LTC Bullet:  What I Believe About Long-Term Care 

Tuesday, March 7, 2006 


LTC Comment:  A transcript of Steve Moses's speech to the Sixth Annual Inter-Company Long-Term Care Insurance Conference last week follows the ***news.*** 

*** TODAY'S LTC BULLET IS SPONSORED BY Superior LTC Planning Services, Inc. which has just completed the prototype for the first LTC Planning Brand for exclusively serving financial professionals (financial planners, estate planning attorneys, and CPAs).  The company is searching for representatives in all major cities of the country.  Representatives will be awarded a protected territory using the Superior LTC Brand and processes.  To be considered for an interview, call 1-800-400-0577. *** 

*** DRA END RUNS:  Curious how the Medicaid planning bar is mobilizing to circumvent provisions of the Deficit Reduction Act?  They're talking about using a "Medicaid-exempt annuity" to keep the "half-a-loaf" loophole alive.  How about "using a traditional A-B trust that splits the home equity upon the death of the first spouse to protect the surviving spouse against ineligibility if the home is valued above the $500,000-$750,000 ceiling."  Or how about "'reverse half-a-loaf' planning, assuming the new law still allows transfers to be cured."  Sound technical and complicated?  How do you think the Medicaid planners command those long billable hours and big fees?  For details on these new shenanigans, see the article at *** 

*** ANTIDOTE?  How shall we fight such continued Medicaid planning abuse?  Editor Gordon Bess of Life Insurance Selling magazine has this to say in the magazine's February 2006 issue at  "One man wages a lonely but determined battle to reform Medicaid and dramatically raise public awareness of the necessity for private long-term care insurance.  . . .  For the better part of 15 years, Moses has tirelessly lobbied Congress to tighten Medicaid eligibility and restore the program to its original intent as a safety net for the genuinely needy.  The other half of this public-policy equation is the need for incentives toward private insurance, and he has argued passionately for that cause as well.  His efforts are bearing fruit.  . . .  The [Deficit Reduction Act's] combination of responsible Medicaid reform and expansion of state LTC partnerships could radically transform the market for LTCI, just when change is sorely needed.  If you believe in the value of LTCI for your clients who don't own such coverage, you'll want to stay informed on the status of the [Act] . . ..  You can be sure Steve Moses is back to prowling the congressional halls, throwing his energy into . . . other important measures that will encourage Americans to plan for their future needs.  If you want to send him a message of support--our industry owes him a few--you can reach him at, or check out the Moses LTC Blog at"   

If you would like to subscribe to Life Insurance Selling magazine, go to *** 

*** JOIN THE CENTER.  To add your support to our efforts and receive all the benefits of Center membership, contact Damon at 206-283-7036 or for details or subscribe online at *** 



LTC Comment:  As promised, we'll have a virtual visit to last week's LTC insurance conference online for you probably next week.  It will include photos, interviews, some session summaries, and an overview and critique.  

In the meantime, what follows is my address to a session at the meeting called "Shaking the Money Tree" which was organized by LTCi veteran and MedAmerica Business Development Vice President Gail Holubinka.  Gail's idea was to have four speakers representing different perspectives on the LTC financing issue describe their vision of the topic.  She asked us to explain our underlying beliefs and to build from that foundation logically toward a description of our proposed solutions to the LTC financing crisis. 

Besides Gail, who has had a distinguished career in both the public and private sector sides of long-term care, the speakers included Cindy Hounsell, Executive Director of the Women's Institute for a Secure Retirement (WISER); Robert Friedland, Director of the National Academy on an Aging Society; Louis Pierro, Founder and Principal of Pierro and Associates, LLC, a New York elder law firm; and myself. 

Perspectives represented included an overview (Holubinka), the caregiver point of view (Hounsell), public LTC financing (Friedland), the elder law viewpoint (Pierro), and private LTC financing (Moses).  While you might have expected some fireworks with me on the same panel with a Medicaid planning attorney, that didn't happen.  At Gail's urging, the program was not a debate but rather an exploration of each of the panelist's philosophical foundations and an explication of the reasoning and evidence supporting our conclusions and recommendations. 

The program was recorded and if tapes of this and other sessions are made available to the public, we'll let you know in a future LTC Bullet.  My remarks follow. 


"What I Believe About Long-Term Care," by Stephen A. Moses, presented to The Sixth Annual Intercompany LTCi Conference in Anaheim, California:  February 28, 2006 

I believe that long-term care is a preventable tragedy. 

I believe that the personal tragedy of long-term care for individuals and families can be substantially relieved if people are able to pay privately for high-quality personal and respite care. 

I believe that the social tragedy of long-term care for America's aging population can be entirely averted by changing public policy so that fewer people end up dependent on underfinanced public welfare programs. 

But, I believe it is foolish to prescribe solutions to America's long-term care crisis until we first identify the problem and explain how it came to be. 

So here's what I think the problem is. 

I believe that friends and families provide most long-term care in the U.S. at no charge, but under enormous personal financial and emotional stress. 

I believe that the vast majority of all formal compensated long-term care services in this country are paid for by Medicaid (welfare) or Medicare (social insurance), that is to say by government. 

I believe that Medicaid and Medicare pay disproportionately for nursing home care (which most people would prefer to avoid) instead of for home and community-based care (which most people would prefer to receive). 

I believe that our country's home and community-based infrastructure is under-developed and starved for revenue. 

I believe that Medicaid routinely pays less than the cost of providing long-term care and that Medicare is slowly ratcheting down its reimbursement, while both programs impose heavier and heavier regulation on LTC providers. 

I believe that America's long-term care facilities have a reputation for providing questionable quality of care and that tort liability lawsuits have led to huge, often punitive settlements and skyrocketing liability insurance premiums. 

I believe that the supply of long-term caregivers, whether paid professionals or unpaid family members, is already inadequate, is dwindling and will be even more deficient in the future. 

I believe that long-term care service delivery has not been profitable enough to attract adequate investment capital to build, operate and maintain the long-term care facilities that America will need in the future. 

I believe that most people don't worry about long-term care enough to buy private insurance against that risk and cost, despite the conventional wisdom that people all across the country are spending down into impoverishment for LTC. 

I believe that if we keep doing what we've always done, all these problems will get worse instead of better. 

I believe that no one deserves serious consideration for their proposals about how to solve these problems, unless and until they explain what caused the problems in the first place. 

So, I believe we're in the mess we're in because forty years ago, the government started paying for nursing home care without limiting its free and subsidized services to people in financial need. 

I believe that by paying only for nursing home care, the government created the problem of "institutional bias." 

I believe that by making nursing home care free for all intents and purposes, the government impeded the development of a private market place for home and community-based services. 

I believe that by subsidizing long-term care for middle- and upper-class Americans, the government impeded the development of a private long-term care insurance market to help pay for the kinds of services people prefer. 

I believe that by becoming a virtual monopsony (or single) buyer of long-term care, the government artificially increased the demand for and the price of care beyond its ability to pay adequately. 

I believe that the resulting cost containment caused quality of care to decline and led directly to the over-regulation which has tied nursing homes and home health agencies in bureaucratic knots. 

I believe that the resulting reputation for poor quality led to the public's aversion to government-financed nursing home care so that families today struggle to provide care themselves and to delay or prevent institutionalization. 

I believe that the government's inability to pay adequately for long-term caregivers has caused the shortage of nurses and nurses aides. 

I believe that deficient government reimbursements for long-term care services have made long-term care service delivery inadequately profitable to attract investors, capital and the most highly qualified providers. 

And I believe that by paying for most long-term care for the past forty years, the government has anesthetized the public to the risk and cost of long-term care which explains why so few people buy long-term care insurance. 

Now, I believe that having explained the problem and having described what caused it, we are now justified to propose a solution. 

I believe that, as I've just explained, all the problems with America's long-term care system are directly related to the government's mismanagement of long-term care financing and interference in the long-term care marketplace. 

Therefore, I believe that so-called "solutions" that propose throwing more government money at long-term care are like trying to put out a fire by dousing it with gasoline. 

I believe that no one who understands why we have a long-term care problem and how it came to be could seriously propose socializing long-term care by adding it to Medicare or propping up the status quo by a patchwork proposal like the LTC Compact. 

I believe that we need to bring to bear what we know about the problem and its cause in order to propose a realistic solution. 

I believe that if too much government financing of long-term care has caused excessive dependency on inadequately financed institutional care, then the answer must lie in targeting scarce government LTC resources to a smaller number of people truly in need. 

I believe that when government programs have fewer people to serve, they will be better able to provide adequate reimbursement for higher quality care across a wider spectrum of services. 

I believe that if they cannot ignore the risk and cost of long-term care, most people will save, invest and insure and thus be able to purchase red-carpet access to top quality care in the private marketplace at the level and in the setting they prefer. 

I believe that when the government stops giving away what the long-term care insurance industry and reverse mortgage lenders are trying to sell, more people will buy those products and fewer people will end up unprotected and lured by Medicaid planners into artificial self-impoverishment and institutionalization on welfare. 

I believe that America is more than wealthy enough to provide excellent long-term care for every citizen, if, but only if, we rely on our deeply rooted traditions of personal responsibility for most people so that our social safety net can provide adequately for a relatively small proportion of the population that cannot provide for themselves. 

In other words, I believe that America's long-term care financing mess has been self-inflicted by well-intentioned but perversely counterproductive public policy. 

And I believe that we can fix the problems easily by removing the perverse incentives in public policy that caused them. 

Furthermore, I believe that we've finally made an important step toward fixing long-term care in the United States with enactment of the Deficit Reduction Act of 2005. 

I believe that the DRA sends a powerful message to America's aging population that long-term care is no longer a free good, that personal responsibility and planning are critical, and that government programs like Medicaid and Medicare will no longer be able to cover most LTC costs in the future. 

I believe that by extending the look back period for asset transfers, by eliminating the "half-a-loaf" giveaway strategy, by starting to ratchet down on the previously unlimited home equity exemption, by closing other abused Medicaid planning loopholes and by encouraging the purchase of LTC insurance, the DRA is a first step in the right direction. 

But I believe that the DRA is only the first timid step in the right direction and that much more will have to be done to preserve and improve Medicaid as a long-term care safety net for the poor. 

This I DO believe:  we've finally turned the corner on long-term care financing policy. 

We all have every reason to believe now that if the DRA is aggressively implemented, enforced and publicized, everyone will have better long-term care in the future-- 

The poor will have better care because Medicaid will be more able to provide for them.  

Everyone else will have better care because they'll be private payers choosing the best available care in the most desirable settings and spending their own money, their home equity, or, if they're smart, their LTC insurance carrier's money.  

Thank you.