LTC Bullet:  LTC Almanac Update

Friday, July 11, 2014


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.***

*** TODAY is lucky Seven-Eleven.  Make the most of it. ***

*** BROKER WORLD’S sixteenth annual 2014 Long Term Care Insurance Survey is in the trade journal’s current issue.  This excellent update on the LTCI industry’s traditional products market is prepared each year by Claude Thau, Dawn Helwig, Allen Schmitz.  We’ll touch on a few key findings here, but don’t miss the full piece in Broker World.

·   “Industry sales were down 26.5 percent from 2012 in terms of premium and 22.9 percent in terms of the number of lives insured with individual policies.”

·   “[T]he average premium per new sale dropped from $2,424 to $2,311, a surprising change of direction, recognizing that prices are increasing.”

·   “Worksite sales also dropped (28.6 percent less new premium; 6.4 percent fewer policies), partly because some insurers discontinued worksite sales or restricted underwriting concessions and price discounts.”

·   “Affinity sales increased, with 27.4 percent more premium and 26.3 percent more policies than in 2012.”

It’s not a happy picture, but as “Hybrid and Linked Long Term Care Planning Solutions” in the same issue by Center Premium Member Barry Fisher and Michael Ashwill observes, prospects for linked/hybrid products are brighter.  (Gated so subscribe to Broker World to get access.) ***



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 one week—today through Friday, July 18, 2014.  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

Assets of the Aged

Johnson (UI) on Income and Wealth of Older Adults URL:

March 26, 2014:  Judy Feder said at ILTCI ’14 in Orlando that most people on Medicaid didn’t have much 10 or 15 years ago.  I asked what she based that statement on.  This is what she referred me to:  testimony before the LTC Commission.

 “Income and Wealth of Older Adults  Needing Long-Term Services and Supports,” Statement of  Richard W. Johnson  Senior Fellow  The Urban Institute  Before the  Commission on Long-Term Care  August 1, 2013

We refuted Feder’s interpretation of this testimony in “LTC Bullet:  Who Gets Medicaid LTC?,” Friday, March 28, 2014.


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

Unfunded Liability Estimates


“Abstract:  We calculate increases in contributions required to achieve full funding of state and local pension systems in the U.S. over 30 years. Without policy changes, contributions would have to increase by 2.5 times, reaching 14.1% of the total own-revenue generated by state and local governments. This represents a tax increase of $1,385 per household per year, around half of which goes to pay down legacy liabilities while half funds the cost of new promises. We examine sensitivity to asset return assumptions, wage correlations, the treatment of workers not currently in Social Security, and endogenous geographical shifts in the tax base.”


Chapter 6:  Long-Term Care Financing


Leading Age on LTC Reform 1113 URL:

LeadingAge Pathways:  A Framework for Addressing Americans’ Financial Risk for Long-Term Services and Supports, October, 2013

LTC Comment:  In this report, the major nonproprietary LTC trade association opines about LTC policy favoring “an approach to long-term care financing reform that values self-reliance but includes some form of social safety net” according to McKnight's LTC News at

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

Health Affairs on 2012 Health Expenditures 0114 URL:

National Health Spending In 2012: Rate Of Health Spending Growth Remained Low For The Fourth Consecutive Year

Abstract:  For the fourth consecutive year, growth in health care spending remained low, increasing by 3.7 percent in 2012 to $2.8 trillion. At the same time, the share of the economy devoted to health fell slightly (from 17.3 percent to 17.2 percent) as the nominal gross domestic product (GDP) grew by 4.6 percent. Faster growth in hospital services and in physician and clinical services was mitigated by slower growth in prices for prescription drugs and nursing home services. Despite an uptick in enrollment growth, Medicare spending growth slowed slightly in 2012, mainly due to lower payment updates. For Medicaid, slowing enrollment growth kept spending growth near historic lows. Growth in private health insurance spending also remained near historically low rates in 2012, largely influenced by the nation's modest economic recovery and its impact on enrollment.

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

Seniors moving to HCBS face more hospital risk 0114 URL:

Community and home-based care are popular and cost Medicaid less money than nursing home care, but a new study in the Journal of the American Geriatrics Society finds that seniors who left the nursing home for such services were 40 percent more likely to become hospitalized for a potentially preventable reason than those who stayed in the nursing home.


Chapter 7:  Long-Term Care Insurance

General and Data

Land This Plane SOA report 0314 URL:

“Land This Plane:  A Delphi Research Study of Long-Term Care Financing Solutions,”  Sponsored by  Society of Actuaries, March 2014

For summary and analysis, see “LTC Bullet:  Inspect This Plane,” Friday, April 18, 2014, but the original is well worth perusing.  Find a link to the .pdf here.

Federal LTCI Program

Paul Forte Contingencies Article 0114 URL:

Title:  “Fresh Thinking on Long-Term Care Financing:  The American Long-Term Care Insurance Program”  Could a public-private model be the way to provide affordable long-term care insurance to large numbers of americans?”

Lead:  MANY U.S. POLICYMAKERS BELIEVE that there's no way a voluntary long-term care (LTC) insurance program can attract a critical mass of enrollees. Given the 2011 severing of the optional federal Community Living Assistance Services and Supports Act from the Affordable Care Act (ACA) and a continuing exodus of private insurers from the LTC market, this isn't surprising. But arguing that any LTC program must be mandatory ignores both the federal budget deficit and ongoing political resistance to mandatory provisions in the ACA.


Chapter 9:  Long-Term Care Providers

HCBS:  Cost-Effective or Not? (See also similar section under LTC Financing)

KFF on Olmstead 0614 LINK

“Olmstead’s Role in Community Integration for People with Disabilities Under Medicaid: 15 Years After the Supreme Court’s Olmstead Decision,” Jun 18, 2014 | MaryBeth Musumeci and Henry Claypool

Executive Summary:  June 2014 marks the 15th anniversary of the United States Supreme Court’s landmark civil rights decision in Olmstead v. L.C., finding that the unjustified institutionalization of people with disabilities is illegal discrimination.  While many cases are resolved without involving the courts, during the last 15 years, the lower courts have had the opportunity to apply Olmstead in a number of contexts, resulting in decisions furthering community integration for people with disabilities.   This issue brief examines the legacy of Olmstead, with an emphasis on legal case developments and policy trends emerging in the last five years and the related contributions of the Medicaid program. Medicaid is important because of its unique role in financing the home and community-based services (HCBS) that enable individuals in institutions to return to the community and those at risk of institutionalization to remain in the community with support.

LTC Comment:  For a different point of view on Olmstead, see LTC Bullet:  Olmstead Languishes,” Monday, April 8, 2002

Managed LTC

3/6/2014, “Pitfalls Seen in a Turn to Privately Run Long-Term Care,” by Nina Bernstein, New York Times

Quote“Even as public attention is focused on the Affordable Care Act, another health care overhaul is underway in many states: an ambitious effort to restrain the ballooning Medicaid cost of long-term care as people live longer and survive more disabling conditions.”

LTC CommentThis is a long article, but I strongly recommend that you take the time to read it.  Managed long-term care, even for the most severely disabled Medicaid recipients, is sweeping the country.  State Medicaid programs are trying to save money by turning over their most severely impaired LTC recipients to giant managed care companies whose job it is to move them from mostly nursing home to mostly home care.  This article explains why the strategy is not working as well as hoped.  Savings from managed deinstitutionalization are not materializing and care quality is suffering.  The underlying problem, however, with which this article does not deal and which most analysts evade, is that Medicaid covers the long-term care for too many people who should, could and would have paid for their own care.  Managed home care for severely disabled patients won’t solve the problem of too many people dependent on welfare-financed long-term care.  That problem will only be solved by (1) returning Medicaid to its original purpose of being a long-term care safety net for the neediest and by (2) incentivizing all who are financially able to plan, save, invest and insure to pay privately for their own long-term care.


Chapter 10:  Medicaid

Medicaid is the 800-pound gorilla of LTC

NBER on Medicaid Literature 0514 URL:

Medicaid: A Review of the Literature

Marianne P. Bitler, Madeline Zavodny

NBER Working Paper No. 20169
Issued in May 2014
NBER Program(s):   
CH   HC   HE

Abstract:  We review the existing literature about the effects of the Medicaid program. We first describe the program’s structure and how it has changed over time. We then discuss findings on coverage, crowd out, take-up and health. Finally, we look at effects of the program on non-health outcomes such as welfare use and labor supply, marriage and fertility, and savings.

Jason J. Fichtner, ed., The Economics of Medicaid, 0614 LINK

Contains chapters on everything except long-term care.  Go figure.

Medicaid Financing

NBER on Medicaid Insurance in Old Age 0613 URL:

MEDICAID INSURANCE IN OLD AGE Mariacristina De Nardi, Eric French, John Bailey Jones:  Working Paper 19151

ABSTRACT The old age provisions of the Medicaid program were designed to insure poor retirees against medical expenses. However, it is the rich who are most likely to live long and face expensive medical conditions when very old. We estimate a rich structural model of savings and endogenous medical spending with heterogeneous agents, and use it to compute the distribution of lifetime Medicaid transfers and Medicaid valuations across single retirees. We find that retirees with high lifetime incomes can end up on Medicaid, and often value Medicaid’s insurance features the most, as they face a larger risk of catastrophic medical needs at old ages, and face the greatest consumption risk. Finally, our compensating differential calculations indicate that retirees value Medicaid insurance at more than its actuarial cost, but that most would value expansions of the current Medicaid program at less than cost.


Chapter 11:  Medicaid Planning

Criticism of Medicaid Planning

“Mark Warshawsky: Millionaires on Medicaid,” Wall Street Journal, January 6, 2014 URL:

"Expanding Medicaid coverage to an estimated nine million more Americans-as mandated by the Affordable Care Act-reinforces the idea that Medicaid only serves the poor. That perception is not accurate. And it distracts from a looming budgetary threat to the program: long-term care. . . .

"We might accept these rising costs if benefits flowed only to the elderly poor, as originally intended. But that is not the case. Significant long-term care benefits flow to individuals in the top 20% of retirement earnings, enabled by Medicaid's generous asset-exclusion limits. . . .

"The rules wouldn't matter if wealthy individuals shunned Medicaid long-term care benefits. But with Medicaid crowding out private alternatives, many don't. In fact, 15% of elderly individuals in the middle-income quintile, 8% in the upper-middle quintile, and 5% in the top quintile receive Medicaid benefits.

"Even these numbers don't capture the burden wealthy individuals place on Medicaid because they live much longer than the poor. Beneficiaries in the top income quintile receive, on average, double the lifetime payouts of those that are less well-off. And because Medicaid lowers reimbursement rates to providers and restricts benefits to contain costs, the poor are tied to lower-quality care and enjoy far less provider flexibility. . . .

"Tightening eligibility rules is the first step toward a solution. Before receiving Medicaid payouts, for example, wealthier households should first be asked to draw down the value of their home through a reverse mortgage to help pay for long-term care. Wealthier households could also be asked to meet long-term care expenses through life annuity payouts from their retirement accounts. Such changes would help ensure that Medicaid benefits flow to the financially needy."


We will update the “Almanac of Long-Term Care” again soon to bring its content up to current.