LTC Bullet:  What States Should Do About the DRA, LTCi and HEC 

Tuesday, October 3, 2006 

Seattle-- 

LTC Comment:  New report by Steve Moses from the Flint Hills Center for Public Policy is a guidepost for states on DRA implementation, Medicaid savings, and private LTC financing growth.  Details after the ***news.*** 

*** WE'RE BACK.  The Center for Long-Term Care Reform's late Summer break is over.  Maybe you noticed we're a day late returning.  Damon, our VP for Admin. and the publisher of these e-pistles, was delayed two nights--and put up in nice hotels--by Air Canada, due to its difficulty returning him from Brazil.  Where, by the way, he celebrated his 30th birthday by hang-gliding off a cliff in Rio.  By comparison, my and my wife's adventures were tame:  Singapore, Melaka and Koala Lumpur, Malaysia, ending on the island of Tioman in the South China Sea for two nights.  But we're home, rested and ready, so here goes. *** 

 

LTC BULLET:  WHAT STATES SHOULD DO ABOUT THE DRA, LTCI AND HEC 

LTC Comment:  The Flint Hills Center for Public Policy, a small think tank in Wichita, Kansas, is a dynamo of analysis and activism on Medicaid.  Its adjunct scholars, including Matt Hisrich and Michael Bond of the Buckeye Institute in Ohio and historian Greg Schneider, have published dozens of op-eds, articles, and reports on Medicaid reform.  Flint Hills' long and detailed "Medicaid Handbook," distributed to all state legislators and the media, is a treasure chest of information, analysis and advice available at http://www.flinthills.org/content/view/37/1/

Now add another arrow to Flint Hills' Medicaid quiver.  Following below are the press release and executive summary of a new report titled "Plain(s) Talk on Medicaid and Long-Term Care Financing in Kansas:  A Case Study of Medicaid and LTC Financing in Kansas."  Read it at www.flinthills.org.  This study, funded with help from a grant by the Milbank Foundation for Rehabilitation, was directed by the Center for Long-Term Care Reform and authored by Center president Stephen Moses. 

We thank Flint Hills' president George Pearson for pushing so hard for so long on Medicaid reform and for retaining the Center for this work.  Special thanks to Flint Hills Adjunct Scholar Professor Greg Schneider of Emporia State University for organizing the site visits, participating in the interviews, and publicizing the report through op-eds, talk radio, television appearances, and personal briefings for Kansas legislators and their staffs. 

If your first thought is "What can I learn from Kansas?," you have a very pleasant surprise coming on a whole range of issues at www.flinthills.org.  

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NEWS RELEASE 

FOR IMMEDIATE RELEASE
September 18, 2006
Contact: Greg Schneider, (316) 634-0218 

Plain(s) Talk on Medicaid in Kansas 

(WICHITA) – The Flint Hills Center for Public Policy announces the publication of a major new paper on the condition of Medicaid and Long Term Care in Kansas. 

“Plain(s) Talk on Medicaid and Long-Term Care Financing in Kansas” offers a powerful argument for reform of long term care financing in the state, arguing that continued Medicaid financing of the majority of LTC is unsustainable given the cresting demographic wave of the baby boom generation. Medicaid spending is projected to consume $2.7 billion of the Kansas budget in the 2007 fiscal year.

The Medicaid program, designed as a safety-net for those truly in need, currently funds an unsustainably high portion of LTC. Middle-and-upper-income Kansans can currently qualify for Medicaid LTC due to eligibility rules that undermine the program’s original intent. 

Stephen Moses argues instead for the use of untapped home equity and the purchase of long-term care insurance, policies which would encourage individual responsibility in the financing of long term care. Such changes will allow for limited state resources to be dedicated to the poor rather than to people who should save, invest, or insure for long-term care. 

Author Stephen Moses of the Center for Long Term Care Reform in Seattle, a nationally recognized expert on Medicaid and long term care, visited the state in July. While in Kansas, Moses spoke to a variety of individuals with interest in Medicaid, including representatives from the state legislature, the governor’s office, SRS, nursing home providers, insurance agents and elder law attorneys. His recommendations for reform establish a powerful incentive to develop a sustainable system of long-term care in Kansas.

For media appearances and interviews, contact Flint Hills Center senior fellow Greg Schneider at greg.schneider@flinthills.org or (316) 634-0218. For copies of the report contact inquiries@flinthills.org 

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The Flint Hills Center for Public Policy is an independent voice for sound public policy in Kansas. As a non-profit, nonpartisan think tank, the Center provides critical information about policy options to legislators and citizens. For more information, please visit our web site at www.flinthills.org or contact us at (316) 634-021 or inquiries@flinthills.org

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Executive Summary 

o  Since 1965, government (mostly Medicaid) has paid for the vast majority of all professional long-term care (LTC) services (mostly nursing home care) without requiring significant spend-down of personal assets. The public thereby largely became anesthetized to the risk of LTC. Individuals rarely buy insurance, for instance, or use home equity to pay the expenses associated with care. Instead, they too often end up depending on public financing. The result is that the whole system is teetering on financial collapse, unable to fund care of consistently high quality either in nursing homes or in less institutional settings. 

o  Demographically, Kansas is no worse off than most states and better off than many. 

o  Kansas has cost-effectively evolved its LTC service delivery and financing system toward less nursing home and more home care so far, but future prospects for continued success are questionable. 

o  Medicaid's LTC and other medical services for the elderly place a heavy strain on state finances, divert resources from other priorities such as children, and pose a fiscal challenge for the future. 

o  Generous and elastic Medicaid LTC eligibility criteria bode ill for Kansas' ability to fund home-based and nursing home care in the future. 

o  Although operating a reasonably successful Medicaid estate recovery program, Kansas is clearly not maximizing potential recoveries. To the extent recoverable wealth remains unrecovered, Kansas Medicaid is operating as "inheritance insurance" for heirs instead of as a LTC safety net for people in need. 

o  Home equity conversion is an enormous but largely untapped potential funding source for LTC in Kansas that could substantially relieve fiscal pressure on Medicaid and state taxpayers except that Medicaid exempts the home and all contiguous property up to as much as $750,000. 

o  Although quality affordable LTC insurance is available in Kansas, too few people buy it. This is partially because of the cost and complexity, but mostly because consumers do not perceive that LTC is a big financial risk for them. In fact, they are right because of the generous availability of Medicaid-financed care. 

o  Kansas should implement, enforce, and publicize new federal rules and guidelines from the Deficit Reduction Act of 2005 in order to restrict Medicaid LTC eligibility, discourage Medicaid estate planning, and encourage private financing alternatives like home equity conversion and LTC insurance.