LTC Bullet:  Two New Articles on LTC Financing

Thursday, April 4, 2002


*** You can still reserve a place at the table for the Center for Long-Term Care Financing's "LTC Graduate Seminar" in Baltimore, Maryland on April 22, 2002.  For all the details on this full-day, small group intensive led by Center President Steve Moses, go to  Email to reserve a spot.  Some topical questions the LTC Graduate Seminar will tackle:  When will above-the-line tax deductibility become law?  What's got LTCI executives so discouraged?  Why are Medicaid planners on top of the world?  What's the real reason most Americans don't plan for LTC and how can senior advisers break through their stubborn denial?  What's happening in the states and at CMS that could balloon Medicaid costs, supercharge Medicaid estate planning, and derail LTCI?  Whether you provide care services, advise seniors, or sell insurance, you will be more effective after attending this program.  ***

*** New content to be added by Monday to the "LTC Week in Review" feature on the Center's donor-only zone includes:  "HIAA LTCI Book II Published," "New Alzheimer's Test," "Free NIC Insider Newsletter," "Stopping Criminals from Getting Nursing Home Jobs," and "Aspirin Combats Prostate Cancer." ***

*** How would you like to have a leading long-term care expert read, cull, summarize, and analyze the most important LTC news and research for you every week?  You could save time, hone your professional edge, and impress clients and colleagues with the currency of your expertise.  But what would that kind of service cost?  Not much, actually.  Donors of $100 or more annually to the Center for Long-Term Care Financing (a 501[c][3] charitable, nonprofit, and nonpartisan organization) have password-protected access to the "LTC Week in Review," "The LTC Reader," and "The LTC Data Base" and other features in our donor-only zone.  Go to for details on how to qualify for the Zone and email when you're ready to Zone In. ***

Two New Articles on LTC Financing

Ron Panko, Senior Associate Editor, at Best's Review (an insurance industry trade magazine) did extensive, in-depth research for an important new article on long-term care financing.  The piece is titled "Hope for a Healthy Marketplace" and subtitled "The nation's financially stressed long-term-care system needs an environment more friendly to private payors and private providers."  You'll find Panko's article in Best's Review's April 2002 issue starting on page 75, or jump directly to and read it online.  Don't miss the excellent full-page side-bar by Claude Thau, a well-known expert on LTC insurance and Chairman of the Board of the Center for Long-Term Care Financing. 

Mr. Panko got the idea for this article from reading the Center for Long-Term Care Financing's "LTC Triathlon" report and he interviewed many of the same respondents cited in that report.  Read "The LTC Triathlon:  Long-Term Care's Race for Survival" at  The article also draws heavily on the analysis presented in another of the Center's major reports:  "LTC Choice:  A Simple, Cost-Free Solution to the Long-Term Care Financing Puzzle" (

A second important article (actually a series of short articles) was published in the March 25, 2002 issue of Investment News, "The Weekly Newspaper for Financial Advisers," published by Crain Communications.  The significance of this coverage is that it evidences a growing interest in private long-term care insurance among general financial planners.  You can't read these items online, but is where to go for subscription information. 

Here are a few excerpts from both articles to whet your appetite:

* From Panko on "Hope for a Healthy Marketplace" *

"Insurers have trumpeted for years the potential of long-term-care insurance and the fact that federal law does not intend for Medicare or Medicaid to pay long-term-care bills, except for those of the poor.  So why does the product remain such a hard sell?" . . .

"In the current environment, government continues to expand its funding of long-term care, providers and insurers cannot earn adequate profits, and public officials and politicians send mixed messages about the importance of individual responsibility and private funding of long-term care in the future." . . .

"Today, attorneys help middle-class and wealthy patients to shift their assets, usually to children, so they can qualify for Medicaid subsidies, in effect forcing taxpayers to subsidize inheritances and subvert the intent of federal law."

"These strains tear at the fabric of the nursing-home business and retard development of assisted-living and home-care infrastructures, said Stephen Moses, president of the Center for Long-Term Care Financing, a Seattle-based nonprofit think tank and advocacy organization." . . . 

"Insurers acknowledge the problems in the system and the urgent need to address them.   'It really is time for a rational approach across the segments of the entire long-term-care industry,' said Ken Grubb, senior vice president of New York Life Insurance Co.'s Long-Term Care Division.  'Absent that, the federal and state governments will be faced with a problem of enormous magnitude.  Long-term care is the largest unfunded liability facing the nation today'." . . .

"[Claude] Thau said future public policy should reflect three guiding principles:  that Medicaid and government in general cannot afford the potential long-term-care drain on their budgets, that private insurance is a key to solving the problem and that government financing of long-term care should not apply to the affluent." . . .

"Asked about the political palatability of the [Center for Long-Term Care Financing's 'LTC Choice'] proposals, Thau said:  'Personal responsibility and providing care for the indigent are noble themes, which should be endorsed.'  He added that moving the financing out of Medicaid and increasing the flexibility of public spending on the poor should both be very attractive proposals."

* From Rick Miller on "A Graying America Challenges Advisers" *

"The topic is not an easy one to broach:  How will a client pay for care if stricken by Alzheimer's disease, Parkinson's disease or a debilitating stroke?

"As far as Plano, Texas, certified financial planner Sharon Luker is concerned, it's a tough but necessary question to ask.

"She fears she could be held legally liable if she doesn't raise the topic and offer a safety net -- long-term care insurance." . . .

"But few financial planners are broaching the issue of long-term care insurance with clients -- despite industry projections that the cost of providing such care could quadruple by 2030.

"Advisers are largely uninformed about long-term-care products, industry observers say, and it's typically up to clients to initiate discussions." . . .

"Industrywide, sales have been growing steadily in recent years, albeit from a low base, analysts note.  But sales fell by 8% in 2001, and only four of the top 10 insurers experienced any growth, according to LIMRA."

In a side-bar to this article titled "To Counter the Looming Crisis, First Close All of the Loopholes," author Rick Miller quotes Center for Long-Term Care Financing President Steve Moses:

"'Eighty-five percent to 90% of all nursing home costs in the U.S. are funded either directly or indirectly by government, or they come from income, not savings,' says Mr. Moses, who heads the non-profit Center for Long-Term Care Financing in Seattle.  'As a consequence, the public is basically anesthetized to the risk,' he says."