Bullet: Don't Mess With
Texans' LTC--Fix It!
Friday, March 16, 2007
LTC Comment: Texas
is a bellwether for what's right (good intentions and creativity) and
what's wrong (counter-productive public policy) in long-term care.
Our analysis after the ***news.***
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LTC BULLET: DON'T
MESS WITH TEXANS' LTC--FIX IT
LTC Comment: The
Center for Long-Term Care Reform's study of Medicaid and long-term care
financing in Texas was published yesterday by the Texas Public Policy
Foundation (TPPF) of Austin, TX.
TPPF describes itself thus at www.texaspolicy.org:
"The Texas Public Policy Foundation is a 501(c)3 non-profit,
non-partisan research institute guided by the core principles of
individual liberty, personal responsibility, private property rights,
free markets and limited government.
The Foundation’s mission is to improve Texas by generating
academically sound research and data on state issues, and by
recommending the findings to opinion leaders, policymakers, the media
and general public."
I want to acknowledge the invaluable assistance and
collaboration of Mary Katherine Stout in every aspect of the Texas
project. Ms. Stout is
TPPF's Vice President of
Policy and the Director of its Center for Health Care Policy Studies.
Following is my "commentary" about LTC in
Texas. You can find it also
To read the full report, titled "Don't Mess With Texans' LTC--Fix
It," go to http://www.texaspolicy.com/pdf/2007-RR05-MedicaidLTC-Moses.pdf.
"Don't Tread on Texans' Long-Term Care-Fix It!
By Stephen A. Moses
If the nation isn’t prepared for the aging baby
boomers, it isn’t because the boomers sneaked up on us. For some time,
we have seen the warnings and been conscious of the coming “age
wave.” The problem is that few have taken heed and been moved to act
While national leaders warn about the coming
collapse of Medicare and Social Security, state lawmakers grow
increasingly concerned about meeting the increasing demand and cost of
Medicaid long-term care as the boomers age. To stave off the coming
disaster, state lawmakers need to respond quickly to embrace every ounce
of the limited federal flexibility available.
Most Medicaid reformers look to how states can
encourage people to plan for their long-term care through private
long-term care insurance. Too often, these lawmakers think that merely
educating people on the differences of Medicaid and Medicare and which
pays for long-term care will be enough to reshape people’s behavior.
But the truth is that it doesn’t matter whether long-term care is paid
for by Medicare, Medicaid, or Santa Claus—the important thing is that
somebody pays, and we know this because people are not going without
The more important thing is for federal and state
officials to recognize why they have a problem with long-term care. To
wit, the government's been giving it away since 1965, crowding out
private financing alternatives like personal spend down, reverse
mortgages and long-term care insurance. It’s no wonder most Texans
don't worry about long-term care, use their home equity to pay for it,
or purchase long-term care insurance against the risk, and instead end
up dependent upon public assistance for long-term care as the only
alternative to consuming their own wealth and their heirs' inheritances.
The second thing is that although Medicaid, the
primary payer of long-term care services in Texas, is a means-tested
public assistance program, it is actually rather easy to qualify for
Medicaid long-term care services. Generous eligibility guidelines and
well-known and exploited loopholes make it easy for Texans with
substantially higher income and assets to qualify by purchasing exempt
assets with otherwise countable resources and retaining the counsel of
Medicaid estate planning specialists.
Medicaid is too often used as inheritance insurance
for those who have resources that should be used to support their own
long-term care. Although Medicaid was intended to be a safety net for
the few who truly have no other alternatives for their long-term care
needs, it now serves the poor and prosperous alike and allows people to
plan for Medicaid to pay their bills. As a consequence, the program will
soon feel the weight of a growing caseload among those who are already
the program’s most expensive population to serve, which will threaten
the safety net for the truly needy.
What should Texas policy makers do about this? To a
large degree, their hands are tied by federal laws and regulations. But
to the extent that they can, they must begin to target Medicaid to the
truly needy and use the savings to educate the public about long-term
care and to incentivize the use of private financing alternatives.
As a result, seniors will get better access to
higher quality care across a wider spectrum of care if they pay
privately, and Medicaid will be able to do a better job for a smaller
number of people who truly need it. The long-term care market will
respond in kind, giving people the services they demand at the best
prices. Competition will reward providers richly for providing benefits
that the people want, and those seeking long-term care services, whether
at home or in an institutional setting, will have greater choice with
Perhaps most importantly, people will have an
interest and an opportunity to plan for their own long-term care.
Of all the examples where government programs have
crowded out private activity, the most egregious and fiscally damaging
have been the impacts of Medicare and Medicaid on planning for long-term
care. Our window of opportunity to set these programs back on sound
footing is quickly closing and nothing short of fundamental reform will
do. If we continue to deny the problem and simply kick it forward into
the future, we will find that the “inheritance” we’re trying to
leave for our kids may not be enough to cover the tax bill with which
we’ve stuck them.
Stephen Moses (firstname.lastname@example.org) is president
of the Center for Long-Term Care Reform in Seattle (www.centerltc.com)
and a Senior Research Fellow at the Texas Public Policy Foundation in
Austin, Texas. Moses’ new report on Medicaid Long-Term Care in Texas
is available through the Foundation at www.texaspolicy.com.