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Principles
of Long-Term Care
*The
Problem*
*Americans are living longer, but dying slower often in need of expensive
long-term care (LTC).
* Trends in aging demographics guarantee that LTC will become a much bigger and
more expensive, possibly
catastrophic, social and political challenge in the future.
* America's LTC service delivery and financing system is severely dysfunctional
in terms of access, quality,
reimbursement, discrimination, and institutional bias.
* LTC places a huge financial burden on U.S. social programs (principally
Medicaid and Medicare) while private financing of LTC, especially insurance, is
very limited.
* In the absence of adequate public and private third party financing for
professional LTC services, American families struggle to provide informal care
at home with little help.
* Related problems are growing, such as, physical and financial abuse of the
elderly exacerbated by economic and emotional pressures on the "sandwich
generation."
*The
Reason*
* Ironically, well-intentioned public financing of LTC since 1965, although
helping many people in need, has inadvertently created and exacerbated the
status quo.
* Medicaid financing of nursing home care led to institutional bias. Neither
Medicaid nor Medicare can afford to provide the community care most seniors
prefer.
* Simultaneously, public financing of LTC inhibited the growth of a private
market for home care, assisted living and the private insurance products to pay
for them.
* Limited provider reimbursement by Medicaid and Medicare caused access and
quality problems, which led to discrimination against public recipients and in
favor of private payers.
* Consequently, private payers are migrating to home care and assisted living
leaving public payers and nursing homes with the highest acuity, most expensive
patients.
* Ramifications for staffing, litigation, liability insurance, capital
financing, stock prices, and viability of the system are approaching the end
game.
* In the meantime, relatively easy access to Medicaid nursing home care and
Medicare home care has desensitized the American public to the risk and cost of
formal LTC.
* Thus, most people who need formal long-term care still end up in nursing homes
paid for by Medicaid and very few Americans plan, save or insure for LTC.
*The Solution*
* The good news is that America's LTC crisis is relatively easy to solve,
because it is self-inflicted by well-intentioned, but negative incentives in
public policy.
* In America today, one can ignore the risk of LTC, avoid premiums for private
insurance, qualify much more easily for public benefits than is commonly
understood, or dodge "spend-down" requirements entirely.
* Stricter eligibility rules (e.g., "Throw Granny in Jail") and
mandatory estate recovery have failed to save Medicaid or encourage individual
responsibility because they come after it is too late to save or insure.
* To solve the LTC crisis, we must: (1) educate everyone by age 50 about the
risk and cost of LTC, (2) enforce "LTC Contracts" before retirement
whereby everyone acknowledges the personal responsibility to save or insure for
LTC, (3) extend to all uninsured Americans the "LTC Choice" of a
publicly backed line of credit on their estates so they can purchase quality LTC
in the private marketplace at the most appropriate level of care, and (4)
faithfully recover
these secured loans from the estates of deceased borrowers in order to encourage
their heirs and all other Americans to plan early and insure fully for LTC.
* Benefit payments can be administered through vouchers or formal loans, but
they must be secured by collateral and recovered upon death of the last
surviving exempt dependent relative, such as a spouse or disabled child.
* With these positive programs and incentives in place, fewer people will depend
on Medicaid or Medicare for their LTC and those programs will be better able to
serve their legitimate recipients and beneficiaries.
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