LTC Bullet:  Medicaid Commission Update 

Wednesday, May 31, 2006 


LTC Comment:  Will the Medicaid Commission fix long-term care financing or make huge problems even worse?  Our best guess after the ***news.*** 

*** TODAY'S LTC BULLET is sponsored by Ron Hagelman and the Republic Marketing Group, Inc. (RMG), a national insurance marketing organization that specializes in long-term care insurance product development and distribution.  Ron says "RMG's new Security Advantage(tm) long-term care insurance product (Patent Pending), provides innovative answers to many of the long-term care insurance product acceptance issues now facing the industry."  Contact Ron and RMG at 888-620-4066 or check out their website at .  To sponsor an LTC Bullet yourself, contact Damon at 206-283-7036 or ***

*** THE BRAVE NEW WORLD OF LONG-TERM CARE.  The Deficit Reduction Act of 2005 changed the ground rules for LTC financing.  Medicaid will no longer be a tax-payer financed fall-back for affluent people who fail to save, invest or insure for long-term care.  That means the public should plan and prepare for LTC as they never have before.  But nothing will change unless states implement the DRA, the feds enforce it, the media publicize it and the private sector sells alternatives to Medicaid like insurance and reverse mortgages.  How well do you and your producers understand this critical law and the new marketing opportunities it opens?  Bring in Center President Steve Moses to present his exciting educational/motivational program on the DRA:  what is it, what does it mean, and how should you present it to maximize LTCi and reverse mortgage volume.

The Center for Long-Term Care Reform usually charges a flat fee of $5,000 for Steve's programs.  But getting the word out about the DRA is so important that we're reducing that cost to $3,000 plus expenses for a limited time.  What's more, if he will be in your area anyway, you can bring him in to speak to producers or consumers for only $1,000 plus expenses.  Here's where Steve is scheduled to be in the next few months:

Seattle:  most of the time
Dallas:  last week of June
Kansas:  mid-July
New Mexico:  late August
Phoenix:  late September
San Antonio:  second week of October
San Diego:  third week of October
Florida:  fourth week of October
Austin, TX:  second week of November 

Contact Steve at 206-283-7036 or to schedule a program. *** 

*** 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, 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. ***   



Medicaid Commission Update
Stephen A. Moses 

Probably no social program or problem has been the subject of more studies, task forces and commissions than Medicaid and long-term care.  Yet the program continues to slip toward insolvency and the problem gets worse every year.  By all appearances, after a good start, the "Medicaid Commission" appointed by Health and Human Services Secretary Michael Leavitt last year, is now likely to damage Medicaid further and exacerbate the long-term care financing problem even more.  Here's the story. 

Secretary Leavitt established the Medicaid Commission in May 2005 under Public Law 92-463, the Federal Advisory Committee Act, to advise him on "ways to modernize the Medicaid program so that it can provide high-quality health care to its beneficiaries in a financially sustainable way."  At the time, states struggled with deficient revenues and bloated budgets.  Medicaid was a big part of the problem.  It had recently exceeded Medicare in cost and topped primary and secondary education as the biggest item in state budgets.  The National Governors Association (NGA) called for strong measures to rein in Medicaid's cost explosion. 

Long-term care and other services for the aged, blind and disabled account for the lion's share of Medicaid's cost problem.  While only one-fourth of Medicaid recipients are aged, blind and disabled, they account for two-thirds of the program's costs.  Poor women and children are three-fourths of Medicaid's enrollment, but they account for only one-third of its cost.  Therefore, the NGA proposed measures to target Medicaid long-term care eligibility to people truly in need in order to stanch the financial hemorrhage. 

The Medicaid Commission took heed.  Its first mandate was by September 1, 2005 "to provide recommendations on options to achieve $10 billion in scorable Medicaid savings over five years while at the same time make progress toward meaningful longer-term program changes to better serve beneficiaries."  It met that deadline and several of its recommendations--including critical measures to discourage Medicaid planning (artificial self-impoverishment) abuses--became part of the Deficit Reduction Act signed by President Bush on February 8, 2006.  

But further developments do not bode so well.  After completing its first report under severe deadline pressure last Fall, the Medicaid Commission turned to its bigger responsibility:  "By December 31, 2006, the Commission is tasked with making longer-term recommendations on the future of the Medicaid program that ensure the long-term sustainability of the program."  In its four meetings since starting on this larger challenge, the Medicaid Commission has heard a barrage of biased testimony favoring expansions of Medicaid and a dearth of ideas on how to preserve the program as a long-term care safety net for the poor. 

At the Commission's May 17-18, 2006 meeting in Dallas, for example, a long line of witnesses advocated an even longer list of measures intended to make Medicaid-financed long-term care more available and attractive to American consumers.  The people and groups with the most access to the Medicaid Commission--well endowed foundations and think tanks, avid advocacy groups, and highly profitable private companies that service Medicaid in various ways--want things we all want such as more home and community-based care, less nursing home institutionalization, better care coordination, consumer-directed care funded by more rational revenue streams and governed by more sensible regulations.  These voices should be heard.  

But there are other ideas and arguments that need to be heard which the Medicaid Commission has failed to entertain.  For example, the Commission should give more consideration to Medicaid long-term care eligibility, financing and history.  Eligibility and financing are critical because unless and until they control easy access to subsidized nursing home care funded by Medicaid, making home and community-based services more readily available will swamp Medicaid financially, encourage more Medicaid planning abuse, and impede the market for LTC insurance and home equity conversion, which are the system's only hope of salvation.  

Understanding the history of long-term care financing is essential.  To focus as the Medicaid Commission is doing on the crazy-quilt status quo of long-term care without examining how it came to be leaves the Commission at risk of addressing symptoms instead of causes.  Why does America have a welfare-financed, institution-based long-term care system in the wealthiest country in the world where no one wants to go to a nursing home?  Until the Medicaid Commission addresses and answers that question, it is in danger of attempting to solve a problem caused by excessive government financing by adding even more government financing.  That's like trying to put out a fire by dousing it with gasoline. 

In the end, the Medicaid Commission will likely make Medicaid's problems worse instead of better if it continues to ignore how government intervention in the long-term care marketplace--however well-intentioned--caused Medicaid's problems of access, quality, reimbursement, discrimination and institutional bias in the first place.  

As of now, the Medicaid Commission is midway on a slippery slope toward contributing to Medicaid's collapse as a long-term care safety net for the needy.  Instead of saving Medicaid by targeting it more wisely and encouraging private financing alternatives like insurance and reverse mortgages, the Commission is moving in the direction of feel-good reforms that could make matters much worse than they already are. 

A public policy tragedy may be in the making.