LTC Bullet: "Analysis: Congress
Strengthens Long-Term Care"
March 9, 2006
Comment: Read Steve Moses's article
on Medicaid reform, LTC Partnerships, and the Deficit Reduction Act in Health
Care News, after the ***news.***
*** TODAY'S LTC BULLET is sponsored by Claude Thau, a
Master General Agent who helps LTCi producers nationwide. Claude is the lead author of Tillinghast Broker World
Individual and Group LTCi Surveys. His
mentoring skills help you build whichever market suits you best (individuals,
executive carve-out, multi-life, affinity, financial institutions, referrals
from other professionals, etc.). As
a Long-Term Care Partnership-promoter in many capacities, Claude may be able to
help your state implement a Partnership effectively. Test Claude by calling 800-999-3026, x2241 to discuss
opportunities or firstname.lastname@example.org.
PLEASE SECURE YOUR OWN LTCi FINANCING BEFORE ASSISTING FELLOW TRAVELERS:
Kudos to Diane Boyle writing in the Corporation for Long-Term Care
Certification's CLTC Newsletter for making the following point about the
Deficit Reduction Act's restrictions on Medicaid planning abuse.
is the lack of [private] planning for potential long term care needs that
creates the victim, not the tightening of Medicaid eligibility.
'Care for yourself first or you'll be useless to your buddy' is advice
often offered to divers. This
lesson can also be heard on any commercial airline - '...please secure your mask
before assisting other passengers.' This
concept must be extended to the generous individuals who provide financial gifts
to others before planning for their long term care needs.
Individuals with sufficient income and resources are expected to provide
LTC BLACKLIST: We seek additional
attorneys to attend the NAELA Symposium in Washington, DC in April.
The National Academy of Elder Law Attorneys changed its rules to exclude
non-attorneys from the semi-annual national conferences.
Why? It's obvious.
I've attended their meetings since 1991, reported on their egregious
Medicaid planning techniques, and persuaded the media and legislators to
discourage the abuse of public assistance by affluent seniors and their lawyers.
But, I'm not a lawyer myself. So,
NAELA's gone underground by disinviting legal laity like me.
If you are a licensed attorney and if you're concerned about saving
Medicaid as a safety net for the poor and a viable funding source for LTC
providers, please consider attending the NAELA conference and reporting on what
you learn. For details and a
pre-attendance briefing on what to look for, contact Steve Moses at 206-283-7036
or email@example.com. ***
CONGRESS STRENGTHENS LONG-TERM CARE"
Comment: Following is an article
compiled by the national newspaper Health Care News from several of our
earlier LTC Bullets and kindly published under my byline.
It's titled "Analysis: Congress
Strengthens Long-Term Care" and is available online at http://www.heartland.org/Article.cfm?artId=18583.
The hard copy was on page 6 of the newspaper's March 2006 (Vol. 7, No. 3)
is The Heartland Institute's national monthly outreach publication for
free-market health care reform. To
subscribe to Health Care News for $36 per year, go to https://www.heartland.org/apps/store/store.cfm?action=itmPubResults&catId=9.
Heartland Institute is a nonprofit organization devoted to discovering and
promoting free-market solutions to social and economic problems.
More information on long-term care planning is available through
PolicyBot(tm), The Heartland Institute's free online research database.
Point your Web browser to http://www.heartland.org,
click on the PolicyBot(tm) button, and select the Topic/Subtopic combination
Health Care/Long Term Care.
Congress Strengthens Long-Term Care"
Stephen A. Moses
Deficit Reduction Act (DRA) of 2006, signed into law by President George W. Bush
on February 8, curbs Medicaid planning abuse (the sheltering of assets to make a
non-eligible person eligible for Medicaid long-term care coverage) and releases
the Long-Term Care (LTC) Partnership program for nationwide expansion.
The latter consists of private/public partnerships that encourage people
to purchase long-term care insurance by allowing them to keep their assets if
they ever exhaust their insurance and have to turn to Medicaid.
DRA warns the public that long-term care is a personal responsibility, that its
risk and cost should not be ignored, that Medicaid remains a safety net but only
for those truly in need, and that everyone who is financially and medically
qualified should begin now to save, invest, and insure for long-term care.
delivered, that message can prevent a great tragedy that threatens this country:
It can save Medicaid for the poor while preparing most Americans to pay
privately for top-quality long-term care across the full spectrum of LTC
services--from home care to skilled nursing facility care.
DRA reauthorizes "LTC Insurance Partnerships;" strengthens "undue
hardship" protections for Medicaid recipients; extends Medicaid's transfer
of assets look-back period from three to five years; starts any applicable
eligibility penalty later to prevent "half-a-loaf" giveaways; drops
the home equity exemption to $500,000 from unlimited; and closes Medicaid
eligibility "loopholes" such as "transfer assets before
income," "Medicaid-friendly annuities," "life estates,"
"partial-month transfers," and "self-canceling installment
minor modifications to Medicaid's hemorrhaging eligibility system are long
overdue and critically needed to begin a long process of restoring and
preserving the welfare program as the long-term care safety net for the poor and
to give prosperous citizens incentives to save, invest, and insure for long-term
care so they will be able to pay privately for quality care when they need it.
on Slippery Slope
American Association of Retired Persons (AARP), big charities, and Medicaid
planning attorneys opposed the DRA because it reduces the ability of their
affluent members and clients to shelter and divest assets in order to shift the
high cost of long-term care from their personal responsibility to taxpayers (who
finance Medicaid), long-term care providers (who are paid too little by Medicaid
to supply quality care), and the poor (who are unable to obtain the same
quantity, quality, and range of services from Medicaid available to the
well-to-do because they lack the "key money" to buy their way into the
better Medicaid facilities).
statement by AARP CEO Bill Novelli on the House budget reconciliation vote was
titled, "Transfer of Assets Provision to Punish the Innocent," and
claimed, "The U.S. House of Representatives has ... approved a provision in
its budget that will deny long-term care coverage to those who give money to
charities, churches, and family members in need. Working with our members, AARP will continue the fight to
have this ill-conceived policy reversed."
the improvements spelled out in the DRA, however, Medicaid will remain on its
slippery fiscal slide toward collapse; LTC insurance, home equity conversion,
and other private LTC financing alternatives will continue to languish; the bias
in most state Medicaid programs to provide LTC in an institutional setting
(i.e., nursing home) will continue, while home and community-based care will
suffer; the public will remain anesthetized to the risk of not preparing for
long-term care; and ultimately the baby boom generation will have to use its
home equity to fund long-term care while the poor will have nowhere to turn when
Medicaid disintegrates entirely.
changes to LTC and Medicaid in the DRA will mean nothing, however, unless the
states implement them, the federal government enforces them, the private sector
promulgates them, and the public understands them.
states are flush with cash again. A
January report on Stateline.org began, "From Massachusetts to Hawaii, signs
abound that the immense pressure placed on state budgets by the fiscal crisis
early this decade has eased and put tax cuts and new spending in the realm of
possibility for the first time in several years."
the fiscal pressure off, states may shy away from enforcing the new Medicaid
eligibility rules in DRA '05 just as they dropped the ball on the Omnibus
Reconciliation Act of 1993 (OBRA '93), which contained many changes that were
groups are already mobilizing to fight LTC reform again.
What they couldn't stop in the above-board legislative process, they'll
try to kill behind the scenes in state legislatures and Medicaid agencies.
planners are already offering a fire sale on asset transfers, and they'll soon
be mobilizing to impede and repeal the DRA reforms. "Although Congress passed a new law February 1 further
restricting the ability of the elderly to transfer assets before qualifying for
Medicaid coverage of nursing home care, many people in most states will still
have time to plan under the old rules," read an email release from
Elderlawanswers.com the day after the House vote. "[T]he old rules will likely apply to transfers if the
Medicaid application is filed before the state passes the complying legislation.
So it may not be too late to plan, and in many cases not too late to
transfer assets," the release said.
won't buy LTC insurance to avoid a Medicaid spend-down liability that does not
exist. If the new Medicaid rules
are implemented and enforced, the LTC Partnerships established by the DRA will
be enormously successful. If not,
private long-term care insurance industry should actively support efforts to
help states implement the new Medicaid rules and LTC Partnerships.
equity conversion lenders should actively support efforts to educate the
American public about the new and likely future Medicaid limits on exempt home
providers should actively support efforts to implement the DRA in such a way as
to prevent asset transfers that leave people ineligible for Medicaid but unable
to pay their own way.
Moses (firstname.lastname@example.org) is the
founder and president of the Center for Long-Term Care Reform, Inc.
For more information, go to http://www.centerltc.com.