LTC Bullet:  LTC Almanac Update (2)

Wednesday, April 6, 2011


LTC Comment:  Our second LTC Almanac Update in as many weeks follows the ***news.***

*** MEDI-CAN'T:  "'My Medicaid card is useless for me right now,' Ms. Dardeau said over lunch. 'It's a useless piece of plastic. I can't find an orthopedic surgeon or a pain management doctor who will accept Medicaid.'" 
Source:  Robert Pear, "Cuts Leave Patients With Medicaid Cards, but No Specialist to See," New York Times, April 1, 2011. ***

Which leads to this:

*** LTCI AWARENESS:  "Public awareness of long-term care insurance (LTC) is growing due, in part, to the realization that the government cannot or will not pay for long-term care costs." 
Source:  David Rando, "Take Advantage of Employer-Sponsored LTC Insurance," San Francisco Chronicle, April 3, 2011. ***

Which leads to this:

***  "BREATHTAKING FRAUD" of government trust funds, including CLASS:  Read John Goodman's excellent expose' of these phony bookkeeping gimmicks here. ***

Which leads right back to ***news*** item number 1:  "MEDI-CAN'T."



LTC Comment:  Damon and I are just back from the 9th LTC Insurance Producers Summit in Las Vegas.  Expect a "virtual visit" to that excellent program after we collect our thoughts, likely early next week.

Today, find below our latest update of the "LTC Almanac."  The Almanac of Long-Term Care is a compendium of information you need at your fingertips if you work in any aspect of LTC financing or service delivery.  Here's the layout:

The LTC Almanac has 11 chapters:

Aging Demographics 
Unfunded Liabilities--Social Security, Medicare, and Budgets 
Long-Term Care 
Long-Term Care Financing 
Long-Term Care Insurance 
Reverse Mortgages 
Long-Term Care Providers 
Medicaid Planning   

Each chapter is divided into sections.  Under each section, you'll find titles, quotes, summaries of and hyperlinks to virtually every important article or report published on the topic listed in descending chronological order.  The idea behind the Almanac of Long-Term Care is to capture for you in easily accessible form every piece of information and knowledge you need to be a fully informed professional in the field of long-term care.

Access the LTC Almanac in The Zone here:  You'll need your user name and password, because you must be a member of the Center to access the Almanac.  Need a reminder?  Want to join and get access?  Contact Damon at 206-283-7036 or

The Almanac of Long-Term Care is only one of the many valuable information resources in The Zone.  Here are a few more: 

CLASS Act Update -- Quick reference to publications on CLASS.
One-hour webinar about the CLASS Act with Steve Moses. Details in this E-Alert.
Deductibility Limits for Long-Term Care Insurance
Unfunded Entitlement Liabilities -- Various articles and reports including data on unfunded entitlement liabilities.
LTC Embed Reports -- Brief on-site reports from the policy front in Washington, D.C. and elsewhere, wherever the LTC policy battle takes us.
Long-Term Care Cost Surveys
Reasons Why Veterans Should Not Depend on VA Benefits for Long-Term Care
VIRTUAL VISITS to LTCI conferences.


LTC Bullets -- "LTC Bullets" is the Center for Long-Term Care Reform's online newsletter covering current topics in the LTC arena. Older editions are available in the archives and are listed both by date and by subject.
LTC E-Alerts -- "LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform to contributors of $150 per year or more. We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research. LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.

Want your staff, colleagues, friends or clients to have access to this wellspring of information?  Encourage them to contact Damon at 206-283-7036 or to request a free peek at The Zone, including the LTC Almanac.

Now, here are our latest updates to the Almanac of Long-Term Care:

Chapter 1:  Aging Demographics

Windfall for the Boomers

MetLife on Wealth Transfer 1210 URL:
"The MetLife Study of Inheritance and Wealth Transfer to Baby Boomers: A Study by the Center for Retirement Research at Boston College for the MetLifeMatureMarket Institute," December 2010

"Our best estimate is that Boomers will inherit $8.4 trillion. Of this amount, $2.4 trillion has already been received, while the remaining $6.0 trillion is anticipated and, therefore, subject to significant uncertainty. The estimates are based on data obtained before the economic crisis, so our analysis explores how the collapse in the stock and housing markets might affect the picture. Evidence from the previous economic crisis in the early 2000s suggests only a temporary reduction in prospective inheritances, which will be reversed as the economy recovers. However, given the severity of the recent crisis, we also looked at how inheritances would be affected if they were to drop proportionately with the decline in housing and stock values between 2007 and 2010. In this case, anticipated inheritances would fall 13% - from $6.0 trillion to $5.2 trillion."


Chapter 3:  Unfunded Liabilities--Social Security, Medicare, and Budgets

Unfunded Liability Estimates

CATO on Unfunded Entitlements 0311 URL:
"Bankrupt: Entitlements and the Federal Budget," by Michael Tanner, Policy Analysis No. 673, March 28, 2011, Cato Institute.

"The U.S. government is about to exceed its statutory debt limit of $14.3 trillion. But that actually underestimates the size of the fiscal time bomb that this country is facing. If one considers the unfunded liabilities of programs such as Medicare and Social Security, the true national debt could run as high as $119.5 trillion." p. 1

"Social Security's future unfunded obligations now run to more than $16.1 trillion. Medicare's unfunded liabilities are more difficult to nail down, in part because of the uncertainty brought about by the new health care reform law. In 2009 Medicare's trustees estimated that the program's unfunded liabilities were $89.3 trillion. In the wake of the health care bill, though, those projections declined dramatically to just $28.7 trillion. But, there is reason to be skeptical of that revised figure. The Centers for Medicare and Medicaid Services (CMS), for example, believes that the spending reductions projected under health care reform are unrealistic.

"Thus, the combined federal debt actually totals at least $59.1 trillion, equal to more than 412 percent of GDP. And if the projected savings in Medicare do indeed prove unrealistic, our debt could run as high as $119.5 trillion (including $200 billion accumulated in February and March 2011), an inconceivable 900 percent of GDP."  pps. 8-9


Chapter 4:  Long-Term Care

Home and Community-Based Services

Medicaid Home and Community-Based Service Programs: Data Update KFF 0211 URL:

"While the majority of Medicaid long-term care dollars still go toward institutional care, the national percentage of Medicaid spending on HCBS has more than doubled from 19 percent in 1995 to 42 percent in 2008."


Chapter 6:  LTC Financing

Nursing Home and Home Care Expenditure Data from CMS and Health Affairs

2009 Data

CMS Tables:
Health Affairs:  Anne Martin, David Lassman, Lekha Whittle, Aaron Catlin and the National Health Expenditure Accounts Team, "Recession Contributes To Slowest Annual Rate Of Increase In Health Spending In Five Decades," Health Affairs, 30, no. 1 (2011):11-22;
LTC Bullet:  So What If the Government Pays for Most LTC?, 2009 Data Update, Wednesday, January 26, 2011:


Medicare LTC Financing

Medicare Spending and Financing Primer KFF 2011 URL:
"This paper provides a detailed overview of Medicare spending and financing, beginning with a review of the factors contributing to the growth in Medicare spending, including the effects of the 2010 health reform law. Next, it explains the structure of the Medicare program's financing, reviews various measures of fiscal status, and discusses the expected effects of rising Medicare costs on beneficiaries. The paper concludes with a discussion of the program's long-run financial challenges."


Chapter 7:  Long-Term Care Insurance


Prudential 2011 LTCI study 0311 URL:
March 2011, Prudential released report titled "Long-Term Care Insurance: A Piece of the Retirement & Estate Planning Puzzle"
See also LTC E-Alert for Friday, March 25, 2011:

Highlights:  "A majority of Americans are concerned about needing long-term care services someday . . . Knowing someone who has required long-term care services greatly increases the level of concern . . . Lack of knowledge leads to misperceptions about the costs and funding sources for long-term care services . . . Americans say long-term care insurance is important but they don't believe they should buy it until they are retired . . . Life stage (e.g., age, marital status) plays an important role in how people view the value of long-term care insurance . . . Misperceptions about long-term care insurance are an obstacle for many Americans to further researching and considering coverage for themselves and their families . . . Greater awareness and education are needed about the role of long-term care insurance in retirement and estate planning . . . Long-term care insurance can help protect retirement savings and provide peace of mind."


NAHSP on LTC Benes in PPACA 0410 URL:
"Long Term Services and Supports and Chronic Care Coordination: Policy Advances Enacted by the Patient Protection and Affordable Care Act," by Diane Justice, SCAN Foundation, April 2010
See also "LTC Bullet:  PPACA'd with Unfunded LTC Benefits," Wednesday, April 14, 2010:


Chapter 8:  Reverse Mortgages

Home Equity Estimates

"Net Worth and Housing Equity in Retirement," Todd Sinai, The Wharton School University of Pennsylvania and NBER, Nicholas Souleles, The Wharton School University of Pennsylvania and NBER, August 7, 2007

Abstract: This paper documents the trends in the life-cycle profiles of net worth and housing equity between 1983 and 2004. The net worth of older households significantly increased during the housing boom of recent years. However, net worth grew by more than housing equity, in part because other assets also appreciated at the same time. Moreover, the younger elderly offset rising house prices by increasing their housing debt, and used some of the proceeds to invest in other assets. We also consider how much of their housing equity older households can actually tap, using reverse mortgages. This fraction is lower at younger ages, such that young retirees can consume less than half of their housing equity. These results imply that 'consumable' net worth is smaller than standard calculations of net worth.


Chapter 9:  Long-Term Care Providers

Nursing Home Challenges

The Alliance for Quality Nursing Home Care ( has published a series of five issue briefs explaining the role and importance of nursing homes as long-term care providers and describing the daunting challenge they face because of dominantly public financing.
Trends in Post-Acute and Long-Term Care, September 2009; Medicaid's Important Role in Supporting High-Quality Care for Nursing Facility Residents; Medicaid Support for Nursing Facility Care: At a Crossroads, May 2010; Economic Contribution of Nursing Facilities, February 2011; Economic Contribution of Nursing Facilities, February 2011; Rehospitalizations From Skilled Nursing Facilities:  A Multifaceted Issue That Calls for Innovative Policy Solutions,  January 2010; Therapy Services in Nursing Facilities, September 2010
For analysis and summaries, see LTC E-Alert:  LTC News and Comment (Nursing Homes), Wednesday, March 30, 2011:


Chapter 10:  Medicaid

Medicaid Financing

Moving Beyond Medicaid 1210 URL:
"Moving Beyond Medicaid:  Long-Term Care for the Elderly as a  Life Quality and Fiscal Imperative"  December 2010,  Citizens League

"Medicaid is not sustainable as a default source of financing. If other forms of financing are not put in place, Medicaid funding for long-term care for the elderly could grow nearly fivefold in Minnesota, from $1.1 billion in 2010 to $5 billion in 2035. Unless we all agree to massive tax increases to pay for one another's long-term care, Medicaid as the fallback is unsustainable."


Kaiser on 50 State Medicaid Budget Survey:  "Hoping for Economic Recovery, Preparing for Health Reform: A Look at Medicaid Spending, Coverage and Policy Trends, Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2010 and 2011," Prepared by Vernon K. Smith, Ph.D., et al., Kaiser Commission on Medicaid and the Uninsured Kaiser Family Foundation, September 2010:

Quote:  "At the end of state fiscal year (FY) 2010 and heading into FY 2011, states were still in the midst of the worst economic downturn since the Great Depression with high unemployment, severely depressed revenues and increased demand for services, including Medicaid. While most states expect to see the impact of the recession last for the next few years, they are hoping that 2011 will be a turning point moving toward economic recovery. State economies were bolstered by federal fiscal relief from the American Recovery and Reinvestment Act of 2009 (ARRA) which provided a temporary increase in the federal Medicaid matching rate (known as the “Federal Medical Assistance Percentage,” or “FMAP”) from October 2008 through December 2010. Legislation to provide states with a scaled back extension of this fiscal relief through June 2011 was enacted in August 2010; however, this was after most states had adopted budgets for FY 2011. Even as states continue to grapple with historically difficult budget conditions, they are planning for the implementation of the Patient Protection and Affordable Care Act (ACA), major health reform legislation which envisions an expanded role for Medicaid and the states."


Medicaid Eligibility

Kaiser on Medicaid Elig 0210 URL:
"Medicaid Financial Eligibility: Primary Pathways for the Elderly and People with Disabilities," February 2010

"Medicaid plays several unique roles in bolstering our nation's health care system, including acting as a safety net for many of our poorest, sickest, and most disabled individuals. It provides health coverage today to almost 60 million Americans overall, including 8.5 million non-elderly persons with disabilities and 8.8 million low-income frail elderly and disabled Medicare beneficiaries who rely on Medicaid to fill Medicare's gaps. This document details the various eligibility pathways individuals with disabilities and the elderly can qualify for Medicaid coverage."


Medicaid Crowd-Out

Medicaid Crowd Out Dissertation 2010 URL:

Recommended Citation:  Kim, Geena, "Medicaid Crowd-Out of Long-Term Care Insurance with Endogenous Medicaid Enrollment" (2010). Publicly accessible Penn Dissertations. Paper 104.


Health Affairs Public/Private LTCI Complementarity:
Health Affairs, 29, no. 1 (2010): 96-101  doi: 10.1377/hlthaff.2009.0920 "The Complementarity Of Public And Private Long-Term Care Coverage" David G. Stevenson,*, Marc A. Cohen, Eileen J. Tell and Brian Burwell

Article debunks Medicaid crowd out and argues against constricting Medicaid LTC eligibility. 

See my letter to the authors answering their arguments in LTC Bullet:  The Enemy of LTC Truth  Monday, February 8, 2010:


Dual Eligibles

KFF on Dual Eligibles 0710 URL:
"Chronic Disease and Co-Morbidity Among Dual Eligibles: Implications for Patterns of Medicaid and Medicare Service Use and Spending," By Judy Kasper, Molly O’Malley Watts and Barbara Lyons

Quote:  "With the passage of health reform, new provisions are directed at improving the delivery and coordination of services for persons enrolled in both Medicaid and Medicare, otherwise known as dual eligibles. Dual eligibles constitute a costly segment of beneficiaries for both programs and include individuals with some of the most severely disabling chronic conditions. While the higher costs associated with services to dual eligibles is well-known, information on how spending distributes across these programs is less understood. This analysis uses linked Medicare and Medicaid data to provide a clearer picture of the chronic physical and mental conditions and multiple co-morbidities that create substantial needs for medical and long-term services among dual eligibles, and provides information about the financial contribution of both Medicare and Medicaid in meeting these needs."


Mathmatica on shifting LTC to Medicare 0310 URL:
"Coordinating and Improving Care for Dual Eligibles in Nursing Facilities: Current Obstacles and Pathways to Improvement," March 2010, James M. Verdier

"Residents of nursing facilities who are dually eligible for Medicare and Medicaid make up over half of all nursing facility residents. These dual eligibles are enmeshed in a care delivery and coverage system that is highly complex, fragmented, and uncoordinated. Their prescription drug coverage is the responsibility of payers who usually have no responsibility for the rest of residents' nursing facility care. Those responsible for their nursing facility care have few, if any, incentives to provide care that will enable residents to avoid unnecessary hospitalizations."