LTC Bullet:  NPR Defends Medicaid Planning, Attacks Messenger

Wednesday, January 4, 2006 

Seattle-- 

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, after the ***news.*** 

*** Check out Phyllis Shelton's new FREE newsletter, "The LTCI Harvest."  It is her latest effort to spur LTCI sales.  You can subscribe simply by going to www.ltciharvest.com and entering your email address in the upper right-hand corner.  Kudos to Phyllis for another job well done. *** 

 *** Our thanks to Liz Shilling's AHCA / NCAL Gazette on Wednesday, 12/28/05 for providing these summaries and links to two important stories.  They underscore the point of today's LTC Bullet that entitlements like Medicaid are out of control and private long-term care insurance is an important part of the solution. 

"Entitlements Consume More Federal Spending.  By the Associated Press.  The New York Times. Dec 28, 2005.  Social Security, Medicare and Medicaid consumed more than $1 trillion in federal spending in budget year 2004, according to a report being released today by the Census Bureau.  Medicare spending is expected to increase with the new Part D benefit that kicks in on Sunday.  http://www.nytimes.com/aponline/national/AP-Federal-Spending.html?pagewanted=print"   

"Insurers push policies for long-term care.  By Jeff D. Opdyke, The Wall Street Journal. Pittsburgh Post-Gazette.  Dec 27, 2005.  In the wake of Congressional action to tighten rules governing eligibility for Medicaid-financed long term care, insurance companies are trotting out new policies that offer a range of added features.  One company is offering a product that combines long-term care insurance with an annuity that is paid out if the long-term care portion is never used.  Another company will offer low-cost short-term policies and a 'shared care' policy.  Other insurance companies are aggressively marketing long-term care insurance packages to employers for their workers.  New tax shelters could provide encouragement for people to purchase long-term care insurance policies.  http://www.post-gazette.com/pg/05361/628539.stm" *** 

 

LTC BULLET:  NPR DEFENDS MEDICAID PLANNING, ATTACKS MESSENGER 

LTC Comment:  When you're an under-funded, one-man "think tank" fighting the entrenched, richly-foundation-and-government-financed bastions of the status quo, you get used to having "the truth you've spoken twisted by knaves to make a trap for fools," as Kipling put it.  But this takes the cake.  

Yesterday, NPR's popular "All Things Considered" drive-time talk show tackled a topic close to our hearts.  A blurb from public radio's website describing the five-and-a-half minute segment follows.  Listen to the whole story online at http://www.npr.org/templates/story/story.php?storyId=5081528.   

"Congress to Enact Tighter Medicaid Restrictions by Joseph Shapiro.  All Things Considered, January 3, 2006.  Congress is preparing to place stricter limits on who can qualify for Medicaid.  It's an effort to lower the program's exploding costs for nursing home care.  One target:  wealthy people who give away assets in order to qualify for Medicaid help for nursing home care.  The problem is, there's no evidence that people do this, and some analysts believe the new restrictions could place new burdens on the very people the program seeks to help -- the poor." 

Summary of the Show: 

Introduction:  "It sounds outrageous, millionaires on Medicaid, the rich covered by the health insurance program that is supposed to be for the country's poorest people.  Well that is the claim and it holds so much sway in Washington that Congress is about to make it harder for the wealthy, and for just about anyone to get Medicaid nursing home coverage.  As NPR's Joseph Shapiro reports, that could mean new burdens for the people the program is designed to help, the poor." 

At once snarly toward interviewee Steve Moses and smarmy toward the audience, reporter Joe Shapiro first builds up, then knocks down a public policy straw man.  He uses techniques of argument recognized as fallacious sophistry centuries ago. 

First he quotes Moses to the effect that it is easy for millionaires to qualify for Medicaid, which is true, but that the bigger problem is that most people are routinely eligible for Medicaid's LTC benefits without spending down, which is also true. 

Then, however, reporter Shapiro claims there is "no hard and fast evidence" for these facts.  He ignores the plethora of articles and reports to which we referred him on the Center's website at www.centerltc.com for evidence and documentation.  Instead, he tries to impugn our integrity.   

He says a quote we cited about "Medicaid for Millionaires" on the website of a trainer of Medicaid planners wasn't there.  But then he admits that the quote had been there when we cited it but that the Medicaid planner removed it because of the "havoc" the quote caused.  Our critical coverage of many Medicaid planners' irresponsible advertising often causes them to tone down their rhetoric.  Unfortunately, they usually continue to practice their abusive artificial impoverishment techniques "under the radar."  

For proof, read our original expose' of that Medicaid planning trainer in "LTC Bullet:  What Should Be Done About Medicaid Profiteers?" published December 3, 2003 at http://www.centerltc.com/bullets/archives2003/473.htm.   Then, check out the current, white-washed version of his promotional brochure at http://www.medicaidpractice.com/docs/brochure.pdf.  You'll see that he still offers a 6-day training program for $7,495 that "will show you how to establish your new Medicaid Practice profit center and generate $100,000+ in the next six months."  That's pretty lucrative compensation for a business about which NPR claims there is no "hard and fast evidence." 

When our quotes and documentation proved his first snide intimations untrue, reporter Shapiro turned to another underhanded approach--the ad hominem attack.  He says that people "like Moses" who oppose abusive Medicaid planning are often just promoting private long-term care insurance.  He points out that the Center "is paid in part by the insurance industry."  What a hoot!   

Our tiny Center for Long-Term Care Reform barely survives on a patchwork of small contributions, membership fees, consulting, speaking and expert witness work.  Contrast that with the millions of dollars from foundations and tax payers that lucratively finance defenders of the corrupt status quo like AARP, the National Academy of Elder Law Attorneys (NAELA), the Georgetown Long-Term Care Financing Project, and yes, National Public Radio, among many, many others.   

Compare the easy money Medicaid planners make artificially impoverishing affluent clients with the relative pittance long-term care insurance agents receive.  We call those struggling agents "AMGs" because it takes an altruistic, masochistic genius to sell the public private insurance protection against a risk the government, with the help of Medicaid planners, has given away for forty years to nearly everyone.  The Center for Long-Term Care Reform advocates for private LTC insurance as the best way to save Medicaid for the truly needy, that is, as a means, not an end in itself.   

When his second devious attack proves ludicrous, reporter Shapiro turns to an ostensibly reliable source for evidence that Medicaid planning is no big deal.  He cites a recent GAO study that found Medicaid asset transfers commonplace, but small on average.  This approach leads nowhere either.  See our "LTC Bullet:  GAO on TOA Underwhelms," published October 5, 2005 at http://www.centerltc.com/bullets/archives2005/581.htm, which explains how "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."  Check it out to see why GAO has little credibility on this subject. 

Finally, NPR tries to make the case that Medicaid reform--already passed by both Houses of Congress and impeded from becoming law by a technicality--would hurt the "poor and middle class."  To establish that dubious proposition, they turn to Charles Sabatino of the American Bar Association's Commission on Law and Aging.  Sabatino is a past president of NAELA, the trade association of the Medicaid planners themselves!  Talk about the fox guarding the henhouse.   

According to Sabatino, the new legislation designed to target Medicaid to the genuinely needy and discourage Medicaid planning abuses, would actually "scoop" up all asset transfers made by poor and middle class people and use them to keep such deserving folks from getting help from government for their long-term care.  We have two points to make in response, which of course did not find their way into the NPR slantcast. 

First, why should Medicaid and tax payers indemnify people for careless and unwise donations to charities or give aways to their children or gifts to their grandchildren?  Aging people should anticipate the high probability of needing expensive long-term care and save, invest or insure against that risk.  If they choose to give their wealth away instead, however noble the purpose, that's fine but public policy should not reward such failure to plan responsibly with a windfall from the welfare program. 

Second, the idea that the new legislation will penalize the poor and middle class for all kinds of transfers for any possible reason is simply wrong.  Current law is strengthened by the new legislation in its explicit application of asset transfer penalties only to assets transferred for less than fair market value for the purpose of qualifying for Medicaid.  Hardship waivers also apply to protect genuine victims of commonplace financial abuse of the elderly. 

NPR's attempted hatchet job is likely to have exactly the opposite of its intended effect.  Rational people will see through such biased reporting to the underlying truths.  Medicaid spending is out of control.  Congress and the President are doing something about it.  Long-term care insurance is the best option for everyone who can qualify for it medically and financially.  Home equity conversion is the next best choice to finance the red-carpet access to top quality care that private payers are guaranteed.  And Medicaid could and should provide more and better care to the poor, if it no longer has to line the pockets of avaricious lawyers, greedy heirs, and self-serving policy wonks. 

In the meantime, we'll take some more advice from Kipling's poem "If," to "keep your head when all about you are losing theirs and blaming it on you," to "trust yourself when all men doubt you," and to "fill the unforgiving minute with sixty seconds' worth of distance run."  

So, I'm off to the gym for thirty minutes on the treadmill. 

Steve Moses