LTC Bullet--"AWOLTC: LTC Leaders Away Without Leave"

Thursday, April 17, 2003


LTC Comment: The Center for Long-Term Care Financing invites our allies in the coalition to liberate long-term care from excessive dependency on scarce public financing to stand and fight with us for rational public policy that encourages private LTC financing and insurance. More after the ***news.***

*** The Florida Long-Term Care Policy Advisory Council has invited LTC Bullets subscribers to attend two events at which Center President Stephen Moses will speak in the coming week. The first is a reception on Tuesday, April 22 from 5:30 PM to 7:00 PM at the Claude Pepper Institute on the campus of Florida State University in Tallahassee, Florida. Steve will address the complexity of long-term care service delivery and financing in a talk titled "The Elephant, The Blind Men, and Long-Term Care." The second event is an open meeting of the Long-Term Care Policy Advisory Council on Wednesday, April 23 beginning at 9:00 AM in the 2nd floor conference room of the Department of Elder Affairs, 4040 Esplanade Way, Tallahassee. If you would like to attend either or both of these events, please contact James Tillery at 850-414-2390 for details. ***

*** Florida already has the aging demographics that the rest of America will experience 20 years from now. How this key state responds to the challenges of an aging population, especially with regard to long-term care service delivery and financing, will be critical. For a detailed picture of the long-term care challenge in Florida, see "The Florida Fulcrum: A Cost-Saving Strategy to Pay for Long-Term Care." This nine-year-old study, newly posted on the Center's website at , remains an excellent introduction to LTC in Florida including 44 recommendations to improve Medicaid and encourage private financing alternatives. More on "The Florida Fulcrum" next week. ***


The LTC Reader #3-016--Making Medicaid More Attractive

Don't miss our "virtual visits" to major LTC industry conferences in The Zone. You'll find our comparison of the conferences, session summaries, interviews and pictures.

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 and archives: . If you do not already qualify for The Zone, 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 user name and password (up to 10 characters each). You can also contribute online by credit card or direct withdrawal at . ***


Long-term care service delivery and financing are falling apart in the United States.

Consider this litany of tribulations: rampant bankruptcies; scarce capital; downtrodden stocks; staff shortages; declining quality; rising tort liability; skyrocketing liability premiums; declining government reimbursements; fewer private payers; more Medicaid residents; ballooning budget deficits; meager LTC insurance coverage; LTCI rate stability and profitability worries; discouraged insurers, providers and financiers; consumers in denial about long-term care AND a growing age wave that will make all these problems exponentially worse in the future.

Are government officials, senior advocates, and the private sector mobilizing effectively to solve these problems? Alas, no. Many of the people and organizations that should be leading the way toward a solution are AWOL .

Present company excepted. The Center for Long-Term Care Financing offers objective analysis and practical proposals to "ensure access to quality long-term care for all Americans." Most LTC Bullets readers are part of the solution, not part of the problem. So, we seek your support for the Center to help advance our common mission.

Following is an update on how the Center for Long-Term Care Financing's approach to America's long-term care challenges differs from what others are doing. On each point, we ask for your tax-deductible financial support if you think the Center is on the right track.

GOVERNMENT: Medicaid and Medicare are the predominant payers for nursing home and home health care in the United States. They control costs by means of rationing (discriminatory eligibility limits), supply restraints ("Certificate of Need" programs), price controls (low provider reimbursements), and consumer aversion (paying primarily for care most people would rather avoid). In spite of these restrictive measures, however, long-term care is a major cause of worsening state and federal budget crises. So, are most government officials promoting public policy to correct such deficiencies? Sadly, no, they're prescribing more of the same.

CENTER FOR LONG-TERM CARE FINANCING: We say: "If public policy encouraged personal responsibility for long-term care by strongly incentivizing home equity conversion and private long-term care insurance, Medicaid and Medicare could provide market-rate reimbursements for the full spectrum of long-term care services to a smaller number of eligibles. Both private payers and government dependents would have better access to higher quality care." If you agree, please give generously to support the Center for Long-Term Care Financing: .

ADVOCATES AND ANALYSTS: Don't blame the public for ignoring the risk and cost of long-term care. They've been put to sleep by nearly 40 years of free and subsidized, government-financed long-term care. No wonder so few people buy private LTC insurance and most seniors demand a new Medicare drug benefit. They've been convinced they're "entitled" and they want what they believe they have coming to them. Instead, point the finger of responsibility at short-sighted "senior advocates" and academics who cling to the false hope that Medicare, Medicaid or some new social insurance program will save the day for long-term care. Their evasion of the economic reality and their pursuit of narrow, unenlightened self-interest threatens to destroy America's social safety net programs.

CENTER FOR LONG-TERM CARE FINANCING: We say: "Save America's long-term care safety net programs by targeting them to the genuinely needy and by creating strong incentives in public policy for people to take the risk of long-term care seriously while they are young, healthy, and affluent enough to save, invest or insure." If you agree, please give generously to support the Center for Long-Term Care Financing: .

LTC PROVIDERS: Because of heavy and growing dependency on Medicaid and Medicare, nursing homes and home health agencies have become virtual public utilities. As government programs reduced reimbursements and increased quality mandates, long-term care providers were forced to scrimp on staff and services or declare bankruptcy, a vicious downward spiral. Yet, LTC providers continue to focus their lobbying on supplications to Congress and state legislatures for marginal increases in Medicaid and Medicare reimbursements. Many in the assisted living industry--which remains 90 percent private pay and comparatively prosperous--are tempted by Medicaid money and may follow the same primrose path of perverse public policy that ruined nursing homes. It's hard to blame the providers, however. They've been making a silk purse (decent care) out of a sow's ear (low Medicaid reimbursements) for many years and the only short-term solution they can see is more public financing. Unfortunately, that's a dry hole and now's the time for a different approach.

CENTER FOR LONG-TERM CARE FINANCING: We say: "Save LTC providers by increasing their private pay census and reducing their dependency on low and diminishing reimbursements from government programs. Change Medicaid LTC eligibility so that people access the program only after they consume illiquid equity in large, currently exempt assets by means of reverse mortgages. Retain generous income and asset protections for well spouses and disabled adult children to sustain a cost-effective LTC safety net without incentivizing Medicaid estate planning or discouraging LTC insurance purchases." If you agree, please give generously to support the Center for Long-Term Care Financing: .

LTC INSURERS: If long-term care were the potential financial catastrophe that insurers make it out to be, seniors and their families would beat a path to the door of any agent who could mitigate that risk for them with private insurance. Instead, less than one in five dollars spent on nursing home or home health care in the U.S. comes from anyone's assets, government programs pay for most formal long-term care, and evidence of widespread asset spend-down is nonexistent. Consequently, consumer demand for private LTC insurance is minimal. In the meantime, the publicly financed long-term care service delivery system that most Americans end up relying upon is collapsing. So, are LTC insurers and their trade associations lobbying for public policy to target public financing of long-term care to the genuinely needy so that others will see the need for private insurance? Sadly, no. Consequently, demand for LTC insurance continues to lag; carriers, brokers and agents get discouraged and quit; and America's LTC status quo continues to disintegrate.

CENTER FOR LONG-TERM CARE FINANCING: We say: "Target Medicaid to the genuinely needy; use part of the savings to pay for a massive, nationwide education campaign to awaken consumers to the newly real financial risk of long-term care; use more of the savings to finance genuine, above-the-line tax deductibility for private LTC insurance; then watch while the old-fashioned self-interest of consumers and insurers drives market forces to save and improve our long-term care service delivery and financing system." If you agree, please give generously to support the Center for Long-Term Care Financing: .

Long-term care is a perplexingly complicated issue. No brief article can do more than raise questions and challenge conventional answers. Whether you agree or disagree with the skeletal analysis offered here, we encourage you to explore the Center for Long-Term Care Financing's website at where we have room to put meat on these bones. Feedback, supportive or critical, is always welcome.

Center Fidelis!