LTC Bullet:  Double Trouble

Friday, May 11, 2012


LTC Comment:  Integrating Medicaid/Medicare funding and care delivery has been the holy grail of LTC dreamers, but their latest plan could backfire.  More after the ***news.***

*** 3IN4 CAMPAIGN BACK IN FULL SWING:  Check out the first "Week in Review" video segment plus highlights from the 3in4 Need More National Bus Tour and Free Rent Give Away Contest.  The 3in4 Need More campaign is dedicated to raising awareness of the importance of planning for one’s long term care needs.  The campaign utilizes multiple marketing strategies in order to increase awareness nationally.  Weekly Media Pick Ups include: 

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*** GOVERNMENT SPENDING IS NOW CALLED INVESTING:  Long-time Center supporter, author and LTCI producer Ross Schriftman recently published this profound squib:  “To understand why our government is in such bad financial shape consider this.  Ben Franklin famously said, ‘A penny saved is a penny earned.’  Last week I was at a presentation where a high ranking Philadelphia official said, ‘A dollar spent is a dollar invested.’  This is the new narrative.  Count how many times our elected and appointed officials will call government spending an investment.  Sorry guys.  You can't invest money you already spent.  It doesn't work that way.  No wonder we are in big trouble.” ***



LTC Comment:  People who qualify for Medicare AND Medicaid are called “dual eligibles.”  Duals are very expensive.  For example, there are only about nine million Medicaid recipients who are also Medicare beneficiaries, but Medicaid spent $142.9 billion on them in 2009 or $16,056 each.  Duals comprise only 15% of Medicaid recipients but they consume 39% of its spending.  Dual eligibles are also heavy users of long-term care (LTC is 70% of their Medicaid expenditures) and acute care services not covered by Medicare (5%).  Medicaid pays for their Medicare premiums (9%) and cost-sharing (15%) too. 

In a paper the Center published recently, we estimated that Medicaid could save $30 billion per year by diverting only 21% of potential dual eligibles from ever becoming duals.  For details, see “Briefing Paper #5:  Dual Eligibles and Long-Term Care:  How to Save Medicaid LTC $30 Billion Per Year and Pay for the ‘Doc Fix’.”  Our plan achieves that goal, by targeting Medicaid to the poor and creating incentives for the middle class and affluent to plan early, save, invest and insure for LTC so they never become a burden on Medicaid and hence do not become expensive dual eligibles.

Unfortunately, that is not an approach the federal and state governments have taken.  Instead, they focus entirely on managing the care of a huge and rapidly growing dual population.  The idea is to combine Medicare and Medicaid funding and place the duals in managed care.  When I was in Washington, DC last summer/fall, the director of the National Association of State Medicaid Directors told me that transitioning Medicaid recipients, including duals, into managed care was the single biggest initiative of the state directors.  At best, that approach can mitigate some of the exploding cost of caring for duals.  It is unlikely, however, to improve the quality of care they receive or reduce expenditures significantly.

Already, analysts from the political left and right are waving warning flags.  The left worries that private managed care companies will sacrifice care quality to maximize profits.  For example: 


The National Senior Citizens Law Center (NSCLC) released a special report . . . entitled "Assessing the Quality of California Dual Eligible Demonstration Health Plans" that raises concern about the eight health plans the state has selected to handle the care of low income older adults and people with disabilities in Los Angeles, Orange, San Diego and San Mateo Counties. California has proposed a three-year demonstration project to enroll individuals dually eligible for Medicare and Medi-Cal [California’s name for Medicaid] into managed care plans.  (Source:  NSCLC Health Network Alert) 


The right worries about care quality too, but also that this new effort to push duals into managed care is just another Medicare money grab.  For example:


Dr. Scott Gottlieb, a former senior official at the Centers for Medicare and Medicaid Services in the Bush administration, warns that under Obamacare disabled seniors who are eligible for both Medicare and Medicaid will receive inferior care, according to a report by the New York Post.  Gottlieb, an American Enterprise Institute resident fellow, says these low-income people who are elderly or have disabilities will be uprooted from the tried-and-true Medicare fold and "herded" into state-run Medicaid plans as another phase of Obamacare grips the nation. . . .  Some cash-strapped states are jumping at the chance to capture federal Medicare dollars for their Medicaid programs, according to Gottlieb.  (Source:  Newsmax)


The biggest problem with government-financed health or long-term care is that well-intentioned interventions have a way of causing bigger problems than the ones they try to fix.  Instead of preventing people from becoming dual eligibles in the first place, the latest public financing approach is to cut costs by turning over care of the sickest and most disabled public dependents to big companies that may or may not be able to manage their complex care needs adequately.  This could be double trouble for vulnerable elderly people dually dependent on Medicaid and Medicare.  It definitely bears keeping a close eye on developments.


In the meantime, the only way to be sure you and your loved ones never have to rely on disintegrating entitlement programs--like the dying duo of Medicare and Medicaid--is to plan early and save, invest or insure for your health and long-term care needs.