“The $97 Trillion LTC Paradox”
by
Stephen A. Moses

Executive Summary

Government motivates personal asset accumulation with generous tax incentives. But it discourages spending the amassed wealth on long-term care (LTC), the single biggest financial risk aging Americans face. This contradictory policy undercuts LTC service delivery by relying too heavily on inadequate public financing. Resolving it in favor of more private LTC financing would reduce Medicaid expenditures by billions of dollars and simultaneously expand tax revenues from increased commercial activity. This paper explains why and how.

Contradictory Policies

Many government laws and regulations encourage private wealth accumulation in retirement savings, home equity, and life insurance. Tax-favored programs like IRAs and 401(k)s reward people for setting aside retirement funds. The federal government promotes home ownership with subsidized mortgages (FHA, VA, USDA), mortgage-interest tax deductions, and down payment assistance, enabling owners to grow equity. Life insurance receives favorable treatment through tax-deferred growth of cash value and tax-free death benefits. Thanks to these policies, Americans hold trillions of dollars in retirement savings ($40T),[1] home equity ($35T),[2] and life insurance ($22T),[3] $97 trillion in total for these resources alone. But little of this enormous wealth goes to pay for the potentially catastrophic cost of LTC. How can that be?

LTC includes the long-term services and supports people require when they cannot perform basic activities of daily living without assistance. Such assistance may be needed due to injury, illness, frailty, cognitive impairment or old age. The need grows exponentially as America’s vulnerable aging population surges. Most of what we read about LTC in the popular and academic literature presumes that people all across the country are spending huge sums of money on nursing homes, assisted living facilities, and long-term home care. See for example the “Dying Broke” series by the New York Times and KFF.[4] The media tell us that many people spend down their life’s savings for this commonplace, unavoidable and supposedly uncompensated expense. In truth, the most reliable evidence shows that widespread, ruinous LTC spend down does not occur. What really happens?

LTC Financing

As the following table shows, government paid for most of the $629 billion America spent on LTC in 2023. Medicaid covered 44 percent and Medicare, 16 percent. Private insurance paid nine percent and other public and private sources, 17 percent. Thus, third parties covered the vast majority of all LTC expenses, 87 percent. Personal out-of-pocket spending (OOP)  accounted for only 13 percent. As explained below, half of OOP came from income contributed mandatorily by people already on Medicaid, not from personal assets. Only six or seven percent of the entire cost of LTC could possibly come from spend down of private savings. At roughly $40 billion, out-of-pocket asset spend down barely nicks the tip of the nearly $100 trillion private wealth iceberg.

Source: National Health Expenditures*

Table: 2023 Total LTC Spending by Type and Source in Billions of Dollars with the Percentage Increase Since 2022[5]

*  For definitions of all National Health Expenditure Accounts (NHEA) categories, see LINK.

How can it be that private wealth is largely off the table for financing LTC? For one thing, paid LTC services are far less common than many believe. Fifty-five percent of people who reach age 65 will not require any paid LTC. Thirty-one percent will need two years or less.[6] Those shorter term needs do fall largely on the public, but they are manageable. Johnson and Wang found that “Nearly nine in ten older adults have enough resources, including income and wealth, to cover assisted living expenses for two years.”[7]

It is the remaining 14 percent of paid LTC lasting two years or more, especially the 4 percent lasting over five years, that incur crushing outlays due to the high cost of care. Median rates for nursing homes are $320 per day for a private room and $285 for a semi-private room; assisted living runs $5,350 per month; homemaker and home health aide services, $30 and $33 per hour, respectively.[8] Paid LTC need lasting for long periods at those high rates is clearly unaffordable by a public largely uninsured privately for the risk. So, as there is no evidence of widespread catastrophic private LTC spend down, we must focus on who or what pays instead and how exactly the public avoids this huge liability.

Medicaid’s LTC Financing Role

Medicaid pays for most of the longest, most expensive LTC needs. However, the public welfare program’s 44 percent share ($278 billion) of total 2023 LTC expenditures ($629 billion) understates its full impact on the service delivery system. Medicaid recipients are required to contribute most of their personal income (upwards of half of OOP), including their Social Security benefits (41% of OOP), to offset Medicaid’s cost for their care.[9] This supplemental private revenue makes the cost of Medicaid look smaller and out-of-pocket expenditures appear higher. After co-opting their private revenue in this way, Medicaid underpays LTC providers, reimbursing them on average only 70 percent of the rates they would otherwise have received from private payers.[10] The combined impact of Medicaid’s commandeering half of total out-of-pocket LTC spending, approximately $40 billion worth of private income, and then paying LTC providers often less than the cost of supplying the care[11] has had a devastating impact on LTC access and quality. Resulting meager wages worsen the nationwide shortage of paid caregivers. By dominating LTC financing while paying sub-market rates, Medicaid also shifts costs to a dwindling number of private payers who must pay higher rates for their usually shorter LTC terms of need to compensate.

Thus, Medicaid is the dominant payer for the longest needs and largest LTC expenditures. But Medicaid is a public assistance program presumed to have draconian income and asset limits that block eligibility. That is why most analysts and the media assume that people must spend down both their income and assets for LTC until, impoverished, they qualify for Medicaid benefits. It is this “Fallacy of Impoverishment”[12] that resolves the paradox of low public out-of-pocket LTC spending despite sky-high national LTC expenditures.

Financial Eligibility for Medicaid LTC

Medicaid does require low income to qualify for LTC benefits, but most state Medicaid programs deduct private health and LTC expenditures from income before applying the low-income standard. So, even high income people qualify if their medical and LTC costs are commensurately high, as they usually are for seniors in need of expensive, extended care. Some states do cap income instead, but they allow special income diversion trusts to achieve the same purpose of enabling higher income people to qualify.

Likewise, high assets do not interfere with eligibility for Medicaid LTC. Most large assets seniors own, such as homes, tax-favored retirement savings, or an automobile are exempt. Countable assets, such as cash, stocks, bonds, really anything easily convertible to cash, are usually capped at $2,000. But excess countable wealth is easily converted to exempt status by using it to purchase exempt assets. See “Medicaid’s $100+ Billion Leak.”[13] Long lists of exempt resources to facilitate this process are readily available on line or from financial advisers who specialize in reconfiguring clients’ income and assets to qualify them for Medicaid LTC benefits. Bottom line, virtually no amount of income or assets automatically disqualifies someone from qualifying for LTC funded by Medicaid and practically any amount of wealth can be reconfigured to secure Medicaid LTC eligibility.

Mystery Solved

It should be clear now what is going on. The conundrum of how private out-of-pocket LTC spending can be so low when total national LTC spending is so high is solved. The public handles relatively small, shorter-term LTC expenses out of their available income and assets without severe difficulty. But as LTC need extends in time and cost, pressure builds on families to find a way to fund the care. Millions take on the responsibility of caring for loved ones without pay, but the financial and emotional stress is so great that many seek help elsewhere. Turned away by Social Security and Medicare, which do not pay directly for LTC, they eventually discover Medicaid. There they find the help they seek, but it comes with all the downsides associated with the program such as the need to rejigger income and assets to qualify, access and quality problems, institutional bias, long home care waiting lists, and discrimination due to providers preferring higher-rate private payers.

Consequences

What are the ramifications of this unwieldy LTC system for each of its economic stakeholders? For government, the dominant payer, LTC is a huge expense that unrelentingly compounds budget deficits and long-term debt. For the public, LTC is a risk about which they are in denial until they need it, at which time Medicaid obviates the biggest cost, further desensitizing future generations to LTC risk. For senior advocates, LTC means seeking extra government benefits, while missing the irony that the more government spends on LTC, the less incentive people have to prepare privately for the risk. For Medicaid planners, LTC generates big profits from artificially impoverishing affluent clients to qualify them for benefits while holding back “key money” so their clients can access the best publicly financed care available to the exclusion of needier recipients. For care providers, LTC is a race for survival, as they struggle to supply quality care despite inadequate reimbursement from public programs that crowd out private payers at market rates. To the financiers who supply the debt and equity capital to build, operate and maintain care facilities, LTC requires a constant search to find profitable projects in a market dominated by poor public payers. Finally, for insurers, LTC is a hopeless challenge to sell a product government has been giving away since Medicaid began in 1965. These players in the LTC marketplace compete to squeeze scraps of benefit or profit from a centrally planned, government-dominated system that serves none of them well, and simultaneously defies reform.

Solutions

What can be done? This entrenched LTC economic system must be disrupted to its core. All payers, including Medicaid, should pay market rates to all LTC providers. This would reduce caregiver shortages and mitigate access and quality problems through market competition. To be able to pay market rates, however, Medicaid would need to cover fewer recipients. To reduce Medicaid LTC dependency without harming people in need, the program’s financial eligibility limits must be tightened gradually so that the public has time to adjust to a new reality of heightened private LTC risk. To achieve that objective, the system should exempt everyone under 55 years of age and anyone already needing LTC from the following changes.

1.  Keep Medicaid’s treatment of income the same, continuing to require a low income standard after deducting private medical and LTC expenses from total income. Excess Social Security, pension and other private income should continue to offset Medicaid’s cost for recipients’ care, but the income flowing to LTC providers should be at market rates eliminating Medicaid’s artificially low reimbursements and reinvigorating the entire LTC service delivery system.

2.  Stanch Medicaid’s $100+ Billion Leak. Stop allowing Medicaid applicants to purchase exempt assets in order to spend down unlimited, otherwise countable resources artificially. Instead, treat asset spend down the same as income spend down, by limiting it to deductions for actual, documented private medical or LTC expenditures.

3.  Bring seniors’ $14 trillion[14] of home equity into the LTC financing system by eliminating or vastly reducing Medicaid’s home equity exemption. At its current 2025 level between $730,000 and $1,097,000,[15] Medicaid’s misplaced generosity diverts nearly all home equity away from LTC funding, enough alone to solve most of LTC’s many access and quality problems.

4.  Stop “Medicaid Asset Protection Trusts”[16] and “Medicaid Compliant Annuities”[17] from diverting vast sums of private wealth from LTC spending into taxpayer-financed Medicaid expenditures. These legal gimmicks, used exclusively by the affluent clients of Medicaid planning specialists, should be illegal.

5.  Medicaid’s 5-year asset transfer look-back[18] is too short to discourage intentional self-impoverishment to qualify for LTC benefits. Expand it to 20 years. As home ownership and transfers are publicly recorded by county assessors and recorders, respectively, a 20-year look-back rule could be easily administered. It would end one of the most commonly recommended early LTC planning methods.

6.  End systemic LTC racism.[19] Today, affluent Medicaid planners’ clients access the best Medicaid facilities and services to the exclusion of needier groups, including racial and socio-economic minorities, by using “key money”[20] to purchase red-carpet LTC access that the less privileged cannot afford. When all funders, including Medicaid, pay market rates for care this unfair advantage benefiting the well-to-do over the underprivileged will disappear.

7.  Give Medicaid back to the vulnerable aged and disabled people for whom it was originally intended by reversing the program’s new focus on able-bodied, working-age adults.[21]

8.  Allow states to experiment with creative ways to do more with less by encouraging and approving waivers that trade federal matching fund limits for more state-level LTC policy flexibility.

Implementing these eight measures will vastly reduce Medicaid LTC caseloads over time, including the most expensive cases dually eligible for Medicare and Medicaid. The new program will be better for all who qualify because it will pay market reimbursement rates adequate to ensure access to and quality of care across the care continuum from home to nursing home care. Middle class and affluent people no longer able to qualify for Medicaid LTC while sheltering wealth will find private pay LTC of higher quality and greater availability. They will pay market rates instead of higher private rates inflated by cost shifting caused by earlier artificially low Medicaid rates. With enormous sums of new private financing flowing through the LTC service delivery system at market rates, commercial activity will flourish generating additional tax revenue as more caregivers and LTC providers join the newly profitable sector.

Obstacles

This is an attractive picture. But getting from the dysfunctional system we have now to this vastly different organization of incentives and results is a problem. Critics will excoriate this new approach as uncaring toward people in need despite the irony that most of them believe incorrectly that the existing LTC system already impoverishes millions. But in truth this change will mean better LTC for those most in need who will continue to qualify for assistance from Medicaid. Others who become responsible to pay for their own LTC before they qualify for Medicaid will have time to adjust and prepare before they are affected. People already in need of LTC or under age 55 will remain unaffected and covered by Medicaid.

The biggest challenge to re-inventing LTC in this way is how to awaken the public to the new reality without inciting opposition. No longer will people be able to ignore the risk and cost of LTC in their younger years and still receive Medicaid LTC in old age while preserving wealth. How to achieve a transition from current LTC complacency and government dependency to serious personal responsibility and planning is the major obstacle. Families struggling to make ends meet and save for their own retirement will not look kindly at a new obligation to save, invest or insure for LTC. How can they be relieved of that burden while simultaneously reducing the public financing option that has failed everyone so miserably?

Answers

The solution is to re-prioritize LTC among life’s responsibilities. As this paper has explained, public policy rewards the accumulation of savings, but discourages the use of private wealth to fund LTC. Why should amassing wealth that will pass to heirs if unspent take precedence over funding quality LTC for the living? Why should Medicaid incentivize heirs to use welfare-financed care for their infirm parents’ LTC needs? What if public policy prioritized preparing privately for future LTC need instead? What might such policy look like?

Step one is to inform the public about the loss of Medicaid as a late-life wealth preserving safety net for the middle class and affluent. Then establish and promulgate new LTC planning goals for consumers to achieve no later than age 65 as a precondition for any later Medicaid help with catastrophic costs. Give every citizen an objective analysis of their LTC risk and an estimate of the likely cost of the care they may need some day. Each person could then know what they need to set aside to cover their average expected LTC need. Research shows that an overall average is $70,000 invested by age 65 will cover median paid LTC need.[22] Of course individuals may need to set aside less or more depending on their unique circumstances. While ensuring that every individual’s average LTC risk is covered by private funding would not eliminate Medicaid’s back end catastrophic risk, it would substantially reduce that risk enabling Medicaid to do a better job for all remaining long-duration recipients.

How can people achieve their needed level of LTC savings without undue pressure on their ongoing living needs? One way could be to allow or require individuals and families to earmark other resources they are accumulating, such as retirement savings, home equity or life insurance, to be used for LTC if and only if otherwise unaffordable LTC needs occur in the future. In that manner, wealth being accumulated with strong public policy inducements can be repurposed to fund future LTC without impairing families’ current cash flow. Savings that would otherwise pass through inheritance would go to fund higher quality LTC for the living and create a stronger inducement for younger generations to save, invest or insure for their own future LTC need.

Conclusion

Some government policies encourage citizens to accumulate vast savings. But other public policies discourage them from spending this wealth on LTC. Easy access to Medicaid LTC benefits late in life enables people to ignore LTC risk and cost when they are young without drastic financial consequences later. As a result, few people plan, save, invest or insure for LTC early in life and they end up dependent on Medicaid late in life. But Medicaid distorts the LTC market by dominating it, paying too little for care, and thus causing caregiver shortages and other access and quality problems.

To fix LTC, all payers, including Medicaid, should pay market rates enabling competition to ameliorate service delivery and financing problems. For Medicaid to pay market rates, however, LTC caseloads must decline dramatically. To reduce LTC caseloads, tighten Medicaid LTC financial eligibility limits by ensuring that recipients actually spend down income and assets for real private medical and LTC expenses before becoming eligible. To prepare the general public for this less easily available Medicaid LTC program, identify each person’s likely LTC risk and cost, then let them earmark enough from assets they are otherwise accumulating to satisfy their LTC planning responsibility if and only if needed to fund their future LTC.

This arrangement will induce people to plan for LTC earlier and to pay privately for their care when needed. That private spending will reduce the cost of LTC for Medicaid. Medicaid, relieved of covering so many people who should, could and would have paid for their own LTC absent current public policy incentives to the contrary, will be able to do a better job for all remaining, genuinely needy recipients. The terrible condition of LTC service delivery and financing in the United States is not the result of too little government funding and regulation, but too much. Reconfiguring the carrots and sticks in public policy to redirect vast personal savings toward private LTC financing is the key to improve LTC for everyone, rich and poor alike.
 

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Updated Friday, November 21, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC BULLET: CATO ON LTC

LTC Comment: Cato published papers on long-term care financing reform in 2005 and again this year. After slow progress for two decades a change for the better may be coming soon. Reflections after the ***news.*** 

*** REGISTRATION IS NOW OPEN for the 2026 Intercompany Long Term Care Insurance Conference! Organizers report: “Our in-person conference March 8-11, 2026 at the Rosen Shingle Creek in Orlando, FL is now accepting attendee registrations! As always, our agenda will include numerous educational sessions over two days across seven tracks with ample time for networking and reconnecting with colleagues. We still have room for exhibitors and sponsors!  Please contact us at info@iltciconf.org if you are interested in either opportunity to showcase your products and services to our attendees. Everyone who's anyone in Long Term Care Planning will be there. What about your company?” Damon and I will be there to work and cover the conference, respectively. See you then. ***

LTC BULLET: CATO ON LTC

LTC Comment: In 2005, public policy regarding LTC financing was in ferment. The U.S. economy slowed to a crawl. State and federal politicians worried about making fiscal ends meet. Medicaid LTC expenditures soared while public interest in private LTC insurance waned. Policymakers worried about funding LTC, but frequent appeals for a big new entitlement program for that purpose fell flat. The best thing I can say about that time two decades ago is that LTC and fiscal responsibility still mattered to legislators and policymakers.

I spent half that year commuting from Seattle to Washington, DC—2 weeks on, 2 weeks off—to advocate for tighter Medicaid financial eligibility rules, stronger estate recoveries, and more support for private LTC insurance. I spoke to everyone who would listen from all the LTC trade associations, to members of Congress and their staffs, to experts at the most influential think tanks, Cato, AEI, and Heritage. We had high hopes to pass legislation that would encourage the public to plan early for LTC and save, invest or insure for that risk instead of ending up on Medicaid by default.

That was how things stood on September 1, 2005 when the Cato Institute published “Aging America’s Achilles’ Heel: Medicaid Long-Term Care.” If you don’t feel like reading that 18-page article, listen instead to this 6-minute interview that summarizes it generated by Google Illuminate. Or, better yet, check out this hour-long debate between yours truly and Vincent Russo, who is a Medicaid planner with three offices in New York as well as a founding member and fifth president of the National Academy of Elder Law Attorneys, the Medicaid planners’ trade association.

As it turned out, we did get meaningful legislation the following March 2006 when Vice President Dick Cheney flew back from the Middle East expressly to break a Senate deadlock and pass the Deficit Reduction Act of 2005. The DRA ’05 enacted the first ever cap on Medicaid home equity, setting the exemption between $500,000 and $750,000 at state option. The legislation also unleashed the LTC Partnership program that had been stifled for years by a prohibition against exempting sheltered assets from estate recovery. Those were two steps in the right direction, but not nearly enough.

Unfortunately, the DRA ’05 was the last significant progress America has made toward saving Medicaid LTC benefits for the needy and diverting middle class and affluent people toward savings, investment or insurance for LTC. An amazing thing happened in the U.S. during those intervening years. The Federal Reserve pushed interest rates to near zero setting off a government, corporate, and personal spending spree such as the country had never seen before. State and federal budgets exploded; national debt soared to $38 trillion; and personal wealth from home equity, stocks, and bonds skyrocketed. The wealthy profited more than ever; the needy made few if any gains.

As long as this economic party continued, the powers-that-be had little interest in fixing Medicaid LTC. I’d noticed over the years that when the economy went into recession and politicians couldn’t stay within budgets, they showed interest in ideas and recommendations to control Medicaid LTC costs, especially when proposed to improve care access and quality at the same time. But when the good times rolled, they lost interest. That’s why I’m hopeful now.

The U.S. economy is showing signs of stress. Interest rates are up. National debt is in the stratosphere. Interest on the debt exceeds defense expenditures. Deficits approaching $2 trillion per year increase the debt immediately and boost debt-service costs over time. Doubts emerge that the United States can service its debt going forward. That means it will struggle repaying bondholders for their investments resulting in America’s creditors losing confidence in the dollar. The “debasement trade” tempts investors to abandon fiat currencies like the dollar for hard assets like gold and silver.

In other words, conditions are lining up for policymakers and politicians to take the need for LTC financing reform seriously again. Therefore, timing was right for another Cato paper to point the way. Cato published “Better Long-Term Care for Billions Less” on November 13, 2025, bookending its 2005 coverage of the issue. Please read the new paper or listen to this 7-minute “interview” summarizing it. Then share your feedback, positive or negative, with me at smoses@centerltc.com. Thanks for your time and consideration.

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Updated Monday, November 17, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #25-042:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

• New Paper: Better Long-Term Care for Billions Less

• Better Long-Term Care for Billions Less

• Long-term care is ‘elephant in room’ in financial planning discussions, despite concerns

• Better than Boca

• The cost of care is gutting the American dream. Here's how to fix it.

• Robots will play a growing role in elder care, experts say

• Genworth Plans to Offer Market-Linked Long-Term Care Benefits

• Number of ‘solo-agers’ skyrockets, AARP survey finds

• I just retired with a cushy $2M nest egg but my wife, 62, has been diagnosed with a serious illness and may need long-term care. What do we do now?

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"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

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Updated Monday, November 10, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #25-041:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

• Rise in premature deaths prevents Americans from reaching age of Medicare eligibility, study finds

• Layin’ It on the Line: The long-term care crisis 2.0 — Why the government may force you to buy coverage

• Measure to allow investment of WA Cares tax dollars in stock market on track for approval

• Are taxpayers wasting $86 billion on SilverSneakers and Medicare Advantage goodies they don't use?

• Long-term services: Lots of ideas but who will pay for them?

• Medicaid payment pause could have unintended consequences for assisted living providers, residents

• As Pickleball Continues to Gain Players, Injuries Are Increasing

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"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

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Updated Friday, November 7, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC BULLET: OOPS! THE COLLAPSE OF OUT-OF-POCKET LONG-TERM CARE SPENDING AND ITS CONSEQUENCES

LTC Comment: Academics and the media claim millions of middle class Americans are spending their life’s savings on long-term care until they’re broke. We examine this “Fallacy of Impoverishment” after the ***news.***

*** REGISTRATION IS NOW OPEN for the 2026 Intercompany Long Term Care Insurance Conference! Organizers report: “Our in-person conference March 8-11, 2026 at the Rosen Shingle Creek in Orlando, FL is now accepting attendee registrations! As always, our agenda will include numerous educational sessions over two days across seven tracks with ample time for networking and reconnecting with colleagues. We still have room for exhibitors and sponsors!  Please contact us at info@iltciconf.org if you are interested in either opportunity to showcase your products and services to our attendees. Everyone who's anyone in Long Term Care Planning will be there. What about your company?” Damon and I will be there to work and cover the conference, respectively. See you then. ***

*** BOLO. The Cato Institute plans to publish Steve Moses’s “Policy Analysis” titled “Better Long-Term Care for Billions Less” on November 11. This new paper reveals why America’s LTC service delivery and financing systems are such a mess. It proposes a creative new approach to resolve all LTC’s problems. Be on the lookout. ***
 

LTC BULLET: OOPS! THE COLLAPSE OF OUT-OF-POCKET LONG-TERM CARE SPENDING AND ITS CONSEQUENCES

LTC Comment: Anecdotes abound that some people spend enormous sums on long-term care (LTC). What is lacking is any evidence that catastrophic LTC asset spend down is widespread. The evidence we do have is all to the contrary. For example, consider the following decade-by-decade tables derived from annual National Health Expenditure data. Start with the most recent year for which we have data, 2023. It shows that overall out-of-pocket LTC spending for nursing homes, continuing care retirement communities, home health care and other health, residential, and personal care is only 12.9%. What can we make of this?

Source: National Health Expenditures*
“Other” includes “health, residential, and personal care”
*  For definitions of all National Health Expenditure Accounts (NHEA) categories, see http://www.cms.gov/NationalHealthExpendData/downloads/quickref.pdf.

If you didn’t have these facts right in front of you, what percentage of U.S. spending for LTC would you guess that people pay out of pocket? You’ve heard Medicaid requires impoverishment, so that implies a lot of private spending. You know LTC insurance is unpopular, owned by only 3.1% of Americans, so that source wouldn’t contribute much. Everyone says Medicare doesn’t pay for LTC, so no help there. The other public and private third-party LTC payers are each relatively small and not well known. So, you could be excused for guessing that out-of-pocket LTC expenditures must be half, maybe even two-thirds of total LTC spending.

Actually, that guess wouldn’t be far off from what peer-reviewed scholars have estimated over the years. Kemper, Komisar, and Alecxih claimed in 2005 that 45% of  LTC expenditures were “uninsured private expense.” In 2016, Favreault and Dey said: “Families will pay about half of the costs themselves out-of-pocket.” Favreault and Johnson reckoned in 2021 that “out-of-pocket payments” were 57% of “total LTSS expenditures.” The following NHE tables, covering 2020, 2010, and 2000, reveal that actual OOP spending during those periods was 12.0%, 14.1% and 19.9%, respectively. How could respected scholars get such an important statistic so wrong? And why?

How and Why Do Scholars Estimate OOPS at Double or Triple the Actual Rate?

Instead of using the actual NHE data provided by CMS that I’m citing here, scholars chose to rely on “micro simulations” generated by software like the Urban Institute’s “Dynamic Simulation of Income Model (DYNASIM).” Here’s how DYNASIM describes its seductive capabilities:

Using the best and most recent data available, [DYNASIM] projects the size and characteristics—such as income and health status—of the US population for the next 75 years. DYNASIM can also describe “what if” scenarios, showing how outcomes would likely evolve under changes to public policies, business practices, or individual behaviors. With this model, we can show how different groups will fare over time, who is moving ahead and who is being left behind, and which groups would win and lose under various policy options.

In other words, as it applies to our current question, if you plug in Medicaid’s financial eligibility rules, DYNASIM will grind out a statistic for how much people must have had to pay out-of-pocket for LTC based on national data for how much income and wealth the public starts with before they confront LTC costs. On top of that, DYNASIM points scholars and policymakers  toward who “would win and lose under various policy options.” Scholars like simulations based on assuming LTC causes impoverishment because they “point” to the policy options most academics prefer, i.e., more public, less private financing.

What’s Wrong with DYNASIMulation?

So, exactly how do the experts come up with those high OOP spending estimates? First, they cite sources that say Medicaid LTC eligibility depends on having “low income,” only $967 per month and low assets, usually $2,000. These are the Supplemental Security Income (SSI) limits that do guarantee Medicaid eligibility once reached. Then they assume everyone spends down any excess wealth they possess for private LTC until they reach those levels and become eligible for Medicaid. Their simulator applies those strict financial eligibility criteria to national income and wealth data and conclude that half or more of all LTC expenditures must come from private out-of-pocket spending. QED.

What’s wrong with this method? Why does it produce estimates that are three or four times what the actual data show? Although people who fall within those low Medicaid income and asset limits do qualify for LTC benefits, that does not mean that other people with substantially more income and assets cannot qualify nor that they must spend down their savings for private LTC before becoming eligible for Medicaid.

People with high incomes qualify because in most states Medicaid deducts their private health care spending from their incomes before applying a low income standard. Some states do apply an income cap, but they allow special income diversion trusts to achieve the same purpose. Either way, high income people qualify easily for Medicaid LTC benefits.

Nor do high assets disqualify people from Medicaid LTC. Most large assets seniors own are exempt for determining eligibility. Exempt assets include most home equity, home improvements, IRAs, a side business, a vehicle, prepaid funeral expenses, all personal belongings and household furnishings and others, lists of which are available online and from Medicaid planners. Extra countable assets people own are easily made exempt by using them to purchase resources that are exempt, thus achieving eligibility while preserving wealth in a different form. This is “Medicaid’s $100+ Billion Leak.”

In other words, Medicaid LTC financial eligibility is more complicated than simply applying the presumed income limit of $967 per month and the $2,000 cap on countable assets to national income and asset ownership data. That simple-minded simulation produces vastly over-estimated numbers for OOPS. So, given that CMS provides hard data every year on actual OOP spending, we need to ask not only how the experts come up with such inflated estimates, but why they do it.

I think the reason scholars inflate OOPS is the ideological proclivity among academics toward “LTC solutions” that involve more government spending and regulation. Most of their articles, reports and books that estimate very high OOP spending then conclude that to relieve the awful burden of LTC on families, the only viable solution is to increase Medicaid spending, add LTC to Medicare, or concoct a new compulsory, payroll-funded, LTC entitlement on the model of Social Security and Medicare.

But all such proposals have fallen flat. The time for big government entitlement programs has passed. We’re likely to lose the ones we already have before a new one for LTC comes along. The national debt exceeds $38 trillion. Spending surpasses revenue this year by $1.8 trillion. We’re on the brink of being unable to service the national debt, which means the bond market may demand austerity, not a promising economic environment for big new government spending programs going forward.

Consequences of Declining OOPS

Consider the history of actual OOPS spending over the years. Here are the remaining tables for each start of decade since 1970.

Note the gradual decline in OOPS starting from almost 40% in 1970, only five years after Medicaid began subsidizing LTC with virtually unlimited federal matching funds, to 25.9% in 1990, finally dropping by half again to 12.9% in 2023. Clearly the burden of out-of-pocket LTC spending on the public has declined radically over the years.

These facts have consequences. The decline in OOPS explains why most Americans do not worry about LTC until they need it. As their LTC spending soars, they easily qualify for Medicaid. The next generation receives that message when, thanks to Medicaid, their inheritances are unencumbered by their parents’ LTC costs. The cycle is perpetuated as each new generation fails to save, invest or insure for LTC and ends up relying on Medicaid.

Today, Medicaid is the dominant payer for all forms of LTC, 44.2%. In 2023, as the first table above shows, it covered, 30.4% of nursing home care, 34.6% of home health care, and 60.3% of “other” health, residential, and personal care services. Medicaid pays nursing homes and other LTC providers dismally low reimbursements, often less than the cost of providing the care. Much higher private-pay revenue for nursing homes has collapsed to only 7%. High dependency on low Medicaid reimbursements is the cause of LTC’s biggest problems including caregiver shortages, poor access and low quality.

What to Do Instead

Instead of fantasizing catastrophic LTC spending, based on wishful simulations, to scare up demand for a big new, compulsory, payroll-funded LTC entitlement program, here’s what needs to happen instead.

Recognize that OOPS is much lower than the scare mongers claim. Strengthen Medicaid financial eligibility rules so they do not allow middle-class and affluent people to qualify for LTC benefits while preserving wealth and without spending down for their own care. Save and improve Medicaid as a LTC safety net for the genuinely needy who currently receive the program’s worst facilities and services.

For full documentation of these problems and detailed proposals to solve them, see the Paragon Health Institute’s “Long-Term Care: The Problem” and “Long-Term Care: The Solution.” Watch for the Cato Institute’s “Better Long-Term Care for Billions Less,” forthcoming November 11.

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Updated Monday, November 3, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #25-040:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

• Are Consumers Ready For The Great Wealth Transfer?

• Who Will Care For Aging Clients?

• Gen X could be ‘most financially vulnerable cohort’ facing retirement: report

• Fiscal sanity or risky gamble? Allowing state to invest WA Cares Fund in stock market

• New report finds wide variation across states in financial strain among family caregivers

• New Research on Long-Term Care Insurance Partnerships

• 90% of Americans plan to skip the No. 1 piece of Social Security advice, study finds

• My husband and I have $7K in Social Security and $2.5 million in stocks. What could go wrong?

• 9 Things Retirees Should Stop Buying, According to Financial Experts

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"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

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Updated Monday, October 27, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #25-039:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

• Deciding on Senior Living? 10 Things You Should Know

• 8 Insurance Benefits You Lose After 70

• Shutdown or not, there are things to do

• Exposure to bright lights at night linked to increased risk of heart disease, study finds

• Investment Firm Acquires LifeSecure From Michigan Blue

• LTCi makes a difference in family caregiving, study finds

• Nationwide expands hybrid long-term care lineup with new annuity option

• Strengthening a safety net requires reforms to long-term care through Medicaid

• Morgan Stanley: Longevity Is Redefining Financial Planning

• Pushed from liberal-leaning states, home care providers may eye expansion in Arizona, Florida, Texas, attorney says

• The Top 5 Reasons For Turmoil In The Medicare Advantage Market

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"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

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Updated Friday, October 24, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC BULLET: A BETTER LTC ANSWER THAN WA CARES

LTC Comment: As WA Cares slides down the slippery fiscal slope facing all compulsory, payroll-funded government entitlements, we bring you a better option, after the ***news.***

*** REGISTRATION IS NOW OPEN for the 2026 Intercompany Long Term Care Insurance Conference! Organizers report: “Our in-person conference March 8-11, 2026 at the Rosen Shingle Creek in Orlando, FL is now accepting attendee registrations! As always, our agenda will include numerous educational sessions over two days across seven tracks with ample time for networking and reconnecting with colleagues. We still have room for exhibitors and sponsors!  Please contact us at info@iltciconf.org if you are interested in either opportunity to showcase your products and services to our attendees. Everyone who's anyone in Long Term Care Planning will be there. What about your company?” Damon and I will be there to work and cover the conference, respectively. See you then. ***

*** LTC CLIPPINGS are a daily feature we bring to Center for LTC Reform premium members. Steve Moses tracks the news and analysis bearing on LTC issues of all kinds. He cites the source, pulls a representative quote, and gives his interpretation of important articles, reports, and news items. To join the Center and get access to our LTC Clippings, LTC Bullets, LTC E-Alerts and our members-only website, go to https://centerltc.com/support/index.htm or contact Damon at 206-283-7036 or damon@centerltc.com. In the meantime, here’s a sample LTC Clipping highlighting an article by today’s Guest LTC Bullet author Elizabeth New.

7/16/2025, “Estate recovery is fair — if Medicaid is for the needy,” by Elizabeth New, Washington Policy Center

Quote: “The American Medical Association (AMA) recently voted to oppose a federal requirement that says states must seek to recover long-term care (LTC) Medicaid costs from the estates of deceased beneficiaries. That’s bad advice from the AMA and implies that states are doing a good job with estate recovery efforts. They’re not. … Stephen Moses, a longtime advocate of estate recovery and president of the Center for Long-Term Care Reform, has argued for years that strong recovery policies promote personal responsibility and discourage Medicaid gaming. He’s right. Pretending that all estate recovery is punitive or unjust ignores the fact that the real injustice lies in allowing people with means to use a safety net they do not need. The AMA's vote of opposition sends the wrong message, and lawmakers just missed a cost-saving beat in their big bill. Medicaid is not an inheritance-preservation program. It is a last-resort lifeline. Federal and state lawmakers should not be shamed for treating it that way.”

LTC Comment: Hearty thanks to Elizabeth New of the Washington Policy Center for this spot-on article. She is a tireless advocate for sensible LTC financing policy. For more on the topic, read my 1988 study for the USDHHS Inspector General titled “Medicaid Estate Recoveries.” Most of its recommendations, including mandatory estate recoveries, became federal law in the Omnibus Budget Reconciliation Act of 1993.  ***

LTC BULLET: A BETTER SOLUTION FOR WASHINGTON THAN WA CARES

LTC Comment: Elizabeth New, nee Hovde (her former byline) is Director of the Center for Health Care and Center for Worker Rights at the Washington Policy Center, a free market oriented think tank in Washington State. We’ve cited her analysis and criticism of WA Cares in LTC Clippings at least six times in the past year. She indicts Washington State’s LTC entitlement program as insufficient, mismanaged, and unfairly structured, placing an undue burden on taxpayers. Today Ms. New brings us a broader perspective on her thinking about Medicaid’s and WA Cares’ roles in long-term care service delivery and financing. Here’s how she introduces today’s LTC Guest Bullet:

Elizabeth New: A funny thing happened on the way to WA Cares. 

As I studied Washington state’s new, mandatory long-term care program — which distorted the private insurance market, has solvency issues, will offer limited help to only some workers and taxes low-income earners to subsidize those with no need for public aid — I learned about the even more concerning burden Medicaid Long-Term Care is placing on taxpayers.

The following policy paper, written for Washington state lawmakers, is the result of that deeper investigation. It proposes reforms to Medicaid Long-Term Care that can preserve the safety net for people in true need, while protecting taxpayers from a program that has been stretched beyond its design.

My analysis draws on key insights from industry experts, including the foundational work of Stephen Moses. I invite you to read, “Strengthening a safety net requires reforms to long-term care through Medicaid.” 

Introduction

Washingtonians are living longer. More people are — and will end up — using long-term-care services to help them with activities of daily life. 

Some people need financial help with long-term care, which state and federal taxpayers generously provide through Medicaid. Other people finance long-term care with private resources and have no need for taxpayer dependency. Many others have savings and investments that could be used for long-term care but instead have taxpayers pay for their long-term care, while protecting money and assets to pass onto their heirs. Inadequate eligibility requirements and low pursual of estate-recovery measures make this easier to do.

Medicaid is the primary payer of long-term care (LTC) services in the nation and Washington state, and LTC funding makes up 20% of Washington state Medicaid spending. Keeping up with the financial demands to come from an increased number of people relying on taxpayers for long-term care requires changes to eligibility requirements and estate recovery measures attached to the safety net.

Key Takeaways

1. Washington state is aging, and an increasing number of people are applying for Medicaid long-term care (LTC) earlier. This will lead to longer durations of use and escalating costs.
2. LTC costs consumed 20% of $29.2 billion in Medicaid spending in Washington state in fiscal year 2022. 
3. Medicaid enrollees who used long-term services and supports comprised 6% of total enrollment but 37% of federal and state spending.
4. The WA Cares Fund is unlikely to substantially help reduce Medicaid LTC demand. Given a lifetime benefit of $36,500, high LTC costs and irresponsible state messaging, program recipients will often exhaust the benefit and then seek Medicaid.
5. Medicaid is the primary payer for LTC nationally, financing more than half (61%) of the total spending. This reliance on taxpayers is concerning as the population ages and program eligibility remains broadly accessible.
6. Eligibility rules let people rearrange assets to appear poor and qualify for taxpayer-funded long-term care, even when they have nearly $1.1 million in home equity.
7. Estate recovery helps repay taxpayers after a recipient’s death, supporting program integrity and sustainability, yet Washington recovered only 0.34% of $5 billion in fiscal year 2025.
8. To deter gaming and preserve aid for those truly in need, lawmakers should push Congress to extend the five-year asset look-back period to 20 years.
9. Medicaid needs to be a safety net — not an inheritance-preservation vehicle — protecting resources for vulnerable Washingtonians.

READ THE FULL STUDY HERE

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Updated Monday, October 20, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #25-038:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

• Say what? Insensitive comments fuel family caregiver’s humorous web video series

• Seniorly to be acquired by CareScout in $20 million transaction

• How the Government Shutdown Could Affect Older Adults

• Impact Of The Carer's Gap

• US adults are generally unprepared for aging, new ‘longevity preparedness index’ finds

• US health agency releases 2026 quality ratings for Medicare plans

• Here’s what’s really stopping Medicare Advantage from covering all of America’s seniors

• Economic volatility driving people to delay retirement or go back to work

• Nationwide launches CareMatters Annuity to Address Growing Long-Term Care Concerns

• CBD Calms the Inflamed Alzheimer’s Brain

• RN turnover in skilled nursing reaches 100 percent over a decade

• Out of pocket payments for home-based long-term care in Europe drive older people into poverty

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"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

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Updated Monday, October 13, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #25-037:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

• 2026 Tax Deductible Limits For Long-Term Care Insurance Increase 3 Percent

• Layin' it on the Line: The long-term care crisis - why the government may force you to buy coverage

• Largest Study of Alzheimer’s in African Americans Reveals Disease Targets

• Vote ‘Yes’ to strengthen WA Cares Fund for elder, long-term care | Editorial

• A small think tank's crusade against Obamacare is making some Republicans nervous

• Most Americans expect to need long-term care in the future, and they don’t want that care in assisted living

• Retirement goals slipping away as more Americans live paycheck to paycheck

• Senior living and care market sees resurgence, increased demand

• A small think tank's crusade against Obamacare is making some Republicans nervous

• Vote ‘Yes’ to strengthen WA Cares Fund for elder, long-term care | Editorial 

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"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

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Updated Friday, October 10, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC BULLET: MEDICAID MONEY MANIPULATION HARMS LONG-TERM CARE

LTC Comment: State Medicaid programs, Medicaid planners, and the federal government manipulate money mischievously in different, but complementary ways to the detriment of the program’s mission. We explain after the ***news.***

*** REGISTRATION IS NOW OPEN for the 2026 Intercompany Long Term Care Insurance Conference! Organizers report: “Our in-person conference March 8-11, 2026 at the Rosen Shingle Creek in Orlando, FL is now accepting attendee registrations! As always, our agenda will include numerous educational sessions over two days across seven tracks with ample time for networking and reconnecting with colleagues. We still have room for exhibitors and sponsors!  Please contact us at info@iltciconf.org if you are interested in either opportunity to showcase your products and services to our attendees. Everyone who's anyone in Long Term Care Planning will be there. What about your company?” ***

LTC BULLET: MEDICAID MONEY MANIPULATION HARMS LONG-TERM CARE

LTC Comment: State Medicaid programs employ provider taxes, intergovernmental transfers and other creative financing methods to transfer costs from their general funds onto federal taxpayers. Medicaid planners manipulate Medicaid financial eligibility rules to qualify their affluent clients artificially for Medicaid’s best care to the exclusion of the poor. The state and federal governments convert high private LTC revenue into less-than-cost Medicaid reimbursements to the detriment of care access and quality for the poor and vulnerable the program is supposed to serve. This concatenation of poor public policies got under my skin. I wrote the following essay to tease out their meaning and consequences.

“Medicaid Money Manipulation Harms Long-Term Care”
by
Stephen A. Moses

The Medicaid program is big and growing rapidly. States administer Medicaid; the federal government oversees their programs; both share the cost. States contribute a payment that their federal partner matches by a formula varying from 50% (one-to-one) to 83% of the total cost. States manipulate this system with various creative financing techniques. For example, nearly all states (49) tax health care providers to generate extra revenues they use to boost their federal financial match without drawing on their general funds. The Paragon Health Institute calls this and other similar methods to maximize federal expenditures at minimal state cost, often diverting them to unauthorized purposes, “legalized money laundering.”[1]

The largest laundered sums involve hospitals and managed care insurers, but states also tax nursing homes and other long-term care (LTC) providers for the same purpose. Less understood is a related form of money laundering. Non-poor people routinely qualify for Medicaid LTC benefits. Medicaid converts their potentially higher private-pay revenue into below-cost payments to LTC providers with serious negative consequences for care access and quality. This paper discusses each of these Medicaid money manipulation methods and their results.

Long-Term Care

LTC consumes a disproportionate share of Medicaid. Only six percent of Medicaid recipients use LTC, but they consume 37 percent of program expenditures.[2] Although home and community-based services (HCBS) now consume nearly two-thirds (63.2 percent) of Medicaid LTC spending,[3] nursing homes remain a critical care venue, serving 24 percent of all Medicaid LTC recipients.[4]

Forty-nine states tax nursing homes, maximizing their federal match and laundering funds for expanded uses. Despite measures implemented to control this practice, the sums involved are very large. The Paragon Health Institute cites a particularly egregious example in Indiana.[5]

But more than just money is involved. New research indicates that the LTC provider tax gimmick may have far-reaching detrimental impacts on the access to and quality of care Medicaid recipients receive.

Creative LTC Financing

A recent NBER working paper, titled “Creative Financing and Public Moral Hazard:

Evidence from Medicaid and the Nursing Home Industry,”[6] argues that creative financing schemes like provider taxes have several negative secondary effects. The authors conclude that such schemes distort state incentives “discouraging increases in effective reimbursement rates retained by the providers, while encouraging expanded access to inpatient care.” (p. 35) They therefore exacerbate “the persistently low effective Medicaid reimbursement rates that contribute to the systematic quality shortfalls in the nursing home industry.” (p. 36) Simultaneously, “the schemes incentivize higher inpatient care volume,” (p. 36) which the authors call “public moral hazard,” despite “widespread preferences among older adults to age at home.” (p. 36) Worst of all, they “show that creative financing leads to disproportionate increases in Medicaid funded care in the lowest-quality nursing facilities, with potentially harmful consequences for patients.” (p. 1) According to the authors, dementia patients in low quality facilities are disproportionately impacted.

Wholesale Medicaid Money Laundering

In summary, the new NBER paper finds that taxing LTC providers to increase federal matching funds incentivizes states to (1) expand nursing home care volume in preference to the HCBS that patients prefer, (2) channel funds disproportionately to lower quality nursing homes serving many dementia patients, and (3) capture some of the added federal funds for purposes other than LTC, thus reducing effective nursing home reimbursement rates and exacerbating related access and quality problems. Provider taxes operate as a kind of wholesale money laundering scheme to capture extra federal funds, redirect them from their intended use to other purposes, increase LTC use and expenditures, and transfer the cost from state to federal tax payers.

Retail Money Laundering

Provider taxes may also encourage money laundering at a retail level. The NBER paper observes that “States can influence care volume through capacity regulations, Medicaid eligibility, benefit design, and Home- and Community-Based Services (HCBS) waivers.”[7] (Emphasis added) How might states increase caseloads by manipulating Medicaid financial eligibility rules for the purpose of gaining more federal matching funds? States have wide discretion to set and enforce rules governing eligibility for Medicaid LTC benefits. They decide, for example, how much countable wealth to allow recipients to retain; which kinds of assets are exempt and in what amounts; to what extent they enforce restrictions on asset transfers, irrevocable trusts and compliant annuities to qualify; the level of effort they extend to track and collect estate recoveries; and many others. Could it be that the incentive to increase Medicaid LTC caseloads created by the provider tax scheme contributes to the indifference many states show toward setting and enforcing strict financial eligibility controls?

California is an outlier in this regard, having totally eliminated its countable asset limit for a time, and leaving in effect its most generous limit in the country.[8] But few states successfully restrain access to Medicaid LTC benefits by people with assets they could use to pay privately for their care. Although Americans hold $97 trillion in retirement savings ($40T),[9] home equity ($35T),[10] and life insurance ($22T),[11] very little of that wealth goes to pay for their LTC. Only 6.5 percent of the $629 billion they spent on LTC in 2023 came from private savings. Medicaid (44 percent), Medicare (16 percent), private insurance (10 percent), other third party payers (17 percent), and private income of people already on Medicaid (6.5 percent) paid the rest. In essence, most potential private LTC spending is converted, or effectively laundered, to become public spending mainly through Medicaid and Medicare with serious consequences for LTC services and financing.

Combined LTC Money Laundering

States and the federal government are complicit in laundering private funds to convert them to public expenditures. Federal financial eligibility rules discourage states from controlling access to Medicaid LTC benefits by the middle class and affluent. Provider tax incentives predispose states not to exercise such control. The federal government requires that state Medicaid programs treat many large assets as exempt. Examples include home equity, side businesses, retirement savings, home furnishings, personal belongings and many more. But federal law and regulations place no restriction on spending down countable assets to purchase exempt resources effectively obviating the need for prosperous people to spend their own funds on care. “Medicaid’s $100+ Billion Leak” explains how this loophole works and its consequences.[12]

This policy of diverting private LTC spending into public expenditures has devastating consequences for LTC access and quality. It diverts hundreds of billions of dollars of LTC spending from coming to care providers at market rates. Channeling that spending through Medicaid causes providers to receive the funds at egregiously low reimbursement rates, less on average than the cost of providing the care.[13] This inadequate revenue is a primary cause of caregiver shortages that lead to widespread access and quality problems. Faced with unsustainably low reimbursements for nearly two-thirds of their residents,[14] nursing homes charge a dwindling supply of private payers rates above the market-based rates that would apply in Medicaid’s absence. This incentivizes the remaining private payers to find ways to qualify for Medicaid without spending down assets.

Medicaid’s Mission Redefined by LTC Money Laundering

Medicaid is supposed to be a safety net for people in need of LTC but unable to pay for it. But Medicaid LTC money laundering at the wholesale, retail and combined levels has made a mockery of that mission. States fleece the federal government with provider tax schemes. Federal eligibility laws and regulations enable the middle class and affluent to access LTC benefits without spending down assets. Savvy financial advisers direct prosperous clients to take full advantage of the loose financial eligibility rules. At the same time, Medicaid’s income and asset spend down rules quickly crush the poor, aged and vulnerable with high private pay outlays they have no way to avoid.

In recent years, the Affordable Care Act (ACA) further undermined Medicaid’s LTC safety net role by extending benefits to able-bodied, working-age recipients up to 138 percent of the poverty level. The 90 percent federal match for these “expansion” enrollees incentivized states to shift eligibility and spending to that group leaving the traditional poor and vulnerable caseload shortchanged.[15] In 2003, the aged and disabled were 25 percent of enrollees and they consumed 69 percent of total Medicaid expenditures.[16] By 2022, this needier group had declined to 20 percent, receiving only 51 percent of total spending.[17] The poorest of the poor, “dual eligibles” who qualify for both Medicaid and Medicare, were 14 percent of Medicaid enrollees in 2005 and accounted for 42 percent of total program expenditures.[18] By 2023 they remained 14 percent of enrollees but they garnered only 32 percent of spending.[19] These changes reflect the ACA’s redirecting Medicaid toward able-bodied, working-age recipients to the detriment of the more vulnerable aged and disabled.

Conclusion

Creative financing schemes used (1) by state Medicaid programs, such as provider taxes (wholesale); (2) by individual affluent recipients and their financial advisers, such as gaming Medicaid financial eligibility rules (retail), and (3) by both, such as diverting LTC funding from the private market sector to Medicaid funding (combined), increase federal Medicaid LTC expenditures excessively, divert federal funds to unintended and unauthorized purposes, and impair the access to and quality of care available to the public.

Congress should recapture control of Medicaid LTC financing by (1) ending the provider tax gimmick, (2) closing the financial eligibility loopholes that convert Medicaid LTC from a safety net for the needy to a hammock for the middle class, and (3) using the savings therefrom to ensure Medicaid pays LTC providers market-based rates for a much smaller caseload of genuinely needy recipients. Further savings will accrue as these changes work their way through the market incentivizing more aging Americans to take the risk and cost of LTC seriously, plan ahead, save, invest or insure for LTC, and stay off Medicaid.

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Updated Monday, October 6, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #25-036:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

• Why fewer seniors are expected to enroll in Medicare Advantage next year - and opt for original Medicare instead

• Malpractice claims involving nurses on the rise in home healthcare, report finds

• Occupancy increases for 17th quarter in a row as boomers fill up senior living communities ‘faster than they can be built’: NIC

• What the Trump Administration Can Do in the Short-Term to Address the Long-Term Care Crisis

• CareScout launches long-term care insurance option

• CareScout Launches Care Assurance, First Insurance Solution for Company

• Protecting Your Inherited Home From Long-Term Care Costs: The Basics

• Veterans with burdened caregivers more likely to enter nursing homes, study finds

• KFF study: A look at growing enrollment in Medicare Advantage special needs plans

• Pay gap getting bigger, ADP says

• China:New guidelines for long-term care insurance services

• Who'll Take Care of Grandma? How Trump's Immigration Policies Threaten Elder Care

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"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com). 

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Updated Monday, September 29, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #25-035:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

• Americans risk retirement security to support loved ones, study finds

• I Asked ChatGPT How a 55-Year-Old Can Prepare for Retirement, Here's What It Said

• Study Sheds Light on Drinking and Dementia Risk

• Home care job openings expected to skyrocket amid wage pressures, job instability

• Study uncovers communication gaps between long-term care insurers, family caregivers

• States Are Cutting Medicaid Provider Payments Long Before Trump Cuts Hit

• Alliance urges policymakers for ‘bold’ action to correct HCBS rate insufficiency

• Physical frailty may cause dementia, study suggests

• Average Spending by Age for Those 55 and Up: Are You Thrifty?

• U.S. Retirement Assets Hit Record $45.8 Trillion In Second Quarter 2025

• Nursing homes fail to report 43% of major falls: Behind OIG’s findings

• Layin’ It on the Line: The hidden IRS rule that could save your retirement from long-term care costs

• 66 percent of millennials, Gen Z expect to inherit $335K from parents in ‘Great Wealth Transfer’

• New Study Finds Families with Long-Term Care Insurance Face Less Financial Strain

• Longer Pre-SNF Hospital Stays More Likely For Medicare Advantage Beneficiaries 

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"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

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Updated Friday, September 26, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC BULLET: LTC POLICY GOES AROUND AND COMES AROUND

LTC Comment: The last year long-term care financing policy and Medicaid LTC reform were major political issues was 2005. What goes around comes around, after the ***news.***

*** ATTENTION: ILTCI ’26. The next Inter-Company Long-Term Care Insurance Conference will be held March 8-11, 2026 in Orlando, Florida. Exhibitor and sponsor applications are available now and attendee registration opens online with early bird pricing October 1^st. As usual, Steve and Damon from the Center for Long-Term Care Reform look forward to attending this essential LTC industry event. Join us, and in the meantime, go to ILTCICONF.ORG for further information. ***

*** “What goes around comes around,” and thanks to our members, the Center for Long-Term Care Reform stays around. Please join us in our mission to ensure quality long-term care for all Americans. We do this by promoting public policy that targets scarce public resources to the neediest, while encouraging people who are young, healthy and affluent enough, to take responsibility for themselves. To find out how you can "do well by doing good," consider supporting our work by joining us at the Premium Membership level. Center for Long-Term Care Reform premium members receive our full suite of individual membership benefits including:

·       All LTC Bullets and E-Alerts

·       Access to our Members-Only Zone website and Almanac of Long-Term Care

·       Subscription to our Clipping Service

·       Email/phone access to Steve Moses for 24-hour turnaround queries

Our Premium Membership is designed to give you a competitive advantage in your long-term care profession. Your increased knowledge of the critical issues and challenges we face in the field of long-term care service delivery and financing equals improved professional success for you and better LTC services for your clients and for those who have no choice but to rely on scarce public resources. 

Stay on the forefront of professional knowledge and help us fight for rational long-term care policy reform by contacting Damon at 206-283-7036 / damon@centerltc.com to start your Premium Membership immediately or go directly to our secure online subscription page and sign up for as little as $21 per month. ***

LTC BULLET: LTC POLICY GOES AROUND AND COMES AROUND

LTC Comment: Join me today for a ride in the Cato Institute’s way-back machine. The libertarian think tank has recovered a long-lost video of a 2005 debate. The battle of wits pitted free-market advocate Steve Moses against Medicaid estate planner Vincent Russo. Cato’s Director of Health Policy Studies, Michael F. Cannon, introduced the program. Marilyn Werber Serafini, then an award-winning journalist with the National Journal, moderated. Watch the debate here. (Click the picture on the right when the website comes up.)

Watch the video and you’ll note I got some things wrong. I predicted that federal and state budgets were approaching a breaking point. I said Medicaid and Medicare were at risk. In the future, I thought people would not be able to ignore the risk and cost of LTC until they need care and then turn the liability over to Medicaid. Home equity would become the main funder of LTC for the majority of elderly who were home owners. Private LTC spending and insurance would flourish as the only path to quality LTC, especially in home and community-based settings.

Boy was I wrong back then. What happened instead was that Medicaid LTC spending continued to grow. Medicaid financial eligibility remained easy. LTC insurance sales slumped dramatically. Medicaid’s giant home equity exemption continued to crowd out private LTC financing through home equity conversion. All the things I warned were ruining LTC access and quality back then only became worse over the next two decades. Hope for change languished.

How can we explain those last twenty years? 2005 was a heady year for LTC financing policy. The economy was good, but politicians fought over Medicaid spending, especially LTC expenditures. The big LTC issues were resolved when the Deficit Reduction Act became law in March of 2006. The DRA established the first ever cap on Medicaid’s home equity exemption and made asset transfer restrictions longer and stronger. It seemed like my predictions and recommendations were coming true.

Unfortunately, 2005 was the last year that Medicaid and LTC financing costs dominated political discussion. Since then, there have been studies and proposals, mostly advocating big new state and federal LTC entitlements, but spending has surged instead in the existing dysfunctional system with no relief. For the past twenty years, worries about budget deficits and escalating debt subsided, enabling the status quo to continue and worsen. Consequently, the national debt exploded from $8.1 trillion in 2005 to $37.5 trillion today.

But politicians’ casual attitude about deficits and debt is changing now. Budget constraints that dominated in 2005 are finally returning in 2025. Inflation has exceeded the Fed’s 2% goal for nearly five years and will continue high until 2028 at least. In FY 2024, the federal government spent $6.75 trillion, but collected only $4.92 trillion in revenue, causing a $1.83 trillion deficit. Analysts worry the U.S. will be unable to service the national debt as interest payments alone already exceed spending for national defense.

So, I stand by my predictions and recommendations from that long-ago debate. The economic reckoning I predicted then is finally upon us. We may flounder on a little longer, but by the mid-2030s, the end will come for the LTC financing system that has prevailed since Medicaid’s founding in 1965. 2031 marks the year boomers start turning 85 and their health and LTC needs skyrocket. Social Security’s trust fund is exhausted in 2034; Medicare’s in 2033. Both those entitlements prop up Medicaid LTC, but won’t help much going forward.

If you want to know what all this means, watch that 2005 debate again. I stand by what I said then. What’s different is that the denouement I predicted in 2005 is closer than ever now. What goes around, comes around, and, boy, is it coming at us hard and fast today.

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Updated Monday, September 15, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #25-034:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

• Federal long-term care advisory commission proposed

• CCRC operations have stabilized, but SNF-heavy ones face issues, Fitch says

• Senior living helps older adults live well longer, NORC/NIC study finds

• From early detection to advanced care: How IoT is reshaping Alzheimer’s management

• Who Pays for Long-Term Services and Supports?

• Expanding the scope of extended care to ease the growing healthcare burden

• Risky Prescribing and the Epidemic of Deaths From Falls

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"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

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Updated Tuesday, September 9, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #25-033:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

• Why Bruce Willis's Family Moved Him into a Separate Home

• Affluent Investors Are Embracing "Multi-Retirements"

• How will Medicaid changes affect long-term care?

• ‘Sandwich Generation’ Neglecting Retirement Savings

• Nebraska Town Says CON Laws Are Blocking Nursing Home Care

• BREAKING: CMS intends to repeal nursing home staffing rule

• Social Security and Medicare cuts are coming because the bond market will eventually bring Congress to its knees, economist says

• Is Life Insurance The Answer To The Growing Long-Term Care Need In The U.S?

• Study finds accumulated wealth dramatically reduces dementia odds in seniors over 80

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"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

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Updated Friday, September 5, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC BULLET: HOW TO FUND WISH

LTC Comment: Analysts and advocates have rallied around WISH, but the proposed LTC insurance plan is starved for funding. Where could the needed money come from?

LTC BULLET: HOW TO FUND WISH

LTC Comment: New York Congressman Tom Suozzi has introduced the Well-Being Insurance for Seniors to be at Home (WISH) Act. It is a creative new approach to funding long-term care that has captured the imagination and gained the support of many LTC analysts, advocates, providers, and insurers. I’ve criticized the plan here and here. But that is not my purpose today. Rather, I’d like to say “if this is what you want to do, here’s how to pay for it.”

What is WISH?

In briefest summary, WISH proposes a new catastrophic or back-end LTC insurance program that would pay qualified recipients a cash benefit equal to the median cost of six hours per day of personal care. To qualify, participants would have to meet their own LTC costs during a waiting period of one to five years depending on their income. Higher income people would pay their own way longer than lower income people before qualifying. WISH also plans a major public education campaign; expects private insurers to wrap new, less expensive policies around the WISH chassis; and hopes that Medicaid savings will accrue.

The catch is how to pay for WISH. Earlier proposals included a mandatory payroll deduction of three percent from workers and three percent from employers. In the current economic and political climate, that plan proved impractical. With the national debt exceeding $37 trillion, interest rates and inflation on the increase, and America’s creditors balking at buying our bonds, the country’s ability to service the debt it already has is at risk. As federal expenditures already far exceed revenue, any additional spending must be borrowed or printed, further worsening the financial crisis. So, if payroll taxes are out, where could the money come from to support WISH?

Finding New LTC Money

Medicaid allows LTC recipients to retain substantial wealth in exempt form. Exempt assets include up to a million dollars in home equity; the cost of home upgrades; one business including the capital and cash flow; an automobile; personal service contracts; unlimited home furnishings and personal belongings; compliant annuities and promissory notes; and even IRAs if they are in payout status, as most are for the elderly due to required minimum distributions (RMDs). No one knows how much wealth Medicaid LTC recipients own in this exempt form. But it is likely very substantial because of a quirk in Medicaid financial eligibility rules that encourages conversion of countable assets into exempt status.

Artificial Asset Spend Down

Medicaid treats asset spend down differently than income spend down. To reach the maximum monthly income limit of $967 dollars, applicants must demonstrate that they have purchased qualified medical or LTC goods or services with their own funds. The same is not true for asset spend down. To reach the $2,000 asset limit that applies in most states, applicants may spend their excess funds on anything they choose as long as they receive fair market value in return. They do not have to purchase qualified medical or LTC goods or services. In fact, they can buy assets that Medicaid considers exempt. This gives Medicaid LTC applicants a strong incentive to “spend down” by converting their countable assets into exempt resources with a simple purchase. There is no practical limit on how much wealth Medicaid LTC recipients can shelter from actual spend down in this way.

Medicaid’s well acknowledged proper role is to be a LTC safety net for the poor and vulnerable. It is supposed to protect the middle class and affluent only after they have consumed their excess resources by purchasing their own care. The presumption that genuine spend down of assets for LTC will occur is a key element of the WISH program. It follows that we need to know how much private wealth Medicaid protects in exempt form and how common the practice of spending down countable wealth by purchasing exempt resources is. What if the sums are so large and the practice so common that Medicaid has effectively obviated the need for middle class and affluent people to spend substantial personal funds for their long-term care? This could explain why so few people plan early, save, invest or insure for LTC. If the worst happens, Medicaid pays and protects significant wealth.

Clues from GAO

We have more questions than answers, but here are some clues. GAO conducted a study in 2014 that attempted to estimate the amount of exempt assets Medicaid LTC recipients own. GAO’s findings were not “generalizable” to the whole country due to limits in their methodology. But in a paper for the Paragon Health Institute titled “Medicaid’s $100+ Billion Leak,” I asked “what if GAO’s findings were projectable? How much money lies fallow, unused to purchase private LTC, because Medicaid exempts that wealth and pays the bills instead?” The sums were impressive. For example:

• “Half or more of Medicaid’s $217 billion annual LTC budget [$278 billion as of 2023] goes to beneficiaries who could otherwise afford to pay privately.”

• “Medicaid covered 5.6 million LTC recipients in 2020. If 12.6 percent of them had over $100,000 in noncountable resources, as GAO found, then at least $70.4 billion went unused for private LTC financing at Medicaid’s expense. That’s a lot of wealth for a poverty program to protect, fully 32.5 percent of the total $217 billion Medicaid spent on LTC.”

• “If [as GAO found] 75 percent of LTC recipients owned a median amount of $12,530 in noncountable assets each, then at least $52.6 billion found its way into sheltered wealth, largely as prepaid burial expenses, which are sometimes permitted for the entire family, including adult children. That is a giant subsidy for the funeral industry at the expense of LTC financing for the poor, fully 24.2 percent of total Medicaid LTC expenditures.”

• “If [according to GAO] 31 percent of 5.6 million Medicaid recipients owned homes with a median value of $68,350, then $118.7 billion of real estate value was diverted from private LTC financing. (The $68,350 is from the GAO report and would be much higher if the analysis was done today and not a decade ago.) Given that Medicaid exempts nearly all home equity, it is clear that Medicaid replaces practically all personal LTC liability from home equity. The loss is 54.7 percent of what the program spends on LTC.” 

That is a lot of money (54.7 percent of 2023 Medicaid LTC expenditures [$278 billion] would be $152 billion) that Medicaid protects from the cost of paying privately for LTC. But what if the actual amount is much higher? GAO analyzed the total of exempt assets in only two counties in each of three states, Florida, New York and South Carolina. They researched and analyzed only a small sample of 350 cases. GAO based its findings on case record reviews and interviews with eligibility workers, but it did not verify the completeness and accuracy of the case records by reviewing bank accounts or public records, such as property ownership or transfers. Given these shortcomings, and others GAO acknowledges in this and other reports, it is safe to say that this study found only a fraction of the exempt assets that the Medicaid recipients possessed.

Follow the Money

To identify funds that could be tapped to fund WISH, Congressman Suozzi should ask GAO and CBO to conduct comprehensive studies of (1) the kind and amount of exempt assets held by Medicaid recipients in the United States and (2) the extent of the practice of qualifying for Medicaid LTC benefits by purchasing exempt assets to spend down countable wealth.

These studies should …

• Review sample sizes sufficient to generalize results to the whole U.S. population.

• Include critical review of case records, followed by interviews with Medicaid eligibility workers, supervisors, recipients and family members.

• Review public records such as county assessors (real property ownership) and recorders (property transfer).

• Conduct matches with IRS, Social Security, and other data bases to find unreported assets.
  Verify the incidence and equity value of home ownership by Medicaid LTC recipients.

Home equity incidence and amount is especially important to determine because it is currently unknown, likely very high and could easily be used to reduce Medicaid expenditures, saving money WISH could employ, if Congress required home equity conversion as a condition of eligibility.

Make Asset Spend Down Real

Once we know how much exempt wealth Medicaid protects from actual LTC spend down, Congress should consider making two changes in Medicaid financial eligibility policy.

1. Change the asset spend down rules to comport with the income spend down requirements. In other words, require that asset spend down be for qualified medical or LTC expenses as is already mandatory for income spend down.

2. Disallow the practice of purchasing exempt assets to reduce countable wealth artificially.

These measures would likely not entirely replace the revenue WISH could have generated from a payroll tax, probably around $530 billion per year, but they would vastly relieve the burden on Medicaid of funding LTC and substantially increase the incentive for the middle class and affluent to plan for LTC, purchase private insurance, and stay off Medicaid.

More to Come

Does it seem far-fetched that more than half of what Medicaid spends on LTC, over $150 billion, could be protecting wealth that people might otherwise have used to purchase quality care in the private market? What if I told you that amount is dwarfed by the total wealth that could go to fund private LTC, but doesn’t, because of various third parties? To get the evidence and logic to support this claim, stay tuned for a forthcoming LTC Bullet, provisionally titled “Better LTC for Billion$ Less.” Coming this month.

Subscribe

Did someone forward today’s LTC Bullet to you? Don’t miss any future LTC Clippings, LTC Bullets, or LTC E-Alerts. Become a premium member of the Center for Long-Term Care Reform here. Thanks for your support.

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Updated Monday, September 1, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #25-032:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

• ALTCS Release on Support for Long-Term Care Bill

• Sense of purpose protects against dementia, large study finds

• WISH Act could ‘substantially’ improve retirement outcomes for those with catastrophic LTSS needs, analysis finds

• Could ‘Golden Passport’ tempt older adults to swap senior living for cruise ship living?

• Failing to save enough for retirement is top financial regret, survey finds

• Public awareness campaigns needed to increase long-term care insured rate, report says

• My Mom Needs Nursing Home Care —Can She Cash Out Her Annuity To Pay Off Her Mortgage And Still Qualify For Medicaid In New York?

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"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

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Updated Monday, August 25, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #25-031:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

• Despite expectations of longevity, many retirees unprepared for potential LTC needs

• Dual eligibles still rely heavily on family for care despite LTSS program expansion

• Biden-era rule curbing Medicare Advantage marketing incentives overturned

• Bill Gates Backs $1M AI prize to Tackle Alzheimer’s

• A Federal Backstop for Long-Term Services and Supports Could Change Retirement Outcomes

• CMS Launches Nationwide Push to Remove Ineligible Medicaid Enrollees, Uphold Citizenship Requirements

• States created Medicaid add-ons to protect access. Nursing homes started taking more Medicare patients instead

• Nearly one quarter of Americans financially support aging parents: report

• Senior living returns outperform all other real estate sectors in first half of 2025

• Why Are So Many Seniors Being Evicted From Their Long-Term Care Homes?

• Estate Planning: The latest regarding Medi-Cal’s asset test

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"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

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Updated Friday, August 22, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC BULLET: IS MEDICAID FOR THE POOR AND VULNERABLE?

LTC Comment: Medicaid is nearly always described as a program for the poor and vulnerable. Is that true? Was it ever? Today, we explore some evidence that suggests it wasn’t and isn’t, after the ***news.***

*** TAKE ACTION: Compiling and reviewing the content of today’s Bullet brought to my mind these famous quotes.  

"The only thing necessary for the triumph of evil is for good men to do nothing".
"Silence in the face of injustice is complicity with the oppressor."
"If you are neutral in situations of injustice, you have chosen the side of the oppressor."

Standing by while Medicaid is converted from a safety net for the poor and disabled into a hammock for the financially comfortable is a case in point.

If you want to be part of the movement to return Medicaid to those who need it most and to incentivize everyone else to take personal responsibility, especially for LTC planning, then join the Center for LTC Reform and help us fight the good fight.

You can join and contribute here. Thanks for your time and consideration. ***

LTC BULLET: IS MEDICAID FOR THE POOR AND VULNERABLE?

LTC Comment: How many articles have you read that explain how Medicaid benefits the affluent, often to the exclusion or disadvantage of the needy? Not many, I’ll bet, unless you follow these LTC Bullets. But there is plenty of evidence that, to whatever extent Medicaid was aimed at the poor and vulnerable originally, the program is undergoing a major change in the opposite direction. I’ll summarize some of that evidence below and use it as a base for a future article on the topic.

Of course, the go-to source for evidence that Medicaid LTC benefits are easily and widely available to non-poor Americans is the Center for Long-Term Care Reform’s articles, speeches, reports and newsletters (LTC Bullets). Here are quotes from and links to a few recent examples

“Medicaid should help the poor, but crushes them. The affluent should pay for their own LTC, but don’t. Then they take the best Medicaid offers. What’s wrong and what to do?” (“Medicaid Oversight,” July 11, 2025

“Is Medicaid LTC set up to hurt the poor, underprivileged, and marginalized while inordinately benefiting the affluent and middle class?,” (“Understanding Structural Long-Term Care Racism,” May 16, 2025)

“Private wealth sits on the sidelines as Medicaid shifts from helping the poor and vulnerable to subsidizing the middle class and affluent. Facts and analysis follow.” (“How the Wealthy Stole Medicaid,” April 18, 2025)

But Medicaid is not only available to the middle class and affluent in need of long-term care. It has also come to prioritize young, able-bodied people over the aged, poor, disabled, and most vulnerable. The Paragon Health Institute has identified a number of ways that Medicaid has transitioned from covering the poor and vulnerable to covering many more.

“For more than a decade, the Affordable Care Act’s (ACA) Medicaid expansion has shifted resources away from the most vulnerable Americans – single moms, infants, and the disabled – in favor of able-bodied adults without dependents.” (“Losing Focus: How the ACA’s Medicaid Expansion Left Traditional Enrollees Behind,” by Liam Sigaud, February 10, 2025)

“Since 2013, Medicaid rolls have swelled under the Affordable Care Act. More than 20 million able-bodied, working-age adults to Medicaid. These new enrollees, who now account for about 25 percent of Medicaid enrollees nationwide, have put additional strain on the health care system and diverted resources away from vulnerable Medicaid enrollees.(“Myth: The OBBB will harm the most vulnerable Medicaid enrollees,” by Liam Sigaud, August 5, 2025)

“The Affordable Care Act (ACA) significantly expanded Medicaid over the past decade, worsening the program’s structural problems. The ACA created a new eligibility category for Medicaid—able-bodied, working-age adults—with a much higher federal reimbursement percentage for these enrollees. This has led to a host of problems, including: 1) a diversion of resources away from traditional Medicaid enrollees, particularly low-income children and people with disabilities, that has reduced their access to health care services; 2) a near quadrupling of Medicaid’s improper payments; and 3) a surge of spending that has significantly contributed to large and growing federal deficits.” (Medicaid Financing Reform: Stopping Discrimination Against the Most Vulnerable and Reducing Bias Favoring Wealthy States,” by Brian Blase and Drew Gonshorowski, July 2025)

“States receive $9 in federal funds for every $1 of state spending on able-bodied, working-age adults compared to an average of only $1.33 in federal funds for every $1 of state spending on children, pregnant women, seniors, and people with disabilities. Thus, states receive nearly seven times more federal funding for every $1 of spending on expansion enrollees than traditional enrollees. This incentivizes states to prioritize expansion enrollees over traditional, more vulnerable populations and harms their access to care.” (“Consequences of Medicaid’s Discrimination Against the Most Vulnerable,” by Brian Blase, June 29, 2025)

“The week’s Paragon Pic highlights the significant expansion in Medicaid enrollment over the last three decades, demonstrating that it is no longer solely a safety net for categories of just low-income Americans. … Paragon has written extensively on how Medicaid expansion has led to many problems, including a diversion of resources away from traditional Medicaid enrollees, a near quadrupling of Medicaid’s improper payments, and a surge of spending that has significantly contributed to ballooning federal deficits. Paragon also has written about how easy it is for people to qualify for Medicaid long-term care services, as the easy ability to artificially impoverish parents, aunts, and uncles has enabled heirs to protect their inheritances and pass costs to their fellow Americans.” (“Paragon Pic: Medicaid is No Longer for the Poor,” by Drew Gonshorowski)

“Though Medicaid was intended to provide health care for the truly needy, the federal government provides an open-ended federal reimbursement of real state expenditures but also artificial state expenditures. As a result, states, insurers, and providers have used Medicaid to siphon hundreds of billions of dollars from federal taxpayers over the past decade and raise payments well above what can be considered ‘economical or efficient,’ as federal law requires.” (“Addressing Medicaid Money Laundering,” by Brian Blase and Niklas Kleinworth, March 2025) 

“Unrestricted Medicaid Expansion: California uses this influx of federal money to fund large-scale Medicaid expansions. The most significant of these are extending Medicaid coverage to illegal immigrants and eliminating the asset test so wealthy people can qualify for taxpayer-financed long-term care. Because the federal dollars are money laundered, the state circumvents restrictions on federal Medicaid funding for illegal immigrants.” (“California’s Insurance-Tax Shuffle: How Federal Money Ends Up Paying for Medicaid for Illegal Immigrants,” Paul Winfree and Brian Blase, March 12, 2025)

“Medicaid, a vital program for indigent and disabled Americans who need long-term care, is facing a crisis of sustainability. The program, initially designed to assist those with insufficient means, is commonly exploited by loopholes in the system that allow basically anyone to gain eligibility for LTC services through financial planning. This trend not only stretches Medicaid’s resources thin but also raises questions about the program’s long-term viability and its impact on state and federal budgets.” (“Preserving long-term Medicaid for the poor,” Gary Alexander, January 15, 2024)

“For decades, federal policymakers of both parties tried to ensure that scarce Medicaid LTC resources went solely to the needy. They failed, leaving Medicaid, including state and federal budgets, financially overwhelmed and most people, regardless of their economic condition, using public assistance if they incur catastrophic LTC costs.” (“Long-Term Care: The Solution,” Stephen Moses, October 2023) 

Closing LTC Comment: From 1965 until 1980, Medicaid allowed everyone to give away unlimited wealth without penalty to qualify for LTC benefits. Costs exploded, so measures were taken to discourage improper asset transfers and eventually to require recovery of exempt assets from estates. But none of those measures succeeded. Middle class and affluent people gained access to Medicaid after they confronted high LTC costs. Heirs benefited by Medicaid’s protecting their inheritances. Consumers responded by failing to plan for LTC. Private LTC insurance languished as a result. During Covid, Medicaid didn’t even enforce the existing lenient financial eligibility rules exacerbating all these problems. Since the Affordable Care Act, Medicaid has prioritized serving young, able-bodied people with huge subsidies for them to the detriment of aged, poor and disabled recipients. This whole house of cards is destined to collapse. When it does, America will be forced to adapt to an absence of huge, market distorting government transfers. Far better to move in the direction of market-based LTC by thoughtful policy than to wait for the economy to take us there by default. How to do that?

For analysis and ideas on LTC reform, read the Paragon Health Institute’s “Long-Term Care: The Problem” and “Long-Term Care: The Solution” and watch this “virtual LTC event” featuring age wave visionary Ken Dychtwald and leading LTC researchers. To find ample private funds for LTC, check out “Medicaid’s $100+ Billion Leak.” For what not to do, see “Medi-Cal-amity: California’s Reckless Expansion of Medicaid Long-Term Care to the Affluent.” Find much more on long-term care here.

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Updated Monday, August 18, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #25-030:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

• Genworth plans major move in fraught long-term care insurance market

• Ken Dychtwald’s Future Vision of Health, Aging and Longevity

• Should You Disown Your Assets to Get Medicaid Long-Term Care? What to Know

• The Rise of Phantom Obamacare Enrollees: Biden COVID Credits Drive Massive Increase in Individual Market Enrollees With No Medical Claim

• Men with dementia face 24 percent higher death risk than women in major Medicare study

• 300 million program to expand access met with restrained enthusiasm by long-term care experts

• How retirees can manage rising healthcare costs

• ‘Groundbreaking’ companionship exemption to give home care agencies better flexibility, attorney says

• Long-Term Services and Supports in Supplemental Benefits in Medicare Advantage Plans 

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"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

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Updated Monday, August 11, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #25-029:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

• The Silver Tsunami

• MA-specialized home health agencies deliver less care, worse health outcomes, major study finds

• Long-term care on track for a third of healthcare bankruptcy case volume this year

• Foreign-Born Workers Made Up Half The Increase In The Direct Care Workforce In Home And Community Settings, 2012–22

• Study: Mental health problems plague nearly half of nursing home staff

• Surgical care through Medicare Advantage is lower cost and does not compromise patient safety, new major study finds

• Study: Medicare spends billions on medically unnecessary procedures

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"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

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Updated Friday, August 8, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC BULLET: LTC MUSINGS

LTC Comment: Three weeks of wandering around East Africa with hardly a thought about long-term care left me reflecting on four decades of struggling with that intractable public policy challenge. Some thoughts after the ***news.***

*** LTC CLIPPINGS:  Did you catch these stories this week?  Our LTC Clippings subscribers received them in real time including Steve Moses’s always trenchant, often ironic, sometimes humorous, usually concise “LTC Comments.”  To subscribe or for a free trial, contact Damon at 206-283-7036 or damon@centerltc.com. Examples below:

8/2/2025, “Study: Medicare spends billions on medically unnecessary procedures,” by Donna Shryer, McKnights LTC News

Quote: “A new study reveals that Medicare beneficiaries are receiving billions of dollars worth of medical care that offer little to no clinical benefit and may lead to harm. Researchers found that Medicare spent $4.4 billion annually between 2018 and 2020 on 47 different low-value medical services, with seniors paying an additional $800 million out of their own pockets.”

LTC Comment: When government is the payer, the provider is the customer, and the patient is caught in between, this is what you get.

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8/2/2025, “German nursing homes see cost for care explode,” by Volker Witting, DW

Quote: “The cost of a stay in a nursing home has risen to an average of €3,248 ($3,760) per month, according to the German Association of Nursing Homes (vdek), an association that represents the interests of several statutory health insurance providers.”

LTC Comment: We warned over 20 years ago that Germany’s LTC “insurance” plan would not be the end all and be all it was being made out to be: LTCI in Germany and Don't Look to Germany for a Long-Term Care Model. Now reality is setting as it is about to do for our Social Security and Medicare entitlements. At least we dodged the LTC entitlement trap … well, except in Washington State. ***
 

LTC BULLET: LTC MUSINGS

LTC Comment: I used to think long-term care was pretty simple and straight forward … both the problem and the solution.

People become old, injured, or demented and they need help with activities of daily living. That help can be very expensive.

But, like death, age and disability are things people don’t like to think about, so they tend not to plan for them.

Consequently, many people end in need of LTC but unable to pay for it.

So, government wanted to help. Medicaid came along 60 years ago this month and started paying for nursing homes, the main care venue available at the time.

Two big things happened quickly:

1. Medicaid LTC costs exploded because nearly everyone qualified.

2. The public stopped worrying about LTC because government paid.

Policymakers and politicians adapted by making Medicaid LTC harder to get with asset transfer restrictions and other eligibility controls.

But lawyers specializing in “elder law” found ways around Medicaid’s eligibility restrictions, making their affluent clients as quickly and easily eligible as the poor, often more so, by streamlining and systemizing the application process.

When I started working on the LTC issue in 1982, this was the situation.

Most people ignored LTC until they needed it. The poor qualified for Medicaid care. The middle class and affluent did as well, often with help from specialized “Medicaid planners.”

I figured that as long as the public could ignore LTC risk and cost, wait to see if they ever need extended care, and get the government to pay if they do, why would they plan, save, invest or insure for LTC?

Specifically, I noticed there was a budding new product, called private LTC insurance, trying to get a foothold in the market. How I wondered would it have a chance competing with Medicaid?

To buy insurance for a risk, people have to believe a risk exists and plan ahead. But everything about government’s handling of LTC sent the message: “don’t worry, if you ever need LTC, Medicaid will pay.”

As I studied the issue I concluded “you can’t have it both ways.” You can’t provide free LTC after the insurable event occurs through Medicaid and still expect people to buy private insurance for LTC risk with high premiums 30 years in advance.

So I did a study and wrote a report in 1985 for the Health Care Financing Administration (CMS’s predecessor) advocating that if Medicaid is to pay for LTC when needed it should also secure exempt property so it isn’t transferred to qualify and require recovery from recipients’ estates when the wealth is no longer needed by qualified relatives.

That way, people would have skin in the game. They would figure “if I ever need LTC, Medicaid will pay, but Medicaid is welfare with a poor reputation for access and quality, and if I rely on it I’ll have to pay it back out of my estate anyway, so maybe I should consider this new LTC insurance product. You can still read that 40-year-old report here.

HCFA suppressed that report, believing Regional Office staff should not be writing and publicizing national policy studies. But the USDHHS Inspector General and the Government Accountability Office picked it up and did similar studies under their imprimaturs. The IG hired me out of HCFA to do its study and write its report, published in 1988 and available here.

The LTC social contract described in that study became law in the Omnibus Budget Reconciliation Act of 1993. Most of the study’s recommendations, such as longer and stronger transfer of assets restrictions and mandatory estate recoveries, became statutory requirements for state Medicaid programs to impose.

Had the new rules been implemented and enforced, planning for LTC by saving, investing or insuring would have become routine as a sensible way to avoid dependency on Medicaid with its welfare stigma and poor quality, combined with the requirement to pay it back from the estate.

Instead of incentivizing adult children to save their inheritances by putting their ailing parents on Medicaid, the new system would encourage them to help their elders pay privately for LTC and stay off Medicaid with its various downsides. It would also encourage the younger generation to prepare for their own future LTC need.

But as it turned out, states did not implement the new rules effectively; the federal government did not enforce the rules; the media didn’t publicize them and consumer behavior did not change.

As a consequence, we find ourselves decades later with Medicaid LTC costs continuing to soar, with access and quality deficient, with private LTC insurance languishing, and with little hope for improvement.

What’s worse, there have been recent calls to cut back or eliminate mandatory estate recovery, limiting or removing one of the only provisions in the rules to encourage early LTC planning.

Whereas Medicaid LTC eligibility was always easy to obtain, especially with legal assistance, it has become easier than ever due to the widespread practice of artificially spending down countable wealth by using it to purchase exempt resources. See “Medicaid’s $100+ Billion Leak” for details on that practice.

America’s faltering LTC system sinks deeper and deeper into dysfunction. Nursing home bankruptcies are up. Assisted living facilities follow nursing homes down Medicaid’s primrose path. Realignment from institutional to home and community-based care, expected to save money, actually drives up total costs because those in home care need nursing homes eventually too.

Crazy, contradictory public policies encourage asset accumulation on the one hand (Americans hold $97 trillion in home equity, retirement savings and life insurance) but discourage asset expenditure for LTC by Medicaid eligibility policy that allows high income and high asset people to qualify easily while preserving wealth in exempt form.

The common assumption that Medicaid LTC eligibility requires impoverishment is myth at best (misunderstanding), hoax at worst (intentional). The common statement in popular and academic media that millions of Americans are spending their life’s savings on LTC is unsupported by facts. Only 6.5% of LTC expenditures could come from savings. 

LTC is not the high financial risk (70%?) it is often reported to be. 55% who reach 65 will have no paid LTC costs. 31% will need 2 years or less and 9 in 10 have resources (income and wealth) to cover two years of assisted living. For the remaining 14% who need 2 years or more, especially the 4% who need 5 years or more, Medicaid pays much of the cost. Little wonder people worry so little about LTC until they need it.

Estimates of out-of-pocket LTC expenditures are dubious because they are based on micro-simulations that assume people are paying going rates for care. There is no evidence that people actually spend down savings for care as opposed to reconfiguring wealth to qualify by other means, such as asset transfers, irrevocable trusts, Medicaid-friendly annuities or purchase of exempt assets.

Medicaid pays LTC providers notoriously low reimbursement rates which accounts for the access and quality problems and the caregiver shortages.  Medicaid requires recipients to contribute most of their income to offset the cost of their care to Medicaid. This in effect converts what would have been private pay revenue at market rates into Medicaid-level reimbursement that is a cause of many problems.

America’s dismally inadequate LTC system will not improve until Medicaid pays market rates. Medicaid can’t pay market rates until it covers fewer middle class and affluent people.

Medicaid treats the affluent well but crushes the poor. Key money allows affluent people who have used Medicaid financial eligibility loopholes to quality to access the best care to the exclusion of the aged, poor and vulnerable Medicaid supposedly helps first.

So, in conclusion, America’s Medicaid-based LTC system is much more complicated than it seemed when I first assessed the situation in 1982. We made progress in 1993 with stronger asset transfer limits and mandatory estate recovery. In the Deficit Reduction Act of 2005 we finally got the first ever cap on home equity. But since then, no progress, and some back sliding.

I remain optimistic that the country will come to its senses. Winston Churchill famously said “You can always count on Americans to do the right thing - after they’ve tried everything else.” But I’m convinced now that we will have to hit a financial wall before the right corrective actions are taken.

When the country has borrowed so much and the rest of the world loses confidence in our ability to service our debt, a reckoning will occur. I expect that to happen in the 2030s when a triple threat occurs. Boomers start turning 85 in 2031, Social Security and Medicare cut back by mid-decade, and their reductions in support for Medicaid LTC will spell the end of that program’s availability to middle-class and affluent people.

At that point, by default if not by intentional policy, Medicaid will shrink to a safety net for the poor, be forced to pay market rates for care to attract enough caregivers, and become a much better program for those in need when it no longer covers those who should, could and would pay their own way going forward.

To make sense of what ails LTC, read the Paragon Health Institute’s “Long-Term Care: The Problem” and “Long-Term Care: The Solution” and watch this “virtual LTC event” featuring age wave visionary Ken Dychtwald and leading LTC researchers. To find ample private funds for LTC, check out “Medicaid’s $100+ Billion Leak.” For what not to do, see “Medi-Cal-amity: California’s Reckless Expansion of Medicaid Long-Term Care to the Affluent.” Much more on long-term care here.

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Updated Monday, August 4, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #25-028:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

• German nursing homes see cost for care explode

• Genworth Gets More Approvals for Long-Term Care Market Return

• Study reveals how medication side effects can lead to dangerous medication cycles in adults 65+

• Federal funding cuts force retirement research centers to close

• Shield Your Assets as Part of a Comprehensive Long-Term Care Plan

• Where and How to Invest Your Long-Term-Care ‘Bucket’

• Medicare Advantage in 2025: Enrollment Update and Key Trends

• First-of-its-kind study finds that lifestyle programs improve cognition in older adults

• Users of Medicaid HCBS increased while users of institutional LTSS decreased from 2019 to 2021, new report reveals

• The number of family caregivers is surging

• Long-term care insurance still a rare benefit for employees, and enrollment is low 

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"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

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Updated Monday, July 28, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #25-027:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

• Why So Many Seniors Can’t Afford Long-Term Care

• Victims of Biden’s Enrollment-At-Any-Cost Exchange Strategy

• ‘Gray Divorce’ Trend Threatens Retirement Security

• LTCi environment ripe for innovation

• Does Using Medicaid Affect Quality of Care in Long-Term Care Facilities?

• Fiscal Fallout: Long-term care spending driver of Washington DSHS’s swelling budget

• Seniors face widening care gaps after dementia diagnoses, major study reveals

• CMS Finds 2.8 Million Americans Potentially Enrolled in Two or More Medicaid/ACA Exchange Plans

• Unpaid caregivers sacrifice more than $15.5K annually, study finds 

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"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

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Updated Friday, July 25, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC BULLET: HAGELMAN REFLECTS

LTC Comment: Ron Hagelman has been an oracle of LTC insurance knowledge for decades. Here he shares some off-the-cuff comments on the business, its practitioners, and their beneficiaries, after the ***news.***

*** CLTCR Premium Membership  --  Center for Long-Term Care Reform premium members receive our full suite of individual membership benefits including:

·       All LTC Bullets and E-Alerts

·       Access to our Members-Only Zone website and Almanac of Long-Term Care

·       Subscription to our Clipping Service

·       Email/phone access to Steve Moses for 24-hour turnaround queries

Our Premium Membership is designed to give you a competitive advantage in your long-term care profession. Your increased knowledge of the critical issues and challenges we face in the field of long-term care service delivery and financing equals improved professional success for you and better LTC services for your clients and for those who have no choice but to rely on scarce public resources. 

Stay on the forefront of professional knowledge and help us fight for rational long-term care policy reform by contacting Damon at 206-283-7036 / damon@centerltc.com to start your Premium Membership immediately or go directly to our secure online subscription page and sign up for as little as $21 per month. ***

LTC BULLET: HAGELMAN REFLECTS

LTC Comment: You’ve read his columns in Broker World and heard his formal presentations and casual comments at long-term care meetings. Now peel away the formality and consider these “personal reflections” straight from Ron’s heart. 

“The Personal Reflections of a Veteran LTCI Evangelist”
by
Ronald R. Hagelman, Jr. CLTC, CSA, LTCP

I have considered myself an insurance professional for 40 plus years, three-fourths of it in LTCI and I will not give up the notion that the good guys and girls in our chosen corner of the insurance marketing universe are the ones that survive to tell their stories. We are consistent in strapping on our fiduciary armor every morning to restore and confirm each day our belief in the wisdom of understanding and leveraging risk. We understand better than most the value of planning ahead and drastically altering future outcomes by our diligent and caring interference.

My insurance career seems to have paralleled the rise of a new vital product and sales genre. I grew up in an insurance family. As a product and distribution consultant uphill sales battles, innovative product development and national marketing strategies have continued to define my work, good and bad. In the 1980’s supplemental health plans proliferated from cancer indemnity to nursing home supplements. These augmenting policies and concepts helped create a rich sales environment that fed a growing inventory of benefit added on and specific indemnity enhancements. The industry did not ignore the risk. We simply had yet to understand its actual size and benefit trajectory.

Our clients responded better to the idea of care at home. With the advent of HIPAA, a corollary universe of senior home care service companies also began to evolve. The government had taken drastic action to incentivize the private market by defining a tax-qualified comprehensive policy, fair benefit triggers and aggressive corporate premium deductibility. New sales and the necessity of senior care support at home began to flourish in tandem. In truth many of the readers of this column just like me would never be the same. Subsequently, adverse pricing adjustments, the Pension Protection Act expanding combo life and annuity product options, partnership plans, NAIC rider restructuring and rate stabilization have expanded our opportunities to sell protection into place.

The new definition of the LTCI conundrum is no longer only focused on sales and it is about to be overwhelmingly about claims. The billions of claim reserve dollars we stockpiled so diligently into place for the last 25 years should again caution us to follow the money pouring through claim management. We must not forget the delay of payment fines not so long ago levied against disability income carriers. Boomers we worked so hard to prepare will begin to turn 80 next year when the average age at claim is 78 and half will need care. We remain woefully unprepared: reserves under pressure, claim management TPA’s who exclude or diminish the role of professional financial planners in the claim process, serious shortages of available caregivers and the persistent lack of will from public or private sources to prepare for the claim tsunami now rapidly approaching the beach.

I must strongly caution my fellow veterans, those who care ahead and plan ahead to get your fiduciary claim support duck parameters in a row. This is when Noah started looking for timber. I would strongly recommend being prepared by establishing a relationship with a senior care company that understands the complexity of LTCI and can help expedite claims when the impact occurs. It is imperative we acknowledge the volume of claims gathering just offshore. It is mandatory that we applaud and gratefully recognize those agents who are now ready to hand out safety vests to their past clients and righteously help their children purchase their own future safety devices.

Ronald R. Hagelman has 44 years in the business, currently consults for Amada Senior Care, received the ILTCI Recognition Award (2024), and published over 250 LTCI articles. He created and distributed over 50 Life, Health and Annuity products for 16 companies.

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Updated Monday, July 21, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #25-026:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

• Respite care more than doubles chances of elderly patients dying at home, study finds

• Estate recovery is fair — if Medicaid is for the needy

• Nurse practitioners critical in treating older adults as ranks of geriatricians shrink

• Genworth's CareScout Unit Unveils Long-Term Care Insurance Strategy

• Caring for a loved one with dementia is hard. Financial planning can alleviate the stress.

• Estate, Long-Term Care Plans Under the ‘Big Beautiful Bill’

• ‘I enjoy vacations to Europe’: I’m 75 and have $1 million in an IRA. Why do I feel guilty?

• Retirement conditions more challenging for late baby boomers, later generations

• Your Guide to Medicare Dual Eligible Special Needs Plans (D-SNPs) 

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"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

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Updated Monday, July 14, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #25-025:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

• Hospital-to-home transitions fail seniors with dementia and multiple conditions, study reveals

• UPDATED: Genesis HealthCare files for bankruptcy, nearing sale

• The Number Of Americans Planning To Leave An Inheritance Goes Up As The Number Expecting To Receive One Goes Down

• Be inspired by this feature article on Maddy Dychtwald's work and life

• Labor Department withdraws Biden-era proposal to eliminate subminimum wages for disabled workers

• New Trump budget ‘a significant win’ for providers; optimism among the gloom

• New York releases Master Plan for Aging providing 100 aging-in-place solutions

• Changes made — and not made — to WA Cares in 2025

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"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

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Updated Monday, July 11, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC BULLET: MEDICAID OVERSIGHT

LTC Comment: Medicaid should help the poor, but crushes them. The affluent should pay for their own LTC, but don’t. Then they take the best Medicaid offers. What’s wrong and what to do? After the ***news.***

*** LTC PROVIDERS struggle to provide decent LTC while Medicaid pays too little to meet that minimal standard. Now the federal government wants to cut back even more. Fighting to keep the already inadequate status quo is not the answer. It’s high time to fight back. So I wrote this column for McKnight’s LTC News suggesting how the LTC profession should proceed. Check it out and let me know what you think: “The best defense is a good offense,” ***

LTC BULLET: MEDICAID OVERSIGHT

LTC Comment: We had a chance to address the inequities in Medicaid LTC with the “One Big Beautiful Bill.” But that opportunity passed. What should we do now? Here’s one way to save billions and improve Medicaid for those who need it most.

“Medicaid Oversight”
by
Stephen A. Moses

Medicaid is the talk of the town. Republicans want to “fix” it (reduce costs). Democrats want to “save” it (no change). But Medicaid’s biggest component and its dirty little secret go unaddressed.

Medicaid funds 61 percent of long-term care (LTC) in the USA and LTC consumes 37 percent of state and federal Medicaid spending. But only six percent of Medicaid recipients use LTC and spending on them is nine times higher than for non-LTC users. So LTC overweighs Medicaid spending.

Yet the big funding debate just concluded in Washington, DC ignored LTC. Advocates and opponents of the One Big Beautiful Bill (OBBB) fought over the 63 percent of Medicaid dollars that go to the other 94 percent of recipients. That’s important of course, but it should not have excluded LTC.

What about LTC should analysts and lawmakers consider more closely? The three things everyone knows about LTC are that

• most people will need it as they age;
• LTC is very expensive; and
• it wipes out the life’s savings of millions of Americans.

But Mark Twain said “It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.” That adage applies perfectly to Medicaid and LTC.

Which things most people think they know about LTC are not so? And how should that information become part of the mission to improve Medicaid while reducing its cost?

LTC wipes out the savings of millions of Americans? Not so. Only 12.9% of LTC spending comes out of people’s pockets and half of that is income (mostly from Social Security) that people already on Medicaid have to pay to offset the cost of their care. Only $1 in $15 (6.5%) could come from savings. There is no evidence of widespread catastrophic LTC spend down, only anecdotes.

Medicaid LTC eligibility requires low income? Not so. Medicaid either deducts private health care costs from income before applying a limit or it allows income diversion trusts. So, high-income applicants with commensurately high private expenses qualify routinely.

Medicaid LTC eligibility requires low assets? Not so. Most large assets seniors own, such as home equity, retirement savings, one business, a vehicle, personal belongings, and others, are exempt from the asset test. Mandatory estate recovery is only lightly enforced and easily avoided.

Countable assets, such as cash, stocks, bonds, etc., over $2,000 preclude Medicaid LTC eligibility? Not so. Countable assets are easily reduced or eliminated entirely by using them to purchase exempt resources, a common technique explained in “Medicaid’s $100+ Billion Leak.”

Medicaid LTC eligibility serves the poor, aged and disabled best? Not so. Medicaid income and asset spend down rules quickly crush the needy who have few resources and little advice from financial advisors on how to qualify for Medicaid without devastating financial consequences.

All Medicaid recipients receive the same care? Not so. Poor, aged and disabled recipients tend to live in neighborhoods with nursing homes and other LTC providers that are most heavily dependent on Medicaid’s low reimbursement rates resulting in deficient access and quality.

Middle class and affluent people would never seek Medicaid LTC eligibility due to its poor reputation for access and quality? Not so. The well-to-do who self-impoverish artificially hold back “key money” to pay privately before they convert to Medicaid. This ensures their access to the best nursing homes and other LTC providers that are desperate to attract private payers at much higher rates than Medicaid pays. Once in, they can’t be removed when their payment source changes.

Medicaid’s dirty little LTC secret is that it punishes the poor and rewards the affluent leaving the latter with little reason to worry about LTC risk and cost. This is why few plan for LTC and most end up on Medicaid when care costs escalate beyond their incomes.

Is there one thing the Congress could do that would save money and reduce this inequity? Yes.

Apply the same rule to asset spend down that already applies to income. High-income people qualify for Medicaid LTC, but only after they prove they spent down for actual medical or LTC expenses. High-asset people, however, are under no such obligation to spend down for care. They can spend excess countable assets to purchase exempt resources, becoming eligible while hiding their wealth for heirs to inherit.

This oversight in Medicaid LTC financial eligibility rules lets the affluent take the best of what Medicaid offers and leaves fewer resources in the program to serve its more appropriate, needier recipients. It also creates a moral hazard by eliminating the need for people to plan early for LTC by saving, investing, or insuring against the risk.

Solution? Require that Medicaid LTC asset spend down be for private medical or LTC expenses, not just to buy exempt assets. Based on a 2014 Government Accountability Office report, we estimate this could save Medicaid $100 billion or more every two or three years as burgeoning numbers of elders move through the LTC financing system.

Confronting LTC’s realities instead of accepting its commonplace fallacies is a foolproof way to save money and improve Medicaid for the vulnerable people who need it most.

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Updated Monday, July 7, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #25-024:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

• The One Big Beautiful Bill Now Heads to President Trump

• Feds ensnare home-based care providers in nationwide healthcare fraud crackdown

• Don't Rely on Medicare or Medicaid for Your Long-Term Care

• Senate Passes Bill Keeping Helpful Nursing Home Provisions Intact But Worries Remain

• Older childless Americans worry about who'll care for them — do these 4 things if you’re 50-plus with no kids

• The best defense is a good offense

• CMS proposes 6.4 percent home health rate cut for 2026

• The Senate Improves OBBB's Health Policy Provisions

• A Perfect Storm Is Poised to Raise Long-Term Care Costs. Here’s How You Can Get Ahead of It

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"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

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Updated Monday, June 30, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #25-023:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

• Discrepancy exists between proposed federal budget, what Americans want, survey finds

• Documentary pulls back curtain on home care

• US Short-Term Care Insurance Market to Grow from USD 45 Billion to USD 110.1 Billion by 2033 with a Robust 10.2% CAGR

• More Boomers Can Afford Senior Living, But Development Shortfall Threatens ‘Severe Shortage’ Ahead

• 10 Warnings Clients Would Give Their Younger Selves About Long-Term Care

• Rogers Victor: America’s senior health crisis needs fresh solutions

• National Health Expenditure Projections, 2024–33: Despite Insurance Coverage Declines, Health To Grow As Share Of GDP

• Financial strain, illness hinder seniors’ desire to age in place, CenterWell survey finds

• California budget must consider growing older adult population

• UPDATED: Providers ‘hopeful’ but ‘skeptical’ as feds announce insurers, MA plans will limit prior authorization use

• CAPITAL IDEAS: Should millionaires buy long-term care insurance?

• If You Want Medicaid to Cover Long-Term Care, Get Ready to Hire a Lawyer

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"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

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Updated Monday, June 23, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #25-022:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

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• New dashboard breaks down by state, county the number of people using Medicaid HCBS

• 1 trillion in cuts to Medicaid would have a devastating impact on people receiving long-term care. Here's why

• Why is caregiving so hard in America? The answers emerge in a new film

• Higher Medicaid mix drives down nurse staffing, regardless of ownership type

• MA plans extend hospital stays, reduce post-acute services

• Medicare and Social Security go-broke dates pushed up due to rising health care costs, new SSA law

• Older adults in the US are increasingly dying from unintentional falls

• States allocate highest percentage of revenue to Medicaid in FY 2023 in 20 years: report

• New study reveals seniors are money-savvy until dementia sets in

• Senior care insurance costs double over a decade with steepest risks for SNFs

• Study projects Alzheimer’s financial burden will hit African American and Latino families hardest by 206

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"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

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Updated Monday, June 20, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC BULLET: MEDICAID’S LONG CON

LTC Comment: How did Medicaid swindle LTC providers, insurers, and consumers for six decades? Answers after the ***news.***

*** PARAGON ON THE OBBB: As we enter the dog days of summer, weighty questions are under consideration in Washington, DC and consequential decisions will soon be made. The Trump administration’s One Big Beautiful Bill (OBBB) touches health policy and LTC policy in significant ways. For the health policy issues at stake, follow the Paragon Health Institute’s many reports, articles and weekly newsletter. On the LTC side, stay tuned here. LTC providers worry caps on provider taxes in the OBBB will hurt state Medicaid programs and reduce providers’ already inadequate revenue stream. But I think “The Best Defense is a Good Offense” so I’m hoping McKnights LTC News will publish my draft article of that title. It proposes an amendment to the OBBB that would save the billions of dollars Republicans seek while delivering the better access to higher quality care Democrats demand. ***

LTC BULLET: MEDICAID’S LONG CON

LTC Comment: The more I thought about the history of Medicaid’s role in providing and funding long-term care, the more it seemed like a decades-long confidence game. Promising to help the poor with LTC, the program instead captured LTC providers between the rock of inadequate reimbursement and the hard place of mandatory quality. Medicaid tricked insurers into offering a product the program was giving away to the same middle class and affluent people who should have bought it. And consumers, barraged with warnings that LTC could wipe out their life’s savings, were duped into complacency by the reality that when the time came, late in life, that they faced potentially catastrophic LTC costs, Medicaid always paid. The consequences couldn’t be more real if they were intentionally inflicted by a bad actor rather than the haphazard result of centrally planned, government regulated, interference in the LTC marketplace.

So, I started writing. The following essay is a work in progress. There is much to change and more to add before it is complete. So take it with a grain of salt for now. And think about what a mess Medicaid has made of LTC service delivery and financing. 

“Medicaid’s Long Con”
by
Stephen A. Moses

A "long con" is a “sophisticated and extended confidence game where a swindler slowly gains the victim's trust over a long period to eventually extract a large sum of money or other valuable assets. It involves multiple stages and careful manipulation of the victim's perception to make them believe they are in control while being subtly guided towards the con artist's desired outcome.”

That definition, culled from AI, brings to mind how Medicaid, the dominant payer for long-term care (LTC) in the USA, has duped LTC providers, insurers, and consumers into making poor financial decisions and accepting insufferable economic conditions. From this perspective, let’s review each LTC player’s relationship with Medicaid one at a time.

Providers

Starting with its passage in 1965, Medicaid sold LTC providers (almost exclusively nursing homes at the time) a bill of goods. Reimbursements were generous at the start. With no asset transfer restrictions or estate recoveries in the beginning, new Medicaid admissions soared. Nursing homes evolved from largely Mom and Pop operations into a vast industry of big corporations maximizing revenue from the public welfare program. As Medicaid paid exclusively for nursing home care, other potential modes of service delivery, such as home care or assisted living, were stymied for decades.

This sweet deal for nursing homes didn’t last long. Medicaid LTC expenditures exploded from the start. To control costs, state Medicaid programs reduced reimbursement levels. To compensate, nursing homes charged private payers more. Private payers responded by seeking Medicaid eligibility, often facilitated by Medicaid planning attorneys exploiting financial eligibility “loopholes.” Nursing homes’ private-pay revenue collapsed from half in 1970 to under ten percent in 2023. In the meantime, many state Medicaid programs established certificate of need programs to limit construction of new nursing homes on the principle that “they can’t charge us for a bed that doesn’t exist.” But this practice gave existing nursing homes a de facto monopoly by excluding potential competition, further undercutting the incentive to provide quality care.

Over time Medicaid nursing home reimbursements became so inadequate that access and quality deteriorated substantially. Media exposés of awful institutional conditions proliferated. National legislation passed in 1987 requiring better care, but little changed. It became so bad that new venues and modes of care finally became available, because, faced with the choice between nursing home care paid for by Medicaid or the new and rapidly growing option of assisted living, financially able consumers chose to pay privately for the more desirable alternatives. In time, private-pay home care also got traction as consumers’ distaste for Medicaid funded nursing home care grew.

How does this history display the trappings of a swindle? Nursing homes were led down a primrose path to rely almost exclusively on Medicaid (and some Medicare) financing. Their private pay revenue stream, half again as much as Medicaid pays, nearly disappeared as savvy consumers took advantage of the easily available public financing. As care quality deteriorated and consumers migrated to other private-pay options, nursing homes were left with too little revenue to hire and retain enough caregivers resulting in further deterioration of care access and quality. Nursing homes and other Medicaid LTC providers don’t even get the benefit of the relatively low out-of-pocket LTC spending that consumers still pay (12.9 percent of total LTC spending). Medicaid converts recipients’ private income and asset spend down into its egregiously low level by requiring recipients to pay most of their income (largely Social Security) to the LTC provider to offset the cost to Medicaid.

If a con artist had set out in 1965 to trap LTC providers in a system that disables their ability to provide quality care while holding them accountable to achieve unrealistic standards, he could not have done a more effective job than Medicaid itself has done, however haphazardly.

Insurers

How did Medicaid ensnare insurers? When Medicaid LTC expenditures exploded in the early 1970s, lawmakers and program officials started clamping down. Transfer of assets restrictions  and estate recoveries were first authorized (TEFRA ’82) and later made mandatory (OBRA ’93). In 1988, the DHHS Office of Inspector General published a report (full disclosure, I wrote it) that said in paraphrase: if we’re going to let people get Medicaid LTC benefits while retaining large exempt assets, then they should have to pay it back out of their estates. That was the quid pro quo in OBRA ’93.

So the OBRA ’93 message to insurers was: Medicaid will no longer pay all the LTC costs for everyone. People now have to pay their own way until they qualify under Medicaid’s stringent income and asset rules … or … they’ll have to pay back everything Medicaid pays for their care out of their estates. More distressing yet, most analysts and the media went even further. They insisted people could get no help from Medicaid until they spent down all their savings into impoverishment. Some big insurance companies took this draconian LTC situation to the bank, or so they thought.

Starting in the 1980s and through the early 2000s, over 100 insurance companies made private LTC coverage available. They priced it low to attract market share and because solid historical actuarial data on the incidence of paid LTC was unavailable to counsel them otherwise. Who wouldn’t buy this coverage, they speculated, given the consequences of going bare: total impoverishment or loss for heirs of the estate to Medicaid recovery? But results did not meet expectations. It turned out that prospects for the coverage didn’t buy the hype about total economic risk; the estate recovery liability was never fully enforced or publicized; and the public remained too complacent about LTC risk and cost to purchase the expensive LTC coverage.

Medicaid duped the private insurance industry into thinking LTC was a big financial risk that people would buy coverage for and then pulled the rug out from under the carriers who tried, by making catastrophic coverage available even to the middle class and affluent after the insurable event occurred. The end result is that relatively few people plan and insure for LTC and most end up on Medicaid if they need high cost extended care. Swindled by Medicaid’s bait and switch, the LTC insurance business has evolved creatively and maintained a foothold but it has now, and can only anticipate for the foreseeable future, a relatively minor role in financing LTC.

Consumers

Perhaps the biggest losers in Medicaid’s long con are consumers, especially the needy whom the program is supposed to serve. The public was trapped in a welfare-financed LTC system for decades that gave them nothing but nursing home care. Only after that system deteriorated to the point of a national disgrace, did enough financially able consumers rebel by spending their own money for newly evolving private home and community-based care options. But LTC is so long in duration and so expensive to pay for privately, families were put in the position of having to care for their own loved ones as long as possible. This caused tremendous financial and emotional stress, leading them to turn to Medicaid when the strain and cost became too much.

That’s when Medicaid softens the blow. Despite conventional wisdom, drummed into everyone by the media (remember “Dying Broke”), that Medicaid LTC requires spend down for care into impoverishment, the reality is very different. Middle class and affluent people, once they consider and look into public financing options, find that eligibility for Medicaid is relatively easy. Income is no obstacle for people with high private medical or LTC costs because those costs are deducted before a low income standard is applied. Likewise, high assets don’t matter as they are either already tied up in exempt resources (the home, retirement savings, a vehicle, person belongings, etc.) or they’re easily converted to exempt status by using countable assets to purchase non-countable resources. See “Medicaid’s $100+ Billion Leak.”

Here’s the irony and the tragedy. Medicaid financial eligibility rules crush the poor quickly. They lack resources to pay privately even for a while. They end up in the worst nursing homes and LTC providers, the ones that are heavily dependent on Medicaid’s low reimbursements. So the people Medicaid is supposed to serve first, the aged, disabled, and disadvantaged, get the worst care Medicaid provides. But what about those middle class and affluent people Medicaid allows to qualify so easily? They hold back enough “key money” from their artificial self-impoverishment process, so they can pay privately for a few months. That gives them access to the nursing homes and LTC providers, who have relatively few Medicaid recipients, and are less dependent on Medicaid’s poor reimbursements. They crowd out the poor and most needy from the best care.

So here’s how Medicaid swindled consumers. By making Medicaid LTC benefits easy to obtain late in life after the insurable LTC event occurs, Medicaid created a moral hazard. The public doesn’t believe the scare tactics insisting that LTC is a catastrophic risk. People don’t know who pays for LTC, but they can see someone must. Alzheimer’s patients aren’t dying in the streets in large numbers. So consumers don’t worry about LTC until they need it at catastrophic levels and then they slip seamlessly onto Medicaid. By making the best care Medicaid offers available to people who can afford to hold back “key money,” the program added insult to injury. It helps most the very people who, if they bore more of the cost of LTC, would protect themselves earlier with savings and insurance in order to avoid the need to co-opt Medicaid’s scant resources.

Summary

Medicaid’s long con continues to this day. LTC providers, suckered by the promise of practically unlimited customers and revenue, find themselves struggling to supply decent care at less than the cost. LTC insurers struggle to sell a product Medicaid has been giving away for 60 years, with its best care going to the very people who should, could and would have bought LTC insurance in Medicaid’s absence. Consumers, duped by Medicaid to think they don’t need to worry about LTC when they are young, healthy and affluent enough to prepare for the risk, end up dependent on a deficient welfare program that does a better job for the financially able than for the poor and disabled it was supposed to serve first.

Do you think the confidence game analogy is inapt? No one set out to mess up America’s LTC financing system so badly? Well, consider this: “Central planning, public funding, heavy regulation, and easy access to welfare benefits have caused most of LTC’s problems, such as nursing home bias, poor access and quality, inadequate revenue for care providers, caregiver shortages, and the terrible emotional and financial distress for caregiving families. Medicaid especially is responsible because, despite the conventional wisdom that it requires impoverishment, the program’s LTC benefits are routinely available not only to the poor but to the middle class and affluent as well.” (Source) To say the terrible results were unintentional is a distinction without a difference. The same causes always produce the same results.

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Updated Monday, June 16, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #25-021:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

• AMA Opposes Estate Recovery to Recoup Medicaid $$ From Dead Beneficiaries

• More Americans Are Filing for Retirement Benefits Earlier—Their Long-Term Retirement Security Could Suffer as a Result

• More workers caring for aging parents than those caring for preschool children, survey finds

• More Americans aging into retirement are still paying down mortgages

• Study: 82 percent of unpaid caregivers suffer mental health struggles

• ‘Consequences Are Undeniable’: New AHCA Survey Warns Medicaid Cuts Could Force Nursing Home Closures

• Your Company Needs an Eldercare Policy

• Medi-Cal and Asset Tests: Hit by Reality

• US dementia caregiving costs to surpass $3T by 2060, study indicates

• Alzheimer’s Association launches free app for newly diagnosed dementia patients

• Family caregivers provide $873.5 billion in unpaid labor annually: report

• Gov. Newsom proposes ‘asset test’ for low-income and disabled Medi-Cal applicants. What does that mean?

• 660,000 more LTC workers needed by 2030, skilled nursing still below pre-pandemic levels

• How Nondisabled Medicaid Recipients Without Children Spend Their Time

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"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

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Updated Monday, June 02, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #25-020:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

• Alzheimer’s Association launches free app for newly diagnosed dementia patients

• First Look: Understanding the Governor’s 2025-26 May Revision

• Failure to factor in LTSS costs ‘most significant risk’ to retirement income

• How Medicare Advantage Changed Home Health Care Use

• Health Care Provisions in the One Big Beautiful Bill: Summary and Analysis

• 5 Key Facts About Nursing Facilities and Medicaid

• AI predicts cognitive frailty risk in older adults with 84 percent accuracy, study finds

• The Middle-Class Dilemma: Funding Long-Term Care Without Insurance

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"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

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Updated Monday, May 30, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC BULLET: WHY SHOULD THE WEALTHY BUY LTCI?

LTC Comment: Why buy insurance when you can afford to self-fund for the risk and cost of long-term care? Answers after the ***news.***

*** WHO PAYS FOR LTC? We’ve explained elsewhere how little of the cost of LTC gets paid “out of pocket.” Here’s a table summarizing all of the LTC financing sources.

Note that only 12.9% of LTC spending comes out of pocket. But half of that is spend through of income (not savings) that people already on Medicaid half to contribute to offset Medicaid’s cost for their care. So, only about 6.5% of total LTC expenditures could come from savings, despite all the media hullaballoo about how LTC wipes out the life savings of millions of Americans.

That brings us to this LTC Clipping we published last week about similar findings presented by Andrew Biggs of the American Enterprise Institute.

5/20/2025, “No, Long-Term Care Costs Aren’t Going to Cause a Retirement Crisis*,” by Andrew G. Biggs, American Enterprise Institute
Quote: “*Unless we eliminate Medicaid, Medicare, state programs, private insurance and charities. Then sure, we’ve got a problem. … But assuming that retirees pay nothing for long-term care is actually closer to the truth than Morningstar’s assumption that seniors pay 100% of costs out of pocket, given that we know seniors actually only pay about 14%. This would be particularly true for lower-income seniors, where long-term care costs almost certainly would be covered by Medicaid. For instance, a 2022 analysis published by the Department of Health and Human Services projected that 73% of low-income seniors will pay nothing out of pocket for long-term care services. The overall out-of-pocket average for this group is slightly over $6,000. Not per year, but ever. In short, the Morningstar analysis doesn’t point toward Americans facing a retirement crisis. If anything, it indicates the opposite.”
LTC Comment: Finally another analyst (besides me) who gets it right. Assuming that huge LTC costs will wipe out elders’ savings is just wrong. Only 14% of LTC expenditures come out of pocket and half of that is Social Security income people already on Medicaid have to contribute to offset the program’s cost for their care. Only 7% could come from savings, one dollar out of 14. Unless and until the USA puts more private wealth at risk for LTC, most people will ignore LTC risk, end up on Medicaid without spending down their savings for care, and suffer the poor LTC access and quality the government provides. [Excuse the slight variances in percentages as they come from using different data bases.] ***

LTC BULLET: WHY SHOULD THE WEALTHY BUY LTCI

LTC Comment: “Let me tell you about the very rich. They are different from you and me.”
F. Scott Fitzgerald 

That sentiment holds true for the reasons high net worth people should consider purchasing private long-term care insurance. In today’s “Guest Bullet,” Center for LTC Reform individual member Shawn Britt of corporate-member Nationwide explains why the wealthy would be well advised to buy LTCI. The very rich may have different “pain points” than the less affluent. Finding those vulnerabilities, identifying them, and asking the right questions to bring them forward are keys to helping the wealthy see the need to insure. Read Shawn’s cogent advice and apply it for your well-to-do clients’ benefit … and yours.

"Why the Wealthy Shouldn't Overlook Long-Term Care Insurance"
by
Shawn Britt – CLU, CLTC

Long-term care insurance is often thought of as a “safety-net” for the middle market, but in reality, LTC coverage is for everyone! Too often, high net worth (HNW) clients approaching their financial professional about purchasing LTC coverage are told “you can afford to self-fund long-term care.” It happens in reverse as well, with clients rebuffing a LTC discussion by saying “we plan to self-insure.” However, being able to afford self-funding does not make it a good idea. There are many sound reasons for the wealthy to use LTC coverage in their financial strategy.

Find financial pain point

How do you discuss the need for LTC coverage with HNW clients in a way that makes sense? For these clients, you are looking for their “financial pain point” – a concern related to money that can be solved or protected by having LTC coverage. Yes, they can afford to pay for their own care, but that involves spending money – funds that may have been allocated to be used for better purposes. When you find their financial pain point, you justify the need for LTC coverage, particularly if that pain point has an emotional tie to it. But first, it is important to understand just how much the affluent and the HNW spend on long-term care expenses.

Highly affluent individuals spend more on long-term care

High net worth and highly affluent clients typically spend more on LTC than the typical upper middle class or middle market client.

•    The HNW and highly affluent people are less likely to receive physical care from their adult children – who are more likely to have executive/professional level jobs

•    The HNW are more likely to stay at home for care, no matter the cost. The current national average cost for 24/7 care at home exceeds $260,000 annually, but can run $350,000, $400,000 or higher in the wealthier communties!¹

•    For those going to a facility, it is often a top end “luxury” facility with services and amenities not typically found in a traditional facility. The cost of receiving care in such an atmosphere can run upwards to $35,000 a month.²  That can add up to over $400,000 per year in today’s dollars. 

The cost of an LTC event for a HNW or highly affluent individual that lasts three years can easily exceed a $1,000,000 or more in today’s dollars - and fifteen to twenty years from now, costs could run from $2 million to $4 million for an individual or a couple. That is a lot of money – even for the wealthy! When you discuss that level of cost with a client, the idea of “self-insuring” may start to lose appeal. How could those same dollars have been put to a better use if the HNW client had used cost effective insurance to pay for their LTC expenses?

How LTC Insurance Eases the “Financial Pain Points”

The following are just a few of the potential pain points you may discover when talking with your financially affluent and HNW clients.

•    Ask your client to list the charities and causes they would like their estate to donate to upon their death. Then after showing them the cost of a 3-year LTC claim that could cost anywhere from $1 million to $2 million (depending on when the claim commences), ask them which charity should be crossed off the list.

•    Is your HNW client heavily invested in real estate or businesses that cannot be easily liquidated? An LTC event taking place when this client is asset rich and cash poor could result in having to sell an asset well below its value.

•    Does your client have relatives or other people they are financially responsible for? Using LTC coverage to fund those potential events make much more sense than paying out of pocket.

•    Does your client call you every time the market takes a hit? Most clients, regardless of wealth, do not want to see their account values go down. Pulling out large amounts of money to pay for care in a down market results in a double loss. The money cannot be grown back or grown forward.

•    Self-funding sets up the client’s estate to potentially pay unnecessary estate taxes. If they are lucky enough not to need LTC, the “LTC funds” sitting in their estate could be estate taxed. What if you could avoid that risk by using the “self-insurance funds” to purchase LTC coverage at a faction of the cost, and then donate the rest of the dollars to charity now, which would allow for a tax deduction now? The tax deduction could help offset the cost of the LTC insurance premium!

•    Regardless of wealth, putting one adult child in charge of a parent’s care puts them in the position of making financial decisions that their siblings may not agree with. Having LTC insurance helps take that issue off the table. When LTC benefits are paying for the parent’s care, it is far less likely that siblings will disagree on how the money is being spent, since the care is being paid for by LTC benefits from an insurance company – not their inheritance.

Final Thoughts

How do the HNW become wealthy? Some inherit – but many build their wealth (or build it further) by making good financial decisions throughout their life that include leveraging assets and finding win-win solutions to potential problems. So, why would they stop doing that now? The key is to find the pain point. What really means something to the HNW or highly-affluent client that has that has a dollar cost associated with it? Then show the client how self-funding LTC expenses eats up the dollars they might otherwise devote to that desire, such as charitable giving, liquidity needs, supporting family members needing LTC, inheritances, major philanthropy or whatever that pain point is.

Today’s LTC coverage options attached to some form of financial product can offer guaranteed premiums and benefits, and protect the investment in the policy from loss if LTC is not needed. Long-term care coverage is just as important for the HNW and highly affluent client as with any client – it is just for different reasons.

Shawn Britt is Director of Long-term Care Initiatives, Advanced Consulting Group, Nationwide

¹ A Place of Mom – ”How Much Does 24/7 Home Care Cost in 2024? An In-Depth Guide” – May 9, 2024

² Evelyn Battaglia – Brick Underground “Where seniors can find luxury independent living residences with resort-like amenities plus 24/7 personal care” – August 22, 2023

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Updated Tuesday, May 27, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #25-019:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

• Medicare vs. Medicaid for Long-Term Care: What You Don't Know Can Cost You

• Morningstar study on long-term care costs gets pushback from think tank

• No, Long-Term Care Costs Aren’t Going to Cause a Retirement Crisis*

• Explaining Waste, Fraud, and Abuse in Medicaid

• Medicaid State Fact Sheets

• 10 Things You Should Never Say to a Caregiver

• America’s retirement security hits ‘breaking point’ as Social Security funds dwindle: report

• Federal judge sides with 23 states, blocks billions in HHS cuts

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"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

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Updated Monday, May 19, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #25-018:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

• Home health use remains high among beneficiaries with dementia, study finds

• Residents more likely to suffer physical restraints, bedsores at bankrupt nursing homes: report

• UnitedHealth under criminal investigation for possible fraud in Medicare Advantage line: WSJ

• Medicare ACO program shows no impact on end-of-life care for dementia patients

• Tracking the Medicaid Provisions in the 2025 Reconciliation Bill

• Expanding state private insurance partnership programs can help reduce public spending on long term care

• Long-Term Care Provisions in the House Committee on Energy and Commerce Bill

• The Evergreen Model for Long-Term Care: A state-level strategy for a persistent social policy problem

• Caregiving: HHS Should Clarify When Youth May Qualify for Support Services

• “Here There Be Dragons”: The Myths and Claims Undermining Medicaid

• Congress Must Cut and Reform Medicaid

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"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

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Updated Monday, May 16, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC BULLET: UNDERSTANDING STRUCTURAL LONG-TERM CARE RACISM

LTC Comment: Is Medicaid LTC set up to hurt the poor, underprivileged, and marginalized while inordinately benefiting the affluent and middle class? Answers after the ***news.***

*** GENWORTH/CARESCOUT LTC SYMPOSIUM: On May 7, 2025 Genworth and CareScout convened a symposium in Washington, DC on “Sustainable Solutions: The Future of Long-Term Care Financing.” Read all about it on the program’s “landing page” here. Genworth CEO Thomas McInerney welcomed the attendees. Congressman Tom Suozzi, author of the WISH Act, keynoted the program. Four panels followed focused on LTC financing policy and reform. I joined the fourth panel, titled "Better Together..." – Public + Private Collaboration, moderated by CareScout President and CEO Lynn White, along with fellow panelists Stephanie Moench from Oliver Wyman and Susan Coronel from AHIP. The end result of the half-day program was a long-sought, final solution to the LTC financing crisis! Well, maybe not, but a sincere effort toward that objective was made by all. Kudos to Genworth/CareScout for underwriting and producing this program. ***

*** STOP THE PRESSES: I was just informed that a “2025 Long-Term Care Symposium Recap” has been posted here with this announcement: “On May 7, Genworth & CareScout hosted our 2025 Long-Term Care Symposium. We convened leaders, advocates, policymakers, and other stakeholders from the public and private sectors to discuss how we can meaningfully progress toward solving our country’s long-term care financing challenges. Take a look at the replays and photos from the event, information about our panelists, supplementary videos highlighting the perspectives of caregivers, and additional resources … .” Check out panel #4, on which I served, here. ***
 

LTC BULLET: UNDERSTANDING STRUCTURAL LONG-TERM CARE RACISM

LTC Comment: A couple years ago I began reading what has become a vast, peer-reviewed literature about structural long-term care racism. Peer-reviewed articles, many cited in the paper that follows, claim that underprivileged, marginalized, often racial minority groups receive less and lower quality long-term care than members of the more affluent demographic majority. The authors make a compelling case for the discrepancies they identify. They uniformly place the blame on Medicaid, especially that welfare program’s deficient reimbursement rates that undercut access and quality. What they fail to do, however, is to identify and explain the “laws, policies, institutional practices, and entrenched norms” that disempower racial and ethnic minorities and cause the care disparities they list. That is what I’ve attempted to do in the following paper posted today to the Center for LTC Reform’s website.

My paper explains how Medicaid LTC financial eligibility policy affects the poor and the affluent differently. It crushes the poor with stringent income and asset spend down rules that impoverish them, often immediately. But it treats the affluent and middle class very differently. They can have virtually unlimited incomes as long as their health and LTC expenses are high enough as they usually are for people who need expensive LTC. The affluent can also retain virtually unlimited assets because seniors hold most of their wealth in resources Medicaid considers exempt, such as home equity. Even the very wealthy qualify for Medicaid by using special trusts, annuities and other Medicaid planning techniques. Bottom line, the affluent and middle class qualify for Medicaid LTC benefits almost as easily and quickly as the poor.

But why would the well-to-do choose Medicaid, with all its well-known deficiencies, when they could afford quality care in the private market? The answer to that question is the underlying cause of LTC racism. Prosperous people gain access to the best care available from Medicaid. They are routinely advised to hold back “key money” so they can pay privately for a while before applying for Medicaid. This buys them access to the best nursing homes and LTC providers who are desperate to attract private payers even for short initial stays at 1.5 times the Medicaid reimbursement rate. The poor and underprivileged, lacking any private funds after spending down their meager incomes and assets to qualify for Medicaid, have access only to the mostly Medicaid nursing homes and home care providers that receive so much bad publicity about poor access and quality. The net effect is that people with wealth receive the best Medicaid has to offer while the less fortunate receive the worst. 

That is the root of structural LTC racism. Read the following paper for details and see if you agree.

Title: Understanding Structural Long-Term Care Racism

By: Stephen A. Moses

Abstract: Socioeconomically marginalized groups, including racial minorities, receive lower quality long-term care (LTC) in the U.S. compared to the more affluent majority. Disparities include sub-standard nursing home care, impaired access to assisted living or home care and reduced or inferior medical treatments. Medicaid causes these deficiencies because it dominates LTC financing, but pays too little to ensure quality. Many scholars conclude the system is structurally racist. This paper examines the laws, regulations and policies that produce racially prejudiced LTC outcomes. Medicaid’s financial eligibility rules devastate the poor but enable higher income individuals to qualify and preserve substantial exempt wealth. By retaining “key money” to pay privately at market rates before converting to Medicaid, the financially able access better facilities and services than are available to enrollees unable to pay. By indemnifying the nonneedy against LTC risk, Medicaid created a moral hazard that discouraged LTC planning and left most people dependent on public assistance when they face catastrophic care costs. The solution to structural LTC racism is to eliminate Medicaid’s laws and regulations that benefit the affluent and disfavor minorities.

Main Text: Long-term care (LTC), also known as long-term services and supports, encompasses medical and custodial care in residential or institutional settings for people in need of assistance with activities of daily living due to frailty, disability or cognitive impairment. Socially and economically marginalized groups face impaired access to quality LTC in the United Sates. A rapidly expanding academic literature documents disparities of many kinds.

Blacks tend to reside in nursing homes that have “serious deficiencies, lower staffing ratios, and greater financial vulnerability.”[1] Besides dubious nursing homes, the range of deficiencies experienced disproportionately by Black, Indigenous, and persons of color (BIPOC) includes segregation;^1,[2] reduced access or deficient home and community-based care,[3]^,[4]^,[5] assisted living,[6] mental health services,[7] pain medication,[8] influenza vaccinations,[9] hospital and hospice care[10] and ADRD (Alzheimer’s Disease and Related Dementias) care;[11] more physical restraints[12] and pressure ulcers;[13] and higher COVID-19 incidence, hospitalization and death counts.[14]^,[15]

Structural LTC Racism

What accounts for these inequities? The common denominator is Medicaid dependency.[16] Due to its dominance of LTC financing, contributing over half of the $438 billion the U.S. spent on LTC in 2022,[17] and its low reimbursement rates, far below private-pay levels and often less than the cost of providing the care,[18] Medicaid is responsible for most of the deficient access and quality that BIPOC patients receive. Because the long-term care system itself causes racial disparities, many sources attribute the problems to “systemic, structural or institutionalized racism.”[19]^,[20] Structural racism “operates through laws and policies that allocate resources in ways that disempower and devalue members of racial and ethnic minority groups, resulting in inequitable access to high-quality care.”[21]

Residential segregation and poverty cause BIPOC LTC users to live disproportionately in poor neighborhoods. People with lower economic status who live in relatively impoverished neighborhoods with nursing homes that rely most heavily on Medicaid’s meager reimbursements tend to be the ones who suffer most from structural LTC racism. Whites who depend on Medicaid are not immune to the same deficiencies afflicting marginalized enrollee groups. But Whites on the margin are more prosperous and less dependent on Medicaid. They tend to live in areas with better private-pay LTC options, such as home care and assisted living, and with nursing homes that are less Medicaid dependent.[22]

Proposed Solutions for Structural LTC Racism

Proposals to eliminate or mitigate structural LTC racism center on improving Medicaid with better policies and more funding. One source calls for a multi-prong effort to add “disproportionate-share payment adjustments to nursing homes with a higher proportion of Medicaid residents” and to equalize “Medicaid and private-pay payments.”¹ Another would “increase Medicaid and Medicare reimbursement rates, especially for providers serving high proportions of Medicaid-eligible and BIPOC older adults” and “expand access to Medicaid-waivered HCBS services.”²⁰ These are worthy goals, but simply pouring more resources into Medicaid without eliminating the conditions that favor Whites over BIPOC patients would only deliver a better funded, but still structurally racist program.

Absent from the large body of peer-reviewed articles on structural LTC racism is much discussion of the specific “laws, policies, institutional practices, and entrenched norms” that disempower racial and ethnic minorities and cause the care disparities.[23] If Medicaid dependency triggers the LTC system’s inequities and deficiencies, then the laws and policies governing Medicaid LTC eligibility should be a crucial topic for analysis. What are those laws and policies? What role do the rules governing access to Medicaid LTC benefits play? Do they benefit some and disadvantage others? If so, how are marginalized groups disempowered and devalued? Do prosperous people benefit disproportionately from Medicaid? If so, how?

Medicaid and Structural LTC Racism

Income and Asset Eligibility Rules

The most common statement about Medicaid LTC eligibility in both the popular and academic literature is that qualification requires low income and assets. Sources explain that income above $943 per month ($967 as of 2025) or assets exceeding $2,000 renders someone ineligible for the program. Applicants must “spend down” privately for care to those levels before they become financially eligible. In fact, however, Medicaid LTC financial eligibility is much less stringent.

Income is rarely an obstacle to eligibility because state Medicaid programs either deduct private health and LTC expenses before applying the low income standard or they permit applicants to divert excess income into trusts. Most states (34) use the “medically needy” income eligibility method.[24] They deduct private medical and LTC expenses from income before determining eligibility, enabling people to qualify despite having incomes well above categorical eligibility limits. Other states use an “income cap” method, allowing income up to 300 percent of the Supplemental Security Income monthly limit. People with much higher incomes can still qualify for Medicaid in income cap states by diverting excess income to an income diversion trust, also known as a “Miller” or “Qualified Income Trust.”[25] A rule of thumb is that income below the monthly cost of a nursing home, easily $8,000 or $9,000, relatively high income, is not disqualifying.

Likewise, most large resources seniors own are exempt from Medicaid’s asset limit. Exempt wealth includes a home and all contiguous property up to a minimum of $713,000 ($730,000 as of 2025) everywhere and a maximum of $1,071,000 ($1,097,000 as of 2025) or more in nine states,[26] but also, without any dollar limit, one vehicle, prepaid burial funds, a business including its capital and cash flow, personal belongings and household furnishings, even IRAs if they are in payout status as is usually true for elders in need of LTC.²⁵

Medicaid Financial Eligibility and Structural LTC Racism

How do these facts about Medicaid LTC income and asset eligibility relate to structural LTC racism? Most low income, asset-poor people qualify for Medicaid LTC benefits quickly. They have little income and countable wealth to spend down and what they do have is consumed rapidly by private health and LTC expenditures. Medicaid LTC financial eligibility policy devastates people on the lowest rung of the wealth ladder.

Less understood is that many people with substantially greater wealth also qualify quickly and with little or no asset spend down required. Their biggest assets, such as home equity, are exempt already and their countable resources are easily converted to exempt status. They can “spend down” countable assets simply by purchasing a new car, home improvements or any other item on long lists of exempt assets available online,²⁵ or from attorneys specializing in Medicaid planning.[27]

Medicaid planners routinely qualify even wealthy clients for Medicaid LTC benefits by means of legal spend down avoidance strategies such as Medicaid asset protection trusts used “to protect assets from being counted for Medicaid eligibility;”[28] Medicaid-compliant annuities that convert “excess funds into an income stream with no cash value” to accelerate “Medicaid eligibility, while protecting your client’s assets;”[29] life estates “to preserve your residence and increase your Medicaid eligibility,”[30] or half-a-loaf methods. “Half a Loaf, Reverse Half a Loaf, and Modern Half a Loaf are Medicaid gifting strategies (also called transfer strategies) … used for the purpose of reducing countable assets to qualify for Medicaid. These strategies can also preserve some of the Medicaid applicant’s assets for their family members.”[31] California’s Medi-Cal program recently eliminated its limit on countable assets altogether making LTC benefits available regardless of wealth and obviating the need for sophisticated legal spend down strategies.[32]

One effect of this system is that middle-class and affluent people qualify for Medicaid LTC benefits as easily as the poor and with less financial disruption. Once qualified, all use Medicaid’s LTC benefits. When people of moderate or substantial wealth qualify for Medicaid, they consume scarce resources that would otherwise have benefited people of lesser means. Such expanded coverage depletes Medicaid’s scarce resources and reduces the range and quality of care available to others on the program, especially BIPOC enrollees.

But why would people who could purchase high quality LTC in the private market prefer to qualify for Medicaid instead? Is it only to save money? Or could they somehow capture the best care Medicaid has to offer to the exclusion of more disadvantaged enrollees? How biased is Medicaid-based structural LTC racism?

Key Money[33]

It seems counter-intuitive that individuals and families with significant wealth would choose to use Medicaid even when that path is legally available to them given the program’s reputation for substandard access and quality. The reason they do is one of the many ways structural LTC racism manifests in the LTC marketplace.

Some nursing homes have relatively few Medicaid beds. Such facilities often have supplemental philanthropic funding and comparatively high private-pay or Medicare resident census.¹ They enjoy the higher financial margins that come from those sources’ relatively more generous reimbursements. Such facilities often provide better care and services because of their higher revenue and lesser dependency on low Medicaid rates. This two-tier system benefits those who can access it, but disadvantages any, including many BIPOC enrollees, who cannot.¹⁶

Because the Medicaid reimbursement rate for nursing home care is approximately 70 percent of what private payers pay,[34] skilled nursing facilities eagerly seek out new admissions who can pay privately from day one and for at least some period of time before they convert to Medicaid.¹ Medicaid planners encourage their affluent clients to hold back enough countable wealth, so-called “key money,” from the Medicaid spend down process so they will be able to pay privately for care at the start “to facilitate the admission of the Medicaid applicant to the best long-term care facility available.”[35] Once admitted, nursing homes cannot evict patients simply because their source of payment changes from private pay to Medicaid.[36]^,[37]

Because socioeconomically disadvantaged groups lack key money, they end up in the less desirable Medicaid-only or mostly Medicaid facilities. More prosperous White enrollees tend to live in areas with the best LTC facilities and they possess the key money to buy their way in. This result is unfair, unethical, and structurally racist, but commonplace.[38]

Moral Hazard

Beyond consuming Medicaid resources that could have gone to economically marginalized people, the availability of Medicaid LTC benefits to individuals of higher financial means has another negative, systemic consequence. In effect since Medicaid began operating in 1966, this system created a moral hazard—“a situation in which people or organizations do not suffer from the results of their bad decisions, so may increase the risks they take.”[39] The result of making Medicaid LTC eligibility available late in life while allowing significant wealth to be divested or retained in exempt form is that too many people fail to plan for LTC.[40] They end up consuming Medicaid resources instead. Why save, invest or insure early in life against needing LTC someday in old age when the government covers catastrophic costs if such care is needed and reserves the best publicly financed care for the most economically well-off people? This harmful incentive discourages early, responsible LTC planning by relatively prosperous people. It underwrites structural LTC racism.

Roots of Structural LTC Racism

Medically Needy Eligibility

From the beginning, Medicaid LTC benefits were available not only to the financially destitute, those meeting the strict financial qualifications for state welfare payments or Supplemental Security Income (SSI), but also to the medically needy. The medically needy are people with too little income to pay for institutional or home-based LTC, but with too much income to qualify for cash assistance. These higher income people are not excluded from Medicaid eligibility based on income if their private health and LTC expenses are high enough or they use an income diversion trust. The result is that people with significant incomes end up relying on Medicaid. The same people preserve wealth in the form of exempt assets. While such assets are vulnerable to mandatory estate recovery, few states enforce that requirement effectively and the liability is easy to avoid with some early legal planning.[41]

Law makers’ well-intentioned plan to help more people with LTC disinclined everyone to prepare personally for LTC risk and overloaded the public assistance program with enrollees. Medicaid LTC tried to do too much for too many so it does too little for most, especially for BIPOC enrollees with the greatest need. That is the root of structural LTC racism.

LTC Financing and Racism

Medicaid LTC enrollees are required to contribute most of their income to offset the program’s cost for their care. As Medicaid reimbursement rates are only about two-thirds of private-pay rates, enrollees get a substantial discount on their care.³⁴ But LTC providers are short-changed. They receive only the Medicaid rate, often less than the cost of the care, instead of the higher private-pay rate even though enrollees are paying “out-of-pocket” from their incomes, largely from their Social Security benefits. It sometimes happens that enrollees’ incomes are higher than Medicaid’s rate for their care. In those cases, Medicaid pays nothing; the enrollee pays all; and the LTC provider struggles financially with most of its revenue coming from the lowest payors’ rate. As the structural LTC racism literature often observes, low Medicaid reimbursements cause care deficiencies and inequities. These occur because of the laws and policies that govern Medicaid LTC eligibility and financing.

A Solution for Structural LTC Racism

If the cause of structural LTC racism is too many enrollees with sheltered or divested wealth overwhelming Medicaid’s ability to pay for quality care, then the solution must lie in diverting more prosperous people away from Medicaid dependency, enabling them to pay privately for LTC, and thus empowering Medicaid to afford better care for those most in need who remain eligible. But that is a tall order. It presents two major challenges: (1) how to keep people with significant wealth off Medicaid so more program resources reach the people currently shortchanged by structural LTC racism, and (2) how to prepare the middle class and affluent to pay for their own LTC when they need it after Medicaid is no longer available to pay for their care and preserve their wealth as now.

Re-targeting Medicaid to end structural LTC racism

Knowing how to exclude higher-income/higher-asset people from Medicaid LTC so that more program resources reach the disadvantaged is not difficult. Simply repeal the Medicaid laws, regulations and policies that permit them to qualify. Medically needy income eligibility rules that allow higher income people to qualify if their private health and LTC expenses are high enough should end. Practically unlimited asset exemptions, such as for home equity, that permit people with any amount of wealth to qualify must go. Spending down by purchasing exempt assets instead of paying for care should cease. Medicaid strategies such as special trusts, annuities, spousal refusal, and life estates—legal gimmicks that enrich lawyers and their affluent client heirs—must stop as well. Easing the path to Medicaid’s best LTC options by means of key money should end. Stopping structural LTC racism cannot be achieved until Medicaid is preserved exclusively for the most disadvantaged, whom its laws and policies have hurt the most historically.

But these needed changes are much more difficult to achieve politically than they are to identify and list. People who benefit from the status quo will fight to preserve and expand the current system and structure. These interested parties include (1) most Americans who remain oblivious to LTC risk and cost because easy access to Medicaid LTC late in life has enabled their denial; (2) elder law attorneys and financial planners who profit from transitioning prosperous clients to the best of Medicaid-financed care; (3) politicians who garner votes by promoting easy access to Medicaid LTC benefits; (4) LTC analysts and economists who ignore the extensive legal literature on Medicaid planning and pretend the practice of artificial impoverishment does not occur, and (5) the state and federal health and human services bureaucracies that have strived to expand Medicaid LTC to everyone, especially the White middle class, instead of targeting it to the victims of structural LTC racism. These are the people and the reasons that sustain the LTC status quo and stand in the way of reform, consistently protecting structural LTC racism whether consciously and intentionally or not.

Conclusion

Structural LTC racism causes reduced access to quality LTC for marginalized groups. It is grounded in Medicaid LTC eligibility law, regulations and policies. By enabling middle class and affluent people to access Medicaid LTC late in life, and preserve exempt wealth, the program became overloaded with people who should, could and would otherwise have prepared privately for LTC risk and cost. Medicaid covered too many enrollees with too many benefits ensuring that those most vulnerable financially would receive the program’s deficient care, while others more privileged, in possession of key money, would gain access to the best care the program offers.

The good news is that this condition is reversible. Lawmakers should end access to wealth-preserving Medicaid LTC benefits late in life. Instead, offer creative methods for families in mid-life to prepare responsibly to pay privately when and if they ever need expensive extended care. Some possibilities include allowing individuals and families to meet individually set LTC saving goals by carving out portions of other wealth they are accumulating, such as from retirement savings, home equity, life insurance or estate planning. Implement such measures and enormous, desperately needed private funds will flow immediately into the LTC service delivery system ensuring better access to higher quality care for everyone. Relieved of financing LTC for the middle class and affluent, Medicaid will be able to pay adequately to ensure quality care for all enrollees, ending the long-standing system of structural LTC racism.

Why this goal is realistic and how to achieve it are topics for another paper.

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Updated Monday, May 12, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC E-ALERT #25-017:  LTC NEWS AND COMMENT

LTC Comment:  Do you spend hours searching the internet for useful articles, key data, and relevant reports to keep you on the forefront of professional knowledge?  Do you lose business because you’re blindsided by clients or competitors who learn critical information before you do?  Here’s an antidote:

LTC Clippings:  The Center for Long-Term Care Reform notifies subscribers to our LTC Clippings service daily of information you need to know.  Each message contains only the critical facts about new publications:  a title, representative quote, a link to the original, and our analysis in a sentence or two.  To inquire or subscribe, contact Damon at 206-283-7036 or damon@centerltc.com.  Read testimonials by satisfied subscribers here.  To subscribe online, please click here.

LTC E-Alerts:  Once a week, we compile our daily LTC Clippings into a summary, email it to Center for Long-Term Care Reform members, and archive it in The Zone, our password-protected members-only website.  Center members also receive our weekly LTC Bullet op-ed.  To join the Center and receive all these benefits and more, contact Damon at 206-283-7036 or damon@centerltc.com.  

We no longer post our LTC E-Alerts on the Center’s public access website, but here’s what today’s LTC E-Alert contained:  links, quotes and comments on the following articles, reports, or data:

• Suozzi Looks To Trim Costs Of His Public Long-Term Care Insurance Plan

• Employees with higher incomes, education levels more likely to anticipate need for long-term care

• Skilled nursing workers more prone to violence, injuries than any other healthcare sector: study

• Elder Law Planning: Safeguarding Your Assets And Securing The Best Care

• 2 in 7 say low pay will be the reason they leave senior care sector: study

• The age-old problem of long-term care

• More than 1 in 5 Medicare home health users have unreported dementia, study finds

• Americans with Alzheimer’s tops 7 million, new report  shows

• Fate Worse Than Death: Many Long-Term Care Residents Lose All Independence, Study Says

• VA Nursing Home Care: Opportunities Remain to Enhance Oversight of State Veterans Homes

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"LTC E-Alerts" are a feature offered by the Center for Long-Term Care Reform, Inc. to members at the $150 per year level or higher.  We'll track and report to you news and analysis regarding long-term care financing, service delivery, and research.  We hope The LTC E-Alerts will help you attain and maintain a high level of knowledge and competency in this complex field.  The Center for Long-Term Care Reform, Inc. is a private institute dedicated to ensuring quality LTC for all Americans (www.centerltc.com).

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Updated Monday, May 2, 2025, 10:03 AM (Pacific)
 
Seattle—

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LTC Bullet: Five Things You Probably Don’t Know about Long-Term Care

LTC Comment: What if most of what we think we know about long-term care is wrong? Let’s explore some possibilities after the ***news.***

*** WEDNESDAY, I participated in an “Alliance for Health Policy” event in Washington, DC. The Alliance’s annual Signature Series addresses challenging issues in health policy “by convening cross-sector dialogue with experts in both policy and practice” to “critically examine and identify what’s at stake, as well as key areas of opportunity.” Last year’s theme focused on the transformative power of Artificial Intelligence (AI) in health care and health policy. This year’s theme is “aging.” Participants imagined what it would be like to be 80 years old (easy for me) and considered what challenges being that age could bring to various demographic scenarios.

 I’ll be back in DC next week for Genworth and CareScout’s Symposium on “Sustainable Solutions: The Future of Long-Term Care Financing.” Check out the program’s landing page here, where you can read about each of the four panels and review the panelists’ bios. Join us virtually for the Symposium here. I’ll be on Panel #4: "Better Together..." – Public + Private Collaboration. Expect some spirited discussion. ***
 

LTC BULLET: FIVE THINGS YOU PROBABLY DON’T KNOW ABOUT LONG-TERM CARE

LTC Comment: Will Rogers is famously quoted as saying, "It isn't what we don't know that gives us trouble, it's what we know that ain't so." No truer words have been spoken about long-term care. Here are some thoughts and considerations on that theme. I may develop these notes into a paper, but for now just see what you think and feel free to offer feedback to smoses@centerltc.com.

“Five Things You Probably Don’t Know about Long-Term Care”

by

Stephen A. Moses

1. Very little private wealth funds LTC

a.  $97 trillion wealth in …

              i.   Retirement savings ($40T),

            ii.   Home equity ($35T)

            iii.  Life insurance ($22T)

b.  LTC spending: $629.3B

                           i.   Medicaid: $278.3B, 44.2%

                           ii.   Medicare: $100.3B, 15.9%

                           iii.  Private insurance and other public payers: $169.0, 26.9%

                           iv.  Out of pocket: $81.7B, 12.9%

1.  Half is income of people already on Medicaid

a.  Mostly Social Security income

b.  But pension and other private income too

2.  Only half could be spend down of savings

a.  $40.9B, 6.5%

b.  $1 out of $15 spent on LTC 

2. Medicaid is good for the affluent, bad for the poor

a.  Medicaid treats the affluent well

                           i.  High income people qualify (medically needy)

                           ii.  High asset people qualify (exempt wealth)

                           iii.  Affluent people get the best Medicaid offers

1.  Key money

                           iv.  Medicaid is a windfall for affluent heirs

1.  Big exemptions

2.  Little estate recovery

b.  Medicaid treats the poor poorly

                           i.  Few assets wiped out quickly

                           ii.  Lack key money, so …

1.  Shunted to the worst, high-Medicaid nursing homes and home care providers

                           iii.  Victims of “LTC racism”

3. Medicaid no longer prioritizes the poor aged, disabled and dual eligibles (“How the Wealthy Stole Medicaid”)

a.  Since ACA, Obama Care, in 2010

                           i.  90% federal match; $9 federal for every $1 state

                           ii.  Covers working age adults with incomes up to 138 percent of the federal poverty level

                           iii.  Mostly single, often unemployed, childless people incentivized to remain so and to attract others to the same generous benefit

b.  Expansion population grew from nothing to 20% of Medicaid dollars

c.  Aged and disabled

                           i.  Went from 25% of enrollees and 69% of expenditures (2003)

                           ii.  To 20% and 50%, respectively (2023)

d.  Dual eligibles

                           i.  From 14% and 42% (2005) to 14% and 32% (2023)

4. LTC financing is schizophrenic

a.  Diametrically contradictory public policies

                           i.  Reward accumulation of wealth, such as tax-favored IRAs and 401(k)s that build nest eggs; subsidized mortgages and mortgage-interest tax deductions that grow home equity; and tax-deferred growth and tax-free death benefits that boost life insurance cash value.

                           ii.  Medicaid eligibility policies that discourage spending for LTC

1.  Punish the poor

2.  Reward the affluent.

b.  Results

                           i.  Plenty of private funds in the economy lie fallow for LTC financing

1.  Less full price revenue for LTC providers

2.  LTC access and quality suffer

                           ii.  As those funds are not at risk, LTC insurance market to protect them lags

1.  People ignore LTC until they need it

2.  Then qualifying for Medicaid is the path of least resistance

                           iii.  Too many people rely on Medicaid, with dire consequences

1.  Poor reimbursements

a.  Caregiver shortages

b.  Deficient care

c.  Too little HCBS

d.  Nursing home closures

2.  Institutional bias

a.  Decades warehousing elderly in nursing homes

b.  Still problem in rural areas

3.  Discrimination

a.  In favor of private payers

                                                         i.  Key money