LTC Bullet:  We Help New York with Medicaid LTC Redesign 

Monday, March 7, 2011 

Atlanta, Georgia-- 

LTC Comment:  The Empire Center for New York State Policy published our report on Medicaid and LTC financing in New York.  Check it out after the ***news.***

*** TODAY'S LTC BULLET is sponsored by Claude Thau, a General Agent who helps LTCi producers build business in any market (individual, executive carve-out, work-site, affinity, financial institution, referrals from other professionals, etc.). He has been expert in CLASS for 6 years and has tools to leverage CLASS for private LTCi sales. Claude is the lead author of the Milliman Broker World LTCi Surveys, was named one of the 10 "Power People" in the LTCi industry by Senior Market Advisor 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. ***

***  I'M IN ATLANTA, GEORGIA for the 11th Annual Intercompany Long-Term Care Insurance Conference.  Check it out here.  You can even read the PowerPoint "session presentations" here.  I'll debate Connie Harner (who promoted CLASS for Ted Kennedy's Senate HELP committee and heads Advance CLASS now).  AARP's Rhonda Richards joins Ms. Garner on the pro-CLASS side of the debate and John Greene of NAHU teams with me on the anti-CLASS side.  We'll give you a full report after the event. *** 

*** BIG MOE.  Probably nothing is more important to state Medicaid programs (and to the marketability of private LTCI) right now than "Maintenance of Effort" (MOE) rules in the stimulus (which expire June 30, 2011), but are extended in PPACA (health reform or "ObamaCare.")  MOE rules deny states federal Medicaid matching funds if they tighten eligibility.  Desperate to save money without cutting coverage or bankrupting providers, states have asked for more "flexibility" and clarification regarding MOE.  Finally, CMS has obliged with this letter to state Medicaid directors which offers no help and is about as clear as mud.  In the meantime, the feds keep forcing states to cover LTC for middle class and affluent recipients due to mandatory lenient and elastic income and asset eligibility rules.  For details, check out our recent New York, California, and Pennsylvania reports here. *** 

*** 3 IN 4 NEED MORE:  "On March 8 in Atlanta, the '3 in 4 Need More' campaign will get a boost from Dr. Marion Somers, the long-term care planning advocate who is a frequent guest on programs such as Good Morning America, Today Show, and NBC Nightly News. In an informal press conference at the Eleventh Annual Intercompany Long Term Care Insurance Conference -- March 6 - 9 at the Marriott Marquis, Atlanta, Georgia -- Dr. Marion's endorsement will be recorded for TV and Internet exposure. 'We are delighted that she will be lending her support,' says Jonas Roeser, President of the 3 in 4 Association, promoters of the '3 in 4 Need More' campaign." *** 



LTC Comment:  The Empire Center for New York State Policy, a project of the Manhattan Institute for Policy Research, is dedicated to promoting freedom, opportunity and enterprise in the Empire State. 

On March 3, the Empire Center published our report titled "Long-Term Care Financing in New York:  How to Save Money While Serving the Needy."  Read the press release here or below.  Save a .pdf copy of the report here

For future reference, find our report on the Empire Center's website here or on the Center's website here.

In cooperation with the Empire Center, the Center for Long-Term Care Reform has published a longer version of the same report titled "Long-Term Care Financing in New York:  The Consequences of Denial."  Don't miss this full-length version with its clever "cartoon" cover designed by Lynn Voss of GoldenCare USA.  Check it out here

Media coverage of our report has already begun.  Read "Cost of Long-Term Care Too Costly:  Report," in the North Country Gazette.  Check out "Medicaid reform is vital to building new New York" in the Rochester, NY Democrat and Chronicle.  Read my op-ed titled "The poor aren't the big problem" here or below. 


Steve's op-ed in the Rochester, New York Democrat and Chronicle, Sunday, March 6, 2011: 

"The poor aren't the big problem" 

Written by Stephen Moses, Guest essayist  

Long-term care is high-risk and high-cost, especially in New York. 

People 65 and older face a 70 percent probability that they'll need some LTC and a 20 percent likelihood they'll need five years or more. Nursing homes average $336 per day in New York, over half again the national average. Home care alternatives are prohibitively expensive for full-time care. 

So, why isn't the public in New York scared to death about the risk and cost of LTC?  Simple. The government pays for most of it. Medicaid is the dominant payer, picking up the bill for 72 percent of all nursing home residents and paying nearly three times the national average per capita for home health care. 

But hold on! Medicaid is welfare. It's a means-tested public assistance program.  Don't people have to spend down into impoverishment before they qualify for Medicaid?  

If that were true, everyone would worry about long-term care for their parents and themselves. They'd spend down rapidly, tap home equity, or buy private insurance.  But they don't, so what gives? The truth is almost everyone qualifies easily for Medicaid-financed LTC in New York.  Income rarely interferes because Medicaid subtracts the cost of medical expenses, including nursing home charges, before asking if you're “poor” enough. You don't need to be low income. All you need is a cash flow problem. 

Likewise, excess assets aren't an obstacle for most people. Medicaid allows only $13,800 in liquid assets but exempts $750,000 worth of home equity and ignores unlimited resources in one business, a car, term life insurance, home furnishings and pre-paid burials. If you still don't qualify, consult a Medicaid planning attorney for advice on artificial self- impoverishment. 

Here's the problem. N.Y.'s Medicaid program is buckling under the cost of LTC already, but the public has been anesthetized to its risk and cost so doesn't save or insure. Both policy makers and the public are in denial. Something has to give because the age wave of baby boomers will sink the system for sure. 

Here's the solution: Target scarce Medicaid LTC resources to New Yorkers most in need by tightening eligibility, reducing the home equity exemption and maximizing federally mandatory estate recoveries. Use some of the savings to encourage the purchase of private LTC insurance and the use of reverse mortgages to fund LTC privately. 

Moses is a long-term care expert. 


Empire Center press release: 

Report Finds Long-Term Care Is Too Costly
Lenient and Elastic Eligibility Criteria Burden Medicaid
March 3, 2011
Contact: Tim Hoefer

The cost of financing long-term care (LTC) through Medicaid is on track to become "a crippling burden" for New York State unless steps are taken to reform the program, a report issued today by the Empire Center for New York State Policy warns. 

The report, written by Stephen A. Moses, suggests that New York's Medicaid program could ultimately save up to $2.9 billion in combined federal, state and local funds by tightening eligibility criteria, enforcing federally mandated recovery of paid benefits, promoting home equity conversion prior to Medicaid eligibility, and encouraging the purchase of private long-term care insurance.  

"Access to Medicaid funding for LTC in New York State has been too easy for too long" the report says. "The combination of an aging population with greater care needs, a flagging economy, and dwindling federal support will soon bring Medicaid LTC spending up short. Instead of trying to provide a full range of LTC services to nearly everyone in the state, New York Medicaid will have to prioritize." 

"The preferable course is to funnel scarce Medicaid resources to the neediest people and encourage wealthier individuals to plan early and save, invest, or insure against the risks and costs of LTC," it concludes.  

Entitled "Long-Term Care Financing in New York: How to Save Money While Serving the Needy," the exhaustive 28-page report is a joint product of the Empire Center and the Seattle-based Center for Long-Term Care Reform, of which Moses is president. In the course of his research, Moses interviewed 58 people directly involved in the long-term care field in New York, including senior state and local Medicaid administrators, social workers and policy analysts; insurance industry executives and consultants; and representatives of organizations representing practitioners and providers. 

Several of the report's key recommendations have been adopted by Governor Andrew Cuomo's Medicaid Redesign Team.  These include: 

  • Close the "spousal refusal" loophole, through which the assets of a chronically ill elderly person can be shifted to his or her spouse, who can then refuse to take responsibility for paying for that person's long-term care;   
  • more aggressive efforts to pursue estate recoveries on a statewide basis; and
  • stronger incentives to promote the purchase of private long-term care insurance.

Adoption of the governor's amended Medicaid proposals would equate to "important steps in the right direction, but much remains to be done to put long-term care policy in New York on an economically and financially sustainable footing," the report says. 

The report is available here.