LTC Bullet:  The Maine Thing About Long-Term Care

Friday, September 7, 2012


LTC Comment:  What’s happening in Maine right now could untie the Gordian knot of LTC financing.  Details after the ***news.***

*** NEW CENTER STUDY:  The Maine Health Care Association has engaged the Center for LTC Reform to conduct a study of Medicaid and LTC financing in the Pine Tree State.  Read today’s Bullet for details.  By demonstrating the high cost of health reform’s “maintenance of effort” rule, we believe this research will show the way for major Medicaid savings and improvements in the LTC safety net both in Maine and nationwide. ***

*** GAO REPORT:  The Government Accountability Office published “Medicaid Long-Term Care Information Obtained by States about Applicants' Assets Varies and May Be Insufficient” (GAO-12-749) on July 26, 2012.  It’s worth a quick read but we consider it another of many lost opportunities for GAO to tackle the vastly misunderstood subject of Medicaid LTC eligibility.  This report addresses the process of determining who’s eligible for Medicaid’s most expensive benefit and concludes states don’t always collect enough income and asset information to make a correct decision.  What’s needed is a study to determine whether and to what extent accurate eligibility decisions are actually being made.  That’s a much tougher task.  It requires pulling a valid random sample of Medicaid LTC cases and researching their financial eligibility thoroughly.  Such a study would show that many people receiving Medicaid LTC benefits are and have been ineligible all along.  Further analysis would show that many who are eligible could have, would have and should have avoided Medicaid dependency if the proper incentives had been in place to encourage them, while still young, healthy and affluent enough, to have planned responsibly to pay for their own care. ***

*** BILL CLINTON’S ABOUT FACE ON MEDICAID:  In his speech Wednesday night to the Democratic National Convention, former President Clinton claimed Republican plans to cut Medicaid would devastate nursing home funding.  Whatever you may think of the GOP’s specific proposal to block grant Medicaid, you have to know that much of what Medicaid spends on long-term care is wasted by paying for care people should have and could have paid for themselves.  Mr. Clinton used to understand that.  He signed the Omnibus Budget Reconciliation act of 1993 into law.  OBRA ’93 closed some gaping loopholes in Medicaid eligibility rules, made estate recovery mandatory, and sent the message to the American public that LTC financing is a personal responsibility.  While not fully successful because it wasn’t actively enforced, OBRA ’93 pointed clearly in the direction of saving the Medicaid LTC safety net by targeting it to people most in need.  Clinton’s latest position points in the opposite direction by propping up a failed LTC financing system instead of reforming it. ***

*** BON VOYAGE to Damon.  The Center’s VP for Administration doesn’t take many breaks but we’ve convinced him to enjoy some R&R this month.  He’ll be on vacation through the remainder of September, starting Monday.  Consequently, because Damon sends our LTC Bullets and E-Alerts as well as keeping our website up to date, you lucky Center members and readers will get some time off too.  Our weekly e-publications will resume early in October.  Not to worry, though, if you subscribe to the Center’s “Clippings Service.”  We’ll keep those daily “mental vitamins” coming to you without a break.  If you’re not receiving our clippings, here’s the deal:  Center members can subscribe for an extra $100 per year.  Non-members pay $120.  Premium ($250 per year) and Premium-Elite members as well as Regional Representatives ($500 per year) are entitled to the clippings at no extra cost.  If you want to join the clippings distribution, just let Steve know at or 206-283-7036.  He’ll sign you up immediately and Damon will collect after he returns from his getaway. ***

*** THE 13TH ANNUAL INTERCOMPANY LONG TERM CARE INSURANCE CONFERENCE:  It’s not too early to mark your calendars for this major industry conference to be held March 3-6, 2013 at the Hilton Anatole in Dallas, Texas.  AND it is almost too late to take advantage of the early-bird discount for exhibitors and corporate sponsors.  That expires on Thursday, September 13, just next week!  So jump on it by contacting Jim Glickman at 818-867-2223 or  Find more information at ***



LTC Comment:  First a little “inside baseball” information that you must have to understand why the “maintenance of effort” (MOE) issue is so important.

Health reform, AKA the Patient Protection and Affordable Care Act (PPACA, 2010), AKA “ObamaCare” contains a provision which threatens state Medicaid programs with loss of all their federal matching funds if they implement eligibility policies stricter than those in effect when the law was passed in March 2010.  In essence, this MOE rule prevents states from implementing sensible limits on Medicaid eligibility to save money in hard economic times. 

But what if a state opts not to participate in PPACA’s expansion of Medicaid?  Does the MOE restriction still apply?  Federal Medicaid officials say “yes.”  Some analysts, including the Cato Institute’s Director of Health Policy Studies, Michael Cannon, say “no.” 

According to Cannon:  “The amount of money HHS [Department of Health and Human Services] is threatening to withhold if the states don't maintain the effort is the same amount HHS threatened to withhold if states did not expand their Medicaid programs.”  In other words, for the same reason the Supreme Court decided the Feds couldn’t force states to expand Medicaid by threatening a loss of all federal funds, so also the Feds cannot use the same draconian threat to force non-Medicaid-expanding states to abide by MOE.

So what?  What’s at stake here is the right of states to operate their Medicaid programs in ways they consider most beneficial and cost-effective as long as they abide by all other federal laws and regulations besides the MOE.  Also at stake is a lot of money.

Take for example the State of Maine’s request to save $20 million and close a gaping hole in its budget by removing 33,000 less-needy recipients from its Medicaid rolls.  Governor LePage’s administration has sued to compel the federal government to approve the cut arguing that the MOE rule should not apply because Maine does not intend to expand Medicaid under health reform.

So far, this issue has little to do with long-term care.  But here’s the kicker.  The Center for LTC Reform analyzed Maine’s Medicaid long-term care program.  We concluded that the state could save approximately ten percent of its Medicaid nursing home expenditures or $24,000,000 per year by implementing measures to target the program’s benefits to the neediest Mainers.  We believe this goal can be achieved while simultaneously improving access to quality long-term care for poor, middle-class, and affluent citizens of the state.

How?  By implementing thoughtful eligibility reforms that abide by all federal rules except the MOE restrictions which Maine is already challenging.  One simple example:  Maine, in better times, opted to allow the maximum home equity exemption under Medicaid rules of $728,000.  Now the state would like to be able to reduce that exemption to the minimum under federal law of $525,000, still over 14 times the exemption allowed in England’s socialized system.  But the MOE rule prevents such a moderate change. 

There are many other examples of measures Maine could take that would target scarce Medicaid resources to people most in need while at the same time demonstrating the importance for others, who have the time and financial wherewithal to plan for LTC, to do so.  What are those measures?  How much would they save?  How might they increase Medicaid reimbursements to providers and increase access to and quality of care provided by the program?  What will the cost be to Maine and federal taxpayers if the MOE restrictions prevent Maine from implementing such measures?

Those are a few of the questions the Center for LTC Reform will attempt to answer in a study for the Maine Health Care Association.  According to its website, “MHCA is a statewide non-profit trade association representing 300 proprietary, nonprofit, and government-owned providers of long-term care [including] nursing homes and assisted living/residential care facilities . . ..  Members provide a range of long term care services that may include skilled nursing, rehabilitation or post-acute care, hospice, adult day care and independent living services.”

We’re proud to report that MHCA has contracted with the Center to conduct this research, including interviews with LTC financing experts on site during the week of October 1-5, 2012.  We have committed to provide a report explaining the potential benefits to Maine Medicaid and its stakeholders within one month of the field work and shortly before the national election on November 6, 2012.

We will keep Center members and readers apprised of our progress with this study.  We’re also soliciting your financial support for this work.  Please send your special contributions in support of our Maine Medicaid study to the Center for Long-Term Care Reform, 2212 Queen Anne Avenue North, #110, Seattle, Washington, 98109.  The Center’s tax I.D. number is 202653166.

Thanks for your support.