LTC Bullet: Long-Term Care Across the States

Thursday, September 27, 2018

Seattle—

LTC Comment: This is the single best source and compendium you’ll find anywhere of state and national-level demographic and long-term care data, after the ***news.***

*** TODAY'S LTC BULLET is sponsored by Claude Thau, a GA whose proprietary tools help advisors find and educate clients, reducing the “Ping-Pong” in the LTCi sales process. Help clients project their exposure to LTC risk, compare Combo vs. Stand-Alone LTCi easily, and make informed final decisions about buying LTCi in 15-20 minutes!  Change work-site LTCi sales from a series of proposal deliveries to a single interactive consultation!  Claude is the lead author of the Milliman Broker World LTCi Survey, one of Senior Market Advisor's 10 "Power People" in LTCi in 2007, & a past Chair of the Center for Long-Term Care Financing. Contact Claude at 800-999-3026, x2241 or claudet@targetins.com to ask questions or get references. ***

*** “LTCG, a recognized leader in business process outsourcing for long term care insurance (LTCi), has announced the launch of its new Unified Provider Database (UPD). This new product contains detailed information for more than 100,000 senior care providers including non-skilled home care, skilled home health, assisted living communities, skilled nursing facilities, memory care, hospice agencies, adult day care facilities and continuing care retirement communities.” For the full story, click here. We extend congratulations to LTCG, a longtime friend and corporate member of Center for Long-Term Care Reform. ***

*** ADVISORS INSURANCE BROKERS announcement: “This is just a friendly reminder to our valued business partners. Note: while our Marketing name has changed, our Corporate ID, including our ID for carrier licensing and contracting, commissions, etc., is NOT changing. That will remain under the New York Long Term Care Brokers, Ltd. Corporate name. We continue to ‘fine tune’ our transition from New York-National LTC Brokers to our new Marketing name, Advisors Insurance Brokers. I am also pleased to announce that our new AIB website, www.AdvisorsIB.com is now LIVE. Please feel free to check out the new website at your convenience, and we welcome your feedback.” Congratulations to Kevin Johnson and Bob Vandy of AIB/NYNLTCB, longtime friends and supporters of the Center for Long-Term Care Reform. ***
 

LTC BULLET: LONG-TERM CARE ACROSS THE STATES

LTC Comment: Three cheers for AARP! Those are words you won’t hear often in these LTC Bullets. But in this case, they’re deserved.

The AARP Public Policy Institute has published a new version of its longest running (24 years) and best publication, titled “Across the States 2018.” This is the first update of the classic since 2012.

We’ll tell you more about the report and pull a selection of highlights below, some with our comments, but first this slide deck by two of its authors, Ari Houser and Wendy Fox-Grage, from their recent presentation to the LTC Discussion Group, makes a good summary.

I’m especially fond of “Across the States” because it was a principal source for the “Index of Long-Term Care Vulnerability” we developed in 2013 and used to analyze the condition of long-term care services and financing in these four states:

Our plan eventually to apply the Index of Long-Term Care Vulnerability to every state in the country was stymied when AARP stopped publishing Across the States after its 2012 version. The data was just getting too old. So despite the fact that our other principal sources continued to be published annually, we had to give up on the larger project.

But, hallelujah, publication of Across the States 2018, means we can get back to analyzing long-term care vulnerability state by state. So please review the reports linked above for NH, NJ, GA, and VA. If you would like to underwrite similar studies applying the Index of Long-Term Care Vulnerability to any state, please contact Steve Moses at smoses@centerltc.com or 425-891-3640. I think you’ll be surprised how economically this work can be done.

Now, back to Across the States 2018. Here’s how the authors describe it:

“This reference book is a powerful compilation of state data and analysis on LTSS in each state. This resource combines data from a large number of studies and data sources—including some original analysis not found elsewhere—into a single volume, so these state data can be at your fingertips. … Each state profile is a four-page, user-friendly, print-ready document that provides your state’s data and rankings and can be found at http://www.aarp.org/acrbossthestates.” (p. 1)

Report Highlights:

“The ages 85+ population—the cohort with the highest need for LTSS—is projected to triple (a 208 percent increase) between 2015 and 2050.” (p. 2)

“The caregiver support ratio … will drop [from 7 to 1] to 3 to 1.” (p. 2)

“In particular, the Hispanic population ages 65+ is projected to quadruple between 2015 and 2050.” (p. 2)

“The percentage of LTSS [long-term care] spending for older people and adults with disabilities going to HCBS [home and community-based services] ranged from 13 percent to 73 percent in 2016. While 40 states became more balanced [more HCBS], 11 states became less balanced [less HCBS] for older adults and people with physical disabilities in 2016 compared with 2011.” (p. 2)

“Nearly one-third of this [age 85+] population has dementia. Members of this age group not only have higher rates of disability than younger people, but they are also more likely to live alone, without a spouse or other family member to provide them with assistance.” (p. 3)

“Although disability is often associated with old age, the number of people ages 18–64 with cognitive difficulty or any disability is actually higher than the number of adults ages 65+ with these conditions.” (p. 6)

“The cost of LTSS is not within reach of most families across all the states. The annual median cost for nursing facilities is more than double the median income of older households, $42,113. This high cost of care can all too often cause people to exhaust their savings and rely on Medicaid, the largest public payer for LTSS.” (p. 7)

LTC Comment: Oops. Not every conclusion in this report is justified by the facts. Yes, LTC is expensive and most people cannot afford it. But, no, people do not have to “exhaust their savings” to qualify for Medicaid. There are dozens of ways to convert savings into exempt resources preserving most wealth while shifting LTC costs to taxpayers.

Report: “Despite the need for long-term care insurance to cover these costs, the vast majority (95 percent) of adults ages 40+ do not have this type of insurance. … Because of the low take-up rates, the overwhelming majority of private pay LTSS is paid out of pocket rather than by insurance.” (p. 8)

LTC Comment: Ah, true, but misleading. Fully half of the “out of pocket” funding for long-term care comes from the personal income people on Medicaid are required to contribute toward their cost of care. Even if they pay most of the bill out of pocket, providers get the notoriously low Medicaid reimbursement, often less than the cost of providing the care. Medicaid is a far bigger factor undercutting access to and quality of care in the US than appears evident from these unanalyzed data.

Report: “Family caregivers provided $470 billion worth of unpaid care in 2013, more than six times the Medicaid spending on home-and community-based services.” (p. 11)

“In 2015, there were 7 people ages 45–64 (the peak caregiver age group) for each person age 80 and older (the peak care need age group). While not all people ages 80+ have access to 7 potential caregivers ages 45–64, this is a useful metric for the overall availability of caregivers to provide family care to older people. In 2030, it is estimated that the ‘family caregiver support ratio’ will drop to 4 to 1. It is estimated to then fall to about 3 to 1 in 2050, when all baby boomers will be ages 85 or older.” (p. 11)

LTC Comment: So, we’ll just rely on paid caregivers then, right?

Report: “In 2015, nearly 2 million home health and personal care aides provided care, at just slightly more than $11 per hour on average. These workers made roughly $22,000 each in 2015 if they worked full time, which is just above the poverty line for a family of three (about $20,000), making them eligible for Medicaid.”

LTC Comment: Not exactly an attractive career we should expect future professional caregivers to seek.

Report: “Assisted living and residential care communities are needed options for when living at home is no longer viable. …These options are available mostly to people who can pay privately for them. Medicaid cannot cover room and board charges, only services. However, many state Medicaid programs do not cover these optional services in assisted living and residential care settings.”

LTC Comment: So Medicaid should pay more for ALFs and RCFs, right? Sounds logical until you analyze why we have a nursing home bias and quality of care problem in the first place. That is, because Medicaid made institutional care virtually free. We run the risk of ruining assisted living and residential care in the same way if we follow that course, as I explained in "The Sirens' Call, The Primrose Path, and Assisted Living," Assisted Living, April 2004.

Report: “Roughly 6 out of 10 (62 percent) nursing facility residents rely on Medicaid because many of them have spent their life savings paying for care.”

LTC Comment: There is no empirical evidence that many “have spent their life savings paying for care.” Medicaid does not require spend down for care. People can spend down by purchasing exempt resources, thus preserving wealth, while qualifying for Medicaid. To learn how and why, Google “Medicaid planning.” To learn why it’s terrible public policy, condemning millions to mediocre care or worse, read any report by the Center for Long-Term Care Reform here.

Closing LTC Comment: We’ll have more to say based on the excellent AARP Across the States report soon. We will revisit the potential of applying the “Index of Long-Term Care Vulnerability” to more states and we’ll explore what AARP means by “primary payer,” a critical concept, misused I think, to make Medicaid appear less damaging to LTC access and quality than it truly is. Stay tuned.