LTC Bullet: Adios, DRA?

Wednesday, June 3, 2009


LTC Comment: The DRA '05 helped preserve Medicaid LTC benefits for the needy and encourage responsible LTC planning for others. Is it doomed to repeal? Answers after the ***news.***

*** TODAY'S LTC BULLET is sponsored by Claude Thau, a Master General Agent who serves LTCi producers nationwide. Claude is the lead author of the Towers Perrin Broker World Individual and Group LTCi Surveys. He helps you build whichever market suits you best (individuals, executive carve-out, work-site, affinity, financial institutions, referrals from other professionals, etc.). Claude has been active in the State Partnership movement and campaigns for independent review of LTCi claims. Test Claude by calling 800-999-3026, x2241 to ask questions or get references or email ***

*** STATE X UPDATE. Two weeks ago we announced a special project in a state to remain anonymous for now. I called it a "Unique LTC Reform Opportunity." Read the LTC Bullet about the project here. We appealed for special contributions totaling $5,000 to enable me to (1) spend a week in State X and (2) write a report listing ways to improve Medicaid and save money by promoting responsible LTC planning. Your response has been exceptional. We've almost reached our goal. So far, 11 Center members have pledged $4,450 and we've received $2,800. Another donor gave $5,000 directly to the state think tank we'll work with on the State X project. So, bottom line, we're already able to plan a bigger and better project than previously envisioned. But it would be great to close that remaining $550 gap to reach our original $5,000 goal. All donors are added to a special email list to receive updates on the State X project before they're announced publicly. So don't miss this chance to become a State X Project insider. Email your pledge to or and follow up with a check to the Center for Long-Term Care Reform, 2212 Queen Anne Avenue North, #110, Seattle, Washington, 98109. Thanks for your support. ***

*** LTC GRADUATE SEMINAR. I gave one and two hour versions of our "LTC Graduate Seminar" 100 times to over 5,000 financial professionals on the LTC Consciousness Tour. These programs were big hits as you can see from the testimonials here. If you missed out, don't worry. You can take the full 8-hour LTC Graduate Program online in webinar form. Check it out here. Click on "View Webinar" to hear me describe the program. Hit "Online Version" for details in text form. If you're already a member of the Center for Long-Term Care Reform, you can access a full transcript of the two-hour version of the LTC Graduate Seminar in "The Zone" here. So, we've got you covered. To pursue any or all of these options, contact Damon at 206-283-7036 or ***



LTC Comment: Last week an insurance industry lobbyist emailed me this discouraging message:

"Congress is contemplating a massive Medicaid expansion starting with a rollback of the 5 year look back provision passed under DRA. It will revert to 3 years. Hold on to your hats and wallets."

Gee, what a great idea! Expand Medicaid and let prosperous people self-impoverish more easily to get the welfare program's most expensive benefit. That would be like beating your head against a wall and attributing the resultant headache to not knocking it hard enough.

I'm dubious that any Congress would make such a silly mistake. But then, when the other party controlled both House and Senate, it pushed through a Medicare expansion that added $11 trillion to that program's hopelessly unfunded liabilities. Go figure.

So, anything is possible. But not very long ago, the Congressional Budget Office (CBO) recommended doing just the opposite. CBO proposed saving $220 million between 2010 and 2019 by LENGTHENING the Medicaid transfer of assets look-back period from five to seven years.

[Source: Congress of the United States, Congressional Budget Office, "Budget Options, Volume I: Health Care," Publication Number 3185, Washington, D.C., December 2008, Chapter 10, page 185,]

In the same document, CBO proposed to: "Require Deposits to Individual Accounts for Purchasing Long-Term Care Insurance" because "Increasing the ability of individuals to purchase private long-term care insurance could help reduce the strain on federal and state budgets." [Source: Congress, ibid. p. 188.]

That measure would cost $214 million, almost exactly the same amount as expanding the Medicaid look-back period would save. Now there's a trade off that makes sense.

But public policy that makes sense may not be a priority in government right now. Consider these facts:

-- The transfer of assets look-back period for LTC assistance in Germany is TEN YEARS. Ours is only five years and Congress contemplates cutting it back to three.

-- The United Kingdom allows only a $35,000 home equity exemption for long-term care. Anything over that and you have to use the home's value to pay for care. We exempt a minimum of $500,000 and up to $750,000 in New York and California.

Ironically, we're more generous with our scarce public welfare resources for long-term care in the United States than they are in those two European, supposedly socialized, health care systems.

The USA must be rolling in Medicaid money. Thank goodness California and New York are flush with revenue. It's lucky federal taxpayers in the rest of the country don't mind paying half the cost of those states' generous Medicaid LTC programs. (Yeah, right.)

If it's starting to sound like we're drifting into la-la-land here, don't blame the messenger. Hold the politicians and bureaucrats to account who wrought this Rube Goldberg LTC service delivery and financing system.