
READ STEVE'S BIO.JPG)
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Updated,
Friday, June 24, 2022, 10:40 AM (Pacific)
Seattle—
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LTC
BULLET: MEDICAID’S PLAN TO FAIL
LTC
Comment: AARP says too few people plan for old age even though most
believe they’ll need long-term care, but it offers no clue as to why or
what to do about it. Insights and analysis after the ***news.***
***
LTC CLIPPINGS are news items we send to Center Premium Members
daily with news, data, studies, and information they need to know to stay
at the professional forefront. Steve Moses scans the popular and scholarly
media, condenses vital information, and forwards to you a message with the
title, author, a link, a representative quote and his “LTC Comment”
analyzing the significance. To subscribe to LTC Clippings, contact
Damon at 206-283-7036 or
damon@centerltc.com.
Here are two examples of LTC clippings sent this week:
5/2022,
“Post-acute
and Long-term Care Providers and Services Users in the United States,
2017–2018, Analytical and Epidemiological Studies,”
by Sengupta, Manisha, et. al., National Center for Health Statistics
Quote:
Key Findings [excerpts]
In 2018, about 69,000 paid, regulated post-acute and long-term care
services providers in seven major sectors served more than 9.5 million
people in the United States.
•
Post-acute and long-term care services were provided by 4,200 adult day
services centers, 11,500 home health agencies, 4,700 hospices, 15,600
nursing homes, 31,400 assisted living and similar residential care
communities, 1,200 inpatient rehabilitation facilities, and 400 long-term
care hospitals (Appendix III, Table IX).
•
In
2018, an estimated 251,100 current participants were enrolled in adult day
services centers; 1,321,200 people were current residents in nursing
homes; and 918,700 current residents were living in residential care
communities. In 2017, about 4,940,300 patients were discharged from home
health agencies; 1,562,500 patients received services from hospices;
380,400 patients received services from inpatient rehabilitation
facilities; and 115,800 patients received services from long-term care
hospitals (Appendix III, Table XII).
LTC
Comment:
Consult the report for much more data on the LTC continuum. Center friend
Bill Comfort observed that “the CDC data notes that Home HEALTH Care is
for Medicare-paid skilled care at home. From my first look at the report,
it appears that this doesn’t address at all private-duty, private-pay,
custodial home care. The 11,500 home HEALTH agencies do not include the
likes of Home Instead, Right At Home, Comfort Keepers, and all the mom and
pop home care agencies at all! We continue to get a distorted view of
post-acute and just basic custodial care from this oversight.”
6/23/2022,
“Many
Retirees Wish They'd Planned, Saved Earlier: EBRI Survey,”
by Dinah Wisenberg Brin, ThinkAdvisor
Quote:
“Half of surveyed retirees said they would have changed their financial
habits during their working years. But those who paid a professional to
develop a financial plan were satisfied and felt the service was worth the
expense. Unexpected medical expenses, preventive health spending,
inadequate retirement savings and inflation led the list of retirees'
pre-retirement financial concerns.”
LTC
Comment:
Yet few people plan for old age. To learn why and what to do about it,
read tomorrow’s [now today’s] “LTC
Bullet: Medicaid’s Failure to Plan.”
LTC
BULLET: MEDICAID’S PLAN TO FAIL
LTC
Comment: There are few people in the LTC profession I’ve known longer and
respect more than
John
O’Connor.
He is editorial director, vice president and associate publisher at
McKnight’s Long-Term Care News and
sister publication,
McKnight’s Senior Living.
I’ve been reading John’s thoughtful commentaries since 1989 when I left
government LTC research to join the private sector.
O’Connor’s “Editor’s Column” yesterday made several points that form a
fine foundation for a crucial conclusion. Read “Worse
than a bad plan for senior living”
and then rejoin me for some observations.
He
begins:
“Even though Ben Franklin uttered the words more than two centuries ago,
they still ring true today: ‘If you fail to plan, you are planning to
fail.’ I was reminded of his gentle warning while reading about the AARP’s
latest ‘Long-Term
Care Readiness’ survey.”
Who
in the insurance side of the LTC business hasn’t heard that Franklin quote
and probably used it in sales?
The
AARP study John refers to, titled “Long-Term Care Readiness: An AARP
Survey of Adults 50+,” is available
here.
Read its “Key Findings” below and then we’ll see what John does with them.
“Key
findings
“Uncertainty about Medicare coverage of long-term care services is common
among adults 50-plus.
Roughly half (46%) incorrectly believe Medicare covers care in a nursing
home or care in the home from a home health aide.
“Recognizing that they may need assistance as they get older does not mean
that adults 50-plus have really thought about *how* they will live
independently.
Nearly seven in 10 (68%) believe that they will need assistance with their
daily activities as they get older, yet fewer than three in 10 (28%) have
given a lot of thought to how they will continue to live
independently if they need such assistance.
“The
COVID-19 pandemic has had little effect on one’s thinking about
independent living,
with more than six in 10 (62%) thinking about the topic about the same
now as two years ago.
“Roughly six in 10 adults 50-plus are concerned about multiple issues
regarding aging,
with concerns about not being able to live independently and becoming a
strain or burden on family topping the list. Slightly fewer say they are
concerned about not having enough money saved, needing to live in a
nursing home or assisted living facility, or not being able to remain in
their own home.
“When it comes to planning for their futures, half have discussed their
end-of-life plans with family and have written a will.
More
than four in 10 have also planned for their funeral expenses and have
designated a legal Power of Attorney, but far fewer say they have
researched or made plans for in-home, community-based, or nursing home
care.”
Back
to John O’Connor’s column:
“Consider, less than a third of the respondents (28%) have given much
thought to how they will live independently should a need for assistance
arise. That’s right, 28%. It’s a safe bet the percent of people in this
crowd planning their next vacation is considerably higher. And it’s not
like those who are 50 or older are unaware bad things might happen later
in life. In fact, more than two-in-three (68%) believe they will need help
with their daily activities at some point. For those who have reached age
65, the number spikes to 75%.”
He
concludes:
“If I’m running a senior living organization, these findings scare the
heck out of me. Because what they strongly suggest is that more and more
senior living services will need be paid for by states and the federal
government going forward. Many potential prospects in the suddenly popular
middle market may not have the means to pay their own way.”
What
does he advise senior living providers to do?
If you don’t want to be a “publicly subsidized enterprise” subject to the
“regulatory hoops” and less than “generous” payments skilled nursing
facilities endure, then consider waging “a campaign to get people to
actually prepare for the decline old age will surely bring.”
He
continues:
“But be warned, your work is cut out for you. … it’s probably safe to say
the fail-to-plan crowd is pretty dug in. Which is very unfortunate. Their
eat, drink and be merry mentality may be OK for a night of celebration.
But it’s no way to prep for the challenges of old age. As many will
discover, once the party ends.”
LTC
Comment:
What I don’t find in John O’Connor’s column, nor in the AARP study, is the
question “Why don’t people plan?” much less an answer. So let me try to
provide both.
What
could possibly explain why so few people worry or plan for old age? Why
will their failure to plan leave future senior living providers as
dependent as nursing home operators on meager government reimbursements?
What could possibly be done to reverse this unfortunate outcome?
To
me the answers are as glaringly obvious as the questions themselves.
People don’t plan for old age because they’ve been assured the don’t need
to by (1) Social Security, (2) Medicare, and (3) Medicaid. Read
Medicaid and Long-Term Care
for a full explanation.
Senior living providers are doomed to follow nursing homes down the
primrose path of Medicaid dependency, including excessive regulation and
inadequate payments, because of the moral hazard (“lack of incentive to
guard against risk where one is protected from its consequences”) the
entitlement program caused.
What
could/should be done to fix this mess?
Stop doing what government has always done. Stop giving easy access to
Medicaid-funded care after the insurable event has already occurred. In
other words, end “The
Entitlement Put.”
Instead, move the LTC responsibility forward to a time when it’s not too
late for people to plan. Enforce it then, but not by channeling everyone
into compulsory payroll-funded government programs that are no better than
the ones that caused LTC’s problems in the first place. Let people choose
how to meet their LTC obligation—through insurance, or a home equity carve
out, or an investment set aside, or a formal, recorded lien on their
estate, or some other legitimate, trackable means—as a way to avoid
government interference altogether instead of as an escape from a public
program that traps everyone like WA Cares.
Closing LTC Comment:
Hey John, how would you answer those three questions? What do you think of
my answers? I’ll keep an eye out for that “Editor’s Column.” Thanks
for the important contribution you and sidekick Jim Berklan make toward
our common objective of improving long-term care.
#############################
Updated, Monday, June 20, 2022, 10:40
AM (Pacific)
Seattle—
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LTC
E-ALERT #22-020 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:
-
Healthy lifestyle shown to decrease
dementia risk up to 36 percent: study
-
The Future Of WA Cares: A Response To
Warshawsky
-
Update on number of people opting out of
state's long-term-care program
-
Can I Use a Medicaid Beneficiary’s
Inheritance to Pay Her Assisted Living Facility Three Months in Advance?
-
New form of dementia prevalent in 40% of
older adults
-
‘Startling’ lack of physical activity found
in assisted living pilot study
-
Older adults more likely to have multiple
ailments compared with prior generations
-
A Permanent Pandemic Means a Huge Medicaid
Expansion
-
Shingles is not associated with increased
risk of dementia, finds study
-
Assisted living’s place in the long-term
care continuum
#############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Monday, June 13, 2022, 10:40
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #22-019 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:
-
Medicaid Weighs Attaching Strings to Nursing Home
Payments to Improve Patient Care
-
Nursing Home Closures Hit Smaller Markets as
Financial, Staffing Crisis Deepens Across Industry
-
OPM Expects to ‘Revise’ FLTCIP Premiums, Could
Temporarily Bar New Enrollments
-
A Two-Year Reprieve For Medicare Insolvency Sounds
Like Good News. But It Isn’t
-
Under the radar: cash-only caregivers
-
House members launch new caucus focused on
long-term care
-
A Small World Is a Big Solution for Workforce Woes
-
US Nursing Homes Face Closure Risks From Staffing
Shortages
-
With 41% leap in nursing home costs, ‘doing
nothing’ not an option: AHCA
-
Long-term care’s mortal risk
#############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Friday, June 10, 2022, 10:40 AM (Pacific)
Seattle—
#############################
LTC
BULLET: THE ENTITLEMENT PUT
LTC
Comment: Eliminating personal risk is morally hazardous especially when
government does it. Considerations after the ***news.***
***
STEVE MOSES’S latest published articles:
“Long-Term
Care Epiphany,”
by Stephen A. Moses, Broker World, June 2022
“Long-term
care’s mortal risk,”
by Stephen A. Moses, McKnight’s LTC News, June 6, 2022 ***
***
WILL NY FOLLOW WA CARES down the primrose path of compulsory public LTC
financing? Rumor has it New York State may copycat Washington State’s WA
Cares Fund program. We asked longtime Center friend
Bob
Vandy,
President of
Advisors Insurance Brokers
(an Integrity Marketing Group Company). Bob assures us based on advice
from a knowledgeable Empire State lobbyist that there is a Senate Bill in
NY, but no companion bill in the Assembly. “The legislation’s sponsor is
interested in LTC and someone we will engage with in preparation for next
session/budget. My NAIFA lobbying contact says ‘all indications are that
the bill is unlikely to go any further in this legislative session.’” So
rest easy for the time being. In the meantime, if you want to know what
New York really should do about long-term care, read
Long-Term Care Financing in New York: How to Save Money While Serving the
Needy.
***
LTC
BULLET: THE ENTITLEMENT PUT
LTC
Comment: Human beings evolved to fear danger and to respond with “fight or
flight.” Then around the turn of the twentieth century governments took it
upon themselves to make private risk go away. They set out to provide
collective security instead. We’re living now with the consequences of
100-plus years of that policy. We don’t worry about or plan ahead for the
“thousand
natural shocks that flesh is heir to”
as much as we otherwise would.
Lose
your job? Get unemployment insurance. Face a pandemic? Checks will roll
in. Get sick? Apply for ObamaCare or Medicaid. Old and sick? Medicare.
Broke? Welfare. Old and broke? Supplemental Security Income. Frail or
demented? Medicaid LTC. Want college? Get a guaranteed student loan. Can’t
pay it back? Ask forgiveness. Do we have a safety net or a
hammock in which we’ve fallen asleep?
Are
we really better off swapping personal risk, responsibility and freedom
for collective security, carelessness and dependency? I don’t think so
based on what I see all around me in the modern American polity and
culture. The following article is one way of looking at what has happened
and why.
“The
Entitlement Put”
by
Stephen A. Moses
For
the past two decades, investors profited by “buying the dip.” Whenever
stocks were in free fall, the Federal Reserve lowered interest rates
and/or bought securities (quantitative easing) to restore the bull market.
This Fed policy acted like a
put
option
protecting investors from downside risk. What began as the Greenspan put
in the 1990s became the Bernanke, Yellen and Powell puts over time.
This
financial safety net encouraged over-investment in stocks, bonds and real
estate. It inflated asset bubbles that popped during the dot-com (2001),
real estate (2008) and pandemic (2020) recessions. Right now, we’re
watching the biggest asset bubble of all deflate with the usual economic
repercussions. What’s new this time is simultaneous unusually high
consumer price inflation worsening the downturn and hurting the poor and
middle class most.
By
reducing investors’ risk, the “Fed put” repeatedly distorted equity, bond
and real estate markets causing irrational exuberance, malinvestment, and
devastating economic consequences. That is no mere coincidence. It is an
example of “moral
hazard,”
the “lack of incentive to guard against risk where one is protected from
its consequences.” Moral hazard also operates at a deeper and potentially
devastating level in American society.
For
example, in 1935, Social Security sent the message that private retirement
savings are no longer crucial. In 1965, Medicare assured older Americans
they will no longer need to worry about health care. That same year
Medicaid removed concerns about paying for long-term care by opening
nursing homes to anyone who could not afford them otherwise. Most
recently, to combat the pandemic, government borrowed, printed and
monetized trillions of dollars to shower benefits and accommodations on
people and companies alike.
In a
nutshell, government attempted to improve social conditions by eliminating
personal and commercial risk but created instead a new culture of
dependency with far greater collective peril. This “entitlement put”
convinced the public and businesses that the government’s fiscal and
monetary high wire act had a safety net that would always protect them
from need. But now Social Security and Medicare share
$56
trillion
of unfunded liabilities. The Fed’s balance sheet has ballooned to
$9
trillion.
The national debt is
131
percent
of GDP. Asset inflation has enriched the wealthy, while impoverishing the
middle class. Consumer inflation at
40-year highs
may soon complete that process.
Consequently, consumers and companies now face the greatest danger they
have confronted since those “progressive” protections began. Boomers start
turning 85, the age at which health and long-term care costs spike, in
2031. That’s three years after Medicare becomes insolvent (expected
in 2028)
and four years before Social Security follows suit (expected
in 2035).
Of course, Medicaid has no imaginary trust fund to run out. Medicaid is a
direct draw on general funds of which the federal government has none
extra as it runs a
$2
trillion
annual deficit. When Social Security and Medicare can’t pay full benefits,
welfare programs like Medicaid will have to make up the difference
creating more financial strain on the already overwhelmed federal budget.
U.S.
companies and their customers are living on borrowed time … and on hollow
government fiat money that has run out. Like
Wile
E. Coyote
they’ve overrun the fiscal cliff but have not yet looked down. What should
be done?
It
is easier to say what should not be done. Do not double down on what
caused these problems in the first place, that is, central planning,
public financing and punitive government regulations. Most of all avoid
big new social insurance programs funded with compulsory payroll
deductions that siphon private capital out of the productive economy. That
would be greasing the slippery slope we’re already sliding down.
Instead, we need to reemphasize private responsibility and risk management
for personal financial, retirement and estate planning. Gradually phase
out the big compulsory government programs on which people have become too
dependent. Eliminate the moral hazard that has drawn so many into public
welfare dependency. In other words, end the entitlement put. If we don’t
do this intentionally through responsible public policy changes, ongoing
economic default will do it for us anyway.
Steve Moses is president of the Center for Long-Term Care Reform (www.centerltc.com).
Reach him at smoses@centerltc.com.
#############################
Updated, Monday, June 6, 2022, 10:40
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #22-018 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:
-
Long-Term Care Insurance: Higher Premiums
for Shrinking Benefits
-
Long-Term Care Epiphany
-
BREAKING NEWS: CMS updates Medicaid
eligibility standards
-
Social Security Trust Funds Doing Better
Than Last Year: Trustees Report
-
25% of Americans are delaying retirement
due to inflation, survey finds
-
Is Slowed Walking a Sign Dementia Is Near?
-
How To Self-Insure For Long-Term Care
Health Expenses (2022)
-
Legacy Lessons Part 2: More Wisdom from
Leaders in the Aging Field
-
Less than 25 percent of Americans expected
to save enough to retire comfortably
-
Retiree Health Care Cost Estimate
-
Inflation jumps 8.5% in a year for nursing
goods and services, tripling the number of residents at risk of
displacement
-
The Double-Edged Sword of Long-Term Care
for Women
-
Reckoning with the growing demand for
long-term care
-
Why Every Company, Organization and
Association Should Gather the Wisdom and Life Lessons of their Field's
Elders
-
Nursing homes sue over minimum staffing
ratios, mandatory spending levels
-
Middle class declines, but not necessarily
middle-market senior living opportunities
-
Elder Law Guys: When long-term care is
looming, there's a short window to get financial affairs in order
############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Friday, May 27, 2022, 10:40 AM (Pacific)
Seattle—
#############################
LTC
BULLET: BEGGING THE LTC QUESTION
LTC
Comment: LTC researchers employ logical fallacies copiously after the
***news.***
***
LTC CLIPPINGS are news items we send to Center Premium Members
daily with news, data, studies, and information they need to know to stay
at the professional forefront. Steve Moses scans the popular and scholarly
media, condenses vital information, and forwards to you a message with the
title, author, a link, a representative quote and his “LTC Comment”
analyzing the significance. To subscribe to LTC Clippings, contact
Damon at 206-283-7036 or
damon@centerltc.com.
Here are three examples of LTC clippings sent this week:
5/23/2022,
“Middle
class declines, but not necessarily middle-market senior living
opportunities,”
by Kathleen Steele Galvin, McKnight’s Senior Living
Quote:
“A new Pew Research Center analysis of
government data found that the share of adults who live in middle-class
households fell from 61% in 1971 to 50% in 2021. At the same time, the
analysis found, the share of adults in the upper-income tier increased
from 14% in 1971 to 21% in 2021, and the share of adults in the
lower-income tier went from 25% to 29%.”
LTC
Comment:
The rich get richer and the poor get poorer. Evidence of supply side tax
cuts promoting corporate interests? Hardly. Blame demand side policies
forcing interest rates to zero and showering unearned money on nonworking
citizens to buy their votes for more of the same. That created inflation
which pumped up asset bubbles benefiting the affluent. Now the bill for
profligate fiscal and monetary policy has come due in the form of consumer
goods inflation. That’s where the poor pay the price for the self-serving
economic policies of the rich. We’re in for a rough ride as the well-to-do
lose their wealth (easy come, easy go) but the poor bear the brunt of the
suffering.
5/25/2022,
“Nursing
homes sue over minimum staffing ratios, mandatory spending levels,”
by Danielle Brown, McKnight’s LTC News
Quote:
“Nonprofit New York nursing homes are taking action against the state in a
push to overturn ‘illegal and unconstitutional’ policies that establish a
minimum staffing requirement and spending mandates for providers. … The
group is seeking a statewide preliminary and permanent injunction
prohibiting the penalties being levied against nursing homes, and wants
the regulations declared unconstitutional and illegal.”
LTC
Comment:
Déjà vu; seen this before. The federal government mandated improved
long-term care, more caregivers, better training and compensation in OBRA
’87 but offered no extra funding. Nursing homes sued under the Boren
Amendment and won. But Congress repealed Boren leaving no floor under
Medicaid reimbursement rates. Free markets achieve cost-effective
excellence. Government compulsion fails every time.
5/25/2022,
“Why
Every Company, Organization and Association Should Gather the Wisdom and
Life Lessons of their Field's Elders,”
by Ken Dychtwald, Generations
Quote:
“After providing funding and in partnership with ASA and 37 co-sponsoring
organizations, during the late summer of 2021, I hosted and filmed (via
Zoom) a series of 12 ‘Legacy Interviews’ with a diverse set of leading
pathfinders. … Click here to
watch all of the one-hour interviews. Read the Generations Now post
featuring the second half of Dychtwald’s Legacy interviews next week.”
LTC
Comment:
Here’s your chance to learn from a dozen members of aging’s Hall of Fame.
***
***
NEW MOSES ARTICLES forthcoming. Keep an eye out for “LTC Epiphany” in
Broker World’s June issue and “Long-Term Care’s Mortal Risk” in
McKnight’s LTC News sometime during the week starting June 6. ***
LTC
BULLET: BEGGING THE LTC QUESTION
LTC
Comment: Long-term care analysts routinely ignore, diminish and/or
misrepresent the impact of Medicaid planning (artificial
self-impoverishment to qualify for benefits) on the long-term care market.
Here’s an example taken from Richard W. Johnson and Melissa M. Favreault,
“Economic
Hardship and Medicaid Enrollment in Later Life: Assessing the Impact of
Disability, Health, and Marital Status Shocks,”
HHS/ASPE/BHDAP,
January 31, 2021. For the full context, please review the source before
reading the following critique.
“Begging the LTC Question”
by
Stephen A. Moses
Begging the question is the logical fallacy of assuming as a premise of
your argument the conclusion you want to prove. You can find examples of
such circular reasoning
here
and all over the popular media. But begging the question should not appear
in serious scholarship.
Yet
here’s a glaring example from two leading long-term care scholars:
“Medicaid enrollment is a reliable indicator of economic hardship because
people qualify only if they have very low income (after covering health
care costs) and few assets.” (Johnson
and Favreault,
2021, p. 10)
Hmmm. Medicaid indicates economic hardship because you must have an
economic hardship to qualify. That statement evokes another flaw in
reasoning, the opposite of a fallacy, something that is always true
automatically. A
tautology
is “a phrase or expression in which the same thing is said twice in
different words.” It tells you nothing new.
Besides errors of logic and reasoning what else is wrong with the argument
that Medicaid indicates economic hardship because you must be poor to get
it? For one, it is false. People can retain substantial assets in exempt
form and still receive Medicaid. To be fair, Johnson and Favreault
acknowledge this fact elsewhere in their paper: “Countable assets exclude
the value of the home and such things as automobiles, household goods, the
surrender value of life insurance, and burial funds.” (p. 7)
But
if Medicaid recipients can retain all those things, is it correct to say
they must have “few assets” to qualify? The vast majority of seniors’
assets are held in these exempt forms. Whatever else they own, such as
stocks, bonds, or cash, is easily converted from countable to noncountable
status. Medicaid planners provide long lists of exempt assets and
encourage their affluent clients to reduce their countable wealth by
purchasing them. That’s the commonest way savvy people qualify for
Medicaid without spending down for care. It’s legal but violates what
public policy intends and what analysts like Johnson and Favreault assume
occurs.
These authors do pay lip service to the idea that some people find ways to
qualify for Medicaid long-term care benefits without spending down their
wealth for care. For example: “Despite concern that some older adults game
the system by transferring wealth to their children to qualify for
Medicaid, there is little evidence that this practice is widespread … .
(p. 8) But here they employ another logical fallacy. “A straw
man argument
attacks a different subject rather than the topic being discussed … The
purpose of this misdirection is to make one's position look stronger than
it actually is.”
Asset transfers are a significant, but comparatively minor form of
Medicaid planning. By focusing specifically on asset transfers instead of
generally on Medicaid planning, Johnson and Favreault divert attention
from the far more commonly used methods of artificial self-impoverishment.
These include the purchase of exempt assets described above and the use of
Medicaid Asset Protection Trusts,
Medicaid Compliant Annuities,
reverse half-a-loaf strategies,
and myriad other techniques including the ones on
this
long list.
Medicaid planning by one or more of these methods is the rule, not the
exception among Medicaid long-term care applicants who are not poor when
they apply.
By
ignoring the evidence of widespread Medicaid planning and disregarding the
vast legal literature devoted to explaining and promoting it, Johnson and
Favreault employ yet another logical fallacy. “An
appeal to ignorance
(also known as an ‘argument from ignorance’) argues that a proposition
must be true because it has not been proven false or there is no evidence
against it.” In other words, people must be spending down into
impoverishment on long-term care, because there is no evidence they don’t.
But the onus of proof is on whoever asserts the positive. Neither Johnson
and Favreault nor others in the
LTC
intelligentsia
ever adduce evidence of actual, as opposed to artificial, spend down. The
truth is that people with substantial assets who actually spend their
wealth for health or long-term care do so either voluntarily or out of
ignorance of Medicaid’s generous and elastic financial eligibility rules.
But
what about income. The one thing everyone knows about Medicaid is that it
requires “low income.” Here’s Johnson and Favreault: “Because people
qualify for Medicaid only if they have virtually no assets, except for a
home, and very little income, receipt of Medicaid benefits is a strong
indicator of financial vulnerability. … A single SSI beneficiary without
earnings who does not receive Social Security or other income, like a
state supplement could receive no more than $771 [$841 as of 2022] in
monthly income in 2019 (equivalent to $9,252 per year), well below the FPL
[Federal Poverty Level].” (p. 7)
Unlike their less intellectually honest scholarly colleagues, Johnson and
Favreault do clarify that having “very little income” to qualify for
Medicaid actually means applicants can have unlimited income as long as
their private health care expenses are high enough or a Miller income
trust is in place.
Many
states account for individuals’ health care spending when determining
Medicaid eligibility by subtracting applicants’ out-of-pocket costs for
medically necessary services and supplies from their countable income.
This adjustment essentially allows people to “spenddown” their income
until they qualify for Medicaid. Other states achieve similar outcomes by
allowing applicants to assign that portion of their income that exceeds
the Medicaid income threshold to a special trust used to help cover
service costs. The state receives any funds remaining in these trusts
after a Medicaid enrollee’s death, up to the amount the state paid in
Medicaid benefits. (p. 7)
Johnson and Favreault close their paper with this non sequitur:
“Serious LTSS needs create economic hardship for many middle-class older
adults because paid LTSS is expensive and third-party reimbursement is
rare for people with too many financial resources to qualify for
Medicaid.” (p. 19) Actually, third-party reimbursement is commonplace for
people with too many financial resources to qualify for Medicaid if they
employ the methods of artificial self-impoverishment described in this
column or consult an elder law attorney with Medicaid planning expertise.
Unless or until policy makers wake up to this reality and fix it, Medicaid
will continue to be the dominant payor for low cost long-term care of
dubious quality in the United States. Private financing of top rate care
at market rates will remain the exception instead of the rule.
#############################
Updated, Monday, May 23, 2022, 10:40
AM (Pacific)
Seattle—
#############################
LTC E-ALERT #22-017 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 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:
-
Here's How Long-Term Care Planning Is
Changing
-
Experiment Over: Future of Nursing Home
3-Day Stay Waiver in Doubt Post-PHE
-
As Medicare Advantage grows, experts say,
so do hard-to-fight denials
-
Strategies for Paying for Long-Term Care -
Lunch and Learn
-
Reports: Feds will extend public health
emergency
-
Sending hopeful messages about state's
long-term-care law doesn’t make it a good deal; exemptions continue
-
54 percent increase in low-care nursing
home residents presents opportunity for assisted living
-
With REIT ownership of SNFs at 12%, experts
question compatibility of business and healthcare goals
-
$2.7 billion settlement in CalPERS
long-term care insurance lawsuit is canceled
#############################
"LTC
E-Alerts" are a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Monday, May 16, 2022, 10:40
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #22-016 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 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:
-
Long-Term Care in the United States — Problems and Solutions
-
In
first nursing home visit, CMS admin gets straight talk on agencies, pay
and performance
-
Dr.
Bill Thomas, Independence Officer, Lifespark
-
OIG:
Older Medicare recipients often harmed during hospital stays
-
What Is
the Functional Assessment for Long-Term Care Benefits?
-
Longevity and the New Journey of Retirement
-
All
Clients Need Bone Scans: LTCI Insider
-
Covid-Related
Nursing Home Lawsuits to ‘Skyrocket’ With Protections on Shaky Ground
-
Large
Share of Alzheimer's, Dementia Cases Tied to 8 Modifiable Risk Factors
-
MA
enrollees with dementia report poor quality of care: study
############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Friday, May 13, 2022, 10:40 AM (Pacific)
Seattle—
#############################
LTC
BULLET: LTC EPIPHANY
LTC
Comment: To fix long-term care once and for all we must front load the
responsibility to plan and eliminate Medicaid’s financial honey trap on
the back end. Enlightenment after the ***news.***
***
BE
CAREFUL OUT THERE: “Friday the 13th is considered an unlucky day in
Western superstition. It occurs when the 13th day of the month in the
Gregorian calendar falls on a Friday, which happens at least once every
year but can occur up to three times in the same year. … Friday the 13th
occurs in any month that begins on a Sunday.” ***
*** AGEWAVE INSPIRATION: Don’t miss Ken Dychtwald’s latest views on
The Future of Medicine, Aging, Health and Longevity. You’ll gain
knowledge, vision and motivation. Put them all to work in whatever you do
to advance the field of long-term care. ***
***
RECENTLY PUBLISHED ARTICLES by Steve Moses. We hope you’ll read these
articles,
join
the Center for Long-Term Care Reform,
and help us solve the long-term care financing problem. The Center’s
“Membership Levels and Benefits” schedule is
here.
Join individually or urge your company or association to join as a
corporate member so you can receive all the benefits of membership at no
cost to you. Universal access to top quality care for all Americans (the
Center’s mission) is achievable. Join us and make it happen!
“Trappings
of LTC system leave operators trapped,”
by Stephen A. Moses, McKnight’s Long-Term Care News, February 23,
2022. (Originally titled more simply “Trapped.”)
“The
Great Long-Term Care Compromise,”
by Stephen A. Moses, Broker World, January 1, 2022
“The
irony of long-term care advocacy,”
by Stephen A. Moses, McKnight’s Long-Term Care News, December 17,
2021
“Long
Term Care Irony,”
by Stephen A. Moses, Broker World, December 1, 2021 (PDF
version.)
“What
works for long-term care and what doesn’t,”
by Stephen A. Moses, McKnight’s LTC News, November 17, 2021.
“What’s
better for senior living and care — the market or government?,”
by Stephen A. Moses, McKnight’s Senior Living, October 25, 2021.
“Long-Term
Care’s Problems Are Bad, Getting Worse, but Fixable,”
by Stephen A. Moses, McKnight’s LTC News, October 1, 2021.
“Should
Medicaid Protect $8 Trillion from Private Senior Living Costs?”
for McKnight’s Senior Living, August 9, 2021
“The
InLTCgentsia”
for Broker World’s August 2021 issue. (PDF
version.)
“Panel
Gives States Pass in Collecting Assets for Medicaid Long-Term Care,”
by Stephen A. Moses, Health Care News, July 2021
“Government
Violates the Long Term Care Social Contract to Your Detriment,
by Stephen A. Moses, Broker World, June 2021. (PDF
version.)
“President
Biden, tear down this wall,”
by Stephen A. Moses, McKnight’s LTC News, June 23, 2021
“Using
Medicaid to protect inheritances,”
by Steve Moses and Brian Blase, The Hill, June 10, 2021.
“LTC
financing: Be careful what you WISH for,”
by Stephen A. Moses, McKnight’s Senior Living, June 7, 2021.
“The
social contract for long-term care,”
by Stephen Moses for McKnight’s Long-Term Care News, May 17, 2021.
***
LTC
BULLET: LTC EPIPHANY
LTC
Comment: The following article will be published in Broker World
magazine’s June 2022 issue. We thank editor and publisher Stephen Howard
for permission to pre-publish the column here. We strongly recommend
Broker World
to anyone working in the financing or provider sides of the long-term care
profession. Subscribe
here;
only $6 for a year.
“LTC
Epiphany”
by
Stephen A. Moses
When
I first studied the long-term care issue in 1982, I sized it up quickly.
People were living longer and dying slower usually in welfare-financed
nursing homes. The reason was easy to discern. Well-intentioned
politicians made institutional long-term care available to anyone who
couldn’t afford it otherwise. They called the program Medicaid and over
time it caused virtually all of the problems long-term care faces today.
By
making nursing home care virtually free, Medicaid locked institutional
bias into the long-term care system, crowded out private home care
financing, and trapped the World War II generation in sterile,
under-funded nursing facilities.
By
reimbursing nursing homes less than the cost of providing the care,
Medicaid guaranteed that America’s long-term care service delivery system
would have a shortage of qualified caregivers and suffer from serious
access and quality problems.
By
providing care of dubious quality, Medicaid incentivized plaintiffs’
lawyers to launch giant tort liability lawsuits, extract massive financial
penalties, and further undercut providers’ ability to offer quality care.
By
compelling impoverished citizens to spend down what little income and
savings they possessed in order to qualify for long-term care benefits,
Medicaid discouraged accumulation and growth of savings among the poor,
reducing their incentives to improve their stations in life.
By
allowing affluent people to access subsidized long-term care benefits late
in life, Medicaid encouraged accumulation and growth of savings among the
rich who could pass their estates to their heirs whether they were
stricken by high long-term care expenditures or not.
Medicaid discriminated against the poor and favored the affluent by
allowing people and families with extra “key” money to buy their way into
the better nursing facilities, and by allowing planners to help affluent
clients avoid the program’s reputedly poor care.
By
making public financing of expensive long-term care available after the
insurable event occurred, Medicaid discouraged early and responsible
long-term care planning and crowded out the market for private long-term
care insurance.
All
these pieces in the long-term care puzzle were clear to me from the
beginning. A solution immediately revealed itself. We had to get people to
worry about and plan for long-term care earlier in life so they would not
end up decades later in need of catastrophically expensive care with
relying on Medicaid their path of least resistance.
One
way to do that was to force everyone to pay extra taxes to fund a new
program that would, somehow be better than Medicaid. But using government
compulsion repulsed me and besides the other programs of that kind we
already had, Social Security and Medicare, were slipping toward inevitable
insolvency.
So I
recommended a kind of long-term care social contract. We would continue
allowing people with substantial income and assets to qualify for Medicaid
long-term care benefits, but if they chose that route their largest
resource, their homes, would be liened and recovery of the cost of their
care mandatory from their estates.
We
got most of the LTC social contract into federal law with the Omnibus
Budget Reconciliation Act of 1993, but alas states didn’t implement it
fully, the federal government didn’t enforce it, and the media didn’t
publicize it. So the public remained blithely unaware and continued to
ignore long-term care until they needed it, relying on Medicaid by
default.
So
here I am in 2022, 40 years later, with a flash of insight, my LTC
Epiphany. To fix long-term care once and for all, we have to move its risk
and cost forward to a time in life when people are still young, healthy
and affluent enough to qualify and afford responsible long-term care
planning.
But
how can we get their attention to this critical issue when they have so
many other things pressing on their minds and their pocketbooks. Who
worries about long-term care when there are car, home and credit card
payments to make, plus retirement and college savings? Answer, almost no
one.
Recent research has helped in this regard, however, by showing that the
long-term care financing problem is not as big as we feared it was. For
example: “an American turning 65 today will incur $138,000 in future LTSS
costs, which could be financed by setting aside $70,000 today.” That does
not sound so daunting.
(Melissa Favreault and Judith Dey. 2016. “Long-Term
Services and Supports for Older Americans: Risks and Financing.”
ASPE Issue Brief. Revised February, p. 1).
If
we’re not going to use government to force people into another
one-size-fits-all government program like the WA Cares Fund or the WISH
Act, what can we do? We can learn from the critical mistake WA Cares made.
Instead of starting with a bad government program and allowing people to
opt out of it, begin with the opt out as the way to avoid government
compulsion.
Give
people options to show they have met their individual responsibility to
cover the LTC risk they bring into the risk pool. They can pony up $70,000
today earmarked for future LTC or show they have a plan in place to cover
$138,000 of LTC costs later. How? Count the ways.
Long-term care insurance could cover that risk. Earmarking a portion of
home equity for long-term care would also work. A new kind of individual
retirement account dedicated to LTC would be a third way. Or maybe a
“deferred reverse estate annuity mortgage,” that is, a legally binding and
officially recorded lien on one’s estate set aside for long-term care.
There are probably many other ways people could formally and legally prove
they have satisfied their individual share of long-term care risk and
cost. All that would be needed is a private company or agency to certify
that whatever the individual proposes actually does cover his or her share
of the liability.
Ah,
but what if someone says no, I won’t do my part? Then and only then the
government could step in by garnisheeing wages, reducing grants or
withholding tax refunds to create a dedicated LTC account on the
recalcitrant citizen’s behalf.
Covering each individual’s contribution to the LTC risk pool will not
fully offset the total LTC risk across society. Some people incur far more
than the average risk and cost. But by transferring so much of the LTC
risk to the private sector, the residual burden on public financing would
be vastly reduced and manageable.
With
most people already covered for their share of the LTC risk, very few will
remain dependent on public programs later on. So Medicaid, or whatever
replaces it, could be a high quality provider of LTC services across the
full spectrum of care paying private market rates thus raising the access
to and quality of long-term care for everyone.
Maybe long-term care is not the overwhelming challenge it has always been
considered to be. Maybe all we have to do is reconceptualize the issue,
remove the perverse incentives that discourage LTC planning, and enforce
long-term care responsibility on the front end instead of rewarding
irresponsibility on the back end as now.
#############################
Updated,
Monday, May 9, 2022, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #22-015 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 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:
-
Genworth Rethinks Long-Term Care Market Return
-
The Nation’s Fiscal Health: Federal Action Critical
to Pivot toward Fiscal Sustainability
-
Join Us for a Webinar by Ken Dychtwald, PhD, on the
Future of Medicine, Aging, and Longevity
-
Medicare Advantage Plans Hit Back at Report on
Coverage Denials
-
California task force ponders long-term care
insurance program
-
OIG: MA plans denying, delaying services to
beneficiaries
-
WA Cares Act Update: Federal Court Dismisses
Lawsuit, Holding Premiums Are State Taxes and Case Must Be Litigated in
State Court—Court Notes State Constitutional Challenge Likely
-
Ameriprise Celebrates Fed Interest Rate Increases
-
Older adults’ home equity exceeds record $10.6
trillion: report
-
Considering Hybrid Long-Term Care Insurance? Policy
Differences To Understand Before Buying
-
Campaign highlights benefits of senior living
versus home
#############################
"LTC E-Alerts" are
a
feature offered by the Center for Long-Term Care Reform, Inc. to members
at the $150 per year level or higher. We'll track and report to you news
and analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Friday, April 29, 2022, 10:40 AM (Pacific)
Seattle—
#############################
LTC
BULLET: THE MYTH OF UNAFFORDABILITY, REDUX
LTC Comment: Nothing is
affordable if you don’t think you need it. We revisit long-term care
insurance affordability after the ***news.***
*** LTC CLIPPINGS
are news items we send to Center Premium Members daily with news, data,
studies, and information they need to know to stay at the professional
forefront. Steve Moses scans the popular and scholarly media, condenses
vital information, and forwards to you a message with the title, author, a
link, a representative quote and his “LTC Comment” analyzing the
significance. To subscribe to LTC Clippings, contact Damon at
206-283-7036 or
damon@centerltc.com. Here are some examples of LTC clippings sent this
week:
4/26/2022, “WA
Cares Act Update: Federal Court Dismisses Lawsuit, Holding Premiums Are
State Taxes and Case Must Be Litigated in State Court—Court Notes State
Constitutional Challenge Likely,” by Davis Wright Tremaine,
Lexology
Quote: “On April 25, 2022, Judge Thomas Zilly of the U.S. District
Court for the Western District of Washington dismissed a class action
lawsuit that had been filed in federal court by DWT on behalf of employers
and employees challenging the Washington Cares Act (WA Cares) premium
assessed at the rate of .58 percent of wages. The lawsuit contended that
the Act violated ERISA and other federal laws. … Judge Zilly dismissed the
plaintiffs' federal case holding that the premium charged against an
employee's wages was a tax and not an insurance premium.”
LTC Comment: Voters twice rejected WA Cares at the ballot box. So
they sued, but now federal court has slapped them down too. When will the
powers-that-be take “no” for an answer? When the current batch is thrown
out of office. Is the cavalry coming?
4/27/2022, “Older
adults’ home equity exceeds record $10.6 trillion: report,” by
Kathleen Steele Galvin, McKnight’s Senior Living
Quote: “Homeowners aged 62 and older increased their home
equity by 3.98% in the fourth quarter of 2021 to a record $10.6 trillion
from the previous quarter, according to the National Reverse Mortgage
Lenders Association. That’s a difference of $405 billion. … Reverse
mortgages aren’t just for homeowners short on cash anymore, the New York
Times reported earlier
this month.”
LTC Comment: Home equity could pay for a lot of long-term care if
Medicaid didn’t exempt nearly all of it. How exactly does that policy help
the poor who have no home equity? ***
LTC BULLET:
THE MYTH OF UNAFFORDABILITY, REDUX
LTC
Comment: In 1999, when the Center for Long-Term Care Reform was only one
year old, we published a report titled
The Myth of Unaffordability.
Read it
here.
Even back then, in the good old days of long-term care insurance
marketability, the product was not an easy sell. People didn’t believe the
politicians who urged them to buy it (to relieve Medicaid), much less the
AMGs (altruistic, masochistic, geniuses) trying to make a living selling
it. Then, as now, the real problem with long-term care insurance sales was
not affordability, but the misperception of need.
Why don’t people
perceive the need for long-term care insurance? They’ve been regaled for
decades with the threat that if they don’t buy it, they could lose their
life’s savings to catastrophic long-term care costs. That seems like a
pretty powerful motivation. It would be, if it were true. But it wasn’t
true back then and it isn’t true now. Once you understand who pays for
expensive long-term care and why people don’t worry about that risk and
cost when they’re still young, healthy and affluent enough to plan for it,
it’s pretty easy to see what needs to be done to fix the problem.
Explaining that is what we did in
The Myth of Unaffordability.
In the meantime, much
has changed. Fruitless appeals are more common than ever for government to
take over long-term care financing with a new federal or state-based
compulsory payroll-funded program. Long-term care insurance is more
expensive than before and fewer companies sell it. But what is more
important for the LTCI market has not changed. Medicaid still pays for
most expensive long-term care after the care is needed. So people don’t
see the need in time to prepare for it. Instead of dealing with that
cause, however, most analysts focus on the symptom of “unaffordability,”
and write off private insurance because of it. Let’s reconsider.
Following
are excerpts from
The Myth of Unaffordability.
Many of the numbers would need to be updated, but the fundamental analysis
and recommendations remain sound. Take this walk down memory lane, but
keep your focus on applying its principles to the future.
Executive Summary
The
publisher of this report—the Center for Long-Term Care Financing [now
Reform] in Seattle, Washington—is
dedicated to ensuring high quality long-term care for all Americans.
The global aging crisis
is a demographic vise closing rapidly and inexorably on America and the
world.
In the United States,
challenges to our pension (Social Security) and health care (Medicare)
entitlement programs capture most of the public’s attention.
In the end, however, the
paramount problem of aging demographics is long-term care and how to pay
for it.
Unfortunately, long-term
care service delivery and financing in America are already fragmented and
dysfunctional. They continue to decline.
Medicaid and
Medicare—the principal public financing sources for long-term care—pay too
little for nursing home and home care to assure public access to quality
care.
Private financing,
including long-term care insurance, remains inadequate to support the home
and community-based services and assisted living that most seniors prefer.
Nevertheless, America’s
World-War-II generation is dying in nursing homes on public assistance
while their baby-boomer children blithely ignore the risks of long-term
care.
Why do most Americans
evade the risk of long-term care and fail to plan, save and insure before
the chronic illnesses of old age befall them?
The usual
answer—“They’re in denial”—begs the question “How can they ignore a nine
percent risk of spending five years or more in a nursing home after age 65
at $50,000 per year?”
The other commonplace
answer—“Most people cannot afford to buy private long-term care
insurance”—is demonstrably untrue as this report substantiates.
The real reason
Americans fail to prepare for the risk of long-term care is twofold:
First: since
1965, they have been able to ignore this risk, avoid the premiums for
private insurance, wait until they need long-term care, and get Medicaid
and Medicare to pay.
Second: the
insurance industry has tried to sell asset protection (which the
government is giving away) instead of emphasizing its unique
benefit—access to quality care at the optimal level.
The solution to the
long-term care financing problem is also twofold:
First: the
government should redesign Medicaid to be a loan instead of a grant (for
anyone with assets) and simultaneously educate the public about the real
risk of long-term care.
Second: the
long-term care insurance industry should market much more heavily the
crucial benefit of access to quality care at the appropriate level in the
private marketplace.
This report demonstrates
and documents the fact that most Americans should, could and would
purchase private long-term care insurance if the right public policy
incentives obtained.
When most Americans
do purchase long-term care insurance, the public financing programs
will be better able to provide for those who are unable to pay privately
for their care.
Once consumers recognize the real need for long-term care insurance,
i.e. not just asset protection, but access to quality care at the
appropriate level, they will have many strategies and techniques from
which to choose that can enhance their ability to afford the protection.
For example:
-
Buy young when premiums are lower.
The average policy referenced above costs $589 per year at age 40, but
$5,592, at age 79. The immediate benefit of buying young is
self-evident. What may be less obvious is that total premiums paid for a
long-term care policy purchased at age 55 and held to age 85 will be
less than one-third the total premiums paid for similar coverage
purchased at age 75 and held for only ten years.[1]
A good strategy is to buy what you can afford when you are young and
“stack” on additional coverage if you still qualify later as your
financial condition improves. “Learn about long-term care insurance in
your forties and own it by 50” is very sound advice.
-
Look to home equity for cash flow.
Approximately, 77 percent of seniors own their homes and 82 percent of
these own them free and clear.[2]
More than $1.5 trillion lies untapped in seniors’ home equity that could
be freed up by means of home equity conversion tools such as reverse
annuity mortgages[3]
to enhance the incomes of older people.[4]
This extra income would empower many more people to buy long-term care
insurance or to purchase home and community-based services. According to
one expert: “Estimates reveal that 57% of all homeowners could pay the
premium of the prototype LTC policy with their RM [reverse mortgage]
disbursement.”[5]
New, “premium-less” long-term care insurance policies could be developed
funded entirely by home equity.
-
Buy Chevrolet, not Cadillac coverage.
Consumers can decrease the cost of long-term care insurance drastically
by reducing the length, breadth, and depth of coverage. For example, why
would someone purchase a two-year, inflation-less, facility-only policy
with a 90-day elimination period? If that is all a 79-year-old can
afford, such a policy at least assures the policyholder highly
competitive access to a quality nursing home as a private payer and
improves the chances of remaining there should conversion to Medicaid
occur later. Instead of paying $5,592 per year for the “average” policy
cited above, a 79-year old purchasing this shorter-term, facility-only
plan (which includes assisted living coverage) could pay $1,704 per
year.[6]
-
Self-insure for some of the risk to reduce
premiums. Long-term care insurance need
not cover the entire cost of care. Over 90 percent of seniors receive
Social Security benefits; approximately one-third have pension income;
many receive interest or appreciation on their savings or investments.
When someone enters an assisted living facility or a nursing home, his
or her income, previously spent on food and lodging in the community,
becomes available to offset the cost of facility care. Home equity
conversion could also generate additional income to supplement the
long-term care insurance benefits whether or not a surviving spouse
remains in the home. Furthermore, many policies waive premium payments
at some point after benefits begin.
-
Invite heirs to contribute toward premiums.[7]
After all, who should insure the heirs’ potential inheritance against
the risk of depletion by long-term care expenses? Is it the
responsibility of the generation that struggled through the Depression,
fought World War II, and scrimped and saved to accumulate the estate? Or
should their baby-boomer heirs—who are about to inherit a $10.4 trillion
windfall from their parents and who are now in their peak earnings
years—pay the price to protect the estate and their parents’ access to
quality long-term care?[8]
This is more than common sense; it is common decency. Nevertheless, a
survey of “Who Buys Long-Term Care Insurance” found: “When asked if
children help to pay for long-term care insurance premiums, 98 percent
indicated that they paid for premiums without help from their children.”[9]
Worse yet, adult children are the driving force behind the artificial
impoverishment of the elderly by means of Medicaid estate planning.[10]
-
Reconfigure assets to find premium dollars.
Older people often have large sums of money tied up in low-yielding
financial instruments such as bank accounts and certificates of deposit.
Conversion of these assets into higher-yielding limited-risk instruments
such as annuities or bonds can help to bridge the gap between available
income and premium costs. Furthermore, by linking the income from a
fixed-income asset to payment of a long-term care insurance premium, the
policyholder reduces the risk of accidentally lapsing the policy for
failure to pay the premium on time.
-
Mine the Med-Sup Policy.
A fundamental principle of insurance is that one should insure against
catastrophic risk first. Nursing home costs account for over 80 percent
of seniors’ out-of-pocket expenditures that exceed $2,000 per year.[11]
Yet most of the elderly are unprotected against this risk while 70
percent or more have “Medi-Gap” policies that cover routine,
first-dollar acute care. Many seniors still pay $1,500 to $2,500
annually for Medicare Supplemental or Medi-Gap insurance policies. While
it could be unwise[12]
to drop this traditional coverage in favor of the low-cost or “free”
Medicare wraparound protection offered by many health maintenance
organizations, it may make sense to reduce Medi-Gap premiums
drastically. A true catastrophic-only Medi-Gap policy, available for
$600 or $700 per year, could often free up $1,000 or more annually to
apply toward long-term care insurance premiums.
-
Look to life insurance for help.
It is very important to match insurance coverage to your stage of life
and to your financial goals. Many older people have significant assets
frozen in whole life policies that could be freed up to finance
long-term care insurance. Middle-aged people may find that by age 55
they need long-term care insurance more than they need their old
term-life policy for which the premiums have increased over time to
equal what a long-term care policy would cost now.[13]
Single-premium and other equity-based life insurance policies that will
also pay for long-term care are a good option for people with sufficient
assets available to fund them. Finally, viatication, or sale of the
rights to the benefits of an insurance policy is a viable care financing
option for people with shortened life expectancies.
The truth is that if you recognize the need for long-term care insurance
and if you give this kind of coverage a high enough priority in your
financial plan, the probability is very high that you will find the
product affordable at one stage of life or another. If it is out of reach
when you are young, low paid and building a family, perhaps you will be
able to afford protection when you are older, even if the premiums are
higher, if you look creatively for optional financing sources such as
heirs, home equity, and efficient asset management.
[1]
Assume, for example, that someone purchases a four-year, zero-day
elimination, “pool of money” policy that pays up to $100 per day for
nursing home, assisted living, or home care. At age 55, one could pay
$860 per year for a policy with five percent simple benefit increase
protection that is actually offered by one of the 12 carriers who
represented 80 percent of all individual and group policies sold in
1996. Holding this policy for twenty years, one would pay $17,200 in
premiums, and its benefit value would increase to $200 per day (i.e.,
$100 plus five percent simple inflation for 20 years). Now, assume
that someone waited until age 75 to buy the same policy with a benefit
of $200 per day. The premiums at age 75 would be $8,400 per year or
$84,000 for the ten years from the 75th to the 85th
birthday. In the meantime, by age 85, the 55-year-old purchaser has
paid another ten years of premiums making a total of $25,800.
Therefore, the 55-year-old has paid less than one-third the total
premiums paid by the 75-year-old purchaser ($25,800 as compared to
$84,000) and has been protected by coverage for twenty years longer.
(Note that it is true that the 75-year-old purchaser will have more
coverage at age 85 than the 55-year-old purchaser [$300 per day
instead of $250 per day], because the simple five percent inflation
increase on $200 worth of coverage is greater than the increase on
$100 worth of coverage. To end up with $300 of coverage at age 85, the
55-year-old purchaser would have had to have purchased $120 worth of
coverage originally, instead of $100. This would have required $30,960
in premiums over 30 years, still only 37 percent of the total premiums
paid by the 75-year-old purchaser for twenty years less coverage.)
[2]
Of 20,438 occupied housing units with an elderly householder, 15,767
or 77.1 percent are owner-occupied. Of these, 12,873 or 81.6 percent
are owned free and clear. Bureau of the Census, American Housing
Survey for the United States in 1993, Current Housing Reports
#H150/93, issued February 1995, Table 7-13 (p. 340) and Table 7-15 (p.
348).
[3]
“Reverse annuity mortgages allow homeowners to use their housing
equity to secure a loan that is made available to the borrower either
as a line of credit or an annuity. The value of the house is the
lender’s guarantee against repayment of the accumulated debt, with
repayment due only after the residents die or sell the house. The
reverse mortgage is a non-recourse loan, so the lender may not attach
other assets even if the outstanding loan eventually exceeds the
dwelling’s value. The borrower has the right to reside in the house
until he or she decides to sell or until death.” Barbara A. Morgan,
Isaac F. Megbolugbe and David W. Rasmussen, “Reverse Mortgages and the
Economic Status of Elderly Women,” Gerontologist, Vol. 36, No.
3, 1996, p. 401.
“Government-backed ‘reverse’ mortgages are now available in 47 states,
and homeowners 62 and over can get more money from the equity in their
homes in more states due to lower interest rates and a growing federal
insurance program.... The loan is fully insured by the federal
government, and no repayment is required until she dies, sells her
home or permanently moves.…” National Center Home Equity Conversion
(Ken Scholen, Director, 612-953-4474) cited in Aging News Alert,
January 12, 1994.
[4]
“The homeownership rate steadily declined from almost 80 percent for
householders between ages 65 and 69 to 62 percent for those in their
nineties or older.... It was quite common for elderly owners to have
lived in their home for at least 30 years.... Just over one-half of
them had lived at their current residence for 3 decades or more; over
90 percent of these homes were single-family detached houses.... Just
because an elderly homeowner had a low income didn’t necessarily mean
that their home had a low value. To illustrate, there were more than
600,000 elderly home owners who had incomes of $20,000 or less but
owned a home free and clear that was valued at $100,000 or more. About
half of these owners were aged 75 or older. Reverse annuity mortgages
make their homes a potential source of income.” U.S. Bureau of the
Census, “Statistical Brief: Housing of the Elderly,” SB/94-33,
Washington, D.C., January 1995.
[5]
Aldo A. Benejam, “Home Equity Conversions as Alternatives to Health
Care Financing,” Medicine and Law, Vol. 6, No. 4, May 1987, p.
340.
Note also that public policy clearly expects home equity to be used to
finance long-term care: “The Congress intends that all assets,
including home equity, available to Medicaid nursing home residents be
used to help pay for their care.” General Accounting Office,
“Recoveries from Nursing Home Residents’ Estates Could Offset Program
Costs,” GAO/HRD-89-56, March 1989, p. 3. 3.
According to legislative history, the intent of Congress in the Tax
Equity and Fiscal Responsibility Act of 1982 was “to assure that all
of the resources available to an institutionalized individual,
including equity in a home, which are not needed for the support of a
spouse or dependent children will be used to defray the cost of
supporting the individual in the institution.” United States Code,
Congressional and Administrative News, 97th Congress—Second
Session—1982, Legislative History (Public Laws 97-146 to 97-248)
Volume 2, St. Paul, Minnesota, West Publishing Company, p. 814.
[6]
This premium is based on an actual long-term care insurance policy
offered by one of the 12 carriers who represent 80 percent of all
individual and group policies sold in 1996.
[7]
See “LTC Bullet #40: Money Magazine Recommends Boomers Protect
Parents” in the “Appendix” of this report.
[8]
“Boomers will inherit some $10.4 trillion from 1990 to 2040—for a mean
inheritance of some $90,000, according to Robert B. Avery and Michael
S. Rendall, professors of consumer economics and housing at Cornell
University.” Business Week, September 12, 1994, p. 64.
[9]
LifePlans, Inc., Who Buys Long-Term Care Insurance?: 1994-95
Profiles and Innovations in a Dynamic Market, Health Insurance
Association of America, 1995, p. 2.
[10]
“...[I]t seems fair to say that middle-aged children have much less
concern about propriety than their elderly parents. The funds are
there, at least for the moment, the planning is legal, and the stakes
are high...once people become frail and ‘old-old’ it is much easier to
do paperwork on their behalf and without their realizing the full
impact of being on Medicaid.” Joel C. Dobris, “Medicaid Asset Planning
by the Elderly: A Policy View of Expectations, Entitlement and
Inheritance,” Real Property, Probate and Trust Journal, Vol.
24, No. 1, Spring 1989, p. 22.
[11]
Thomas Rice and Jon Gabel, “Protecting the Elderly Against High Health
Care Costs,” Health Affairs, Vol. 5, No. 4, Winter 1986, p. 17.
[12]
Possibly unwise because seniors are rebelling against perceived access
and quality problems in such managed care programs.
[13]
“The State Farm Insurance company charges a nonsmoking male in good
health $350 a year for a $100,000 policy at age 50, $920 at age 60,
and $2,504 at age 70.... Mr. Feld [a CPA] maintains that people in
their 50’s who have not taken a second look at the cost and compared
it with their needs should do so. ‘You can usually eliminate term
insurance as soon as your kids are out of college,’ he said.” New
York Times, October 9, 1993.
#############################
Updated, Monday, April 25, 2022,
10:40 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #22-014 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 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:
-
More
than 400 nursing home closures projected for 2022: report
-
New
Long-Term Care Insurance Rate Pact May Speed Rate Hikes
-
Many
Americans Worry Inflation Will Derail Ability To Save Enough For
Retirement
-
Feds
might dictate minimums nursing homes must spend on direct care workers
-
Pacific
Life to Change Long-Term Care Product Strategy
-
PLANNING AHEAD: Consider state benefits for long-term care before moving
[Column]
-
MA plan
beneficiaries saving up to $2K annually
-
States’
nursing home staffing shortages ranked best to worst
-
Admissions discrimination ‘really, really widespread’ at nursing homes:
expert
-
FDA
authorizes first Covid-19 breath test
-
AARP
Livability Index a ‘powerful tool’ for senior living operators,
residents
-
Study
finds healthy lifestyle adds to longevity, but not for Alzheimer’s
patients
-
Washington state retools a first-in-nation payroll tax plan for
long-term care costs
############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Monday, April 18, 2022, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #22-013 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 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:
-
Longevity Without
Alzheimer's Tied to Lifestyle
-
What to Do if Your
Medicaid Application Is Denied
-
Is Long-Term Care
A Predictable Need, Or An Unexpected One?
-
Can Medicaid
Recover Benefits from an IRA After the Recipient Dies?
-
HHS extends public
health emergency, answering providers’ No. 1 priority
-
Who doesn't text
in 2022? Most state Medicaid programs
-
Inflation: A
Special Report
-
New Pilot Could
Mean Blue Skies for Staffing
-
COVID-19 lawsuits
growing ‘in spades’ against long-term care providers
-
2023 Social
Security COLA Estimate Rises to 8.9% as Inflation Climbs
-
NYers buy Medicaid
for illegal migrants in Gov. Hochul, Dems’ $220B budget
-
All-Cause U.S.
Mortality Was Up 29% in Early 2022
-
CMS Proposes $320M
Decrease in Medicare Funding for Nursing Homes
-
Having a sense of
purpose in life can slash risk of developing dementia, study suggests
-
Seniors Are Not
Aware Of The No-Cost Long-Term Care Insurance Planning Technique
############################
"LTC E-Alerts" are
a
feature offered by the Center for Long-Term Care Reform, Inc. to members
at the $150 per year level or higher. We'll track and report to you news
and analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Friday, April 15, 2022,
10:40 AM (Pacific)
Seattle—
#############################
LTC BULLET:
LTC CHOICE, STILL THE BEST SOLUTION
LTC Comment: In
long-term care, as in life,
the fundamental things apply as time goes by. We discuss some
long-term care fundamentals after the ***news.***
*** LTC CLIPPINGS
are news items we send to Center Premium Members daily with news, data,
studies, and information they need to know to stay at the professional
forefront. Steve Moses scans the popular and scholarly media, condenses
vital information, and forwards to you a message with the title, author, a
link, a representative quote and his “LTC Comment” analyzing the
significance. To subscribe to LTC Clippings, contact Damon at
206-283-7036 or
damon@centerltc.com. Here are some examples of LTC clippings sent this
week:
4/13/2022, “Inflation:
A Special Report,” by Terry Savage, TerrySavage.com
Quote: “It’s the most important financial headline of this century:
Inflation! A new generation of Americans is about to face the impact of
inflation – on their daily lives, their financial decisions, their
investment choices, and their retirement lifestyle. While many pundits
proclaim that this period of inflation will come to a quick end, history
shows that inflation has always ended not with a whimper, but with a bang.
Once started, the fires of inflation are not easily tamped down. Whether
in Germany in the 1930s or in Zimbabwe a decade ago (their trillion-dollar
note became worthless!) or in the United States in the late 1970s, it has
taken a ruthless hand to stamp out the persistent belief that prices would
go higher. It’s important to understand what inflation is—and isn’t, what
causes it, what “cures” it –- and the potential impact on your life.”
LTC Comment: Terry Savage is my favorite source for financial
advice. As a bonus, she’s always been an advocate for private long-term
care insurance. Today, she sends this wake-up call about the importance of
inflation and what to do to prepare for it. Don’t miss this chance to
learn the “Savage Truth.”
4/12/2022, “2023
Social Security COLA Estimate Rises to 8.9% as Inflation Climbs,” by
Ginger Szala, ThinkAdvisor
Quote: “Overall, prices rose 8.5% in March from a year earlier,
according to CPI data released Tuesday. Annual COLAs are based on
inflation in the third quarter; Social Security recipients got a 5.9%
raise for 2022. The average Social Security recipient has lost $162.60 in
purchasing power so far in 2023, according to Mary Johnson of The Senior
Citizens League.”
LTC Comment: You’re at a nice restaurant with a big group of
people. A few diners order the most expensive things on the menu, and add
more drinks and appetizers. Then when the check comes and gets divvied up,
some poor sap is stuck covering the shortfall. That’s how politics works.
Politicians buy your votes with lots of “free” benefits, including big
cash checks recently. Later the bill arrives and they’re nowhere to be
found. You get to pay for their “generosity.” That’s inflation. Oh, and if
you think 8.9% will cover 2023 inflation, you’re going to have another
think, and a big bill, coming.
4/10/2022, “Having
a sense of purpose in life can slash risk of developing dementia, study
suggests,” by Xantha Leatham, Daily Mail
Quote: “Feeling a sense of purpose or meaning in life can lower the
risk of developing dementia,
a study shows. Researchers reviewed evidence from eight previously
published papers which included data from 62,250 older adults across three
continents. They found higher purpose or meaning in life was
‘significantly associated’ with a reduced risk of dementia and cognitive
impairment. Notably, having a sense of purpose was linked with a 19 per
cent reduced rate of clinically significant cognitive impairment.”
LTC Comment: This is great news for LTC insurance producers. I’ve
never met more purposeful people. Most are driven by a passionate desire
to confront LTC risk and cost by helping people prepare. Their passion is
nearly always deeply rooted in a personal experience with a loved one.
Selling LTCI may have a steep learning curve and demand permanent
commitment and perseverance, but now we know at least it comes with a
lower personal risk of dementia. ***
*** RECENTLY PUBLISHED
ARTICLES by Steve Moses. We hope you’ll read these articles,
join the Center for Long-Term Care Reform, and help us solve the
long-term care financing problem. The Center’s “Membership Levels and
Benefits” schedule is
here. Join individually or urge your company or association to join as
a corporate member so you can receive all the benefits of membership at no
cost to you. Universal access to top quality care for all Americans (the
Center’s mission) is achievable. Join us and make it happen!
“Trappings
of LTC system leave operators trapped,” by Stephen A. Moses,
McKnight’s Long-Term Care News, February 23, 2022. (Originally titled
more simply “Trapped.”)
“The
Great Long-Term Care Compromise,” by Stephen A. Moses, Broker World,
January 1, 2022
“The
irony of long-term care advocacy,” by Stephen A. Moses, McKnight’s
Long-Term Care News, December 17, 2021
“Long
Term Care Irony,” by Stephen A. Moses, Broker World, December
1, 2021 (PDF
version.)
“What
works for long-term care and what doesn’t,” by Stephen A. Moses, McKnight’s
LTC News, November 17, 2021.
“What’s
better for senior living and care — the market or government?,” by
Stephen A. Moses, McKnight’s Senior Living, October 25, 2021.
“Long-Term
Care’s Problems Are Bad, Getting Worse, but Fixable,” by Stephen A.
Moses, McKnight’s LTC News, October 1, 2021.
“Should
Medicaid Protect $8 Trillion from Private Senior Living Costs?” for
McKnight’s Senior Living, August 9, 2021
“The
InLTCgentsia” for Broker World’s August 2021 issue. (PDF
version.)
“Panel
Gives States Pass in Collecting Assets for Medicaid Long-Term Care,”
by Stephen A. Moses, Health Care News, July 2021
“Government
Violates the Long Term Care Social Contract to Your Detriment, by
Stephen A. Moses, Broker World, June 2021. (PDF
version.)
“President
Biden, tear down this wall,” by Stephen A. Moses, McKnight’s LTC
News, June 23, 2021
“Using
Medicaid to protect inheritances,” by Steve Moses and Brian Blase, The
Hill, June 10, 2021.
“LTC
financing: Be careful what you WISH for,” by Stephen A. Moses, McKnight’s
Senior Living, June 7, 2021.
“The
social contract for long-term care,” by Stephen Moses for McKnight’s
Long-Term Care News, May 17, 2021. ***
LTC BULLET: LTC CHOICE,
STILL THE BEST SOLUTION
LTC Comment: The
Center for Long-Term Care Reform celebrated our 24th
anniversary in business on April 1, 2022. Since the beginning, we’ve
published 1,332
LTC Bullets and scores of
articles, speeches, and reports. It’s to the first of those reports
I’d like to direct your attention today. Read it and I think you’ll agree
it conveys some fundamental things about long-term care that still apply.
LTC Choice: A Simple, Cost-Free Solution to the Long-Term Care
Financing Puzzle opened with this …
Executive Summary
How can America solve the long-term care
financing problem?
-
The publisher of this study, the Center for
Long-Term Care Financing, is dedicated to ensuring high quality
long-term care for all Americans.
-
The problem of how to finance long-term
care for the baby boom generation rivals Medicare and Social Security as
the most serious social policy challenge facing the United States.
-
Today, America’s long-term care service
delivery and financing system is fragmented, dysfunctional, and plagued
by problems of access, quality, reimbursement, discrimination and
institutional bias.
-
Nevertheless, we know exactly what we would
like our country’s long-term care system to provide: universal access to
top-quality care for rich and poor alike in the least institutional
settings possible.
-
Pundits, politicians and policy-makers
recognize the problem; they know what the solution should look like; why
can’t they get the job done? That is the long-term care financing
puzzle.
-
In this report, we explain how America’s
long-term care system came to its current sorry state by tracing the
history of long-term care financing since the establishment of Medicaid
and Medicare.
-
We disprove and discard the conventional
wisdom that catastrophic long-term care spend-down is widespread and
therefore requires expanded public financing.
-
We prove and adopt the position that
virtually everyone can obtain public financing of long-term care through
Medicaid or Medicare after being stricken by chronic illness. This fact
explains why so few people plan ahead for the risk of long-term care.
-
We demonstrate that the solution to the
long-term care financing puzzle is to persuade people to consider and to
confront the risk of long-term care while they are still young, healthy,
and affluent enough to save or insure privately.
-
We offer a simple, cost-free solution
called LTC Choice.
-
LTC Choice requires the
United States Government to provide information about long-term care
risk and financing options to all citizens as soon as possible, but no
later than their 65th birthdays.
-
Under LTC Choice, every
individual may choose to show proof of private insurance or adequate
financial reserves to pay for long-term care and thus abstain from
public financing entirely and avoid all other reporting requirements.
-
Alternatively, anyone who is unable or
chooses not to show proof of private long-term care financial protection
would have to acknowledge formally in writing that any future
eligibility for publicly financed long-term care is contingent upon
spending down nearly all his or her income and assets for care expenses
first.
-
Requiring all citizens to confront the
LTC Choice long before the insurable event occurs will
radically increase the proportion of Americans who plan responsibly for
long-term care and drastically reduce the incidence of artificial
impoverishment to qualify for Medicaid.
-
With over $10 trillion about to pass by
inheritance to the baby boomers from the WWII generation, Americans have
no shortage of private money to save or insure for long-term care.
-
All we need to do is eliminate the perverse
incentives in the current system that enable denial of longterm care
risk and discourage responsible, early planning.
LTC Comment: That was then. This is
now. Little has changed except it’s the baby boom generation that is about
to pass
$68 trillion to their Millennial heirs by inheritance. People over age
62 now hold
$10.1 trillion in home equity alone. In other words, money is not the
problem. It never was. The problem is that government pays for most
catastrophic long-term care expenses long after it’s too late for people
to plan responsibly for that risk and cost. The solution remains to get
people’s attention to long-term care risk and cost while there is still
time for them to plan, save, invest or insure so they’re able to pay their
own way when the time comes and avoid public dependency.
How then can we get people to confront the
LTC Choice earlier, say by age 50. That’s when they really start
getting serious about estate planning. Merely threatening them as in the
past doesn’t work: “Mr. Jones, if you don’t buy long-term care insurance
now, you will lose your life’s savings if you every need expensive,
extended care.” We tried that for decades and it failed miserably, because
it was not true. You could always ignore the risk, avoid the premiums for
private insurance, wait to see if you ever need catastrophic long-term
care, and easily switch the liability to Medicaid and the taxpayers if
necessary. Measures taken to prevent that option, such as ostensibly
draconian financial eligibility rules, liens and estate recoveries, failed
because states didn’t implement them, the federal government didn’t
enforce them and the media didn’t publicize them. So the public continued
to ignore long-term care until they need it and then to rely on the
government to provide.
We need something new, different, and far
more persuasive to get people to deal with long-term care long before they
need it. Putting that $10.1 trillion of home equity at risk would go a
long way toward waking the public up. Just eliminate or radically reduce
Medicaid’s huge home equity exemption. That would compel people who didn’t
plan ahead by saving or insuring, to use their home equity to pay for
their long-term care. Reverse mortgages would enable them to continue
living at home while they receive the care they need. Most older people
own homes and most of them own their homes free and clear. Voila. Problem
solved for most homeowners.
But what about the rest of the population who
may not own homes or who have no home equity? We should have special
individual retirement accounts earmarked for long-term care that everyone
contributes to by the age of 50. Such accounts should be voluntary, not
compulsory like traditional social insurance programs, i.e., Medicare and
Social Security. Compulsion is anathema to America’s culture and economy
of freedom. But, while voluntary, the accounts should be “opt-out,” that
is, automatically enrolled upon employment and only avoidable by
consciously choosing not to participate.
Home equity and LTC-IRAs will cover most
people, but what about the less responsible or less able? Will they fall
through the cracks? No. We should lengthen, strengthen, publicize and
enforce rules to ensure that no one with significant income or assets
relies on public welfare to fund long-term care. That means eliminating
the many “loopholes” in Medicaid financial eligibility policy that now,
and always before, enabled the public’s denial about long-term care risk
and cost. Once people really do have to become impoverished to get public
assistance, very few will end up in that condition. Those that do will
join a much smaller Medicaid long-term care program that can afford to
provide better care in the most preferred settings than has been the case
heretofore.
Solving long-term care is not as complicated
as the analysts, policy makers, and politicians make it out to be. Just
stop rewarding people with free long-term care later and they’ll take
personal responsibility sooner.
#############################
Updated,
Monday, April 11, 2022, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #22-012 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,
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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:
-
COVID Stimulus Checks Worsened Inflation
-
Long-term care operators devise creative solutions
to staffing shortages: NIC
-
Investment Strategist Challenges Genworth Board
-
Call for holistic nursing home reform a ‘wake-up’
for lawmakers, stakeholders
-
Insurance Administrator Acquires Key Long-Term Care
Program Manager
-
Medicare Advantage Plans Get A Big Pay Hike, Offer
More Services And Supports For Older Adults
-
Early Death Cuts Smokers' Lifetime Medicare Claims:
Researchers
-
BREAKING: U.S. nursing home system ‘ineffective,’
‘unsustainable,’ National Academies report says
-
'Industry Experts' suggest Long Term Care Insurance
is unworkable
-
AALTCI Finds Out What Life-LTC Hybrid Coverage
Really Costs
-
9 U.S. Health Spending Projections We All Should
Know
-
Dementia soars among U.S. adults at end of life,
study finds
############################
"LTC E-Alerts" are
a
feature offered by the Center for Long-Term Care Reform, Inc. to members
at the $150 per year level or higher. We'll track and report to you news
and analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Monday, April 4, 2022, 10:40
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #22-011 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 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:
-
Covid's Effect On Long-Term-Care Insurance
-
Medicaid: CMS Should Assess Effect of Increased
Telehealth Use on Beneficiaries' Quality of Care
-
Are You Receiving, Providing or Paying for
Long-Term Care?
-
Risk of Alzheimer's linked to cholesterol, blood
sugar levels at age 35
-
Parkinson offers ‘obvious solution’ to staffing
problems, occupancy outlook and financing answers
-
Can a Reverse Mortgage Pay for Long-Term Care?
-
National Health Expenditure Projections, 2021–30:
Growth To Moderate As COVID-19 Impacts Wane
-
Biden Adds New Tax on Wealthy to $5.8T Budget
-
Beware the growth of Medicare Advantage, Harvard
professor says
-
We can turn the caregiver crisis around, but fast
action is needed
############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Friday, April 1, 2022, 10:40 AM (Pacific)
Seattle—
#############################
LTC
BULLET: GO FUND WHAT?
LTC
Comment: Would you contribute to a GoFundMe account intended to buy
someone better long-term care than what is readily available from
Medicaid? Asked and answered after the ***news.***
***
THE BIDEN ADMINISTRATION, in a surprise announcement, today abandoned its
no tax under $400,000 income pledge. Talking off script, the President
said “We have no choice but to charge everyone, regardless of income
level, this new 8% and rising tax (aka inflation) to pay for recent
extremely generous federal benefits and subsidies.” (See details below.)
***
***
CENTER’S 24TH ANNIVERSARY. Stephen Moses and David Rosenfeld
co-founded the
Center for Long-Term Care Reform
(formerly Financing) on April 1, 1998. Happy birthday, Center. You might
ask “what have you done for us lately?” Check out “LTC Bullet:
LTC Center Standing Guard”
for the history of our efforts to fight for better LTC financing policy
and against bad reform proposals. Read 1,330 LTC Bullets
here.
Join the Center team with an individual or corporate membership
here.
Check out all the membership options
here.
Contact Damon at 206-283-7036 or
damon@centerltc.com
for details. ***
***
FEDPOINT
(formerly LTC Partners) is celebrating its 20th anniversary.
The company’s
Federal Long-Term Care Insurance Program
has over 260,000 enrollees and has paid more than $2 billion in LTCI
claims to date. FedPoint has grown, become more sophisticated, and has
diversified its business portfolio by taking a significant role in the
electronic enrollment and premium administration business for the federal
government. Congratulations to CEO
Paul
Forte
and the whole, amazing FedPoint team! ***
***
APRIL FOOLS re the Biden announcement above: ***
LTC
BULLET: GO FUND WHAT?
LTC
Comment: We’re indebted to syndicated financial columnist
Terry Savage
for tipping us to this story. She wrote: “Steve — read ALL the answers to
the item about using a GoFundMe to finance nursing home care. You will see
the reality of what you have been saying all along — no incentive for
insurance!” Boy, was she right! Read on to see what we mean.
Q:
Has anyone used GoFundMe to help pay assisted living costs?
Click that link and you’ll find this question followed by 39 replies:
“I am trying to find additional money to help pay for my brother's
assisted living bills. He has vascular dementia and Alzheimer's Disease.
He also has Major Depressive Disorder. He is medically eligible for
Medicaid, but I would have to move him to the skilled nursing portion of
his care facility to apply for Medicaid. He would have to move out of his
comfortable room into the hospital ward-like beds of skilled care. His
clinical depression is eased somewhat by the pleasant surroundings of his
assisted living room. If he moves to the clinic-like skilled nursing
section, I'm concerned that his depression would increase and his decline
from his dementia would only get worse. I am his financial POA, and I need
an additional $1,600 a month added to his social security and pension to
keep him in his assisted living room. I have been dipping into his savings
to pay the current bills, but his money will soon run out. I am 70 years
old and retired with health problems of my own and have no assets I can
use to pay my brother's bills. I am considering using GoFundMe to do
fundraising for my brother. Has anyone gone this route? Any suggestions or
opinions? Thanks very much.”
LTC
Comment:
I’ve culled some telling excerpts from the replies, organized them by
topic, and offered a little LTC commentary.
Medicaid and Quality
“If
he's eligible for Medicaid and you are his POA [Power of Attorney], start
looking at different care facilities for him so he won't have to go to the
‘nursing home’ part of the facility he's in now. If he has Alzheimer's and
vascular dementia he should be in a memory care facility. Most of them
accept Medicaid.”
LTC
Comment:
Most memory care facilities accept Medicaid? Hardly. Compare these
answers.
“I
thought memory care is considered assisted living and not covered by
Medicaid? Is your [brother] getting memory care within a skilled nursing
facility?”
“I
am wondering if you have contacted your county dept. on aging. In many
states, there are some memory care facilities that accept Medicaid.
However, there aren’t many.”
“You
mean the plight of many families that are forced to care for an elderly
position? The story is not unique or compelling, and funding options exist
it is called Medicaid. They are essentially saying their [loved one] is
too good for Medicaid and is entitled to ‘better’ quality facility.”
“As
a number of people have suggested, your best alternative, unfortunately,
is to enroll him in Medicaid for long term nursing care. Keep in mind,
when you do, Medicaid only pays for multiple bed rooms. If the facility is
older and has an exemption, that usually means 3 beds to a room. A newer
facility has to meet a higher standard of 100 square feet per person plus
6sf for storage. … There are assisted living places that do accept
Medicaid, but they are far and few between. Also, I doubt you could get
people to contribute on an on-going basis even if it were legal. Medicaid
pays about $200/day so you'll find the level of service very inadequate.
Be prepared to fight every day to have his needs taken care of. I know -
I've been an advocate for my brother in a nursing home paid by Medicaid in
California for over 3 years. It's brutal. There are no good alternatives.
Good luck.”
“Look into care homes, they will sometimes be covered by Medicaid.”
LTC
Comment:
This is Medicaid truth right from the mouths of consumers actually
experiencing it. Forget about obtaining quality in special memory care
units. Plan on getting whatever Medicaid pays for at rates literally less
than the cost of providing the care. Can’t find an assisted living
facility that will accept Medicaid or a decent skilled nursing facility,
then look for a “board and care home.” That is a house with a few beds
presided over by a caregiver getting a pittance from public welfare to
help some nearly helpless, often bedbound patients. You get what Medicaid
pays for and don’t expect much.
Medicaid and Income Eligibility
“Just FYI, you cannot do both, GoFundMe and Medicaid. I think you may know
that.”
“Once he's on Medicaid, he could not receive any money from a go fund me
source if it went toward his housing, food, or medical expenses; this is
illegal. People can only pay expenses that are not in these categories.”
“The
GoFundMe donations would eliminate your brother to be eligible for
Medicaid. Those donations are considered income by Medicaid eligibility.
In other words you cannot use GoFundMe and Medicaid together. Medicaid
does limit the choices for your brother, but as long as he is well cared
for, you have to accept the skilled nursing facility.”
“The
money for the GoFundMe will be designated (by your own words when you post
it) for your brother's care --- this would be income for your brother. It
could raise issues for Medicaid (maybe, maybe not) and a question to ask
an attorney before you step into that mess.”
LTC
Comment:
Think you can improve what Medicaid provides by paying extra? Forget about
it. “Family supplementation” is not allowed because it would let the rich
buy better care than the poor receive. That’s equity by the lowest common
denominator, a characteristic of socialism.
Selfishness
“If
he’s eligible for Medicaid WHY would you do a go fund me? Don’t you think
it’s insulting to expect others to pay for his care so he can be more
‘comfortable’? Really??? His care will be paid for by Medicaid. I just
don’t get it. There are people with NO help out there. Sounds selfish but
just my opinion.”
“If
he's on Medicaid which is publicly funded by taxes, why give to a Go Fund
Me so he can have a nicer room? Seems selfish to me too.”
“In
this day and age when times are quite tight for most individuals, it seems
inconsiderate at best to ask strangers to pay for your brother's health
care needs since you've already stated that Medicaid is a viable option.”
“A
nice try, but why would you expect other people to pay for your brother's
care when other people need their money for their own and their own
family's care?”
“Unfortunately, not using Medicaid because you don't want to move your
brother to skilled nursing isn't going to fly. Taxpayers will already pay
for his care with Medicaid, yet you're asking for even more. It won't
work.”
Medicaid Planning
“I
have been paying for my mom’s incidentals for the last ten years. Toilet
paper, shampoo, soap, socks, underwear, haircuts, etc... I did that hoping
to preserve mom's savings for as long as possible so that she could afford
the AL [assisted living]. She will run out of savings later this year. We
will need to apply for Medicaid and create a Millers trust with an elder
lawyer. She will need to move to a facility that accepts Medicaid. The
Millers trust is a way to funnel the money mom does have coming in to the
nursing home [so] Medicaid will hopefully pay the difference. I don't want
to move mom from the private pay memory care, but we do not have a choice.
I also dread managing the trust and the flaming hoops that I am sure
Medicaid will make us jump through.”
LTC
Comment:
The Miller income diversion trust is a legal device to shelter income
above Medicaid’s allegedly “low” income threshold so that people with
substantially higher incomes can qualify for LTC benefits. Miller trusts
are used in “income cap” states to achieve the same purpose of allowing
higher income people to qualify as in “medically needy” states. Medically
needy states simply deduct all private health and LTC expenses from income
before assessing eligibility. The rule of thumb in all states is that
anyone with income below the cost of a nursing home is eligible. Hardly
low income.
“Any
chance your brother was a veteran during a war?? If so, look into Aid and
Attendance thru the VA. It would provide enough funds to keep him at his
current facility.”
LTC
Comment:
If one welfare program won’t pay, try another. VA benefits now have an
asset transfer penalty similar to Medicaid’s.
“My
brother just passed in a skilled nursing center. He was covered by
Medicaid which left a small allowance $30, from his social security check
that went to [the] facility. With multiple childhood disabilities, polio,
etc., it took months to be approved after I cashed his life policy,
prepaid his funeral, and spent down the funds in bank. If your brother has
more than $2,000 total in assets, bank, real estate, whole life insurance,
etc., he will not qualify for Medicaid. They can look at records years
back. From what you describe, he will not be going home. With Alzheimer’s,
depression and dementia, its questionable he can appreciate (or cares
about) the difference in surroundings. His assets should be liquidated and
utilized for the level of care you think he should have. Then apply for
Medicaid when his asset level meets the requirement. My brother had no
mental impairment, and I did the best I could with what we had to make him
as comfortable as possible, as his multi conditions made bringing him home
impossible. My other siblings did not offer assistance. Starting a ‘Go
Fund me’ for someone with available fund sources, is improper.”
LTC
Comment:
This is the “Medicaid trap” people get caught in who have low income and
resources and lack the advice of a financial planner or lawyer. Middle
class and affluent people routinely avoid the inconvenience of “spending
down” to qualify for Medicaid LTC benefits.
“If
he qualifies for Medicaid you need to move him into a nursing home. My
elder attorney advised me to be sure I can self-pay several months at a
nursing home. That way you can choose the NH. Otherwise if he has no money
left but his Social Security ... good luck in even getting him into one. I
took his advice and when my mom only had about $27,000 I placed her in a
NH I was referred to by her Hospice nurse. That paid for 3 months. She
then was able to stay there while she was Medicaid pending. I applied for
Medicaid when she only had $5,000 left. It took Medicaid 5.5 months to
approve. She was just approved this past week. They will go back to
11/11/21 and back pay the facility. I know this isn't the ideal decision
for you. But sometimes you just have to do what is financially in yours
and his best interest.”
“If
he is running out of money your only choice is placing him in LTC. If he
has enough for one or months in a nice LTC, get him placed. Then apply for
Medicaid. If the facility helps you with the process, keep on top of it.
In my State you only have 90 days to spend down and get info needed to the
caseworker. With my Mom I started the application process in April. She
paid 2 months privately for May and June. I confirmed in June with the
caseworker, that Mom was spent down and he had all info needed. Medicaid
started July 1st.”
“Contact a care placement specialist. They can get you on the right track.
Personally, if he has dementia, he needs to be in memory care. My mom is
in memory care, She has her own private room and Medicaid covers it 100% …
Find a memory care facility first so Medicaid doesn't try placing him
first. You've got a better chance of getting what you want.
“It
is best to move him in the SNF while he still has funds. If a Medicaid bed
is not available when he needs it at the last minute, there is a
possibility that he will have to move to another facility not of your
choice.”
“I
would consult with a Medicaid Planner for his state. FYI in addition to
having to financially qualify he also has to medically qualify for LTC,
and in my experience ‘just’ having dementia doesn't require LTC but rather
MC [managed care?]. You don't get to make that LTC decision unless the
facility is willing to give that assessment just to keep him there. Every
state has different rules about Medicaid and that's why you need to talk
to a professional who knows your state's rules inside and out. Then
depending on what you find out, it may be helpful to consult an elder law
attorney.”
LTC
Comment:
What these commenters are saying is what Medicaid planners call “key
money.” Save out some hard cash so clients can pay privately for a few
months. That will get them into the very best facilities which cannot
expel them just because their payment source changes from private pay to
Medicaid at a fraction of the private rate. This is how middle class and
affluent people co-opt Medicaid for their own benefit at the expense of
the poor people Medicaid was intended to serve.
Medicaid as Last Resort
“Sorry it has come to this, but I think applying for Medicaid will keep
him with a roof over his head.”
“If
you do decide to use GoFundMe to find money for your brother, let us know
how it goes. Where I live, there are a lot of panhandlers standing at the
center dividers where people wait to make a left turn. If they get one
person to give them $1 every traffic light cycle, they probably get
$20/hr. So, potentially they can make $100 or more per day, or
$3000/month. No wonder they don't want to work. I also have seen a few
women pushing their little kids in strollers, walking up to people in
parking lots and asking for money. And there are a few normal/not homeless
people carrying big poster boards with pictures of a sick child and a
message saying the kid has cancer and they need money, etc. These people
will walk right into the street where cars are waiting at red lights and
shove their signs in front of the drivers to ask for money. Whether they
actually have a sick kid with cancer, who knows. But these people get a
lot of money, $5 or $10 from each donor vs $1 that panhandlers get. At 70
[years old], … I don't recommend you try any of the above.”
LTC
Comment:
For too many, Medicaid has become just another form of mendicancy. Its
easy availability after care is needed and long after it could have been
planned, saved or insured for, makes it a trap too many people fall into.
Do you still wonder why so many people fail to save, invest or insure with
long-term care risk and cost in mind?
#############################
Updated, Monday, March 28, 2022,
10:40 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #22-010 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 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:
-
Kennedy, Inhofe introduce bill to protect
Medicaid recipients
-
Don’t Look Up? Medicare Advantage’s
Trajectory And The Future Of Medicare
-
Cognitive decline rates more than double
over 10 years: study
-
Where Long-Term Care Insurance Is Heading
-
Opinion: The imperative of equality in
long-term care
-
Time Is on Group Long-Term Care Insurance
Sellers' Side
-
COVID-19 and Long-Term Care Insurance
Operations
-
How to Grease the Long-Term Care Planning
Gears
-
6 New Long-Term Care Insurance Bills in
Play Now
-
To Families’ Dismay, Biden Nursing Home
Reform Doesn’t View Them as Essential Caregivers
-
Bill would reform tax code to make
long-term care insurance more affordable, accessible
-
Long-Term Care Players Gather — in Person
-
California to eliminate Medicaid waitlists
through assisted living waiver
-
Parkinson calls on providers to fight
Biden’s ‘offensive’ reform plans
############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Monday, March 21, 2022, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #22-009 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 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:
-
Ukrainian refugees could find support,
employment at U.S. long-term care facilities
-
New Program Can Cover Up to 50 Weeks of
Home Care
-
Medicare Advantage plans ‘robust’ at the
expense of traditional Medicare plans: report
-
MedPAC’s call for 5% SNF pay cut
‘outdated and obsolete’
-
Dementia to cost nation $321 billion
this year, Alzheimer’s Association says
-
Lincoln Financial Group Enhances
Long-term Care Benefits Experience Through Partnership with LTCG
-
Congress passes bill targeting financial
exploitation of older adults
-
Former CMS leader rips Biden’s nursing
home reform plans
-
S&P Global Upgrades Genworth
-
Despite Seniors’ Strong Desire to Age in
Place, the Village Model Remains a Boutique Option
-
America's Seniors Eating Junkier Diets
-
Walmart partnership provides lifeline to
family caregivers
#############################
"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 18, 2022, 10:40 AM (Pacific)
Seattle—
#############################
LTC Comment: A few things are going right for the
long-term care insurance business lately. We’ll cover one of them after
the ***news.***
*** ILTCI CONFERENCE NEWS: The
Intercompany Long Term Care Insurance Conference at the Raleigh, North
Carolina Convention Center, March 20-23, 2022 is only days away.
Organizers say: “Join us and reconnect with over 700 of your colleagues
from across the industry whom you haven’t seen since 2019! Choose from 49
educational break-out sessions across seven
tracks. Look into the crystal ball with our
Keynote Speaker, futurist Anders
Sorman-Nilsson. Our closing session with
Plug and Play Tech Center will host the first ever “LTC Innovators
Invitational Challenge,” featuring nine aging-in-place innovators! The
full schedule of the conference, including the
breakout sessions is now available. Please visit
ILTCI Conference Schedule to view our exciting program.” To all those
able to attend, we at the Center for Long-Term Care Reform say “have a
great conference!” ***
*** JOIN US. Since
1998, the Center for Long-Term Care Reform has conducted
and published dozens of national and state-level studies and published
1330 LTC Bullets. We’ve helped to win crucial federal Medicaid
statutory changes in 1993 (mandatory estate recovery) and 2005 (capping
the home equity exemption). We’ve analyzed
and refuted virtually every study and article advocating a government
takeover of long-term care. Now we’re proposing a
simple, cost-saving solution to the long-term care mess government
created. Won’t you join us and support these achievements, goals, and
future potential? Become a regular or premium member. Or ask your company
or organization to become a corporate member, with benefits accruing to
you at no extra expense. Contact Damon at 206-283-7036 or damon@centerltc.com for
details. Review our Membership Levels and Benefits schedule here.
Let’s get this done! Thanks for your consideration and support. ***
*** RECENTLY PUBLISHED ARTICLES by Steve Moses. We
hope you’ll read these articles,
join the Center for Long-Term Care Reform, and help us solve the
long-term care financing problem. The Center’s “Membership Levels and
Benefits” schedule is
here. Join individually or urge your company or association to join as
a corporate member so you can receive all the benefits of membership at no
cost to you. Universal access to top quality care for all Americans (the
Center’s mission) is achievable. Join us and make it happen! ***
“Trappings
of LTC system leave operators trapped,” by Stephen A. Moses,
McKnight’s Long-Term Care News, February 23, 2022.
“The
Great Long-Term Care Compromise,” by Stephen A. Moses, Broker World,
January 1, 2022
“The
irony of long-term care advocacy,” by Stephen A. Moses, McKnight’s
Long-Term Care News, December 17, 2021
“Long
Term Care Irony,” by Stephen A. Moses, Broker World, December
1, 2021 (PDF
version.)
“What
works for long-term care and what doesn’t,” by Stephen A. Moses, McKnight’s
LTC News, November 17, 2021.
“What’s
better for senior living and care — the market or government?,” by
Stephen A. Moses, McKnight’s Senior Living, October 25, 2021.
“Long-Term
Care’s Problems Are Bad, Getting Worse, but Fixable,” by Stephen A.
Moses, McKnight’s LTC News, October 1, 2021.
“Should
Medicaid Protect $8 Trillion from Private Senior Living Costs?” for
McKnight’s Senior Living, August 9, 2021
“The
InLTCgentsia” for Broker World’s August 2021 issue. (PDF
version.)
“Panel
Gives States Pass in Collecting Assets for Medicaid Long-Term Care,”
by Stephen A. Moses, Health Care News, July 2021
“Government
Violates the Long Term Care Social Contract to Your Detriment, by
Stephen A. Moses, Broker World, June 2021. (PDF
version.)
“President
Biden, tear down this wall,” by Stephen A. Moses, McKnight’s LTC
News, June 23, 2021
“Using
Medicaid to protect inheritances,” by Steve Moses and Brian Blase, The
Hill, June 10, 2021.
“LTC
financing: Be careful what you WISH for,” by Stephen A. Moses, McKnight’s
Senior Living, June 7, 2021.
“The
social contract for long-term care,” by Stephen Moses for McKnight’s
Long-Term Care News, May 17, 2021. ***
LTC BULLET: LTC GOOD NEWS
LTC Comment: The news about private long-term care
insurance isn’t always so great. The number of companies in the business
has declined over the past couple decades from ten dozen to one or less.
So, when we see Genworth getting a financial upgrade or new companies
dipping a toe into the field, it’s refreshing. Recently, we learned that
LTCG, long a good friend and corporate supporter of the Center for
Long-term Care Reform, has also had good news. Today’s LTC Bullet
covers that news and adds a little background “color” from CEO Peter
Goldstein.
On February 24,
illumifin,* a leading insurance third-party administration and
software provider, announced it is purchasing
LTCG, the leading TPA for the private long-term care insurance
business. Industry press covered the story and supplied details:
Illumifin, a Greenville-headquartered insurance third-party
administration and software provider, has signed an agreement to acquire LTCG,
a provider of administrative solutions and clinical services to the
long-term care insurance industry. The transaction is expected to close
within the next 60 days, according to a news release. (Ross Norton, “Illumifin
to acquire LTCG to expand third-party administration capabilities,
February 25, 2022)
LTCG Chief Executive
Officer Peter Goldstein explained at the time of the announcement:
Given our 25-year history as the leading
partner for long-term care insurers and our deep customer relationships,
the integrated company will allow us to build more strategic partnerships
with our clients and help them enhance the customer experience for both
policyholders and distributors. (“Illumifin
to Acquire LTCG to Expand Third-Party Administration Capabilities,”
Business Wire, February 24, 2022)
LTC Bullets spoke with CEO Goldstein this week
to get the backstory about this transaction. He told us LTCG has been
“experiencing tremendous growth.” The company just announced an expanded
partnership with Lincoln Financial, taking on the claims administration
for MoneyGuard, the industry’s leading hybrid product. The CNA group
business is on its way back to LTCG and Transamerica will go live with
over 300,000 policies and 14,000 claims later this year. Market share is
growing again after years of slower expansion. From the macroeconomic
standpoint mergers and acquisitions are strong despite the pandemic.
LTCG is not the same company it was five years ago,
Goldstein explained. The long-term care insurance business has evolved.
Carriers are adapting to the market reality, especially rapidly increasing
claims. With so many closed books of business and smaller operations, they
look to TPAs like LTCG to manage this complex risk by outsourcing work
they lack the scale or systems to manage in house. This translated into
“significant momentum” and expansion of services for LTCG.
Bottom line, when Goldstein reviewed the marketplace
last year, it seemed like a good time to consider a sale. He explained
that LTCG was always investor owned with private equity backing the
management team. Sale of the company was therefore not unexpected. It had
been done three times before. It’s a common pattern. Private equity buys
high potential companies, adds value through targeted investments, and
then sells a bigger, more diversified company. The typical hold period is
five to seven years, which was about where LTCG is now.
Furthermore, absent a major transformation in the
long-term care insurance business overall, Goldstein believes LTCG needs
to expand into other areas, such as life insurance, annuities, and Med
Supp. From that perspective, illumifin is the perfect company with which
to merge. illumifin is a new name for an old company with many years of
experience under various corporate identities. It supports a lot of the
same insurance companies as LTCG. Goldstein clarified “illumifin gives us
a whole new set of services to bring to our valued clients, especially
with the growth of hybrid life and annuity LTC products.”
I asked what the sale means for Peter personally. He
said, “As part of this process, I thought I might finally retire as it’s
been 25 years at LTCG.” But because of the new opportunity and upside
potential, he agreed to stay on, becoming president of illumifin and
joining its board of directors. He looks forward to partnering with CEO
Phil Ratcliff whom he has known for several years. The LTCG leadership
team will stay in place as the company “paints on a larger canvas.”
We congratulate LTCG and illumifin on this merger and
wish all involved every ongoing success.
* illumifin’s official name begins with a lower case
“i.” We observed that formality in this article, except when quoting other
sources that used an initial capital “I.”
#############################
Updated,
Monday, March 14, 2022, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #22-008 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 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:
-
Will the ‘Long-Term Care Tax’ be Coming to Your
State Soon?
-
California Is Ending Its Asset Test For Medicaid
Long-Term Care. Is It A Mistake?
-
Midlife Chronic Diseases Associated With Dementia
Risk Later in Life
-
Unprecedented Caregiver Fatigue In America
-
2023 Social Security COLA Estimated at 7.6% as CPI
Keeps Rising
-
U.S. Household Net Worth Jumps to a Record on
Equities, Housing
-
‘Adequate’ funding part of nursing home staffing
minimum strategy, CMS chief says
-
The silver tsunami factor: Creating a disaster
recovery plan for the impending healthcare devastation
-
No Viable Path for Many SNFs to Improve, Avoid
Penalties in Value-Based Purchasing
-
CNAs cite staffing shortage as biggest on-the-job
challenge: survey
-
Spending on Medicaid HCBS totals nearly $116B in FY
2020, report finds
-
Reform policies ‘double down’ on decades-long
failures, LTC physicians warn
############################
"LTC E-Alerts" are
a
feature offered by the Center for Long-Term Care Reform, Inc. to members
at the $150 per year level or higher. We'll track and report to you news
and analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Monday, March 7, 2022, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #22-007 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 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:
-
CMS Releases Updated Guidance on
Medicaid Eligibility and Redeterminations
-
Biden Proposes Major Nursing Home
Reforms, Most Extensive “In Decades
-
Ken, Maddy, and Elyse: Age Wave’s
Unbeatable Leadership Trio
-
Medicare Advantage Plans Boost
Supplemental Benefits Offerings
-
The Impact of the COVID-19 Recession on
Medicaid Coverage and Spending
-
AHCA Releases Report Highlighting
Unprecedented Economic Crisis in Nursing Homes; High Operating Costs and
Stagnant Recovery Could Mean More Nursing Home Closures, Threatening
Access to Care for Seniors
-
The White House vision for nursing homes
by many other names
-
[UPDATED] White House Unveils Major
Nursing Home Reform Package, Targets Private Equity Ownership
-
Illumifin to acquire LTCG to expand
third-party administration capabilities
-
The debate on overpayment in Medicare
Advantage: Pulling it together
-
Trappings of LTC system leave operators
trapped
-
The pandemic pummeled long-term care –
it may not recover quickly, experts warn
-
States should refuse the feds’ ‘free
money’ that’s creating huge, costly Medicaid rolls
-
High-fiber diet linked with reduced risk
of developing dementia
-
Multimorbidity associated with increased
risk for dementia
-
15 Most Expensive States for Long-Term
Care: 2021
#############################
"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 4, 2022, 10:40 AM (Pacific)
Seattle—
#############################
LTC
Bullet: LTC Bankruptcy
LTC
Comment: Is this Wall Street Journal anecdote of LTC bankruptcy
commonplace, occasional, rare … or contrived? Considerations after the
***news.***
***
ILTCI CONFERENCE NEWS: Organizers report “The 2022
Intercompany Long Term Care Insurance Conference
starts in just three weeks! Join over 700 of your colleagues at this
year's in-person conference. Click ‘Register
Now’
to see the full schedule of over 45 educational sessions and networking
events and register for the conference. Attendees have filled three of our
four hotel blocks. Please be sure to
make
your reservation
soon if you haven't yet. ***
***
JOIN US. Since
1998,
the Center for Long-Term Care Reform has conducted
and published dozens of national and state-level studies and
published 1328 LTC Bullets. We’ve helped to win crucial federal
Medicaid statutory changes in 1993 (mandatory estate recovery) and 2005
(capping the home equity exemption). We’ve analyzed
and refuted virtually every study and article advocating
a government takeover of long-term care. Now we’re proposing a
simple, cost-saving solution to
the long-term care mess government created. Won’t you join us and support
these achievements, goals, and future potential? Become a regular or
premium member. Or ask your company or organization to become a corporate
member, with benefits accruing to you at no extra expense. Contact Damon
at 206-283-7036 or damon@centerltc.com for
details. Review our Membership Levels and Benefits schedule here.
Let’s get this done! Thanks for your consideration. ***
***
RECENTLY PUBLISHED ARTICLES by Steve Moses. We hope you’ll read these
articles,
join
the Center for Long-Term Care Reform,
and help us solve the long-term care financing problem. The Center’s
“Membership Levels and Benefits” schedule is
here.
Join individually or urge your company or association to join as a
corporate member so you can receive all the benefits of membership at no
cost to you. Universal access to top quality care for all Americans (the
Center’s mission) is achievable. Join us and make it happen! ***
“Trappings
of LTC system leave operators trapped,”
by Stephen A. Moses, McKnight’s Long-Term Care News, February 23,
2022.
“The
Great Long-Term Care Compromise,”
by Stephen A. Moses, Broker World, January 1, 2022
“The
irony of long-term care advocacy,”
by Stephen A. Moses, McKnight’s Long-Term Care News, December 17,
2021
“Long
Term Care Irony,”
by Stephen A. Moses, Broker World, December 1, 2021 (PDF
version.)
“What
works for long-term care and what doesn’t,”
by Stephen A. Moses, McKnight’s LTC News, November 17, 2021.
“What’s
better for senior living and care — the market or government?,”
by Stephen A. Moses, McKnight’s Senior Living, October 25, 2021.
“Long-Term
Care’s Problems Are Bad, Getting Worse, but Fixable,”
by Stephen A. Moses, McKnight’s LTC News, October 1, 2021.
“Should
Medicaid Protect $8 Trillion from Private Senior Living Costs?”
for McKnight’s Senior Living, August 9, 2021
“The
InLTCgentsia”
for Broker World’s August 2021 issue. (PDF
version.)
“Panel
Gives States Pass in Collecting Assets for Medicaid Long-Term Care,”
by Stephen A. Moses, Health Care News, July 2021
“Government
Violates the Long Term Care Social Contract to Your Detriment,
by Stephen A. Moses, Broker World, June 2021. (PDF
version.)
“President
Biden, tear down this wall,”
by Stephen A. Moses, McKnight’s LTC News, June 23, 2021
“Using
Medicaid to protect inheritances,”
by Steve Moses and Brian Blase, The Hill, June 10, 2021.
“LTC
financing: Be careful what you WISH for,”
by Stephen A. Moses, McKnight’s Senior Living, June 7, 2021.
“The
social contract for long-term care,”
by Stephen Moses for McKnight’s Long-Term Care News, May 17, 2021.
***
LTC
BULLET: LTC BANKRUPTCY
LTC
Comment: Clare Ansberry describes a heartrending case of long-term care spending
unto impoverishment in “Caring
for Older Relatives Is So Expensive That Even AARP’s Expert Filed for
Bankruptcy”
(Wall Street Journal, 2/20/22). The anecdote perfectly fits a
narrative repeated endlessly in the academic and popular media. To wit:
all across America the high cost of long-term care is wiping out the
savings of aging Americans and of their families who struggle to care for
them. Therefore, they conclude in a classic non sequitur: we need
to add long-term care to Medicare or create a new, compulsory,
payroll-funded program to cover it.
Does catastrophic long-term care spend down happen? Of course. Consider
the case this article describes. Amy Goyer worked for AARP as a “family
and caregiving expert.” She provided long-term care for her parents. She
gave care herself and spent her own money to supplement her parent’s
incomes when paid care became necessary. She left her job and moved from
DC to Arizona to be with her ailing parents when caregiving trips became
too frequent. She maxed out $25,000 on credit cards, took out a home
equity line of credit, borrowed from her boyfriend and ultimately declared
bankruptcy. All this happened despite her parents having private long-term
care insurance, a pension, Social Security, and VA benefits. It would be
hard to imagine a more tragic case. In fact, it seems almost too bad to be
true.
The Ansberry article summarizes a national crisis that the Goyer case
characterizes …
Family caregivers are the backbone of the nation’s long-term care system
and provide an estimated $470 billion worth of free care—often at
great personal cost.
On average, caregivers spend 26% of their personal income on caregiving
expenses, according to a
2021 AARP study,
with most personal spending going to housing, including home
modifications. A third of caregivers dip into their personal savings, like
bank accounts, to cover costs, and 12% take out a loan or borrow from
family or friends.
Could all of this be true and yet the predicate, that we need the
government to take over long-term care and force everyone to pay for it
like health care (Medicare) and retirement income (Social Security), be
false? If so, how?
As tragic as the Goyer case is, we need to remember that she chose the
course of action she took. At any point in her parents’ story, she could
have qualified them for Medicaid. Their home equity was exempt and their
huge health and long-term care expenses would have been deducted from
their incomes before Medicaid’s low income eligibility threshold was
applied. Qualifying them for Medicaid would of course have limited their
choice of care setting and quality. Medicaid often means going to a
nursing home, encountering long waiting lists for home care, and becoming
dependent on Medicaid’s low reimbursements and poor quality reputation.
My point is not that Ms. Goyer should have taken this course instead of
spending down into poverty as she did. I only mean to suggest that most
people are not so self-sacrificial. Based on the fact that Medicaid pays
for most expensive long-term care, it would seem that many do opt for that
route instead. Nursing homes remain the dominant venue for long-term
custodial care, but their private pay revenue has diminished to only 7.4
percent. Over 66 percent of their patients are covered by Medicaid and the
welfare program’s extremely low reimbursement rates, often less than the
cost of the care, account for half of nursing homes’ revenue. Home care is
no different. Medicare, Medicaid and private insurance pick up about 80
percent of home care costs; out-of-pocket expenditures, only 10 percent.
Government, mostly Medicaid and Medicare pay for 70 percent of all
long-term care. Private out of pocket costs for nursing home care have
plummeted from 49 percent to only 23 percent since 1970. Half of that 23
percent is actually spend-through of Social Security (another fiscally
vulnerable federal program) income that people already on Medicaid have to
contribute toward their cost of care. Government has paid for most
expensive long-term care for almost 60 years. That has anesthetized the
public to long-term care risk and cost leaving most unprepared when
catastrophic need arises.
Whatever its intentions, government set a long-term care trap for people.
By making the high cost of long-term care go away for most, Medicaid
anesthetized the public to long-term care risk, created institutional
bias, hampered the home care market, and crowded out most private
insurance. A few responsible people like Amy Goyer’s parents planned
relatively well despite the perverse incentives in public policy. They
even bought some, though obviously not enough, private long-term care
insurance. She and they faced the sad choice of bankruptcy or welfare
dependency.
The
lamentable reality about long-term care in America today is that most
people follow government’s lead if they need high cost long-term care.
This results in an overwhelmed Medicaid program that pays too little to
ensure quality care. The few like the family in this story who insist on
paying their own way get wiped out financially. Forcing everyone into a
new government funded and controlled program would only double down on the
failures caused by the current government funded and controlled programs.
For a full analysis and a better solution, read
Medicaid and Long-Term Care.
#############################
Updated,
Friday, February 25, 2022, 10:40 AM (Pacific)
Seattle—
#############################
LTC
BULLET: MOSES VS. GRABOWSKI ON LONG-TERM CARE
LTC
Comment: Is government the problem or the solution for long-term care. Two
conflicting views after the ***news.***
***
JOIN US. Since
1998,
the Center for Long-Term Care Reform has conducted
and published dozens of national and state-level studies and
published 1328 LTC Bullets. We’ve helped to win crucial federal
Medicaid statutory changes in 1993 (mandatory estate recovery) and 2005
(capping the home equity exemption). We’ve analyzed
and refuted virtually every study and article advocating
a government takeover of long-term care. Now we’re proposing a
simple, cost-saving solution to
the long-term care mess government created. Won’t you join us and support
these achievements, goals, and future potential? Become a regular or
premium member. Or ask your company or organization to become a corporate
member, with benefits accruing to you at no extra expense. Contact Damon
at 206-283-7036 or damon@centerltc.com for
details. Review our Membership Levels and Benefits schedule here.
Let’s get this done! Thanks for your consideration. ***
***
RECENTLY PUBLISHED ARTICLES by Steve Moses. We hope you’ll read these
articles,
join
the Center for Long-Term Care Reform,
and help us solve the long-term care financing problem. The Center’s
“Membership Levels and Benefits” schedule is
here.
Join individually or urge your company or association to join as a
corporate member so you can receive all the benefits of membership at no
cost to you. Universal access to top quality care for all Americans (the
Center’s mission) is achievable. Join us and make it happen! ***
“Trappings
of LTC system leave operators trapped,”
by Stephen A. Moses, McKnight’s Long-Term Care News, February 23,
2022.
“The
Great Long-Term Care Compromise,”
by Stephen A. Moses, Broker World, January 1, 2022
“The
irony of long-term care advocacy,”
by Stephen A. Moses, McKnight’s Long-Term Care News, December 17,
2021
“Long
Term Care Irony,”
by Stephen A. Moses, Broker World, December 1, 2021 (PDF
version.)
“What
works for long-term care and what doesn’t,”
by Stephen A. Moses, McKnight’s LTC News, November 17, 2021.
“What’s
better for senior living and care — the market or government?,”
by Stephen A. Moses, McKnight’s Senior Living, October 25, 2021.
“Long-Term
Care’s Problems Are Bad, Getting Worse, but Fixable,”
by Stephen A. Moses, McKnight’s LTC News, October 1, 2021.
“Should
Medicaid Protect $8 Trillion from Private Senior Living Costs?”
for McKnight’s Senior Living, August 9, 2021
“The
InLTCgentsia”
for Broker World’s August 2021 issue. (PDF
version.)
“Panel
Gives States Pass in Collecting Assets for Medicaid Long-Term Care,”
by Stephen A. Moses, Health Care News, July 2021
“Government
Violates the Long Term Care Social Contract to Your Detriment,
by Stephen A. Moses, Broker World, June 2021. (PDF
version.)
“President
Biden, tear down this wall,”
by Stephen A. Moses, McKnight’s LTC News, June 23, 2021
“Using
Medicaid to protect inheritances,”
by Steve Moses and Brian Blase, The Hill, June 10, 2021.
“LTC
financing: Be careful what you WISH for,”
by Stephen A. Moses, McKnight’s Senior Living, June 7, 2021.
“The
social contract for long-term care,”
by Stephen Moses for McKnight’s Long-Term Care News, May 17, 2021.
***
LTC
BULLET: MOSES VS. GRABOWSKI ON LONG-TERM CARE
LTC
Comment:
David C. Grabowski,
PhD, is Professor of Health Care Policy in the Department of Health Care
Policy at Harvard Medical School. Professor Grabowski is omnipresent in
the news about long-term care.
Stephen A. Moses
is president of the Center for Long-Term Care Reform. His media megaphone
is more subdued. But both were featured yesterday in
McKnight’s Long-Term Care News.
Their differing views on what ails long-term care services and financing
provide food for thought about this complicated topic.
Grabowski is featured in a McKnight’s article by editor Kimberly
Marselas titled “These
10 steps needed to save skilled nursing, experts say.”
In a special
issue of
the Annals of the American Academy of Political and Social Science,
Grabowski and co-author Brian E. McGarry, Ph.D. propose
Paying higher wages for direct care workers, adopting meaningful
regulatory reform, increasing the presence of advanced practice clinicians
in skilled nursing facilities, and realigning Medicare and Medicaid rates
… Increasing wages for direct care staff and ensuring minimum staffing
requirements … an infusion of federal dollars that nursing home operators
would have to spend on wages or other staff benefits … more physicians,
physician assistants and nurse practitioners to work routinely in
long-term care settings …revisit an approach like the Boren Amendment —
which required states’ Medicaid nursing home rates be “reasonable and
adequate” — but to give it more teeth … increasing financial and ownership
transparency; bolstering alternate models of nursing care, including the
small house model; increasing use of home- and community-based services
while ensuring the future viability of skilled nursing care; and offering
better long-term care financing as a nation.
What
do all these ideas have in common? They rely more than ever on the failed
government central planning and regulation that already dominate long-term
care services and financing. They do more of what has already been tried
unsuccessfully but at much higher cost. To his credit, Grabowski
acknowledge “In terms of finding the dollars, the political will, I don’t
think that we’re there yet as a country ….”
Moses has a different view of long-term care’s problems and their
solution. In a Guest Column for the same issue of McKnight’s titled “Trappings
of LTC system leave operators trapped,”
simply “Trapped” was his title for the piece, Moses writes:
Long-term care operators are trapped in a public financing system that
pays too little, expects too much, rewards cronyism, discourages
creativity, punishes profit making and disserves aging Americans … New
ideas and creative caregiving approaches hit a brick wall of inadequate
funding, bureaucratic red tape, political indifference and ideological
bias. No one thrives in the publicly financed long-term care system we
have now, least of all the aging Americans so poorly served by it. … In a
free market, prices are set by supply and demand, not by government decree
or pressure. So prices would reflect the kind, amount and quality of care
options for which people are willing and able to pay … Profit-seeking
entrepreneurs would revolutionize the LTC system with heretofore
unimagined options if we would just get the government out of their way
and let it happen … Home equity, if not protected by Medicaid’s huge
exemption (up
to $955,000),
represents $9.2
trillion of
wealth held by older people, that should, could, and would flow quickly
into the long-term care financing market.
Moses argues that government funding and regulation of long-term care
since Medicaid and Medicare arrived in 1965 are exactly what caused the
system’s problems of institutional bias, poor access and quality,
inadequate funding, caregiver shortages and a public oblivious to
long-term care risk and cost. So, doing more of the same, as Grabowski and
McGarry propose, would only make these problems worse.
Today’s LTC Bullet gives you only a hint of what these authors are
saying. We encourage you to read more by both. You’re likely to find
Professor Grabowski in virtually everything you read in the LTC media. For
Moses’s views, see
Medicaid and Long-Term Care
and
join
the Center for Long-Term Care Reform
to find 1,328 of his LTC Bullets archived chronologically and by
topic. Check out
Stephen A. Moses
on
Google Scholar
or find his many national and state-level studies
here.
The Center for Long-Term Care Reform’s “Membership Levels and Benefits”
schedule is
here.
#############################
Updated, Monday, February 21, 2022,
10:40 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #22-006 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 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:
-
American Seniors Feeling the Inflation Heat
-
Nearly all high-touch surfaces in LTC are
contaminated, study finds
-
Millions of People Could Lose Medicaid
Coverage When the Pandemic Is Declared Over
-
Assisted living rate increase grows 4.65
percent — more than skilled nursing but less than home care
-
Gap between patient costs, reimbursements
hits $11 daily
-
Why millions on Medicaid are at risk of
losing coverage in the months ahead
-
Covid-19 created America’s next health care
crisis: The cancers we didn’t catch early
-
Lifetime of knowledge can clutter memories
of older adults
-
5 First Looks from 2022 Medicare Advantage
Enrollment
-
SLEEPY HEAD Alzheimer’s: The sleeping
position that slashes your risk of developing dementia
-
Studying This Could Slash Your Alzheimer's
Risk, Experts Say
-
Taxpayers 65 and Older Eligible for Earned
Income Tax Credit
-
Is it time to reimagine assisted living?
These industry experts say yes
-
Retirees From Market Downturns: New Study
-
Long-term care financing success requires
federal program, coverage across continuum: report
-
$200,000 sign-on bonus program seeks to
entice nurse aides to long-term care
############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Friday, February 18, 2022, 10:40 AM (Pacific)
Seattle—
#############################
LTC
BULLET: LONG-TERM CARE’S FUNDAMENTAL FALLACY
LTC Comment: We explain the fundamental fallacy that
leads LTC analysts and policy makers astray after the ***news.***
*** TODAY'S LTC BULLET is
sponsored by Claude Thau, who provides many unique services to
advisors relative to individual, worksite and affinity LTCi. Advisors
like his unique, simple and effective LTCi presentation. His
revolutionary “Range of Exposure” tool protects financial planners by
projecting the LTC cost (joint for a couple) and mean age of LTC based
on age, gender, marital status, and success goal (the desired chance
of not outliving assets), etc. 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.thau@gmail.com to discuss how he
might help you. *** |
*** ILTCI CONFERENCE NEWS: Organizers report “The
Intercompany Long Term Care Insurance Conference has locked in our
educational sessions schedule for our in-person conference at the
Raleigh Convention Center from March 20-23. We will feature 49 sessions
from seven disciplinary tracks. In addition to our
educational sessions, our conference will have three days of
networking events to help you reconnect with colleagues and reach out to
decision-makers. With just under two months until it starts, we already
have nearly 700 attendees and 70 exhibitors and sponsors.” Furthermore:
“Sixty companies will host exhibit booths in our spacious exhibit hall in
addition to ten innovators in our special Innovation Alley. Not yet
registered to attend the conference? What are you waiting for? Register
here. Rooms are booking fast, so please remember to book your hotel
after registering. Book your hotel
here. ***
*** *** RECENTLY PUBLISHED ARTICLES by Steve Moses.
We hope you’ll read these articles,
join the Center for Long-Term Care Reform, and help us solve the
long-term care financing problem. The Center’s “Membership Levels and
Benefits” schedule is
here. Join individually or urge your company or association to join as
a corporate member so you can receive all the benefits of membership at no
cost to you. Universal access to top quality care for all Americans (the
Center’s mission) is achievable. Join us and make it happen! ***
Watch for Steve’s latest article, titled “Trapped,”
to appear in the February 23, 2022 edition of McKnight’s Long-Term Care
News. He explains how “Long-term care operators are trapped in a
public financing system that pays too little, expects too much, rewards
cronyism, discourages creativity, punishes profit making, and disserves
aging Americans.” He follows up with solutions that do not involve using
government threats and compulsion to impose a universal,
one-size-fits-all, tax-financed program.
“The
Great Long-Term Care Compromise,” by Stephen A. Moses, Broker World,
January 1, 2022
“The
irony of long-term care advocacy,” by Stephen A. Moses, McKnight’s
Long-Term Care News, December 17, 2021
“Long
Term Care Irony,” by Stephen A. Moses, Broker World, December
1, 2021 (PDF
version.)
“What
works for long-term care and what doesn’t,” by Stephen A. Moses, McKnight’s
LTC News, November 17, 2021.
“What’s
better for senior living and care — the market or government?,” by
Stephen A. Moses, McKnight’s Senior Living, October 25, 2021.
“Long-Term
Care’s Problems Are Bad, Getting Worse, but Fixable,” by Stephen A.
Moses, McKnight’s LTC News, October 1, 2021.
“Should
Medicaid Protect $8 Trillion from Private Senior Living Costs?” for
McKnight’s Senior Living, August 9, 2021
“The
InLTCgentsia” for Broker World’s August 2021 issue. (PDF
version.)
“Panel
Gives States Pass in Collecting Assets for Medicaid Long-Term Care,”
by Stephen A. Moses, Health Care News, July 2021
“Government
Violates the Long Term Care Social Contract to Your Detriment, by
Stephen A. Moses, Broker World, June 2021. (PDF
version.)
“President
Biden, tear down this wall,” by Stephen A. Moses, McKnight’s LTC
News, June 23, 2021
“Using
Medicaid to protect inheritances,” by Steve Moses and Brian Blase, The
Hill, June 10, 2021.
“LTC
financing: Be careful what you WISH for,” by Stephen A. Moses, McKnight’s
Senior Living, June 7, 2021.
“The
social contract for long-term care,” by Stephen Moses for McKnight’s
Long-Term Care News, May 17, 2021. ***
*** JOIN US. Since
1998, the Center for Long-Term Care Reform
has conducted
and published dozens of national and state-level studies and
published 1327 LTC Bullets. We’ve helped to win crucial federal
Medicaid statutory changes in 1993 (mandatory estate recovery) and 2005
(capping the home equity exemption). We’ve analyzed
and refuted virtually every study and article advocating
a government takeover of long-term care. Now we’re proposing a
simple, cost-saving solution to the
long-term care mess government created. Won’t you join us and support
these achievements, goals, and future potential? Become a regular or
premium member. Or ask your company or organization to become a corporate
member, with benefits accruing to you at no extra expense. Contact Damon
at 206-283-7036 or damon@centerltc.com for
details. Review our Membership Levels and Benefits schedule here.
Let’s get this done! Thanks for your consideration. ***
LTC BULLET: LONG-TERM CARE’S FUNDAMENTAL FALLACY
LTC Comment: Many recent articles and reports insist
that America needs a new, compulsory, payroll-funded social insurance
program for long-term care. These proposals follow decades of similar
studies and recommendations. They persist despite the universal failure of
such initiatives from the Pepper Commission in 1990 through the CLASS Act
of 2010 and the WA Cares Fund’s collapse this year. What drives the
advocates of socialized long-term care? What keeps them trying in spite of
universal rejection by voters? What underlies their persistence?
I think the answer is the social insurance advocates’
unquestioning acceptance of a fundamental fallacy about long-term care. My
1990 Gerontologist article titled “The
Fallacy of Impoverishment” explained that misconception and provided
evidence of the damage it causes. But to this day the same fallacy
prevails among long-term care scholars and the politicians they influence.
Today’s LTC Bullet briefly summarizes the fallacy of impoverishment
and provides an example of how it misguides well-intentioned analysts who
sincerely want to fix what ails America’s long-term care system.
The fallacy of impoverishment is the idea that people
must be poor to the point of destitution before they qualify for
government-financed long-term care. That idea prevails because Medicaid
law and regulations seem to say that only people with low incomes ($730
per month) and minimal assets ($2,000) qualify. With draconian limits like
that, how else could people become eligible for Medicaid besides spending
down their life’s savings if they need expensive long-term care? They must
spend down into impoverishment. They simply must. It’s so certain there is
no need or reason to seek or cite evidence that it actually happens.
That’s the trap analysts fall into if they do not
consider how Medicaid financial eligibility actually works and how it is
expanded vastly further for people with wealth protected by legal experts.
Medicaid does not require low income because private health and long-term
care expenses are usually deducted from income before the low income
standard is applied. The rule of thumb is that anyone with income below
the cost of a nursing home qualifies. As nursing homes cost around $8,000
per month on average, people with substantial incomes routinely qualify
for benefits. Others, with even higher incomes, qualify with advice from
Medicaid planning experts by converting income-generating countable assets
into exempt resources.
Likewise high assets are not necessarily
disqualifying. Assets are easily converted from countable to exempt form
by simply purchasing the latter with the former. Medicaid planners keep
long lists of exempt assets which they advise their clients to purchase in
order to “spend down” without actually depleting their wealth.
Furthermore, the exempt assets that Medicaid recipients may retain are
virtually unlimited. Home equity is capped at between $636,000 and
$955,000 depending on the state, vastly exceeding the $143,500 median home
equity of older people, but many other assets are completely unlimited.
These include one vehicle, household goods, personal belongings, prepaid
burial funds, term life insurance, a business including the capital and
cash flow and Individual Retirement Accounts. On top of these routinely
allowable assets, Medicaid planners use special annuities, Medicaid
trusts, reverse half-a-loaf strategies and other sophisticated legal
techniques to divert even more wealth from Medicaid asset limit
consideration.
While these facts are widely known and available to
anyone with an internet connection, just Google “Medicaid planning,” they
are routinely ignored by long-term care scholars. The experts rarely
acknowledge, much less cite, the extensive formal legal literature on
Medicaid estate planning. They state that Medicaid requires
impoverishment, but never cite evidence that people actually spend down
significant sums for long-term care before becoming eligible for Medicaid.
They ignore the evidence that widespread catastrophic spend down is
clearly not happening. Such evidence includes the fact that nursing home
private-pay financing has nearly disappeared, amounting recently to only
7.4 percent of total revenue and that out-of-pocket expenditures for home
care are only 10.2 percent of total home care spending. Ask them for proof
of the asset spend down they insist is commonplace and they blank out.
Let me give you one example of how the fallacy of
impoverishment misguides analysts resulting in very bad judgments and
recommendations. The case in point is an article titled “The
Long-Term Care Challenge” by
Robert P. Saldin in the Winter 2022 issue of
National Affairs, “a quarterly journal of essays about domestic
policy, political economy, society, culture, and political thought.” The
American Enterprise Institute, a conservative think tank, publishes
National Affairs which goes to show the “fallacy of impoverishment” is
not limited to the political left. Following are quotes from the Saldin
article followed by our comments.
Saldin: “LTC is expensive — so expensive that
it can deplete a middle-class family's lifetime of savings in a few short
years. Notably, the term ‘middle class’ here includes a vast demographic
range, from those just over the poverty line to those maintaining
six-figure retirement accounts decades after they leave the workforce. To
be sure, once individuals have burned through their assets to the point of
impoverishment, Medicaid swoops in to pick up the tab. But this
intervention only shifts the burden to state budgets, which crowds out
other spending priorities.”
LTC Comment: Saldin says LTC expenses “can
deplete” lifetime savings, implying that it does but offering no evidence.
He can give no evidence because there is none. The many analysts and
scholars who write on this topic never cite empirical data to substantiate
the assumption that private long-term care expenses impoverish wide swaths
of the American public.
Saldin: “Of course, the United States already
has robust social-insurance programs targeted at various vulnerable
populations. Social Security hedges against elder impoverishment and
homelessness. Medicare covers most health costs for the same demographic,
while Medicaid does so for the poor. Rather than undermining freedom and
economic dynamism, as some critics initially worried, these forms of
social insurance have provided the kind of predictability and social
continuity that free, dynamic societies require. Such public backstops
also have the potential to neutralize the forces of polarization and
populism that fuel calls for Washington to intervene more directly in the
economy.”
LTC Comment: Whoa. Social Security and
Medicare are unfunded by many trillions of dollars. Young people doubt
they’ll ever see the benefits those programs promise. Medicaid, that
program for the “poor,” actually supports the vast majority of middle
class people and many of the affluent who need expensive long-term care.
Medicaid strains state and federal budgets already although the age wave
has only begun to crest. Those “robust” social insurance programs,
financed by decades of monetary and fiscal profligacy, have already
saddled American consumers with sky-rocketing price inflation. Surely this
author cannot be proposing more of the same.
Saldin: “Recognizing the LTC challenge, the
Biden administration recently proposed $400 billion in new funding to
support home-care workers (that proposal was included in the House-passed
Build Back Better legislation, albeit with a reduced price tag of $150
billion). While the initiative's emphasis on expanding options for home-
and community-based care — as opposed to less desirable and more costly
institutional care — represents a step in the right direction, it fails to
address the core problem at issue: Americans are woefully ignorant of the
likelihood of requiring LTC. Consequently, not enough healthy people pay
into the system to make a robust private market viable. The ultimate
objective, therefore, should be a universal national program to mitigate
the catastrophic costs that drain state budgets and impoverish
middle-class Americans.”
LTC Comment: Well, yes, there it is, the
ultimate objective is yet another “universal national program.” First, the
Biden “Build Back Better” plan fell flat because it was unsound fiscally
and monetarily. Second, the idea that home and community-based care saves
money has been proven wrong repeatedly. Home care is more desirable but
does not save money because it delays but does not prevent
institutionalization. The big problem is that Americans are “woefully
ignorant” about long-term care? Nonsense, they’ve been barraged about the
risk and cost of long-term care for decades. They just don’t believe it
and they’re right. Medicaid pays. Do you begin to see how the fallacy of
impoverishment underlies errors of analysis and fosters mistaken
conclusions?
Saldin: “The key takeaway is that American
society is rapidly aging, which means that our population is going to need
far more support in the coming years and decades. Since LTC is so
expensive for most Americans, that increased level of need poses a serious
challenge. Without reform, the situation could impose significant
constraints on America's dynamism and vitality.”
LTC Comment: Well, true, but how does relying
on the government to print and spend a lot more money we don’t have help?
We're seeing now how the cost of government “generosity”—creating money
out of thin air and giving it to people to spend and letting the
ineligible remain on Medicaid during the pandemic—has to be repaid. We’re
no longer dumping this obligation only on our “children and
grandchildren.” We’re paying for it ourselves through consumer price
inflation, and will be doing for decades.
Saldin: “For those who aren't wealthy, LTC
expenses can quickly exhaust personal savings. To the surprise of many,
Medicare does not cover LTC expenses. This means that individuals and
families are often paying out of pocket for care unless they are poor
enough to qualify for Medicaid or are among the few with private LTC
insurance.”
LTC Comment: There’s the fallacy of
impoverishment again. We’re offered a presumption that LTC wipes out
savings. No evidence; no citation. Poor enough to qualify for Medicaid?
How poor is that? Not very according to the fallacy of impoverishment. Few
people have LTCI? Why is that? The government has paid for most expensive
long-term care since Medicaid began in 1965. Authors and papers like this
one never ask the right question. Why is American long-term care such a
mess in the first place? So they never put the blame where it belongs, on
public policy that convinced the public they can ignore long-term care
risk and cost.
Saldin: “Although there is considerable
variation, the average person reaching the age of 65 will require $138,000
in LTC spending. Roughly half of Americans reaching age 65 will face
‘significant need’ — defined as being unable to perform multiple
activities of daily living without assistance. For about 15% of American
adults, the average cost will exceed $250,000 over the course of a
lifetime.”
LTC Comment: $138,000? That’s the huge
financial catastrophe driving our need to socialize long-term care? The
same source (Favreault
and Dey, 2016, p. 1) that came up with that total average need also
said someone would only have to invest about $70,000 now to cover it in
the future. Older Americans possess $9.2 trillion in home equity, which
could lap up that small risk easily. $250,000 for 15%? That’s where
private insurance would make the problem go away if it weren’t for the
government obscuring the risk by paying for most expensive long-term care
already through Medicaid.
Saldin: “The current system of LTC provision
puts intense pressure on the middle class. Unlike the poor — who have few
assets to spend down prior to reaching Medicaid eligibility — and the
wealthy, who can finance their own care with relative ease, those in the
vast middle have a lot to lose. About half of households aged 55 or over
have retirement savings, but the median amount is just $109,000 [https://www.gao.gov/assets/gao-15-419.pdf].
For many families, a sum like that represents a lifetime of responsible
saving, giving off the appearance of a healthy nest egg. But even average
LTC expenses can eat through that amount in short order. Another 23% of
households aged 55 or over have defined-benefit plans but no funds
earmarked for retirement. Though many of these households are well above
the poverty line, their plans are unlikely to provide enough funds to
cover LTC costs.”
LTC Comment: Do you get it yet or does he have
to say it for a fourth time? LTC wipes out middle class Americans’ savings
all over the country. That’s a matters of faith, an assumption you must
accept even though there is no evidence and Medicaid operates so that such
catastrophic spend down is unnecessary.
Saldin: “In sum, the financial burden of our
LTC-provision system falls squarely on the shoulders of a remarkably broad
middle-class cohort that stretches from just above the poverty line to
those who are still sitting on six-figure savings after a couple of
decades of retirement. Medicaid provides a safety net, but qualifying for
the means-tested program requires being in financial ruin. And even then,
the economic burden doesn't go away; it's merely shifted from the
individual to society.”
LTC Comment: OK, evidently we’re too stupid to
have understood the first three times we were told this so a fourth was
necessary. We’ve already shifted the long-term care burden to society?
Then why would shifting even more help? The truth is we have already
shifted most of the catastrophic burden to government. That’s why we have
the current system’s problems: deficient access and quality, institutional
bias, inadequate reimbursements, caregiver shortages, disappearing private
payments and inadequate private insurance. Society, Medicaid, took the
burden of long-term care off the shoulders of consumers and look what it
delivered instead.
Saldin: “In addition to the political
constraints it places on reformers, widespread ignorance regarding LTC has
led America's patchwork system of LTC provision to be plagued by a classic
case of adverse selection. Because there is relatively little interest in
planning for LTC needs, the population interested in coverage is far more
likely to already need care. This situation makes a non-mandatory program
untenable, since there would be too few healthy people paying into the
system to cover its costs.”
LTC Comment: It is not the public that’s
ignorant about long-term care, but authors like this one. Of course a
non-mandatory program is tenable; only a non-mandatory program is
tenable. What he is saying is that freedom to choose does not work. That
people must be forced by government to participate whether they see the
value or not. Private insurance works for life insurance. It would work
for long-term care also if government had not eliminated the catastrophic
event which is the incentive to insure privately.
Saldin: “To re-conceptualize that system,
reforming LTC should be understood as part of a broader effort to bolster
the American social safety net in a way that promotes economic freedom and
helps bring some much-needed stability to our democracy. As the Niskanen
Center's Samuel Hammond has emphasized, combining free markets with a more
universal system of social insurance can facilitate free enterprise by
providing the kind of social continuity and certainty that are essential
for sustainable economic dynamism.”
LTC Comment: What kind of Orwellian double
speak is this? Compulsory payroll-funded government insurance makes us
free? No, getting government to stop forcing us to do things against our
will, things that hurt no one else, that’s what makes us free.
Saldin: “In addition to framing LTC reform as
part of a broader effort to bolster the American social safety net,
policymakers need to address the system's status quo, which leaves a broad
swath of Americans vulnerable to financial ruin. This weakness is
especially apparent when considering how people become eligible to receive
assistance from Medicaid for LTC expenses. To do so, people must ‘spend
down’ their savings until they are impoverished. Since wealth transfers
are prohibited and Medicaid's five-year ‘look-back’ period is designed to
ensure that applicants haven't, say, gifted money to family members,
‘spending down’ typically means spending assets on LTC until the Medicaid
threshold is met.”
LTC Comment: I guess if you make the same
false statement often and strongly enough, some people will begin to
believe it.
Saldin: “These eligibility requirements hit
the middle class the hardest. Poor Americans have few assets to burn
through before qualifying for Medicaid, while the wealthy are often able
to self-finance their care without significantly diluting their wealth.
But for middle-class Americans hoping to pass on modest inheritances to
family members, LTC expenses can be crushing. Reform efforts should seek
to mitigate that risk while also recognizing that it's reasonable to
expect middle- and upper-class individuals to make some provision for the
likelihood they will have LTC needs as they age.”
LTC Comment: Thanks, I must have missed that
point the first six times you made it. Do you begin to see why the whole
argument authors like this are making relies entirely on the fallacy of
impoverishment? Their conceptual framework falls apart without it.
Saldin: “Ultimately, meeting that challenge
will require a national program focused on catastrophic LTC costs. But
passing such a program is a heavy lift in our current political climate.”
LTC Comment: We already have a national
program focused on catastrophic LTC costs. All we need to do is let it
work the way it was intended to work by enforcing meaningful financial
eligibility limits and recovering from estates so that people who fail to
plan for long-term care and end up relying on Medicaid have to reimburse
the government for the cost of their care. That is the “long-term
care social contract.”
Saldin: “In the United States, the objective
need not be a comprehensive program that covers every last dollar of LTC
spending. Rather, reform should be geared toward the most daunting
concerns facing individuals, families, and American society: the risk of
financially catastrophic LTC expenses and the excessive burden LTC
spending imposes on state budgets. A government-sponsored public program,
or even a regulated private-insurance program that provides standard
coverage for catastrophic LTC expenses, would go a long way toward
addressing these challenges without expecting the public to provide
complete protection for the assets of wealthy and middle-class Americans.”
LTC Comment: We already have that; all we need
to do is enforce its rules: reasonable and universally enforced financial
eligibility limits, liens to hold exempt property during Medicaid
eligibility and later estate recovery to reimburse Medicaid with some of
the savings going to incentives for private long-term care insurance.
Saldin: “The resulting program should address
the high cost of institutionalized care. As noted above, shifting as much
LTC as possible from institutionalized settings to home- and
community-based settings is certainly desirable, but nursing homes will
always be necessary, too. It is here that costs are highest and the burden
on the middle class and Medicaid is greatest.”
LTC Comment: Private-pay nursing home revenue
is down to 7.4%. Medicaid pays for most expensive long-term care. Home and
community-based care does not save money.
Saldin: “Alternatively, individuals could be
required to carry private, government-approved catastrophic LTC coverage.
Subsidies would be needed to assist those with few assets, but this
formulation would make certain that healthy and middle-class Americans
would be funding at least some of their own LTC needs. Income-based
premiums — already a feature of Medicare parts B and D — could further
ensure that the middle class and especially the wealthy are contributing
to their own LTC needs rather than leaving taxpayers to pick up the tab.
Coverage could be structured like the private LTC insurance plans that are
already available, which provide daily benefits of about $128 for five
years.”
LTC Comment: Again with the compulsion, even
for private insurance. And note the irony that Medicare, supposedly social
insurance, is being welfarized by charging “income-based” premiums.
Saldin: “Again, the mandated coverage should
be geared toward helping older adults with the kind of catastrophic
expenses that lead to family impoverishment. Because the average stay in a
nursing home is just under three years, individuals could be required to
carry a plan covering that length of time. As noted earlier, a shared room
in a nursing home costs about $93,000 per year, which could be covered
with a daily benefit of about $250. Those living beyond the covered three
years could become eligible for Medicaid immediately. This scenario would
retain Medicaid as a key player in LTC spending but would dramatically
reduce its obligations, thereby easing budgetary pressure on state
governments. If participation was mandatory, premiums would be far more
reasonable than those now available from private insurers.”
LTC Comment: Oh, impoverishment is a problem?
Who knew? Why didn’t you say so? Compulsion again.
#############################
Updated,
Monday, February 7, 2022, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #22-005 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 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:
-
U.S. stroke rate declining in adults 75 and older,
yet rising in adults 49 and younger
-
The second failed attempt at public insurance for
long-term services and supports
-
CMS eyes 8% revenue increase for Medicare Advantage
-
Score on fatigue scale predicts 3-year likelihood
of death in seniors
-
How Medicaid and Medicare Fit Into Planning for
Long-Term Care
-
Genworth Plans to Start Selling Long-Term Care
Product in Some States
-
U.S. national debt exceeds $30 trillion for first
time
-
State effort to cover SNF care, other services
falls short
-
Government watchdog give HHS an F for its COVID-19
response
############################
"LTC E-Alerts" are
a
feature offered by the Center for Long-Term Care Reform, Inc. to members
at the $150 per year level or higher. We'll track and report to you news
and analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Friday, February 4, 2022,
10:40 AM (Pacific)
Seattle—
#############################
LTC Comment: Long-term care financing is complicated.
Here’s a key to help decipher it, after the ***news.***
*** ILTCI CONFERENCE NEWS: “The
Intercompany Long Term Care Insurance Conference is excited to
announce that Plug and Play Tech Center will sponsor and produce our
closing Shark Tank session and an Innovation Alley section of our exhibit
hall! Both will feature ten aging-in-place innovators! Join us March 20-23
for our in-person conference at the Raleigh Convention Center. With just
under two months until it starts, we already have nearly 600 attendees and
70 exhibitors and sponsors. We have three days of events to help
you reconnect with colleagues, reach out to decision makers, and attend
our many
educational sessions within our 7 different
tracks.” ***
*** JOIN US.
Since 1998, the Center for Long-Term Care Reform has
conducted and published dozens of national and state-level studies and
published 1327 LTC Bullets. We’ve helped to win crucial federal
Medicaid statutory changes in 1993 (mandatory estate recovery) and 2005
(capping the home equity exemption). We’ve
analyzed and refuted virtually every study and article advocating a
government takeover of long-term care. Now we’re proposing
a simple, cost-saving solution to the long-term care mess government
created. Won’t you join us and support these achievements, goals, and
future potential? Become a regular or premium member. Or ask your company
or organization to become a corporate member, with benefits accruing to
you at no extra expense. Contact Damon at 206-283-7036 or
damon@centerltc.com for details. Review our Membership Levels and
Benefits schedule
here. Let’s get this done! Thanks for your consideration. ***
LTC BULLET: THE HISTORY OF LONG-TERM CARE FINANCING
IN A SINGLE CHART
LTC Comment: The following chart shows percentages of
total expenditures for nursing home and home care by source at the start
of each new decade. The figures come from the Centers for Medicare and
Medicaid Services (CMS)
here. Just unzip the “NHE Tables” and refer to
Table 15: Nursing Care Facilities and Continuing Care Retirement
Communities Expenditures; Levels, Percent Change, and Percent
Distribution, by Source of Funds: Selected Calendar Years 1970-2020
and Table
14: Home Health Care Services Expenditures; Levels, Percent Change, and
Percent Distribution, by Source of Funds: Selected Calendar Years
1970-2020.
After you review the chart, consider the comments
that follow it.
OOP stands for “Out of Pocket”; PHI is “Private
Health Insurance”; “Other” is a grab bag of smaller third party payers
that are listed in a footnote to the CMS tables. A second, very small
“other” category is also defined in the CMS tables but omitted here.
Nursing Home and CCRC |
Year |
Medicaid |
Medicare |
OOP |
PHI |
Other |
1970 |
23.3 |
3.5 |
49.2 |
.2 |
22.3 |
|
|
|
|
|
|
1980 |
46.2 |
2.0 |
40.5 |
1.2 |
7.7 |
|
|
|
|
|
|
1990 |
36.7 |
3.8 |
40.1 |
6.0 |
11.1 |
|
|
|
|
|
|
2000 |
37.5 |
12.8 |
31.6 |
8.5 |
7.4 |
|
|
|
|
|
|
2010 |
33.0 |
23.0 |
26.4 |
7.6 |
7.2 |
|
|
|
|
|
|
2020 |
27.0 |
20.1 |
23.0 |
8.5 |
18.0 |
Home Care |
Year |
Medicaid |
Medicare |
OOP |
PHI |
Other |
1970 |
6.7 |
26.7 |
9.4 |
3.0 |
52.7 |
|
|
|
|
|
|
1980 |
11.7 |
26.8 |
15.2 |
14.7 |
31.1 |
|
|
|
|
|
|
1990 |
17.1 |
26.1 |
17.8 |
22.8 |
15.9 |
|
|
|
|
|
|
2000 |
20.9 |
26.8 |
19.1 |
23.9 |
9.0 |
|
|
|
|
|
|
2010 |
36.0 |
45.0 |
8.2 |
7.2 |
3.1 |
|
|
|
|
|
|
2020 |
32.5 |
33.6 |
10.2 |
12.7 |
10.5 |
President Lyndon Baines Johnson and Congress created
Medicaid and Medicare in 1965. So began the Great Society’s impact on
long-term care financing. Here’s what happened next.
Nursing Home and CCRC
Early Years
By 1970, even though Medicaid had been paying for
nursing home care for five years, it accounted for less than a quarter of
the cost. Out-of-pocket expenditures were still high at nearly half but
falling.
From 1965 until 1980, Medicaid had no restriction on
asset transfers to qualify. Anyone could give away everything and become
eligible immediately. The Omnibus Budget Reconciliation Act of 1980
permitted states to impose penalties for asset transfers done for the
purpose of qualifying for Medicaid within two years of applying. But OBRA
’80 excluded exempt assets so it didn’t apply to seniors’ biggest
financial resource, their homes. The Tax Equity and Fiscal Responsibility
Act of 1982 corrected that omission by including exempt assets in the
transfer penalty. TEFRA ’82 also allowed states to place liens under
certain limited circumstances and to recover benefits correctly paid from
recipients’ estates.
From 1970 on, out-of-pocket expenditures for nursing
home care steadily declined, dropping from almost half to less than
one-quarter in 2020. But don’t interpret that statistic to mean Americans
still have to spend down their assets into impoverishment to pay for
private nursing home care. Half of what CMS reports as out-of-pocket
nursing home expenditures is actually spend-through of Social Security and
other income that Medicaid recipients are required to contribute toward
their cost of care. Analysts often assume that people routinely spend down
their life’s savings on long-term care before becoming eligible for
Medicaid. There is no evidence for that conclusion and they never cite
any. It is very important to understand that Medicaid’s predominant role
as a long-term care funder is heavily dependent on financing from Social
Security and Medicare (as explained below), two highly vulnerable
entitlement programs with trillions of dollars of unfunded liabilities
between them.
Confusing Numbers
Medicaid’s share of nursing home expenditures is
misleading. It doubled from 1970 to 1980, leveled out for three decades
and then plummeted six percent in 2020. Medicaid is a much bigger factor
in nursing home financing than those numbers imply. It covers almost
two-thirds of all nursing home residents and nearly all of the most
expensive long stayers. It pays about 80 percent of private pay rates,
often less than the cost of providing the care. Thus Medicaid’s relatively
small contribution to nursing home costs has a disproportionately large
damaging impact on the program’s ability to pay for quality care.
Furthermore, CMS changed the definition of National
Health Expenditure Accounts (NHEA) categories in 2011, adding 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 percent in 2008 to under one-third
(32.8 percent) in 2009 (as reported originally in those years by CMS).
That is because CCRCs include independent and assisted living. Combining
CCRCs, which are mostly private pay, with nursing homes, which provide
most of the Medicaid-financed long-term custodial care for the elderly,
had the effect of making Medicaid appear less a factor and out-of-pocket
costs a much bigger factor in nursing home financing.
Medicare
What about Medicare financing of nursing home care?
Piddling until it jumped to 12.8 percent in 2000, 23.0, in 2010, and 20.1,
in 2020. What happened? In 1983, Medicare prospective payment for hospital
care incentivized quicker and sicker discharges to nursing homes.
Prospective payment for nursing homes, implemented in 1998, didn’t stop
the expenditure growth. Why does it matter to long-term care since
Medicare pays only for short-term sub-acute and rehabilitative care?
Nursing homes depend financially on Medicare’s more generous reimbursement
levels to make up for their losses on Medicaid’s low reimbursements for 63
percent of their residents. Without the 10 to 15 percent profit margins
from their Medicare business, nursing homes could not survive Medicaid’s
often less-than-cost reimbursements.
Public vs. Private Long-Term Care Financing
In 1970, Medicaid and Medicare paid 26.8 percent of
nursing home costs. Other sources (see the CMS tables for the definition
of “Other”) paid 22.3 percent. Private health insurance amounted to almost
nothing,.2 percent. Nursing home residents and their families paid 49.2
percent. In the mid-1970s a fledging private insurance product began to
appear designed to cover the risk of incurring catastrophic nursing home
costs. By 2020, however, the share of nursing home and CCRC expenditures
covered by Medicaid (27.0 percent), Medicare (20.1 percent) and Other
sources (18.0 percent) had increased to 65.1 percent. Private health
insurance added another 8.5 percent bringing third party coverage to 73.6
percent. Out-of-pocket expenditures had declined by more than half to 23.0
percent. Half of that came from income, not asset spend down.
Consequently, private long-term care insurance, which prospered early on
with over 120 companies marketing the product, began to decline by the
late 1990s as out-of-pocket expenditures declined and third party funding
from Medicaid, Medicare, private health insurance and Other sources
increased.
What is “Private Health Insurance?”
If private long-term care insurance coverage has
declined significantly since 2000, what is that private health insurance
(PHI) that CMS says increased steadily from 1970 until 2000 and then
leveled out at over 8 percent? According to CMS, PHI
[i]ncludes premiums paid to traditional managed care, self-insured health
plans and indemnity plans. This category also includes the net cost of
private health insurance which is the difference between health premiums
earned and benefits incurred. The net cost consists of insurers’ costs of
paying bills, advertising, sales commissions, and other administrative
costs; net additions to reserves; rate credits and dividends; premium
taxes; and profits or losses.
That definition does not mention private long-term
care insurance by name. Is it included? The American Association for
Long-Term Care Insurance reported that the “nation’s long-term care
insurers paid out $12.3 Billion in claims during 2021.” That would be 6.3
percent of the $196.8 billion America spent on nursing home care in 2020.
But AALTCI also says more “than two-thirds of new long-term care insurance
policy claimants receive benefit payments covering care in their own home
….” Paid claims of $12.8 billion would be only 4.0 percent of the
country’s total expenditure for nursing homes and home care in 2020. So,
does PHI include private long-term care insurance? Who knows?
Why Pump OOP and Minimize Medicaid?
Why does CMS mix apples (custodial nursing home and
home care mostly paid by Medicaid) and oranges (CCRC independent and
assisted living mostly private pay)? Why are nursing home out-of-pocket
costs (23.0 percent) reported so high and Medicaid costs (27 percent) so
low, when nursing homes’ revenue mix is 50.7 percent Medicaid and only 7.4
percent private pay and their patient day mix is 66.2 percent Medicaid but
only 8.2 percent private pay (NIC,
Skilled Nursing Monthly Report)?
I think the intention is to make out-of-pocket costs
appear higher and Medicaid costs appear lower. Why do that? To promote the
idea that out-of-pocket nursing home costs are more onerous than they
actually are and that Medicaid does less than it actually does to finance
and influence nursing home care. Why do that? Because CMS bureaucrats,
politicians, and policy analysts are biased toward public financing and
against private financing alternatives. They rig the data to support
proposals to expand public long-term care financing options, especially
social insurance.
Home Care
The home care story is similar except out-of-pocket
expenditures were never as large a factor as for nursing homes. In 1970,
Medicaid (6.7 percent), Medicare (26.7 percent) and Other (52.7 percent)
covered 86.1 percent of home care expenditures. Out-of-pocket costs were
only 9.4 percent, less than one dollar out of 10. By 2020, Medicaid (32.5
percent), Medicare (33.6 percent) and Other (10.5 percent) were 76.6
percent of home care expenditures but private health insurance coverage
had increased from 3.0 percent in 1970 to 12.7 percent in 2020 leaving
only 10.2 percent of home care costs to be paid out of pocket. Still about
one dollar in ten, leaving very little incentive to purchase private
long-term care insurance against the risk of extended home care expenses.
Conclusion
Hopefully these observations and interpretations shed
some light on the confusing state of America’s centrally planned, mostly
public, and largely welfare-financed long-term care system. If not for the
economic distortions created by that system’s lack of free-market price
data, entrepreneurs and business people could imagine, design and
implement better ways and means to meet the caregiving needs of aging
Americans. As it stands, the age wave is cresting and about to crash while
long-term care remains hamstrung by giant bureaucracies, self-serving
politicians, and crony-capitalist operators.
There is a better way.
#############################
Updated, Monday, January 31, 2022,
10:40 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #22-004 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 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:
- With his signature, Inslee pauses WA Cares program for 18 months
- What to Watch in Medicaid Section 1115 Waivers One Year into the
Biden Administration
- Question Answered
- A ‘Medicaid annuity’ may be a useful option when your spouse needs
nursing home care
- Terry Savage: Retiree medical costs are soaring
- Feds must deliver immediate $5 wage increase, relief payments for
LTC workers, top provider group warns
- How the Feds Handcuff States to Medicaid
- ‘Great retirement’ in U.S. driven by older female baby boomers
- BREAKING NEWS: OSHA to withdraw COVID-19 vaccine mandate
- 80 is the mean age for long-term care insurance claims, study finds
- Hospital discharge pressures build as nursing homes clamor for help
- Why Medicare Doesn’t Pay for Rapid At-Home Covid Tests
############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Monday, January 24, 2022,
10:40 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #22-003 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 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 Is Planning to Eliminate the
Asset Test for Medicaid Applicants
-
The $84T Wealth Transfer Underway Now, by
the Numbers: Cerulli
-
What's next for beleaguered WA long-term
care program?
-
State lawmakers fast-track long-term care
tax delay, could be passed by next week
-
The big Medicare Advantage players keep
getting bigger
-
LTCG Announces New Contract with CNA to
Administer its Long Term Care Insurance Business
-
Informal Caregivers Provide Considerable
Front-Line Support In Residential Care Facilities And Nursing Homes
-
If You Notice This in Conversations, Get
Checked for Dementia
-
Working in long-term care can be hazardous
to your health
############################
"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 21, 2022,
10:40 AM (Pacific)
Seattle—
#############################
LTC BULLET:
LONG-TERM CARE IRONY
LTC Comment: If
long-term care is such a huge risk and cost, why don’t more people plan
for it and how could better public policy fix that overnight? After the
***news.***
*** ILTCI CONFERENCE
early-bird discount deadline extended until January 31, 2022. The
Intercompany Long-Term Care Insurance Conference convenes “in-person”
March 20-23, 2022 at the Raleigh Convention Center in Raleigh, North
Carolina. You have 10 more days to lock in a $100 discount on the
conference registration fee. Check out all the pricing details
here. Register
here. Organizers say “Don't miss out on key networking opportunities
at the long term care industry's biggest event of the year. We have three
days of events to help you reconnect with colleagues, reach out to
decision makers, and attend our many
educational sessions within our 7 different
tracks.” ***
*** JOIN US.
Since 1998, the Center for Long-Term Care Reform has
conducted and published dozens of national and state-level studies.
We’ve helped to win crucial Medicaid statutory changes in 1993 (mandatory
estate recovery) and 2005 (capping the home equity exemption). We’ve
analyzed and refuted virtually every study and article advocating a
government takeover of long-term care. Now we’re proposing
a simple, cost-saving solution to the long-term care mess government
created. Won’t you join us and support these achievements, goals, and
future potential? Become a regular or premium member. Or ask your company
or organization to become a corporate member, with benefits accruing to
you at no extra expense. Contact Damon at 206-283-7036 or
damon@centerltc.com for details. Review our Membership Levels and
Benefits schedule
here. Let’s get this done! Thanks for your consideration. ***
LTC BULLET: LONG-TERM
CARE IRONY
LTC Comment: The
following article was
originally published in Broker World magazine’s December 2021
issue. We thank editor and publisher Stephen Howard for permission to
republish that column here. We strongly recommend Broker World to
anyone working in the financing or provider sides of the long-term care
profession. Subscribe
here; only $6 for a year.
Steve Moses’s next
Broker World column, in the magazine’s current (January 2022) issue,
is titled “The Great Long-Term Care Compromise.” It proposes a simple
public policy solution to the “long-term care irony” described below. Read
it
here.
Long Term Care Irony
by
Stephen A. Moses
December 1, 2021
“If you don’t buy
long term care insurance, you could lose your life’s savings.”
We’ve heard that threat
from government, private companies and the media for decades, but private
long term care insurance has languished nevertheless. It wasn’t until a
state government forced people to buy public long term care
coverage through the WA Cares Fund that private policy sales exploded.
Demand for private long term care insurance, as the only means to escape
Washington State’s otherwise mandatory payroll tax, overwhelmed supply
leaving many citizens of the Evergreen State trapped in a public program
they would rather avoid. How ironic and contra-intuitive.
Let’s first put this
puzzle into historical context and then resolve the incongruity by
examining the almost universally held, but faulty premises on which it’s
based.
Anyone who knows
anything about long term care financing in the United States recognizes
this mantra: Own long term care insurance or you may be impoverished by
catastrophic care costs. Almost three of four Americans will need some
long term care; one in four will face huge bills. All across the country
people spend down into impoverishment until they slip onto Medicaid. That
safety net only becomes available when people have been wiped out
financially with no more than $2,000 left in savings and no more than $723
per month of income. Both the academic and popular media drum those
warnings loudly and constantly into our ears.
Wow! How awful. You’d
expect people to seek out and buy private insurance against such a risk
without having to be cajoled by commissioned sales agents. But they don’t.
How odd.
Finding that long term
care’s high cost and Medicaid’s draconian financial eligibility rules
weren’t enough to win consumers over, the state and federal governments
hammered home the message with carrots and sticks. The long term care
partnership program promised partial estate recovery forgiveness in
exchange for buying private long term care insurance. Didn’t work. The
“Own Your Future” long term care awareness campaign urged people to wake
up and take action. They didn’t. Tax deductions and credits at the state
and federal levels made private coverage cheaper. But even that didn’t
work.
As positive incentives
failed, the government tried negative persuasion. Policy makers figured
making Medicaid even harder to get should sensitize consumers to the need
for private insurance. The look-back penalty for asset transfers to
qualify for Medicaid was lengthened and strengthened by federal
legislation in 1982, 1988, 1993, and 2006. Congress and President Clinton
made it a crime to transfer assets in order to qualify for Medicaid in
1996 only to repeal that “Throw Granny in Jail” a year later and replace
it with the unenforceable “Throw Granny’s Lawyer in Jail” law in 1997.
Medicaid estate recovery became mandatory in 1993. The home equity
exemption was capped in 2006. None of these measures persuaded consumers
that they should take personal responsibility to plan, save, invest or
insure for long term care.
In fact, nothing worked
to get the public to buy private long term care insurance until the State
of Washington imposed a compulsory public program financed with a .58
percent supplemental payroll tax and promising a $36,500 lifetime benefit
for state citizens. Although the state represented this program as a major
contribution to solving the long term care financing problem and promised
it would ease the public’s worries about long term care, as soon as a
choice to “opt out” by purchasing private long term care insurance became
available, Washingtonians stampeded to the exits. Private LTCI carriers
were overwhelmed by the demand. Within weeks, private coverage became
almost entirely unavailable in the state.
No amount of
importuning, positive incentives, or negative threats prevailed. But let
the government step in to force people to pay for public long term care
benefits and all of a sudden private insurance enjoyed a fire sale. Is
this just a one-off in Washington State or could it become a pattern as
other states and the federal government experiment with compulsory public
long term care programs? Should people and companies hurry to get in front
of those experimental public programs by insuring privately? Will they? Or
will the long term care irony prevail with denial and evasion continuing
to hold sway?
It all depends on
whether or not future state and federal long term care programs offer
people a choice, an opportunity to opt out by purchasing private coverage.
If they do, consumers will behave as they have done in Washington. If not,
not. Why is that true?
The answer lies in the
commonplace but faulty premises about Medicaid and long term care
financing listed in the preceding paragraphs. Medicaid long term care
eligibility does not require impoverishment. People can have incomes up to
the cost of a nursing home plus virtually unlimited exempt assets and
still qualify. Estate recovery is easy to evade. There is no evidence of
widespread long term care spend down which is why the academic literature
cites none. For documentation of these facts about how long term care
financing really works, see Medicaid
and Long-Term Care.
So here’s the answer to
the “Long Term Care Irony.” People don’t buy private long term care
insurance when the government pays for most catastrophic long term care
costs, as it has done through Medicaid since 1965. No amount of cajoling,
positive or negative incentives will get them to buy. But create a real
cost for long term care by forcing them into a payroll-funded government
long term care program and they’ll rush to buy private coverage if that
escape hatch is available.
The lesson for state and
federal central planners is this: If you must force people into mandatory
payroll-funded long term care programs of dubious solvency, at least give
them a way out by purchasing private insurance so we have some consumers
able to pay their own way if and when the bottom falls out of the
country’s many fiscally challenged entitlement programs.

Stephen A. Moses
425-891-3640 smoses@centerltc.com
Stephen A. Moses is
president of the Center for Long-Term Care (www.centerltc.com). 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), a 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.
He completed the “2008
National Long Term Care Consciousness Tour” traveling for a year and
28,028 miles while living in an Airstream trailer dubbed the “Silver
Bullet of Long Term Care.” The LTC Tour promoted responsible long term
care planning and rational long term care public policy.
Moses can be reached at
the Center for Long-Term Care Reform, 2212 Queen Anne Avenue North, #110,
Seattle, WA 98109
#############################
Updated, Monday, January 17, 2022,
10:40 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #22-002 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 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:
-
House panel votes to delay Washington’s
long-term care tax to 2023
-
BREAKING NEWS: Supreme Court stays OSHA
vaccinate-or-test mandate for large private business
-
National Medicare Insurance Industry
Conference Acquired: Connectiv Holdings and Insurance Forums Acquire
National Medicare Insurance Industry Conference
-
Webinar on HCBS Settings Regulation: Where
Are We Now and Where Are We Going
-
COVID-19 Hospitalizations Are Soaring for
Working-Age People, Too
-
COVID-19 deaths among nursing home staff
near all-time high
-
Seniors have less angst about personal
finances than younger people: survey
-
Long-haul impacts on senior living — what
to expect in 2022
-
Study: ‘Cognitive frailty’ may be result of
aging — not the brain changes found in dementia
-
Regulators Aim to Curb Medicare Plan
Lead-Generation Firms
-
Humana halves 2022 Medicare Advantage
enrollment outlook
-
Dementia cases may triple globally by 2050:
Study
-
Democratic lawmakers file 2 bills hoping to
fix problems with Washington's new long-term care benefit
-
Health habits’ connection to dementia in
the spotlight as new year begins
-
The Great Long-Term Care Compromise
-
Long-term care insurers pay out $12.3
billion in claims
-
Almost Half of CCRCs Plan to Downsize
Skilled Nursing Footprint
-
Even After Covid, Could Congress Ignore The
Long-Term Care Needs Of Older Adults?
############################
"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 7, 2022,
10:40 AM (Pacific)
Seattle—
#############################
LTC Bullet: Long-Term Care Financing Update
LTC Comment: The
political environment for long-term care financing is realigning. Policies
impossible yesterday will become likely tomorrow. Read on after the
***news.***
*** ILTCI EARLY BIRD
DISCOUNTS expire soon. So grab yours by January 14 to get $100 off the
cost of admission. Conference planners report: “We have a full
schedule in place for our in-person conference March 20-23rd at the
Raleigh Convention Center in North Carolina. Our agenda includes over 45
educational sessions with ample time for networking and reconnecting
with colleagues. Our session schedule is in the works right now and will
be announced in February. We also still have some 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. Sponsorship Opportunities are going quick. ***
*** “THE GREAT LONG-TERM
CARE COMPROMISE” is the title of
an article by Center president Steve Moses in the current issue of
Broker World. In it he proposes a radical new way to structure
long-term care financing public policy. Here’s an excerpt: “The Great
Long-Term Care Compromise invites social insurance advocates to relinquish
their demand for compulsory universal participation. It requires free
market advocates to agree with mandatory participation for all who do not
opt out. If both sides can make those concessions, we can quickly get
everyone covered for long-term care now and for the future.” Read the
article
here and let us know what you think. ***
LTC BULLET: LONG-TERM
CARE FINANCING UPDATE
LTC Comment: Center for
Long-Term Care Reform president Stephen Moses delivered the following
presentation by webcast to staff and agents of
GoldenCare on Wednesday, January 5, 2022.
Steve is available to
address audiences on the past, present and future of long-term care by
webcast or in person. Contact the Center for Long-Term Care Reform at
206-283-7036 or
info@centerltc.com for details.
Good morning,
One year ago tomorrow I
spoke to you about long-term care financing. That evening a mob penetrated
the U.S. Capitol building. What a tumultuous year it’s been politically
ever since.
Long-term care financing
public policy is no exception. The country seems to have tiptoed up to the
edge of a precipice in social policy … and then paused.
The Biden
Administration’s Build Back Better plan would be the biggest expansion of
America’s welfare state since the New Deal of the 1930s, as big if not
bigger than the Great Society programs of the 1960s.
It looks now like Build
Back Better, including its proposed $400 billion expansion of Medicaid
home and community-based care, will either fail or be vastly scaled back.
The country seems to be
stepping back from the brink of socialism. So it is a very good time to
review the roles of government, on the one hand, and markets on the other
in our economy.
What works best to make
the most of America’s great resources? How does public vs. private
financing impact our ability to provide quality long-term care for all
Americans?
I know you’re interested
in the Washington Cares Fund, its future prospects and its likely impact
on the LTC insurance market.
I will cover that, but I
want to put it into a broader context. What led up to WA Cares? Why has it
dominated the headlines lately? What else is happening? Where is all this
heading?
I’m going to cover six
topics briefly. You can refer to the electronic outline GoldenCare is
providing for details, including links to many published articles where I
develop these ideas much more fully.
These are my six topics
for today:
1.
What is the LTC problem? I won’t spend much time on this as you are
already experts.
2. Then I’ll discuss three approaches to correct the long-term
care problem.
3. Third, in general, what’s better? Government or market-based
solutions and why?
4. Next, how have government or market-based solutions actually
played out in long-term care?
5. Fifth, I’ll mention some new research that suggests LTC isn’t
such a huge problem after all.
6. Finally, I’ll suggest the best course for public
policy going forward
So, first, what
is the long-term care problem. In a nutshell, too many people living
longer and needing help with activities of daily living for extended
periods of time.
70% will need some
long-term care, but only one quarter will require help involving
catastrophic costs. Most of those extremely high costs are currently
covered by government programs like Medicaid, Medicare and the VA. Those
public programs are underwater financially already and extremely
vulnerable in the future.
But private sources of
long-term care financing are drying up. Private pay nursing home revenue
is down to 7.4% from closer to half 50 years ago. Long-term care insurance
never really caught on despite your best efforts. Home equity is rarely
used to fund long-term care.
Families are suffering
to provide care for “free.” Even paid caregivers are in short supply due
to the hard, dangerous work, low wages, and vaccine mandates. Most people
prefer home care but government pays primarily for institutional care.
It looks like all these
problems are getting worse and worse. The pandemic exacerbated all of
them.
So, second, what
should be done? There are three primary options.
1.
Do nothing. That’s an option we’ve not employed since the 19th
century. But, try this thought experiment:
What if there were no Medicaid program to pay
for catastrophic long term care costs? How would consumers behave? Odds
are people would worry about the risk of having a severe, expensive need
for long term care in the future. They would save, invest, or insure to
spread the risk. Unprepared people who were stricken would rely on private
charity or use their home equity to fund care as most elderly own homes.
Spending their own money for long term care, patients and families would
seek home- and community-based care instead of nursing homes. With private
asset spenddown, including potentially $9 trillion of home equity, flowing
through the long term care services industry, access and quality of care
would improve for everyone. Potential profits would supercharge
entrepreneurs to discover and offer new and better care options. The
relatively small numbers of genuinely needy people who remain could be
served by private charity and/or a vastly scaled down public assistance
program funded by a fraction of the savings from ending the Medicaid LTC
program.
Voila! Problem solved. Except free market
solutions are out of favor, so what’s another way?
2.
Second, consider the “social contract for long-term care.” This is
actually the system in effect now, although it is mostly unenforced. It
goes like this:
If you are stricken by a need for long-term
care that you cannot afford, we help you even if you are not poor.
Assuming you’re eligible medically, and hold all but $2,000 of your assets
in exempt form such as home equity, you’ll qualify for Medicaid long-term
care benefits as long as your income is (1) less than the cost of a
semi-private nursing home bed, about
$93,072 per year, and (2) insufficient to cover your private
uncompensated medical and long-term care expenses. But this benefit comes
with the quid pro quo of mandatory estate recovery. So if you want to stay
off Medicaid with all its shortcomings and avoid having to pay for it in
the long run anyway, plan ahead and buy LTC insurance.
I won’t take time today to explain how and
why even upper middle class people qualify for Medicaid LTC benefits
without spending down assets significantly. You can find that in the
outline and in many of my publications.
Why didn’t this “social contract for
long-term care” work? The states didn’t implement estate recoveries
effectively, the federal government didn’t enforce the program
aggressively, the media didn’t publicize it. So the public remained in
ignorant bliss, uninsured for long-term care, and ultimately dependent on
Medicaid.
Now, MACPAC (the Medicaid and CHIP Payment
and Access Commission) wants to water down estate recovery, making it
voluntary and further debilitating the social contract.
Still, the social contract for long-term care
is salvageable and may well be the course the country takes in the end.
3.
Social insurance is the third approach to solving long-term care and by
far the most popular option among what I’ve called the InLTCgentsia, the
researchers, analysts, advocates, politicians, policymakers, etc. that are
constantly opining about long-term care.
Social insurance is compulsory, universal and
paid for by employers and workers through payroll deductions. Think of
Social Security and Medicare. Every few years some author, commission or
consortium proposes creating a new federal social insurance program to
cover long-term care. Or they just want to shoehorn it into Medicare.
These federal plans have always failed.
So now states are picking up the mantle. The
one furthest along is Washington, the Evergreen State. The WA Cares Fund
passed in 2019. It imposes a .58% payroll tax effective January 1, 2022
and promises to pay $36,500 to people who vest after 10 years of paying
into it.
But before it could be implemented, WA Cares
was hit by a storm of problems and opposition. Its opt-out escape hatch
launched a fire sale of private LTC insurance that overwhelmed and quickly
shut down the LTC insurance market in the state.
Besides being underfunded by about $15
billion, WA Cares required workers who live out of state who would not be
eligible for benefits to contribute to the fund. Likewise, it made no
provision for people who are about to retire and would pay in but not
qualify for benefits.
These and many other problems led Governor
Inslee only days before the program’s scheduled start to call a halt.
Well, sort of. He enjoined the legislature to revisit WA Cares to try and
fix its problems. Confusingly, he told employers they could either collect
the payroll taxes or not, but regardless, they would be liable to pay them
to the state if the legislature doesn’t repeal or modify the program to
relieve them.
In other words, WA Cares is a total mess
reminiscent of previous attempts to impose government social insurance for
long-term care, such as the CLASS Act. Hopefully, other states reported to
be considering a similar program are taking note and will back off.
A few of those states are …
(a)
California
(b)
Minnesota
(c)
Hawaii
(d)
Maine
(e)
Michigan
Why do all programs of this kind fail? What’s
wrong with social insurance? The fundamental problem is that social
insurance spreads risk, but does not price it. Everyone is charged the
same “premium” or tax regardless of the risk they bring into the risk
pool. So in effect, social insurance punishes good behavior with higher
rates and rewards bad behavior with lower rates. It is inequitable. It
treats some people (poor risks) better than other people (good risks).
Private insurance, on the other hand,
spreads, but also prices risk. You pay more for life insurance if you
smoke, for example. So private insurance rewards good behavior with lower
rates and punishes bad behavior with higher rates. Private long-term care
insurance ensures that beneficiaries pay only for the risk they bring into
the risk pool. Private insurance is equitable. It treats everyone the same
based on the risk they bring to the pool.
Why is social insurance so popular now after
decades of failure to prevail? The answer is Modern Monetary Theory. The
idea that government deficits don’t matter has taken over politics. No one
cares anymore about the nearly $30 trillion national debt or that
government spends each year almost double what it takes in through taxes,
borrowing or printing the remainder.
Probably that whole house of cards will
collapse in time. The resulting consumer price inflation flaring right now
suggests the denouement is not far off. But in the meantime Modern
Monetary Theory has seduced politicians and the experts who advise them.
Until it does collapse, we’ll see more and more efforts at the state and
federal level to impose long-term care social insurance programs on the
country.
Now, for our third topic of the day,
what is the fundamental difference between government solutions and
private sector solutions to social problems like long-term care?
Private-market forces prevail in independent
living, somewhat less so but predominantly, in assisted living and further
less but considerably in home care.
Government funding and regulation prevail in
home care, skilled nursing and, less so but significantly, in assisted
living.
By most measures, the more market-based
independent and assisted living sectors fare better economically over time
than the more government-dependent nursing home and home health sectors.
Why is this so? Certain fundamental economic
principles apply. Government is public, collectivist and bends toward
socialism. Markets are private, individualistic and they’re maximized by
capitalism.
Government subjects can only vote yes or no
(that is, they accept) this or that politician or ballot measure with no
gradations for preference, amount or quality. But in the market,
free-acting consumers vote with their dollars (that is, they choose)
whatever they want in the quantity and quality they desire.
In government, politicians compete by
satisfying interest groups with benefits paid for by others, and with
quality and efficiency notoriously absent. In markets, entrepreneurs
compete by creating or identifying and meeting consumers’ needs based on
quality and efficiency.
In government, the Federal Reserve sets
interest rates based on balancing political powers and influence resulting
in asset bubbles, malinvestment and economic inequality. In markets,
millions of transactions between willing buyers and sellers create
spontaneous economic order, set interest rates (the price of money)
through supply and demand, and generate price data that tell investors and
businesses how much of which products and services to produce.
Because of long-term care’s heavy reliance on
centrally planned government financing, America’s long-term care system
does not produce the price data investors would need to allocate resources
in the most productive and beneficial way.
For these reasons, the less government
controls long-term care and the more markets prevail, the better off
consumers will be.
Our fourth topic of the day examines
this point more closely. How do these principles play out specifically in
the field long-term care?
The history of long-term care is a tension
between public and private financing. Medicaid made public financing of
long-term care easy to get after care is needed. It paid not only for
long-term care, but also for health care, room, board, and laundry.
Consequently, the public didn’t worry about
long-term care, didn’t buy insurance for it, and ended up on Medicaid.
Government costs exploded. Access and quality suffered. Nursing home care
prevailed despite the public’s preference for home care. In other words,
government made a mess of long-term care.
The private sector—markets—have mitigated
some of this damage. Assisted living came along in the 1980s and offered
nicer facilities at half the cost of nursing homes, but fully private pay.
People were actually willing to pay out of their own pockets to avoid
Medicaid nursing homes.
Unfortunately, the assisted living industry
is following nursing home down the primrose path of accepting Medicaid.
ALF operators figure it’s better to get Medicaid’s low reimbursement than
to have an empty unit. 16.5% of ALF residents receive Medicaid now and
it’s growing.
Home care is similar. Government has failed
to “rebalance” from nursing homes to home care despite decades of trying.
But home care companies like Amada, for example, routinely search for
customers who have LTC insurance, help them get all the benefits they’re
entitled too and counsel them on using home equity or life settlements to
fund their care privately as well. In other words, the private sector
plays a critical role in helping consumers find ways to pay privately for
the home care they prefer, but government has failed to provide.
Government went a long way to ruin LTC
insurance by giving away what producers are trying to sell and by forcing
interest rates to zero which compelled carriers to raise premiums, which
alienated LTCI prospects and clients.
The private sector did the right thing,
raising premiums to ensure benefits would be paid when due, unlike Social
Security and Medicare which have huge unfunded liabilities and will never
keep the promises they’ve made.
The private LTCI market licked its wounds and
responded creatively with new hybrid products.
In other words, what government fouled up,
the private sector goes a long way to fix. The lessons of long-term care
history are clear. Public programs have diverted the public from
responsible planning and left too many people dependent on
welfare-financed nursing home care. The private sector has interceded
repeatedly with preferred options such as assisted living, private
insurance and home care.
Our fifth topic is new research that
concludes long-term care may not be such a titanic problem after all.
Recent research shows that half of people
turning 65 will incur LTC expenses, those expenses will average only
$138,000, and that the people needing long-term care could handle that
cost by investing only $70,000 today. That doesn’t sound so intimidating.
Other research shows 74% could fund two years
of paid home care by liquidating all of their assets, and 58% could fund
two years of extensive paid home care.
Of course people will not liquidate their
assets to pay for LTC as long as Medicaid financial eligibility works the
way it does. So, fix Medicaid. Don’t impose a massive new compulsory
payroll tax on everyone to fund a universal program that isn’t needed.
NIC, the
National Investment Center, says reducing the annual cost of seniors
housing by $15,000, from $60,000 to $45,000 per year would expand the
middle market for seniors housing by 3.6 million individuals enabling 71
percent of middle-income seniors to afford the product.
Where could consumers find that extra
$15,000? The LTCI premium for an annual policy of $15,000 would be a tiny
fraction of the premiums consumers find so financially daunting now.
Unfortunately, insurance regulations forbid carriers from offering
coverage with a benefit of less than $18,000 per year. So, fix LTCI regs.
We should explore further the possibility
that private LTC insurance, home equity conversion, and private savings
could meet this less daunting challenge of providing quality long-term
care to most Americans if government would just get out of the way.
Finally, our sixth and last topic of
the day. What is the best course of action going forward?
Stop doing what we’ve always done that
created long-term care’s problems. Reduce government’s role in financing
and regulating long-term care. Cut federal financial participation in
state Medicaid programs. Enforce Medicaid financial eligibility rules and
estate recovery. Eliminate or radically reduce Medicaid’s home equity
exemption to encourage the use of home equity conversion to fund long-term
care privately. Close Medicaid financial eligibility “loopholes” and
discourage Medicaid estate planning as inequitable, favoring the
well-to-do over the poor.
Encourage personal responsibility for
long-term care. Use some of the savings from tightening Medicaid to
incentivize responsible LTC planning. Consider recommendations from NAIC’s
2017 report “Long-Term
Care Federal Policy Options to Present to Congress” such as … Permit
distribution from 401(k), 403(b) or Individual Retirement Account (IRA) to
purchase LTCI with no early withdrawal tax penalty. Consider the
AHIP proposal to allow employers to offer long-term care insurance
under a cafeteria plan.
Publicize Medicaid’s estate recovery
obligation. Make sure the public understands LTC is a personal
responsibility: you either pay now or pay later. Encourage all forms of
private LTC financing: Savings and investment. Private LTC insurance, both
traditional and hybrid. Reverse mortgages and other kinds of home equity
conversion. Life settlements also.
Finally, consider
“The Great LTC Compromise.” That’s the title of my article in the current,
January 2022 issue of Broker World magazine. If we can’t stop the
drive for federal or state level LTC social insurance, then let’s at least
demand they maintain an opt out by purchasing private LTCI. That ensures
at least some people will be protected when the social insurance
“entitlement” programs become insolvent.
I’ll conclude there but before we go to
questions, let me just say a few words about my organization, the Center
for Long-Term Care Reform.
The Center is a private think tank dedicated
to ensuring access to quality long-term care for all Americans.
We do research and public policy advocacy
aimed at convincing consumers to take the risk of long-term care seriously
and plan early to save, invest and insure against that risk.
We publish two online newsletters, LTC
E-Alerts and LTC Bullets.
We conduct and publish national and
state-level studies and reports.
We speak at conferences and testify before
state legislatures and Congress.
The Center is a membership organization with
individual memberships beginning at $150 per year.
For more information, go to
www.centerltc.com or contact me at 425-891-3640 or smoses@centerltc.com.
Thanks for your attention. That’s a lot to
digest in a short time. Do you have questions?
#############################
Updated, Monday, January 3, 2022,
10:40 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #22-001 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 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:
-
Update: Exemption statistics for state’s
long-term-care fund, payroll tax
-
Federal Government Approves California's Medicaid
Overhaul
-
Washington Long-Term Cares Fund Update: Employers
Advised to Withhold Premiums Starting January 1
-
‘Medicaid for All’ is rapidly becoming a reality in
New York
-
Study finds abrupt decline in the prevalence of
cognitive impairment among older Americans
-
Inslee statement on payments collected for
long-term care program
-
WA’s Long-Term Care Insurance on Hold
-
Nursing Homes Bleed Staff as Amazon Lures Low-Wage
Workers With Prime Packages
-
Washington State Delays Long-Term Care Program
Launch
############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Monday,
December 20, 2021, 10:40 AM (Pacific)
Seattle—
#############################
LTC BULLET: SO WHAT IF THE GOVERNMENT PAYS FOR MOST LTC, 2020 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. But first …
*** THE CENTER FOR
LONG-TERM CARE REFORM announces a new in-person or Zoomed program by
Stephen Moses covering LTC services and financing. What works, what
doesn’t, why, and what to do about it. Including …
-
So What if the
Government Pays for Most Long-Term Care?
-
What Happened to WA
Cares and Why it Matters
-
How to Square the LTC
Circle
-
The Great LTC
Compromise
-
The Irony of Long-Term
Care Advocacy
-
What works for
long-term care and what doesn’t
-
What’s better for
senior living and care — the market or government
-
Long-Term Care’s
Problems Are Bad, Getting Worse, but Fixable
-
Should Medicaid
Protect $8 Trillion from Private Senior Living Costs?
-
“The InLTCgentsia”—How
it ruined long-term care
-
And much more
Start the new year off
with a motivational long-term care convention-busting program by the
fountainhead of creative LTC policy thinking. Zoom Steve’s presentation
for $1,500 or bring him to your live program in person for $2,500 plus
travel expenses. Steve says “there’s never been a more promising time to
reinvent long-term care financing than right now, but we must come
together, agree on the plan, and shout it from the electronic rooftops.”
Call (425-891-3640) or email
smoses@centerltc.com to schedule this electrifying program for your
agents, members, employees and staff. ***
LTC BULLET: SO WHAT IF
THE GOVERNMENT PAYS FOR MOST LTC, 2020 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 2020 statistics on its website at
NHE Tables (ZIP). Click on that link to download the tables, unzip
them, then click on the data tables of interest, Tables 14 and 15 for our
purposes.
Health Affairs
has published a summary and analysis of the new data titled “National
Health Care Spending In 2020: Growth Driven By Federal Spending In
Response To The COVID-19 Pandemic." Health Affairs subscribers can
access the full text of that article
here. Others can purchase it. The “Abstract” is available free.
Unfortunately, the Health Affairs summary has little to say about
long-term care, so read on to get that story.
Following is our annual
analysis of the latest nursing home and home health care data.*
Heads Up: This
may be the most important LTC Bullet we have published all year. It
is the nineteenth 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 for Most LTC.”
You’ll find our yearly analyses of the data going all the way back to "So
What If the Government Pays for Most LTC, 2002 Data Update."
------------------
"So What If the
Government Pays for Most LTC, 2020 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 $196.8
billion on nursing facilities and continuing care retirement communities
in 2020, a 14.0% increase over 2019. The percentage of these costs paid by
Medicaid and Medicare has gone up over the past half century (from 26.8%
in 1970 to 47.1% in 2020, up 20.3 % of the total) while out-of-pocket
costs have declined in the same period (from 49.2% in 1970 to 23.0% in
2020, down 26.2% 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 1970-2020.
So What?
Consumers' liability for nursing home and CCRC costs has declined by over
half, down 53.3% in the past five decades while the share paid by Medicaid
and Medicare has increased by three-quarters, up 75.7%.
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 $636,000 and in some states up to $955,000 of home equity (as of
1/1/22). No wonder nursing homes are struggling 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 (27.0% of the dollars in 2020), it covers two-thirds (66.3%)
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. “With states setting the Medicaid rates paid
to nursing centers, there is a wide variation in the percentage of costs
covered by the rates. In 2015, the coverage ranged from a low of 73.5
percent to a high of 100 percent. A similar range exists with the 2017
projected shortfall across the states.” (Latest available data) Source:
A Report on Shortfalls in Medicaid Funding for Nursing Center Care.
Private Health
Insurance
Don't be fooled by the
8.5% of nursing home costs that CMS reports as having been paid by
"private health insurance" in 2020. 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 2020, ALFs cost an average of $51,600
per year, up 6.15% from 2019. Although assisted living facilities
remain mostly private pay, “48%
of ALFs are Medicaid certified” and only “a
small minority of state Medicaid programs do not cover services in
assisted living.” 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
$636,000 or $955,000 depending on the state), plus—in unlimited 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 $123.7 billion on home health care in 2020, up 9.5%
since 2019. Medicare (33.6%) and Medicaid (32.5%) paid 66.1% of this total
and private health insurance (not LTC insurance) paid 12.7%. Only 10.2% 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
1970-2020.
So What?
Only one out of every ten 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 at risk for the cost of their care.
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:
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
“CASSANDRA’S QUANDARY:
The Future of Long-Term Care” (2016), at
http://www.centerltc.com/pubs/FIA-Cbassandra-Quandry.pdf.
“How to Fix Long-Term
Care,” a series of briefing papers, at
http://www.centerltc.com/BriefingPapers/Overview.htm;
"Medi-Cal Long-Term
Care: Safety Net or Hammock?" at
http://www.centerltc.com/pubs/Medi-Cal_LTC--Safety_Net_or_Hammock.pdf;
"The LTC Graduate
Seminar Transcript"
here (requires password, contact
smoses@centerltc.com);
"Aging America's
Achilles' Heel: Medicaid Long-Term Care" at
http://www.centerltc.com/AgingAmericasAchillesHeel.pdf; and
"The Realist's Guide to
Medicaid and Long-Term Care" at
http://www.centerltc.org/realistsguide.pdf.
In the Deficit Reduction
Act of 2005, Congress took some significant steps toward addressing these
problems. A cap was placed for the first time on Medicaid's home equity
exemption and several of the more egregious Medicaid planning abuses were
ended. But much more remains to be done. With the Age Wave cresting and
threatening to crash over the next two decades, we can only hope it isn't
too late already.
* Note that CMS
changed the definition of National Health Expenditure Accounts (NHEA)
categories in 2011, adding for example Continuing Care Retirement
Communities (CCRCs) to Nursing Care Facilities. This change had the effect
of reducing Medicaid's reported contribution to the cost of nursing home
care from over 40% in 2008 to under one-third (32.8%) in 2009. CMS also
created a new category called "Other Third Party Payers" (7.1%) which
includes "worksite health care, other private revenues, Indian Health
Service, workers' compensation, general assistance, maternal and child
health, vocational rehabilitation, other federal programs, Substance Abuse
and Mental Health Services Administration, other state and local programs,
and school health." For definitions of all NHEA categories, see
http://www.cms.gov/NationalHealthExpendData/downloads/quickref.pdf.
Stephen A. Moses is president of the
Center for Long-Term Care Reform in Seattle, Washington. The Center's
mission is to ensure quality long-term care for all Americans. Steve Moses
writes, speaks and consults throughout the United States on long-term care
policy. Learn more at
www.centerltc.com or email
smoses@centerltc.com.
#############################
Updated, Monday, December 20, 2021,
10:40 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #21-044 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:
- Payroll tax meant for long-term care delayed
- The irony of long-term care advocacy
- Inslee, Leaders Opt to Pause Washington Payroll Tax
- Here’s How Not to Reform Long Term Care
- Health spending growth more than doubled in first year of pandemic
- Obsessive-Compulsive Disorder and the Risk of Dementia
- Terrible staffing competition will worsen: survey
- Number of MA plans offering home care benefit to skyrocket in 2022
- Average net worth per generation
- Dual Eligible Beneficiaries Prefer Medicare Advantage Over FFS
- How record Social Security cost-of-living adjustment will be
impacted by high inflation, Medicare premiums
- Post-acute care in nursing homes is increasingly out of reach for
many, study finds
- Recap of Dec. 10 commission meeting on long-term-care law
- Opposition to state long-term care tax ramps up ahead of January
implementation
- Are Medicaid annuities sound crisis-planning tools?
- Who will have unmet long-term care needs?
#############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Friday, December 17, 2021, 10:40 AM (Pacific)
Seattle—
#############################
LTC
BULLET: SQUARE THE LTC CIRCLE
LTC
Comment: How can we get government and private industry working together
on long-term care financing? The answer after the ***news.***
***
ILTCICONF.ORG reports “Registration is Now Open for the 2022 Intercompany
Long Term Care Insurance Conference! Our in-person conference will be
March 20-23rd at the Raleigh Convention Center. Our agenda includes over
45 educational sessions with ample time for networking and reconnecting
with colleagues. Register now to save $100 on your registration during our
early bird. 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.” ***
***
RECENTLY PUBLISHED ARTICLES by Steve Moses. We hope you’ll read these
articles,
join
the Center for Long-Term Care Reform,
and help us “Square the LTC Circle.” The Center’s “Membership Levels and
Benefits” schedule is
here.
Join individually or urge your company or association to join as a
corporate member so you can receive all the benefits of membership at no
cost to you. Universal access to top quality care for all Americans (the
Center’s mission) is achievable. Join us and make it happen! ***
“Long
Term Care Irony,”
by Stephen A. Moses, Broker World, December 1, 2021 (PDF
version.)
“What
works for long-term care and what doesn’t,” by Stephen A. Moses, McKnight’s
LTC News, November 17, 2021.
“What’s
better for senior living and care — the market or government?,”
by Stephen A. Moses, McKnight’s Senior Living, October 25, 2021.
“Long-Term
Care’s Problems Are Bad, Getting Worse, but Fixable,”
by Stephen A. Moses, McKnight’s LTC News, October 1, 2021.
“Should
Medicaid Protect $8 Trillion from Private Senior Living Costs?”
for McKnight’s Senior Living, August 9, 2021
“The
InLTCgentsia”
for Broker World’s August 2021 issue. (PDF
version.)
“Panel
Gives States Pass in Collecting Assets for Medicaid Long-Term Care,”
by Stephen A. Moses, Health Care News, July 2021
“Government
Violates the Long Term Care Social Contract to Your Detriment,
by Stephen A. Moses, Broker World, June 2021. (PDF
version.)
“President
Biden, tear down this wall,”
by Stephen A. Moses, McKnight’s LTC News, June 23, 2021
“Using
Medicaid to protect inheritances,”
by Steve Moses and Brian Blase, The Hill, June 10, 2021.
“LTC
financing: Be careful what you WISH for,”
by Stephen A. Moses, McKnight’s Senior Living, June 7, 2021.
“The
social contract for long-term care,”
by Stephen Moses for McKnight’s Long-Term Care News, May 17, 2021.
***
LTC
BULLET: SQUARE THE LTC CIRCLE
LTC
Comment: What does it mean to “square a circle?”
Answer:
construct a square equal in area to a given circle (a problem incapable of
a purely geometric solution). In other words, do something that is
considered to be impossible.
What
does it mean to “square the long-term care circle?” Answer: find a way to
get the government and private industry working together, instead of at
cross purposes, to solve the long-term care financing problem.
That
is a very tall order. For decades, at least since the implementation of
Medicaid in 1965, government and private insurance have tackled long-term
care financing with different, often contradictory approaches.
Government sought to provide long-term care to people who need but cannot
afford it. So Medicaid offered nursing home care to anyone with an income
below the cost of care and allowed them to retain practically unlimited
exempt assets while receiving the benefit.
Easy
access to Medicaid long-term care benefits after the insurable event
occurred desensitized the public to LTC risk and cost leaving most
Americans unprotected by private savings or insurance and dependent
eventually on public assistance.
Attempting to pull the economy out of the “Great Recession” of 2008,
government (the Federal Reserve) forced interest rates to near zero and
kept them there still in order to encourage more capital investment and
spending.
But
those low interest rates crippled LTC insurers’ ability to obtain
actuarially anticipated returns on reserves and forced them to raise
premiums which alienated beneficiaries and prospects causing the market to
implode from 120 carriers to around a dozen.
Bottom line, government and private insurance have pursued common goals by
irreconcilable means for decades. That problem may be about to worsen
exponentially.
Frustrated by the growing population in need of long-term care, by the
exploding cost of providing that care and by the tremendous financial and
emotional stress on family caregivers, the state and federal governments
are leaning toward imposing mandatory, payroll funded long-term care
social insurance programs on their populations.
That
of course would be the death knell for private long-term care insurance.
Why pay premiums for private coverage when the government has already
compelled you to pay for it through taxes?
But
here’s the problem with that “solution.” According to a
recent Gallup poll,
“Americans' opinions of capitalism have generally been stable over the
past decade, with around six in 10 having a positive view of capitalism
and slightly fewer than four in 10 having a positive view of socialism.”
In
other words, the public doesn’t want more socialism. When governments try
to impose more compulsory social insurance programs like Social Security
and Medicare, voters rebel against their huge unfunded liabilities and
doubtful ability to provide the benefits they promise.
Rather, the public prefers capitalism, free markets, individual
responsibility and choice, which private long-term care insurance
provides.
So,
are government and private insurance hopelessly at loggerheads? Maybe not.
Recent developments with Washington State’s foray into long-term care
social insurance suggest a way to resolve their differences and square the
LTC circle.
Politicians in the Evergreen State pushed through
WA
Cares
to compel state citizens to contribute .58% of payroll in order to fund
their long-term care in the future. But they gave people an escape hatch.
Buy private LTC insurance by November 1 and you can avoid the tax forever.
To
escape the tax, Washingtonians stampeded to buy the private coverage. That
caused so much demand that overwhelmed private LTC insurance carriers had
to shut down the market leaving thousands unable to get the coverage they
needed in order to avoid the State’s new tax.
Chaos ensued and
today it looks like the WA Cares Fund will fail
as have its predecessors including the CLASS Act.
In
the meantime, states all across the country are reported to be following
Washington State’s lead by developing long-term care social insurance
programs of their own, compelling their citizens to pay up for long-term
care whether they want to or not.
The
big question is whether these developing programs will or will not include
the escape hatch that Washington offered. If they don’t, they’ll wither
and die eventually as all social insurance programs are doomed to do. If
they offer the opt out, they can square the LTC circle. How?
If
state and federal governments insist on forcing people to prepay for
long-term care through payroll deductions, they should leave open the
choice to opt out by purchasing private long-term care insurance. Such a
system captures everyone either coming or going in the long-term care
financing net.
But
don’t make the mistakes Washington made. Offer the opt-out early so that
as many people as want to can purchase private insurance to avoid the tax.
Establish a certain minimum amount and quality of private coverage to
qualify. Review the coverage annually to ensure it remains in place. If
private coverage lapses, revoke the payroll exemption.
This
policy squares the LTC circle by getting all the potential benefits of a
mandatory public insurance system while eliminating the downside of
forcing people into the public program by giving everyone who prefers
private coverage a way to remain independent and personally responsible.
Voila! We have everyone protected for long-term care without relying on
universal compulsion. Few will remain dependent on Medicaid so its costs
will plummet relieving taxpayers. Access and quality will increase across
the care continuum as more revenue flows through the service delivery
system. More paid caregivers will receive living wages bringing relief to
financially and emotionally stressed caregiving families.
LTC
circle squared!
#############################
Updated, Monday, December 13, 2021,
10:40 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #21-043: 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:
-
Advocates Sound Alarm About Pilot Program
They Say Could Privatize All of Medicare
-
The Difference Between Elder Law and Estate
Planning
-
Welcome to long-term care insurance. You
want some sanity with that?
-
2022 SSI and Spousal Impoverishment
Standards
-
Increasing Medicaid’s Stagnant Asset Test
For People Eligible For Medicare And Medicaid Will Help Vulnerable
Seniors
-
Medicaid Expansion Alone Not Associated
With Improved Finances, Staffing, Or Quality At Critical Access
Hospitals
-
Can Viagra Prevent Alzheimer's?
-
Long-term prognosis and educational
determinants of brain network decline in older adult individuals
-
Long-term care providers get help from
National Guard
############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Monday, December 6,
2021, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #21-042: 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:
- Washington’s long-term care tax could be delayed after Inslee shows
support for bill tweaks
- Paragon Health Institute
- Some States Taking Matters Into Their Own Hands to Curb Price
Gouging Staffing Agencies
- Greater use of unpaid caregivers post-hospital raises questions
about shift to home care, study suggests
- Freedom in the 50 States
- Long Term Care Irony
- Long-term care tops list of retirement concerns of American workers:
study
- When Should Family Caregivers Apply for Medicaid for a Loved One?
- As opposition grows, Washington’s long-term care tax to see fixes in
Legislature this session
############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Friday, December 3, 2021,
10:40 AM (Pacific)
Seattle—
#############################
LTC BULLET:
HOW TO PREPARE FOR THE COMING WAVE OF GOVERNMENT LONG-TERM CARE PROGRAMS
LTC Comment: Ironically,
a wave of state-level social insurance programs may unleash the private
LTCI market at long last. We explain after the ***news.***
*** SHOPPER’S GUIDE
MIS-DIRECTS: Lynn Voss of longtime Center friend and corporate member
GoldenCare reports that the
Shopper’s Guide to Long-Term Care Insurance, the
2022 Medicare and You publication, and the NAIC website have
undergone modifications that left some of their hyperlinks to critical
information about LTC insurance dysfunctional. We join her in calling on
the powers-that-be to fix the problem. Simply redirecting the broken links
to links that work would resolve the matter without having to recall and
correct the publications. What’s worse than clicking on a link to
information you desperately need and getting sent to a “404 Page Not
Found” error? ***
*** LTCIrony: For more
on the theme of today’s LTC Bullet check out Steve Moses’s column
titled “Long-Term
Care Irony” in the current issue of
Broker World magazine. ***
LTC BULLET: HOW TO
PREPARE FOR THE COMING WAVE OF GOVERNMENT LONG-TERM CARE PROGRAMS
LTC Comment: My first
reaction to the
WA Cares Fund, Washington State’s revolutionary experiment in
state-level LTC social insurance, was very negative:
LTC Bullet: The Keystone Kops of LTC Insurance. The program’s clumsy
design, inept execution, and dangerous precedent were very worrisome. It
seemed like the fondest hopes of the analysts, advocates and politicians
who have abandoned free market principles of private insurance in favor of
compulsory socialist plans that have failed everywhere they’re tried were
being realized.
Then a strange thing
happened. Citizens of the Evergreen State stampeded for the exits as soon
as the WA Cares Fund offered a way to opt out of the program. Purchase
private LTC insurance by November 1 and you can avoid forever the
compulsory payroll tax and mediocre benefits of the public plan. A fire
sale of private long-term care insurance ensued, like nothing that market
had ever seen. Demand quickly overwhelmed the ability of private LTCI
carriers to supply the product. Untold numbers of Washingtonians were left
uninsured and trapped in a program the state’s citizens had twice voted
against,
rejecting it at the ballot box in 2019 and
refusing to fund it with risky investments in 2020.
Other states, including
California, Hawaii, Maine, Michigan, and Minnesota, are reported to be
planning programs similar to Washington’s. Unable to lure federal
lawmakers down the primrose path of yet another underfunded national
program like Social Security and Medicare, many state politicians want to
take that challenge on themselves. They’re swimming in excess revenue now
thanks to the explosion of economic activity created by the Federal
Reserve’s artificially low interest rates and easy money. Like Washington
State’s pols who are ignoring their program’s $15 billion dollar actuarial
shortfall, lawmakers in other states assume the artificial bubble economy
producing the current tax windfall will go on forever.
It won’t! It isn’t, as
the current inflation surge shows. But what can we do in the meantime to
mitigate the damage of these misguided social insurance programs? That’s
the subject of today’s LTC Bullet.
ACSIA Partners inspired the following white paper titled “How to
Prepare for the Coming Wave of Government Long-Term Care Programs.” Read
and heed it while there is still time to anticipate and adapt to the next
market-disorienting curveball to come from state and federal policymakers.
How to Prepare for the Coming Wave of
Government Long-Term Care Programs
America faces a long-term care financing
crisis. Much of the growing financial burden will fall on employers and
employees as state and federal governments mobilize to provide home care,
assisted living and nursing home care for a rapidly increasing elderly
population through employee payroll taxation. It behooves businesses to
get in front of the long-term care challenge by establishing private
insurance plans before their options are limited or closed by new
government initiatives as is happening now in Washington State. This white
paper explains the problem and offers a solution.
What to Do? Decades of special
long-term care commissions, research studies and proposals have failed to
fix the existing system. The Pepper Commission, 1990; the Medicaid
Commission, 2006; and the Commission on Long Term Care, 2013 all struggled
with the long-term care problem but were unable to mobilize sufficient
political support to implement major changes. Lately, however, a consensus
among scholars and politicians has formed around pursuing a social
insurance approach to long-term care reform. The plan is to address
long-term care problems with a mandatory, payroll-funded program financed
by employees and/or employers paying into a trust fund on the model of
Social Security and Medicare.
Status of Reform. The federal
government and several states, including California, Hawaii, Illinois,
Maine, Michigan, Minnesota and Washington, are exploring various forms of
social insurance to address the long-term care challenge. So far, only
Washington State has implemented such a program. The
WA Cares Fund provides a case study in the difficulty of conceiving,
designing, implementing and enforcing a compulsory social insurance
program at the state level. It is a wake-up call for citizens, employees
and employers throughout the country to think, plan and prepare early for
long-term care before new government programs restrict or close off
existing options.
The WA Cares Fund. The State of
Washington is implementing the country’s first social insurance program
for long-term care. Mandatory employee payroll deductions of .58 percent
of gross wages begin/began January 1, 2022. The proceeds of this tax will
go into a trust fund from which the state promises to pay beneficiaries,
who have paid into the fund for at least 10 years or otherwise qualify, up
to $100 per day to cover long-term care expenses, but with a lifetime
limit of $36,500. Individuals may opt out of paying the extra payroll tax
by showing proof of qualifying private long-term care insurance no later
than November 1, 2021.
Fraught with Problems. From its
conception, the WA Cares Fund has faced opposition from voters, workers
and employers.
Their concerns include:
-
The Long-Term Services and Supports (LTSS)
Trust Commission’s failure to heed a voter ballot advisory opposing the
program
-
The trust fund’s 75-year, $15 billion
shortfall
-
The Commission’s plan, voted down last year
but to be offered to voters again, to close the budget deficit by
investing the trust fund in riskier securities than the state otherwise
allows
-
The inadequacy of the $36,500 total
lifetime benefit
-
The inability of program beneficiaries to
take their earned benefits with them if they move out of Washington
State
-
Confusion and late decisions about whether
and how workers can opt out of the program by purchasing private
long-term care insurance.
The Opt-Out Alternative. The original
2019 state law creating the program now called WA Cares Fund did not
include an option not to participate. In April of 2021 the state
legislature approved a one-time opportunity for workers to avoid the
payroll tax by showing proof no later than November 1, 2021 that they own
comparable private long-term care insurance. With little more than half a
year for the opt out alternative to be clarified, publicized, and sought
by workers, the burgeoning demand for private coverage quickly overwhelmed
the long-term care insurance carriers’ ability to underwrite it. On August
30, 2021 National Public Radio reported “Long-term care insurance
companies have temporarily halted sales in Washington. The move follows a
frenzy of interest … prompted by a November 1 deadline to opt out of a new
state-run long-term care program.”
For those Washingtonians who have obtained
private long-term care insurance and qualified for the WA Cares Fund
exemption, it is important to be aware of this new language recently added
to the WA Trust website – “Make sure you save your insurance
policy, because you may need to provide it in the future. But you
won’t need it for this exemption application.” The implication is
that the state may require proof the insurance remains in effect to
validate the exemption in the future.
Other states have indicated that they may
establish an opt out date prior to the implementation date to avoid
anti-selection; in effect, residents of these states would have to have
coverage in place prior to the announcement of their state plan to avoid
the payroll tax.
The Insurers’ Dilemma. Long-term care
insurers, including life insurers with hybrid product (life insurance with
a long term care rider) offerings, are in business to provide
coverage for suitable customers who want it, so extra demand for their
product was welcome. But because the new demand surged in such a short
time, they were unable to accept, review, underwrite and approve such a
huge number of policies by the November 1, 2021 deadline. One carrier
received more applications in one week than in the previous two years.
Concern arose that people eager to avoid the payroll tax might try to
purchase policies otherwise unsuitable to their needs.
In response carriers began placing restrictions on policies sold in
Washington such as: minimum daily benefits, mandatory inflation
protection, ceasing the sale of facility-only policies, minimum issue age,
even a charge back of agent commissions if premiums are unpaid in the
second year of policy ownership.
Precisely who and what will qualify for the opt out remains in limbo as
the Washington State Employment Security Division (ESD) has not yet
provided definitive guidance.
The Employers’ Dilemma. The short
implementation schedule of the WA Cares Fund caught many Washington
employers unaware. Forward-looking Employee Benefit insurance brokers were
advising some of the US’ largest companies’ human resources departments to
act quickly to advise their personnel about the new payroll tax and to
offer opt-out solutions. Large, mid-sized and smaller companies were
blind-sided as were out-of-state firms that have employees in Washington
State. Since the WA Cares Fund is still sorting out who must pay the
payroll tax, who can opt out and exactly how, any company with employees
in Washington is stymied in how to accommodate the new mandate.
On a Positive Note. The growing
interest in new government programs to fund long-term care is awakening
consumers to the need for private LTC protection. The threat of added
deductions from their take home pay incentivizes workers to seek quality
private coverage in order to avoid potentially problematical public
coverage. It should also inspire their employers to get ahead of the curve
in order to avoid the kinds of problems created by delayed clarification
and implementation of the WA Cares Fund.
Act Now. Insurance distributors are
receiving more calls from employers and Employee Benefit Brokers,
especially in states that are considering programs like the WA Cares Fund.
Business executives and entrepreneurs see what is happening in Washington.
They want to get ahead of the issue by setting up worksite long-term care
insurance programs for employees now. By doing so, when the government
comes to offer a compulsory public long-term care program, many of their
employees will already be protected. Neither their company nor their
employees will have the problems encountered in Washington.
The goal of sharing this white paper with you
is to outline the very real financial and physical capacity problems the
insurance industry had in accommodating the unprecedented demand for
coverage as the result of the implementation of the WA Cares Fund. As
other states are contemplating implementing similar programs, we will
inevitably experience the same problems, and if deadlines are set prior to
the launch of a given state's program, we will be in a situation where we
cannot provide a solution to avoid a payroll tax or similar funding
mechanism.
As we encourage you to get in front of this
issue by having the conversation with your employer clients, the message
is the same to them: let's get in front of this problem and discuss the
implementation of a carefully planned long-term care program.
Contact
ACSIA Partners to begin the process.
#############################
Updated, Monday, November 29, 2021,
10:40 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #21-041: LTC NEWS AND COMMENT
LTC
Comment: Do you spend hours searching the internet for useful articles,
key data, and relevant reports to keep you on the forefront of
professional knowledge? Do you lose business because you’re blindsided by
clients or competitors who learn critical information before you do?
Here’s an antidote:
LTC
Clippings: The Center for Long-Term Care Reform notifies subscribers to
our LTC Clippings service daily of information you need to know. Each
message contains only the critical facts about new publications: a title,
representative quote, a link to the original, and our analysis in a
sentence or two. To inquire or subscribe, contact 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:
-
Senior living, home most frequent destinations
after hospital discharge of Medicare beneficiaries
-
When You Go Home for Thanksgiving
-
Long-term care tax exemption applicants told not to
worry about latest email
-
State is painting lipstick on its one-of-a-kind,
long-term-care law
-
A payment program that should be fixed, not nixed
-
As $2 trillion Build Back Better Act heads to
Senate, senior living industry seeks more
-
Experts propose new Medicare payment model that
emphasizes collaboration between nursing homes, hospitals
-
Half of Americans fear falling more than cancer and
want to age in home without stairs
-
What’s in store for the Long Term Care Act?
-
BREAKING NEWS: OSHA suspends implementation of
COVID-19 vaccine mandate for businesses
-
Lawsuit Seeks To Overturn Washington State’s Public
Long-Term Care Insurance Program
-
Unfunded Nursing Home Mandates in 'Build Back
Better Act' Will Worsen Historic Staffing Crisis
-
What works for long-term care and what doesn’t
-
A Clever Strategy to Get Your Long-Term Care Costs
Covered by Medicaid
-
Payment, regulatory and staffing reforms could
emerge from effort to ‘reimagine’ care for older adults
-
Nursing homes can now lift most COVID restrictions
on visits
############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Monday, November 15, 2021, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #21-040: LTC NEWS AND COMMENT
LTC Comment: Do you spend hours searching
the internet for useful articles, key data, and relevant reports to keep
you on the forefront of professional knowledge? Do you lose business
because you’re blindsided by clients or competitors who learn critical
information before you do? Here’s an antidote:
LTC Clippings: The Center for Long-Term
Care Reform notifies subscribers to our LTC Clippings service daily of
information you need to know. Each message contains only the critical
facts about new publications: a title, representative quote, a link to the
original, and our analysis in a sentence or two. To inquire or subscribe,
contact 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:
-
US announces big
hike in Medicare premiums
-
A list of trouble
for Washington state’s long-term-care law
-
Repeated listening
to favorite music induces beneficial brain plasticity in Alzheimer’s
patients
-
Opinion | ‘We
Don’t Fix This Because We Just Don’t Care About Old People’
-
Medicare
Advantage's cost to taxpayers has soared in recent years, research finds
-
No cognitive gains
from ‘brain gaming’ found in studies of older adults with dementia
-
Class action
lawsuit filed against new WA long-term care tax
-
Long Term Care
Industry Facing Worst Job Loss Among All Health Care Providers
-
More than 2,000
nursing homes earn top U.S. News ratings
-
Pandemic Takes Its
Toll On Caregivers
-
How to Restructure
Your Assets to Qualify for Medicaid
############################
"LTC E-Alerts" are
a
feature offered by the Center for Long-Term Care Reform, Inc. to members
at the $150 per year level or higher. We'll track and report to you news
and analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Friday, November 12, 2021, 10:40 AM (Pacific)
Seattle—
#############################
LTC BULLET: AMADA KEYNOTE
LTC Comment:
Amada is a model for home care delivery and financing from which
Medicaid should learn. Details follow the ***news.***
*** WA CARES
FUND problems dominate the news as these three recent LTC Clippings
indicate:
11/1/2021,
“Leaders
are saying — and writing — the magic word in regard to a misguided
long-term-care law: ‘repeal’,” by Elizabeth Hovde, Washington Policy
Center
Quote: “Momentum is building to repeal the Legislature’s unpopular long-term-care
law and accompanying payroll tax that starts in January. A Nov. 1 press
release announces that Reps.
Joe Schmick, R-Colfax, and Peter
Abbarno, R-Centralia, have drafted legislation to
repeal the law, a Washington Policy Center recommendation, calling the
long-term-care program it creates ‘unfair,’ ‘inadequate’ and ‘insolvent,’
and rightly pointing out that the payroll tax is ‘regressive.’ The draft
legislation has the support of House Republicans.”
LTC Comment: Given that Washington voters have twice rejected the
WA Cares Fund, this legislation to repeal it has a good chance to succeed.
11/1/2021,
“Initiative
could change Washington's controversial long-term care fund,” by Drew
Mikkelsen, King 5
Quote:
“Backers of an initiative to change the state’s new long-term care fund,
called the WA
Cares Fund, said they are not having trouble getting signatures. ‘Just
say we're trying to make the long-term care tax optional. That's all you
have to say is that one sentence and they go, ‘Where do I sign?'‘ said
Cary Condotta, co-founder of Reform Washington, the organization behind
I-1436. … If enough signatures are turned in by the end of the year for
the initiative to reach the Legislature, lawmakers would have three
options: make the program optional, send the issue to the voters next
November, or offer an alternative to the initiative to voters.”
LTC Comment:
Freedom to choose? Naw, can’t have that, say Washington State
legislators.
11/9/2021,
“Class
action lawsuit filed against new WA long-term care tax,” by Rachel La
Corte, Associated Press
Quote: “Opponents of a mandatory payroll tax to fund Washington
state’s new long-term care program filed a class action lawsuit Tuesday in
federal court seeking to stop the January start of the payroll premium for
most employees in the state. … Among the arguments made by the suit is
that the WA Cares Fund violates a federal law that forbids the state from
passing any law that requires employees to participate in a plan that
provides sickness or medical benefits. It also says that the disparate
treatment of people paying the tax but not receiving benefits if they are
not a Washington resident violates the Equal Protection and the Privileges
and Immunities clauses of the U.S. Constitution.”
LTC Comment: Latest on the WA boondoggle. ***
*** LTC
CLIPPINGS are a benefit received my premium members ($250 per year) of
the Center for Long-Term Care Reform. Center president Stephen Moses scans
the academic and popular media for critical studies, articles and data LTC
professionals need to know. He sends an average of two brief email
messages per day (like the ones above) to subscribers. Regular Center
members ($150 per year) receive a weekly LTC E-Alert compendium of
the previous week’s LTC Clippings. Both options provide members a
way to stay on top of critical news and information so they are not
blindsided by clients who have important knowledge before they do. Join
the Center
here. ***
LTC BULLET:
AMADA KEYNOTE
LTC Comment:
Amada Senior Care provides home care through franchisees. CEO
Tafa Jefferson reports that over half the company’s clients own
private long-term care insurance. Amada seeks out LTCI owners to become
clients and then assists them to obtain all the benefits they’re entitled
to under their policies. When more funding is needed, Amada helps
customers explore home equity conversion and/or life settlements. If only
Medicaid thought more creatively about diverting consumers away from
dependency on public assistance.
Center for
Long-Term Care Reform president Stephen Moses delivered the keynote
address to Amada’s annual franchisees’ conference in Dana Point,
California on October 27. After celebrating the company’s creative
approach to private home care financing, he delivered the following
remarks.
Amada Keynote
Address
by
Stephen A. Moses
Most high-cost
long-term custodial care is funded by Medicaid and is still delivered
primarily in nursing homes. Quality is problematical because Medicaid
often pays less than the cost of providing the care. When you’re losing
money on every patient, you can’t make up for it in volume. But it seems
like that’s exactly what many politicians want to attempt.
Most people
prefer to “age in place.” I expect one of your biggest challenges is to
find people to provide home care. Paid caregivers are in short supply. The
pandemic made the shortage critical. But, what’s the problem?
It’s a steady
job; lots of overtime; you’re doing God’s work. On the other hand,
caregivers work long hours, move heavy objects and clean up smelly
messes--for fast-food wages. Who wants to stay home and watch Netflix when
you could be changing bedpans and turning patients?
You’re in this
whirlwind business of coordinating and providing long-term care in the
home. So I expect you often feel more like contestants in the Squid Game.
My
Background
I attend a lot
of big long-term care conferences. The keynoters are usually mountain
climbers, motorcycle CEOs, or they come from some other exotic background.
I congratulate you on picking someone with many years of work experience
in long-term care.
I’ve been
working in this field for about forty years. Let me tell you a little bit
about that journey to establish my bona fides and give you a little
background on the history of long-term care insurance and how its
prospects have been affected by government policies.
I first got
involved in 1982 as a U.S. government employee working in the Seattle
regional office of the Health Care Financing Administration, the now
defunct predecessor of the Centers for Medicare and Medicaid Services.
I did research
about Medicaid and long-term care in the states of Oregon and Idaho. I
concluded Medicaid was doing more harm than good and that it was stifling
the market for a then new and promising product called long-term care
insurance.
My HCFA bosses
didn’t like that conclusion. They thought regional office staff shouldn’t
be doing policy studies, so they threatened me with negative personnel
actions if I kept distributing
my report.
But it was too
late. The HHS Inspector General and the Government Accountability Office
liked what I’d written and both agencies went on to conduct similar
studies on a national level.
In fact, the
Inspector General hired me out of HCFA to conduct
its national study based on my findings in Region 10. Recommendations
from the IG’s resulting 1988 report became federal law in the Omnibus
Budget Reconciliation Act of 1993.
Those changes
included longer and stronger transfer of assets restrictions for Medicaid
eligibility and mandatory estate recovery. The idea was to aim Medicaid
toward the truly needy so others would have a stronger incentive to plan
ahead and insure for long-term care.
In the
meantime, a small long-term care insurance brokerage in Seattle called LTC,
Inc. had just received a big contract from American Express to take its
local marketing strategy national. They hired me as their Director of
Research in 1989.
I published a
lot of
articles, conducted several state and national studies many of which
are linked on your electronic handout, and gave numerous speeches, but in
1995 General Electric bought American Express’s long-term care business. A
couple years later GE also bought LTC, Inc.
Suddenly I was
working for a giant international company which put the same kinds of
restraints on me that I left government to escape. To do the kind of
disruptive research and advocacy I’d become known for, I could not be
under the thumb of corporate overlords worried I might say something to
the media that could embarrass them.
So, I told GE:
“You need me doing what I do, but I can’t do it working for you. So give
me the money to start an independent think tank and I’ll pursue research
and advocacy that will help you market your product. After all, you can’t
sell long-term care insurance on one side of the street when the
government is giving it away on the other.”
So I founded
the Center for Long-Term Care Financing as a 501c3 charitable non-profit
in 1998, but I quickly learned I couldn’t afford to be a non-profit. It
was too expensive to keep all those records and too bothersome to maintain
a Board of Directors that always wanted to tell me what to do. So the
Center became a for-profit, more accurately a no-profit, in 2005.
In that same
year, we had another opportunity to impact federal law. The American
Health Care Association, the big nursing home lobby, hired me to work half
time in DC promoting policies that would return Medicaid to the needy and
incentivize others to save, invest and insure so they could pay privately
for long-term care. Seattle to DC was a long commute, but that’s what I
did for six months, two weeks on and two weeks off.
We succeeded.
The Deficit Reduction Act of 2005, actually passed in 2006 when Vice
President Cheney flew in from overseas to break a tie in the Senate. It
put the first cap ever on Medicaid’s home equity exemption and unleashed
the long-term care partnership program that California Congressman Henry
Waxman had hamstrung years before.
These were
important steps in the right direction, but they didn’t solve the problem.
Most Americans still ignored the risk and cost of long-term care until
they needed it and then slipped quickly and easily onto Medicaid. So we
turned our efforts to waking the public up.
In December
2007, I teamed up with some industry sponsors, bought a silver FJ cruiser
and a 16-foot Airstream trailer, plastered it with corporate decals and
headed out on a 16-month “National
Long-Term Care Consciousness Tour.” I did a lot of radio, TV and print
interviews, trained insurance agents, gave speeches to community groups
and, really, addressed anyone who would listen about the importance of
long-term care planning.
When the Silver
Bullet of Long-Term Care and I visited Met-Life’s Connecticut
headquarters, they greeted me with this video. Would you play it please
Rick? [Play
video.]
I guess you
could call me the Nomadlander of long-term care.
Then in March
of 2009, my wife of 45 years, was stricken with a glioblastoma. That’s an
aggressive form of primary brain cancer, the same disease that took Ted
Kennedy and John McCain. Suddenly, I went from speaking about long-term
care in the abstract to delivering it in the most concrete ways for the
next 20 months.
That
experience, along with guiding my own and my late wife’s parents through
the shoals of aging and long-term care, sensitized me intimately to what
we’re all dealing with in this issue.
In the past 16
years we’ve made little further progress toward getting people to take the
risk and cost of long-term care seriously and early enough to prepare for
it. The number of carriers offering the product has declined from over 100
to about a dozen.
In fact
politicians and policy analysts have drifted toward a very different
model. They want to fund long-term care with compulsory social insurance
funded with payroll deductions that go into a “trust fund” like Social
Security and Medicare. I’m afraid that would be like trying to extinguish
a fire by dousing it with gasoline.
So here’s the
big picture: long-term care is a huge risk and cost yet most people don’t
worry about it until they need it. Then, because they have not prepared
financially, they drift toward public programs that mostly provide
institutional care and pay too little to ensure quality.
America and
Americans are prosperous, especially now that the Federal Reserve has
printed so much new money. Yet very little of that money finds its way
into funding the kind of home-based long-term care people prefer.
Puzzling
Questions
Does all this
seem a little incongruous to you? It does to me. It raises several
questions in my mind:
(1)
All the studies show that the vast majority of Americans prefer to age in
place, at home not in nursing homes or assisted living facilities. And
yet, our long-term care system remains institutionally biased. Why?
(2)
When they’re spending their own money, consumers gravitate toward home and
community-based care. So …
Why do so many people rely today on
underfunded public programs and so few pay privately?
Why has private-pay declined to
7.1% of nursing home revenue (5.9% in urban areas)?
Why are assisted living facilities
accepting more Medicaid residents despite that program’s extremely low
reimbursement rates?
Why are out-of-pocket expenditures
only
11% of home health costs?
(3)
If the risk and cost of catastrophic long-term care spend down is wiping
out life savings all across the country, as the academic journals and
popular media are constantly telling us, why is the public still asleep
about that risk and cost? Why is private long-term care insurance so hard
to market?
(4)
We know Medicaid is a means-tested public welfare program with apparently
stringent income and asset eligibility limits. So, how is it that once
people need expensive long-term care, they quickly become eligible for
Medicaid?
(5)
America is awash in wealth.
According to Federal Reserve data, the median net worth for Americans in
their late 60s and early 70s is $266,400. Seniors hold over
$9 trillion in home equity alone. Why are huge potential sources of
private LTC financing, such as home equity and private insurance, only
minor contributors to long-term care providers’ revenue? (Present company
excepted with regard to the insurance.)
Those are the
thorny questions I propose to answer for you this morning.
But, I have my
work cut out for me: First I want to persuade you that a lot of what you
know about long-term care policy is wrong. Then I need to convince you
that what I’m going to explain is actually correct.
Mark Twain said
it best: “It ain’t what you don’t know that gets you into trouble. It’s
what you know for sure that just ain’t so.”
My Story
The best way I
know to explain these things is to tell you the story of how I learned
them.
In the early
1980s, I was the Medicaid state representative for Oregon in the Health
Care Financing Administration.
My job was to
ensure that Oregon’s Medicaid program complied with federal rules and
regulations. I led an annual program assessment to ensure that was the
case.
During one of
those assessments, I came across a program that puzzled me. Oregon’s
estate recovery unit was collecting enough from deceased recipients’
estates to offset 1.7 percent of total Medicaid vendor payments and five
percent of the cost of the state’s Medicaid nursing home expenditures.
$3.8 million was still a lot of money in 1981.
Remember, back
then, Medicaid was all nursing home care. I actually helped Oregon’s
Senior Services Division implement the first Medicaid home and
community-services waiver program in the country. That’s where the
decades-long campaign of rebalancing Medicaid long-term care from nursing
homes to home care began.
Now, here’s the
quandary that jumped out at me. If Medicaid is welfare and you have to be
poor to get it, how did so many people spend so much time in Oregon’s
nursing homes on Medicaid, but the state still collected all that money
from their estates?
This
contradicted everything I thought I knew about Medicaid. Back then, as
now, the conventional wisdom about long-term care and Medicaid went
something like this.
“The risk and
cost of long-term care is huge. People are spending down into
impoverishment all across the country if they need extended care. When
they run out of money, they turn to the Medicaid safety net. But Medicaid
pays mostly for nursing home care, which people don’t want. They want home
care, but too few can afford it. Private long-term care insurance could
have helped finance home care, but it failed because it’s too expensive
and complicated. The public remains largely ignorant or in denial about
who pays for long-term care. So government keeps picking up more and more
of the tab. Therefore, most conclude, government should pick up the whole
tab.”
Does that about
sum it up?
This peculiar
state of affairs sent me to the library to study Medicaid eligibility
rules and the long-term care financing market. What I found blew me away.
Medicaid does
appear to have stringent income and asset limits, but that’s an illusion.
The apparent income limit of $730 per month is obviated by the fact that
Medicaid subtracts applicants’ personal health and long-term care expenses
from their income before comparing the result to that low income limit.
The rule of
thumb nationally is that anyone (well, anyone 65 or older with a
qualifying medical need) with an income of less than the monthly cost of a
nursing home qualifies for Medicaid. That can easily be $7,000 per month
or $84,000 per year. Definitely not “low income.”
The truth about
Medicaid long-term care income eligibility is that people do not need to
be low income to qualify. They only need to have a cash-flow problem due
to high personal health and long-term care expenditures. That is a
condition most older people find themselves in once they need expensive
long-term care.
Medicaid’s
eligibility rules governing assets are similarly misleading. The academic
and popular literature focus on the seemingly draconian resource limit of
$2,000 and conclude people must be spending down huge amounts of wealth to
qualify. But that $2,000 limit only applies to “countable” assets like
cash, bank deposits, stocks and bonds, in fact anything easily convertible
to cash.
But older
Americans hold most of their wealth in assets that Medicaid considers
“non-countable,” including home equity. Medicaid exempts between $603,000
and $906,000 of home equity depending on the state. According to recent
research, that exemption prevents virtually all elderly Americans from
having to use their home equity to fund their long-term care.
Besides the
home equity exemption, which at least has an upper limit, Medicaid also
exempts the following with no dollar limit: one automobile, prepaid burial
plans, personal belongings including heirlooms, term life insurance, one
business including the capital and cash flow, and Individual Retirement
Accounts if they’re in payout status as most are for older people because
of the Required Minimum Distribution rules.
The quickest
and easiest way to become eligible for Medicaid long-term care benefits
without spending down for care is to convert countable assets into exempt
resources by purchasing the latter with the former. The lawyers who help
affluent clients qualify for Medicaid benefits maintain long lists of
exempt assets which they encourage the clients to purchase.
Medicaid
planning attorneys also have a well-stocked armory of special legal
trusts, annuities and so-called “half-a-loaf” strategies they use to
qualify even wealthier clients for Medicaid.
I expect you’ve
heard about this kind of “Medicaid planning” and scratched your heads. Who
in their right mind with the wealth to purchase quality long-term care in
the best and most appropriate venue would choose instead to “game”
Medicaid and end up in the kind of underfunded welfare-financed facility
you read about in the newspapers. That’s an objection I hear often.
But there are
reasons why this happens. By the time elderly people need long-term care,
they are often too infirm physically or cognitively to make their own
decisions. Their adult children, that is to say their heirs, who have a
financial conflict of interest, are in control. What is not spent on Mom
and Dad’s long-term care will go to the heirs.
Nevertheless,
most adult children do have their parents’ best interests top of mind. But
the lawyers who advise them say not to worry about Medicaid’s poor
reputation. They’ll get Mom and Dad into the best facilities that only
have a few Medicaid beds.
How do they do
that? They hold back some “key money” to ensure the client can pay
privately for a few months. Nursing homes receive about half again as much
from private payers as from Medicaid recipients, so they roll out the red
carpet for people who can pay cash. After a few months, the family’s
lawyer flips the legal switch and, voila, Medicaid takes over paying.
The sad truth
about Medicaid planning is that poor people, for whom Medicaid is supposed
to be a safety net, get wiped out financially very quickly because they
don’t know the tricks of qualifying for Medicaid and don’t have access to
special legal advice. So they end up in the least desirable nursing homes
that rely mostly on Medicaid’s penurious reimbursement rates.
Answer the
Questions
Let’s answer
the questions we posed earlier:
1.
Why do most people prefer home care but end up in nursing homes? Medicaid
started paying for nursing home care, including room, board, medical care
and laundry facilities, in 1965. Ostensibly stringent financial
eligibility rules are actually very generous and elastic. Stories of
catastrophic long-term care spend down are just anecdotal. There is no
empirical evidence to prove that problem is widespread. So analysts cite
none. No wonder people don’t worry about long-term care until they need
it.
2.
Why has private pay nearly disappeared from nursing home revenue? Why are
assisted living facilities tempted to accept Medicaid? Why is so little
home health care funded privately? Because government co-opted long-term
care financing with well-intentioned but perversely counterproductive
policies.
3.
Why is the public still asleep about long-term care risk and cost? Why is
long-term care insurance so hard to sell? Because consumers have been able
to ignore the risk, avoid the premiums, wait to see if they ever need
extended care, and if they do, get the government to pay. As undesirable
as the care government pays for may be, at the point of facing
catastrophic costs, it’s not hard for the elderly, and their heirs to
justify qualifying for Medicaid. Any port in a storm.
4.
How do so many financially comfortable people become eligible for Medicaid
so quickly and without spending down significantly? Medicaid’s financial
eligibility rules devastate the poor who lose everything quickly but
welcome the middle class and affluent who have legal and financial
advisers to guide them.
5.
Why does the richest
country in the world not tap the two biggest potential sources of private
long-term care financing? Medicaid exempts nearly all home equity. Without
their biggest asset at risk for long-term care, few people buy insurance
to protect it.
What Can We
Do?
What can we do
to fix this ailing long-term care market?
What are policy
analysts and the politicians who listen to them doing about this? Not
much. They never ask “how did we get into this mess?” so they never
discover that government funding and regulation are the primary causes.
They just recount all of the dysfunctions afflicting long-term care and
insist we need a bigger, better, compulsory, payroll-funded social
insurance program. If their models, to wit Social Security and Medicare,
were not under water by trillions of dollars in unfunded liabilities
already, maybe they’d have a case to make. As it is, programs like the
Washington Cares Fund and the federal WISH Act proposal only make you want
to say “Oh no, here we go again.” I’ve analyzed those programs in articles
cited in your handout. Ironically, the WA Cares Fund ignited a long-term
care insurance fire sale by offering an exemption from its otherwise
mandatory payroll tax for people who can show proof they have private
long-term care insurance by November 1. The resulting demand for the
product overwhelmed the insurance industry’s ability to meet it. The
market shut down before the hundreds of thousands of people who wanted the
exemption could qualify for it by purchasing a private policy. I have a
column coming out in Broker World next week titled “LTCIrony.”
[Publication of this article was delayed until Broker World’s
December issue.]
What are LTC
insurance carriers doing about these policy issues? Not much. The carriers
have been very creative modifying their policies to deal with common
objections. The newer “hybrid” policies, for example, counter the “what if
I don’t need it” complaint, by returning a payment whether beneficiaries
need long-term care or not. But there’s not much they can do about the
“too expensive” objection. Fire insurance wouldn’t be cheap either if
every fourth house burned down. With regard to the issues we’ve identified
today as inhibiting the long-term care insurance market, the carriers and
their industry groups have been mostly silent. Either they don’t get it or
they’re too scared to offend the powers that be. I’ve made the case to
them that they should support me and the Center for Long-Term Care Reform.
We can say what needs to be said and advocate for the policies that are
needed. And we’re not required to disclose our contributors, nor do we do
so.
What are the
long-term care providers and their trade associations doing about this?
Again, not much. Their principle revenue sources are Medicaid and
Medicare. Virtually all of their lobbying effort goes into asking for more
money from those sources. It’s hard to think about the big picture and the
need for major public policy changes when you’re struggling to keep the
doors open for another month. I think the most promising source of support
for better long-term care policies is companies like yours that would
benefit tremendously from more private payers and less public funding.
What am I doing
about this? I figure it’s really very simple actually. We want people to
take the risk of long-term care seriously and buy insurance in case they
ever require a long, expensive bout of care. So, the government should
stop giving away what the insurance industry is trying to sell. Require
people to use their home equity, through reverse mortgages or other
methods, to fund their long-term care before they turn to public safety
net programs.
Give the safety
net programs back to the poor whom they were originally intended to serve.
Do this and huge new revenue will flow into the service delivery system,
most people will get the kind, quality, and type of care they prefer by
paying privately; Medicaid will serve fewer, cost much less, and people
still dependent on public assistance will also get better care because of
the increased private revenue going to providers.
What’s
Standing in Our Way?
I mentioned
earlier that we made great progress changing federal law in 1993 and 2005,
but we’ve made little or no progress in the last 16 years since. Why?
What’s changed?
In the 1990s
and early 2000s, politicians still cared about fiscal responsibility.
Remember the “Contract With America” in 1994 and the worries about
excessive spending and skyrocketing debt that ensued when the dot-com
bubble burst?
Back then, we
were able to get the powers that be to listen about ways to reduce
government long-term care expenditures while simultaneously improving care
for rich and poor alike. That’s our mission after all.
But nowadays no
one seems to care about excessive government spending. The Federal Reserve
just prints more money to cover whatever the U.S. government wants to
spend.
It’s as though
our public officials are guided by Modern Monetary Theory. It says that a
country borrowing in its own currency can accumulate unlimited debt
without creating a problem unless or until inflation flares.
Well, in case
you haven’t noticed, inflation is finally flaring. So the Fed’s monetary
policy of meeting every financial crisis—including the dot-com collapse,
the 2008 housing bust, and the Covid recession—with more money printing,
spending and debt may be slowly ending.
Ironically,
while the politicians want us to believe that their big spending plans
will be paid for by the wealthy, the truth is that inflation, the most
pernicious tax of all, which hits low income people hardest, will be the
price we pay for decades of careless monetary and fiscal policy.
The only silver
lining in that cloud is that once inflation forces policy makers to
refocus on responsible public policies that keep spending under control
and incentivize personal responsibility, saving and private insurance,
perhaps then our proposals regarding Medicaid and long-term care will have
a better chance to succeed.
Want to
Learn More?
Now, I think I
know what’s on the tips of your tongues right now. Tell me Steve, how can
we learn more about all this? If that is the case ….
I would refer
you to two of my recent publications. Both are monographs. The first is
titled “How
to Fix Long-Term Care Financing.” It presents the material I’ve
covered today, but it also includes a long annotated bibliography of
books, elder law treatises and law journal articles on Medicaid planning.
I think you’ll be amazed how vast and sophisticated that literature is.
The other
monograph is titled “Medicaid
and Long-Term Care.” It presents my argument and evidence in a
more formal, scholarly way with abundant citations to the peer-reviewed
academic literature on long-term care to make and substantiate my points.
Finally, you
can find over 1300 of my articles, we call them “LTC Bullets” archived
chronologically and by topic at the Center’s website,
www.centerltc.com.
The Center is a
membership organization, so please consider joining and working with us to
achieve these goals. Amada is a member in good
standing.
I think I’ll
stop there. Thank you for your attention. I will be around the rest of the
day and this evening. If you have any questions, please find me and ask
them.
#############################
Updated,
Monday, November 8, 2021, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #21-039: LTC NEWS AND COMMENT
LTC Comment: Do you spend hours searching
the internet for useful articles, key data, and relevant reports to keep
you on the forefront of professional knowledge? Do you lose business
because you’re blindsided by clients or competitors who learn critical
information before you do? Here’s an antidote:
LTC Clippings: The Center for Long-Term
Care Reform notifies subscribers to our LTC Clippings service daily of
information you need to know. Each message contains only the critical
facts about new publications: a title, representative quote, a link to the
original, and our analysis in a sentence or two. To inquire or subscribe,
contact 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:
-
Resourceless
vaccine rule could have ‘disastrous’ impact on long-term care
-
Genworth Might
Resume Long-Term Care Insurance Sales by July
-
Democrats reach a
breakthrough deal on drug prices, as spending bill nears the finish line
-
Many Now Use Life-LTC
Hybrids to Pay for Care: Genworth
-
Leaders are saying
— and writing — the magic word in regard to a misguided long-term-care
law: ‘repeal’
-
Initiative could
change Washington's controversial long-term care fund
-
Family feels less
guilt when loved one moves to assisted living versus nursing home: study
-
Caregiving
becoming more complex, consuming for family members, surveys reveal
-
State lawmakers
look at long-term care program as criticism builds
-
Middle Class U.S.
Households Have Few Financial Assets
-
Pandemic reshaping
Medicaid programs
############################
"LTC E-Alerts" are
a
feature offered by the Center for Long-Term Care Reform, Inc. to members
at the $150 per year level or higher. We'll track and report to you news
and analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Monday, November 1, 2021, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #21-038: LTC NEWS AND COMMENT
LTC Comment: Do you spend hours searching
the internet for useful articles, key data, and relevant reports to keep
you on the forefront of professional knowledge? Do you lose business
because you’re blindsided by clients or competitors who learn critical
information before you do? Here’s an antidote:
LTC Clippings: The Center for Long-Term
Care Reform notifies subscribers to our LTC Clippings service daily of
information you need to know. Each message contains only the critical
facts about new publications: a title, representative quote, a link to the
original, and our analysis in a sentence or two. To inquire or subscribe,
contact 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:
-
Redesigning The Washington Cares Act
-
Answers to your questions on the new Washington
Cares Fund and the long-term care payroll tax
-
Long-Term Care Insurers May Have to Keep Their
Policies: Regulators
-
Caregiving Caused Me to Divorce My Siblings
-
Confronting Ageism in Health Care: A Conversation
for Patients, Caregivers and Clinicians
-
Policymakers see retraining older Americans as key
to combating labor shortage
-
What’s better for senior living and care — the
market or government?
-
3 States Limit Nursing Home Profits in Bid to
Improve Care
-
SNF staffing shortages may get ‘much worse’
#############################
"LTC E-Alerts" are
a
feature offered by the Center for Long-Term Care Reform, Inc. to members
at the $150 per year level or higher. We'll track and report to you news
and analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Friday, October 29, 2021, 10:40 AM (Pacific)
Seattle—
#############################
LTC
BULLET: THREE NEW ARTICLES
LTC
Comment: With Halloween approaching, here are some scary stories about
long-term care. Synopses after the ***news.***
***
AMADA SENIOR CARE
Annual Franchise Conference 2021. Stephen Moses delivered the keynote
address for this event at the beautiful Marriott Laguna Cliffs Resort in
Dana Point, CA on October 27. He congratulated the home care company’s
stunning success. Over half its customers have private long-term care
insurance. Amada prides itself in helping its LTCI beneficiaries obtain
all the benefits they have coming to them under their insurance policies,
cutting through red tape that sometimes inhibits the process. Steve
assessed the state of long-term care financing in the USA and suggested
how the country could move successfully from its remaining institutional
bias toward a mostly privately financed system dominated by home and
community-based care. ***
***
RECENTLY PUBLISHED ARTICLES by Steve Moses.
In
addition to the columns listed below, Steve has another article accepted
for publication soon.
“LTC
Irony” scheduled for the November issue of Broker World.
“What’s
better for senior living and care — the market or government?,”
by Stephen A. Moses, McKnight’s Senior Living, October 25, 2021
“Long-Term
Care’s Problems Are Bad, Getting Worse, but Fixable,”
by Stephen A. Moses, McKnight’s LTC News, October 1, 2021.
“Should
Medicaid Protect $8 Trillion from Private Senior Living Costs?”
for McKnight’s Senior Living, August 9, 2021
“The
InLTCgentsia”
for Broker World’s August 2021 issue.
“Panel
Gives States Pass in Collecting Assets for Medicaid Long-Term Care,”
by Stephen A. Moses, Health Care News, July 2021 (PDF
version.)
“Government
Violates the Long Term Care Social Contract to Your Detriment,
by Stephen A. Moses, Broker World, June 2021. (PDF
version.)
“President
Biden, tear down this wall,”
by Stephen A. Moses, McKnight’s LTC News, June 23, 2021 (PDF
version.)
“Using
Medicaid to protect inheritances,”
by Steve Moses and Brian Blase, TheHill, June 10, 2021. (PDF
version.)
“LTC
financing: Be careful what you WISH for,”
by Stephen A. Moses, McKnight’s Senior Living, June 7, 2021. (PDF
version.)
“The
social contract for long-term care,”
guest column by Stephen Moses for McKnight’s Long-Term Care News,
May 17, 2021. (PDF
version.)
***
LTC
BULLET: THREE NEW ARTICLES
LTC
Comment: Magazines want exclusives on everything they publish. So I can’t
share my three latest columns with you in full. But I do have permission
to convey the essence of the articles and some short quotes. Please read
the articles in their entirety at the sources.
McKnight’s Long-Term Care News
published “Long-term
care’s problems are bad, getting worse, but fixable” on October 1,
2021. In it I explained what ails long-term care service delivery. I
asked: “What do all of the analysts’, politicians’, and bureaucrats’
proposed solutions have in common?” I answered: “They propose more
government funding and regulation, usually in the form of a new
compulsory, social insurance program for long-term care.” I pointed to the
WA Cares Fund and the WISH Act as examples of these dangerous approaches
seeking to build on the shaky fiscal foundation of Social Security and
Medicare. I explained how and why government funding and regulation caused
long-term care’s problems by making Medicaid easy to get after care is
needed. I concluded with these questions: “Who dares raise the call to
close Medicaid LTC eligibility loopholes, make home equity a giant new
source of private LTC financing, strengthen estate recovery rules to
recapture wealth lost to Medicaid exemptions and persuade more people to
plan early to save, invest or insure so they can pay privately for
long-term care when they need it? Will you?”
Broker World
has scheduled “LTC Irony” for publication in its November issue. In it I
point out the irony that decades of warning us “If you don’t buy long-term
care insurance you could lose your life’s savings” had little impact on
expanding the market. But let Washington State government impose a
compulsory payroll tax on personal income unless citizens have private LTC
coverage by November 1, and voila. A sudden fire sale ensued that shut
down the market with excess demand. I conclude: “The lesson for state and
federal central planners is this: if you must force people into mandatory
payroll-funded LTC programs of dubious solvency, at least give them a way
out by purchasing private insurance so we have some consumers able to pay
their own way if and when the bottom falls out of the country’s many
fiscally challenged entitlement programs.” Finally we’ve found the secret
to selling private long-term care insurance: make it the only way to
escape more government taxes, rules, regulations, and interference.
McKnight’s Senior Living
published “What’s
better for senior living? The market or government?”
on October 25, 2021. In it I compare and contrast the basic principles
underlying markets on the one hand and government on the other. For
example: “In markets, millions of transactions between willing buyers and
sellers create spontaneous economic order, set interest rates (the price
of money) through supply and demand, and generate price data which tell
investors and businesses how much of which products and services to
produce. In government, the Federal Reserve sets interest rates based on
balancing political powers and influence resulting in asset bubbles,
mal-investment, and economic inequality.” In the article, I ask and answer
“How has government impacted senior living?” and “How could a more
market-oriented approach improve senior living?” I conclude “Applying the
general principles of markets and government identified above to the
practical challenges of senior living and long-term care points to only
one conclusion. We need to rely more on markets and less on government to
improve both.”
Happy reading!
#############################
Updated, Monday, October 25, 2021,
10:40 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #21-037: 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 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:
-
So far, more than 200,000 apply for exemption from
the state’s long-term-care fund
-
Milliman Report Shows $32.5B Value in Medicare
Advantage
-
New federal funds spur expansion of home care
services for the elderly and disabled
-
Are You Ready to Move Your Aging Parent Into Your
Home?
-
My Perfect World
-
For most seniors, there’s no place like home
-
The Troubling Trend of ‘Gray Sheeting’ Life
Insurance Policies
-
Covid-19 breakthrough deaths most common among
older Americans, data shows
-
‘Fairly large contingent’ of National Guard will
alleviate ‘healthcare backups’ at long-term care facilities
-
How a long-term care operator used immigrant
program to overcome chronic staff shortages
#############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Monday, October 18, 2021, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #21-036: 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 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:
-
Long-term care
planning, retirement savings suffered during pandemic: study
-
My incredible
shrinking lifespan
-
Most post-acute
Medicare recipients with dementia sent to SNFs despite payment changes:
study
-
Nursing home
residents may have better CPR outcomes than their community-dwelling
peers: study
-
Alzheimer’s
villages could be the answer to the rising cases—and cost—of dementia
-
Poorly controlled
diabetes — not diabetes itself — triples dementia risk, study finds
-
Washington state
receives 95,000 exemption applications to new long-term care benefit in
first week
-
Parkinson:
COVID-19 May Be An ‘Endemic Problem’ For Nursing Homes Moving Forward
-
Nursing Facilities
Need to Weather the ‘Reimbursement Storm’ of Medicare Advantage
-
Medicaid's safety
net for pregnant women
-
State Senator:
Only Gov. Inslee ‘has the power’ to pause Washington’s long-term care
tax
#############################
"LTC E-Alerts" are
a
feature offered by the Center for Long-Term Care Reform, Inc. to members
at the $150 per year level or higher. We'll track and report to you news
and analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Friday, October 15, 2021, 10:40 AM (Pacific)
Seattle—
#############################
LTC
BULLET: A FRAMEWORK FOR THINKING ABOUT MEDICAID AND LONG-TERM CARE
LTC
Comment: What would a bare-bones outline of the long-term care problem
and its solution look like? Read on after the ***news.***
***
LTC
DISCUSSION GROUP
has launched their new and improved
website. Browse
it, find presentation materials from prior sessions, get added to their
mailing list, submit questions or topic ideas for future sessions, or
heaven forfend, even unsubscribe from future “Save the Date”
notifications. Check the Group’s new
You
Tube channel
for presentation videos starting with the
September 2021
meeting that we highlighted in
LTC
Bullet: LTC Prevention is Better than Cure.
Save the date for the LTC Discussion Group’s October 19th
meeting on “Direct
Care Workforce.”
***
***
AMADA SENIOR CARE
has retained Stephen Moses to deliver the keynote address at their annual
franchise conference in Dana Point, CA on October 27. Amada is a home care
provider that specializes in helping people get everything they’re
entitled to from their long-term care insurance policies. The company also
joins the Center for Long-Term Care Reform as a Bronze Member for the
coming year. ***
***
RECENTLY PUBLISHED ARTICLES by Steve Moses:
In
addition to the columns listed below, Steve has another article accepted
for publication soon and a second out for query. Watch for them.
“LTC
Irony” scheduled for the November issue of Broker World.
“What’s better for senior living? The market or government?”
“Long-Term
Care’s Problems Are Bad, Getting Worse, but Fixable,”
by Stephen A. Moses, McKnight’s LTC News, October 1, 2021.
“Should
Medicaid Protect $8 Trillion from Private Senior Living Costs?”
for McKnight’s Senior Living, August 9, 2021
“The
InLTCgentsia”
for Broker World’s August 2021 issue.
“Panel
Gives States Pass in Collecting Assets for Medicaid Long-Term Care,”
by Stephen A. Moses, Health Care News, July 2021 (PDF
version.)
“Government
Violates the Long Term Care Social Contract to Your Detriment,
by Stephen A. Moses, Broker World, June 2021. (PDF
version.)
“President
Biden, tear down this wall,”
by Stephen A. Moses, McKnight’s LTC News, June 23, 2021 (PDF
version.)
“Using
Medicaid to protect inheritances,”
by Steve Moses and Brian Blase, TheHill, June 10, 2021. (PDF
version.)
“LTC
financing: Be careful what you WISH for,”
by Stephen A. Moses, McKnight’s Senior Living, June 7, 2021. (PDF
version.)
“The
social contract for long-term care,”
guest column by Stephen Moses for McKnight’s Long-Term Care News,
May 17, 2021. (PDF
version.)
Find
many more articles like these, plus scores of speeches and reports
covering 35 years of long-term care policy analysis at
www.centerltc.com.
***
LTC
BULLET: A FRAMEWORK FOR THINKING ABOUT MEDICAID AND LONG-TERM CARE
LTC
Comment: Long-term care financing is complicated. Most analysts bewail
long-term care’s problems—excessive dependency on family caregiving,
institutional bias, caregiver shortages, inadequate funding, etc.—and
then, without analyzing or explaining why these problems exist, they
reflexively prescribe more government financing and regulation.
Ironically, they recommend more of what arguably caused the problems in
the first place.
The
explanation of why long-term care is so dysfunctional requires complex
research, analysis, evidence, and reasoning. Our monographs,
Medicaid and Long-Term Care
and
How to Fix Long-Term Care Financing,
provide that. But they contain too much data and analysis to absorb all at
once. So below, for brevity and clarity, I present only the basic
argument. It leads in a very different direction than the anti-democratic,
compulsory, payroll-funded social insurance plans (like
WA
Cares Fund
and the federal
WISH
Act)
on which so many analysts and advocates have come to agree.
A
Framework for Thinking about Medicaid and Long-Term Care
by
Stephen A. Moses
The
big picture: About 70% of people will require assistance with activities
of daily living due to age. But only 25% are likely to experience expenses
that are potentially catastrophic.
The
purpose of insurance is to replace the small risk of a catastrophic loss
with the certainty of an affordable premium. A one in four chance of a
catastrophic loss is an insurable risk.
So
private insurance against long-term care risk should be a promising
market. That is why over 100 companies sold the product at one time. But
only a dozen still do. Why?
People only buy insurance against real risk from which they can see the
dire consequences of being unprotected. That condition does not exist with
long-term care. Why?
Most
catastrophic long-term care costs are paid for by Medicaid, Medicare, the
VA, and other smaller public programs.
Add
“spend-through” of Social Security and other income Medicaid recipients
must contribute toward their care and we account for 90% of total LTC
costs without touching any savings.
But
don’t people have to spend down their wealth before they become eligible
for Medicaid? That is the conventional wisdom in most academic and popular
articles but it is untrue.
To
qualify for Medicaid people do need to meet ostensibly low income
($723/month) and asset ($2,000) limits. But those limits are misleading
because …
Medicaid subtracts private medical and long-term care costs from income
before determining eligibility. Rule of thumb: income below the cost of a
nursing home, say $7K/month, qualifies.
Most
large assets are exempt including $603K to $906K of home equity plus
without a $ limit one vehicle, burial expenses, personal belongings, a
business, term life insurance, IRAs, etc.
Non-exempt assets are easily converted to exempt status. Medicaid
eligibility workers routinely advise applicants how to use countable
assets to purchase exempt resources in order to qualify.
Beyond these already generous financial criteria, Medicaid planning
attorneys qualify much wealthier people for Medicaid LTC using special
trusts, annuities, and half-a-loaf strategies.
If
most people aren’t at risk for catastrophic long-term care expenses, it
makes sense that they are not sufficiently concerned about them to plan
ahead, much less buy expensive insurance.
Yet,
even experts still believe that all we need to do is educate the public
about long-term care and they’ll take it seriously. But telling people
they’re at risk when they’re not doesn’t work.
Consumers have been barraged for decades with warnings from government and
the media about potentially catastrophic long-term care spend down. They
still ignore the risk. Why?
Most
people don’t know and don’t care who pays for long-term care. Many think
incorrectly that Medicare pays. It doesn’t, but as explained above
Medicaid does.
Medicaid enables denial about long-term care risk by paying for most
expensive long-term care after the care is needed and long after the risk
has become privately uninsurable.
It
works like this. The public does not see large numbers of people being
wiped out financially by long-term care. Why?
There is no empirical evidence that this actually occurs. That’s why the
academic literature on this topic never cites hard evidence. There is
none.
How
can that be? As previously explained, the vast majority of catastrophic
long-term care expenses are paid by sources other than personal wealth,
mostly government programs.
So
here’s the anomaly and the explanation. People don’t know who pays for
long-term care, but they ignore the strident warnings about catastrophic
spend down anyway, because …
They
are not confronted with evidence that it actually happens, so they
casually ignore the risk until they need expensive long-term care and when
they do they slide easily onto Medicaid.
But
don’t middle class and affluent people want to avoid Medicaid, which has
such a poor reputation for nursing home bias and deficient quality? Two
points:
Once
care is needed the senior is usually out of the picture due to physical or
mental incapacity. So, adult children, who are heirs with a financial
conflict of interest, are making the decisions.
Second, Medicaid planners advise affluent clients not to worry about
Medicaid’s poor reputation. They promise access to the best facilities
that have only a few Medicaid beds. How?
The
trick is to hold back enough “key money” to get those facilities to roll
out the red carpet. Nursing facilities receive half again as much from
private payers as from Medicaid.
So
anyone who can pay privately for a while is welcomed into the nicest
places. The tragedy is that poor people dependent on Medicaid end up in
the nastier nursing homes.
What
should be done?
They
key to fixing what ails long-term care in the USA is to wake up consumers
to the real risk and cost while they are still young, healthy and affluent
enough to plan, save, invest or insure.
To
do that, Medicaid must stop exempting seniors’ biggest asset, the home, so
that aging Americans and their heirs know long-term care is a real risk
for which they need to prepare.
With
home equity finally at risk for the first time, more people will worry
about long-term care and insure against the risk.
But
those who don’t insure will have to tap home equity by means of a reverse
mortgage or some other form of commercial or intra-family home equity
conversion.
As
more people have to use home equity, more will want to avoid that result
by insuring, thus creating a positive incentive to insure and replacing
the current perverse incentive to go without.
Over
a very few years huge new private revenues from home equity conversion and
private long-term care insurance will flow into home care, assisted living
and nursing home providers.
The
new private revenue at much higher market rates than Medicaid or Medicare
pay will improve access and quality across the whole continuum of care for
rich and poor alike.
What
prevents this solution from being implemented? The main obstacle is
political sensitivity. People have a visceral attachment to their homes.
Politicians benefit by providing “free” goods and services in exchange for
votes. Removing or vastly limiting Medicaid’s home equity exemption is not
politically feasible … yet
What
is important now is to be ready with the right analysis and proposals when
the political calculation changes as the result of a major economic
collapse coming in the 2030s. Why then?
Social Security’s “trust fund” runs dry in 2034; Medicare’s, in 2026;
Medicaid has no phony savings. Boomers start to turn 85 in 2031, the
critical age for rising health and LTC expenditures.
This
perfect fiscal and demographic storm will make the solution to long-term
care financing possible. But what must be our focus in the meantime?
Defense.
We
need to defend what remains of Medicaid’s integrity as a means-tested
public assistance program. That means opposing
MACPAC’s proposal
to make estate recoveries voluntary.
It
also means opposing the increasingly popular proposals by academics,
advocates and politicians to impose new, compulsory, payroll-funded social
insurance programs for LTC.
Job
one now is “do no harm.” Oppose bad programs like the
WA
Cares Fund
and the federal
WISH
Act
while we defend and strengthen Medicaid eligibility limits and estate
recovery.
#############################
Updated,
Monday, October 11, 2021, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #21-035: 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 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:
-
Tallying the Cost of Growing Older
-
How Making Public Long-Term Care Insurance (Sort
Of) Voluntary Created A Mess In Washington State
-
Better Than No Loaf: Medicaid Planning Using “Half
a Loaf” Strategies
-
10 Fastest-Rising Costs for Older Americans Since
2000
-
From transportation to housekeeping, MA plans
moving further into the home in 2022
-
Limiting Medicare benefits deepens rift among Hill
Democrats
-
Social Security Debt up $6.8T
-
The Delta variant caused a spike in deaths among
nursing home residents, study finds
-
Long-term care’s problems are bad and getting worse
— but fixable
-
Website to opt out of Washington state’s long-term
care tax crashes on first day
#############################
"LTC E-Alerts" are
a
feature offered by the Center for Long-Term Care Reform, Inc. to members
at the $150 per year level or higher. We'll track and report to you news
and analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Monday, October 4, 2021,
10:40 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #21-034: 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 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:
-
The Risk of Coverage Loss for
Medicaid Beneficiaries as the COVID-19 Public Health Emergency Ends
-
Opt-out option for
Washington's long-term care tax begins Oct. 1
-
Medicare Advantage premiums
to decline slightly in 2022, Part D to rise by nearly 5%
-
AP-NORC poll: Virus fears
linger for vaccinated older adults
-
Assured Allies Makes Key
Hires and Expands Advisory Board With Increasing Market Acceptance for
Its Innovative ‘Successful Aging’ Platform
-
Biden’s $400 billion push for
LTC faces severe cuts
-
Long-Term Care Planning: What
Advisors Should Know
-
Strengthening Long-Term
Services and Supports: The Difference Federal Investment Can Make
-
The Build Back Better Plan
Remains Popular
-
New podcast offers latest
insights about dementia
#############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Friday, October 1, 2021, 10:40 AM (Pacific)
Seattle—
#############################
LTC
BULLET: LTC PREVENTION IS BETTER THAN CURE
LTC Comment: The old saying “an ounce of prevention
is worth a pound of cure” applies equally well in long-term care according
to three experts in this promising field. Much more after the ***news.***
*** TODAY'S LTC BULLET is
sponsored by Claude Thau, who provides many unique services to
advisors as National Brokerage Director for USA-BGA in the individual,
worksite and affinity LTCi markets. Advisors like his unique, simple
and effective LTCi presentation and his revolutionary “Range of
Exposure” tool which, among other things, projects a client’s (joint
for a couple) mean age of LTC, likely annual cost and length of need
based on age, gender, marital status, success goal (% chance of not
outliving their assets), etc. 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.thau@gmail.com to discuss how he
might help you. *** |
*** ILTCI CONFERENCE
live and in person returns March 21-23, 2022 in Raleigh, NC. The
organizers are planning the program and want your help. They say “Our
Programs & Education Committee would like to know what YOU want to learn
about next year.” Submit your session ideas and topic requests
here. Additional information on the 2022 ILTCI Conference will be
available soon. Check
the website for details. Registration will launch in November.
Exhibitor & Sponsor applications will be accepted beginning Oct 1st. As
the program develops, we’ll keep you posted here as well. ***
*** WHAT’S NEXT AFTER
THE WA CARES FUND? We thank Center corporate member
CLTC and its Executive Director
Amber Pate for inviting us to attend Wednesday’s webinar of that
title. CLTC® Certification for Long-Term Care educates and certifies
professionals in the fields of insurance, financial services, law and
accounting in the discipline of extended care planning.
Steve Cain emceed this 30-minute webinar for CLTC graduates with
Melissa Steiner and
Courtney Crenshaw commenting. Highlights follow.
- The
WA Cares Fund in Washington
State unleashed an unprecedented demand for private LTC insurance.
- Both traditional and hybrid policies
went “bananas” in Washington. “3 years of business in 3 months.” “3 to
10 times normal volume.”
- Advisers should build on the rising
awareness of LTC planning caused by the Covid crisis and supercharged by
new state-level efforts to develop public funding programs.
- Carriers had to adapt by leveraging
technology and maneuvering underwriting procedures to process more
applications faster.
- Lesson learned: important to track
state program development earlier and closer and work directly with
developers to influence design and implementation. Avoid surprises.
- 49 more states could potentially follow
Washington with similar programs. They may not offer an opt out in which
case there would be no incentive to buy private coverage.
- Encourage states to include renewal
monitoring in their opt-outs so new insureds cannot quickly drop the
policies they just purchased in order to avoid the public program.
- The LTCI industry did a good job of
mobilizing in Washington, so was able to affect some beneficial
amendments. Kudos especially to
LTCA’s
Stephen D. Forman.
- Washington is unlikely to delay their
program despite its many flaws. A proposal to “pause” at a recent
Trust Commission meeting was
quickly shot down.
- What else is going on?
WISH Act at the federal level.
Caregiver tax credit under consideration. Biden wants $400 billion for
HCBS, but probably won’t get it. Senator Pat Toomey proposes allowing
withdrawals from IRAs for LTCI.
- CLTC training, certification, and
webinars like this one ensure a knowledgeable and highly professional
work force of long-term care planning advisers. ***
*** RECENT MOSES
COLUMNS:
In addition to the
published columns listed below, Steve has two more articles accepted for
publication soon and a third out for query. Watch for them.
“LTC Irony” in the
November issue of Broker World.
“Long-Term Care’s
Problems Are Bad, Getting Worse, but Fixable,” expected October 1, 2021 in
McKnight’s LTC News.
“What’s better for
senior living? The market or government?”
“Should
Medicaid Protect $8 Trillion from Private Senior Living Costs?” for
McKnight’s Senior Living, August 9, 2021
“The
InLTCgentsia” for Broker World’s August 2021 issue.
“Panel
Gives States Pass in Collecting Assets for Medicaid Long-Term Care,”
by Stephen A. Moses, Health Care News, July 2021 (PDF
version.)
“Government
Violates the Long Term Care Social Contract to Your Detriment, by
Stephen A. Moses, Broker World, June 2021. (PDF
version.)
“President
Biden, tear down this wall,” by Stephen A. Moses, McKnight’s LTC
News, June 23, 2021 (PDF
version.)
“Using
Medicaid to protect inheritances,” by Steve Moses and Brian Blase, TheHill,
June 10, 2021. (PDF
version.)
“LTC
financing: Be careful what you WISH for,” by Stephen A. Moses, McKnight’s
Senior Living, June 7, 2021. (PDF
version.)
“The
social contract for long-term care,” guest column by Stephen Moses
for McKnight’s Long-Term Care News, May 17, 2021. (PDF
version.)
Find many more articles
like these, plus scores of speeches and reports covering 35 years of
long-term care policy analysis at
www.centerltc.com. ***
LTC BULLET: LTC
PREVENTION IS BETTER THAN CURE
LTC Comment: The
Long Term Care Discussion Group is a “voluntary independent group that
meets solely for the purpose of educating the policy community on all
facets of long term care.” The group’s September 28, 2021 meeting
discussed “How Wellness Programs Can Enhance Care for Long-Term Care (LTC)
Insurance Policyholders.” The speakers were:
Vince Bodnar, Chief
Actuary, Bain Capital Insurance
Peter Goldstein, CEO, LTCG
Afik Gal, Co-Founder and CPO, Assured Allies
What follows is a
paraphrased summary of the program in case you missed it followed by the
presenters’ professional bios.
Vince Bodnar opened the program asking “What is a wellness program?”
It is foremost about getting people into optimal care settings and not
only about saving claims dollars. To keep people well is good for
everybody involved. There are two areas of focus: pre-claim and in-claim.
Pre-claim is about interacting with policy holders before they need care,
usually before age 75. Interventions increase as the covered population
becomes more frail. The goal is to maximize “disability-free lifetime.”
The claim is a critical event taking place over a week or so. Once on
claim, the focus becomes initiating, prolonging and improving services at
home in order to avoid nursing home intake by default.
The LTC insurance
industry asks “does this stuff work?” about two common wellness models.
CCRCs without walls (Continuing Care Retirement Communities) is one model.
People contract with an organization, pay a monthly fee while still
healthy, and receive care as needed. There are annual physicals; prior
authorization required to enter a facility; annual visits by a care
coordinator to monitor progress and ensure quality. The care coordinators
often become almost like family members. Over 90% of people in these
programs receive services at home as compared to 40% on average for the
LTCI industry in general.
The other wellness model
is Medicaid Long-Term Services and Supports programs. The MLTSS model
involves commercial managed care companies receiving capitation fees from
state Medicaid programs to manage care recipients’ long-term care. They
require prescreening before institutionalization; mandate referrals;
attempt to “repatriate” people from facility to home care. They may help
people find a home who no longer have one. One-on-one caseworkers
coordinate care as with the CCRC w/o walls model. The more advanced
programs use data for sophisticated risk scoring. MLTSS programs keep 80%
in home care compared to 40% for LTCI.
If home care claims are
half of facility claims, a carrier can reduce claims costs by 12%. That’s
a big number. Carriers save money while policy holders get better care and
stay in their homes longer.
A long list of the kinds
of interventions used to achieve these outcomes is included in the
presentation materials. (The LTC Discussion Group usually archives program
materials
here. I don’t find them there yet, but it’s worth checking again when
you read this.) For a tongue-in-cheek example of technology helping
seniors, see the Saturday Night Live skit
Alexa for Seniors.
How do companies collect
and use data to guide caregiving? Big data collection; wearables;
monitoring devices; data from assessments; risk scoring for people needing
care. Learn what the early warning signs are that transfer to facility is
imminent. Intervention scoring: what’s working?
Companies talked about
wellness programs in the 1990s, but high cost and low results led the
programs to be dropped. Carriers were afraid such programs would stimulate
claims. We’re getting beyond that now. Instead of being limited only to
rate increases or benefit reduction to confront the industry’s challenges,
this is an honest attempt to save money while delivering better services.
Interest in wellness programs is expanding geometrically, especially in
the past year and a half. Some carriers have entire teams working on this.
They’re beginning to see promising results.
But there are
challenges. Vendor contracting processes with carriers can be frustrating.
Is there rebating? Who should provide services? Can be viewed as
discriminatory if not providing same services to all. Liability might
attach to referring a policy holder to a certain provider. The regulatory
community is quite interested in these programs. Mostly positive. Seen as
beneficial if done right. NAIC working group concerns: data privacy,
rebating, unfair trade practices model regulations, discrimination.
The LTC insurance
business needs good news. The wellness approach is very positive. Deliver
better care more efficiently. No more “grim reaper of LTC.”
Peter Goldstein
The wellness focus is
not just a funding issue. There is always the idea that a LTC insurance
policy can provide a helpful service, not just dollars. We’re thinking
about wellness, pre-claim, at-claim and on-claim.
LTCG is the largest claims payer. $4 billion last year. The business
is all about claims now. After 25 years of adding policy holders, they’re
now going into claim status. Previously, there was not enough interest.
Now claims are growing rapidly and so are costs. We ask: what can we do
besides raise rates and reduce benefits? Pursuing wellness is win/win
because it benefits all stakeholders, carriers, policy holders and care
providers.
Getting grounded in the
claims process is challenging. We needed to make decisions, prioritize. We
know we can’t be all things for all people. Three phases: pre-claim, the
claim event, post-claim. The process usually lasts 2 to 3 years. LTCG made
the decision to focus on at-claim and post-claim. Once someone makes a
claim, what else can we offer to be sure the claim managed effectively?
The presentation
material diagrams and explains the claim process. An interview is
conducted at the point of claim so the process begins with more than just
a claim form. We get them on phone, find out what has been done so far,
what care received, face-to-face interview. Every time a claim is opened
it creates a $250,000 cost (on average) for the carrier. We ask what are
the needs? How can we manage those needs and arrange payments efficiently.
Then loop around, reassess as needs change. Active management.
Make the right decision;
use training; keep rules the same for all; same outcomes; collaborate with
policy holders; the customer experience is important. Aim for recovery.
About 33% recover, which is surprising; with right support, they get off
claim. A lot of depression in this population, people spiral down. So we
need to lean into recovery.
Pay benefits according
to the approval. You need systems to vet claims. Don’t pay claims not
covered by the policy. Catch any questionable activity; incredible what we
see in fraud from seniors and providers. People are smart, savvy, if money
is involved, people find a way to get it whether or not they’re entitled.
Expanded programs and capabilities to address risk management, customer
experience and administrative efficiency. This is a high touch business,
but it needs to be efficient.
Best practices are
important. You need an electronic way to view what providers are doing,
including downloadable information on location, time in, time out. LTCG is
launching a clearing house to take paper out of the process. Fraud
detection using analytics. Interact electronically through a portal. 40%
of the calls we receive are “where’s my check?” That information is
available online so should not require taking phone calls. Care concierge
service.
Post claim things we’re
doing. There is a huge correlation with fraud when an agent is involved.
We need to know and monitor the claim start date. High volume of
unverified visits. Data tells more than a paper file. Important to
stratify fraud risk.
LTCG partnered with Afik
Gal and
Assured Allies to expand our capabilities.
Afik Gal
Pre-claim issues are
important. Tighter integration of the value proposition. Go a step beyond.
That is what Assured Allies does.
We have
multi-disciplinary teams, with actuaries, medical staff and others. We
bring together professionals not often brought together. Assured Allies
was developed because of our long-term care experience with our own
parents.
We’re looking at LTC
insurance as one determinant for successful aging as a whole. Make sure
people don’t decline prematurely. But recognize they will decline and need
support. Families must fund it themselves or find a solution, such as LTCI.
That’s what attracted us to this topic.
To summarize, we are
about employing multi-disciplinary teams to achieve successful aging Make
health care work from the lens of insurance and finances. For policy
holders, live healthier in homes whenever possible. We’re bringing a
win/win value proposition to this market. It is a rare opportunity to do
the right thing for the policy holder, the provider, and the payer.
Pre-claim the focus is
wellness, risk management. All financially positive if done right.
It is easy to help a lot
of people by spending a lot of money. The bigger issue is efficiency. It
is important to understand trade-offs. The system must be sustainable
financially, not only socially good. Reduce costs of claims while
improving care.
Real case study from
policy holder standpoint. Reach out to engage people. See what their needs
are. Do they want help? Do they want to change how they’re aging? That
information translates into how much to spend on people. There is much on
the
Assured Allies website about how it works. Check out the videos there.
We use data to estimate
how likely people are to claim and when. We must decide how much to invest
to change or delay that. Depends on their desire to get help.
Intervention, feedback loop, compare experience with others. Careful
measurement mechanism. Is it working or not? 25,000 lives by end of this
year. This market is notorious for poor data. We’re spending a lot of
energy improving that to get well-validated data.
Interventions are
various. Stratify policy holders by proximity to claim. Ask what is the
right thing to do? Self-efficacy. How much effort? How much money? Careful
monitoring. Predictive modeling. We don’t focus just on caregiving.
Multiple of tools based on risk factors. For example: is the caregiver far
away? Different discussion for the very sick. Are the caregivers
fighting?, etc. We try to coach them into a solution. We only do things
proven to be effective.
We’re not going to
actually provide home care assistance. That would be a disservice to the
carrier because not proven to deliver a positive ROI (return on
investment). We find the right approach for the policy holder.
The goal is successful
aging. At age 80 plus, the focus may be urinary continence and caregiver
issues. Better to get an earlier start because we can do more at age 60.
Build good relationship between all parties so that all parties have
better outcomes.
Speakers’ Bios
Vince Bodnar is
an actuary with Bain Capital Insurance. He has 37 years of experience with
a broad array of insurance products. Mr. Bodnar has led projects related
to product and distribution strategy, in-force management, capital
optimization, reinsurance strategy, operational reviews and diligence,
company rehabilitations and liquidations, and mergers and acquisitions.
Prior to joining the firm, Mr. Bodnar had senior leadership roles at
Genworth and GE Capital and led actuarial consulting practices at Milliman,
Willis Towers Watson, Oliver Wyman and KPMG.
Peter Goldstein
is CEO of LTCG, a leading provider of administrative and clinical services
within the LTC insurance industry. His 25 years of leadership have helped
LTCG adapt to a changing industry environment and have transformed the
organization into a premier partner for LTC insurers. LTCG serves all of
the top LTC carriers and is the largest third-party claims payer in this
space. Peter’s strategic vision for the company has transformed LTCG from
a TPA focused on processing capabilities into an organization dedicated to
proactive, holistic risk management for its customers. Peter is a
recognized thought leader on topics ranging from next-generation claims
management to the public policy changes needed to ensure a sustainable
future for this industry. He has been featured in a variety of
wide-reaching business publications including the Wall Street Journal,
Bloomberg, Mergermarket, Think Advisor, Business Week and many others.
Afik Gal is a
physician and a co-founder of Assured Allies, an insur-tech company
dedicated to making longevity sustainable. Afik has spent over 15 years
bringing innovative technological care management solutions to life across
healthcare and financial insurance industries. Prior to founding Assured
Allies, Afik served as VP of Product Innovation at EviCore healthcare
where he revolutionized prior authorization as a benefit to payers,
providers, and patients. He also led the innovation lab at PwC’s
healthcare advisory practice helping clients design and implement advanced
analytics solutions with great impact on their business models. Afik has
also served as a partner and advisor to numerous hospitals and startup
companies developing
technologies to improve patient care.
#############################
Updated, Monday, September 27, 2021,
10:40 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #21-033: 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 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:
-
The nursing care insurance fund is
apparently threatened with insolvency
-
Bipartisan group of state lawmakers ask
Gov. Inslee to pause long-term care insurance tax
-
Why the Cost of Long-Term Care Is Out of
Reach for the Middle Class
-
Opt-out direction, updates, and good and
bad news concerning long-term-care law
-
Consumers Use Up Washington State's Private
LTCI Capacity
-
Medicare and Medicaid recipients,
minorities receive more low-value, aggressive cancer care at end of
life, study finds
-
The Next Medicaid Blowout
-
Recognize, Assist, Include, Support, &
Engage (RAISE) Family Caregivers Act Initial Report to Congress
-
State of the Long Term Care Industry:
Survey of nursing home and assisted living providers show industry
facing significant workforce crisis
-
Annexus to Offer Social Security
Uncertainty Protection
-
COVID-19 Claims More Than 675,000 US Lives,
Surpassing the 1918 Flu
-
Survey finds family caregiver burden is
worsening
-
Bipartisan Solutions to Improve the
Availability of Long-term Care
-
Steep BMI Increase for Kids, Teens During
the Pandemic
#############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Monday, September 20, 2021,
10:40 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #21-032: 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 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:
-
Retirees’ Need for Caregivers Varies Widely
-
Letter to Gov. Inslee Objecting to the WA Cares
Fund
-
U.S. poverty declined overall last year due to
pandemic relief, Census says
-
Facing Medicare’s fiscal challenges: The 2021
Medicare trustees’ report
-
Two Healthcare Insiders at Aegis Living Blow
Whistle on Alleged Elder Abuse and Medical Fraud
-
Changes to WA Cares Fund likely next session
-
Will Medicaid take life insurance proceeds after I
die?
-
Long-term care tax is the wrong answer to a good
question
-
The $3.5T Spending Mistake
-
Study: Medicare reduces older adults' risk for
catastrophic health expenses
-
‘We’ve Been Too Reactive’: Argentum Pivots to
Invest More in Public Policy Efforts,”
-
Older adults with dementia half as likely to move
to a nursing home if they live with adult children: study
-
UK lawmakers back tax hike to pay for health,
long-term care
-
Workers at home health agencies receiving Medicare,
Medicaid must get vaccinated: CMS
-
BREAKING: 16,000 COVID deaths missed in nursing
homes
-
Social Security predicts pandemic birth blip, not
birth dearth
-
Washington is taking the worry out of long term
care
-
New poll: Seniors want to age at home with
caregiver support
-
Nursing home leaders unraveling after months of
pandemic dangers, workloads, McKnight’s survey shows
#############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Friday, September 17, 2021,
10:40 AM (Pacific)
Seattle—
#############################
LTC BULLET:
THE LTC ANOINTED
LTC Comment: Thomas
Sowell’s books,
A Conflict of Visions,
The Vision of the Anointed and
Intellectuals and Society, offer insights into why the
long-term care intelligentsia think and act the way they do. We explain
after the ***news.***
*** LTC CLIPPINGS
are daily emails the Center for LTC Reform sends to premium members ($250
per year or $21 per month) apprising them of critical information they
need to know before they’re blindsided by clients or prospects. They
average two per day and include the date, title, author, a representative
quote, a link to the source and Steve Moses’s brief interpretation. The
Clippings cover popular and scholarly articles, studies and reports,
newly published data, etc. Our goal is to free others from time-consuming
research that takes them away from their normal sales or administrative
work. The LTC Clippings are compiled each Monday in an LTC
E-Alert sent to all Center regular members ($150 per year or $12.50
per month). Check out all the membership levels and benefits
here and join the Center
here. These are two LTC Clippings from earlier this week:
9/16/2021, “Facing
Medicare’s fiscal challenges: The 2021 Medicare trustees’ report,”
American Enterprise Institute
Quote: “For the fourth consecutive year, Medicare trustees report
that the program will be unable to pay the full cost of health benefits by
2026. The COVID-19 pandemic harmed Medicare’s finances, but the mismatch
between program spending and revenue has been a long-standing concern. If
it continues unabated, the consequences for millions of beneficiaries will
be dire. Please join AEI as Medicare’s chief actuary summarizes the
results of the 2021 trustees’ report. A panel of experts will discuss the
need for reform and policy options that could improve the program’s fiscal
condition.”
LTC Comment: If you missed it live this morning, catch this video
of the program now. What’s more disconcerting? That politicians continue
to ignore the oncoming insolvency of Medicare and Social Security? Or that
the academics and advocates they listen to keep pushing for more of the
same financially irresponsible programs?
9/13/2021, “Will
Medicaid take life insurance proceeds after I die?,” by Karin Price
Mueller, NJ.com
Quote: “Q. If I have an insurance policy that has no cash value
and my son is the beneficiary, when I die and he receives the money, will
Medicaid file a lien on that money? Would my son have to pay it?
— Uncertain
A. Many families are surprised that Medicaid will go after funds if it
pays for your care before you die. …
New Jersey Medicaid considers proceeds from term life insurance policies
with no cash benefit to belong to the named beneficiaries and are not
subject to estate recovery, said Shirley Whitenack, an estate planning
attorney with Schenck, Price, Smith & King in Florham Park.”
LTC Comment: Medicaid exempts term life insurance in unlimited
amounts. So to get rid of a million dollars and qualify immediately for
Medicaid LTC benefits, all the applicant needs to do is buy a term policy
in that amount. Wait, you say. Wouldn’t the premium for such a policy be
almost as much as the benefit? Why do it? This article explains the key to
this Medicaid planning gimmick. As long as the beneficiary is someone
other than the Medicaid recipient’s estate, such as an adult child heir,
the family dodges the estate recovery requirement and the millionaire
achieves immediate Medicaid eligibility. ***
LTC BULLET: THE LTC
ANOINTED
LTC Comment: In A
Conflict of Visions, Thomas Sowell identifies and distinguishes two
principal ways of viewing the world and human potential. He calls them the
unconstrained and the constrained visions. The “unconstrained vision” is
The Vision of The Anointed. People with that view of the world
imagine that anything is possible, human nature is improvable, and the
better sort, especially intellectuals, should guide and direct the rest of
humanity. Those with Sowell’s “constrained” or “tragic” vision, in
contrast, see human potential as delimited by unavoidable obstacles that
must be systematically confronted and overcome. For them, human nature is
already mostly established and must be worked around with ingenuity and
effort. Intellectuals, according to the constrained vision, are
self-satisfied prima donnas who arrogate authority to themselves while
ignoring or demeaning the public’s cumulative knowledge and preferences,
often called “common sense,” gained from centuries of experience and
tradition. Which of these two visions of the world would you associate
with the academics and advocates who tell us so confidently what’s wrong
with and what to do about long-term care?
To my mind, Sowell’s
unconstrained vision clearly prevails among “The
InLTCgentsia.” These experts, the “LTC anointed,” believe they know
best what ails America’s long-term care system and how to fix it. They
ignore the long history of government interference in the long-term care
market. They persist in promoting government “solutions” for problems
created by government funding and regulation. They brush off arguments to
the contrary while refusing to engage on specific objections to their
collectivist dogmas. They insist on addressing only symptoms, never
identifying or analyzing the causes of long-term care’s dysfunctions. They
seduce politicians with ideas and proposals based on the fantasy that
government, following their advice, can provide better long-term care than
a free market in which people vote with their own money for the kind,
amount and quality of care they prefer. The LTC anointed persist in
offering the same analysis and proposals rejected by voters decade after
decade while expecting a different result.
To expand and elucidate,
here are some quotes from Thomas Sowell about the unconstrained vision of
the anointed followed by our examples based on observation of the “LTC
anointed.”
Sowell: “The
question for the anointed is not knowledge but compassion, commitment, and
other such subjective factors which supposedly differentiate themselves
from other people. The refrain of the anointed is we already know the
answers, there’s no need for more studies, and the kinds of questions
raised by those with other views are just stalling and obstructing
progress. ‘Solutions’ are out there waiting to be found, like eggs at an
Easter egg hunt. Intractable problems with painful trade-offs are simply
not part of the vision of the anointed. Problems exist only because other
people are not as wise or as caring, or not as imaginative and bold, as
the anointed.”
― Thomas Sowell, The
Vision of the Anointed: Self-Congratulation as a Basis for Social Policy
LTC Comment: The
LTC anointed have dreamed up “solutions” for long-term care in studies,
commissions and legislative proposals over many decades. Somehow they can
never figure out how to force the public, who are more self-interested,
and supposedly less wise and caring, to pay for their illusive dreams.
Sowell: “While
those with the vision of the anointed emphasize the knowledge and
resources available to promote the various policy programs they favor,
those with the tragic vision of the human condition emphasize that these
resources are taken from other uses (‘there is no free lunch’) and that
the knowledge and wisdom required to run ambitious social programs far
exceed what any human being has ever possessed, as the unintended negative
consequences of such programs repeatedly demonstrate.”
― Thomas Sowell, The
Vision of the Anointed: Self-congratulation as a Basis for Social Policy
LTC Comment: All
we need to do is raise the marginal tax rate, bump up the Social Security
tax, or nail the rich. Never mind that every dollar removed from the
supply of private capital to fund social welfare schemes is a dollar that
will not go to invest in producing products and services people actually
want, as proved by the fact they’re willing to pay for them and do not
have to be compelled by the threat of government force to spend for them.
Sowell: “To
suggest that ‘society’ can simply ‘arrange’ better outcomes somehow,
without specifying the processes, the costs or the risks, is to ignore the
tragic history of the twentieth century, written in the blood of millions,
killed in peacetime by their own governments that were given extraordinary
powers in the name of lofty goals.”
― Thomas Sowell, Intellectuals
and Society
LTC Comment: The
LTC anointed insist, without specifying the “processes, the costs or the
risks,” that if we would just turn over to government the power to compel
everyone to pay more taxes to support their recommendations, we could
somehow get a better long-term care result than the dysfunctional system
we have now that is grounded in many decades of government funding and
control.
Sowell: “The
vision of the anointed is one in which ills as poverty, irresponsible sex,
and crime derive primarily from ‘society,’ rather than from individual
choices and behavior. To believe in personal responsibility would be to
destroy the whole special role of the anointed, whose vision casts them in
the role of rescuers of people treated unfairly by ‘society.”
― Thomas Sowell, The
Vision of the Anointed: Self-Congratulation as a Basis for Social Policy
LTC Comment: The
LTC anointed assume it is society’s responsibility to fix long-term care
as other followers of the anointed vision “fixed” retirement security and
elderly health care with Social Security and Medicare. It feels good to
proclaim solutions from on high. But greater and greater dependency on
government has depleted individuals’ sense of personal responsibility
leaving real life people unprotected if and when government lets them
down.
Sowell: “Systemic
processes tend to reward people for making decisions that turn out to be
right—creating great resentment among the anointed, who feel themselves
entitled to rewards for being articulate, politically active, and morally
fervent.”
― Thomas Sowell, The
Vision of the Anointed: Self-Congratulation as a Basis for Social Policy
LTC Comment: That
shoe fits the LTC anointed like a glove. They bask in the warm,
unchallenged shibboleths of the “unconstrained” vision while evading the
market’s school of hard knocks. Entrepreneurs, on the other hand, risk
their own capital in search of profits earned by giving consumers what
they actually need and want. Which should we appreciate more?
Sowell: “The
hallmark of the vision of the anointed is that what the anointed consider
lacking for the kind of social progress they envision is will and power,
not knowledge. But to those with the tragic vision, what is dangerous are
will and power without knowledge—and for many expansive purposes,
knowledge is inherently insufficient”
― Thomas Sowell, The
Vision of the Anointed: Self-congratulation as a Basis for Social Policy
LTC Comment: The
LTC anointed seek to force people into one-size-fits-all compulsory social
programs that eliminate the power of personal agency leaving people
dependent on politicians and bureaucrats. What has our increasing
dependency on politicians and bureaucrats given us so far?
Sowell: “One of
the first things taught in introductory statistics textbooks is that
correlation is not causation. It is also one of the first things
forgotten.”
― Thomas Sowell, The
Vision of the Anointed: Self-Congratulation as a Basis for Social Policy
LTC Comment: The
LTC anointed often confuse correlation and causation. Two examples: (1)
They assume elderly asset decumulation late in life must have been caused
by catastrophic long-term care spend down. They never consider the
possibility that older people and their families may learn of Medicaid’s
generous and elastic income and asset eligibility rules and hide, jettison
or reconfigure their wealth to qualify, with or without the assistance of
omnipresent lawyers eager to help them artificially self-impoverish in
exchange for a generous fee. (2) Trying to make their case for
catastrophic Medicaid spend down, the LTC anointed over-estimate its
incidence by pretending that every transition to Medicaid LTC eligibility
occurs because of spending on long-term care. People can and often do
transition to Medicaid eligibility without spending down significantly.
The correlation between spending and transition often hides the true
causation, i.e., that Medicaid rules allow people with substantial
income and assets to qualify for LTC benefits. Even greater wealth than
the basic eligibility rules allow is protected by means of techniques
explained in the formal legal literature on Medicaid planning which the
LTC anointed almost entirely ignore.
Sowell: “What is
seldom part of the vision of the anointed is a concept of ordinary people
as autonomous decision makers free to reject any vision and to seek their
own well-being through whatever social processes they choose. Thus, when
those with the prevailing vision speak of the family—if only to defuse
their adversaries’ emphasis on family values—they tend to conceive of the
family as a recipient institution for government largess or guidance,
rather than as a decision-making institution determining for itself how
children shall be raised and with what values.”
― Thomas Sowell, The
Vision of the Anointed: Self-congratulation as a Basis for Social Policy
LTC Comment: The
LTC anointed treat ordinary people like chess pieces to be moved around on
political and economic game boards. They seek to replace personal
responsibility and planning with government compulsion through mandatory
social insurance for long-term care. They know best; the rest of us are
too ignorant or irresponsible to do the right thing. But do they ever ask
why the public has become so ignorant and irresponsible when it comes to
retirement, health care and long-term care planning? Do they question
whether government promises from Social Security, Medicare and Medicaid
may have undercut private concern for economic risks? Does the concept of
moral hazard, so fundamental to private insurance theory, ever enter their
minds? The answers are no, no and no.
Sowell: “Among
the many other questions raised by the nebulous concept of ‘greed’ is why
it is a term applied almost exclusively to those who want to earn more
money or to keep what they have already earned—never to those wanting to
take other people’s money in taxes or to those wishing to live on the
largesse dispensed from such taxation. No amount of taxation is ever
described as ‘greed’ on the part of government or the clientele of
government.”
― Thomas Sowell, The
Vision of the Anointed: Self-Congratulation as a Basis for Social Policy
“[W]hen people choose
their occupations according to what the public wants and is willing to pay
for, that is ‘greed,’ but when the public is forced to pay for what the
anointed want done, that is ‘public service’.”
― Thomas Sowell, The
Vision of the Anointed: Self-congratulation as a Basis for Social Policy
LTC Comment: The
LTC anointed routinely ask hard-working people to pay just a little more
in taxes to fund their elaborate schemes. Two examples are the
WA Cares Fund and the
WISH Act. These programs and their ilk add long-term care to the
mountain of moral hazard already inflicted on the economy by Social
Security and Medicare. Yet the LTC anointed will characterize the
opponents of their programs as uncaring and stingy.
Sowell: “Another
way of verbally masking elite preemption of other people’s decisions is to
use the word ‘ask’—as in ‘We are just asking everyone to pay their fair
share.’ But of course governments do not ask, they tell. The Internal
Revenue Service does not ‘ask’ for contributions. It takes.”
― Thomas Sowell, The
Vision of the Anointed: Self-congratulation as a Basis for Social Policy
LTC Comment:
Usually the LTC anointed don’t even bother to ask nicely. They presume
they’re right and the rest of us should fall into step with their
mandates.
Sowell: “…the
very commonness of common sense makes it unlikely to have any appeal to
the anointed. How can they be wiser and nobler than everyone else while
agreeing with everyone else?”
― Thomas Sowell, The
Vision of the Anointed: Self-Congratulation as a Basis for Social Policy
LTC Comment: The
LTC anointed bristle at arguments grounded in common sense. They display
contempt for people who just want to keep what they’ve earned, take
responsibility for themselves and their families, and give charity as and
when they can afford it and deem it justified.
Sowell: “In
short, numbers are accepted as evidence when they agree with
preconceptions, but not when they don’t.”
― Thomas Sowell, The
Vision of the Anointed: Self-Congratulation as a Basis for Social Policy
“Today, despite free
speech and the mass media, the prevailing social vision is dangerously
close to sealing itself off from any discordant feedback from reality.”
― Thomas Sowell, The
Vision of the Anointed: Self-congratulation as a Basis for Social Policy
“Reality does not go
away when it is ignored.”
― Thomas Sowell, Intellectuals
and Society
LTC Comment:
Confirmation bias is commonplace among the LTC anointed. They do not
consider, much less attempt to refute, evidence that conflicts with their
predispositions. Examples are rife. The LTC anointed cling to the myth
that Medicaid requires impoverishment while they ignore the ubiquitous
popular and scholarly published evidence to the contrary. They insist wide
swaths of the American public are being wiped out financially by long-term
care expenditures, when there is no evidence this is so and they cite
none. They rely slavishly on
Health and Retirement Study (HRS) longitudinal data on asset
decumulation assuming it’s proof of LTC spenddown without acknowledging or
addressing the data’s many flaws. Moreover, nothing in that data
demonstrates that spend down occurs because of long-term care expenses.
Sowell: “Many
intellectuals are so preoccupied with the notion that their own special
knowledge exceeds the average special knowledge of millions of other
people that they overlook the often far more consequential fact that their
mundane knowledge is not even one-tenth of the total mundane knowledge of
those millions. However, to many among the intelligentsia, transferring
decisions from the masses to people like themselves is transferring
decisions from where there is less knowledge to where there is more
knowledge. That is the fatal fallacy behind much that is said and done by
intellectuals, including the repeated failures of central planning and
other forms of social engineering which concentrate power in the hands of
people with less total knowledge but more presumptions, based on their
greater average knowledge of a special kind.”
― Thomas Sowell, Intellectuals
and Society
LTC Comment: That
quote pretty much sums it up.
#############################
Updated, Tuesday, September 7, 2021,
10:40 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #21-031: 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 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:
- Number of people with dementia set to jump 40% to 78 million by 2030
-WHO
- COVID vaccine protection drops by 80 percent in 6 months among
nursing home residents: study
- Do some cognitive functions improve with age?
- Long-Term Care Needs Reform, Not More Money
- Medicare Advantage slowing COVID discharges to SNFs: report
- Why some plan to opt out of new WA long-term care insurance
- Senator’s Report Provides Alternative Long-Term Care Policy
- Covid could trigger a spike in dementia cases, say Alzheimer’s
experts
- A New Report Says The COVID Recession Has Pushed Social Security
Insolvency Up A Year
- Want to opt-out of Washington’s new long-term care tax? Good luck
getting a private policy in time
- Social Security Fund on Track to Go Bust by 2033: Trustees Report
- Could active adult housing be a solution to the middle-market
affordability challenge?
#############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Friday, September 3, 2021,
10:40 AM (Pacific)
Seattle—
#############################
LTC
BULLET: THE INLTCGENTSIA
LTC Comment: Should LTC
intellectuals, politicians and bureaucrats who pay no price for being
wrong direct long-term care financing reform? Considerations after the
***news.***
*** ANNUAL LTCI SURVEYS
available now in
Broker World. Check them out for the latest on the status of
private long-term care insurance.
“2021
Milliman Long Term Care Insurance Survey,” by Claude Thau, Allen
Schmitz, FSA, MAAA and Chris Giese, FSA, MAAA, Broker World, July
1, 2021
“2021
Analysis Of Worksite LTCI,” by Claude Thau, Allen Schmitz, FSA, MAAA
and Chris Giese, FSA, MAAA, Broker World, August 1, 2021 ***
*** LTC CLIPPINGS are a
feature that Center for LTC Reform Premium Members ($250 per year) receive
to keep them up to date on the articles, reports and data they need to
know to stay at the forefront of professional expertise. Steve Moses scans
the popular and scholarly literature constantly and sends subscribers
daily emails (2 per day on average) with the date, title, author, source,
and his brief analysis of every important new publication. Regular members
($150 per year) receive a weekly compendium of the LTC Clippings
each Monday in an LTC E-Alert. Subscribe now
here or contact
smoses@centerltc.com with your questions or comments. Two examples
follow:
8/2021, “Senator’s
Report Provides Alternative Long-Term Care Policy,” by Ashley Herzog,
Health Care News
Quote: “First,
Congress would eliminate Medicaid loopholes that allow affluent seniors to
qualify, ending the ‘perverse incentives’ that discourage consumers from
planning early and responsibly for long-term care, Moses writes. ‘Step two
is to put the Medicaid estate planning bar out of business,’ Moses writes.
‘Systematically identify, analyze and prohibit the methods and financial
products elder law attorneys use to qualify their affluent clients for
Medicaid LTC benefits. Stop their discriminatory practice of using ‘key
money’ to buy well-heeled clients access to the best long-term care
facilities at the exclusion of poor people who lack the funds to pay
privately.’ The third step is to warn the public that long-term care is a
‘pay now or pay later’ proposition, Moses writes”
LTC Comment: We
thank Ms. Herzog and Health Care News for citing the Center’s LTC
policy proposals at length. “Health Care News is available on the
internet. Point your browser to HeartlandDailyNews.com.” To be clear, the
Moses proposals are not a part of Senator Tim Scott’s alternative LTC
policy referenced in the article’s title … yet. We’ll work on that.
9/2/2021, “Long-Term
Care Needs Reform, Not More Money,” by Chris Pope, National Review
Quote:
“The reconciliation bill being prepared by congressional Democrats is
so substantial that specific provisions as large as $400
billion in proposed extra funds for Medicaid’s long-term-care benefit
have attracted little attention. … However, the shortcomings of Medicaid’s
long-term-care benefit owe much to the program’s resources being
improperly targeted. Instead of being a safety net of last resort, the
program has loose and inconsistent eligibility requirements, disincentivizing the
purchase of private long-term-care insurance — which ought to bear the
bulk of long-term-care costs. Policymakers should use the provision of
additional funds to facilitate reforms that fix these deeper structural
problems.”
LTC Comment: Well
said. Much of this article we might have written ourselves. Actually, we
have and
many times. Other parts of the article are less coherent and there is
no explanation of what should be done except a reference to Senator
Casey’s bill, a step in the wrong direction. For a full picture of the
problem and the solution, read
Medicaid and Long-Term Care. Special thanks to long-time
Center friend and supporter Brad Winnekins (President of Legacy Services,
bradw@legacyltci.com) for tipping us to this article. ***
*** RECENT MOSES
COLUMNS:
“Should
Medicaid Protect $8 Trillion from Private Senior Living Costs?” for
McKnight’s Senior Living, August 9, 2021
“The
InLTCgentsia” for Broker World’s August 2021 issue.
“Panel
Gives States Pass in Collecting Assets for Medicaid Long-Term Care,”
by Stephen A. Moses, Health Care News, July 2021 (PDF
version.)
“Government
Violates the Long Term Care Social Contract to Your Detriment, by
Stephen A. Moses, Broker World, June 2021. (PDF
version.)
“President
Biden, tear down this wall,” by Stephen A. Moses, McKnight’s LTC
News, June 23, 2021 (PDF
version.)
“Using
Medicaid to protect inheritances,” by Steve Moses and Brian Blase, TheHill,
June 10, 2021. (PDF
version.)
“LTC
financing: Be careful what you WISH for,” by Stephen A. Moses, McKnight’s
Senior Living, June 7, 2021. (PDF
version.)
“The
social contract for long-term care,” guest column by Stephen Moses
for McKnight’s Long-Term Care News, May 17, 2021. (PDF
version.)
“Why
LTCI Fails,” guest column by Stephen Moses for Broker World magazine,
March 2021. (PDF
version.)
Find many more articles
like these, plus scores of speeches and reports covering 35 years of
long-term care policy analysis at
www.centerltc.com. ***
LTC BULLET: THE
INltcGENTSIA
LTC Comment: The
following article was
originally published in Broker World magazine’s August 2021
issue. We thank the editor and publisher Stephen Howard for permission to
republish the column here. Subscribe to Broker World here:
https://brokerworldmag.com/orders/. We strongly recommend this
publication for anyone working in the financing or provider sides of the
long-term care profession.
“The InLTCgentsia”
By
Stephen A. Moses
“What is called
‘social’ planning are in fact government orders over-riding the plans and
mutual accommodations of millions of people subject to those orders.”
—Thomas Sowell, Intellectuals and Society
“Why the transfer
of…decisions from the individuals and organizations directly involved–often
depicted collectively and impersonally as ‘the market’–to third parties
who pay no price for being wrong should be expected to produce better
results for society at large is a question seldom asked, much less
answered.”
—Thomas Sowell, Intellectuals and Society1
The LTC intelligentsia
agrees on long-term care’s problems and solutions. To wit, more and more
people need long term care. Current public programs are inadequate.
Private LTCI failed. Providing “free” care stresses families financially
and emotionally. So, obviously, we need government to take a bigger role
in long term care, preferably with a new, compulsory, payroll-funded,
social insurance entitlement program. Or, to keep it simple, just shoehorn
long term care into Medicare. That’s the InLTCgentsia’s diagnosis and
prescription in a nutshell.
Their remedy relies on
government central planners, guided by their own sophisticated expert
advice, to design, introduce, pass, implement and defend legislation
impacting every individual and family in the country. How do these
planners and their advisors know what millions of individuals and families
who comprise the market for long term care need and want? In the absence
of price data reflecting actual preferences, “polls” must suffice. People
say they want more home care, fewer nursing homes, higher quality, lower
costs, more control and choices. Will a big new government program deliver
those benefits? At what cost? With what unintended consequences?
To answer those
questions, don’t we first need to ask and answer why America’s long term
care system doesn’t deliver those desired benefits already? Is it for lack
of government funding? No. Medicaid, Medicare, the VA and other smaller
government programs pay for most long-term care in the United States.2 Is
it for lack of government regulation? No. Long term care is the second
most regulated industry in the nation, after nuclear power.3 So
what does explain the dysfunctionality of our long term care services and
financing?
Could the answer
possibly be—the same government funding and regulation that dominate long
term care already? Medicaid is by far the biggest source of funding for
long term care and a huge drain on state and federal budgets. Its coverage
rules cause institutional bias. Its eligibility rules crowd out private
financing sources.4 Its low reimbursements hamper quality. Its
availability after people need care creates a moral hazard that
discourages early planning and traps many on public assistance late in
life. If the public funding program we already have is the principal cause
of what ails long term care, why should we expect a bigger, more expensive
and intrusive program to improve the situation?
Try this thought
experiment instead. What if there were no Medicaid program to pay for
catastrophic long term care costs? How would consumers behave? Odds are
people would worry about the 25 percent probability of having a severe
need for long term care in the future.5 They would save,
invest, or search for private insurance to spread the risk. Unprepared
people who were stricken would use their home equity to fund care as most
elderly own homes.6 Spending their own money for long term
care, patients and families would seek home- and community-based care
instead of nursing homes. With private asset spenddown, including
potentially $8 trillion of home equity,7 flowing through the
long term care services industry, access and quality of care would improve
for everyone. Potential profits would supercharge entrepreneurs to
discover and offer new and better care options.
What I’ve just described
would solve the middle market problem.8 We don’t need to worry
about the wealthy; they can take care of themselves. But, what about the
poor? Having removed the perverse incentives that discourage responsible
long term care planning, many fewer people will end up needing long term
care but unable to pay. There will be no more incentive to hire attorneys
to manipulate government eligibility rules in order to self-impoverish
artificially. The relatively small numbers of genuinely needy people who
remain could be served by private charity and/or a vastly scaled down
public assistance program funded by a fraction of the savings from ending
the Medicaid LTC program.
So let’s pose Thomas
Sowell’s “seldom asked, much less answered” question from the quotation
above. Whom should we entrust? The InLTCgentsia “who pay no price for
being wrong” or the millions of consumers, providers, and insurers who
comprise the market for long term care? Why should we be subject to
“government orders over-riding the plans and mutual accommodations of
millions of people?” When those millions vote with their own money for the
kind of long term care they prefer, we will all receive better services in
preferred settings. That is the answer.
References:
-
https://www.goodreads.com/work/quotes/8518862-intellectuals-and-society.
-
http://www.centerltc.com/bullets/archives2020/1295.htm.
-
http://www.isanti-chisagocountystar.com/.
-
https://economics.mit.edu/files/7890.
-
https://www.marketwatch.com/.
-
https://www.jchs.harvard.edu.
-
https://www.mcknightsseniorliving.com/.
-
https://www.soa.org/resources/research-reports/2018/ltc-middle-market/.

Stephen A. Moses
425-891-3640 smoses@centerltc.com
Stephen A. Moses is
president of the Center for Long-Term Care (www.centerltc.com). 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), a 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.
He completed the “2008
National Long Term Care Consciousness Tour” traveling for a year and
28,028 miles while living in an Airstream trailer dubbed the “Silver
Bullet of Long Term Care.” The LTC Tour promoted responsible long term
care planning and rational long term care public policy.
Moses can be reached at
the Center for Long-Term Care Reform, 2212 Queen Anne Avenue North, #110,
Seattle, WA 98109
#############################
Updated, Monday August 30, 2021,
10:40 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #21-030: 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 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:
-
The staggering, exhausting, invisible costs of
caring for America’s elderly
-
New Research Signals Mass Employee Exodus From Long
Term Care Due to Vaccination Mandate
-
Related: 10 Life Insurance Tax Facts to Know
-
How Taxes, Medicare Premiums Erode Social Security
Benefits Despite COLAs
-
A Massive Elder Corps Is Just Waiting to Be Helpful
-
PLANNING AHEAD: Are inheritances protected and
other Medicaid myths [Column]
-
Medicare nursing home residents more likely to be
diagnosed, hospitalized and die from COVID-19 than beneficiaries not in
facilities
-
Study: Pandemic increased the number of homebound,
isolated seniors
-
How COVID-19 Has Changed Americans' Views on Health
Insurance
-
What Can YOU Do to Resolve the LTSS Workforce
Crisis?
-
CalPERS long-term care insurance settlement: how to
avoid missing out on $35,000 checks
#############################
"LTC E-Alerts" are
a feature offered by
the Center for Long-Term Care Reform, Inc. to members at the $150 per year
level or higher. We'll track and report to you news and analysis regarding
long-term care financing, service delivery, and research. We hope The LTC
E-Alerts will help you attain and maintain a high level of knowledge and
competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Monday August 23, 2021, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #21-029: 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 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:
-
AHCA, NCAL Urge
Administration to Consider Implications of Vaccination Policy
-
Medicare Advantage
Healthcare Spending Exceeds Original Medicare: Policymakers may soon
have to address inequities between Medicare Advantage healthcare
spending and Medicare spending
-
5 Ways to Keep
People With LTC Insurance Healthy
-
BREAKING: It’s
official: Nursing homes must vaccinate employees or lose Medicaid,
Medicare funding
-
Yogurt every day
keeps Alzheimer’s away? Probiotics, strong gut health may be key to
avoiding dementia
-
The gig economy
finally catches up with long-term care
-
Washington’s New
Long-term Care Benefit Program: Important Deadlines Loom!
-
It’s Getting Late
to Opt Out of Washington’s Long-Term Care Program
-
The Rising Toll of
Autoimmune Diseases in Older People
-
Boosters to be
expanded to most vaccinated Americans: reports
-
State Regulators
Eye Long-Term Care Insurers' Wellness Programs
-
Retirement Income
Policy Needs a Facelift
-
Commentary: New
long-term care tax will affect Washington workers
#############################
"LTC E-Alerts" are
a
feature offered by the Center for Long-Term Care Reform, Inc. to members
at the $150 per year level or higher. We'll track and report to you news
and analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com)
#############################
Updated,
Friday, August 20, 2021, 10:40 AM (Pacific)
Seattle—
#############################
LTC BULLET: WISHful THINKING
LTC Comment: Hope springs eternal among the LTC anointed that one more
government program forced on the public at the expense of the productive
economy can reduce the damage done by its many failed predecessors.
Analysis of the WISH Act follows.
LTC BULLET: WISHful THINKING
LTC Comment:
Thomas Sowell’s
A Conflict of
Visions
contrasts people with “constrained” vs. “unconstrained” visions of the
world. Those with the constrained or “tragic” vision see human limitations
and focus on systemic analysis and marginal improvements. There are no
solutions, only tradeoffs, for those with the tragic vision. Those with
the unconstrained vision,
The Vision of the
Anointed,
believe everything is possible. All it takes is for the best and the
brightest to apply their superior intelligence and understanding to a
problem and, voila, solutions emerge. But so do unintended, often
disastrous, consequences.
We’ll have more to say about the LTC anointed in a future LTC Bullet,
but suffice it here to say there’s no question which vision of the world
the authors of the article we’ll review today share. Instead of focusing
on the historical failure of government to solve the long-term care
financing problem after decades of trying, they think one more attempt
with the same approach applied by smart people
with the best of
intentions
will have a better result. They’re unconstrained by any analysis or
understanding of how the long-term care service delivery and financing
system in the United States became so dysfunctional. So, anything seems
possible to them.
Marc A. Cohen
and
Stuart M. Butler
published “The
Middle Ground For Fixing Long-Term Care Costs: The WISH Act,"
in the Health Affairs Blog on August 9, 2021. Their article reviews
and strongly recommends a new, compulsory social insurance program for
long-term care recently introduced in Congress. Quotes from their article
and our comments in reply follow.
Cohen/Butler:
“Roughly one week before Americans celebrated the July 4 holiday,
Representative Thomas Suozzi (D-NY) introduced a revolutionary bill (H.R.
4289)
designed to repair our broken system for financing long-term services and
supports (LTSS). The ‘WISH Act’—Well-Being Insurance for Seniors to be at
Home—is based on an idea first put forward by a group of long-term care
experts known as the Long-Term
Care Financing Collaborative,
which was convened in 2012 by the Convergence Center for Policy Resolution
and included the authors of this blog post. The [LTC Collaborative] idea
was developed further in a 2018 paper presented
at the Bipartisan
Policy Center.
If enacted, the WISH Act could significantly transform our LTSS financing
system by harnessing the best of what the public and private sectors can
jointly do to solve a problem that neither sector seems able to solve on
its own. And it does this in a fiscally responsible way.”
LTC Comment:
If public policy proposals are only as good as the research on which
they’re based, the WISH Act is handicapped from the start. We have
critiqued and rejected both of the studies cited in the article as
foundational for the WISH Act. “LTC
at a Crossroads”
(June 3, 2016) addressed the “LTC Cooperative’s” proposal and “Feder
Fantasy Fatally Flawed (Cohen Contribution Notwithstanding)”
(May 4, 2018) analyzed the 2018 Bipartisan Policy Center paper. Both
studies share these shortcomings: (1) They begin by describing long-term
care’s problems without asking or answering why and how the problems came
to exist in the first place. Thus they run the risk, and do in fact,
recommend more of the same government policies that caused the problems.
(2) Both mistakenly assume wide swaths of the public are spending down
their life’s savings for long-term care based on the “Fallacy
of Impoverishment.”
(3) Both ignore the vast legal and popular literature on qualifying for
Medicaid LTC without spending down, so they assume incorrectly that “big
data” from the
HRS/AHEAD/Rand
studies on asset decumulation prove LTC spend down is widespread. (4) Both
equivocate on Medicaid planning by suggesting it means only “asset
transfers,” which are a relatively small part of the wide range of
techniques to qualify without spending down assets. (5) They equivocate on
“spend down” and “transitions” by assuming that any transition to Medicaid
means someone had to spend down savings before becoming eligible. (6) They
equivocate on “out of pocket” expenses, making them seem larger than they
really are by including residential care and excluding Medicare post-acute
care expenses from LTC costs. These points are fully explained in “LTC
at a Crossroads”
and developed further in
Medicaid and
Long-Term Care.
For our review and critique of 100 similar studies and proposals, see “LTC
Center Standing Guard,”
May 14, 2021. How these points and principles undercut the WISH Act’s
approach is explained below.
Cohen/Butler:
“The legislation seeks to address the growing problem that needing LTSS
for a long spell and, particularly, receiving them in a nursing home, can
be financially devastating even for middle-class Americans with
significant savings. A year in a two-bed nursing-home room can cost
upwards of $93,000,
causing many to exhaust their funds and become reliant on Medicaid.”
LTC Comment:
The assertion that large numbers of people exhaust their wealth paying for
nursing home care before qualifying for Medicaid is often made even in
peer-reviewed journal articles. But you will never find a citation to
evidence supporting the claim. That is because there is none. According to
the
National Investment
Center’s “NIC
Skilled Nursing Data Report”
covering data through May 2021, private-pay nursing home revenue mix has
plummeted to 7.0%, compared to 49.5%, 20.4%, and 10.8% for Medicaid,
Medicare and Managed Medicare, respectively. Most of the small remaining
private payments to nursing homes are for short-term sub-acute and
rehabilitative care not for the kind of long-term custodial care that
Cohen/Butler claim is wiping out the savings of so many. This is a prime
example of scholars using the “fallacy of impoverishment” to justify big
new government programs. Furthermore,
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.” 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” (Johnson
and Wang, 2019, p. 994).
Furthermore: “Nearly nine in ten older adults have enough resources,
including income and wealth, to cover assisted living expenses for two
years” (Ibid., p. 1000). So, the problem is much more manageable
than we thought. All we have to do is persuade people to liquidate all
their assets. (Medicaid
and Long-Term Care,
p. 65)
Obviously, most people aren’t liquidating their assets to fund long-term
care or those expenditures would show up in the data for out-of-pocket
spending. Nor are people going to start liquidating assets to purchase
long-term care as long as Medicaid is so easy to get after extended care
is needed. How to remove this obstacle to private financing and
responsible long-term care planning is explained below.
Cohen/Butler:
“In theory, private insurance is the appropriate tool for protection
against such a risk. But the private long-term care insurance market has
been declining over the past two decades, with fewer
than 10 percent of
Americans having policies. … There are multiple
reasons for
the condition of the insurance market. One is the widespread but erroneous
belief that Medicare will pay for LTSS, combined with confusion about what
private long-term care policies cover, and an aversion among consumers to
the policy’s upfront cost.”
LTC Comment:
People don’t buy LTC insurance because they think Medicare pays for
long-term care? Maybe, but there is some justification for the public’s
seeming misapprehension when Medicare and Managed Medicare contribute
31.2% of nursing home revenues as referenced immediately above. Still,
let’s stipulate that Medicare doesn’t pay a large share of the long-term
care expenses that Cohen/Butler claim are catastrophically impoverishing
so many. No matter; Medicaid does. So if you reconfigure the
statement to read “People don’t buy LTC insurance because they think
Medicaid pays for long-term care” you’d be much closer to the truth.
But there is still a nuance of difference. In truth, most people don’t
know who pays for long-term care. It doesn’t matter to them. They can
ignore LTC risk, wait to see if they ever need care, and if they do,
Medicaid usually pays and its financial eligibility rules are so generous
and elastic that most people qualify without spending down assets
significantly. Fifty-six years of that being true has essentially
anesthetized the public to LTC risk, virtually eliminated potential demand
for private LTC insurance, and left most of the middle class unprotected
and dependent on Medicaid when they need expensive extended care.
Cohen/Butler:
“Agreement on a policy solution has long been stymied by a fundamental
philosophical conflict between those who would limit public policy to the
promotion of private insurance as the only appropriate policy for
protecting private resources and those who regard public insurance as
essential to the assurance of adequate, affordable protection for all.”
LTC Comment:
That statement is personally galling. I know of no one among academic or
popular writers who has ever advocated limiting “public policy to the
promotion of private insurance as the only appropriate policy for
protecting private resources.” Yet that position has been attributed
falsely to me. To be very clear, my position is that America has a
social contract for
long-term care
that includes both public and private contributions. It was established in
the Omnibus Budget Reconciliation Act of 1993 (OBRA ’93) which made
Medicaid estate recovery mandatory. This was the plan Congress and
President Clinton had in mind at that time: when people need long-term
care they can’t afford, Medicaid will provide the care as long as the
applicant’s income is below the cost of a nursing home and most retained
assets, allowed to be virtually unlimited, are held in exempt form. The
only quid pro quo was that after the Medicaid recipient dies, the
estate must reimburse Medicaid for the cost of the care provided. That
contract still exists although it is
under attack
by the
Medicaid and CHIP
Payment and Access Commission (MACPAC).
The social contract for long-term care created in 1993 failed to solve
long-term care’s problems because states did not implement its estate
recovery provisions aggressively; the federal government did not enforce
the requirements; the media did not report the new estate recovery
liability; and so the public remained unaware of the need to save, invest
or insure for long-term care in order to avoid Medicaid dependency and
estate recovery risk. The Medicaid estate planning bar flourishes by
helping their affluent clients evade estate recovery at the same time and
in the same manner as they qualify those clients for Medicaid by means of
artificial impoverishment. We should enforce estate recovery, prohibit
Medicaid planning, stop exempting home equity from LTC responsibility, and
publicize the fact that long-term care planning is a personal
responsibility. In other words, we should fully implement the long-term
care social contract as should have been done, but wasn’t, in the 1990s.
That would change the incentives for long-term care planning so that they
encourage personal savings, investment and insurance instead of
desensitizing the public to LTC risk resulting in their dependency on
public assistance in the end.
Cohen/Butler:
“The WISH Act, however, steers a careful middle course. It combines public
and private roles in ways that would promote comprehensive insurance
protection while strengthening the private insurance industry. It does so
by creating a modest ‘catastrophic’ public program to limit exposure for
LTSS costs that modest- and middle-income people can reasonably be
expected to manage, either through reliance on family caregivers, personal
resources, or on private insurance. In this way, the WISH Act gives
private insurers the opportunity and greater actuarial certainty to design
insurance as a gap-filler (much like private Medigap insurance does for
health costs).”
LTC Comment:
Here wishful thinking borders on full-fledged fantasy. Even a “modest
catastrophic” benefit sends the worst possible message to consumers:
“don’t worry about long-term care; the government has you covered.”
Private insurers won’t want to fill the public program’s gaps for reasons
I’ll explain below. Middle income people won’t buy more private policies
for the same reasons they don’t buy them now; Medicaid picks up
catastrophic costs already and the WISH Act does nothing to change that.
Cohen/Butler:
“The likely result: Many more middle-income people would buy private
policies that, combined with the new public insurance, would provide
nearly comprehensive insurance protection against LTSS costs. This
fundamental idea is key to the WISH Act: using limited public insurance in
part to help stabilize private insurance.”
LTC Comment:
It is not necessary to create a new economy-debilitating compulsory
payroll-funded catastrophic LTC financing program to solve the problems
long-term care faces. All that’s needed is to recognize that Medicaid is
America’s catastrophic LTC financing system and restore it to its original
purpose. Retarget Medicaid’s benefits to people most in need. Eliminate or
radically reduce its home equity exemption. Close its many other egregious
eligibility loopholes; and enforce estate recovery. When long-term care
really is a potential financial catastrophe that threatens even home
equity, people will save, invest and insure against that risk.
Furthermore, it does not require a new government program to make adequate
private LTC insurance affordable to middle-income people.
The National
Investment Center (NIC)
recently reported that reducing the annual cost of seniors housing by
$15,000, from $60,000 to $45,000 per year, would expand the middle market
for seniors housing by 3.6 million individuals enabling 71 percent of
middle-income seniors to afford the product (NIC,
2019, April).
Where could consumers find that extra $15,000 to bring the cost of seniors
housing into reach? The premium for an annual long-term care insurance
benefit of $15,000 would only cost a small fraction of the premium
required for the full coverage that consumers find so financially daunting
now. Unfortunately, insurance regulations 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 long-term care
policy and planning. (Medicaid
and Long-Term Care,
pps. 65-66)
That is how to make adequate private LTC insurance affordable to
middle-income people when they’ve come to want the coverage after Medicaid
no longer obviates the need for it. The best solution is to reduce
dependency on government not expand it with a big new program.
Cohen/Butler:
“Under the legislation, the public program would begin paying a benefit
only after an individual has a LTSS need that lasts for at least one to
five years—depending on income. … Thus, the amount of time a family would
wait to receive the public insurance benefit would be directly related to
their income history so that those with lower incomes have to wait less
time to receive benefits. This scaled, income-based waiting period is
designed to target benefits to middle-income households and protect them
from financial ruin.”
LTC Comment:
Actually “this scaled, income-based waiting period” is a means test. In
other words, the WISH Act would create another welfare program. It is not
social insurance
as its authors intend it to appear. Ironically, the welfare programs we
already have—Medicaid and Supplemental Security Income (SSI)—have
gradually become entitlements accessible to people of substantial means as
a result of eligibility bracket creep and lack of financial eligibility
enforcement. On the other hand, the programs billed as social
insurance—Social Security and Medicare—have been welfarized with the
addition of extra costs for higher income people. America already has too
many middle-class people dependent on government social insurance and
welfare programs. We should go in the opposite direction, not add more of
the same.
Cohen/Butler:
“The WISH Act would also strengthen private insurance by using public
insurance to address a part of the risk that is hard for the private
insurance market to predict: the costs associated with long-duration LTSS
need. Historically, the unpredictability of these costs has discouraged
insurers from offering policies in this market. But having a well-defined
public insurance program in place would stabilize the market and make it
more appealing to new entrants.”
LTC Comment:
That statement displays a fundamental misunderstanding of
the role of private
insurance.
The purpose of insurance is to replace the small risk of a catastrophic
loss with the certainty of an affordable premium. The private insurance
industry is uniquely qualified to perform that role responsibly in
actuarially sound ways that the government has shown it is incapable of
doing. Filling gaps with private coverage as the WISH Act proposes and
Medi-Gap policies do is not insurance. It is dollar cost averaging which
lacks the leverage against risk that real insurance provides. By taking
over the catastrophic health risk, Medicare ruined genuine private health
insurance for the elderly and placed an insupportable burden on the U.S.
economy which has no hope of covering that program’s unfunded liabilities,
currently $33.2 trillion according to the
US Debt Clock.
To add more to government’s catastrophic promises at this stage is unwise
and irresponsible.
Cohen/Butler:
“The largest public payer of LTSS is the Medicaid program. While it pays
for more than half of
all LTSS, however, it covers support services only after people expend
most, if not all, of their personal resources. … The WISH Act would have a
dramatic impact on state Medicaid programs, helping to stem expenditure
growth and in a manner that also advances health equity. Indeed, by
covering long-duration LTSS needs, which are the primary driver of LTSS
costs, the WISH program would reduce Medicaid expenditures by at
least 23 percent,
based on an analysis of a similar approach.”
LTC Comment:
The WISH Act would not reduce Medicaid LTC expenditures at all, much less
by 23 percent. That’s because the proposed legislation does nothing to
change Medicaid’s hemorrhaging financial eligibility system. The idea that
Medicaid LTC benefits are only available “after people expend most, if not
all, of their personal resources” insults the intelligence of anyone who
knows how Medicaid actually works. Income only obstructs eligibility if it
exceeds the cost of a nursing home, $7,750 per month on average, hardly
low income. Virtually all large assets are exempt including $603,000 or
$906,000 of home equity depending on the state and, with no limit on the
amount, one vehicle, prepaid burial expenses, term life insurance, one
business including the capital and cash flow, IRAs in payout status as
most are for older people due to required minimum distributions, household
goods and personal belongings, including expensive “heirlooms.” Elder law
attorneys expand these already generous rules to qualify their affluent
clients by means of special trusts, annuities, and spend down gambits.
Absent estate recovery, which most states do not pursue aggressively,
Medicaid operates to preserve substantial assets for heirs at the expense
of taxpayers. Heirs who receive large bequests because their parents’
long-term care costs were paid by Medicaid are not likely to purchase
long-term care insurance for themselves. If Medicaid operated as it
should, as a safety net for the poor, there would be no credible need for
a program like the WISH Act proposes. People would know LTC is a personal
risk and cost. They would use personal savings and home equity conversion
to purchase their preferred kind of high quality care in the private
market. In time, more would buy private LTCI to protect their savings and
home equity. Fewer people would need Medicaid leaving the program with
more resources to provide better care to truly needy recipients. Everyone
can benefit by reducing government interference and funding instead of
expanding both.
Cohen/Butler:
“One of the shortfalls of the CLASS Act was that its design made it
fiscally unsustainable,
leading to its repeal in 2013. In contrast, the WISH Act is financed much
like a typical insurance program, with a payroll premium offsetting
program costs. In this case, 0.6 percent of wages would be collected from
all participants (half from employees and half from employers). Like
Social Security, full benefits would be available after 40 quarters of
work. Pro-rated benefits would be available after six quarters. This
structure would fund projected benefits and administrative expenses
without general revenue.
“What does this mean for a typical worker? In early 2020, median weekly
earnings for full-time wage and salary employees were $936.
Thus, for such full-time employees, a total of $5.62 per week ($292 per
year) would be set aside into a trust fund to pay for future catastrophic
LTSS needs.”
LTC Comment:
This is so much verbal slight-of-hand. CLASS failed because it was
voluntary. It didn’t force people to participate under penalty of law as
the WISH Act would. Structuring another quasi-welfare program on the model
of Social Security, whose current unfunded liabilities are
$21.4 trillion,
is folly. Putting a median-income worker’s payroll tax into another “trust
fund” that government will spend immediately and replace with IOUs it can
never satisfy will be no consolation. Furthermore, what the “InLTCgentsia”
never seem to grasp is that pulling $5.62 per week out of workers’ income
and the same amount from their employers, which might otherwise have
increased workers’ income, is a drag on the productive economy. We see the
“benefits” they allege, but the opportunity cost—all the things productive
people might have done with the wealth expropriated by government—goes
unseen.
Closing LTC Comment:
The essence of the Cohen/Butler case for the WISH Act is that
(1) Catastrophic spend down for nursing home care is wiping out the
savings of large numbers of Americans. That is false. All but 7% of
nursing home revenue comes from government programs. Is it long-term home
health care, instead of nursing homes, that is wiping out so much wealth?
No, only 11% of home
health care expenditures are out-of-pocket.
Most (85.3%) come from Medicare, Medicaid, and private health insurance
with the remainder deriving from several small public and private
financing sources.
(2) Private LTC insurance failed because insurers are afraid of
catastrophic risks. That is false. Insuring catastrophic risk is the
appropriate role for private insurance, one which government has proven
fiscally incompetent to manage.
(3) People don’t buy private LTC insurance because it is too expensive.
That is false. The main reasons private LTC insurance has languished are
that (a) government forced interest rates artificially low making returns
on reserves inadequate to avoid premium increases that alienated potential
customers, and (b) after the insurable event occurs, Medicaid gives away
the protection insurers were trying to sell when the need for expensive
long-term care was still an insurable risk. If Medicaid did not crowd out
private LTC insurance, people could purchase smaller amounts of it at much
lower cost to close the remaining $15,000 gap identified (above) by NIC.
(4) We can’t possibly meet the long-term care needs of middle-income
Americans without forcing them into another mandatory payroll-funded
government Ponzi scheme like the ones that are already impossibly over
extended financially. That is false. Long-term cares problems were created
by decades of government financing that incentivized the public to ignore
LTC risk, remain financially unprepared, and rely on public welfare if and
when the need arose. Remove those perverse incentives and most people will
do the right and responsible thing.
#############################
Updated, Monday August 16, 2021,
10:40 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #21-028: 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 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:
-
Is The WISH Act A Real
Fix For Long-Term Care Costs?
-
Who Will Take Care of
America’s Caregivers?
-
Guest Opinion: Stop,
rethink Washington state’s long term care law
-
Kaiser study finds
severe workforce shortages challenging HCBS providers
-
Advisors, Take Fear
Out of Long-Term Care Planning
-
Which long-term-care
insurance plans qualify for a payroll tax exemption?
-
Social Security COLA
Estimate for 2022 Raised to 6.2%
-
The Middle Ground For
Fixing Long-Term Care Costs: The WISH Act
-
Life-LTC Combo Product
Sales Fell in 2020: LIMRA
-
Getting Old Is a
Crisis More and More Americans Can’t Afford
-
Democrats Hope To Beef
Up Medicare With Dental, Vision And Hearing Benefits
-
Should Medicaid
protect $8 trillion from private senior living costs?
#############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Monday August 9, 2021, 10:40
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #21-027: 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 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:
-
Schweitzer urges Inslee to end long-term care
insurance benefit
-
A Woman’s Guide to Long-Term Care
-
Money For Nothing: The Biden Administration Seeks
To Overturn Section 1115 Demonstration Safeguards
-
Genworth Hopes to Return to Long-Term Care Market
Next Year
-
2021 Poverty Projections: Assessing the Impact of
Benefits and Stimulus Measures
-
SNF-at-Home Model Becoming ‘Critical Player’ For
Success
-
How a Medicaid Trust Protects Your Assets
-
The Evolution Of Long Term Care: What we might
learn from Germany and other countries about managing the care for our
aged
-
Advising non Washington State Employers about the
Collection & Remittance process for their Washington State Employees for
Wash. Cares
-
Deaths From Alzheimer's Far More Common in Rural
America
-
The InLTCgentsia
-
Low vaccination rates, rise in variants preventing
end to COVID-19 crisis in long-term care
-
COVID-19 Cases and Deaths in Long-Term Care
Facilities through June 2021
-
3 Reasons Dementia Cases Could Triple by 2050
-
Ageism remains last accepted prejudice in
‘egalitarian’ workplace, according to research
#############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Friday, August 6, 2021,
10:40 AM (Pacific)
Seattle—
#############################
LTC
BULLET: GREAT MOMENTS IN UNINTENDED LTC CONSEQUENCES
LTC
Comment:
The best-laid plans of mice and
men often go awry
and especially in long-term care financing policy, after the ***news.***
*** TODAY'S LTC BULLET is
sponsored by Claude Thau, who provides many unique services to
advisors as National Brokerage Director for USA-BGA in the individual,
worksite and affinity LTCi markets. Advisors like his unique, simple
and effective LTCi presentation and his revolutionary “Range of
Exposure” tool which, among other things, projects a client’s (joint
for a couple) mean age of LTC, likely annual cost and length of need
based on age, gender, marital status, success goal (% chance of not
outliving their assets), etc. 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.thau@gmail.com to discuss how he
might help you. *** |
*** LTC CLIPPINGS are a feature that Center for LTC Reform Premium Members
($250 per year) receive to keep them up to date on the articles, reports
and data they need to know to stay at the forefront of professional
expertise. Steve Moses scans the popular and scholarly literature
constantly and sends subscribers daily emails (2 per day on average) with
the date, title, author, source, and his brief analysis of every important
new publication. Regular members ($150 per year) receive a weekly
compendium of the LTC Clippings each Monday in an LTC E-Alert.
Subscribe now
here
or contact
smoses@centerltc.com
with your questions or comments. ***
*** JOIN THE LTC RESISTANCE: Unite to prevent government taking over what
remains of the private long-term care market. Join the “LTC Resistance” by
reading
Medicaid and
Long-Term Care,
browsing the articles linked below, and merging your efforts with ours at
the Center for Long-Term Care Reform
here.
Find our “Membership Levels and Benefits” schedule
here.
Momentum is building for policies that would make the ones critiqued in
today’s LTC Bullet look benign by comparison. Act now before it’s
too late.
In
addition to today’s featured column and the recent articles linked below,
Steve has the following piece accepted for publication in August:
“Should Medicaid Protect $8 Trillion from Private Senior Living Costs?”
for McKnight’s Senior Living, August 9, 2021
“The
InLTCgentsia”
for Broker World’s August 2021 issue.
“Panel
Gives States Pass in Collecting Assets for Medicaid Long-Term Care,”
by Stephen A. Moses, Health Care News, July 2021 (PDF
version.)
“Government
Violates the Long Term Care Social Contract to Your Detriment,
by Stephen A. Moses, Broker World, June 2021. (PDF
version.)
“President
Biden, tear down this wall,”
by Stephen A. Moses, McKnight’s LTC News, June 23, 2021 (PDF
version.)
“Using
Medicaid to protect inheritances,”
by Steve Moses and Brian Blase, TheHill, June 10, 2021. (PDF
version.)
“LTC
financing: Be careful what you WISH for,”
by Stephen A. Moses, McKnight’s Senior Living, June 7, 2021. (PDF
version.)
“The
social contract for long-term care,”
guest column by Stephen Moses for McKnight’s Long-Term Care News,
May 17, 2021. (PDF
version.)
“Why
LTCI Fails,”
guest column by Stephen Moses for Broker World magazine, March
2021. (PDF
version.)
Find many more articles like these, plus scores of speeches and reports
covering 35 years of long-term care policy analysis at
www.centerltc.com.
***
LTC BULLET: GREAT MOMENTS IN UNINTENDED LTC CONSEQUENCES
LTC Comment: We thank
McKnight’s Long-Term
Care News
for publishing the following article on July 26, 2021. Long-term care
providers and insurers share a common interest in improving public policy
that governs LTC services and financing. Equally important, however, is
that these two components of the long-term care business collaborate to
prevent bad public policy from taking effect. Please read this article
and, if you have something to say about it or the topic, avail yourself of
the opportunity to comment, which McKnight’s provides readers at the end
of the piece. Or just drop me a note at
smoses@centerltc.com.
Thanks for your time and attention to this important subject.
“Great
moments in unintended LTC consequences”
by
Stephen A. Moses
Reason.com publishes
a video feature called “Great
Moments in Unintended Consequences.”
Each episode features three problems, three “solutions,” and comical
coverage of the unanticipated results.
For example, “The
Luxury Yacht Tax.”
The year: 1990. The problem: the national debt is exploding. The solution:
a 10% luxury tax on expensive boats.
Narrator: “Sounds like a great idea with the best of intentions. What
could possibly go wrong?”
It
turns out that while wealthy people buy yachts, it’s usually middle-income
people who make them. This tax plan cut sales of luxury boats by 70%,
destroyed hundreds of thousands of middle-class jobs, and resulted in a
net loss of tax revenue to the government.
Many episodes of this feature are equally amusing and thought-provoking.
They got me thinking about “Great Moments in Unintended Long-Term Care Consequences.”
The year:
1965.
The problem:
People are living longer, dying slower and in desperate need of more
long-term care.
The solution:
Provide Medicaid-financed nursing home care covering room and board as
well as custodial and skilled care for anyone who can’t afford it
otherwise and with no limit, for the first 15 years, on transferring
assets to qualify.
“Sounds like a great
idea with the best of intentions. What could possibly go wrong?”
With free long-term care available after they need it, people didn’t
bother to save, invest or insure for that big risk and cost when they were
young and healthy enough to prepare.
Once they needed care, most discovered they could get Medicaid to pay as
long as their incomes were below the cost of a nursing home and they held
their assets in easily convertible exempt form, such as a home, car,
business, IRAs, prepaid burial funds, term life insurance, household goods
or personal belongings.
Demand surged. Medicaid nursing homes filled to 95% capacity in the 1980s.
Private pay census at market rates plummeted while Medicaid residents,
reimbursed at less than the cost of care, surged. Care quality suffered.
You can’t expect Ritz Carlton care for Motel 6 rates.
Medicaid costs exploded, so the government tried to clamp down on
eligibility by penalizing asset transfers to qualify, requiring estate
recoveries and capping the home equity exemption. But Medicaid planning
lawyers dodged these restrictions, and expenditures continued to
skyrocket.
Easy access to free or subsidized nursing home care stunted a private-pay
market for home care and assisted living for decades until
welfare-financed institutional care got such a dubious reputation that
people were willing to spend their own money to stay out of a nursing
home.
Potential private sources of long-term care financing, such as home equity
conversion and private LTC insurance, dried up. Why spend your own money
when Uncle Sam is so eager to pay for long-term care, room and board if
you ever need them?
So, today we approach the second third of the 21st century,
when boomers start turning 85 and blow the lid off medical and LTC costs
just as the Social Security and Medicare trust funds run out, forcing
those programs to cut their payments.
We
find ourselves overly dependent on welfare-financed institutional
long-term care with untrained, unpaid family and friends struggling to
care for loved ones and little hope the system will do anything but
deteriorate further.
It’s all because well-intentioned academics, policymakers and politicians
wanted to help by providing more long-term care back in 1965, then kept on
“fixing” it until it became the Rube Goldberg mess it is today, and never
asked, much less answered the key question: “What could possibly go
wrong?”
But at least they’ve learned their lesson and no longer want to turn
long-term care over to more government financing and regulation. Right?
Alas, no.
Most of the recommendations coming from analysts and think tanks these
days call for even more government involvement, including billions of
dollars for Medicaid home-and-community based care and new, compulsory,
payroll-funded, government-regulated entitlement programs with “trust
funds” bound to be diverted to current spending like the ones we have
already.
That sounds like doubling down on the same policies that caused long-term
care’s problems in the first place. What could possibly go wrong?
There is a better way. For a fuller explanation of what did go wrong with
long-term care and how to fix it, read Medicaid
and Long-Term Care.
Steve Moses is
president of the Center
for Long-Term Care Reform and
author of Medicaid
and Long-Term Care.
Reach him at
smoses@centerltc.com.
The opinions expressed
in McKnight’s
Long-Term Care News guest submissions are the author’s and are not
necessarily those of McKnight’s Long-Term Care News or its editors.
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Updated,
Monday August 2, 2021, 10:40 AM (Pacific)
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