LTC Bullet: Let the LTC Revolution Begin

Friday, November 8, 2002


LTC Comment: We're often asked "Have any states pursued the Center's LTC Choice plan?" We respond, "Not yet, but when conditions in LTC get bad enough, policy makers will eagerly turn to our "simple, cost-free solution." Well, evidently, the end game is nearing. In the following commentary, a long-term care leader in Washington state concludes the time has come to reform long-term care financing, save Medicaid for the needy, and unleash the powerful potential of private insurance. Read this "call to action" (after the ***news***) and let us and the author know what you think. Your willingness to provide moral and financial support to this pioneering initiative, could make the difference between its success or failure. [The Center for Long-Term Care Financing is a 501(c)(3) charitable, nonprofit organization. We do not endorse or oppose specific legislation. We do advocate for public policy that targets scarce public LTC resources to the genuinely needy and encourages everyone else to save, invest or insure for the risk of long-term care.]

*** New content added today to the donor-only zone includes "The LTC Week in Review for November 4 - 8, 2002: LTC E-Alerts #256-#260." Every LTC E-Alert contains some news or information that will help people understand the need to prepare early for the risk and cost of long-term care. If you already qualify for The Zone, you can click the following link, enter your user name and password, and go directly to the latest E-Alerts: .

LTC E-Alert #256--How to Find a Good Nursing Home in California
LTC E-Alert #257--Having LTCI Could be a Matter of Life or Death
LTC E-Alert #258--16 Million with Alzheimer's by 2050
LTC E-Alert #259--New Alzheimer's Association President Shows Real Promise
LTC E-Alert #260--How to Fight Frailty and Stay at Home

To Zone In, mail your tax-deductible contribution of $100 or more to the Center for Long-Term Care Financing, 2212 Queen Anne Avenue North, #110, Seattle, WA 98109. Then email your preferred password and user name (up to 10 characters each). He'll get you into The Zone ASAP. You can also contribute online by credit card or direct withdrawal at . ***




Revolution Needed to Save Our Long-Term Care System from Collapse

By Jerry Reilly, Public Policy Consultant

Former state Medicaid director in New Jersey and Washington

Past executive director Washington Health Care Association

It is time for a revolution if we are to save our long-term care system. We must take strong and dramatic action to reform the way long-term care services are financed in this country, and in each state.

Without such change, we are already on the verge of the collapse of our long-term care system. When we start to experience the elder population wave anticipated over the next 20 years or so, the crisis will be staggering.

But the truth is simply coming up with a new approach is not enough. We cannot count on elected officials to take an idea Ė no matter how good Ė and implement it.

The only way anything will change is if we take action ourselves.

We must develop our own specific proposal . . . get it introduced as legislation . . . guide it through the legislative process . . . generate public awareness and influence public opinion . . . and persuade lawmakers to adopt the reforms we propose.

Thatís the revolution that is desperately needed. And we must be the ones to make it happen.

Throughout my long career dealing with long-term care and government medical assistance programs, we have seen the treadmill of increased reliance upon diminishing public financing take the long-term care system to the brink of collapse.

The government can no longer pay adequate reimbursement rates. Providers can no longer meet regulatory or consumer expectations. Access to services and the quality of care are increasingly jeopardized. Our publicly-financed long-term care system is faltering, but few Americans have prepared by saving or insuring to pay privately for their own long-term care needs.

Fortunately, there is another path we can take. But, it wonít happen unless we take action and stop waiting for government to solve the problem.

Instead of the bleak picture we see today, imagine a long-term care system in which one-third of the participants are supported by Medicaid, one-third are paying their own way through guaranteed loans secured by their estates, and one-third are supported by insurance payments from policies which they had the foresight and incentive to purchase.

This is the future that will flow from the ideas offered by the Center for Long-term Care Financing for a restructuring of the financial foundation of long-term care. (For a detailed description and analysis of the long-term care problem and the "LTC Choice" solution, visit .)

It is a future based upon the original premise that Medicaid needs to be a program for the genuinely indigent. The rest of us should be expected to pay our own way by means of insurance coverage or use of our personal resources.

Most recognize that Medicaid has become the de facto, taxpayer-financed, social insurance system for the large majority of people receiving residential long-term care services, especially in nursing homes. Many recognize that growth of a private insurance market to cover long-term care risk has been very slow partly because of competition from an essentially "free" public program, which despite continuing attempts to tighten eligibility, makes it possible for almost anyone to gain entry.

I have been frustrated by the apparent lack of interest or political will to take up the powerful ideas embodied in the "Long-Term Care Choice" program advocated by the Center. One of the key factors in this lack of progress is that there has been no focused public policy campaign, at the grassroots political level, to implement the vision of "LTC Choice" in any state.

With the long-term care crisis growing worse day by day, we can no longer sit by and wait for somebody else to start the revolution.

Thatís why we are organizing a Coalition to Reform Long-Term Care Finance. The Coalition will campaign to enact the concepts of "LTC Choice" in Washington state. Once this campaign gains momentum in Washington, we expect it to generate substantial interest in other states facing the same issues. Our objective is to establish model legislation and a campaign framework in Washington that can translate into success throughout the country.

Washington is identified as the initial target because the state currently faces a $2 billion shortfall in building its state budget for the next two years. The state now finances the cost of care for about 12,000 nursing home patients and about 3,000 assisted living residents through its existing Medicaid program. All of this costs about $1 billion each biennium, with the federal government providing roughly half of the funds. In addition to the magnitude of the stateís budget crisis, Washington is a logical target because it has created a Medicaid system that is more generous than most. This combination has made the fiscal burden of Medicaid greater than in most other states.

In short, legislators in Washington are facing an especially difficult budget situation and view Medicaid, including long-term care, as a particular problem area. This should make lawmakers in Washington very open to reform proposals.

If the elements of the "LTC Choice" program were now in effect, it is likely that between 30 and 50 percent of the Medicaid-supported long-term care recipients would be financed privately. This would reduce total public expenditures for long-term care in Washington by up to $500 million per biennium.

Clearly, the kind of restructuring required could not be completed in a single two-year period. However, the financial problems faced by Washington, as well as most other states, will exist for the foreseeable future and substantial long-term reductions in public funding can be achieved in a relatively short time -- but only if we begin the transition as soon as possible.

Because of this stark budget situation, Washington, and other states as well, may now be ready to look at the ideas contained in the "LTC Choice" proposal.

Yet it will only happen if we succeed in putting together a broad coalition of people who care about improving long-term care financing and long-term care services.

Implementation of the "LTC Choice" program as our "future" will have many benefits.

Long-term care consumers will have more choices and better access to the services they want as more of them enter the market as private buyers.

Long-term care insurers will find a much larger market for their products.

Long-term care providers will see their costs met and be able to meet changing consumer preferences in a market that is two-thirds private.

State budget writers will experience a significant drop in demand for scarce public resources.

Medicaid-sponsored residents will receive better care because government payers will be able to pay on a more adequate basis since they will responsible for fewer eligible people.

Long-term caregivers and other employees will benefit by higher wages that providers will be able to pay as they become less dependant on public funds.

Recipients, providers and caregivers will all benefit from enhanced quality of care when greater reliance on private financing provides the resources necessary to improve staffing.

Taxpayers will benefit because they will no longer be required to subsidize the care for people who can afford to pay their own way.

No matter how reasonable, rational and beneficial "Choice" reforms may be . . . the only way anything will change is if we decide to take action and create our own revolution.

We are striving to create a coalition that will take specific action to wage and win this fight:

If you are willing to participate in this coalition, please contact me (e-mail would be best at or phone at 360-561-4212).

We can save the long-term care system, but only if we are willing to take strong action to foster a revolutionary re-structuring of how we finance this essential set of services