LTC Bullet:  LTC Almanac Update

Friday, January 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.***

*** 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”:   We’ll keep a close watch on that LTC Commission as its most likely recommendation will be a new CLASS-like entitlement program but with compulsory participation.  Before even considering expensive new government LTC programs, the Commission should propose ending Medicaid loopholes that trap the middle class on LTC public assistance.  Examples of such loopholes include Medicaid’s $802,000 home equity exemption; Medicaid-compliant annuities which allow hiding hundreds of thousands of dollars immediately before Medicaid qualification; and the welfare program’s unlimited exemptions for personal belongings, a business, prepaid funeral expenses, an automobile, and term life insurance. ***

*** ILTCI CONFERENCE:  Early Bird Registration ends Thursday, January 10th, for the Thirteenth Annual Intercompany Long Term Care Insurance Conference to be held from March 3-6, 2013 at the Hilton Anatole, in Dallas, Texas.  Once again, the ILTCI conference will host and subsidize the cost for a special 2-day pre-conference CLTC Master Class (only $95 extra).  Harley Gordon will personally conduct this class.  If you are an agent selling LTC (or other) insurance directly to consumers, you can apply here for a Scholarship that will qualify you for a $295 Scholarship rate (plus an additional $95 if attending the CLTC class).  If you are a government employee, register here for the conference using the Government Employee rate of $95.  For those who have never attended ANY of the previous twelve annual conferences, get a special rate of only $395 (instead of the $895 early bird rate) and register here before January 10th.  The price of registration goes up $100 after that date.  Make your Hotel reservations early for attractive rates of only $129 (for the Hilton Anatole Hotel).  The final few booths available for exhibitors are going fast.  Get all details at  If you have any questions, contact Jim Glickman at 818-867-2223. ***



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

*** SPECIAL.  To celebrate the New Year of 2013, we are making access to The Zone, including the "Almanac of Long-Term Care" free for seven days—today through Friday, January 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 3:  Unfunded Liabilities--Social Security, Medicare, and Budgets

Unfunded Liability Estimates

“How Much Does the Federal Government Owe,” NCPA 0612 URL:

“This fiscal imbalance is equal to the current debt held by the public plus the unfunded obligations of all federal government programs, or the amount by which future expenditures exceed projected revenues.

“In 2011, a conservative estimate of these amounts totaled $84 trillion. More than one-third of this amount — $30.3 trillion — is due to public debt holders, federal employees or current retirees through their Social Se­curity and Medicare benefits. The remaining two-thirds can be affected by policy changes, and much of this remainder is for Social Security and Medicare benefits.”


State Fiscal Responsibility

Fiscal Report Card, Cato 1012 URL:
“Fiscal Policy Report Card on America's Governors 2012, by Chris Edwards, Cato Institute, Washington, D.C.

“Four governors were awarded an ‘A’ in this report card—Sam Brownback of Kansas, Rick Scott of Florida, Paul LePage of Maine, and Tom Corbett of Pennsylvania. Five governors were awarded an ‘F’—Pat Quinn of Illinois, Dan Malloy of Connecticut, Mark Dayton of Minnesota, Neil Abercrombie of Hawaii, and Chris Gregoire of Washington.” (p. 1)


Chapter 5:  Caregiving


MetLife Grandparents Study 0912 URL:

"The majority (62%) of grandparents have provided financial support or monetary gifts for grandchildren within the past five years. Of those grandparents who provide financial assistance: • The average amount given for all grandchildren over the past five years was $8,289 total. More than half gave up to $5,000. • Cash was the most common type of financial support, and helping with basic needs rose to the top with 43% of grandparents giving for clothing, 33% for general support, and 29% for education, such as pre-school through high school private schools, tutoring, college tuition, and graduate school. • The top average dollar amount spent per grandparent was $23,068 for investments, $8,276 for education, and $6,742 for a down payment on a grandchild's home. • Forty-three percent report they are providing more financial support due to the economic downturn, and one-third (34%) are giving financial support to grandchildren even though they believe it is having a negative effect on their own financial security."


Chapter 6:  Long-Term Care Financing

Cost of Care Surveys

MetLife Cost of Care Survey 2012 URL:

“According to the newly released 2012 MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services and Home Care Costs, conducted for the tenth year by the MetLife Mature Market Institute, national average rates for long-term care in the U.S. continue to rise. The average cost of a semi-private room in a nursing home rose 3.7% in 2012, from $214 daily or $78,110 annually in 2011, to $222 or $81,030 annually. Assisted living base rates increased by 2.1%, from $3,477 monthly or $41,724 annually to $3,550 or $42,600 annually. The average rate for a homemaker increased by 5.3%, from $19 to $20 per hour. Only rates for home health aides and adult day services were unchanged year-to-year, remaining at $21 per hour and $70 per day respectively.”

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

EBRI on LTCI 0612 URL: 
“Effects of Nursing Home Stays on Household Portfolios By Sudipto Banerjee, Ph.D.

LTC Comment: This article purports to prove that a large percentage of Americans spend down catastrophically into impoverishment for nursing home care.  It and the study on which it is based are bunk. They assume that because people in nursing homes have less money and property than they did before they were institutionalized, they must therefore have spent down their savings and home equity for their care. Nonsense. Medicaid pays for the vast majority of all long-term (> 3 months) nursing home stays. Private pay nursing home patients have declined radically. Cash and real estate disappear for many reasons other than LTC spend down, including for the purpose of self-impoverishing to qualify for public benefits. There is no empirical evidence whatsoever to indicate large amounts of asset spend down for nursing home care. As I've explained year after year, from 80% to 90% of the entire cost of nursing home care in the United States is accounted for by direct government payment (Medicaid and Medicare), indirect government payment (Social Security income of people already on Medicaid), and by other sources of income, not assets. See "LTC Bullet: So What If the Government Pays for Most LTC?," 2010 Data Update, Friday, January 13, 2012.


Nursing Home and Home Care Expenditure Data from CMS and Health Affairs

National Health Expenditures Projections 0712 URL:

“National Health Expenditure Projections: Modest Annual Growth Until Coverage Expands And Economic Growth Accelerates,” by Sean P. Keehan, Gigi A. Cuckler, Andrea M. Sisko, Andrew J. Madison, Sheila D. Smith, Joseph M. Lizonitz, John A. Poisal, and Christian J. Wolfe, Health Affairs 31, NO. 7 (2012): 16001612

“For 2011–13, US health spending is projected to grow at 4.0 percent, on average—slightly above the historically low growth rate of 3.8 percent in 2009. Preliminary data suggest that growth in consumers’ use of health services remained slow in 2011, and this pattern is expected to continue this year and next. In 2014, health spending growth is expected to accelerate to 7.4 percent as the major coverage expansions from the Affordable Care Act begin. For 2011 through 2021, national health spending is projected to grow at an average rate of 5.7 percent annually, which would be 0.9 percentage point faster than the expected annual increase in the gross domestic product during this period. By 2021, federal, state, and local government health care spending is projected to be nearly 50 percent of national health expenditures, up from 46 percent in 2011, with federal spending accounting for about two-thirds of the total government share. Rising government spending on health care is expected to be driven by faster growth in Medicare enrollment, expanded Medicaid coverage, and the introduction of premium and cost-sharing subsidies for health insurance exchange plans.”


Chapter 7:  Long-Term Care Insurance

General and Data 

LIMRA on LTCI, “LTCI: An Industry Subdued,” technical report 0712:

“Eighty-three individuals from 48 organizations participated in LIMRA's 2012 LTCI Industry Outlook and Insights Study, a survey fielded every three years to examine the state of the industry. Survey participants are asked to identify the most pressing issues facing the industry today, what they're most encouraged by, and what's keeping them awake at night.”

See also LTC Bullet:  Nursing Home Spend Down Misunderstood and Late-Breaking LTCI Industry News  Friday, July 20, 2012


Why Don’t More People Buy LTCI?

Health Affairs (Brown-Goda) on LTCI 0612 URL: 
“Long-Term Care Insurance Demand Limited By Beliefs About Needs, Concerns About Insurers, And Care Available From Family,” Health Affairs

“Abstract:  In spite of the high costs and major financial risks involved in long-term care, the majority of older Americans do not own long-term care insurance. We conducted a survey designed to learn more about the role of the following four broad factors in affecting the demand for longterm care insurance: preferences and beliefs, such as notions about the likelihood that one will become disabled; substitutes for insurance, such as savings that could be spent on long-term care; substitutes for formal care, such as care provided by family members; and features of the private market, such as concerns about the high costs of coverage. We found evidence that each of these factors was important in explaining low demand for long-term care insurance. For example, people who believed they might need long-term care were more likely to purchase long-term care coverage. People who had alternative ways to pay for care, such as through savings, or those who could use unpaid care from family members, were less likely to purchase insurance. Features of the private market, such as peoples lack of trust in insurers and the high cost of coverage, made people less likely to buy long-term care insurance. We conclude that policy interventions designed to address only one factor limiting the purchase of long-term care insurance are unlikely to dramatically increase demand for long-term care insurance. [Emphasis added]  “As long as people know that there is some means-tested payer of last resort, then the existence of these programs may still reduce people’s demand for insurance.”  (p. 1298)  “In the open-ended responses, the cost of long-term care insurance was the most frequently cited reason for not purchasing it, given by 57 percent of respondents.”  (p. 1299, emphasis added)

For a critique of this paper, see:  LTC Bullet:  Why Don’t More People Buy LTC Insurance?  Friday, July 13, 2012


Chapter 9:  Long-Term Care Providers

Medicaid Reimbursement

A Report on Shortfalls in Medicaid Funding for Nursing Center Care, 2012 LINK,

“Medicaid underpayments are expected to exceed $7 billion nationally in 2012, an average shortfall of $22.34 per resident day. That's up from $18.54 in 2010, notes the ‘Report on Shortfalls in Medicaid Funding for Nursing Center Care.’ The report was commissioned by the American Health Care Association and conducted by Eljay, LLC. It was released Tuesday.”


Chapter 10:  Medicaid

Medicaid Financing

Kaiser Family Foundation on Federal Medicaid Assistance Percentage 0912 URL:
Medicaid Financing: A Primer on the Federal Medicaid Matching Rate (FMAP)

“A new paper from the Kaiser Family Foundation's Commission on Medicaid and the Uninsured provides an overview of the Federal Medicaid Assistance Percentage (FMAP), the formula which is used to determine the federal government's share of the cost of covered services in state Medicaid programs. It also reviews the various temporary changes to the FMAP formula that have taken place over the history of the Medicaid program. Beginning in 2014, the Affordable Care Act (ACA) establishes highly enhanced FMAPs for the cost of services to low-income adults with incomes up to 138% of the Federal Poverty Level (FPL) who are not currently covered. The federal government will pick up 100 percent of such costs in 2014 through 2016, phasing down to 90 percent in 2020 and beyond.”


 State Budget Crisis 0712 URL:, “Report of the State Budget Crisis Task Force”

 “Medicaid programs are growing rapidly because of increasing enrollments, escalating health care costs and difficulty in implementing cost reduction proposals. At recent rates of growth, state Medicaid costs will outstrip revenue growth by a wide margin, and the gap will continue to expand.”


Medicaid Eligibility

GAO on Medicaid LTC Eligibility Documentation 0712 URL:
“MEDICAID LONG-TERM CARE Information Obtained by States about Applicants' Assets Varies and May Be Insufficient”

From:  LTC Bullet:  The Maine Thing About Long-Term Care, Friday, September 7, 2012:  *** 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. ***


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