LTC Bullet:  The Index of Long-Term Care Vulnerability

Friday, August 2, 2013


LTC Comment:  Is America’s LTC services and financing system sustainable?  We propose a way to measure LTC vulnerability state by state, after the ***news.***


*** MISS US?  For the past couple weeks, you’ve heard a little less from the Center for LTC Reform.  We’ve skipped an LTC E-Alert or two and this is our first LTC Bullet in two weeks.  That’s because Center VP Damon, who edits, formats, posts and sends all our publications, is doing his civic duty, serving on a jury for a trial expected to last three weeks.  Center premium members ($250 per year and above) continue to receive our “clippings” service uninterrupted because those links to key articles and reports come directly from Steve’s laptop wherever he is.  We’ll endeavor to give you the best possible service while Damon’s jury duty proceeds.  In the meantime, we very much appreciate your patience and support. ***

***  ON THE ROAD AGAIN.,  Have you watched our datelines from recent publications?  What do Alpine, Texas, New York City, Cream Ridge, New Jersey, and Richmond, Virginia have in common?  They’re locations from which Steve Moses has reported since May.  Steve’s traveling in the Silver Bullet of Long-Term Care again.  “Living on site enables me to spend more time at each of our three study states,” he says.  “That means I can interview more people and get more documentary evidence to support our analysis and recommendations.”  Stay tuned for Steve’s LTC Embed reports from the long-term care policy front in Georgia, our next study state.  ***

*** SPEAKING OF OUR CLIPPING SERVICE . . .  The Center for Long-Term Care Reform’s “clipping service” is the best way to stay abreast of critical professional news.  Don’t waste your valuable time and effort searching the internet and reading a lot of chaff just to locate what you really need to know.  Steve Moses has to do that anyway and he’ll save you the trouble, send you an average of three key items to review per day, and provide a representative quote and a link to the source so you can dig deeper if you wish.  Premium members of the Center and higher ($250+ per year) receive our clippings at no extra charge.  Corporate members receive one complimentary clipping service subscription upon request and are eligible for additional subscriptions at a discounted rate.  For details, contact Damon at 206-283-7036 or ***



LTC Comment:  Your Center for Long-Term Care Reform set out in May cross country toward the East (in the Silver Bullet) to conduct three state-level studies of Medicaid and long-term care financing.  Target states are Virginia, New Jersey and Georgia.  We’ve completed our field work in the first two and I’m headed to Atlanta next.  But there’s a problem.

The Affordable Care Act, aka ObamaCare, has a provision in it called “maintenance of effort” (MOE), which prevents state Medicaid programs from tightening their LTC financial eligibility rules.  Targeting Medicaid to those most in need while diverting the middle class and affluent toward private financing alternatives should be states’ most important LTC priority.  Unfortunately, the MOE rule prevents states from implementing the critically needed corrective actions we’d likely recommend.

Furthermore, most state Medicaid programs aren’t cutting back on growing Medicaid expenditures.  They’re doubling down.  Initiatives to make Medicaid more attractive by “rebalancing” from nursing homes to home care are widespread.  Efforts to shift recipients—even the high-risk, high-cost Medicaid/Medicare “dual eligibles”—into care managed by giant corporations are nearly universal.  At the same time, most state budgets remain over-stressed, pinched most of all by growing Medicaid expenditures.

In the meantime, a huge age wave is rushing toward state Medicaid programs which are unprepared and failing to plan adequately for it.  When the flood of frail and infirm boomers starts to hit, what will happen?  Which states are more prepared?  Which less?  What are the key factors to consider?  Can the current public programs such as Medicaid and Medicare survive as the dominant LTC payers?  What is the potential for private financing alternatives like LTC insurance and home equity conversion?  These are some of the questions we’ve set out to ask and answer in a new “Index of LTC Vulnerability.”

We’re still in the roughest draft phase of developing the index.  Your thoughts and suggestions are welcome.  Here’s an outline of the top line factors we’re beginning to consider for evaluating a state’s ability to sustain its LTC services and financing system.  Think of it this way.  How would your state score if it were ranked on each of the following factors?

The Index of Long-Term Care Vulnerability

  1. Economy:  The current LTC system is predominantly publicly financed, so a state’s economy must generate sufficient revenue to support LTC financing while maintaining other critical state services.

      a.  Measures of state economic potential:

                        i.  Rich States, Poor States ranks states on economic competitiveness.

                  ii. Cato’s Fiscal Policy Report Card ranks state governors on fiscal policy

            b.  State budget shortfalls measure current fiscal duress

  1. Aging Demographics:  AARP’s “Across the States, Ninth Edition, 2012” gives state-by-state demographic and health data plus predictions

      a.  Growth in 85+ population

      b.  People age 65+ with disabilities, 2010

      c.  Alzheimer’s onslaught

  1. Health Condition:  AARP’s “Across the States, Ninth Edition, 2012

      a.  Residents with dementia, 2010

      b.  Nursing facility residents with low care needs, 2008

      c.  Quality & Oversight of Nursing Facilities

  1. Medicaid:  Kaiser Family Foundation’s “StateHealthFacts” website provides extensive data on state Medicaid programs including . . .

      a.  Expenditure trends

                  i.  Overall

                  ii.  Percent of state budget for Medicaid: Distribution of State General Fund Expenditures (in millions)

                       iii.  Medicaid LTC spending for older people and adults with physical disabilities (millions)

                       iv.  Medicaid nursing facility spending (millions)

    v.  Medicaid HCBS (home and community-based services) spending for older people and adults with  physical disabilities (millions)

                       vi.  Medicaid HCBS as a % of LTC spending, for older people and adults with physical disabilities          

b.  FMAP (Federal Medical Assistance Percentage):  the percent of Medicaid expenditures paid by the federal government

c.  Medicaid Expansion under ACA?  States that expand Medicaid under ObamaCare are vulnerable to higher future costs.

d.  Medicaid LTC Eligibility and Medicaid Planning:  how generous are the states Medicaid LTC financial eligibility rules?  See our state-level LTC studies.

e.  Low reimbursement vulnerability:  How much below the cost of care are the state’s Medicaid reimbursement rates?  See Eljay Medicaid Shortfalls Report.

f.  Dual eligibles vulnerability:  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" -- (PDF for print)

g.  Rebalancing vulnerability:  the more states rebalance from nursing home care (which most people will avoid) to home care (which most people want), the more vulnerable they are to increased utilization and costs.  See Briefing Paper #4:  Rebalancing Long-Term Care -- (PDF for print)

                        i.  Family caregivers; economic value of family caregivers likely to decline as Medicaid HCBS expands

          h.  Managed care vulnerability:  advocates warn of impact on . . .

                        i.  Access

                        ii.  Quality

                        iii.  Independence

  1. Private Pay Level

      a.  Spend down lack:  little spend down in lenient LTC financial eligibility programs

      b.  Estate recovery lack:  few states enforce estate recovery strongly:  See Maximizing Non-Tax Revenue from Estate Recoveries

           c.  Loss of home equity for LTC financing:  Medicaid exempts up to $802,000

      d.  Long-term care insurance level

                  i.  LTCI market penetration?

                  ii. LTC partnership?

                  iii.  LTCI tax incentives?

  1. Federal Government

     a.  Dependency on “provider taxes” used to leverage up FMAP

          b.  Social Security role in sustaining Medicaid

          c.  Medicare role in sustaining Medicaid

For now, “The Index of Long-Term Care Vulnerability” is just an outline.  We plan to flesh it out with measureable ranking factors and apply the index to each of the states in our three current studies.  After that a new goal will be to apply the index to all states as a means to warn those with the lowest scores of their risk and to recommend ways for them to sustain their long-term care social safety nets in the future.