May 23, 2001
now and then, LTC Bullets alerts you to an article which articulates clearly
many important observations about our current long-term care financing crisis as
well as ideas for reform. The
following such article, “Long-Term Care and the Four Urban Legends” comes
courtesy of Conrad F. Meier, Senior Fellow in Health Policy at The Heartland
Institute. Thank you to Mr. Meier
and The Heartland Institute for this thoughtful and provocative analysis.
Term Care and the Four Urban Legends”
Conrad F. Meier
to the “American Opinions on Reforming Medicaid” survey, 72 percent of
Americans say they cannot afford to pay the high cost of LTC without assistance.
Our current reliance on Medicaid to finance LTC actually propels people
towards dependence on government largesse and personal impoverishment.
also know Medicaid cannot long withstand the current demographic onslaught of
aging citizens much less the approaching tidal wave of baby boomers.
Unless there is a fundamental shift to a long-term care system based
predominately on private sector insurance, Medicaid and other entitlement
programs will cause a major demand for increased taxation and further rationing
of services to citizens.
insurance is a sensible alternative that can ease the fiscal burden on state and
federal governments while allowing a level of freedom not found in restrictive
the same survey, 76 percent of those interviewed said they want government to
shift from the current Medicaid financing program to one grounded in private
long-term care insurance. However,
the survey also noted that few Americans understand what LTC options exist.
Given this knowledge gap it is no wonder LTC urban legends exist.
Legend #1: Don’t need it*
percent of Americans believe they will have no need for nursing home care,
assisted living programs, home-based or community-based care, or any other LTC
service. The facts show otherwise:
two out of five Americans will need some LTC some time in their life.
Over the age of 50, the risk is even greater for one in five Americans
who will need LTC services during the next twelve months.
The U.S. Census Bureau reports the over-85 population is the fastest
growing societal group with one out of four elders already living in a nursing
year about seven million men and women over the age of 65 needed long-term care.
By 2005, the number will increase to nine million.
Legend #2: Can’t afford it*
interest groups and vocal advocates for increased, if not total, government
funding for long-term care incorrectly insist that most Americans cannot afford
facts collected from insurance buying patterns data indicate are revealing:
a majority of LTC insurance buyers have annual incomes of less than
$35,000, and one third of those buyers had assets valued at less than $30,000.
This seems to suggest LTC insurance is a viable option for retiring
middle-class seniors, particularly when balanced against the high cost incurred
by someone without financial protection.
home LTC can average around $55,000 a year, with East and West Coast facilities
reporting twice that amount. While
in-home LTC is less expensive, bringing in an aide to help with dressing,
bathing, feeding, meal preparation, and similar chores can easily top $12,000 a
year. These figures do not reflect
the emotional or physical cost of the family caregiver or the added cost of
skilled aid, like physical therapists.
bureaucrats promising a LTC government entitlement program are pandering to
seniors. Significant reform would
have government partnership with the private sector and allow a 100 percent tax
deduction for all qualified LTC insurance premiums along with tax-free
distribution of 100 percent of all benefits.
Increasing Medicare or Medicaid benefits to cover LTC is nothing less
than the redistribution of private wealth from one social group to another.
Legend #3: Not a good value*
Here again, advocates
for government funding claim LTC insurance is not worth the cost of premiums.
This position raises the following questions:
1. Is the cost worth the freedom of choice for quality care?
2. Is the cost worth being free from personal debt?
3. Is the cost worth knowing your family will not be financially or emotionally burdened with your care?
4. Is the cost worth being free of government rationing experienced in Medicare and Medicaid?
5. Is the cost worth increasing your dependence upon government?
studies show that most people fail to prepare for the long-term care event
because they mistakenly believe Medicare or their own health insurance will pay
for care. This knowledge gap is dangerous in that it gives the consumer a false
sense of security. According to the Health Care Financing Administration, two
out of three nursing home residents - about one million people - rely on
government welfare to pay for their care.
has restrictive limits that cover post-hospital skilled nursing and
rehabilitation care for a maximum of 100 days for each illness.
For the first 20 days Medicare pays the full cost of care, but for the
next 80 days the patient must pay a substantial co-insurance payments.
The 2001 co-pay is $99.00 a day from the 21st day to the 100th
average length of stay in a skilled facility is reportedly one year.
After which there is no Medicare benefit in any other level of care such
as custodial or intermediate care. Most
long term-stays are at the custodial or intermediate care level.
is welfare and as such requires forces a patient to declare a state of
impoverishment before being eligible for benefits. Despite the popular belief, private individual and group
health insurance plans do not cover LTC costs.
URBAN LEGENDS ASIDE
is a two-fold issue and must be addressed as such.
a consumer knowledge gap is a threat to the financial well being of
everyone who mistakenly thinks long-term care is a luxury rather than a
necessity in the 21st Century.
The notion that government can effectively deal with the potential cost
and administrative complexities of a program vastly more expensive than Medicare
is a dangerous step towards a socialized program that would rob every senior
citizen of the very independence they cherish.
must have the courage to educate citizens about taking individual responsibility
for themselves before government is allowed to make individuals more dependent
and less responsible.
Conrad F. Meier is Senior Fellow in Health Policy, The Heartland Institute, Chicago, IL. Contact firstname.lastname@example.org. This essay was first published by BrokerNews, Feb.,2001.
1. Luntz Research Companies national survey “American Opinions on Reforming Medicaid.”
2. The Gallup Organization, “Public Attitudes on Long Term Care: The EBRI Poll.”
3. HIAA Consumer Information, “Guide to Long-Term Care.”
4. Conrad F. Meier, Long-Term Care or Long-Term Government Dependency? Broker News, May, 1999.