LTC Bullet:  Real vs. Mythical Medicaid

Friday, August 26, 2016


LTC Comment:  What’s the difference between the Mythical Medicaid conjured by analysts and the Real Medicaid at work in the LTC financing market and why does it matter?  After the ***news.***

*** GLICKMAN FOR PRESIDENT:  President of the Society of Actuaries, that is.  Jim asks “Although you may not be eligible to vote in the SOA election (only actuaries can vote for the President) it would be very helpful for my campaign if you can contact the actuaries at your company (as well as actuaries at other companies that you may know) and let them know about my candidacy, and how involved and dedicated I am to my volunteer activities in the LTCi industry.”  We say “hear, hear” and gladly support the candidacy of this indefatigable advocate for responsible LTC planning.  Here are a few links he pointed us to in support of his candidacy: 

Go Glickman! ***

*** SAVAGE TRUTH on long-term care:  Don’t miss this column by Center friend and nationally syndicated financial columnist Terry Savage that quotes Brian Gordon of Center- corporate-member MAGA, Ltd.:  “Don't ignore possible long-term care needs,” by Terry Savage, Chicago Tribune. ***

*** LTC CLIPPING:  Too many academics and senior advocates live in an ideological fantasy world.  They think long-term care is inadequate and call for more government financing which is exactly what fouled up LTC financing in the first place.  I loved this article so we sent it to LTC Clippings subscribers last week.  Here’s what happens when an academic with her head in the clouds confronts the hard reality of Real Medicaid. 

8/21/2016, “An academic knowledge of elder care becomes a harsh, real lesson,” by Erin E. Arvedlund,

Quote:  “‘You can only get your parent 10 hours of in-home care a week under Medicaid. Then the gap in service becomes real. I had to fill in the gap myself,’ Olson said of her visits to Florida. ‘While everyone is pushing for at-home care, there's not enough coverage under Medicaid. In order to be eligible, you have to be nursing-home eligible,’ which means your elder relative's assets have been depleted. In 2013, she moved her mother, now 93, into Gracedale, a county-run and subsidized senior facility in Nazareth, Pa. Finding a facility for her mother and ensuring that her benefits stayed consistent shattered Olson's convictions and exposed irrationalities in government systems. Despite her expertise, Olson was ill-prepared to deal with the bureaucratic barriers imposed at every turn. ‘I was surprised at how much every service is siloed,’ she said. ‘It's so burdensome as to be impossible. The VA? To deal with them [Dottie Katz's husband was a veteran] is a nightmare.’”

LTC Comment:  Read this article and you’ll hate to let another LTCI prospect say “No thanks.”  I’ll bet dollars to donuts this elder care “academic” spent her classroom decades teaching that private LTCI is unworkable and we need more government financing of long-term care.  Karma.

To subscribe to LTC Clippings, contact Damon at 206-283-7036 or ***



LTC Comment:  Economists and health policy analysts insist that Medicaid requires impoverishment; that it drives millions of Americans into destitution paying for long-term care; and that, therefore, we need a new mandatory, payroll-financed, government program to cover the catastrophic LTC risk and cost.


The Center for Long-Term Care Reform’s new paper proves access to Medicaid LTC benefits does not require impoverishment (that’s Mythical Medicaid); that Medicaid has counterproductively ameliorated LTC risk and cost rather than caused widespread penury (Real Medicaid); and that a new unfunded government entitlement program is the diametrically wrong prescription for future LTC financing.

You’ll have to wait for final release of the paper currently under review by its sponsor to see all the evidence and logic backing up that conclusion, but here’s a peek at how Real Medicaid (government financed indemnification for LTC costs after care is needed) has impacted the long-term care financing market.


Following is an excerpt from Long-Term Care Financing:  The Myth and the Reality”
Stephen A. Moses

Real Medicaid's Consequences

By making nursing home care virtually free in the mid-1960s, Real Medicaid locked in institutional bias, crowded out a privately financed market for home care, and trapped the World War II generation in sterile, welfare-financed nursing facilities.

By reimbursing nursing homes less than the cost of providing the care, Real Medicaid guaranteed that America's long-term care service delivery system would suffer from serious access and quality problems.

By underfunding most long-term care providers resulting in serious quality problems, Real Medicaid incentivized plaintiffs' lawyers to launch giant tort liability lawsuits, extract massive financial penalties, and further undercut providers' ability to offer quality care.

By making public financing of expensive long-term care available after the insurable event occurred, Real Medicaid discouraged early and responsible long-term care planning and crowded out the market for private long-term care insurance.

By compelling poor people to spend down what little income and savings they possessed in order to qualify for long-term care benefits, Real Medicaid discouraged accumulation and growth of savings among the poor, reducing their incentives to improve their stations in life.

By allowing affluent people to access subsidized long-term care benefits late in life, Real Medicaid encouraged accumulation and growth of savings among the rich who could pass their estates to their heirs whether or not they were stricken by high long-term care expenditures.

By enforcing spend down more aggressively on the poor than the rich, Real Medicaid aggravated ageism and racism because the rich tend to live longer than the poor and minorities.

By allowing people and families with extra "key" money to buy their way into the better nursing facilities, Real Medicaid discriminated against the poor and favored the affluent.  Medicaid planners help affluent clients avoid the program's reputedly poor care.

Medicaid is the cause of most of the dysfunctions in America's long-term care service delivery and financing system.  But blame should not fall on the Mythical Medicaid program imagined by advocates of a new compulsory government program.  Rather blame the Real Medicaid program that has operated to fund long-term care after people need expensive care while allowing them to preserve most of their wealth.