LTC Bullet: Presidential Hopefuls Give Lip Service to LTC

Wednesday, February 4, 2004


LTC Comment: When terrorism has been defeated, America's new twin towers of vulnerability will be retirement and health security for aging boomers. Yet, the leading candidates for President, including the current incumbent, barely recognize the impending mega-trauma of long-term care. More after the ***news.***

*** David M. Walker, Comptroller General of the United States (the director of the General Accounting Office), wrote the following today in a New York Times op-ed:

"The federal government's gross debt - the accumulation of its annual deficits - was about $7 trillion last September, which works out to about $24,000 for every man, woman and child in this country. But that number excludes items like the gap between the government's Social Security and Medicare commitments and the money put aside to pay for them. If these items are factored in, the burden for every American rises to well over $100,000.

"The new Medicare prescription drug benefit will add thousands more to that tab. . . . The truth is that the drug benefit as signed into law is one of the largest commitments ever undertaken by the federal government. Preliminary estimates of its long-term cost in current dollars range up to $8 trillion."

The point? Government's unfunded liability problem is staggering compared to the relatively minor "rate stability" challenge facing private LTC insurance products. Watch for big premium (tax) increases and benefit (service) cuts in tax-funded social insurance programs in the future. Don't expect more government spending on long-term care any time soon, including tax deductibility for LTC insurance or tax credits for long-term caregivers. The message? When it comes to paying for long-term care, Americans will have to depend more than ever in the future on their own resources, especially home equity, or private insurance. ***

*** Read an excellent review in the Seattle Times by aging and LTC expert Liz Taylor of the Center for Long-Term Care Financing's latest report: . Here's an excerpt: "Every state is in trouble, and each must undo the perverse public policies that created this mess. One state has begun - Nebraska - and a recently published report, "The Heartland Model for Long-Term Care Reform," outlines what needs to be done. It's a fascinating study of the painful, politically and personally difficult, delicate steps that are needed everywhere. Authorized by the Nebraska Legislature and researched and written by Seattle's own Center for Long-Term Care Financing, a national non-profit think tank, the report is available at" ***

*** The Center for Long-Term Care Financing has a new company handling our online donations. As always, the donation site is completely secure, but now you can make monthly, quarterly, or yearly, automatically recurring donations to the Center. That means that instead of contributing the whole $150 for your subscription to LTC Bullets and our password-protected Donor-Only Zone at once, you can have your credit card charged automatically monthly ($12.50) or quarterly ($37.50). Please make a new or supplemental contribution now at . Your support is much needed, greatly appreciated, and tax deductible. Please direct any questions regarding our Donor-Only Zone or donating online or by check to or call us at 206-283-7036. ***

*** 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 #4-006--Don't Forget "The Forgetting" (Read about this powerful PBS program on Alzheimer's, including how to order the DVD or Videocassette.)

The LTC Reader #4-005--Et Tu, GE? (General Electric is the latest company to divest its long-term care insurance business. Where will it end?)

The LTC Data Update #4-004--LTCI Down, Medicaid and Medicare Up (LTCI sales are down, but the proportion of LTC paid by Medicaid and Medicare is way up, again!)

The LTC Data Update #4-005--Medicaid-Driven State Fiscal Crises Worsen (If you thought 2003 and 2004 were bad for state Medicaid programs, just wait for 2005.)

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 .

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LTC Comment: Our thanks to LTC insurance expert Marilee Driscoll for the following article about the Democratic presidential candidates' positions on long-term care. You'll note that not one of them recommends controlling Medicaid long-term care expenditures or encouraging personal responsibility through private LTC insurance and home equity conversion. In fact, most of them want to grow Medicaid and make the welfare program even more attractive to the middle class by expanding its home and community-based services. Such a strategy will be disastrous unless and until the hemorrhage in Medicaid LTC eligibility is stanched so that middle and upper-middle class people have a reason to plan early and pay privately for long-term care. Lest you think President Bush is doing a better job, however, note that a search for "long-term care" at his campaign's website yielded no relevant hits ( ). In fact, the Bush Administration is already pursuing an aggressive program called the "New Freedom Initiative," to encourage expansion of Medicaid HCBS services ( ), while remaining virtually AWOL on the critical task of targeting Medicaid to the needy and enforcing estate recoveries. In the meantime, LTC insurance languishes, Medicaid bulges and the Age Wave of boomers continues to crest. If you think things are bad now in long-term care service delivery and financing, you won't have long to wait for conditions to become far, far worse.


The opinions expressed in the following article are those of the author and do not necessarily reflect the positions of the Center for Long-Term Care Financing or its staff.

"Long-Term Care: What if the Democrats Win?"
Marilee Driscoll

Will government long-term care (LTC) programs change if the Democrats win the presidency? Let's face it - the perception that a government program may fix the current LTC problem - making LTC insurance unnecessary - gives many people an excuse to delay their personal LTC planning. "The government will have to do SOMETHING about providing long-term care for the baby boomer generation! We'll just vote it in!" In the opinion of this writer, that kind of thinking is simply unrealistic. Below I look at what the leading Democratic candidates are writing about long-term care (at their web sites).

After reading the position papers summarized below, it appears only Howard Dean is advocating changes that would impact the typical LTC insurance agent and his or her clients. It's clear to me that any change in the next few years to LTC policy will likely make little difference to those families struggling to pay for the care they desire, and is likely to be tied to income and assets. Since Medicaid planning is getting tougher and tougher, this means that private-pay LTC planning is becoming more and more important to middle class and upper-middle-class clients. Whether plans involve lining up a reverse mortgage line of credit to pay for home care down the road, purchasing long-term care insurance, and/or moving into a senior-friendly home in the same town as a caring child, the message is clear to the public: make your own LTC plans now. There is no LTC financing relief for your clients on the government's horizon. Let's take a look at the leading Democrats, in alphabetical order.


Clark has a position paper titled "Seniors Make America Great." Its third point is "Improve long-term care," and is one paragraph long. It advocates better options for helping loved ones, real alternatives to traditional institutions, improving home care, and protecting the continued viability of Medicaid. Read Clark's white paper at:


Dean offers a 2 1/2 page white paper on Long-term Care. Excerpt: "Our current long-term care system spends nearly three out of every four dollars on nursing home care a care setting few families would choose. And the price of admission is your life savings."

Key components include:

1) give states flexibility to offer home care without a federal waiver (NOTE: This means Medicaid);

2) invest modest federal dollars in home and community-based care---AVAILABLE WITH MODEST COPAYMENTS TO FAMILIES WITH MEANS (emphasis added)

3) to combat elder abuse, create a national registry of LTC workers;


5) require consumer protections for any LTC insurance policy to be eligible for a deduction. Protections include market stability and protection of premiums invested;

6) earmark more National Institute of Health resources to study prevention and treatment of disabilities in our aging population.

Read Howard Dean's white paper: "Long-term Care - A New Partnership with America's Families" at


What does John Edwards say about LTC? Edwards proposes to double federal support for respite care (respite care is temporary caregiving to allow primary caregivers a break - to take a vacation, for example). He also proposes to recruit and retain more LTC providers by treating them with respect and improving conditions at nursing homes.

Read John Edward's "Real Change for America's Families," which includes eldercare:


On January 13, current front-runner John Kerry released his "Compact with the Greatest Generation." It has 4 key components:

1) Assuring Quality Nursing Home Care;

2) Protect Medicaid Support;

3) Give Seniors More Options;

4) Support Caregivers.

Component #3 (Give Seniors More Options) reads "Allow Medicaid to pay for more alternative care outside of nursing homes to allow more Americans to age in their own homes." This option already exists in some states - which have applied for and been granted waivers under the federal Medicaid program. On its face, less-expensive home care sounds like it makes sense. But for many years politicians and social scientists have warned of the "woodwork effect." They speculate that if Medicaid covered home care, seniors would come "out of the woodwork" and apply for this benefit. This begs the following question: who will pay the bill if more seniors apply for home care than the budget allows?

Read Kerry's "Compact With the Greatest Generation"


Marilee Driscoll, CLU, CSA, is a speaker, author, consultant, and a leading consumer authority on strategies to pay for long term care. Subscribe to her free, bi-monthly LTC Letter e-zine by sending an e-mail to, or sign up at .