LTC Bullet: Columbo Interviews Don Quixote of LTC

Tuesday, February 2, 2010

Seattle--

LTC Comment: I give a lot of media interviews every year, but this was the most fun. 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 Milliman Broker World LTCi Surveys. He helps you build whichever markets suit you best (individual, executive carve-out, work-site, affinity, financial institution, referrals from other professionals, etc.). Claude was selected by Senior Market Advisor as one of the 10 "Power People" in the LTCi industry in 2007 and was Chairman of the Board of the Center for Long-Term Care Financing. Test Claude by calling 800-999-3026, x2241 or email him at cthau@targetins.com to ask questions or get references. ***


*** PRESIDENT OBAMA released his $3.8 trillion Fiscal Year 2011 budget yesterday. It includes a $1.3 trillion deficit (34% based on very optimistic projections). Just to put it in perspective, that would be like you spending $6,000 per month with an income of $4,000 when you're already in debt up to your ears. Most significant for LTC financing the President proposes extending the temporary increase in the Federal Medical Assistance Percentage (FMAP) for six months (from January 2011 to June 2011) at an additional cost of $25.5 billion. To continue receiving that windfall states must agree to "maintenance of effort," i.e. NOT to do anything to tighten loose Medicaid LTC eligibility rules or hemorrhaging costs. ***

*** SCHOLARSHIPS AVAILABLE FOR ILTCI CONFERENCE IN NEW ORLEANS. $700 discount on registration for 2010 Intercompany Long-Term Care Insurance Conference in New Orleans March 14-17. To qualify, you must have had $50,000 of personal LTCI premium production in Calendar Year 2009 or within the 12 months prior to the date of your application. Application here. If you missed our detailed announcement, call Damon at 206-283-7036. ***

*** NASHVILLE CONFERENCE: Don't miss Phyllis Shelton's "Worksite and Combo Products Conference" convening in Nashville, Tennessee on May 24-26, 2010. Register by February 15th and save $200! Enjoy a registration reception with entertainment and a fun-filled barbecue dinner at the world famous Wildhorse Saloon in downtown Nashville. Limited to 200. Details here. ***

*** CONTEST. The American Association for Long-Term Care Insurance (www.aaltci.org) has announced its "2010 LTC Insurance Sales Awards" contest. Deadline to enter is February 28, 2010. Something new this year: "Rookie of the Year" competition. Click here for more information. ***

 

LTC BULLET: COLUMBO INTERVIEWS DON QUIXOTE OF LTC

LTC Comment: Long Term Living magazine is a trade journal for "continuing care professionals." Visit their website at www.ltlmagazine.com to subscribe.

LTL was a gold sponsor of our 2008 National Long-Term Care Consciousness Tour. We thank editor Maureen Hrehocik for permission to "reprint" the following interview. Read it online with pics here.

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Long-Term Living, Issue Date: January 2010, Posted On: 1/1/2010

"Just one more question"

by Gary Tetz

Like the great TV detective Columbo, Long-Term Living columnist Gary Tetz (Funny You Should Ask) always has one more question. In this bimonthly feature, he talks with long-term care leaders about anything that pops into his mind. He's as surprised as you are that they'll speak to him, and apologizes in advance for whatever inanity he might blurt out in the pressure of the moment.

This Month's Victim:

Stephen Moses

President, Center for Long-Term Care Reform, Seattle, Washington, http://www.centerltc.com

I don't know if he's part Mayan, but a lot of the scary things Stephen Moses predicts tend to come true. On the bright side, he hasn't said long-term care will end in 2012. Yet.

As president of the Center for Long-Term Care Reform, Moses roams the country promoting universal access to top-quality long-term care by encouraging private financing as an alternative to Medicaid dependency. He's widely considered one of the most influential people in long-term care, a status I have not managed to achieve. Yet.

Since serving as a senior analyst for the Inspector General of the U.S. Department of Health and Human Services in the late 1980s, Moses has played an active role in major legislation aimed at reducing Medicaid planning abuses. A noted speaker and prolific author, he has testified before Congress and most of America's state legislatures, which perhaps explains why he had no difficulty answering my questions.

Where are you this morning?

Providence, Rhode Island.

Remind me where that is. Can you see Russia from your hotel?

Not quite. I can see three states, but not Russia.

You're president of the Center for Long-Term Care Reform. Is that a place facility administrators can go to be rehabilitated and integrated back into society?

Yes, we try to get them on a 12-step process to recovery.

What are you doing in Rhode Island?

I'm working on a study of the state's long-term care financing system and global Medicaid waiver. Rhode Island is attempting to rebalance its Medicaid long-term care program from dominantly nursing home care to more home- and community-based care. This intrigues me, because I'm not at all convinced that it saves money to deinstitutionalize people. It's desirable. We want to do it. But most of the research shows that it doesn't replace nursing home care, it just delays it. And over the lifetime of a population it will end up costing more.

The way I would like to pay for more long-term care for all Americans is to preserve the scarce resources available under Medicaid, which is after all a means-tested public welfare program, and make sure that public money goes to the people most in need. Now, many of the public resources go to the middle class and even the affluent because of the way the generous Medicaid rules work. And even if you don't qualify, there are always attorneys who specialize in impoverishing people artificially.

So I'd like to see if there's a way to use the increased flexibility under Rhode Island's global Medicaid waiver to target welfare benefits primarily to people most in need, and create stronger incentives for those who are still young, healthy, and affluent enough to save, invest, or insure for long-term care. Because Medicaid, for all intents and purposes, is insolvent.

That's essentially the speech you've been giving for more than 25 years.

Yes. And if they'd listened to me 25 years ago, we wouldn't be in the mess we're in now. They didn't, and we are.

You've basically been a roving prophet of doom.

Some people call me the Don Quixote of long-term care, but I've tipped over a few windmills in my time and more are soon to fall.

What has changed, if anything, over that time?

The message has been sent over and over again by the federal government that there is a limit to how much we can pay to cover long-term care for everybody. Unfortunately, they have not successfully restricted it yet. I am now convinced, after 25 years of beating my head against this problem, that it's not going to be fixed through responsible public policy. As a result, the whole entitlement house of cards is going to collapse as we hit a brick wall of fiscal reality.

I think you've called that a long-term care Armageddon.

(Laugh) Ah, you did your homework.

You've also used Niagara Falls to illustrate unfunded liabilities, and the Grand Canyon to show the financial hole this country is digging. Are you going to run out of metaphors at some point?

No, I have a boundless supply.

So what's going to happen?

The public has been totally duped into thinking they aren't at risk. The vast majority never think or worry enough about long-term care even to ask who pays. They don't know if it's Medicaid, Medicare, or Santa Claus-and they don't care. Whether you're poor, middle class, or even affluent, the government continues to pay for the vast majority of all expensive long-term care in this country, and that fact has enabled the public's denial.

But the government is soon going to have to means test Social Security and Medicare, and finally Medicaid, and a lot of people are going to get hurt, especially the poor. The middle class and affluent, once they can no longer get the government to pay for their long-term care, are going to have no place to go but to their savings. They'll spend that down very fast, and then go to their home equity in an explosion of reverse mortgages. And once we eliminate or radically decrease the $500,000 home equity exemption still available under Medicaid, the public is going to start to realize they need private long-term care insurance to cover this risk and substantial liability.

But it isn't going to happen because politicians wake up and realize they've caused the problem. It's going to happen because they keep digging the fiscal hole deeper. We're facing a $107 trillion infinite horizon of unfunded liability on Social Security and Medicare alone, not even counting the problem with Medicaid and long-term care. So we've basically painted ourselves into a corner with no exit, and that's why I think it's all going to come to a crashing halt.

Well, thanks. Now you've scared the heck out of me.

People tell me that a lot. I'm just a bearer of joy and hope.

Are you more fun than this at parties?

Oh, you've got to believe it. (Laugh) On our Web site, by the way, there's a link to 13 predictions I made in November of last year. Shortly after the presidential election, everybody was walking around with rose-colored glasses. They thought healthcare was going to be reformed and all the problems were going to go away-it was just mindless. So I tried to throw a little objective ice water on that and predicted basically what is playing out. I could still be wrong, but I doubt it.

Can you say anything to cheer us up?

I'm very optimistic long term. The way the United States operates is not to deal with something until it becomes a crisis. But underneath the entitlement mentality that is crushing us remain the fundamental values that made the country great in the first place. Once the government programs collapse, independence, personal responsibility, and hard work are going to come back. We'll see entrepreneurial ingenuity and the tremendous power of the profit motive and capitalism. That's what's going to save us, and what could have saved us all along.

Of course, we're going 100 miles an hour in the opposite direction right now, but all that does is speed up the crash. Over a couple decades this will all work itself out. But in the meantime, a lot of people are going to be hurt unnecessarily as a result of the well-intentioned but perversely counterproductive public policy incentives in this crazy, mixed-up system we've had all these years.

Dare I ask for a 60-second reaction to healthcare reform?

They'll have to pass a bill, just to make it look like they did something. But I never would have thought comprehensive changes could get this far. I mean, it is just insane the money being spent that we don't have. There are basically three things they can do to pay for it all-tax, borrow, or print more money-and all of those lead directly to an isolated financial corner with nowhere to turn. If you think it can't happen to the United States, I'm sure there are people from Argentina who didn't think it could happen there either.

You and Al Gore seem to share a similar predicament. You're both traveling the country with a lot of grim statistics and dire warnings, but people still refuse to listen.

But there's a fundamental difference. I'm right and he's wrong.

What else should I have asked you?

I think you have your 1,600 words. I'm getting a dollar a word, right?

Yes. And it's being safely direct-deposited into the Medicare trust fund for your future benefit. (Okay, I admit it. I didn't think of that retort until 10 minutes after he hung up. But I'm pretty sure he would have been impressed, and might even have laughed about it later. Maybe.)

[Ha, ha. SM]