LTC
Bullet: Bravo CMS! Monday, July 31, 2006 Seattle-- LTC Comment: Implementation
of the DRA '05 probably seems agonizingly slow to most observers.
But to those of us in the public policy trenches for decades, new
CMS guidance to states on long-term care partnerships and Medicaid
eligibility arrived in record time.
Details after the ***news.*** *** CENTER SUPPORTER AND LTCI PRODUCER HONEY LEVEEN
SAYS: "The following article confirms a great many informal
observations I've made over years.
Most people initially think of long-term care insurance as a
wealth preservation tool only. I
always try to help clients understand that LTC is far more than that.
LTC insurance can be one of the most loving and considerate
things someone can buy. The
majority of people needing care are no longer capable of making their
own decisions about it. This
responsibility defaults to loved ones.
When someone owns long-term care insurance they are laying down a
track to run on, they are making their wishes and desires known, and
avoiding the unnecessary, additional stress and conflict this article so
beautifully describes." To
read the article Ms. Leveen describes:
Bob Morris, "The Age of Dissonance:
Stop Spending My Inheritance," New York Times, July
30, 2006, click here.
*** *** NATIONAL LTCI PRODUCERS SUMMIT GREAT DEAL. First Timer registrations are still available, but going fast. First Timers pay $225 (compared to the Early Registration fee of $395 for others). Don't miss this outstanding event. Click here http://www.aaltci.org/2006summit for more information. The 2006 Summit takes place November 5-7 in Austin, Texas. You'll hear from the best long-term care insurance producers and marketing experts and even some policy wonks like Steve Moses who will hold forth on the DRA and its likely effect on LTCi marketability. *** LTC BULLET: BRAVO
CMS! LTC Comment: Following
below is text from a Centers for Medicare and Medicaid Services press
release issued on Thursday, July 27, 2006.
This excerpt covers policy guidance provided to state Medicaid
programs on how to interpret and implement provisions in the Deficit
Reduction Act of 2005 bearing on long-term care partnerships and
Medicaid long-term care eligibility.
For now, just the facts. Our
and others' analysis and interpretation will follow in the weeks and
months ahead. Note especially this quote from CMS Administrator
Dr. Mark McClellan, MD, PhD: "Medicaid
is truly not equipped to pay the long-term care expenses of every
American,' said Dr. McClellan. 'We
must preserve the program for the future and for those who are its
intended beneficiaries.' Medicaid
cannot afford to pay for long-term care services for those who truly
need it, if it is used to protect inheritances for those with the assets
to pay for the care they need,' said Dr. McClellan.
'We are taking steps to make sure that Medicaid benefits do not
go to those who are trying to protect inheritances, but only to those
without alternative ways to pay. At
the same time we will also work with states to make sure that people who
did not deliberately shield assets are not penalized.'" Note also that you can find copies of the state Medicaid directors' letters
outlining the new policies implementing the DRA at http://www.cms.hhs.gov/smdl/smd/list.asp.
If you go to that link, you will find the "State Medicaid
Directors Letters" listed chronologically beginning in 1997.
To find the most recent letters, including the ones covering
long-term care partnerships and Medicaid eligibility, click on the word
"Date." That will change the list so that links to the most recent
letters come first. For
full details, click on the "enclosures" for both the
"long-term care" and "transfer of assets" subject
letters. They explain precisely how CMS is directing states to
implement the new rules. ------------ Text
of the full press release is at http://www.cms.hhs.gov/apps/media/press/release.asp?Counter=1911
For
Immediate Release: For
questions about Medicare please call 1-800-MEDICARE or visit
www.medicare.gov. CMS
TAKES STEPS TO IMPROVE COVERAGE AND SUSTAINABILITY OF CARE FOR
DUAL-ELIGIBLE BENEFICIARIES; NEW POLICIES ANNOUNCED FOR LONG-TERM CARE
PARTNERSHIPS, MEDICAID TRANSFER OF ASSETS AND IMPROVED COORDINATION OF
CARE To
encourage people to make better plans for their future long-term care
needs, and to protect the stability of the Medicaid program, CMS today
announced a set of important steps to keep coverage secure and improve
care and coverage options for people with Medicare and Medicaid. These
policies include new incentives for people to buy private long-term care
insurance, improved rules governing the transfer of assets to prevent
inappropriate use of taxpayer funded programs, and improved coordination
of care for those with both Medicare and Medicaid coverage, the
so-called "dual eligibles" who are in managed care plans. "One
of the greatest challenges facing our nation is providing high-quality
care for older Americans when their health declines," said Mark
McClellan, MD PhD, administrator of CMS.
"As the Baby Boom generation approaches Medicare eligibility
we need to make sure that benefits are secure and available for those
who need them. Today we announced more steps we are taking to provide
well-coordinated care to prevent costly complications for beneficiaries
with complex medical problems. "Older
Americans will have a new win-win option to meet their long-term care
needs," added Dr. McClellan. "They will have new, private
insurance options for long-term care coverage that enables them to get
the kind of assistance they prefer while protecting some of their assets
should they ever need Medicaid's help to pay for long-term care
expenses. This new
partnership will reduce the pressure on Medicaid financing of long-term
care," added Dr. McClellan. Medicaid
rules normally require applicants to have spent their assets (with some
exceptions such as a home or burial funds) before they qualify for
Medicaid and its long-term care (LTC) benefit.
In fact, the new Deficit Reduction Act of 2005 (DRA) tightens
existing rules to discourage individuals from transferring their assets
to family members or others to hasten their Medicaid eligibility. State
Medicaid programs may disregard assets that match, dollar for dollar,
the amount paid to an applicant by a private long-term care insurance
policy when determining if the applicant meets the asset limits for
Medicaid eligibility. Changes
made by the DRA, and announced today, will allow those same assets to
later be deducted from the amount the state must recover from the
beneficiary's estate. "Partnerships
between consumers, the private insurance industry and Medicaid will help
people better plan for long-term care needs they may have in the
future," said Dr. McClellan. "The Partnership program, we
believe, will encourage people to accept personal responsibility for
their future long-term care needs by purchasing insurance, and will
reduce the incentive to transfer or hide assets that can be protected
legally," Dr. McClellan said. States
may apply to Medicaid to adopt LTC Partnership programs as long as they
require policies sold under the program to meet strict consumer
protection conditions set by the National Association of Insurance
Commissioners' (NAIC) long-term care model regulations.
California, Connecticut , Indiana , Iowa and New York are already
operating LTC Partnership programs under the authority of earlier
legislation which will continue to operate. Under
the new program, only persons who purchase LTC insurance policies that
meet certain requirements will be eligible to protect assets from estate
recovery. CMS
also announced steps to assure that Medicaid benefits for dual-eligibles
were targeted to those who have no ability to pay. "Medicaid
is truly not equipped to pay the long-term care expenses of every
American," said Dr. McClellan. "We must preserve the program
for the future and for those who are its intended beneficiaries." "Medicaid
cannot afford to pay for long-term care services for those who truly
need it, if it is used to protect inheritances for those with the assets
to pay for the care they need," said Dr. McClellan. "We are
taking steps to make sure that Medicaid benefits do not go to those who
are trying to protect inheritances, but only to those without
alternative ways to pay. At
the same time we will also work with states to make sure that people who
did not deliberately shield assets are not penalized." Under
the Deficit Reduction Act, states must review any transfers of assets by
an applicant for less than fair market value for the 60 months prior to
in most cases, the date that the individual applied for Medicaid and was
institutionalized. Prior to
DRA, a state was required to review transfers made in the 36 months
prior to that date (or up to 60 months for transfers to trusts).
In addition, prior to DRA, a person found to have inappropriately
transferred assets for purposes of Medicaid qualification were deemed
ineligible for a period of time equal to the amount of time that money
would have covered nursing home expenses.
The time clock on the asset contribution requirements began with
the date of the transfer, not the date of eligibility for Medicaid's
long-term care benefit. As
a result, assets often would not contribute to deferring Medicaid costs. DRA now requires the clock to start on the later of the date
of the transfer of assets or the date that the person would otherwise
qualify for Medicaid coverage of LTC expenses. At
the same time, the DRA provides additional protections to individuals
who otherwise would be subject to periods of ineligibility, by
strengthening the hardship waiver process.
States will be required to verify they have a process to notify
applicants that hardship waivers are available. States must also have an
appeals process in place. States
must make hardship waivers available if the period of ineligibility for
Medicaid payment of LTC services would endanger the individual's life or
health, or would deprive the individual of food, clothing, shelter, or
other necessities of life. Inability
of a person to pay for needed nursing home care would be a key factor
that states would have to take into account in this process. Copies
of the state Medicaid directors' letters outlining the new policies
implementing the DRA can be viewed at http://www.cms.hhs.gov/smdl/smd/list.asp
. . . [A
short section of the press release of less direct interest to LTC
Bullets readers is omitted at this point.] #
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