LTC Bullet: Washington Provider Association Gets It
Friday January 4, 2002
***Important Reminder: Check out the Center's new "LTC Week in Review" feature published every Monday afternoon in our website donor-only zone. Titles in next Monday's edition include: "An Aspirin a Day Keeps the Doctor Away," "Nursing Home Liability Crisis in Florida," and "Retirement More Expensive than Commonly Believed." Details on how to access the donor-only zone are available at www.centerltc.org/bullets/archives2001/294.htm. See you there!***
The Washington (State) Association of Housing and Services for the Aging (WAHSA), the state association of not-for-profit nursing home providers, recently published a series of public policy white papers in a single bound report. The position statements describe WAHSA's position on long-term care issues, including proposed legislation for the 2002 Washington State legislative session as well as broad public policy concerns for the future. The position statements are grouped into four categories: "Financing Long Term Care," "Staffing," "Regulations" and "Medicaid Reimbursement." You can view the full report at www.wahsa.com/White%20Papers%202002.pdf. WAHSA's homepage is www.wahsa.com.
Within the category of "Financing Long-Term Care," the WAHSA report addresses specifically the need to reduce demand for Medicaid services in order to save Medicaid for the truly needy--a major goal of the Center for LTC Financing's education and advocacy efforts. In addition, the WAHSA report makes the connection between easy access to Medicaid-financed care and low demand for private long-term care insurance--a constant refrain of the Center for LTC Financing and a connection the LTC insurance industry itself is beginning to accept in greater numbers. Why pay premiums for years when you can wait to see if you ever need care and get the government to pay after the insurable event occurs? Kudos to WAHSA for addressing this critical subject head-on.
Here is an excerpt from the WAHSA report of particular interest to LTC Bullets subscribers followed by a CLTCF comment.
"Reducing the Demand for Medicaid Services:
1) State Encouragement of LTC Insurance Financing;
2) Changing the Rules for Divestiture; And
3) Changing the Look Back Period for Medicaid Eligibility-Financing
"Washington State has become the long-term care insurer for the middle and lower
classes. By planning ahead by a few years, anyone can rid themselves of assets and
become eligible for Medicaid. This is a legal and rational choice that will bankrupt the
system if it is not changed.
"In the next thirty years the number of elderly citizens in the country will double. Seniors will account for nearly one quarter of the population. In Washington State, persons age 85+ have increased by 49% over the past 10 years and are the state's second fastest growing population. Washingtonians age 75-84 have increased by 33% over the same 10 years. Simply put the state is about to be overwhelmed by the demand for long-term care.
"Currently there is little incentive to purchase long-term care insurance. With a little help
from an attorney, any individual can rid themselves of assets by passing them to their
heirs. The State will cover long-term care expenses through the Medicaid program. Since eligibility for Medicaid can easily be achieved, people have little incentive to purchase long-term care insurance.
"However, if eligibility was tougher and assets could not be freely transferred to heirs to
qualify for Medicaid, there would be a strong incentive to purchase long-term care
insurance. Furthermore, this would assure that quality care through Medicaid is available
for the truly needy, while citizens who can provide for their own long-term care will do
"*WAHSA supports ending the technique of artificial divestiture of assets to qualify
"*WAHSA supports expanding the "look back" periods to assure that assets are not
transferred simply to qualify for Medicaid.
"*WAHSA supports state sponsored incentives to promote the purchase of and
provision of long-term care insurance as a benefit." (p. 6).
[CLTCF Comment: Artificial impoverishment to qualify for Medicaid does not require years of pre-planning. Almost anyone can qualify for Medicaid--quickly and without spending down signficantly--even after the insurable event occurs. Moreover, generous eligibility rules that allow middle-class seniors to walk right onto Medicaid are more responsible for overutilization than fancy Medicaid planning by affluent seniors. Sophisticated planning techniques make headlines, however, because of the outrageous lengths some seniors and their attorneys will go to transfer the cost of care to unwitting taxpayers. Check out the Center's "LTC Choice" policy paper in .pdf format at www.centerltc.org/pubs/CLTCFReport.pdf for a more complete analysis and recommendations for public policy reform.]