#############################
Updated Friday, November 8, 2024,
10:03 AM (Pacific)
Seattle—
#############################
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 (!)
#############################
Updated Monday, November 4, 2024,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-041:
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:
-
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
#############################
"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).
#############################
Updated Monday, October 28, 2024,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-040:
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:
-
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
#############################
"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).
#############################
Updated Friday, October 25, 2024,
10:03 AM (Pacific)
Seattle—
#############################
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.***
*** 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. *** |
*** 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.
#############################
Updated Monday, October 21, 2024,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-039:
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:
-
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
#############################
"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).
#############################
Updated
Monday, October 14, 2024, 10:03 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #24-038:
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:
- 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
#############################
"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).
#############################
Updated Friday, October 11, 2024,
10:03 AM (Pacific)
Seattle—
#############################
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
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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 30th.
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 1/3rd 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 24th 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 21st, 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
#############################
Updated Monday, October 7, 2024,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-037:
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:
-
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
#############################
"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).
#############################
Updated
Monday, September 30, 2024, 10:03 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #24-036:
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:
-
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
#############################
"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).
#############################
Updated Friday, September
27, 2024, 10:03 AM (Pacific)
Seattle—
#############################
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.
------------------
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.
------------------
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.
------------------
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.
------------------
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.
------------------
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.
------------------
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.
------------------
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!
------------------
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.
------------------
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.
------------------
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.
------------------
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.”
------------------
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.
------------------
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.
------------------
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.
------------------
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.
------------------
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 7th 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!
------------------
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.
------------------
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.
#############################
Updated
Monday, September 23, 2024, 10:03 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #24-035:
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:
-
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?
#############################
"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).
#############################
Updated
Monday, September 16, 2024, 10:03 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #24-034:
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:
·
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
#############################
"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).
#############################
Updated,
Friday, September 13, 2024, 10:03 AM (Pacific)
Seattle—
#############################
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.
#############################
Updated Tuesday, September 03, 2024,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-033:
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:
·
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
#############################
"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).
#############################
Updated, Friday, August 30, 2024,
10:03 AM (Pacific)
Seattle—
#############################
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 26th
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.
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 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.
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*
2022 (Billions) |
Total |
Medicaid |
Medicare |
Private Insurers
|
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% |
HH |
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.
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.
#############################
Updated, Monday, August 19, 2024,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-032:
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:
-
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
#############################
"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).
#############################
Updated, Monday, August 12, 2024,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-031:
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:
- 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
#############################
"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).
#############################
Updated,
Friday, August 9, 2024, 10:03 AM (Pacific)
Seattle—
#############################
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.
#############################
Updated, Monday, August 5, 2024,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-030:
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:
-
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
#############################
"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).
#############################
Updated,
Monday, July 29, 2024, 10:03 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #24-029:
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:
-
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?
#############################
"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).
#############################
Updated,
Friday, July 26, 2024, 10:03 AM (Pacific)
Seattle—
#############################
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 20th 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 20th
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.
#############################
Updated, Monday, July 22, 2024, 10:03
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-028:
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:
-
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
#############################
"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).
#############################
Updated, Monday, July 15, 2024, 10:03
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-027:
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:
-
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
#############################
"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).
#############################
Updated,
Friday, July 12, 2024, 10:03 AM (Pacific)
Seattle—
#############################
LTC BULLET: UNDERSTANDING MEDICAID SPEND DOWN
LTC Comment: To fix
long-term care you must understand Medicaid spend down. We explain after
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. *** |
*** 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.”
#############################
Updated, Monday, July 8, 2024, 10:03
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-026:
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:
-
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
#############################
"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).
#############################
Updated, Monday, July 1, 2024, 10:03
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-025: 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:
-
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?
#############################
"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).
#############################
Updated,
Friday, June 28, 2024, 10:03 AM (Pacific)
Seattle—
#############################
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.
#############################
Updated,
Monday, June 24, 2024, 10:03 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #24-024:
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:
-
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
#############################
"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).
#############################
Updated, Monday, June 17, 2024, 10:03
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-023:
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:
-
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
#############################
"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).
#############################
Updated,
Friday, June 14, 2024, 10:03 AM (Pacific)
Seattle—
#############################
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
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 7th
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.”
#############################
Updated, Monday, June 10, 2024, 10:03
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-022:
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:
-
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
#############################
"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).
#############################
Updated, Monday, June 3, 2024, 10:03
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-021:
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:
-
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
#############################
"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).
#############################
Updated, Tuesday, May 28, 2024, 10:03
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-020:
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:
-
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
#############################
"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).
#############################
Updated,
Friday, May 24, 2024, 10:03 AM (Pacific)
Seattle—
#############################
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 1st
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.
#############################
Updated, Monday, May 20, 2024, 10:03
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-019:
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:
-
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
#############################
"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).
#############################
Updated, Monday, May 13, 2024, 10:03
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-018: 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:
-
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
#############################
"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).
#############################
Updated,
Friday, May 10, 2024, 10:03 AM (Pacific)
Seattle—
#############################
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.***
*** 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. *** |
*** 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’s an example:
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.”)
#############################
Updated, Monday, May 6, 2024, 10:03
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-017:
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:
-
‘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
#############################
"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).
#############################
Updated, Monday, April 29, 2024,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-016:
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:
-
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
#############################
"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).
#############################
Updated, Friday, April 26, 2024,
10:03 AM (Pacific)
Seattle—
#############################
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?
#############################
Updated, Monday, April 22, 2024,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-015: 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:
-
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
#############################
"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).
#############################
Updated, Tuesday, April 16, 2024,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-014:
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:
-
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’
#############################
"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).
#############################
Updated, Friday, April 12, 2024,
10:03 AM (Pacific)
Seattle—
#############################
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/.
#############################
Updated, Monday, April 8, 2024, 10:03
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-013: 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:
-
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
#############################
"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).
#############################
Updated, Monday, April 1, 2024, 10:03
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-012:
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:
-
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
#############################
"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).
#############################
Updated, Friday, March 29, 2024,
10:03 AM (Pacific)
Seattle—
#############################
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 17th
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 5th 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.”
#############################
Updated, Monday, March 25, 2024,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-011:
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:
-
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
#############################
"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).
#############################
Updated,
Friday, March 15, 2024, 10:03 AM (Pacific)
Seattle—
#############################
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 20th 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 20th 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 21st 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.”
#############################
Updated, Monday, March 11, 2024,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-010:
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:
-
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
#############################
"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).
#############################
Updated, Monday, March 4, 2024, 10:03
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-009:
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:
-
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
#############################
"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).
#############################
Updated,
Friday, March 1, 2024, 10:03 AM (Pacific)
Seattle—
#############################
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.***
*** 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. *** |
*** 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 21st 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.
#############################
Updated, Monday, February 26, 2024,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-008:
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:
-
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
#############################
"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).
#############################
Updated, Tuesday, February 20, 2024,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-007:
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:
-
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
#############################
"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).
#############################
Updated,
Friday, February 16, 2024, 10:03 AM (Pacific)
Seattle—
#############################
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.
#############################
Updated, Monday, February 12, 2024,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-006: 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:
-
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
#############################
"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).
#############################
Updated, Monday, February 5, 2024,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-005:
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:
-
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
#############################
"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).
#############################
Updated, Friday, February 2, 2024,
10:03 AM (Pacific)
Seattle—
#############################
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). 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.
#############################
Updated,
Monday, January 29, 2024, 10:03 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #24-004:
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:
-
‘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
#############################
"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).
#############################
Updated, Monday, January 22, 2024,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-003:
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:
-
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
#############################
"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).
#############################
Updated,
Friday, January 19, 2024, 10:03 AM (Pacific)
Seattle—
#############################
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?
#############################
Updated, Tuesday, January 16, 2024,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-002: 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:
-
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?
#############################
"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).
#############################
Updated,
Friday, January 5, 2024, 10:03 AM (Pacific)
Seattle—
#############################
LTC BULLET:
SO WHAT IF THE GOVERNMENT PAYS FOR MOST LTC, 2022 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.***
*** 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. *** |
***
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.
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 this year. 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-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."
------------------
"So What If the Government Pays for
Most LTC, 2022 Data Update"
by
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 $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.
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.
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.
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 $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.
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:
“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.
* 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.
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.
#############################
Updated, Tuesday, January 02, 2024,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #24-001:
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:
-
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
#############################
"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).
#############################
Updated,
Monday, December 18, 2023, 10:03 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #23-037:
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:
-
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
#############################
"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).
############################
Updated,
Friday, December 15, 2023 10:40 AM (Pacific)
Seattle—
#############################
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.
#############################
Updated, Monday, December 11, 2023,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #23-036:
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:
-
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
#############################
"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).
#############################
Updated, Monday, December 4, 2023,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #23-035: 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:
-
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
#############################
"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).
#############################
Updated, Friday, December 1, 2023,
10:40 AM (Pacific)
Seattle—
#############################
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).
[69]
Early, “Reassessing the Facts,” p. 2.
[70]
Early, “Reassessing the Facts,” p. 4.
[71]
Early, “Reassessing the Facts,” 21.
[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.
[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/.
[85]
Jane Bryant Quinn, “Do Only the Suckers Pay?,” Newsweek,
December 18, 1989.
[88]
CMS, National Health Expenditure Data, Table 14. To access Table 14,
open and unzip
NHE Tables (ZIP).
[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.
#############################
Updated, Monday, November 27, 2023,
10:03 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #23-034:
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:
-
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
#############################
"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).
#############################
Updated,
Monday, November 20, 2023, 10:03 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #23-033:
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:
-
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
#############################
"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).
#############################
Updated,
Monday, November 17, 2023, 10:03 AM (Pacific)
Seattle—
#############################
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. ***
*** 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 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.
[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/).
[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,