LTC Bullet:  The Future of LTC and Medicaid 

Friday, July 21, 2006 

Kansas City, KS-- 

LTC Comment:  The full transcript of a hearing on the future of LTC and Medicaid that we reported on last week is now available.  Find out what lawmakers, policy makers, and opinion leaders are saying, after the ***news.*** 

*** TRIPLE TROUBLE.  We've reported here the ominous growth of obesity and its link to diabetes as a health and long-term care problem.  Now comes evidence of another tie in: "Studies reinforce link between diabetes, Alzheimer's disease.  There is more evidence that diabetes increases the risk of Alzheimer's disease.  Two new studies definitively tie Type 2 diabetes, the kind usually related to obesity, with increased risk of Alzheimer's. One of the studies reported by the Alzheimer's Association at a six-day conference in Madrid, Spain, found that even people who had borderline diabetes were 70% more likely than those with normal blood sugar to develop Alzheimer's.  Another study determined that diabetics with higher blood sugar levels are at a greater the risk of dementia.  Higher levels of blood sugar mean the diabetes is severe or is being poorly treated, or both, said researcher Rachel A. Whitmer of the Division of Research at Kaiser Permanente in Oakland, CA.  Results imply there should be tight control of blood sugar in elderly patients, even though some doctors tend to relax the rules for them, Whitmer said."  Source:  McKnight's LTC News Daily Update, 7/19/6 ***   

*** YOU THINK WE'VE GOT LTC PROBLEMS?  "Global caregiving cost of Alzheimer's tops $248 billion worldwide.  The estimated total global cost of caring for people with Alzheimer's disease and dementia is now more than $248 billion annually, according to researchers.  Swedish researchers reported their findings over the weekend during the annual International Conference on Alzheimer's Disease and Related Disorders, in Madrid, Spain.  They based their estimate on the estimated costs of informal and indirect care for nearly 28 million with Alzheimer's and dementia worldwide.  Informal care refers to patient care provided at no cost, usually by family members and friends.  Direct care refers to paid professional healthcare services.  The estimates indicate great challenges for both families and our national healthcare systems, said William Thies, Alzheimer's Association vice president of medical and scientific relations, in a prepared statement."  Source:  McKnight's LTC News Daily Update, 7/18/6 *** 

 

LTC BULLET:  THE FUTURE OF LTC AND MEDICAID 

LTC Comment:  Following below are the opening introductory comments by House Small Business Committee Chairman Manzullo (R, IL) and Vice Chairman Bartlett (R, MD) at the Committee's July 10 hearing on the future of long-term care and Medicaid.  Read the entire hearing transcript in The Zone at http://www.centerltc.com/members/hill_longterm.pdf

For background on this hearing and a full transcript of Steve Moses's testimony, see the LTC Bullets at http://www.centerltc.com/members/ltcbullets/642.htm and http://www.centerltc.com/members/ltcbullets/643.htm, respectively.  Both Bullets remain in The Zone, available only to dues-paying members of the Center.  They'll go into our public archives at www.centerltc.com in a few weeks.  To read them now, contact Damon at 206-283-7036 or damon@centerltc.com to join the Center.  Alternatively, you can find much of the content on our public LTC Blog at www.centerltc.com.  Just keep scrolling down. 

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"THE FUTURE OF LONG-TERM CARE AND MEDICAID:  SMALL BUSINESS ROUNDTABLE" 

July 10, 2006, 1:00 - 4:00 p.m. EDT 

Washington County Commissioners Meeting Room
Second Floor, Room 227
100 West Washington, Street
Hagerstown, Maryland
 

TAPE TRANSCRIPTION [edited] 

ATTENDEES: 

THE HONORABLE DONALD MANZULLO (R-16-IL)
Chairman, Small Business Committee
 

THE HONORABLE ROSCOE BARTLETT (R-6-MD)
Vice Chairman, Small Business Committee
 

PANEL ONE: 

ANTHONY MCCANN
Secretary, Department of Health & Mental Hygiene
Member, Commission on Medicaid
Baltimore, Maryland
 

GRACE-MARIE TURNER
President, Galen Institute
Member, Commission on Medicaid
Alexandria, Virginia
 

DENNIS SMITH
Director, Center for Medicaid and State Operations
Centers for Medicare and Medicaid Services
Baltimore, Maryland
 

PANEL TWO: 

STEPHEN MOSES
President, Center for Long-Term Care Reform
Seattle, Washington
 

DR. JAMES MITCHELL
Administrator, Moran Manor
Westernport, Maryland
 

GREGORY STANGEL, II
Co-owner, Stangel & Stangel Financial Services
Cresaptown, Maryland
 

P R O C E E D I N G S 

MR. MANZULLO:  The increasing cost of long-term care is one of the most significant challenges we're faced with.  In 2000, there were an estimated 9.5 million people with long-term care needs in the U.S., including 6 million elderly and 3.5 million non-elderly. 

These numbers are projected to grow significantly in the coming years, especially after 2030, when the Baby Boom Generation begins to reach 85.  The senior population, 12 percent in 2000, by the year 2030 will grow to 20 percent. 

As a matter [of fact], in the twenty-first century, the provisions and financing of long-term care is a daunting challenge for seniors, soon to be seniors, and their children.  The cost of long-term care is high and increasing, averaging over $70,000 annually for a private room, $25 an hour for a visit by home health aide, and an average annual base rate of over $32,000 for the services of an assisted-living center.                       

Since 1990, the price of nursing-home care has increased at an average annual rate of 5.8 percent, almost double the overall inflation rate.  Medicaid, paid for by federal and state taxpayers, has become a primary way of financing long-term care for elderly people in nursing homes.  The 40 percent or more of those who need long-term care during their lives, about two-thirds of all recipients of long-term care must depend on Medicaid.           

The current mix of financing for long-term care, in which a significant share of financing comes from government programs, that a depression that the federal government will experience with the aging of the Baby Boom Generation.  Entitlement, or mandatory spending, is the largest proportion of the federal budget, and has been increasing at faster rates than the GDP and discretionary federal spending. 

Medicaid is a huge entitlement, and has become the entitlement program with the fastest rate of increase.  Expenditures top $300 billion annually, and rise at eight percent annually.  In total, Medicaid's expenditures for long-term care for elderly people since 1992 have grown at an average annual rate of about five percent. 

The Congressional Budget Office estimates that in 2004 Medicaid's payments for institutional care for seniors, including both state and federal expenditures, totaled about $36 billion for about 77 percent of all Medicaid long-term care spending.  Medicaid's payments cover the care of more than half of all elderly, nursing-home residents. 

The Deficit Reduction Act, which became law on February 8, 2006, makes several changes to the long-term care and Medicaid dynamic, and that's what we're here today to discuss.  I'm looking forward to the discussion that will follow.  And, again, I want to thank Congressman Bartlett for inviting me here to discuss this important issue. . . . 

Before I turn it over to -- thank you -- to Roscoe, we try to keep the testimony at about five minutes.  And at about 4 minutes, there may be a gentle tap; at five minutes I take it and I throw the gavel at you, to give you an idea.  That will give us plenty of time for discussion. 

Congressman Bartlett? 

MR. BARTLETT:  . . .  So thank you very much for being here.  I want to thank my Chairman and my friend -- we came in together, as Don mentioned, in '92 -- for coming out today.  This is a subject that concerns a lot of people. 

America is graying, of course, and more and more of us are living longer and longer.  Just a few weeks ago, I passed my eightieth birthday, and I was just wondering to my wife when I would enter mid-life, because I haven't yet.  And this is true of America, we're getting -- we're graying, getting older and older, and more of us will be ending up needing long-term care.                       

The Deficit Reduction Act made some changes, and the general intent of these changes was to prevent people from impoverishing themselves, so that they could then get their healthcare really from their friends and neighbors.  The average person looks at it, and frequently they're encouraged by their attorney to look at it this way:  Don't worry about it; it's government money.  But, of course, basically government has no money. 

There is no such thing as a "federal dollar".  Every dollar the federal government has, they took from the paycheck of some hard-working American.  Notice that I didn't include businesses because really, fundamentally you cannot tax a business, because a tax on the business simply becomes a part of the cost of doing business, and they pass it on to the consumer.  So ultimately all of our taxes are paid by consumers, are they not? 

And there's an interesting phenomenon, and this relates to that.  When I came to Congress, Tax Freedom Day was about the ninth day of May, and Government Freedom Day was about the fourth of July, which gave a special significance to Independence Day because it was not until Independence Day that you could work to get any money for yourself, because up until Independence Day, you were working to pay your taxes and the additional costs of government. 

What was that roughly two-month period between when you'd finished paying all your federal, state, and local taxes and you finished paying for the cost of government?  That represented the time that you were working to pay for unfunded federal mandates. 

Now, we've done a little better on taxes.  We tried really hard to reduce taxes.  We've done a little better.  We moved that day from the ninth of May back to sometime near the end of April, maybe almost two weeks back.  But Government Freedom Day, Don, has gone from about the fourth of July to about the ninth of July.  So although we've reduced taxes, the unfunded federal mandates have grown until now you're working even a longer time to pay for the total cost of government than you were working to pay for government in '92, when we came to the Congress. 

Of course, Medicaid is a part of that because the cost of Medicaid to the states is mandated by a formula, and I understand that no states have opted out.  You can't opt out of Medicaid.  Nobody has opted out of Medicaid.  And so when people artificially impoverish themselves so that they qualify for Medicaid, what they're doing -- not just asking their friends and neighbors to pay for their healthcare. 

But increasingly today, Don, we're asking our kids and our grandkids to pay for it because we're amassing an incredibly large -- this is the largest inter-generational-debt transfer in the history of the world, and we're bequeathing this to our kids and our grandkids. 

And what this legislation did was intend to require those who could pay for their healthcare to pay for their healthcare so that their friends and neighbors weren't paying for it.  And, even worse, so that their kids and their grandkids weren't paying for it. 

You know, I know of no seniors, when they understand, who really want their kids and their grandkids to pay for their healthcare.  And so I think that when you get the information out there, that seniors are going to be the strongest supporters of these changes that we've made in eligibility for Medicaid. 

So I wanted to thank you for chairing this hearing, this roundtable.  And I want to thank our witnesses and those in the audience for coming.  Thank you very much. 

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At this point, the testimony of two panels of witnesses began.  Read the entire transcript of this hearing in The Zone at http://www.centerltc.com/members/hill_longterm.pdf