LTC Bullet: How Not to Redesign Long-Term Care

Friday, June 12, 2020


LTC Comment: Do we really need more government money and regulation for long-term care, as this Forbes columnist insists? Analysis and better choices, after the ***news.***

*** THE DEBT CLOCK: We introduced this new feature in last week’s LTC Bullet when the U.S. national debt stood at almost $26 trillion. Now it’s over that mark by $8 billion or so. Unfunded liabilities, including $20.5 trillion for Social Security and $31.8 trillion for Medicare, topped $148 trillion in the meantime. Here’s a little historical perspective. In “LTC Bullet:  The Impending Collapse of the Roadblocks to LTC Insurance,” December 1, 2009, we reported “According to the U.S. NATIONAL DEBT CLOCK, our country is currently in hock nearly $12 trillion and soon Congress will be forced to lift the cap on that debt yet again.” By August 1, 2014 in “LTC Bullet:  Entitlement Double Talk,” we lamented “Our national debt stands at $17.6 trillion according to the US Debt Clock.” Less than a year ago, we found in “LTC Bullet: The Post-Medicaid History of Long-Term Care,” August 9, 2019, that “The ‘National Debt Clock’ places U.S. national debt at $22.5 trillion and unfunded liabilities at $125.0 trillion, a little over $1 million per taxpayer.” Our national debt, therefore, has more than doubled since 2009, and it’s accelerating, up 16% in less than a year. Most scary, unfunded liabilities are up 18% in the past year. We’re falling into a monetary and fiscal sink hole. Dramatic consequences are coming. But what will they be and when will they arrive? We’ll keep trying to understand and discuss. ***

*** JOIN THE CENTER. We have not made a recent appeal for you to support the Center for Long-Term Care Reform. But now is the time. Our major federal legislative successes came during or after major recessions. OBRA ’93 required Medicaid estate recoveries and closed important eligibility loopholes. DRA ’05 put the first cap ever on Medicaid’s home equity exemption and removed the leash Henry Waxman had put on the Long-Term Care Partnership Program. We’re entering a period when Medicaid, especially its massive long-term care component, will consume more state revenue and crowd out other, critical state and local programs. By retargeting Medicaid to its originally intended recipients, people in need, the states and federal government can reduce expenditures and attract more private financing into the LTC service delivery system benefiting everyone. We’ve explained precisely how to do that in dozens of national and state-level studies available here and most recently in “Medicaid and Long-Term Care.” Help us spread the word and fix long-term care. Check out our “Membership Levels and Benefits” here and join the Center here. Thanks for your consideration. Address inquiries to or call Steve at 425-891-3640. ***


LTC Comment: They say when the only tool you have is a hammer, every problem looks like a nail. Here’s a corollary: when the only tool you have is government, every problem looks like you need more public money and regulation.

That’s the fundamental problem with Howard Gleckman’s argument in “How To Redesign Long-Term Care For Older Adults After Covid-19,” Forbes, June 9, 2020. Compare these quotes from Gleckman (HG) with Steve Moses’s (SM) replies.

HG: “The way we care for older adults in the US is, self-evidently, not working. In just the past three months, at least 44,000 residents and staff of nursing homes and other long-term care facilities have died from Covid-19. Hundreds of thousands have been sickened. And millions have been isolated from family and friends for months.”   

SM: Sadly true. I said as much in the Wall Street Journal recently: “Nursing Homes, Coronavirus and Medicaid,” June 1, 2020.

HG: “Yet, this crisis did not spring from nowhere. The Covid-19 epidemic has amplified and exposed an already deeply-flawed system for long-term supports and services (LTSS) in the US. As tragic as this episode is, it has created an opportunity to rethink our care model from the ground up. But what would it look like?”

SM: True again. We do need to start over with a new long-term care model. But “what would it look like?” is the wrong place to start. You need to ask and answer a more basic question first: how did we get into this mess that we need to fix? If you don’t start there, you run the risk of making the problems worse by doing more of what caused them in the first place. That’s why I started by explaining what caused the dysfunctional long-term care status quo in “Medicaid and Long-Term Care,” a January 2020 monograph. But that’s not where this writer takes us. He jumps right in to ask for more money.

HG: “In short, long-term care in the US needs more money and a new model for delivering care. Our system never will provide adequate care for frail older adults and younger people with disabilities as long as it remains so severely underfunded.”

SM: Hammer is to nail as government is to money. That’s the trap! Let’s see where this leads.

HG: “Imagine no entrenched business or bureaucratic interests struggling to protect an existing system. No legacy regulatory and payment systems. What sort of care system would we create? Not the one we have, for sure.” 

SM: Absolutely! Imagine what a free market in long-term care could render. Entrepreneurs would compete to provide the best possible long-term care in the most desirable venues at the least possible cost. No government interference; no Medicaid-induced institutional bias; no lawyer-abetted Medicaid planning lure; no access and quality problems caused my parsimonious Medicaid reimbursements; more private pay at market rates lifting access and quality for all; fewer people drawing down Medicaid funds so the truly needy get better care. But is this what Mr. Gleckman wants? It does sound similar.

HG: “It might look like this: Frail older adults and younger people with disabilities, with support from family and a case manager, would choose the care setting and supports that would help them live the best life possible. Long-term supports and services would be well integrated with medical treatment, with no regulatory or payment barriers, and through a financial model that creates incentives for strong chronic care management.”

SM: Yes! Let’s do it. But, how? There’s the rub.

HG: “This could be delivered through managed care plans, such as Medicare Advantage, fully integrated programs such as the Program for All-Inclusive Care for the Elderly (PACE), or special needs plans (SNPs). It might also be possible in traditional Medicare through Medicare Supplement (Medigap) insurance. … A public program such as Medicaid still would support this care for those with very low incomes. But Medicaid would be far more flexible than today, and the default setting for care would be people’s own homes, not nursing homes.”

SM: Wait a minute! Haven’t we tried all those things already and they wouldn’t scale? What would you do differently that could make these longstanding programs work better and become bigger? Their advocates have claimed for decades that what these programs need is more money. Is that what you’re saying too? More of the same but expect a different result? This is where the article becomes very foggy.

HG: “A public program such as Medicaid still would support this care for those with very low incomes. But Medicaid would be far more flexible than today, and the default setting for care would be people’s own homes, not nursing homes.” 

SM: Been there; done that; didn’t work.

HG: “States should better align Medicaid LTSS with other public services, such as low-income housing, transportation, home delivered meals, adult day, and primary medical care.”

SM: But would they? Why now and not before? This is aspirational, not realistic or practical.

HG: “The agencies that deliver these programs need to work with one another to provide flexible, holistic care.” 

SM: OK, but why are these agencies going to hop out of their silos all of a sudden and start working cooperatively as never before?

HG: “The vast majority of those receiving long-term care at home are getting their support from relatives. Today, those family members are providing personal assistance with great love—and little or no skill. Like paid caregivers, they need training. Perhaps, they should even be paid.”

SM: Instead of relying on the free care provided by families and friends, which is the main prop sustaining the current Rube Goldberg financing scheme, we’re going to start paying them and provide more paid home caregivers also? How?

HG: “Where will the additional funding for all this come from? The reality is that few Americans have saved sufficiently for the cost of long-term care in old age, few have private long-term care insurance, and Medicaid does not have the resources to fund this care for the fast-growing Baby Boom generation.”

SM: Precisely the question that popped into my mind. So what’s the answer?

HG: “A public long-term care insurance program could supplement out-of-pocket spending, especially for those with true catastrophic costs that few private long-term care insurance policies cover.” 

SM: Well, what do you know? The answer is to use the punitive power of government to force people to buy mandatory government insurance. If you liked the CLASS Act, you’ll love this compulsory version with a political bullwhip for enforcement.

HG: “Washington State already has adopted a modest public long-term care insurance plan. A half-dozen other states are exploring the idea. And there is some interest in Congress.”

SM: Have you heard anything about these “promising” ideas from anyone else lately? More likely, you’re hearing the lockdown is bankrupting state governments and the federal government is maxed out printing and borrowing money to support closed businesses and laid off workers.

HG: “The long-term care system in the US was failing long before Covid-19. But now that this terrible disease has exposed the flaws in our system, we have an opportunity to fix them.” 

SM: See what happens when you start from the observation that LTC is failing in the U.S. and jump straight to proposing solutions? You end up as HG does proposing more of the government spending and regulation that caused the problems in the first place. So here’s what to do instead.

Analyze what caused long-term care’s problems. You’ll find that easy access to Medicaid nursing home care after care is needed but when it’s too late to preserve wealth otherwise caused excessive dependency on Medicaid. Fifty years of that pernicious public policy created the current system’s major dysfunctions including institutional bias; poor access and quality; stultified private home care and LTC insurance markets; overburdened family caregivers; and many thousands of unnecessary deaths from the virus contagion.

Unfortunately, the challenges facing long-term care are too complicated to explain in a few sentences or to resolve simply by throwing more government money at them. The key is to explain why the problems exist in the first place before trying to solve them with more government interference. Do that and you will find the same answers I did in “Medicaid and Long-Term Care.” Read it and see.