LTC Bullet: Pete for LTC?

Friday, December 6, 2019


LTC Comment: Give Mayor Pete credit for publishing the most comprehensive long-term care plan of all the presidential candidates, but it could do more harm than good as we explain after the ***news.***

*** ILTCI 2020 registration is now open! Register here. Organizers report: “On your registration confirmation page/email you will see a link to book your hotel room. If you use that link some info will be prefilled for you. Please book your hotel as soon as possible. Our room block rate of $129/night is only available through Feb 22, 2020 or when our block fills up.” Jump on this so you won’t find “no room at the inn.” Not sure this conference is for you? Read our next item. ***

 *** HISTORY OF LTC INSURANCE CONFERENCES published. The report we promised in “LTC Bullet: History of LTC Insurance Conferences,” November 22, 2019, is up. Read the 65-page History of LTC Insurance Conferences (2019) or just browse. Find pictures of LTCI’s leading lights from a couple decades ago. Compare what people thought then with objective circumstances now. It was a real re-education for me compiling this material and I hope others enjoy, and maybe even learn, from it as I did. Some of the links in the report go the Center for Long-Term Care Reform’s members-only site, The Zone. To access one of these, you’ll need your user name and password. To get a UN and PW if you’re not yet a member, join. We’ll have you in The Zone immediately. Call or email 425-891-3640 or to begin. ***

*** MEDICAD AND LONG-TERM CARE. Around the end of the year, the Center for Long-Term Care Reform will publish a new report titled “Medicaid and Long-Term Care.” This study will explain what is wrong with the favored government takeover plan for long-term care including the one proposed by Mayor Pete described in today’s LTC Bullet. Our study will describe a far less onerous voluntary solution. For a pre-publication copy of “Medicaid and Long-Term Care,” join the Center here and contact the author at You’ll have your copy by email within minutes of joining our campaign to fix long-term care. For a preview of what to expect see “LTC Bullet: The Battle Lines Are Drawn,” October 25, 2019.


LTC Comment: Pete’s LTC plan is Section I of his overall prescription for “Dignity and Security in Retirement.” We’ll keep our focus on long-term care. But consider briefly “Section II: Economic Security for America’s Retirees” in which “Pete believes every American has the right to a secure retirement with a dignified standard of living.” That is a very dangerous principle, because for every positive good to which everyone has a “right,” others are obligated involuntarily to provide it. That’s the definition of slavery. True rights are only negative. You have the right to be secure in your person and property from force or fraud. Protecting that right is the proper role for government, not guaranteeing benefits for some while extorting others to pay for them.

Back to long-term care.

Pete: “Pete is proposing a new, historic long-term services and supports program to help cover the costs of long-term care for older Americans with a high level of need. To provide financial protection for those who have shorter-term needs or are in the early stages of long-term needs, Pete will strengthen the private long-term care insurance market and make Medicaid benefits more accessible.”

LTC Comment: Not a good start. He wants to pawn off short-term care to the insurance industry and make Medicaid even easier to get. The proper role of private insurance is to replace the small risk of catastrophic loss with the certainty of an affordable premium, not to help people save for an almost inevitable, but smaller care need. Easy access to Medicaid LTC benefits is the main reason consumers have been desensitized to LTC risk and remain unprepared for care costs. Making Medicaid even more “accessible” to middle class and affluent people would make this problem worse.

Pete: “Pete’s Long-Term Care America proposal would create a long-term care program to protect people over age 65 who require assistance with two or more activities of daily living, such as bathing or eating. Benefits would be worth $90 per day for as long as they need care, and kick in after an income-related waiting period. The cash benefit would come with requirements attached to ensure it is being used for high quality long-term services and supports and that the money isn’t perpetuating or undermining worker standards. This benefit will become ‘first payer,’ and can be used to cover the cost of hiring a home health aide for several hours a day, or offset the cost of assisted living or nursing home facilities. It will be inflation-adjusted and regionally-adjusted. Similar programs have been supported by the Long-Term Care Financing Collaborative (a diverse group of policy experts), and the Bipartisan Policy Center.”

LTC Comment: Ah-ha, Pete’s adopting the latest progressive scheme to replace CLASS. We critiqued this plan from the LTC Collaborative, Leading Age and the Bipartisan Policy Center in LTC Bullet:  LTC at a Crossroads, June 3, 2016. Unlike CLASS, which was voluntary, and financially unsustainable, this new plan is compulsory and financially unsustainable. Pete has nothing to say about how to pay for it.

Pete: “Only a handful of insurers offer meaningful coverage policies, and the market has shrunk considerably in the last decade. The private long-term care insurance market is failing people. But because our government can set the rules by which private players operate, the government can change the rules.”

LTC Comment: Ominous. First government destroys the demand for LTC insurance by giving away what the industry is trying to sell for half a century. Then government forces interest rates to zero for a decade ruining the product’s profitability. Now government is here to help us by changing the rules and commandeering “private players” options. No thanks.

Pete: “Home care workers are often paid poverty wages. Last year, home care workers made an average of under $12 an hour.” So: “Set a $15 per hour minimum wage for everyone, including direct care workers.”

LTC Comment: The vast majority of home care workers making $12 an hour are dependent on Medicaid’s impecunious reimbursement levels. Artificially forcing the minimum wage up will only make the burden on nursing homes, assisted living facilities and home care agencies greater. They’ll be able to hire fewer caregivers so access and quality of care will suffer. Why is it that the last thing anyone considers about the caregiver problem is its cause, Medicaid?

Pete: “Reduce the financial burden of unpaid caregiving, including by ensuring working Americans have access to 12 weeks of comprehensive paid leave to take care of loved ones.”

LTC Comment: In other words, government can’t figure out how to fix this problem, so they pawn it off on the private sector.

Pete: “Medicaid accounts for a majority of national long-term services and supports spending—over $150 billion a year. Yet Medicaid services are generally only available to people with low incomes and assets, requiring middle-income people to impoverish themselves in order to access the benefit.”

LTC Comment: That is a preposterous statement. Medicaid’s generous LTC eligibility rules allow very high incomes (up to the cost of a nursing home) and virtually unlimited exempt assets. We’ve developed these facts in numerous national and state-level studies over the years. Find them here. If it were true that Medicaid required impoverishment for LTC, consumers would not be desensitized to the risk and cost of long-term care and they would be far more likely to plan responsibly for that risk much earlier. So, what would Pete do?

Pete: “Raise the asset and income limits for long-term services and supports through Medicaid. To qualify for Medicaid’s long-term care benefits, individuals can’t own more than about $2,000 in assets and need an income below $771 per month. This means that to access public long-term care services, older people often must push themselves into poverty. Pete will alleviate this burden on families by raising Medicaid’s asset limit for people who need long-term care to $10,000, and increasing the income limit by 300 percent, or $2,313 per month for an individual in 2019.”

LTC Comment: Smoke and mirrors. The $2,000 asset limit excludes exempt assets that are virtually unlimited. The $771 income limit ignores how virtually everyone can qualify for Medicaid LTC benefits based on income if most of their income is going to pay for their long-term care. So $8,000 per month of income is not disqualifying where nursing home costs are that high or higher. Raising these limits would only exacerbate the problem. The real problem that Medicaid co-opted long-term care demand by providing an easy pathway to care after the insurable event has already occurred. Using public funds to subsidize even further the LTC costs of people who should, could and would have planned responsibly for their own care if left to their own devices only further rewards the irresponsibility Medicaid has subsidized for decades.

Pete: “Make protections against spousal impoverishment permanent for individuals seeking longterm care through Medicaid. Spousal impoverishment rules protect a spouse from losing their home or income when their partner needs long-term care. Pete will permanently extend these protections so families can live with independence and dignity.”

LTC Comment: Spousal impoverishment protections for community spouses of institutionalized Medicaid recipients are already permanent. What Pete refers to here is the new benefit slipped into ObamaCare that is about to expire. It’s meant to encourage home care by allowing spouses to keep more of their Medicaid spouses’ income even if they’re living together at home. It is this benefit that has enabled Medicaid census in assisted living facilities to increase to 20 percent. It is one more way government makes it easier for people to ignore the risk of long-term care, avoid the premiums for private insurance, and still get radically subsidized care even at home or in assisted living.

Pete: “Bar Medicaid from taking families’ homes to pay for their long-term care. Under current law, states are required to seek repayment of Medicaid costs from the estates of individuals who received long-term care benefits prior to their deaths. This policy overwhelmingly punishes working- and middle-income Americans. Pete’s administration will eliminate estate recovery rules.”

LTC Comment: Medicaid does not take “families’ homes to pay for their long-term care.” Medicaid guarantees the right to retain a home even if the recipient is medically unable ever to return but expresses a subjective intent to return. Estate recovery occurs after the recipient dies and only after a non-Medicaid spouse dies later. The purpose of this policy was to prevent families who fail to help their parents prepare for long-term care risk and cost from reaping a windfall of tax-payer subsidized long-term care. How can we ever hope to engage young people in their own and their parents’ long-term care planning if we allow them to ignore the risk, take advantage of Medicaid, and receive large inheritances at public expense?

Pete: “Ensure everyone has the choice of receiving long-term care at home or in their community, including by eliminating Medicaid’s institutional bias.”

LTC Comment: I don’t think Pete understands just how hypocritical that statement is. Medicaid’s institutional bias is what caused the private home care market to remain stunted. The only way to get most people access to home care is to remove their dependency on Medicaid. In fact most of the problems our long-term care system faces are caused by excessive dependency on Medicaid for so long. Our new monograph “Medicaid and Long-Term Care” (prepublication copies available to Center members now) explains it this way

By providing only nursing home care—including room, board, and medical care—funded with virtually unlimited federal and state matching funds, Medicaid (1) exploded in cost, (2) created institutional bias, (3) caused access and quality problems by paying providers too little, (4) enriched plaintiff’s attorneys with the resulting tort liability cases, (5) crowded out private markets for home care and long-term care insurance, and (6) kept poor people poor with punishing spend down rules, while (7) letting the affluent save and benefit through eligibility loopholes. The key to fixing the problems that plague long-term care is to make Medicaid a better safety net for the poor while diverting the general public to private financing alternatives. This paper explains how to do that while reducing government funding and regulation, which arguably caused the long-term care problems in the first place.

Ironically, government caused most of the problems Mayor Pete seeks to solve … with even more, very much more government intervention, regulation and funding. It’s the same primrose path that led us into the current mess and it spirals dangerously downward from here.