Results tagged “long-term care insurance” from Caring For Our Parents

In an important speech for those interested in the future of the CLASS Act, federal Department of Health and Human Services Secretary Kathleen Sebelius said today that the program must be self-supporting but conceded that, as designed, it may not meet that goal. 

"The program must be able to pay for benefits over the long-term with the premiums it takes in,' she told the Kaiser Family Foundation. "No taxpayer dollars will be used to pay for CLASS benefits.This is non-negotiable."

At the same time, however, Sebelius said she was open to major changes to the program and acknowledged that the national, voluntary long-term care insurance system that was included in the 2010 health reform law "is not perfect." And, in an apparent nod to critics, said "it would be irresponsible to ignore the concerns about the CLASS program's long-term sustainability in its current form."

To respond to those fears, she suggested that HHS has broad authority to restructure key provisions of the law. Sebelius said that, besides sustainability, CLASS contains only two other "key principles." The first is that consumers must have the ability to direct their own services--a reference to CLASS' cash benefit. The other is that there should be no traditional underwriting for health status such as is included in private long-term care policies.

However, she explicitly opened the door to other highly controversial changes to the law. These include tightening its "at work" requirement, changing its premium structure, and assisting employers who offer CLASS benefits to their workers. 

The biggest change would make it tougher for some people with disabilities to enroll in the program. The law allows anyone 18 and older to sign up for CLASS as long as they earn just $1,100 a year, which makes it possible for many working people with disabilities to buy coverage. This is an extremely important change for them, but such a flexible standard has been sharply criticized by industry actuaries.

The problem is that this design may mean that those buying CLASS insurance will be more likely than average to claim benefits under the program. If that happens, the government will have to increase premiums to pay those claims which in turn will discourage healthy consumers from buying coverage. This will eventually lead to a "death spiral" that will destroy the program.

Sebelius said her office is reviewing that at-work requirement, although it is unclear how much flexibility she has to change it without an amendment to the law.

Other changes she is considering include:

Replacing a flat premium with one that increases annually with inflation. This postive change would allow for relatively low initial premiums, especially for young buyers.

Imposing anti-gaming rules. These would prevent consumers from going in-and-out of coverage during their lives without paying penalties.

Easing the burden on employers that offer CLASS insurance. This could be another key change. The law automatically enrolls workers in CLASS, but only if they get coverage through their job. Currently, however, the law includes no incentives for employers to participate.

Creating an aggressive marketing campaign for long-term care insurance. This change could attract broad insurance industry support. But coming up with the funding will be a huge challenge, especially given severe budget pressures and the strong opposition to CLASS from congressional Republicans.

Tailoring benefits to individual needs. The law appears to require Sebelius to approve only a single policy. But today she suggsted she might have the flexibility to approve multiple coverage options. This could be another key change.

Sebelius' speech today was a major acknowledgement that CLASS as currently designed is in deep trouble--both politically and as an insurance program. By recognizing the flaws that some of us have been noting for more than a year, she has taken the first steps towards making CLASS successful. The question now is whether it is not too late given the broad opposition to the program that has been building for months on Capitol Hill. 

Senior Obama Administration official Richard Frank says he is "cautiously optimistic" that the Department of Health and Human Services (HHS) can build a viable government sponsored long-term care insurance program under the CLASS Act. CLASS is a national, voluntary long-term care insurance system that was included in the 2010 health reform law.

Frank, a highly respected professor of health policy at Harvard Medical School, is Deputy Assistant Secretary for Policy and Evaluation at HHS. He told a group of long-term care industry representatives, researchers, and elder advocates today that while HHS faces major challenges, the agency can design a workable insurance program under the controversial law, 

Although a deficit reduction commission appointed by Obama recommended last week that CLASS be either repealed or reformed, Frank says he is squarely in the reform camp. And, while he acknowledges it will be a major challenge to create policies that consumers will be willing to buy, he thinks that goal can be reached without changes to the law. CLASS, Richard says, "is designed to change the terms under which we buy and sell long-term supports and services in this country." And, he adds, "it has a great deal of potential."

I agree. But I worry that a real insurance market may never develop under CLASS. The problems are many: CLASS is a voluntary program for both consumers and their employers. The government is barred from refusing coverage to anyone over 18 who works even part-time, no matter what their health status. Anyone who makes more than $1,100 a year is eligible to participate, and low-income workers may buy insurance for only $5-per-month. This arrangement will encourage many working people with disabilities to buy, but also threatens to drive premiums so high that others will be discouraged from purchasing.

Richard acknowledges the problem, and says he assumes initial participation rates will be quite low--likely well below 10 percent. He also says HHS is wrestling with a number of technical issues, such as how to encourage employers to participate in the program, how CLASS will work for those who are also using home care services under Medicaid, how to manage the risk of rapidly-rising long-term care costs, and how to deermine eligibility, especially for those with mental illness. The mentally ill are not usually covered by long-term care insurance but some will be eligible for CLASS benefits.

Making CLASS work will be a huge challenge, but at least today, two years before HHS is due to begin selling policies, Frank still thinks the agency can pull it off. I hope he's right.    

It is a tough time to try to sell long-term care insurance.  The private market was stunned on Nov. 11 when MetLife, one of the nation's biggest carriers with insurance on 600,000 lives, announced it would stop selling new policies. At the same time, surveys by two of the nation's most respected long-term care researchers suggest why it will continue to be very difficult both for private companies to sell coverage and for the federal government to succeed in its new national long-term care insurance program--the CLASS Act.

CLASS is the national, voluntary, government-sponsored long-term care insurance program that was passed as part of health reform. It would provide people who need personal assistance with an average minimum daily cash benefit of $50 for life.  

At a conference on Tuesday, Josh Weiner of the research firm RTI International reported that a new survey of potential consumers showed very little interest in a CLASS-like product. The survey, taken in Hawaii last summer, found that 60 percent of respondents said they favored the public insurance program. But only one-fifth thought they'd buy coverage. A quarter said they would not, and more than half didn't know--not surprising for a product that was so new and unfamiliar.

But Josh also asked how much people were willing to pay for coverage. And those responses were far more ominous for the future of the program. Twenty-three percent said they would not enroll. Nearly 60 percent said they'd pay no more than $40 a month, and 17 percent said they'd pay no more than $80. Only 1.5 percent said they'd pay between $80 and $120, and the same number would be willing to spend more than $120.

This is very bad news since most independent analysts figure CLASS premiums will average at least $120-a-month.  It does not mean that only 1.5 percent of potential buyers will purchase, but it shows what a tough selling job the government will have to convince people to buy--a marketing campaign that private insurance has so far failed to pull off for its own long-term care products.

Btw, Josh also asked what people thought of mandating private long-term care insurance--an idea I strongly support. One quarter agreed, 20 percent didn't know, and almost 60 percent opposed the idea. Honestly, I thought it would be worse.

The second survey was done by Marc Cohen of the consulting firm Lifeplans on behalf of the insurance industry. This national survey asked about long-term care insurance in general, not just CLASS

While Marc found that price matters, he also learned that attitudes may be just as important. He concluded that buyers shared several key attributes that non-buyers did not. They were more likely to believe they'd need care at some point in their lives, had a much better idea what it would cost, realized they or their family would have to pay these costs, and were "planners" who felt the need to prepare for future care needs.  His conclusion: People are willing to buy, but only if they perceive value.

There is lots of quiet speculation in Washington about the fate of the CLASS Act in the wake of the huge Republican 2010 election day victory. Will CLASS be repealed? Will it be changed in any major way?

My best guess is that CLASS--the national voluntary long-term care insurance program passed as part of the 2010 health reform law--will neither be repealed nor fundamentally changed, despite the GOP threat to roll back the entire health law. 

That is not to say conservatives won't try. Activists at the Heritage Foundation and elsewhere have called for repeal of CLASS, which they fear will turn into a new unfunded entitlement program. Sen. Lindsey Graham (R-S.C.) has already introduced a bill to repeal the law.

Worse for CLASS backers, the law has no real advocate in Congress. No Democrat has stepped up to take ownership of the idea since its primary sponsor, the late Sen. Edward Kennedy, died last year. Indeed, about a half-dozen Democratic senators opposed the provision when it was added to the health law.

There is a good chance the soon-to-be GOP-controled House will pass a repeal bill early next year. It would fit with the Republican vow to wipe out the entire health law and their special dislike of federal long-term care insurance. But even with strengthened GOP ranks in the Senate and the support of those Democrats, CLASS opponents remain far short of the 60 votes they'd need to repeal the law. And they''d need even more-- 67 votes-- to override a veto by President Obama. As one insurance lobbyist told me today, "CLASS isn't going to disappear."

Similarly, there is little chance Congress will gut the bill. Unfortunately, the new political environment also makes it extremely unlikely that Congress will improve those elements of CLASS that need to be fixed. As I have written before, there is a real question about how many people will buy CLASS policies, which are likely to cost an average of $100 or more per month.

Some changes in premium design and eligibility could help bring those premiums down. But given the hostility to the law on Capitol Hill, there is no chance the White House will ask Congress to make repairs. Those backers of CLASS who pushed to pass the law, flaws and all, in the expectation that they could fix it down the road are now stuck with the measure, flaws and all.       

What will our growing ability to identify Alzheimer's Disease years before a patient shows full symptoms mean for the U.S. system of voluntary long-term care insurance?

The New York Times reported this week that a new test using spinal fluid can accurately identify Alzheimer's a decade before it becomes full-blown. With some patient groups, the technique--which is already commercially available--can identify future onset of the disease with 100 percent accuracy. The Times also reports that separate PET scan imagery is also being used on an experimental basis to detect early signs of the disease.

This diagnostic work is great news for medicine. These tests may become impotant steps toward eventual treatment and possible prevention of the disease. But they also promise to completely shake up our model of long-term care insurance. This is a very big deal.

To understand why, keep in mind that nearly half of long-term care insurance claims costs are for those with dementia. While Alzheimer's is only one of many memory loss diseases, it is by far the most common. 

Second. rememember how insurance works. We buy it to protect against the cost of a future bad event. I know that some people will contract Alzheimer's, but don't know if I will. So I can use the insurance to hedge against that risk. I may never file a claim, while others may end up spending far more for care than they ever pay in premiums. So insurance companies use my premiums (and the money they make investing those premiums) to pay the claims of those who do.    

Now imagine if people can learn 10 years before full onset of Alzheimer's that they are highly likely to suffer from it. Imagine, moreover, that a future genetic test can tell them decades in  advance, perhaps while they are still in the 20s or 30s. The result is that those who test positive will flock to buy insurance, dramatically increasing the amount of money carriers will have to pay in claims. They in turn will raise rates to reflect these higher costs. 

Some states have already barred insurance companies from getting results of diagnostic tests. But that will just drive up premium prices for all buyers. Knowing that the tests are widely available, the companies will simply assume that more buyers are at greater risk for getting Alzheimer's and raise rates accordingly.

Btw, the new national long-term care insurance program, the CLASS Act, will face exactly the same problem since it is voluntary. In fact, it may bear an ever greater burden. If private insurance more tightly underwrites to screen out those susceptible to Alzheimer's, those unable to buy in the market will turn to government insurance, which cannot reject buyers based on health. And that will drive up CLASS premiums.

Nice to see President Obama and Health and Human Services Secretary Kathleen Sebelius beginning to talk about the CLASS Act--the voluntary national long-term care insurance program that is included in the new health law. But unfortunately, even at a town hall yesterday at a senior center, CLASS was little more than an afterthought for the Administration.

Sebelius discussed the new program only in response to a question. Obama was focused on other benefits, such as shrinking the donut hole for the Medicare Part D drug benefit and new preventive care under Medicare. Of course, these are important. And because people must still be working to enroll in CLASS, many seniors who attended the event will not be eligible for the program. Still, the Administration will need to talk far more aggressively about CLASS if the program is to succeed.

As private insurers will tell you, selling long-term care coverage is very hard. Consumers don't want to think about disability and they are reluctant to pay premiums today--which will reduce their current disposable income-- to insure against the possibility of needing personal care in 30 or 40 years.

That's a big reason why only about 7 million people have private long-term care insurance and why so few policies are being sold these days. Like private insurance, CLASS will be be nothing more than a niche product without an aggressive marketing campaign. And unless millions of people buy, CLASS will fail.

A lack of funding to promote CLASS is a major flaw of the new law. It allows the government to spend only 3 percent of premiums on all administrative costs, including marketing. This is far too little. But it actually overstates the available resources. The key period for promoting any new product is just before it goes on sale. And since no-one will have yet purchased, the government will have no premium income and thus no funding for advertising. 

A handful of private foundations and some advocacy groups are quietly discussing ways they can help market CLASS coverage. But the White House has tbe biggest megaphone of all and, I hope the President will use it to encourage people to prepare for their long-term care needs. If not, the government will learn what private insurers already know--only a few people will buy long-term care insurance, no matter how important many of us think it is.       

Private long-term care insurance got a nice boost from a new study by the federal Department of Health and Human Services. The report, by the consulting firm LifePlans Inc, concluded that nearly 98 percent of those filing claims against their LTC policies received benefits, despite articles by The New York Times and others suggesting that claims denials are widespread. The study also showed the insurance helped many frail elderly receive the care services they needed.  

The researchers observed nearly 1500 long-term care policyholders over a period of 2 1/2 years, all of whom had either made claims or said they were about to. One important caveat: the report studied seniors claims history only from 2003 to 2007.

About two-thirds of those studied were receiving care at home-- 37 percent used paid assistance, while 26 percent did not, even though insurance may have funded outside help. This may have been because these seniors had limited insurance coverage and wanted to preserve benefits until they needed more help.

About 23 percent of this insured population resided in assisted living facilities, and only about 14 percent in nursing homes. The share of those in assisted living was noticeably higher than among the frail elderly as a whole, often estimated at less than 10 percent.One possible reason is that Medicaid, which pays for more than 40 percent of long-term care, rarely pays for assisted living and, when it does, only finances care and not room and board. Thus those using insurance to "private pay" seem more likely to be residing in assisted living facilities.  

While some researchers have concluded that the frail elderly often move from home to assisted living to skilled nursing facilities as their care needs grow, this study found relatively little movement. For the most part, those who started the 2 1/2 year period living at home stayed there, and so did those in assisted living facilities. By contrast, a large percentage of those who were in nursing homes at the beginning of the study either died or moved to a lower level of care.

President Obama has signed health reform, including the CLASS Act, into law. Now, his administration needs to turn a law into an insurance product people will buy.

It won't be easy. No other country has tried to create a voluntary public long-term care insurance program, which is what CLASS is. The challenge will be to design a policy that provides a respectable benefit at an affordable premium. The fear is that only those who need the coverage will buy, driving up premium prices and driving out young and healthy buyers.

CLASS supporters had hoped to make some changes in the law Obama signed this week through the so-called "fixes" bill now being considered by the Senate. But in the end, they chose not to. Instead, the Department of Health and Human Services will try to make some adjustments through regulation and backers are likely to try to quietly slip in some legislative changes in a few months.

Here are some of the key issues administration officials would like to address:

The work requirement: The law makes insurance available to part-time workers. Actuaries fear this would allow many already-disabled people to enroll in CLASS, driving up premiums. As a result, this work standard may be toughened up.

Gaming: Analysts fear some people will game the system by dropping in and out of the program. To prevent this, the administration may limit people's ability to enroll, drop coverage, and re-enroll. 

Marketing: Administration officials believe CLASS will require a major marketing campaign to succeed. They are looking for the money to do this.

Premiums: The new law sets a fixed premium based on your age at enrollment, and that premium generally doesn't increase. But in an effort to encourage more young people to enroll, some suggest setting a very low initial premium that would rise slowly each year.

One senior HHS official says that, for now, four elements of CLASS seem etched in stone. On one hand, policies must provide cash benefits and coverage must be guaranteed to the broadest possible population. On the other, political realities demand the program be voluntary and based on a system of premium support, rather than mandatory and funded by taxes. Within those constraints, the administration will be challenged to build a functioning insurance program.            

While the United States struggles to figure out how it is going to pay for long-term care, it is important for policymakers, care providers, and those of us caring for our parents to see how other countries do it. The Commonwealth Fund has just published my new paper, LongTerm Care Financing Reform: Lessons from the U.S. and Abroad  that looks at where the U.S. is in its efforts, and how the rest of the world already finances this critical assistance.     

What I found is interesting, challenging, and, in the end, encouraging. If the rest of the dveloped world can do this, so can the U.S.

Two decades ago, most developed nations realized that their systems for paying for long-term care services were headed for failure. They paid unlimited care costs, but only for the very poor--and they sharply restricted what services the frail elderly and younger people with disabilities could receive. While most countries had long since established national insurance programs for medical care, nearly all excluded long-term care. This model, which copied welfare-like Medicaid in the U.S., failed in two ways: It was financially unsustainable and provided unsatisfactory care.   

At that point, the world split. The U.S. tried to fix things by encouraging the middle-class to buy private long-term care insurance. Both the states and the federal government provided new tax subsidies for private insurance. The government offered long-term care insurance to federal workers and created a new marketing campaign to teach the public about their long-term care needs. And the Partnership Program tried to better meld private insurance with Medicaid. 

Despite all these efforts, private long-term care insurance remains only a niche product. Only about 7 million Americans have policies. As a result, many middle-class people who need long-term care have little choice but to spend all of their financial assets on care and, when they run out of money, end up on Medicaid.  

Japan and most of Europe took another tack. Building on their national health systems, they created social insurance programs for long-term care as well. Each country did this in a somewhat different way, but most now have universal government long-term care insurance, at least for the elderly.

In Germany, all workers pay a payroll tax of about 2 percent and, in return. all who need assistance with daily living get benefits--either in cash or in services.

In Japan, the program is funded a bit like Medicare, through a combination of taxes and premiums, and covers about 90 percent of the long-term care costs of the elderly.

In France, long-term care is funded through higher taxes and everyone over 60 gets some cash benefits, although higher-income people get less than the poor. Interestingly,one of result of the French reforms is growing interest in private long-term care insurance to supplement government benefits.

A few countries, such as the United Kingdom, have retained their Medicaid-like systems. But nearly everyone else has headed in a very different direction. The big question is what will the U.S. do now? Will it adopt the CLASS Act, which is a unique voluntary national long-term care insurance program? Will it try some other reforms? Or will it do nothing?

Take a look at the paper and let me know what you think. If you''d like to learn even more, check out my book, Caring for Our Parents (St. Martin's 2009)     

Why can't The Washington Post ever get it right when it comes to long-term care. Its latest self-embarrassment came with a piece it ran today comparing elder care in the U.S. with similar assistance in France and the U.K.

According to the author, a psychologist named Sara Mansfield Taber, elderly women in England and France receive far better care than the writer's mother did in the U.S. Unfortunately, she hopelessly confuses health care with long-term care and paints a picture of high-quality personal supports in Europe that I only wish really existed.

In truth, the system of long-term care in England very closely resembles the deeply flawed welfare-like arrangement we have in the U.S. through Medicaid. While nursing care is provided as part of the National Health System, government-supported personal assistance such as home health aides provide is only available for those with few assets and very low incomes.

This is troublingly similar to the U.S, and has been the subject of severe criticism in the U.K. for decades. One scathing 2006 report by the Joseph Rowntree Foundation concluded "the public finds the present system incomprehensible and considers its outcomes unjust." 

Because benefits vary so widely by locale in the U.K. the system is often disparagingly referred to as the "postcode lottery." Indeed, the current labour government of Gordon Brown is proposing major reforms to address some of these perceived inequities.

In France, the author's other model, government long-term care benefits are also based largely on income. Unlike the U.K. and the U.S., where those with more than $2,000 in financial assets and less than $700- a-month in income usually receive no Medicaid benefits, in France everyone who suffers from severe enough disability gets some assistance. However, they face some fairly tough limits. First, to be eligible, a person must be significantly more disabled than in the U.S. Second, benefits are sharply reduced for those not in poverty. The average monthly benefit for someone receiving home care in France is only about $600. And while someone who is very poor gets about $1,400 per month, a person with income of about $4,000-a-month would get less than $300 for home care.

The French middle class has found the public long-term care benefit so insubstantial that about 25 percent of those 65 or older feel the need to purchase private long-term care insurance to supplement this government assistance. Fewer than half that many have bought this insurance in the U.S.

Don't get me wrong, the U.S. system for providing long-term care is shameful. And Congress is finally taking some steps to both expand home care benefits under Medicaid and create a national long-term care insurance program to help middle-class people begin to prepare for their frail old age. But despite what The Post would have you believe, the systems in the U.K., and France are hardly panaceas.

When it comes to long-term care, we all have work to do. Especially The Post, which provided wildly inaccurate commentary on alleged "death panels" last summer, and has been unable to write about long-term care reform in any serious way during the current debate over health care.            

Connie Garner, the top Senate staffer on long-term care issues, said today that she is certain the CLASS Act, which would create a new national long-term care insurance program, will be included in the final health bill being considered by Congress. "I don't have any question CLASS will survive," Garner told a long-term care conference sponsored by the journal Health Affairs.

A senior insurance industry official told me today that he agrees with Garner's assessment. He said the industry is shifting its attention to tweaking the bill rather than trying to kill it and will begin to work with the Obama Admnistration on the design of CLASS policies. 

Garner, a veteran Hill staffer and no pollyanna when it comes to legislative predictions, said there were still many unresolved issues as House, Senate, and White House negotiators write a final version of CLASS. Among the issues: how to prevent people from enrolling in the program for the five year minimum, then dropping out for many years before re-enrolling again late in life.

She said her biggest concern now is making sure the Adminsitration will have the flexibility it needs to design insurance policies under CLASS while maintaining the basic framework of the new program. "We have to be careful to watch the structure doesn't change," Garner said.

For her, that means keeping the program's cash benefit and protecting Medicaid for those who need it. As the bill has moved through Congress, it has gradually become less specific about the exact design of the insurance policies. It now leaves many questions--including the premiums and specific benefits--to the Secretary of Health and Human Services.

Garner acknowledged concerns that too few healthy people will enroll in CLASS insurance and that premiums will be too high for many. But she said she believed the program would attract many buyers: "Our gamble is that we'll have a big enough risk pool."

And, as she has often said in the past, she insisted private insurers would have the opportunity to sell their own policies to wrap around the CLASS benefit, which is expected to be modest. "It is not meant to crowd out private long-term care insurance," she said.  

The national long-term care insurance program called the CLASS Act will be included in the Senate Democratic leadership health reform bill that is expected to be released within the next day. The decision by Democratic leader Harry Reid to add CLASS to the bill is a huge victory for backers of the measure, which is already in the House-passed bill. However, many steps remain before the idea becomes law.

CLASS would provide a government-sponsored basic cash benefit to those needing long-term care services at home, in assisted living, or in a nursing facility. All workers would be automaticaly enrolled, although they'd have the right to opt-out of coverage. The design of the policies, including premiums and benefits, would be left to the Secretary of Health & Human Services.

The proposal is strongly opposed by many private long-term care insurance companies.   

I spent yesterday morning at a Kaiser Family Foundation panel discussion on the CLASS Act, the national long-term care insurance program being considered as part of health reform. The panelists, who included Senate Health Committee aide Connie Garner and a number of advocates for long-term care reform, were upbeat about the possibility that CLASS will be included in a final health bill. However, the idea still faces opposition from big private insurers.

Connie said the proposal continues to evolve, to satisfy both substantive and political concerns. However, its basic form remains unchanged: People would be able to participate as soon as they begin working, enrollment would be automatic, but they could choose to opt-out. Once they need care, they'd be eligible for an average minimum cash benefit of $50-a-day for life. The benefit would increase both with care needs and inflation.

It looks like the premium would now average about $120-a-month, twice what sponsors of the bill had first hoped. However, neither premiums nor benefits would be fixed in the legislation. Instead the Secretary of Health and Human Services would be given broad flexibility to design coverage.

While people would have to be actively working to be eligible for the insurance (a provision actuaries say is important to keep premiums relatively low), employers would not be required to offer a payroll deduction plan. This exemption could make enrollment complex and hold down participation.

We'll know within the next week or so whether CLASS will be included in the combined Senate bill. If it is, it will be a major step forward for the measure, which is already in the House version of health reform.     

I am disappointed, but not surprised, that Congress' latest health reform effort does almost nothing to repair our tattered long-term care system.  

The massive health reform bill proposed today by Senate Finance Committee Chairman Max Baucus (D-Mont) touches nearly every part of the health system: Medicare, Medicaid, private insurance, hospitals, doctors, you name it. Except for one critical element. The proposal all but ignores the needs of the 10 million Americans who require long-term care, both at home and in nursing facilities, and the 40 million family members and friends who care for them.

In fact, the measure could end up hurting some of the poorest and most frail who rely on Medicaid for the long-term care services. I'll tell you why in just a minute.

The proposal does include some new incentives for people to buy private long-term care insurance through their workplace. For the first time, it would allow employers to include this coverage in what are known as cafeteria plans. The benefit for workers is they'd be able to pay their premiums with pre-tax dollars. That's a big advantage, especially for the highest earners.

However, the proposal also would cap the amount of a worker's annual pre-tax Flexible Savings Account contributions at $2,000. That means they would have only that amount to pay for health care deductibles, copayments, and other uncovered medical expenses. And it would leave them with very little to pay for long-term care premiums.

Baucus' proposal does not include the national long-term care insurance program known as the CLASS Act, although that idea is included in another bill that was approved over the summer by the Senate Health Committee. It includes only some modest provisions to better coordinate care for those with multiple chronic diseases, and it does nothing for hard-pressed direct care workers such as home health aides.

Finally, the Baucus plan does nothing to encourage states to provide Medicaid long-term care at home rather than in nursing facilities. And here is where it may make it even more difficult for those at home to get help from Medicaid. The Baucus plan would greatly expand the number of young mothers and children eligible for Medicaid. But states must pay half of those costs, and they would be only partially reimbursed by the feds. That means their Medicaid budgets, already stressed to the breaking point, will be squeezed even more. And where will they cut to make up their new costs? Home care expenses for the elderly and disabled--a costly benefit states are not required to provide--could well be a prime target.

Health reform will go through many more steps over the next few months. And long-term care reforms remain on the table. But by ignoring this critical issue today, Baucus certainly didn't help those efforts.           

I moderated two interesting panels today at a long-term care conference sponsored by Genworth, the big insurance company. The first panel included author and family caregiving expert Virginia Morris, National Family Caregivers Association president Suzanne Mintz, and Ancil Alexander, a home health aide who visits clients in the South Bronx. Virginia talked about the desperate need caregivers have for information, Suzanne discussed the needs paid and family caregivers share, and Ancil gave a powerful description of just how hard it is to care for clients with multiple chronic diseases, including dementia. Some of the stories Ancil told reminded me of what the families I met in Caring for Our Parents went through.

The second panel was made up of congressional staffers, all of whom work for lawmakers who have sponsored long-term care legislation that Congress is considering as part of broader health reform. The aides included Connie Garner of the Senate Health Committee, who worked for the late Ted Kennedy for many years on a plan for national long-term care insurance (the CLASS Act); Alison Bonebrake, whose boss, Senator John Kerry (D-MA), is sponsoring a bill to make it easier for Medicaid beneficiaries to receive home care; Anne Montgomery, senior policy adviser to the Senate Aging Committee; and others. 

As readers of this blog now, long-term care is very much on the bubble in the debate over health reform. With changes in the overall health system so controversial, many lawmakers have been reluctant to confront long-term care as well. Financing issues such as the CLASS Act; Medicaid reforms such as Kerry's; and measures to encourage doctors, nurses, aides, and others to take jobs caring for the frail elderly are all in the mix. Each addresses a critical problem for the 10 million Americans who need long-term care and the 40 million family members and friends who help them. But all must overcome a wall of indifference if they are to become law.

In that environment, I asked each of the Hill staffers whether it is better to address long-term care this year as part of health reform, or to wait for another year or two and consider these issues separately. Every one of the six staffers on the panel said the same thing: Do it now. Don't wait. Get as much long-term care reform as possible today.

It sounded like a pretty good message to me.