LTC Bullet:  Who Ya Gonna Call? 

Wednesday, October 31, 2007 


LTC Comment:  Happy Halloween!  If you’re uninsured and need LTC in the future, you may as well call Ghostbusters as Medicaid.  Details after the ***news.*** 

*** TODAY'S LTC BULLET is sponsored by, which has provided LTCI sales, marketing, presentation systems and custom consumer websites for over seven years and helped more than 5,000 subscribers attain higher levels of LTCI sales success.  Explore their suite of products and sign up to receive their free monthly sales tip at  Contact:  Jennifer Sullivan, 877-603-2771 or  We thank for sponsoring this LTC Bullet and for supporting the Center for Long-Term Care Reform’s 2008 “National Long-Term Care Consciousness Tour.”  If you'd like to sponsor a Bullet and have an ad on the LTC Blog at, contact Damon at 206-283-7036 or *** 

*** LTC TOUR UPDATE.  I’m calling all Center members in Florida, Georgia, Alabama, Mississippi, South Carolina, North Carolina and Tennessee.  We’re enlisting Regional Representatives to work with me as I come through their territories on the Center’s 2008 “LTC Tour.”  In just our first few days of planning and scheduling, we’ve nailed down seven events and received pledges of support and partnership from 21 people and organizations.  Don’t wait for me to call you.  Every event I schedule locks up my itinerary and reduces the days and places available for new events.  If you’d like to be part of the LTC Tour and work with me next year in your area, call now from anywhere in the U.S.  We’ll schedule your event or activity.  Then everyone else will have to work around your pre-committed time.  We’ll work out the details as the dates approach.  Call Steve Moses at 206-283-7036 or email *** 

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LTC Comment:  America’s unfunded entitlement liabilities are a frequent theme in these LTC Bullets.  Is the connection between Social Security’s and Medicare’s $91 trillion fiscal hole and long-term care financing clear?  Let me elaborate on that before we discuss today’s gloomy news. 

Medicaid is the predominant payor of LTC in the U.S., not just for the poor, but for the middle class and even many of the legally-savvy affluent.   

But Medicaid doesn’t stand alone.  People on Medicaid have to contribute their income to offset Medicaid’s cost of care.  For the elderly getting LTC paid by Medicaid, most of their income derives from Social Security.  So when Social Security cuts benefits by nearly a quarter, as the Social Security Administration warns us every year they’ll have to do someday absent a miraculous fiscal fix, Medicaid LTC financing will bear the brunt.  Strike one for Medicaid LTC. 

But that’s nothing compared to the damage a default by Medicare will cause.  Medicare pays 16 percent of the cost of nursing home care in the U.S. and pays very generously.  But Medicare’s $75 trillion unfunded liability will sink the program in the future.  Even if it survives as a means-tested welfare program, Medicare won’t be able to pay nursing homes and home health agencies as generously in the future as it has in the past.  When Medicare reneges, the extra LTC financing burden will on Medicaid which is unsustainable now and totally hopeless in the event.  Strike two for Medicaid LTC.   

Strike three for Medicaid LTC is that even before the foregoing calamities occur, Medicaid already underfunds long-term care disastrously.  Here’s the story, followed by our comment: 


New Medicaid Study:  Underfunding of Seniors' Long Term Care Undermines Medicare Stability 

WASHINGTON, Oct. 3 /PRNewswire-USNewswire/ -- A new independent analysis of the nation's Medicaid program by the accounting firms BDO Seidman/Eljay, LLC estimates states are underfunding the actual cost of providing seniors' critical nursing home care by at least $4.4 billion annually, or, $13.15 per patient day -- representing a dramatic 45% increase from 1999 through 2007. The new study also found that the states with the greatest disparity between the actual cost of providing quality care and Medicaid reimbursements are, in order of severity, Illinois, New Jersey, Wisconsin, Minnesota, Vermont, New Hampshire, Missouri, Delaware, Washington and Massachusetts. 

In releasing the new report at a Capitol Hill briefing on pending FY 2008 health and budget issues, David Hebert of the American Health Care Association said it is essential for policymakers, key legislative staff and all long term care stakeholders to understand the growing inter-dependence between Medicaid and Medicare - and how according to the study's findings, the long term care sector operates at a 2.5% negative margin when factoring both Medicare and Medicaid funding into the overall long term care financing equation. "As federal and state lawmakers consider cuts or freezes in either Medicare or Medicaid the significance of the overall negative operating margin cannot be discounted," the AHCA President and CEO said. "These findings are further evidence that policymakers and the Medicare Payment Advisory Commission should take into account the symbiotic nature of Medicaid and Medicare financing as key healthcare funding decisions are made." 

"The federal government has a moral responsibility to cover at least the overhead costs of caring for those who are most in need. The federal government's practice of passing the buck must come to an end -- right here and right now. At stake is the continued existence of high quality care for our senior citizens and disabled American citizens," stated U.S. Representative Steve Kagen (D-WI-8) at the Hill briefing. 

Source:  Insurance News Week, 10/8/7 


LTC Comment:  As most political candidates, public officials and senior advocates ignore this “hand-writing on the wall,” America speeds carelessly toward that brick wall of fiscal reality. 

Most of us have little hope to reverse this crash course of irresponsible public policy, but we’re doing our best here at the Center for Long-Term Care Reform. 

In the meantime, we can all redouble our efforts to sound the warning.  And those of you who market products like long-term care insurance and reverse mortgages can do so much more. 

You can help people plan to protect themselves and their families from the risk and cost of long-term care.  For everyone who accepts that responsibility, the load for America’s social safety net is reduced. 

So stand proud and when the media or government officials bad mouth your products, tell them this.  People who insure privately have a contract enforceable in a court of law and a product actuarily underwritten with hard-dollar reserves backing it up. 

Then ask them what kind of guarantee they give for Social Security, Medicare and Medicaid.