medicaid. These strategies can also preserve some of the Medicaid applicant’s assets for their family members” (American Council on Aging, “How the Modern Half a Loaf Strategy Helps Families Become Medicaid Eligible and Preserves Assets,” updated January 25, 2023, https://www.medicaidplanningassistance.org/modern-half-a-loaf/).

[40] “A data analytics application could review household data or claims information to spot anomalous patterns that suggest ineligibility.” William J. Oliver with Josh Archambault, “MassHealth Protecting Medicaid Resources for the Most Vulnerable: How Massachusetts Saved Hundreds of Millions through Enhanced Eligibility Verification,” Pioneer Institute, October 2018, p. 7, link

[41] “Washington Advisory Vote 20, a non-binding question concerning whether to maintain or repeal House Bill 1087, was on the ballot in Washington as an advisory question on November 5, 2019. A majority of voters voted in favor of repealing the bill.” Ballotpedia, “Washington Advisory Vote 20, Nonbinding Question on Tax to Fund Long-Term Healthcare Services (2019),” link.

“Washington Senate Joint Resolution 8212, the Authorize Fund Investment of Long-Term Services and Supports Trust Account Amendment, was on the ballot in Washington as a legislatively referred constitutional amendment on November 3, 2020. It was defeated.” Ballotpedia, “Washington Senate Joint Resolution 8212, Authorize Fund Investment of Long-Term Services and Supports Trust Account Amendment (2020),” link.

[42] “As of Monday, Aug. 15, [2022] the [State of Washington] Employment Security Department reports the following WA Cares exemption numbers:

Total opt-out requests submitted: 478,781
Total opt-out requests processed: 478,681
Total opt-out requests approved: 475,072
Applications processed as a percentage of total: 99.98%.”

Elizabeth Hovde, “Updated Numbers on People Exempted from State’s Long-Term-Care Program and Payroll Tax,” Washington Policy Center, August 16, 2022, https://www.washingtonpolicy.org/publications/detail/updated-numbers-on-people-exempted-from-states-long-term-care-program-and-payroll-tax.

[43] “Washington State’s ‘Washington Cares Fund’ (WCF) stimulated a tremendous demand for private LTCI from individuals and businesses within WA…. Partly because the tax applies to all earned income, LTCI sales in Washington soared to unprecedented levels. Insurers quickly became backlogged with applications and were concerned about early lapses as the law provided a permanent WCF exemption based on only a one-time attestation. Insurers reduced design flexibility, and then discontinued sales in WA before the November 1 deadline.” Claude Thau, Allen Schmitz, and Chris Giese, “2022 Milliman Long Term Care Insurance Survey,” Broker World, July 1, 2022, https://brokerworldmag.com/2022-milliman-long-term-care-insurance-survey/.

[44] “We estimate total stand-alone LTCI annualized new premium sales of nearly $200 million in 2021 … almost 1/3 more than our 2020 estimate of $150 million. However, premium outside the state of Washington decreased 6.0 percent, based on the insurers that reported sales.

“We estimate that 140,000 to 150,000 people purchased stand-alone LTCI coverage in 2021, more than triple the 2020 numbers. Outside of WA, the number of new insureds dropped 9.4 percent based on the insurers that reported sales.” Thau, Schmitz, and Giese, “2022 Milliman Long Term Care Insurance Survey.”

[45] Richard W. Johnson and Judith Dey, “Long-Term Services and Supports for Older Americans: Risks and Financing, 2022,” HHS, Assistant Secretary for Planning and Evaluation, revised August 2022, p. 1, https://aspe.hhs.gov/sites/default/files/documents/08b8b7825f7bc12d2c79261fd7641c88/ltss-risks-financing-2022.pdf. LTSS stands for “long-term services and supports,” another term for LTC.

[46] Johnson and Dey, “Long-Term Services and Supports for Older Americans,” p. 6.

[47] Johnson and Dey, “Long-Term Services and Supports for Older Americans,” p. 1. On page 5, Johnson and Dey clarify: “We project that total paid LTSS expenses will average $120,900 per person (Table 3). Medicaid is the largest payer of LTSS, averaging $51,800 after age 65 and accounting for 43% of the total. Family out-of-pocket costs are also substantial, averaging $44,800 and accounting for 37% of the total.”

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

[49] Johnson and Dey, “Long-Term Services and Supports for Older Americans,” p. 17. Table A1.

[50] “PDV estimates, which are reported in Tables A1-A9, use the Social Security trustees’ ultimate real interest rate of 2.5%. Because the trustees assume long-range price growth averages 2.6%, this real discount rate is equivalent to a nominal long-run discount rate of about 5.1%.” Johnson and Dey, “Long-Term Services and Supports for Older Americans,” p. 13.

[51] See footnote 75.

[52] Resources set aside for future LTC expenses would be expended in the private LTC market, where services cost more—often 150 percent of what Medicaid pays for the same service. This differential needs to be accounted for in estimating the average and catastrophic LTC responsibility of individuals. On the plus side, paying privately for LTC tends to command better access to higher quality care across a wider choice of care venues than Medicaid does.

[53] Richard W. Johnson and Claire Xiaozhi Wang, “The Financial Burden of Paid Home Care on Older Adults: Oldest and Sickest Are Least Likely to Have Enough Income,” Health Affairs 38, no. 6 (June 2019), p. 994, https://www.healthaffairs.org/doi/10.1377/hlthaff.2019.00025.

[54] Johnson and Wang, “The Financial Burden of Paid Home Care on Older Adults.”

[55] Johnson and Wang, “The Financial Burden of Paid Home Care on Older Adults,” p. 1000.

[56] “Over the past two decades, annual LTCI premiums in the stand-alone market have increased significantly for both current and new policyholders. Higher average premiums reflect increased demand for more comprehensive benefit packages (including inflation protection) and higher daily benefit amounts” (Kirsten J. Colello, “Long-Term Care Insurance: Overview,” Congressional Research Service, updated July 21, 2023, https://crsreports.congress.gov/product/pdf/IF/IF11614).

[57] “We conservatively defined the middle market as those individuals in the 41st to 80th percentile of individual income and annuitized assets in 2014. For seniors age 75-84, that band corresponds to $25,001 to $74,298 in annual income and assets. The band is wider for older seniors age 85 and above, where it ranges from $24,450 to $95,051” (Beth Burnham Mace et al., “Middle Market Seniors Housing Study: Executive Summary,” National Investment Center, https://www.nic.org/wp-content/uploads/pdf/Executive-Summary.pdf).

[58] “By reducing annual seniors housing costs by $15,000 per year—from $60,000 to $45,000— the potential market expands by 3.6 million individuals 75+. At the $45,000 annual cost level, 10.2 (71 percent) million middle-income seniors have resources including housing equity above the annual cost” (Mace et al., “Middle Market Seniors Housing Study”).

[59] Already, limited LTC insurance premiums and certain LTC expenses can be withdrawn from HSAs tax free.

[60] Investment Company Institute, “Release: Quarterly Retirement Market Data,” June 14, 2023, https://www.ici.org/statistical-report/ret_23_q1.

[61] “According to the Housing Vacancy Survey, 78.5 percent of households age 65 and over owned their primary residences in 2018.” Joint Center for Housing Studies of Harvard University, “Housing America's Older Adults 2019: A Supplement to the State of the Nation’s Housing Report,” 2019, p. 6, link.

[62] National Reverse Mortgage Lenders Association, “Senior Home Equity Levels Fall Slightly to $12.39T in Q4,” press release, April 21, 2023, link.

[63] GAO, Medicaid: Recoveries from Nursing Home Residents’ Estates Could Offset Program Costs, p. 4.

[64] “Americans purchased $3.3 trillion of new life insurance coverage in 2021, a 1.3 percent decrease from 2020. By the end of 2021, total life insurance coverage in the United States was $21.2 trillion, an increase of 3.7 percent from 2020 (Table 7.1).” American Council of Life Insurers, “Life Insurers Fact Book,” November 28, 2022, https://www.acli.com/about-the-industry/life-insurers-fact-book.

[65] “Life insurance can provide much-needed cash for loved ones you leave behind when you die.… But life insurance also can provide cash for you while you’re living—that is, if you have a cash value life insurance policy.… You can access the cash in a variety of ways. That’s right: It’s yours for the taking.” Cameron Huddleston, “Cash Out Life Insurance Guide,” Forbes, updated May 19, 2022, https://www.forbes.com/advisor/life-insurance/tap-cash-value/.

[66] “You can sell either a term life policy or a permanent life policy. However, if you have a term life policy, investors prefer that the policy have an option to be converted to a permanent policy because they don’t want to risk having the insured outlive the length of the policy…. Or the insured’s life expectancy must be shorter than the term of the policy to sell it.” Cameron Huddleston and Amy Denise, “Life Settlements Provide Escape Hatch When You Need Cash,” Forbes, updated March 28, 2021, https://www.forbes.com/advisor/life-insurance/life-settlements/.

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

Seattle—

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

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

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

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

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

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

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

· As People Live Longer, Family Caregivers Face Financial Challenges

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

· The federal Medicaid bait and switch

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

Seattle—

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

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

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

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

Seattle—

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

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

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

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

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

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

The LTC Solution

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

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

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

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

What Did Not Work

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

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

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

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

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

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

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

What Happened and Why Action Is Imperative Now

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

[4] Moses, “Long-Term Care: The Problem.”

[5] For example: “Even making small changes in your daily life can help you live longer and better. In general, you can support your physical health by staying active, eating and sleeping well, and going to the doctor regularly” (National Institutes of Health, National Institute on Aging, “What Do We Know About Healthy Aging?,” https://www.nia.nih.gov/health/what-do-we-know-about-healthy-aging).

[6] “A shocking 56% of boomers mistakenly believe that Medicare will pay for long-term (sometimes called ‘custodial’ care). They are sadly mistaken. Medicare was designed to cover medical care only.” Sara Zeff Geber, “Hey Boomer: Medicare Won’t Cover Your Long-Term Care,” Forbes, July 28, 2021, https://www.forbes.com/sites/sarazeffgeber/2021/07/28/hey-boomer-medicare-wont-cover-your-long-term-care/.

[7] “Because of the attention focused on Medicare, Title XIX [Medicaid] was passed by Congress with little public notice. This relative obscurity was lost when the cost of New York State’s Medicaid program (effective May 1, 1966) became known. Federal cost estimates for the entire Medicaid Program were shown to have been grossly underestimated.… The amounts expended to finance Medicaid in the first two years were surprisingly high. Estimates in 1965 of the annual federal cost of Medicaid ranged from $150 million to $238 million. Yet actual federal expenditures were $621 million in the calendar year 1966. In 1967, Congress estimated that the annual federal share would rise to $1.4 billion in fiscal 1968 and to $3.1 billion by 1972, provided no additional restrictions were placed on the 1965 program.” (p. 63, 65, footnotes omitted) ______, Columbia Journal of Law and Social Problems, “Medicaid: The Patchwork Crazy Quilt,” April 1969.

[8] “During the decade following the 1965 passage of Medicare and Medicaid, there was a dramatic expansion in the supply of nursing home beds and an even more dramatic escalation in costs. New facilities were built, and a more sophisticated set of owners emerged, including the multistate, multifacility systems or chains. These developments were largely a product of four factors: (1) the availability of funding; (2) the method of reimbursing facilities; (3) increasing demand; and (4) federal health and safety regulation.” Catherine Hawes and Charles D. Phillips, The Changing Structure of the Nursing Home Industry and the Impact of Ownership on Quality, Cost, and Access (Washington: National Academies Press, 1986), https://www.ncbi.nlm.nih.gov/books/NBK217907/.

[9] “The principal group that is eligible for federal sharing of medical care costs is the categorically related medically needy, i.e., the aged, disabled, blind, or members of families with dependent children, whose income and resources exceed the maximum levels established by the state in question for eligibility for cash public assistance payments, but are not adequate to pay all their medical care expenses.” Sydney E. Bernard and Eugene Feingold, “The Impact of Medicaid,” Wisconsin Law Review 726 (1970), p. 753 (footnotes omitted, bolding added), [LINK].

[10] “Many [pre-Medicaid state assistance plans] required that the beneficiary must transfer to the pension authority any property they possessed before any payment would be made. Most had property and income caps to limit eligibility, generally a maximum of $3,000 in property and $300-$365 a year in income. Most required that benefits would be denied to anyone who gave away property in order to qualify for public assistance. Most required that a lien be placed on the estate of the beneficiary to be collected upon their death. Most required that recipients be ‘deserving,’ and benefits were denied to anyone who deserted a spouse, failed to support their families, had committed any crime, or had been a tramp or beggar.” Jeff Hoyt, “Senior Living History: 1930-1939,” SeniorLiving.org., July 27, 2023, https://www.seniorliving.org/history/1930-1939/.

[11] “Those states which attempted to bring the poor into the mainstream by providing liberal eligibility standards, broad benefits, and adequate fees found themselves running into opposition at home and in Congress on both financial and ideological grounds.… High costs are the result of precisely those aspects of Medicaid which were welcomed by social reformers-the broadening of eligibility requirements and of services covered, the maintenance of effort and equality of treatment requirements, and the payment of more generous fees.” Bernard and Feingold, “The Impact of Medicaid,” 752-53.

[12] The Omnibus Budget Reconciliation Act of 1980 imposed the program’s first limit on asset transfers to qualify for Medicaid. Previously “applicants were expressly permitted to transfer resources that otherwise would have disqualified them from receiving any benefits.” (p. 372) “The new SSI rule was expressly not applicable to assets which were exempt when transferred, and this included the family home. Because of this exemption, courts were prohibiting states from applying their transfer rules to assets that were exempt when transferred.” (p. 373 [footnotes omitted], Timothy N. Carlucci, “The Asset Transfer Dilemma: Disposal of Resources and Qualification for Medicaid Assistance,” Drake Law Review 36, no. 369 (1986-1987), [LINK].

[13] “Careful planning even under adverse state law will still be able to achieve the goal of excluding an applicant’s resources for purposes of determining Medicaid eligibility” (William G. Talis, “Medicaid as an Estate Planning Tool,” Massachusetts Law Review 66 [Spring 1981], p. 94).

[14] The Tax Equity and Fiscal Responsibility Act of 1982 expanded the voluntary two-year transfer of assets restriction to include exempt homes and permitted state Medicaid programs to place liens under certain limited circumstances in order to secure real property until it could be recovered from the estates of deceased Medicaid recipients to offset the cost of their LTC. Nevertheless, this Medicaid planner was undeterred: “With long-range planning, the cooperation of relatives, some good health, and maybe a little luck, couples will be in a position to negotiate between the rock and a hard place that Congress has placed in the Medicaid path” (Gill Deford, “Medicaid Liens, Recoveries, and Transfer of Assets after TEFRA,” Clearinghouse Review, June 1984).

[15] The Medicare Catastrophic Coverage Act of 1988 also required state Medicaid programs to look back 30 months (previously only 24 months and voluntary) for inappropriate asset transfers. It established an ineligibility penalty equal to the amount of assets transferred for less than fair market value for the purpose of qualifying for Medicaid divided by the average cost of a nursing home in the state. So, for example, an applicant who gave away $80,000 to qualify for Medicaid in a state where nursing home care averaged $8,000 per month would be ineligible for 10 months from the date of the transfer. The law also capped the maximum asset transfer penalty at 30 months. Although Medicare provisions contained in this legislation were repealed, these Medicaid provisions remained.

[16] For example: “So is there any practical way to juggle assets to qualify for Medicaid before losing everything? The answer is yes! By following the tips on these pages, an older person or couple can save most or all of their savings, despite our lawmakers’ best efforts…. Here are the best options: Hide money in exempt assets…. Transfer assets directly to children tax-free…. Pay children for their help…. Juggle assets between spouses…. Pass assets to children through a spouse…. Transfer a home while retaining a life estate…. Change wills and title to property…. Write a durable power of attorney… Set up a Medicaid Trust…. Get a divorce” (Armond D. Budish, Avoiding the Medicaid Trap: How to Beat the Catastrophic Costs of Nursing-Home Care [New York: Henry Holt, 1981]).

[17] HHS, Office of Inspector General, Medicaid Estate Recoveries: National Program Inspection, June 1988, http://oig.hhs.gov/oei/reports/oai-09-86-00078.pdf. This author directed the study and wrote its report.

[18] GAO, Medicaid: Recoveries from Nursing Home Residents’ Estates Could Offset Program Costs, March 7, 1989, p. 3, https://www.gao.gov/products/hrd-89-56.

[19] HHS, Office of Inspector General, Medicaid Estate Recoveries, pp. 47-48.

[20] The Omnibus Budget Reconciliation Act of 1993 (OBRA ’93) implemented many of the OIG’s and GAO’s recommendations. It extended the look-back period for asset transfers to a full three years (36 months) for most improper transfers and to five years for transfers into or out of a trust. The law also dropped the 30-month cap on the eligibility penalty, making it potentially unlimited. OBRA ’93 made estate recoveries mandatory for the first time. It prohibited the common practice of “pyramid divestment,” which had allowed asset transfer penalties to run simultaneously, enabling as much as a million dollars to be jettisoned in less than a year to achieve eligibility without additional penalty.

[21] For example: “Now we have more complicated plans, but we have plans. We are going to bill more. OBRA ’93 was bad for our clients, but good for us…. Numerically, most of the techniques we use are still there…. It is worth trying anything once; then network and tell each other what we got away with…. Most of my clients get eligible quickly just from thoughtful spending” (Robert Fleming, speech before the National Academy of Elder Law Attorneys [NAELA] Institute, November 21, 1993).

“WE STILL BELIEVE THAT ALMOST ANYONE CAN BECOME MEDICAID ELIGIBLE FOR LONG-TERM CARE BENEFITS EVEN IN CRISIS…. It is still possible to transfer non-exempt assets (countable) into exempt assets (non-countable) for purposes of obtaining eligibility. The catch will be planning around the estate recovery program…. For instance, the conversion of cash into an interest in a third person’s residence is a way to shelter cash assets as part of the spend-down amount. The interest in the residence would then be transferred into a limited partnership. This limited partnership interest is not real property and is, therefore, not subject to having a lien placed against it” (Baird Brown and Robert Fleming, “Planning Options That OBRA ‘93 Does Not Affect,” NAELA Elder Law Institute proceedings, 1993, Section 12, pp. 11, 14, 16; emphasis in original).

“While many practitioners may believe that the Medicaid qualifications rules limit benefit eligibility to only the very poor, significant planning opportunities exist which can be utilized to qualify an individual for Medicaid benefits who otherwise has the financial resources to pay the cost of long-term care” (Harley Gordon, How to Protect Your Life Savings from Catastrophic Illness and Nursing Homes [Boston: Financial Strategies Press, 1994], p. 66).

[22] The Health Insurance Portability and Accountability Act of 1996 made transferring assets for less than fair market value to qualify for Medicaid a crime punishable by a fine of up to $10,000 and up to a year in jail.

[23] The Balanced Budget Act of 1997 repealed the criminalization of asset transfers and targeted lawyers who recommended asset transfers instead. The law’s criminalization of Medicaid planning advice set the elder law bar back on its heels for a while, but it also had a lasting impact. From then on, caution prevailed more often among elder law attorneys. They retreated from using terms such as juggling assets or Ziegfield Follies spending to qualify for Medicaid. Some reflected in print about the profession’s poor judgment and bad reputation in this regard:

Unfortunately, members of the Medicaid planning bar have sometimes been their own worst enemies. For example, at the May 1996 Symposium of the National Academy of Elder Law Attorneys, two prominent NAELA members (one a former President of the organization) gave a presentation on Medicaid planning. Using the format of a skit in which other NAELA members played the roles of the family, the presenters took the audience through a session in which an elderly couple, whose net worth exceeded $750,000, was counseled on how to arrange their affairs to attain Medicaid eligibility. Among the assets in the couple’s portfolio was a vacation home. The skit became fodder for critics of Medicaid eligibility planning and indeed was widely criticized by other NAELA members (Timothy L. Takacs and David L. McGuffey, “Medicaid Planning: Can It Be Justified? Legal and Ethical Implications of Medicaid Planning,” William Mitchell Law Review, 29, no. 111, p. 135).

[24] “US Attorney General Janet Reno has sent Speaker of the House Newt Gingrich a letter dated March 11, 1998, to the effect that the Department of Justice will take no action against professionals who advise people on transferring their assets to become eligible for Medicaid’s LTC benefits.” George Sherman, “Department of Justice Won’t Enforce Law Prohibiting Professional Assistance for Medicaid Transfers,” LTC News and Comment, May 1998.

[25] “A federal law that made it illegal to advise people how to shed assets to qualify for Medicaid is unconstitutional, a federal judge ruled Tuesday. The 1997 law was intended to prevent financially secure people from giving away or hiding assets in order to qualify for taxpayer-funded Medicaid benefits.” Tampa Bay Times, “‘Granny’s Adviser’ Law Is Struck Down,” September 13, 2005, https://www.tampabay.com/archive/1998/09/23/granny-s-adviser-law-is-struck-down/.

[26] Joint Center for Housing Studies of Harvard University, “Housing America’s Older Adults 2018,” Figure 7, p. 7.

[27] Robert Hest, Giovaan Alarcon, and Lynn A. Blewett, “Modeling Financial Eligibility for Medicaid Long-Term Services and Supports,” Journal of Aging and Social Policy, March 29, 2020, p. 7, https://www.tandfonline.com/doi/abs/10.1080/08959420.2020.1740638.

[28] The White House (G. W. Bush), “President Signs S.1932, Deficit Reduction Act of 2005,” press release, February 8, 2006, https://georgewbush-whitehouse.archives.gov/news/releases/2006/02/20060208-8.html.

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

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

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

New initiative aims to strengthen ties between family caregivers, paid caregivers
Should you buy long-term care insurance for your grandparents?
Transamerica Faces Suit Tied to Long-Term Care Buyout
Caregiving crisis prompts search for long-term care solutions
Rise in nursing home costs ‘drastically’ affects middle class: analysis
Baby boomers are aging. Their kids aren’t ready
Dementia’s staggering financial cost is revealed in new report: ‘Bankrupting families’
Most Seniors Will Need Long-Term Care. Here’s How to Save for It

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

Seattle—

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

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

Medicaid should only be ‘safety net’ for LTC needs, expert says
‘Sirens Going Off’: Providers Warn of Mass Closures, Vast Nursing Home Deserts Due to Staffing Mandate
Minimum wage to increase to $25 for nursing home, assisted living workers in California
Study: Dementia diagnosis causes out-of-pocket spending to skyrocket, net worth to plummet
Sex Appears to Protect Brain Health in Older Adults, Scientists Say
Underrated and underutilized: A look at long-term care insurance
Assisted living providers must pay attention to Medicaid beneficiary protections in HCBS regulations, groups warn
Another state takes the Medicaid MCO plunge as questions about delayed, denied care mount
Chronic diseases take a toll on U.S. life expectancy
Can states ease homelessness by tapping Medicaid funding? Oregon is betting on it
A focus on HCBS can eliminate bias in senior living and care: report
Staffing mandate could shift big costs to states — but they may not know it yet
Long-term-care planning using trusts

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

Seattle—

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

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

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

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

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

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

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

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

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

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

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

Seattle—

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

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

· California is leading the way in Medicaid abuse

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

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

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

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

· Release of ‘Long-Term Care: The Solution

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

· Experts create new vision for senior living

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

Seattle—

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LTC BULLET: LONG-TERM CARE: THE SOLUTION

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

LTC BULLET: LONG-TERM CARE: THE SOLUTION

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

Today, Paragon is releasing an important new report, Long-Term Care: The Solution, authored by Stephen Moses. Steve is the nation’s top expert on long-term care financing and his new report contains a solution to a very difficult policy problem.

Given the structure of our major entitlement programs—Social Security, Medicare, and Medicaid—the aging of the baby boomers presents a variety of public policy challenges. One is long-term care (LTC), which consists of medical and supportive services that people require at home or in institutions when they are unable to care for themselves.

As Steve wrote in a 2022 Paragon report, Long-Term Care: The Problem, well-intended government policy caused many of LTC’s problems. Government programs have largely paid our nation’s LTC expenses since 1965. Unfortunately, easy access to Medicaid while retaining wealth creates a moral hazard that discourages responsible LTC planning during early and middle adulthood and crowds out private sector alternatives. Too many people end up on Medicaid, which pays too little to ensure access to quality home care and causes excessive reliance on institutionalization and unpaid help from families and friends.

In Long-Term Care: The Solution, Steve constructs a reform that would reduce dependence on Medicaid and free up private financing to fix the LTC challenges. The following are from the paper’s executive summary, and the entire paper is worth a read to understand both why past efforts to reform Medicaid LTC have failed and why this new approach is our best hope to improve government LTC policy.

What Steve Found

When people encounter high LTC costs later in life, they typically qualify more easily for Medicaid than commonly thought. This moral hazard discourages early LTC planning. The past policy approach of generous Medicaid LTC eligibility with estate recovery after death did not adequately promote proper planning, either through savings or insurance. Most Americans possess enough wealth to fund their average LTC needs, which is about two years of home-based services. If the average 65-year-old had $70,000 set aside for LTC, it would grow to meet that need after age 85, when LTC commonly occurs. Positive incentives to plan early and pay privately avoid the loss of freedom and high economic cost from compulsory, payroll-funded policies.

Why It Matters

With the aging of the baby boomers and an increasing percentage of the population living past 85, creating a sustainable LTC policy is crucial. If Medicaid did not pay for expensive LTC after care is needed, more consumers would prepare privately and avoid Medicaid dependency. Unless policy is changed and the incentive to avoid proper LTC planning is removed, the LTC system will fail, harming those who most need public support.

Policy Suggestions

Medicaid LTC should be restored as a safety net for indigent elderly people. Lawmakers should eliminate the ability to access publicly funded LTC while preserving wealth. This paper details seven options to empower younger and middle-age Americans to meet a new, publicized individual LTC planning responsibility. This would unleash wealth currently unused for LTC that remains locked in home equity, individual retirement accounts, life insurance, and estates and reorient the LTC system to cater to seniors’ desires to age in their homes rather than in institutions.

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

Seattle—

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

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

Shortcomings of the ACA Exchanges: Far Less Enrollment at a Much Higher Cost
Minnesota Tops New AARP Long-Term Care Scorecard; Other States Lag Behind
A Winning Health Policy Agenda
Insights Care Honors Ken Dychtwald
CMS to lose half of staff in shutdown, full impact on providers uncertain
John Hancock to Sell Long-Term Care Hybrid Through Worksites
[Updated] BREAKING: Price of nursing home staffing mandate is $6.8B, 100K more workers, analysis finds
Expiring PHE policies spell trouble for HCBS programs

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

Seattle—

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

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

Commission recommends increasing hours-worked requirement for WA Cares, among other proposals
Medicare Can Cover a Lot More Home Care: Witness to Senate Panel
End of pandemic-era payments to family caregivers could complicate workforce shortages
Older adults at risk for dementia see fast declines in household wealth before dementia onset
Recession would add to ‘deteriorating’ CCRC outlook: Fitch
Protect Aging Clients Against Undue Influence
More than half of older Americans will need long-term term care. Many can’t afford the rising cost
How Medicare Impedes Health Care Innovation
Substantial differences’ in assisted living, nursing home admissions show need for improved health equity, researchers say
Long-Term Care Insurance Sales Rise at Some Carriers: A.M. Best
Demand for direct care workers expected to outpace availability: report
Gallup Poll Shows Public’s Deep Aversion to Nursing Homes, 42% of Americans Give ‘D’ or ‘F’
Pandemic Aid Lifts Federal Share of State Budgets to New Highs
Long-Term Care Claims Skyrocket In 2022
Study: Being a family caregiver does not mean you will plan for your own long-term care

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

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

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

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

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

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

What is LTC racism?

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

What are some examples of LTC racism?

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

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

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

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

What causes LTC racism?

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

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

LTC racism: Diagnosis

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

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

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

Key Money: LTC Racism’s Motor

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

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

LTC racism: Treatment

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

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

Long-Term Care: Cure

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

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

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

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

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

State veterans home rife with deficiencies, inaccurate COVID death reports: federal report
Biden’s Proposal to Restrict Affordable Health Options
Fitch Downgrade Could Mean Medicaid Cuts
Could legacy long-term care (LTC) blocks be the next wave of M&A deals?
Understanding the Stages of Dementia: A Compassionate Guide for Families and Caregivers
Fixing Medicaid rolls doesn’t mean leaving people without coverage
Biden unloads on nursing home operators

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

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LTC BULLET: LONG-TERM CARE RACISM

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

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

LTC BULLET: LONG-TERM CARE RACISM

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

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

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

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

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

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

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

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

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

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

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

“Highlights

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

BREAKING: CMS issues first-ever nursing home staffing mandate
BREAKING: CMS nursing home staffing mandate in question after study leaks
Proposed mandatory long-term care insurance: A closer look at the potential negatives
Short-Term Plans: The Battle for Health Insurance Choice
Can the Left and Right Agree on Health Reform?
As forecast price of federal staffing mandate climbs to $11.7B, analysts offer alternatives
Researchers identify lifestyle factors that predict nursing home needs later in life

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

Seattle—

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

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

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

· Dementia Risk From Midlife Onward Predicted With New Tool

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

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

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

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

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

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

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

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

Seattle—

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

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

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

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

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

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

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

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

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

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

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

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

Medi-Cal’s Structural LTC Racism

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

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

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

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

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

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

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

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

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

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

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

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

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

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

HealthyLife.net (Moses podcast interview)
Nine out of 10 seniors concerned about senior living cost, care and quality: report
State becomes first to strip Medicaid asset limit
8 Big Things Clients Don't Know About Estate Planning, Long-Term Care and Probate
Japan: Long-term care insurance system under funding pressure
Minnesota studies a Medicare companion product for LTC coverage
‘Old Age’ Enters a New Age: Dramatic shifts in demography and Americans' views of aging revealed in new Harris Poll study conducted by Age Wave
The Long View: Six reasons to start retirement planning in your 20s
Brains of people with Alzheimer’s are low on some antioxidants, study finds
How Do You Hide Money From Nursing Homes
Medicaid spending up for seniors but who will bankroll coming growth
Got Insurance? You May Be on Medicaid Too

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

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

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

Nursing homes and adult care costs surged by largest amount in July
Life Settlements Can Pay for Long-Term Care
What Happens to the Items I Bought to Qualify for Medicaid?
Genworth Set to Offer Long-Term Care Services in Texas
Painful and Getting Worse: Rise of Medicare Advantage Drains Vast Revenue from SNF Sector, Worsens Workforce Instability
Transforming health care for older adults
Providers must confront radical change in shifting competitive landscape: experts
Minority groups comprise more than 25 percent of MA beneficiaries, study finds
Many Americans Believe AI Will Provide Their In-Home Care As They Age
More Baby Boomers are living alone. One reason why: ‘gray divorce’

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Nationwide Maps Consumers' Long-Term Care Insurance Confusion
Tracking The Elusive Medicaid Workforce To Improve Access
National Advisory Commission for long-term care proposed — without providers
In a rapidly aging America, Medicaid can be a lifeline for long-term care
Introducing OmniFlex™: A Revolutionary Short-Term Care Plan Redefining the Industry, offered by ManhattanLife
In policy break, Medicare to pay for respite services under new dementia care model
CNA hourly pay nears $19 average, while admins score major gains of their own: salary survey
Long-term care: Insurance innovation can’t come soon enough

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

Seattle—

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

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

California to eliminate asset tests for Medicaid
Comedy Video: D.C.'s Premier Elder Care Community
New OIG Report Examines Prior Authorization Denials in Medicaid MCOs
The Forgotten Generation: Generation X Approaches Retirement
Pandemic loans showed dollars will move the staffing shortage needle: study
8 facts about Americans with disabilities
Medicare Advantage Plans Face More Budget Pressure
At-home, finger-prick blood test for Alzheimer’s is latest touted stab at early diagnoses
Healthcare bankruptcy filings set to triple
What Is Transfer Trauma?

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

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LTC BULLET: CASSANDRA’S CURRENT QUANDARY

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

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

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

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

LTC BULLET: CASSANDRA’S CURRENT QUANDARY

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

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

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

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

Executive Summary

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

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

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

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

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

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

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

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

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

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

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

We have plenty of reasons to worry:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Seattle—

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

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

For Home Care Providers, There’s Untapped Potential In Long-Term Care Insurance
The CLTC Digest Quarter 3
Nursing care has fastest-growing prices of healthcare sectors
Family caregivers have fewer assets, more debt issues than non-caregivers
For some Washington residents, the new WA Cares Fund may seem appealing. But sticking with a private long-term care insurance plan might still be the better option. Our expert has the details.
Alzheimer’s among seniors is most common in these parts of the US, first-of-its-kind data shows
Dementia patients fared better in LTC facilities, not home, during pandemic, new study shows
New Paragon Study: The Harm of Delaying the Disenrollment of Medicaid Ineligibles
KFF: Only 29% of Nursing Homes Would Meet 4-Hour Federal Staffing Mandate
Tax Advantaged Strategies to Help Clients Plan for Long-Term Care
AHCA to White House: Nursing home staffing mandate spells ‘disaster’
Republicans want to make state's long-term care tax optional
Biden’s long-term care agenda faces headwinds Workforce shortages: Medicaid reimbursement rates make it hard to hire staff for long-term, home and community-based care facilities
Is Work From Home to Blame for Senior Housing’s Muted Recovery?
Independent living program to aid hundreds of aging, disabled adults

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

Seattle—

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LTC BULLET: LTC BLOCK GRANT OR WAIVER POTENTIAL

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

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

LTC BULLET: LTC BLOCK GRANT OR WAIVER POTENTIAL

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

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

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

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

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

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

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

1. Introduction

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

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

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

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

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

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

II. Background

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

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

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

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

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

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

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

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

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

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

III. The Challenge

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

It should save taxpayers money while improving access to quality long-term care for all citizens;
It should encourage, instead of discouraging, private financing of home and community-based services and assisted living;
It should encourage, instead of discouraging, the purchase of private long-term care insurance to pay for all levels of extended care;
It should combine generous eligibility criteria to protect the unprotected with strong incentives for everyone to plan ahead for self-protection;
It should pay market-based reimbursement rates to assure access to quality care for all participants and to eliminate discrimination;
It should promote strong market competition between providers of all levels of care;
It should maximize the number of consumers in the marketplace who have a pecuniary interest in getting the best possible care at the lowest possible price.

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

IV. The Moral High Ground

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

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

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

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

A. Preserve generous eligibility

1. Status Quo

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

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

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

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

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

2. Senior Financial Security Program

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

3. Model State Statute

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

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

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

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

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

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

"Other exempt resources and limitations to be delineated."

B. Prohibit divestiture

1. Status Quo

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

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

2. Senior Financial Security Program

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

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

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

3. Model State Statute

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

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

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

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

C. Require legal security as a condition of eligibility

1. Status Quo

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

2. Senior Financial Security Program

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

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

3. Model State Statute

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

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

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

D. Require estate recoveries

1. Status Quo

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

2. Senior Financial Security Progra

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

3. Model State Statute

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

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

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

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

1. Status Quo

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

2. Senior Financial Security Program

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

3. Model State Statute

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

F. Educate the public

1. Status Quo

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

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

2. Senior Financial Security Program

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

3. Model State Statute

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

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

VI. Conclusion

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

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

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

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

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

Seattle—

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

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

Alzheimer’s drug Leqembi has full FDA approval now and that means Medicare will pay for it
State factsheet not helpful for long-term-care crisis
A Closer Look at the Five Largest Publicly Traded Companies Operating Medicaid Managed Care Plans
‘Astronomical’ Medicare Advantage Denials, Pre-Auth Issues Cause Outcry from Nursing Homes
Retirees are underestimating how long they will live
Medicare Advantage retaining sicker patients with more complex health needs: study
Ages 55-Plus Control Three Quarters Of U.S. Investable Assets, But Assets Aren’t Main Driver For Retirement: Net equity in real estate jumps; taxable now outpaces retirement assets
Dollars spent on HCBS go further than those spent on nursing homes, study finds
Nursing home, home health fast-growing health spending categories
Washington State Long-Term Care Insurance Program to Launch Saturday
Majority Of Americans Have Taken A Financial Hit Due To Rising Interest Rates
LTC workers need higher wages, better training now that society’s applause has ended: report
TOMORROW: Medicaid Redeterminations: Setting the Record Straight
Medicaid Long Term Care Update

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

Seattle—

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LTC BULLET: THE LTC NARRATIVE

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

*** HAPPY INDEPENDENCE DAY ***

LTC BULLET: THE LTC NARRATIVE

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Seattle—

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

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

Russian hackers expose information of 2.5 million Genworth customers
A blow to CMS’s credibility … thank goodness
ChatGPT and Beyond: How Artificial Intelligence is Shaping the Future of Nursing Home Operations
Americans pay $17.5 billion to support parents in a year
Should State Long-Term Care Insurance Funds Invest In Stocks?
Ben Veghte: As long-term care needs grow, WA Cares offers long-term solution for working Washingtonians
Medicaid changes could help assisted living help more older adults
‘Harmful Yet Largely Invisible:’ Resident Fear of Staff Highlighted in Recent Report
Workers in Germany will soon pay more for long-term care insurance

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

Seattle—

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

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

Medicare spending expected to top $1 trillion this year, CMS says
What to Know About Buying Long-Term Care Insurance
Long Term Care Insurance & Inflation
White House asks states to pump the brakes on Medicaid disenrollment
UC Davis Health launches new geriatric division
New tool detects falls 32 days before they happen
It’s no better in 16 years of long-term care study in SD
Public Long Term Care Insurance Programs
Social Security COLA Estimated at 2.7% for 2024 as Inflation Cools
New long-term care solution for couples eliminates the guesswork of who will need care: Nationwide CareMatters Together is the first cash-indemnity, linked benefit solution designed for two lives
Researchers identify home health fraud patterns across U.S.

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

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LTC BULLET: THE MEDICAID SPEND DOWN BULLETS

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

LTC BULLET: THE MEDICAID SPEND DOWN BULLETS

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

The Medicaid Spend Down Bullets

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Seattle—

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

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

New York Regrets How It Regulated Long-Term Care Insurance Rates
My Child Helps Pay My Bills. Do I Need to Tell Medicaid?
The Nation's Fiscal Health: Action Needed to Address Projected Unsustainable Debt Levels
Setting the Record Straight on Medicaid Redeterminations
‘New retirement reality’ undermines planning, survey finds
WA Cares investment meeting talks money, mentions renewed website
What Should We Do About Medicare?
The Future of Assisted Living: AI in Elderly Care
‘Impetus’ ignored: LeadingAge CEO calls on Congress, White House to act on broader threats to long-term care
Social Security and Medicare Are Ticking Time Bombs
Americans refocusing on future amid decline in financial readiness for retirement: analysis
Ensuring Resident Coverage During the Medicaid Unwinding

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

Seattle—

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Let’s consider those questions we raised earlier.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Gary D. Alexander and Elizabeth Stelle: Medicaid eligibility matters
America aged rapidly in the last decade as baby boomers grew older and births dropped
U.S. Nursing Homes Fail to Report Many Serious Falls, Bedsores: Study
Washington’s long-term care program still flawed as new tax looms
Wearable AI patch monitors multiple health factors for seniors
3 nursing homes closing quickly as Ohio leaders plead for Medicaid adjustment
Is The Next Wave Of Life Expectancy Gains On The Horizon?
People with disabilities need more access to HCBS, researchers say
Senior-Living Debt Defaults Far Outpace the Rest of Government Debt Market
The History of Medicare Advantage: From Inception to Growing Popularity

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

Seattle—

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

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

The Home Care Workforce Has Not Kept Pace With Growth In Home And Community-Based Services
Don't let caregiving sabotage retirement planning
Senators probing largest Medicare Advantage plans over how algorithms factor in care denials
Complete Debacle’: US House Hearing on Nursing Home Covid Deaths Blames Political Acrimony, Policies, Staffing
Western Diet Identified as Risk Factor For Alzheimer's Disease, Scientists Warn
Medicaid and leadership challenges, as state takes over nursing home
What to know about Washington Cares payroll tax as premiums are set to resume
Medicare, Medicaid Spending Similar Among Dual Eligible Beneficiaries
Sorry kids if I need long-term care, I’m spending your inheritance
40 percent of healthcare working hours can be augmented by AI, study finds

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

Seattle—

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How do they figure that?

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

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

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

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

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

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

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

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

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

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

Argentum Releases New Report Outlining Policy Solutions to Increase Access to Assisted Living
How to Use a Trust to Plan for Long-Term Care
Social Security COLA Estimated at 3.1% for 2024
AHCA’s CEO: Nursing Homes Must Prepare for ‘Massive’ Staffing Mandate Battle, Adapt to Managed Care ‘Mega-Trend’
TCARE Welcomes Long-Term Care Executive Vince Bodnar as Chief Actuary
The Nation's Fiscal Health: Road Map Needed to Address Projected Unsustainable Debt Levels
Provider payments could be at ‘catastrophic’ risk if federal debt limit breached
AARP poll: Majority of voters want more support for family caregivers

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

Seattle—

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

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

The Hidden Costs Home Health Providers Face When Taking On More MA Patients
Genworth Creates Discounted LTC Provider Network
Biden Moves To Increase Pay For Medicaid Home Care Aides. Will It Work?
‘Big Trouble’: Medicare Advantage Rates Strain SNF Margins, Deepen Sector’s Pain
Regular internet use may be linked to lower dementia risk in older adults, study says
A Clever Strategy to Get Your Long-Term Care Costs Covered by Medicaid
ChatGPT’s blind spots can compromise caregiving, authors warn
Life Estates: Helpful or Problematic? (Part 3: Medicaid)
The Super SNF Comes of Age: Advanced Care Programs Expand, Yield Results
Retirement Confidence Hits Lowest Point Since 2008: EBRI
AI chats could be more empathetic than doctors’ responses to patient questions, study finds
Half of All Eligible Medicare Beneficiaries Are Now Enrolled in Private Medicare Advantage Plans
How Can I Protect My IRA From Medicaid?

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

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LTC Bullet: AI on LTC

LTC Comment: Artificial intelligence (AI) is all the rage these days. Does it help or hurt long-term care planning? We ask; AI answers; and we respond after the ***news.***

LTC BULLET: AI ON LTC

LTC Comment: “Artificial intelligence is the simulation of human intelligence processes by machines, especially computer systems.” Click the link for details, but bottom line, among other features: AI makes it possible for us to ask questions online and get plausible narrative answers almost instantaneously. Leaving aside for now that some experts’ worry AI technology could threaten human survival, we decided to Ask AI some important questions about LTC financing policy. What follows are our questions, AI’s answers, and our comments in response.

Especially, don’t miss iAskAI’s answer to my final question at the very end: “If you were to write an ‘LTC Bullet,’ what would it say?” Here’s an excerpt from the chatbot’s answer: “The LTC Bullet is known for its in-depth analysis and comprehensive coverage of long-term care issues. It is highly regarded by policymakers, industry professionals, and academics alike. The publication is available to subscribers only and is distributed via email. In conclusion, the LTC Bullet is a valuable resource for those interested in long-term care policy and financing. It provides insightful analysis on a range of topics related to long-term care and is highly regarded by industry professionals and policymakers.” Gosh, thanks.

Should I buy LTC insurance or wait to see if I ever need long-term care and if I do use Medicaid planning?

According to iAsk.AI Answer Engine: Long-term care (LTC) insurance is a type of insurance that covers the cost of long-term care services, such as home health care, nursing home care, and assisted living facilities. It is designed to help individuals pay for these services without depleting their savings or relying on Medicaid. However, whether or not to buy LTC insurance depends on several factors.

One factor to consider is your age and health status. LTC insurance premiums increase with age, so if you are young and healthy, it may be more affordable to purchase LTC insurance now than to wait until you are older and at a higher risk of needing long-term care. On the other hand, if you have pre-existing health conditions, you may not be able to qualify for LTC insurance or may have to pay higher premiums.

Another factor to consider is your financial situation. If you have significant assets and income, you may be able to afford the cost of long-term care without depleting your savings or relying on Medicaid. However, if you have limited assets and income, LTC insurance may be a good option to help protect your financial security.

It is also important to consider the potential benefits of Medicaid planning. Medicaid is a government program that provides health coverage for low-income individuals and families. It also covers the cost of long-term care for those who meet certain eligibility requirements. However, Medicaid planning can be complex and requires careful consideration of your financial situation and goals.

In summary, whether or not to buy LTC insurance depends on several factors, including your age and health status, financial situation, and goals for long-term care. It is important to carefully weigh the potential benefits and costs of LTC insurance and Medicaid planning before making a decision.

LTC Comment: Not a lot of help. Pretty wishy-washy. Doesn’t define Medicaid planning, acknowledge it involves artificial self-impoverishment to qualify for public welfare, nor disclose Medicaid’s serious access and quality deficiencies. On the other hand, the answer emphasizes LTCI’s downsides such as age-based premiums and pre-existing conditions without developing the product’s substantial benefits. So we homed in on Medicaid planning with this question …

What are the main techniques Medicaid planning attorneys use to qualify their clients for Medicaid LTC benefits while preserving their wealth?

According to iAsk.AI Answer Engine: Medicaid planning attorneys use several techniques to qualify for Medicaid long-term care benefits while preserving their clients' wealth. These techniques include:

1. Asset Protection Trusts: Attorneys can create irrevocable trusts that protect assets from being counted towards Medicaid's asset limit. These trusts can be set up so that the client and their spouse can still receive income generated by the assets in the trust, but the assets themselves are protected.

2. Medicaid Compliant Annuities: Attorneys can also use annuities to convert countable assets into income streams that are not counted towards Medicaid's asset limit. These annuities must meet certain criteria to be considered Medicaid compliant.

3. Spend Down Strategies: Attorneys can help clients spend down their assets in a way that maximizes their eligibility for Medicaid benefits. This might involve paying off debts, making home modifications, or prepaying funeral expenses.

It's important to note that Medicaid planning strategies can be complex and should only be undertaken with the guidance of an experienced attorney. Additionally, there are strict rules governing Medicaid eligibility, and any attempts to hide or transfer assets could result in penalties or disqualification from benefits.

LTC Comment: What struck me most about this answer is how it differs from what LTC researchers say about Medicaid planning. They rarely refer to any artificial self-impoverishment techniques other than asset transfers, which AI doesn’t even mention and are relatively uncommon methods. Note that AI does mention “spend down strategies” which are more accurately described as reducing countable resources by purchasing exempt assets. That is the Medicaid planning method used the most. So, let’s ask about it.

Can people with large assets qualify for Medicaid LTC benefits by purchasing "exempt" resources?

According to iAsk.AI Answer Engine: Yes, people with large assets may be able to qualify for Medicaid long-term care (LTC) benefits by purchasing "exempt" resources. Medicaid is a joint federal and state program that provides healthcare coverage to eligible individuals with low income and limited assets. Medicaid can also cover the cost of long-term care services, such as nursing home care, for those who meet certain eligibility requirements.

To qualify for Medicaid LTC benefits, an individual must meet both financial and medical eligibility criteria. Financial eligibility is determined by the individual's income and assets. In most states, an individual cannot have more than $2,000 in countable assets to be eligible for Medicaid LTC benefits. However, some assets are considered exempt and are not counted towards this limit.

Exempt assets may include a primary residence (up to a certain equity value), one vehicle, personal belongings, and certain types of prepaid funeral arrangements. Some states may also allow individuals to purchase exempt resources, such as annuities or trusts, in order to reduce their countable assets and meet the eligibility criteria for Medicaid LTC benefits.

It is important to note that purchasing exempt resources can be a complex process and may have legal and financial implications. It is recommended that individuals consult with a qualified attorney or financial advisor before making any decisions regarding the purchase of exempt resources.

In summary, people with large assets may be able to qualify for Medicaid LTC benefits by purchasing "exempt" resources. However, this strategy should only be pursued after careful consideration and consultation with a qualified professional.

LTC Comment: So, purchasing exempt assets is a “complex process” and people should consult a “qualified attorney” before using it? Nonsense. This technique of self-impoverishment is very easy, completely unlimited, and involves no special legal knowledge. State Medicaid eligibility workers routinely advise applicants and their families to speed up their “spend down” process by purchasing exempt assets, especially prepaid burial funds. Of course, people who do consult Medicaid planning lawyers will get the extra help of receiving long lists of exempt assets they are advised to buy in order to reduce their countable wealth. What does this easy access to Medicaid LTC benefits after people need care mean for the marketability of private LTC insurance? Let’s ask.

Does Medicaid Planning for LTC benefits impede the private LTC insurance market?

According to iAsk.AI Answer Engine: Medicaid planning for long-term care (LTC) benefits can potentially impede the private LTC insurance market. Medicaid is a government-funded program that provides healthcare coverage to low-income individuals, including coverage for long-term care services. Medicaid planning involves legally restructuring an individual's finances to qualify for Medicaid benefits, which can include transferring assets or income to a spouse or trust.

One potential way that Medicaid planning can impede the private LTC insurance market is by reducing the demand for private insurance. Since Medicaid provides coverage for long-term care services, individuals may choose not to purchase private insurance policies, especially if they believe they can qualify for Medicaid benefits through planning. This reduction in demand could lead to higher premiums and reduced profitability for private insurers, which could ultimately discourage insurers from offering LTC policies.

Another way that Medicaid planning can impact the private LTC insurance market is by creating adverse selection. Adverse selection occurs when individuals who are more likely to use LTC services are more likely to purchase private insurance policies, while those who are less likely to need LTC services opt-out of purchasing insurance. This can lead to higher premiums and reduced profitability for insurers, which again could discourage insurers from offering LTC policies.

However, it is important to note that there are also arguments against the idea that Medicaid planning impedes the private LTC insurance market. For example, some experts argue that Medicaid planning actually increases awareness of the need for long-term care services and encourages individuals to consider their options for financing these services, including private insurance.

In conclusion, while there are arguments both for and against the idea that Medicaid planning impedes the private LTC insurance market, it is clear that there is a complex relationship between these two factors that requires further research and analysis.

LTC Comment: Pretty good answer except on a couple points. AI says Medicaid planning might discourage LTC insurance if people “believe they can qualify for Medicaid benefits through planning.” Such belief is not necessary. Nor is it common. Most people don’t know who pays for LTC. But because Medicaid does pay and has paid since 1965, it enables consumers’ denial resulting in their skipping LTCI while they’re still young, healthy, and affluent enough to buy it. Of course, the idea that easy access to free LTC if it’s ever needed by means of Medicaid planning somehow increases awareness and encourages LTC planning is preposterous. How can free care at the point of need funded by the government not crowd out planning decades ahead, paying high premiums for many years and maybe getting nothing from your coverage in the end if you never need LTC? Count on AI to stretch every point to present a “balanced” view. But does any of this really matter?

How common is it for people to artificially impoverish themselves to become eligible for Medicaid LTC benefits?

According to iAsk.AI Answer Engine: It is difficult to determine the exact number of people who artificially impoverish themselves to become eligible for Medicaid LTC benefits. However, it is a known practice that some individuals engage in to qualify for government-funded long-term care benefits.

To be eligible for Medicaid LTC benefits, an individual must meet certain income and asset requirements. These requirements vary by state but generally require that an individual's income and assets fall below a certain threshold. Some individuals may artificially lower their income or transfer assets to family members in order to meet these requirements.

This practice of artificially impoverishing oneself is not illegal, but it may be considered unethical by some. Additionally, it can have negative consequences for the individual and their family members. For example, transferring assets can result in gift taxes and can also disqualify the individual from receiving Medicaid benefits for a period of time.

It is important to note that there are legal ways to plan for Medicaid eligibility without resorting to artificial impoverishment. Consulting with a qualified elder law attorney or financial planner can help individuals and families navigate the complex rules surrounding Medicaid eligibility.

In conclusion, while there is no exact number on how common it is for people to artificially impoverish themselves to become eligible for Medicaid LTC benefits, it is a known practice that some individuals engage in.

LTC Comment: This answer is a good example of the double talk you get from attorneys and most LTC researchers when you ask them about Medicaid planning. They downplay its frequency and whitewash its morality to divert attention and avoid regulation. So, is there no “exact number” of how many people ignore the risk of long-term care, avoid saving or insuring for the need, and take advantage of the Medicaid poverty program if necessary? Don’t you think that is something policy makers ought to know? Why are there no academic studies to measure this problem?

What is the "two Mercedes strategy" to gain Medicaid LTC eligibility?

According to iAsk.AI Answer Engine: The "two Mercedes strategy" is a planning technique used to gain Medicaid long-term care (LTC) eligibility by spending down assets. Essentially, the strategy involves purchasing exempt assets, such as two Mercedes-Benz cars, in order to reduce the countable assets of an individual seeking Medicaid LTC coverage.

In order to qualify for Medicaid LTC coverage, an individual must meet certain asset and income requirements. Generally, an individual's countable assets cannot exceed a certain amount (varies by state), and their income must be below a certain level. However, there are certain assets that are considered exempt and do not count towards the asset limit. These can include a primary residence, personal belongings, and one vehicle.

The "two Mercedes strategy" takes advantage of this exemption by purchasing two high-value vehicles that are exempt from the asset limit. By doing so, the individual can reduce their countable assets and potentially qualify for Medicaid LTC coverage.

It is important to note that this strategy may not work in all cases and should only be used after consulting with a qualified elder law attorney or financial planner. Additionally, it is important to consider the ongoing costs associated with owning two luxury vehicles.

In conclusion, the "two Mercedes strategy" is a planning technique used to gain Medicaid LTC eligibility by spending down assets on exempt assets such as two high-value vehicles. However, it is important to consult with a professional before implementing this strategy.

LTC Comment: Well, iAskAI finally got an answer clearly wrong. The “two Mercedes” method does not involve buying two cars. Two cars would make one ineligible for Medicaid. Rather, one purchases a single luxury vehicle, which is exempt in any dollar amount, and gives it away. That gift is not a transfer of assets for less than fair market value for the purpose of qualifying for Medicaid which would trigger a penalty because owning the car was not disqualifying in the first place and giving it away therefore is not done for the purpose of qualifying for Medicaid. But maybe I’m splitting hairs. AskAI got the basic idea right that people can qualify for Medicaid LTC benefits by purchasing an expensive car and giving it away, though only one at a time.

Does it hurt the poor when Medicaid planning attorneys qualify affluent clients for Medicaid LTC benefits?

According to iAsk.AI Answer Engine: Medicaid planning attorneys qualifying affluent clients for Medicaid LTC benefits can potentially hurt the poor by diverting resources from those who truly need it. When affluent clients are qualified for Medicaid, they are essentially taking advantage of a system that is meant to help those who are unable to afford long-term care. This can lead to a strain on resources and funding, which can ultimately harm the poor who rely on Medicaid for their healthcare needs.

However, it is important to note that not all Medicaid planning attorneys engage in this practice. Some attorneys may work within the legal framework to help their clients qualify for Medicaid benefits while also ensuring that resources are not diverted away from those who truly need it.

Furthermore, there are also other factors that contribute to the strain on Medicaid resources, such as an aging population and rising healthcare costs. Addressing these issues would require a comprehensive approach that goes beyond just targeting Medicaid planning attorneys.

Overall, while there may be instances where Medicaid planning attorneys qualifying affluent clients for Medicaid LTC benefits can hurt the poor, it is not a black and white issue and requires careful consideration of various factors.

LTC Comment: Not black and white? Some Medicaid planners ensure resources are not diverted from the poor? Name one. How would they do that even if they wanted to? I think iAskAI must have an algorithm that searches for arguments to balance any potential disagreement, but often fails to come up with plausible counterpoints.

What percentage of Medicaid LTC applicants purchase prepaid burial funds to spend down to asset limits?

According to iAsk.AI Answer Engine: I'm sorry, but I cannot provide a comprehensive answer to this question as there is no available data or statistics on the percentage of Medicaid Long-Term Care (LTC) applicants who purchase prepaid burial funds to spend down to asset limits. The Medicaid program is administered by individual states, and each state has its own rules and regulations regarding eligibility requirements and asset limits. While some states may allow the purchase of prepaid burial funds as a way to spend down assets, it is not a universal practice across all states.

Additionally, there is no centralized database or reporting system that tracks the specific financial strategies used by Medicaid LTC applicants to meet asset limits. Therefore, it is impossible to provide an accurate percentage or estimate of how many individuals use prepaid burial funds for this purpose.

It is worth noting, however, that Medicaid planning and asset protection strategies are complex and often require the assistance of an experienced elder law attorney or financial advisor. These professionals can help individuals navigate the rules and regulations surrounding Medicaid eligibility and develop a customized plan to protect their assets while still qualifying for benefits.

LTC Comment: I’ve conducted many state-level studies of Medicaid eligibility and planning. State Medicaid eligibility workers told me that between two-third and 80 percent of Medicaid LTC applicant/recipients shelter assets in prepaid burial funds averaging around $7,000 or $8,000 each. If that is true nationwide, it amounts to many billions of dollars diverted from personal LTC responsibility to public liability, constituting a huge subsidy for the funeral industry at taxpayers’ expense. Again, this is an aspect of poor public policy that researchers should study, analyze, and report, but don’t.

Is it ethical to self-impoverish oneself by transferring wealth five years in advance, purchasing exempt assets, or putting money into special annuities or trusts in order to qualify for Medicaid's welfare LTC benefits?

According to iAsk.AI Answer Engine: It is a controversial topic whether it is ethical to self-impoverish oneself by transferring wealth five years in advance, purchasing exempt assets, or putting money into special annuities or trusts in order to qualify for Medicaid's welfare LTC benefits.

On one hand, some argue that it is unethical to take advantage of a government program intended for those who are truly in need. They argue that individuals who engage in these practices are essentially gaming the system and taking resources away from those who may not have any other means of support. Additionally, some argue that these practices may be considered fraudulent and could result in legal consequences.

On the other hand, others argue that it is not unethical to engage in these practices as they are simply taking advantage of legal loopholes within the system. They argue that individuals have a right to protect their assets and ensure that they are able to receive the care they need without depleting their life savings. Additionally, some argue that these practices can actually benefit society as a whole by reducing the burden on government-funded programs.

Ultimately, whether or not it is ethical to self-impoverish oneself in order to qualify for Medicaid's welfare LTC benefits is a matter of personal opinion and values.

LTC Comment: Exactly how can using Medicaid planning to get the government to pay for one’s long-term care “actually benefit society as a whole by reducing the burden on government-funded programs.” That is just more double talk in groundless justification of practices that hurt taxpayers, the poor, and even the affluent who end up in nursing homes on public welfare but could have purchased quality home care instead.

Should people who shelter wealth in exempt assets, such as a home, car or business, in order to qualify for Medicaid LTC benefits, be required to repay Medicaid after they die?

According to iAsk.AI Answer Engine: Yes, people who shelter wealth in exempt assets such as a home, car, or business in order to qualify for Medicaid long-term care (LTC) benefits should be required to repay Medicaid after they die. This is because Medicaid is a needs-based program that provides healthcare assistance to those who cannot afford it. It is not intended to provide a way for individuals to pass on their wealth to their heirs while still receiving government assistance.

The practice of sheltering assets in order to qualify for Medicaid LTC benefits is known as Medicaid planning. While it is legal, it can be seen as unethical by some. Medicaid planning involves transferring assets out of an individual's name in order to meet the program's asset and income limits. Exempt assets, such as a primary residence, are not counted towards these limits.

However, when an individual who has received Medicaid LTC benefits passes away, their estate may be subject to estate recovery. This means that Medicaid can recover the cost of the benefits paid out from the individual's estate after they die. This includes any assets that were transferred out of the individual's name during the Medicaid planning process.

The National Academy of Elder Law Attorneys (NAELA) explains that estate recovery is required by federal law and applies to all states that receive Medicaid funds. However, each state has its own rules regarding how and when estate recovery can occur.

The Centers for Medicare & Medicaid Services (CMS) provides guidance on estate recovery and states that it can only be applied to individuals who are over 55 years old, permanently institutionalized, or who receive home and community-based services through a waiver program.

The Kaiser Family Foundation notes that estate recovery is controversial because it can create a burden for heirs who may not have been aware of the Medicaid planning their loved one engaged in. However, the foundation also notes that estate recovery helps ensure that Medicaid funds are used appropriately and can help offset the cost of the program.

In conclusion, individuals who shelter wealth in exempt assets in order to qualify for Medicaid LTC benefits should be required to repay Medicaid after they die. This is because Medicaid is a needs-based program, not an inheritance planning tool. Estate recovery is a legal requirement and helps ensure that Medicaid funds are used appropriately.

LTC Comment: OK, so we don’t need to worry about Medicaid planning because Medicaid “can recover the cost” from “the individual’s estate.” That would be a valid point if states actually enforced estate recoveries and the federal government compelled them to do so in compliance with the law. But that rarely happens. Nor do the media publicize the estate recovery liability. Consequently, estate recovery risk does not incentivize the public to plan privately for LTC and leaves them relying on Medicaid in the end despite the welfare program’s downsides. Is Medicaid really “a needs-based program, not an inheritance planning tool” when eligibility is so easy to obtain and estate recovery is so easy to avoid?

How easy is it to avoid Medicaid estate recovery?

According to iAsk.AI Answer Engine: Avoiding Medicaid estate recovery can be a complex and challenging process. However, there are some legal strategies that can help individuals protect their assets from Medicaid estate recovery. One of the most effective ways to avoid Medicaid estate recovery is by transferring assets out of the individual's name before they apply for Medicaid benefits. This can be done through various legal mechanisms, such as irrevocable trusts, gifting, or purchasing exempt assets.

Another approach to avoiding Medicaid estate recovery is by using annuities. By purchasing an annuity, the individual can convert their countable assets into an income stream that is not subject to Medicaid estate recovery. However, it is important to note that annuities must meet certain criteria to be considered exempt from Medicaid estate recovery.

Additionally, some states have implemented laws that allow individuals to protect their homes from Medicaid estate recovery by transferring ownership to a spouse or child. However, these laws vary by state and may have limitations on the amount of equity that can be protected.

It is important to note that attempting to avoid Medicaid estate recovery through fraudulent means, such as hiding assets or providing false information on a Medicaid application, can result in serious legal consequences.

In summary, while there are legal strategies available for avoiding Medicaid estate recovery, it is important to consult with a qualified attorney who specializes in elder law and Medicaid planning to determine the best approach for your individual situation.

LTC Comment: All in all, AI does a pretty good job of summarizing the facts and arguments on both sides of the Medicaid planning debate. Unfortunately, AI grants equal credibility to specious arguments in favor of Medicaid planning and to common sense objections to the practice. What I take away from this is that we need more and better research and analysis on this topic to avoid the errors of thought and ethics that AI does such an effective job of summarizing and justifying. Anybody out there want to fund such a study? I’m ready to conduct it.

One last question for iAsk.AI: “If you were to write an ‘LTC Bullet,’ what would it say?”

According to iAsk.AI Answer Engine: As an AI Search Engine, I am not capable of writing an "LTC Bullet" as it is a publication produced by the Center for Long-Term Care Reform. However, I can provide information on what an LTC Bullet is and its purpose.

An LTC Bullet is a publication produced by the Center for Long-Term Care Reform (CLTCR), which is a private institute that aims to ensure quality long-term care for all Americans. The purpose of an LTC Bullet is to provide analysis and commentary on issues related to long-term care policy, financing, and delivery. The publication covers a range of topics such as Medicaid, Medicare, long-term care insurance, and the aging population.

The LTC Bullet is known for its in-depth analysis and comprehensive coverage of long-term care issues. It is highly regarded by policymakers, industry professionals, and academics alike. The publication is available to subscribers only and is distributed via email.

In conclusion, the LTC Bullet is a valuable resource for those interested in long-term care policy and financing. It provides insightful analysis on a range of topics related to long-term care and is highly regarded by industry professionals and policymakers.

LTC Comment: No argument there from us. Thanks, iAsk.AI. Good luck as you pursue your wide-ranging interests. Please don’t destroy humankind.

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

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

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

CMS proposes that 80 percent of Medicaid payments for home care go to direct care workers
Feds to crack down on harmful uses of AI
What is Medicaid and why should you and your farm care?
Rising interest rates helping to stabilize long-term care insurance policies
Startup to Sell Life-LTC Hybrid at the Worksite
Older adults’ housing equity dips to $12.39 trillion in fourth quarter
Washington nursing homes get 13.6 percent Medicaid boost — no strings attached
The Future is Here. Watch Ken Dychtwald’s keynote at NextMed and be ready to embrace healthy longevity
Poll: 40% of clinicians thinking of quitting
Most older patients embrace move toward deprescribing, poll finds

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

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

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

How Assured Allies Is Helping People Thrive As Long As Possible Without Long-Term Care
Why Medicaid is for the middle class
The Home Care Workforce Has Not Kept Pace With Growth In Home And Community-Based Services
80% of Older Americans Cannot Pay for Long-Term Care or Withstand a Financial Shock, New Study Shows
Biden Order Could Create Federal Long-Term Care Benefits Demand
BREAKING: New Biden executive order would tie Medicare rates to turnover
CVS report finds more seniors facing chronic conditions
Life Insurance Is Profitable Again, but Too Late for Many Insurers

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

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LTC BULLET: LONG-TERM CARE AND THE SOCIAL COMPACT

LTC Comment: When governments promise their citizens less risk through pay-as-you-go entitlement programs, they reduce the public’s sense of personal responsibility leaving people unprotected by either public programs or private savings when their ability to tax and borrow runs out. More after the ***news.***

*** AS THE CENTER FOR LONG-TERM CARE REFORM, founded April 1, 1998, begins its second quarter century we seek your support for our pursuit of public policy aimed to improve long-term care financing and service delivery in the United States. Over the years, we’ve had some success influencing federal policy (OBRA ’93 and DRA ’05) but much more remains to be done. Ask about those laws and our role in passing them. In the meantime, we’ve published dozens of state and federal level studies here; authored scores of articles here; delivered speeches all across the country for decades here; published to date 1,354 LTC Bullets (our now bi-weekly op-ed like columns, archived by date and topic here; and we’ve sent thousands of daily LTC Clippings to keep our members apprised of new events, reports, developments and potential professional vulnerabilities so they are ready for anything prospects or clients may hit them with. Most recently we are working with the Paragon Health Institute to clarify the long-term care problem (Long-Term Care: The Problem) so we can present a radically new, market-based approach to solve it (Long-Term Care: The Solution, due this fall.) Won’t you help us keep this noble mission vibrant and successful? To join the Center, support our efforts, become part of our team, and receive the benefits of membership, contact Damon at 206-283-7036 or Damon@centerltc.com. Or join and contribute online here. Thank you for your time and consideration. Let’s do this! ***

LTC BULLET: LONG-TERM CARE AND THE SOCIAL COMPACT

LTC Comment: America and Americans have strayed from the binding principles—balancing personal freedom and individual responsibility—that made the country great. No social issue illustrates this problem better than long-term care (LTC).

To need LTC is a high risk: seventy percent of people who reach age 65 will eventually develop severe need. Forty-eight percent will receive paid care averaging $138,000. Among those who need paid care, about half will require less than a year, and a little more than 10 percent will need five years or more at an average cost of $266,000.

Thus, LTC represents a high probability of significant cost, but a relatively small risk of ruinously high expense. That is precisely the condition for which private insurance is best suited. That is, to replace the small risk of catastrophic loss with the certainty of an affordable premium.

Yet, most people do not buy private insurance for LTC risk. Why?

Since its founding in 1965, Medicaid has paid for most catastrophically high LTC costs. Although it is ostensibly a means-tested public assistance program, Medicaid’s financial eligibility rules allow its LTC benefits recipients to retain substantial exempt assets and to have high incomes as long as their personal health and LTC expenses were comparably high.

By offsetting the public’s catastrophic LTC risk, Medicaid desensitized consumers to the need to plan, save, invest or insure when they were still young, healthy and affluent enough to do so. This “moral hazard” left most aging Americans, including the Greatest Generation, unprotected for LTC risk and dependent on Medicaid nursing home care.

As the dominant LTC funder, Medicaid paid too little to ensure access to quality care, created “institutional bias” by paying only for nursing homes, caused caregiver shortages due to low wages, crowded out private financing from insurance or home equity conversion, and left too great a direct caregiving burden on financially and emotionally stressed friends and families.

In other words, by attempting to solve the problem of financing LTC, Medicaid had the opposite effect of reducing the public’s perception of the risk resulting in too many people in need of LTC dependent on public welfare and too few prepared to pay privately for the type, quality and venue of care they prefer.

That is how Medicaid LTC violated the social compact. Instead of protecting their freedom to take care of themselves, Medicaid undercut their sense of personal responsibility leaving them dependent on a public welfare program unable to meet their needs.

LTC is only one example. Social Security and Medicare are two more programs that told citizens they are protected for income and health security in old age, but are now facing massive unfunded liabilities and the high probability of insolvency in the short term.

Government promises should never replace personal freedom and individual responsibility.

For full development of this argument and its conclusion, including citations to scholarly sources, read How to Fix Long-Term Care Financing (2017), Medicaid and Long-Term Care (2020), and Long-Term Care: The Problem (2022). Expect Long-Term Care: The Solution this fall.

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

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

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

Social Security and Medicare Reform
Fast Facts about Medicare and Social Security
The Growing Opportunity For Wealth Transfer; Not Only For The Wealthy
Falling Inflation May Be Too Late for Retirees. Here’s Where It’s Still Hitting Hardest
Hourly wage growth slowing across long-term care, Fitch Ratings says
BREAKING: CMS failed to publicly post deficiencies for two-thirds of nursing homes, OIG finds
Weight loss linked to 10 percent higher mortality in elders, particularly men
Anxiety Abounds as Americans Contemplate Social Security, Market Risks
Study finds frailty prevalent in middle-aged and older adults
Feds broaden nursing home quality campaign with new discharge, satisfaction and vaccination measures
Nursing Homes Profited Off Pandemic, Reports Kaiser

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

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

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

Lawmaker again tries to rid workers of a payroll tax that begins in July
10 State-Level Long-Term Care Bills to Track Now
Assisted-living homes are rejecting Medicaid and evicting seniors
Government forecast predicts steep climb in nursing home costs for next two years
Continental General Agrees to Acquire Elevance LTCI Policies
Solving today’s enigma of the state long-term care tax mandates of tomorrow
Exclusive: US to build $300 mln database to fuel Alzheimer's research
My Wacky Idea to Save Social Security
Study: Burnout high among all healthcare professionals
Long-term care insurance could create huge fiscal burden for adult children of aging boomers
Medicare, Social Security financial shortfalls would ‘further cripple’ long-term care, advocates say

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

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LTC BULLET: LTC TANSTAAFL

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

*** CENTER’S 25^TH ANNIVERSARY: On April 1, 1998 attorney David Rosenfeld and I founded the Center for Long-Term Care Financing (now Reform). A quarter century later, the Center is still going strong. David moved on to play a major role as a Congressional staffer in passing our proposals as part of the Deficit Reduction Act of 2005. Damon joined as VP for Administration in 2002 and he’s kept us in business ever since. We thank our corporate and individual members for your many years of support, encouragement, collegiality and friendship. The most promising opportunities to improve LTC financing public policy are immediately ahead. Stay committed with us. ***

LTC BULLET: LTC TANSTAAFL

LTC Comment: TANSTAAFL: There Ain’t No Such Thing As A Free Lunch. That immortal verity pertains today more than ever. But equally true is its corollary that everyone wants a free lunch and many will fall for the promise of one when offered.

Government is the worst purveyor of free lunches that turn out to be very expensive indeed. Pay a little now and get a lot later. That’s the formula employed by Social Security, Medicare, Ponzi, and Bankman-Fried. The outcome is always the same. Sooner or later there aren’t enough new suckers to keep the game going.

Medicaid LTC’s free lunch isn’t as obvious. You don’t have to pay in to get the bonanza later. You only have to be broke. Medicaid even says that if you aren’t broke and you need expensive LTC, you have to become broke by paying for your own care first to qualify.

Not much of a free lunch if you put it that way. But here’s the twist. When the time comes that you need high-cost LTC, you don’t have to impoverish yourself. Reaching “low income” is easy. Medicaid subtracts your private health and LTC costs. Most big assets are exempt so uncounted.

Here’s how Medicaid LTC offers a free lunch. It turns the typical Ponzi entitlement scheme on its head. It says “ignore the risk of LTC and if you need it you’ll lose your life’s savings paying for it before you get any help from the government.” Then, when you need care, government pays anyway, ignoring the draconian warnings.

Medicaid LTC’s free lunch is the worst of both worlds. People ignore the impoverishment warnings with impunity. They don’t plan, save, invest or insure for LTC. The fact that government always paid in the end enabled their denial of the risk.

There are two ways to eliminate Medicaid LTC’s upside down free lunch. You can force everyone to pay a tax to fund a new entitlement for LTC. That’s WA Cares. It turns LTC into a conventional social insurance free lunch scheme.

A better approach is to establish a LTC planning responsibility, offer many ways to meet it, monitor compliance, but only enforce responsibility when it’s unmet voluntarily. Instead of threatening catastrophic spend down maybe someday without following through, incentivize responsible early planning as a way to avoid any government compulsion.

That’s the plan that I’m working on now, details of which are being formulated every day. So stay tuned.

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

Seattle—

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

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

How to Get Your Long-Term Care Planning on the Right Track
Why the U.S. Health Care System Must Address the Shortage of Geriatricians Now
100 Must-Know Statistics About Long-Term Care: 2023 Edition
Medicaid a major challenge to providing affordable assisted living, NCAL says
Retirement plan contribution rate decreases
The Looming Collapse of a Long-Term Care Insurer Raises Questions for DFS
Study: Older adults spending billions on home repairs to age in place
Life expectancy confusion may be jeopardizing retirement planning: study
Long-Term Care Planning vs. Taxes: Finding a Healthy Balance
CalPERS to pay $800 million settlement over claims it misled retirees on costs of long-term care insurance

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LINKS

Here are some links you can check out to find valuable information on long-term care providers, financiers and insurers. This is just for starters. We'll add many more as time goes on plus advice on what to look for on their sites.

www.ahca.org American Health Care Association

www.leadingage.org American Association of Homes and Services for the Aging

www.alfa.org Assisted Living Federation of America

www.nic.org National Investment Center

www.ahip.net America's Health Insurance Plans

ltcconsultants.com Phyllis Shelton's website

www.aaltci.org American Association for Long-Term Care Insurance

ltcconnection.com LTCi producers' information

Whirled News Tonight Improv Show General Conference Session

Managing the Back End

Why Not Social Insurance Instead?

Step One: Eliminate Moral Hazard

How These Policy Changes Would Impact the LTC Market

Step Two: Publicize LTC Risk and Cost

Step Three: Reconceptualize the LTC Challenge

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

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

Step Four: Show Younger People a Better Way

Methods to Satisfy Individual LTC Responsibility

Whirled News Tonight Improv Show
General Conference Session