LTC Bullet:  LTC Almanac Update

Friday, June 1, 2018

Seattle—

LTC Comment:  We’ve updated the “Almanac of Long-Term Care” in The Zone.  More on the LTC Almanac and today’s update after the ***news.***

*** TODAY'S LTC BULLET is sponsored by Claude Thau, whose revolutionary “Range of Exposure” tool projects clients’ likelihood (joint for a couple) of spending $100,000; $250K; $500K or over $1,000,000 on LTC, based on their personal characteristics.  Claude offers ways to educate clients and reduce “Ping-Pong” in the LTCi sales process. Help clients compare Combo vs. Stand-Alone LTCi easily and make informed final LTCi decisions in 15-20 minutes!  Change work-site LTCi from a series of proposal deliveries to a single interactive consultation!  Claude is the lead author of Milliman’s annual Broker World LTCi Survey & a past Chair of the Center for Long-Term Care Financing. For questions or references, reach Claude at 913-403-5824 or claudet@targetins.com. ***

*** HEADS UP! “My Million Dollar Mom” is available to download and watch. From the movie’s website:

Based on a true story, a loving mother is diagnosed with Alzheimer's. Her devoted son steps forward to care for her. Her needs are so great that he must decide whether to pursue his final chance for his lifelong dream of high political office, something she wanted so much for him, or give it all up to fulfill a promise he made to her long ago that he would care for her and be by her side at the end of her life.

“My Million Dollar Mom” is densely emotional and satisfying to watch. Those who know the joy, difficulty and complexity of caregiving should relate to the son. Those who don’t know, yet, will learn. All will gain important insight into the growing epidemic of Alzheimer’s disease and what it means to be a caregiver for a loved one with Alzheimer’s. The writer, Ross Schriftman, states: “You'll laugh. You'll cry. You'll cheer. Bring tissues.” Indeed.

We own “My Million Dollar Mom” and you can, too. It’s only $4.95 through Vimeo. Visit http://www.mymilliondollarmom.com/ to learn more and buy your copy. ***

 

LTC BULLET:  LTC ALMANAC UPDATE

LTC Comment:  Center members know and appreciate our "Almanac of Long-Term Care" in The Zone, our password-protected website. 

*** SPECIAL:  We are making access to The Zone, including the "Almanac of Long-Term Care," free for two weeks—today through Friday, June 15, 2018.  To access this introductory peek into The Zone, go to http://www.centerltc.com/members/index.htm and use the following case-sensitive user name and password:  UN:  IntrotoZone / PW:  FreeTrial.  Like what you see?  Then join the Center for Long-Term Care Reform here.  Or contact Damon at 206-283-7036 or damon@centerltc.com.  ***

The LTC Almanac is divided into 11 sections: 

Aging Demographics 
International 
Unfunded Liabilities--Social Security, Medicare, and Budgets 
Long-Term Care 
Caregiving 
Long-Term Care Financing 
Long-Term Care Insurance 
Reverse Mortgages 
Long-Term Care Providers 
Medicaid 
Medicaid Planning   

Each section is divided into sub-sections and under each sub-section we provide a list by date of the most important reports and articles published on the topic, usually with a few highlights and sometimes with analysis.

The Almanac of Long-Term Care is a great way to find statistics you need quickly or to get current on topics you need to know the latest information about.

The Zone and the LTC Almanac are for Center for Long-Term Care Reform members only, except during the current free trial offer.  Join the Center here:  http://www.centerltc.com/support/index.htm.  Call or email Damon at 206-283-7036 or damon@centerltc.com.  He can give you a user name and password to open up The Zone even before your dues payment arrives.  Individual annual memberships are $150.  Premium memberships with access to our “Clipping Service” start at $250.  Premium Elite and “Regional Representative” membership (if you qualify professionally) are $500.  Corporate memberships with many extra benefits start at $1,000.  See our "Membership Levels and Benefits" schedule here.

Caveat:  With time, some hyperlinks go bad.  In a huge document like the "LTC Almanac," we can't keep all the links current all the time.  If you find a bad link, but want to get to the material, contact us.  We often have an electronic copy of the document and we can usually find a current live link.  We'll also fix the link in the LTC Almanac so it will be current again for others.

Suggestion:  Read through the following update to stay current on new resource materials.  Then browse the full LTC Almanac at your leisure.  When you need a quick fact or the latest research on a particular topic, you'll know right where to go.  Enjoy.

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Chapter 1:  Aging Demographics

United States

General Stats

2017OlderAmericansProfile 0418 URL

4/30/2018, “2017 Profile of Older Americans,” The Administration for Community Living, which includes the Administration on Aging

Quote: “Highlights

  • Over the past 10 years, the population age 65 and over increased from 37.2 million in 2006 to 49.2 million in 2016 (a 33% increase) and is projected to almost double to 98 million in 2060.
  • Between 2006 and 2016 the population age 60 and over increased 36% from 50.7 million to 68.7 million.
  • The 85 and over population is projected to more than double from 6.4 million in 2016 to 14.6 million in 2040 (a 129% increase).
  • Racial and ethnic minority populations have increased from 6.9 million in 2006 (19% of the older adult population) to 11.1 million in 2016 (23% of older adults) and are projected to increase to 21.1 million in 2030 (28% of older adults).
  • The number of Americans aged 45-64 – who will reach age 65 over the next two decades – increased by 12% between 2006 and 2016.
  • About one in every seven, or 15.2%, of the population is an older American.
  • Persons reaching age 65 have an average life expectancy of an additional 19.4 years (20.6 years for females and 18 years for males).
  • There were 81,896 persons age 100 and over in 2016 (0.2% of the total age 65 and over population).
  • Older women outnumber older men at 27.5 million older women to 21.8 million older men.
  • In 2016, 23% of persons age 65 and over were members of racial or ethnic minority populations--9% were African-Americans (not Hispanic), 4% were Asian or Pacific Islander (not Hispanic), 0.5% were Native American (not Hispanic), 0.1% were Native Hawaiian/Pacific Islander, (not Hispanic), and 0.7% of persons 65+ identified themselves as being of two or more races. Persons of Hispanic origin (who may be of any race) represented 8% of the older population.
  • A larger percentage of older men are married as compared with older women---70% of men, 46% of women. In 2017, 33% older women were widows.
  • About 28% (13.8 million) of noninstitutionalized older persons lived alone (9.3 million women, 4.5 million men).
  • Almost half of older women (45%) age 75 and over lived alone.
  • The median income of older persons in 2016 was $31,618 for males and $18,380 for females. The real median income (after adjusting for inflation) of all households headed by older people increased by 2.1% (which was not statistically significant) between 2015 and 2016. Households containing families headed by persons age 65 and over reported a median income in 2016 of $58,559.
  • The major sources of income as reported by older persons in 2015 were Social Security (reported by 84% of older persons), income from assets (reported by 63%), earnings (reported by 29%), private pensions (reported by 37%), and government employee pensions (reported by 16%).
  • Social Security constituted 90% or more of the income received by 34% of beneficiaries in 2015 (23% of married couples and 43% of non-married beneficiaries).
  • Over 4.6 million older adults (9.3%) were below the poverty level in 2016. This poverty rate is not statistically different from the poverty rate in 2015 (8.8%). In 2011, the U.S. Census Bureau released a new Supplemental Poverty Measure (SPM) which takes into account regional variations in living costs, non-cash benefits received, and non-discretionary expenditures but does not replace the official poverty measure. In 2016, the SPM showed a poverty level for persons age 65 and over of 14.5% (more than 5 percentage points higher than the official rate of 9.3%). This increase is mainly due to including medical out-of-pocket expenses in the poverty calculations.
  • The need for caregiving increases with age. In January-June 2017, the percentage of older adults age 85 and over needing help with personal care (22%) was more than twice the percentage for adults ages
  • 75–84 (9%) and more than six times the percentage for adults ages 65–74 (3%).”

LTC Comment: Annual update of a premier source of data on older Americans.

Expenditures of the Aged

EBRI on Assets 0418 URL: https://www.ebri.org/pdf/briefspdf/EBRI_IB_447.pdf

4/20/2018, “No Spend Down,” by Stephen D. Forman, LTCA Weekly Reader

Quote: “The Employee Benefit Research Institute (EBRI) always publishes high-quality research. In their latest study they find that retirees do a poor job of asset decumulation. Those with few assets (who enter retirement with median assets of $31,740) still have $24,000 eighteen years later, a parsimony which is ‘not irrational,’ according to the authors. But even when assets are plentiful upon retirement (a median of $857,450), eighteen years later this group still maintains a healthy bank account worth $763,900. In short, EBRI finds that retirees spend their income (what comes in, goes out), but rarely touch assets. That's what the chart above illustrates. (This is not what ‘life cycle theory’ or traditional financial planning has presumed.)”

LTC Comment: So much for the idea that wide swaths of the American public are spending down into impoverishment for long-term care. As we’ve explained frequently and most recently here, Medicaid pays for most expensive LTC in the USA and for most Americans it’s easy to get after care is needed without spending down significantly.

Elderly Below Poverty

KFF on Senior Poverty 0318 URL:  http://files.kff.org/attachment/Data-Note-How-Many-Seniors-Are-Living-in-Poverty-National-and-State-Estimates-Under-the-Official-and-Supplemental-Poverty-Measures-in-2016

3/2018, “How Many Seniors Are Living in Poverty? National and

State Estimates Under the Official and Supplemental Poverty Measures in 2016,” by Juliette Cubanski, Kendal Orgera, Anthony Damico, and Tricia Neuman, Kaiser Family Foundation

Quote: “Payments from Social Security and Supplemental Security Income have played a critical role in enhancing economic security and reducing poverty rates among people ages 65 and older. Yet many older adults live on limited incomes and have modest savings. In 2016, half of all people on Medicare had incomes less than $26,200. This analysis provides current data on poverty rates among the 49.3 million seniors in the U.S. in 2016, as context for understanding the implications of potential changes to federal and state programs that help to bolster financial security among older adults.”

LTC Comment: We don’t know that SS and SSI have enhanced economic security and reduced poverty rates compared to what would have happened if those programs had not undercut the public’s sense of personal responsibility to save, invest and insure privately against the risk and costs of aging and retirement. Further, what matters is not that half of all Medicare recipients have incomes below $26,500. We have them covered with a wide range of government programs. What matters is how many people are getting those same programs, including Medicaid long-term care benefits, who have incomes far in excess of the median. KFF’s ideological bias is to over-estimate poverty in order to promote ever more government spending on the very programs that have created the problems it is claiming to fix.

Retirement Planning

EBRI on Retirement Confidence 0418 URL:  https://www.ebri.org/pdf/surveys/rcs/2018/2018RCS_Report_V5MGAchecked.pdf

4/24/2018, “Only 16% of retirees 'very confident' they can afford long-term care,” by Lois A. Bowers, McKnight's Senior Living

Quote: “Only 16% of current retirees are ‘very confident’ that they will have enough money to pay for long-term care should they need it during their retirement, according to the results of a survey released Tuesday. That percentage, said the nonpartisan Employee Benefit Research Institute and research firm Greenwald & Associates, is a decrease from last year's 20%, which they defined as ‘down significantly.’ The firms polled 1,040 retirees between Jan. 3 and 16 for the annual Retirement Confidence Survey.

LTC Comment: Sounds like denial is declining, but how do you reconcile these findings with the reality that few people worry enough about LTC expenses to plan for them? Answer: By paying for most expensive LTC, Medicaid enabled people to claim they worry about LTC, do nothing to prepare, and still preserve most of their wealth for heirs. That’s been the reality for 53 years and it explains America’s dysfunctional LTC services and financing.

RBC on Wealth 0318 URL: https://www.rbcwealthmanagement.com/_us/static/documents/insights/taking-control-of-health-care-in-retirement.pdf

3/2/2018, Good data source referenced by Stephen D. Forman in the “LTCA Weekly Reader”

Quote: “RBC Wealth Management did a bang-up job on their new report, "Taking Control of Healthcare in Retirement." It's a readable mix of text, graphs and well-sourced information that points frequently toward long-term care. Pre-retirees reading its 20-pages will not only get a better handle on the magnitude of the challenges they face, but also an encouraging tour of the manageable steps they can take.”

LTC Comment: We thank Center friend and Corporate member Steve Forman of Long-Term Care Associates for this resource tip.

 

Chapter 3:  Unfunded Liabilities--Social Security, Medicare, Pensions and Budgets

National Health Expenditures

Health Affairs on National Health Expenditures for 2016 URL:  https://www.healthaffairs.org/doi/pdf/10.1377/hlthaff.2017.1299

See also LTC Bullet: So What If the Government Pays for Most LTC?, 2016 Data Update, Friday, December 8, 2017

Unfunded Liability Estimates

Heritage on Welfare 040518 URL:  https://www.heritage.org/sites/default/files/2018-04/BG3294_4.pdf

4/5/2018, “Understanding the Hidden $1.1 Trillion Welfare System and How to Reform It,” by Robert Rector and Vijay Menon, Heritage Foundation Backgrounder

Quote: “The true cost of welfare or aid to the poor is largely unknown because the spending is fragmented into myriad programs. Current welfare is focused largely on increasing benefits and enrollments and redistributing income. Self-defeating behaviors that increase the need for assistance are rarely even mentioned. Policymakers should replace welfare’s current focus with a new set of interlinked goals: reducing self-defeating and self-limiting behaviors, increasing self-support, and improving true human well-being. Welfare reform should (1) require all able-bodied adult recipients to work or prepare for work as a condition of receiving aid, (2) remove the substantial penalties against marriage within the welfare system, and (3) fund programs aimed at improving behavior on a payment-for-outcome basis rather than today’s fee-for-service basis.”

LTC Comment: This fascinating report is a case study in the unintended consequence of well-intentioned, but perversely counterproductive public policy.

 

Chapter 6: Long-Term Care Financing

General

BPC-Health-Policy-Roadmap-For-Individuals-With-Complex-Care-Needs 0118 URL:  https://bipartisanpolicy.org/wp-content/uploads/2018/01/BPC-Health-Policy-Roadmap-For-Individuals-With-Complex-Care-Needs.pdf

https://www.forbes.com/sites/howardgleckman/2018/01/31/a-new-publicprivate-long-term-care-financing-plan/#23370cc23b9b

1/31/2018, “A New Public/Private Long-Term Care Financing Plan,” by Howard Gleckman, Forbes

Quote: “Two years ago, the Long-Term Care Financing Collaborative proposed a public catastrophic long-term care insurance program. In effect, people would use private insurance, savings, or home equity to pay for the first few years of their care needs, then the government would pick up costs for people with true catastrophic needs. Today, two highly-respected long-term care experts offered an important refinement to that basic structure: A plan that ties the time period before insurance benefits are available to a person’s income. As a result, lower-income people could access new benefits sooner than higher-income people.

LTC Comment: This new plan is more of the same old, same old. It calls for compulsory, payroll-funded, means-tested social insurance for long-term care supplemented by wrap-around private coverage that converts LTCI from real insurance, with all its benefits, to a kind of Medi-Gap policy, with all its drawbacks. What’s worse, it won’t work because it fails to address the real problem, easy access to Medicaid after the insurable event occurs. We’ll have more to say in a future LTC Bullet.

Cost of Care Surveys

PWC on Cost of Care 0318 URL:  https://www.pwc.com/us/en/insurance/assets/pwc-insurance-cost-of-long-term-care.pdf

https://www.pwc.com/us/en/insurance/assets/pwc-insurance-cost-of-long-term-care.pdf

3/16/2018, “Formal Cost of Care,” by Stephen D. Forman, LTCA Weekly Reader

Quote: “Formal Cost of Care: Price Waterhouse Cooper analyzed 223,963 claims worth $14.8B of payments from carriers representing 72% of the inforce population to produce the report: "Formal Cost of Long-Term Care Services." It concludes the average lifetime cost of formal care (i.e., excluding informal services) is $172,000. As you can see from Figure 4, a quarter of the time, the cost is less than $26,000, while another quarter of the time it's over $240,000, and there's a 5% chance of exceeding $578,000. In Figure 5, we see that the largest cohort of policyholders incur claims under $50,000 (this is supported by Figure 7, not shown, which reports that 49% of claims are 1-yr or less). Should you download the 29-pg report, you'll find that males average 2.5 yrs on claim, while females average 3.4 yrs-- but 16% of women and 9% of men outlive their benefits. Meanwhile, non-cognitive claims average $140,000, while cognitive claims cost much more: $216,000 (and last 1 yr longer). There's more stuffed into this brief report than I can share here, but you should consider the PwC stats the most current on the subject.”

LTC Comment: Thanks to Steve Forman of Center-corporate-member LTCA for this excellent summary of the PWC findings.

Nursing Home and Home Care Expenditure Data from CMS and Health Affairs

NHE Estimates 2017-2026 URL: https://www.healthaffairs.org/doi/pdf/10.1377/hlthaff.2017.1655

2/14/2018, “National Health Expenditure Projections, 2017–26: Despite Uncertainty, Fundamentals Primarily Drive Spending Growth,” by Gigi A. Cuckler, Andrea M. Sisko, John A. Poisal, Sean P. Keehan, Sheila D. Smith, Andrew J. Madison, Christian J. Wolfe, and James C. Hardesty, Health Affairs

Quote: “National health spending growth is expected to average 5.5 percent per year for 2017–26 and to reach $5.7 trillion by 2026 (exhibit 1). Over the same period, growth in the nation’s gross domestic product(GDP) is expected to be 4.5 percent per year. This 1.0-percentage-point differential is expected to result in an increase in the health share of the economy from 17.9 percent in 20161 to 19.7 percent in 2026.”

LTC Comment: We don’t need Ben Franklin to remind us spending beyond our means is problematical. But what’s really interesting about this iteration of CMS’s annual projection of the coming decade’s national health expenditures is that it doesn’t mention long-term care! Oh, you can find “home health care” and “nursing care facilities” in the detailed tables, but LTC isn’t highlighted for consideration in the analysis as in past years. Nevertheless, nursing facility care is expected to grow from 3% annually in 2013 to 5.3% by 2026, topping around $261 billion in expenditures by 2026. Likewise, home health care, rising 5.1% in 2013 will be going up 6.7% annually by 2026 to $172.6 billion. Dramatic numbers, but evidently not worth highlighting in CMS’s analysis.

 

Chapter 9: LTC Providers 

HCBS:  Cost-Effective or Not? (See also similar section under LTC Financing)

GAO on Medicaid ALFs 0218 URL: https://www.gao.gov/assets/690/689302.pdf

https://www.nytimes.com/2018/02/03/us/politics/assisted-living-gaps.html?hpw&rref=politics&action=click&pgtype=Homepage&module=well-region&region=bottom-well&WT.nav=bottom-well

2/3/2018, “U.S. Pays Billions for ‘Assisted Living,’ but What Does It Get?,” by Robert Pear, New York Times

Quote: “Federal investigators say they have found huge gaps in the regulation of assisted living facilities, a shortfall that they say has potentially jeopardized the care of hundreds of thousands of people served by the booming industry. The federal government lacks even basic information about the quality of assisted living services provided to low-income people on Medicaid, the Government Accountability Office, a nonpartisan investigative arm of Congress, says in a report to be issued on Sunday. … Assisted living was not part of the original Medicaid program, but many states now cover it under waivers intended to encourage ‘home and community-based services’ as an alternative to nursing homes and other institutions.”

LTC CommentIn "The Sirens' Call, The Primrose Path, and Assisted Living," Assisted Living, April 2004, I warned “In a nutshell, as an industry leader told me once, ‘Medicaid demands Ritz Carlton care for Motel 6 rates while imposing a regulatory Jihad.’ The assisted living industry should keep that in mind before accepting more Medicaid money.” Evidently, those chickens are coming home to roost.

 

Chapter 10: Medicaid

Medicaid Spousal Impoverishment Tables

2018 SSI and Spousal Impoverishment Numbers URL:  https://www.medicaid.gov/medicaid/eligibility/downloads/spousal-impoverishment/ssi-and-spousal-impoverishment-standards.pdf

See also LTC Bullet: Why Couples Worry So Little about Long-Term Care, Friday, December 15, 2017