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LTC Bullet:

Medicaid vs. LTC Insurance for Home Care

Friday October 6, 2000


A frequent theme of "LTC Bullets" is that people who fail to plan, save or insure for long-term care often become dependent upon less desirable services funded by Medicaid. Deficiencies associated with Medicaid- financed nursing home care--such as problems with access, quality, reimbursement and discrimination--are well known and thoroughly documented. As Medicaid focuses more and more on community-based care, however, similar problems are arising in that area also. The following quotes are from an article by Clarence J. Sundram entitled "Abuse and Neglect in Community Settings," in the September/October 2000 issue (Vol. 3, No. 3) of "Victimization of the Elderly and Disabled," a bi-monthly newsletter published by the Civic Research Institute in Kingston, NJ. (For subscription information, contact By empowering more individuals to pay privately for high-quality home and community-based long-term care, LTC insurance plays the doubly beneficial role of relieving the financial strain on Medicaid and helping cash-strapped home care providers to remain in business despite deficient Medicaid and Medicare reimbursements.

"Recently, HCFA has been conducting in-depth reviews of the Home and Community Based Waiver programs in several states and its findings strongly suggest that the problems of abuse and neglect that once plagued institutions, like the institutional residents, have migrated to the community programs in which they now reside."

. . .

"HCFA's finding in two large states illustrate well the nature of the problem found in the Home and Community Based Waiver program, although these two states are by no means unique in this respect. In Illinois, HCFA found the lack of an effective system for reporting, tracking, investigating and preventing abuse. It found that the State had no system to assure that employees who abused clients did not simply relocate to another provider agency. There were numerous examples of cases where front-line staff failed to report cases of abuse promptly. And the state lacked a proactive approach to preventing abuse and neglect.

"In California, HCFA found residential facilities and day programs to be unsanitary, unsafe and inadequately supervised. Medications were improperly prescribed and administered. It found the State had failed to fulfill its obligation to safeguard the health and safety of the service recipients. The licensure system was not effective in protecting the health and safely of consumers."

. . .

"Just as the conditions in institutions were a visible manifestation of an abdication by government of its responsibility to be a competent service provider, the emerging problems in the community signal an equally profound failure of government to fulfill its responsibility to be a competent funder and regulator."

. . .

"As states implement the Medicaid Home and Community Based Waiver and policies on self-determination, they are expanding rapidly to non-traditional providers where there is even less scrutiny of competence and fiscal accountability."

. . .

"[T]he Medicaid waiver is an engine for reform and offers access to public money and freedom from regulation. But its chief virtue is also its principal vice. The complete absence of standards and regulations continues to expose vulnerable people to unreasonable risks. We have to be more careful to ensure that the Medicaid waiver does not aid and abet a waiver of responsibility."