Bullet: What I Believe About
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 http://www.elderlawanswers.com/resources/article.asp?id=5194§ion=3.
*** 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 http://www.lifeinsuranceselling.com/NR/exeres/74352970-57C6-4135-9A4D-0B25D194FEAA.htm.
"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 email@example.com, or
check out the Moses LTC Blog at www.centerltc.com."
you would like to subscribe to Life Insurance Selling magazine, go to https://securefsg.pfpub.com/lis/subscription/general/default.cfm.
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 firstname.lastname@example.org
for details or subscribe online at http://www.centerltc.com/support/index.htm.
LTC BULLET: WHAT
I BELIEVE ABOUT LONG-TERM CARE
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
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
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
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
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
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
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
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
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
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
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
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.