Wednesday, August 9, 2006 Manchester, NH-- LTC Comment: The national Medicaid Commission, appointed last year to fix Medicaid (including its dysfunctional LTC component) before the welfare program implodes financially, is way off track. Details after the ***news.*** [omitted] LTC BULLET: MEDICAID
COMMISSION ERRS BY OMISSION LTC Comment: The
Medicaid Commission is well on its way toward recommendations which, if
implemented, would make the program less sustainable financially and
worsen the markets for private long-term care financing solutions like
LTC insurance and home equity conversion. Steve Moses's article on the Medicaid Commission's
erring ways is republished below with permission from Health Care
News. Health Care News is The Heartland Institute's national monthly outreach
publication for free-market health care reform. The Heartland Institute is a nonprofit organization devoted
to discovering and promoting free-market solutions to social and
economic problems. Visit
Heartland at www.heartland.org.
Read Health Care News at http://www.heartland.org/Publications.cfm?pblId=2.
Find Steve's article in the August 2006 issue at http://www.heartland.org/pdf/HCNAug06.pdf
or http://www.heartland.org/Article.cfm?artId=19451
in different formats. ---------------- "Medicaid Commission Overlooks Private
Financing Options" Written By: Stephen A. Moses ---------------- The Medicaid Commission--a 30-member committee
appointed by U.S. Health and Human Services Secretary Michael
Leavitt--convened in Dallas in mid-May to pursue its congressionally
mandated objective of fixing the federal health care program for the
poor before it implodes financially. Since being established by Leavitt in May 2005, the
commission has met approximately once every two months. At this sixth
meeting, roughly two-thirds of the way between its founding and its
expected final report, the outlines of the commission's likely findings
and recommendations became clear. But some witnesses and commissioners
worried the majority is ignoring its fiscal mandates. Dennis Smith, director of the Center for Medicaid
and State Operations, warned that the program, especially its long-term
care (LTC) component, is growing beyond its means. "Everybody can agree that Americans should
prepare for their own retirement needs," Smith said. "LTC
insurance is one solution, but it hasn't grown for many reasons. We need
lots of good discussion on how to stimulate the private sector." Yet the commissioners rarely addressed
incentivizing private financing alternatives. Their focus was nearly
exclusively on how to make Medicaid-financed care more attractive and
more affordable. Racking Up Expenses As states have struggled with growing deficits and
bloated budgets over the past few years, it has become increasingly
clear that Medicaid is a big part of the problem. In 2004, Medicaid
costs exceeded those of Medicare, and the program became the largest
item in state budgets. The National Governors Association (NGA) called
for strong measures to rein in Medicaid's cost explosion. LTC and other services for the aged, blind, and
disabled account for most Medicaid costs. While only one-fourth of
Medicaid recipients are aged, blind, or disabled, they account for
two-thirds of the program's costs. Poor women and children make up
three-fourths of Medicaid's enrollment but account for only one-third of
its cost. The NGA proposed measures to target Medicaid LTC eligibility
to truly needy people in order to stanch the financial hemorrhage. Comprising 15 voting members--including the
chairman, former Tennessee Gov. Don Sundquist--and 15 nonvoting members
representing public and private interest groups, the Medicaid
Commission's first mandate was "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" by September 1,
2005, according to its charter. The commission met that deadline, and several of
its recommendations--including critical measures to discourage Medicaid
estate planning, the technically legal but ethically questionable
practice of artificial self-impoverishment to qualify for
Medicaid--became part of the Deficit Reduction Act signed by President
George W. Bush in February. Encountering Problems Chances for further positive developments appear
slim. After completing its first report last September, the commission
turned to its bigger responsibility: making recommendations by December
31, 2006 intended to ensure Medicaid's long-term sustainability. Vice Chairman Angus King, former governor of Maine,
declared the May meeting would be the session in which the commission
began focusing on its recommendations and the final report. Commission Executive Director Stacie Maass
presented a "roadmap" intended to guide the commissioners
toward closure by a process of submitting recommendations, seeking
consensus, and culling and selecting a few key recommendations. Criteria
for inclusion in the final report are that recommendations have major
impact; address Medicaid's long-term sustainability; not increase
program costs; not increase the number of uninsured people nationwide;
and meet Leavitt's guidelines on long-term issues such as eligibility,
benefits, and quality. "If the commission follows criteria 2, 3, and
4, it will be a very short report, indeed," quipped Commissioner S.
Anthony McCann, secretary of the Maryland Department of Health and
Mental Hygiene--meaning that sustaining Medicaid without increasing
costs or reducing the number of insured would be virtually impossible. Hearing Biased Testimony Several advocates for the elderly and disabled
testified before the commission, recommending Congress expand Medicaid
and improve its services, but few focused on the commission's charge to
preserve the program as a safety net for the poor. Most advocated
measures intended to make Medicaid-financed LTC more widely available
and attractive to consumers. Richard Browdie, president and CEO of the Benjamin
Rose Institute, which advocates programs for the elderly, said, "I
have to emphatically state ... that it is not a reasonable goal to
reduce the number of people who will need to be served." Bob Kafka, co-director of American Disabled for
Attendant Programs Today (ADAPT), added to the calls for policies that
would make Medicaid more attractive, arguing for "consumer
direction in all community programs, including all managed-care efforts
to integrate acute and long-term services and supports." Echoing Kafka's statement, Ernest McKenney, a
long-term care policy consultant, said it's time to "blow
[Medicaid] up and start over" and "require states to implement
person-centered planning and to offer consumer direction." Working at Cross Purposes Those are noble goals, but are they realistic? They
certainly conflict with the commission's mandate to make Medicaid
sustainable financially for the future, as that does not seem achievable
while adding recipients, integrating and supplementing services, and
turning over care to recipients' own direction. That will not be
possible until the commission confronts and resolves some critical
issues it has avoided so far. For example: If Medicaid provides more desirable services, such
as home and community-based care instead of nursing home care, that will
encourage greater numbers of people to rely on the program. Medicaid's generous eligibility criteria allow LTC
recipients to keep half a million dollars in home equity plus a business
(including the capital and cash flow), one automobile, term life
insurance, prepaid burials for the whole family, and home
furnishings--all of unlimited value. Making the program more attractive will invite more
people to turn to artificial impoverishment to qualify. The system discourages people from planning early
to save, invest, or insure privately for LTC, because they can ignore
the risk, avoid the premiums, wait until they need help, and get the
government to pay for care while preserving most of their estates for
their heirs. The nation has an LTC system based on welfare-financed
nursing home care when no one wants to go to a nursing home. Running Risks Without addressing these matters, the commission
risks attacking symptoms instead of causes with its recommendations,
proving ineffective or worse. Yet no one on the commission and none of
the witnesses in Dallas raised these concerns, though I tried to do so
in two minutes of "public testimony." Voting members of the Medicaid Commission who are
more favorable to private financing alternatives, such as Galen
Institute President Grace-Marie Turner and Robert Helms, director of
health policy studies at the American Enterprise Institute, have
expressed concern that some of their requests to invite witnesses have
not been honored. The Medicaid Commission may be drifting toward
conclusions and recommendations that will make Medicaid even less
sustainable financially in the future than it is today--exactly the
opposite of its mandate. ---------------- Stephen A. Moses (smoses@centerltc.com) is a policy advisor to The Heartland Institute and president of the Center for Long-Term Care Reform in Seattle, which encourages private financing of long-term care and works for reduction of welfare dependency for most Americans. |