 LTC Bullet: Great Moments in Unintended LTC Consequences Friday, August 6, 2021 Seattle— LTC Comment: The best-laid plans of mice and men often go awry and especially in long-term care financing policy, after the ***news.***
*** LTC CLIPPINGS are a feature that Center for LTC Reform Premium Members ($250 per year) receive to keep them up to date on the articles, reports and data they need to know to stay at the forefront of professional expertise. Steve Moses scans the popular and scholarly literature constantly and sends subscribers daily emails (2 per day on average) with the date, title, author, source, and his brief analysis of every important new publication. Regular members ($150 per year) receive a weekly compendium of the LTC Clippings each Monday in an LTC E-Alert. Subscribe now here or contact smoses@centerltc.com with your questions or comments. *** *** JOIN THE LTC RESISTANCE: Unite to prevent government taking over what remains of the private long-term care market. Join the “LTC Resistance” by reading Medicaid and Long-Term Care, browsing the articles linked below, and merging your efforts with ours at the Center for Long-Term Care Reform here. Find our “Membership Levels and Benefits” schedule here. Momentum is building for policies that would make the ones critiqued in today’s LTC Bullet look benign by comparison. Act now before it’s too late. In addition to today’s featured column and the recent articles linked below, Steve has the following piece accepted for publication in August: “Should Medicaid Protect $8 Trillion from Private Senior Living Costs?” for McKnight’s Senior Living, August 9, 2021 “The InLTCgentsia” for Broker World’s August 2021 issue. “Panel Gives States Pass in Collecting Assets for Medicaid Long-Term Care,” by Stephen A. Moses, Health Care News, July 2021 (PDF version.) “Government Violates the Long Term Care Social Contract to Your Detriment, by Stephen A. Moses, Broker World, June 2021. (PDF version.) “President Biden, tear down this wall,” by Stephen A. Moses, McKnight’s LTC News, June 23, 2021 (PDF version.) “Using Medicaid to protect inheritances,” by Steve Moses and Brian Blase, TheHill, June 10, 2021. (PDF version.) “LTC financing: Be careful what you WISH for,” by Stephen A. Moses, McKnight’s Senior Living, June 7, 2021. (PDF version.) “The social contract for long-term care,” guest column by Stephen Moses for McKnight’s Long-Term Care News, May 17, 2021. (PDF version.) “Why LTCI Fails,” guest column by Stephen Moses for Broker World magazine, March 2021. (PDF version.) Find many more articles like these, plus scores of speeches and reports covering 35 years of long-term care policy analysis at www.centerltc.com. ***
LTC BULLET: GREAT MOMENTS IN UNINTENDED LTC CONSEQUENCES LTC Comment: We thank McKnight’s Long-Term Care News for publishing the following article on July 26, 2021. Long-term care providers and insurers share a common interest in improving public policy that governs LTC services and financing. Equally important, however, is that these two components of the long-term care business collaborate to prevent bad public policy from taking effect. Please read this article and, if you have something to say about it or the topic, avail yourself of the opportunity to comment, which McKnight’s provides readers at the end of the piece. Or just drop me a note at smoses@centerltc.com. Thanks for your time and attention to this important subject. “Great
moments in unintended LTC consequences” Reason.com publishes a video feature called “Great Moments in Unintended Consequences.” Each episode features three problems, three “solutions,” and comical coverage of the unanticipated results. For example, “The Luxury Yacht Tax.” The year: 1990. The problem: the national debt is exploding. The solution: a 10% luxury tax on expensive boats. Narrator: “Sounds like a great idea with the best of intentions. What could possibly go wrong?” It turns out that while wealthy people buy yachts, it’s usually middle-income people who make them. This tax plan cut sales of luxury boats by 70%, destroyed hundreds of thousands of middle-class jobs, and resulted in a net loss of tax revenue to the government. Many episodes of this feature are equally amusing and thought-provoking. They got me thinking about “Great Moments in Unintended Long-Term Care Consequences.” The year: 1965. The problem: People are living longer, dying slower and in desperate need of more long-term care. The solution: Provide Medicaid-financed nursing home care covering room and board as well as custodial and skilled care for anyone who can’t afford it otherwise and with no limit, for the first 15 years, on transferring assets to qualify. “Sounds like a great idea with the best of intentions. What could possibly go wrong?” With free long-term care available after they need it, people didn’t bother to save, invest or insure for that big risk and cost when they were young and healthy enough to prepare. Once they needed care, most discovered they could get Medicaid to pay as long as their incomes were below the cost of a nursing home and they held their assets in easily convertible exempt form, such as a home, car, business, IRAs, prepaid burial funds, term life insurance, household goods or personal belongings. Demand surged. Medicaid nursing homes filled to 95% capacity in the 1980s. Private pay census at market rates plummeted while Medicaid residents, reimbursed at less than the cost of care, surged. Care quality suffered. You can’t expect Ritz Carlton care for Motel 6 rates. Medicaid costs exploded, so the government tried to clamp down on eligibility by penalizing asset transfers to qualify, requiring estate recoveries and capping the home equity exemption. But Medicaid planning lawyers dodged these restrictions, and expenditures continued to skyrocket. Easy access to free or subsidized nursing home care stunted a private-pay market for home care and assisted living for decades until welfare-financed institutional care got such a dubious reputation that people were willing to spend their own money to stay out of a nursing home. Potential private sources of long-term care financing, such as home equity conversion and private LTC insurance, dried up. Why spend your own money when Uncle Sam is so eager to pay for long-term care, room and board if you ever need them? So, today we approach the second third of the 21st century, when boomers start turning 85 and blow the lid off medical and LTC costs just as the Social Security and Medicare trust funds run out, forcing those programs to cut their payments. We find ourselves overly dependent on welfare-financed institutional long-term care with untrained, unpaid family and friends struggling to care for loved ones and little hope the system will do anything but deteriorate further. It’s all because well-intentioned academics, policymakers and politicians wanted to help by providing more long-term care back in 1965, then kept on “fixing” it until it became the Rube Goldberg mess it is today, and never asked, much less answered the key question: “What could possibly go wrong?” But at least they’ve learned their lesson and no longer want to turn long-term care over to more government financing and regulation. Right? Alas, no. Most of the recommendations coming from analysts and think tanks these days call for even more government involvement, including billions of dollars for Medicaid home-and-community based care and new, compulsory, payroll-funded, government-regulated entitlement programs with “trust funds” bound to be diverted to current spending like the ones we have already. That sounds like doubling down on the same policies that caused long-term care’s problems in the first place. What could possibly go wrong? There is a better way. For a fuller explanation of what did go wrong with long-term care and how to fix it, read Medicaid and Long-Term Care. Steve Moses is president of the Center for Long-Term Care Reform and author of Medicaid and Long-Term Care. Reach him at smoses@centerltc.com. The opinions expressed in McKnight’s Long-Term Care News guest submissions are the author’s and are not necessarily those of McKnight’s Long-Term Care News or its editors. |