LTC Bullet: The Heartland Model for Long-Term Care Reform

Wednesday, December 10, 2003


LTC Comment: What if we could save the faltering Medicaid program by getting everyone else to buy private LTC insurance or use home equity? Where better to start than America's Heartland where Medicaid census is lowest, LTC insurance sales are highest, and pioneer values of personal responsibility remain strong? Read about "The Heartland Model for Long-Term Care Reform." After the ***news.***

*** 'Tis the Season. Please show your support for Center for Long-Term Care Financing. There are so many ways to help. Make a tax-deductible contribution ($150 or more gets you into The Zone). Sponsor an LTC Bullet for $500. Get your employer to make a corporate contribution (starting at $1,000) which will qualify you all for The Zone. Help organize an LTC Graduate Seminar in your city. Offer a matching gift that we can leverage through other donors. Give a grant to finance our attendance at Medicaid planning conferences so we can keep you, the media, and policy makers apprised of the latest abuses perpetrated on the welfare program. Make a targeted gift to fund a special purchase like new presentation folders for the Center. If you want us to keep fighting for rational long-term care policy, we need your financial support. Please pitch in! Contact or 425-377-9500 for details. Or mail your contribution to the Center for Long-Term Care Financing at 2212 Queen Anne Avenue North, #110, Seattle, Washington 98109. Or contribute online at Many thanks for your past support and encouragement. ***

*** The Certified Senior Advisor organization makes a contribution to the Center for Long-Term Care Financing for every new enrollee to their program who mentions the Center and cites the "source code" number 8196. Although the Center does not endorse any companies or professional designations, we've heard a lot of good things about CSA and we've met many capable professionals who have attended their training and received that designation. For information on the CSA course and certification, go to . If you enroll in the CSA program, please mention the Center for Long-Term Care Financing in your application and reference source code 8196. Drop us an email to and let us know you've enrolled. Then send us your evaluation of the program when you've completed it. CSA classes are coming up January 14-17 in Charlotte, NC; January 28-31 in Phoenix, AZ; February 4-7 in Walnut Creek, CA; and March 3-6 in Detroit, MI. ***

*** LATEST DONOR-ONLY ZONE CONTENT: Here's the latest Zone content followed by instructions on how to subscribe so you can receive these critical epistles daily by email.

LTC E-Alert #3-063--Center Releases Major New LTC Report (Donor-Zoners got an early sneak peek last week at "The Heartland Model for Long-Term Care Reform.")

LTC E-Alert #3-064--High Tech Aging (New electronic gizmos will make aging in place at home more feasible . . . if you can afford them. LTCI will help.)

The LTC Reader #3-049--Video on How to Choose an ALF (Would you or your clients know what to look for and how to rank assisted living facilities? Here's a video guide.)

LTC E-Alert #3-065--No More Nursing Homes in Florida? (Will the last nursing home to leave Florida, please turn off the lights?)

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 at .

Individual donors of $150 or more and corporate donors to the Center for Long-Term Care Financing receive our daily email LTC Bullets, LTC E-Alerts, LTC Readers, and LTC Data Updates for a full year. You'll also get access to the donor-only zone where these publications are archived along with other donor-only features. 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 . ***


LTC Comment: The Nebraska legislature contracted with the Center for Long-Term Care Financing on September 15, 2003 to conduct a study on "Controlling Medicaid Long-Term Care Costs." The Center delivered the final report, titled "The Heartland Model for Long-Term Care Reform: A Case Study in Nebraska," on deadline December 1, 2003. What follows is that report's major section headings, "Executive Summary," and the "Heartland Manifesto." You can find the complete report, including analysis, findings, recommendations, and the results of a national survey questionnaire at The "Heartland Model" study is rooted in Nebraska and America's Heartland, but its analysis and recommendations are national in scope and potential. Happy reading. We welcome your questions, comments, and feedback.


The Big Picture: Long-Term Care Service Delivery and Financing in the United States

By Comparison: Long-term Care in Nebraska

The Perilous Path of Good Intentions or How Did We Get Into This Mess in the First Place?

The Elephant, the Blind Men and Long-Term Care or Why Is It So Hard to Reform Long-Term Care?

Summary, Analysis and Recommendations

The Heartland Model For Long-Term Care Reform



"One can go into a wild country and make it tame, but, like a coat and cap and mittens that he can never take off, he must always carry the look of the land as it was."

Source: Big Andrew in Mari Sandoz' "Old Jules"

This quote from a classic novel of the state's pioneer days suggests "you can take the people out of Nebraska, but you can't take Nebraska out of the people."

The best hope Nebraska and America have to reform long-term care is to revitalize the spirit of personal responsibility and self-sufficiency characterized by the plains' pioneers.

It's not too late, but nearly forty years of publicly financed long-term care have created a strong and growing sense of entitlement to Medicaid benefits among Nebraskans.

Nebraska Medicaid spent $372 million on long-term care in 2003 and the program continues to grow at nearly seven percent a year, triple the national inflation rate.

Nevertheless, long-term care providers complain that Medicaid reimbursement rates are too low to ensure adequate staffing and quality care. They fear anticipated future cuts will be devastating and cause bankruptcies and closures.

Medicaid pays for 54.4 percent of all nursing home patient days in Nebraska. The state could save $54 million per year by dropping this percentage to 44.4 percent.

Conversely, if the percentage of nursing home days paid by Medicaid continues to increase to 64.4 percent, expenditures will increase by $54 million per year.

The state Medicaid program has made long-term care benefits more attractive by reducing nursing home institutionalization and increasing home and community-based care for program recipients.

Despite recommendations in Nebraska's 1997 Long-Term Care Plan, however, the state has done little to control Medicaid eligibility growth or to encourage private financing options.

Too few Nebraskans prepare for the risk and cost of long-term care by purchasing private insurance and fewer still tap the equity in their homes by means of reverse mortgages.

Most older Nebraskans pass their wealth--such as homes, farms, ranches and businesses--to the younger generation in their late 60s or early 70s which results in quicker Medicaid long-term care eligibility whether the transfers were done for that purpose or not.

Medicaid eligibility workers estimate conservatively that 20 percent of long-term care cases transfer assets without penalty which would result in a loss of $49 million across the caseload that might otherwise have been spent privately for care.

Huge amounts of wealth are sheltered from long-term care spend-down requirements by federally mandated exemptions such as prepaid burials for Medicaid recipients and their spouses, which may divert over $51 million from private long-term care spending.

Nebraska Medicaid exempts the first $5,000 of a deceased Medicaid long-term care recipient's estate from otherwise mandatory "estate recovery" if a child of any age survives the recipient.

At any given time, upwards of $31 million is exempted from estate recovery in this way. By eliminating the exemption, Nebraska could recover an additional $10 million per year, after expenses, from estates.

Bottom line, people aware of long-term care have come to see Medicaid as an entitlement that should ensure access to care and insure an inheritance for their heirs. People unaware of long-term care remain so because Medicaid does pay for most such care.

Fiscal reality is closing like a vise on this "entitlement mentality." Nebraska should take steps soon to underscore that Medicaid is a means-tested public assistance program, i.e. welfare, and that citizens are personally responsible to pay for their own long-term care.

The following proposed corrective actions are described in greater detail in the section of this report titled "Analysis and Recommendations."

Tighten Medicaid long-term care eligibility rules and strengthen Medicaid estate recoveries in order to divert more people to private long-term care financing alternatives and reduce program expenditures.

Use some of the savings from these initiatives to fund an educational campaign to wake up the public to the risk of long-term care and the importance of planning early to pay privately if and when extended care becomes necessary.

Use some of the savings to finance state tax incentives for the purchase of private long-term care insurance and the use of home equity conversion to pay for long-term care and delay or prevent Medicaid eligibility.

Discourage financial abuse of the elderly and reduce program expenditures by actively prosecuting cases where seniors have been left impoverished and dependent on Medicaid because of financial expropriation by relatives or others.

Attack the entitlement mentality and encourage personal responsibility with a "sense of the legislature" resolution like the "Heartland Manifesto" proposed on page 31.



[Nebraska] has very limited dollars available for public assistance. The state's first responsibility is to take care of the truly poor and disadvantaged.

The middle class and well-to-do should pay privately for long-term care to the extent they are able without suffering financial devastation.

Prosperous people who rely on public assistance for long-term care should reimburse the taxpayers before giving away their wealth to heirs.

Seniors and their heirs who wish to avoid such recovery from the estate should plan ahead, purchase private long-term care insurance, and pay privately for the care of their choice when the time comes.