LTC Bullet: Special LTC Project Update

Thursday, April 1, 2004

Seattle--

LTC Comment: The Center's special LTC project is well underway. Read an update and our appeal for in-kind research and statistical support after the ***news.***

*** Happy Birthday to your Center for Long-Term Care Financing. We're six years old today! Thanks for your support and encouragement over the years. (And yes, we know it's April Fool's Day, so never mind the wise cracks, OK?) By the way, today's LTC Bullet is number 495 in the series. Please help us keep them coming with a generous tax-deductible contribution today. What better way to say Happy Birthday to the Center! ***

*** Yesterday, the National Public Radio show "Day to Day" aired a five-minute segment on Medicaid estate recovery by Michigan Public Radio personality Rick Pluta. Quoted in favor of saving Medicaid for the poor by recovering from the estates of affluent Medicaid recipients were Michigan's Democratic Governor Jennifer Granholm and Center President Stephen Moses. Michigan is one of the last three states in the country to implement Medicaid estate recoveries, a program made legally mandatory a decade ago by the Omnibus Budget Reconciliation Act of 1993 (OBRA '93). (The other holdouts were Georgia and Texas.) You can listen to the NPR story today online at http://www.npr.org/rundowns/rundown.php?prgId=17&prgDate=current . Just scroll down to the heading "Michigan Could Tap Estates for Medicare [sic] Costs," click on the link, and select your media player. After today, you may have to look for the estate recovery piece in the "Day to Day" archives at http://www.npr.org/rundowns/calendar/calendar.php?prgId=17 . We'll also post an active link to this story on the Center's website at http://www.centerltc.org/ . ***

*** 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.

The LTC Data Update #4-016--The Trust Fund Oxymoron (Why the latest report from the Social Security/Medicare Trustees underscores the need for private insurance.)

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 http://www.centerltc.com/members/index.htm .

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: http://www.centerltc.com/members/index.htm . 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 mailto:damon@centerltc.org your preferred user name and password (up to 10 characters each). You can also contribute online by credit card or direct withdrawal at http://www.centerltc.com/support/index.htm . ***

LTC BULLET: SPECIAL LTC PROJECT UPDATE

LTC Comment: Two weeks ago, we reported to you on a special long-term care study the Center is undertaking with the cooperation of CAHI (the Council for Affordable Health Insurance) and ALEC (the American Legislative Exchange Council): "LTC Bullet: Center Announces Special LTC Project," Wednesday, March 17, 2004, http://www.centerltc.com/bullets/current/491.htm .

At that time we were still $10,000 short of raising the full funding for this project. Thanks to some generous contributions from corporate, foundation and individual donors, we have now closed to within $3,150 of the total $45,000 goal. Read the following update, and if you can help us close the remaining financial gap, please contribute by check or online indicating "Special Project" on your remittance. Checks go to the Center for Long-Term Care Financing, 2212 Queen Anne Avenue North, #110, Seattle, Washington 98109. Online contributions can be made at http://www.centerltc.com/support/index.htm .

We also seek in-kind professional support for the project. If you are or have available on your staff a statistician, a research analyst, or an expert on Excel spreadsheets and/or Access data bases, please contact Steve Moses at 206-283-7036 or mailto:smoses@centerltc.org . Any professional time you or your organization can volunteer will be much appreciated, put to very good use, and gladly acknowledged in the final report if you wish.

Now to the project update. The purpose of our special LTC study is to "Identify and publish a list, by state, of prioritized interventions to reduce Medicaid expenditures and increase private LTC financing sources while improving access to and quality of long-term care for all citizens: rich, poor and in between."

To achieve the project's purpose, our first task was to pinpoint the variables that would be most likely to effect an increase or decrease in Medicaid and private long-term care expenditures. We have provisionally identified these key variables as the following:

(1) Ease or difficulty of Medicaid long-term care eligibility.

(2) Level of Medicaid estate recovery.

(3) Attractiveness of Medicaid benefits as measured by the level of community-based vs. nursing home services.

(4) Home equity conversion market penetration.

(5) Long-term care insurance market penetration.

(6) Medicaid nursing home census.

Here's the reasoning stated in the form of hypotheses:

If consumers in a state receive (1) relatively easy Medicaid LTC eligibility, (2) face little or no estate recovery liability, and (3) access generous Medicaid-financed home and community-based LTC services, they would be less likely to pay privately for long-term care and hence less likely to (4) tap the equity in their homes for LTC expenses, or to (5) purchase private long-term care insurance in advance. Consequently, it would be more likely that (6) the state would have a relatively high percentage of nursing home residents dependent on Medicaid.

Conversely, if consumers in a state encounter (1) restrictive Medicaid LTC eligibility rules, (2) backed up by strong estate recovery enforcement, and (3) few or no Medicaid-financed alternatives to nursing home care, then they would be more likely to pay privately for long-term care and to (4) tap home equity or (5) purchase LTC insurance early, with the result that (6) the state would have a relatively low percentage of nursing home residents dependent on Medicaid.

In other words, is it true that the more attractive government financing of long-term care is in a state, the less likely people are to plan early, and save, invest or insure, so they can pay for their own long-term care? And vice versa, if publicly financed long-term care is less attractive to middle and upper-middle class people, are they more likely to take personal responsibility to pay for their own care, thus relieving the financial burden on Medicaid?

We've provisionally identified ten states about which to ask these questions including California, Connecticut, Georgia, Michigan, Minnesota, Nebraska, New Mexico, Oregon, New York, and Texas. These study states may change or be added to depending on availability of data and project resources.

Now, what if our hypotheses prove true? Would that suggest that states should make their Medicaid programs as unattractive as possible to save money? On the contrary, it would indicate a relatively pain-free solution to the biggest problem facing long-term care in the United States, i.e. excessive dependency on Medicaid financing and inadequate private funding of long-term care.

By targeting Medicaid long-term care benefits more effectively to the genuinely needy (i.e., making the program less attractive financially for relatively affluent people), the program should be able to offer better access to higher quality care across a wider range of services to a smaller number of recipients who are truly in need (thus, making the program more attractive to people who lack the means to pay for their own care.)

We are currently in the process of collecting the data to test the project's hypotheses. Please send us any information such as news stories or reports that you consider to be relevant. We'd particularly appreciate receiving Medicaid estate planning advertisements or articles from within the ten project states.

Stay tuned for future updates.