
READ STEVE'S BIO.JPG)
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Updated,
Monday, January 11, 2021, 10:40 AM (Pacific)
Seattle—
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LTC E-ALERT #21-001: 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:
-
Trump Officials
Approve Tennessee's Controversial Request To Revamp Medicaid Funding
-
New Analysis Finds
Significant Financial Benefits Locked in Long-Term Care Insurance
Policies Sold Fifteen to Twenty-Five Years Ago
-
One-week US
Covid-19 case and death totals are higher than ever
-
Genworth May Cut
Remaining LTCI Sales and Marketing Operations
-
December Proved To
Be Deadliest Month For Residents In Long-Term Care
-
2021 Economic
Outlook Fraught With Uncertainty
-
Older Adults and
COVID-19: Implications for Aging Policy and Practice
-
MA Beneficiaries
See Nearly 20% Fewer Home Health Days Than Traditional Medicare Peers
-
Genworth to Shift
to China Oceanwide Deal Backup Plan
-
‘Because of You
Guys, I’m Stuck in My Room’
-
The COVID-19
Pandemic Has Upended The LTCi Market
-
What's Most
Hurting the Financial Security of Older Americans?
-
We need long-term
solutions for older Americans’ long-term care
-
Elder Law Guys:
The twelve COVID elder law days of Christmas
-
Trust Fall
-
Crushing Despair,
Glimmers of Hope: The Top Skilled Nursing Stories of 2020
-
Senate Passes
$2.3T Package of Relief, Funding and Tax Breaks
#############################
"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 8, 2021, 10:40 AM (Pacific)
Seattle—
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LTC Bullet:
Long-Term Care and the Pandemic
LTC Comment: What has the Covid-19 pandemic wrought
for long-term care? Answers after the ***news.***
*** ILTCI CONFERENCE GOES VIRTUAL: “After surveying
our attendees and careful consideration, we will change the 2021 ILTCI
Conference from an in-person meeting to a virtual format.” So announced
Barry Fisher, Conference Chairperson and Vince Bodnar, Conference
Co-Chairperson recently. They’ve polled past participants for their
preferences regarding how to structure and present the leading LTC
insurance industry conference in a virtual format. Whatever they come up
with will be far better than nothing (last year) but could never match
past in-person versions. Nevertheless, we’ll take whatever we can get!
Read the Center for Long-Term Care Reform’s
History of LTC Insurance Conferences (2019) for a detailed look
back at all the Intercompany Long-Term Care Insurance Conferences from the
first one, 2001 in Miami to the latest, 2019 in Chicago. ***
*** “Trust
Fall: The Untold Story of Washington's LTC Trust Act” is an excellent
essay by
LTC Associates’ Senior Vice President,
Stephen D. Forman. In it Forman describes, explains and debunks the
CLASS-like public policy misfire currently being operationalized in the
Evergreen State. This evergreen new deal for long-term care “vigorously
remakes Washington’s insurance market—without voice from the insurance
industry—to the financial injury of residents.” We hope to bring you a
“guest bullet” by Mr. Forman summarizing the key points in his essay. In
the meantime, don’t wait. Read this provocative essay now while there’s
still time to talk sense to Washington State policy makers. As with CLASS,
it may be possible to derail this taxpayer shakedown before its major
damage is done. Washington voters have already expressed their opposition
to the plan twice by
rejecting it at the ballot box in 2019 and
refusing to fund it with risky investments in 2020. ***
*** IF YOU FIND VALUE IN TODAY’S LTC BULLET,
please consider
joining the Center for Long-Term Care Reform so you can enjoy the
many benefits of membership and stay tuned daily with our LTC
Clippings, weekly with LTC E-Alerts and bi-weekly with LTC
Bullets. Get in front of your prospects and clients by knowing what’s
happening in long-term care news and analysis—and what to say about
it—before they blindside you with stories you haven’t heard. ***
LTC BULLET: LONG-TERM CARE AND THE PANDEMIC
LTC Comment: Invited by two leading national
distributors of long-term care insurance to help kick off their 2021 sales
year,
Center for Long-Term Care Reform president Steve Moses delivered the
following presentation on Wednesday and Friday of this week. He thanks
GoldenCareUSA and
Long-Term Care Resources (LTCR) for this opportunity to reflect on the
impact Covid-19 is having on long-term care services and financing,
including the future prospects for LTC insurance sales. Read on for
Steve’s insights in the following presentation notes.
Long-Term Care and the Pandemic
Presented to GoldenCareUSA and Long-Term Care Resources agents and
staff
Wednesday and Friday, respectively, January 6 and 8, 2021
By Stephen A. Moses, President
Center for Long-Term Care Reform
Covid Impact: Earthquake, life as we’ve known
it changed radically, huge opportunities, giant risks, long-term care and
LTC financing are more interesting, challenging, and fun than ever before
in my 38 years following the field. The opportunity to do well by doing
good selling LTCI has never been greater. You producers, distributors and
the carriers you represent to consumers are critical to our country’s
surviving this crisis and prospering in the future.
3 Themes: I’ll discuss three major themes or
contexts of the Covid-19 pandemic:
-
Health and long-term care
-
The Economy
-
Politics
LTC Clippings since last month,
December 2020, are the source for most of what follows. LTC Clippings
is a publication we produce and distribute to subscribers.
We send an average of two clippings per day by email
to subscribers. Each clipping gives the title, a link to the source, a
representative quote and a couple sentences of my analysis to put the
information in context.
The purpose of LTC Clippings is to inform
agents of news, data, reports, articles, etc. that they need to know
before they’re blind-sided by prospects or clients who’ve read something
the agents haven’t seen yet.
I’ll make today’s presentation and all the links to
original stories it covers available in our next LTC Bullet to be
published on Friday. The same day it will be posted on The Moses LTC Blog
at www.centerltc.com. You can find it there.
My point: if you received the LTC Clippings
you would know all of what I’ll say today already.
If you’re blown away and you want to subscribe, check
out our “Membership
Levels and Benefits” link and our “Join
and Contribute Online” link. Both links will be live in the LTC
Bullet on the blog.
Health and LTC Context
Acknowledge sources: Experts like Claude Thau,
Sally Leimbach and Margie Barrie.
Watch for two forthcoming white papers by Margie
Barrie: “The Impact of Covid-19 on Long-Term Care” and “The Medicare White
Paper”
-
Long-term care is in the news—that’s a big change
for better and worse
-
On the bad side, people are dying in LTC
facilities:
-
Even though just 1 percent of the U.S. population
resides in a long-term-care facility, LTC deaths represent nearly four
in 10 COVID-19 deaths. (Source – Christine Benz, Morningstar, December
8, 2020.)
-
I covered the causes, consequences and solutions
in my June 1, 2020 op-ed in the WSJ:
Nursing Homes, Coronavirus and Medicaid
-
“The dual factors of sharply declining occupancy
[down from 85% in Feb to 74% in Sept.] coupled with the high cost of
personal protective equipment, COVID-19 testing, and hazard pay for
workers is placing the skilled nursing sector under unsustainable
financial strain.”
12/4/2020, “
NIC Points to Unprecedented Challenges for Skilled Nursing as
Occupancy Remains Low ,” by Patrick Connole, Provider
-
“Two-thirds of nursing homes say they won’t make
it another year given the current operating pace due to increased
COVID costs. … Staffing has been the top cost in response to COVID
with nine out of 10 nursing homes hiring additional staff and/or
paying staff overtime.”
12/16/2020 , “
State of Nursing Home Industry: Facing Financial Crisis and Staffing
Challenges” by Beth Martino, AHCA/NCAL
-
“The COVID-19 pandemic [will contribute] to
substantial eldercare cost hikes, especially for assisted living and
in-home care. … Over the course of a single year, assisted living
community rates increased by 6.15% to an annual national median cost
of $51,600.” (And pre-Covid)
12/3/2020, “
COVID-19 linked to ‘substantial cost increases’ in assisted living:
survey ,” by Kimberly Bonvissuto, McKnight’s Senior Living
-
“The United States spent a collective $172.2
billion on care at nursing homes and continuing care retirement
communities (CCRCs) in 2019…; that’s a gain of 3.3% [from] 2018. But
that increase pales in comparison to the 7.7% jump in spending on home
health services during that time, from $105.4 billion in 2018 to
$113.5 billion in 2019.” Again, all pre-Covid so expect much more
coming.
12/16/2020, “ Spending Growth on Nursing
Home Care Falls Far Behind Home Health, Hospitals ,” by
Alex Spanko, Skilled Nursing News
-
Shortage of health care workers:
“Notwithstanding sign-on bonuses, competitive salaries and benefits
packages, recruiting [caregivers] is a challenge, [one home health
provider] said. ‘Before the pandemic, I used to get 10 applicants a
week for our open positions. Now I’m getting one or two.’”
12/14/2020, “Help
wanted: More home healthcare workers due to COVID-19 ,” by Joe
Jancsurak, McKnight’s Senior Living
People aren’t exactly lining up for minimum-wage
jobs in Covid’s bullseye with higher unemployment benefits readily
available. Go figure.
-
Hospital costs down 36% due to elimination of
noncritical services such as elective surgeries
-
Dental care down 65%. When was the last time you
saw a dentist?
-
Flu cases lower than normal so far this year;
measures taken to avoid COVID-19 are likely the reason
12/11/2020, “Flu
cases lower than normal so far this year, COVID-19 likely the reason
,” by Brian P. Dunleavy, UPI
12/16/2020,
“COVID-19 Shocks The US Health Sector: A
Review Of Early Economic Impacts,” by George Miller, Corwin
Rhyan, Ani Turner, and Katherine Hempstead, Health Affairs
-
“The number of COVID-19 cases and deaths for
home- and community-based services programs pales in comparison with
those for nursing homes … After [researchers] compared positive
COVID-19 cases and deaths in three Medicaid [home care] programs to
results for nursing home and assisted living residents for March
through July, they found that only 3% of older [home care] adults were
infected, and only 1% died from COVID-19. Meanwhile, nursing home and
assisted living residents showed a 37% positivity rate and an 11%
death rate.”
12/10/2020, “Study
shows far fewer COVID-19 cases at home than in nursing homes, assisted
living,” by Joe Jancsurak , McKnight’s Senior Living
-
“61% of Americans now report that they would
rather die than live in a nursing home. … Americans prefer to stay in
their home for long-term care (71%), and most would like to have the
option of relying on a family member if they needed long-term care
(68%) but would not expect them to [provide such care] if they were
unable to pay them (69%).’”
12/9/2020, “More
than 6 in 10 Americans now say they would rather die than live in
nursing home: survey ,” by Amy Novotney, McKnight’s
Senior Living
-
“The vast majority of Americans (87%) believe
it’s more important than ever for people to stay at home for long-term
care, as well as have a plan for long-term care (85%) and have
long-term care insurance (81%) as COVID-19 has raised concerns about
the safety of nursing homes.”
12/16/2020, “Americans
Worry More Now About Their Long-Term Care Plans and Prioritize Staying
At Home ,” by Nationwide Retirement Institute, Advisor Magazine
-
Nursing home, assisted living and home care costs
will rise further, especially for home care
-
LTCI prices are rising, especially for hybrids
-
According to Margie Barrie: “Virtually all
carriers have increased their premium rates and most have limited
the application age to 70.”
-
The impact on traditional LTCI products has
been more limited, but stricter underwriting requirements keep
coming: Applications may be postponed if someone has been outside
the country within the past month; or in contact with somebody who
tested positive; or if quarantined, even with no diagnosis or
symptoms.
-
So called “Value Based Care” means fewer
services being provided to beneficiaries.
-
People are being sent home sooner from the
hospital and nursing home.
-
Medicare has changed the payment process.
Hospitals will now control the distribution of payments for all
parts of the long term care continuum.
-
For details, read Margie’s forthcoming “The
Medicare White Paper.”
-
“A majority of today’s workers and retirees range
from feeling cautious to pessimistic about the economic outlook for
2021, with nearly 75% concerned about how the global pandemic may
impact their retirement savings ….”
1/5/2021, “2021
Economic Outlook Fraught With Uncertainty,” by Principal Financial
Group, Advisor Today
-
People are more aware of their own and
their parents’ vulnerability
“Although almost every household with an income
of $100,000 or more reports saving for retirement, only half of them
(49%) say they believe they will ever be able to retire.”
12/8/2020, “
Half of Americans with incomes over $100,000 think they’ll never be
able to retire ,” by Amy Novotney, McKnight’s Senior Living
-
“According to an analysis of applicants for
traditional long-term care insurance in 2019, decline rates ranged
from 19.4 percent for individuals applying between ages 40 to 49 to
53.6 percent after age 75. ‘Couples comprise the majority of
traditional long-term care insurance applicants,’ explains Claude Thau,
National Brokerage Director at USA-BGA … ‘The likelihood that at least
one spouse will be declined ranges from 35.0 percent for spouses
between ages 40 and 49 to 78.5 percent for couples age 75 or older.’”
That’s pre-Covid too so likely getting worse.
12/10/2020, “Long-Term
Care Insurance Decline Rates Reported,” by Jesse Slome,
American Association for Long-Term Care Insurance
-
Insurability is declining as urgency for
consumers is increasing: Insurance companies are wary to take on
applicants who have had the virus or been exposed to it. Intelligent
people who realize this are more inclined to purchase LTCI while they
still can prove that Covid-19 has not yet compromised their health
history.
-
Hybrids provide a wide range of benefits
-
Traditional products still offer the biggest
leverage against LTC risk
-
But carriers face increasing costs and consumers
confront higher premiums and/or reduced benefits due to the
government’s artificially low interest rates.
12/18/2020, “
COVID-19 Drove Up Group Term Life Death Claims: SOA Survey,” by
Allison Bell, ThinkAdvisor
-
Virtual marketing and sales via face-to-face
electronic connections make LTCI easier and less expensive to sell,
eliminating drive time for example
-
People will be back at work after the vaccine, so
their future financial outlook will become more stable.
Now let’s examine the situation from the standpoint
of the …
Economic Context
Characterized by irresponsible fiscal and monetary policy
-
Consider the national debt. According to the “Debt
clock” for 2008 (Obama’s first term)
$9.6 trillion; 2016 (Trump elected)
$19.2 trillion; 2021, (now)
$27.8 trillion; 2025 (end of Biden term)
$48.9 trillion projected. See a trend?
-
These current and projected numbers are going up so
fast, they may increase by hundreds of billions of dollars between the
time I posted them yesterday and when you click the links
-
So-called “stimulus” to confront the economic
downturn caused by the pandemic has resulted in these huge deficits and
rampant money printing by the Federal Reserve to monetize the
skyrocketing debt.
-
All this new money had to go somewhere. It didn’t
inflate consumer prices so much because of low demand suppressed by
high unemployment.
-
So instead, we’ve seen rapid inflation in
equities (stocks and bonds) and real estate.
-
Ironically, in this economic crisis stock markets
are at all-time highs.
-
Home prices rose 8.4% in the year that ended in
October, up from a 7% annual rate the prior month to a 14-year high:
U.S. Home-Price Growth Accelerated in October
-
People working from home with shorter or no
commutes are looking for larger homes in suburbia offering more space,
better home offices and a place to provide home care if needed for
themselves or their parents.
-
They have more wealth to protect and more money
for premiums.
-
People going back to work after the vaccines kick
in means a bigger worksite market.
-
On the negative side, inequality is exacerbated:
elderly poor get poorer even as the rich get richer.
-
There will be more elderly debt: “Adults age 70
and older have increased their debt since the Great Recession —
largely due to mortgage payments — and this hampers their ability to
overcome ‘negative events’ as they age …” Substitute “a long-term care
crisis” for “negative events” and you can see what this means.
-
The elderly poor get poorer even as the rich get
richer due to irresponsible monetary policies that inflate stock and
real estate values. What this means in terms of long-term care is that
more people will depend on Medicaid when Medicaid is least able to
support them. The good news is that the well-to-do will have more
wealth to protect and more money to pay premiums for LTC insurance. So
the current mess in LTC services and financing will worsen. Medicaid
will continue to deteriorate and private LTCI will become more
desirable and salable than ever before.
-
12/29/2020, “What's
Hurting the Financial Security of Older Americans?,” by Ginger
Szala, ThinkAdvisor
Now let’s look at the political context. As I
prepared this presentation before the Georgia Senate run-off elections, it
was impossible to predict what the future might hold politically. Would
the Democrats win control of the Senate taking the trifecta of President,
House and Senate? That would free them to pursue their left wing’s
most radical progressive wish list. Or would the Republicans hold control
of the Senate and remain a bulwark of opposition to the goals of Bernie
Sanders, Elizabeth Warren, and Alexandria Ocasio-Cortez.
It was a cliff-hanger, but now we know …
The Democrats have taken both Georgia Senate races
and so will control both houses of Congress as well as the Presidency.
Vice President Kamala Harris will cast the deciding vote in case of a
50/50 tie on key issues. We’ll likely see more progressive measures pass,
more spending approved, more money printing to cover it, and higher
national debt than otherwise. Only time will tell what the long-term
results of such policies will be.
Political Context
Biden Administration
As we’ve seen from the economic context, there isn’t
much concern for financial responsibility any more in either party. We
have to ask …
Will
Modern Monetary Theory, the idea that the government can print and
spend unlimited amounts of money without consequences, will MMT prevail
allowing progressives to pursue their whole bucket list of goals including
“free” long-term care provided by Medicare? That would finally wipe out
private LTC insurance.
Actually, the Biden Administration’s LTC wish list is
much less ambitious.
According to the “Biden-Harris Plan to Make Nursing
Homes and Long-term Care Facilities Safe” the Biden Administration’s whole
focus is on
regulation and enforcement. For example, they want to …
-
Promote safety and care
-
Ensure appropriate oversight of facilities to
protect patient safety and wellbeing
-
Provide oversight for how taxpayer and resident
funds are spent and provide avenues for bringing complaints
-
Increase access to home and community-based
services for the number of older Americans and people with disabilities
able to receive home and community-based services (HCBS).
-
All nice sounding ideas, but what they mean is more
inspections, more fines and financial penalties, not more money and
support. In a phrase “The beatings will continue until morale improves.”
The Biden Plan For Older Americans addresses long-term care by
promising to …
-
“The Congressional Budget Office (CBO) now
projects that the trust fund will be
exhausted in 2024 , a little more than three years from now, which
is the nearest the fund has come to exhaustion in the 55 years of its
existence.
-
12/15/2020, “The
Coming Crisis For The Medicare Trust Fund ,” by David Muhlestein,
Health Affairs
-
Heavier than ever reliance on Medicaid, a
bankrupt welfare program, is a mistake. Making Medicaid LTC more
attractive by offering more home care does not save money and further
reduces consumers’ perception of LTC risk.
-
Consider Medicaid’s well-known deficiencies …
-
Access and quality problems, notoriously low
reimbursement rates, discrimination, institutional bias, loss of
independence and control, but add to these some new defects …
-
Managed long-term care through Medicaid is
increasing, adding another layer of compensation and control between
the patient and provider.
“Over half of states contract with managed care organizations to
provide [LTC] services. [GAO] examined 6 states, each of which
reported finding significant problems with the quality of care
provided through these contracts. In some cases, the problems led to
patient injury or neglect.”
12/16/2020, “Medicaid
Long-Term Services and Supports: Access and Quality Problems in
Managed Care Demand Improved Oversight
-
On top of that: “The true Medicaid
improper-payment rate now exceeds 25 percent, meaning that more than
one in every four dollars spent in the Medicaid program — or more
than $100 billion in federal spending each year — is in violation of
program rules. It
turns out that millions of Medicaid enrollees are ineligible
for the program — in most cases because they earn too much income,
but in others because they are not lawful residents.”
12/9/2020, “
Improper Medicaid Payments Have Soared since Obamacare ,” by
Brian Blase and Hayden Dublois, National Review
12/8/2020, “Biden
nominates defender of long-term care causes and a virus expert to health
team,” by Alicia Lasek, McKnight’s LTC News
Biden wants to lower the Medicare age to 60
-
What happened to “Medicare for All?” “Medicare at
60” is “Medicare For…Gotten.”
-
Hospitals fear adding millions of people to
Medicare will cost them billions of dollars in revenue.”
-
11/11/2020, “Biden
Plan to Lower Medicare Eligibility Age to 60 Faces Hostility From
Hospitals,” by Phil Galewitz, Kaiser Health News
-
Medicare at 60 is just one more way for government
to say “don’t worry” just before bottom falls out of the trust fund.
I’m going to close by explaining biggest risk to
private long-term care insurance:
LTC intelligentsia has formed a consensus around compulsory social
insurance
Their analysis goes like this:
Long-term care is in crisis;
Especially now in the pandemic;
The middle class is unprotected;
LTCI failed;
Big government programs aren’t coming;
Medicaid requires impoverishment;
So our best hope is what Washington State is doing:
Compulsory social insurance funded by mandatory taxes on workers and with
a back-end focus;
But “Keystone
Kops” and “Trust
Fall.”
I’ll explain why this analysis and recommendation is
wrong and doomed to fail disastrously in “Why LTCI Fails,” my article in
the February Broker World. Watch for it.
Bottom line: Given what’s happening in health and
long-term care, in the U.S. economy, and politically, there’s never been a
better time to sell LTCI.
#############################
Updated,
Monday, December 21, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-049: 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-19 Shocks
The US Health Sector: A Review Of Early Economic Impacts
-
COVID-19 Drove Up
Group Term Life Death Claims: SOA Survey
-
Spending Growth on
Nursing Home Care Falls Far Behind Home Health, Hospitals
-
Medicaid Long-Term
Services and Supports: Access and Quality Problems in Managed Care
Demand Improved Oversight
-
Americans Worry
More Now About Their Long-Term Care Plans and Prioritize Staying At Home
-
State of Nursing
Home Industry: Facing Financial Crisis and Staffing Challenges
-
HC2 Gets Offer for
Long-Term Care Insurance Business
-
The Coming Crisis
For The Medicare Trust Fund
-
Making Care Work
Pay: How A Living Wage For LTSS Workers Benefits All
-
Medicare Advantage
Beneficiaries Log Almost 30% Fewer SNF Days Than Traditional Medicare
-
Help wanted: More
home healthcare workers due to COVID-19
-
Flu cases lower
than normal so far this year, COVID-19 likely the reason
#############################
"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 18, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC
BULLET: SO WHAT IF THE GOVERNMENT PAYS FOR MOST LTC, 2019 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.
***
TODAY'S LTC BULLET is sponsored by Claude Thau, who provides many
unique services to advisors as National Brokerage Director for USA-BGA
and to other entities as a consultant, in the individual, worksite and
affinity group markets. For example, his revolutionary “Range of
Exposure” tool projects clients’ likelihood (joint for a couple) of
spending $100,000; $250K; $500K or over $1,000,000 on long-term care,
based on their personal characteristics and estimates how much of
their cost in each range would be covered by various traditional or
linked insurance designs. Claude is the lead author of Milliman’s
annual Broker World LTCi Survey & a past Chair of the Center for
Long-Term Care Financing. You can reach him at 913-707-8863 or
claude.thau@gmail.com.
*** |
LTC BULLET: SO WHAT IF THE GOVERNMENT PAYS FOR MOST LTC, 2019 DATA UPDATE
LTC BULLET: SO WHAT IF THE GOVERNMENT
PAYS FOR MOST LTC, 2019 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
2019 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 2019: Steady Growth for the Fourth
Consecutive Year." Health Affairs subscribers can access the full
text of that article
here. Others can purchase it. The “Abstract” is available free. A good
summary of the new long-term care data is
here.
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 publish all year. It
is the eighteenth 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, 2019 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 $172.7 billion on
nursing facilities and continuing care retirement communities in 2019. The
percentage of these costs paid by Medicaid and Medicare has gone up over
the past 49 years (from 26.8% in 1970 to 51.5% in 2019, up 24.7 % of the
total) while out-of-pocket costs have declined (from 49.2% in 1970 to
26.4% in 2019, down 22.8% 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 1970-2019.
So What? Consumers' liability for
nursing home and CCRC costs has declined by nearly half, down 46.3% in the
past almost five decades while the share paid by Medicaid and Medicare has
nearly doubled, up 92.2%.
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 $595,000 and in some
states up to $893,000 of home equity (as of 1/1/20). 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 (29.4% of
the dollars in 2019), it covers two-thirds (66.5%)
of all nursing home patient days.
So What? Medicaid pays in full or
subsidizes 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 10.4% of
nursing home costs that CMS reports as having been paid by "private health
insurance" in 2019. 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 $595,000 or
$893,000 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 $113.5 billion on home health care in 2019. Medicare (38.7%)
and Medicaid (32.0%) paid 70.7% of this total and private health insurance
(not LTC insurance) paid 14.6%. Only 11.0% 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
1970-2019.
So What? Only one out of every nine
dollars spent on home health care comes out of the pockets of patients and
a large portion of that comes from the income (not assets) of people
already on Medicaid.
No wonder the public does not feel
the sense of urgency about this risk that they would if they were more 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-Cassandra-Quandry.pdf.
“How to Fix Long-Term Care,” 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 starting to crest 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 14, 2020, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-048: 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:
-
GE
Puts SEC Long-Term Care Insurance Probe Behind It
-
Long-Term Care Insurance Decline Rates Reported
-
Improper Medicaid Payments Have Soared since Obamacare
-
Study shows far fewer COVID-19 cases at home than in nursing homes,
assisted living
-
‘We can no longer ignore this’: Affordable long-term care is urgent
priority, panelists say
-
Measuring The New Costs Of Care: How the pandemic is exacerbating the
already rising price-points of long-term-care
-
More than 6 in 10 Americans now say they would rather die than live in
nursing home: survey
-
Long-Term Care Planning Firm Sees Life-LTC Hybrid Prices Rising
-
Half of Americans with incomes over $100,000 think they’ll never be able
to retire
-
Biden nominates defender of long-term care causes and a virus expert to
health team
-
BREAKING: HHS awards nursing homes $523M in COVID-19 performance
payments
-
MedPAC: Nursing Homes on Solid Financial Ground Despite COVID, Medicare
Boost ‘Poor Approach’
-
NIC Points to Unprecedented Challenges for Skilled Nursing as Occupancy
Remains Low
#############################
"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 7, 2020, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-047: 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-19 linked to ‘substantial cost increases’ in assisted living:
survey
- Cost of Care: Trends & Insights
- Town’s only nursing facility converting to ALF, as national study
finds ‘dangerously low’ occupancy threatening many SNFs
- SNF occupancy ticks up but is ‘dangerously’ low and threatens
long-term survival
- CDC advisers: Long-term care workers, residents should receive first
COVID-19 vaccinations
- Life’s Third Age: A Public Television Pledge Special
- Genworth, China Oceanwide Push Deal Deadline Back
- Financial ‘symptoms’ of dementia seen up to 6 years before diagnosis
- Medicaid is hemorrhaging $100B on Americans ineligible for the
program
- Nearly 6 million Americans expect to lose homes in the next 2
months: survey
- COVID-19 Has Claimed the Lives of 100,000 Long-Term Care Residents
and Staff
- Nursing home residents could start receiving COVID vaccines in about
2 weeks
- CMS’s 2020 Final Medicaid Managed Care Rule: A Summary of Major
Changes
- COVID-19 Pandemic Shifts Caregiving Responsibilities
#############################
"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 4, 2020, 10:40 AM (Pacific)
Seattle—
#############################
LTC
BULLET: IS MEDICAID THE LTC SOLUTION OR THE PROBLEM?
LTC
Comment: Will more Medicaid funding and regulation help (short-term) and
harm (long-term) America’s fragile long-term care system? Answers after
the ***news.***
***
“LTC CLIPPINGS” is a special daily service that premium Center members
($250 per year or $21 per month)
and above can opt to receive. Steve Moses scans the internet for news,
articles, reports and data you need to know before your prospects start
asking about them. He provides the date, title, author, a link, a
representative quote and a brief, often humorous or satirical, but always
thoughtful comment. Know what you need to know before you’re caught off
guard.
Subscribe to LTC Clippings.
***
***
RECENT LTC CLIPPINGS:
11/28/2020,
“Medicaid
is hemorrhaging $100B on Americans ineligible for the program,”
by Brian Blase, New York Post
Quote:
“The federal government’s improper Medicaid payments now exceed $100
billion a year. This means that more than one-in-four dollars flowing out
of Medicaid — our nation’s third-largest government program — do not meet
program rules. This staggering failure doesn’t just reduce health-care
access for the truly eligible, it also harms taxpayers who fund it.”
LTC
Comment:
This is an excellent piece by my co-author of “Nursing
Homes, Coronavirus and Medicaid,”
published June 1, 2020, in the Wall Street Journal. The problem of
improper payments is even worse since the Families First Coronavirus
Response Act (FFCRA), signed March 18, 2020, imposed maintenance of effort
rules prohibiting states from terminating eligibility even for the
ineligible. See
Medicaid Maintenance of Eligibility (MOE) Requirements: Issues to Watch
When They End,
Kaiser Family Foundation, September 22, 2020, for details. Kind of makes
tracking improper payments moot if ineligibility itself isn’t “improper.”
Ugh!
---
11/25/2020,
“COVID-19
Has Claimed the Lives of 100,000 Long-Term Care Residents and Staff,”
by Priya Chidambaram, Rachel Garfield and Tricia Neuman, Kaiser Family
Foundation
Quote:
“This week marks a bleak milestone in the pandemic’s effect on residents
and staff in long-term care facilities across the country. According to
our latest analysis of state-reported data, COVID-19 has claimed the lives
of more than 100,000 long-term care facility residents and staff as of the
last week in November. This finding comes at a time when public health
experts are predicting a surge in cases after holiday gatherings and
increased time indoors due to winter weather, which will have ripple
effects on hospitals and nursing homes, given the
close relationship between community spread and cases in congregate care
settings.
As the nation braces for the fallout of the holiday, recent
data on
deaths in long-term care facilities highlight the ongoing disproportionate
impact on this high-risk population.”
LTC
Comment:
Maybe the time has come for another “Long-Term Care Consciousness Tour.”
Here’s what the first one was like:
http://www.centerltc.com/LTC%20Tour/LTC_Tour_Index.htm.
This is my favorite
reminiscence
of that 2008-9 Tour. The need for long-term care planning is even greater
now than it was then.
---
11/20/2020,
“Nearly
6 million Americans expect to lose homes in the next 2 months: survey,”
by Amy Novotney, McKnight’s Senior Living
Quote:
“Approximately 5.8 million Americans — including many seniors — say they
are somewhat or very likely to face eviction or foreclosure in the next
two months, according to a Bloomberg
analysis of
survey data from the U.S. Census Bureau. The survey also found that about
28% of renters, or roughly 14.9 million Americans, have little to no
confidence that they’ll be able to pay their December rent.”
LTC
Comment:
So what’s next? Let them suffer? Or another paroxysm of government
borrowing and money printing to aid home buyers and renters? And, when
that public debt bill comes due, what then? ***
LTC
BULLET: IS MEDICAID THE LTC SOLUTION OR THE PROBLEM?
LTC
Comment: As the Covid plague surged through long-term care facilities this
spring, one thing was certain. The long-term care intelligentsia would
recommend more government, specifically Medicaid, spending. Our favorite
federal fetishist, Judith Feder of the McCourt School of Public Policy at
Georgetown University, was no exception. In
May
2020, she proposed
…
Long-term care financing policy should be modified to either adjust
federal matching funds by the age of each state’s population, or fully
federalize the funding of LTC expenses of Medicaid beneficiaries who are
also eligible for Medicare. (p. 350)
That
didn’t happen, won’t, and shouldn’t. Federal funding and regulation of
long-term care are what caused us to rely excessively on underfinanced
institutional care settings for elderly people leaving them susceptible to
the pandemic’s ravages. More of what caused the problem in the first place
will hurt, not help.
In
fact, what the federal government actually did exacerbated the problem of
excessive federal dependency. In Feder’s words …
The
Families First Coronavirus Response Act included a modest 6.2 percentage
point bump in the Medicaid match tied to the public health emergency,
conditional on states’ retention of current eligibility levels or
“maintenance of effort” (Broaddus, 2020). (p. 352)
So,
the Feds gave states a little more money but only if they maintained their
current Medicaid efforts. What does this “maintenance of effort” mean?
According to the
Kaiser Family Foundation
…
To
receive the enhanced federal matching funds, states must meet
certain MOE requirements that include ensuring continuous coverage for
current enrollees.
Specifically, states must provide continuous eligibility through the end
of the month in which the PHE [public health emergency] ends for those
enrolled as of March 18, 2020, or at any time thereafter during the PHE
period, unless the person ceases to be a state resident or requests a
voluntary coverage termination. Medicaid eligibility during this time must
continue “regardless of any changes in circumstances or redeterminations
at scheduled renewals that would otherwise result in termination.”1 (Emphasis
in the original)
In
case that bureaucratese confounds you, what it means is that state
Medicaid programs, if they want to receive the extra federal money, can’t
tighten their loose LTC financial eligibility rules. They can’t even
terminate Medicaid recipients who are proven to be totally ineligible.
They must throw the federal financial floodgates wide open.
So
how is this generous policy working out so far? Are people in nursing
homes finally free from worry and sickness? Hardly. According to the
Kaiser Family Foundation
…
This
week marks a bleak milestone in the pandemic’s effect on residents and
staff in long-term care facilities across the country. According to our
latest analysis of state-reported data, COVID-19 has claimed the lives of
more than 100,000 long-term care facility residents and staff as of the
last week in November.
The
holidays and long winter months ahead presage much worse. Current public
policy for long-term care services and financing is deadly. We should be
asking: “How did we get into this mess?” not “How much more federal money
and regulations can we pour on?”
For
an answer to the first question, see
Medicaid and Long-Term.
That
2020 monograph explains step by step how Medicaid caused the very problems
that people ask it to solve today. The study’s recommendations explain how
to fix the problems Medicaid created.
For
specific state-by-state analysis and recommendation, see our many
state-specific reports at
http://www.centerltc.com/reports.htm.
As you see the increasingly frequent pleas of Governors and long-term care
trade groups for federal relief, visit that site, find our report for
whichever state, and forward its link to them. Policy makers can reduce
Medicaid costs and simultaneously expand and improve
care, but they must first understand why costs are so high now and care
quality so diminished.
Answers to long-term care’s persistent problems—poor access and quality,
institutional bias, inadequate funding, etc.—are readily available. The
knee-jerk reaction to increase Medicaid actually cripples any hope to fix
these problems in the future. Yet, it’s easy to understand why politicians
and provider associations gravitate toward the easy money in the current
crisis. Any port in a storm.
Unfortunately, higher spending for Medicaid in the short term is far more
likely than thoughtful restraint given the incoming Biden administration’s
ideological predispositions. With Yellen at Treasury, pile-it-on Powell at
the Fed, the
Modern Monetary Theory
predominating, and fulsome support for unlimited federal spending
guaranteed from academia and the media, greater damage to long-term care
services and financing is probably inescapable.
It’s
as though a family had their maxed-out credit card limit miraculously
doubled all of a sudden. The good times would roll until they hit the
higher limit too. What’s the upper limit for federal spending? I don’t
know, but I’m afraid we’re going to find out.
#############################
Updated, Monday, November 23, 2020,
9:00 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #20-046: 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:
-
How to Save Money on Assisted Living Costs
-
Higher Medicare Premiums For 2021
Announced, Topping Out At $504.90
-
CalPERS approves 90% price increase for
long term care insurance plans
-
Vast majority of providers struggling to
fill work shifts or hire new employees: industry survey shows
-
Where Are the Gray Panthers
-
COVID-19’s Deadly Lesson: Time To Revamp
Long-Term Care
-
Vulnerable Senior Populations in the
Pandemic
-
89 percent of families with loved ones in
long-term care facilities consider home care: survey
-
Economists warn of lag time between vaccine
and recovery
-
Parkinson: ‘Worst Fears Have Come True’ as
Nursing Home COVID Cases Hit New Record, Operators ‘Powerless’ to Stop
Trend Alone
-
81% of providers encouraging residents to
stay put for Thanksgiving: survey
-
Big, big changes’ coming to nursing home
regulation thanks to pandemic’s destruction, Grabowski says
#############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Friday, November 20, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC Comment:
Today’s “Guest Bullet” by
Bruce Stahl of
RGA Reinsurance Company develops the idea of “Caregiver Insurance”
after the ***news.***
*** LTC IMPACT
WEEK EXCELLS: Last week, on November 10, 11, 12,
NAIFA’s
Limited & Extended Care
Planning Center
Zoomed nine hours of briefings aimed at LTCI producers. Kudos to
LECP Executive Director Carroll
Golden for
sponsoring this creative educational program and to
Steve Cain
of
LTCI Partners
for his omnipresent participation. Highlights included
Matt Hamann
of
Transamerica
speaking on “Why LTC Now?”;
Denise Gott
of
ACSIA Partners
on “LTC
Worksite Enrollments in
a Virtual World”;
Marc Glickman
of
BuddyIns
presentation on the “Technology Panel”;
Shelley Giordano
of
Mutual of Omaha Mortgage
on “No, Long Term Care Insurance Does Not Mean No Plan at All for Long
Term Care Needs”; and
Barry Fisher
and
Ron Hagelman, Jr.,
Principals of
Ice Floe Consulting, LLC
reporting on results of their survey with
Oliver Wyman’s
Vince Bodnar,
“Who is Selling What? To Whom, How & Why?” This innovative program
provided a great foundation on which to build. Room for improvement
includes increasing the turnout which I never noticed reaching 200
attendees and considering the larger market in which LTC insurance is
sold, including the public policy context, LTC providers, and the elephant
in the room, Medicaid’s crowd out of LTC risk and planning. ***
*** SUBSCRIBE
to LTC Bullets, LTC E-Alerts, and LTC Clippings. Join
the Center for Long-Term Care Reform
here. Due to the pandemic, long-term care is in the news more than
ever before. Calls for more funding to alleviate the strain on seniors’
housing and caregivers are everywhere in the media. But no one has any
idea where to find the money to improve long-term care. Except the Center
for Long-Term Care Reform. We advocate targeting scarce public resources
to those most in need and using the savings to incentivize private
financing alternatives such as home equity conversion and long-term care
insurance. Check out our analysis and recommendations in
Medicaid and Long-Term Care (2020) and
How to Fix Long-Term Care Financing (2017). Then join
the Center and encourage your employers to join as corporate members. Our
“Membership
Levels and Benefits” schedule explains all the options. Contact Steve
Moses at 425-891-3640 or
smoses@centerltc.com with questions or comments. ***
LTC BULLET:
CAREGIVER INSURANCE
LTC Comment:
Bruce Stahl and
Winona Berdine, both vice presidents at
RGA Reinsurance Company, published “A
Middle-Market Senior Care Solution” in the August 2020 issue of the
Society of Actuaries’
Long-Term Care News. Their idea is a product to mitigate LTCI’s
“affordability gap.”
They propose a
“living benefits solution” that “reaches the middle market, provides
security to generations of family members, satisfies real customer
financial needs and provides them with peace of mind, minimizes risk in
the morbidity tail, reduces asset and interest rate risk, and reduces
concerns about pandemic risk in facilities.” (LTC
News)
A tall order,
but intriguing, so we asked Bruce Stahl to tell us more. His reply
follows. But first read “A
Middle-Market Senior Care Solution” to get details on the proposed
product.
“Caregiver
Insurance”
by
Bruce Stahl
The attributes
of the product define it better than the name. Our focus groups
recommended calling it something with a personal flavor, like “Caregiver
Insurance.” Originally, we at RGA were calling it a decreasing term
product and a career protection product. Yet the attribute of having a
pre-chosen terminus date and the fact that the benefits would be
determined by another person’s expenses make the product valuable.
Here’s how it
works: The parents are underwritten, but the working adult child is the
policyholder. The policy covers the costs of a parent’s care while the
child is working. This allows the child to save for their own retirement
while still addressing the cost of care needs of parents. The term of
coverage is designed to end when the policyholder retires and can care for
parents themselves without interrupting their own career.
Typically, care
is assumed to be in the parent’s home, given the expectation that the
retiree will care for their parents at a time suitable to their plans and
budget. The applicant would hypothetically purchase a policy to cover care
expenses for the span of time they intend to remain in the workforce. The
applicant could also choose a term that allows payment of benefits for
additional time after retirement, such as for a prolonged vacation, before
taking up caregiver duties. But the policy does not have a waiver of
premium benefit, so the policyholder would want to plan on continuing
premium payments even when not earning income.
Distributors of
senior benefits products might find Caregiver Insurance an attractive
product to promote to the insurers they represent. It could fit well as a
supplemental worksite benefit if underwriting with electronic medical
records could be sufficient. It could also work well for Medicare
Supplemental or Advantage distributors, who can contact these adult
children policyholders ten to twenty years before they themselves are
ready for Med Supp.
Also, if
distributors are concerned that their insurance partners might not be
willing to take on investment risk at this time, the product has only a
small pool of assets available to invest because the maximum benefit
decreases as the policy ages, the risk is far lower.
Finally, if
insurers want to avoid standalone LTCI’s reputation for premium rate
increases, this product, even though it is not LTCI, does cover many
long-term care needs without the concerns of increased longevity and lack
of very old age mortality and morbidity experience.
Bruce Stahl,
ASA MAAA is senior vice president, head of U.S. Individual Health for RGA
Reinsurance Company. Reach him at bstahl@rgare.com.
#############################
Updated,
Monday, November 16, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-045: 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:
- Federal Medicaid Outlays During the COVID-19 Pandemic
- Medicare Part B premiums are rising in 2021 by more than double the
Social Security COLA bump
- Baby boomer retirements have taken a big jump in the past year
- Pandemic is forcing providers to be ‘catalysts of change’ for
long-term care sector, association head explains
- Biden Plan to Lower Medicare Eligibility Age to 60 Faces Hostility
From Hospitals
- 28% Growth in Medicare Advantage Plans Led By Senior Housing and
Care Providers
- As Admissions Stall and Aid Dries Up, ‘Losses are Coming’ for
Nursing Homes in ‘Bleak’ First Half of 2021
- COVID-19 Tied to New Psych Diagnoses; Pessimism & Bipolar Disorder
- 70 percent of long-term care claims begin with home care
- Nursing home COVID-19 cases rise four-fold in surge states
- Medicare Part B Premium to Jump $3.90 a Month for 2021
- Welcome to 2020 Impact Week: 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,
Monday, November 9, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-044: 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:
-
How To Plan For Nursing Home And Long-Term Care
Costs
-
Long-Term Care Insurance: A Comprehensive Guide to
Costs, Coverage, and Whether It's Right for You
-
What COVID-19 Exposed In Long-Term Care
-
Are You a Good Candidate for Long Term Care
Insurance?
-
Skilled nursing occupancy hits new low of 73.8%:
NIC
-
Verma: COVID-19 Shows LTC ‘Relies Too Heavily on
Nursing Homes’
-
Retirees, Make the Most of Your Home Equity
-
A Middle-Market Senior Care Solution
-
Does Hard Work Help Preserve the Brain?
-
Community spread triggers growing number of
COVID-19 cases in nursing homes: AHCA
-
Integrity Expands in the Southwestern United States
with the Addition of Western Asset Protection
#############################
"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 6, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC
BULLET: LONG-TERM CARE INSURANCE IN CHINA
***
TODAY'S LTC BULLET is sponsored by Claude Thau, who provides many
unique services to advisors as National Brokerage Director for USA-BGA
and to other entities as a consultant, in the individual, worksite and
affinity group markets. For example, his revolutionary “Range of
Exposure” tool projects clients’ likelihood (joint for a couple) of
spending $100,000; $250K; $500K or over $1,000,000 on long-term care,
based on their personal characteristics and estimates how much of
their cost in each range would be covered by various traditional or
linked insurance designs. Claude is the lead author of Milliman’s
annual Broker World LTCi Survey & a past Chair of the Center for
Long-Term Care Financing. You can reach him at 913-707-8863 or
claude.thau@gmail.com.
*** |
*** KUDOS to
Bruce Stahl and
Winona Berdine of
Reinsurance Group of America (a corporate member of the Center for
Long-Term Care Reform) for this creative idea highlighted in our recent
LTC Clipping:
8/2020, “A
Middle-Market Senior Care Solution,” by Bruce Stahl and Winona Berdine,
Long-Term Care News
Quote: “Would you like to have an insurance product in your
company’s lineup that provides all of the following? • Reaches the middle
market, • provides security to generations of family members, • satisfies
real customer financial needs and provides them with peace of mind, •
minimizes risk in the morbidity tail, • reduces asset and interest rate
risk, and • reduces concerns about pandemic risk in facilities.”
LTC Comment: Well, yeah! Click through to read this intriguing
proposal.
We hope soon to publish
a “Guest Bullet” by Bruce Stahl further developing and explaining this
“caregiver insurance proposal. Your comments on the idea are welcome. ***
*** PREDICTING IS HARD,
they say, especially about the future. Toward the end of the
2017 Intercompany Long-Term Care Conference in Jacksonville, Florida,
which took place shortly after Donald Trump was inaugurated, attendees
were invited to answer this question via electronic polling:
Q7. Do you think the
next four years will bring an improved economic climate? Or will we see a
continuation of low interest rates?
Answers:
1. Improved economic climate/higher interest rates = 76%
2. Stay pretty much the same = 13%
3. Get worse = 11%
In “LTC Bullet:
LTC Policy Poll Results,” on April 14, 2017, I offered my own
answer to that question and suggested to readers: “Tickle your calendar to
review this prediction on election day, November 3, 2020. I’ll do the
same.” Here’s my answer then followed by my comment now.
Then: “LTC
Comment: I think these voters are vastly over-optimistic. I’d agree with
the stay-the-same or get-worse minority. The current ‘economic recovery’
is long in the tooth; the ‘Trump trade’ is already petering out as health
and tax reform languish; we may already be in a recession; the Federal
Reserve’s tightening cycle has nearly run its course; after perhaps one
more interest rate increase, the next step is down and most likely we’ll
see more quantitative easing (QE4). That means more and more debt. The
U.S. dollar is unsupported by real value and very vulnerable; foreign
countries that give us real economic goods in exchange for paper (bonds
that the U.S. cannot ever afford to redeem) could wise up any time, stop
buying our debt, and start selling it; carrying costs on our
$20 trillion debt [$27.2 trillion as of today (11/6/20)] will force a
reversal of the Fed’s tightening soon, as the economy worsens. The credit
bubble inflating for a decade will pop. Sadly for the Trump
Administration, the wages for the economic sins of its predecessors will
come due in its first term. (Tickle your calendar to review this
prediction on election day, November 3, 2020. I’ll do the same.)”
Now: LTC Comment:
QE4 actually turned into QE Infinity. Modern Monetary Theory, as explained
and critiqued in “LTC Bullet:
Modern Monetary Theory and Long-Term Care,” is sweeping the land. The
Federal Reserve has forced real interest rates (nominal rates minus
inflation) into negative territory. It appears Trump has been swept out of
office and the incoming Biden administration will likely double down on
the same inflationary policies. Thus “the wages for the economic sins” of
Trump and his predecessors will come due in the term of his successors. We
are in for a rough economic ride, exacerbated by the pandemic, but
inevitable regardless, because of the irresponsible fiscal and monetary
policy of both political parties. ***
*** NOWADAYS, we need
clear-eyed analysis of the prospects for long-term care services and
financing more than ever. Don’t ingest the “soma” of social insurance
purveyed by most of the LTC intelligentsia. If you haven’t already, join
the Center for Long-Term Care Reform
here. Encourage your company to support the Center as a corporate
member. Share our “Membership
Levels and Benefits Schedule” with any and all. Join the fight for
rational long-term care financing policy. Thanks for your consideration.
***
LTC BULLET: LONG-TERM
CARE INSURANCE INBB CHINA
LTC Comment: With
Genworth long hanging on the cusp of sale to a Chinese company, what could
be a more timely topic than LTCI in China?
On October 20, 2020 the
Society of Actuaries LTCI Section sponsored a webinar titled
“Long-Term Care Insurance in China.” Moderator
Vincent L. Bodnar, ASA, MAAA, a Partner and Long-Term Care Practice
Leader, at
Oliver Wyman introduced the program and the panel of three experts,
two of whom called in from Beijing at midnight local time. (Vince visited
China some years ago, conducted a briefing on the U.S. experience with
LTCI, found avid interest there and has followed China’s LTCI experience
ever since.)
A recording of the “LTCI
in China” webinar should be available to buy on the
SOA website soon. Attendees who purchased the original webcast will be
able to access the recording for free. But here’s a synopsis of the
program for those of you who missed the original and may want to consider
obtaining the recording:
Panelists:
Guangyao Liu, FSA
Executive Actuary
China Life Reinsurance Company
Xiaochen Sun
Product Actuary
China Life Reinsurance Co Ltd
Song-Song S. Liao
President
Song-Song & Associates
Guangyao Liu
opened the session with an introduction to China’s “LTC Pilot Program.” He
began by summarizing the uniquely challenging demographics his country
faces. China has more “baby boomers,” 359 million, born between 1962 and
1975, than the USA has people (328 million). A second wave of Chinese
boomers, 374 million, born between 1981 and 1997, is not far behind. With
176 million elderly (over age 65) people, 12.6% of the population as of
2019, China is looking at 28% and 380 million by 2050. In the meantime,
China’s birth rate has been decreasing since the 1990s, due in large part
to the country’s one-child policy, exacerbating the elderly dependency
ratio and resulting in 120 million “empty nest elderly.”
Anticipating the
inevitable challenges of providing and paying for the care of this
burgeoning elderly population, the Ministry of Human Resources and Social
Security/National Healthcare Security Administration implemented a
four-year pilot project in 2016 which is expected to be extended this
year. The pilot covers 15 cities and 88.5 million people (out of a total
of 1.4 billion). It covers 426,000 insureds at an equivalent cost of 1,300
U.S. dollars per person per year. Care provided is 70% home care and 30%
facility care.
Problems of the pilot
include limited coverage as only seven pilot cities cover rural residents;
an imbalance of funding structure, which is highly dependent on China’s
government healthcare fund; inadequate professional care services, which
cannot meet demand; lack of uniform standards for care service, ADL
assessment, etc.; and large variation of program administration across
pilot cities ‐ hard to copy to other cities.
But substantial benefits
accrue to commercial LTC insurance including a start to educate residents
about the concept of long‐term care and raise potential demand; improve
care facility development and care service quality; and participating
commercial life and health insurers gain experience data and operating
expertise.
Xiaochen Sun next
discussed commercial LTCI in China, the first example of which, with a
“sum assured” benefit, emerged in 2005. In 2010 a product appeared with a
benefit structure like “universal life” and 2017 saw a reimbursement or
sum-assured benefit directly to care providers. As of 2020, the Chinese
commercial LTCI market has 20 players and 40 products.
The big takeaways from
this section of the program, as summarized by Vince Bodnar are:
- China has
both standalone and hybrid products, like the US
- There are
two big players in the market today: Taikang Life and Pingan Life
- Taikang
offers a high-end product that gives the policyholder access to its LTC
facilities. It looks a little like a CCRC approach.
- Pingan sells
a “trauma-led” product, which is cheap. They sell 10,000 of these
policies a month.
Song-Song S. Liao
concluded the survey of LTCI in China with an excellent summary of the
challenges and opportunities the country faces. For example, there is no
clear distinction in China between nursing homes and other levels of care.
There is inconsistency in defining and monitoring activities of daily
living and benefit triggers. Cultural differences often complicate the
business. Admission to a long-term care facility, for example, could be
considered a disgrace because of the traditional Chinese belief in the
responsibility of the younger generation for the older generation. The
potentially unrealistic goal is to have 90% age at home with only 3%
depending on institutional care.
Further difficulties
include insufficient infrastructure and a commercial insurance industry
that is very small compared to China’s dominant social insurance
structure. Chinese actuaries are exploring all the approaches tried in
U.S. It is not a lack of product ideas limiting product development; it’s
that the Chinese infrastructure does not support U.S. LTC products. It may
be China requires a product more like what we call “critical illness”
insurance. Or a product that only provides cash; not care services.
Shanghai pushed out a product like the US model, but can’t sell it. The
current infrastructure is the biggest obstacle to design a product for
China, but “we all know the need is there.”
Song Song summarized the
“Contextual Differences” thus:
• LTC business could
mean handling government pilots, not commercial LTC
• Commercial LTC is
supplemental to social insurance
• Differentiation
between medical/acute care vs residential care vs nursing
homes/SNF settings is
not distinct in China
• Regulation and
standards may exist but not in full compliance
• Much narrower
coverage, more restrictive benefit triggers, and more carve outs in China
• ADL 2/6 vs 3/6 or even
4/6
• E.g. restrict to 12
types of diseases, not including cancer, diabetes.
• Age limits and long
elimination period
LTC Comment:
Congratulations to the Society of Actuaries and Vince Bodnar for
conducting this review of nascent LTC insurance in China. We’ll be hearing
much more about this topic over time.
#############################
Updated,
Monday, November 2, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-043: 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:
-
Medicare Advantage
2021 Spotlight: First Look,” by Medicare Advantage 2021 Spotlight: First
Look
-
U.S. cities seen
ill-prepared for boom in elderly population
-
LONG TERM CARE:
Caught in the Middle: How Young Parents Can Plan for Long-term Care
-
BREAKING: First
Alzheimer’s commercial blood test to detect amyloid beta hits the market
-
Older Americans 2020:
Key Indicators of Well-Being
-
2021 Tax
Deductibility Limits
-
Leisure Activity and
Dementia Risk: When Does It Matter?
-
Report shows 51%
growth for home-based services
-
How do you get the
new Medicare Advantage benefits? It’s not easy
-
Social Security will
be exhausted several years earlier than expected: report
-
Retirement: Average
Boomer's savings would only last seven years, 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, October 26, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-042: 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:
-
Community noise may affect dementia risk
-
New poll shows most older adults worried about
potential healthcare and long-term care costs
-
Binge drinking may cause Alzheimer's disease—and it
might strike younger and in a severe form
-
Nearly half of COVID-positives were asymptomatic,
nursing home study finds
-
The Collapse of Long-Term Care Insurance
-
Long-Term Care Awareness Month Approaches Like an
Avenging Angel
-
As most states see nursing home cases increase,
providers fear third wave of COVID-19
-
Most Americans want health insurance companies and
Medicare to pay for long-term care: poll
-
Report shows huge jumps in Medicare Advantage
enrollment among minorities, dually eligible
-
30 percent of COVID deaths in long-term care have
occurred in assisted living: 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, October 23, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC Comment: Finally, a solution for the long-term
care financing crisis. Or not? Explanation 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
and to other entities as a consultant, in the individual, worksite and
affinity group markets. For example, his revolutionary “Range of
Exposure” tool projects clients’ likelihood (joint for a couple) of
spending $100,000; $250K; $500K or over $1,000,000 on long-term care,
based on their personal characteristics and estimates how much of
their cost in each range would be covered by various traditional or
linked insurance designs. Claude is the lead author of Milliman’s
annual Broker World LTCi Survey & a past Chair of the Center for
Long-Term Care Financing. You can reach him at 913-707-8863 or
claude.thau@gmail.com.
*** |
LTC BULLET: MODERN MONETARY THEORY AND LONG-TERM CARE
LTC Comment: Policy wonks have anguished over how to
finance long-term care for decades. Most have concluded (wrongly I think,
see
Medicaid and Long-Term Care) that the only answer is some form
of compulsory, government-imposed LTC social insurance program. But, given
the insolvency of all existing social insurance programs (Social Security,
Medicare, Medicaid, etc.), voters have not been willing to approve even
more of these unfundable liabilities. Result: stalemate, frustration,
anger, despair, and, finally, hanging their meager hopes on another
hapless experiment in government-designed and –imposed LTC insurance that
is already foundering in Washington State. (See “LTC
Bullet: The Keystone Kops of LTC Insurance.”)
What’s needed to save the policy pundits’ preferred
social insurance model is an economic miracle. What if it were possible to
find the unlimited government financing that social insurance would need
to survive indefinitely? That’s what “Modern Monetary Theory” (MMT)
promises to deliver.
For easy, entertaining access to the principles and
arguments behind MMT read Stephanie Kelton’s best-selling book The
Deficit Myth. Better yet, don’t invest so much of your precious
professional time on that source. You can get more than enough to
understand Modern Monetary Theory from a summary of the book
here.
But let’s cut right to the chase today. Here’s the
essence of MMT and the bottom line on what it means. (If what follows
seems too bizarre to be credible, refer to the
book summary just referenced. You’ll see I’ve neither mis-stated nor
exaggerated MMT’s ideas and claims.)
According to MMT, currency issuers like the
USA, can print as much money as they want. They do not have to work within
conventional financial limits, with revenue matching outlays over time, as
mere currency users, such as families, businesses, or countries
borrowing in a currency not their own, must.
The power to spend with no set limits is especially
true for the U.S. because the dollar is the world’s reserve currency.
TABS or STAB: Conventional economic theory
assumes governments must Tax and Borrow to be able to Spend
(TABS), but MMT says what really happens is that governments create money
by Spending and then they Tax and Borrow (STAB) to
control any resulting excessive inflation.
Currency issuers, according to MMT, don’t need to
collect taxes, in order to be able to spend. Taxes are necessary
but not to generate revenue. Rather the purpose of taxes is to compel
citizens to work and provide goods and services the economy needs in order
to earn the money to be able to pay the required taxes.
Deficits don’t matter per se. The Federal
Reserve could print enough money to pay off the national debt and
eliminate the interest cost of servicing the debt. No kidding. MMT
actually claims this.
Therefore, to achieve any and all social goals, such
as controlling climate change, free college, universal health care, or
generous long-term care financing, etc., all it takes is for a currency
issuer’s government to have the will to spend/create enough money.
The only limit on printing and spending money in
one’s own currency is inflation. When too many dollars chase too few
goods, prices increase, thus devaluing the currency and leaving people
unable to afford goods and services they need.
So, if inflation starts to become a problem, MMT says
the government should raise taxes to reduce the amount of money in
circulation and thus stanch inflation before it gets out of control.
Crazy? Of course. But seductive? Very. If you trust
government to solve problems, Modern Monetary Theory is your key to unlock
not just the Treasury, but the entire productive capacity of the national
economy.
But here’s the rub. The net effect of Modern Monetary
Theory is redistribution by the Marxist principle “from each according to
his ability to each according to his need.”
Government spending (money creation) pursues
“progressive” goals, i.e. Need, such as financing free health care,
free college, the Green New Deal, free LTC, etc. But when all that extra
money printing/spending spikes inflation, who gets taxed to tamp it down?
People with the money, i.e. Ability, are the only ones who can be
taxed.
MMT is “Miracle Gro” for the idea that taxing
productive people is the best way to provide for the needs of unproductive
people. Unfortunately, this tried and true principle always applies: you
get less of what you tax (ability) and more of what you subsidize (need).
In other words, need is unlimited. It always grows to
consume whatever ability, always scarce, is able to produce. Subsidize the
former by taxing the latter for 85 years and what you get is …
The whole mess we’re in today including the long-term
care financing crisis.
#############################
Updated,
Monday, October 19, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-041: 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:
-
Was COVID-19 Really
the Killer?
-
Medicare Advantage
Plans May Have More Search Buzz
-
Covid-19 Has Made
Caregiving Harder, But Isn’t Making Americans More Likely To Plan For
Their Old Age
-
Long-Term Care
Insurance Benefits Cut Panel Drafts Principles
-
Having Dementia
Doesn’t Mean You Can’t Vote
-
HCBS could be
solution to ‘catastrophic costs’ of long-term care: report
-
Apathy Predicts
Dementia in Cognitively Normal Older People
-
Extreme confusion
most common Covid-19 symptom in frail older adults, new research
discovers
-
Long-term care usage
increased under ACA-funded Medicaid expansion
-
US sees 20% more
deaths than expected this year, most due to Covid-19, research finds
-
HHS officially
extends COVID-19 public health emergency again ahead of upcoming
expiration date
-
The Times recommends:
Vote to support trust fund for 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,
Monday, October 12, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-040: 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:
-
What Does Retirement
Look Like in a Pandemic?
-
SEC Adds to General
Electric's Long-Term Care Insurance Headaches
-
9 Surprising Secrets
About Long-Term Care and Medicaid
-
Measuring The
Financial Impact of Cognitive Decline
-
Skilled nursing,
assisted living facilities top OSHA’s COVID-19 violators list
-
The Nation's Fiscal
Health: A Long-Term Plan Is Needed for Fiscal Sustainability
-
The Alzheimer's Stamp
Now Available to Purchase
-
Walmart Jumps Into
the Medicare Plan Distribution Market
-
The Problem With
Buying Bundled Life and Long-Term Care Insurance
-
Northwestern Mutual
Announces New Senior Leadership Appointments
-
Looming Medicare Cuts
Threaten Physician Services in Nursing Homes, Even as COVID Continues
#############################
"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 9, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC
BULLET: THE KEYSTONE KOPS OF LTC INSURANCE
LTC
Comment: What happens when the Keystone Kops design a long-term care
insurance plan? Details after the ***news.***
***
LONG-TERM CARE INSURANCE IN CHINA:
Don’t miss this Society of Actuaries webcast on Oct.
20 as
speakers discuss the history of long-term care insurance products in
China, current government pilot programs and the opportunity for new
products. Register
here
by October 18, 2020. What could be more timely as Genworth contemplates
entering the Chinese market? ***
***
LTCI SURVEY: The deadline for responding to the survey has been extended
to October 15th. Take the
Who is Selling What? To Whom, How & Why Survey
today! Even if you don’t ordinarily discuss long-term care planning with
your prospects and clients, your thoughts are vitally important. This is
the largest national effort of its kind, spearheaded by
Oliver Wyman Actuarial
and
Ice
Floe Consulting,
and supported by
NAIFA,
NAILBA,
Broker World Magazine,
the
Center for Long-Term Care Reform,
and life and long-term care insurance companies. Take the survey and
you’ll be first in line to receive its findings. ***
LTC
BULLET: THE KEYSTONE KOPS OF LTC INSURANCE
The "Keystone
Kops"
are fictional, humorously incompetent policemen featured in silent film
slapstick comedies between 1912 and 1917. Play
this
video
and you’ll have a pretty good idea what the Washington State Long-Term
Services and Supports (LTSS) Trust Commission’s September 30, 2020 meeting
was like. More on that below. It’s always a comedy when governments try to
do long-term care insurance. Remember CalPERS? CLASS? Every public
commission ever mandated to fix long-term care? This new adventure in
state-based LTCI hubris is headed toward the same fate.
Washington State’s “Long-Term
Services and Supports Trust Act (Trust Act),”
enacted in 2019, created a long-term care insurance benefit for all
eligible Washington employees that would cover some of the cost of their
long-term services and supports. Specifically, a .58% mandatory payroll
tax would fund benefits up to a lifetime total of $36,500 for people who
paid premiums either (1) for 3 years within the past 6 years, or (2) for a
total of 10 years, with at least 5 of those years paid without
interruption. The state won’t collect the tax until January, 2022 and
doesn’t pay benefits until 2025. Eligibility triggers at the need for help
with three or more ADLs. Benefits are paid directly to service providers
which may include sufficiently trained family members. There are more
complications in the legislation, but this is enough to indicate what’s
wrong.
The
same Trust Act that created this program also created the Long-Term
Services and Supports Trust Commission to figure out how to implement it.
The Commission consists of legislators, administering agencies, and
stakeholder representatives. It
“makes recommendations regarding criteria for determining who is a
qualified individual, minimum provider qualifications, service payment
maximums, actions needed to maintain Trust solvency, and monitoring of
agency expenses.”
Now ask yourself, aren’t these basic questions that should have been
analyzed before imposing a compulsory tax-supported program on
citizens? Didn’t the Washington State Legislature put the cart in front of
the horse?
What
would happen to a private LTC insurance plan dreamed up by an insurance
executive and offered to the public without first thinking through who
qualifies, provider standards, payment maximums, solvency issues and
expenses? Free markets are vicious. No caring person would wish the
inevitable catastrophic consequences that would ensue on such a hapless
entrepreneur. Yet politicians can wave a magic wand, create such a
program, force it on their constituents, and then turn it over to be
somehow fixed by a commission comprised of more clueless legislators,
bureaucrats, and highly paid representatives of rent-seeking special
interest groups … though with not a single representative from the one
profession that could help … the private long-term care insurance
business.
Now
back to the LTSS Commission’s September 30, 2020 virtual meeting. I
followed the three-hour session in jaw-dropped awe as one critical issue
after another was raised, discussed, and tabled for future consideration.
Premium rates? Gotta wait to set those because the law caps the
maximum rate and who knows if premiums plus investment returns will cover
costs. Qualified individuals? When does the clock start on the
required period of employment; when does the look back period begin; how
about people too near retirement who will be left out? People disabled
before age 18? There ensued a long discussion on how to handle the
under-18 who are excluded in the law but mandated to be considered for
inclusion. No decisions. As one astute commenter exclaimed: “They don’t
even know what they don’t know.”
I
think the one thing Washington State has gotten right in this project was
to hire
Milliman
to guide them through the actuarial thicket created by the state
legislature’s carelessness. Anyone knowledgeable about insurance could not
help but smile as Milliman’s Chris Giese patiently explained adverse
selection to the committee. In paraphrase: “You need to set a rate that
matches health risk. With no underwriting, the question of who can opt in
or opt out creates challenges. Individuals will evaluate what’s best for
them in their circumstances. Healthy individuals might opt out. When they
opt out, you’re left with a pool of individuals using benefits who are at
higher risk. If you adjust the premium rate up to compensate, then more
healthy people won’t participate. You get more uncertainty and a spiral of
higher and higher costs.” Wow! What an insight? Who could have imagined
that adverse selection might be a problem before the program was carved in
statutory stone?
Giese also explained the financial facts of life to the Commission. You
see, the program must generate enough in premiums plus investment returns
on reserves to cover costs. But Treasury yields are very low these days.
Stocks have the potential to earn much more, but they’re riskier. How does
that impact program income and long-term solvency? The pandemic is a
monkey wrench further complicating this problem. Washington State revenues
have plummeted as have the incomes of the citizens compelled to fund this
program’s new tax. It’s probably not a great time to pile on more
government at the expense of the productive private sector.
The
LTSS Commission has hundreds of little definitional issues to straighten
out. Giese talked about several. The issue of opting out by purchasing
private LTC insurance, he explained, is “still relatively undefined.” What
if top wage earners opt out? What if half of wage earners opt out by
getting private coverage? Who gets to opt out? Only those who had private
LTCI before? People who buy it later just to escape the government
program? What qualifies for the escape hatch: hybrid policies too or just
traditional LTCI. How to handle the self-employed? What if you opt out,
can you opt back in? What about elimination periods? What about
portability and divesting alternatives? There will be additional costs if
people want to receive benefits outside Washington State. On and on and
on. Repeatedly, the approach to issues like these was to create yet
another “work group,” but (no surprise) volunteers were scarce.
People who monitored the meeting through Zoom had the opportunity to
comment or ask questions at the end of the program. One very thoughtful
auditor, Stephen D. Forman of
LTC
Associates
posed this:
The
Commission has referenced the stakeholder community several times, but I'm
not seeing any private insurance industry representation, why is that?
It's a 300 million dollar per year market that is being broadly remade by
the Commission's decisions. The decisions have the potential to discourage
responsible planning by those who have the means to do so, thereby
protecting Medicaid, which is a point of the Trust Act. In February we
proposed a number of blind spots and loopholes in the Act before the
Legislature--including the lack of stakeholder representation--and the
fact that these remain speaks to the fact that this institutional
expertise is needed. Thank you for listening, and for your hard work!
So,
that’s what happens when the Keystone Kops design a long-term care
insurance program. It would be funny if it weren’t so sad.
#############################
Updated,
Monday, October 5, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-039: 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:
-
Genworth and China Oceanwide Push Back Deal
Completion Deadline
-
Elderly and Homeless: America’s Next Housing Crisis
-
Low Interest Rates Push Prices for New Life-LTC
Hybrids Higher: Milliman
-
Medicaid expansion filled unmet needs for home
health, other long-term care: JAMA
-
More than 50 coronavirus wrongful death suits have
been filed against long-term care facilities
-
Home healthcare outpaces skilled nursing in its
post-COVID-19 rebound
-
Keeping workers will be biggest struggle for
nursing homes as pandemic persists, national policy expert predicts
-
Medicare Advantage plans banking on non-medical
home care needs
-
CMS touts lower premiums and benefits of Medicare
Advantage plans
-
Nursing homes in Washington state struggled with
adequate staffing for years. Then coronavirus struck
#############################
"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 28, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-038: 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:
-
Nation’s first
COVID-19 criminal charges against nursing home operators filed in
Massachusetts
-
Americans worry
about Alzheimer's disease, survey finds, but most don't know the early
signs and symptoms
-
Virus Cases Surged
in Young Adults. The Elderly Were Hit Next
-
CMS announces $165
million in funding to move people from nursing homes to assisted living
and other settings
-
Medicaid
Maintenance of Eligibility (MOE) Requirements: Issues to Watch When They
End
-
The Nation’s
Fiscal Health: Effective Use of Fiscal Rules and Targets
-
Can You Pass the
New York State COVID-19 Death Risk Test?
-
“‘Living wage’
would benefit 75 percent of direct care workforce: LeadingAge report
-
The work-from-home
surge may lead workers to buy retirement homes even before they retire
-
4 in 5 Americans
Lack Retirement Planning Knowledge: Survey
-
Older adults in
Philly turn COVID-19 into musical comedy
-
Can The Dutch
Example Help Us Improve Long-Term Care And Manage Its Costs? Maybe
-
Davies announces
acquisition of TriPlus as it steps-up North American expansion plans
-
Nursing Homes Oust
Unwanted Patients With Claims of Psychosis
#############################
"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 25, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC
BULLET: DYING WITH OR OF COVID AND THE DOUBLE WHAMMY OF A SECOND WAVE IN
THE COMING FLU SEASON
LTC
Comment: For fresh thinking on the pandemic and long-term care, look no
further than “60
Seconds with Steve Monroe.”
We explain after the ***news.***
***
TAKE THE SURVEY: It’s not too late to participate in
the
nation’s largest opinion survey of agents and advisors
that we announced and described in “LTC
Bullet: The Who is Selling What to Whom, Why & How Survey.”
Read more about this important study in
Ron
Hagelman’s Broker World column
this month. You have until October 8 to do your part by contributing to
our knowledge of this critical subject. Take the survey
here.
***
***
ARE YOU A MEMBER? If you’re not receiving an LTC E-Alert every
Monday and an LTC Bullet every second Friday like clockwork, then
you’re not a member of the Center for Long-Term Care Reform and you’re
only receiving our occasional wider distribution to non-members (or a
bootleg copy from someone else.) You can fix that today. Check out our
“Membership Levels and Benefits”
here
and join the Center
here.
Note that premium members hear from us daily with LTC Clippings
that keep them current on all kinds of LTC information you need to know.
For questions or comments, contact
smoss@centerltc.com
or 425-891-3640. ***
***
TRUE FREEDOM, 9/14/2020, “True
Freedom and GoldenCare USA Partner to Provide Seniors with Innovative Home
Care Solutions”
Quote:
“True Freedom announces our Preferred Marketer partnership with GoldenCare
USA, an Integrity Marketing Group company. True Freedom is the only
company that provides nationwide home care plans for seniors as an
alternative to traditional insurance. GoldenCare and their western-states
counterpart, American Independent Marketing, have been leading subject
matter experts in long-term care for more than 40 years. By partnering
together, they can now serve more Americans by providing unique options
for long-term care.”
LTC
Comment:
Congratulations to long-time friend and corporate member
Golden Care
on this exciting new partnership. ***
LTC
BULLET: DYING WITH OR OF COVID AND THE DOUBLE WHAMMY OF A SECOND WAVE IN
THE COMING FLU SEASON
LTC
Comment: Do we face double pandemic jeopardy when flu compounds the Covid
crisis this fall? What does it mean to die “of” Covid when the Coronavirus
only shortens the life by a week or two of people with multiple
co-morbidities?
Those are two of the intriguing questions raised and answered by
Irving Levin Associates’
Steve Monroe
in his weekly video series “Sixty
Seconds with Steve Monroe.”
Stephen M. Monroe has been a healthcare and senior care financial expert
for over 30 years. In addition to being an often-quoted healthcare finance
expert in mainstream media, he has published over 50 bylined articles
dealing with various aspects of investing in health care and senior’s
housing. He is also called upon to keynote and speak at organizations such
as the American Seniors Housing Association, Assisted Living Federation of
America, National Investment Center for Seniors Housing and Care, American
Health Care Association and the New York State Health Facilities
Association, among others.
I’ve
followed Steve’s analysis for two decades or more, ever since I became
intrigued by the role of finance in shaping the type and availability of
seniors housing. When he told me many years ago that he bought private
long-term care insurance and it cost him less than the cost of a daily cup
of coffee, that sealed it for me. I’ve followed his thoughtful
commentaries ever since.
Here
are two of them that he and his employer have allowed me to share with
you. This material is proprietary so not usually available for free. If
you find it helpful, there’s more where this came from and you can
subscribe for a 60-day free trial
here.
“Beware
the Flu Season?,”
by
Steve Monroe,
August 26, 2020
Almost every conversation surrounding the coronavirus and outbreaks in
nursing homes or assisted living communities eventually gets around to the
double whammy of a “second wave” combined with the upcoming flu season.
Yes,
providers will have to be vigilant, but they have never been as well
prepared for the flu season as they are today. Think about it. Less than a
year ago, do you remember ever walking into any senior care facility where
the staff were all wearing masks, where hand sanitizers were everywhere,
where your temperature was taken at the entrance, where mobile residents
were wearing masks? No, it never happened except if someone had the flu.
My
bet is that there will be a record number of people, in and out of senior
care, who will get the flu shot this year. And transmission will be lower
because most Americans are wearing masks in public, hands are cleaner than
ever before, and we are all still coming into contact with fewer people on
a daily basis than at the start of any other flu season.
The
coronavirus will still be with us, but because of the extra care taken in
all senior care communities, its prevalence has declined and the double
whammy with the flu season will not be as bad as people fear.
“Death
By or With COVID,”
by Steve
Monroe,
August 28, 2020
We
are sure every provider is sick and tired of hearing about how many
residents have died of COVID-19 in a nursing home or assisted living
community. The problem is that the classification may be all wrong.
Unfortunately, there may be a financial reason for such classifications,
as in more reimbursement, or more governmental aid. And for those who can
profit from making this pandemic seem worse than it is (yes, they do
exist), piling up the number of COVID deaths helps to make their case. It
has certainly helped the mainstream media and their advertising dollars.
But here is the problem, at least as it relates to the deaths in assisted
living, memory care and nursing homes. What the statistics don’t
differentiate is those residents who died “of” COVID from those who died
“with” it.
Let
us explain. Most people who are long-term residents in nursing homes, or
assisted living and memory care communities, have multiple health issues,
commonly referred to as co-morbidities. It is a word often used in the
senior care industry, but particularly during this pandemic.
In
its most simple definition, a comorbidity is the presence of one or more
“additional” health conditions, usually co-occurring with a primary
condition. And we are not talking about minor health problems, but major
ones, usually chronic and often cardiac or respiratory related, as well as
diabetes. To be un-politically correct, these residents today have several
health problems, any one of which could result in their death at some
point.
In
addition, the average length of stay for these residents is relatively
short, even in the best of times, especially compared with independent
living communities or CCRCs, not to mention active adult communities with
their much younger average age. They have moved into nursing homes or
AL/MC [assisted living/memory care] communities in a frailer condition
than 20 and even 10 years ago. In many cases, they are going to die in six
or 12 months even without a pandemic.
So,
when a 90-year resident in a memory care wing (true story), on hospice,
with maybe three weeks to live gets infected with the coronavirus and dies
in two weeks, she is listed as having died “of” COVID. But that is not
true. She died “with” COVID. She actually could have died from any of her
comorbidities, if not just old age, but that is not how it is recorded.
She becomes a statistic as one of the 170,000 and growing deaths from
COVID. [The reported U.S. death toll passed 200,000 on September 22, 2020,
a little less than a month after this column was published.]
The
entire senior care industry has to get this message out and the only way
to do so is to track what really is happening inside your buildings. The
overall number of deaths “by” COVID will go down, and the industry can
make a better case to the consumer for what is really happening to seniors
under their care. We would love to receive your statistics, on or off the
record.
#############################
Updated, Monday, September 21, 2020,
9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-037: 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:
- True Freedom and GoldenCare USA Partner to Provide Seniors with
Innovative Home Care Solutions
- Nursing Homes Given Federal Go-Ahead To Allow More Visitors
- Dementia mortality skyrockets since lockdowns; CMS loosens visitor
restrictions
- Opinion: Long-term care insurance: There’s no good alternative
- Federal Nursing Home Commission Calls on CMS to Adopt 27
Recommendations, ‘Reduce Suffering’
- When Elder Care Requires Legal Advice
- Social Security COLA Estimated at 1.3% for 2021
- Lapse In Long-Term Care Insurance Doesn’t Necessarily Ruin Coverage
- U.S. health care system on life support, say test results from new
study
- A win for long-term care: Providers applaud withdrawal of MFAR
proposal
- Missed Vaccines, Skipped Colonoscopies: Preventive Care Plummets
- COVID-19 pushed SNF occupancy below 75% in June: NIC
- Ken Dychtwald: 75% of Households Could Face a Big Retirement Shock
- COVID-19 and Fast Underwriting Are a Bad Mix: Veteran Underwriter
- 41% don’t trust assisted living, nursing homes to keep residents
safe during pandemic: survey
- Recession And Medicaid Budgets: What Are The Options?
- How the Aging Immune System Makes Older People Vulnerable to
Covid-19
- Almost 40% of residential care aides live in low-income households:
report
- Vitamin D deficiency may nearly double coronavirus risk, 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,
Friday, September 11, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC Comment: We’ll finally get answers to all those
questions if you fill out
this brief survey. We explain 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
and to other entities as a consultant, in the individual, worksite and
affinity group markets. For example, his revolutionary “Range of
Exposure” tool projects clients’ likelihood (joint for a couple) of
spending $100,000; $250K; $500K or over $1,000,000 on long-term care,
based on their personal characteristics and estimates how much of
their cost in each range would be covered by various traditional or
linked insurance designs. Claude is the lead author of Milliman’s
annual Broker World LTCi Survey & a past Chair of the Center for
Long-Term Care Financing. You can reach him at 913-707-8863 or
claude.thau@gmail.com.
*** |
*** HOW AND WHY TO JOIN the Center for Long-Term Care
Reform. After you read “LTC Bullet:
What Value Do LTCI Producers Get from the Center for Long-Term Care
Reform?, I hope and trust you’ll want to get everything the Center has
to offer. So check out our “Membership Levels and Benefits” schedule
here. That’ll help you decide between the various levels of individual
and corporate membership. If you have questions, drop me a note or give me
a call at
smoses@centerltc.com or 425-891-3640. One of the benefits of all
Center memberships is anytime access to me for questions about LTC
services and financing policy. As I explained in that
Bullet, I like hearing from agents and discussing the
challenges you face. It helps keep my policy analysis grounded in your
real world of LTCI prospecting, fighting against prospects’ denial, and
answering the hard questions people actually ask. So let’s talk. ***
*** “LTC CLIPPINGS” is a special daily service that
premium Center members
($250 per year or $21 per month) and above can opt to receive. Steve
Moses scans the internet for news, articles, reports and data you need to
know before your prospects start asking about them. He provides the date,
title, author, a link, a representative quote and a brief, often humorous
or satirical, but always thoughtful comment. Know what you need to know
before you’re caught off guard. Subscribe to LTC Clippings. ***
LTC BULLET: THE WHO IS SELLING WHAT TO WHOM, WHY &
HOW SURVEY
LTC Comment: There probably aren’t many public policy
analysts who have actually sold a long-term care insurance policy, but I’m
one. After leaving my government career to become Director of Research for
LTC, Inc., I took the sales training, got a license, did some phone
prospecting, and hit the road with a pocket full of leads. My mission was
to learn what LTCI agents were really up against.
Boy did I find out. After driving to a distant corner
of Washington State so as not to burn leads real agents needed, I set to
conducting sales interviews. I talked, they listened, and listened. I knew
a lot and, by gum, they were going to hear it all. That’s when I learned
the wisdom of the adage “You have two ears and one mouth. Use them in that
proportion.”
Long story a little shorter, I got skunked. No
buyers. I returned to the office with my tail between my legs wondering
how in the world successful agents managed. But later that week I got a
call from one of my prospects. He decided to buy a policy after all. What
was it, I inquired, my expertise, my savvy selling, my personal charm?
Nope, he said. He just didn’t like the policy his retired teachers’
association was promoting.
I’m telling this story because that was my earliest
introduction to how little we really know about the who, what, when,
where, why and how of long-term care insurance sales. Ever since that
experience I’ve referred to the heroes who somehow manage to help people
protect themselves for long-term care as AMG’s, altruistic, masochistic
geniuses. It’s long past time we empowered those AMGs by giving them
answers to those crucial questions. Finally someone is setting out to do
so.
The Survey
Ron Hagelman and
Barry Fisher of
Ice Flow Consulting and
Vince Bodnar of
Oliver Wyman have teamed up to design and offer a survey questionnaire
to address these issues:
-
Best practices in starting the long-term care
planning conversation.
-
Agent/Advisor/Consumer product perceptions and
preferences.
-
Best ways to get prospects and clients to “YES”.
-
New product insights.
-
Types of training and education that will improve
sales results.
-
Why many agents/advisors DO NOT discuss long-term
care planning with consumers.
The survey’s sponsors say “This agent/advisor-focused
sales analysis is designed specifically to help reveal the mysteries of
the structure and motivations of buying behavior from those who make the
sales happen.” It will define the “new normal in long-term care planning.”
The project is advised and supported by NAILBA, NAIFA, numerous
traditional and combo carriers and key distribution friends. Learn more in
the September issue of Broker World magazine.
The survey only takes about 5-15 minutes to complete.
If you provide your email address, they’ll send you the executive summary
as soon as the results are compiled. Don’t wait. Take the survey now
here.
Don’t sell LTCI? Please
take the survey anyway. The sponsors say: “We’d like you to take a few
minutes out of your busy day to take the survey. If you do not discuss
long-term care planning with consumers the survey will take 5 minutes or
less. Knowing why you don’t is vitally important to us. If you do have
long-term care planning conversations with prospects and clients, the
survey will take about 15 minutes or less. Your insights into the
aforementioned survey goals will help us with new product development,
expanding the market, improving agent education and increased consumer
awareness.”
We look forward to reviewing the results of this
survey and we’ll bring them to you in a future LTC Bullet.
Now
TAKE THE SURVEY!
#############################
Updated,
Monday, September 7, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-036: 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:
-
Ethics Consult:
Keep Patient on Feeding Tube After Dementia Diagnosis?— You make the
call
-
COVID-19 shifts
mindset of family caregivers about senior living decisions
-
Grabowski: As Case
Counts Rise and PPE Issues Persist, Nursing Homes Face Grim ‘Groundhog
Day’
-
CBO Cuts Forecast
for Social Security Fund Life Span, Sees Debt Topping GDP in 2021
-
COVID-19 Outbreaks
in Long-Term Care Facilities Were Most Severe in the Early Months of the
Pandemic, but Data Show Cases and Deaths in Such Facilities May Be On
the Rise Again
-
Skilled Nursing
Distress Looms as CARES Funding Ebbs: ‘Bills Are Starting to Come Due’
-
Key Questions
About the Impact of Coronavirus on Long-Term Care Facilities Over Time
-
China Oceanwide Is
'Progressing Well' Toward Getting Deal Funding: Genworth
-
Why you need to
talk to your parents about how they want to die
-
Does Medicare
cover long-term care?
-
Long, Frequent
Naps Predict Alzheimer's 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,
Monday, August 31, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-035: 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:
-
Bonnie Kraham
column: 2020 rates for Community Medicaid and Nursing Home Medicaid
-
Hundreds of
Thousands Of Nursing Home Residents Don’t Need To Be There
-
Longevity Brings
Increased Risk of Cognitive Decline
-
Female chromosomes
offer resilience to Alzheimer's
-
Morningstar gives
‘negative outlook’ rating to skilled care
-
State Actions to
Sustain Medicaid Long-Term Services and Supports During COVID-19
-
Ending Payroll Tax
Would Drain Social Security by Mid-2023
-
State with First
COVID-19 Outbreak Rolls Back Medicaid Boost for Nursing Homes: ‘Needless
Deaths Will Rise’
-
Dementia may be
three times more deadly than thought, analysis finds
-
A Novel Way to
Combat Covid-19 in Nursing Homes: Strike Teams
-
Two or more
long-term health conditions linked to positive COVID-19 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,
Friday, August 28, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC
Bullet: What Value Do LTCI Producers Get from the Center for Long-Term
Care Reform?
LTC
Comment: Why join and support the Center for Long-Term Care Reform? What’s
in it for you, 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
and to other entities as a consultant, in the individual, worksite and
affinity group markets. For example, his revolutionary “Range of
Exposure” tool projects clients’ likelihood (joint for a couple) of
spending $100,000; $250K; $500K or over $1,000,000 on long-term care,
based on their personal characteristics and estimates how much of
their cost in each range would be covered by various traditional or
linked insurance designs. Claude is the lead author of Milliman’s
annual Broker World LTCi Survey & a past Chair of the Center for
Long-Term Care Financing. You can reach him at 913-707-8863 or
claude.thau@gmail.com.
*** |
*** HOW
AND WHY TO JOIN the Center for Long-Term Care Reform. After you read
today’s LTC Bullet I hope and trust you’ll want to get everything
the Center has to offer. So check out our “Membership Levels and Benefits”
schedule
here.
That’ll help you decide between the various levels of individual and
corporate membership. If you have questions, drop me a note or give me a
call at
smoses@centerltc.com
or 425-891-3640. One of the benefits of all Center memberships is anytime
access to me for questions about LTC services and financing policy. As I
explain in the following Bullet, I like hearing from agents and
discussing the challenges you face. It helps keep my policy analysis
grounded in your real world of LTCI prospecting, fighting against
prospects’ denial, and answering the hard questions people actually ask.
So let’s talk. ***
*** “LTC
CLIPPINGS” is a special daily service that premium Center members
($250 per year or $21 per month)
and above can opt to receive. Steve Moses scans the internet for news,
articles, reports and data you need to know before your prospects start
asking about them. He provides the date, title, author, a link, a
representative quote and a brief, often humorous or satirical, but always
thoughtful comment. Know what you need to know before you’re caught off
guard. Subscribe to LTC Clippings. ***
LTC
BULLET: WHAT VALUE DO LTCI PRODUCERS GET FROM THE CENTER FOR LONG-TERM
CARE REFORM?
LTC
Comment: I enjoy speaking to agents about the challenges they face finding
and convincing clients to protect themselves against long-term care risk
and cost. Agents see the battle for better LTC from the foxholes. As a
policy analyst, my perspective often feels high altitude by comparison.
Hearing the problems and challenges agents face day in and day out helps
ground me in practical ideas and proposals.
So that’s
why I jumped at the chance when Center-corporate-member
Long Term Care Associates (LTCA)
invited me to address their next agent conference call. Special thanks to
Stephen, Gary, and Robert Forman and their team for the opportunity to
answer the following questions. Here’s what they asked and how I
responded.
1. From
your vantage, what value proposition from the Center do you think agents
should be taking advantage of, which they’ve failed to over the years?
The
agent’s role is to educate and sell. To do that well agents need to be on
the forefront of professional knowledge and expertise. But how can they do
that if they’re also doing all their own research? A critical role of the
Center for Long-Term Care Reform is to keep agents apprised of important
articles, reports, studies and data they need to know. How often have you
been blind-sided by a prospect’s question or criticism that they picked up
from a news report that you hadn’t seen or heard yet? Follow the Center
and that won’t happen again. The best way to follow the Center is to know
our website at
www.centerltc.com
inside out.
The
website has two levels: One for the general public and one for Members
Only. Check out the links at the top of the website to get started.
Here are
the items available to all:
Take our virtual tour of the
Center's website. (Be
patient, it may take some time to load.) This video webinar explains how
to access and navigate the valuable content on the CLTCR website. This is
the best way to find everything quickly.
The “Moses
LTC Blog” includes
LTC Bullets and LTC E-Alerts as they’re posted. (To find it,
scroll down from the top of
www.centerltc.com)
Links
to 1286 LTC Bullets newsletters, archived chronologically and by
topic covering every aspect of LTC services and financing since 1998
Links
to hundreds of articles, speeches, state-level and national reports on
every aspect of LTC services and financing
Video
of Steve Moses’s 9/21/11congressional testimony on “Examining Abuses of
Medicaid Eligibility Rules” (Steve testifies at 18 minutes, 45 seconds
into the hearing)
"Clash of
the Titans: Moses vs Gordon on Medicaid and other Dark Matter" at the 12th
Annual ILTCI Conference.
Listen
to this riveting debate. (May load slowly)
See a
retrospective of the 2008 National LTC Consciousness Tour:
LTC Tour Slide Show,
pictures of the Silver Bullet
of Long-Term Care;
history of the year-long tour
to raise consciousness about long-term care
Members
only website content (available to all on a trial basis for two weeks; use
user name: CLTCR2020 and password: FreeTrial):
Aging Demographics
International
Unfunded Liabilities--Social Security, Medicare, and Budgets
Long-Term Care
Caregiving
Long-Term Care Financing
Long-Term Care Insurance
Reverse Mortgages
Long-Term Care Providers
Medicaid
Medicaid Planning
2.
You’ve been instrumental in many major pieces of Medicaid reform
legislation: is there anything you or others you know of are currently
working towards?
We’ve been
on the defense for the past decade. Irresponsible monetary and fiscal
policy since the Great Recession have convinced the powers-that-be the
country can print and spend unlimited funds without producing new goods
and services for people to buy. That’s a recipe for disaster and the
catastrophe is baking in the economic oven right now, soon to be served up
to the country.
In the
meantime, the LTC intelligentsia—analysts and economists who opine about
the long-term care problem and what to do about it—have come together in
support of a compulsory, public, catastrophic LTC insurance plan based on
payroll deductions similar to Social Security and Medicare. Handling LTC
in this way won’t work any better than those programs, which are insolvent
already and likely to survive only as means-tested welfare programs in the
not-very-distant future.
Here’s the
good news. Thanks to the dozens of state-level and national studies we’ve
conducted and which are available on the Center’s website
here,
we know what to do and how to do it when policymakers are finally forced
by circumstances to do what needs to be done.
What’s
that? Redirect Medicaid to the needy and use some of the savings to
incentivize responsible LTC planning including private LTCI. Specifically,
eliminate Medicaid’s huge home equity exemption, close other eligibility
loopholes, and enforce estate recovery. Operate Medicaid as a loan instead
of a welfare trap for people with wealth. In time consumers will realize
private insurance is a far better option than relying on Medicaid.
3.
What’s the single greatest legislative change that could galvanize the
private LTCI market?
We need to
get the government to stop giving away what you’re trying to sell.
Eliminating Medicaid as your primary competition for the business of
middle class and affluent people is the one change that could make the
biggest difference. Unfortunately, that’s not a very popular idea
politically, so it’s not likely to happen until the economy tanks, which
it is about to do. When states have to curb Medicaid’s excesses to make
budget ends meet, they’ll listen again to what we have to say. That’s how
we won in 1993 with the Omnibus Budget Reconciliation Act (OBRA ’93 closed
eligibility loopholes and made estate recovery mandatory) and in 2005 with
the Deficit Reduction Act (DRA ’05 unleashed LTC Partnerships and placed
the first cap ever on Medicaid’s home equity exemption). We’re in a better
place now than we have been in over a decade to get the policy changes we
need done.
4. In
all the state-level reports, data, and studies you read, what have you
come across that would surprise our agents—and is there something they
could use to advance the importance of LTC planning?
What it’s
so hard for agents and everyone else to understand is how easy it is for
people to qualify for Medicaid LTC benefits despite having large incomes
and assets. I was amazed doing state Medicaid eligibility studies to find
that eligibility workers are appalled at how easy it is. They’re angry
that lawyers for well-heeled people prepare their perfect applications,
sometimes three inches think with documentation. Welfare workers can’t get
poor people on Medicaid without devastating the families, but the
well-to-do go right on. Adult children have a financial conflict of
interest and they’re usually the ones making the decisions once the elders
are demented and need care. The system is corrupt and leads to bad
consequences as we’re seeing during the pandemic especially, with tragic
nursing home deaths and families kept from visiting their
institutionalized loved ones.
5.
You’ve been even-handed of your criticism of both major parties’ failing
to address LTC financing: do you think choice of President or Congress
matters much to LTC financing in this country, and if so, does either
platform appeal to you more on this basis?
Honestly,
no, politics doesn’t matter. Politics is the problem not the solution.
Politics is about buying votes by promising people something for nothing.
Economics is what matters. Markets fairly distribute goods and services
based on merit and hard work instead of political influence and graft. So,
no, it makes no difference who controls the government. They’re all prone
to irresponsible excess. What matters is what we do when the wages of
their irresponsibility come due. Fortunately, we’ve done the prep work to
know how to fix long-term care when politics fails and markets matter
again.
6.
Despite continued efforts to “rebalance” Medicaid towards more home health
care, it continues to bias toward nursing homes: how would you communicate
this bias—and Medicaid’s other shortcomings—to a client who thinks they
can self-insure or “Medicaid Plan”?
The idea
that home care costs less than nursing home care is a fallacy. Across
society home care delays but does not replace facility care. The two
together always end up costing more. Bottom line, Medicaid can’t afford
quality institutional care, much less a full continuum of care.
Institutional bias is here to stay as the only way Medicaid can keep costs
manageable. The public knows nursing homes are undesirable, more so now
during the pandemic than ever before. The best way to stay out of a
nursing home as long as possible and to access the best ones when
necessary is to be able to pay privately for alternative care. The best
way to do that is to share the risk and cost through private insurance.
7.
Reaction to your message from the carriers sometimes seems tepid: why do
you think it’s not been more universally welcomed?
Carriers
fear that by exposing the abuse of Medicaid by middle class and affluent
people in order to correct it I’m actually disclosing to consumers the
secrets of how to dodge private insurance. My dilemma is that I can’t get
the problem fixed without exposing and criticizing it. Carriers can be
very short-sighted and exceedingly careful. They hear that Medicaid
captures most of their potential market and instead of aggressively
addressing that problem they too often fear criticism and do nothing. The
truth is the only way to fix Medicaid for the poor is to get the non-poor
to take responsibility and insure. That’s what I’m advocating.
8.
What’s wrong with “selling the Medicaid myth”? (i.e. the notion that you
have to spenddown to poverty in order to qualify) The insurance companies,
the government, the media, and many agents all repeat this same
myth—shouldn’t we?
The
Medicaid myth is that you can’t get LTC benefits without spending down
into impoverishment. It’s a myth because it isn’t true. If it were true,
most people with the financial wherewithal to buy LTCI would own a policy.
They’d be scared to death of losing their life’s savings if their life
savings really were at risk. You could say the Medicaid myth is a “noble
lie.” So if it helps you protect someone with a good policy, so be it.
Just know yourself what’s really happening.
What’s
really going on is that the public has been anesthetized to LTC risk and
cost because Medicaid has picked up most of the catastrophic costs for LTC
since 1965. So people don’t worry about LTC until they need it, and once
they need it they slip onto Medicaid easily. You’re much better off to
acknowledge virtually anyone can get Medicaid to pay for long-term care
but to focus on the reasons for not doing that: the problems of access,
quality, low reimbursement, institutional bias, discrimination, and loss
of independence and control.
Do you say
“my clients know about Medicaid’s deficiencies and they don’t want to end
up on that welfare program?” If so, you’re missing the point. Nine out of
ten potential prospects don’t even contact you or answer your calls. Most
people don’t worry about long-term care until it’s too late to plan, save,
invest or insure against the risk. That’s true because Medicaid has been
the payor of last resort for so long. Undesirable as Medicaid is, it looks
pretty tempting when it’s the only thing standing between a family and
huge out of pocket costs. Help us remove Medicaid as an easy solution for
middle class and affluent people after the insurable event has occurred,
and then see how many people are beating down your door to get the LTCI
protection they truly need.
#############################
Updated,
Monday, August 24, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-034: 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:
-
Short-Term
Bailouts Won’t Fix Nursing Homes or Medicaid Home-Based Long-Term Care
-
Covid-19
Vaccination Costs to Strain State Medicaid Programs
-
Task force
delivers final report for senior living’s transformation post-COVID-19;
6 strategies identified
-
Seattle life plan
community successfully shifts from communal dining to food court model
-
Assisted Living
Communities Facing Similar Financial Hardship as Nursing Homes
-
Assisted living
occupancy declines at highest rate since April: NIC
-
Nearly 75% of
older Americans with dementia given drugs that don’t help them despite
serious risks: Study
-
Game changer for
long-term care? More like a game ender
-
REPORT: COVID
Cases in Nursing Homes Surpass Peak Level Back in May
-
U.S. Treasury task
force: Federal government must educate public about LTC 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 17, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-033: 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:
-
Nursing Home
Families Yearn to Visit Loved Ones Again
-
Verma ‘Deeply
Concerned’ About Rise in Nursing Home COVID Counts, ‘Significant
Deficiencies’ in Infection Control
-
The Trump
Administration Thought About Reforming Long-Term Care Insurance. But
Decided Not To
SURVEY: Nursing Homes Incurring Significant Costs and Financial Hardship
in Response to COVID-19
-
Coronavirus cases
in nursing homes show alarming spike, AHCA warns
-
LTCG appoints
Sharon Reed as SVP of Process Improvement and Enterprise Training
-
Older Americans
Coping Better With Pandemic Than Younger Ones: Age Wave
-
Job losses
continue in the eldercare sector: Labor Department
-
When Covid-19 Hit,
Many Elderly Were Left to Die
-
Dementia on the
Retreat in the U.S. and Europe
-
Long-term care
groups, 490 others, call for enactment of COVID-related legal
protections ‘as soon as possible’
-
1,600 nursing home
workers plan strike
#############################
"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 14, 2020,
7:00 PM (Pacific)
Seattle—
#############################
LTC Comment: Sometimes bad studies
happen to good people. We explain after the ***news.***
*** ILTCI CONFERENCE: Why am I getting
Denver history lessons from Barry Fisher? Because he’s a former resident,
knows the city well and he’s in charge of the 20th anniversary
Intercompany Long-Term Care Insurance Conference to be held March 8-11,
2021 in Denver. This iteration of the event replaces the one canceled due
to the pandemic in March of this year. Get all the details
here and
here. Barry reports “The good news is that almost all our exhibitors
and sponsors have committed to attend the 2021 Conference. The Program and
Education Committee is hard at work creating sessions designed to
instruct, enlighten, and entertain. And, our Keynote Speaker,
Futurist Anders Sorman-Nilsson, will share a whole new look into his
crystal ball.” I’m reminded there’s a little Denver lore in the Moses
family history also. It seems my great grandfather traded 40 acres of
prairie waste land for a pair of pearl-handled six-shooters. Those 40
acres are downtown Denver today, but we don’t even have the pistols to
show for it. Oh well! At least we have a great reunion with friends and
colleagues coming up in the Mile High City next March … Covid-19
permitting, of course. ***
LTC BULLET: UMPTEENTH LONG-TERM CARE
STUDY DISAPPOINTS
LTC Comment: Having toiled in the
long-term care field for 38 years, I’ve seen a lot of study groups and
commissions come and go aimed at finding a better way to provide and pay
for long-term services and supports. Besides their universal abject
failures, these many endeavors also have this in common. They brought
together experts representing various “stakeholders’” interests who
talked, talked, talked until they arrived at the lowest common denominator
of their wishful thinking. That usually included a long list of wonderful
things to do with no mention of how to pay for them. How might we define
such a “study?” The
Urban Dictionary suggests this: “A group discussion or activity
between like-minded individuals that validates mutual biases or goals in a
non-confrontational environment.” What got me thinking along those lines?
“Learning
from New State Initiatives in Financing Long-Term Services and Supports”
is a report published last month jointly by the
Center for Consumer Engagement in Health Innovation at Community Catalyst
and
The LeadingAge LTSS Center @UMass Boston. Its authors include two,
Marc Cohen and Eileen Tell, whose previous work deserves praise. The
report is the fruit of deliberations by “42 stakeholders and state
officials” who shared “their depth of knowledge and insightful
observations on the reform efforts occurring in their states.” Their
states, which have “adopted or are considering innovative state-based LTSS
financing reforms” include California, Hawaii, Maine, Michigan, Minnesota
and Washington. As I’ve conducted studies in three of those states (CA, ME
and WA) I’ll offer some balancing perspective when relevant.
So let’s dive into this new report and
see what we find. I’ll select a quote and then make a comment. I’m
omitting the report’s footnotes but you can find them quickly in
the original.
LTSS Report:
“Most of the LTSS costs that people are projected to pay will be out of
their own pockets (53%); this is especially true when it comes to home and
community-based care (68%). Yet Americans are woefully unprepared to pay
for their own care, should they need it.” (p. 4)
LTC Comment:
What those percentages ignore is that the vast majority of all high
cost long-term care expenses are paid for by Medicaid and Medicare. If
these catastrophic costs were not removed by public financing, people
would worry about and save, invest or insure for long-term care. They
would be much better prepared for LTC risk and cost than they are now.
I’ve explained in
Medicaid and Long-Term Care (pp. 64ff) that “some recent
research suggests how we might reconceptualize the quandary we are in so
that it is not such a huge challenge and may in fact be amenable to a
market-based solution.”
Check it out.
LTSS Report:
“The bottom line is that private LTC insurance is now out of the financial
reach of most middle-income Americans and for that reason, it is not
likely to play a meaningful role in financing LTSS costs in the coming
decades.” (p. 4)
LTC Comment:
This statement reflects a misunderstanding about why private LTCI take-up
is so low. Many more consumers than now would find a way to afford the
product if they believed they needed it. If, for example, their home
equity were at risk for potential long-term care expenses, they’d see a
real risk far more starkly. But despite decades of the media and insurance
agents telling people they’ll lose their life savings if they don’t
insure, they still don’t believe it. Ironically, they’re right. They can
ignore the risk, avoid the premiums, and, if they ever need expensive
long-term care, Medicaid provides while exempting most assets and charging
only excess income as a kind of co-insurance. Until those facts change,
the market for private LTC insurance will languish. But those facts
will change soon when the bottom falls out of the existing welfare-based
LTC financing system.
LTSS Report:
“Medicaid provides coverage of LTSS only after individuals have depleted
their own resources in paying for care.” (p. 4)
LTC Comment:
That statement is so blatantly false it is hard to believe serious people
still publish it. Medicaid requires excess income to be spent down
for care. But that rule does not apply to excess assets. Assets may
be spent down for anything of value. As long as the items purchased are
exempt, and most large assets are, Medicaid does not care for purposes of
determining eligibility. That’s why elder law attorneys keep long lists of
exempt resources and encourage their clients to spend any disqualifying
countable assets on them. Even Medicaid eligibility workers frequently
advise families to do the same. It defies belief that long-term care
experts remain so uninformed or naïve as to ignore these facts. You can
find scores of examples with citations to the sources in
How To Fix Long-Term Care Financing, pp. 34-63.
LTSS Report:
“Currently, Medicaid pays roughly 57% of LTSS costs, elders and their
families pay an additional 23%, other public sources contribute 16%, while
private insurance pays less than 5% of the nation’s bill.” (p. 4)
LTC Comment:
Of that 23% of LTSS costs attributed to elders and their families, roughly
half is Social Security income received by people already on Medicaid,
which they’re required to contribute to offset Medicaid’s cost for their
care. In other words, it’s not—or even mostly—life savings being spent
down catastrophically into impoverishment as analysts imply. I explain
this Social Security “spend-through” and why it’s so critical to
understanding LTC risk and cost in
Medicaid and Long-Term Care at pp. 7-8. The key point is
that nearly 90% of LTSS costs as cited by the LTSS report come from
Medicaid (57%), other public sources (16%), LTCI (5%), or Social Security
(1/2 of the 23% attributed to out of pocket expenditures). Why should we
be surprised that most people fail to plan, save or insure for long-term
care when they’re only personally at risk for about 10% of the cost?
What’s worse, when the Social Security trust fund runs out, as it is
likely to do much sooner than previously anticipated because of current
monetary and fiscal policies aimed at providing coronavirus relief,
Medicaid and its long-term care providers will have to adapt somehow to
the loss of some or all of this substantial “spend-through” revenue. As
Medicaid and providers are already vastly underfunded, this loss will be
devastating.
LTSS Report:
“Median retirement savings for Americans between age 55 and 64 is roughly
$107,000, which is far less than the average expected LTSS costs for those
who have to purchase care.” (p. 5).
LTC Comment:
True, but irrelevant. Medicaid already covers people with median savings
and below. The key question is whether Medicaid also covers most people
with savings above the median. It can and often does. In
Medicaid and Long-Term Care (pp. 44-46), I explain how
Medicare beneficiaries up to the 95th percentile of income and
assets qualify financially for Medicaid LTC benefits. As long as this
remains true, don’t expect most people to worry about long-term care until
it’s too late to save or insure and Medicaid, despite its flaws, becomes
preferable to spending privately.
LTSS Report:
“All of the data suggests that our current approach – based on Medicaid,
savings, and private insurance – is not meeting the needs of families,
providers, nor public payers. Currently, there are two primary strategies
designed to move the system toward greater insurance coverage: (1) a
federal public insurance approach which is designed to add social
insurance coverage for LTSS to existing health insurance programs offered
at the federal level, and; (2) state-based social insurance programs,
which represent the most recent efforts at reform and for which there is
growing interest across multiple states. These state-based efforts are the
primary subject of this report.” (p. 5)
LTC Comment:
This is the switcheroo. Having described the existing LTC system’s many
shortcomings, the LTSS Report jumps right into proposing “strategies”
based on social insurance, i.e. more government money, regulation
and compulsion. Neither this report nor others of its ilk give the
slightest attention to why and how America’s long-term care system became
so fouled up in the first place. How in the world can we conclude that new
federal or state-based social insurance programs are the right strategies
to pursue without explaining what went wrong with the existing government
dominated system and why? That explanation is what I provided in
Medicaid and Long-Term Care (pp. 10-16). I concluded
that excessive government funding and regulation is exactly what ruined
the long-term care system over the past eight decades. Adding more of what
caused long-term care’s problems in the first place is hardly likely to
fix them going forward.
LTSS Report:
“In light of the fiscal strain brought on by the COVID-19 pandemic, as
well as uncertainty regarding the upcoming federal election results, it is
highly unlikely that these [federal LTC reform] bills will move forward in
the immediate future.” (p. 7)
LTC Comment:
This is a neat brush-off of omnipresent but simpleminded proposals to add
long-term care to Medicare. But the same facts bear even more heavily
against state-level reform plans. States can’t print and borrow unlimited
funds like the federal government can. We’ve barely begun to see the
devastation unconstrained federal monetary and fiscal profligacy will
cause. Will the federal government pay all the states’ bills in the same
way as it has taken the place of private payrolls nationwide? How long
before the trillions of newly printed dollars, with no new goods and
services for them to purchase, lose their value? “Too much money chasing
too few goods?” Where have I heard that expression before? Oh yeah, Econ
101.
LTSS Report:
“We describe recent LTSS financing reforms in six states, identify
motivating factors that are driving policy change, describe how policy
design decisions are being made, and document the key players involved in
these reform initiatives. ... The fact that a growing number of states are
seeing a broad and disparate array of LTSS stakeholders come together to
work in concert on this issue represents a real change in the policy
landscape; in essence, it highlights an expansion in the potential policy
solution-set for this issue.” (p. 7)
LTC Comment:
“Growing number of states?” These are the same six referenced in
a program titled “State Initiatives for LTC Financing Reform”
at the 19th Annual ILTCI Conference in Chicago on March 25,
2019 minus one planned then for Illinois. We’re not exactly seeing a wave
of new enthusiasm for higher payroll taxes to fund more government
long-term care.
LTSS Report:
“We conducted comparative qualitative case studies across six states in
various stages of developing or executing on reform initiatives including
Washington State, which recently passed and is currently implementing a
new social insurance program for LTSS; Hawaii, which has programs designed
to assist family caregivers; and Maine, which put a specific LTSS
financing initiative on the ballot in 2018 that failed to pass. The other
three study states – Minnesota, California and Michigan – are at various
stages of building stakeholder coalitions to work with policymakers to
develop new programs, undertaking studies of the issue to inform policy
development, or are ready to move to a full-blown legislative agenda.” (p.
8)
LTC Comment:
Now we’re getting into the meat of the report. Of the six states reviewed,
only one, Washington, actually has “a new social insurance program for
LTSS” underway. The rest have either tried and failed, done something very
different, or are perennially studying the matter.
LTSS Report:
“In total, we completed interviews with 42 stakeholders and state
officials across these states, many of whom were referred by state
leaders. Key informants included state officials, leaders working in aging
services, consumer advocates working on a broad range of health,
disability, and LTSS issues, union leaders, and an assortment of
individuals from LTSS provider organizations.” (p. 8)
LTC Comment:
What every one of these “stakeholders” has at stake is getting more money
from the state and federal governments to finance their special interests.
There’s a name for this process: “crony socialism.” When you decide before
you begin a study that LTC only has two ways to go, federal or state
social insurance, and then interview only people who stand to benefit from
either of those options, you’ve squandered intellectual and financial
resources.
LTSS Report:
“In all the study states, the median monthly costs of home care and
nursing home care exceed the national average, and in all but two, the
median monthly costs for care in an assisted living facility are also in
excess of the national average. This indicates a growing payment burden
faced largely by families paying out-of-pocket or, on behalf of those who
are poor or become poor paying for care, on the state’s Medicaid program.”
(p. 11)
LTC Comment:
No, what those constantly rising home care and nursing home costs “in
excess of the national average” actually show is that these study states
have failed miserably to control expenditures by means of the government
regulation and interventions they’ve already employed. For example,
rebalancing from nursing home care to home care was supposed to save
money, but it didn’t. It turned out home care only delayed institutional
care and the two combined cost more. Pouring more and more Medicaid money
into experimental programs and continuing to allow easy access to Medicaid
benefits with generous financial eligibility rules impeded the private
markets for home care, home equity conversion, and private long-term care
insurance leaving consumers dependent on poor public programs. Social
insurance isn’t the solution for the long-term care problem; it is
the problem. For full development of this argument, see any or all of the
state-level studies
here including these three reports covering states addressed in the
current study:
What We Don't Know About Medicaid and Long-Term Care is Hurting
Washington State (2004);
Medi-Cal LTC: Safety Net or Hammock? (2011);
The Maine Thing About Long-Term Care Is That Federal Rules Preclude a
High-Quality, Cost-Effective Safety Net (2013); and
Maximizing NonTax Revenue from MaineCare Estate Recoveries (2013).
LTSS Report:
“We compared the amount of taxes paid per capita by the study states to
explore two opposing concepts. The first is that a high tax rate per
capita could reflect a state’s willingness to invest in social
infrastructure, inferring a greater probability that they would be willing
to continue to do so for LTSS finance reform. … On the other hand, states
with higher than average taxes per capita may be reluctant to put in place
new programs requiring additional tax increases, feeling that citizens are
already paying enough in taxes. While there is a great deal of variation
in the ranking of taxes paid per capita among the case study states, five
of the six states are within the top half of the country in terms of
overall ‘tax burden,’ and four of them are in the top 11.” (p. 11)
LTC Comment:
A more credible interpretation is that lukewarmness toward expensive new
social insurance schemes documented in this study simply means overtaxed
citizens are increasingly reluctant to take on an even greater tax burden.
LTSS Report:
“In Appendix 2, we include state timelines showing key milestones in the
move to adopt these financing initiatives. They clearly illustrate that
the journey of reform is best described as a ‘long and winding road’
filled with both off-ramps and on-ramps.” (p. 12)
LTC Comment:
An objective interpretation of these financing initiatives’ sluggish
progress would use different metaphors, such as wild goose chase,
cul-de-sac and dead end.
LTSS Report:
“The profiles begin with a brief description of the type of initiative,
its current status and the nature of the coalition working on it. Also
summarized are the primary motivators driving the LTSS reform efforts
identified by respondents. These motivators include easing the burden on
family caregivers, concern about the growth in Medicaid budgets, financial
help for the middle class, improving financial access to LTSS services,
improving support for the LTSS workforce, and compensating for the failure
of the private market.” (p. 12)
LTC Comment:
All those “motivators” are fine goals. But don’t we need to understand
first why and how our existing LTC system, dominated by government funding
and regulation, came to have these problems? Don’t we risk making the
problems worse by adding more of the same? Forging ahead to propose more
government interference in the long-term care market without first
explaining how (1) the LTC burden became so great on family caregivers,
(2) Medicaid budgets exploded, (3) the middle class are financially
overburdened, (4) the workforce struggles and (5) private insurance
failed, is intellectually negligent.
LTSS Report:
“The driving force in California is the need to address what stakeholders
cited as ‘a rapidly rising and unsustainable’ Medicaid budget.
Additionally, there is concern with providing financial protection for the
state’s broad middle class. As one stakeholder stated the problem, ‘I
would say it’s primarily related to the fact that people who are above the
Medi-Cal eligibility level…I would say, the whole middle-income…of our
state, can’t afford the cost of long-term care. They’re having to
impoverish themselves…And Medi-Cal is not an ideal system…it has its own
challenges.’ Working with an outside actuarial firm, the coalition is
presently exploring a wide variety of program design options and the
pricing implications of each.” (p. 12)
LTC Comment:
This assessment of the long-term care problem in California would be
laughable if it weren’t so sadly mistaken. Middle class people in
California do not have to impoverish themselves to get long-term care. The
state has the most generous Medicaid financial eligibility standards of
any in the country and the biggest elder law bar artificially
impoverishing more affluent people. California Medicaid has not even
implemented some of the mandatory federal standards from OBRA ’93 and DRA
’05 designed to target Medicaid to the needy. Long-term care is a mess in
California because the state trapped its population on Medicaid by making
public welfare the path of least resistance for citizens who failed to
plan, save, invest, or insure for long-term care. For a full development
of this analysis, see
Medi-Cal LTC: Safety Net or Hammock? (2011).
LTSS Report:
“Hawaii does not currently have an LTSS social insurance program. However,
of all the case study states, they have the longest history of attempting
to pass a social insurance program for LTSS, as we describe below. …
Unlike other states reviewed here, current activity in Hawaii is more
narrowly focused on improving the caregiver support program rather than on
trying to develop a new social insurance program for LTSS. … In 2012, the
legislatively appointed State LTC Commission recommended establishing a
‘limited, mandatory public LTSS insurance program.’ It was to be funded by
a 0.5% general excise tax on businesses and would provide 365 days of
front-end insurance coverage paying up to $70 per day in benefits. The
measure failed to pass the legislature …. Social insurance for LTSS has
not been taken up since that time. Even so, Hawaii maintained its interest
in addressing resident LTSS needs but no longer through a social insurance
mechanism.” (p. 14)
LTC Comment:
Well, then, it sounds like Hawaii thoroughly explored and decisively
rejected the social insurance approach to long-term care. So why is Hawaii
featured in a study that limits “primary strategies” on page 5 to two:
either federal or state-based social insurance?
LTSS Report:
“Maine’s attempt at LTSS financing reform was based on a ballot initiative
– rather than the legislative approach in the other five states studied –
to establish a social insurance program focusing exclusively on
comprehensive in-home care. The ballot measure failed when put to a vote
in November 2018.” (p. 15)
LTC Comment:
What part of the public’s clear rejection of these tax-based social
insurance programs do these researchers not get? If you want to know
what’s really wrong with Maine’s long-term care system and what to do
about it, read this:
The Maine Thing About Long-Term Care Is That Federal Rules Preclude a
High-Quality, Cost-Effective Safety Net (2013).
LTSS Report:
“Michigan, like California, is in the earlier stages of building a
coalition and exploring approaches for a social insurance LTSS finance
reform solution. … The Michigan stakeholders are working in coalition, and
have hired an outside actuarial firm to model the pricing impacts of a
variety of program options. With the support of a state representative,
Michigan created the Bipartisan Care Caucus in 2017 to advocate for LTSS
care and finance reforms. … Legislation was introduced in the 99th
Legislature (2017-2018) to require a feasibility study on a variety of
LTSS finance and workforce reform proposals, including an actuarial study
of a social insurance model. … Stakeholder listening sessions, the
actuarial analysis, and a workforce analysis are in process. … The study
is due to be completed before December 1, 2020 and delivered to the
legislature within 60 days of the study completion date.” (p. 17)
LTC Comment:
More bureaucratic and legislative wheel spinning with no clue why the
problems they are trying to fix exist in the first place.
LTSS Report:
Minnesota’s “reform approach is unique in focusing on options to enhance
affordable private market solutions for middle income families. … For many
years, Minnesota has focused on raising consumer awareness of the need to
plan for LTSS needs and building better private LTSS financing vehicles to
meet the needs of the middle-income market. … The first product is called
LifeStage, a term life insurance policy that converts into long-term care
insurance coverage when someone reaches the ‘policy conversion age.’ … The
second product seeks to add expanded coverage for a package of home and
community services to Medicare supplemental health policies sold in
Minnesota.” (p. 18)
LTC Comment:
Finally, a state that is trying to make personal responsibility and
private insurance work. What Minnesota needs to understand is that what
has kept them from fully succeeding with that approach are myriad federal
Medicaid laws and regulations that prevent them from targeting Medicaid to
the needy so that middle class and affluent people have a stronger reason
to plan for long-term care before it’s too late for anything but Medicaid
to save their wealth. Instead of celebrating Minnesota’s more thoughtful
approach, the LTSS Report tells us that …
LTSS Report:
“the Governor appointed a Blue Ribbon Commission to study LTSS finance
reforms for Minnesota that go beyond these private sector product options.
The commission’s work is about to commence and a number of stakeholders
are interested in exploring social insurance options including a program
to provide catastrophic coverage for individuals with long-duration LTSS
needs.” (p. 18)
LTC Comment:
So even in a state that gets it, that understands personal responsibility
and private markets are the key to solving the long-term care problems
government created, the LTSS reporters still think what Minnesota really
needs is a Blue Ribbon Commission with stakeholders pushing social
insurance programs.
LTSS Report:
“With the passage of the Washington State LTC Trust Act in 2019,
Washington became the first state in the country to establish a social
insurance program for LTSS. … Premium collection for the LTSS program is
scheduled to begin in 2022, with full program implementation in January
2025. The LTSS program will be available to all employed state residents
(including those who are self-employed); it is funded through a mandatory
employee payroll tax of 0.58%. The program reimburses expenses up to $100
per day (with annual adjustments for inflation) for care provided at home,
in the community and in care facilities, up to a lifetime dollar maximum
of $36,500. All workers who contribute to the program become eligible for
benefits after an initial vesting period and once they meet eligibility
requirements based on functional or cognitive impairments.” (p. 19)
LTC Comment:
Washington’s program is the LTSS Report’s pièce de résistance. It has
everything. Government control; mandatory participation; no premiums until
2022; a payroll tax; and a vesting period before outlays begin. CLASS
redux? No, CLASS was voluntary. You could escape CLASS; not this program.
Unfortunately for its supporters, this program will never pay a dollar in
benefits. It will hit a brick wall of fiscal reality probably before any
premiums are paid and certainly before anyone vests. Washington’s
experiment with state-based LTC social insurance was doomed from the start
but the Covid-19 pandemic, the worsening recession, and irresponsible
federal monetary and fiscal policies sealed its fate earlier than
otherwise.
LTSS Report:
“The uniform view was that ‘success’—defined by an ability to form and
sustain a coalition, articulate a common goal, and (for states further
along in the policy development process) identify and/or implement a
specific approach or program—depends on effectively developing, mobilizing
and channeling ground-level demand for policy change.” (p. 21)
LTC Comment:
Is it any wonder none of these initiatives will succeed when they’re
grounded in bureaucratic claptrap like that? What’s really going on here
is that these researchers and the stakeholders they interviewed have
closed their minds to any facts or analysis that conflict with their
social insurance ideology. That ideology embraces the Marxist precept
“from each according to his ability to each according to his need.” Its
fatal flaw is that ability is scarce and need always devours any available
ability. Human nature rebels at self-sacrifice. Sacrificing ability to
need, the philosophical foundation of social insurance, destroys ability
without satisfying need. Thus good intentions pave hell. Using government
force to compel participation in idealistic social insurance schemes is
ironically what made long-term care so bad in the first place and why it
keeps getting worse.
#############################
Updated, Monday, August 10, 2020,
9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-032: 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:
-
COVID-19 May Fix GE's Long-Term Care
Problem
-
Bullish Investors Still Targeting
Investment Returns Above 10%
-
COVID-19 long-term toll signals billions in
healthcare costs ahead
-
What We Know About Provider Consolidation
-
Baby boomers show concerning decline in
cognitive functioning
-
68 Million Americans Are Changing Their
Retirement Plans
-
COVID-19 could lead to billions in
long-term healthcare costs: experts
-
Despite PPE, healthcare workers face
greater risk of positive COVID-19 test
-
After COVID-19: A Health Care Forecast for
Older Americans
-
Approximately 95% of Green House homes have
reported zero cases COVID-19 among residents or staff: study
#############################
"LTC
E-Alerts" are a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Monday, August 3, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-031: 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:
-
Building The
Long-Term Care System Of The Future: Will The COVID-19 Nursing Home
Tragedies Lead To Real Reform?
-
Genworth Paid $10
Million in Q2 COVID-19 Life Insurance Claims
-
It’s ‘never too
late’ to prevent or delay dementia, international commission claims
-
Mourning The Many
Foibles Of Medicare And Medicaid At 55
-
COVID-19 Increased
LTCI Claimant Mortality 30%: Unum
-
Scientists get
closer to blood test for Alzheimer’s disease
-
Senior Living
Providers Net At Least $252 Million in Small PPP Loans
-
The COVID-19
Downturn Triggers Jump in Medicaid Enrollment
-
Flu and pneumonia
vaccinations linked to lower Alzheimer’s incidence
-
New Report:
Exploring LTSS Social Insurance Strategies in 6 States
-
Whole Life
Insurance … Love It or Leave It?
#############################
"LTC E-Alerts" are
a
feature offered by the Center for Long-Term Care Reform, Inc. to members
at the $150 per year level or higher. We'll track and report to you news
and analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Friday, July 31, 2020, 9:00 AM
(Pacific)
Seattle—
#############################
LTC Comment: Guest
author Claude Thau explains how to improve Medicaid LTC after the
***news.***
***
DEBT CLOCK: U.S. national debt is approaching $26.6 trillion. Average
debt per citizen is $80,506, $213,277 per taxpayer and $252,788.84 per
family. Unfunded liabilities, including $20.6 trillion for Social Security
(over 75 years, but
$53 trillion over the infinite horizon) and $31.9 trillion for
Medicare, total $153.6 trillion. The Federal Reserve has printed trillions
of new dollars unsupported by new goods and services. The pandemic removed
all stops on federal spending. Inflation hedge gold and silver prices
soar. Yet, as we’ll report next time, analysts know nothing to propose for
the long-term care problem besides more government spending, borrowing,
printing and regulation. ***
*** WHY JOIN THE
CENTER?: The
Center for Long-Term Care Reform’s mission is to “ensure quality
long-term care for all Americans.” We pursue that goal by conducting
research, publishing analysis and recommendations, supporting good public
policy, opposing bad policy, and helping everyone who works in long-term
care stay on the forefront of professional knowledge and expertise. Find
hundreds of our articles, speeches, and reports
here. Read 1,285 LTC Bullets, archived chronologically and by
topic
here. Take our virtual tour of the Center's website
here. Review our “Membership Levels and Benefits” schedule
here. Regular members ($150 per year or $12.50 per month) receive our
LTC Bullets and weekly LTC E-Alerts plus access to our
Members-Only Website (The Zone), which is full of special resources
including the comprehensive “Almanac of Long-Term Care.” Premium members
($250 per year or $21 per month) receive all of the above plus a
subscription to LTC Clippings, our daily alerts pointing you to key
articles, reports, or data that LTC professionals need to know before
they’re barraged by questions and objections from their prospects and
customers. Any individual or corporate member of the Center also has
access by phone or email to Center president Steve Moses for questions or
comments regarding all aspects of long-term care services and financing.
***
LTC BULLET: HOW TO
IMPROVE MEDICAID LTC
LTC Comment: What’s
right about Medicaid long-term care? What’s wrong? And what should we do
about it? Today, we turn over the editorial reins to one of the LTC
insurance industry’s leading lights, author, analyst, actuary, and broker
general agent Claude Thau. After Claude has his say, I’ll chime back in
with an LTC Comment anticipating and answering criticism his proposal is
likely to elicit.
The Medicaid long-term
care program is complicated. So here’s a brief set up for Claude’s piece:
Medicaid is a
means-tested public assistance program; in a word, welfare. To qualify for
Medicaid’s long-term care benefits, people must meet defined medical and
financial qualifications. The financial qualifications sound very
strict—monthly income of $723 or below and no more than $2,000 in
countable assets. But in practice, there is no limit on income as long as
a Medicaid applicant’s health and LTC expenses are high enough. Most of
seniors’ large assets, such as home equity, are exempt, and the rest are
easily converted to exempt status. As a rule of thumb, any medically needy
senior holding virtually unlimited exempt assets who has income below the
cost of a nursing home can qualify anywhere in the country for Medicaid
LTC benefits.
That is why Medicaid’s
estate recovery requirement is so important. It ensures that affluent
people pay back the cost of their care from their estates after they and
their last surviving exempt dependent relative pass on. Without estate
recovery, Medicaid rewards recipients’ heirs with a taxpayer financed
windfall, not for taking care of their parents, but for placing them on
public assistance. As Claude points out, the right way to look at generous
Medicaid long-term care eligibility tempered by estate recovery—or a
private loan program that could serve the same purpose—is to view it as an
excellent way to fund long-term care for people who need it, give them the
dignity of staying off welfare (it isn’t welfare if you pay it back), and
ensure that the public program does not disincentivize early and
responsible long-term care planning through private savings, investment
and insurance. For a full explanation of Medicaid long-term care benefits
and eligibility, see
Medicaid and Long-Term Care.
Medicaid Long-Term
Care Reform Suggestions
by
Claude Thau
Medicaid is a wonderful
program. In particular, it makes commercial long-term care services and
support (LTSS) available to indigent people.
It is critical that we
take steps to enable Medicaid to continue to provide such service. These
steps include:
- Encouraging
non-indigent people to take personal responsibility for their LTSS
costs, including, but not limited to, planning in advance
- Using
available resources most effectively to reduce the burden on Medicaid
- Encouraging
states to test ideas to help Medicaid
Aspects of the
current Medicaid LTSS system
In addition to serving
the indigent, Medicaid supports people who are not indigent. If
people had to sell their homes to pay for LTC, and then recovered, they
could not go back home. Therefore, we pay their LTSS costs, expecting to
recover our expenditure from their estate, as required by OBRA 1993 (i.e.,
we loan them money).
Not only do we pool our
money to provide such a loan, we provide that loan on an interest-free
basis! And it is a long-term loan, as it does not require
repayment until the care recipient dies. If the recipient’s spouse is
living in the house, the loan does not have to be repaid until the spouse
dies. If disabled or minor children live in the house or if adult children
who were caregivers for a couple of years live in the house, the loan
continues until they die or sell the house. If siblings were living in the
house for at least a year before the care recipient entered a nursing
home, the loan extends until their death.
Medicaid reimbursements
pay LTSS providers less than the cost of LTSS. At best, they pay marginal
costs without contributions to overhead and profit. When budgets are
tight, state legislators and governors may slash such payments even
further. Meanwhile government pushes provider costs upward with a variety
of mandates, such as quality controls, mandatory staff training, etc.
With low reimbursements,
LTSS providers cannot pay a competitive salary. So when they train staff,
the newly-trained person often secures a higher-paying job in a hospital
or elsewhere. The vacancy reduces the quality of care in the facility, and
the facility incurs cost hiring a new employee, who typically is less
experienced than the person who left.
LTSS providers may
suffer 100% annual turn-over, which means some jobs turn over more than
once; others not at all. Their best employees leave as they are most in
demand, but providers get stuck with their hiring mistakes. Surely, good
managers would fire weak performers, right? Unfortunately, it is not easy
to fire anyone when you are understaffed. As time goes on, the labor pool
quality, as regards caregivers, likely deteriorates. Even outstanding
nursing home managers have an extremely difficult time providing excellent
care in such an environment.
Private-pay
LTSS recipients in Medicaid-certified facilities get “taxed” in three ways
to support this system: 1) they pay income taxes to support Medicaid; 2)
they pay higher fees to LTSS providers (subsidizing the costs of Medicaid
recipients); 3) they can suffer from inferior care in facilities which
have many Medicaid clients.
Therefore, some savvy
private payors now avoid Medicaid-certified facilities. Instead of being
seen as a badge of honor, Medicaid “certification” may be viewed by some
people as a public announcement that cost transfer will occur and that
care might be inferior.
When our government
seeks loan repayment from the Medicaid beneficiary’s estate so that we
will be able to loan the money to another individual who needs LTSS, some
people bewail the plight of “poor Sarah” who wanted to leave her house to
her children, but whose estate had to sell the house because it was
partially encumbered by a government lien.
Of course, recouping
payments from indigent welfare recipients sounds harsh. However, Sarah and
other home-owners were not indigent. We all gave
Sarah a 20-year interest-free loan; all we are trying to do is to recover
the principal (no interest) so that we can lend the money to someone else.
Encouraging
non-indigent people to take personal responsibility
Providing such loans is
marvelous, but such loans should be provided through programs outside
Medicaid, some of which already exist but suffer from having to “compete”
against Medicaid.
When we provide such
loans through Medicaid:
a) Recipients
feel uncomfortable being "on welfare." They have scrimped and saved to
maintain their independence since their youth. Why should they be placed
on a welfare program when they are not indigent?
b) On
Medicaid, they are restricted to Medicaid-certified LTSS providers. They
cannot select the facility of their choice; nor can they have a private
room; nor can they select an assisted living facility, commercial home
care or reward relatives or friends for providing care. Eventually,
they’ll be paying for the services with their money. Why should their use
of their money be restricted?
c) Nursing
homes, receive inadequate government reimbursement, so they cannot afford
to pay competitive salaries. Shouldn’t providers receive full cost for
clients who are not indigent?
d) The
government loses revenue and incurs greater expenses.
We can improve this
situation by not putting people on Medicaid if their assets could fund
their LTSS. Instead, such loans could be financed privately. This simple
change would have dramatic impact:
1. Such
care recipients would no longer be upset that they are "on welfare."
2. They
would have flexibility to purchase the kind of care they want, from
whomever they want (instead of being assigned shared rooms in nursing
homes perhaps not located conveniently for family visits).
3. Many
more care recipients would remain “private payors” rather than being on
Medicaid. Providers would benefit from the resultant higher fees.
4. State
and federal governments will benefit from lower expenses and more revenue,
that is both above-the-line and below-the-line benefits!
5. People’s
buying decisions would encourage consumer-driven efficiency in the
marketplace. Consumer choice and increased profitability (due to fewer
low-margin Medicaid clients) would encourage more private investment in
LTSS, creating more jobs and better services.
6. Improved
care for LTSS recipients would ease burdens on family members, enabling
them to maintain employment and productivity more effectively.
7. The
additional provider revenue would lead to reduced cost transfer (less need
for private-pay clients to make up for the low revenue generated by
Medicaid LTSS recipients) and improved care.
8.
As everyone expects to have to repay a
loan, we avoid the problems of "repaying Medicaid" and "government liens."
Making such a change to
Medicaid would reduce state government expenditures in several ways:
a) There
will be many fewer people on Medicaid, so Medicaid payments for LTSS will
decrease substantially (benefitting the federal government as well as the
state government).
b) Additional
savings accrue from not having to determine whether such people are
“Medicaid eligible.”
c) The
cost of processing their Medicaid payments disappears.
d) The
entire administrative effort for recoveries can be dropped.
In addition to the
substantial savings in expenses mentioned above, there is an increase in
revenue!
- The
additional income of LTSS providers will be taxable, directly if they
retain the money or through their staff if their staff’s salaries are
increased.
- More people
will opt to purchase long-term care insurance (“LTCi”). To the degree
that more people buy LTCi, insurers will pay state premium taxes and
federal income taxes.
- Insurance
brokers will pay state and federal income taxes on their commissions.
- Residents
who use insurance money (rather than personal income or assets) to pay
for LTSS will retain greater invested assets which will generate income
taxes.
- More people
will opt for reverse mortgages. Commercial lenders and reverse mortgage
brokers who participate in the resultant increase in reverse mortgages
will also pay income taxes.
All of the above, except
the investment income, involve an additional circulation of money through
our nation’s economy, producing additional government income with no
offset. Such revenue is significant.
The State also benefits
because there will be more investment in LTSS and more consumer control
over selection of their LTSS provider. Because of better quality LTSS,
some family members are likely to be able to continue to be gainfully
employed, thereby generating additional taxable income. In other cases,
there will be more incentive for family care-giving.
The National Council on
Aging reported that 48% of households headed by someone age 62 or older
could get a reverse mortgage, for an average of $72,128/year.[1]
That would go a long way toward reducing our Medicaid LTSS budget. The
Center for Long-Term Care Reform estimates that $30 billion could be saved
annually.[2]
Thus, my #1 suggestion
for Medicaid Reform is to discontinue giving loans through Medicaid. Shift
such loans to programs established for the purpose of providing loans.
Of course, we could also
encourage personal responsibility by making it harder to reposition assets
in order to qualify for Medicaid LTSS and by promoting LTCi, reverse
mortgages and personal savings. One attractive idea is to permit tax-free
and penalty-free withdrawals from retirement savings accounts to purchase
LTCi. Another would be to allow reverse mortgages for ages under 62,
perhaps with restrictions (such as spousal approval).
Using available
resources most effectively to reduce the burden on Medicaid
Currently, life
insurance policies with cash value greater than $1500 must be surrendered
for their cash value, which must then be spent down, prior to obtaining
Medicaid LTSS.
However, those policies
are generally worth significantly more than their cash value because the
life expectancy of the insured person is relatively short. The greater
value can be accessed by creating an irrevocable LTSS account or by
selling the policy on the secondary market.
For example, according
to “The
Treatment of Life Insurance as an Unqualified Asset for Medicaid
Eligibility”: “By converting an existing life insurance policy to a
long term care Assurance Benefit plan, the owner is spending down the
asset towards their cost of care in a Medicaid compliant manner while
still preserving a portion of the death benefit. If the insured passes
away while spending down via their Assurance Benefit enrollment, any
remaining death benefit would pay out to the designated beneficiary
without being subject to Medicaid recovery.”
We should attempt to
leverage the true value of such insurance policies. In that vein, the
National Conference of Insurance Legislators (NCOIL) supports requiring
life insurers to inform policy owners about options to consider instead of
abandoning an in-force policy. Regardless of whether someone supports such
legislation or not, some type of education to help people stay independent
and to save Medicaid money is desirable.
This option also allows
the owner to preserve a portion of the death benefit throughout the
spend-down period, protecting it from Medicaid Recovery legal action
against the estate.
Another way to use
existing resources more efficiently would be to enact measures that would
reduce the cost of liability insurance for LTSS providers. Tort reform
could help boost our economy in several respects, well beyond simply the
cost of LTSS.
A third way to use
available resources more efficiently might be to facilitate use of
under-utilized housing for LTSS. For example, many widows took care of
their husbands, thereby developing LTSS expertise and now live in an
otherwise-empty house with time on their hands and perhaps low income. If
neighbors could access these people’s caregiving expertise, we might
improve care while reducing expenses.
Encourage states to
test ideas to help Medicaid
It may also be a good
idea to allow states more freedom to obtain Medicaid waivers to try
programs to encourage personal responsibility, reduce costs and leverage
resources more effectively. For example, it would be great to find that a
package of reform measures stabilizes the system sufficiently to allow
Medicaid to pay for more home health care.
Summary
We need to continue to
provide LTSS to the indigent and should attempt to improve the quality of
that care. Medicaid reform is a topic that deserves a lot of attention.
This paper supports the following changes:
- Continue to
provide loans to people who need LTSS but lack liquid assets, but do so
through existing (or new) private lending programs rather than through
Medicaid.
- Allow
withdrawals from qualified retirement accounts to purchase LTCi, without
incurring taxes or penalties.
- Encourage
leveraging the value of life insurance policies rather than having them
surrendered for their “cash value.”
- Allow
reverse mortgages for ages under 62, perhaps with restrictions (such as
spousal approval).
- Encourage
more discussion of ideas to accomplish these goals, such as making it
harder to reposition assets in order to qualify for Medicaid LTSS;
support and promoting LTCi, reverse mortgages and personal savings; tort
reform; and accessing the LTSS skill of people who provided LTSS to a
family member until the family member’s death and now have time
available to provide care to others.
- Grant
greater freedom to states to experiment with programs consistent with
these goals.
These simple changes
would have dramatic impact:
a) Care
recipients with assets would no longer perceive themselves as “being on
Medicaid.”
b) Care
recipients would have greater control and flexibility with respect to the
care they receive.
c) More
care recipients would remain “private payers” rather than being on
Medicaid. Providers would benefit from the resultant higher fees.
d) Providers
will flourish, resulting in more investment and innovation in the area of
LTSS.
e) Family
caregivers may be less-burdened, hence may be more productive, stimulating
the economy.
f) Governments
will earn more revenue, while also reducing their expenditures.
Republicans should
support these ideas because they strongly favor personal responsibility
and reducing unnecessary government involvement. Democrats should support
these ideas because they focus our limited resources on helping the truly
needy.
Claude Thau is
National Brokerage Director for USA-BGA (cthau@usa-bga.com)
and President of Thau Inc. (consulting;
claude.thau@gmail.com). You can call him at 913-707-8863.
LTC Comment:
Claude’s ideas are thoughtful and thought-provoking. I share them, but in
my mind I can hear the strident objections coming from analysts and
advocates who prefer more, not less, government money and regulation in
long-term care. So here’s how I’d reply to some of those objections. For a
comprehensive response, see
Medicaid and Long-Term Care.
Objection:
Despite anecdotes about the “wealthy on welfare,” that rarely happens.
Most people on Medicaid are poor.
Response: Of
course most people on Medicaid are poor. They’re also young women,
children or able-bodied adults, not aged, blind or disabled. What matters
is that financial eligibility rules for Medicaid long-term care
applicants, who are aged, blind or disabled, are extremely generous, a
vast literature on how to qualify while preserving assets is readily
available, and an army of Medicaid planning attorneys helps even the most
affluent fit through Medicaid’s elastic loopholes. In fact, there is
plenty of evidence, as summarized in
Medicaid and Long-Term Care that people with significant wealth
actually do take advantage of these benefits in large numbers. Read it and
see.
Objection: As
Claude admits, Medicaid has a reputation as a poor program with serious
access and quality problems. Why would well-to-do people seek access to a
program like that?
Response:
Medicaid isn’t such a bad program for people with enough personal wealth
to pay privately for a while. Medicaid planning lawyers call that “key
money,” because it buys access to the best care. Medicaid planners
reassure adult children that it’s OK to take an early inheritance from
their parents’ savings in order to qualify them for Medicaid, because they
don’t have to worry about the horror stories they hear regarding Medicaid
nursing homes’ poor quality. By paying privately for a few months, these
affluent clients buy their way into the best facilities. Nursing homes
roll out the red carpet for private payers because they charge them half
again as much as Medicaid pays. Once in the nice facilities, residents
can’t be evicted just because their payment source changes. So the lawyer
flips a legal switch, converts the client to Medicaid, and the family gets
the dual benefit of avoiding the cost of care and knowing the loved one is
in a top quality nursing home. Unfortunately, poor people don’t have key
money. They lose everything they’ve saved quickly and they end up in the
100 percent Medicaid hell holes the media write about. For details on
“Medicaid estate planning,” including its techniques, availability, and
why analysts and advocates ignore or downplay it, see
Medicaid and Long-Term Care.
Objection: Home
equity is by far the biggest potential source of private financing in
Claude’s plan, but most older people receiving Medicaid long-term care
benefits don’t own homes. So the potential is very limited.
Response: The key
question is not how many people currently on Medicaid own homes. The right
question is how many older people on Medicaid owned homes 20 years ago and
what happened to that home equity? Was it transferred to heirs five years
before applying for Medicaid, making it uncountable in any amount, as all
the Medicaid planning lawyers and books urge people to do? It’s a wonder
any home equity remains with people after they need long-term care. Yet
GAO found that 31 percent of the Medicaid nursing home recipients in
its sample owned homes. See
Medicaid and Long-Term Care, p. 56 for details and the full
citation. If the GAO sample were projectable to the country as a whole,
which it is not, it would mean “887,598 Medicaid nursing home recipients
nationwide or 275,155 recipients own homes with a median equity value of
$50,000, [so] at least $13.8 billion worth of their home equity is
non-countable, a figure that is 1.7 times the annual $8.1 billion cost of
their care.” If this is true, it shows Claude’s proposal has very
substantial savings potential. Granted we cannot depend on this particular
study, but why aren’t scholars conducting research that is projectable
nationwide? For the answer to that question and for an explanation of why
analysts have ignored the larger phenomenon of Medicaid overuse by people
with significant wealth, see again
Medicaid and Long-Term Care.
Objection: Why in
the world would we want to fix Medicaid when a much better approach to
funding and providing long-term care is available? Just pass and implement
a universal public catastrophic long-term care insurance program as
proposed by several study groups.
Response:
Government funding and regulation of long-term care caused the problems
long-term care faces today.
Medicaid and Long-Term Care explains in historical
detail how that happened. Compelling Americans to buy government-designed
insurance they may or may not need or want will only further desensitize
the public to the risk and cost of long-term care. The greater probability
we face is that government entitlements like Medicaid, Medicare and Social
Security will succumb to financial dissolution rather than a new program
appearing to cover long-term care. We need more thinking outside the box
like Claude Thau’s and less regurgitating worn out policy themes by
ideologically biased researchers.
#############################
Updated,
Monday, July 27, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-030: 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:
-
Pandemic-Driven
Change: 60 Seconds with Steve Monroe
-
Temporary Enhanced
Federal Medicaid Funding Can Soften the Economic Blow of the COVID-19
Pandemic on States, but is Unlikely to Fully Offset State Revenue
Declines or Forestall Budget Shortfalls
-
New study reveals
older adults coped with pandemic best
-
Biden Makes Big
Commitment To Home-Based Medicaid Long-Term Care, But Gaps Remain
-
Older adults
excluded, underrepresented in clinical trials for COVID-19
-
Take the insurance
coverage and risk COVID-19?
-
Ten Targets for
Reducing Alzheimer's Risk
-
Now Available:
2019 Profile of Older Americans
-
Another Problem On
The Health Horizon: Medicare Is Running Out Of Money
-
More REM Sleep
Needed to Reduce Mortality Rate in Older Adults
-
Elderly who
distinctly smell roses, paint-thinner or lemons 'have half the risk of
dementia'
-
Senior living
needs ‘substantial and immediate financial relief’ from COVID-19,
leaders tell federal government
-
Home Health in the
Time of COVID-19
#############################
"LTC E-Alerts" are
a
feature offered by the Center for Long-Term Care Reform, Inc. to members
at the $150 per year level or higher. We'll track and report to you news
and analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Monday, July 20, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-029: 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:
- The case for defunding nursing homes and replacing them with a
radically different model
- Joe Biden Is Slowly Acknowledging the Nation’s Need To Reform
Long-Term Care
- Millions of Seniors Live In Households with School-Age Children
- Survey: 80% of Older Adults Have Faced Ageism
- Nursing facilities in ‘hot spots’ to receive first batch of COVID-19
test equipment
- Federal Government Will Send Point-of-Care COVID-19 Testing Units,
Kits to All Nursing Homes in U.S. [Updated]
- Journal Special Edition Dedicated to COVID-19 and Older Adults:
Lessons From the Pandemic
- Regulators May Hire LTCI Block Extraction Advisor
- Woman gets job at long-term care facility to see her husband amid
pandemic restrictions
- States Allow In-Person Nursing Home Visits As Families Charge
Residents Die ‘Of Broken Hearts’
- Medicare Advantage Plans Increase, Improve Quality Over FFS Plans
- Andrew Cuomo’s Report on Controversial Nursing Home Policy for COVID
Patients Prompts More Controversy
#############################
"LTC E-Alerts" are
a
feature offered by the Center for Long-Term Care Reform, Inc. to members
at the $150 per year level or higher. We'll track and report to you news
and analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Friday, July 17, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC
BULLET: THE CRISIS ON TOP OF THE CRISES
LTC
Comment: What could be worse than the current cataclysm of nursing-home
coronavirus deaths? More of the same if we keep doing what caused them.
Explanation after the ***news.***
***
THE DEBT CLOCK
shows the U.S. national debt exceeds $26.5 trillion, up more than another
quarter trillion dollars since our
last LTC Bullet
nine
days ago. Total unfunded liabilities, including $20.6 trillion for Social
Security and $31.9 trillion for Medicare, are $153.3 trillion. Every
citizen owes $80,387. The federal budget deficit was
$2.7 trillion
in the first nine months of fiscal year 2020. Where is the federal
government getting all this lucre to spend? It’s printing the money,
creating it out of thin air, and borrowing it by purchasing its own and
private companies’ bonds, even their junk bonds. At some point, maybe not
far off, printing more money won’t work because more money will no longer
buy the same quantity of goods and services which are not being produced
because of the lockdown-induced recession. Borrowing more won’t work
because our own people, foreigners and other countries will lose
confidence that America will ever be able to repay the loans, which it
can’t. They’ll stop lending to us. Higher taxes won’t help because they
would only stymie the real economy even further. In the end, inflation—the
most grievous tax of all—will wipe out most government and private debt,
effectively confiscating most private wealth held in dollars. Borrowers
benefit; savers suffer. That is the danger of the course we are on. ***
***
THE TRAGIC IRONY of the Covid-19 crisis is that government responded by
locking down the businesses and people least vulnerable to the virus while
exposing the most vulnerable of all, residents in nursing homes, to sick
and recovering patients from overburdened hospitals. For months, nursing
homes begged for more personal protective equipment, testing, and funds to
little avail. But as we pointed out in this LTC Clipping, that’s
finally beginning to change.
7/16/2020,
“Nursing
facilities in ‘hot spots’ to receive first batch of COVID-19 test
equipment,”
by Alicia Lasek, McKnight’s LTC News
Quote:
“Nursing homes with three or more COVID-19 cases will be the first to
receive on-site diagnostic test equipment from federal health agencies —
starting in regions where infections are spiking. The news was announced
Wednesday by the Centers for Medicare & Medicaid Services, a day after
Administrator Seema Verma revealed a new federal plan to deploy rapid
point-of-care COVID-19 testing capabilities to eldercare facilities
nationwide.”
LTC
Comment:
Harvard professor David Grabowski
found that
nursing home coronavirus deaths were highest in geographic areas with the
highest Covid-19 incidence. Other factors, such as Medicaid census or
for-profit status, didn’t seem to matter much. Businesses have to
prioritize. Governments rarely do. So this new focus on protecting nursing
home residents in high virus areas is a promising development. See
tomorrow’s LTC Bullet titled “The Crisis on Top of the Crises” for
more on this aspect. [Read it today below.]
To
receive LTC Clippings in real time,
join the Center
at the “Premium”
level. Steve Moses will become your research assistant. He reads
everything related to long-term care services and financing; he culls out
what’s most important for you to know; then he emails you with the title,
author, a representative quote, a link to the source, and his brief
analysis. In this way, you can stay abreast of all the news, reports,
articles, data and stories about LTC that you need to know without having
to do so much research yourself. Spend your time doing what you do best;
let Steve do the time-consuming, painstaking research. Contact him at
425-891-3640 or
smoses@centerltc.com
or simply join
here.
***
LTC
BULLET: THE CRISIS ON TOP OF THE CRISES
David Grabowski is everywhere these days describing and explaining the
Covid-19 disaster in nursing homes. The Harvard professor aptly documents
how an epidemiological crisis on top of a long-term care financing crisis
has devastated America’s nursing homes and the people who depend on them.
But there is another crisis on top of those two, which poses greater
danger than either. That is the risk and likelihood that public policy
will make these problems worse instead of better.
Dr. Grabowski observed in a recent
presentation
that “deaths in long-term care facilities account for a majority of
COVID-19 deaths in most states.” The US average is 45%, close to the OECD
average of 42%. I note that
Canada is even worse
with 80% of coronavirus deaths in nursing homes. To stem this viral tide,
U.S. nursing homes locked down, allowed no visitors, closed communal
dining, and took staff temperatures at the start of each shift. Yet 66,000
staff with very limited personal protective equipment, testing, hazard
pay, benefits, and sick leave, contracted the virus. Hundreds have died
doing these very dangerous jobs.
What caused this awful situation? Grabowski says it’s a combination of
things: low Medicaid reimbursement; poor staffing and infection control;
clinicians “missing in action”; ineffective regulations; lack of quality
transparency; and fragmented ownership structures. I’d summarize in one
word—government—because government is responsible for all of these
shortcomings including the “fragmented ownership structures” that private
sector firms set up to take advantage of the perverse financial and
operational incentives that public policies require.
Now consider Dr. Grabowski’s counter-intuitive research findings. Covid-19
nursing home deaths do not correlate with a higher or lower rating
on CMS’s nursing home compare five-star quality rating scheme, nor do they
correlate with having a prior infection violation, nor with whether a
facility is for-profit or part of a chain. Even a high Medicaid census,
despite that program’s notoriously low reimbursement and poor facility
staffing levels, doesn’t signal greater nursing home virus risk. Grabowski
summarizes that what matters is where you are—in geographic areas with
higher Covid incidence—not who you are—such as a Medicaid recipient in a
low quality nursing home. Bottom line, residing in a nursing home during
the coronavirus contagion is deadly. It’s just more deadly if you live in
an area with a higher incidence of Covid-19 in the local population.
So, we can extract two key points from Dr. Grabowski’s analysis. First,
government funding and regulation of long-term care are responsible for
the problems, such as poor funding, staffing, infection control, and
quality, which killed so many people in nursing homes. Second, residing in
a nursing home is dangerous during the contagion and much more so if your
nursing home happens to be in a geographic area heavily stricken by
Covid-19. How can we address both of those problems effectively?
The obvious answer is to divert people away from nursing homes as much as
possible in the future. But that just begs the larger question: Why are so
many people living in nursing homes in the first place, sharing
underfunded “semi-private” rooms with potentially contagious roommates?
The answer to that question is that Medicaid started making nursing home
care virtually free for the poor, middle class and affluent in 1965 and
has continued to do so ever since. Efforts to rebalance Medicaid from
institutional to home care have partially succeeded but totally failed to
save money as they were intended and expected to do. The only permanent
answer is to end the perverse incentive of easy access to Medicaid
long-term care after it is too late for people to save, invest or insure
for the risk. To do that, save Medicaid money, improve care, and support
more people in their own homes requires only clear thinking, objective
analysis, and better public policy. I’ve provided those in
Medicaid and Long-Term Care.
Thus the “crisis on top of the crises” is that we’ll keep doing what we’ve
always done, which has caused the human tragedy in nursing homes that
we’re now experiencing, and we’ll get ever more of the same. Instead, stop
trapping people in Medicaid nursing homes by luring them away from early
and responsible long-term care planning. Eliminate or radically reduce
Medicaid’s gargantuan home equity exemption, upwards of $900,000 in some
states but no less than $595,000 in any state, so that middle class and
affluent people will use the wealth in their homes to fund care leaving
more in Medicaid for the actually needy. Enforce estate recoveries, which
have been mandatory since 1993, but largely unenforced. Use some of the
savings to incentivize the purchase of private long-term care insurance.
Legislate, implement and enforce these and the other recommendations in
Medicaid and Long-Term Care.
The only good news in this whole tragic mess is that it has been
self-inflicted by terribly counterproductive public policy and could be
easily reversed with the better, more efficacious policies we’ve
identified and recommended in that monograph.
#############################
Updated,
Monday, July 13, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-028: 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:
-
BREAKING NEWS: CMS
directing ‘immediate’ help to nursing homes in COVID-19 ‘hotspot’ areas
-
Insurance getting
much more expensive, when it’s available
-
Medi(long-term)care for All: A Look into the Future of Long-Term Care
Insurance—Part Two
-
Nevada lawmakers
consider slashing millions in Medicaid services
-
This Threat Scares
Investors More Than the IRS: Lincoln Financial
-
Why Nursing Homes
Are Pandemic Hotbeds (Guest: Stephen Moses)
-
Milliman Actuary:
COVID-19 Adding Fuel to Medicare Advantage’s Home Care Fire
-
Covid-19: Don’t
Mess With My Retirement
-
Skilled Nursing
Occupancy Fell to 78.9% in April as Medicaid Rates Jumped 5%
-
State Regulators
May Form LTCI 'Rate Hike v. Reduced Benefits' Panel
-
COVID-19 has not
changed consumer sentiment toward seniors housing: survey
-
Employee spread —
not controversial admission policy — was driver behind COVID-19 deaths,
report finds
#############################
"LTC E-Alerts" are
a
feature offered by the Center for Long-Term Care Reform, Inc. to members
at the $150 per year level or higher. We'll track and report to you news
and analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated, Monday, July 6, 2020, 8:51
PM (Pacific)
Seattle—
#############################
LTC BULLET:
WHAT TOPICS AND SPEAKERS DO YOU WANT FOR THE NEXT ILTCI?
LTC Comment: Wouldn’t a
debate on the merits and potential of private vs. public long-term care
financing spice up the next ILTCI conference? Offer your own suggestions
to the event’s organizers after the ***news.***
***
THE DEBT CLOCK shows the U.S. national debt will soon exceed $26.5
trillion, up nearly another quarter trillion since our
last Bullet ten days ago. Total unfunded liabilities,
including $20.6 trillion for Social Security and $31.8 trillion for
Medicare, are $153 trillion. Every citizen owes $80,285. At the rate we’re
going, this
2024 version of the Debt Clock estimates the debt four years from now
will be $45.3 trillion with unfunded liabilities of $199.4 trillion on a
debt per citizen of $131,857. So eat, drink and be merry until the bill
comes due for this paroxysm of funny money printing and spending by the
Federal Reserve and Treasury. ***
LTC BULLET: WHAT TOPICS
AND SPEAKERS DO YOU WANT FOR THE NEXT ILTCI?
LTC Comment: The
coronavirus curveball ruined all our plans to learn and network at the
2020 Intercompany Long-Term Care Insurance conference. After fighting to
save the program, the ILTCI Executive Committee finally had to surrender
to hard reality and cancel. But the ILTCI conference is back on for
Monday, March 8, 2021 through Thursday, March 11, 2021 at the same
Sheraton Downtown venue in Denver, CO where we would have met this year.
The 2021 convocation
will be ILTCI’s 20th, so it is special. To mark the occasion,
organizers have appealed to all potential attendees for their suggestions
of “topics or content” to present and of speakers to address them. I don’t
recall such a general invitation having been made before. It’s a great
idea. I hope everyone will rack their brains and pour their recommended
ideas in to the organizers. Here’s their appeal:
“Planning for the ILTCI
Conference is underway and we can't wait to see you in Denver, Colorado
from March 8-11, 2021. But first...
“We need your help with
planning!
“What topics or content
do you want to hear about? Have you thought of a session topic or speakers
you'd want to present at the next ILTCI? This is your opportunity to help
shape the 2021 conference! If you want to offer your assistance in
producing or speaking at a session, this is also the time to raise your
hand and get involved. Session ideas are being generated now and we want
to make this a collaborative process with your feedback.
“Please complete this
quick 4 question survey and enter one session idea or speaker suggestion
at a time through this simple tool. There will be a link to enter
additional ideas at the end of the survey for anyone with multiple
ideas/speakers to submit. We know you have some good ideas for session
content and topics - send them in and let’s collaborate for the 2021 ILTCI.”
At my request organizers
agreed to extend the deadline for submitting your content and speaker
recommendations from the original deadline of Friday, July 10 until
Tuesday, July 14. So, don’t wait—click “Submit your Ideas” now and offer
your suggestions.
To spur your creative
thinking about possible conference ideas, review the “History
of Long-Term Care Conferences” that we published last year. You’ll
find summaries of each ILTCI conference including the first, held January
21-23, 2001 in Miami. You’ll also discover some old photos of some LTCI
leading lights who are still active in the field today, some with less
hair and more heft, but still loaded with institutional memory and savvy.
No one concerned about long-term care financing should miss the
opportunity to confer with the long-term care insurance industry’s leaders
at the 2021 ILTCI conference in Denver.
Now, while you cogitate,
decide and submit your ideas for topics and speakers at the forthcoming
conference, please consider my hopeful proposal.
I love debates. There is
no better way to get a lot of ideas on the table in a hurry with
contrasting points of view compellingly revealed. Nothing culls out bad
ideas and elevates good ones like two contrasting experts challenging each
other’s positions. So let’s debate this question at the next ILTCI
conference: “Can and Should Private Financing Become a Bigger Funder of
Long-Term Care than Government?” I’ll take the positive and I invite any
of the leading advocates of expanding publicly financed long-term care
coverage to take the negative. I’d especially like to debate Marc Cohen,
Judy Feder, or Howard Gleckman, but there are many others who could bring
the case for more government money and regulation thoughtfully.
As format for the debate
I recommend the structure used by the distinguished
Soho Forum of New York City. For their programs, the audience votes
yes or no on the question under consideration both before and after the
debate. The discussant who changes the most minds wins. The debate begins
with each discussant delivering a 15-minute opening statement. Then each
has five minutes for rebuttal followed by questions from the moderator,
from each other and from the audience. Five minute closing statements end
the debate. After the votes are counted, the winner is announced. (By the
way, since the pandemic has shut down in-person events, the Soho Forum has
gone virtual. You can follow their debates in Zoom
here.)
The ILTCI Conference
has a long history of hosting debates. There were probably others, but
these are the ones I recall distinctly and fondly:
At the fourth annual
Society of Actuaries Long-Term Care Insurance Conference (the meeting’s
name before ILTCI) in Houston, Texas on February 10, 2004, I squared off
with
Dr. Judith Feder, then Professor and Dean of Public Policy at
Georgetown University.
Winthrop Cashdollar, then the Executive Director for DI & LTCI at
AAHP-HIAA, moderated. My assignment was to make the case for more
private financing of long-term care. Dr. Feder argued for heavier public
funding. My remarks at the time are available
here. Judy Feder is a distinguished scholar and more active than ever
today researching and promoting her preferred solutions.
In 2011, the CLASS Act
was the hot topic at the eleventh annual Intercompany Long Term Care
Insurance Conference in Atlanta.
Peter Goldstein, then of Univita, now
LTCG, moderated a program titled “Panacea or Problem:
Point/Counterpoint on CLASS,” in which
John Greene of
NAHU and I debated Ted Kennedy-protégé Connie Harner and Rhonda
Richards of AARP.
Eileen Tell enforced time limits on the debaters. I’m not saying John
and I won, but CLASS was later repealed. Check out my three-minute
opening statement
here where I proposed a CLASS-like program called “Steve’s Insurance,
LTC for You” or SILY for short. It involved no policies, no underwriting,
no set premium levels, benefits, or triggers; you’d pay premiums for five
years before you’d qualify for benefits; I’d spend all the proceeds as
soon as they come in, but our trust fund would have lots of IOUs, uh
bonds. In other words SILY was just like CLASS.
But the
pièce de résistance was
the “Clash of Titans” at the 2012 ILTCI conference in Las Vegas. Here’s
how I described that program at the time in “LTC
Bullet: LTC Embed Report from the ILTCI Conference in Las Vegas”:
“Now to recount the most
fun that was had at the conference. In the afternoon of DAY ONE, a great
debate ensued titled “Clash of the Titans: Moses vs Gordon on Medicaid and
Other Dark Matter.” Ably produced and moderated by Federal Long-Term Care
Insurance Program [now
FedPoint] CEO
Paul Forte, the program included a dramatic “fight poster” inviting
the audience to attend, slides featuring great debates of the past,
e.g. Lincoln vs. Douglas, etc., and a dual-podium presidential-style
debate format. Moses and lawyer/author/entrepreneur
Harley Gordon each began with 3-minute opening statements. (Find a
transcript of the “fable” I began with at the end of today’s Bullet
or
here.)
After a coin flip to see
who would get the first question, Forte pummeled the combatants in turn
with six queries ranging from why the LTCI market languishes to what
they’d advise presidential candidates to say about LTC financing. Answers
were strictly enforced to no more than two minutes, with a one-minute
rebuttal, and a final 30-second “re-direct” by the original answerer.
The program moved fast
with lots of humor and more than just a little gentlemanly confrontation.
In the second phase of the debate, the participants asked each other
questions, with the same time limits applying. Neither knew what the other
would ask so the questions and responses were totally spontaneous.
Finally, the audience submitted written queries pinning down the debaters
with new and different viewpoints.
Bruised, bloodied, but
upright, Moses and Gordon shook hands at the end and affirmed they remain
friends. They look forward to continue pursuing their different paths
toward the common goal to improve long-term care for all.
Who won? Just between
you, me and the lamppost, here’s how LTCI producer and author Craig
McCormick, a former college debater himself, scored the matchup: 13 to 4,
for Moses. Now, I acknowledge that Mr. McCormick may have a bias in my
favor. So I invite any of you faithful readers out there who may have
attended the debate to weigh in with your own scoring of the event. I’d
particularly like to hear from anyone who gave the win to Harley instead
of me. Well, I want to hear from anyone except you, Harley! I’ll publish
any thoughtful comments or analysis of the debate in a future LTC
Bullet. Let us hear from you.
“The Elephant, the
Blind Men and Long-Term Care: Three-Minute Opening Statement” by
Stephen A. Moses for the Debate with Harley Gordon at The 12th Annual
Intercompany Long-Term Care Insurance Conference in Las Vegas, Nevada on
Monday, March 19, 2012
Once upon a time, some
blind men approached an elephant.
The first blind man
grasped the elephant’s tail and exclaimed: “This is a rope.”
The next blind man
patted the elephant’s flank and said: “This is the side of a barn.”
A third blind man
clutched the elephant’s trunk and stated confidently: “This is a hose.”
The moral of this
fable?
You don’t know any
complex thing until you comprehend its entirety, including all of its
facets and their interrelationships.
Long-term care is like
the elephant in this story and LTC interest groups are like the blind men.
Government is a blind
man of long-term care. It’s paid for most expensive LTC since 1965, but
can no longer afford the cost. The elephant of LTC gobbles budgets.
The public is a blind
man of LTC. Most people don’t worry about LTC despite the apparent risk
and cost. Somehow the elephant of long-term care provides.
Senior advocates blindly
demand more and better long-term care from the government. To them the
elephant of LTC is a cornucopia of free benefits.
Home care and nursing
home providers obsess over low government reimbursements. They see the
elephant as a stingy, but demanding customer.
What do long-term care
insurers see when they look at the elephant of LTC? A puzzle. Why don’t
consumers buy the product when they obviously need it?
If you want to
understand the elephant of long-term care, you’d better be able to explain
why those five blind men see the elephant so differently.
How can the government
be bankrupt; the public, asleep; senior advocates, naïve; LTC providers,
spoiled; and LTC insurers, befuddled? All at the same time.
No new policy designs,
nor tax incentives, nor education programs will sell more LTC insurance
until we resolve that paradox.
Here’s how I see it:
Government pays for most
expensive LTC which desensitizes consumers to LTC risk resulting in a lack
of demand for LTC insurance. But senior advocates and LTC providers are
hooked on government money and dubious of private LTCI.
Nothing will end this
stalemate short of weaning the elephant of long-term care away from the
trough of public financing.
That’s what’s about to
happen, either on purpose or by default, and that’s why the future of LTC
insurance is bright.
#############################
Updated,
Monday, July 6, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-027: 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:
- The Next Pandemic Will Be Caused by the National Debt. It Will
Crater the Economy
- Coalition forms to oppose potential long-term care budget cuts
- OSHA blasted for inaction on COVID-19 pleas
- Returning Home To Assisted Living
- Genworth Says Would-Be Buyer Is Having Trouble Closing on Financing
- Amid pandemic, fears that older Americans are feeling 'expendable'
- Strong job growth predicted for aides and other care positions in
senior living and other settings
- Housing wealth among older homeowners grew by $120 billion in Q1:
report
- NIC point-in-time survey shows COVID-19 cases, testing higher in
settings where residents have greater care needs
- Long Term Care Insurance — Act Now!
#############################
"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 29, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-026: LTC NEWS AND COMMENT
LTC Comment: Do you spend hours searching
the internet for useful articles, key data, and relevant reports to keep
you on the forefront of professional knowledge? Do you lose business
because you’re blindsided by clients or competitors who learn critical
information before you do? Here’s an antidote:
LTC Clippings: The Center for Long-Term
Care Reform notifies subscribers to our LTC Clippings service daily of
information you need to know. Each message contains only the critical
facts about new publications: a title, representative quote, a link to
the original, and our analysis in a sentence or two. To inquire or
subscribe, contact 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:
-
New Data Reveal
Just How Deadly Covid-19 Is for the Elderly
-
LTC Partners
Announces Rebrand to FedPoint
-
Nursing Homes
Struggle As Staff Choose Unemployment Checks Over Paychecks
-
CNA to Offer Some
LTCI Insureds Free Concierge Services
-
‘Sin Taxes’ Could
Help States in Pandemic Budget Slump (at Least a Little Bit)
-
National median
age increases 1.2 years as aging baby boomers grow older
-
Long-term care
facilities as a risk factor in death from COVID-19
-
Younger adults
most interested in solutions to pay for chronic care as they age: survey
-
A third of
Medicare enrollees with coronavirus ended up in the hospital. A quarter
of them died
-
Are Your Long-Term
Care Plans Putting You in Danger?
-
Better COVID
payments driving Medicaid-resident evictions: report
-
Senior healthcare
workers are the forgotten front line
-
The Future of
Nursing Homes in the Post-COVID-19 Era
-
Older adults
concerned about retirements, look to alternatives to pad portfolios:
surveys
#############################
"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 26, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC Comment:
The
Heartland
Institute
recorded a podcast with Steve Moses concerning “Covid and Nursing Home
Deaths.” A transcript follows after the ***news.***
***
DEBT CLOCK:
The U.S. national debt is 26 trillion, 258 billion dollars, fully one
quarter of a trillion dollars higher than it was when we published
our last
LTC Bullet
two weeks ago. In that time, total unfunded liabilities jumped nearly $5
trillion. Every citizen owes $79,588 and every taxpayer owes $211, 222.
We’re in a financial sinkhole, but the politicians just keep digging. What
will happen if we stay on this course? Stay tuned. ***
*** THE
MEDICAID TRAP remains where most people end up if they have a big
long-term care expense and they’ve failed to prepare to pay privately.
What’s changed recently is how serious the outcome of ending up on
Medicaid for long-term care really is. That’s the topic of the following
podcast and of “Nursing
Homes, Coronavirus, and Medicaid,”
my June 1st Wall Street Journal op-ed with Brian Blase.
If you’re in the business of helping people prepare for future long-term
care liability, you owe it to your prospects and clients to warn them
about this added risk of failure to prepare. To overcome their denial and
procrastination, you need facts and arguments. You’ll find them in our
LTC Bullets, LTC E-Alerts, and LTC Clippings. Join the
Center for Long-Term Care Reform and we’ll keep you up to date constantly
with the data, reports, and articles you need to wake people up and get
them to take action. Join the Center
here
or contact Steve Moses at 425-891-3640 or
smoses@centerltc.com.
It’s too late for most people to avoid the Medicaid trap, but it’s not too
late for the people you can reach with this information. ***
LTC
BULLET: COVID AND NURSING HOME DEATHS
LTC
Comment: Following is the transcript of a podcast recorded with Steve
Moses on June 23, 2020 regarding the impact of Covid-19 on nursing home
deaths. We expect to have a link to the actual recording soon. Heartland’s
Health
Care News
publication will have a related story. We’ll send you a link to that as
well in a future LTC Bullet. For now, here’s the transcript.
Date for
recording: June 23
Time:
11am ET
Title:
Why Nursing Homes Have Failed to Protect the Elderly from COVID
Hello and
welcome to the Heartland Daily Podcast. I’m your host today, AnneMarie
Schieber, managing editor of
Health
Care News.
We now are learning that the pandemic in the U.S. has been a crisis for
nursing homes. The Centers for Medicare and Medicaid Services reports of
the 122,289 people who died from COVID-19, nearly 30 thousand lived in
nursing homes…about 1 in 4.
My guest
today is not surprised. Stephen Moses is president of the
Center for
Longer-Term Care Reform
and author of the new book, “Medicaid and Long Term Care.”
Welcome.
1
.
For most
people, this is the first glimpse they have had of nursing home care in
the U.S. That it is substandard at best… Is that an accurate and fair
assessment?
Yes, I’d
say that statement is accurate and recognized by most economists and other
analysts. Medicaid reimburses nursing homes only about 80 percent of the
private-pay rate and often less than the cost of providing the care,
according to the American Health Care Association. Consequently, nursing
homes heavily dependent on Medicaid have difficulty hiring and retaining
enough quality caregivers at the very low salaries they can afford to pay.
Having inadequate caregiving staff is closely associated with lower care
quality ratings.
2.
How
many seniors live in nursing homes and how many are covered by Medicaid?
Roughly
1.3 million people reside in America’s 15,600 nursing homes. Medicaid
covers 62 percent of them for some or all of their bills. Medicaid
residents tend to be long-stayers, so their low reimbursement rates touch
a much higher proportion of nursing home patient days than their total
numbers alone would imply.
3.
How
is it that such a large percentage of seniors are covered by Medicaid long
term care?
You have
to look way back in history to answer that question. As in third world
countries, long-term care was provided largely by extended families in the
U.S. for most of our history. In the 20th century, as people
started living longer, the state and federal governments began offering
cash benefits to the indigent. Old and frail citizens used that cash to
pay for residential care as families became less able to provide full time
home care. Mom and pop nursing homes flourished. By mid-century,
government programs began providing residential care for the “medically
needy,” that is people who weren’t poor except because of their high
medical or long-term care costs. The commercial nursing home industry took
off as a result.
In 1965,
as part of the Great Society programs of Lyndon Johnson, Medicaid became
the dominant long-term care payer. That’s when the problems plaguing the
system today started. From the beginning, Medicaid paid only for nursing
home care, but that benefit included room, board, laundry and related
services. Anyone who wanted home care had to pay for it and the other
services totally out of pocket. Medicaid long-term care eligibility was
originally available to almost anyone who applied. Transferring assets to
qualify was explicitly permitted until 1980. Since then elastic income and
asset eligibility rules have allowed the middle class and affluent to
qualify for what was originally intended to be a poverty program. There is
literally no limit on income if your medical and long-term care costs are
high enough. Assets are also practically unlimited with home equity exempt
between $595,000 and $893,000. Many other resources are exempt with no
dollar limit, such as a car, term life insurance, individual retirement
accounts, one business including the capital and cash flow, personal
belongings and home furnishings including heirlooms. Generous matching
funds from the federal government encouraged state Medicaid programs to
maximize their grants almost without limit. Naturally, Medicaid
expenditures exploded.
From 1965
to the present, Medicaid has paid for the vast majority of all expensive
long-term care. Few people plan to rely on Medicaid, but most end up there
if and when they need high cost care for an extended period. The dynamic
works like this. People don’t worry or plan for long-term care because
Medicaid has always been there as the safety net for poor, rich and in
between. Once they need expensive care, the path of least resistance is to
qualify for Medicaid. That’s the only way to preserve wealth and heirs’
inheritances which makes the program’s access and quality downsides more
tolerable. Thousands of elder law attorneys across the country use
sophisticated legal techniques to qualify affluent clients while
preserving enough “key money” to buy their way into the higher quality,
lower-Medicaid-census facilities.
4.
How
much does Medicaid pay for long care and what should it reasonably cost?
According
to Genworth’s 2019 cost of care survey, the average private-pay monthly
nursing home cost for a semi-private room is $7,513, and $8,517 for a
private room. Costs in expensive urban areas can easily be half again as
much or even double. As Medicaid pays about 80 percent of the private pay
rate, it would pay about $6,010 on average for a semi-private room.
Medicaid would rarely if ever pay for a private room.
It is
important to understand that most people on Medicaid have some sources of
personal income, nearly always Social Security at least. Medicaid requires
that all income except for a tiny personal needs allowance must be used to
offset the program’s cost for their care. For example, a person with
several thousands of dollars’ worth of income from Social Security, a
private pension, an exempt business, etc. qualifies for Medicaid nursing
home benefits because their income is less that the cost of the nursing
home. But once on Medicaid, they must pay most of that income back to the
nursing home reducing Medicaid’s liability. There are even cases where the
Medicaid recipient’s income covers the entire cost of the care at the
Medicaid rate. This is very important because it shows (1) that Medicaid
recipients get a substantial discount on the cost of their care, (2)
nursing homes end up with more low-pay Medicaid recipients and fewer
higher-pay private patients which impairs their ability to provide quality
care, and (3) state and federal Medicaid programs subsidize welfare
dependency at the expense of nursing home providers’ financial viability.
5.
Why
do families want to subject their loved ones to long term care under
Medicaid?
Medicaid
is the only way to get long-term care for free or highly subsidized.
People don’t worry about long-term care until it’s too late. At that
point, the elder is usually very old, infirm and often demented. Adult
children are making the decisions and they have a financial conflict of
interest. Their choices: take Medicaid, put Mom or Dad in a nursing home,
and preserve the estate for their inheritance. Or use the parents’ wealth
to buy high quality home care or assisted living in the private market and
end up with less for themselves or nothing. Medicaid planning attorneys
assure their well-heeled clients (usually the “kids,” not the elders) not
to worry about the horror stories regarding Medicaid nursing homes.
They’ll hold back enough money to pay privately for a few months. Nursing
homes are so strapped for revenue that they roll out the red carpet for
private payers. This key money buys access to the best nursing homes with
the fewest Medicaid beds. After a few months, the attorney flips the
switch and, voila, Medicaid picks up the tab going forward. Tragically,
poor people don’t have key money so they end up in the 100 percent
Medicaid hellholes.
6.
Tell us about market place for private long-term care and insurance for
it,
I’ve
often explained it this way: you can’t sell apples on one side of the
street when they’re giving them away on the other. Easy access to Medicaid
after the insurable event has occurred was the biggest obstacle to private
long-term care insurance. But the federal government added insult to
injury by artificially forcing interest rates to nearly zero making it
impossible for insurance carriers to get adequate returns on their
reserves. That forced the carriers to raise premiums which enraged policy
holders and repelled future prospects. These government policies nearly
destroyed the traditional long-term care insurance market, but the
industry has adapted by offering so-called hybrid products that combine
life insurance or annuities with a long-term care financing component.
Still, private long-term care insurance of any kind will never become a
major market until people can no longer ignore the risk, avoid the
premiums, wait until they need long-term care and then shunt the liability
off onto taxpayers.
7. Let’s
talk about solutions we’ve been hearing about. Congress is already talking
about investigations. I’d like to go over a few that have been mentioned
so far
a. Better
oversight
Won’t
work. As the saying goes, you can’t make a silk purse out of a sow’s ear.
More oversight, regulations, and penalties without enhanced revenue will
only tie caregivers in more paperwork knots. If you keep up the beatings,
don’t expect morale to improve.
b.
increasing
Medicaid reimbursement
Won’t
work. Low Medicaid reimbursement is a symptom, not the cause of the
long-term care market’s malaise. Pump more money into it and all you’ll
end up with is a more expensive welfare trap diverting more people and
resources from the private sector into dependency on public assistance.
c.
home
care
Tried and
failed. State and federal Medicaid programs have attempted for at least
two decades to divert recipients from nursing homes to home care on the
theory that home and community-based care saves money. It doesn’t and
hasn’t. Total institutional and home care Medicaid costs have continued to
increase year after year in every state. On average and across the
society, home care delays but does not replace nursing home care. Home
care is desirable. It is a worthy goal. But it does not save money.
So what
would work? Stop discouraging responsible and early long-term care
planning. Stop making Medicaid available to virtually everyone after
expensive care is needed and when it’s too late to save, invest or insure
for future care. Eliminate or vastly reduce Medicaid’s huge home equity
exemption so that people who need long-term care but have insufficient
income to pay for it can use reverse mortgages to purchase high-quality
home care or assisted living of their choice. Enforce Medicaid’s estate
recovery mandate and use some of the savings to educate the public about
long-term care planning and to incentivize purchasing private LTC
insurance.
8.
What does Congress need to do? What should individuals do to best prepare
for long term care?
Congress
should remove the perverse incentives in public policy that discourage
responsible long-term care planning as I just described.
Individuals should wake up to the reality that to avoid Medicaid and its
nursing home trap, they must plan early, and save, invest or insure so if
and when they need extended, expensive long-term care, they can pay
privately for it. Money talks and it opens doors to the best long-term
care in the most desirable venue, usually one’s own home.
As bad as
the long-term care tragedy is in America, the good news is that it would
be easy to fix. If we stop doing what we’ve always done, we’ll get a
different and better result.
[The
interviewer ended the podcast with a couple questions about long-term care
problems that occur in government-financed systems. Moses explained that
such systems are highly prone to rationing and even euthanasia because
they lack the kinds of incentives and moderating controls that are present
in free markets.]
#############################
Updated,
Monday, June 22, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-025: LTC NEWS AND COMMENT
LTC Comment: Do you spend hours searching
the internet for useful articles, key data, and relevant reports to keep
you on the forefront of professional knowledge? Do you lose business
because you’re blindsided by clients or competitors who learn critical
information before you do? Here’s an antidote:
LTC Clippings: The Center for Long-Term
Care Reform notifies subscribers to our LTC Clippings service daily of
information you need to know. Each message contains only the critical
facts about new publications: a title, representative quote, a link to
the original, and our analysis in a sentence or two. To inquire or
subscribe, contact 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:
-
As
Covid-19 Hits Developing Countries, Its Victims Are Younger
-
Surprise: Unhealthy lifestyle tied to Alzheimer’s risk
-
So
Far, So Good: No COVID-19 Spread From Protests...Yet
-
Why the coronavirus has taken so many lives in US nursing homes
-
What to Consider Before Moving a Parent Into Assisted Living During
COVID-19
-
Life plan community model remains stable, viable: report
-
The Road Map to Maximizing Long Term Medicaid Coverage During the
COVID-19 Emergency
-
Never Retire: Why People Are Still Working in Their 70s and 80s
-
What Albany did to seniors when we weren't looking
-
Quit treating the pandemic like a ‘bad apples’ problem, expert warns
#############################
"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 15, 2020, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-024: LTC NEWS AND COMMENT
LTC Comment: Do you spend hours searching
the internet for useful articles, key data, and relevant reports to keep
you on the forefront of professional knowledge? Do you lose business
because you’re blindsided by clients or competitors who learn critical
information before you do? Here’s an antidote:
LTC Clippings: The Center for Long-Term
Care Reform notifies subscribers to our LTC Clippings service daily of
information you need to know. Each message contains only the critical
facts about new publications: a title, representative quote, a link to
the original, and our analysis in a sentence or two. To inquire or
subscribe, contact 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:
-
How did we get
here?
-
Nursing home
industry on verge of financial collapse, group claims
-
Offer Appropriate
Coverage for LTCi
-
Financial Crisis
of Nursing Home Industry
-
HHS to distribute
$25B for Medicaid, safety-net providers
-
COVID-19 pandemic
encourages consumers to plan for long-term care: survey
-
Misconceptions
about Paying for Long-term Care Part 2 of 3
-
Assisted Living
Communities Ask HHS for COVID-19 Help, Support
-
As negative
thoughts accumulate, so might Alzheimer’s risk
-
LTC workforce has
declined nearly 5% since February
-
Long-term care
facilities driving up COVID-19 death totals
#############################
"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 12, 2020, 8:00 PM (Pacific)
Seattle—
#############################
LTC
BULLET: HOW NOT TO REDESIGN LONG-TERM CARE
LTC
Comment: Do we really need more government money and regulation for
long-term care, as this Forbes columnist insists? Analysis and
better choices, after the ***news.***
***
THE
DEBT CLOCK:
We introduced this new feature in last week’s LTC Bullet when the
U.S. national debt stood at almost $26 trillion. Now it’s over that mark
by $8 billion or so. Unfunded liabilities, including $20.5 trillion for
Social Security and $31.8 trillion for Medicare, topped $148 trillion in
the meantime. Here’s a little historical perspective. In “LTC
Bullet: The Impending Collapse of the Roadblocks to LTC Insurance,”
December 1, 2009, we reported “According to the U.S. National Debt Clock,
our country is currently in hock nearly $12 trillion and soon Congress
will be forced to lift the cap on that debt yet again.” By August 1, 2014
in “LTC
Bullet: Entitlement Double Talk,”
we lamented “Our
national debt stands at $17.6 trillion according to the
US Debt Clock.”
Less than a year ago, we found in “LTC
Bullet: The Post-Medicaid History of Long-Term Care,”
August 9, 2019, that “The ‘National Debt Clock’ places U.S. national debt
at $22.5 trillion and unfunded liabilities at $125.0 trillion, a little
over $1 million per taxpayer.” Our national debt, therefore, has more than
doubled since 2009, and it’s accelerating, up 16% in less than a year.
Most scary, unfunded liabilities are up 18% in the past year. We’re
falling into a monetary and fiscal sink hole. Dramatic consequences are
coming. But what will they be and when will they arrive? We’ll keep trying
to understand. We’ll tell you want we learn. ***
***
JOIN THE CENTER. We have not made a recent appeal for you to support the
Center for Long-Term Care Reform. But now is the time. Our major federal
legislative successes came during or after major recessions. OBRA ’93
required Medicaid estate recoveries and closed important eligibility
loopholes. DRA ’05 put the first cap ever on Medicaid’s home equity
exemption and removed the leash Henry Waxman had put on the Long-Term Care
Partnership Program. We’re entering a period when Medicaid, especially its
massive long-term care component, will consume more state revenue and
crowd out other, critical state and local programs. By retargeting
Medicaid to its originally intended recipients, people in need, the states
and federal government can reduce expenditures and attract more private
financing into the LTC service delivery system benefiting everyone. We’ve
explained precisely how to do that in dozens of national and state-level
studies available
here
and most recently in “Medicaid
and Long-Term Care.”
Help us spread the word and fix long-term care. Check out our “Membership
Levels and Benefits”
here
and join the Center
here.
Thanks for your consideration. Address inquiries to
smoses@centerltc.com
or call Steve at 425-891-3640. ***
LTC
BULLET: HOW NOT TO REDESIGN LONG-TERM CARE
LTC
Comment: They say when the only tool you have is a hammer, every problem
looks like a nail. Here’s a corollary: when the only tool you have is
government, every problem looks like you need more public money and
regulation.
That’s the fundamental problem with Howard Gleckman’s argument in “How
To Redesign Long-Term Care For Older Adults After Covid-19,”
Forbes, June 9, 2020. Compare these quotes from Gleckman (HG) with
Steve Moses’s (SM) replies.
HG:
“The way we care for older adults in the US is, self-evidently, not
working. In just the past three months, at
least 44,000 residents and staff of
nursing homes and other long-term care facilities have died from Covid-19.
Hundreds of thousands have been sickened. And millions
have been isolated from
family and friends for months.”
SM:
Sadly true. I said as much in the Wall Street Journal recently: “Nursing
Homes, Coronavirus and Medicaid,”
June 1, 2020.
HG:
“Yet, this crisis did not spring from nowhere. The Covid-19 epidemic has amplified
and exposed an already deeply-flawed system for
long-term supports and services (LTSS) in the US. As tragic as this
episode is, it has created an opportunity to rethink our care model from
the ground up. But what would it look like?”
SM:
True again. We do need to start over with a new long-term care model. But
“what would it look like?” is the wrong place to start. You need to ask
and answer a more basic question first: how did we get into this mess that
we need to fix? If you don’t start there, you run the risk of making the
problems worse by doing more of what caused them in the first place.
That’s why I started by explaining what caused the dysfunctional long-term
care status quo in “Medicaid
and Long-Term Care,”
a January 2020 monograph. But that’s not where this writer takes us. He
jumps right in to ask for more money.
HG:
“In short, long-term care in the US needs more money and a new model for
delivering care. Our system never will provide adequate care for frail
older adults and younger people with disabilities as long as it remains so
severely underfunded.”
SM:
Hammer is to nail as government is to money. That’s the trap! Let’s see
where this leads.
HG:
“Imagine no entrenched business or bureaucratic interests struggling to
protect an existing system. No legacy regulatory and payment systems. What
sort of care system would we create? Not the one we have, for sure.”
SM:
Absolutely! Imagine what a free market in long-term care could render.
Entrepreneurs would compete to provide the best possible long-term care in
the most desirable venues at the least possible cost. No government
interference; no Medicaid-induced institutional bias; no lawyer-abetted
Medicaid planning lure; no access and quality problems caused my
parsimonious Medicaid reimbursements; more private pay at market rates
lifting access and quality for all; fewer people drawing down Medicaid
funds so the truly needy get better care. But is this what Mr. Gleckman
wants? It does sound similar.
HG:
“It might look like this: Frail older adults and younger people with
disabilities, with support from family and a case manager, would choose
the care setting and supports that would help them live the best life
possible. Long-term supports and services would be well integrated with
medical treatment, with no regulatory or payment barriers, and through a
financial model that creates incentives for strong chronic care
management.”
SM:
Yes! Let’s do it. But, how? There’s the rub.
HG:
“This could be delivered through managed care plans, such as Medicare
Advantage,
fully integrated programs such as the Program
for All-Inclusive Care for the Elderly (PACE),
or special needs plans (SNPs). It might
also be possible in traditional Medicare through
Medicare Supplement (Medigap) insurance. … A public program such as
Medicaid still would support this care for those with very low incomes.
But Medicaid would be far more flexible than today, and the default
setting for care would be people’s own homes, not nursing homes.”
SM:
Wait a minute! Haven’t we tried all those things already and they wouldn’t
scale? What would you do differently that could make these longstanding
programs work better and become bigger? Their advocates have claimed for
decades that what these programs need is more money. Is that what you’re
saying too? More of the same but expect a different result? This is where
the article becomes very foggy.
HG:
“A public program such as Medicaid still would support this care for those
with very low incomes. But Medicaid would be far more flexible than today,
and the default setting for care would be people’s own homes, not nursing
homes.”
SM:
Been there; done that; didn’t work.
HG:
“States should better align Medicaid LTSS with other public services, such
as low-income housing, transportation, home delivered meals, adult day,
and primary medical care.”
SM:
But would they? Why now and not before? This is aspirational, not
realistic or practical.
HG:
“The agencies that deliver these programs need to work with one another to
provide flexible, holistic care.”
SM:
OK, but why are these agencies going to hop out of their silos all of a
sudden and start working cooperatively as never before?
HG:
“The vast majority of those receiving long-term care at home are getting
their support from relatives. Today, those family members are providing
personal assistance with great love—and little or no skill. Like paid
caregivers, they need training. Perhaps, they should even be paid.”
SM:
Instead of relying on the free care provided by families and friends,
which is the main prop sustaining the current Rube Goldberg financing
scheme, we’re going to start paying them and provide more paid home
caregivers also? How?
HG:
“Where will the additional funding for all this come from? The reality is
that few Americans have saved sufficiently for the cost of long-term care
in old age, few have private long-term care insurance, and Medicaid does
not have the resources to fund this care for the fast-growing Baby Boom
generation.”
SM:
Precisely the question that popped into my mind. So what’s the answer?
HG:
“A public
long-term care insurance program could
supplement out-of-pocket spending, especially for those with true
catastrophic costs that few private long-term care insurance policies
cover.”
SM:
Well, what do you know? The answer is to use the punitive power of
government to force people to buy mandatory government insurance. If you
liked the CLASS Act, you’ll love this compulsory version with a political
bullwhip for enforcement.
HG:
“Washington
State already has adopted a
modest public long-term care insurance plan. A half-dozen other states are
exploring the idea. And there is some
interest in Congress.”
SM:
Have you heard anything about these “promising” ideas from anyone else
lately? More likely, you’re hearing the lockdown is bankrupting state
governments and the federal government is maxed out printing and borrowing
money to support closed businesses and laid off workers.
HG:
“The long-term care system in the US was failing long before Covid-19. But
now that this terrible disease has exposed the flaws in our system, we
have an opportunity to fix them.”
SM:
See what happens when you start from the observation that LTC is failing
in the U.S. and jump straight into proposing solutions? You end up as HG
does proposing more of the government spending and regulation that caused
the problems in the first place. So here’s what to do instead.
Analyze what caused long-term care’s problems. You’ll find that easy
access to Medicaid nursing home care after care is needed but when it’s
too late to preserve wealth otherwise caused excessive dependency on
Medicaid. Fifty years of that pernicious public policy created the current
system’s major dysfunctions including institutional bias; poor access and
quality; stultified private home care and LTC insurance markets;
overburdened family caregivers; and many thousands of unnecessary deaths
from the virus contagion.
Unfortunately, the challenges facing long-term care are too complicated to
explain in a few sentences or to resolve simply by throwing more
government money at them. The key is to explain why the problems exist in
the first place before trying to solve them with more government
interference. Do that and you will find the same answers I did in “Medicaid
and Long-Term Care.”
Read it and see.
#############################
Updated,
Monday, June 8, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-023: LTC NEWS AND COMMENT
LTC Comment: Do you spend hours searching
the internet for useful articles, key data, and relevant reports to keep
you on the forefront of professional knowledge? Do you lose business
because you’re blindsided by clients or competitors who learn critical
information before you do? Here’s an antidote:
LTC Clippings: The Center for Long-Term
Care Reform notifies subscribers to our LTC Clippings service daily of
information you need to know. Each message contains only the critical
facts about new publications: a title, representative quote, a link to
the original, and our analysis in a sentence or two. To inquire or
subscribe, contact Steve at 425-891-3640 or
smoses@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC E-Alerts: Once a week, we compile our
daily LTC Clippings into a summary, email it to Center for Long-Term Care
Reform members, and archive it in The Zone, our password-protected
members-only website. Center members also receive our weekly LTC Bullet
op-ed. To join the Center and receive all these benefits and more,
contact Steve at 425-891-3640 or
smoses@centerltc.com.
We no longer post our LTC E-Alerts on the
Center’s public access website, but here’s what today’s LTC E-Alert
contained: links, quotes and comments on the following articles, reports,
or data:
-
Four Ways the
Coronavirus Pandemic May Affect Long-Term Care Insurance
-
CMS releases
provider COVID-19 case, death totals to consumers on Nursing Home
Compare
-
Congress’s
Medicaid Funding Increase Creates Massive Legal Uncertainty for States
During the Covid-19 Crisis
-
Nursing Homes
Already Were Weakened—WSJ op-ed by Blase and Moses
-
Skilled Nursing
Occupancy Hit Record Low in March, ‘Mainly’ Due to Post-Acute Admission
Decline
-
How Covid-19 Will
Shape the Future of Senior Living. New Models of Care, More Aging in
Place
-
Nursing Homes,
Coronavirus and Medicaid
-
BULLETIN: CMS
‘ratcheting up’ nursing home penalties in light of 26,000-resident,
450-worker COVID-19 death toll
-
More Universal
Life Comes With Long-Term Care Riders: Milliman
-
Alzheimer's Gene
Linked to Severe COVID-19 Risk
-
Public Opinion of
Nursing Homes Takes COVID-19 Hit, But Most Think Government Didn’t Do
Enough
#############################
"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 5, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC
BULLET: WSJ COLUMN ON NURSING HOMES, CORONAVIRUS AND MEDICAID
LTC
Comment: Steve Moses and Brian Blase published an op-ed in Tuesday’s
Wall Street Journal. Here’s the back story and much more on the
subject, after the ***news.***
***
THE DEBT CLOCK: New feature. We’re going to start posting a link to the
U.S.
Debt Clock
at the top of each LTC Bullet. U.S. national debt stands now at
almost $26 trillion. Worse yet, our country’s unfunded liabilities,
including $20.5 trillion for Social Security and $31.7 trillion for
Medicare, total $147.9 trillion. Evidently no one cares. The Federal
Reserve is printing, the Treasury Department is spending, and together
they’re borrowing unlimited funds ostensibly to stimulate the economy but
effectively to re-inflate a bubble in stocks, bonds and real estate. This
will not end well. The debt is suddenly skyrocketing. In future Bullets,
we’ll track where the debt stood as we reported it occasionally in the
past. ***
***
WHO KNEW? The coronavirus pandemic lockdown crashed the economy. America
is burning, literally, with civil unrest. Government’s monetary and fiscal
floodgates are wide open. Public and private debt is spiking. Unemployment
is at depression levels. Yet the stock and bond markets are at or
approaching new highs. Who knew we could borrow and spend unlimited
amounts with no consequences? How great is this? You say: “Don’t waste a
crisis.” I say “Why wait for a crisis?” Let the good times roll all the
time. Who needs jobs and taxes? Just print enough money for everyone to
have everything. Voila! Welcome to economic WallyWorld. ***
***
SOHO FORUM: I find these debates fascinating and now that they’re online,
easy to access. The topics are always timely and usually pit a libertarian
against a more middle-of-the-roader. Most recent topic paraphrased: did
the lockdowns do more harm than good? I love the format. The audience
votes on the question before and after the debate. The winner is the
discussant who changes the most minds. Here’s how the Forum describes
itself: “The
Soho Forum
is a monthly debate series held in Soho/Noho, Manhattan. A project of the
Reason Foundation,
the series features topics of special interest to libertarians and aims to
enhance social and professional ties within the NYC libertarian community.
Moderated by Gene Epstein, former economics editor of Barron's, The
Soho Forum features some of the most highly regarded speakers across
varied fields. At each event, the audience actively engages with the
speakers, votes on the resolution, and there is a social reception that
follows.” Enjoy! ***
LTC
BULLET: WSJ COLUMN ON NURSING HOMES, CORONAVIRUS AND MEDICAID
LTC
Comment: When people started dying in droves at nursing homes all across
the country, it raised the question: why are so many frail, infirm elderly
people residing in these institutional settings in the first place? My
friend,
Brian Blase
of
Blase Policy Strategies
and most recently
Special Assistant to the President for Health Care Policy,
had the same thought.
We
conferred and the
Wall
Street Journal
published our op-ed “Nursing
Homes, Coronavirus and Medicaid”
online Monday evening, June 1 and in the print edition Tuesday, June 2.
The WSJ has a pay wall so I can’t link you to the full piece, but
here are the first three paragraphs, which I am allowed to share:
“A
national tragedy began in March when Covid-19 killed 35 residents of Life
Care Center in Kirkland, Wash. Since then, more than 22,000 nursing-home
residents have died in Connecticut, Massachusetts, New Jersey, New York
and Pennsylvania. Nearly half of all Americans who have fallen victim to
the novel coronavirus lived in nursing homes.
“Politicians have made plenty of mistakes. Governors in several states,
including New York and Pennsylvania, ordered nursing homes to take
coronavirus patients discharged from hospitals and reversed the orders
only after weeks of casualties. Families are suffering, forced to stare at
their parents and grandparents through windows or talk only by phone.
Overworked caregivers are at high risk of exposure.
“Why
do so many elderly people live in low-quality nursing homes? Almost no one
wants to end up in a nursing home, and most families prefer not to place
their loved ones in one. The main answer is the legacy of Medicaid, a
Great Society program intended to help the poor.”
Want
more? If you don’t have a print or online subscription, maybe you can find
someone who does. I can forward a limited number of copies for a limited
number of days through the Center’s subscription. If you ask, I’ll try.
After 30 days, the article will be in the public domain.
In
the meantime, how about reading the “rest of the story” that didn’t make
it into the WSJ piece? Here’s my two-part early draft: Part 1
answers the question of why so many people end up in nursing homes
vulnerable to the coronavirus contagion. Part II explains what we can do
to fix that problem.
“Covid-19 and Long-Term Care, Part 1: Why Are So Many Elderly People
Trapped in Nursing Homes?”
by
Stephen A. Moses
News
from the nursing home sector is not good.
Thirty-five die
at a Life Care Center in Kirkland, WA. Locked out
families stare plaintively
at quarantined parents and grandparents through nursing home windows
across the country.
New
York demands nursing homes take Coronavirus patients,
then
prohibits them.
Half or
more of COVID-19 deaths are nursing home residents.
What’s happening? Why are so many old, frail, often cognitively impaired
elders residing in nursing homes? Why aren’t they aging in place at home,
safer from contagion with visiting caregivers and telemedicine? Why is
nursing home quality such a serious problem?
The
answers to all those questions stem from a Great Society program intended
to help the elderly poor. In 1965, Medicaid began providing nursing home
care—including room, board, and medical care—funded with virtually
unlimited federal and state matching funds. It was welfare supposedly, but
it allowed unlimited asset transfers to qualify until 1980. Since then,
generous financial eligibility rules placed no set limit on income for
people with high medical expenses and allowed virtually unlimited exempt
assets, including home equity of $595,000 in every state ($893,000 in some
states). A program intended for the poor became the fall back payor for
middle class and affluent people who didn’t plan for long-term care and
slipped through or manipulated Medicaid’s elastic financial eligibility
rules.
By
making long-term care virtually free when expensive care is needed:
Medicaid (1) quickly exploded in cost, (2) created
institutional bias
by paying only for nursing homes, (3) caused access and quality problems
by paying care providers too little, (4) enriched plaintiff’s attorneys
with the resulting tort liability cases, (5) crowded out private markets
for home care and long-term care insurance, and (6) kept poor people poor
with punishing spend down rules, while (7) letting the well-to-do save and
benefit through eligibility loopholes.
Medicaid pays the bills of
62
percent
of nursing home residents. It pays notoriously low rates, often
less
than the cost
of providing the care. Those low rates drag down nursing homes’ ability to
provide quality care for Medicaid recipients and for the
few
remaining private payers.
Very few private payers remain because Medicaid is so easy to obtain, even
for the well-to-do. Thousands of elder law attorneys specialize in
impoverishing affluent clients artificially to qualify them for Medicaid
and to protect their heirs’ inheritances. Search “Medicaid
planning”
to find these specialists in every state.
Five
and a half decades of easy access to Medicaid-subsidized nursing home care
anesthetized consumers to the risk and cost of long-term care. Few people
know who pays for it and fewer still worry or prepare as a result. Once
they need long-term care, the path of least resistance is to qualify for
Medicaid, preserve most of their assets for heirs, and take whatever
Medicaid has to give. That’s usually nursing home care in facilities too
heavily dependent on the impecunious public welfare program to provide
high quality care.
That’s why so many frail, elderly people are trapped in poor nursing homes
vulnerable to the ravages of Covid-19.
For
the solution, read “Covid-19 and Long-Term Care: Part 2, Save Long-Term
Care with Medicaid Reform.”
Stephen Moses is co-founder and president of the
Center for Long-Term Care Reform
and the author of
Medicaid and Long-Term Care
(2020).
“Covid-19 and Long-Term Care, Part 2: Save Long-Term Care with Medicaid
Reform”
by
Stephen A. Moses
Too
many infirm elderly people are trapped in beleaguered nursing homes
inadequately funded by a public welfare program, Medicaid. They are
vulnerable to the ravages of Covid-19, forcibly cut off from friends and
family, and dying in droves. Part 1 explained why this is so. Part 2
proposes a solution. As bad as the nursing home problem is, there’s good
news. It is easy to fix.
Fifty-five years of easy access to Medicaid financing when expensive
extended care becomes necessary desensitized consumers to long-term care
risk leaving them with a Hobson’s choice. Do we spend our life’s savings,
including home equity, to pay for long-term care privately? Or do we
accept welfare-financed nursing home care and preserve most of our wealth
for a surviving spouse and heirs? In the end, most people choose the
latter course.
That’s how Medicaid became the dominant long-term care payer for the
middle class and affluent as well as the poor. Medicaid planners did a
land office business artificially impoverishing people to qualify them for
the program. Heirs received windfall inheritances, diverted from their
parents’ long-term care expenses by a taxpayer-financed public assistance
program originally intended only for the poor.
Analysts and policy makers study the serious problems afflicting America’s
long-term care system—the poor access and quality, nursing home bias, too
little preferred home care, inadequate financing, excessive dependency on
unpaid family caregivers causing enormous financial and emotional
distress. They propose measures to alleviate these symptoms, usually more
government spending and regulation. But they rarely ask what caused the
problems in the first place.
What
if government interference in long-term care is exactly what caused
long-term care’s problems? Wouldn’t that suggest a different approach than
more of the same?
How
about this? Remove the perverse public policy incentives that trap people
on Medicaid. Don’t exempt their biggest asset, home equity, from long-term
care risk. Let people who fail to plan, save, invest or insure for
long-term care use reverse mortgages or other assets to pay for the home
care they prefer. Perhaps losing their inheritances to their parents’
long-term care costs will make adult children more likely to plan
responsibly for their own future. In other words, stop using Medicaid to
subsidize people for ignoring the risk and cost of long-term care.
Do
not delay making these changes. Budget shortfalls from the current
recession will impair the states’ ability to fund Medicaid, further
devastating nursing home finances and damaging care quality. In past
economic downturns, Medicaid imposed asset transfer restrictions, mandated
estate recovery, and closed eligibility loopholes to control costs. More
of the same will be necessary in the current economic downturn. The poor
will suffer most.
Directing Medicaid long-term care benefits only to the genuinely needy
would ensure more resources and better care for them, achieving the
original intent of the program. With Medicaid long-term care harder to
get, consumers will do the right thing. They’ll plan for long-term care,
save, invest and insure for it. New waves of private financing will surge
through the long-term care market improving quality and choice for
everyone. Care will quickly evolve away from nursing homes toward the home
and community-based care people vastly prefer.
Stephen Moses is co-founder and president of the
Center for Long-Term Care Reform
and the author of
Medicaid and Long-Term Care
(2020).
#############################
Updated,
Tuesday, June 2, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC
Bullet: WSJ Column on Nursing Homes, Coronavirus and Medicaid
Tuesday, June 2, 2020
Seattle—
LTC
Comment: Steve Moses and Brian Blase (formerly Special Assistant to the
President for Health Care Policy) have an op-ed in today’s Wall Street
Journal. It explains why so many elderly Americans are confined to
nursing homes where they’re disproportionately vulnerable to the virus
contagion. This is just a quick notice so you can pick up a copy if you
would like to. We’ll share some quotes and give you the back story in a
full-sized LTC Bullet on Friday.
#############################
Updated, Monday, June 1, 2020, 9:00
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #20-022: LTC NEWS AND COMMENT
LTC
Comment: Do you spend hours searching the internet for useful articles,
key data, and relevant reports to keep you on the forefront of
professional knowledge? Do you lose business because you’re blindsided by
clients or competitors who learn critical information before you do?
Here’s an antidote:
LTC
Clippings: The Center for Long-Term Care Reform notifies subscribers to
our LTC Clippings service daily of information you need to know. Each
message contains only the critical facts about new publications: a title,
representative quote, a link to the original, and our analysis in a
sentence or two. To inquire or subscribe, contact Steve at 425-891-3640
or
smoses@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC
E-Alerts: Once a week, we compile our daily LTC Clippings into a summary,
email it to Center for Long-Term Care Reform members, and archive it in
The Zone, our password-protected members-only website. Center members
also receive our weekly LTC Bullet op-ed. To join the Center and receive
all these benefits and more, contact Steve at 425-891-3640 or
smoses@centerltc.com.
We no
longer post our LTC E-Alerts on the Center’s public access website, but
here’s what today’s LTC E-Alert contained: links, quotes and
comments on the following articles, reports, or data:
-
Social Security trust funds could run
out even faster due to the coronavirus pandemic
-
The Most Important Coronavirus
Statistic: 42% Of U.S. Deaths Are From 0.6% Of The Population
-
WHO launches digital app to improve
care for the elderly
-
The Bifurcating Seniors Housing Market
-
Seniors housing municipal bonds under
distress due to COVID-19 costs
-
The COVID Nursing Home Crisis Was 50
Years in the Making
-
Long-Term Care Policy after Covid-19 —
Solving the Nursing Home Crisis
-
$672 million would be cost of one-time
COVID-19 testing for all assisted living and nursing home residents,
staff, AHCA / NCAL says
-
One in five COVID-19 tests fail to
detect virus
-
Simplifying telemedicine use in
long-term care facilities
-
Families still need care, but many are
afraid of nursing homes amid the coronavirus 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, May 25, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-21: 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:
-
Ideal Nursing
Homes: Individual Rooms, Better Staffing, More Accountability
-
Few Medicare
Advantage plans cover social needs for chronically ill patients
-
FAQs About
Coronavirus and Long-Term Care Insurance
-
COVID-19 and
Long-Term Care Insurance
-
HHS Releases $4.9B
in COVID-19 Relief for Skilled Nursing Facilities
-
Coronavirus or no,
why do we have so many people in nursing homes?
-
Senior Employment
Outlook and COVID-19
-
States using
Medicaid to provide ‘lifeline’ for providers, association reports
-
Skilled nursing
occupancy slips as COVID-19 pandemic rages: NIC
-
Home Health
Industry ‘Getting Closer’ to Reimbursement for Telehealth Visits
-
Medicaid Providers
At The End Of The Line For Federal COVID Funding
-
COVID-19-caused
kidney injuries heighten demand for dialysis
-
Reopening Guidance
by CMS Wins Praise for Aggressive Stance on Staff, Resident Testing
-
Governors eye
Medicaid cuts to ease COVID-19 budget pain
#############################
"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 22, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC
BULLET: THE REVERSE ROBIN HOOD ECONOMY AND LONG-TERM CARE
LTC
Comment: Does government take from the rich to help the poor? Or is it
just the opposite? We scrutinize after the ***news.***
***
THE ILTCI EXECUTIVE COMMITTEE reports that the Intercompany Long Term Care
Insurance Conference, cancelled for 2020 due to the pandemic, will convene
in 2021on Monday, March 8th through Thursday, March 11th
at the Sheraton Downtown Denver in Denver, CO. They say “In the coming
months we will be offering a selection of our 2020 ILTCI break-out
sessions/workshops in the form of webinars and podcasts. The first one
will take place this month. We are happy to make this content available
and wish to thank all session producers and speakers who prepared
informational and educational content this year. In the meantime don’t
hesitate to visit our updated FAQs on
www.iltciconf.org
or email
info@iltciconf.org
if you have any questions. ***
LTC
BULLET: THE REVERSE ROBIN HOOD ECONOMY AND LONG-TERM CARE
LTC
Comment: The coronavirus pandemic has thrown millions out of work and
ruined thousands of companies. But, not to worry, the federal government
has taken unprecedented action to alleviate the economic pain until the
virus goes away and we get back to normal.
Specifically, the Federal Reserve is printing money with no limit and the
Treasury is borrowing and spending “whatever it takes.” Voila! People get
paid whether they work or not and companies survive whether they’re open
for business or not. Problem solved.
OK,
but won’t someone, somehow, someday have to pay for all that printing,
borrowing and spending? Yes, of course. TANSTAAFL: There’s No Such Thing
As A Free Lunch. So who gets the bill? Presumably, the rich will pay as
they have most of the money and they pay most of the taxes. This economy,
therefore, is Robin Hood on steroids. Government takes from the rich to
give to the poor.
Or
does it? What’s really happening? Qui bono? That’s the apt
question. Who benefits?
At
first blush, it seems like the poor and unemployed receive a bonanza. They
get money while remaining idle, sometimes even more income than when they
were employed. But look under the economic surface. What happened to all
that money the government created out of nothing?
Some
of it will find its way into consumer spending, which means there will be
much more money chasing fewer goods and services due to the economy’s
shutting down. That is the definition of inflation. So the good news is
government gave you money, but the bad news is that it won’t buy as much
as before.
But
the bulk of the new money will find its way into the stock, bond and real
estate markets. That’s why equity values skyrocketed after the 2008
financial crisis when the same policies were employed. It’s why it is
happening again now. In other words, the new money benefits the already
well-to-do substantially, but only allows the unemployed to wait out the
crisis less painfully.
So,
what happens as we emerge from this pandemic-induced financial cataclysm?
The government and the private sector have taken on unprecedented levels
of debt. Debt is not free. It must be serviced. Even at artificially low
interest rates, that’s difficult. There are only three ways to service
debt: borrow more, raise taxes, or let inflation run rampant.
Borrowing more is possible only until lenders, i.e., the rest of
the world, realize you’ve put no limits on debt. Sooner or later, they’ll
figure out you’re unlikely to pay back what you’ve already borrowed, much
less service even bigger liabilities. So, either you can’t borrow more or
lenders demand higher interest rates. Either way, it’s harder than ever to
service the compounding debt. It’s a vicious downward spiral.
Taxing to pay the interest and/or reduce the debt doesn’t work. People
object to higher taxes. Politicians benefit by giving people what they
want, specifically free stuff, not by raising taxes. Besides, taxes reduce
private capital which is what creates jobs and prosperity which are the
source of tax revenue in the first place. Everyone is better off when we
leave money in the private sector where it can grow through wise
investment.
Finally, inflation makes debt disappear instead of paying it off.
Inflation hurts lenders who get their loans paid back in less valuable, or
worthless, dollars. Inflation helps borrowers by letting them pay back
their loans with cheaper dollars.
Who
are the borrowers? Government and overleveraged companies. Who are the
lenders? You’re looking at ‘em: the American people and all the suckers
around the world who bought our bonds and let us use the proceeds to
purchase their goods and services.
In
other words, we’re in the middle of a big Ponzi scheme benefiting the rich
at the expense of everyone else, especially the poor. As long as there is
a bigger sucker willing to buy into the giant government debt bubble, it
keeps getting bigger. But the coronavirus may just be the pin that finally
pops this monetary balloon. We’re going to find out soon.
Long-Term Care
So
where does long-term care come in? It’s similar in a way. Government
purports to pay for long-term care for the poor by taxing the prosperous.
Robin Hood again, right?
Think again. Medicaid, the government’s long-term care funding program, is
readily available to the middle class and affluent as well as the poor.
Find the evidence for that statement in
Medicaid and Long-Term Care.
So,
the poor end up in welfare-financed nursing homes with notoriously low
quality care. But so do the affluent Medicaid recipients, right?
No.
Prosperous people who take advantage of Medicaid hold back some cash so
they can pay privately for a few months. That gets them into the best LTC
facilities that have relatively few Medicaid recipients. Then they, or
their Medicaid planning attorney, flip the switch and convert their payor
to Medicaid.
The
poor get the worst Medicaid has to offer. The well-to-do get the best.
Reverse Robin Hood redux.
#############################
Updated,
Monday, May 18, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-020: 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:
-
States face
looming crisis over Medicaid growth, which could trigger changes for
providers and payers
-
Masks change
everything
-
Seniors turn to
reverse mortgages as a cash lifeline during the coronavirus crisis
-
WSJ: Seniors
housing could face big vacancies with telemedicine available to help
with care needs at home
-
The Pandemic and
the Politics of Long-Term Care in Canada
-
Ken Dychtwald:
Pandemic Will Force Big Changes in Retirement Planning
-
Fewer workers
confident they can meet long-term care cost demands: survey
-
White House: Test
all nursing home residents, staff for COVID-19 over next 2 weeks
-
Key Takeaways: The
Impact of COVID-19 on Social Security and Highlights from the Trustees'
2020 Report
-
Algorithm Beats
Experts in Alzheimer’s Diagnosis
-
New task force to
develop guidance for reopening senior living and care communities
-
For Most States,
At Least A Third Of COVID-19 Deaths Are In Long-Term Care Facilities
#############################
"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 11, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-019: 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:
-
Senior living industry bracing for
effects state reopening will have on residents, staff
-
Genworth Aims to Line Up Backup
Financing Options
-
The Grim Post-COVID-19 Future For
Nursing Homes
-
States cut Medicaid as millions of
jobless workers look to safety net
-
How Are States Supporting Medicaid Home
and Community-Based Services During the COVID-19 Crisis?
-
How Quarantine Is Affecting Different
Generations: Ken Dychtwald
-
Medi(long-term)care for all: A look Into
the future of long-term care insurance—Part one
-
Unum to Add $2.1 Billion to Long-Term
Care Insurance Reserves Over 7 Years
-
Financial incentives might tempt
facilities to admit infected residents: LA Times
-
States ordered nursing homes to take
COVID-19 residents. Thousands died. How it happened
#############################
"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 8, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC Bullet:
The Gold Standard for Long-Term Care Insurance
LTC Comment: We face a brave new
world—epidemiologically and economically. What’s really happening and how
can long-term care insurance adapt? Analysis and conjecture after the
***news.***
*** LTC BULLETS took some time off to reflect
on the sea change impacting long-term care services and financing. We
serialized our latest report, published in January, titled
Medicaid and Long Term Care. That report presents our analysis
and recommendation for long-term care policy as circumstances existed
before the pandemic. Today and for the future we turn to the challenge of
analyzing, understanding and opining out the radically different
circumstances the long-term care profession faces today. We invite you to
join the conversation by replying to each LTC Bullet as it is
published whenever you agree, disagree, or just have something to say.
Next week, we’ll address the question “Why Are So Many People Trapped in
Nursing Homes?” It’s never been more important to understand the causes
and consequences of Medicaid’s institutional bias than now, with SNF
residents confined to quarters and their loved ones locked out. ***
*** ACTIONABLE NEWS about long-term care is more
frequent and vital during the pandemic than ever before. The Center for
Long-Term Care Reform’s LTC Clippings bring you one or two daily
updates about critical information you need to know to stay at the
forefront of professional knowledge. Steve Moses scans the news and LTC
literature. He chooses reports, articles, stories and data that LTCI
agents, financial advisors, and anyone involved in aging issues need to
know. He provides the title, author, source, a hyperlink to the original,
and a sentence or two of commentary. As a bonus to LTC Clippings
subscribers, Steve will answer questions by phone or email usually within
24 hours. Hook yourself into this reliable source and you can safely spend
less time scanning for information and more time doing what you do best
professionally. Contact Steve at 425-891-3640 or
smoses@centerltc.com to subscribe or learn more. Two sample clippings
from this week:
5/4/2020, “The
Grim Post-COVID-19 Future For Nursing Homes,” by Howard Gleckman,
Forbes
Quote: “The deaths of
more than 16,000 of their residents from COVID-19 has profoundly
disrupted senior living facilities—especially nursing homes— and will
drive historic change in the industry. Robert Kramer, president of the
consulting firm Nexus Insights and a long-time observer of nursing home
finances, told me, ‘There never will come a time when we will return to
the old normal.’”
LTC Comment: Rare flawless analysis by this
writer. Obvious conclusion based on the evidence adduced: stop trapping
people in nursing homes on Medicaid and incentivize responsible LTC
planning by means of saving, investment and insurance. But no, this
article leaves us only with despair. There is nothing about why this
system went so wrong and what needs to happen to fix it. For that, read
Medicaid and Long-Term Care.
5/5/2020, “States
cut Medicaid as millions of jobless workers look to safety net,” by
Rachel Roubein and Dan Goldberg, Politico
Quote: “State Medicaid programs in the
previous economic crisis cut everything from dental services to podiatry
care — and reduced payments to hospitals and doctors in order to balance
out spending on other needs like roads, schools and prisons. Medicaid
officials warn the gutting could be far worse this time, because program
enrollment has swelled in recent years largely because of Obamacare’s
expansion.”
LTC Comment: So, tell me again why it makes
sense to exempt up to $893,000 in home equity so that affluent Americans
can avoid paying for private insurance and qualify for welfare-subsidized
nursing home care, where they’re dying in droves cut off from friends and
family. The only silver lining in this pandemic/recession is that maybe we
can finally reform this corrupt LTC financing system. We made progress
after recessions in the early 1990s and the early 2000s, but the system
has stagnated unreformed since the Great Recession. To learn why, read
Medicaid and Long-Term Care. ***
LTC BULLET: THE GOLD STANDARD FOR LONG-TERM CARE
INSURANCE
“This too will pass”
“After the pandemic, markets will surge back”
“We have nothing to fear but fear itself”
If you believe this HHS (Happy Horse Sh**), you’d
better open your eyes.
This crisis is not going to pass any time soon.
Markets won’t surge back after the virus passes. There is no viable “back”
to go to.
The roaring economy a couple months ago wasn’t real;
it was an asset bubble.
The Federal Reserve pumped it up by imposing
artificially low interest rates through quantitative easing, buying bonds
with printed money.
The federal government, taking advantage of the low
interest rates, overspent
creating huge extra debt.
The private sector over-borrowed at low interest
rates to fund malinvestments, starting uneconomical projects that only
seemed to make sense because borrowing was so cheap.
All the extra money printed (created out of thin air)
drifted into equities so stocks and bonds surged, diverting the huge money
inflation so it didn’t show up significantly in consumer prices.
The wealthy, with real estate and equity investments,
prospered while the poor and middle class languished economically.
The good times rolled as affluent Americans partied,
buying tons of cheap goods from China.
But where’d they get the money to do buy those cheap
goods? America doesn’t produce much to sell internationally anymore. Our
trade deficits are huge.
Easy, we sold the treasury bonds created by the
Federal Reserve to China and other foreign countries.
In short, they gave us dollars in exchange for paper
promises to pay back the principal plus artificially low interest,
someday, somehow.
We prospered on the easy money and left foreigners
holding the paper-money bag.
That was the wonderful, booming, “best market in
American history” according to the President, that we enjoyed until the
bottom fell out in March.
In other words, it was all fake, an asset bubble
created by, well,
Modern Monetary Theory.
How did we get there?
Twenty years ago, back when we still had some
semblance of a real economy, it blew apart with the dot-com bust when the
Fed tried to cool the economy by raising interest rates.
Instead of letting the economy suffer the hangover of
a severe recession that could have squeezed the public and private
malinvestment out of the system …
The Fed pushed interest rates down artificially and
left them there.
Public and private malinvestment surged with a
vengeance, especially in the real estate market, resulting in the 2008
housing bust.
After that bubble burst, the Fed returned to the
seemingly tried and true policy of artificially low interest rates.
A Tale of Two Bubbles: How the Fed Crashed the Tech and the Housing
Markets
This time they added three rounds of Quantitative
Easing (QE) vastly expanding the money supply with the hope of making
people spend more because of the “wealth effect” created by all that extra
cash going into the equity markets.
So, where are we now?
The Coronavirus pandemic shot through the latest
asset-bubble economy like a ballistic missile.
The government closed down the economy to curtail the
disease’s spread.
People are suddenly out of work and out of money as
are the companies that used to employ them.
Few Americans have any appreciable savings because government
programs—from Social Security in 1935 to Medicare/Medicaid in 1965, to the
paroxysm of free stuff promised by present-day progressives—have
desensitized the public to the need for personal responsibility.
So naturally the people from the government, who are
always coming to help us, dove right in.
Did they learn their lesson from the earlier
disastrous policies that created the previous asset bubbles?
Well no, they tripled down on those same policies in
the hopes of re-inflating the bubble yet again once the pandemic goes
away.
The Federal Reserve quickly forced interest rates
back to near-zero and implemented not just QE4, but rather QE∞ (Quantitative
Easing to Infinity).
The Treasury responded in kind promising to spend
whatever it takes.
So the Fed is printing unlimited money and the
Treasury is spending it as fast as it appears out of nowhere.
That’s called
monetizing the debt and it’s economically fatal sooner or later.
The Trump Administration and Congress have pledged to
pay everyone’s wages who isn’t working, to end evictions, to forgive all
kinds of late or non-payments, to buy even junk bonds!
Already the
money supply is exploding and the checks are still going out.
Inflation Alert: Money Supply Expanding At 26x Rate Of QE1
Next likely steps: (1) the Fed will start buying
stocks so government owns the means of production (the definition of
socialism) and (2) the Administration and Congress will ask for trillions
more for “infrastructure” building jobs.
Moral hazard has become moral catastrophe.
OK, so here we are: the economy is shut down;
production and distribution have plummeted; supply chains, including those
cheap products from China, are interrupted, and suddenly we have a
virtually unlimited supply of money.
At the same time, we’re producing fewer goods and
services than ever.
Timid efforts to “restart the economy” will likely
prove false starts indefinitely as the virus resurges wherever they’re
tried.
“Too much money chasing too few goods?” Where have I
heard that phrase before? Oh yeah, a couple decades ago before all this
economic craziness got started in earnest.
Inflation? Yes of course. Inflation is nothing more
than an increase in the money supply. This is inflation by definition and
by orders of magnitude greater than ever before.
Well, then, why aren’t consumer prices going up more?
They didn’t go up commensurately with the increases
in money supply during the previous two asset bubbles because most of the
new money went into the debt and equity markets instead of consumer
prices.
OK, so why won’t that just happen again? We’ll blow
up an even bigger bubble and let the good times roll! Isn’t that what the
currently resurging V-shaped stock market results are showing?
Nope: too much money this time. Too few goods to buy.
Equity markets are unattractive for anyone without the rose-colored
glasses of mindless confidence in the Fed.
Too many dollars with no place to go means the dollar
loses value. People lose confidence in the dollar. The dollar loses its
status as the world’s reserve currency.
Blow a balloon too big and it’ll pop even without a
pin like the Coronavirus to puncture it.
So, this is it, the reckoning, the end game.
Hyperinflation. The Weimar Republic, Argentina, Zimbabwe, the new USA.
The good news: Social Security and other government
pensions and programs will pay in full; the bad news: what they pay won’t
buy much.
On the other hand …
We’ll have no more moral hazard as the government
will have no more ability to supply it.
Medicaid and Medicare? Maybe some residual safety net
will remain, but the smart money will seek protection in the private
market: saving, investing and insuring in real money.
Real money? It’ll be gold again as it always was
under the surface and behind the scenes. It’s the only money that keeps
its value as fiat currencies fluctuate.
Does this have anything to do with long-term care?
You bet.
As the economy stabilizes around real money, we’ll
have no more inflation, no more moral hazard from government “help.”
If Medicaid survives, it will be vastly attenuated,
and certainly not a resource middle class and affluent people can rely on
for long-term care as they have in the past.
Private charity will fill the gap left by
disappearing entitlement programs, but it won’t be enough.
People will have to rely again on personal
responsibility and private means: saving, investment, and insurance, as
they did long ago when America was becoming the great economic powerhouse
it has frittered away.
Long-term care will remain expensive and people will
need it as much as ever.
With no government program to fall back on, private
long-term care insurance will resurge, but underwritten by gold.
We’ll pay premiums, receive benefits, and finance
stable long-term care expenditures with gold, the once and future
objective standard of value.
Instead of “who needs it” private LTCI will become
“can’t go without it” protection.
It’s a long, rocky road ahead, but that’s where we’re
headed.
Your thoughts?
#############################
Updated, Monday, May 4, 2020, 9:00 AM
(Pacific)
Seattle—
#############################
LTC
E-ALERT #20-018: 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:
-
Want to slash coronavirus deaths? Start
(really) caring about long term care
-
Coronavirus: Why so many US nurses are
out of work
-
More than 80% of assisted living
facilities report occupancy declines: NIC
-
White House creates national nursing
home safety panel, will deliver 2 weeks’ worth of PPE to every facility
in response to COVID-19 crisis
-
COVID-19 Could Increase Seniors’ Rapid
Disenrollment in Medicare Advantage
-
How Can a Trust Help You Avoid Nursing
Home Costs?
-
Aging in the Time of COVID-19:
Reflections on Life, Health, Family, Community and Purpose - A Chat with
Ken Dychtwald
-
MILLENNIALS SURPASS BABY BOOMERS AS
LARGEST U.S. GENERATION, ENDING 20-YEAR RUN
-
Why Are We So Shocked By COVID-19
Nursing Home Deaths? We Have Been Failing Our Frail Older Adults For
Decades
-
Nursing Homes Were a Disaster Waiting
to Happen
-
Medicare Beneficiaries’ Financial
Security Before the Coronavirus Pandemic
-
COVID-19 May Deplete Social Security
Trust Funds This Decade
#############################
"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 27, 2020, 9:00
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #20-017: 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:
-
The Potential Health Care Costs And
Resource Use Associated With COVID-19 In The United States
-
National Health Expenditure Projections,
2019–28: Expected Rebound In Prices Drives Rising Spending Growth
-
Coronavirus to accelerate Social Security,
Medicare depletion dates, U.S. officials say
-
Seniors with COVID-19 showing unusual
symptoms, plus: blood clotting an issue
-
A Dozen Facts About Medicare Advantage in
2020
-
Pandemic may push seniors housing occupancy
below 80% for first time
-
Righteous COVID-19 indignation
-
Coronavirus Exposes the Dangers of Age
Segregation
-
ACL Announces Nearly $1 Billion in CARES
Act Grants to Support Older Adults and People with Disabilities in the
Community During the COVID-19 Emergency
-
Pandemic’s Costs Stagger the Nursing Home
Industry
-
CMS Requires SNFs to Report Confirmed
COVID-19 Cases to Residents, Families, CDC
-
Dementia diagnosis often means death within
five years, study finds
-
White House: Senior Care Facility Visits to
Remain Banned Until Final Phase of COVID-19 Reopen Plan
-
CMS Orders Nursing Homes to Report All
COVID-19 Cases to CDC, Plans Public Data Release
-
Some rules of Medicaid for long-term care
are changing
#############################
"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 24, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC Bullet: Medicaid and Long-Term Care, the Serial,
Part 7, the End
LTC Comment: The full
Medicaid and Long-Term Care monograph is 78 pages, so we’re
bringing it to you in bite-sized pieces. Here’s the seventh and last one,
after the ***news.***
*** SERIAL ENDS, ACTION BEGINS: Today’s LTC Bullet
brings you the exciting conclusion of
Medicaid and Long-Term Care. In it, we capitalize on the
findings in six earlier episodes to explain why and how Medicaid reform is
necessary and sufficient to improve long-term care service delivery and
financing in the United States. That’s our marker. Future LTC Bullets
will move from analysis and recommendations toward advocacy and
implementation. The U.S. government having thrown open the monetary and
fiscal floodgates, anything is possible now. Will we slip into
hyperinflation, depression, and ever greater government dependency or
revive private markets, competition and personal responsibility? We’ll
tackle that question in a new series of LTC Bullets. Stay tuned!
***
*** IN THE MEANTIME, there’s never been a better time
to renew your support for the Center for Long-Term Care Reform. Our work
was instrumental in winning federal level public policy improvements in
OBRA ’93 (closed Medicaid loopholes and mandated estate recovery) and DRA
’05 (capped home equity exemption and unleashed LTC Partnerships). For the
first time in a decade and a half, the potential for reforming Medicaid at
the federal and state levels is great again. That is the key to unbridle
private long-term care insurance as well. So, please renew and upgrade
your Center memberships; subscribe to LTC Clippings; and urge your
companies to join the Center as corporate members (making your personal
membership free.) Check out our “Membership
Levels and Benefits” schedule for all the details. Contact Steve Moses
at 425-891-3640 or
smoses@centerltc.com. You can also join or upgrade here:
http://www.centerltc.com/support/index.htm. ***
LTC BULLET: MEDICAID AND LONG-TERM CARE, THE SERIAL,
PART 7, THE END
LTC Comment:
Episode 1 of our serialization of the
Center’s newest report described the current defective method of
providing and paying for long-term care.
Episode 2 explained how Medicaid became the dominant payor for
long-term care, the dire consequences that ensued, and central planners’
futile efforts to fix the broken system.
Episode 3 showed how scholars made the same mistakes as policymakers,
lamenting long-term care’s problems without analyzing their causes, and
recommending more of the same interventions that caused the problems in
the first place.
Episode 4 focused on how affluent people qualify for Medicaid
long-term care benefits, why they ignore the risk and cost of long-term
care until they need it, and how the government has tried, mostly
unsuccessfully, to curtail artificial self-impoverishment to qualify for
benefits.
Episode 5 explained how and why most long-term care analysts ignore or
misrepresent the vast literature on qualifying for Medicaid long-term care
benefits while avoiding spend down of wealth.
Episode 6 discussed and gave examples of the evidence that Medicaid’s
spend down rules do not prevent middle class and affluent people from
taking advantage of the welfare program’s long-term care benefits. In
today’s seventh and final episode, Steve Moses capitalizes on the
preceding evidence and arguments to explain how long-term care financing
policy must change to ensure quality long-term care for all Americans.
Due to email formatting challenges, we’ll leave out
the content of the report’s extensive footnotes in this serialized
version. But the footnotes are important, and you can find them by
clicking through to the unabridged version
here. Likewise, citations to sources are given in the form (author,
year, page number). To find the full citations for those sources, see the
“References” section at the end of the
full report.
Here’s the seventh and final episode of “Medicaid and
Long-Term Care,” by Stephen A. Moses, Center for Long-Term Care Reform,
Seattle, Washington, published January 17, 2020. This paper was presented
to The Libertarian Scholars Conference on September 28, 2019 in New York
City and to The Cato Institute’s State Health Policy Summit on January 3,
2020 in Orlando, Florida.
Ramifications
If Medicaid is not the
catastrophic poverty-maker it is commonly made out to be, what is it?
Simply put, Medicaid has become a long-term care entitlement for
middle-class and affluent families. Individuals can ignore the risk of
future long-term care expenses, avoid premiums for private insurance, and
then protect home equity and other wealth for heirs if such care is ever
needed, shifting the cost of long-term care to taxpayers. The consequences
of this reality affect every aspect of the long-term care market.
By making nursing home
care virtually free in the mid-1960s, Medicaid locked institutional bias
into the long-term care system, crowded out a privately financed market
for the home care seniors prefer, and trapped the World War II generation
in welfare-financed 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 suffer from serious
access and quality problems.
By underfunding most
long-term care providers—leading to doubtful 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 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.
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
(De Nardi, French and Jones,
2009, pp. 4-580).
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, contributing to inequality (Ibid.,
p. 281).
These conditions have
prevailed for Medicaid’s 55-year history. They explain why America’s
long-term care service delivery and financing system is so dysfunctional.
The widespread fallacy of impoverishment sustains this status quo because
scholars fail to challenge it. This explains why long-term care dominates
Medicaid expenditures but remains impervious to reform.
Policy Recommendations
Everyone agrees that
America’s long-term care services and financing system is broken and
unsustainable. But most analysis of the problem fails to address its
causes rooted in public financing. The usual result is ever more emphasis
on expanding government’s role even further. On that path lies more
decline and dysfunction.
If the fundamental cause
of long-term care problems is easy and elastic Medicaid financial
eligibility combined with generous federal matching funds to induce
Medicaid spending by states, then corrective action must address those
causes if it is ever to effect improvements in the symptoms of exploding
costs, dubious access and poor quality.
The best way to eliminate
the incentive for states to maximize federal Medicaid matching funds is,
for the first time ever, to cap those funds at some reasonable level based
on past and anticipated future long-term care expenditures. Without
unlimited access to federal funds and with fewer regulatory strings
attached to the funds they do receive, states will have an incentive to
make the best use of the federal revenue. They will experiment, succeed or
fail, and learn from each other, taking full advantage of America’s
inimitable federal system.
On the consumer side, the
obvious solution is to eliminate incentives in public policy that
discourage early and responsible long-term care planning. One way to do
that would be to end all pathways that enable people to qualify for
Medicaid while protecting income and assets. If individuals and families
truly did face impoverishment when catastrophic long-term care
expenditures occur, that risk and cost would move to the top of their
retirement and estate planning priorities much earlier. But such an
approach would be disruptive, disorienting, and cruel, as well as
politically infeasible.
A less drastic measure
would be to eliminate or greatly reduce Medicaid’s home equity exemption.
Home equity is seniors’ largest asset. As of the third quarter of 2019,
78.9 percent of people over the age of 65 own their homes (U.S Census
Bureau, 2019), and of these 63.2 percent own free and clear of mortgage
debt (Census Bureau, 2017). “Housing wealth for homeowners 62 and older
continues to grow at a steady clip, reaching a record $7.05 trillion in
the fourth quarter of 2018” (Guerin, 2019). Ownership and transfers are
easy to track through public records. Transfers of ownership within 20
years of applying for Medicaid could be deemed disqualifying as all
transfers of any assets are now, though with only a five-year look-back.
With home equity at risk, more people would save, invest or insure for
long-term care. If they failed to do that, they would need to use reverse
mortgages or some other method of public or private home equity conversion
to pay for their care until they became legitimately eligible for public
welfare assistance.
A less politically
objectionable approach would be to allow people to receive long-term care
help from Medicaid when they need it while retaining even more of their
income and assets than is allowed now, but to lien that wealth effectively
and recover it after the recipients’ passing, from their estates. Instead
of making families run the gauntlet of degrading artificial
self-impoverishment methods, let them keep and use what they have saved.
As most of elders’ wealth is in their home equity, securing that wealth
with a publicly administered and enforced home equity conversion program
could reduce the cost of Medicaid and empower far more people to obtain
high quality private long-term care in the most appropriate venue. To
avoid dependency on Medicaid and the eventual liability of estate
recovery, elders and their heirs would have a much stronger incentive to
plan early and responsibly for long-term care risk and cost.
Critics may say we tried
that approach with OBRA ’93, which discouraged divestment of wealth and
required estate recovery. Unfortunately, that strategy did not work
because the legislation left too many loopholes and exclusions enabling
divestment and impeding estate recovery. The Medicaid planning bar
creatively worked around the new restrictions finding ever more ingenious
ways to defeat the policy. Furthermore, states failed to implement; the
federal government did not enforce; and the media neglected to publicize
the new rules that were intended to encourage people to plan ahead to
avoid Medicaid dependency (USDHHS Inspector General, 201482).
Consequently, consumer behavior did not change.
Policymakers should try
again and this time eliminate the loopholes, enforce implementation, and
publicize the methods and benefits of preparing to pay privately for
long-term care. But first, we should all …
Redefine the Problem
Albert Einstein said “We
can't solve problems by using the same kind of thinking we used when we
created them.” The kind of thinking that created the long-term care
problem is that markets cannot provide the services people need without
massive government regulation and financing. No other way of thinking
about the problem has been seriously considered heretofore. But some
recent research suggests how we might reconceptualize the quandary we are
in so that it is not such a huge challenge and may in fact be amenable to
a market-based solution.
Long-term care may not be
the titanic crisis it has been assumed to be. For example, in February
2016, the Department of Health and Human Services Assistant Secretary for
Planning and Evaluation (ASPE) reported:
Using microsimulation
modeling, we estimate that about half (52%) of Americans turning 65 today
will develop a disability serious enough to require LTSS, although most
will need assistance for less than two years. About one in seven adults,
however, will have a disability for more than five years. On average, an
American turning 65 today will incur $138,000 in future LTSS costs, which
could be financed by setting aside $70,000 today (Favreault and Dey, 2016,
p. 1).
That does not sound so
daunting, especially if you consider these authors believe half the cost
of long-term care will be covered by other payers, including Medicaid.
Where would the average person come up with $70,000 today so that it would
appreciate from that present discounted value to the $138,000 he or she
might need to cover long-term care costs in the future? The extractable
home equity of 19.4 million senior households (age 65 plus) at a
conservative Combined Loan to Value (CLTV) of 75 percent was $3.1 trillion
in 2015, averaging $160,000 per household (Kaul and Goodman, 2017, pp. 2-3
and Tables 1 and 2). If Medicaid did not exempt a minimum of $595,000,
more than triple the average extractable home equity amount, a way could
be found to earmark enough of it to cover the total cost of most older
homeowners’ long-term care. By diverting people with sufficient home
equity from Medicaid dependency to financing their own care privately, the
fiscal burden on Medicaid could be substantially reduced.
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.
Obviously, there is no
incentive for people to liquidate their wealth as long as Medicaid
long-term care financial eligibility works the way it does. But if
Medicaid’s perverse incentives were changed to encourage responsible
long-term care planning and private payment, how would people respond?
Home equity conversion could handle much of the financial burden for the
majority of home-owning elders. Reverse mortgages would free up cash flow
to cover home care expenses or, for people who plan ahead, the extra
revenue could be used to fund long-term care insurance premiums.
Most analysts, however,
have written off private long-term care insurance as unlikely ever to
penetrate enough of the middle market to become a significant payment
source. But they have always assumed that people would need much more
coverage at too great a cost to attract enough buyers to make a big
difference. That assumption may be wrong. 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, April83).
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.
Then there is this. A
Cato Institute Policy Analysis reports that “Improved estimates of poverty
show that only about 2 percent of today’s population lives in poverty,
well below the 11 percent to 15 percent that has been reported during the
past five decades” (Early, 2018, p. 1). How can that be? “By design, the
official estimates of income inequality and poverty omit significant
government transfer payments to low-income households; they also ignore
taxes paid by households” (Ibid., p. 2). What is the bottom line?
“The net effect is that pretax data overstate the true income of
upper-income households by as much as 50 percent, and missing transfers
understate the true income of lower-income households by a factor of two
or more” (Ibid., p. 4). The rich are poorer and the poor, richer
than we thought. “More than 50 years after the United States declared the
War on Poverty, poverty is almost entirely gone. … Public policy debate
should begin with the realization that only about 2 percent of the
population—not 13.5 percent—live in poverty” (Ibid., p. 21).
Former Democratic
presidential candidate New York Mayor Bill de Blasio is correct when he
says “There's
plenty of money in this country.” He’s mistaken when he adds “it’s
just in the wrong hands.” It’s in exactly the right hands, those of
the people with personal resources or home equity sufficient to fund their
own long-term care and stay off Medicaid. All they need is positive public
policy incentives to get them to use it. But, unfortunately, the kind of
corrective action needed to achieve that outcome is highly unlikely in the
current economic environment of profligate fiscal and monetary policy.
The Broken Rhythm of
Reform
Historically, progress
toward making Medicaid a better long-term care safety for the poor—by
diverting the middle class and affluent from dependency on it—tends to
occur after major economic downturns when state and federal governments
face serious budgetary constraints. After most recessions since 1965,
congresses and presidents of widely divergent ideological persuasions
backed legislation closing Medicaid long-term care eligibility loopholes
and encouraging early and responsible long-term care planning. But as each
recession was followed by a rapid economic recovery in which budgetary
pressure abated, Medicaid long-term care benefits always reverted to
virtually universal availability for all economic classes.
This pattern has changed
since the start of the new millennium. After the recession from March 2001
to November 2001 following the internet bubble’s implosion, economic
recovery came more slowly than before. Likewise, it took much longer for
legislation discouraging the excessive use of Medicaid long-term care
benefits to be passed. The Deficit Reduction Act of 2005, which imposed
the first cap on home equity and expanded the asset transfer look back
period, was not signed into law until February of 2006, nearly five years
after the start of the previous recession. Economic recovery came and,
true to form, enforcement of DRA 2005 declined.
The new boom ended when
the housing bubble burst, causing the Great Recession of December 2007 to
June 2009. Again, economic recovery came very slowly. To date, over ten
years after the end of the last recession, we have seen no action to spend
Medicaid’s scarce resources more wisely by aiming them toward people most
in need. In fact, public policy analysts and advocates are moving in the
opposite direction, towards proposing yet another compulsory government
program funded by taxpayers to expand public financing of long-term care
for all.
What might explain slower
economic recoveries in recent years and less attention to the cost of
Medicaid long-term care benefits? The Federal Reserve forced interest
rates to artificially low levels during and since the Great Recession. The
consequences of this policy have ramified through the economy in many
ways. One way is that government has been able to finance deficit spending
and the rapidly increasing national debt at considerably lower carrying
costs than before, when interest rates were much higher. By enabling
politicians to spend more without facing the normal budgetary
consequences, this new economic policy has attracted greater financial
resources, including borrowed funds, into public financing of all kinds
and simultaneously diverted private wealth into low-interest-rate-induced
malinvestment. Consequently, political concern about burgeoning budgets
and debt has subsided and no significant effort to preserve Medicaid funds
by targeting them to the poor has occurred.
The danger is that just as
excessive public spending and private malinvestment in the early 2000s led
to the housing bubble and its consequent recession, so the current much
larger credit bubble driven by excessive government borrowing and spending
could lead to an even greater economic collapse. With the current national
debt exceeding $23 trillion and total unfunded entitlement liabilities
around $128 trillion, a return to economically realistic market-based
interest rates would render the federal government immediately insolvent
(The National Debt Clock, 2019).
Further exacerbating the
problem of long-term care financing is the fact that the long-anticipated
age wave is finally cresting and will soon crash on the U.S. economy. Baby
boomers began retiring and taking Social Security benefits at age 62 in
2008. At age 65 in 2011, they turned the Social Security program cash-flow
negative (Burtless, 2011). Boomers began taking Required Minimum
Distributions (RMDs) from their tax-deferred retirement accounts in 2016,
depleting the supply of private investment capital. They will begin to
reach the critical age (85 years plus) of rising long-term care needs in
2031, around the time Medicare (2026) and Social Security (2035) are
expected to deplete their trust funds, forcing them to reduce benefits.
Of course, Medicaid is
the main funder of long-term care, but according to the Centers for
Medicare and Medicaid Services Chief Actuary in a statement of consummate
denial: “. . . Medicaid outlays and revenues are automatically in
financial balance, there is no need to maintain a contingency reserve,
and, unlike Medicare, the ‘financial status’ of the program is not in
question from an actuarial perspective” (Truffer, Wolfe, and Rennie, 2016,
p. 3). In summary, conditions are coalescing for a potential
economic cataclysm in or before the second-third of this century and
public officials are almost entirely ignoring the risk.
Conclusion
America’s long-term care
services and financing system is badly broken. An oncoming demographic age
wave guarantees the symptoms of its dysfunctionality will get much worse
if something is not done. But to address the symptoms of high cost and low
quality without reducing reliance on the public financing which caused
them will only make matters worse. Unfortunately, that is the course most
scholarship on this subject takes, resulting in ever more urgent calls for
even more state and federal financial involvement, with citizens compelled
to participate and pay. Ludvig von Mises warned: “The goal of their
policies is to substitute ‘planning’ for the alleged planlessness of the
market economy. The term ‘planning’ as they use it means, of course,
central planning by the authorities, enforced by the police power. It
implies the nullification of each citizen’s right to plan his own life” (Mises,
1953, p. 436). A better course is to reduce states’ dependency on federal
funds, target scarce public resources to people who need them most, and
let free market incentives and products take care of the rest.
< End >
#############################
Updated,
Monday, April 24, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC
BULLET: MEDICAID AND LONG-TERM CARE, THE SERIAL, PART 7, THE END
LTC
Comment: The full
Medicaid and Long-Term Care
monograph is 78 pages, so we’re bringing it to you in bite-sized pieces.
Here’s the seventh and last one, after the ***news.***
***
SERIAL ENDS, ACTION BEGINS: Today’s LTC Bullet brings you the
exciting conclusion of
Medicaid and Long-Term Care.
In it, we capitalize on the findings in six earlier episodes to explain
why and how Medicaid reform is necessary and sufficient to improve
long-term care service delivery and financing in the United States. That’s
our marker. Future LTC Bullets will move from analysis and
recommendations toward advocacy and implementation. The U.S. government
having thrown open the monetary and fiscal floodgates, anything is
possible now. Will we slip into hyperinflation, depression, and ever
greater government dependency or revive private markets, competition and
personal responsibility? We’ll tackle that question in a new series of
LTC Bullets. Stay tuned! ***
***
IN THE MEANTIME, there’s never been a better time to renew your support
for the Center for Long-Term Care Reform. Our work was instrumental in
winning federal level public policy improvements in OBRA ’93 (closed
Medicaid loopholes and mandated estate recovery) and DRA ’05 (capped home
equity exemption and unleashed LTC Partnerships). For the first time in a
decade and a half, the potential for reforming Medicaid at the federal and
state levels is great again. That is the key to unbridle private long-term
care insurance as well. So, please renew and upgrade your Center
memberships; subscribe to LTC Clippings; and urge your companies to
join the Center as corporate members (making your personal membership
free.) Check out our “Membership
Levels and Benefits”
schedule for all the details. Contact Steve Moses at 425-891-3640 or
smoses@centerltc.com.
You can also join or upgrade here:
http://www.centerltc.com/support/index.htm.
***
LTC
BULLET: MEDICAID AND LONG-TERM CARE, THE SERIAL, PART 7, THE END
LTC
Comment:
Episode 1
of our serialization of the
Center’s newest report
described the current defective method of providing and paying for
long-term care.
Episode 2
explained how Medicaid became the dominant payor for long-term care, the
dire consequences that ensued, and central planners’ futile efforts to fix
the broken system.
Episode 3
showed how scholars made the same mistakes as policymakers, lamenting
long-term care’s problems without analyzing their causes, and recommending
more of the same interventions that caused the problems in the first
place.
Episode 4
focused on how affluent people qualify for Medicaid long-term care
benefits, why they ignore the risk and cost of long-term care until they
need it, and how the government has tried, mostly unsuccessfully, to
curtail artificial self-impoverishment to qualify for benefits.
Episode 5
explained how and why most long-term care analysts ignore or misrepresent
the vast literature on qualifying for Medicaid long-term care benefits
while avoiding spend down of wealth.
Episode 6
discussed and gave examples of the evidence that Medicaid’s spend down
rules do not prevent middle class and affluent people from taking
advantage of the welfare program’s long-term care benefits. In today’s
seventh and final episode, Steve Moses capitalizes on the preceding
evidence and arguments to explain how long-term care financing policy must
change to ensure quality long-term care for all Americans.
Due
to email formatting challenges, we’ll leave out the content of the
report’s extensive footnotes in this serialized version. But the footnotes
are important, and you can find them by clicking through to the unabridged
version
here.
Likewise, citations to sources are given in the form (author, year, page
number). To find the full citations for those sources, see the
“References” section at the end of the
full report.
Here’s the seventh and final episode of “Medicaid and Long-Term Care,” by
Stephen A. Moses, Center for Long-Term Care Reform, Seattle, Washington,
published January 17, 2020. This paper was presented to The Libertarian
Scholars Conference on September 28, 2019 in New York City and to The Cato
Institute’s State Health Policy Summit on January 3, 2020 in Orlando,
Florida.
Ramifications
If Medicaid is not the catastrophic poverty-maker it is commonly made
out to be, what is it? Simply put, Medicaid has become a long-term care
entitlement for middle-class and affluent families. Individuals can ignore
the risk of future long-term care expenses, avoid premiums for private
insurance, and then protect home equity and other wealth for heirs if such
care is ever needed, shifting the cost of long-term care to taxpayers. The
consequences of this reality affect every aspect of the long-term care
market.
By making nursing home care virtually free in the mid-1960s, Medicaid
locked institutional bias into the long-term care system, crowded out a
privately financed market for the home care seniors prefer, and trapped
the World War II generation in welfare-financed 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 suffer from serious access and quality problems.
By underfunding most long-term care providers—leading to doubtful
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 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.
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
(De Nardi, French and Jones, 2009, pp. 4-580).
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,
contributing to inequality (Ibid., p. 281).
These conditions have prevailed for Medicaid’s 55-year history. They
explain why America’s long-term care service delivery and financing system
is so dysfunctional. The widespread fallacy of impoverishment sustains
this status quo because scholars fail to challenge it. This explains why
long-term care dominates Medicaid expenditures but remains impervious to
reform.
Policy Recommendations
Everyone agrees that America’s long-term care services and financing
system is broken and unsustainable. But most analysis of the problem fails
to address its causes rooted in public financing. The usual result is ever
more emphasis on expanding government’s role even further. On that path
lies more decline and dysfunction.
If the fundamental cause of long-term care problems is easy and elastic
Medicaid financial eligibility combined with generous federal matching
funds to induce Medicaid spending by states, then corrective action must
address those causes if it is ever to effect improvements in the symptoms
of exploding costs, dubious access and poor quality.
The best way to eliminate the incentive for states to maximize federal
Medicaid matching funds is, for the first time ever, to cap those funds at
some reasonable level based on past and anticipated future long-term care
expenditures. Without unlimited access to federal funds and with fewer
regulatory strings attached to the funds they do receive, states will have
an incentive to make the best use of the federal revenue. They will
experiment, succeed or fail, and learn from each other, taking full
advantage of America’s inimitable federal system.
On the consumer side, the obvious solution is to eliminate incentives
in public policy that discourage early and responsible long-term care
planning. One way to do that would be to end all pathways that enable
people to qualify for Medicaid while protecting income and assets. If
individuals and families truly did face impoverishment when catastrophic
long-term care expenditures occur, that risk and cost would move to the
top of their retirement and estate planning priorities much earlier. But
such an approach would be disruptive, disorienting, and cruel, as well as
politically infeasible.
A less drastic measure would be to eliminate or greatly reduce
Medicaid’s home equity exemption. Home equity is seniors’ largest asset.
As of the third quarter of 2019, 78.9 percent of people over the age of 65
own their homes (U.S Census Bureau, 2019), and of these 63.2 percent own
free and clear of mortgage debt (Census Bureau, 2017). “Housing wealth for
homeowners 62 and older continues to grow at a steady clip, reaching a
record $7.05 trillion in the fourth quarter of 2018” (Guerin, 2019).
Ownership and transfers are easy to track through public records.
Transfers of ownership within 20 years of applying for Medicaid could be
deemed disqualifying as all transfers of any assets are now, though with
only a five-year look-back. With home equity at risk, more people would
save, invest or insure for long-term care. If they failed to do that, they
would need to use reverse mortgages or some other method of public or
private home equity conversion to pay for their care until they became
legitimately eligible for public welfare assistance.
A less politically objectionable approach would be to allow people to
receive long-term care help from Medicaid when they need it while
retaining even more of their income and assets than is allowed now, but to
lien that wealth effectively and recover it after the recipients’ passing,
from their estates. Instead of making families run the gauntlet of
degrading artificial self-impoverishment methods, let them keep and use
what they have saved. As most of elders’ wealth is in their home equity,
securing that wealth with a publicly administered and enforced home equity
conversion program could reduce the cost of Medicaid and empower far more
people to obtain high quality private long-term care in the most
appropriate venue. To avoid dependency on Medicaid and the eventual
liability of estate recovery, elders and their heirs would have a much
stronger incentive to plan early and responsibly for long-term care risk
and cost.
Critics may say we tried that approach with OBRA ’93, which discouraged
divestment of wealth and required estate recovery. Unfortunately, that
strategy did not work because the legislation left too many loopholes and
exclusions enabling divestment and impeding estate recovery. The Medicaid
planning bar creatively worked around the new restrictions finding ever
more ingenious ways to defeat the policy. Furthermore, states failed to
implement; the federal government did not enforce; and the media neglected
to publicize the new rules that were intended to encourage people to plan
ahead to avoid Medicaid dependency (USDHHS Inspector General, 201482).
Consequently, consumer behavior did not change.
Policymakers should try again and this time eliminate the loopholes,
enforce implementation, and publicize the methods and benefits of
preparing to pay privately for long-term care. But first, we should all …
Redefine the Problem
Albert Einstein said “We
can't solve problems by using the same kind of thinking we used when we
created them.”
The kind of thinking that created the long-term care problem is that
markets cannot provide the services people need without massive government
regulation and financing. No other way of thinking about the problem has
been seriously considered heretofore. But some recent research suggests
how we might reconceptualize the quandary we are in so that it is not such
a huge challenge and may in fact be amenable to a market-based solution.
Long-term care may not be the titanic crisis it has been assumed to be.
For example, in February 2016, the Department of Health and Human Services
Assistant Secretary for Planning and Evaluation (ASPE) reported:
Using microsimulation modeling, we estimate that about half (52%) of
Americans turning 65 today will develop a disability serious enough to
require LTSS, although most will need assistance for less than two years.
About one in seven adults, however, will have a disability for more than
five years. On average, an American turning 65 today will incur $138,000
in future LTSS costs, which could be financed by setting aside $70,000
today (Favreault and Dey, 2016, p. 1).
That does not sound so daunting, especially if you consider these authors
believe half the cost of long-term care will be covered by other payers,
including Medicaid. Where would the average person come up with $70,000
today so that it would appreciate from that present discounted value to
the $138,000 he or she might need to cover long-term care costs in the
future? The extractable home equity of 19.4 million senior households (age
65 plus) at a conservative Combined Loan to Value (CLTV) of 75 percent was
$3.1 trillion in 2015, averaging $160,000 per household (Kaul and Goodman,
2017, pp. 2-3 and Tables 1 and 2). If Medicaid did not exempt a minimum of
$595,000, more than triple the average extractable home equity amount, a
way could be found to earmark enough of it to cover the total cost of most
older homeowners’ long-term care. By diverting people with sufficient home
equity from Medicaid dependency to financing their own care privately, the
fiscal burden on Medicaid could be substantially reduced.
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.
Obviously, there is no incentive for people to liquidate their wealth
as long as Medicaid long-term care financial eligibility works the way it
does. But if Medicaid’s perverse incentives were changed to encourage
responsible long-term care planning and private payment, how would people
respond? Home equity conversion could handle much of the financial burden
for the majority of home-owning elders. Reverse mortgages would free up
cash flow to cover home care expenses or, for people who plan ahead, the
extra revenue could be used to fund long-term care insurance premiums.
Most analysts, however, have written off private long-term care
insurance as unlikely ever to penetrate enough of the middle market to
become a significant payment source. But they have always assumed that
people would need much more coverage at too great a cost to attract enough
buyers to make a big difference. That assumption may be wrong. 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, April83).
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.
Then there is this. A Cato Institute Policy Analysis reports that
“Improved estimates of poverty show that only about 2 percent of today’s
population lives in poverty, well below the 11 percent to 15 percent that
has been reported during the past five decades” (Early, 2018, p. 1). How
can that be? “By design, the official estimates of income inequality and
poverty omit significant government transfer payments to low-income
households; they also ignore taxes paid by households” (Ibid., p.
2). What is the bottom line? “The net effect is that pretax data overstate
the true income of upper-income households by as much as 50 percent, and
missing transfers understate the true income of lower-income households by
a factor of two or more” (Ibid., p. 4). The rich are poorer and the
poor, richer than we thought. “More than 50 years after the United States
declared the War on Poverty, poverty is almost entirely gone. … Public
policy debate should begin with the realization that only about 2 percent
of the population—not 13.5 percent—live in poverty” (Ibid., p. 21).
Former Democratic presidential candidate New York Mayor Bill de Blasio
is correct when he says “There's
plenty of money in this country.”
He’s mistaken when he adds “it’s
just in the wrong hands.”
It’s in exactly the right hands, those of the people with personal
resources or home equity sufficient to fund their own long-term care and
stay off Medicaid. All they need is positive public policy incentives to
get them to use it. But, unfortunately, the kind of corrective action
needed to achieve that outcome is highly unlikely in the current economic
environment of profligate fiscal and monetary policy.
The Broken Rhythm of Reform
Historically, progress toward making Medicaid a better long-term care
safety for the poor—by diverting the middle class and affluent from
dependency on it—tends to occur after major economic downturns when state
and federal governments face serious budgetary constraints. After most
recessions since 1965, congresses and presidents of widely divergent
ideological persuasions backed legislation closing Medicaid long-term care
eligibility loopholes and encouraging early and responsible long-term care
planning. But as each recession was followed by a rapid economic recovery
in which budgetary pressure abated, Medicaid long-term care benefits
always reverted to virtually universal availability for all economic
classes.
This pattern has changed since the start of the new millennium. After
the recession from March 2001 to November 2001 following the internet
bubble’s implosion, economic recovery came more slowly than before.
Likewise, it took much longer for legislation discouraging the excessive
use of Medicaid long-term care benefits to be passed. The Deficit
Reduction Act of 2005, which imposed the first cap on home equity and
expanded the asset transfer look back period, was not signed into law
until February of 2006, nearly five years after the start of the previous
recession. Economic recovery came and, true to form, enforcement of DRA
2005 declined.
The new boom ended when the housing bubble burst, causing the Great
Recession of December 2007 to June 2009. Again, economic recovery came
very slowly. To date, over ten years after the end of the last recession,
we have seen no action to spend Medicaid’s scarce resources more wisely by
aiming them toward people most in need. In fact, public policy analysts
and advocates are moving in the opposite direction, towards proposing yet
another compulsory government program funded by taxpayers to expand public
financing of long-term care for all.
What might explain slower economic recoveries in recent years and less
attention to the cost of Medicaid long-term care benefits? The Federal
Reserve forced interest rates to artificially low levels during and since
the Great Recession. The consequences of this policy have ramified through
the economy in many ways. One way is that government has been able to
finance deficit spending and the rapidly increasing national debt at
considerably lower carrying costs than before, when interest rates were
much higher. By enabling politicians to spend more without facing the
normal budgetary consequences, this new economic policy has attracted
greater financial resources, including borrowed funds, into public
financing of all kinds and simultaneously diverted private wealth into
low-interest-rate-induced malinvestment. Consequently, political concern
about burgeoning budgets and debt has subsided and no significant effort
to preserve Medicaid funds by targeting them to the poor has occurred.
The danger is that just as excessive public spending and private
malinvestment in the early 2000s led to the housing bubble and its
consequent recession, so the current much larger credit bubble driven by
excessive government borrowing and spending could lead to an even greater
economic collapse. With the current national debt exceeding $23 trillion
and total unfunded entitlement liabilities around $128 trillion, a return
to economically realistic market-based interest rates would render the
federal government immediately insolvent (The National Debt Clock, 2019).
Further exacerbating the problem of long-term care financing is the
fact that the long-anticipated age wave is finally cresting and will soon
crash on the U.S. economy. Baby boomers began retiring and taking Social
Security benefits at age 62 in 2008. At age 65 in 2011, they turned the
Social Security program cash-flow negative (Burtless, 2011). Boomers began
taking Required Minimum Distributions (RMDs) from their tax-deferred
retirement accounts in 2016, depleting the supply of private investment
capital. They will begin to reach the critical age (85 years plus) of
rising long-term care needs in 2031, around the time Medicare (2026) and
Social Security (2035) are expected to deplete their trust funds, forcing
them to reduce benefits.
Of course, Medicaid is the main funder of long-term care, but according
to the Centers for Medicare and Medicaid Services Chief Actuary in a
statement of consummate denial: “. . . Medicaid outlays and
revenues are automatically in financial balance, there is no need to
maintain a contingency reserve, and, unlike Medicare, the ‘financial
status’ of the program is not in question from an actuarial perspective” (Truffer,
Wolfe, and Rennie, 2016, p. 3). In summary, conditions are
coalescing for a potential economic cataclysm in or before the
second-third of this century and public officials are almost entirely
ignoring the risk.
Conclusion
America’s long-term care services and financing system is badly broken.
An oncoming demographic age wave guarantees the symptoms of its
dysfunctionality will get much worse if something is not done. But to
address the symptoms of high cost and low quality without reducing
reliance on the public financing which caused them will only make matters
worse. Unfortunately, that is the course most scholarship on this subject
takes, resulting in ever more urgent calls for even more state and federal
financial involvement, with citizens compelled to participate and pay.
Ludvig von Mises warned: “The goal of their policies is to substitute
‘planning’ for the alleged planlessness of the market economy. The term
‘planning’ as they use it means, of course, central planning by the
authorities, enforced by the police power. It implies the nullification of
each citizen’s right to plan his own life” (Mises, 1953, p. 436). A better
course is to reduce states’ dependency on federal funds, target scarce
public resources to people who need them most, and let free market
incentives and products take care of the rest.
< End >
#############################
"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 20, 2020, 9:00
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #20-016: 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:
-
How Can
It Happen Here? The Shocking Deaths in Canada’s Long-Term Care Homes
-
What to
Do About Your Relatives in Long-Term Care During the Coronavirus
Pandemic
-
COVID-19 Issues and Medicaid Policy Options for People Who Need
Long-Term Services and Supports
-
How
Much More Than Medicare Do Private Insurers Pay? A Review of the
Literature
-
Virtually Perfect? Telemedicine for Covid-19
-
Long-term care deaths due to COVID-19 soar to more than 5,500;
healthcare workers represent almost 20% of coronavirus cases
-
Senior
living employers get a chance to turn the tables
-
In
Shutting Out Threat, Seniors In Continuing Care Communities Feel Shut In
-
Pandemic putting pressure on seniors housing: Marcus & Millichap
-
CMS
expected to order COVID-19 reporting; nursing home deaths surpass 3,600
#############################
"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 13, 2020, 9:00
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #20-015: 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:
-
How Your Stimulus Check Affects Medicaid
Eligibility
-
The Economics of Lockdowns
-
COVID-19 Stimulus Package to Benefit
U.S. Insurers
-
Hiring frenzy: Brookdale and other senior
living operators seek to address labor shortage with displaced workers
-
Pandemic Delays Federal Probe Into Medicare
Advantage Health Plans
-
China Oceanwide Renews Genworth Deal
Financing Arrangement
-
Feds relax Medicare Advantage regulations
amid pandemic
-
COVID-19 could have $57 billion impact on
senior living; Argentum, ASHA request $20 billion from HHS
-
HHS OIG: Many long-term care facilities
requiring negative COVID-19 tests before accepting hospital discharges
-
Public policy expert: COVID-19 is forcing
U.S. to ‘disrupt and upend how we use post-acute care’
-
The Real Reasons People Decide to Buy
Long-Term Care Insurance
#############################
"LTC E-Alerts" are
a feature
offered by the Center for Long-Term Care Reform, Inc. to members at the
$150 per year level or higher. We'll track and report to you news and
analysis regarding long-term care financing, service delivery, and
research. We hope The LTC E-Alerts will help you attain and maintain a
high level of knowledge and competency in this complex field. The
Center for Long-Term Care Reform, Inc. is a private institute dedicated to
ensuring quality LTC for all Americans (www.centerltc.com).
#############################
Updated,
Monday, April 10, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC Comment: The full
Medicaid and Long-Term Care monograph is 78 pages, so we’re
bringing it to you in bite-sized pieces. Here’s the sixth one, after the
***news.***
*** HAPPY BIRTHDAY, CENTER: Steve Moses and David
Rosenfeld co-founded the Center for Long-Term Care Financing [now Reform]
on April 1, 1998. Damon Moses joined in 2001. Thank you for 22 years of
your attention, support and good wishes. ***
***
THE ECONOMICS OF LOCKDOWNS: What will hurt or kill more people: the
virus or a ruined economy? Click through to check out this excellent
program broadcast yesterday by the Cato Institute. ***
*** HAS THE TIME COME FOR BETTER MEDICAID LTC POLICY?
New York’s Medicaid program is the most generous purveyor of subsidized
long-term care benefits in country. Its practically unlimited home health
benefit, unencumbered by transfer of assets restrictions, was bankrupting
the state. But finally, according to an Empire State Medicaid planning
attorney: “Commencing on October 1, 2020, and as part of the New York
State Budget enacted on April 3, 2020, there will now be imposed a thirty
(30) month look back period for all home care services which is calculated
the same way the penalty is calculated for skilled nursing home level
Medicaid. Thus, for all home care applications filed on or after October
1, 2020, any transfer of assets (gifts/non-exempt transfers) will
disqualify the applicant for Medicaid home care for thirty (30) months.”
Good for New York Medicaid. Now if they’d just implement
the rest of our recommendations from 2011, recipients and taxpayers
would benefit far more. As economic reality reasserts itself all across
the United States, every state will need to reassess long-term care
financing policy. You’ll find dozens of national and state-level studies
focused on how to do that
here. ***
LTC BULLET: MEDICAID AND LONG-TERM CARE, THE SERIAL,
PART 6
LTC Comment:
Episode 1 of our serialization of the
Center’s newest report described the current defective method of
providing and paying for long-term care.
Episode 2 explained how Medicaid became the dominant payor for
long-term care, the dire consequences that ensued, and central planners’
futile efforts to fix the broken system.
Episode 3 showed how scholars made the same mistakes as policymakers,
lamenting long-term care’s problems without analyzing their causes, and
recommending more of the same interventions that caused the problems in
the first place.
Episode 4 focused on how affluent people qualify for Medicaid
long-term care benefits, why they ignore the risk and cost of long-term
care until they need it, and how the government has tried, mostly
unsuccessfully, to curtail artificial self-impoverishment to qualify for
benefits.
Episode 5 explained how and why most long-term care analysts ignore or
misrepresent the vast literature on qualifying for Medicaid long-term care
benefits while avoiding spend down of wealth. In today’s Episode 6, Steve
Moses explains and provides many examples of the evidence that Medicaid’s
spend down rules do not prevent middle class and affluent people from
taking advantage of the welfare program’s long-term care benefits.
Due to email formatting challenges, we’ll leave out
the content of the report’s extensive footnotes in this serialized
version. But the footnotes are important, and you can find them by
clicking through to the unabridged version
here. Likewise, citations to sources are given in the form (author,
year, page number). To find the full citations for those sources, see the
“References” section at the end of the
full report.
Here’s the sixth episode of “Medicaid and Long-Term
Care,” by Stephen A. Moses, Center for Long-Term Care Reform, Seattle,
Washington, published January 17, 2020. This paper was presented to The
Libertarian Scholars Conference on September 28, 2019 in New York City and
to The Cato Institute’s State Health Policy Summit on January 3, 2020 in
Orlando, Florida.
What is the Evidence
that People Dodge Medicaid Asset Spend Down Requirements?
Anecdotal Evidence
Abounds
Ask any Medicaid
eligibility worker if he or she sees wealthy people taking advantage of
Medicaid long-term care benefits and you are likely to hear a rant in
reply. Workers are often frustrated by the difficulty they have qualifying
really needy people for the program, while the well-to-do provide
sanitized applications completed by their lawyers that are indisputable.
New York Medicaid
eligibility supervisor Janice Eulau testified before Congress in 2011 that
during her 36-year career in the field, she witnessed many individuals
diverting significant resources in order to obtain Medicaid. She stated
that about 60 percent of applicants do some form of Medicaid planning and
added
It is not at all unusual to encounter individuals and couples with
resources exceeding a half million dollars, some with over one million.
There is no attempt to hide that this money exists; there is no need.
There are various legal means to prevent those funds from being used to
pay for the applicant’s nursing home care. Wealthy applicants for
Medicaid’s nursing home coverage consider that benefit to be their right,
regardless of their ability to pay themselves (Eulau, 2011).
In response to a
Congressional inquiry,77 states provided numerous examples of
Medicaid planning practices. For example:
North Dakota
A couple with $700,000
in liquid assets qualified for Medicaid long-term care benefits by
purchasing a more expensive house, car, and an additional annuity while
receiving $8,000 per month of income from pensions, Social Security,
annuity payments and oil lease money. Another couple had more than
$528,000 in assets, but qualified when the community spouse bought a new
home, a new car, and two annuities worth $240,000, and then applied for
Medicaid to pay the institutionalized spouse’s nursing home costs.
Wisconsin
An ill spouse
transferred $600,000 to the community spouse who refused to sign the
Medicaid application, making the ill spouse eligible for Medicaid because
“interspousal transfers are not considered divestment.”
New York
Using promissory notes,
immediate annuities and spousal refusal, affluent long-term care Medicaid
applicants qualify while retaining unlimited assets. This occurs even when
the state has legal recourse, because “Medicaid does not have sufficient
resources to pursue all these cases in court.”
Rhode Island
A couple with $400,000
in a bond account became eligible in one month by purchasing “a large
single premium immediate annuity.” A single man transferred $100,000 to
his son but dodged half of the penalty for transferring assets by using a
promissory note to carry out a reverse half-a-loaf strategy.
Virginia
A man bought a $900,000
annuity in his wife’s name, which paid her $89,000 per month, but “the
Virginia Medicaid program could not count this income for purposes of
determining the husband’s Medicaid LTC eligibility.”
“Spending down” assets
to qualify for Medicaid without expending those funds for long-term care
or any other health-related expense is far easier and more commonplace
than most economists and long-term care policy analysts willingly
acknowledge.
But Hard Evidence is
Scarce
Unfortunately, hard
empirical evidence of Medicaid long-term care asset spend down avoidance
is sparse. Most researchers have preferred to scan big data bases looking
for evidence to the contrary instead of examining actual Medicaid
long-term care cases. In May 2014, however, the Government Accountability
Office published results of the only study to date of a sample of such
cases for this purpose. They found dramatic results, but for some reason
downplayed their own findings.
GAO identified four main methods used by applicants to reduce their
countable assets—income or resources—and qualify for Medicaid coverage: 1.
spending countable resources on goods and services that are not countable
towards financial eligibility, such as prepaid funeral arrangements; 2.
converting countable resources into noncountable resources that generate
an income stream for the applicant, such as an annuity or promissory note;
3. giving away countable assets as a gift to another individual—such gifts
could lead to a penalty period that delays Medicaid nursing home coverage
[N.B.: but only if discovered]; and 4. for married applicants, increasing
the amount of assets a spouse remaining in the community can retain, such
as through the purchase of an annuity (GAO, 2014, unnumbered “GAO
Highlights” page).
Those methods of
qualifying for Medicaid without spending down resources for care are
exactly in line with the techniques and procedures recommended by the
popular and professional literature on the topic discussed above.
GAO analyzed a random,
but non-generalizable, sample of 294 Medicaid nursing home applications in
two counties in each of three states: Florida, New York, and South
Carolina. They found “Nearly 75 percent of applicants owned some
non-countable resources, such as burial contracts; the median amount of
non-countable resources was $12,530” (Ibid.). That seems
significant, but GAO does not draw out the implications in its report. A
back-of-the-envelope estimate finds that if those results could be
projected to the total of all Medicaid nursing home residents
nationally—which they cannot, suggesting a study that could provide
generalizable results is needed—665,700 Medicaid nursing home residents
sheltered over $8.3 billion in non-countable resources or 42.4 percent of
the $19.7 billion Medicaid paid for their nursing home care in 2009, the
most recent data available at the time of the GAO study’s publication
(Houser, Fox-Grage and Ujvari, 201279). That is a lot of money
to divert from private long-term care financing liability.
GAO found “Eligibility
workers in 10 of the 12 counties interviewed stated that purchasing burial
contracts and prepaid funeral arrangements, which are generally
noncountable resources, was a common way applicants reduced their
countable assets; and eligibility workers from one state said they
recommend making such purchases to applicants” (GAO, 2014, 25). In fact,
39 percent of GAO’s sample owned “Burial contracts and prepaid funeral
arrangements” with a median value of $9,311. If that proportion holds for
the country as a whole, $3.2 billion or 6.3 percent of total Medicaid
nursing home expenditures are diverted from funding long-term care to
relieving families of the final expenses for their loved ones. This
matters because funeral and burial pre-planning to expedite Medicaid
eligibility is big business in the United States. Heavy use by Medicaid
families of prepaid burial plans to shelter otherwise countable assets has
the effect of shifting scarce program resources from purchasing long-term
care services for the poor to subsidizing the funeral industry and
indemnifying often affluent adult children from the cost of burying their
parents.
GAO found “. . . 44
percent of approved applicants—129 applicants—had between $2,501 and
$100,000 in total resources, and 14 percent of approved applicants—42
applicants—had over $100,000 in total resources” (Ibid., p. 14).
Pretending again that GAO’s findings are representative of all Medicaid
nursing facility recipients, how much wealth would that mean Medicaid is
sheltering from private long-term care financial liability
nationwide? 887,598 nursing home residents receive Medicaid. If 14 percent
of them, or 124,264 recipients, possessed $100,000 or more in
non-countable resources, that is at least $12.4 billion or 3.4 times the
$3.7 billion Medicaid spent for their nursing facility care. Yet, again,
GAO does not draw out the implications.
GAO found: “For the 51
applicants for whom we were able to determine the equity interest in the
home, the median home equity was $50,000, and ranged from $0 to $700,000”
(Ibid., p. 20). Most home equity (equity, not value) is
non-countable, up to as much as $893,000 in some states as of 2020. GAO
found median home equity to be $50,000 among the 51 applicants (out of 91
total homeowners or 31 percent of the sample) for whom they were able to
determine it. Thus 100 percent of their sample’s home equity was
non-countable. Keep in mind that $50,000 is a median home equity value,
meaning as many exempt homes were higher in home equity value as were
lower, and meaning that the average or mean home equity value could be
significantly higher. If 31 percent of 887,598 Medicaid nursing home
recipients nationwide or 275,155 recipients own homes with a median equity
value of $50,000, then at least $13.8 billion worth of their home equity
is non-countable, a figure that is 1.7 times the annual $8.1 billion cost
of their care. Did it not behoove GAO to dig a little deeper? How much
money could Medicaid save by making nursing facility care available only
after home equity is spent down by means of private or commercial home
equity conversion methods?
GAO found: “Among the
Medicaid application files that we reviewed in selected states, 16 of the
294 approved applicants (5 percent) had a personal service contract—all of
which were determined to be for FMV [fair market value]. The median value
of the personal service contracts was $37,000; the value of the contracts
ranged from $4,460 to $250,004” (Ibid., p. 26). What if GAO’s
findings were valid nationwide? If 5 percent of Medicaid nursing home
recipients (44,380 recipients) sheltered a median value of $37,000 each in
personal service contracts, the total diverted away from private long-term
care financial liability would be $1.6 billion or 3.4 percent of total
Medicaid nursing home expenditures nationally in the same year. That’s a
very large subsidy to family members for taking care of their loved ones.
Personal service contracts are a technique that is available mostly to
savvier, more affluent families who seek legal advice on how to shelter
assets. Commonly, the poor lose what little wealth they have to long-term
care expenses without learning the often technical and complicated legal
methods of artificial self-impoverishment.
GAO found: “Of the 70
married approved applicants whose files we reviewed, 13 had applications
that contained a claim of spousal refusal. . . . These 13 applicants
resided in two states and the community spouse retained a median value of
$291,888 in non-housing resources; two of the community spouses were able
to retain over $1 million in non-housing resources” (Ibid., p.
31). Spousal refusal is based on a bizarre interpretation of federal law
commonplace in only two states (New York and Florida, both of which were
included in GAO’s three-state sample for this study) by which spouses of
institutionalized Medicaid recipients are allowed to refuse to contribute
financially toward the cost of their spouse’s Medicaid-financed care—with
impunity and in direct contradiction of the federal statute. The GAO
report does not challenge this practice, nor has CMS taken action to
curtail or end it. The spousal refusal cases GAO identified had a median
value of nearly $292,000 in non-housing resources, but as they also found,
some spousal refusal cases involve a million dollars or more. Why exactly
is this allowed? Why doesn’t GAO question the practice? Where is CMS?
The report makes no comment.
GAO found: “State
Medicaid officials, county eligibility workers, and attorneys who provided
information on the value of annuities for the community spouse reported
average values ranging from $50,000 to $300,000. Officials from one state
reported seeing annuities for the community spouse worth more than $1
million. Medicaid officials from one state indicated that they have seen
annuities that disbursed all of the payments to the community spouse
shortly after the annuity was purchased, while officials from another
state said that annuities can have large monthly payments for the
community spouse, such as $10,000 per month” (Ibid., p. 32).
Spousal annuities are a huge loophole that allows many millions of dollars
to be diverted from private long-term care financing into the pockets of
affluent Medicaid nursing home recipients’ spouses. Yet GAO does not call
for closing the annuity loophole nor has CMS done anything about it.
GAO found: “Among the
294 approved applicants whose files we reviewed, we identified 5
applicants (2 percent) who appeared to have used one of the ‘reverse
half-a-loaf’ mechanisms; 4 of the applicants appeared to use the mechanism
that involved creating an income stream through a promissory note to pay
for nursing home care during the penalty period. These 4 applicants gifted
between $20,150 and $227,250 worth of resources, and had penalty periods
of between 2 months and 22 months” (Ibid., p. 29). Again, GAO gives
only glancing attention to the reverse half-a-loaf technique often
employed by Medicaid planners to reduce their affluent clients’ Medicaid
spend down liability by half. The incidence of this technique’s use as
identified by GAO—only 2 percent—seems small, but keep in mind that it is
only used for people with substantial assets. Otherwise, it would hardly
be worth the cost in attorneys’ fees to set up the complicated procedure.
Public officials should ask about this and all the other techniques
downplayed in the GAO report “how much public spending is being wasted?”
and “why are such abuses allowed to continue?”
One final point about
this study: GAO says “Our analysis was limited to information included in
the application files, which states used to make their eligibility
determinations. We did not independently verify the accuracy of this
information (Ibid., pp. 4-5).” That single admission obviates any
value or credibility this report might otherwise have. Federal quality
control audits have found that state welfare eligibility determinations
are wrong in a third to a half of all cases even after state quality
control reviews have confirmed the original determinations by state or
county workers. We will never know the true extent of Medicaid asset
shelters, transfers and other artificial self-impoverishment techniques
until someone reviews a valid random sample of long-term care cases that
is generalizable statewide and nationwide and goes beyond the extremely
limited information available in case records for purposes of
verification.
The Government
Accountability Office or the DHHS Inspector General or any serious
researcher or organization should review a generalizable sample of
Medicaid long-term care cases to establish once and for all how much money
is being lost to Medicaid financial eligibility rules that divert the
programs scarce resources from the needy to the affluent.
< End >
#############################
Updated,
Monday, April 6, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-014: 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:
-
Coronavirus Is Making the Public Pension Crisis
Even Worse
-
U.S. assisted living costs range from $50,892 to
$62,976 per year, on average: survey
-
Here's Why Genworth Financial Is Soaring Today
-
As Nursing Homes with Cases Reach 400, AHCA Advises
Operators to Assume All Untested Patients Positive for COVID-19
-
Second thoughts: Some opting to remove parents from
senior living communities
-
CMS waives nurse-aide training, certification
requirements
-
She’s Alone, 105 and in a Nursing Home Threatened
by the Virus
-
Coronavirus Lands Another Blow to Senior Housing
Operators
-
Should You Consider Taking a Loved One Out of a
Long-Term-Care Facility Now?
-
Providers: Death total would rise if nursing homes
forced to admit COVID-19 patients
#############################
"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 30, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-013: 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:
-
This Causes Most
Falls for Older Adults
-
When Dementia
Meets the Coronavirus Crisis
-
Older patients
stranded in hospitals as nursing homes turn them away over coronavirus
-
Who cares for
those most vulnerable to COVID-19? 4 questions about home care aides
answered
-
Operator survey:
Coronavirus hasn’t scared families away from moving loved ones into
senior living
-
Moderate drinkers
have lower amyloid-beta levels, study finds
-
COVID-19 May Delay
China Oceanwide-Genworth Deal Closing
-
Report documents
quick spread of new coronavirus through U.S. nursing facilities
-
How Would Free
Market Health Care Respond To The Coronavirus?
-
LTC providers
getting creative to boost seniors’ morale during pandemic
-
New COVID-19
tip-off may be loss of smell
#############################
"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 27, 2020,
9:00 AM (Pacific)
Seattle—
#############################
LTC BULLET: MEDICAID AND LONG-TERM CARE, THE SERIAL, PART 5
LTC
Comment: The full Medicaid
and Long-Term Care
monograph is 78 pages, so we’re bringing it to you in bite-sized pieces.
Here’s the fifth one, after the ***news.***
***
THE TEST: Consensus has been forming among analysts for the past several
years about the most politically expedient way to improve long-term care
financing policy. The best articulation of the proposal I’ve seen goes
like this. We should set up “A public catastrophic insurance program for
LTSS costs that takes effect after an income-related waiting period has
been met.” (Cohen,
Feder, and Favreault, 2018, p. 7)
What this means is that the federal and/or state governments should back
up catastrophic long-term care expenses by borrowing more money than we
have already (nearly $24 trillion), as
there is no un-borrowed money to spend.
If we’re going to try this, now is the time. The Federal Reserve
has just removed all limits on government borrowing. Congress is about to
lift all limits on spending. If it is possible to solve problems by
printing money and spending it without limits, then now’s the time to
throw long-term care into the mix as well. Will it work? What do you
think? That’s THE TEST. If you want to know what I think, read the
report serialized in today’s LTC
Bullet.***
***
PREDICTIONS: We all lament cancellation of the 2020 ILTCI conference that
would have begun in a few days. Fill that void vicariously by reading our History
of LTC Insurance Conferences (2019).
Here’s a little peek back at the Jacksonville, Florida 17th Annual
Inter-Company Long-Term Care Insurance Conference’s closing general
session on March 28, 2017, which explored the topic “New
President and Congress: Implications for Aging and LTC Finance.” Participants
were asked to vote on several questions. One of them follows including my
response. See the others in “LTC Bullet:
LTC Policy Poll Results,” April
14, 2017.
“Q7.
Do you think the next four years will bring an improved economic climate?
Or will we see a continuation of low interest rates?
1.
Improved economic climate/higher interest rates = 76%
2. Stay pretty much the same = 13%
3. Get worse = 11%
LTC
Comment: I think these voters are vastly over-optimistic. I’d agree
with the stay-the-same or get-worse minority. The current “economic
recovery” is long in the tooth; the “Trump trade” is already
petering out as health and tax reform languish; we may already be in a
recession; the Federal Reserve’s tightening cycle has nearly run its
course; after perhaps one more interest rate increase, the next step is
down and most likely we’ll see more quantitative easing (QE4). That
means more and more debt with the age wave and entitlement insolvencies
looming. The U.S. dollar is unsupported by real value and very vulnerable;
foreign countries that give us real economic goods in exchange for paper
(bonds that the U.S. cannot ever afford to redeem) could wise up any time,
stop buying our debt, and start selling it in competition with The Fed;
carrying costs on our $20 trillion debt will
force a reversal of The Fed’s tightening soon as the economy worsens.
The credit bubble, inflating for a decade, will pop. Sadly for the Trump
Administration, the wages for the economic sins of its predecessors will
come due in its first term. (Tickle your calendar to review this
prediction on election day November 3, 2020. I’ll do the same.)”
LTC
Comment: I was a little early with this prediction. It took the current
pandemic to prick the asset bubble I described, but here we are. What
comes next is the critical TEST for the U.S. economy and for long-term
care financing. Stay tuned. ***
LTC
BULLET: MEDICAID AND LONG-TERM CARE, THE SERIAL, PART 5
LTC
Comment: Episode 1of our
serialization of the Center’s
newest reportdescribed the
current defective method of providing and paying for long-term care. Episode 2 explained how
Medicaid became the dominant payor for long-term care, the dire
consequences that ensued, and central planners’ futile efforts to fix
the broken system. Episode 3showed how
scholars made the same mistakes as policymakers, lamenting long-term
care’s problems without analyzing their causes, and recommending more of
the same interventions that caused the problems in the first place.Episode 4 focused on how
affluent people qualify for Medicaid long-term care benefits, why they
ignore the risk and cost of long-term care until they need it, and how the
government has tried, mostly unsuccessfully, to curtail artificial
self-impoverishment to qualify for benefits.
In
Episode 5, which follows, Steve Moses explains how and why most long-term
care analysts ignore or misrepresent the vast literature on qualifying for
Medicaid long-term care benefits while avoiding spend down of wealth.
Due
to email formatting challenges, we’ll leave out the content of the
report’s extensive footnotes in this serialized version. But the
footnotes are important, and you can find them by clicking through to the
unabridged version here.
Likewise, citations to sources are given in the form (author, year, page
number). To find the full citations for those sources, see the
“References” section at the end of the full
report.
Here’s
the fifth episode of “Medicaid and Long-Term Care,” by Stephen A.
Moses, Center for Long-Term Care Reform, Seattle, Washington, published
January 17, 2020. This paper was presented to The Libertarian Scholars
Conference on September 28, 2019 in New York City and to The Cato
Institute’s State Health Policy Summit on January 3, 2020 in Orlando,
Florida.
Why
Do Analysts Ignore this Vast Literature on Medicaid Eligibility Planning?
Long-term care researchers rarely mention,
and never delve deeply into, the Medicaid planning literature. They
pretend these easier pathways to eligibility are not widely used. Analysts
might argue that widely available consumer information and the formal
legal literature on Medicaid planning are irrelevant because the fact that
people can qualify for Medicaid
while preserving most of their wealth does not mean they do it. All that matters is the evidence showing whether people do or
do not spend down. Yet, when analysts ignore the evidence of easy
financial eligibility and widespread Medicaid planning, they are
predisposed to expect more rather than less genuine spend down. If they
knew and understood the methods, techniques, and incentives to use them
described in this literature, they would be more likely to look for, find
and understand evidence that disproves the presumption of widespread asset
spend down for care.
Analysts know the official laws and
regulations governing Medicaid long-term care eligibility are complicated
and pliant. Yet they frequently apply only the ostensibly severe standards
to data on seniors’ wealth and then conclude people must be spending
down millions before they qualify. If Medicaid denies access to applicants
with more than $723 per month of income and $2,000 in assets, then surely,
they reason, the vast majority of people on Medicaid have spent down,
often catastrophically before qualifying. With that mistaken assumption
firmly fixed in their minds, analysts conduct studies and search giant
data bases looking for evidence to support it. This confirmation bias
skews what they find.
Analysts could avoid such bias by reviewing
and taking into account the legal literature on how to qualify for
Medicaid without spending down for care. But they do not, which is a
peculiar oversight as the evidence adduced and referenced above is
inescapable. How and why do scholars discuss Medicaid long-term care
financial eligibility while avoiding the facts of easy access to Medicaid?
Evasion
of and Equivocation on Critical Concepts and Facts
Long-term care scholarship does include
several excellent explanations of the complicated federal and state
Medicaid long-term care financial eligibility rules such as Musumeci,
Chidambaram and O’Malley Watts, 2019. But these treatments rarely draw
out the ramifications of allowing relatively high-income people with
substantial wealth to qualify for public benefits. Nor do they discuss how
the superficially strict but fundamentally generous income and asset rules
can be stretched to expand eligibility to include even the very
well-to-do. When analysts do acknowledge that Medicaid long-term care
benefits reach more than the poor, they nearly always equivocate on key
concepts such as impoverishment, spend down, decumulation, median wealth,
Medicaid planning and out-of-pocket expenses. Moreover, they use highly
dubious data sources to substantiate their conclusions. These examples
will clarify this point.
Impoverishment
Medicaid
long-term care eligibility requires inadequate cash flow, i.e.
insufficient income, to cover all of an individual’s medical and
long-term care costs. But it does not require low income, low assets, or
financial destitution. Yet a typical analysis claims “Medicaid only
covers the long-term care costs of the indigent” (Friedberg, Hou, Sun,
and Webb, 2014, p. 1). Synonyms for the term “indigent” include
“poor, impecunious, destitute, penniless, impoverished, poverty-stricken, down
and out, pauperized, without a penny to one's name,” and many
more (Dictionary
definition of indigent).
Clearly, if people with substantial income and assets can qualify for
Medicaid long-term care benefits, then eligibility does not require
impoverishment, much less indigence. The right conclusion to reach about
Medicaid’s role in long-term care financing is that it substantially
ameliorates the risk and cost of long-term care, not that it impoverishes
people.
Spend
Down
Medicaid financial eligibility rules allow
people to spend down their private income and assets to reach eligibility
limits. Income spend down must
be done to purchase medical or long-term care services (Medicaid.gov,
2019)69. But asset
spend down does not have the same requirement (ElderLawAnswers, 201870).
Excess assets may be spent on or converted to exempt resources. There is
no requirement to spend down assets on medical or long-term care expenses
(Schneider and Huber, 1989, p. 14271). An expensive
birthday party or “one last
tour of Reno’s finest establishments” (Gilfix and Woolpert, p. 4272)
are viable asset spend down options. Yet the presumption that wide
swaths of the American public are forced to spend down their life’s
savings on long-term care has prevailed in the research literature for
decades.
When several “spend down” studies in the
late 1980s and early 1990s set out to prove widespread asset spend down,
they found it was far less common than previously believed. A 1992
analysis concluded: “Based on the studies conducted to date, it appears
thatsomewhere between one in four
and one in five persons who originally enter nursing homes as private
payers convert to Medicaid before final discharge (Spend-Down I)” (Adams,
Meiners and Burwell, 1992). Moreover, neither these early studies nor more
recent ones distinguished between real spend down, paying privately for
care until eligible, and artificial spend down, qualifying by purchasing
exempt assets or otherwise sheltering or divesting wealth. Hence:
Very
little is known about what has actually taken place for the individuals
whom the foregoing studies have identified as asset spend-downers. Indeed,
we cannot actually be sure these individuals have depleted assets; most of
the studies can only identify that a change in payor source has taken
place (Ibid.).
A well-known, more recent reportfurther
exemplifies the point.“Medicaid Spend Down: Implications for Long-Term
Services and Supports and Aging Policy” confidently states: “The high
cost of long-term services and supports (LTSS) results in catastrophic
out-of-pocket costs for many people needing services, some of whom spend
down to Medicaid eligibility” (Wiener, et
al., 2013, p. 1). Yet what this report calls “spend down” is
nothing more than the “transition” from non-Medicaid status to
Medicaid eligibility, which as explained above, is achievable without
catastrophic financial consequences.
Asset
Decumulation
Recent research on asset decumulation in
retirement belies the conventional wisdom that widespread long-term-care
spend down occurs. In a study sponsored by the Employee Benefits Research
Institute, Sudipto Banerjee observed: “One
of the assumptions underlying many models used to measure retirement
income adequacy is that retirees will spend down their accumulated assets
to fund their retirement needs.” Then he asked“While this may make
sense in theory, do people actually behave like this?”
(Banerjee, 2018, p. 4) What he found was stunning. People with relatively
low savings, under $200,000 in non-housing assets, dropped in wealth only
24.4 percent in the first 18 years of retirement, a rate of asset
decumulation “definitely much lower than what has been traditionally
assumed by most retirement models” (Ibid.,
p. 5). Those with $200,000 to $500,000 dropped only 27.2 percent (Ibid.,
p. 7). “So, in this group as well, retirees did not spend down their
assets as quickly as retirement models would generally predict” (Ibid.). Finally, the group with over $500,000 dropped only 11.2
percent. “So, the group with the highest level of assets had the lowest
rate of asset spend down” (Ibid.).
Banerjee
then asks “Why are retirees not spending down their assets?” (Ibid.)
He speculates that people are reluctant to expend their savings because
they do not know how long they will live or how large their medical or
long-term care expenses may be. They may wish to leave a bequest or they
are just being cautious or saving is a habit for them. But there could be
a much simpler explanation. Once in retirement, consumers who safely
ignored the risk and cost of long-term care during their work lives
finally become concerned after their employment income has ended. Decades
of academic studies and media reports convince them they will lose
everything if they succumb to the high risk of needing long-term care. So,
as best they can, people preserve their assets and spend only income. But
catastrophic spend down for long-term care is a myth because Medicaid pays
for most expensive long-term care, exempts most assets, is easy to get
after care is needed without spending down wealth significantly and only
requires income as the patient’s contribution to the cost of care.
Consequently, after decades living in retirement, most people at most
levels of wealth spend down very little.
Other research does show that people do spend
down very rapidly at the very end of life, especially in the last year.
But, again, no one knows for sure how much of this depletion of measurable
wealth represents real or artificial spend down. French, et
al., found that medical spending before death, combined with burial
expenses explained only “about 24 percent of the decline in assets of
the soon-to-be deceased and about 37 percent of the decline in assets in
the last year of life” (French, De Nardi,
Jones, Baker, and Doctor, 2006, p.
2). The bottom line question, however, is how much Medicaid actually helps
affluent people defray the cost of late-life chronic illness and the
answer is striking. For households at the top of the income distribution,
Jones, et al., found
Medicaid
covers 21 percent of lifetime costs at age 70, with the fraction rising to
nearly 30 percent at age 100. While most high-income households do not
receive Medicaid, those that do qualify under the Medically Needy
provision, which assists households whose financial resources have been
exhausted by medical expenses [N.B.: Or by Medicaid planning, a key point
unmentioned in this article]. Such households tend to have high medical
expenses and tend to receive large Medicaid benefits (Jones, Bailey,
De Nardi, French, McGee, and Kirschner,
2018, p. 24).
The
fact that Medicaid offsets upwards of one quarter of the lifetime medical
and long-term care expenses of high income households is staggering and
belies the common presumption that people must and do spend down into
impoverishment to obtain benefits.
Median
Wealth
Analysts focus on people with median or less
income and assets, but they routinely evade the more interesting questions
of whether and how people with much higher wealth qualify for Medicaid.
For example, in testimony before the Commission on Long-Term Care, Richard
W. Johnson of the Urban Institute summarized his research findings that
people who end up in nursing homes on Medicaid tend to have relatively low
incomes and assets. Then he concluded
Most
older adults who end up on the program would never have been able to earn
enough income or accumulate enough wealth to cover their nursing home
costs. It seems likely that Medicaid will continue to play an important
role in long-term care financing as long as those with long-term care
needs are disproportionately those with limited financial resources
(Johnson, 2013, p. 12).
It
should not evoke surprise that poor people qualify for Medicaid or that
most people who qualify for Medicaid are, and many always were, poor.
Helping the poor is the program’s statutory purpose. But, what about
people who do have income and assets well above the median? Take Medicare
beneficiaries for example. The Kaiser Family Foundation states
While
a small share of the Medicare population lives on relatively high incomes,
most are of modest means, with half of people on Medicare living on less
than $26,200 and one quarter living on less than $15,250 in 2016. The
typical beneficiary has some savings and home equity, but the range of
asset values among beneficiaries is wide and varies greatly across
demographic characteristics. . . . As policymakers consider options for
decreasing federal Medicare spending andaddressing the federal debt and
deficit, these findings raise questions about the extent to which the next
generation of Medicare beneficiaries will be able to bear a larger share
of costs (Jacobson, Griffin, Neuman, and Smith, 2017, pp. 6-7).
In
essence, Kaiser says Medicare beneficiaries are so poor that it behooves
policymakers not to consider “decreasing federal Medicare spending”
when they are “addressing the federal debt and deficit.” But, what
about Medicare beneficiaries who are not so poor? Would they still qualify
for Medicaid long-term care benefits?
According to the Kaiser issue brief, half of
all Medicare beneficiaries have incomes of $26,200 or less (Ibid.).
That is more than double the $12,490 poverty guideline for a single person
as of 2017, but poor enough to be sure. These are the people we might hope
the Medicaid long-term care safety net protects. In fact, it does. Anyone
needing formal long-term care with that level of income would qualify
easily anywhere in the United States.
But
what about the other half of Medicare beneficiaries? Forty-five percent of
them had incomes between $26,200 and $103,450. That is hardly
impoverished. Could someone with an annual income of up to $103,450, at
the 95th percentile of all Medicare beneficiaries, qualify for
Medicaid LTC benefits? Yes. All it would take is paying the cost of a
nursing home out of pocket at a little more than the median national
annual rate for a semi-private bed ($89,292), hardly uncommon in high-cost
states like California, New York or Massachusetts. Anyone in the $26,200
to $103,450 range would qualify in most states as long as their total
uncompensated medical and long-term care expenses exceeded their income,
as they likely would for people who need expensive long-term services and
supports.
Turning to the savings of Medicare beneficiaries, we find the same upside down
policy incentives as for income.
The one-half of beneficiaries with the least savings qualify easily for
Medicaid LTC benefits, but so do
most of the upper half.
Half
of Medicare beneficiaries have savings of $74,450 or less, including
“retirement account holdings (such as IRAs or 401Ks) and other financial
assets, including savings accounts, bonds and stocks” (Ibid., p. 3). Although their savings exceed the usual Medicaid limit
of $2,000 in countable assets, these people can easily purchase extra home
equity and other exempt assets, in any amount, such as personal
belongings, home furnishings, prepaid burial plans, term life insurance,
an automobile, etc., in order to
reduce their countable resources and reach the asset eligibility limit.
But,what
about the 45 percent of Medicare beneficiaries who have savings between
$74,450 and $1.4 million? These higher-savings seniors generally have
greater access to professional financial advice on how to protect their
wealth from long-term care expenditures. They can avail themselves of
Medicaid’s $595,000 to $893,000 home equity exemption and purchase other
exempt assets as well; they can take advantage of loopholes favoring the
affluent such as Medicaid-friendly annuities, irrevocable income-only
trusts, spousal refusal and reverse half-a-loaf strategies; or they can
simply divest their savings five years or more before applying for
Medicaid as most Medicaid planning attorneys recommend.
Because
it is easy and financially beneficial to qualify for Medicaid long-term
care benefits while sheltering or divesting up to $1.4 million (the 95th
percentile of Medicare beneficiaries’ savings) or more, Medicaid
planners do a land-office business often in practices with multiple
geographic locations.73
Medicaid
Planning
Medicaid
planning is the practice of reconfiguring income and assets, with or
without professional legal advice, to achieve financial eligibility for
Medicaid long-term care benefits while minimizing financial consequences.
Analysts seldom cite the extensive legal literature on Medicaid planning
nor do they acknowledge the omnipresent information on its many methods
and techniques available online and in the popular media. Instead, when
they write about decumulating wealth to qualify for Medicaid, they assume
and imply that savings are used to purchase long-term care rather than
being divested, diverted, or sheltered to achieve eligibility.
In
the rare instances when analysts consider the possibility that people
might qualify for Medicaid without spending down wealth, they write only
about “asset transfers” without considering other far more common and
effective Medicaid planning techniques. For example: "[C]ritics
contend that . . . Medicaid pays for the care of most nursing home
residents because people with the resources to afford their own
care—middle-income and wealthier people, even 'millionaires'—transfer
their assets to qualify for public subsidies intended for the poor”
(O’Brien, 2005, p. 2). First, no one contends that “most nursing home
residents” transferred assets. Asset transfers are very expensive for taxpayers, having increased Medicaid spending
by as much as “1 percent of total Medicaid spending for long-term
care” (Waidmann and Liu, 2006, p. 1) or $1.7 billion as of 2016. But
asset transfers are only the tip of the Medicaid planning iceberg, a minor
factor compared to the more common methods of artificial
self-impoverishment. Yet the O’Brien article makes only this passing
reference to “establishing trusts,giving cash gifts to children and
grandchildren, or otherwise concealingtheir ability to pay for their own
care by converting countable assets toexempt forms (by spending assets on
a car or on a home or home renovation,since those assets are not counted
in making a Medicaid eligibilitydetermination)”(O’Brien, 2005, p. 2).
By focusing exclusively on asset transfers while ignoring the abundant
evidence for the more important Medicaid planning techniques, this article
and most of its type violate the Strawman logical fallacy.74
Furthermore,
formal Medicaid planning itself pales in significance compared to the
simple reality explained above that most income and assets do not impede
access to Medicaid long-term care benefits. Average middle class people
qualify fairly easily without using asset transfers or other Medicaid
planning techniques that, when employed, enable even the wealthy to
qualify by following sophisticated legal advice.
Long-term
care researchers sometimes debunk the idea that Medicaid planning is
common among the well-to-do by suggesting that Medicaid’s reputation for
poor access and quality would discourage people with financial means from
seeking eligibility. Two points rebut that argument. First, the principal
drivers behind Medicaid planning are not the ailing parents, but rather
the adult children who want to protect their inheritances and therefore
have a financial conflict of interest. Second, Medicaid planners routinely
advise clients and their families not to worry about Medicaid’s poor
reputation. By holding back enough “key money” for the parent to pay
privately for a few months, they can buy their way into the best
facilities which have relatively few Medicaid beds. Nursing homes
routinely give admission preference to higher-paying private payers
(Gandhi, 2019, p.175). Then when the last of the cash runs out,
the attorney files the Medicaid application and the client remains in the
preferred facility because state and federal laws prevent expelling
residents simply because their source of payment changes from private to
Medicaid. Ironically, poor people for whom Medicaid is supposed to be a
safety net, lack the key money to ensure access to the best care. They go
to the Medicaid facilities with the bad reputations.
Out-of-Pocket
Expenditures
Some
analysts wrongly insist Medicaid requires impoverishment by claiming
out-of-pocket expenditures are higher than they really are. For example,
Melissa Favreault and Judith Dey conclude “Families will pay about half of the costs themselves out-of-pocket
….” (Favreault and Dey,
2016, p. 1). They arrive at that figure by including room and board
expenses in residential care settings—costs that people would incur
whether they need long-term care or not—and by excluding Medicare
post-acute care expenditures, which as explained above, are critical to
sustain Medicaid’s viability as the dominant long-term care financing
source. The truth is that out-of-pocket long-term care costs have been
declining for half a century. In 1970, five years after Medicaid began
picking up the long-term care tab, nearly half of nursing home
expenditures still came from private resources. That share has dropped to
almost one quarter as of 2017, including the spend-through of Social
Security income, as explained earlier. Bottom line, over 90 percent of the
cost of nursing home care in the United States is explained without
counting out-of-pocket asset, as
opposed to income, spend down (Colello,
2018, p. 176).
The
situation with home health care financing is very similar. According to
CMS, of the $102.2 billion America spent on home health care in 2018,
Medicare covered 39.4 percent and Medicaid 35.1 percent, totaling 74.5
percent.Private insurance paid 11.9 percent. Only 9.9 percent of home
health care costs were paid out of pocket, roughly one dollar out of every
$10, and some portion of that amount was income spend down that Medicaid
requires from recipients. The remainder came from several small public and
private financing sources(CMS, 2020, Table 14).
Faulty
Data
When
economists and health policy analysts claim that older people approaching
the need for long-term care retain few assets and spend down rapidly, they
generally draw their evidence from survey data provided by the Health and
Retirement Study (HRS) and its auxiliary, the Asset and Health Dynamics
among the Oldest Old (AHEAD) study. These longitudinal surveys contain
information on home values, automobile ownership, liquid assets, farms and
other businesses, retirement accounts, and other assets (De Nardi, French
and Jones, 2016). Noteworthy is the fact that each of these financial
holdings, as explained above,is either expressly exempt under federal law
or easily converted into an exempt asset for purposes of achieving
Medicaid long-term care eligibility. In other words, it would not matter
for purposes of determining Medicaid long-term care eligibility whether
such assets were retained or spent down.
Furthermore,
the HRS and AHEADdata are highly dubious regarding amounts held in each of
these asset classes.One expert describes “measurement errors in the
data, particularly those arising from item nonresponse and frominaccurate
respondent reports of the ownership and level of assets” (Venti, 2011,
p. 3). Another identifies several other problems with the data including
The
Health and Retirement Study contains no information on health and
long-term services and supports expenditures, including out-of-pocket
expenditures. Thus, it is not possible to directly link transition to
Medicaid with out-of-pocket expenditures for health and long-term services
and supports. … Finally, information on people who are cognitively
impaired and who die is derived from proxy respondents, often relatives,
who may not know about specific long-term services and supports use or
Medicaid eligibility (Wiener, et al.,
2013, p. 50).
There
are many reasons why survey respondents and their representatives might
fail to report income and assets to surveyors or even purposefully
misrepresent the facts. People who have hidden or reconfigured their
wealth to qualify for public welfare benefits may be ashamed of having
done so or simply unaware that their heirs did this on their behalf.
Seniors reporting on themselves may be cognitively impaired or intimidated
by self-interested family members. Heirs who benefit from preserving
parents’ estates by putting them on Medicaid may prefer to conceal the
facts. Lawyers who do Medicaid planning are protected from disclosure by
attorney/client privilege, while long-term care providers and Medicaid
eligibility staff, who often know which affluent locals are taking
advantage of Medicaid, cannot disclose the information because of legally
enforced confidentiality. Getting to the truth in such matters is
extremely difficult. Yet analysts routinely accept the HRS/AHEAD data as
though it were unchallengeable. They often treat such data as
incontrovertible proof of widespread catastrophic long-term care spend
down.
<
End >
#############################
Updated, Monday, March 23, 2020,
10:40 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #20-012: LTC NEWS AND COMMENT
LTC
Comment: Do you spend hours searching the internet for useful articles,
key data, and relevant reports to keep you on the forefront of
professional knowledge? Do you lose business because you’re blindsided by
clients or competitors who learn critical information before you do?
Here’s an antidote:
LTC
Clippings: The Center for Long-Term Care Reform notifies subscribers to
our LTC Clippings service daily of information you need to know. Each
message contains only the critical facts about new publications: a title,
representative quote, a link to the original, and our analysis in a
sentence or two. To inquire or subscribe, contact Steve at 425-891-3640
or
smoses@centerltc.com.
Read testimonials by satisfied subscribers
here.
To subscribe online, please click
here.
LTC
E-Alerts: Once a week, we compile our daily LTC Clippings into a summary,
email it to Center for Long-Term Care Reform members, and archive it in
The Zone, our password-protected members-only website. Center members
also receive our weekly LTC Bullet op-ed. To join the Center and receive
all these benefits and more, contact Steve at 425-891-3640 or
smoses@centerltc.com.
We no
longer post our LTC E-Alerts on the Center’s public access website, but
here’s what today’s LTC E-Alert contained: links, quotes and
comments on the following articles, reports, or data:
-
Nursing
Home and Assisted Living Breaking News: Revised DHS Guidance for
Visitation
-
FAQs on
Medicare Coverage and Costs Related to COVID-19 Testing and Treatment
-
Senior
housing and care facilities could help employ today’s out-of-work
restaurant, hotel and retail workers
-
Post-Acute Bed Capacity Concerns Loom as COVID-19 Cases Grow
-
U.S.
coronavirus death toll surpasses 100
-
Coronavirus Is Changing The Way We Care For Frail Older Adults
-
Coronavirus bill provisions would ‘decimate’ senior living workforce,
organizations say
-
CMS
waives three-day stay requirement, MDS deadlines as dining struggles
emerge amid COVID-19 response
-
Opportunities To Expand Telehealth Use Amid The Coronavirus Pandemic
-
McKnight’s 40 for 40: Bill Thomas
#############################
"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 16, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-011: 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:
-
BREAKING: Feds to
ban most nursing home visitors in escalation of coronavirus fight
-
Denver 2020 ILTCI
Conference Cancelled
-
The Federal
Government Is on an Unsustainable Fiscal Path
-
2020 Alzheimer’s
Webinar Series
-
AHCA’s Parkinson:
COVID-19 ‘Almost a Perfect Killing Machine’ for Elderly
-
Avalanche of
Alzheimer's Cases: Are We Ready?
-
Study links 3 key
risk factors to coronavirus deaths among older adults
-
BREAKING: Feds,
providers take ‘unprecedented’ action regarding visitor access at
long-term care facilities over COVID-19 fears
-
COVID-19: What's
Cancelled, What Isn't
-
Nursing Homes Face
Unique Challenge With Coronavirus
-
Senior living
communities in Washington, Maryland take precautions after positive
COVID-19 test results
#############################
"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 13, 2020, 10:40 AM (Pacific)
Seattle—
#############################
LTC BULLET: MEDICAID AND LONG-TERM CARE, THE SERIAL, PART 4
LTC Comment: The full
Medicaid and Long-Term Care monograph is 78 pages, so we’re
bringing it to you in bite-sized pieces. Here’s the fourth one, after the
***news.***
***
DENVER 2020 ILTCI CONFERENCE CANCELLED: “The Executive Committee of
the ILTCI has monitored the COVID-19 virus closely. The situation in the
host city of Denver, Colorado has worsened, including the governor of
Colorado declaring a state of emergency. Unfortunately, we feel that it is
impossible to proceed with the 2020 conference given the facts surrounding
this pandemic. As likely goes without saying, we put the safety of our
members first. Like most conferences, professional sports teams and other
organizations whose members planned to meet in any material number this
March, we have decided that proceeding with the conference does not
justify the risk that our members could become ill. Steps taken by our
members to mitigate the risk of infection have already resulted in speaker
and attendee cancellations in significant numbers.
As a result, the ILTCI's Board of Directors voted unanimously to cancel
the 2020 conference. We are continuing to evaluate whether the meeting
can be rescheduled at a later time. As you can surely appreciate, that
evaluation will be contingent on the future trajectory of COVID-19, which
is presently unknown.
We will soon reach out to attendees, exhibitors, and sponsors under
separate cover with communications regarding the implications of this
cancellation.
We will have FAQs available soon on our website,
www.iltciconf.org.
Sincerely,
The ILTCI Executive Committee”
LTC Comment:
This is a sad but sensible decision. The virus pandemic puts older and
immune-deficient people at greatest risk, the very people private LTCI
aims to protect financially. What a PR fiasco if someone had sickened at
the meeting spreading the infection and carrying it home. The ILTCI
Conference has a long, proud tradition. We’re confident it will return
next year bigger and stronger than ever. In the meantime, check out our
history of the long-term care insurance conferences including all 19
ILTCI’s up to now:
History of LTC Insurance Conferences (2019). We should all
express our appreciation to the ILTCI conference’s organizers, staff, and
contributors for their dedication, hard work and consummate
professionalism under extremely difficult circumstances.
***
LTC BULLET: MEDICAID AND LONG-TERM
CARE, THE SERIAL, PART 4
LTC Comment:
Episode 1 of our serialization of the
Center’s newest report described the current defective method of
providing and paying for long-term care.
Episode 2 explained how Medicaid became the dominant payor for
long-term care, the dire consequences that ensued, and central planners’
futile efforts to fix the broken system.
Episode 3 showed how scholars made the same mistakes as policymakers,
lamenting long-term care’s problems without analyzing their causes, and
recommending more of the same interventions that caused the problems in
the first place.
In Episode 4 of this series, which
follows, Steve Moses explains how affluent people qualify for Medicaid
long-term care benefits and why they ignore the risk and cost of long-term
care until they need it. He then describes the vast popular and legal
literature on “Medicaid planning”--artificial self-impoverishment to
qualify for assistance--providing many quotes as examples. Finally, he
recounts each of the statutory measures taken by numerous presidents and
congresses to counteract Medicaid eligibility abuse while also explaining
how the Medicaid planning bar circumvented each of those corrective action
measures.
Due to email formatting challenges,
we’ll leave out the content of the report’s extensive footnotes in this
serialized version. But the footnotes are important, and you can find them
by clicking through to the unabridged version
here. Likewise, citations to sources are given in the form (author,
year, page number). To find the full citations for those sources, see the
“References” section at the end of the
full report.
Here’s the fourth episode of “Medicaid
and Long-Term Care,” by Stephen A. Moses, Center for Long-Term Care
Reform, Seattle, Washington, published January 17, 2020. This paper was
presented to The Libertarian Scholars Conference on September 28, 2019 in
New York City and to The Cato Institute’s State Health Policy Summit on
January 3, 2020 in Orlando, Florida.
Are
Consumers Planning to Use Medicaid for Long-Term Care?
Do
consumers deliberately plan to take advantage of Medicaid if they ever
need long-term care? Do they know the rules on how to qualify for Medicaid
long-term care benefits while minimizing the financial spend down
consequences? Research suggests they do not. Most people believe
mistakenly that Medicare or their health insurance will cover long-term
care (AP-NORC, 2017, p. 266). They remain blissfully ignorant
of long-term care risk despite being inundated with claims like those
cited above insisting the government will not help with long-term care
costs except after one’s personal resources are exhausted. What seems to
happen is that consumers ignore the alarmist information about
catastrophic spend down risk until they need expensive long-term care. At
that point, they become quickly aware of information on how to avoid
serious spend down liability and they use it, with or without the help of
professional advisors.
Such consumer
behavior is rational and complies precisely with the real, though
unintentional incentives in Medicaid eligibility policy. Eventual easy
access to Medicaid long-term care benefits enables consumers to ignore
warnings of long-term care risk with impunity. Then, if and when they need
high-cost long-term care, they focus on how to pay and quickly discover
the many ways to qualify for Medicaid. By then, however, the damage is
done. It is too late, after someone already needs care, for him or her to
save, invest, insure or otherwise prepare to pay privately for care. At
that stage, Medicaid is the path of least resistance.
How Do
People Qualify for Medicaid Long-Term Care Benefits While Preserving Most
Wealth?
Once
people are stricken by chronic illness that requires expensive long-term
care, they and their families quickly become sensitive to the question of
who pays and who does not. At first it sounds like they are on their own
and the consequences could be devastating. But then they begin to learn
how the system really works. After receiving no help from their Social
Security, Medicare, or health insurance, they hear about Medicaid. When
they—or more likely their adult children, as the parents themselves are
disabled and often demented—go to the local welfare office, they receive a
long, complicated Medicaid application form with many items of financial
verification to complete, such as bank balances, home ownership and
equity, asset transfers and why they made them, and so on. But they will
also learn from the local Medicaid eligibility worker that income is not
usually an obstacle, that many assets are totally exempt, and that they
can and should use countable assets such as cash and liquid investments to
purchase non-countable resources, such as prepaid burial plans or home
improvements, in order to hasten the process of spend down and quicken
eligibility. Some eligibility workers are more forthcoming than others
with information on how to facilitate eligibility for benefits, but most
are caring people eager to help families negotiate an emotionally and
financially difficult transition.
By this
point, people discover information everywhere on how to navigate the
crisis. Consumer information on painlessly qualifying for Medicaid is
universally available. How-to and self-help books abound. An internet
search for “Medicaid planning” reveals thousands of articles on how to
qualify without spending down significantly. Anyone can search “Medicaid
planning in [your state]” to find websites of law firms that specialize in
the practice. Many such firms offer online articles explaining in general
how Medicaid planning works, but also warning, to attract clients, why it
is too complicated for laypersons to attempt without their professional
guidance. Such firms routinely obtain, fully document, fill out, and
submit the Medicaid application, often inches thick with verifying
documents, to the state agency on behalf of their affluent clients’
families. MedicaidPlanning.org encourages advisors “of any kind (e.g.,
attorney, financial planner, CPA, care planner, etc.)” to provide the
service and offers a book and training on how to impoverish people
artificially to qualify them for Medicaid. The American Council on Aging,
not to be confused with AARP’s National Council on the Aging (NCOA),
offers these
Asset Planning Strategies covering “Irrevocable Funeral Trusts,
Spousal Asset Transfers, Annuities, Spend Down Excess Assets, Lady Bird
Deeds, Medicaid Divorces, Medicaid Asset Protection Trusts, ‘Half a Loaf’
Strategies, Income Planning Strategies, Spousal Income Transfers,
Qualified Income Trusts/Miller Trusts, and Income Spend Down.”
Access to
a Medicaid planner anywhere in the country is facilitated by the National
Academy of Elder Law Attorneys (NAELA), the professional association of
lawyers who specialize in the practice of Medicaid planning. NAELA has a
national membership of 4,500 and an annual budget of $2 million (NAELA,
2019). Although elder law attorneys perform a wide range of beneficial
services for their mostly affluent clients, their primary source of
billable hours is Medicaid planning. The fee to qualify someone for
Medicaid ranges “from $2500 for individuals with relatively simple estates
to $10,000 for individuals with significant assets” (Markovic, 2016,
footnote 88).
Medicaid
planners’ services are most often sought by the adult children of
declining elders for the purpose of preserving their inheritances by
avoiding private long-term care expenses for the parents. As Medicaid
dependency often involves impaired access to and quality of long-term care
(Ameriks, 2007, p. 22), Medicaid planners are vulnerable to and sensitive
about accusations of financial abuse of the elderly. This self-description
and justification is typical:
It is
not uncommon for couples and individuals to engage in a practice often
referred to as “Medicaid Planning,” which one commentary defines as “the
legal fiction of ‘rearranging assets’ to make someone poor on paper so
that he or she may qualify for Medicaid.” It is well established that such
“Medicaid Planning” is legal and that it is professionally ethical, or
acceptable, for attorneys and financial planners to assist clients in such
planning. Nonetheless, the Medicaid planning and spend down processes are
quite complex, potentially highly financially disruptive, and may lead to
inequitable results. Moreover, although legal, Medicaid planning is often
perceived as “gaming the system” (Hyer, Hannah, Burkhart, and Toevs, 2012,
p. 359).
Clearly,
information on how to qualify for Medicaid long-term care benefits while
avoiding the seemingly restrictive financial eligibility rules is widely
available. The financial incentive to use such information is great. There
is every reason to believe families use this information (and no evidence
they do not) to minimize personal asset spend down and to hasten access to
care financed by Medicaid.
The Legal
Literature on Medicaid Planning
Beyond the
ubiquitous consumer information on Medicaid planning, there is a large and
always expanding professional legal literature on the topic. The first
such article appeared within months of President Jimmy Carter’s signing
the Omnibus Budget Reconciliation Act of 1980 (OBRA ’80), which
imposed the first ever restriction on
asset transfers done to qualify for Medicaid. OBRA ’80 became law
in December 1980;
“Medicaid as an Estate Planning Tool,” by William G. Talis, appeared in
the Massachusetts Law Review’s Spring 1981 issue.
It stated
“Careful planning even under adverse state law will still be able to
achieve the goal of excluding an applicant's resources for purposes of
determining Medicaid eligibility” (Talis, 1980, p. 94).
The
article also describes ways clients might reduce exposure to health costs
through (1) creation of various trust devices, (2) conveyance of remainder
interests in property, (3) conversion of property into assets exempted
from eligibility tests for Medicaid, and (4) outright transfers of
property. If a client can be rendered eligible for Medicaid, medical
expenses will be paid in full and estate assets will be conserved.
Moreover, while the Department of Public Welfare may seek recovery for
payments made on behalf of elderly recipients from their estates, careful
planning can lawfully defeat the Department’s ability to obtain
indemnification (Ibid., p. 90).
Although some
of the methods described in this early article have since been proscribed
or delimited by federal law, most of them remain viable and widely used.
Quotes on how to do Medicaid planning from this first article and a
selection of 86 others spanning the next 35 years are compiled in
“Appendix I: Supplemental Bibliography” of How to Fix Long-Term Care
Financing (Moses, 2017). These include:
After
President Ronald Reagan signed the Tax Equity and Fiscal Responsibility
Act of 1982 (TEFRA ’82) authorizing states voluntarily to (1) restrict
asset transfers done within two years of applying for Medicaid, (2) place
liens on real property, and (3) recover benefits correctly paid from
recipients’ estates, Medicaid planners concluded they could circumvent the
new rules and explained how: “With long-range planning, the
cooperation of relatives, some good health, and maybe a little luck,
couples will be in a position to negotiate between the rock and a hard
place that Congress has placed in the Medicaid path” (Deford, 1984, p.
139).
After
President Reagan signed the Consolidated
Omnibus Budget
Reconciliation Act of 1985 (COBRA ’85) restricting the use of Medicaid
Qualifying Trusts, lawyers reassured their colleagues and clients:
“Many people assume that a family’s resources must be virtually exhausted
before any help will be available through the Medicaid program. In fact,
people in Washington [state] who need nursing home care can benefit from
Medicaid without devastating their families” (Greenfield and Isenhour,
1986, p. 29).
After
President Reagan signed the Medicare Catastrophic Coverage Act of 1988 (MCCA
’88) making asset transfer penalties mandatory nationwide and expanding
the look-back period to 30 months, one especially aggressive Medicaid
planner wrote this in his best-selling book Avoiding the Medicaid Trap:
How to Beat the Catastrophic Costs of Nursing-Home Care:
So is
there any practical way to juggle assets to qualify for Medicaid before
losing everything? The answer is yes! By following the tips on these
pages, an older person or couple can save most or all of their savings,
despite our lawmakers’ best efforts...Here are the best options: Hide
money in exempt assets...Transfer assets directly to children
tax-free...Pay children for their help...Juggle assets between
spouses...Pass assets to children through a spouse...Transfer a home while
retaining a life estate...Change wills and title to property...Write a
durable power of attorney...Set up a Medicaid Trust... Get a divorce.... (Budish,
1989, p. 34)
After
President Bill Clinton signed the Omnibus Budget Reconciliation Act of
1993 (OBRA ’93) making estate recovery mandatory, expanding the asset
transfer look back period to three years, eliminating the cap on asset
transfer penalties, and prohibiting “pyramid divestment,” two experts
reassured their colleagues: “Most of the basic planning options that seem
to exist today will survive; but many of the more unique, aggressive
tactics may or may not survive [p. 1] .... WE STILL BELIEVE THAT ALMOST
ANYONE CAN BECOME MEDICAID ELIGIBLE FOR LONG-TERM CARE BENEFITS EVEN IN
CRISIS.... [p. 11]” (Brown and Fleming, 1993, emphasis in original).
After
President Clinton signed the Health Insurance Portability and
Accountability Act of 1996 (HIPAA ’96) making it a crime to transfer
assets for less than fair market value for the purpose of qualifying for
Medicaid, planners sought ways around the new rules:
By using
a LCC [Life Care Contract], the applicant is outside the purview of the
disqualifying transfer section of Title 42 because the contract
anticipates a transfer for value and not a gift. Therefore, to the extent
that the elder’s assets are transferred pursuant to this contract, the
elder will incur no period of ineligibility ... Using this one payment
method, an elder can transfer a large number of assets and shortly
thereafter qualify for Medicaid if the caregiver can prove that the
medical condition causing the disability was totally unanticipated ... a
one lump sum payment of $540,000 is a transfer for value and outside of
the Medicaid rule ... IT DOESN’T MATTER IF MOM HAS A MASSIVE STROKE AND
IS A CANDIDATE FOR LONG TERM CARE SIX MONTHS LATER....” (NAELA
Conference Proceedings, 1996, pps. 1-2, 4, 11, double emphasis in the
original).
After
President Clinton signed the Balanced Budget Act of 1997 (BBA ’97)
repealing the criminalization of asset transfers to qualify for Medicaid,
but making it a crime to recommend asset transfers for the purpose of
qualifying for Medicaid in exchange for a fee, mortified planners
encouraged community spouses of institutionalized Medicaid recipients
simply to dodge their spousal support responsibility.
The law,
therefore, allows an institutionalized spouse to qualify for Medicaid
benefits even though he or she may have a spouse that chooses to keep
assets over the CSRA [Community Spouse Resource Allowance]. The spouse
retains the assets, in any amount, and then refuses to make them available
for the institutionalized spouse’s costs of long-term care. In turn, the
state seeks an assignment of the institutionalized spouse’s support rights
(Solkoff, 2001, p. 26).
After
President George W. Bush signed the Deficit Reduction Act of 2005 (DRA
’05) placing the first cap ever on Medicaid’s home equity exemption,
limiting the half-a-loaf loophole, amending the annuity rules, and
unencumbering the Long-Term Care Partnership Program, Medicaid planners
reassured their colleagues and clients that artificial self-impoverishment
to qualify for Medicaid remained feasible and no less ethical than tax
planning:
Due to
the high cost of nursing home care, elderly people and their families have
increasingly turned to Medicaid-planning strategies to qualify for
Medicaid benefits and ease their financial burden. Medicaid planning
involves taking measures to preserve one’s assets in order to gain
Medicaid eligibility by meeting the program’s financial criteria (Wone,
2006, p. 487).
Many
commentators, as well as taxpayers generally, have criticized the practice
of ‘Medicaid estate planning, [when] individuals shelter or divest their
assets to qualify for Medicaid without first depleting their life savings.
… However, Medicaid estate planning is not only rational, but it is also
consistent with notions of morality and fairness. Akin to tax planning,
Medicaid estate planning is as justifiable as any other legal advice an
attorney may give to a client to obtain favorable governmental treatment,
despite recent measures taken by Congress that might suggest otherwise.
The public perception seems to be that tax planning is perfectly
acceptable, whereas Medicaid estate planning is morally questionable (Bothe,
2009-10, pp. 815-6).67
No further
government action has occurred since 2006 to target Medicaid long-term
care benefits to the needy or to discourage their overuse by the affluent.
These recent law journal articles show that most methods to qualify for
Medicaid without spending down for care have survived and thrived:
Thus,
for example, if a person gives away one million dollars six years before
applying for Medicaid, that gift will not be considered in determining
eligibility. (Miller, 2015-2016, p. 8)
In our
earlier work on this topic, my co-authors and I described many Medicaid
planning strategies. These include gifts beyond the five-year look-back
period, disinheritance of the institutionalized person; the use of special
needs trusts for the institutional spouse; annuitization of retirement
accounts and savings (often for the benefit of the community spouse);
spend down on the home or other exempt assets (called asset
repositioning); caregiver agreements with family members; certain
transfers of the home to a spouse, child or sibling; use of exempt assets
(i.e., the home) to pay for the nursing home during a penalty period
arising from gratuitous transfers; and, finally, divorce or marriage
avoidance. Some of these are only designed to obtain Medicaid eligibility
while preserving wealth during the recipient’s lifetime. Others, most
prominently gifts and annuities, are designed to avoid estate recovery as
well. The liberal income rules and the restrictive resource rules make the
purchase of an annuity for the community spouse with excess resources an
important planning tool for middle class couples. Indeed, the annuity
purchase option is the chief planning alternative to divorce in many cases
(Ibid., p. 14).
Countable assets which are attributable to the
institutionalized spouse can be reduced by spending or consuming them for
the benefit of either spouse. The applicant or their spouse could pay off
a mortgage or other debt, pay attorney's fees or other professional fees,
pay for travel for themselves, or pay for home care services. … Countable
assets can be transformed into exempt assets, for example, by
purchasing an irrevocable burial plan for each spouse and by paying
for exempt assets which enhance the quality of life of either spouse, such
as clothing, electronics, and repairs or improvements to the residence. …
Countable assets may also be transformed into a stream of income by
the purchase of an approved annuity, with the community spouse as
annuitant (immediate payee) (Gilsinan, 2018, p. 19).
If a married couple who owns no primary residence but
has substantial liquid assets engages in Medicaid planning, they could
create an irrevocable trust and transfer all of their assets to that
trust. … As long as there are no circumstances in which the trustee could
pay them any amount of trust principal, and as long as the married couple
complies with the five-year look-back rule, the applicant would be
eligible for Medicaid benefits because the assets would not be countable
as his or her assets. … The inclusion of the primary residence among the
assets transferred to the irrevocable trust allows the grantor to avoid
the estate recovery claim against his or her primary residence that would
occur had the grantor obtained Medicaid long-term care benefits and
continued to own the home until it was transferred to his or her heirs as
part of the probate estate (Tunney, 2018, p. 23).
There are two main alternatives to the CSRA for protecting
assets for the community spouse: spousal refusal and divorce. a.
Spousal Refusal. A community spouse can simply refuse to allow his or
her assets to be made available for use by the institutionalized spouse
and refuse to cooperate in the application for Medicaid. … b. Divorce
... Following the divorce, the institutionalized spouse could quickly
qualify for Medicaid, and the couple's assets would be preserved for the
community spouse (Beckett, 2016, p. 31).68
Clearly the practice of Medicaid planning remains
vibrant and very well documented in the popular and professional
literature on aging and estate planning.
< End >
#############################
Updated,
Monday, March 9, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-010: 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:
-
Innovation in the
LTC Insurance Market
-
The number of
millennials with early-onset Alzheimer's disease is surging, report
finds
-
An update from the
ILTCI Conference regarding COVID-19
-
CMS to
‘Immediately’ Refocus Nursing Home Inspections on Infection Control Amid
Coronavirus
-
Living The Golden
Rule
-
COVID-19 Webinar &
Educational Resources
-
Genworth reaches
deal 'in principle' with New York regulator to clear acquisition by
China-based company
-
Why Are So Many
Nursing Homes Shutting Down?
-
COVID-19 Webinar
Tomorrow
-
House task force
introduces Older Americans Bill of Rights
-
Nursing home the
site of first US coronavirus outbreak: 1 dead, 4 hospitalized
#############################
"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 2, 2020, 9:00
AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #20-009: 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:
-
Debt among oldest Americans skyrockets 543%
in two decades
-
Blue Cross Plans Say Alzheimer’s Has
Tripled Among Adults Ages 30 To 64
-
Long-Term Care Insurance v. a Hybrid:
AALTCI Gets the Numbers
-
One Conversation Can Make All
the Difference
-
Prepare now for coronavirus, association
warns
-
One LTCI Producer’s Take on Nursing Home
Closures
-
550 Nursing Homes Closed from 2015-2019 —
With Trend Accelerating Toward End of Decade
-
Cannabis use rising among older adults,
study shows
-
Empire Center says billions could be saved
through Medicaid cost-cutting proposals
-
Medicare Managers Hope to Lift Agent
Referral Fee Cap
-
McKnight’s 40 for 40: Robert G. Kramer
-
State considers end to 'spousal refusal' to
pay for nursing home 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 28, 2020,
9:00 AM (Pacific)
Seattle—
#############################
LTC Comment: The full
Medicaid and Long-Term Care monograph is 78 pages, so we’re
bringing it to you in bite-sized pieces. Here’s the third one, after the
***news.***
*** HAPPY 20TH: This
year’s
Intercompany Long-Term Care Insurance Conference, which meets in
Denver, March 29 to April 1, is the program’s 20th iteration.
To celebrate this memorable achievement, we published a 65-page
History of LTC Insurance Conferences. It covers all of the ILTCI
events, but also some of the other, earlier, now defunct industry
meetings, such as Jesse Slome’s “LTCI Producer Summits” and Greg Luque’s
“Forums.” For a quicker read, check out “LTC Bullet:
History of LTC Insurance Conferences,” which provides thumbnail
summaries of each of the conferences covered in the full report. We offer
sincere thanks and congratulations to Jim Glickman and everyone associated
with the leading LTC insurance industry conference. May it continue to
unite, educate and motivate everyone dedicated to improving long-term care
in America for many years to come. ***
*** ILTCI RECOGNITION
AWARD nominations are open. The deadline for nominations is March 6 so act
now! I just submitted my nomination. Can you guess whom I proposed? The
Intercompany Long-Term Care Insurance Conference is sponsoring a third
annual award for a person or organization “that has made a significant,
long-term contribution towards the attainment of the ILTCI vision. The
ILTCI vision is to create an environment for aging in America that
includes thoughtful, informed planning that takes into account the most
effective and efficient use of resources in addressing the risks and costs
of long-term care for all levels of American society. For details and to
submit your nomination, go to
https://iltciconf.org/recognition-award/. Past recipients of the award
were Marc Cohen and Stephen Moses. ***
*** CLTC MASTER CLASS AT
ILTCI 2020: Veteran LTCI expert and trainer Bill Comfort will teach the
two-day course March 28-29 at the Intercompany Long-Term Care Insurance
Conference in Denver.
Watch Video on CLTC Master Classes. The class and
conference registrations are discounted now. For inquiries, contact:
Audrey Sunner, CLTC, CSA at 919-230-8523 or
asunner@ltc-cltc.com. The Center for Long-Term Care Reform is proud to
acknowledge the Certification for Long-Term Care (CLTC) program as a
corporate sponsor. ***
LTC BULLET: MEDICAID AND
LONG-TERM CARE, THE SERIAL, PART 3
LTC Comment:
Episode 1 of our serialization of the
Center’s newest report described the current method of providing and
paying for long-term care, explained the long-term care financing problem
in detail, and showed how heavily dependent the existing dysfunctional
system is on public, especially Medicaid, financing.
Episode 2 explained how Medicaid became the dominant payor for
long-term care, described the severe unintended access and quality
problems that ensued, and recounted the long series of fruitless
interventions policymakers have attempted aimed at correcting symptoms
(high cost, nursing home bias, and poor quality) while ignoring their
causes (strong financial incentives for states to maximize Medicaid
spending and perverse incentives for consumers to rely on the safety net
program rather than prepare to pay privately for long-term care.)
In Episode 3, which
follows, Steve Moses explains how scholars have made the same mistakes as
policymakers. They lament long-term care’s problems without analyzing
their causes. Then they propose expanded government funding and regulation
without accounting for the damage such interventions have produced in the
past. Steve then addresses the key to unraveling the long-term care
conundrum, which is to understand and interpret correctly Medicaid’s
long-term care eligibility rules and their impact on consumers’ incentives
to plan responsibly (or not) for long-term care risks and costs.
Episode 4 in this
series, two weeks from now, will explain how Medicaid’s dominance as the
principal funder of long-term care inhibited the private market for home
care, which consumers prefer over nursing homes, and crippled the
potential private sources of financing, such as home equity conversion and
long-term care insurance, that could and should solve the system’s access
and quality problems—all this transpiring without most consumers even
knowing who pays for long-term care!
Due to email formatting
challenges, we’ll leave out the content of the report’s extensive
footnotes in this serialized version. But the footnotes are important, and
you can find them by clicking through to the unabridged version
here. Likewise, citations to sources are given in the form (author,
year, page number). To find the full citations for those sources, see the
“References” section at the end of the
full report.
Here’s the third episode
of “Medicaid and Long-Term Care,” by Stephen A. Moses, Center for
Long-Term Care Reform, Seattle, Washington, published January 17, 2020.
This paper was presented to The Libertarian Scholars Conference on
September 28, 2019 in New York City and to The Cato Institute’s State
Health Policy Summit on January 3, 2020 in Orlando, Florida.
Conventional Long-Term Care Scholarship
If government policy on long-term care has
consistently addressed the symptoms of high cost and poor quality instead
of the cause, excessive public financing, so has and does most
scholarship. Building on decades of research and special commission
reports, a scholarly consensus has formed regarding the long-term care
problem and what to do about it. For example, a December 2015 article in
Health Affairs (Favreault, Gleckman, and Johnson, 2015, p. 2190)assessed the problem as high and growing care needs, high and
growing cost, inadequate private resources to pay for care exacerbated by
the lack of private insurance, resulting in high, growing and
unsustainable dependency on Medicaid. Without analyzing how or why these
conditions obtain, the article recommends ever more government engagement
in the market, specifically mandatory, comprehensive public insurance
coverage for the catastrophic back end of the long-term care risk. In
other words, we are advised to address the symptoms of the long-term care
problem by adding more of the generous funding source that arguably caused
them in the first place.
That article spawned three major reports in
2016 promoting its analysis and recommendations. Leading Age, a long-term
care provider trade association, reviewed the usual symptoms and concluded
“a mandatory, universal insurance approach that covers catastrophic events
is the most effective pathway to pursue” (Leading Age, 2016, p. 12). The
Bipartisan Policy Center, a Washington, DC think tank, concurred with a
now rare nod to cost control, recommending: “Pursue the concepts and
elements of a public insurance program to protect Americans from
catastrophic LTSS expenses, while assuring that it does not add to the
federal deficit” (BPC, 2016, p. 21). The “Long-Term Care Financing
Collaborative,” a self-described “diverse group of policy experts and
senior-level decision makers representing a wide range of interests and
ideological views” proposed “A universal catastrophic insurance program
aimed at providing financial support to those with high levels of care
needs over a long period of time” (LTC Financing Collaborative, 2016, p.
2).
Nor has this emerging agreement on the
problem (symptoms) and its preferred solution (more government) receded.
Last year, a respected private long-term care insurance analyst teamed up
with a researcher who favors public financing options to produce yet
another proposal on the same theme. They recommend
A public catastrophic insurance program for
LTSS costs that takes effect after an income-related waiting period has
been met. … Eligibility … phased in over ten years, with people eligible
for benefits once they work 40 quarters after the law’s enactment ….
Benefits would become available once people incur impairments in 2+ ADLs
[activities of daily living] and/or severe cognitive impairment … . Up to
$110/day cash benefit (2014 dollars) … Paid out either daily or weekly …
Unlimited benefit once an income-related waiting period is met … Waiting
period of 1 year for people with lifetime incomes in the lowest two
quintiles of the distribution and 2, 3, and 4 years for people with
incomes in the third, fourth and highest quintiles, respectively. … Annual
benefits increase at the rate that hourly costs increase for home health
aide workers (Cohen, Feder, and Favreault, 2018, p. 7).
Would consumers choose to participate in this
complicated scheme? There is no need to ask. The paper does not contain
the terms obligatory, involuntary, or compulsory, but they all apply to
this proposal. Like Social Security, Medicare and other plans to fix
long-term care mentioned above and below, this one also forces people to
pay up, take part and accept whatever the government delivers.
Two influential recent articles home in on
special challenges facing the middle market and home care. In May 2019, “The
Forgotten Middle: Many Middle-Income Seniors Will Have Insufficient
Resources for Housing and Health Care” correctly assessed the plight
of middle-income seniors whose resources will be inadequate to fund their
senior living and long-term care and suggested “lawmakers could consider a
new benefit that explicitly funds long-term care (for example, a Medicare
‘Part E’ that shifts funds from Medicare Part A acute care)” (Pearson,
et al., 2019, p. 8). In June 2019, “The
Financial Burden of Paid Home Care on Older Adults: Oldest and Sickest Are
Least Likely to Have Enough Income” argued that home care is
desirable; too few people can afford enough of it; so “Government programs
could be launched that cover LTSS expenses for the entire duration of an
enrollee’s
LTSS” (Johnson and Wang, 2019, p. 1000).
Many similar examples from the past three
decades could be adduced. Conventional long-term care scholarship is
tediously consistent in these respects. It begins by recounting the dire
service delivery and financing challenges consumers face, but without
analyzing or commenting on how or why those problems came to be. Then it
recommends an expansion of government’s role, usually proposing a new or
expanding an existing compulsory public financing program.
The Key: Medicaid Long-Term Care Financial
Eligibility
The current paper takes a different approach
to analyze the long-term care issue. It described and acknowledged the
problems and dysfunctions in long-term care services and financing. But
then it traced the history and evolution of those problems linking them
causally to the early, substantial and constantly expanding role of
government financing and regulation in the long-term care market.
Having shown how and why long-term care
problems exist, we can now ask: Why are
analysts and policymakers caught in the trap of looking only for
government solutions to problems government created? Why do most
researchers obsess about the status quo without explaining how it came to
be? Why do they despair of financing quality long-term care without vastly
expanding government spending? Ideological bias is one explanation, but
there may be something more basic and easier to resolve at work. The key
to answer these questions lies in understanding how Medicaid long-term
care eligibility really works as compared to how it is represented to work
by the popular media, by most scholarship, and ostensibly by the federal
law and regulations themselves.
The federal
rules governing financial eligibility for Medicaid long-term care benefits
sound draconian. “Medicaid eligibility depends primarily on income and
assets. … In general, aged, blind, and disabled beneficiaries may not have
more than $2,000 in countable assets for individuals and $3,000 for
couples, a level that has not changed since 1989” (Thach and Wiener, 2018,
p. 4). No argument; that is poor. Income eligibility is more complicated
than asset eligibility, because states may follow various “alternative or
optional eligibility pathways to determine which groups qualify …” (Ibid.).
But income eligibility under all those pathways still sounds stringent
when represented as allowing only $723 per month of income (LTC
Financing Collaborative, 2016, p. 19).
These “official” financial eligibility rules seem to say that when it
comes to paying for long-term care, you are on your own unless or until
you spend down your income and life’s savings into impoverishment.
So quotes
like these abound in the mass media:
People who
exhaust their savings could wind up on Medicaid, the government health
program for the indigent that pays for about half of all nursing home and
custodial care (Weston, 2019) .
Essentially,
you need to have spent practically all your assets before Medicaid will
kick in (Eisenberg, 2017).
People may
qualify for Medicaid after they have “spent-down” their assets (Lawrence,
2015).
Well-respected scholars often say the same.
The current
program requires people to impoverish themselves (“spend down”) to qualify
for coverage (Pearson, et al., 2019, p. 858).
At the same
time, public ‘insurance’ – through Medicaid – supports services only
after people pay what might be called an ‘infinite deductible’ – that is,
only after they expend most, if not all, of their personal liquid
financial resources (Cohen, Feder, and Favreault, 2018, p. 2).
Medicaid (the federal-state health care
program for the poor) covers long-term care costs for individuals below
certain income levels, but the deductible for Medicaid is nearly all of an
individual's income and assets. As a result, Medicaid is the long-term
care coverage of last resort for those with no assets (Banerjee, 2012, p.
4).
Beneficiaries are subject to strict
eligibility rules. While these vary from state to state and differ by care
setting, they typically limit beneficiaries to $2,000 in financial assets
and $723 per month in income (the monthly benefit level for the
Supplemental Security Income program). As a result, millions of
middle-income families who face catastrophic LTSS costs must impoverish
themselves before receiving public support (LTC
Financing Collaborative, 2019, p. 19).
The reality of Medicaid long-term care
financial eligibility is far more nuanced, generous, and elastic than
these quotes convey. While scholars usually and the media sometimes
explain (1) how Medicaid allows people with excess income to qualify by
spending down privately for care until they reach the required level and
(2) how some assets are non-countable and so do not affect eligibility and
are not required to be spent down, generally both the media and scholars
leave the strong impression that qualifying for Medicaid long-term care
benefits is financially devastating and highly undesirable. Media articles
usually point their readers to legal experts who can help families
reconfigure their income and assets to qualify without spending down.
Scholarly articles rarely take that alternative into account. This latter
fact is the key to understanding why expanding government spending is
usually the only option considered by analysts for reforming long-term
care services and financing.
The
Fallacy of Impoverishment
Income Eligibility
How does Medicaid long-term care eligibility
really work? Most states use “medically needy” eligibility rules, which
means people who have too much income can pay privately for their care
until their net income level is reduced to the accepted limit (Thach and
Wiener, 2018, p. 549). Other states apply “income caps,”
usually 300 percent of the Supplemental Security Income (SSI) limit,
currently $2,313 per month (Thach and Wiener, 2018, p. 550).
But income cap states may allow people with excess income to qualify by
setting up special “Miller income diversion trusts,” into which the
recipient transfers excess income until the income eligibility level is
reached. Then, the trust pays out the money to offset Medicaid’s cost for
the recipient’s care (Musumeci, Chidambaram and O’Malley Watts, 2019, p.1451).
The result is the same as under the medically needy system. The rule of
thumb in all states, whether “medically needy” or “income cap” standards
apply, is that anyone with income below the cost of a nursing home can
qualify for Medicaid long-term care benefits based on income. As nursing
home care is very expensive (roughly $7,500 or $8,500 per month on average
and much higher in many urban venues) (Genworth, 2019), people with
substantial incomes qualify routinely for Medicaid long-term care benefits
throughout the United States. For example, someone with income of $7,500
per month or $90,000 per year would fall in the 84th percentile
of income nationally (PK, 2018), but would nevertheless qualify for
publicly financed long-term care based on income if that income is
expended for medical and/or long-term care expenses including home care,
assisted living, or nursing home residency. Medicaid long-term care income
eligibility requires a cash flow problem, but not low income.
Asset Eligibility
Similarly, Medicaid’s seemingly harsh asset
spend down rules are much less so as applied. Most of the wealth seniors
hold is not counted in determining eligibility. Home equity is entirely
exempt if a spouse remains in the home. Between $595,000 and $893,000 of
home equity, depending on the state (Musumeci, Chidambaram and O’Malley
Watts, 2019, p. 1552), continues exempt as of 2020 even if the
home is unoccupied as long as the Medicaid recipient expresses a
subjective, medically unverified intent to return to the home (Thomson/MEDSTAT,
2005, p. 353). Additional exempt assets, all without any dollar
limits, include
-
one income-producing business,54
including the capital and cash flow (Hales and Shandrick, 1992, p. 1555)
-
individual retirement accounts (IRAs) (CANHR,
2019)56 if generating periodic income57 as most
are required to do by age 70 ½ in compliance with the required minimum
distribution rules (IRS, 20198)
-
term life insurance,59
-
prepaid burial funds for the immediate
family,60
-
one automobile,61
-
household goods and personal effects
including heirlooms.62
Thus federal law and regulations, which state
Medicaid agencies are supposed to follow, allow applicants and recipients
to possess virtually unlimited assets while receiving benefits. It is true
that state Medicaid programs are technically required to recover such
sheltered assets from the estates of deceased recipients, but enforcement
of that requirement is inconsistent, complicated by regulations severely
limiting lien placement, and relatively easy to avoid, especially with
legal advice.63
Married applicants receive additional
financial eligibility considerations. Community spouses of
institutionalized Medicaid recipients may retain a “Minimum Monthly
Maintenance Needs Allowance” (MMMNA) of between
$2,113.75 and
$3,216.00 per month (ACA, 2020, MMMNA64)
plus a “Community Spouse Resource Allowance”
(CSRA) of half the couple’s joint assets not to exceed $128,640 but no
less than $25,728 (ACA, 2020, CSRA65). These allowances began
at $1,500 per month and $60,000, respectively, when the Medicare
Catastrophic Coverage Act of 1988 established them. By law, they increase
annually with inflation. The MMMNA and CSRA were created to end the
“spousal impoverishment” that could occur previously when the
institutionalized recipient’s (usually the man’s) income was captured as
required by federal law to offset Medicaid’s cost of his or her care.
Although there is considerable variation
in state Medicaid eligibility rules, DeNardi, et al. concluded
there was “little practical difference in Medicaid eligibility across the
different states” due to medical and long-term care expense deductions.
They explain that “most individuals in nursing homes incur medical
expenses far greater than 300 percent of the SSI level,” thus achieving
eligibility (De Nardi, French, Jones and Gooptu, 2011, p. 26).
< End >
#############################
Updated, Monday, February 24, 2020,
9:00 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #20-008: 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:
- Continental, a Long-Term Care Insurance Block Buyer, Is Up for Sale
- Long-Term Care Costs
- Mediterranean diet improves gut health in elders; tied to lower
frailty
- Stalked by the Fear That Dementia Is Stalking You
- GE’s Long-Term-Care Insurance Liability Is a Non-Issue in 2020
- Medicare Advantage enrollment swells
- VA Health Care: Veterans' Use of Long-Term Care Is Increasing, and
VA Faces Challenges in Meeting the Demand
- The Ballooning Costs Of Long Term Care
- A VA Program Can Help War Veterans Pay For Long-Term Care, But
Applying For It Can Be An Ordeal
- What Every Dementia Caregiver Must Know
- By 2060, a quarter of U.S. residents will be over age 65
- What’s the best way to manage agitation related to 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,
Monday, February 17, 2020, 10:40 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-007: 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:
-
Combining Life and Long-Term Care Insurance
-
Long-Term Care Annuities: Pros and Cons
-
Feds Probing How Personal Medicare Info Gets to
Marketers
-
Seniors on Medicare Advantage less likely to have
issues paying medical bills: CDC study
-
More Than Half Of Americans Disagree With How Their
Tax Dollars Are Spent
-
Task Force: To Save Top Nursing Homes, Government
Should Encourage Lower-Performing SNFs to Exit
-
A whole new world: 15% growth in post-acute care
among 30-year nursing home industry changes
-
Operators treating Medicare Advantage enrollees for
depression, dementia and frailty are unfairly penalized: viewpoint
-
No, the Trump administration is not cutting
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, February 14, 2020, 9:00 AM (Pacific)
Seattle—
#############################
LTC
BULLET: MEDICAID AND LONG-TERM CARE, THE SERIAL, PART 2
LTC
Comment: The full Medicaid and Long-Term Care monograph is 78
pages, so we’re bringing it to you in bite-sized pieces. Here’s the second
one, after the ***news.***
***
ILTCI RECOGNITION AWARD nominations are open. The Intercompany Long-Term
Care Insurance Conference is sponsoring a third annual award for a person
or organization “that has made a significant, long-term contribution
towards the attainment of the ILTCI vision. The ILTCI vision is to create
an environment for aging in America that includes thoughtful, informed
planning that takes into account the most effective and efficient use of
resources in addressing the risks and costs of long-term care for all
levels of American society. For details and to submit your nomination, go
to
https://iltciconf.org/recognition-award/.
Past recipients of the award were Marc Cohen and Stephen Moses. ***
LTC
BULLET: MEDICAID AND LONG-TERM CARE, THE SERIAL, PART 2
LTC
Comment: The one thing everyone agrees about long-term care is that our
current system of providing and paying for it is a mess. Unfortunately,
most researchers observe the existing system, agonize over its problems,
and proceed to recommend solutions without first explaining what caused
the problems in the first place and why they persist. These analysts put
the proposal cart before the analytical horse.
Our
new monograph,
Medicaid and Long-Term Care,
takes a different approach. Steve Moses first explains historically how
long-term care’s major problems--such as institutional bias, inadequate
funding, caregiver shortages, access and quality problems, etc.--came to
be. Only after explaining the cause of the problems does he turn to ways
to correct them, arriving at a much more promising solution than the usual
proposals.
But
at 78 pages
Medicaid and Long-Term Care
is a lot to take in as a whole. So we’re serializing the report. Today’s
offering is Part 2. We’ll bring you the next installment in a couple
weeks.
Due
to email formatting challenges, we’ll leave out the content of the
report’s extensive footnotes in this serialized version. But the footnotes
are important, and you can find them by clicking through to the unabridged
version
here.
Likewise, citations to sources are given in the form (author, year, page
number). To find the full citations for those sources, see the
“References” section at the end of the
full
report.
Here’s the second episode of “Medicaid and Long-Term Care,” by Stephen A.
Moses, Center for Long-Term Care Reform, Seattle, Washington, published
January 17, 2020. This paper was presented to The Libertarian Scholars
Conference on September 28, 2019 in New York City and to The Cato
Institute’s State Health Policy Summit on January 3, 2020 in Orlando,
Florida.
How Did Medicaid Become the Dominant Long-Term Care Payer?
Social services and benefit programs in the United States evolved
gradually in the country’s first two centuries from a system based on
British poor laws—“indoor relief” with many poor houses—toward a system
based on cash relief payments (Senior Living: 1776-1799). Cash payments
from programs like Old Age Assistance and Social Security gave people
funds to spend on residential long-term care enabling the nursing home
industry to grow rapidly (Senior Living: 1930-1939). In 1960, the Medical
Assistance for the Aged (MAA) program made health care available to people
sixty-five and older with low or moderate income and required state
matching funds (Senior Living: 1960-1969). The same Kerr
Mills statute
radically changed eligibility for nursing home care by adding people who
“were not sufficiently needy to qualify for cash assistance to cover their
ordinary expenses, but who were unable to pay their medical expenses” (Ibid.).
In 1965, the new Medicaid program dropped strict eligibility criteria,
transfer of assets restrictions, and mandatory liens which were
commonplace previously. For its first 15 years, Medicaid explicitly
permitted asset transfers for the purpose of qualifying for long-term care
benefits (Carlucci, 1986-87, p. 372-332). Finally, Medicaid
paid exclusively for nursing home care, incentivizing its use by covering
“housing,
food, housekeeping, and laundry, services” which were not covered for
in-home services (Senior Living: 1960-1969).
These features of the new Medicaid program—medically needy eligibility
exclusively for nursing home care, including normal costs of living as
well as health care, funded with virtually unlimited federal and state
matching funds and with no limits on asset transfers to qualify—guaranteed
Medicaid would explode in cost from the outset, perpetrate a nursing home
bias in long-term care services, discourage development of a private home
and community-based care market, and crowd out private long-term care
financing sources. That is exactly what happened (Bernard and Feingold,
1970, p. 74533) and policymakers have been trying to reverse
the damage ever since. But their efforts to tame Medicaid long-term care
funding growth by capping supply and price, controlling financial
eligibility, rebalancing services from institutional to home care,
promoting private insurance, and enforcing federal rules on state programs
have failed.
A Litany of Failed Interventions
From the beginning, efforts to fix the problems Medicaid created have
addressed the symptoms—exploding costs, nursing home bias, and poor
quality—not the causes—strong financial incentives for states to maximize
Medicaid spending and perverse incentives for consumers to rely on the
safety net program rather than prepare to pay privately for long-term
care. Inevitable, if unintended, consequences followed a long series of
policy errors.
In the 1970s, central health planners tried to control skyrocketing
Medicaid nursing home costs by capping bed supply, requiring “Certificates
of Need” (CONs) (NCSL, 201934) before allowing new construction on the
premise “they can’t charge us for a bed that doesn’t exist.” Nursing homes
gratefully took advantage of this new government-imposed monopoly which
excluded new entrants from their market. But to compensate for their
impeded growth, the nursing home industry raised the rates they charged
Medicaid. In response, Medicaid capped nursing home reimbursement rates,
which remain to this day only about four-fifths of private-pay rates (Liberman,
2018). But low Medicaid rates created a strong incentive for higher paying
private-payers to convert to Medicaid. Consumers sought more and more
creative ways to qualify for assistance, sometimes relying on the advice
of specialized Medicaid planning attorneys to divest or shelter otherwise
disqualifying resources.
Consequently, private-pay nursing home revenue declined from 49.2 percent
in 1970 to 26.7 percent in 2017 while Medicaid funding increased from 23.3
percent to 30.2 percent in the same period (CMS, 2018, Table 15). The
problem of declining private-pay and increasing Medicaid nursing home
revenue is much worse than these numbers suggest due to a change in the
definition of National Health Expenditure Accounts (NHEA) categories CMS
made in 2011. CMS added Continuing Care Retirement Communities (CCRCs) to
the category Nursing Care Facilities. Because CCRCs are much more likely
than nursing homes to involve private payments, this misleading 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 2009.35
The federal government responded to the growing Medicaid dependency with a
long series of laws attempting to restrict asset transfers and close other
eligibility “loopholes” while requiring recovery of benefits paid from
recipients’ estates. In 1996, President Clinton and the Gingrich
Republicans even criminalized asset transfers for the purpose of
qualifying for Medicaid.36 But this “throw Granny in jail law” was
repealed a year later and replaced with a “throw Granny’s lawyer in jail”
alternative, which quickly proved unenforceable.37 These efforts to target
Medicaid long-term care resources to people most in need largely failed,
though for correctable reasons discussed below. But the main failure was
that these measures did not address the larger problem, financial
eligibility rules that permit people with median and higher assets and
income to qualify even without legal assistance.
By capping the supply and price of nursing home care without effectively
controlling financial eligibility, Medicaid caused demand to skyrocket,
filling nursing homes in the 1980s with too many recipients at too low
reimbursements resulting in serious quality problems (Hawes and Phillips,
1986, p. 50838). By accepting Medicaid recipients, nursing homes could
fill their beds no matter what quality of care they offered. Instead of
addressing this problem’s cause, easy access to under-financed nursing
home care, the government simply demanded higher quality care, requiring
tougher care standards, extra staff and training in the Nursing Home
Reform Act of 1987, but without appropriating extra funds to pay for the
new mandates (Klauber and Wright, 200139). So this measure failed to
improve care quality (Ibid.40). Caught between the rock of inadequate
reimbursement and the hard place of mandatory quality, state nursing home
trade associations sued for higher reimbursements under the 1980 Boren
Amendment and usually won (MacPAC41). Government responded by repealing
the Boren Amendment in 1997 leaving no legal floor under Medicaid nursing
home reimbursements, thus exacerbating the quality problem and causing
nursing homes’ reputation to disintegrate (Wiener and Stevenson, 1998, p.
142).
Trying to save money and give consumers more of the care they prefer,
Medicaid encouraged states to rebalance from providing only nursing home
care to supplying mostly home care. The premise of that policy was that
home care costs less than institutional care. Unfortunately, combined
institutional and home and community-based care expenditures usually
exceed institutional costs alone. Medicaid long-term care costs for older
adults and people with physical disabilities continued to grow from $36
billion in 1995 to $104 billion in 2016 despite, or because of, aggressive
rebalancing (Eiken, et al., 2016, p. 1443). The evidence is overwhelming
that changing from institutional care to home and community-based care
does not save money in the long run. Home care delays but does not
reliably replace nursing home care (Holahan and Cohen, 1986, p. 10644) and
home care is more desirable than institutional care so more people come
out of the woodwork (Ng, Harrington, and Kitchener, 2010, p. 2745) to seek
Medicaid eligibility (Grabowski, 2006, p. 346).
Attempting to divert consumers from Medicaid to private insurance,
government encouraged the use of “long-term care partnerships” which
enabled consumers who purchased qualified policies to protect extra assets
from Medicaid’s spend down and estate recovery rules (McCall, 2001). But
the real problem was that Medicaid’s spend down and estate recovery rules
are ineffectual and often unenforced. Forgiving a liability that does not
exist in the first place did not incentivize many people to purchase
private long-term care insurance policies. A federal income tax deduction
for private insurance introduced in the Health Insurance Portability and
Accountability Act of 1996 also helped little as it applied only to people
with medical and long-term care expenditures exceeding 7.5 percent of
adjusted gross income. Few people healthy enough to qualify medically for
private long-term care insurance had medical expenses high enough to
qualify for the tax deduction.
Having largely crowded out a market for private insurance by paying for
most expensive long-term care, the government added insult to injury by
driving interest rates on carrier reserves to near zero, forcing premium
rates up to compensate, upsetting policyholders and potential buyers, and
effectively suppressing the market. Seeing that nothing they did seemed to
work, Congress and President Obama tried to nudge the public into
voluntarily buying government long-term care insurance with the unfunded
and misbegotten CLASS Act that was quickly repealed (Kane, 201147).
The latest attempt by Medicaid to mitigate the rising cost of long-term
care is to modify the reimbursement system. Huge changes in how the
government pays for post-acute and long-term care are underway and about
to revolutionize long-term care service delivery. The transformation to
"managed care," whereby state Medicaid programs turn over responsibility
for providing and paying for long-term care to the highest bidders, has
long been sweeping the country. Most long-term care will still be provided
by nursing homes and home care companies, but now a new middle-man, the
managed care company, is coming between the payer (Medicaid) and the
provider, which already stand between the patient and access to quality
care.
The newest move toward centralized control of the long-term care market is
even more significant. The Centers for Medicare and Medicaid Services
(CMS) is changing the focus of long-term care financing in both of the
programs for which it is responsible from paying for services (volume) to
paying for value (as measured by new, vague and complicated "quality"
metrics). "Prospective payment," "bundling," and “value-based”
reimbursement are the watchwords of the day. Instead of consumers pursuing
value by purchasing care from providers they prefer, bureaucrats and
politicians will define value, reward providers who deliver it and punish
those who do not. The new system will put care managers and providers at
far greater financial risk. Experts worry the end result will be a
two-tiered system with poor providers getting worse and becoming more
dependent than ever on low Medicaid reimbursements.
< End >
#############################
Updated, Monday, February 10, 2020,
9:00 AM (Pacific)
Seattle—
#############################
LTC
E-ALERT #20-006: 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:
-
Adverse
Childhood Events Tied to Dementia
-
Pennsylvania Puts LTCI Issuer in Rehabilitation
-
Social
Security: Where Do the 2020 Candidates Stand?
-
How to
Deal With an Aging Advisor Force and Aging Clients
-
How the
Longevity Project Is Reimagining Our Longer Lives
-
Flu more
deadly for U.S. seniors than coronavirus, say doctors
-
Are Tax
Credits The Best Way To Subsidize Long-Term Care Costs?
-
WHY HOME
HEALTH CARE IS SUDDENLY HARDER TO COME BY FOR MEDICARE PATIENTS
-
New
Limited CMS Block Grant Program Draws Attention of LT/PAC [Long-Term and
Post-Acute Care] Profession
-
Strategies for Long-Distance 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,
Monday, February 3, 2020, 7:06 AM (Pacific)
Seattle—
#############################
LTC E-ALERT #20-005: 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:
-
Many Adults Are
Helping Their Parents Financially Despite Strain
-
2019 Novel
Coronavirus (2019-nCoV) Situation Summary
-
Staffing woes
threaten shift standards, OnShift survey says
-
Rising rates of
obesity, diabetes may reverse heart disease gains
-
FIVE TROUBLING
TAKEAWAYS FROM THE LATEST CBO REPORT
-
A Closer Look At
The Democratic Presidential Candidates’ Long-Term Care Plans
-
Supreme Court OKs
rule that could limit immigrants’ access to long-term care services,
jobs
-
Living near major
roads linked to risk of dementia, Parkinson's, Alzheimer's and MS
-
New tool predicts
life expectancy of dementia patients
#############################
"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 31, 2020,
9:00 AM (Pacific)
Seattle—
#############################
LTC Comment: The full Medicaid and
Long-Term Care monograph is 78 pages, so we’re going to bring it to
you in bite-sized pieces. Here’s the first one.
LTC BULLET: MEDICAID AND LONG-TERM
CARE, THE SERIAL, PART 1
LTC Comment: It is a mystery for many
why markets work for autos, groceries, and plastic surgery, but not for
health or long-term care. We set out to solve that conundrum in
Medicaid and Long-Term Care. But at 78 pages, this monograph is
a big chunk for busy professionals to consume at a sitting. So here are
the first seven pages. We’ll bring you the next installment in a couple
weeks.
Due to email formatting challenges,
we’ll leave out the content of the report’s extensive footnotes in this
serialized version. But the footnotes are important, and you can find them
by clicking through to the unabridged version
here. Likewise, citations to sources are given in the form (author,
year, page number). To find the full citations for those sources, see the
“References” section at the end of the
full report.
In this opening section, Steve
explains the long-term care financing problem, describes the current
method of providing and paying for long-term care, and shows how heavily
dependent the existing dysfunctional system is on public, especially
Medicaid financing. In the next installment, he’ll explain how and why its
problems of access, quality, low reimbursement, institutional bias,
caregiver shortages and welfare dependency developed. Later sections
address and correct most analysts’ misconceptions of the long-term care
problem concluding with a better market-based solution than the compulsory
social insurance options those analysts invariably propose.
Steve Moses challenges any scholar
whose work is cited and critiqued in Medicaid and Long-Term Care to
discuss and publicly debate this analysis. Contact him at
smoses@centerltc.com or 425-891-3640.
Here’s the first episode of
Medicaid and Long-Term Care, by Stephen A. Moses, Center for Long-Term
Care Reform, Seattle, Washington, January 17, 2020. This paper was
presented to The Libertarian Scholars Conference on September 28, 2019 in
New York City and to The Cato Institute’s State Health Policy Summit on
January 3, 2020 in Orlando, Florida.
Abstract
How to provide and finance long-term care for a burgeoning
elderly population bedevils scholars and policy makers. The existing
service delivery and financing system, dominated by public funding, is
highly dysfunctional, fraught with problems of access, quality,
reimbursement, discrimination and institutional bias. Most long-term care
scholarship analyzes these symptoms, without explaining their cause, and
recommends expanding government’s role, usually by means of a new or
expanded mandatory, tax-funded social insurance program. This paper takes
a different tack, first explaining why the long-term care market has the
problems it does and then suggesting how to remove their causes. At the
root of all long-term care problems is Medicaid, the dominant payer. By
providing only nursing home care—including room, board, and medical
care—funded with virtually unlimited federal and state matching funds,
Medicaid (1) exploded in cost, (2) created institutional bias, (3) caused
access and quality problems by paying providers too little, (4) enriched
plaintiff’s attorneys with the resulting tort liability cases, (5) crowded
out private markets for home care and long-term care insurance, and (6)
kept poor people poor with punishing spend down rules, while (7) letting
the affluent save and benefit through eligibility loopholes. The key to
fixing the problems that plague long-term care is to make Medicaid a
better safety net for the poor while diverting the general public to
private financing alternatives. This paper explains how to do that while
reducing government funding and regulation, which arguably caused the
long-term care problems in the first place.
Introduction
Like the drunk seeking car keys only under a streetlight,
most |