Bullet: LTC Bias
Thursday, January 25, 2007
LTC Comment: Bias
in LTC policy plus national coverage of Jesse Slome's LTCI Summit after
*** WEBINAR. Yesterday's
LTC E-Alert about our forthcoming experimental, members-only
"webinar" garnered more than 40 registrations in less than 24
hours. Seems like we're on
to something here. We'll
try to honor all the registrations so far.
Otherwise, hang tough. We'll
offer more web-based programs and education after this practice session
is successfully completed. ***
*** BOOMER BUCKS.
Remember the article by Barbara Whelehan we took to task in
"LTC E-Alert #7-009: We
Fight Bad Media, Again" on Friday, January 19, 2007 (http://www.centerltc.com/members/e-alerts/ltc_ea7-009.htm)?
True to her word, the author published extensive "reader
Check it out. You'll find letters from Chris Perna, President of MedAmerica,
Phyllis Shelton, well known author and LTC sales trainer, and yours
*** VIRTUAL TRADE SHOW.
Isn't this an interesting idea?
Follow up if you'd like to learn more about LTC providers'
perspectives on long-term care issues.
Here's the email invitation we received:
Colleague: Tired of the
hassle, expense and wasted time of traditional trade shows?
We have a unique solution: The
2007 McKnight's Online Expo! This
FREE two-day event takes place March 14-15.
It gives you the benefits of a
traditional trade show such as interactive presentations led by
some of the country's top
experts, as well as interactive vendor booths.
Get personal attention from the comfort of your own desk - or
wherever your computer is. No
hassles, expenses or wasted time! To sign up for this FREE event or learn more, simply visit:
LTC BULLET: LTC
LTC Comment: Steve
Moses's articles on (1) bias in long-term care public policy and (2) the
recent LTCI Summit conference in Austin, TX are republished below with
permission from Health Care News.
is The Heartland Institute's national monthly outreach publication for
free-market health care reform. The
Heartland Institute is a 501c3 charitable, nonprofit organization
devoted to discovering and promoting free-market solutions to social and
economic problems. Visit
Heartland at www.heartland.org.
Health Care News at http://www.heartland.org/Publications.cfm?pblId=2.
Find Steve's articles in the February 2007 issue at http://www.heartland.org/Article.cfm?artId=20493
in Long-Term Care Favors Nursing Homes, Government"
By: Stephen A. Moses
pervades America's long-term care (LTC) service delivery and financing
system is biased in favor of nursing home care--which Medicaid pays for
but which most people would rather avoid. It is biased against home- and
community-based care--which Medicaid is much less likely to pay for, but
which most aging Americans prefer when they require LTC.
most importantly, LTC in the United States is biased toward public
financing (Medicaid and Medicare) and against private financing
alternatives such as long-term care insurance (LTCi) and home equity
pays, directly or indirectly, for the vast majority of all paid LTC
nationwide. According to the latest data available from the Centers for
Medicare and Medicaid Services (CMS), Medicaid paid 44.3 percent of
nursing home costs in 2004, and Medicare paid 13.9 percent.
top of that, more than half of the 27.9 percent of nursing home costs
paid "out of pocket" were really just contributions from the
Social Security income of people already on Medicaid. Thus, direct or
indirect government payments accounted for nearly 75 percent of all
nursing home expenditures.
Medicaid and Medicare paid 69.7 percent of all home health care costs in
health insurance contributed only 7.8 percent of financing for nursing
home care, and 12 percent of home health care costs.
not surprising private insurance plays such a small role in financing
nursing home and home health care. Only 15 percent of seniors and 5
percent of baby boomers have purchased private LTCi.
to a study by the National Bureau of Economic Research in 2004,
Medicaid-financed long-term care crowds out two-thirds to 90 percent of
the potential market for private LTCi.
for public financing and against private financing is deeply ingrained
in America's long-term care system. That won't change as long as
government pays for most long-term care, even for middle-income and
public policy demands tough love. In this case it means targeting
Medicaid LTC to those truly in need and encouraging everyone else to
plan early to save, invest, or insure for long-term care.
new Deficit Reduction Act of 2005 (DRA) constraints on Medicaid
eligibility, the Administration on Aging's "Own Your Future"
Long-Term Care Awareness Campaign, and the Sisyphean efforts of LTCi
agents to sell their product in spite of the obstacles they face are
progressing ... slowly but surely.
Moses (firstname.lastname@example.org) is president of the Center for Long-Term
Care Reform in Seattle.
more information ...
Interaction of Public and Private Insurance: Medicaid and the Long-Term
Care Insurance Market," by Jeffrey R. Brown and Amy Finkelstein,
National Bureau of Economic Research, December 2004, http://papers.nber.org/papers/w10989
Your Future Long-Term Awareness Campaign, http://www.aoa.gov/LTC/index.asp
Health Care Expenditures, by Type of Expenditure and Source of Funds:
Calendar Years 1997-2004," Centers for Medicare and Medicaid
Services, table 10, http://www.cms.hhs.gov/NationalHealthExpendData/downloads/tables.pdf
Care Conferences Upbeat"
By: Stephen A. Moses
2006 LTCi National Producers Summit, billed as "the largest LTC
[long-term care] insurance sales event of the year," convened in
Austin, Texas on November 4. Attending were 600 of the nation's leading
call them AMGs--altruistic, masochistic geniuses--because they struggle
to market a product (long-term care protection) that the government has
been giving away since 1965. And the challenge is even more complicated
than that because, as a direct result of generous public financing,
consumers remain in near-total denial about the need for LTCi coverage.
the conference mood was upbeat. Patriotic posters proclaiming
"Long-Term Care Insurance is Good for America" covered the
walls. Hopeful speakers thanked the government for new public efforts to
promote LTC planning, such as the Administration on Aging's "Own
Your Future" campaign, the National Clearing House for Long-Term
Care Information created by the Deficit Reduction Act of 2005 (DRA), and
the ongoing expansion of the LTC Partnership program intended to
encourage people to buy LTCi by partially forgiving Medicaid spend-down.
old saw, 'I'm from the government and I'm here to help you' is even true
this time," observed Roy Gosselin, Prudential's new national LTCi
Slome, president of the American Association of Long-Term Care
Insurance, who organized the conference and promoted LTC Awareness Week,
said new government support for private LTCi is a "quantum leap
forward" that will "absolutely increase sales."
Zesbaugh, CEO of Allianz Life Insurance Company of North America,
another LTCi carrier, said, "I think the marketability of LTCi will
increase because there will be reform to Medicare and Medicaid. There
will be more responsibility on individuals. In their current forms,
Medicare and Medicaid cannot last."
addressed the LTCi conference about provisions in the DRA--such as
capping Medicaid's home equity exemption and imposing longer, stronger
transfer of assets restrictions--that help target Medicaid toward more
needy people and thus encourage personal responsibility, early LTC
planning, and private financing alternatives like LTCi and reverse
maybe we're all just well-intentioned Pollyannas, hoping against hope
that government will get out of the way enough to give the LTCi market a
chance to succeed.
certainly seems that way when you see what Consumer Reports had to say
last November about those AMGs' efforts to awaken America to the risks
and costs of long-term care:
the people who sell long-term-care insurance have their way, you'll soon
feel even more agitated than you might feel already about your financial
future," the editors of Consumer Reports wrote. "The American
Association for Long-Term Care Insurance, the industry's trade group,
has dubbed November 5 to 11 Long-Term Care Awareness Week and provided
its 4,000 members with press kits to stir up local media interest in the
topic. Why the public-relations push? One reason might be that a lot of
money is up for grabs."
from a publication that has bashed private LTCi repeatedly for allegedly
high premiums and doubtful benefits, without ever warning readers about
Medicaid's access, quality, and reimbursement problems, nor cautioning
them about Medicare's $71 trillion unfunded liabilities that make its
future LTC coverage dubious at best.
bias permeates the media, adds to the public's denial of LTC risk, and
prevents market growth of private LTC financing products that could
relieve the fiscal strain on public programs.
other conference I want to highlight is an elder law symposium hosted by
the Notre Dame Law School on November 9. I was on a panel with three law
professors, two of whom spoke on the topic of "Who Should Pay for
Kaplan, a professor at the University of Illinois College of Law,
thought we should solve the problems of Medicaid-financed long-term care
by adding the benefit to Medicare. I responded that given Medicare's
fiscal problems, "that would be like adding deck chairs to the
Titanic after the incident with the iceberg."
A. Frolik, professor of elder law at the University of Pittsburgh,
preferred a mandatory long-term care insurance system, government
enforced, and based on compulsory payroll deductions along the lines of
systems now operating in Germany and Japan.
observed that both those countries' LTC systems are severely strained
financially, already economizing on benefits, and raising payroll
deductions to delay insolvency.
Stephen A. Moses
more information ...
"Long-Term Care: Brace Yourself for a Scary P.R. Push," ConsumerReports.org, November 2006.