LTC Bullet: The LTC Narrative

Friday, June 30, 2023

Seattle—

LTC Comment: The dominant long-term care narrative crowds out inquiry, critical reasoning and creativity leaving conformity and groupthink. We explain after the ***news.***

*** HAPPY INDEPENDENCE DAY ***

*** TODAY'S LTC BULLET is sponsored by Claude Thau with BackNine Insurance. Back9 gives you a free personalized website at no cost. Your clients (& family & friends) can, with as little or as much of your involvement as you or they want, buy life insurance and LTCi, and schedule parameds and upload their medical records to speed the process. We quote stand-alone LTCi, linked-benefit and life with a LTC rider side-by-side and provide a sales track with video support. Claude is the lead author of Milliman’s annual Broker World LTCi Survey & a past Chair of the Center for Long-Term Care Financing. Contact him at 913-707-8863 or claude@back9ins.com discuss how he might help you. ***

 

LTC BULLET: THE LTC NARRATIVE

“A dominant narrative is an explanation or story that is told in service of the dominant social group’s interests and ideologies. It usually achieves dominance through repetition, the apparent authority of the speaker (often accorded to speakers who represent the dominant social groups), and the silencing of alternative accounts. Because dominant narratives are so normalized through their repetition and authority, they have the illusion of being objective and apolitical, when in fact they are neither.” College of Literature, Science and Arts, University of Michigan

LTC Comment: Most LTC researchers remind me of the fish who asked “What is water?” They are so steeped in the “LTC narrative” that they don’t see, consider or question anything else. What is the LTC narrative? It goes something like this:

Long-term care is a huge risk and cost that can and does wipe out the life savings of huge numbers of aging Americans. Medicaid is the only option that helps people who need expensive, extended, custodial care. But Medicaid requires impoverishment and has a dubious reputation for care access and quality. So, therefore, America needs a new compulsory, payroll-funded social insurance program similar to Medicare to pay for long-term care.

Nothing in the LTC narrative is true. There is no evidence that LTC frequently wipes out life savings and researchers cite none. Medicaid is not the only option for long-term care; people could save, invest or insure for LTC risk, but few do. Why not? Medicaid does not require impoverishment. That is a myth. Medicaid allows recipients to have income up to the monthly cost of a nursing home and to retain practically unlimited exempt assets. No new LTC entitlement program is needed nor desirable. Rather, we should fix the one, Medicaid, we already have.

Although nothing in the LTC narrative is true, most LTC researchers take it for granted. Why? It fits their ideological prejudice against free markets and in favor of government financing and control. How? They affirm the LTC narrative by ignoring or misrepresenting all evidence to the contrary, by redefining or misinterpreting data to fit the narrative, and by equivocating on key terms such as impoverishment, spend down, out-of-pocket expenses and Medicaid planning.

How do LTC researchers ignore or misrepresent evidence that contradicts the LTC narrative? They pretend that Medicaid financial eligibility rules require impoverishment when the truth is that income rarely stands in the way of qualification for LTC benefits and applicant/recipients may retain virtually unlimited non-countable assets, including very large home equity, one vehicle, a business, personal belongings and home furnishings, even retirement savings accounts. LTC researchers rarely acknowledge the vast legal literature on methods to circumvent Medicaid financial limits and qualify the affluent who possess even much greater wealth. If they do concede that Medicaid planning occurs, they disingenuously pretend it is limited to asset transfers, a method far less common and significant than other, more frequent and important techniques of artificial self-impoverishment, such as the purchase of exempt assets.

How do LTC researchers redefine or misinterpret data to fit the LTC narrative? To promote the misconception that elders all across the country are spending down into impoverishment for LTC, it helps if out-of-pocket LTC expenditures appear high and Medicaid expenditures appear low. That supports the LTC narrative that long-term care is wiping out people’s savings, that Medicaid does not do enough to help, and that, therefore, a big new government program is needed. So LTC researchers try to make out-of-pocket LTC costs appear higher than they actually are, as high as 50 percent, by including room and board expenses in assisted living or residential care facilities’ LTC spending tallies. But people incur room and board costs whether or not they need or receive LTC.

The Centers for Medicare and Medicaid Services (CMS) are also complicit. The agency changed the definition of nursing home services to include Continuing Care Retirement Communities in 2011. That change deceptively made Medicaid expenditures look lower and out-of-pocket costs appear higher because CCRCs are almost entirely private-pay. In fact, Medicaid’s share of nursing home expenditures has been going up and out-of-pocket expenditures, down for decades. Full price out-of-pocket private pay SNF revenue has collapsed to only seven percent leaving nursing homes heavily dependent on Medicaid’s notoriously inadequate reimbursements. But you wouldn’t discern that in CMS’s biased reporting.

How do LTC researchers equivocate on key terms of art to validate the LTC narrative?

(1) They insist Medicaid requires “impoverishment” when the truth is that people need only a cash flow problem, e.g., too little income to afford long-term care privately, to qualify. Medicaid’s role in long-term care financing is that it reduces the risk and cost of long-term care substantially, not that it impoverishes people.

(2) The LTC researchers equivocate on the meaning of “spend down.” They often imply and sometimes assert incorrectly that Medicaid requires applicants to spend down countable resources for health or LTC expenses to qualify. But Medicaid has no such requirement. People may spend down countable assets to purchase and retain exempt assets, thus qualifying for LTC benefits while preserving wealth. Purchase of exempt assets is the single most common method of Medicaid planning and is almost universally practiced by applicants with excess countable assets.

(3) LTC researchers prevaricate on terms like “out of pocket,” spend down and impoverishment, when they misrepresent data from their main data sources, the Health and Retirement Study (HRS) and its auxiliary, the Asset and Health Dynamics among the Oldest Old (AHEAD) study. The HRS and AHEAD studies are often cited as proof older Americans spend down for long-term care until impoverished and thus become eligible for Medicaid LTC benefits. But neither of those data sources provides any information about how elders’ decumulate wealth. They only show that wealth declined and a transition to Medicaid eligibility occurred. Such transitions could as well and as likely have occurred due to purchase of exempt assets as to LTC spend down.

In conclusion, the LTC narrative reflects the dominant scholarly social group’s ideological bias in favor of compulsory government social insurance and against free market competition. The narrative prevails due to constant repetition, the unchallenged authority of its “experts,” and by silencing other accounts. Because no other analyses or evidence can penetrate the LTC narrative’s peer-review barricade, it has the illusion of being objective and apolitical, when it is neither. Unless and until critics deconstruct the LTC narrative and replace it with consistent, principled analysis and recommendations, little success in the decades-long effort to improve LTC services and financing will occur.