LTC Bullet: LTC Embed: Report from the Front (Congress #2)

Thursday, April 28, 2005

Washington, DC--

LTC Comment: The House Energy and Commerce Committee hearing yesterday, titled "Long-Term Care: Spiraling Costs and the Need for Reform," shot down Medicaid planning and raised up private financing alternatives.


LTC Comment: Energy and Commerce is the germane committee for Medicaid in the United States House of Representatives. Yesterday, H&C's Health Sub-Committee met in an all-day session to discuss the explosion in Medicaid's long-term care costs and what to do about it.

Two panels tackled this complicated, emotion-laden topic. After opening statements by Sub-Committee Chairman Nathan Deal (R, Ga.), Full Committee Chairman Joe Barton (R, Tx.) and both majority and minority members, the first panel began. Dr. Mark McClellan, Administrator of the Centers for Medicare and Medicaid Services (CMS) testified first. Then came Dr. Douglas Holtz-Eakin, who heads the Congressional Budget Office (CBO). This "pair o' docs" (an M.D. and a Ph.D.), as Committee member Henry Waxman (D, Ca.) quipped, tackled the paradox of an exploding "welfare" program that has become the primary payor of long-term care for nearly everyone in America, regardless of economic status.

A second panel of eight experts followed in the afternoon. It included Dr. Judith Feder of the Georgetown LTC project, Karen Ignani who heads America's Health Insurance Plans (AHIP), Dr. Barbara Stucki, who spoke eloquently about the potential of home equity conversion to help solve the LTC financing crisis, Bernie Krooks, a Medicaid planner and past president of the National Academy of Elder Law Attorneys (NAELA), and the Center for Long-Term Care Financing's own Steve Moses, who explained what Medicaid planning is, the damage it does, and why there is so little hard empirical evidence to substantiate the extent of a practice that is known anecdotally to be widespread. A complete list of all the witnesses is available on the Committee's website here.

Although this hearing was webcast live yesterday, the archived webcast and a transcript of the testimony will likely be posted on the Committee's website only after some considerable delay. We'll watch for that posting and let you know when it occurs. In the meantime, following below is a link to and excerpts from an Associated Press story about the hearing published in today's New York Times.

Tomorrow, Center donors can expect to receive a copy of the notes from which Steve Moses delivered his testimony and his observations about the tone and content of the hearing. Those tidbits are for Center donors only.


Associated Press, "GOP Wants to Curb Medicaid Estate Planning," New York Times, April 28, 2005,

"WASHINGTON (AP) -- To slow the rapidly growing Medicaid program, some lawmakers would like to make it harder for the elderly to shelter their assets as a way to have the government cover more of their nursing home expenses. . . .

"'We are concerned that some individuals who seek nursing home care under Medicaid may be engaging in certain financial practices -- through their attorney and financial planners -- that are forcing the states and the federal government to absorb the medical costs of individuals for whom Medicaid was never intended to cover,' according to a letter signed by Reps. Joe Barton, R-Texas, and Ed Whitfield, R-Ky.

"Barton is the committee chairman. Whitfield is chairman of a subcommittee overseeing investigations.

"Another committee member, GOP Rep. Charlie Norwood of Georgia, said Medicaid was becoming 'a welfare program for middle-income families.' . . .

"The Bush administration has estimated that changing the policy on the transfer of assets could save taxpayers $4.5 billion over that time. . . .

"Bernard A. Krooks, a former president of the National Academy of Elder Law Attorneys, said Medicaid is the only recourse for many middle-class older people. . . . .

"But one witness told the committee that the use of estate shelters was widespread, even if there is little data to back that contention.

"'Just go on Google and put in quotes "Medicaid planning," or "Medicaid estate planning," and see how many hits you get,' said Stephen Moses of the Center for Long-Term Care Financing, a think tank based in Seattle. 'That'll show how extensive it is.'

"The answer to his challenge for the phrase 'Medicaid estate planning' was about 602,000 hits. . . .

"Some lawmakers said they want to make it more attractive for people to buy long-term care insurance or to use reverse mortgages, in which homeowners take out a loan that is repaid only after the last surviving borrower dies or sells the property. Such mortgages allow people to tap the equity built up. . . ."