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Our Mission:

The Center for LTC Reform is a private institute dedicated to ensuring 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.   We do this through...


Read the Center's two latest reports published by the Paragon Health Institute:
Long-Term Care: The Problem and Long-Term Care: The Solution

Watch Paragon’s web event: Long-Term Care: The Problem and The Solution

VIDEO -- Examining Abuses of Medicaid Eligibility Rules -- Includes Congressional testimony from Steve Moses (at 18min:45sec)
NEED A SPEAKER? Have Steve Moses speak at your next event.
"Clash of the Titans: Moses vs Gordon on Medicaid and other Dark Matter"
at the 12th Annual ILTCI Conference. Listen.
How Can You Work with the Center for LTC Reform?
Take our virtual tour of the Center's website.  This video webinar explains how to access and navigate the valuable content on the CLTCR website.
Read Medicaid Planning Quotes / Read "LTC Predictions" / Read Testimonials

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Not a CLTCR member?  Get a free trial membership for your sneak peak at our LTC Almanac and Members-Only Zone. 
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Join the Center for Long-Te Care Reform.  Help us fight for rational LTC policy reform.  Receive our daily email publications.  Get a user name and password to our Members-Only Zone.  Only $150 per year.  Mail your check to Center for Long-Term Care Reform, Inc., 2212 Queen Anne Avenue North, #110, Seattle, Washington, 98109.  Contact Damon at 206-283-7036 or damon@centerltc.com if you have questions.  Join the team!

 

 

 


READ STEVE'S BIO

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Updated, Monday, July 15, 2024, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Friday, July 12, 2024, 10:03 AM (Pacific)
 
Seattle—


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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:

  1. 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
  1. 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.
  2. 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.
  3. 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.
  4. Paying off debts: Reducing or eliminating outstanding loans, credit card balances, or other debts.
  5. 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.
  6. 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.

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Updated, Monday, July 8, 2024, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Monday, July 1, 2024, 10:03 AM (Pacific)
 
Seattle—

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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?

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"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).

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Updated, Friday, June 28, 2024, 10:03 AM (Pacific)
 
Seattle—


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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.

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Updated, Monday, June 24, 2024, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Monday, June 17, 2024, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Friday, June 14, 2024, 10:03 AM (Pacific)
 
Seattle—


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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.”

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Updated, Monday, June 10, 2024, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Monday, June 3, 2024, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Tuesday, May 28, 2024, 10:03 AM (Pacific)
 
Seattle—

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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

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"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). 

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Updated, Friday, May 24, 2024, 10:03 AM (Pacific)
 
Seattle—


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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.

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Updated, Monday, May 20, 2024, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Monday, May 13, 2024, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Friday, May 10, 2024, 10:03 AM (Pacific)
 
Seattle—


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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.”)

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Updated, Monday, May 6, 2024, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Monday, April 29, 2024, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Friday, April 26, 2024, 10:03 AM (Pacific)
 
Seattle—


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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?

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Updated, Monday, April 22, 2024, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Tuesday, April 16, 2024, 10:03 AM (Pacific)
 
Seattle—

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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’

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"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).

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Updated, Friday, April 12, 2024, 10:03 AM (Pacific)
 
Seattle—


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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/.

[13] Ruqaiijah Yearby, Brietta Clark, and José F. Figueroa, “Structural Racism in Historical and Modern US Health Care Policy,” Health Affairs, 41, No. 2, (February 2022), p. 187, https://www.healthaffairs.org/doi/10.1377/hlthaff.2021.01466.
 

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Updated, Monday, April 8, 2024, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Monday, April 1, 2024, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Friday, March 29, 2024, 10:03 AM (Pacific)
 
Seattle—

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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.”

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Updated, Monday, March 25, 2024, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Friday, March 15, 2024, 10:03 AM (Pacific)
 
Seattle—


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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.

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Updated, Monday, March 11, 2024, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Monday, March 4, 2024, 10:03 AM (Pacific)
 
Seattle—

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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—


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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.

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Updated, Monday, February 26, 2024, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Tuesday, February 20, 2024, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Friday, February 16, 2024, 10:03 AM (Pacific)
 
Seattle—


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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.

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Updated, Monday, February 12, 2024, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Monday, February 5, 2024, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Friday, February 2, 2024, 10:03 AM (Pacific)
 
Seattle—

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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[1]). 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.


[1] Calculations in this section are based on figures for Medicaid nursing home expenditures, number of Medicaid nursing home residents, etc., as reported in AARP’s Across the States, 2012 publication. Detailed computations by the author are available upon request.
 

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Updated, Monday, January 29, 2024, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Monday, January 22, 2024, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Friday, January 19, 2024, 10:03 AM (Pacific)
 
Seattle—


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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?

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Updated, Tuesday, January 16, 2024, 10:03 AM (Pacific)
 
Seattle—

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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—

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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."

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"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.


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Updated, Tuesday, January 02, 2024, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Monday, December 18, 2023, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Friday, December 15, 2023 10:40 AM (Pacific)
 
Seattle—

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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.

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Updated, Monday, December 11, 2023, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Monday, December 4, 2023, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Friday, December 1, 2023, 10:40 AM (Pacific)
 
Seattle—

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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).

[68] John F. Early, “Reassessing the Facts about Inequality, Poverty, and Redistribution,” Cato Institute, April 24, 2018, p. 1, https://www.cato.org/policy-analysis/reassessing-facts-about-inequality-poverty-redistribution.

[69] Early, “Reassessing the Facts,” p. 2.

[70] Early, “Reassessing the Facts,” p. 4.

[71] Early, “Reassessing the Facts,” 21.

[72] Rachel Sheffield and Robert Rector, “Air Conditioning, Cable TV, and an Xbox: What Is Poverty in the United States Today?,” Heritage Foundation, July 19, 2011, https://www.heritage.org/poverty-and-inequality/report/air-conditioning-cable-tv-and-xbox-what-poverty-the-united-states.

[73] John F. Early, “The Myth of American Income Inequality,” Cato Institute, September 20, 2022, https://www.cato.org/study/myth-american-income-inequality.

[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.

[79] Rocki Basel et al., “The Continued Toll of Financial Insecurity in Retirement,” National Council on Aging and LTSS Center, February 2023, https://ncoa.org/article/addressing-the-nations-retirement-crisis-the-80-percent-financially-struggling. Cited 9/4/23.

[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/.

[83] American Council on Aging, “Spending Down Assets to Become Medicaid Eligible for Nursing Home/Long Term Care,” updated December 14, 2022, https://www.medicaidplanningassistance.org/medicaid-spend-down/.

[84] Many are quoted in Center for Long-Term Care Reform state-level reports accessible here: http://www.centerltc.com/reports.htm.

[85] Jane Bryant Quinn, “Do Only the Suckers Pay?,” Newsweek, December 18, 1989.

[86] Centers for Medicare and Medicaid Services (CMS), National Health Expenditure Data, Table 15, https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsHistorical. To access Table 15, open and unzip NHE Tables (ZIP).

[87] National Investment Center, “Monthly Skilled Nursing Data Report,” February 2023, https://info.nicmapvision.com/nic-map-skilled-nursing-data-monthly-report.html.

[88] CMS, National Health Expenditure Data, Table 14. To access Table 14, open and unzip NHE Tables (ZIP).

[89] American Health Care Association and National Center for Assisted Living, “Facts and Figures,” https://www.ahcancal.org/Assisted-Living/Facts-and-Figures/Pages/default.aspx. Find these quotes under the source’s “Finance” tab.

[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.
 

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Updated, Monday, November 27, 2023, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Monday, November 20, 2023, 10:03 AM (Pacific)
 
Seattle—

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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

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"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).

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Updated, Monday, November 17, 2023, 10:03 AM (Pacific)
 
Seattle—

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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.

[33] Law Offices of Stephen J. Silverberg, “What Is a Medicaid Asset Protection Trust (MAPT)?,” https://www.sjslawpc.com/practice-areas/what-is-a-medicaid-asset-protection-trust-mapt/.

[34] Krause Financial Services, “Medicaid Compliant Annuity,” https://www.medicaidannuity.com/products/medicaid-compliant-annuity/.

[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/).

[38] A partial annotated bibliography of Medicaid planning publications is available in Stephen A. Moses, “How to Fix Long-Term Care Financing,” Center for Long-Term Care Reform, July 26, 2017, pp. 34-65, http://www.centerltc.com/pubs/How-To-Fix-Long-Term-Care-Financing.pdf.

[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, https://www.medicaidplanningassistance.org/spousal-refusal/).

Note that spousal refusal is clearly illegal under federal law, but it is routinely permitted in New York and Florida and sporadically in some other states.

Life estate: “A common dilemma that our Fortune 500 clients run into is how to preserve their homes while also gaining Medicare [sic] eligibility. A transfer subject to a life estate may be used to preserve your home and facilitate your eligibility for Medicaid. With this planning tool, you transfer the ‘remainder interest’ in your house to your children (or other beneficiaries), and keep a ‘life estate’ for yourself. As a practical matter, you deed the house to the remainder beneficiaries and incorporate language in the deed to retain your life estate. The life estate gives you the legal right to live in the house for life” (Kevin Won, “Residence Transfer Subject to Life Estate: Medicaid Planning for Fortune 500 Employees and Retirees,” The Retirement Group, October 29, 2020, link).

“Half a Loaf, Reverse Half a Loaf, and Modern Half a Loaf are Medicaid gifting strategies (also called transfer strategies) that have been or are currently used for the purpose of reducing countable assets to qualify for Medicaid. These strategies can also preserve some of the Medicaid applicant’s assets for their family members” (American Council on Aging, “How the Modern Half a Loaf Strategy Helps Families Become Medicaid Eligible and Preserves Assets,” updated January 25, 2023, https://www.medicaidplanningassistance.org/modern-half-a-loaf/).

[40] “A data analytics application could review household data or claims information to spot anomalous patterns that suggest ineligibility.” William J. Oliver with Josh Archambault, “MassHealth Protecting Medicaid Resources for the Most Vulnerable: How Massachusetts Saved Hundreds of Millions through Enhanced Eligibility Verification,” Pioneer Institute, October 2018, p. 7, link

[41] “Washington Advisory Vote 20, a non-binding question concerning whether to maintain or repeal House Bill 1087, was on the ballot in Washington as an advisory question on November 5, 2019. A majority of voters voted in favor of repealing the bill.” Ballotpedia, “Washington Advisory Vote 20, Nonbinding Question on Tax to Fund Long-Term Healthcare Services (2019),” link.

“Washington Senate Joint Resolution 8212, the Authorize Fund Investment of Long-Term Services and Supports Trust Account Amendment, was on the ballot in Washington as a legislatively referred constitutional amendment on November 3, 2020. It was defeated.” Ballotpedia, “Washington Senate Joint Resolution 8212, Authorize Fund Investment of Long-Term Services and Supports Trust Account Amendment (2020),” link.

[42] “As of Monday, Aug. 15, [2022] the [State of Washington] Employment Security Department reports the following WA Cares exemption numbers:

  • Total opt-out requests submitted: 478,781

  • Total opt-out requests processed: 478,681

  • Total opt-out requests approved: 475,072

  • Applications processed as a percentage of total: 99.98%.”

Elizabeth Hovde, “Updated Numbers on People Exempted from State’s Long-Term-Care Program and Payroll Tax,” Washington Policy Center, August 16, 2022, https://www.washingtonpolicy.org/publications/detail/updated-numbers-on-people-exempted-from-states-long-term-care-program-and-payroll-tax.

[43] “Washington State’s ‘Washington Cares Fund’ (WCF) stimulated a tremendous demand for private LTCI from individuals and businesses within WA…. Partly because the tax applies to all earned income, LTCI sales in Washington soared to unprecedented levels. Insurers quickly became backlogged with applications and were concerned about early lapses as the law provided a permanent WCF exemption based on only a one-time attestation. Insurers reduced design flexibility, and then discontinued sales in WA before the November 1 deadline.” Claude Thau, Allen Schmitz, and Chris Giese, “2022 Milliman Long Term Care Insurance Survey,” Broker World, July 1, 2022, https://brokerworldmag.com/2022-milliman-long-term-care-insurance-survey/.

[44] “We estimate total stand-alone LTCI annualized new premium sales of nearly $200 million in 2021 … almost 1/3 more than our 2020 estimate of $150 million. However, premium outside the state of Washington decreased 6.0 percent, based on the insurers that reported sales.

“We estimate that 140,000 to 150,000 people purchased stand-alone LTCI coverage in 2021, more than triple the 2020 numbers. Outside of WA, the number of new insureds dropped 9.4 percent based on the insurers that reported sales.” Thau, Schmitz, and Giese, “2022 Milliman Long Term Care Insurance Survey.”

[45] Richard W. Johnson and Judith Dey, “Long-Term Services and Supports for Older Americans: Risks and Financing, 2022,” HHS, Assistant Secretary for Planning and Evaluation, revised August 2022, p. 1, https://aspe.hhs.gov/sites/default/files/documents/08b8b7825f7bc12d2c79261fd7641c88/ltss-risks-financing-2022.pdf. LTSS stands for “long-term services and supports,” another term for LTC.

[46] Johnson and Dey, “Long-Term Services and Supports for Older Americans,” p. 6.

[47] Johnson and Dey, “Long-Term Services and Supports for Older Americans,” p. 1. On page 5, Johnson and Dey clarify: “We project that total paid LTSS expenses will average $120,900 per person (Table 3). Medicaid is the largest payer of LTSS, averaging $51,800 after age 65 and accounting for 43% of the total. Family out-of-pocket costs are also substantial, averaging $44,800 and accounting for 37% of the total.”

[48] “These estimates differ from a present discounted value (PDV) of expenditures at age 65, the amount that an individual would need to set aside at age 65 to cover future LTSS expenses. The PDV is lower than the sum-of-expenditures measure because it accounts for the investment returns that could be earned on funds set aside at age 65 until LTSS expenses begin, often after age 80. We show PDV projections in the appendix.” Johnson and Dey, “Long-Term Services and Supports for Older Americans,” p. 6.

[49] Johnson and Dey, “Long-Term Services and Supports for Older Americans,” p. 17. Table A1.

[50] “PDV estimates, which are reported in Tables A1-A9, use the Social Security trustees’ ultimate real interest rate of 2.5%. Because the trustees assume long-range price growth averages 2.6%, this real discount rate is equivalent to a nominal long-run discount rate of about 5.1%.” Johnson and Dey, “Long-Term Services and Supports for Older Americans,” p. 13.

[51] See footnote 75.

[52] Resources set aside for future LTC expenses would be expended in the private LTC market, where services cost more—often 150 percent of what Medicaid pays for the same service. This differential needs to be accounted for in estimating the average and catastrophic LTC responsibility of individuals. On the plus side, paying privately for LTC tends to command better access to higher quality care across a wider choice of care venues than Medicaid does.

[53] Richard W. Johnson and Claire Xiaozhi Wang, “The Financial Burden of Paid Home Care on Older Adults: Oldest and Sickest Are Least Likely to Have Enough Income,” Health Affairs 38, no. 6 (June 2019), p. 994, https://www.healthaffairs.org/doi/10.1377/hlthaff.2019.00025.

[54] Johnson and Wang, “The Financial Burden of Paid Home Care on Older Adults.”

[55] Johnson and Wang, “The Financial Burden of Paid Home Care on Older Adults,” p. 1000.

[56] “Over the past two decades, annual LTCI premiums in the stand-alone market have increased significantly for both current and new policyholders. Higher average premiums reflect increased demand for more comprehensive benefit packages (including inflation protection) and higher daily benefit amounts” (Kirsten J. Colello, “Long-Term Care Insurance: Overview,” Congressional Research Service, updated July 21, 2023, https://crsreports.congress.gov/product/pdf/IF/IF11614).

[57] “We conservatively defined the middle market as those individuals in the 41st to 80th percentile of individual income and annuitized assets in 2014. For seniors age 75-84, that band corresponds to $25,001 to $74,298 in annual income and assets. The band is wider for older seniors age 85 and above, where it ranges from $24,450 to $95,051” (Beth Burnham Mace et al., “Middle Market Seniors Housing Study: Executive Summary,” National Investment Center, https://www.nic.org/wp-content/uploads/pdf/Executive-Summary.pdf).

[58] “By reducing annual seniors housing costs by $15,000 per year—from $60,000 to $45,000— the potential market expands by 3.6 million individuals 75+. At the $45,000 annual cost level, 10.2 (71 percent) million middle-income seniors have resources including housing equity above the annual cost” (Mace et al., “Middle Market Seniors Housing Study”).

[59] Already, limited LTC insurance premiums and certain LTC expenses can be withdrawn from HSAs tax free.

[60] Investment Company Institute, “Release: Quarterly Retirement Market Data,” June 14, 2023, https://www.ici.org/statistical-report/ret_23_q1.

[61] “According to the Housing Vacancy Survey, 78.5 percent of households age 65 and over owned their primary residences in 2018.” Joint Center for Housing Studies of Harvard University, “Housing America's Older Adults 2019: A Supplement to the State of the Nation’s Housing Report,” 2019, p. 6, link.

[62] National Reverse Mortgage Lenders Association, “Senior Home Equity Levels Fall Slightly to $12.39T in Q4,” press release, April 21, 2023, link.

[63] GAO, Medicaid: Recoveries from Nursing Home Residents’ Estates Could Offset Program Costs, p. 4.

[64] “Americans purchased $3.3 trillion of new life insurance coverage in 2021, a 1.3 percent decrease from 2020. By the end of 2021, total life insurance coverage in the United States was $21.2 trillion, an increase of 3.7 percent from 2020 (Table 7.1).” American Council of Life Insurers, “Life Insurers Fact Book,” November 28, 2022, https://www.acli.com/about-the-industry/life-insurers-fact-book.

[65] “Life insurance can provide much-needed cash for loved ones you leave behind when you die.… But life insurance also can provide cash for you while you’re living—that is, if you have a cash value life insurance policy.… You can access the cash in a variety of ways. That’s right: It’s yours for the taking.” Cameron Huddleston, “Cash Out Life Insurance Guide,” Forbes, updated May 19, 2022, https://www.forbes.com/advisor/life-insurance/tap-cash-value/.

[66] “You can sell either a term life policy or a permanent life policy. However, if you have a term life policy, investors prefer that the policy have an option to be converted to a permanent policy because they don’t want to risk having the insured outlive the length of the policy…. Or the insured’s life expectancy must be shorter than the term of the policy to sell it.” Cameron Huddleston and Amy Denise, “Life Settlements Provide Escape Hatch When You Need Cash,” Forbes, updated March 28, 2021, https://www.forbes.com/advisor/life-insurance/life-settlements/.
 

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Updated, Monday, November 13, 2023, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #23-032:  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:

·       The $600 Billion Dilemma: How to Help Family Caregivers

·       These lawmakers should be more careful about what they ask for

·       What is the Average Age and Disability Level of Older People Moving Into Long-Term Care?

·       Japan’s aging population to increase burden on nursing care costs

·       Long-Term Care Insurance Coverage: State-to-State 2023

·       As People Live Longer, Family Caregivers Face Financial Challenges

·       Study: People entering nursing homes have more severe disabilities than those going into independent living

·       The federal Medicaid bait and switch

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"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).

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Updated, Monday, November 6, 2023, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #23-031:  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:

  • Nursing Home Construction Dwindles As Operators Downsize – But a Lack of Medicaid Beds is Most Concerning
  • Millennials Join Ranks of ‘Sandwiched’ Caregivers
  • It’s time to dig in and let CMS do the digging out
  • Can a Nursing Home Take Our Assets? We Have a $500k IRA and a Trust to Protect Us
  • Long-term care has its congressional moment
  • Report reveals minorities’ LTSS access barriers, reliance on family caregivers
  • Surge in Dementia Cases by 2040 Expected
  • Executive order from Biden on regulating AI in healthcare expected this week, as the world starts to come to grips with the new technology

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"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).

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Updated, Friday, November 3, 2023, 10:40 AM (Pacific)
 
Seattle—

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LTC BULLET: LONG-TERM CARE: THE SOLUTION (THE SERIAL, Part 2)

LTC Comment: Today we offer easy access to a must-read new study by Center president Steve Moses, after the ***news.***

*** ILTCI REGISTRATION OPEN: “Registration is Now Open for the 2024 Intercompany Long Term Care Insurance Conference!” reports the meeting’s organizing committee. “Our in-person conference will be March 17 - 20, 2024 at the newly remodeled Town & Country Resort in San Diego, CA.  Our agenda includes numerous educational sessions over two days across seven tracks with ample time for networking and reconnecting with colleagues. We still have room for exhibitors and sponsors! Please contact us at info@iltciconf.org if you are interested in either opportunity to showcase your products and services to our attendees.” Click here to register and here to reserve your hotel. I’ll be there covering the conference as I have been for most of its predecessors as recounted in History of LTC Insurance Conferences (2021). Read our coverage of this year’s conference in LTC Bullet: Virtual Visit to ILTCI 2023. ***

*** 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 2)

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 the next few weeks. Today, read “The LTC Solution” (introduction), “What Did Not Work,” and “What Happened and Why Action Is Imperative Now.”  Next time: a whole new approach to LTC financing that will unleash the potential of private financing, including insurance. 

Excerpts from “Long-Term Care: The Solution
by
Stephen A. Moses
President, Center for Long-Term Care Reform


The LTC Solution

In “Long-Term Care: The Problem,[4] I described the lessons of LTC history. Public programs have paid for most expensive LTC since 1965. Government policies diverted the public from early private LTC planning and left too many people dependent on welfare-financed nursing home care. Private sector entrepreneurs interceded repeatedly with preferred options such as assisted living, private home care, and insurance. But the dominance of Medicaid and Medicare financing for nursing homes prevented alternative modes of LTC service delivery and financing from fully developing based on consumer preferences. Given the damage government financing and interference have caused, what are the best LTC policy options going forward?

America’s many LTC service delivery and financing problems are understandable, manageable, and correctable. The fundamental issue is that people do not plan, prepare, save, invest, or insure early enough to be able to pay for LTC when they need it, usually much later in life. The current challenge facing policymakers is twofold: (1) how to get people to think about and plan for LTC in their younger, working years, when LTC risk and cost seem distant and low compared to more immediate needs, and (2) how to provide and pay for LTC in the future for burgeoning numbers of aging people who are unprepared to meet its cost. The growing emphasis on healthy aging, with its resulting expansion of lifespans, will make these imperatives more important than ever to achieve.[5]

The reason most people do not plan early enough for LTC is that, since its establishment in 1965, Medicaid has paid for most expensive formal LTC not only for the poor but also for the middle class and many affluent people. The fallacy of impoverishment—the mistaken belief that eligibility for Medicaid’s LTC benefits requires spend down of income and assets into destitution—has prevented analysts from seeing this connection between Medicaid’s availability and the public’s seemingly irrational denial of LTC risk. The problem is not that people intentionally plan to use Medicaid if they ever need LTC. Few know who pays for LTC, and most wrongly believe Medicare does.[6] Rather, Medicaid’s actual availability when care is needed (usually many years later) enables consumers’ denial of the risk and cost and leaves them unprepared and unprotected when confronted with chronic long-term illness.

Thus, the fundamental solution to the LTC policy problem is to direct the public’s attention to this large risk and cost earlier—before it is too late for them to prepare personally. That has been a major goal of LTC public policy ever since Medicaid’s LTC expenditures spiked far above original expectations in the 1970s. Through the 1980s and 1990s and into the mid-2000s, policymakers of both political parties sought to ensure that escalating Medicaid LTC expenditures went only to the people who needed them most. Numerous laws attempted to discourage the overuse of Medicaid LTC benefits by people who could and should pay for their own care. Those measures’ objective was to convince consumers that they should prepare for likely LTC costs in the future in order to avoid possibly devastating LTC expenditures that could consume their life savings. Although they were largely unsuccessful, the measures intended to scare the public straight point the way toward a better solution. But before designing and implementing a successful solution, it is crucial first to understand what policies failed and why they failed.

What Did Not Work

Congress did not include LTC in Medicare but added nursing home coverage for the poor to Medicaid, recognizing its growing need and costs for an aging population. Medicaid expenditures exceeded expectations from the start of the program.[7] LTC costs in Medicaid increased especially rapidly.[8] Medicaid extended eligibility to anyone unable to afford nursing home care,[9] and it reduced or eliminated strict eligibility criteria, transfer of assets restrictions, and mandatory liens that were previously commonplace in state welfare programs.[10] This easy access to Medicaid nursing home care created a moral hazard that desensitized the public to LTC risk and cost.[11] So long as LTC constituted a small risk of a catastrophic loss sometime in the distant future that a government program would then cover if necessary, most people ignored the risk. Most of those who later confronted catastrophic LTC costs ended up on Medicaid whether or not they knew from the beginning that Medicaid would pay.

Presidents and Congresses of both parties tried to subdue Medicaid LTC expenditure growth by suppressing the tendency to ignore LTC and rely on Medicaid in a long series of statutory and regulatory reforms. President Carter and a Democrat-controlled House and Senate took the initial step to rein in Medicaid LTC benefits in 1980 by imposing the program’s first ever limit on asset transfers to qualify for the program.[12] That measure triggered the first law journal article on how to circumvent Medicaid eligibility rules and become eligible while preserving wealth.[13]

In 1982, President Reagan signed legislation passed by a Democratic House and a Republican Senate that lengthened and strengthened asset transfer restrictions and allowed states to impose liens to secure property for later recovery from recipients’ estates.[14] In 1988, with Democrats controlling both houses of Congress, President Reagan signed legislation that, for the first time, required state Medicaid programs to penalize people who made inappropriate asset transfers.[15] None of these measures succeeded in controlling LTC spending growth. Medicaid planning articles multiplied in formal legal publications and in the popular media. The techniques to qualify for Medicaid included hiding money, transferring assets, juggling resources, changing wills and titles to property, and setting up a Medicaid trust to access benefits without spending down savings.[16]

In the late 1980s, studies by the Office of the Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS)[17] and the Government Accountability Office (GAO)[18] documented inconsistent state enforcement of the asset transfer, lien, and estate recovery regulations. The OIG report observed: “It is their children, after all, who stand to inherit whatever property remains after the costs of long-term care are paid and who currently reap the windfall of Medicaid subsidies. We must emphasize that the issue is enrichment of nonneedy adult heirs, not denial of care to the elderly.”[19] The government watchdogs recommended tightening Medicaid financial eligibility rules; making estate recoveries mandatory; and conducting further studies to analyze the relationships among Medicaid LTC eligibility, reduced private LTC spending, and low private LTC insurance take-up. A Democrat-controlled Congress concurred in 1993 when President Clinton signed legislation that required estate recoveries and made the asset transfer look-back period longer and stronger.[20] But these efforts did little to reduce reliance on Medicaid LTC and nothing to abate an onslaught of legal treatises, law journal articles, popular books, magazine stories, and advertisements recommending “Medicaid estate planning.”[21]

In 1996, frustrated about continued abuses of Medicaid LTC, a Republican House and Senate sent President Clinton a bill that made it a crime to transfer assets for the purpose of qualifying for Medicaid.[22] He signed what became known as the “Throw Granny in Jail Act.” When senior advocates objected, a Republican Congress replaced it in 1997 with the “Throw Granny’s Lawyer in Jail Law.”[23] President Clinton signed this legislation, which made it a crime to accept a fee for advising a client to transfer assets to qualify for Medicaid, but the Justice Department deemed it unenforceable because transferring assets to qualify was no longer a crime in itself,[24] and a federal judge later ruled the law unconstitutional.[25]

Nothing more was done to restrain Medicaid LTC overuse for almost a decade until a Republican Congress passed the Deficit Reduction Act (DRA), which President Bush signed in 2006. The DRA extended the asset transfer look-back period to a full five years. It also put the first ever cap on Medicaid’s home equity exemption, allowing states to set a limit from $500,000 up to a maximum of $750,000. The DRA’s home equity limit increased annually with inflation, reaching $688,000 and $1,033,000, respectively, in 2023. In 2018, the median home equity of homeowners ages 65 plus was only $143,500.[26] Consequently, Hest, Alarcon, and Blewett “estimate that nearly the entire elderly population would meet the home equity threshold,”[27] rendering it ineffectual to discourage Medicaid LTC eligibility except by the wealthiest. When he signed the DRA, President Bush said, “The bill tightens the loopholes that allowed people to game the system by transferring assets to their children so they can qualify for Medicaid benefits. Along with Governors of both parties, we are sending a clear message: Medicaid will always provide help for those in need, but we will never tolerate waste, fraud, or abuse.”[28]

That was the expressed intent not only of the DRA but of the whole history of bipartisan legislation described above. Yet Medicaid LTC expenditures kept increasing despite this long, concerted effort. The public continued to ignore LTC risk and cost. Since 2006, no Congress has passed legislation to target Medicaid to those most in need. Nor has legislation advanced to encourage middle-class and affluent people to prepare early to be able to pay for their own LTC and avoid Medicaid dependency. Earlier economic recessions had led to legislation designed to spend Medicaid LTC money more wisely, discourage its use by the middle class, and encourage the non-needy to take personal responsibility. But after the Great Recession of December 2007 to June 2009 no further measures of that kind appeared.

What Happened and Why Action Is Imperative Now

Innovative and risky new fiscal and monetary policies in effect since the 1990s explain why politicians permitted Medicaid spending to skyrocket over the past two decades. The Federal Reserve dropped interest rates to near zero. Public funds were spent with little constraint. The national debt soared, but few worried because servicing the debt at miniscule interest rates seemed manageable particularly given politicians’ generally short time horizons. With budgetary pressures relaxed, policymakers felt little incentive to address Medicaid’s excessive LTC spending or to reduce its long-standing moral hazard regarding LTC. But all that is changing today with higher inflation and interest rates and rising fiscal pressures from federal programs, particularly the massive unfunded liabilities of Social Security and Medicare. Budgetary pressures are again forcing policymakers to address Medicaid LTC financing expenditures.


 

[4] Moses, “Long-Term Care: The Problem.”

[5] For example: “Even making small changes in your daily life can help you live longer and better. In general, you can support your physical health by staying active, eating and sleeping well, and going to the doctor regularly” (National Institutes of Health, National Institute on Aging, “What Do We Know About Healthy Aging?,” https://www.nia.nih.gov/health/what-do-we-know-about-healthy-aging).

[6] “A shocking 56% of boomers mistakenly believe that Medicare will pay for long-term (sometimes called ‘custodial’ care). They are sadly mistaken. Medicare was designed to cover medical care only.” Sara Zeff Geber, “Hey Boomer: Medicare Won’t Cover Your Long-Term Care,” Forbes, July 28, 2021, https://www.forbes.com/sites/sarazeffgeber/2021/07/28/hey-boomer-medicare-wont-cover-your-long-term-care/.

[7] “Because of the attention focused on Medicare, Title XIX [Medicaid] was passed by Congress with little public notice. This relative obscurity was lost when the cost of New York State’s Medicaid program (effective May 1, 1966) became known. Federal cost estimates for the entire Medicaid Program were shown to have been grossly underestimated.… The amounts expended to finance Medicaid in the first two years were surprisingly high. Estimates in 1965 of the annual federal cost of Medicaid ranged from $150 million to $238 million. Yet actual federal expenditures were $621 million in the calendar year 1966. In 1967, Congress estimated that the annual federal share would rise to $1.4 billion in fiscal 1968 and to $3.1 billion by 1972, provided no additional restrictions were placed on the 1965 program.” (p. 63, 65, footnotes omitted) ______, Columbia Journal of Law and Social Problems, “Medicaid: The Patchwork Crazy Quilt,” April 1969.

[8] “During the decade following the 1965 passage of Medicare and Medicaid, there was a dramatic expansion in the supply of nursing home beds and an even more dramatic escalation in costs. New facilities were built, and a more sophisticated set of owners emerged, including the multistate, multifacility systems or chains. These developments were largely a product of four factors: (1) the availability of funding; (2) the method of reimbursing facilities; (3) increasing demand; and (4) federal health and safety regulation.” Catherine Hawes and Charles D. Phillips, The Changing Structure of the Nursing Home Industry and the Impact of Ownership on Quality, Cost, and Access (Washington: National Academies Press, 1986), https://www.ncbi.nlm.nih.gov/books/NBK217907/.

[9] “The principal group that is eligible for federal sharing of medical care costs is the categorically related medically needy, i.e., the aged, disabled, blind, or members of families with dependent children, whose income and resources exceed the maximum levels established by the state in question for eligibility for cash public assistance payments, but are not adequate to pay all their medical care expenses.” Sydney E. Bernard and Eugene Feingold, “The Impact of Medicaid,” Wisconsin Law Review 726 (1970), p. 753 (footnotes omitted, bolding added), [LINK].

[10] “Many [pre-Medicaid state assistance plans] required that the beneficiary must transfer to the pension authority any property they possessed before any payment would be made. Most had property and income caps to limit eligibility, generally a maximum of $3,000 in property and $300-$365 a year in income. Most required that benefits would be denied to anyone who gave away property in order to qualify for public assistance. Most required that a lien be placed on the estate of the beneficiary to be collected upon their death. Most required that recipients be ‘deserving,’ and benefits were denied to anyone who deserted a spouse, failed to support their families, had committed any crime, or had been a tramp or beggar.” Jeff Hoyt, “Senior Living History: 1930-1939,” SeniorLiving.org., July 27, 2023, https://www.seniorliving.org/history/1930-1939/.

[11] “Those states which attempted to bring the poor into the mainstream by providing liberal eligibility standards, broad benefits, and adequate fees found themselves running into opposition at home and in Congress on both financial and ideological grounds.… High costs are the result of precisely those aspects of Medicaid which were welcomed by social reformers-the broadening of eligibility requirements and of services covered, the maintenance of effort and equality of treatment requirements, and the payment of more generous fees.” Bernard and Feingold, “The Impact of Medicaid,” 752-53.

[12] The Omnibus Budget Reconciliation Act of 1980 imposed the program’s first limit on asset transfers to qualify for Medicaid. Previously “applicants were expressly permitted to transfer resources that otherwise would have disqualified them from receiving any benefits.” (p. 372) “The new SSI rule was expressly not applicable to assets which were exempt when transferred, and this included the family home. Because of this exemption, courts were prohibiting states from applying their transfer rules to assets that were exempt when transferred.” (p. 373 [footnotes omitted], Timothy N. Carlucci, “The Asset Transfer Dilemma: Disposal of Resources and Qualification for Medicaid Assistance,” Drake Law Review 36, no. 369 (1986-1987), [LINK].

[13] “Careful planning even under adverse state law will still be able to achieve the goal of excluding an applicant’s resources for purposes of determining Medicaid eligibility” (William G. Talis, “Medicaid as an Estate Planning Tool,” Massachusetts Law Review 66 [Spring 1981], p. 94).

[14] The Tax Equity and Fiscal Responsibility Act of 1982 expanded the voluntary two-year transfer of assets restriction to include exempt homes and permitted state Medicaid programs to place liens under certain limited circumstances in order to secure real property until it could be recovered from the estates of deceased Medicaid recipients to offset the cost of their LTC. Nevertheless, this Medicaid planner was undeterred: “With long-range planning, the cooperation of relatives, some good health, and maybe a little luck, couples will be in a position to negotiate between the rock and a hard place that Congress has placed in the Medicaid path” (Gill Deford, “Medicaid Liens, Recoveries, and Transfer of Assets after TEFRA,” Clearinghouse Review, June 1984).

[15] The Medicare Catastrophic Coverage Act of 1988 also required state Medicaid programs to look back 30 months (previously only 24 months and voluntary) for inappropriate asset transfers. It established an ineligibility penalty 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. So, for example, an applicant who gave away $80,000 to qualify for Medicaid in a state where nursing home care averaged $8,000 per month would be ineligible for 10 months from the date of the transfer. The law also capped the maximum asset transfer penalty at 30 months. Although Medicare provisions contained in this legislation were repealed, these Medicaid provisions remained.

[16] For example: “So is there any practical way to juggle assets to qualify for Medicaid before losing everything? The answer is yes! By following the tips on these pages, an older person or couple can save most or all of their savings, despite our lawmakers’ best efforts…. Here are the best options: Hide money in exempt assets…. Transfer assets directly to children tax-free…. Pay children for their help…. Juggle assets between spouses…. Pass assets to children through a spouse…. Transfer a home while retaining a life estate…. Change wills and title to property…. Write a durable power of attorney… Set up a Medicaid Trust…. Get a divorce” (Armond D. Budish, Avoiding the Medicaid Trap: How to Beat the Catastrophic Costs of Nursing-Home Care [New York: Henry Holt, 1981]).

[17] HHS, Office of Inspector General, Medicaid Estate Recoveries: National Program Inspection, June 1988, http://oig.hhs.gov/oei/reports/oai-09-86-00078.pdf. This author directed the study and wrote its report.

[18] GAO, Medicaid: Recoveries from Nursing Home Residents’ Estates Could Offset Program Costs, March 7, 1989, p. 3, https://www.gao.gov/products/hrd-89-56.

[19] HHS, Office of Inspector General, Medicaid Estate Recoveries, pp. 47-48.

[20] The Omnibus Budget Reconciliation Act of 1993 (OBRA ’93) implemented many of the OIG’s and GAO’s recommendations. It extended the look-back period for asset transfers to a full three years (36 months) for most improper transfers and to five years for transfers into or out of a trust. The law also dropped the 30-month cap on the eligibility penalty, making it potentially unlimited. OBRA ’93 made estate recoveries mandatory for the first time. It prohibited the common practice of “pyramid divestment,” which had allowed asset transfer penalties to run simultaneously, enabling as much as a million dollars to be jettisoned in less than a year to achieve eligibility without additional penalty.

[21] For example: “Now we have more complicated plans, but we have plans. We are going to bill more. OBRA ’93 was bad for our clients, but good for us…. Numerically, most of the techniques we use are still there…. It is worth trying anything once; then network and tell each other what we got away with…. Most of my clients get eligible quickly just from thoughtful spending” (Robert Fleming, speech before the National Academy of Elder Law Attorneys [NAELA] Institute, November 21, 1993).

“WE STILL BELIEVE THAT ALMOST ANYONE CAN BECOME MEDICAID ELIGIBLE FOR LONG-TERM CARE BENEFITS EVEN IN CRISIS…. It is still possible to transfer non-exempt assets (countable) into exempt assets (non-countable) for purposes of obtaining eligibility. The catch will be planning around the estate recovery program…. For instance, the conversion of cash into an interest in a third person’s residence is a way to shelter cash assets as part of the spend-down amount. The interest in the residence would then be transferred into a limited partnership. This limited partnership interest is not real property and is, therefore, not subject to having a lien placed against it” (Baird Brown and Robert Fleming, “Planning Options That OBRA ‘93 Does Not Affect,” NAELA Elder Law Institute proceedings, 1993, Section 12, pp. 11, 14, 16; emphasis in original).

“While many practitioners may believe that the Medicaid qualifications rules limit benefit eligibility to only the very poor, significant planning opportunities exist which can be utilized to qualify an individual for Medicaid benefits who otherwise has the financial resources to pay the cost of long-term care” (Harley Gordon, How to Protect Your Life Savings from Catastrophic Illness and Nursing Homes [Boston: Financial Strategies Press, 1994], p. 66).

[22] The Health Insurance Portability and Accountability Act of 1996 made transferring assets for less than fair market value to qualify for Medicaid a crime punishable by a fine of up to $10,000 and up to a year in jail.

[23] The Balanced Budget Act of 1997 repealed the criminalization of asset transfers and targeted lawyers who recommended asset transfers instead. The law’s criminalization of Medicaid planning advice set the elder law bar back on its heels for a while, but it also had a lasting impact. From then on, caution prevailed more often among elder law attorneys. They retreated from using terms such as juggling assets or Ziegfield Follies spending to qualify for Medicaid. Some reflected in print about the profession’s poor judgment and bad reputation in this regard:

Unfortunately, members of the Medicaid planning bar have sometimes been their own worst enemies. For example, at the May 1996 Symposium of the National Academy of Elder Law Attorneys, two prominent NAELA members (one a former President of the organization) gave a presentation on Medicaid planning. Using the format of a skit in which other NAELA members played the roles of the family, the presenters took the audience through a session in which an elderly couple, whose net worth exceeded $750,000, was counseled on how to arrange their affairs to attain Medicaid eligibility. Among the assets in the couple’s portfolio was a vacation home. The skit became fodder for critics of Medicaid eligibility planning and indeed was widely criticized by other NAELA members (Timothy L. Takacs and David L. McGuffey, “Medicaid Planning: Can It Be Justified? Legal and Ethical Implications of Medicaid Planning,” William Mitchell Law Review, 29, no. 111, p. 135).

[24] “US Attorney General Janet Reno has sent Speaker of the House Newt Gingrich a letter dated March 11, 1998, to the effect that the Department of Justice will take no action against professionals who advise people on transferring their assets to become eligible for Medicaid’s LTC benefits.” George Sherman, “Department of Justice Won’t Enforce Law Prohibiting Professional Assistance for Medicaid Transfers,” LTC News and Comment, May 1998.

[25] “A federal law that made it illegal to advise people how to shed assets to qualify for Medicaid is unconstitutional, a federal judge ruled Tuesday. The 1997 law was intended to prevent financially secure people from giving away or hiding assets in order to qualify for taxpayer-funded Medicaid benefits.” Tampa Bay Times, “‘Granny’s Adviser’ Law Is Struck Down,” September 13, 2005, https://www.tampabay.com/archive/1998/09/23/granny-s-adviser-law-is-struck-down/.

[26] Joint Center for Housing Studies of Harvard University, “Housing America’s Older Adults 2018,” Figure 7, p. 7.

[27] Robert Hest, Giovaan Alarcon, and Lynn A. Blewett, “Modeling Financial Eligibility for Medicaid Long-Term Services and Supports,” Journal of Aging and Social Policy, March 29, 2020, p. 7, https://www.tandfonline.com/doi/abs/10.1080/08959420.2020.1740638.

[28] The White House (G. W. Bush), “President Signs S.1932, Deficit Reduction Act of 2005,” press release, February 8, 2006, https://georgewbush-whitehouse.archives.gov/news/releases/2006/02/20060208-8.html.
 

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Updated, Monday, October 30, 2023, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #23-030:  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:

  • New initiative aims to strengthen ties between family caregivers, paid caregivers

  • Should you buy long-term care insurance for your grandparents?

  • Transamerica Faces Suit Tied to Long-Term Care Buyout

  • Caregiving crisis prompts search for long-term care solutions

  • Rise in nursing home costs ‘drastically’ affects middle class: analysis

  • Baby boomers are aging. Their kids aren’t ready

  • Dementia’s staggering financial cost is revealed in new report: ‘Bankrupting families’

  • Most Seniors Will Need Long-Term Care. Here’s How to Save for It

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"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).

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Updated, Monday, October 23, 2023, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #23-029:  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:

  • Medicaid should only be ‘safety net’ for LTC needs, expert says

  • ‘Sirens Going Off’: Providers Warn of Mass Closures, Vast Nursing Home Deserts Due to Staffing Mandate

  • Minimum wage to increase to $25 for nursing home, assisted living workers in California

  • Study: Dementia diagnosis causes out-of-pocket spending to skyrocket, net worth to plummet

  • Sex Appears to Protect Brain Health in Older Adults, Scientists Say

  • Underrated and underutilized: A look at long-term care insurance

  • Assisted living providers must pay attention to Medicaid beneficiary protections in HCBS regulations, groups warn

  • Another state takes the Medicaid MCO plunge as questions about delayed, denied care mount

  • Chronic diseases take a toll on U.S. life expectancy

  • Can states ease homelessness by tapping Medicaid funding? Oregon is betting on it

  • A focus on HCBS can eliminate bias in senior living and care: report

  • Staffing mandate could shift big costs to states — but they may not know it yet

  • Long-term-care planning using trusts

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"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).

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Updated, Friday, October 20, 2023, 10:40 AM (Pacific)
 
Seattle—

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LTC BULLET: LONG-TERM CARE: THE SOLUTION (THE SERIAL)

LTC Comment: Today we offer easy access to a must-read new study by Center president Steve Moses, after the ***news.***

*** 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)

LTC Comment: The Paragon Health Institute published “Long-Term Care: The Solution” last week. This new report is long and complicated, but important. So LTC Bullets will deliver it to you in bite-sized pieces over the next few weeks. Today, read “About the Author,” the “Executive Summary” and the “Abstract.” Next time, “What Did Not Work” and then a whole new approach to LTC financing that will unleash the potential of private financing, including insurance.

Excerpts from “Long-Term Care: The Solution
by
Stephen A. Moses
President, Center for Long-Term Care Reform

ABOUT THE AUTHOR
Steve Moses is president of the Center for Long-Term Care Reform. The center promotes universal access to top-quality long-term care by encouraging private financing as an alternative to Medicaid dependency for most Americans. Previously, Mr. Moses was president of the Center for Long-Term Care Financing (1998-2005), Director of Research for LTC, Inc. (1989-98), a senior analyst for the Inspector General of the U.S. Department of Health and Human Services (1987-89), a Medicaid state representative for the Health Care Financing Administration (1978-87), an HHS departmental management intern (1975-78), and a Peace Corps volunteer in Venezuela (1968-1970). He is widely recognized as an expert and innovator in the field of long-term care. 

EXECUTIVE SUMMARY
What This Paper Covers
How to pay for aging Americans’ long-term care (LTC) is a difficult policy problem. This paper follows “Long-Term Care: The Problem,” in which I explained how well-intended government policy caused many of LTC’s problems. Too many people end up on Medicaid, which pays too little to ensure access to quality home care and causes excessive reliance on institutionalization and unpaid help from families and friends. In this paper, I propose reforms to reduce dependence on Medicaid and free up private financing to fix the LTC challenges.
What We Found
When people encounter high LTC costs later in life, they typically qualify more easily for Medicaid than commonly thought. This moral hazard discourages early LTC planning. The past policy approach of generous Medicaid LTC eligibility with estate recovery after death did not adequately promote proper planning, either through savings or insurance. Most Americans possess enough wealth to fund their average LTC needs, which is about two years of home-based services. If the average 65-year-old had $70,000 set aside for LTC, it would grow to meet that need after age 85, when LTC commonly occurs. Positive incentives to plan early and pay privately avoid the loss of freedom and high economic cost from compulsory, payroll-funded policies.
Why It Matters
With the aging of the baby boomers and an increasing percentage of the population living past 85, creating a sustainable LTC policy is crucial. If Medicaid did not pay for expensive LTC after care is needed, more consumers would prepare privately and avoid Medicaid dependency. Unless policy is changed and the incentive to avoid proper LTC planning is removed, the LTC system will fail, harming those who most need public support.
Policy Suggestions
Medicaid LTC should be restored as a safety net for indigent elderly people. Lawmakers should eliminate the ability to access publicly funded LTC while preserving wealth. This paper details seven options to empower younger and middle-age Americans to meet a new, publicized individual LTC planning responsibility. This would unleash wealth currently unused for LTC that remains locked in home equity, individual retirement accounts, life insurance, and estates and reorient the LTC system to cater to seniors’ desires to age in their homes rather than in institutions.

ABSTRACT
As explained in my previous work for the Paragon Health Institute, “Long-Term Care: The Problem,” public financing and regulation—principally through Medicaid—caused most of the problems with long-term care (LTC). Those problems include dubious access and quality, nursing home bias, too little home- and community-based care, inadequate provider revenue, reduced private financing from insurance, savings or home equity, caregiver shortages, excessive emotional and financial strain on family caregivers, and systemic racism. Ignoring this causal connection between Medicaid and LTC’s problems, many analysts recommend increasing the government’s role, including by means of a new compulsory payroll-financed social insurance program. But adding even more of the government funding and regulation that caused LTC’s problems would only make these problems worse.

The main components of a better solution are already in place. Personal, not public, responsibility for LTC is deeply rooted in American values, statutes, and policy. Medicaid is the largest LTC payor, but it is not a social insurance program like Medicare. Employees and employers do not contribute a payroll tax to finance it. Medicaid, rather, was intended as the payor of last resort for people who cannot live independently without LTC services and supports but lack sufficient personal funds to purchase them. For decades, federal policymakers of both parties tried to ensure that scarce Medicaid LTC resources went solely to the needy. They failed, leaving Medicaid, including state and federal budgets, financially overwhelmed and most people, regardless of their economic condition, using public assistance if they incur catastrophic LTC costs. The proper goal of public policy remains to target Medicaid benefits to the truly needy and to divert middle-class and affluent people to private financing alternatives. Achieving that goal would deliver a higher quality LTC system that meets patients’ needs and improves care both for those able to pay and for those who need a safety net. The key question remains: How can policymakers reconfigure LTC financing policy to ensure that scarce public resources reach only those most in need?

Congress should remove Medicaid as an end-of-life, wealth-preserving, fail-safe for the middle class and affluent. Medicaid should not reward people who neglect to plan responsibly for LTC by both paying for services and providing asset protection. New public policy should incentivize early planning for LTC that employs private wealth, including savings, home equity, life insurance, and a revitalized private LTC insurance market. Recent research documents lower risk of severe LTC expenses and indicates that consumers have more funds available to pay privately for LTC than previously believed. These facts suggest a way to revitalize the senior living market financially to the benefit of LTC consumers and providers alike. With more private LTC financing, fewer people will become dependent on Medicaid. Medicaid can then become a better payer of last resort than it is now. This paper explains how and why this new approach is plausible, practical, and preferable given current demographic and financial conditions.

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Updated, Monday, October 9, 2023, 10:30 AM (Pacific)
 
Seattle—

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LTC E-ALERT #23-028:  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:

·       California is leading the way in Medicaid abuse

·       Feds Rein In Use Of Predictive Software That Limits Care For Medicare Advantage Patients

·       MedPAC members rip ‘brute force test’ of staffing mandate, ponder consequences and possible gaming

·       New Supreme Court term has major implications for long-term care

·       Does Putting Your Home in a Trust Protect It From Medicaid?

·       Release of ‘Long-Term Care: The Solution

·       AHCA CEO: Nursing Home Policy Nightmare Just Starting, Business Nightmare Persists — But Clinical Nightmare Over

·       Experts create new vision for senior living

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"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).

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Updated, Friday, October 6, 2023, 10:40 AM (Pacific)
 
Seattle—

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LTC BULLET: LONG-TERM CARE: THE SOLUTION

LTC Comment: The Paragon Health Institute released “Long-Term Care: The Solution” this week. The announcement and links to the study’s content after the ***news.***

*** 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

LTC Comment: Here’s how Paragon Health Institute president Brian Blase announced the paper.

 Today, Paragon is releasing an important new report, Long-Term Care: The Solution, authored by Stephen Moses. Steve is the nation’s top expert on long-term care financing and his new report contains a solution to a very difficult policy problem.
 
Given the structure of our major entitlement programs—Social Security, Medicare, and Medicaid—the aging of the baby boomers presents a variety of public policy challenges. One is long-term care (LTC), which consists of medical and supportive services that people require at home or in institutions when they are unable to care for themselves.
 
As Steve wrote in a 2022
Paragon report, Long-Term Care: The Problem, well-intended government policy caused many of LTC’s problems. Government programs have largely paid our nation’s LTC expenses since 1965. Unfortunately, easy access to Medicaid while retaining wealth creates a moral hazard that discourages responsible LTC planning during early and middle adulthood and crowds out private sector alternatives. Too many people end up on Medicaid, which pays too little to ensure access to quality home care and causes excessive reliance on institutionalization and unpaid help from families and friends.
 
In
Long-Term Care: The Solution, Steve constructs a reform that would reduce dependence on Medicaid and free up private financing to fix the LTC challenges. The following are from the paper’s executive summary, and the entire paper is worth a read to understand both why past efforts to reform Medicaid LTC have failed and why this new approach is our best hope to improve government LTC policy.
 
What Steve Found
 
When people encounter high LTC costs later in life, they typically qualify more easily for Medicaid than commonly thought. This moral hazard discourages early LTC planning. The past policy approach of generous Medicaid LTC eligibility with estate recovery after death did not adequately promote proper planning, either through savings or insurance. Most Americans possess enough wealth to fund their average LTC needs, which is about two years of home-based services. If the average 65-year-old had $70,000 set aside for LTC, it would grow to meet that need after age 85, when LTC commonly occurs. Positive incentives to plan early and pay privately avoid the loss of freedom and high economic cost from compulsory, payroll-funded policies.
 
Why It Matters
 
With the aging of the baby boomers and an increasing percentage of the population living past 85, creating a sustainable LTC policy is crucial. If Medicaid did not pay for expensive LTC after care is needed, more consumers would prepare privately and avoid Medicaid dependency. Unless policy is changed and the incentive to avoid proper LTC planning is removed, the LTC system will fail, harming those who most need public support.
 
Policy Suggestions
 
Medicaid LTC should be restored as a safety net for indigent elderly people. Lawmakers should eliminate the ability to access publicly funded LTC while preserving wealth. This paper details seven options to empower younger and middle-age Americans to meet a new, publicized individual LTC planning responsibility. This would unleash wealth currently unused for LTC that remains locked in home equity, individual retirement accounts, life insurance, and estates and reorient the LTC system to cater to seniors’ desires to age in their homes rather than in institutions.

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Updated, Monday, October 2, 2023, 9:38 AM (Pacific)
 
Seattle—

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LTC E-ALERT #23-027:  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:

  • Shortcomings of the ACA Exchanges: Far Less Enrollment at a Much Higher Cost

  • Minnesota Tops New AARP Long-Term Care Scorecard; Other States Lag Behind

  • A Winning Health Policy Agenda

  • Insights Care Honors Ken Dychtwald

  • CMS to lose half of staff in shutdown, full impact on providers uncertain

  • John Hancock to Sell Long-Term Care Hybrid Through Worksites

  • [Updated] BREAKING: Price of nursing home staffing mandate is $6.8B, 100K more workers, analysis finds

  • Expiring PHE policies spell trouble for HCBS programs

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"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).

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Updated, Monday, September 25, 2023, 9:37 AM (Pacific)
 
Seattle—

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LTC E-ALERT #23-026:  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:

  • Commission recommends increasing hours-worked requirement for WA Cares, among other proposals

  • Medicare Can Cover a Lot More Home Care: Witness to Senate Panel

  • End of pandemic-era payments to family caregivers could complicate workforce shortages

  • Older adults at risk for dementia see fast declines in household wealth before dementia onset

  • Recession would add to ‘deteriorating’ CCRC outlook: Fitch

  • Protect Aging Clients Against Undue Influence

  • More than half of older Americans will need long-term term care. Many can’t afford the rising cost

  • How Medicare Impedes Health Care Innovation

  • Substantial differences’ in assisted living, nursing home admissions show need for improved health equity, researchers say

  • Long-Term Care Insurance Sales Rise at Some Carriers: A.M. Best

  • Demand for direct care workers expected to outpace availability: report

  • Gallup Poll Shows Public’s Deep Aversion to Nursing Homes, 42% of Americans Give ‘D’ or ‘F’

  • Pandemic Aid Lifts Federal Share of State Budgets to New Highs

  • Long-Term Care Claims Skyrocket In 2022

  • Study: Being a family caregiver does not mean you will plan for your own long-term care

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"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).

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Updated, Friday, September 22, 2023, 10:40 AM (Pacific)
 
Seattle—

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LTC BULLET: LONG-TERM CARE RACISM: DIAGNOSIS, TREATMENT, AND CURE

LTC Comment: Once you understand its cause and effects, LTC racism’s cure becomes manageable. Analysis after the ***news.***

*** “LONG-TERM CARE: THE SOLUTION,” Paragon Health Institute’s long-awaited sequel to “Long-Term Care: The Problem,” published last fall, is due to be published on October 2. “The Solution” explains why the challenge of financing LTC for burgeoning numbers of aging Americans remains unmet and proposes a solution. As Medicaid caused most of LTC’s problems, that program’s radical reform is the key to resolving them. The same Medicaid reform is also the crucial step required to eliminate systemic LTC racism. Stay tuned. ***
 

LTC BULLET: LONG-TERM CARE RACISM: DIAGNOSIS, TREATMENT, AND CURE

LTC Comment: Our previous LTC Bullet offered a selection of quotes about LTC racism from peer-reviewed journal articles and invited readers to reflect on the material and its meaning before turning to analysis and recommendations. Let’s go now to that next step.

What is LTC racism?

“Structural [LTC] 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.” (“Structural Racism In Historical And Modern US Health Care Policy,” 2022, Abstract)

What are some examples of LTC racism?

“The long-term services and supports (LTSS) sector is a microcosm of systemic racism that exists in our society. Nationally, half of frontline professional caregivers are nonwhite, while mid- and executive-level managers and board members are predominately white.” (“The Value Proposition for Diversity: Creating A Pipeline of Diversity in The LTSS Sector,” 2022, Abstract)

“Long-term services and supports (LTSS), including care received at home and in residential settings such as nursing homes, are highly racially segregated; Black, Indigenous, and persons of color (BIPOC) users have less access to quality care and report poorer quality of life compared to their White counterparts. Systemic racism lies at the root of these disparities, manifesting via racially segregated care, low Medicaid reimbursement, and lack of livable wages for staff, along with other policies and processes that exacerbate disparities.” (“Evidence for Action: Addressing Systemic Racism Across Long-Term Services and Supports,” 2022, p. 1)

“Findings revealed that black residents are more likely than white residents to be restrained with bed rails, side rails, and trunk restraints. Findings suggest that racial disparities exist in the use of physical restraints. Implications for practice, policy, and research are discussed.” (“Racial disparities in the use of physical restraints in U.S. nursing homes,” 2013, Abstract)

“Racial disparities in nursing homes have been reported for a number of outcomes, including pressure ulcers, influenza vaccination rates, pain management, hospice use and in-hospital death. (16–19, 22) Our findings confirm that compared to Whites, Black residents experience more aggressive EOL[End of Life] care with higher rates of in-hospital deaths and lower rates of hospice use.” (“Racial Disparities in In-Hospital Death and Hospice Use Among Nursing Home Residents at the End-of-life,” 2012, p. 6)

What causes LTC racism?

“Nursing home care is currently a two-tiered system. The lower tier consists of facilities housing mainly Medicaid residents and, as a result, has very limited resources. The nearly 15 percent of U.S. nonhospital-based nursing homes that serve predominantly Medicaid residents have fewer nurses, lower occupancy rates, and more health-related deficiencies. They are more likely to be terminated from the Medicaid/Medicare program, are disproportionately located in the poorest counties, and are more likely to serve African-American residents than are other facilities. The public reporting of quality indicators, intended to improve quality through market mechanisms, may result in driving poor homes out of business and will disproportionately affect nonwhite residents living in poor communities. This article recommends a proactive policy stance to mitigate these consequences of quality competition.” (“Driven to Tiers: Socioeconomic and Racial Disparities in the Quality of Nursing Home Care,” 2004, Abstract)

“A tiered system of nursing home care that concentrates blacks in marginal-quality nursing homes also appears to exist.” (p. 1449) “We found that nursing home care was relatively segregated in 2000, with two thirds of all black residents living in just 10 percent of all facilities.” (p. 1453) “Disparities in payment between Medicaid and private payers make the financial viability of a nursing home dependent on the proportion of private-pay patients it is able to attract. Homes unable to attract sufficient private-pay patients will tend to have lower nurse staffing levels and more-serious inspection deficiencies.” (p, 1456) “Nursing home operators might also try to control admissions to their facilities, limiting the number of first-day-eligible Medicaid admissions and expanding as much as possible admissions of those with sufficient resources that are unlikely to spend down and become eligible for Medicaid.” (p. 1456) “It [discrimination] might also play a role in shaping the decisions of white private-pay nursing home patients and their families about where to get care, including whether to opt for non–nursing home alternatives altogether.” (p. 1456) (“Separate And Unequal: Racial Segregation And Disparities In Quality Across U.S. Nursing Homes,” 2007)

LTC racism: Diagnosis

The definition above attributes structural LTC racism to the “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.” What are those laws and policies? They are the statutes, regulations, policies, procedures, and guidelines that cause long-term care’s two-tiered structure: one top quality tier for private payers and a lower tier for Medicaid dependents.

Specifically, Medicaid LTC financial eligibility rules sort people who need extended care into two groups. Those who have too much income and resources are expected to spend down in the private market. Those who have liquid wealth low enough to qualify become Medicaid recipients with all that entails for the access and quality of care they can expect. This is cause number one of LTC racism. People with wealth, privileged majorities, enjoy the better LTC tier, while underprivileged marginalized groups rely predominantly on Medicaid, in the lower tier.

But the reality is actually much worse than this simple sorting of people by wealth suggests. Medicaid financial eligibility rules allow people with substantial income and assets to qualify for LTC benefits along with the poor and disadvantaged. States either subtract private health and LTC expenses from income before they apply the low-income standard or they permit excess income to be diverted to a “Miller trust.” The rule of thumb is that income below the cost of a nursing home, easily $8,000 or $9,000 per month, is not disqualifying. Nor do assets stand in the way of Medicaid LTC eligibility in most cases, because the largest assets seniors possess are exempt, such as a home, car, personal belongings, etc. and any countable liquid wealth is easily made non-countable by purchasing exempt assets. Even far more affluent people qualify for Medicaid LTC benefits by retaining elder law attorneys to impoverish them artificially with special trusts, annuities and other sophisticated strategies.

Key Money: LTC Racism’s Motor

Why would people who could afford private LTC manipulate eligibility rules to qualify for Medicaid which has such a poor reputation for access and quality? Some Medicaid facilities are better than others. They may serve mostly Medicare or private residents, receive much higher reimbursement rates, enjoy philanthropic support, and have only a few Medicaid beds. Savvy seniors, their families, and legal advisors learn to use “key money” to access those better facilities. Medicaid planners tell their affluent clients to hold back enough liquid capital from the artificial impoverishment process to enable them to pay privately for a while. Because LTC providers are desperate for private payers who contribute half again as much as Medicaid to their bottom line, they roll out the red carpet for new private-pay admissions. Once in a good facility, the advisor flips a legal switch converting the client to Medicaid. By law the provider cannot expel a resident simply because the funding source changes from private to Medicaid.

This is how Medicaid, commonly considered a LTC safety net for the poor, came to be the dominant LTC funding source for nearly everyone, even the affluent, stricken by catastrophic LTC costs. By covering the “medically needy”—people with too much income to qualify categorically, but too little income to pay their health and LTC expenses privately—Medicaid’s limited resources were overwhelmed. The program tried to do too much for too many and ended up doing too little for most. Worse, Medicaid allowed privileged majorities to coopt its better facilities and services while diverting the less advantaged, who lack key money, to the program’s least desirable facilities and services. This is how structural racism, deficient public LTC services for those most in need, came to predominate. Nothing will change until this cause is removed.

LTC racism: Treatment

The most common remedy for LTC racism proposed in the academic literature is to allocate more resources to Medicaid so it can pay caregivers more, provide better services, offer more home- and community-based care, and relieve family caregivers. For example, one source calls for a multi-prong effort to add “disproportionate-share payment adjustments to nursing homes with a higher proportion of Medicaid residents” and to equalize “Medicaid and private-pay payments.” (“Separate And Unequal: Racial Segregation And Disparities In Quality Across U.S. Nursing,” 2007, Abstract) Another source suggests “increase Medicaid and Medicare reimbursement rates, especially for providers serving high proportions of Medicaid-eligible and BIPOC older adults” and “expand access to Medicaid-waivered HCBS services,” “increase promotion of integrated HCBS programs that can be targeted to BIPOC consumers.” (“Evidence for Action: Addressing Systemic Racism across Long-Term Services and Supports,” 2022, Abstract) All have proven to be politically unachievable goals.

But simply spending more on Medicaid would only mean increased resources going disproportionately to the over-privileged with relatively less reaching the underprivileged. The only way to eliminate LTC racism once and for all is to remove from Medicaid dependency the people who rely on the program now, but who could, should and would have prepared to pay privately otherwise. The easy availability of Medicaid LTC late in life while preserving wealth created a moral hazard that discouraged early planning for LTC. The middle class and affluent who crowd out the poor from Medicaid’s best services, could have saved, invested or insured for LTC and avoided reliance on Medicaid. Bottom line, it is they who must be incentivized to take personal responsibility early in life so that later, when they need LTC, they can pay privately, access the best possible care in the most desirable venues, and free up Medicaid to do a better job for those most in need. Relieved of the burden to cover everyone, Medicaid will have the resources to pay private rates, afford top-quality professional caregivers thus eliminating their shortage, offer more HCBS, and move everyone on the program into the top-tier of LTC services.

Long-Term Care: Cure

The solution to LTC racism is to move privileged groups into the private LTC market in order to save and improve Medicaid for the less fortunate. That is a big ask. How can we possibly do it? Government tried unsuccessfully for decades (1) to reduce excess Medicaid dependency (employing income and asset limits, transfer of assets penalties, estate recoveries, even “Throw Granny in Jail”) and (2) to encourage private LTC insurance. Nothing worked. People struggling in mid-life with house and car payments, child care, elder care, retirement and education savings, etc. would not think, plan or prepare for the potential risk and cost of LTC in the distant future. The fact that Medicaid paid for the vast bulk of catastrophic LTC expenses probably didn’t enter their awareness but it influenced their financial planning nonetheless, enabling their denial.

These conditions are the dam obstructing progress toward a solution of LTC racism. I propose a way to break that dam and improve both private and Medicaid LTC in a new paper, titled “Long-Term Care: The Solution,” for the Paragon Health Institute. It is due for publication on October 2 and follows a paper, “Long-Term Care: The Problem” that Paragon published last fall. We’ll bring you more analysis and answers soon.
 

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Updated, Monday, September 11, 2023, 9:32 AM (Pacific)
 
Seattle—

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LTC E-ALERT #23-025:  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:

  • State veterans home rife with deficiencies, inaccurate COVID death reports: federal report

  • Biden’s Proposal to Restrict Affordable Health Options

  • Fitch Downgrade Could Mean Medicaid Cuts

  • Could legacy long-term care (LTC) blocks be the next wave of M&A deals?

  • Understanding the Stages of Dementia: A Compassionate Guide for Families and Caregivers

  • Fixing Medicaid rolls doesn’t mean leaving people without coverage

  • Biden unloads on nursing home operators

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"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).

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Updated, Friday, September 8, 2023, 10:40 AM (Pacific)
 
Seattle—

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LTC BULLET: LONG-TERM CARE RACISM

LTC Comment: What is LTC racism? How does it manifest? What should be done? Excerpts from the scholarly literature follow 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. ***

*** THE INTERCOMPANY LONG-TERM CARE INSURANCE 2024 CONFERENCE (March 17-20, 2024 in San Diego, CA) has announced “Exhibitor & Sponsor Applications for ILTCI 2024 are Now Available! (With Early Bird Pricing).” Check out the Exhibitor & Sponsor opportunities here and here, respectively. Organizers “anticipate opening attendee registration in October so stay tuned for more updates to come!” ***

 

LTC BULLET: LONG-TERM CARE RACISM

LTC Comment: We know America’s LTC service delivery and financing system is fraught with problems. These problems include dubious access and quality, nursing home bias, too little home- and community-based care, inadequate provider revenue, reduced private financing from insurance, savings or home equity, caregiver shortages, and excessive emotional and financial strain on family caregivers. We also know that these problems impact socioeconomically marginalized groups disproportionately.

A large and growing scholarly literature attributes this LTC status quo to systemic, structural or institutionalized racism. Examples of unfair and inequitable LTC conditions and outcomes abound. So do ideas and recommendations about how to fix or improve LTC services and financing by eliminating or reducing LTC racism. Today’s LTC Bullet offers a selection of quotes about LTC racism from many peer-reviewed journal articles. For now, let’s reflect on this material and its meaning before we turn soon to analysis and recommendations.

Definition: “[I]nstitutionalized racism is defined as differential access to the goods, services, and opportunities of society by race. Institutionalized racism is normative, sometimes legalized, and often manifests as inherited disadvantage. It is structural, having been codified in our institutions of custom, practice, and law, so there need not be an identifiable perpetrator.” Levels of Racism: A Theoretic Framework and a Gardener’s Tale, 2000, p. 1212

Examples: “The long-term services and supports (LTSS) sector is a microcosm of systemic racism that exists in our society. Nationally, half of frontline professional caregivers are nonwhite, while mid- and executive-level managers and board members are predominately white.” The Value Proposition for Diversity: Creating A Pipeline of Diversity in The LTSS Sector, 2022, Abstract

“Long-term services and supports (LTSS), including care received at home and in residential settings such as nursing homes, are highly racially segregated; Black, Indigenous, and persons of color (BIPOC) users have less access to quality care and report poorer quality of life compared to their White counterparts. Systemic racism lies at the root of these disparities, manifesting via racially segregated care, low Medicaid reimbursement, and lack of livable wages for staff, along with other policies and processes that exacerbate disparities.” Evidence for Action: Addressing Systemic Racism Across Long-Term Services and Supports, 2022, p. 1

“Long-term services and supports for older persons in the United States are provided in a complex, racially segregated system, with striking racial disparities in access, process, and outcomes of care for residents, which have been magnified during the Coronavirus Disease 2019 pandemic. These disparities are in large measure the result of longstanding patterns of structural, interpersonal, and cultural racism in US society, which in aggregate represent an underpinning of systemic racism that permeates the long-term care system's organization, administration, regulations, and human services. … Additional foundational drivers include a fragmented payment system that advantages persons with financial resources, and reimbursement policies that systematically undervalue long-term care workers.” Addressing Systemic Racism in Nursing Homes: A Time for Action, 2021, Abstract

“In this study, nursing homes with the highest proportions of non-White residents experienced COVID-19 death counts that were 3.3-fold higher than those of facilities with the highest proportions of White residents.” Factors Associated With Racial Differences in Deaths Among Nursing Home Residents With COVID-19 Infection in the US, 2021, p. 1/10.

“We found that a larger share of Hispanic Medicare residents that are admitted to nursing homes have ADRD [Alzheimer’s disease and related dementias] compared with African American and White beneficiaries. Both Hispanics and African Americans with ADRD received care in segregated nursing homes with fewer resources and lower quality of care compared with White residents.” Disparities in Nursing Home Use and Quality Among African American, Hispanic, and White Medicare Residents With Alzheimer's Disease and Related Dementias, 2019, p.1

“Using Medicaid claims data for a national cohort of dual eligibles with MS, we find state HCBS priority is associated with disparities in utilization-blacks and Hispanics receiving HCBS more often do so in low-priority states compared with whites.” Racial Disparities in Medicaid Home and Community-Based Service Utilization among White, Black, and Hispanic Adults with Multiple Sclerosis: Implications of State Policy, 2019, Abstract

“Disparities between vaccination coverage among racial/ethnic minorities versus Whites ranged from 2% to 20% for influenza and 6% to 15% for pneumococcal vaccination. Researchers reported racial/ethnic minorities were more likely to refuse vaccinations and less likely to have vaccinations offered and their vaccination status tracked compared to Whites.” Racial/Ethnic Disparities in Influenza and Pneumococcal Vaccinations Among Nursing Home Residents: A Systematic Review, 2018, p. e205

“Despite the increased use of nursing homes by minority residents, nursing home care remains highly segregated. Compared to whites, racial/ethnic minorities tend to be cared for in facilities with limited clinical and financial resources, low nurse staffing levels, and a relatively high number of care deficiency citations. … We also found that increasing the Medicaid payment rate might help improve both overall quality and disparities, but state case-mix payment approaches might worsen both.” Deficiencies In Care At Nursing Homes And Racial & Ethnic Disparities Across Homes Declined, 2006–11, 2015, p. 1

“Highlights

  • Patients of each race prefer nursing homes with higher prevalence of patients of their own race.
  • Preference for distance and quality of care are same for patients of both the races.
  • Both preference for distance and preference for racial homogeneity contribute to racial disparity in nursing home quality of care.
  • Results are robust among subgroup of patients with same Medicaid eligibility and similar likelihood of becoming long-stay resident.
  • Simulations based on estimated sorting model suggest that interventions targeting nursing homes serving minority population would yield a greater reduction in racial quality disparities than interventions targeting low quality nursing homes.” Racial Segregation and Quality of Care Disparity in US Nursing Homes, 2014, p. 28

“Findings revealed that black residents are more likely than white residents to be restrained with bed rails, side rails, and trunk restraints. Findings suggest that racial disparities exist in the use of physical restraints. Implications for practice, policy, and research are discussed.” Racial disparities in the use of physical restraints in U.S. nursing homes, 2013, Abstract

“Racial disparities in nursing homes have been reported for a number of outcomes, including pressure ulcers, influenza vaccination rates, pain management, hospice use and in-hospital death.(16–19, 22) Our findings confirm that compared to Whites, Black residents experience more aggressive EOL[End of Life] care with higher rates of in-hospital deaths and lower rates of hospice use.” Racial Disparities in In-Hospital Death and Hospice Use Among Nursing Home Residents at the End-of-life, 2012, p. 6

“Between 1999 and 2008, the number of elderly Hispanics and Asians living in US nursing homes grew by 54.9 percent and 54.1 percent, respectively, while the number of elderly black residents increased 10.8 percent. During the same period, the number of white nursing home residents declined 10.2 percent. These shifts have been driven in part by changing demographics, especially the fast growth of older minority populations. However, the numbers of minority residents in nursing homes increased more rapidly than the minority population overall, even in areas with high concentrations of minority populations. Thus, these results may indicate unequal minority access to home and community-based alternatives, which are generally preferred for long-term care. When designing initiatives to balance institutional and noninstitutional long-term care, policy makers should take steps to reduce racial and ethnic disparities.” Growth of Racial and Ethnic Minorities in US Nursing Homes Driven by Demographics and Possible Disparities in Options, 2011, p.1358

“Greater PU [pressure ulcer] occurrence among Blacks may not result from differential within-facility treatment of Blacks versus Whites. Rather, Blacks are more likely to reside in facilities with poorer care quality. To improve PU care for Blacks, efforts should focus on improving the overall quality of care for facilities with high proportion of Black residents.” Pressure ulcer prevalence among Black and White nursing home residents in New York State: Evidence of racial disparity?, 2010, p. 1

“Although segregation in nursing homes seems to have declined slightly, elderly Hispanics are more likely than their non-Hispanic white peers to reside in nursing homes that are characterized by severe deficiencies in performance, understaffing, and poor care.” Elderly Hispanics More Likely To Reside In Poor-Quality Nursing Homes, 2010, p. 65

“Disparities in quality of care are more consistently documented and appear to be related to racial and socioeconomic segregation of long-term care facilities as opposed to within-provider discrimination. Market-based incentives policies should explicitly incorporate the goal of mitigating the potential unintended consequence of increased disparities.” Disparities in long-term care: building equity into market-based reforms, 2009, Abstract 

“Compared to Whites, African Americans were less likely to have completed an advance directive (35.5% vs. 67.4%, P<.001) and had less favorable beliefs about hospice care (Hospice Beliefs and Attitudes Scale score, P<.001). African Americans were more likely to express discomfort discussing death, want aggressive care at the end of life, have spiritual beliefs which conflict with the goals of palliative care, and distrust the healthcare system.” What explains racial differences in the use of advance directives and attitudes toward hospice care?, 2008, p. 1

“Average nursing-home case-mix acuity for African Americans and Caucasians were essentially identical, suggesting that shifts in payment incentives have eliminated the selective admission of easy-care private-pay (predominantly Caucasian) patients and helped fuel the growth of private pay home care and assisted living for this segment of the population. While these shifts in incentives helped increase the use of nursing homes by African Americans, a high degree of segregation and disparity in the quality of the nursing homes used by African Americans persists. Parity in use is an illusive benchmark for measuring progress in assuring equity in treatment.” Racial disparities in access to long-term care: the illusive pursuit of equity, 2008, Abstract

“Nursing homes remain relatively segregated, roughly mirroring the residential segregation within metropolitan areas. As a result, blacks are much more likely than whites to be located in nursing homes that have serious deficiencies, lower staffing ratios, and greater financial vulnerability. Changing health care providers’ behavior will not be sufficient to eliminate disparities in medical treatment in nursing homes.” p. 1448

“A tiered system of nursing home care that concentrates blacks in marginal-quality nursing homes also appears to exist.5” (p. 1449) “We found that nursing home care was relatively segregated in 2000, with two thirds of all black residents living in just 10 percent of all facilities.” (p. 1453) “Disparities in payment between Medicaid and private payers make the financial viability of a nursing home dependent on the proportion of private-pay patients it is able to attract. Homes unable to attract sufficient private-pay patients will tend to have lower nurse staffing levels and more-serious inspection deficiencies.”18 (p, 1456) “Nursing home operators might also try to control admissions to their facilities, limiting the number of first-day-eligible Medicaid admissions and expanding as much as possible admissions of those with sufficient resources that are unlikely to spend down and become eligible for Medicaid.” (p. 1456) “It [discrimination] might also play a role in shaping the decisions of white private-pay nursing home patients and their families about where to get care, including whether to opt for non–nursing home alternatives altogether.” (p. 1456) Separate And Unequal: Racial Segregation And Disparities In Quality Across U.S. Nursing Homes, 2007

“Non-Hispanic Whites (Whites) experienced substantially better functional outcomes than did home health care recipients of other racial/ethnic backgrounds. The disparity in outcomes was most pronounced between Whites and African Americans.” Racial and ethnic disparities in the outcomes of elderly home care recipients, 2005, Abstract

“Nursing home care is currently a two-tiered system. The lower tier consists of facilities housing mainly Medicaid residents and, as a result, has very limited resources. The nearly 15 percent of U.S. nonhospital-based nursing homes that serve predominantly Medicaid residents have fewer nurses, lower occupancy rates, and more health-related deficiencies. They are more likely to be terminated from the Medicaid/Medicare program, are disproportionately located in the poorest counties, and are more likely to serve African-American residents than are other facilities. The public reporting of quality indicators, intended to improve quality through market mechanisms, may result in driving poor homes out of business and will disproportionately affect nonwhite residents living in poor communities. This article recommends a proactive policy stance to mitigate these consequences of quality competition.” Driven to Tiers: Socioeconomic and Racial Disparities in the Quality of Nursing Home Care, 2004, Abstract

“African Americans are about one-third as likely as Caucasians to have living wills and one-fifth as likely as Caucasians to have DNR orders; Hispanics are about one-third as likely as Caucasians to have DNR orders and just as likely as Caucasians to have living wills. In conclusion, we found that the presence of advance care plans is related to race, even after controlling for health and other demographic factors.” Persistence of racial disparities in advance care plan documents among nursing home residents, 2002, Abstract

Results: Most African Americans resided in nursing homes and smaller RC/AL facilities and tended to be concentrated in a few predominantly African American facilities, whereas the vast majority of Whites resided in predominantly White facilities. Facilities housing African Americans tended to be located in rural, nonpoor, African American communities, to admit individuals with mental retardation and difficulty in ambulating, and to have lower ratings of cleanliness/maintenance and lighting.

“Conclusions: These racial disparities may result from economic factors, exclusionary practices, or resident choice. Whether separation relates to inequities in care is undetermined.” Distribution of African Americans in Residential Care/Assisted Living and Nursing Homes: More Evidence of Racial Disparity?, 2002, p. 1272

Solutions: “We developed a set of recommendations for LTSS based on existing evidence, including (1) increase Medicaid and Medicare reimbursement rates, especially for providers serving high proportions of Medicaid-eligible and BIPOC older adults; (2) reconsider the design of pay-for-performance programs as they relate to providers who serve underserved groups; (3) include culturally sensitive measures, such as quality of life, in public reporting of quality of care, and develop and report health equity measures in outcomes of care for BIPOC individuals; (4) implement culture change so services are more person-centered and homelike, alongside improvements in staff wages and benefits in high-proportion BIPOC nursing homes; (5) expand access to Medicaid-waivered HCBS services; (6) adopt culturally appropriate HCBS practices, with special attention to family caregivers; (7) and increase promotion of integrated HCBS programs that can be targeted to BIPOC consumers, and implement models that value community health workers.” Evidence for Action: Addressing Systemic Racism Across Long-Term Services and Supports, 2022, p. 1

“Focusing limited available resources on facilities with high proportions of non-White residents is needed to support nursing homes during potential future [Covid-19] outbreaks.” Factors Associated With Racial Differences in Deaths Among Nursing Home Residents With COVID-19 Infection in the US, 2021, pp. 1-2/10.

“The solution to racial health inequities is to address racism and its attendant harms and erect a new health care infrastructure that no longer profits from the persistence of inequitable disease.” On Racism: A New Standard For Publishing On Racial Health Inequities, 2020 

“Ten-dollar increments in Medicaid rates reduced the odds of hospitalization by 4 percent (95 percent CI=0.93–1.00) for white residents and 22 percent (95 percent CI=0.69–0.87) for black residents.” (p. 869)
“Quality NH care is dependent on the availability of resources (Mor et al. 2004; Miller et al. 2006) but NHs that are largely Medicaid-reliant are often disadvantaged because Medicaid rates are generally below private pay rates and sometimes below actual costs of care (Seidman 2002). Such facilities disproportionately serve black residents (Mor et al. 2004).” (p. 870)
“That higher Medicaid payment rates reduced the risk of hospitalization substantially more for black than for white residents suggests that efforts to reduce racial disparities in NH care must include strategies to better support Medicaid-reliant NHs.” (p. 879) Relationship between State Medicaid Policies, Nursing Home Racial Composition, and the Risk of Hospitalization for Black and White Residents, 2008

“What can be done to cut this knot? A multi-prong effort in four areas could help: (1) disproportionate-share payment adjustments to nursing homes with a higher proportion of Medicaid residents; (2) equalization of Medicaid and private-pay payments; (3) certificate-of-need and broader regional planning responsive to racial-disparity concerns; and (4) ongoing monitoring and more rigorous enforcement of Title VI in admission practices. Indeed, some of the MSA variations on these measures of disparities may reflect variations in effort in these areas. These findings are not very different for the nursing home sector than for other parts of the health system in terms of the characteristics of this knot or in the possible approaches to cutting it.” Separate And Unequal: Racial Segregation And Disparities In Quality Across U.S. Nursing Homes, 2007, pp. 1456-7

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Updated, Tuesday, September 5, 2023, 10:40 AM (Pacific)
 
Seattle—

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LTC E-ALERT #23-024:  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:

  • BREAKING: CMS issues first-ever nursing home staffing mandate

  • BREAKING: CMS nursing home staffing mandate in question after study leaks

  • Proposed mandatory long-term care insurance: A closer look at the potential negatives

  • Short-Term Plans: The Battle for Health Insurance Choice

  • Can the Left and Right Agree on Health Reform?

  • As forecast price of federal staffing mandate climbs to $11.7B, analysts offer alternatives

  • Researchers identify lifestyle factors that predict nursing home needs later in life

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"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).

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Updated, Monday, August 28, 2023, 10:40 AM (Pacific)
 
Seattle—

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LTC E-ALERT #23-023 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 Steve at 425-891-3640 or smoses@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 Steve at 425-891-3640 or smoses@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:

·       Dementia Risk From Midlife Onward Predicted With New Tool

·       California Warns Against Dishonest Marketing Tied to Long-Term Care Proposal

·       AHCA offers ‘wake-up call’ on bed and facility counts: 446,000 residents may be displaced

·       New research uncovers racial inequities in home health patients’ health outcomes

·       The Upheaval at America’s Disappearing Nursing Homes, in Charts

·       Alarming reality: One in four Americans with cognitive impairment lives alone

·       China population: 100 million more senior citizens expected in next decade as ageing crisis enters ‘crucial juncture’

·       Here's the Size of Social Security Cuts if Congress Doesn't Act Soon: CRFB

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"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).

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Updated, Friday, August 25, 2023, 10:40 AM (Pacific)
 
Seattle—

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LTC BULLET: YOU PAY FOR CALIFORNIA’S LTC PROFLIGACY AND STRUCTURAL RACISM

LTC Comment: California’s Medicaid program (Medi-Cal) says come one, come all for free LTC, sends the bill to federal taxpayers, and institutionalizes structural LTC racism. What’s happening, after the ***news.***

*** HELP us change LTC financing policy for the better. Whenever you see an article or report that says something like:

“Only low-income people qualify for Medicaid.”
“Medicaid only pays for long-term care after you spend down into impoverishment.”
“Millions across America are losing their life savings to long-term care.”
“LTC insurance costs too much and will never be a major payer.”
“The best way to fix LTC is to add it to Medicare.”

Forward the source to me (smoses@centerltc.com) or to Damon (damon@centerltc.com). We will contact the author, explain why those commonplace beliefs are false, provide evidence to back up our conclusion, offer correct information, recommend public policy solutions, and propose to become a source for the author’s future publications on LTC.

With the Paragon Health Institute’s publication of our monographs “Long-Term Care: The Problem” and (soon) “Long-Term Care: The Solution,” the time is right again to address and correct misconceptions about LTC financing among reporters, analysts, and policy makers. Let’s fix long-term care once and for all. ***

 

LTC BULLET: YOU PAY FOR CALIFORNIA’S LTC PROFLIGACY AND STRUCTURAL RACISM

LTC Comment: California is eliminating one of the last remaining reasons people have to plan privately for long-term care risk and cost. The state already lifted Medi-Cal’s countable asset limit from $2,000 to $130,000 in 2022. Effective January 1, 2024, the Golden State will eliminate the asset limit entirely. This change applies to people receiving LTC benefits in the community or nursing homes. It will add 18,000 new recipients without their having to spend down or prove their wealth. (McKnight’s Senior Living).

Why should you care? After all, California is notorious for crazy public policies. (Have you been to San Francisco lately?) You may not have to pay for most of their well-intentioned, unintended consequences. But you are paying for this one. The way Medicaid (including Medi-Cal) works, the state puts up part of the program’s cost and the federal government pays the rest. For California this match rate is 50/50. So, for every wealthy Californian newly eligible for Medi-Cal LTC benefits, we federal taxpayers in New Mexico, Illinois, New York, etc., etc. are paying half.

Surely the federal government will not stand for this fiscal inequity. But, no, the Centers for Medicare and Medicaid Services (CMS) approved the state plan amendment removing the asset limit, calling it a “first of its kind.” Will other states follow in California’s footsteps? Will yours?

Maybe you’re thinking “Oh well, at least people have to be ‘low income’ before California can make me pay for their long-term care.” But, no again, the state has “no income limit” for “institutional / Nursing Home Medicaid,” although: “All of a beneficiary’s monthly income, with the exception of a Personal Needs Allowance of $35 / month, Medicare premiums, and a Spousal Income Allowance (if applicable), must be paid to the nursing home as a Share of Cost.” (American Council on Aging). Think of income as kind of a “deductible,” a small price for the asset rich to access government-funded LTC.

Playing fast and loose with welfare-financed LTC benefits is nothing new for California. I documented many examples 12 years ago in  Medi-Cal LTC: Safety Net or Hammock? On pages 25-28 of that report, check out the ways California ignored federal mandates from the Omnibus Budget Reconciliation Act of 1993 and the Deficit Reduction Act of 2005. You paid for all this “generosity” also.

Medi-Cal’s Structural LTC Racism

On average, Medicaid pays LTC providers less than the cost of care, roughly 70 percent of what private payers must contribute. Consequently, Medicaid often provides deficient care access and quality compared to what affluent private payers command. Financially underprivileged minorities tend to end up on Medicaid and in nursing homes that are more dependent on Medicaid than nicer, mostly private-pay skilled facilities or assisted living.

Thus, Medi-Cal’s more favorable treatment of affluent people in terms of eligibility and access has led to charges of structural racism. According to an open access article in Health Affairs*:

Structural racism in coverage and financing has created a two-tier system of racially segregated care in which minority people receive poorer-quality care.… Inequities in nursing home care provide a particularly vivid example.… Stark racial segregation in nursing homes persists today.

Awful as that sounds, the full story is even worse. If Medicaid and Medi-Cal care is so poor, why would people who can afford to pay privately want to qualify for it? Elder law attorneys who specialize in “Medicaid planning,” the legal practice of artificially impoverishing affluent clients to qualify them for publicly funded LTC benefits, have a ready answer. 

Nursing homes are desperate for revenue because Medicaid (Medi-Cal) pays them so little. They will roll out the red carpet for anyone who can pay privately at rates half again as much as Medicaid pays. So lawyers advise clients to hold back enough “key money” to pay privately for a while. That’s how their upscale clients can get into the nicer facilities that accept only a few Medicaid recipients. Then after a short period paying privately, the attorney implements a plan to impoverish the client on paper by means of common legal steps, such as: to purchase unlimited exempt assets; set up a Medicaid Asset Protection Trust; buy a Medicaid-compliant annuity; or use other methods described here, while legally avoiding estate recovery. Voila. Another well-to-do person enters a rare, top-quality facility paid for by Medicaid. Once in, the placement is permanent:

Keep in mind that, once you have been admitted to a Medi-Cal certified facility, you cannot be transferred or evicted simply because of a change from private pay to Medi-Cal payment status even when a (illegal) duration of stay contract has been signed. This applies while the Medi-Cal application is pending, as well. (CANHR, pps. 6-7)

Unfortunately, poor people don’t have the key money to buy their way into the nicer nursing homes in this way. That’s why they end up in the less desirable places that are more likely to be featured in tabloid exposes of deficient care. Worse, the poor on Medi-Cal may be unable to access care in California at all. According to the California Advocates for Nursing Home Reform (CANHR):

Over the past 5 years, one of the most disturbing violations of state and federal laws has been the increase in discrimination against Medi-Cal beneficiaries who need nursing home care. Call a nursing home and tell them that your mother, a Medi-Cal beneficiary, has dementia along with other medical issues and that her doctor has recommended a nursing home– good luck in finding a placement within 200 miles – or at all! … Nursing home discrimination against Medi-Cal beneficiaries and residents has become epidemic in California, and the state regulatory agencies do nothing to contain it. (Source: Medi-Cal Discrimination In Nursing Homes – Getting In Is Half The Battle)

By making it even easier than it was already for affluent people to crowd out the poor from better LTC, Medi-Cal has exacerbated the problem of structural LTC racism which in fact afflicts Medicaid nationwide.

If you want to know why these problems persist, read the Paragon Health Institute’s paper “Long-Term Care: The Problem.” If you want to know what to do about it, watch for “Long-Term Care: The Solution,” coming soon from Paragon and the Center for Long-Term Care Reform.

* Ruqaiijah Yearby, Brietta Clark, and José Figueroa, “Structural Racism in Historical and Modern US Health Care Policy,” Health Affairs, vol. 41, no. 2 (2022).

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Updated, Monday, August 21, 2023, 10:40 AM (Pacific)
 
Seattle—

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LTC E-ALERT #23-022 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 Steve at 425-891-3640 or smoses@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 Steve at 425-891-3640 or smoses@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:

  • HealthyLife.net (Moses podcast interview)

  • Nine out of 10 seniors concerned about senior living cost, care and quality: report

  • State becomes first to strip Medicaid asset limit

  • 8 Big Things Clients Don't Know About Estate Planning, Long-Term Care and Probate

  • Japan: Long-term care insurance system under funding pressure

  • Minnesota studies a Medicare companion product for LTC coverage

  • ‘Old Age’ Enters a New Age: Dramatic shifts in demography and Americans' views of aging revealed in new Harris Poll study conducted by Age Wave

  • The Long View: Six reasons to start retirement planning in your 20s

  • Brains of people with Alzheimer’s are low on some antioxidants, study finds

  • How Do You Hide Money From Nursing Homes

  • Medicaid spending up for seniors but who will bankroll coming growth

  • Got Insurance? You May Be on Medicaid Too

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"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).

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Updated, Monday, August 14, 2023, 10:40 AM (Pacific)
 
Seattle—

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LTC E-ALERT #23-021 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 Steve at 425-891-3640 or smoses@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 Steve at 425-891-3640 or smoses@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:

  • Nursing homes and adult care costs surged by largest amount in July

  • Life Settlements Can Pay for Long-Term Care

  • What Happens to the Items I Bought to Qualify for Medicaid?

  • Genworth Set to Offer Long-Term Care Services in Texas

  • Painful and Getting Worse: Rise of Medicare Advantage Drains Vast Revenue from SNF Sector, Worsens Workforce Instability

  • Transforming health care for older adults

  • Providers must confront radical change in shifting competitive  landscape: experts

  • Minority groups comprise more than 25 percent of MA beneficiaries, study finds

  • Many Americans Believe AI Will Provide Their In-Home Care As They Age

  • More Baby Boomers are living alone. One reason why: ‘gray divorce’

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"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).

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Updated, Friday, August 11, 2023, 10:40 AM (Pacific)
 
Seattle—

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LTC BULLET: LET’S FIX LONG-TERM CARE ONCE AND FOR ALL

LTC Comment: If you had to diagnose and cure what ails LTC in a single page, what would you say? Steve’s answer follows.

 

LTC BULLET: LET’S FIX LONG-TERM CARE ONCE AND FOR ALL

LTC Comment: Policymakers’ attention spans are extremely short. So one pagers are grist for the policy mill in DC and state capitals. But writing short is much harder than writing long. Mark Twain said “I didn't have time to write a short letter, so I wrote a long one instead.” These LTC Bullets aim to say what they want to say in less than 1000 words. But we often blow through that target. So let’s take the time today to keep it short. Here’s everything you need to know about what’s wrong with LTC, why, and what to do about it in one page. But if this précis leaves you wanting more, read “Long-Term Care: The Problem” and await “Long-Term Care: The Solution,” coming soon.

Let’s Fix Long-Term Care Once and for All

Step One: Understand the Cause. People who ignore LTC planning but end up needing catastrophically expensive care later in life routinely transfer that liability and cost to taxpayers via Medicaid.

Step Two: Understand the Problem. As the dominant LTC payer, Medicaid caused most of LTC’s deficiencies including nursing home bias, access and quality problems, inadequate reimbursement, caregiver shortages, and excessive reliance on “free” care by friends and family.

Step Three: Understand the Solution. As long as most people can ignore LTC risk and cost, wait to see if they ever need expensive care, and shift the cost to Medicaid, few will plan early to save, invest or insure for LTC. That must change for more private revenue to fix long-term care.

Step Four: Understand the Plan. Medicaid allows people who failed to prepare privately for LTC to shelter unlimited wealth in trusts, annuities, five-year asset transfers and exempt assets including, over $1 million in home equity. This must end for consumers to take LTC seriously.

Step Five: Understand the Reasoning. If we remove those major loopholes by which people qualify for Medicaid LTC benefits late in life, consumers will have no choice but to plan for LTC earlier. WA Cares proved that by threatening a LTC tax that unleashed a LTCI fire sale.

Step Six: Understand the Practicality. It is unrealistic to expect younger people and families to plan for LTC at a time in their lives when they’re also saving for retirement and children’s education, making house and car payments, etc. So we must offer a way to ease that burden.

Step Seven: Understand the Research. The LTC financing burden may be more manageable than we previously believed. $70,000 invested by a 65-year-old now will cover his/her average LTC cost of $138,000 later. Aging Americans have enough saved already to cover two years of LTC.

Step Eight: Understand the Potential. If people only had to cover their individual average LTC risk by setting aside or earmarking resources they already have or are in the process of saving, they could do so more easily and while simultaneously covering their other financial needs.

Step Nine: Understand the Options. Purchase less LTC insurance at lower premiums to cover average LTC risk instead of catastrophic potential as now. Carve out enough home equity, life insurance, Individual Retirement Account balances or estate wealth to cover average risk.

Step Ten: Retain Medicaid as the payer of last resort for anyone who cannot or will not prepare privately for LTC and to cover catastrophic costs. But make this resource available only after all personal income and assets of applicants/recipients are consumed by private LTC costs.

Summary and Conclusion: If we recognize these facts and implement these measures, America’s failing LTC service delivery and financing system can be saved and improved. There is ample wealth to ensure access to quality long-term care for all Americans. Simply replace perverse incentives to ignore LTC that prevail now with positive incentives to plan for LTC.

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Updated, Monday, August 7, 2023, 10:40 AM (Pacific)
 
Seattle—

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LTC E-ALERT #23-020 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 Steve at 425-891-3640 or smoses@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 Steve at 425-891-3640 or smoses@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:

  • Nationwide Maps Consumers' Long-Term Care Insurance Confusion

  • Tracking The Elusive Medicaid Workforce To Improve Access

  • National Advisory Commission for long-term care proposed — without providers

  • In a rapidly aging America, Medicaid can be a lifeline for long-term care

  • Introducing OmniFlex™: A Revolutionary Short-Term Care Plan Redefining the Industry, offered by ManhattanLife

  • In policy break, Medicare to pay for respite services under new dementia care model

  • CNA hourly pay nears $19 average, while admins score major gains of their own: salary survey

  • Long-term care: Insurance innovation can’t come soon enough

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"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).

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Updated, Monday, July 31, 2023, 10:40 AM (Pacific)
 
Seattle—

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LTC E-ALERT #23-019 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 Steve at 425-891-3640 or smoses@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 Steve at 425-891-3640 or smoses@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:

  • California to eliminate asset tests for Medicaid

  • Comedy Video: D.C.'s Premier Elder Care Community

  • New OIG Report Examines Prior Authorization Denials in Medicaid MCOs

  • The Forgotten Generation: Generation X Approaches Retirement

  • Pandemic loans showed dollars will move the staffing shortage needle: study

  • 8 facts about Americans with disabilities

  • Medicare Advantage Plans Face More Budget Pressure

  • At-home, finger-prick blood test for Alzheimer’s is latest touted stab at early diagnoses

  • Healthcare bankruptcy filings set to triple

  • What Is Transfer Trauma?

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"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).

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Updated, Friday, July 28, 2023, 10:40 AM (Pacific)
 
Seattle—

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LTC BULLET: CASSANDRA’S CURRENT QUANDARY

LTC Comment: Apollo granted Cassandra the ability to predict the future accurately, but cursed her to be disbelieved. That’s a familiar quandary for anyone warning today about LTC jeopardy. Details after the ***news.***

*** 7/20/2023, “The CLTC Digest Quarter 3,” Certification for Long-Term Care

Quote: “We are pleased to share the 2023 3rd Quarter edition of the CLTC Digest. As always, you will find highly educational and insightful articles, and a case study, to expand your knowledge and skills when it comes to helping clients plan for extended care.”

LTC Comment: I discovered an earlier issue of the CLTC Digest and was very impressed. I asked if they would consider an article by me. They did and it became the cover story in this latest issue. If you have the CLTC certification, you can access this new journal issue online. Non-CLTCs can purchase it for $9.95. Go to https://www.ltc-cltc.com/ and click on Store, and then on Marketing Materials. What’s more, CLTC is offering a special deal on their eCLTC (self-study) program. It's $200 off the street rate. That’s a convenient and easy way to get the CLTC designation. But don’t wait; the special ends July 31. That deadline is this coming Monday! ***

 

LTC BULLET: CASSANDRA’S CURRENT QUANDARY

LTC Comment: In 2015 the Center for Long-Term Care Reform published Cassandra’s Quandary. That paper proposed and provided an example of a tool to measure long-term care vulnerability. What, we asked, are the national and state-level risks to the provision and financing of long-term care services? We closely examined these seven variables. 

Aging Demographics: How many older people are coming in the next few decades?
Morbidity: How sick will they be?
Public Funding: How viable is Medicaid as the dominant long-term care payer?
Economy, Federal: How reliable is federal revenue on which Medicaid mostly depends?
Economy, State: How reliable is state revenue on which Medicaid secondarily depends?
Private Financing Alternatives: How much private-pay revenue is available to relieve LTC financing pressure on Medicaid?
Entitlement Mentality: How strong has cradle-to-grave dependency on public programs become?

It is high time to ask those questions again. Our recent paper for the Paragon Health Institute, titled Long-Term Care: The Problem, updates the LTC service delivery and financing challenge.

Our new paper forthcoming soon, titled Long-Term Care: The Solution, will propose a radically new approach to the LTC challenge. In the meantime, following are some excerpts to consider from the original Cassandra’s Quandary:

Executive Summary

It may already be too late to save America’s long-term care safety net. But it is not too late to examine its problems and to propose policy changes to relieve or eliminate them. That is this report’s objective.

Long-term care service delivery and financing face enormous challenges. Risk and cost are very high, yet few Americans plan early to save, invest or insure for long-term care (LTC). Consequently most people who need expensive LTC end up depending on Medicaid, an under-funded, means-tested, public welfare program.

Originally conceived as a last resort for people in dire need, Medicaid has be­come the dominant funder of long-term care for middle class and even affluent people, not only the poor. By trying to do too much for too many, Medicaid has hurt the poor. Decades of institutional bias and questionable access and quality resulted from dismally low reimbursement rates. Programs for the poor, as the adage goes, are poor programs.

Nor have more prosperous people truly benefited from easy access to Medic­aid LTC benefits. Lenient and elastic eligibility rules mandated by the federal government enabled them to dodge high LTC costs, but only at the expense of losing their ability to choose their LTC providers, select their preferred level and venue of care, and demand high quality care as private payers who can change providers.

Today, on the cusp of an unprecedented increase in older Americans most likely to need long-term care, the United States faces exceptionally high debt and un­funded entitlement liabilities, a weak economy despite years of fiscal and mon­etary pump priming, and a populace more dependent on social insurance and welfare programs than ever before.

But health and long-term care expenditures have not yet exploded despite long and frequent warnings they would. Public program cost and utilization pro­jections within the usual ten-year outlook window appear manageable. Deficit spending, enabled by artificially induced low interest rates, defers short-term worries. Complacency prevails. [No longer. Irresponsible fiscal and monetary policies finally created excessive debt, higher interest rates and spiking inflation.]

Lift your sights to 2050, only 35 years from now [27 years now], and all confidence about the existing long-term care system should dissolve. But we face a dilemma like the mythical Cassandra’s. She was blessed with accurate prognostication but cursed to be disbelieved. The primary purpose of this report is to take the longer view, enumerate the coming challenges, estimate the current LTC system’s survivabil­ity, awaken greater concern and propose corrective actions.

New Hampshire is an apt harbinger of the country’s long-term care challenges. The state’s age 85 plus population will nearly quadruple in the next three and a half decades. If its Medicaid long-term care expenditures for the elderly keep pace they’ll increase from $282 million per year to $1,047 million, more than one billion dollars every year. Sustainability at that level is highly dubious.

What exactly are America and the Granite State up against? To answer that ques­tion, we offer an “Index of Long-Term Care Vulnerability” that lists the major challenges and provides a way to measure, analyze and score their impact. We break out aging demographics, future morbidity, Medicaid’s viability, federal and state revenue sustainability, private financing potential, and entitlement mental­ity as the key subjects for review.

We conclude that America’s and New Hampshire’s long-term care service deliv­ery and financing systems - as currently operating and as they are most likely to evolve - will not survive the coming demographic age wave and that radical changes in federal and state laws and regulations are needed to align consumer incentives with the need to finance future long-term care adequately.

We recommend (1) changing the system by which the federal government funds state long-term care systems; (2) empowering states to experiment with different approaches to long-term care financing; (3) reducing dependency on govern­ment funding of long-term care by re-targeting scarce public resources to the genuinely needy; and (4) incentivizing private long-term care financing to en­courage early planning, saving, investing and insuring. …

We have plenty of reasons to worry:

• The boomers start coming of heavy-LTC-usage age 85 in 2031.

• Social Security and Medicare run out of “trust funds” in the early 2030s, less than 20 years from now. [Only a decade away now.]

• Gallup pollsters report “51% of non-retirees doubt they will receive Social Security” and “[t]wo-thirds say Social Security is in crisis or has major problems.”

• U.S. tax-generated general funds will have to make up the entitlements’ annual shortfalls as well as pay off the trust funds’ bonds (IOUs).

• Federal debt is $18.9 trillion and rising rapidly. [Now 72 percent higher at $32.6 trillion and rising even faster.]

• Heavy taxation impedes the economic activity necessary to generate needed tax revenue.

• The Federal Reserve domestically and central banks internationally are pushing the limits of their ability to expand credit in order to conceal economic malaise.

• Fiscal walls are closing on the U.S. and world economies.

• Promiscuous spending leads to impoverishment for individuals or families (sooner) and national economies (later, because of their ability to manipulate currency).

• These lessons are legion throughout history and around the world.

But there are “none so blind as those who will not see,” so this report takes a wide-eyed look at an expansive range of indicators in order to identify and score the LTC system’s risk between now and 2050.

 

LTC Comment: The analysis and warning presented in Cassandra’s Quandary is more relevant and worrisome than ever. That’s why we encourage you to consider it again and revisit the “Index of Long-Term Care Vulnerability” it proposed as a tool to help wake up doubters and resolve the quandary of LTC denial. The Center applied the “Index of LTC Vulnerability” in three additional states in the mid-2010s. Check out: 

We are reviving the Index of Long-Term Care Vulnerability as a tool to arouse interest and concern about LTC again as we prepare to propose a new approach to a solution. Stay tuned.

NB: If you try to open the Index of Long-Term Care Vulnerability and get this message as I do: “Website blocked due to suspicious content,” just disregard it and click “Continue to this website.” Rest assured, it is safe to do so.

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Updated, Monday, July 24, 2023, 10:40 AM (Pacific)
 
Seattle—

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LTC E-ALERT #23-018 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 Steve at 425-891-3640 or smoses@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 Steve at 425-891-3640 or smoses@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:

  • For Home Care Providers, There’s Untapped Potential In Long-Term Care Insurance

  • The CLTC Digest Quarter 3

  • Nursing care has fastest-growing prices of healthcare sectors

  • Family caregivers have fewer assets, more debt issues than non-caregivers

  • For some Washington residents, the new WA Cares Fund may seem appealing. But sticking with a private long-term care insurance plan might still be the better option. Our expert has the details.

  • Alzheimer’s among seniors is most common in these parts of the US, first-of-its-kind data shows

  • Dementia patients fared better in LTC facilities, not home, during pandemic, new study shows

  • New Paragon Study: The Harm of Delaying the Disenrollment of Medicaid Ineligibles

  • KFF: Only 29% of Nursing Homes Would Meet 4-Hour Federal Staffing Mandate

  • Tax Advantaged Strategies to Help Clients Plan for Long-Term Care

  • AHCA to White House: Nursing home staffing mandate spells ‘disaster’

  • Republicans want to make state's long-term care tax optional

  • Biden’s long-term care agenda faces headwinds Workforce shortages: Medicaid reimbursement rates make it hard to hire staff for long-term, home and community-based care facilities

  • Is Work From Home to Blame for Senior Housing’s Muted Recovery?

  • Independent living program to aid hundreds of aging, disabled adults

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"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).

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Updated, Friday, July 14, 2023, 10:40 AM (Pacific)
 
Seattle—

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LTC BULLET: LTC BLOCK GRANT OR WAIVER POTENTIAL

LTC Comment: Consider how a Medicaid block grant or waiver could improve long-term care, after the ***news.***

*** 2023 MILLIMAN LONG TERM CARE INSURANCE SURVEY: This 25th consecutive annual review of stand-alone long-term care insurance (LTCI) authored by Claude Thau, Nicole Gaspar, and Chris Giese, and published by Broker World magazine is available in the insurance trade journal’s July 2023 issue. More discussion of worksite sales, including a comparison of worksite sales distributions vs. non-worksite sales distributions will be in Broker World magazine’s August issue. If you don’t subscribe to this important industry source, fix that problem now here. ***

 

LTC BULLET: LTC BLOCK GRANT OR WAIVER POTENTIAL

LTC Comment: Medicaid law encourages excessive federal and state spending and increases public welfare dependency. These problems manifest in long-term care due to federal financial participation (FFP) match rates that reward increasing state expenditures and through generous financial eligibility policies that discourage early, private LTC planning and subsidize reliance on Medicaid when LTC is needed late in life.

Decades of federal and state efforts to discourage Medicaid LTC expenditure growth by making benefits harder to get, such as lower income and asset eligibility limits, asset transfer restrictions, property liens and estate recoveries, failed to achieve the objective of controlling costs. The rules were weak and full of loopholes. The federal government did not enforce them. The states did not implement them effectively. The media did not publicize them. So the public continued to ignore LTC planning and rely on Medicaid when care was needed driving costs higher and impairing care access and quality, especially for the needy Medicaid is supposed to serve.

As long as these federal rules prevail, nothing is likely to change. If new, worsening economic conditions, including rising debt, deficits, interest rates and inflation compel change, there are very limited options available politically. Doubling down on earlier failed efforts to scare the public straight about LTC by insisting on, but not enforcing, the risk that their life savings are at stake, is futile. Completely eliminating Medicaid as a LTC safety net that preserves middle class and affluent wealth could save the program for the poor, but would prove difficult to implement politically unless and until budgetary pressures compel its adoption. What might work instead?

Over the years, two ideas have received serious consideration that would allow experimentation toward finding a solution to the LTC conundrum just described. One idea is to “block grant” Medicaid, give states a limited amount of money to pursue the program’s objectives, but allow them much more flexibility to set and enforce eligibility controls. Another idea, long an option under federal law, is to allow states to request and receive “waivers” of federal law and regulations enabling them to experiment with new ideas and methods not otherwise permissible. Neither approach has been tried in the endeavor to control costs, preserve Medicaid LTC benefits for the needy, and encourage personal LTC planning by the financially comfortable. But what if an oncoming recession or depression compels more creative measures than in the past? How could states configure LTC benefits under a block grant or waiver?

Following is a proposal I offered in The Long-Term Care Financing Crisis: Danger or Opportunity?: A Case Study in Maryland” (1995). It refers explicitly to using a block grant to achieve the objective, but could as effectively be applied using a waiver as I proposed in “Doing LTC RIght” (2010). The waiver option is based on and inspired by Rhode Island’s ingenious “global Medicaid waiver” designed, obtained and administered by Gary D. Alexander, then Secretary of the Rhode Island Executive Office of Health and Human Services and currently head of the Medicaid and Health Safety Net Initiative at the Paragon Health Institute.

Note that the following proposal refers mostly to nursing home care as that was the dominant venue of care at the time, but it also explains how and why the plan will encourage transition from institutional to home and community-based care. See what you think of this approach and feel free to share your feedback or questions with me at smoses@centerltc.com.

Long-Term Care Financing Under a Medicaid Block Grant
Notes Toward a Model State Statute
[1]
by
Stephen A. Moses

1.         Introduction

            Medicaid is known as the "pac-man" of state budgets and the "800-pound gorilla" of long-term care. We all know something has to be done to control this fiscally hemorrhaging giant.

            On the positive side, if Medicaid block grants pass this year [block granting Medicaid received serious consideration in 1995], states will have the authority for the first time to implement the proper corrective actions. That is a tremendous incentive to prepare now to meet the risks and opportunities that lie immediately ahead.

            The big questions public policy makers face are what to do and how to do it. We cannot plot a course of corrective action until we understand completely the mess we are in and how we got into it. The purpose of this paper is to explain the problem, show how it developed and propose a solution.

            Medicaid nursing home expenditures nearly doubled between Federal Fiscal Year (FFY) 1988 and FFY 1993. Today, Medicaid pays for 73.7 percent of all nursing home patient days in the United States. At least 85 to 90 percent of all nursing home payments come from Medicaid, Social Security benefits contributed by Medicaid patients toward their cost of care, Medicare, or private patient income (not assets). Dozens of recent empirical studies indicate that Medicaid "spenddown" is much lower than previously believed. In fact, there is no evidence whatsoever of the much-touted, widespread catastrophic spenddown.

            Although Medicaid is ostensibly a means-tested public assistance program, i.e. welfare, evidence abounds that middle-class Americans and even the well-to-do qualify easily for the program's nursing home benefits. Congressional actions (in OBRA '93) to close Medicaid eligibility loopholes and mandate estate recovery have had little effect because of unforeseen weaknesses in the law, sluggish implementation by the states, lukewarm enforcement by the Health Care Financing Administration, and creative end-running by public and private Medicaid estate planning attorneys.

            Finally, Medicaid has developed a dismal reputation for problems of access, quality, reimbursement, discrimination, institutional bias, and welfare stigma. How did America come to provide for the long-term care needs of its proud, self-reliant World War II generation by consigning them to a welfare program that is going bankrupt?

II.        Background

            In 1965, America was just starting to have a problem with long-term care. People were living longer, but dying slower of chronic illnesses that caused frailty and cognitive impairment. That was when a prosperous private market in low-cost home and community-based services and long-term care insurance might have developed in the United States. It did not.

            Instead, with every good intention, the new Medicaid program offered publicly financed nursing home care. This subsidy confronted families with a very difficult choice. They could pay out-of-pocket for the home care and assisted living services seniors prefer or they could accept nursing home care paid for by the government. Most people chose the safety and financial benefits of the Medicaid option. Therefore, the market for home care withered, private long-term care insurance expired stillborn, and Medicaid-financed nursing home care flourished.

            The nursing home industry took full advantage of this situation. As fast as the industry could build them, nursing home beds filled with Medicaid residents. Stunned by the cost, Medicaid attempted to control the construction of new beds with Certificate of Need (CON) programs on the principle that "we cannot pay for a bed that does not exist." By the mid-1970's, health planning for nursing homes was in full swing.

            Capping supply, however, only spurred the nursing home industry to drive up rates. Government costs grew faster than ever. So Medicaid capped reimbursement rates too. This compelled the nursing home industry to increase private pay reimbursement rates to compensate. So began the highly problematical differential between Medicaid rates and private pay rates. Today, Medicaid pays only 80 percent of private pay rates on average nationally.

            Higher private rates made Medicaid more attractive to private payers and this led to pressure on legislators to liberalize Medicaid eligibility. A long process of eligibility bracket creep gradually made Medicaid nursing home benefits available even to upper middle class people who had or could obtain the expertise to manipulate eligibility rules. A whole sub-practice of law--Medicaid estate planning--developed to take advantage of this new opportunity.

            With the supply and price of nursing home beds capped by government fiat and with Medicaid eligibility increasingly generous, nursing home occupancy skyrocketed to 95 percent nationally. Nursing home operators realized they could fill their beds easily with low-paying Medicaid patients no matter what kind of care they offered. To achieve adequate operating margins, however, nursing homes had to attract a sufficient supply of full-paying private patients or they had to cut costs drastically.

            If they tried to attract more lucrative private payers with preferred treatment, however, the nursing homes were deemed guilty of discrimination against Medicaid patients. If they tried to cut costs instead, they came under fire for technical violations or quality problems. In response, Congress and state governments pressured the industry to provide higher quality care without discriminating against low-paying Medicaid recipients. Given its fiscal duress, however, Medicaid could not offer higher reimbursement rates to achieve these goals.

            Caught between the proverbial rock and a hard place, the nursing home industry put up a strong fight. Armed with the Boren Amendment, a law that requires Medicaid to provide reimbursement adequate to operate an efficient nursing facility, many state nursing home associations took the battle to court. By now, however, state and federal Medicaid expenditures were rising so fast and taxpayers were so reluctant to pay for growing public spending that large increases in nursing home reimbursement were out of the question.

            In the meantime, a wave of academic speculation in the late 1970's indicated that paying for home and community-based services (HCBS) instead of nursing home care could save a lot of money. For years, therefore, Medicaid experimented with HCBS waivers as a cost-saving measure. In time, however, hard empirical research showed that (desirable as they may be) home and community-based services do not save money overall. Today, institutional bias remains Medicaid's strongest cost containment tool and one of its gravest deficiencies.

            In a nutshell, just as heavy demand was building for a private seniors housing market in the 1960's, Medicaid co-opted the trend by providing easy access to subsidized nursing home care. Confronted with a choice between paying out-of-pocket for a lower level of care or receiving a higher level of care at much less expense, seniors and their families made the predictable economic choice. Not surprisingly, Medicaid nursing home caseloads and expenditures increased rapidly and drastically. In response, Medicaid capped bed supply and reimbursement rates, which led inevitably to excessively high occupancy, private-pay rate inflation, discrimination against low-paying Medicaid patients, and increasingly serious quality problems. In time, Medicai