Bullet: CMS' Scully on LTCI and Tax
February 13, 2002
Info on great new content in "The Zone" follows the text of this
Bullet and precedes the boilerplate. Zone
Bad news for Medicaid planners and their clients; worse news for the poor who
depend on Medicaid: "Iowa
nursing homes are evicting residents or considering closure because of
uncertainty over the state's Medicaid system."
Read about it in the 2/13/2 "DesMoines Register" at http://www.dmregister.com/.
Hint: search for "evictions." ***
Comment: Tom Scully, Administrator
of the Centers for Medicare and Medicaid Services (CMS, formerly HCFA) delivered
a luncheon keynote address on January 24, 2002 to the National Academy of Social
Insurance. The talk, titled ďProspects for Long-Term Care Policymaking
at State and Federal Levels,Ē included some comments on the need for private
long-term care insurance and tax incentives to encourage people to buy it.
The following excerpts from Scully's extemporaneous speech are a little
hard to follow, but considering the prominence of the speaker, they give a
valuable glimpse into the Bush Administration's thinking on long-term care
care insurance is another huge issue. This is another thing that we probably
should have fixed 20 years ago. I
believe, and the Presidentís made some proposals on this, as have many people
on a bipartisan basis, that people start buying long term care insurance when
theyíre 62. I started buying my
mother long-term care insurance when she was 68.
Thatís not a good thing, but thatís what the tax code incentivizes.
point, we need to start looking about, if we donít want to have a, you know,
hundred year trend of everybody spending down their assets and having nursing
homes all be paid for by Medicaid, which is what happens now, which is not
necessarily good social policy, or good financial planning, we need to get to
the point where we change the tax code and start incentivizing people.
theyíre 44 like me, or 24, to say, you know, part of my cafeteria plan at work
is buying a health plan, putting money up beside my 401K and, oh, by the way,
Iím gonna start buying long term care insurance when Iím 24 and not 64.
Because, actuarially, you canít buy insurance for a predictable event
thatís gonna happen when youíre 75 if you start buying it at 65.
But, given the incentives we have in the tax code right now, thatís the
way it is.
"And I think a
lot of our long term care problems are related to the way we pay for long term
care. And theyíre relative strict little boxes we put ourselves in Medicaid
and Medicare and private pay, and itís driving a lot of it.
And, until we start thinking about the financing mechanisms to pay for
long term care, and getting people to start thinking about their long-term life
care financing appropriately, weíre gonna have those problems.
And the tax code drives a lot of behavior.
And, until we start thinking about long term care insurance as a tax
code, those problems are still gonna be there."
*** As promised in
our last Bullet, we've added two new features to the Center's donor-only zone.
Enter The Zone and then click on your choice of The LTC Reader, The Data
Base or LTC Week in Review. Ordinarily,
we'll add an average of one item a day, but for starters, we've posted five
items in the Reader and five in the Data Base to give you the flavor.
Here's a list of what you'll find there already:
The LTC Reader
#1: A.M. Best Warns Re LTCI
#2: Due Diligence for LTCI Agents
#3: How Much BIO is Enough?
#4: The Myth of Anti-Aging
#5: Who Will Buy LTCI?
The Data Base
#1: Dire Shortage of Nursing Home Caregivers
#2: Swiss Re on the LTC Opportunity
#3: Global Aging Through Rose-Colored Glasses
#4: Highlights of AoA's 2001 Profile of Older Americans
New CMS Data on Nursing Home Expenditures is Misleading
Next week, we're going to give LTC Bullets subscribers a
taste of what they will find when they qualify for The Zone.
But we want all of you who already qualify to see the new material first.
Enjoy and let us know what you think.
As a reminder, donors to the Center of $100 or more per
year may access The Zone almost immediately.
Just send your preferred user name and password (10 characters or less)
to email@example.com. Amy will
confirm your user name and password are active, usually within a day or two.
If you aren't a zone-level contributor yet, go to www.centerltc.org and click on "Support the Center." There, you can contribute online directly from a bank account or with a credit card. You'll receive a confirmation and receipt by email. Otherwise, mail your check to the Center at 2212 Queen Anne Avenue North, #110, Seattle, WA, 98109. Contributions to the Center for Long-Term Care Financing are fully tax-deductible.
Here's another option. Maybe you work for a company that already provides corporate-level support to the Center for Long-Term Care Financing. If so, you may qualify for free or discounted access to The Zone. Email firstname.lastname@example.org to find out. If your company does not support the Center yet, encourage them to do so. Tell them access to the The Zone will help you do your job better, faster, and more profitably. ***