Bullet: States Can Fix Long-Term Care Problems
April 17, 2007
Comment: Steve Moses's
latest column for Health Care News explains how "States Can
Fix Long-Term Care Problems" after the ***news.***
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LTC BULLET: STATES
CAN FIX LONG-TERM CARE PROBLEMS
Stephen A. Moses, "States Can Fix Long-Term Care
Problems," Health Care News, Vol. 8, No. 4, April 2007;
Can Fix Long-Term Care Problems
can a state cope with the growing cost of Medicaid long-term care? The
Texas Public Policy Foundation in Austin tackled that question in a
study I conducted for it in December 2006. The lessons we
learned--explained in the Foundation's February 2007 report, "Don't
Tread on Texans' Long-Term Care--Fix It"--apply to any state.
care (LTC) for the frail or infirm elderly is very expensive and is
predominantly financed by Medicaid, a means-tested public assistance
program, both in Texas and nationwide. Medicaid-financed LTC for the
elderly is a worrisome public policy challenge because of the oncoming
demographic "Age Wave" as the Baby Boomers reach retirement.
problem is aggravated in Texas by rapid population increases and
relatively high percentages of poor, minorities, older women, and the
disabled elderly--the populations most likely to need long-term care.
I look forward to the future aging of the population, especially the
growth of the oldest old, I see us straining even to cover the
[relatively lower] cost of home and community-based services," said
Texas Health and Human Services Executive Commissioner Albert Hawkins.
"The problem is the gross numbers, not just the per-recipient
costs. It's just the raw number of people getting older in Texas."
who receive Medicaid long-term care benefits must contribute most of
their income toward their cost of care, which means Medicaid is
vulnerable to any future cutbacks in seniors' income from Social
Security or private pensions. Supplemental sources of LTC
financing--such as LTC insurance or reverse mortgages--are minimal in
Texas, and Medicare's future contribution toward nursing home and home
health care costs is vulnerable due to that program's large unfunded
major nursing home and home health care providers in Texas claim
Medicaid reimbursements for their services are too low, impeding
recruitment and retention of high-quality caregivers, and are
accompanied by excessive, often counterproductive regulations.
representative of the Texas Association of Home Care told me, "Bill
Miller, the Bar-B-Que guy, pays [wait staff] $7 per hour, but the
highest wage home health workers can get is $6.50 per hour." He
noted, "In Texas we're already at the bottom of the barrel. No
state pays less."
was very discouraging to hear.
policymakers have responded to the challenge of funding LTC by trying to
cover as many people as possible in Medicaid-financed home and
community-based care, which they note is less expensive per capita than
nursing facility care.
depending on Medicaid may make overall LTC costs greater, and thus such
a strategy may not be cost-effective. Moreover, depending on Medicaid
may discourage personal responsibility and early planning by individuals
way to relieve the LTC financing burden on Medicaid is to increase
private funding sources, but that will not happen as long as Medicaid
LTC benefits are easy to obtain after the insurable event occurs.
the conventional wisdom that Medicaid eligibility requires total
impoverishment, the truth is most elderly Texans with a nursing home
level of medical need qualify easily for Medicaid-financed LTC.
Middle-income and affluent Texans routinely qualify for benefits.
access in Texas to Medicaid-financed long-term care benefits crowds out
the market for private LTC insurance and reverse mortgages, which might
otherwise contribute significantly toward total LTC costs.
Texas Health and Human Services Commission acknowledged as much in
testimony before a joint hearing of the state Senate Committee on State
Affairs and Senate Committee on Health and Human Services last October,
noting, "Interplay of Medicaid in the LTC system as a whole has not
supported personal responsibility for future care needs planning"
and, "Medicaid coverage of LTC may serve as a disincentive to
private purchase of LTC insurance or other financial planning options
for LTC needs."
top of Texas Medicaid's already-generous LTC eligibility rules, many
Lone Star lawyers specialize in artificially impoverishing their
affluent clients to qualify them for public assistance. Here's an
example from an Internet ad for the Financial Aid Center for Long Term
Care, last accessed in late November:
specialize in helping single patients qualify for Texas Medicaid
assistance, while preserving most of their assets and savings for their
families. ... We show you how to transfer assets and qualify for Texas
Medicaid sooner. ... [W]e've helped thousands of families qualify for
Medicaid while saving millions of dollars for people just like you. ...
Single Texas Residents can legally transfer up to 100 percent of their
assets to their family and still quickly qualify for Medicaid to pay for
Nursing Home or other long term care expenses ... even if you are
already in care."
federal Deficit Reduction Act, enacted February 8, 2006 and already
implemented in large part by Texas, took some critical steps toward
reducing over-utilization of Medicaid, but these measures are too little
to solve the problem. Texas's important, though belated, implementation
of a Medicaid estate recovery program will help recoup some of the
wealth sheltered from LTC costs in the past.
structured as it currently is, the estate recovery program will likely
bring in only a fraction of the revenue it should.
reform in general, and for LTC in particular, is highly controversial
and politically sensitive. Politicians rarely win elections, and public
officials seldom protect their jobs, by reducing publicly financed
benefits and encouraging more personal responsibility.
"Don't Mess with Texans' Long-Term Care" may be popular
short-term advice, although staying the course could become politically
deadly over time. Better advice is "fix LTC" before it's too
late. Unfortunately, federal Medicaid rules make that very difficult to
line: To the extent possible under federal law, states should target
Medicaid LTC benefits to people truly in need; prevent Medicaid from
being free "inheritance insurance" by actively recovering from
estates; and use some of the savings to educate and incentivize everyone
else to plan early, save, invest, and insure for long-term care.
Moses (firstname.lastname@example.org) is president of the Center for Long-Term
Care Reform in Seattle.
more information ...
"Don't Mess With Texans' Long-Term Care--Fix It," by Stephen Moses and Mary Katherine Stout, Texas Public Policy Foundation, February 2007, http://www.texaspolicy.com