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LTC Bullet:


Center for Long-Term Care Financing President Stephen Moses has taped an "LTC Commentary" for broadcast on National Public Radio. It is one in a series of invited commentaries on a broad range of health-related issues slated for "Health Care Day" on April 1, 2000.

The piece will air first on Shawn Dudley's "Health Show," Thursday, March 23rd. Listeners within a seven-state reach of WAMC in Albany, New York can hear the show live then. On the same day, it will go up on the NPR satellite. After that, it will be available to 157 mostly- NPR stations nationwide and to the armed forces radio system for broadcast immediately or with a week or two lag. Check your local listings.

If your computer has a RealAudio player (or if you download a free one), you can hear the show and the commentary by visiting After March 23rd, just click on "The Health Show" about half way down the list of shows on the far left side of WAMC's home page.

According to the station's web site, WAMC's award-winning "Health Show" examines "some of the most fascinating issues surrounding physical and mental health, drawing on national experts for lively discussion of key medical breakthroughs, public health problems, tips on health care and research on diet, nutrition and exercise." Cassette tapes of the program are available by calling (800) 323-9262.

Just in case you'd rather read the commentary, here it is:

Long-Term Care Commentary
Stephen A. Moses, President
Center for Long-Term Care Financing

"Will you still need me.will you still feed me.when I'm.huh?.EIGHTY-four?"

America's 77 million baby-boomers start to become elder-boomers in only a decade. They're already struggling to provide long-term care for their WWII- generation parents. They've begun to worry about what will happen to them when they need help someday. Most will need assistance with the normal activities of daily living sooner or later. Nine percent of them may need five years or more of facility-based care.

So, how are we doing in this critical area of elder care? Long-term care service delivery and financing in the United States is a mess.

Most older people cling to independence. They want to remain in their own homes as long as possible. Unfortunately, America's home and community-based long-term care services are grossly inadequate.

Few seniors prefer to receive care in nursing homes. Institutionalization is a dread event. Nevertheless, our long-term care system is heavily biased toward nursing homes.

Long-term care can be extremely expensive, often over $50,000 per year. Most families cannot afford that kind of expenditure. Even so, only seven percent of seniors and virtually none of the baby-boomers have purchased private long-term care insurance.

Medicaid (which is welfare) and Medicare pay the largest and most rapidly increasing share of long-term nursing home and home health care costs. The public has come to rely on these programs. Yet, like Social Security, Medicaid and Medicare are notoriously close to insol- vency.

What went wrong?

In 1900, the average American's life expectancy was only 47 years. By 1965, life expectancy approached 70 years. More and more people needed long-term care for the chronic illnesses of old age. Women--the traditional caregivers--were leaving the home for the workplace. They were no longer available to provide care for free.

With every good intention, the government began to offer free or subsidized nursing home care through Medi- caid with few strings attached. Later, in the 1990s, Medicare started to provide generous long-term home health benefits. Consequently, very little demand developed for privately financed home and community- based care or for the private insurance coverage that could finance it. Why pay for long-term care if the government is giving it away?

In time, however, Medicaid expenditures for nursing home care and Medicare expenditures for extended home health benefits spiraled out of control. The government's efforts to keep costs down and quality up put the nursing home and home health industries in a bind. They were caught between the rock of inade- quate reimbursement and the hard place of quality control mandates. Finally, they succumbed. Five percent of America's nursing homes and hundreds of home health agencies have gone bankrupt in the past year.

Consequently, here's the problem we face today. Very few Americans are sensitive to the high risk and enormous cost of long-term care, because the government has paid most of these costs in the past. Medicaid and Medicare financing of long-term care have become so inadequate, however, that care quality is suffering and service providers are failing. Both trends--the public's denial and the system's failure--are peaking just as the Age Wave begins to crest. If something is not done soon, the Age Wave will crash very hard indeed on the biggest generation in America's history.

What should be done? The fundamental problem is that most people do not take the risk of long-term care seriously until it is too late. Then they fall into the overburdened social safety net originally intended only for the poor. Instead of duping the public into welfare dependency, the government should (first) educate everyone early about the risk and cost of long-term care, (second) encourage the purchase of private long- term care insurance with tax credits or deductibility for premiums, (third) provide the uninsured who own property a line of credit secured by and repayable from their estates to help finance their long-term care in the private marketplace, and (fourth) give Medicaid back to the genuinely needy so they can get ready access to quality care just like people who are able to pay for it themselves.

We call this approach LTC Choice. Most Americans, if fully aware of the risks and costs, will take responsibility for themselves and either save or insure against the need for long-term care. Others, with low incomes but considerable illiquid wealth, will regain the dignity of paying for their own long-term care with a line of credit on their estates. It isn't welfare if you pay it back. Potential heirs who see their inheritances consumed in this way will be even more likely to plan early and insure fully for long-term care themselves. Finally, when the publicly financed long-term care programs have only to provide for a small minority of long-term care residents instead of the vast majority as now, government will be better able to serve the needs of the destitute. Long-term care is a huge challenge, but one our country can meet if we act thoughtfully, comprehensively and soon.