LTC Bullet: Tough Times Ahead for LTC

Thursday, January 9, 2003


LTC Comment: The editor of Nursing Homes/Long Term Care Management magazine invited Center for Long-Term Care Financing President Stephen Moses to prognosticate about long-term care in 2003. Foresee the future after the ***news***.

*** This Bullet is sponsored by the National LTC Network, "Partners in Long-Term Care Coverage, Design, Education and Distribution." Visit the Network online at Contact Allen Mansfield, Executive Director, at 800-996-6789 or for more information. Thanks so much to Network members for their generous support of the Center. Won't you help too? Go to to sponsor an LTC Bullet. Find out how you can sponsor other Center activities (e.g., articles, speeches, conference exhibits) by contacting Amy Marohn at 425-377-9500 or . ***

*** Internet Radio Interview! Listen through your computer to Center President Steve Moses on Saturday, January 11, 2003 at 4:40 Pacific Time on Jacqueline Marcell's radio program, "Coping with Caregiving," discussing long-term care service delivery and financing at (Find the Green Button). Jacqueline is the "edu-taining" author of, "Elder Rage, or Take My Father... Please! How to Survive Caring for Aging Parents." If you miss the live broadcast, the interview will be archived for 24/7 listening on demand at, see: Recent Archives. (Listen via a free download: Windows Media Player, available at the bottom left of the wsradio site.) ***

*** Tidbit (thanks to Patty Ash of LIMRA): "The National Association of Insurance Commissioners (NAIC) has passed the interstate compact for life insurers, letting them file one form in 51 jurisdictions for long-term care insurance, life insurance, disability insurance, and annuities. The compact has an amendment that allows interested parties to continue to discuss it. Incoming NAIC President Mike Pickens says that commissioners will work on national standards for products, though the compact may not become active for up to four years." (BestWeek, December 16, 2002) ***

*** Forthcoming long-term care insurance conferences:

(1) The Third Annual Intercompany LTCI Conference convenes JANUARY 26-29, 2003 in Las Vegas, Nevada. For details and to register, go to . Highlights: six education tracks offering 47 interactive sessions; network with your peers and LTCI experts; expert speakers from the LTCI industry; two new sub-tracks: Group LTCI and LTCI 101 - The Basics; current, practical and informative discussion opportunities; three national LTC designation programs on Saturday and Sunday before the Conference.

(2) On Friday, JANUARY 31, 2003, the Pittsburgh Airport Area Chamber Enterprise Foundation will present a Long Term Care Conference, "Economic Impact with Long Term Care: Corporate Elder Care Planning." According to organizers, "This one-day event will provide information about the crisis in the Long Term Care Industry and will address how providers, financial services institutions, regulators and employers can work together to ease the economic burden that accompanies long-term care." Speakers include Center President Steve Moses and many national leaders in long-term care service delivery and financing. For details and to register, go to .

(3) The 16th Private Long Term Care Insurance Conference will convene FEBRUARY 12 - 14, 2003, at the Marriott Rivercenter in San Antonio, Texas. Discounted early-bird registration has been extended to January 17, 2003. The conference, which attracts over 500 long term care experts, provides a non-partisan forum for educating attendees about the evolving long term care insurance market, discussing the impact of state and federal legislative policies on the marketplace, and fostering the development of public-private partnerships to finance the nation's long term care bill. For information on attending or exhibiting, go to or call Diane J. Fulton, Conference Coordinator at 703-968-8863.

*** Latest donor-only zone content includes:

LTC E-Alert #3-003--Medi-Cal Becomes Medi-Can't

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 donor zone content: .

To Zone In, mail your tax-deductible contribution of $150 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). You can also contribute online by credit card or direct withdrawal at . ***


We received the following email from Richard Peck, Editor of Nursing Homes/Long Term Care Management, on October 9, 2002.

"Hello: For the December issue of Nursing Homes/Long Term Care Management, I'm conducting a "crystal ball-gazing" for 2003 survey of some leading thinkers on long-term care. I wonder if you would write in your responses to the following items and email them back to me by Tuesday, October 15. . . . The basic question is:

"How do you see 2003 shaping up for long-term care in these vital areas:

--financing (public and private)?



--deinstitutionalization (e.g., Olmstead's impact)?"

Steve Moses' reply to this query was published in the December 2002 issue of the magazine. We republish the piece here with permission. For more information on Nursing Homes/Long Term Care Management and to subscribe, go to . (The version of this article which follows is slightly different from the one published in the magazine.)

"In my crystal ball, I see more of the same and conditions worsening. Government (mostly Medicaid and Medicare) pays for the vast majority of all nursing home and home health services in the country. Government's share of these costs has increased 10 percent in the past decade while out-of-pocket costs have declined 10 percent. Consequently, the public is desensitized to the risk of long-term care and few people purchase private insurance. By the time they need long-term care, it's too late for people to insure and the path of least resistance is government financing. In this way, the system continues to spiral downward toward the ultimate collapse I've predicted for a decade and which is in the latter stages of occurring today. For more details on the history of this process and a proposed solution, see "LTC Choice: A Simple, Cost-Free Solution to the Long-Term Care Financing Puzzle" at .

"The problems of regulation and staffing are directly related to the financing problem. Heavy reliance on inadequate government financing led to staff shortages which led to quality problems which led to stricter and stricter regulations which contributed to tort liability suits which caused skyrocketing liability insurance premiums which contributed to revenue shortages which caused massive bankruptcies, etc., etc. Dip into this cycle anywhere you want and hang on as what goes around comes around over and over again. As LTC providers and financiers told us in the Center for Long-Term Care Financing's LTC Triathlon study: "The government demands Ritz Carlton care for Motel Six rates while imposing a regulatory Jihad." For all the details on how these variables relate to and compound each other and to read dozens of colorful quotes from angry and frustrated LTC providers, financiers, and insurers, see "The LTC Triathlon: Long-Term Care's Race for Survival" at .

"Regarding deinstitutionalization and the Olmstead decision, you'll never find a better case study in how good intentions can lead to disastrous consequences. The Department of Health and Human Services is spending millions to promote the 'New Freedom' to receive Medicaid-financed long-term care at home and in assisted living facilities. States are following the lead. Very negative unintended consequences will soon follow for three reasons: (1) people will come out of the 'woodwork' to take advantage of these new services and quickly overwhelm the program financially, (2) Medicaid estate planning (artificial self-impoverishment) will explode in popularity if it buys people Medicaid-financed services they want instead of just nursing home care, and (3) the budding market for private LTC insurance will collapse if the public perceives they can get home care and assisted living without having to pay for them personally. Ironically, unless the government first targets its scarce LTC resources effectively to the needy, any efforts to finance HCBS through Medicaid or Medicare will either remain tiny and underfinanced (as heretofore) or they will do more damage than good by impeding the potential sources for private financing of long-term care, including home equity conversion, private LTC insurance, and personal savings and investment.

"I'm sad to say everything today points in the direction of repeating the mistakes of the past. Pushing more and more government money into financing long-term care services will only further desensitize the public to this risk, increase their appetite for taking advantage of the public programs, and reduce their sense of urgency to plan and insure for long-term care. Consequently, the current tragic status quo will likely continue to disintegrate.

"On a slightly happier note, the worse publicly financed LTC becomes, the more obvious it will be that people must pay privately to gain access to quality care. Thus, over the long run, even if we fail to solve the problem by changing public policy (along the lines of LTC Choice), I believe the crisis will self-correct in time. Boomers who fail to insure for LTC will end up having to use their home equity to obtain quality LTC as government care becomes so bad that people won't accept it even for free. When boomers have to pay privately, they will demand quality and non-institutional care which will breathe financial oxygen into the service delivery system. In time, LTC insurance will finally take off as the burden of paying for LTC becomes more real. As usual, the only people really hurt in the future will be the poor, whom ironically, Medicaid is supposed to serve."