LTC Bullet: Center Begins Study in Pennsylvania

Wednesday, June 16, 2010


LTC Comment: The Center for Long-Term Care Reform and Pennsylvania's Commonwealth Foundation have begun a study of long-term care financing in the "Keystone State." Details 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 to ask questions or get references. ***

*** STATE X thank you. Last year a group of Center supporters dug a little deeper to help us fund a project that culminated in our Rhode Island study and report titled "Doing LTC RIght." I believe the success of that project helped make our new study in Pennsylvania possible. So one more time, thank you to all members of the Center for your support but especially today, extra thanks to you "State X" donors:

Keystone ($5,000): Thomas Campbell Jackson

Foundation ($1,000 to $500): Rick Leonard and Joe Lautiero (Long Term Care Resources); Sue Howarth; Tom McAuliffe; Mark Randall (GoldenCareUSA); Phillip Sullivan; Stephen Forman (Long Term Care Associates, Inc.); Tony Stratidis

Building ($300 to $50): Bob Callanan; Claude Thau; Bill Dorfii; Eve Anderson; Alan Jonas; B.J. Randolph; Teresa Eagan; Sally Leimbach; Honey Leveen; Kyle Hitt; Annemiek Storm; Heady Nezhadpour. ***

*** AGE WAVE CRESTING. We have longevity, but lack (1) health care to sustain us, (2) finances to support us, or (3) a mission to fulfill us. Leaders in the field of aging must take on those challenges. That was the message and appeal of Age Wave prophet Ken Dychtwald's impassioned speech at the March, 2010 joint convention of the American Society on Aging and the National Council on Aging. Watch, listen and heed Dychtwald's 16-minute clarion call in two YouTube clips. (Two because YouTube has a 10-minute limit for video clips.)
Part 1:
Part 2:
Ken welcomes your thoughts and comments. He can be reached directly at ***

*** 50 WAYS TO LEAVE YOUR . . . SENSES or 50 more reasons to own private LTC insurance.

#50) In 2010 the U.S. government is projected to issue almost as much new debt as the rest of the governments of the world combined.
#49) It is being projected that the U.S. government will have a budget deficit of approximately 1.6 trillion dollars in 2010.
#48) If you went out and spent one dollar every single second, it would take you more than 31,000 years to spend a trillion dollars.

For the other 47: ***



LTC Comment: The Commonwealth Foundation ( "is an independent, non-profit research and educational institute that develops and advances public policies based on the nation's founding principles of limited government, economic freedom, and personal responsibility."

The Harrisburg, Pennsylvania think tank has retained the Center for Long-Term Care Reform to conduct a study of long-term care financing in the state. A description of the project follows below. Preliminary research and identification of sources began last week.

I'll visit Harrisburg during the week of July 12 to 16, 2010 to conduct interviews and other field work. We have begun to schedule meetings with key interest groups and public officials. Our goal is to have a final report in draft by the end of July.

I've apprised the Center's Pennsylvania mailing list of the project. But if you know people in the state who might like to be involved as interviewees or respondents, please have them contact the Center at We have already scheduled a briefing and interview with Pennsylvania representatives of the long-term care insurance and reverse mortgage industries for Thursday, July 15 at 10:00 am EDT.


How to Reduce Medicaid Expenditures and Improve Long-Term Care
a proposal by the
Center for Long-Term Care Reform
submitted to the Commonwealth Foundation
on March 22, 2010

I. The National Problem

Medicaid is a means-tested public assistance program, i.e. welfare. Yet Medicaid is the principal funding source for long-term care (LTC) throughout the United States, not only for the poor, but for most Americans. Although LTC users are only seven percent of the Medicaid population, they account for more than half of the program's costs nationally. The only way Medicaid can survive as a long-term care safety net for the poor is if more prosperous people plan responsibly and pay privately for their own long-term care. But Medicaid crowds out most private LTC financing alternatives such as home equity conversion and insurance. The trend toward greater and greater dependency on welfare-financed nursing home care is reversible. It will be reversed by responsible public policy or by default as costs skyrocket and public resources dwindle with the aging of the baby boom.

II. The State Problem

Pennsylvania spent $15,856,000,000 on Medicaid in 2007 of which $4,322,000,000 or 27.3% were LTC expenditures for older people and adults with physical disabilities, an increase of only 6% since 2002. But Pennsylvania's age 85 plus population, the cohort most likely to require LTC, was 302,000 or 2.4% in 2007, and is expected to be 415,000 and 3.3% in 2030, a 37% increase. Medicaid is the primary payer for 63% of the state's nursing home residents. Another 12% rely primarily on Medicare. Medicaid and Medicare also pay for most home health care, 75% nationally. Our best estimate is that only 6% to 9% of Pennsylvania's 50+ citizens own LTC insurance. Very few use home equity to fund LTC. Thus, financing Medicaid LTC is a large and growing strain on Pennsylvania's budget. Private LTC financing is minimal and shows few signs of increasing. Demographic and fiscal pressures will exacerbate these problems. Yet federal law and regulations inhibit some effective corrective actions Pennsylvania might take--such as tightening loose eligibility rules--and encourage other initiatives--such as "rebalancing" from institutional to home care--which may increase utilization and costs.

III. Substantive Proposal

Pennsylvania can reduce its annual Medicaid budget by an amount equal to 10% of current nursing home expenditures for aged and disabled recipients or $386,800,000 per year within five years. We propose to conduct a study of LTC financing in Pennsylvania that shows why such savings are possible and how to achieve them while improving access to quality LTC for everyone in the state. Toward that end, we will . . .

  • Research and document federal and state Medicaid LTC eligibility laws and regulations that encourage public assistance dependency for LTC.
  • Interview state staff who make, interpret, and implement LTC eligibility policy to identify eligibility "loopholes" that circumvent spend-down rules.
  • Measure the level of Medicaid estate planning, i.e. artificial impoverishment to qualify for Medicaid LTC, in Pennsylvania with a literature search and interviews.
  • Analyze how much revenue Pennsylvania receives from federally mandated estate or lien recoveries and how much more could be recovered using best practices.
  • Examine the reverse mortgage market and interview lenders and loan representatives to identify ways home equity could offset Medicaid LTC costs.
  • Examine the LTC insurance (LTCI) market and interview carriers, brokers, agents and regulators to identify ways LTCI could offset Medicaid LTC costs.
  • Meet key state legislators and executive branch officials to discuss why Medicaid LTC expenditures are so high and how they could be reduced progressively.
  • Meet LTC providers (nursing home, assisted living and home health) to get their perspective and gauge their support for measures to increase private LTC revenue.
  • Meet senior advocates to get their perspective and gauge their support for measures to increase overall public and private LTC resources.

We propose to work with a representative of the Commonwealth Foundation and/or the State Medicaid program to identify interviewees and schedule appointments. We will visit Pennsylvania for one week to conduct the onsite research and interviews. We will conduct other necessary research online.

IV. Business Proposal

Deliverables, within six weeks of project approval, will include (1) a comprehensive report (approx. 25 pages) that explains the problem of LTC financing and recommends solutions to achieve savings of at least 10% of Pennsylvania's Medicaid nursing home budget per annum; (2) one or more newspaper op-eds, and (3) an article suitable for publication in the Commonwealth Foundation's journal.

Stephen Moses (professional bio attached) will conduct all of the research and interviews for this project. He has conducted many similar studies over the years. Examples of his project reports are at

Respectfully submitted March 22, 2010 by

Stephen A. Moses