LTC Bullet:  Election Reflections

Friday, November 7, 2014


LTC Comment:  We maintain political change is usually good for long-term care financing policy, after the ***news.***

*** 2015 LTCI TAX DEDUCTIBLE LIMITS POSTED:  The Health Insurance Portability and Accountability Act of 1996 (HIPAA ’96) established long-term care insurance tax deductibility with age-band limits that increase annually.  We’ve posted the 2015 limits in The Zone, making this the 19th year we’ve updated them.  Curious where the limits started in 1997, the first year?  Wonder how much they’ve increased since then?  Find the answers for every intervening year in The Zone, the Center’s members-only, password-protected website.  Get free access to The Zone for one week to check out its many features here, including the deductible limits here.  Use this temporary UN: CLTCR2014 and PW:  FreeTrial.  Then contact Damon at 206-283-7036 or to join the Center, get full-time access to The Zone and all the many other benefits of Center membership. ***

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11/6/2014, “An Emerging Consensus: Medicare Advantage is Working and Can Deliver Meaningful Reform,” by Thomas Miller and James Capretta, Health Affairs Blog

Quote:  “As MA [Medicare Advantage] enrollment has surged, so has recognition of its improved value.  A recent, comprehensive review of the evidence conducted by Joseph Newhouse and Thomas McGuire of Harvard University makes a compelling case that MA plans are providing higher value services at less societal cost than the traditional FFS program.  Based on their findings, Newhouse and McGuire argue for policies that would provide incentives for even more beneficiaries to enroll in MA plans in the future.

LTC Comment:  More good news for Medicare Advantage and all the better because it comes in the well-regarded journal Health Affairs, which usually leans the other way politically. ***




LTC Comment:  The political earth moved on Tuesday.  A good night, for Republicans.  Not so much, for Democrats.  We’re nonpartisan here at the Center for Long-Term Care Reform, but to quote President Obama after his 2008 landslide, “elections matter.”  What matters about this one?

It was a big change from the status quo.  Sure, the President can still veto House Republicans’ initiatives that Democrats will no longer be able to stop in the Senate.  But, I’m making a different point.  Change itself seems to be good for long-term care financing policy. 

For example, we got stronger Medicaid asset transfer rules and mandatory estate recovery in 1993, shortly after Bill Clinton took the federal helm.  Both measures were intentionally designed to encourage private long-term care planning by making Medicaid LTC dependency less easy and desirable for the middle class and affluent.

We got LTCI tax deductibility, such as it is, and the anti-Medicaid-planning “Throw Granny’s Lawyer in Jail” law, such as it was, in the aftermath of the last Republican sweep of Congress (1994).  Remember Newt Gingrich, the “Contract with America,” and the Democratic President’s promise, on which he delivered, to “change welfare as we know it”?

Finally, under the next Republican president, in the DRA ’05, we got a reinvigorated LTC Partnership program, the first cap ever on Medicaid’s home equity exemption, and several more restrictions on the most egregious Medicaid eligibility loopholes. 

All things considered, it may not matter so much which party’s in power as how fractious the electorate is. 

For the past eight years, the Democrats have had the wind at their backs.  It looked like that was a permanent climatic change.  But what happened in long-term care policy during this political calm?  The CLASS Act bombed; an LTC Commission failed; Medicaid planning resurged; and to this day the public remains either in denial or totally asleep about long-term care risk and cost.

The most devastating outcome of recent political stasis, however, has been degenerating fiscal and monetary policy.  Federal debt exploded in the name of “stimulus” and the Federal Reserve added trillions of dollars to the economy, both to little avail.  Hand-wringing about deficit spending and quantitative easing in 2011 turned to passive acceptance of both as the economy slogged inauspiciously on.

Now we find ourselves with an aging population, fiscally-under-water entitlement programs, giant debt, no arrows left in the monetary quiver with interest rates near zero, and, surprise, a public that thinks the country is on the “wrong track.”  Is it any wonder we’ve experienced another electoral earthquake?

Tuesday’s Republican sweep was the mirror image of the 2006 election when Democrats took both houses of Congress and set the stage for Mr. Obama to capitalize on “hope and change.”  But this year “Yes we can” became “Oh no you didn’t!”  Maybe 2016 will bring a new political savior promising hope and change, this time moving away from failed Keynesian stimulus policies toward fiscal and monetary responsibility.

What matters now is what happens next.  Will this change open new opportunities to improve long-term care financing policy as previous political upheavals have?  We’re betting so.  The Center for Long-Term Care Reform will redouble our efforts to promote rational LTC public policy and responsible LTC planning.  How about you?  Care to join us in the fray?