LTC Bullet:  Pay for the Doc Fix by Fixing Medicaid LTC (LTC Embed Report #2)

Friday, August 5, 2011

Washington, DC--

LTC Comment:  Could stanching the Medicaid LTC financing hemorrhage fund the "Doc Fix?"  We think so.  Read our new report here.

*** Today's LTC Bullet is sponsored by The National LTC Network, proud supporters of the 3IN4 NEED MORE awareness campaign.  Read more about how you and your organization can support LTCI sales and referrals by using the 3in4 Need More campaign at  The National LTC Network is an alliance of leading distributors of long term care insurance.  Network member firms place more than $50 million/year in LTCI premium.  Contact a member firm to attend their Producer's Conference Oct. 2-4 in Dallas, where you'll learn how to sell over the internet and much more.***

*** NY TIMES MAGAZINE PROFILES VIDEOGRAPHER JAMES O'KEEFE.   Read "Stinger:  James O'Keefe's Greatest Hits" here.  This long profile of the one-man scourge of Acorn, NPR, and state Medicaid eligibility systems is fascinating.  Read it, then watch the five videos (and counting) that O'Keefe has completed already catching Medicaid eligibility workers aiding and abetting outright fraud.  Find past and future videos in the series here. ***

*** DO YOU ENJOY A GOOD THRILLER?  Then I've got a tip for you.  Read "Hunter:  A Thriller," by my friend Robert Bidinotto.  "Hunter" is part spy mystery, part crime thriller, and part romantic suspense novel.  I think it's as good as anything I've read in the genre and better than most.  The book is available online for $3.99 as an e-book. You can read all about it, sample the early chapters for free, or purchase it, at:  Amazon's Kindle Store, Barnes & (for Nook owners), or Smashwords for other e-readers.  Amazon has the paperback for $15.95.  This book has nothing to do with LTC, but it is fiction that deals with serious ideas, in this case the plight of crime victims.  Enjoy! ***



LTC Comment:  Following are excerpts (with footnotes omitted) from our newest report, posted today at  Read "Pay for the Doc Fix by Fixing Medicaid LTC," by Stephen A. Moses, here.

The "Doc Fix" Problem

The sustainable growth rate (SGR) formula the government uses to pay physicians is set to slice nearly 30% off the doctors' Medicare reimbursement rates on January 1, 2012.  Almost everyone agrees that can't be allowed to happen.  But no one knows how to pay for avoiding it.  The "Doc Fix" is estimated to cost $30 billion per year, $300 billion over ten years, and $500 billion soon if nothing is done.

In the meantime, Medicaid long-term care is fraught with virtually boundless waste, fraud and abuse, as Cato's Michael Cannon has documented.  Recent exposÚs by video-muckraker James O'Keefe dramatize the problem.  All it would take to save most of the cost of the "Doc Fix" is to think clearly about Medicaid LTC and reform it.  In other words, "Pay for the Doc Fix by Fixing Medicaid LTC."  Here's how.

[To see how we got from this introduction to the following summary, read the whole report here.]


  • Medicaid is supposed to be America's long-term care safety net for the poor.  Instead, it is the principal LTC payor for nearly everyone.
  • Medicaid's LTC benefit has become "inheritance insurance" for baby boomers, lulling them into a false sense of security regarding their own future long-term care needs.
  • Medicaid's generous LTC eligibility and elastic income and asset limits create perverse incentives that invite abuse and discourage responsible long-term care planning.
  • The conventional wisdom that most people must spend down their life savings before they qualify for Medicaid long-term care benefits is a myth, demonstrably false.
  • If people's biggest asset, their home equity, were at risk to pay for long-term care, most people would plan early to save, invest and insure against that risk.
  • Reverse mortgages permit people to withdraw supplemental income or assets from their otherwise illiquid home equity without giving up use of the home.  This extra cash can purchase services to help them remain at home and delay or avoid Medicaid dependency altogether.
  • The single most effective step Congress and the President can take to fix Medicaid, reduce its cost, and improve America's long-term care service delivery and financing system is to replace Medicaid's home equity exemption with a reverse mortgage as a pre-condition of eligibility.
  • That simple measure will pump desperately needed financial oxygen into the LTC service delivery system, relieve the burden of Medicaid on taxpayers, enable Medicaid to provide better access to higher quality care for the genuinely needy, and expand the market for LTC insurance and home equity conversion products, thus generating additional tax revenue for state and federal coffers.
  • It can also pay for the "Doc Fix."