LTC Bullet: The Trojan Horse of LTC
October 23, 2007
Comment: Health Care
News warns state legislators throughout the United States about New
York's LTC Compact proposal after the ***news.***
SILVER BULLET ORDERED. The
"Silver Bullet of Long-Term Care," our media magnet for the
Center's 2008 "National Long-Term Care Consciousness Tour" has
been ordered. Delivery is
scheduled for late December 2007. I'll
begin our LTC Wake Up Tour in the southeast in January.
For details on the tour and a picture of the Silver Bullet, an
Airstream trailer I'll call home for a year on the road, go to www.centerltc.com.
CENTER SEEKS REGIONAL REPRESENTATIVES.
We're looking for experienced LTC professionals to work with me
and the Center on next year's LTC Tour.
Carriers, brokers and individual producers are invited to express
interest now. Contact Steve
Moses at 206-283-7036 or firstname.lastname@example.org.
We'll work together on your home ground to protect more people
for LTC, raise public awareness about LTC planning, and advance the
cause of responsible LTC public policy. ***
80% DISCOUNT. I'm
"taking the show on the road" next year so we can reach more
people with the Center's message for much less cost.
Instead of the flat fee of $5000 we have to charge to get me
across the country for speeches, training and other events, I'll be in
the neighborhood and doing one-day events for $1,000.
Even less if you pledge in advance and work with us to design
programs that will pay their own way for the Center and you.
Inquire by replying to this Bullet. ***
BULLET: THE TROJAN HORSE OF
Comment: Proponents of New
York's LTC Compact proposal think it should be a model for the rest of
the country. Not so.
Why? Read on.
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.
is circulated free of charge to state legislators throughout the United
States. Read Health
Care News at http://www.heartland.org/Publications.cfm?pblId=2.
Find Steve's article in the November 2007 issue at http://www.heartland.org/Article.cfm?artId=22153.
Republished below with permission.
Stephen A. Moses, "New
York State's LTC Compact a Trojan Horse,"
Health Care News, Vol. 8, No. 9, November 2007; http://www.heartland.org/Article.cfm?artId=22153.
York State's LTC Compact a Trojan Horse
for Baby Boomers' long-term care (LTC) is becoming a huge burden on
and Medicare pay for most professional LTC today, but those programs
will soon be in desperate financial straits as Boomers stop paying in
and start pulling out benefits. Few signs indicate private financing
sources, such as insurance or reverse mortgages, will come to the
when I learned New York's Senate Bill 116 aims to relieve the public
financing burden of LTC, encourage personal responsibility, and attract
new private funding, my ears perked up.
to a grant from philanthropist Thomas Jackson of [New York], New York
and a contract with the Flint Hills Center for Public Policy of Wichita,
Kansas, I spent several weeks studying the New York Long-Term Care
Compact proposal. What I found is that the program will actually
undermine its stated aims.
LTC Compact idea is the brainchild of elder law attorneys Vincent Russo
and Howard Krooks and an LTC insurance executive, Gail Holubinka, who
seek a better way to fund LTC.
cornerstone of the Long-Term Care Compact is to create a partnership
between seniors and people with disabilities and government wherein
seniors and people with disabilities will pay a fair share for Long-Term
Care services with the government's support," Russo and Krooks
would it work? A chronically ill patient who needs long-term care could
become a Compact participant by pledging to spend for qualified LTC
services an amount equal to half his non-housing assets (not counting
the first $20,000 for someone with less than $40,000 in total) or the
cost of three years in a nursing home (about $300,000 depending on
region of residence), whichever is less.
spending the pledged amount for approved LTC services, the participant
would become a Compact beneficiary, eligible for a Compact subsidy--an
amount of payment for future LTC services equal to the Medicaid rate for
the same or a similar service.
Compact beneficiary would be entitled to receive future LTC services
funded by the Compact program at the Compact subsidy rate, in accordance
with an assessment of need and a plan of care, by paying out of pocket
an additional 10 percent of the Compact subsidy rate plus an annual
participation fee not to exceed 25 percent of personal income.
benefits of participating in the LTC Compact would be substantial,
compared to circumstances imposed by Medicaid eligibility. Compact
beneficiaries would preserve remaining resources after the Compact
pledge amount is satisfied. They would not endure the additional
resource or income limitations and lien or estate recovery requirements
imposed on Medicaid recipients. They could purchase qualified services
from any willing provider at the Compact rate (i.e. the Compact subsidy
plus the beneficiary's 10 percent co-payment), instead of being locked
into Medicaid providers.
participants could satisfy their required pledge amounts and/or their
service co-pays and annual participation fees through private insurance
policies, if they had the foresight to buy them while still insurable.
Such policies would likely cost considerably less than their full
lifetime coverage in the absence of the Compact program.
refused LTC insurance twice could contribute, or have contributed on
their behalf, up to $10,000 per year into a "qualified LTC savings
account" to fund their pledge amount. Special conditions and
protections would apply for married Compact beneficiaries.
is all this necessary? During State Assembly hearings on the proposal
last year, Aging Committee Chairman Steven Englebright (D-Setauket)
said, "Our current long-term care financing structure is primarily
private pay and of course, Medicaid, with a small percentage covered by
long-term care insurance. Someone in need of long-term care can expect
to quickly exhaust their entire life savings and resources, a very scary
proposition to that individual and their spouse."
New Yorkers are devastated by huge catastrophic LTC costs, so the state
needs to come to the rescue with a program that puts only half their
assets at risk and protects them against all future costs--no matter how
politically seductive as the LTC Compact proposal is, it has myriad
there is no evidence New Yorkers are spending down catastrophically for
LTC costs. Medicaid, Medicare, and Social Security pay for the vast
majority of all professional LTC services. So the real problem is
exactly the opposite of the imaginary one the LTC Compact wants to
should multimillionaires be able to pay for three years of nursing home
care (roughly $300,000 in New York), and then get state and federal
taxpayers to cover all additional LTC expenses? Furthermore, how would
requiring people of lesser means to "pledge" half their assets
encourage them to buy private LTC insurance, when all their assets are
supposedly at risk now and they don't buy the product?
would the LTC Compact really help LTC providers who are currently paid
less than the cost of providing the care by Medicaid today? No. The
Compact proposes to tie providers to a maximum reimbursement level of
the penurious Medicaid rate plus 10 percent.
Medicare, with its $75 trillion unfunded liability, retrenches, it will
no longer help support Medicaid providers. As Social Security, with its
$16 trillion unfunded liability, retrenches, it will no longer
supplement Medicaid's cost of LTC. Medicaid providers will be left with
too little to fund quality care.
scrutiny of the LTC Compact leads to this conclusion: Legislative smoke
and mirrors will not solve the LTC financing problem. The only solution
is to return Medicaid to people truly in need and implement real asset
spend-down (including home equity) for others.
the perverse incentives in public policy that today discourage
responsible LTC planning, and people will pay their own way with
personal wealth, reverse mortgages, and private insurance.
Moses (email@example.com) is president of the Center for Long-Term
Care Reform in Seattle.