LTC Bullet: Minnesota Medicaid Aborts Move to Four ADLs
Friday, January 3, 2014
Seattle--
LTC Comment: If home care saves Medicaid money, why would Minnesota
change from requiring one ADL to four ADLs for recipients to qualify for
its home care waiver? The answer after the ***news.***
*** CLTCR Premium Membership -- Center for Long-Term Care Reform
premium members receive our full suite of individual membership
benefits including: our LTC Bullets and E-Alerts; access
to our Members-Only Zone website and Almanac of Long-Term Care;
subscription to our
Clipping Service; and email/phone access to Steve Moses for 24-hour
turnaround queries. Our Premium Membership is designed to give you a
competitive advantage in your long-term care profession. Your increased
knowledge of the critical issues and challenges we face in the field of
long-term care service delivery and financing equals improved professional
success for you and better LTC services for your clients and for those who
have no choice but to rely on scarce public resources. Premium Membership
is $250 per year, paid up front or monthly by automatically recurring
credit card payments. Contact Damon at 206-283-7036 /
damon@centerltc.com to start your Premium Membership
immediately or go directly to our secure online subscription page and
sign up for as little as $21 per month. ***
*** ILTCI CONFERENCE. The 14th annual Intercompany Long-Term
Care Insurance Conference will convene March 16-19, 2014 at the Rosen
Centre in Orlando, Florida. Get all the details and register
here. Chris Gardner will keynote the event on opening day. His life
was the basis for the book and movie “The Pursuit of Happyness.” The
conference will close with a general session on “The Future of the
Industry,” by Marc Cohen, a nationally known and highly regarded industry
analyst. In between the opening and closing general sessions, you can
expect the usual high caliber presentations, peerless networking, and
excellent food and drink. This is a convocation not to be missed if you
can manage it. Damon and I will be there to cover the program and report
on it. Say hello if you attend and, if you don’t (rue the thought), then
watch for our “LTC Embed” accounts of the action. ***
*** THE INSTITUTE FOR THE AGES will host its Seventh Annual International
Conference on Positive Aging on Florida's Gulf Coast, February 9-12, 2014,
at Sarasota's Hyatt Regency. Registration for the conference is open,
with Early Bird rates offered through December 30. Tickets may be found
online at
www.positiveagingconference7.eventbrite.com. For more information
about the Conference program, travel , hotel arrangements and other
details, visit
www.positiveagingconference.org. ***
LTC BULLET: MINNESOTA MEDICAID ABORTS MOVE TO FOUR ADLS
LTC Comment: Minnesota planned effective January 1, 2014 to jump from
requiring one ADL for Medicaid recipients to qualify for home-based LTC
benefits to four ADLs. Read all about it in the Minneapolis Star
Tribune
here. This was the plan in a nutshell:
“Starting in January, thousands of low-income elderly Minnesotans could
lose government benefits intended to help them stay in their homes and out
of nursing care.
“In an effort to constrain runaway Medicaid spending, Minnesota is
implementing stricter rules that will make it harder for senior citizens
to qualify for home-based services, potentially leaving them with reduced
care or no care at all. . . .
“Until now, it has been relatively easy for poor Minnesotans to qualify
for the program. It was enough to show that they needed assistance in one
basic activity of daily living, such as help with bathing or dressing.
“Under the new criteria, seniors must show that they need assistance in at
least four activities of daily living; or, alternatively, they need help
in a single critical activity such as toileting or transferring, for
example, moving from a bed to a wheelchair.”
This new tougher rule was not implemented. Minnesota Governor Mark Dayton
postponed the change for a year due to “an outcry from advocates for
senior citizens and the poor.” Find details on the delay
here.
What’s going on? First, why would Minnesota Medicaid cut home care
services to save money if home care itself is supposed to save money?
Second, why would the Governor delay the change if it makes sense? The
answers are an object lesson in why and how Medicaid distorts the
long-term care market.
The answer to the first question is that Minnesota Medicaid would not seek
to cut home care services if they really did save money. They do not. No
empirical evidence shows that home care saves money. It tends to delay,
but not prevent institutionalization, thus causing higher costs overall.
State Medicaid expenditures for all long-term care—home and
community-based care and nursing home care combined—continue to rise
rapidly everywhere. Furthermore, the availability of home care makes
Medicaid much more attractive than when nursing home care was its only
option. Thus, when home care is offered, the public is less likely to
plan privately for long-term care and more likely to rely on Medicaid.
Consequently, LTC expenditures, especially for home-based services,
continue to skyrocket.
The answer to the second question is that the senior lobby and groups
claiming to represent the poor brought political pressure to bear on the
Governor leading to his decision to delay the change from one to four ADLs.
The irony is that seniors and the poor do not benefit from programs to
make Medicaid more attractive. The reason is that loose financial
eligibility criteria make it too easy for middle class and affluent people
to qualify for Medicaid LTC benefits. By admitting too many people to
Medicaid, the Medicaid program has distorted the market for long-term care
resulting in the public’s denial of LTC risk, their failure to save,
invest or insure for long-term care, and Medicaid’s burgeoning and
insupportable LTC expenditures. Those consequences do not help, rather
they hurt the poor.
To put the issue in broader historical perspective, this is how Medicaid
distorted the LTC market. It made nursing home care free in 1965 which
resulted in (1) widespread and unnecessary use of nursing homes for
custodial care (Medicaid’s institutional bias), (2) public indifference to
LTC risk and cost which prevented successful development of private LTC
financing alternatives (LTC insurance and home equity conversion), and (3)
impeded growth of a private home care infrastructure and delivery system.
We’re living with the consequences of these market distortions to this
day.
What is changing is that state governments can no longer evade the
budgetary consequences of providing most long-term care through Medicaid,
a defacto entitlement masquerading as a means-tested public assistance
program. The only thing propping up Medicaid’s LTC financing is the
federal government’s ability to borrow and spend beyond its means. At
some point, the federal deficit and debt will sow doubt among lenders
(domestic and foreign bond holders) who will no longer provide needed
funds except at higher interest rates. Higher interest rates will make
servicing the federal debt impossible. States, which constitutionally
cannot run budget deficits indefinitely, will be left holding the bag.
When economic gravity again prevails, the current system will come
crashing down. The lesson in all this is that state Medicaid programs
should seek to return the program to what it was intended originally to
be—a safety net for the poor. When middle class people and the affluent
really do have to spend down their own resources, including home equity,
for long-term care, they will begin to understand why planning for LTC is
necessary. That process has already begun as we’ve successfully curtailed
Medicaid abuse over the years by requiring transfer of assets penalties,
extending the look back period, mandating estate recoveries, and capping
the home equity exemption. Much remains to be done, but Minnesota’s
aborted effort to save money by cutting home care services is evidence the
pressure for such changes remains heavy.
The lesson for individuals and families is that people who want access to
quality home care when they need LTC someday had better plan to pay
privately. The Medicaid safety net will no longer catch them, at least
not for home care and, in the future, probably not even for nursing home
care. |