LTC Bullet:  Our Op-Ed on Medi-Cal LTC 

Tuesday, February 22, 2011 

Seattle-- 

LTC Comment:  The San Bernardino Sun (Circulation: 137,250) published our opinion piece "No Medi-Cal help on long-term care."  Text and links after the ***news.*** 

*** CLASS CRASH.  DHHS Secretary Kathleen Sebelius admits the CLASS program is "totally unsustainable."  The New York Times covered the story yesterday here.  Watch the Secretary's 8.5-minute Finance Committee testimony in response to Senator John Thune's (R, SD) probing questions here.  She thinks CLASS tweaks could save the program.  Unbelievably, 7.5 minutes into her testimony, Secretary Sebelius claims there are no private LTC insurance policies that cover home care services.  Senator Thune wraps with the conclusion he'd still prefer to see CLASS repealed.  Check it out and see what you think.***  

*** THE 11TH ANNUAL INTERCOMPANY LONG TERM CARE INSURANCE CONFERENCE will be held March 6 to 9, 2011 at the Marriott Marquis in Atlanta, Georgia.  Conference registration is only $995, airfares often under $300 and hotel rooms only $129.  To get additional information about the conference and to register, click on the link: www.ILTCIconf.org.  Then place your cursor over "REGISTRATION" and select the link that is correct for your situation from the drop-down menu.  If you have any questions, please contact Jim Glickman at 818-867-2223. *** 

*** BE A PREEMPTIVE PLANNER, not an immobilized worrier, says a new MetLife Mature Market Institute report.  Read "Best-Case Strategies for a Flexible Retirement:  The MetLife Study of Thinking About Retirement in Uncertain Times" here.  The study found that when it comes to finances, there are ten types of people:  Snoozers, Active Resisters, Immobilized Worriers, Oversleepers, Wood Knockers, Plan B-ers, Realists,  Stewers and Brewers, Compromisers, and Preemptive Planners.  "We found that actively preparing for the surprises that inevitably come our way is the most successful approach to retirement," said Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute. "Knowing you will have guaranteed income sources available and access to emergency funds is key." ***

 

LTC BULLET:  OUR OP-ED ON MEDI-CAL LTC 

LTC Comment:  The San Bernardino Sun and the Inland Valley Daily Bulletin published the following op-ed last week.  Read it below and in the Sun or Daily Bulletin

The article cites our report titled "Medi-Cal Long-Term Care:  Safety Net or Hammock."  Read the full report on the Center's website or on the Pacific Research Institute's website

California Healthline added this Wednesday, February 16, 2011:  Opinion: Medi-Cal To Be a 'Bust' on Long-Term Care.  In an Inland Valley Daily Bulletin opinion piece, Stephen Moses -- president of the Center for Long-Term Care Reform -- argues that Medi-Cal, California's Medicaid program, will be unable to provide the long-term care many residents will need and that the cost of long-term care will fall to individuals. He writes, "Budget challenges have forced Medi-Cal to cut back on home care and adult day health programs. Californians should expect such cuts to continue and increase." He adds, "On the other hand, when more Californians pay their own way, access to long-term care will improve, along with its quality."  "No Medi-Cal Help on Long-Term Care" (Moses, Inland Valley Daily Bulletin, 2/15).  Read more: http://www.californiahealthline.org/articles/2011/2/16/opinion-medical-to-be-a-bust-on-longterm-care.aspx#ixzz1EhSvmRg2.  

Special thanks to the Pacific Research Institute and its staff for supporting the underlying research and publicizing the resulting report and recommendations. 

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"No Medi-Cal help on long-term care"
by Stephen A. Moses 

On July 1, the federal funds that have propped up California's troubled Medi-Cal system will disappear. That is only one of the reasons why baby boomers, now retiring in droves, will find Medi-Cal a bust for the long-term care many will need.  

Long-term care (LTC) is the medical or custodial assistance people need when they can no longer care fully for themselves. Nearly 70 percent of all people require some LTC and 20 percent need five years or more. LTC is extremely expensive whether provided in a nursing home ($256/day), assisted living facility ($2,576/month) or in one's own home ($25/hour for an aide).  

Historically, government has paid for most LTC through programs like Medi-Cal, Medicare and the Veterans Administration. In 2008, California spent $3.8 billion on nursing homes and $6.5 billion for home health and personal care through Medi-Cal alone.  
Medi-Cal is public assistance designed to be a safety net for the poor. It has become a comfy hammock for the middle-class and affluent. Anyone with income below the cost of a nursing home qualifies easily for Medi-Cal-funded LTC. Nor are assets an obstacle because Medi-Cal exempts virtually unlimited resources including up to $750,000 of home equity plus a business, automobile, prepaid burial plans, term life insurance and home furnishings of unlimited value.  

For people with even more wealth than Medi-Cal's generous eligibility rules allow, a cottage industry of specialized "Medi-Cal planners" manipulate and stretch the elastic rules with special trusts, annuities, life-care contracts and many other sophisticated legal gambits.  

In the past, Californians relied on Medi-Cal reluctantly despite its easy eligibility because the program paid primarily for nursing homes, which most people would rather avoid. Over the past three decades, however, Medi-Cal has "rebalanced" to pay mainly for home-based and personal care, which most people prefer.  

The effect of easy eligibility and increasingly attractive services - including even Medi-Cal payments for friends or relatives to provide home care - has been to anesthetize the public to LTC risk and cost. Consequently, private-pay for LTC has declined precipitously and only 5.4 percent of Californians age 50-plus have purchased private LTC insurance.  

Medi-Cal costs have been soaring, and California's foundering economy is ill-equipped to pay the bills. With an aging population drifting toward senescence, who will pay for long-term care in the future? Only one thing is certain: it won't be the state and federal governments which now share the cost of Medi-Cal, at least not at anything like the current level.  

Budget challenges have forced Medi-Cal to cut back on home care and adult day health programs. Californians should expect such cuts to continue and increase after July 1, when supplemental federal matching funds that have propped up the program since October 2008 disappear.  

California will then have no choice but to cut popular benefits, tighten Medi-Cal eligibility rules, close gaping "loopholes," strengthen recovery from deceased recipients' estates, and encourage personal responsibility for LTC through greater asset spend-down, home equity conversion, and private insurance.  

As Medi-Cal LTC backs off, more families will have to pay for their own long-term care. When their savings run out, homeowners will turn to reverse mortgages to fund home care. More people will buy private LTC insurance as the consequences of "going bare" become increasingly severe and obvious. On the other hand, when more Californians pay their own way, access to long-term care will improve, along with its quality.  

Currently Medi-Cal LTC attempts to provide too much for too many, failing the very ones for whom it was supposed to provide a safety net. California legislators should redesign Medi-Cal with those realities in mind, and do it sooner rather than later. In 2011, a baby boomer turns 65 every eight seconds. 

Stephen A. Moses is president of the Center for Long-Term Care Reform (www.centerltc.com) and author of . . . "Medi-Cal Long-Term Care: Safety Net or Hammock?" from the Pacific Research Institute (www.pacificresearch.org). 

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*** THE CLASS CONTENT covered in today's LTC Bullet has been added to our Members-Only Zone website here:  http://www.centerltc.com/members/ClassActUpdate-QuickReference.htm, exclusive for Center members.  Not a member yet (you should be if you’re receiving this)?  Need to renew?  Need a refresher on your username and password?  No problem.  Just contact Damon at 206-283-7036 or damon@centerltc.com.  Center membership is only $150 per year for individuals or $12.50 per month and gets you access to The Zone and allows you to receive our daily LTC E-Alerts and LTC Bullets by email. Corporate memberships are also available. Support the Center's research and advocacy on behalf of rational long-term care public policy and responsible LTC planning. ***