LTC Bullet:  LTC Almanac Update

Friday, October 4, 2013


LTC Comment:  We’ve updated the “Almanac of Long-Term Care” in The Zone.  More on the LTC Almanac and today’s update after the ***news.***

*** LTC COMMISSION falls flat.  As many predicted, including LTC Bullets, the federally sponsored Commission on Long-Term Care--created by the “fiscal cliff” legislation, oxymoronically named “The American Taxpayer Relief Act”--came and went with barely a ripple of interest.  Amid universal laments that long-term care is a huge personal and financial, private and public problem, the Commission could not agree on the only thing that really matters:  how to pay for quality LTC for an aging population.  We believe it’s time to change the focus of LTC research.  Instead of asking “What’s wrong and how can we fix it?” it’s time to ask “How did we get into this mess and what can we do to keep it from getting even worse?”  In other words, the time has come to focus on our Rube Goldberg LTC system’s vulnerability and unsustainability.  Keep an eye out for new research from the Center for LTC Reform that does exactly that. ***

*** HE’S BACK.  After four months on the road (in the Silver Bullet) conducting field work in Virginia, New Jersey and Georgia and another month hunkered down writing the reports on those studies, Steve Moses is back at Center headquarters in Seattle.  He says:  “I look forward to refocusing on our Clippings Service, LTC E-Alerts, and LTC Bullets and I thank Damon for picking up the slack while I was fully engaged in report writing.”  Those three reports, titled “The Index of Long-Term Care Vulnerability:  Case Studies in Virginia, New Jersey, and Georgia” have been submitted to the state think tanks that commissioned them.  We look forward to posting them and telling you more about their findings soon.” ***

*** CLIPPING SERVICE subscribers receive news items from us, individually and in real time, as short emails with a link, a quote and occasionally some brief commentary.  We keep our Clipping Service subscribers on the forefront of LTC knowledge.  We spend the time and effort gathering current, critical information on long-term care issues so you don’t have to.  By dividing the labor in this way, we all work more efficiently.  If you like what you read in our LTC E-Alerts, please subscribe to our Clipping Service.  It’s free to all “Premium Members” ($250/year).  Find all the details here.  Contact Damon at 206-283-7036 or to subscribe. ***



LTC Comment:  Center members know and appreciate our "Almanac of Long-Term Care" in The Zone, our password-protected website. 

*** SPECIAL:  We are making access to The Zone, including the "Almanac of Long-Term Care," free for seven days—today through Friday, October 11, 2013.  To access this introductory peek into The Zone, go to and use the following case-sensitive user name and password:  UN:  IntrotoZone / PW:  FreeTrial.  Like what you see?  Then join the Center for Long-Term Care Reform here.  Or contact Damon at 206-283-7036 or  ***

The LTC Almanac is divided into 11 sections:

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 section is divided into sub-sections and under each sub-section we provide a list by date of the most important reports and articles published on the topic, usually with a few highlights and sometimes with analysis.

The Almanac of Long-Term Care is a great way to find statistics you need quickly or to get current on topics you need to know the latest information about.

The Zone and the LTC Almanac are for Center for Long-Term Care Reform members only, except during the current free trial offer.  Join the Center here:  Call or email Damon at 206-283-7036 or  He can give you a user name and password to open up The Zone even before your annual dues payment arrives.  Individual annual memberships are $150.  Premium memberships with access to our “Clipping Service” start at $250.  Premium Elite and “Regional Representative” membership (if you qualify professionally) are $500.  Corporate memberships with many extra benefits start at $1,000.  See our "Membership Levels and Benefits" schedule here.

Caveat:  With time, some hyperlinks go bad.  In a huge document like the "LTC Almanac," we can't keep all the links current all the time.  If you find a bad link, but want to get to the material, contact us.  We often have an electronic copy of the document and we can usually find a current live link.  We'll also fix the link in the LTC Almanac so it will be current again for others.

Suggestion:  Read through the following update to stay current on new resource materials.  Then browse the full LTC Almanac at your leisure.  When you need a quick fact or the latest research on a particular topic, you'll know right where to go.  Enjoy.


Chapter 1:  Aging Demographics

United States 

General Stats

“Rising Demand for Long-Term Services and Supports for Elderly People”
CBO on LTC 0613 URL:

“By 2050, one-fifth of the total U.S. population will be elderly (that is, 65 or older), up from 12 percent in 2000 and 8 percent in 1950. The number of people age 85 or older will grow the fastest over the next few decades, constituting 4 percent of the population by 2050, or 10 times its share in 1950. That growth in the elderly population will bring a corresponding surge in the number of elderly people with functional and cognitive limitations. Functional limitations are physical problems that limit a person's ability to perform routine daily activities, such as eating, bathing, dressing, paying bills, and preparing meals. Cognitive limitations are losses in mental acuity that may also restrict a person's ability to perform such activities. On average, about one-third of people age 65 or older report functional limitations of one kind or another; among people age 85 or older, about two-thirds report functional limitations. One study estimates that more than two-thirds of 65-year-olds will need assistance to deal with a loss in functioning at some point during their remaining years of life. If those rates of prevalence continue, the number of elderly people with functional or cognitive limitations, and thus the need for assistance, will increase sharply in coming decades.” (p. 1)

See also “Methods for Analysis of the Financing and Use of Long-Term Services and Supports”:


Profile of Older Americans, 2012 AOA URL:

• The older population (65+) numbered 41.4 million in 2011, an increase of 6.3 million or 18% since 2000.
• The number of Americans aged 45-64 – who will reach 65 over the next two decades – increased by 33% during this period.
• Over one in every eight, or 13.3%, of the population is an older American.
• Persons reaching age 65 have an average life expectancy of an additional 19.2 years (20.4 years for females and 17.8 years for males).
• Older women outnumber older men at 23.4 million older women to 17.9 million older men.
• In 2011, 21.0% of persons 65+ were members of racial or ethnic minority populations--9% were African-Americans (not Hispanic), 4% were Asian or Pacific Islander (not Hispanic), less than 1% were American Indian or Native Alaskan (not Hispanic), and 0.6% of persons 65+ identified themselves as being of two or more races. Persons of Hispanic origin (who may be of any race) represented 7% of the older population.
• Older men were much more likely to be married than older women--72% of men vs. 45% of women (Figure 2). 37% older women in 2012 were widows.
• About 28% (11.8 million) of noninstitutionalized older persons live alone (8.4 million women, 3.5 million men).
• Almost half of older women (46%) age 75+ live alone.
• In 2011, about 497,000 grandparents aged 65 or more had the primary responsibility for their grandchildren who lived with them.
• The population 65 and over has increased from 35 million in 2000 to 41.4 million in 2011 (an 18% increase) and is projected to increase to 79.7 million in 2040.
• The 85+ population is projected to increase from 5.7 million in 2011 to 14.1 million in 2040.
• Racial and ethnic minority populations have increased from 5.7 million in 2000 (16.3% of the elderly population) to 8.5 million in 2011 (21% of the elderly) and are projected to increase to 20.2 million in 2030 (28% of the elderly).
• The median income of older persons in 2011 was $27,707 for males and $15,362 for females. Median money income (after adjusting for inflation) of all households headed by older people rose by 2% (not statistically significant) from 2010 to 2011. Households containing families headed by persons 65+ reported a median income in 2011 of $48,538.
• The major sources of income as reported by older persons in 2010 were Social Security (reported by 86% of older persons), income from assets (reported by 52%), private pensions (reported by 27%), government employee pensions (reported by 15%), and earnings (reported by 26%).
• Social Security constituted 90% or more of the income received by 36% of beneficiaries in 2010 (23% of married couples and 46% of non-married beneficiaries).
• Almost 3.6 million elderly persons (8.7%) were below the poverty level in 2011. This poverty rate is not statistically different from the poverty rate in 2010 (8.9%). During 2011, the U.S. Census Bureau also released a new Supplemental Poverty Measure (SPM) which takes into account regional variations in the livings costs, non-cash benefits received, and non-discretionary expenditures but does not replace the official poverty measure. The SPM shows a poverty level for older persons of 15.1% (more than 6 percentage points higher than the official rate of 8.7%). This increase is mainly due to including medical out-of-pocket expenses in the poverty calculations.

*Principal sources of data for the Profile are the U.S. Census Bureau, the National Center for Health Statistics, and the Bureau of Labor Statistics. The Profile incorporates the latest data available but not all items are updated on an annual basis.


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

National Health Expenditures

“National Health Expenditure Projections, 2012-22: Slow Growth Until Coverage Expands And Economy Improves”
National Health Expenditure 2012-2022 URL:

“Expected growth for 2014 is 6.1 percent, with an average projected growth of 6.2 percent per year thereafter. Over the 2012-22 period, national health spending is projected to grow at an average annual rate of 5.8 percent. By 2022 health spending financed by federal, state, and local governments is projected to account for 49 percent of national health spending and to reach a total of $2.4 trillion.”  (p. 1)


“National Health Spending In 2011: Overall Growth Remains Low, But Some Payers And Services Show Signs Of Acceleration”  Health Aff January 2013 32:187-99

NHS for 2011 URL:

“ABSTRACT In 2011 US health care spending grew 3.9 percent to reach $2.7 trillion, marking the third consecutive year of relatively slow growth. Growth in national health spending closely tracked growth in nominal gross domestic product (GDP) in 2010 and 2011, and health spending as a share of GDP remained stable from 2009 through 2011, at 17.9 percent. Even as growth in spending at the national level has remained stable, personal health care spending growth accelerated in 2011 (from 3.7 percent to 4.1 percent), in part because of faster growth in spending for prescription drugs and physician and clinical services. There were also divergent trends in spending growth in 2011 depending on the payment source: Medicaid spending growth slowed, while growth in Medicare, private health insurance, and out-of-pocket spending accelerated. Overall, there was relatively slow growth in incomes, jobs, and GDP in 2011, which raises questions about whether US health care spending will rebound over the next few years as it typically has after past economic downturns.” (p. 87)


Unfunded Liability Estimates

2013 Medicare Trustees Report URL:

“From the 75-year budget perspective, the present value of the additional resources that would be necessary to meet projected expenditures, at current-law levels for the three programs combined, is $39.6 trillion. To put this very large figure in perspective, it would represent 4.2 percent of the present value of projected GDP over the same period ($944 trillion).”  (p. 228)


Chapter 4:  Long-Term Care


“Five Key Facts About the Delivery and Financing of Long-Term Services and Supports”
KFF on 5 Key Facts on LTC 0913 URL:

Fact #1: People of All Ages Require Long-Term Services and Supports
Fact #2: Many People Who Need Long-Term Services and Supports Rely on Unpaid, Informal Care
Fact #3: When Paid, Formal Care is Needed, Many People Cannot Afford to Cover These Expenses
Fact #4: Medicaid is the Primary Payer for Long-Term Services and Supports
Fact #5: With the Aging of America, the Demand for Long-Term Services and Supports is Expected to Increase in the Coming Decades


Chapter 6:  Long-Term Care Financing 


“After CLASS: The Long- Term Care Commission's Search For A Solution,” Health Affairs
Josh Wiener on the LTC Commission 0513 URL:

“A heavy reliance on Medicaid has persisted, despite deep unhappiness with rising costs, routine catastrophic out-of-pocket costs that often leave people impoverished, the stigma that goes with a means-tested program, the lack of Medicare or private long-term care coverage, and the disconnect between acute and long-term care financing.” (p. 831)

Our critique of this article is in “LTC Bullet:  After CLASS and the LTC Commission,” Friday, May 10, 2013:


“The Long-Term Care Financing Crisis,” Diane R. Calmus
Heritage on LTC Crisis 0213 URL:

“Abstract. Long-term care (LTC) in the United States is in crisis. The current system is not meeting the needs of the frail elderly and disabled populations. As the 77 million baby boomers enter retirement, the LTC crisis will likely grow, both because of the sheer number of the baby boomers and because of medical advances that have increased longevity. Regrettably, few have prepared to pay for their LTC, either through insurance or savings. Policymakers need to move swiftly to reform the current system to ensure that tomorrow's retirees have access to high quality care without bankrupting future generations.” (p. 1)


Will HCBS Save Money? (See also similar section under LTC Providers)

"How is the Affordable Care Act Leading to Changes in Medicaid Long-Term Services and Supports (LTSS) Today?  State Adoption of Six LTSS Options"
KFF on ACA and LTC 0413 URL:

“With the passage of the Affordable Care Act (ACA) in 2010, states are afforded a number of new and expanded opportunities, including enhanced federal financing, to improve access to and delivery of Medicaid long-term services and supports (LTSS). This policy brief provides an overview of six key Medicaid LTSS options created or enhanced by the ACA and state adoption of these options to date. To date, nearly every state (47 states and DC) has taken steps forward with at least one of the six options (Table 1). Many states are pursuing or plan to pursue multiple new LTSS options. The most popular state options have been the Money Follows the Person (MFP)demonstration grants (45 states and DC) and financial alignment models for dual eligible beneficiaries (26states).” (p. 1)


“Long-Term Care for Older Adults: A Review of Home and Community- Based Services Versus Institutional Care”  AHRQ on HCBS vs NH 1112 URL:

Conclusions. Determining whether and how the delivery of LTC through HCBS versus NHs affects outcome trajectories of older adults is difficult due to scant evidence and the methodological limitations of studies reviewed. More and better research is needed to draw robust conclusions about how the setting of care delivery influences the outcomes and costs of LTC for older adults.  (p. vii)

LTC Clipping January 27, 2013: "Home- and community-based services (HCBS), initially touted as a cost-saving method of delivering long-term care compared to institutional settings, may not actually be a significantly superior setting in which to receive care, suggests a report from the Agency for Healthcare Research and Quality (AHRQ). AHRQ reviewed several studies comparing different long-term care models and concluded there's not enough evidence to truly assess their relative effectiveness in relation to each other. It may be more accurate to simply consider HCBS as a preferred model among consumers, rather than one that provides better care at a lower cost, the report's authors say."

LTC Comment: Academics, policy makers, politicians and senior advocates have pushed the idea for decades that home and community-based care saves money and gives people who need LTC what they want. Now finally comes research that shows no evidence that HCBS saves money or improves outcomes. Nevertheless, Medicaid financing of HCBS continues to skyrocket, crowding out private financing alternatives.


Who Will Pay for LTC? (includes "Not the VA")

“Who Pays for Long-Term Care in the U.S.?  (Updated),”  Fact Sheet • January 2013
SCAN on Who Pays for LTC 0113 URL: 

“Medicare, Medicaid fight could take center stage after debt ceiling extension” - McKnight's Long Term Care News

"Long-term care operators have a stake in any changes to Medicare and Medicaid, which together pay for more than 70% of annual long-term care costs, according to the SCAN Foundation."

LTC Comment: The SCAN report referenced here is an eye-opener. But reality is even worse. When you realize that half the 21.9% of LTC costs called "out of pocket" are really just Social Security income of people already on Medicaid, you see that over 80% of LTC expenditures in the US come from sources other than asset spend down. No wonder people are not as worried about LTC risk and cost as they should be; the government pays for the vast majority of expensive LTC. When that stops, as it must, the poor will suffer most, the affluent will pay their own way, spend down of home equity to fund LTC will skyrocket, and demand for LTC insurance will explode. Likely, interest rates will soar around the same time further pinching government budgets and hopelessly undermining Social Security, Medicare, and Medicaid, but unleashing LTCI profitability. Bank on it! 


“National Spending for Long-Term Services and Supports (LTSS), 2011”
LTC Spending 2011, 0211 URL:

“Medicaid is the dominant source of payment for LTSS, followed by out-of-pocket payments by individuals and families. Of all U.S. spending on LTSS, the federal-state Medicaid program is the principal payer. In 2011, Medicaid paid for 62.3 percent ($131.4 billion) of all LTSS spending. Out-of-pocket spending by individuals and families accounted for about 21.6 percent ($45.5 billion) of spending. Private insurance and other private and public sources paid the balance (Figure 1).”


Chapter 7:  Long-Term Care Insurance

General and Data

American Taxpayer Relief Act of 2012 URL:

From LTC Bullet #983, Friday, January 4, 2013

*** AMERICAN TAXPAYER RELIEF ACT OF 2012:  President Obama signed the “fiscal cliff” legislation on Wednesday, January 2, 2013.  Following is a link to the statute that repeals CLASS and sets up a “Commission on Long-Term Care”:  . . .***


Chapter 10:  Medicaid

Medicaid is the 800-pound gorilla of LTC 

“Medicaid’s Role in Meeting the Long-Term Care Needs of America’s Seniors”
KFF on Medicaid LTC 0113 URL:

"Given the high cost of long-term care services, few elderly people can afford these services. For seniors with long-term care needs, Medicaid, as a complement to Medicare, serves as an essential safety net for institutional and community-based services not fully covered by Medicare or private insurance."

LTC Comment: A key principle in economic analysis is the difference between the seen and the unseen. It's easy to see the benefits Medicaid LTC provides to people who take advantage of it. What reports like the one cited here do not identify or explain are the unseen negatives of Medicaid. Medicaid distorts the LTC marketplace in critical ways. Easy access to Medicaid-financed nursing home care crowded out markets for privately financed home care, for home equity conversion to pay for LTC, and for private LTC insurance. The result is our LTC system's institutional bias and over-reliance on a bankrupt welfare program that pays LTC providers less than their cost to deliver the care. Also unmentioned in the article and unseen to most people is that Medicaid is easy to obtain for people with substantial incomes and assets even without legal gaming. Abuse of annuities and promissory notes that we've highlighted recently in Center publications expand Medicaid access even to the rich, but they too go unacknowledged. Ironically, these unseen aspects of Medicaid LTC are ruining Medicaid as a safety net for the poor AND simultaneously inhibiting private insurance as a resource for the middle class and affluent. Double jeopardy. But the Kaiser Family Foundation hides this reality by focusing only on the benefits easily seen and ignoring the critical unseen deficiencies of Medicaid.


“How Much Will Medicaid Cost in the Future and Why?: A Look At Federal Projections” 0813 URL:

“Over the next decade, federal Medicaid expenditures are expected to grow by an average annual rate of about 8% (including the effects of the ACA), with acute care growing slightly faster than long-term care.

“Medicaid enrollment is expected to grow from 71 million in 2012 to 91 million by 2023, an average annual rate of about 2% per year. Enrollment for adults is expected to increase significantly due to the expansion of Medicaid under the ACA. Over time, the elderly and persons with disabilities will continue to account for the majority of Medicaid spending.”  (p.  1)


Medicaid Eligibility 

“Medicaid Insurance in Old Age,” Mariacristina De Nardi, Eric French, and John Bailey Jones_ June 13, 2013  
Chicago Fed on Medicaid 1212 URL:


“Medicaid was primarily designed to protect and insure the poor against medical shocks. Yet, poorer people tend to live shorter lifespans and incur lower medical expenses before death than richer people. Taking these and other important dimensions of heterogeneity into account, and carefully modeling key institutional aspects, we estimate a structural model of savings and endogenous medical expenses to assess the costs and benefits of Medicaid for single retirees.

“We show that even higher-income retirees benefit from Medicaid, if they live long enough for their resources to be depleted by medical expenses. We also find that all retirees value Medicaid insurance coverage highly, compared to the value of the Medicaid transfers that they actually receive on average.” (p. 1)


“Medicaid and the elderly”
Chicago Fed on Medicaid and the Elderly 0613 URL:

“Although Medicaid is available only to ‘poor’ households, middle-income households with high medical expenses usually qualify for assistance also. Given the ongoing growth in medical expenditures, Medicaid coverage in old age is thus becoming as much of a program for the middle class as for the poor (Brown and Finkelstein, 2008).” (p. 17)


“Medicaid Spend Down: Implications for Long-Term  Services and Supports and Aging Policy,"   Joshua M. Wiener, Wayne L. Anderson, Galina Khatutsky, Yevgeniya Kaganova, and Janet O'Keeffe  (RTI International) and Anne Tumlinson, Eric Hammelman, and Elana Stair (Avalere Health)

SCAN on Medicaid Spend Down 0313 URL:

“The high cost of long-term services and supports (LTSS) results in catastrophic out-of-pocket costs for many people needing services, some of whom spend down to Medicaid eligibility. For people who have been independent all of their lives, transitioning to Medicaid means depending on a means-tested welfare program for their health and long-term care services. Moreover, people transitioning to Medicaid are a substantial portion of state Medicaid expenditures. In an effort to avoid exhausting their resources and relying on Medicaid, others depend on unpaid family support or go without needed services.”  (p. 1) 

Our critique of this paper was published as “LTC Bullet:  SCAN the LTC Possibilities,” Friday, April 5, 2013:


"The Medicaid Medically Needy Program: Spending and Enrollment Update"
KFF on Medically Needy 1212 URL:

“In federal fiscal year 2009, there were 2.8 million medically needy enrollees who spent a total of $36.7 billion. The medically needy accounted for 5 percent of total Medicaid enrollment, but 11 percent of total Medicaid spending.

“Among the 34 states with medically needy programs, there is variation between states. New York and California each provide Medicaid coverage to over 700,000 medically needy individuals - one quarter of the total medically needy population. Sixteen states do not offer medically needy coverage.

“The elderly and individuals with disabilities comprise 41 percent of medically needy enrollment, but make up nearly 88 percent of total medically needy spending. In contrast, non-disabled children and adults comprise the majority (59%) of medically needy enrollment, but only account for 12 percent of total medically needy spending.


“Dual eligible beneficiaries account for 28 percent of medically needy enrollees, but 68 percent of medically needy spending.”


Dual Eligibles 

“Medicaid's Role for Dual Eligible Beneficiaries”
Medicaid's Role for Dual-Eligible Beneficiaries 0813URL:

“Medicaid fills in the gaps in Medicare's benefit package for many low-income Medicare beneficiaries. These "dual eligible" beneficiaries are individuals who are entitled to Medicare and are also eligible for some level of assistance from their state Medicaid program. Such assistance ranges from help paying for Medicare's premiums and cost-sharing to coverage of benefits not offered under Medicare, such as long-term care and at state option, hearing, vision, and dental services. Because dual eligible beneficiaries have significant medical needs and a much higher per capita cost on average than other beneficiaries, they are of great interest to both Medicare and Medicaid policymakers and to the state and federal governments that finance and manage the programs.

“This brief provides an update on Medicaid enrollment and spending attributable to dual eligible beneficiaries through fiscal year 2010.” (p. 1)


Chapter 11:  Medicaid Planning


“Concepts and implications of altruism bias and pathological altruism,” Barbara A. Oakley Pathological Altruism 0413 URL:

“Presented here are the mechanistic bases and potential ramifications of pathological altruism, that is, altruism in which attempts to promote the welfare of others instead result in unanticipated harm. A basic conceptual approach toward the quantification of altruism bias is presented. Guardian systems and their over arching importance in the evolution of cooperation are also discussed. Concepts of pathological altruism, altruism bias, and guardian systems may help open many new, potentially useful lines of inquiry and provide a framework to begin moving toward a more mature, scientifically informed understanding of altruism and cooperative behavior.” (p. 1)


Criticism of Medicaid Planning

“Billions of Federal Tax Dollars Misspent on New York's Medicaid Program,” Committee Report, U.S. House of Representatives, 113th Congress, Committee on Oversight and Government Reform,
February 14, 2013
Oversight Report 0213 URL:

"The Committee has learned that Medicaid estate planning is a long-standing practice and significant problem across the nation and in New York State. The Committee has learned that relatively affluent people in New York artificially impoverish themselves in order to qualify for Medicaid and have taxpayers pick up the cost of their long-term care services and supports. At least in Suffolk County, New York, a relatively affluent part of the State, a legal technique called spousal refusal, which is essentially when one spouse abandons all financial care of a sick or disabled spouse and leaves him or her as a ward of the State, is widely used."  (p. 3)