LTC
Bullet: Kaiser Cover-Up Continues
Thursday, April 27, 2006
Seattle--
LTC Comment: Urban
Institute "scholars," aided and abetted by the Kaiser Family
Foundation, employed an underhanded straw man argument in the foundation's
latest unsuccessful attempt to debunk the impact of Medicaid planning abuse.
More after the ***news.***
*** DRA WORRIES. I'm
concerned. I met over lunch
yesterday with a state legislator and a policy analyst both of whom understand
that Medicaid is doomed as a funding source for LTC for the middle-class.
They want to fix the problem, but they did not grasp until we talked how
much leverage the Deficit Reduction Act gives states to save Medicaid for the
needy and encourage private financing alternatives like LTCi and reverse
mortgages. I encourage readers of
these LTC Bullets to forward them to legislators and reporters with personal
notes urging them to check out the articles, reports and speeches at www.centerltc.com.
If legislators and the media do not understand, implement and publicize
the DRA, it will not have the beneficial effect on consumer planning for LTC
that it should.
Furthermore, it looks like CMS is moving forward rapidly on
the expansion of home and community-based services under Medicaid as authorized
by the DRA but dragging its feet on LTCi Partnerships and critical Medicaid LTC
eligibility reforms. That's exactly
backwards from what they should be doing. They
should tighten eligibility and mobilize LTCi Partnerships first, before making
Medicaid even more attractive than it already is by offering more HCBS.
Watch for a new budget crunch, more severe than ever before, if
politicians and bureaucrats attract ever more people to Medicaid with more
desirable services but stall on constraining Medicaid planning abuse and
encouraging private insurance. ***
*** DALLAS BOUND. Many
thanks to Center for Long-Term Care Reform members who responded to our appeal
in yesterday's LTC E-Alert for targeted contributions to help fund my
trip to Dallas in May for the Medicaid Commission meeting.
Feedback I'm getting from several sources suggests the Medicaid
Commission is listening mostly to advocates of government LTC financing and
opponents of private financing. I'll be on hand at the next meeting to make sure a better
perspective is available. That is,
the best way to save Medicaid is to target it to the genuinely needy and use the
savings to incentivize LTC insurance and home equity conversion.
Watch for our LTC Embed Reports from the Policy Front in late May. ***
***
LTCi PRODUCERS:
Get involved in AALTCI's Long-Term Care Awareness Week [Nov. 5-11, 2006],
an opportunity to create increased understanding of LTC issues among consumers,
media and legislators. You can get
more information and download Awareness Week artwork for your Website and
marketing material on the Association Website at http://www.aaltci.org.
***
***
NEED A WEBSITE? All you have
to do to have your very own LTC website designed by LTC Connection is to join
the Center for Long-Term Care Reform. That's
right, join the Center for $150 per year, get all our publications and access to
The Zone, and on top of that LTC Connection will design your website and waive
their usual $149 fee. Or look at it
this way, buy your website from LTC Connection through the Center and get a year
of membership in the Center for only $1 more.
Sure, you'll have to pay LTC Connection's $39 per month website
maintenance fee, but you'll get a whole year of LTC Bullets and LTC
E-Alerts for no extra charge. So,
what do you have to do? Just
contact Damon at 206-283-7036 or damon@centerltc.com,
join the Center, pay your membership fee, and say "I want my website."
We'll connect you with the right person at LTC Connection and you'll be
on your way. Great content from the
Center and a great website from LTC Connection.
How can you beat it? Already
a member of the Center but want your free website?
No problem. Renew your
annual membership early and get the same deal. ***
LTC BULLET: KAISER
COVER-UP CONTINUES
LTC Comment: My
favorite logic text defines the straw man logical fallacy as one which
"occurs in debate when someone distorts an opponent's position, usually
stating it in an oversimplified or extreme form, and then refutes the distorted
position, not the real one." (David
Kelley, The Art of Reasoning: Second
Expanded Edition, W.W. Norton & Company, New York, 1994, p. 151.)
Even more intellectually dishonest than the simple straw
man fallacy, is a version I call the "underhanded" straw man argument.
That's when someone distorts an opponent's position, refutes the
distorted position instead of the real one, and doesn't even have the
professional courtesy to identify the opponent.
That leaves readers unable to compare and contrast the underhanded straw
man argument to the real argument it misrepresents.
A new issue paper by Urban Institute policy advocates
Timothy Waidmann and Korbin Liu titled "Asset Transfer and Nursing Home
Use: Empirical Evidence and Policy
Significance," published April 2006 by the Kaiser Family Foundation at http://www.kff.org/medicaid/upload/7487.pdf,
employs the underhanded straw man fallacy with impunity.
Here's the story.
Waidmann and Liu attack a simplistic argument while
ignoring the carefully reasoned case they distort and failing even to cite the
legitimate argument's source. That's
the very definition of the underhanded simple straw man fallacy.
The straw man argument Waidmann and Liu employ is that
"many 'well-to-do' elderly Americans transfer assets to gain Medicaid
coverage for nursing home care . . . [and thus] distort the intent of the
Medicaid program and unnecessarily inflate public spending."
(p. 1)
On the face of it, that statement is true, but it is only a
small part of the case against overutilization of Medicaid and Medicaid estate
planning. Therefore, even if the
authors refuted the straw man argument they pose, which they don't, the real
argument would be unaffected.
We have a lot, and could soon have more than enough, hard
evidence to support the statement that asset transfers to qualify for Medicaid
are commonplace. Last week's "LTC
Bullet: Spousal Refusal:
Who Wins? Who Loses?"
at http://www.centerltc.com/members/ltcbullets/627.htm
documented nine cases of millionaires using a single asset transfer gimmick
("spousal refusal") to divest hundreds of thousands of dollars in just
one county of a single state. Thousands
more examples of asset transfers to qualify for Medicaid could easily be
identified by proper scholarly methods, i.e. by investigating a valid random
sample of actual Medicaid long-term care cases and projecting to a reasonable
estimate of the true incidence and cost of the practice.
The Urban Institute and the Kaiser Family Foundation have sufficient
financial resources to undertake this much-needed research, but they don't.
Instead, Waidmann and Liu equivocate on the word
"many," employ a useless research strategy, and commit a serious error
of fact and interpretation.
They equivocate on the word "many" by implying
that their unnamed interlocutor believes asset transfers are the only problem,
that such transfers are rampant across the whole population of Medicaid
long-term care recipients and that asset transfers alone cost Medicaid many
billions of dollars. Certainly,
I've never made such a specious case, and I'm unaware of anyone who has.
As I've explained so many times here and elsewhere, asset
transfers and other fancy Medicaid planning techniques are only the "tip of
the iceberg." The real problem
is that most elderly Americans qualify for Medicaid even without sheltering or
divesting assets and without spending their resources for long-term care.
Last week's other LTC Bullet, titled "Who Still Gets Medicaid
Without Spending Down" at http://www.centerltc.com/members/ltcbullets/628.htm,
explains in detail how that happens. Medicaid's
income and asset limits are so generous that only the top 10 percent or so of
seniors even need to transfer assets, or engage in other, more sophisticated
methods of Medicaid planning, to qualify.
So, when Waidmann and Liu conclude that the "pursuit
of transferred assets would recover only about 1 percent of total Medicaid
spending for long-term care," I say "Wow!"
That's over a billion dollars. I
think the real figure is much higher for reasons explained below.
But when opponents of my position try to defeat it by misrepresenting it
and yet they still concede savings in ten figures from pursuing asset transfers
alone, that is a huge victory for our side indeed.
Now,
let's get down to brass tacks. The
research methodology Waidmann and Liu used for their paper is worthless for
their present purpose. The
"Health and Retirement Study (HRS)" on which their findings are based
is derived from self-reporting by study participants and their families.
Although the surveyors carefully examine, cross-check and benchmark the
data they collect, no independent research or verification is done with outside
sources to determine whether or not all asset transfers are reported and
reported in the correct amount.
I
know from examining many hundreds of actual public welfare and Medicaid case
records since the early 1970s that people frequently fail, both unintentionally
and intentionally, to disclose all relevant information about their income,
assets and wealth transfers when they apply for public assistance.
The only way to get the whole truth is to query financial institutions
and public records on a valid random sample of cases and project reasonable
estimates of the total incidence and amounts of asset transfers and other
artificial self-impoverishment techniques therefrom.
Survey data of the kind employed for this paper is worse than useless
because it undeservedly implies credibility, reliability and accuracy without
verification.
Finally,
Waidmann and Liu make a serious error of fact and interpretation.
They say "approximately 43% of all nursing home residents eventually
become Medicaid eligible, while the balance remains 'always private pay.'"
The truth is very different.
At
any given time, roughly two-thirds (65.7 percent) of all nursing home residents
in the United States, and the vast majority of all expensive long-stayers, are
covered by Medicaid. Another 12.4
percent are covered by Medicare. Other
payers, including the Department of Veteran's Affairs (DVA), major medical
insurance, private long-term care insurance AND finally private payers account
for only 21.8 percent of all payers. (Source:
Reimbursement and Research Department of the American
Health Care Association, The State Long-Term Health Care Sector Data Resource
Book, 2005, "Nursing Facility Patients by Payor - Percent of
Patients," p. 92, based on CMS
OSCAR Current Survey, June 2005.) The
only way the authors' statement that 43 percent of nursing home residents
eventually qualify for Medicaid and the rest remain private pay could be true is
if they count everyone who spends even one day in a nursing home and they
consider Medicare and the DVA to be "private payers."
Neither such assumption makes sense because the first one illogically
mixes expensive long-stayers with inexpensive short-stayers and the other one
corrupts the meaning of private pay. Any
conclusions these authors reach based on such faulty assumptions and mistaken
reasoning are spurious.
Let
me make an invitation and offer a challenge.
I invite the authors of this latest paper, and those of the dozen or so
others of the same ilk published in the past year by the multi-million dollar
Kaiser Family Foundation, to read and I challenge them to refute a serious
articulation of the argument that over-utilization of Medicaid is undermining
the program and driving up costs unnecessarily.
It's titled "Aging America's Achilles' Heel:
Medicaid Long-Term Care" and you'll find it on the Cato Institute's
website at http://www.cato.org/pub_display.php?pub_id=4376.
But
does anyone really believe these advocates of public financing posing as
objective scholars have not read that paper already?
Of course they have. Instead
of confronting its arguments frontally, however, they would rather ignore the
real arguments and attack a distorted, and un-cited position that is easier to
defeat. Even at that, they failed.
And
that is precisely why we're winning the big public policy battles--witness the
Deficit Reduction Act--with our tiny war chest, augmented by strong evidence and
logic, in spite of their specious sniping, funded by deep pockets.
Steve Moses