LTC Bullet:  Government LTC is Getting Old

Friday, December 13, 2013


LTC Comment:  Georgia Medicaid is free inheritance insurance, after the ***news.***

*** Happy Friday the 13th.  Be careful out there! ***

*** ILTCI CONFERENCE.  The 14th annual Intercompany Long-Term Care Insurance Conference will convene March 16-19, 2014 at the Rosen Centre in Orlando, Florida.  Get all the details and register here.  Chris Gardner will keynote the event on opening day.  His life was the basis for the book and movie “The Pursuit of Happyness.”  The conference will close with a general session on “The Future of the Industry.”  Stay tuned here to learn who will deliver that challenging presentation.  In between the opening and closing general sessions, you can expect the usual high caliber presentations, peerless networking, and excellent food and drink.  This is a convocation not to be missed if you can manage it.  Damon and I will be there to cover the program and report on it.  Say hello if you attend and, if you don’t (rue the thought), then watch for our “LTC Embed” accounts of the action. ***

*** VIRGINIA HEALTH CARE ROUND TABLE.  The Thomas Jefferson Institute for Public Policy convened a conference in Richmond yesterday to discuss health and long-term care policy.  Some of the leading national critics of the Affordable Care Act (aka ObamaCare) spoke including Grace-Marie Turner of the Galen Institute and Michael Tanner of Cato.  Addressing the challenges to Medicaid and long-term care financing, respectively, were Bob Helms of the American Enterprise Institute and the Center for Long-Term Care Reform’s Steve Moses.  The audience of public officials, business and professional people came away educated but hardly edified.  National health and LTC public policy are on a rapidly accelerating deadly course. ***

*** CLTCR Premium Membership  --  Center for Long-Term Care Reform premium members receive our full suite of individual membership benefits including:  our LTC Bullets and E-Alerts; access to our Members-Only Zone website and Almanac of Long-Term Care; subscription to our Clipping Service; and email/phone access to Steve Moses for 24-hour turnaround queries.  Our Premium Membership is designed to give you a competitive advantage in your long-term care profession. Your increased knowledge of the critical issues and challenges we face in the field of long-term care service delivery and financing equals improved professional success for you and better LTC services for your clients and for those who have no choice but to rely on scarce public resources.  Premium Membership is $250 per year, paid up front or monthly by automatically recurring credit card payments.  Contact Damon at 206-283-7036 / to start your Premium Membership immediately or go directly to our secure online subscription page and sign up for as little as $21 per month. ***



LTC Comment:  For the second week in a row, we’re announcing publication of a major study by the Center for Long-Term Care Reform.  The Georgia Public Policy Foundation (GPPF) underwrote the project.  Steve Moses conducted the onsite research last summer and produced the draft report on deadline September 30, 2013.  You can read “The Index of Long-Term Care Vulnerability:  A Case Study in Georgia,” on the GPPF’s website here or on the Center for Long-Term Care Reform’s website here.

Now, if you’re thinking to yourself “Gee, that title sure sounds familiar,” give yourself a gold star.  Last week’s published report was “The Index of Long-Term Care Vulnerability:  A Case Study in Virginia.”  And, get ready for this, we have one more coming soon titled “The Index of Long-Term Care Vulnerability:  A Case Study in New Jersey.”  What’s with all this “Index” business you might ask.

The “Index of Long-Term Care Vulnerability” is an analytical tool we’ve developed to help legislators and policy makers (and anyone else who’s interested) assess the future sustainability of their state’s long-term care service delivery and financing system.  Check it out here as applied to Virginia and here (pages 27-28) as applied to Georgia in our latest report.  In both reports, you’ll find the Index filled out by me for the USA and for the state in question.  In each of the reports, you’ll also find a blank version of the Index inviting you to weight the key factors determining the sustainability of LTC and to score your own state’s vulnerability.  Check it out here and let me know what you conclude.

Op-Ed Published

I wrote an op-ed to introduce our Georgia report to the media.  I titled it “Georgia Medicaid is Free Inheritance Insurance.”  Editors change titles sometimes with or without telling authors.  That can be annoying, but this time I had no objection to the new title.  “Government's role in long-term care is getting old” was the title assigned by The Columbia County News-Times.  Read the piece here or below.

It’s true literally and figuratively that government LTC is getting old.  It started long before Medicaid and Medicare came along in 1965, but it has ballooned ever since.  Government interference in the LTC market is not only temporally old, it is deadly tiresome as well.  When will the powers-that-be learn that providing underfinanced LTC after the insurable event has occurred to consumers who should, could and would have planned responsibly and paid privately otherwise--is a recipe for insolvency?


Here’s the op-ed for your consideration:

“Government’s Role in Long-Term Care is Getting Old”
Stephen A. Moses

The single biggest expense senior citizens face is long-term care. The risks and cost are huge: a 20 percent chance they’ll need five years or more, with costs of $181 per day for a nursing home in Georgia. Yet few Georgians plan for long-term care. Only 3.5 percent of Georgians over age 40 own private insurance; the national average is 4.5 percent. Why don’t they?

The answer is surprising. Most frail or infirm elderly Georgians don’t pay for their own long-term care. In fact, expensive long-term care in Georgia is financed mostly by the state and federal government through Medicaid, a means-tested public assistance program. Georgia Medicaid spent a billion dollars on long-term care in 2011, most of it for nursing home care (76 percent) but a substantial portion (13 percent) for the more popular, waivered home care services. Medicaid recipients occupy 72 percent of the beds in Georgia’s nursing homes.

The way Medicaid eligibility works results in most people qualifying for Medicaid-financed long-term care almost regardless of their income or assets. That’s the conclusion we reached in a study sponsored by the Georgia Public Policy Foundation and published recently in a report titled The Index of Long-Term Care Vulnerability: A Case Study in Georgia. Read it here:

This is what we found:

Georgians can circumvent Medicaid’s $2,130 per month income limit by setting up Qualified Income Trusts (QITs). County eligibility workers provide “templates” to help families set up QITs, which enable people with substantially higher incomes to qualify for Medicaid-financed long-term care.

Nor are assets a significant obstacle to qualifying for Medicaid. The $2,000 limit applies only to cash or assets easily convertible to cash. Medicaid recipients in Georgia may also retain up to $536,000 worth of home equity, plus one automobile, prepaid burial plans, personal belongings and home furnishings of unlimited value.

Income and asset eligibility rules are even more generous for married couples and Georgia Medicaid is more lenient in this area than federal rules require. The spouse in the community can draw on the institutionalized spouse’s income to bring monthly income up to $2,898. The non-institutionalized spouse may retain $115,920 of the couple’s joint assets. Federal rules limit the income to $2,184 (without a household to maintain) and set the minimum asset limit to only half the joint assets, not to exceed $115,920.

Even wealthier Georgians qualify by retaining Medicaid planning attorneys to impoverish themselves (or more often, their parents) artificially. Common Medicaid planning techniques used in Georgia include asset transfers, promissory notes, annuities and purchase of exempt assets. For example, according to county eligibility workers, annuities worth hundreds of thousands of dollars are established in ways that prevent the state from capturing any of the money to offset Medicaid costs.

Isn’t this retained wealth recaptured from the estates of deceased Medicaid recipients? Georgia Medicaid finally implemented an estate recovery program a decade after the federal Omnibus Budget Reconciliation Act of 1993 made one mandatory. Georgia’s program is set up in such a way, however – exempting, for example, the first $25,000 of an estate – that it is unlikely to recover much revenue.

Georgia Medicaid makes free or subsidized long-term care available to most residents of the state. The consequences of this generous policy are that few Georgians plan for long-term care or purchase insurance for it, and most expensive long-term care is paid for by Medicaid, a large and rapidly growing program that consumes more and more state and federal resources.

Georgia should seek ways to return Medicaid to its original intent: a long-term care safety net for people in need. Without that, Medicaid will remain free inheritance insurance for relatively prosperous heirs, deflating their sense of urgency about long-term care risk and cost, and resulting in too many ending their lives on Medicaid for that program to survive.

(Stephen Moses is president of the Center for Long-Term Care Reform and author of The Index of Long-Term Care Vulnerability: A Case Study in Georgia.)