LTC Bullet: Big Problems, Small Victories

Wednesday, March 23, 2005


LTC Comment: Medicaid is broke. It pays providers too little to ensure quality care. Yet most people don't buy LTC insurance and the Age Wave is approaching. So, let's celebrate one little bright spot. After the ***news.***

*** SUBSCRIBE TO LTC BULLETS. Please encourage your colleagues to fill out the simple online subscription form at . Subscriptions are free to everyone for the first three months. ***

*** JOIN THE DONOR-ZONE WITHOUT THE $150 FEE UP-FRONT. Did you know you can now donate as little as $12.50 per month (automatically on your credit card) and qualify immediately for the Center for Long-Term Care Financing's donor-only web zone AND for our one-a-day mental vitamins (LTC E-Alerts, LTC Data Updates, and LTC Readers)? Please make a new or supplemental contribution now at . Don't feel limited to the minimum if you can afford and feel moved to contribute more. 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.

The LTC Reader #5-013--Told You So (New HHS Secretary considers LTCi critical to saving Medicaid, but LTCi honchos don't capitalize on the opportunity.)

The LTC Data Update #5-009--Living Longer Leads to LTCi Need (Longer life expectancies mean more people will live long enough to face chronic illnesses.)

The LTC Data Update #5-010--LTC Future Shock (Three more articles on the Age Wave and unfunded entitlement liabilities point toward the need for private planning.)

(Steve Moses's three "LTC Embed" reports on recent long-term care policy and legislative developments in DC received rave reviews from dozens of Donor-Zoners. Sign up today for access to the Donor Zone and read immediately about the latest give and take on Capitol Hill. Upon informing us that your $150 or greater annual contribution to the Center has been made online or mailed, Damon ( will email you your user name and password for immediate Donor Zone access.)

Special Alert: Donor Zoners can find many stories about the shortcomings of VA LTC benefits in our special donor-zone feature: "Reasons Why Veterans Should Not Depend on VA Benefits for Long-Term Care" at

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 . ***


The Center for Long-Term Care Financing received the following note from a desperately frustrated insurance agent. We asked and received his permission to publish it. He pretty much sums up America's problem with long-term care financing.


"I have been an insurance agent since l969, owning my own independent agency since l983 in Bradford County, north of Williamsport in the town of Alba, Pennsylvania. We specialize in health insurance, Medicare supplements, HSA's, group health, disability income and RARELY long-term care insurance. [Emphasis added.] The one item we have found that simply stops folks from buying long-term care insurance are the ads from elder law attorneys and financial planners that state you can protect your assets from nursing home costs, etc. One of the biggest advertisers in our area is the law firm that Lycoming County Representative [name omitted] is a partner in. He is also the number three man in the Republican House of Representatives in Pennsylvania.

"Until the Medicaid loopholes are closed, I believe that folks will simply sit back and not buy. We even partnered with an estate planning attorney and had interviews with his clients in his office, and still could not convince folks to buy LTC coverage. This included folks who had mothers, fathers, or siblings that they took care of. I believe that almost 36 years in the life and health insurance business qualifies me as successful, except on this issue. The last sale we made was purchased by my wife and me, and we are still in our 50's. Nothing seems to work. We are so discouraged by the failures to get folks to buy what they need, that we no longer even advertise LTC insurance."

Jim Collins, CSA, HIA, MHP, LUTCF


LTC Comment: In other words, as we've said here many times before: "You can't sell apples on one side of the street when they're giving them away on the other."

Medicaid nursing home eligibility is much easier to obtain than is commonly understood. Even if you have too much income or assets, you can hire a Medicaid planner and qualify quickly without spending down savings significantly. The "loopholes" in Medicaid are rarely closed or even constricted because state and federal legislators and their constituents benefit financially from them. Sometimes, legislators and other public officials even practice Medicaid estate planning themselves, as in the example above.

Under these circumstances, is there any wonder that Medicaid costs are out of control, that long-term care providers receive inadequate reimbursements, that few Americans buy private LTC insurance, that the status quo is locked in place, and that the Age Wave is bound to drown the whole system in a few years?

That's the problem in a nutshell. Almost the only profits to be made in long-term care go to people manipulating the Medicaid system in one way or another. People and organizations that try to save Medicaid for the needy by diverting others to private financing alternatives struggle to survive financially.

That's why even small victories mean a lot. For example, the other day we received this note from Evadna Bartlett, a reporter with the Charleston Daily Mail of Charleston, West Virginia:

"Last year you responded promptly to my inquiries regarding long-term care insurance for a West Virginia Public Radio article. Since then I have continued to receive your LTC Bullets, purchased LTC insurance and more recently, written the two attached columns on the issue. Thank you for your assistance. Evadna Bartlett"

Following are links to and excerpts from Ms. Bartlett's excellent articles:

Evadna Bartlett, "Medicaid Maneuvering is a Costly Tactic," Charleston Daily Mail, March 15, 2005,

"Have I missed something?

"Governors are protesting losses in Medicaid funds under the Bush budget proposals.

"Hospitals, organizations such as the Alzheimer's Association and state officials alike urge us to lobby against the cuts.

"But is anyone asking for changes to halt seniors, often aided, abetted or prodded by their heirs and assisted by 'elder law' attorneys, from maneuvering assets to qualify for Medicaid-financed nursing home care? . . .

"That's not the purpose of Medicaid, established in 1965 to provide medical care for the poor. . . .

"The elderly, along with disabled, comprise only about one-fourth of Medicaid recipients, but they account for two-thirds of the costs, writes Stephen Moses, president of the Center for Long-Term Care Financing. Poor women and children who make up three-fourths of recipients get the rest.

"A former senior analyst for the Inspector General of the U.S. Department of Health and Human Services, Moses advocates increased use of insurance or reverse mortgages to pay for care at home, assisted living or nursing facilities. Eliminating the 'exploitation' could save Medicaid $20 billion a year, he suggests ( . . . .

"Most of us don't need statistics to know the reality. In my family alone, two grandparents, my father, my mother and two of her siblings have had care at home and/or in facilities.

"Mom at 95 has been in assisted living homes eight years after the in-home care agency discontinued part-time care. The agency refused to provide anything but 24-hour service because of safety hazards.

"I've paid for the care with a combination of pension, Social Security and interest and dividends on money my frugal parents, Depression survivors, put aside. And I've been fortunate not to have to buy more expensive nursing home care.

"But it never occurred to any of us to try to protect their funds as an inheritance and depend on the public trough to support them."


Evadna Bartlett, "On Retirement: Long-Term Care Insurance Covers the Bases," Charleston Daily Mail, March 1, 2005, .

"Among the unpaid bills Stephanie Warner found in the Charleston home of her increasingly confused father was a premium payment for an insurance policy that didn't address health, home or vehicle.

"'I had no idea what it covered,' Warner said. 'So I dug through his stuff.'

"It turned out that her father, Kennon Chambers, now 74, almost two decades earlier had taken out a long-term care policy. It's been a godsend. The policy has covered the cost for Chambers, diagnosed with Alzheimer's Disease, to reside in a St. Albans care home since August 2001.

"Health insurance and Medicare cover limited rehabilitation care in nursing homes or in-home care under specific circumstances, but not long-term care that people like Chambers require.

"Medicaid underwrites nursing home care for the needy, with protection of the family home for spouses and children, but can later require that property be sold to recoup some of the cost.

"For the most of us, long-term care at home or in a facility can quickly eat up savings and assets. . . .

"Insurance isn't cheap, either, but it provides some protection for assets and peace of mind. Insurance is something we always hope we won't need, but reality says we may. West Virginia and federal tax laws permit income tax deductions for qualified long-term care premiums and legislators in 2004 approved additional protections for policyholders. . . ."


LTC Comment: Kudos to Ms. Bartlett and the Charleston Daily Mail for this exceptionally insightful coverage of a perplexingly difficult topic. Why not drop Evadna ( and her editor ( a thank you note? So few in the media are part of the solution instead of the problem.