What I Believe About Long-Term Care
Stephen A. Moses
The Sixth Annual Intercompany LTCi Conference
Anaheim, California: February 28,
believe that long-term care is a preventable tragedy.
believe that the personal tragedy of long-term care for individuals and families
can be substantially relieved if people are able to pay privately for
high-quality personal and respite care.
believe that the social tragedy of long-term care for America's aging population
can be entirely averted by changing public policy so that fewer people end up
dependent on underfinanced public welfare programs.
I believe it is foolish to prescribe solutions to America's long-term care
crisis until we first identify the problem and explain how it came to be.
here's what I think the problem is.
believe that friends and families provide most long-term care in the U.S. at no
charge, but under enormous personal financial and emotional stress.
believe that the vast majority of all formal compensated long-term care services
in this country are paid for by Medicaid (welfare) or Medicare (social
insurance), that is to say by government.
believe that Medicaid and Medicare pay disproportionately for nursing home care
(which most people would prefer to avoid) instead of for home and
community-based care (which most people would prefer to receive).
believe that our country's home and community-based infrastructure is
under-developed and starved for revenue.
believe that Medicaid routinely pays less than the cost of providing long-term
care and that Medicare is slowly ratcheting down its reimbursement, while both
programs impose heavier and heavier regulation on LTC providers.
believe that America's long-term care facilities have a reputation for providing
questionable quality of care and that tort liability lawsuits have led to huge,
often punitive settlements and skyrocketing liability insurance premiums.
believe that the supply of long-term caregivers, whether paid professionals or
unpaid family members, is already inadequate, is dwindling and will be even more
deficient in the future.
believe that long-term care service delivery has not been profitable enough to
attract adequate investment capital to build, operate and maintain the long-term
care facilities that America will need in the future.
believe that most people don't worry about long-term care enough to buy private
insurance against that risk and cost, despite the conventional wisdom that
people all across the country are spending down into impoverishment for LTC.
believe that if we keep doing what we've always done, all these problems will
get worse instead of better.
believe that no one deserves serious consideration for their proposals about how
to solve these problems, unless and until they explain what caused the problems
in the first place.
I believe we're in the mess we're in because forty years ago, the government
started paying for nursing home care without limiting its free and subsidized
services to people in financial need.
believe that by paying only for nursing home care, the government created the
problem of "institutional bias."
believe that by making nursing home care free for all intents and purposes, the
government impeded the development of a private market place for home and
believe that by subsidizing long-term care for middle- and upper-class
Americans, the government impeded the development of a private long-term care
insurance market to help pay for the kinds of services people prefer.
believe that by becoming a virtual monopsony (or single) buyer of long-term
care, the government artificially increased the demand for and the price of care
beyond its ability to pay adequately.
believe that the resulting cost containment caused quality of care to decline
and led directly to the over-regulation which has tied nursing homes and home
health agencies in bureaucratic knots.
believe that the resulting reputation for poor quality led to the public's
aversion to government-financed nursing home care so that families today
struggle to provide care themselves and to delay or prevent
believe that the government's inability to pay adequately for long-term
caregivers has caused the shortage of nurses and nurses aides.
believe that deficient government reimbursements for long-term care services
have made long-term care service delivery inadequately profitable to attract
investors, capital and the most highly qualified providers.
I believe that by paying for most long-term care for the past forty years, the
government has anesthetized the public to the risk and cost of long-term care
which explains why so few people buy long-term care insurance.
I believe that having explained the problem and having described what caused it,
we are now justified to propose a solution.
believe that, as I've just explained, all the problems with America's long-term
care system are directly related to the government's mismanagement of long-term
care financing and interference in the long-term care marketplace.
I believe that so-called "solutions" that propose throwing more
government money at long-term care are like trying to put out a fire by dousing
it with gasoline.
believe that no one who understands why we have a long-term care problem and how
it came to be could seriously propose socializing long-term care by adding it to
Medicare or propping up the status quo by a patchwork proposal like the LTC
believe that we need to bring to bear what we know about the problem and its
cause in order to propose a realistic solution.
believe that if too much government financing of long-term care has caused
excessive dependency on inadequately financed institutional care, then the
answer must lie in targeting scarce government LTC resources to a smaller number
of people truly in need.
believe that when government programs have fewer people to serve, they will be
better able to provide adequate reimbursement for higher quality care across a
wider spectrum of services.
believe that if they cannot ignore the risk and cost of long-term care, most
people will save, invest and insure and thus be able to purchase red-carpet
access to top quality care in the private marketplace at the level and in the
setting they prefer.
believe that when the government stops giving away what the long-term care
insurance industry and reverse mortgage lenders are trying to sell, more people
will buy those products and fewer people will end up unprotected and lured by
Medicaid planners into artificial self-impoverishment and institutionalization
believe that America is more than wealthy enough to provide excellent long-term
care for every citizen, if, but only if, we rely on our deeply rooted traditions
of personal responsibility for most people so that our social safety net can
provide adequately for a relatively small proportion of the population that
cannot provide for themselves.
other words, I believe that America's long-term care financing mess has been
self-inflicted by well-intentioned but perversely counterproductive public
I believe that we can fix the problems easily by removing the perverse
incentives in public policy that caused them.
I believe that we've finally made an important step toward fixing long-term care
in the United States with enactment of the Deficit Reduction Act of 2005.
believe that the DRA sends a powerful message to America's aging population that
long-term care is no longer a free good, that personal responsibility and
planning are critical, and that government programs like Medicaid and Medicare
will no longer be able to cover most LTC costs in the future.
believe that by extending the look back period for asset transfers, by
eliminating the "half-a-loaf" giveaway strategy, by starting to
ratchet down on the previously unlimited home equity exemption, by closing other
abused Medicaid planning loopholes and by encouraging the purchase of LTC
insurance, the DRA is a first step in the right direction.
I believe that the DRA is only the first timid step in the right direction and
that much more will have to be done to preserve and improve Medicaid as a
long-term care safety net for the poor.
I DO believe: we've finally turned
the corner on long-term care financing policy.
all have every reason to believe now that if the DRA is aggressively
implemented, enforced and publicized, everyone will have better long-term care
in the future--
poor will have better care because Medicaid will be more able to provide for
else will have better care because they'll be private payers choosing the best
available care in the most desirable settings and spending their own money,
their home equity, or, if they're smart, their LTC insurance carrier's money.