long term care reform: September 2009 Archives

The other day, long-term care insurance gadfly Stephen Moses called me "an advocate of more government financing and an enemy of private LTC financing alternatives." I assume he said this because I believe that reforms such as the CLASS Act, which would create a national long-term care insurance system, would be a far better way to pay for this assistance than the costly and inefficient mess we currently have.

Today, far too many Americans pay for care out of their own pockets until they run through their financial assets, then they go on to Medicaid, a welfare-like government program. Medicaid pays for their care in nursing homes, where they don't want to be, or, if they are lucky, provides some limited home care benefits. Almost no one buys Steve's preferred alternative, private long-term care insurance, because they can't afford it, don't understand it, and don't want to think about it. 

While Moses runs what he calls The Center for Long-Term Care Reform, he is an outspoken opponent of nearly all actual proposals for long-term care financing reform (George Orwell, phone home). His blog is bankrolled by the insurance industry, and his favored solution is to push more people to buy private LTC coverage by limiting their eligibility for Medicaid. Dude, the Democrats won the election.

He and I agree that Medicaid is a poor solution for those who need long-term care. For many, the benefit is both parsimonious and inappropriate, and care is poorly coordinated for those chronically-ill "dual eligibles" who receive both Medicare and Medicaid benefits. In addition, Medicaid is breaking the back of state budgets and putting enormous fiscal pressure on Washington.

That's why I like the idea of a national insurance program. Properly designed, it would give people more choice in the care they receive, ease the cost pressures on Medicaid, and substitute the personal responsibility of broad-based insurance for the welfare-like Medicaid system. So how does this make me "an advocate of more government financing?"

The CLASS Act can, and should, be designed to be self-financing. People would pay market premiums and get, in return, a benefit. No taxpayer dollars involved. If consumers chose, they could buy additional private long-term care insurance to supplement the CLASS benefit, much as they buy Medicare Supplement (Medigap) coverage today. And to the degree they'd be covered by a national insurance plan, some people could avoid Medicaid. That means less government financing of long-term care, not more.

I'd go a step further and make the insurance mandatory, but as long as it is self-financed through premiums there would be no new government costs.  

Steve's rhetoric echoes the absurd claims of a "government takeover" of insurance that we hear from some conservatives in the broader health debate. This argument is even more ridiculous in the context of long-term care reform. Private insurance pays only 7 percent of long-term care costs. Medicaid pays nearly half. It has already "taken over" paying for most of this assistance. In the real world, if your goal is to get Medicaid out of the long-term care business, a broad-based, financially stable, self-funded national long-term care insurance program isn't a bad place to start.

Oh, by the way Steve, despite your deepest wishes, I don't think the CLASS Act is dead. Far from it. The proposal faces an uphill battle this year--no surprise there--but it remains very much alive.

In a bit of surprising news, Senate Finance Committee Chair Max Baucus (D-Mont) added some key long-term care amendments to his health reform bill. The provisions, first proposed by senators John Kerry (D-Mass), Maria Cantwell (D-WA), and Chuck Schumer (D-N.Y.) would all make home and community based care more accessible under Medicaid.

Currently, Medicaid is only required to provide long-term care in nursing homes. States provide limited home care services, but in most, the benefits are very limited. The amendments would make more frail seniors and younger people with disabilities eligible for home care, and provide financial incentives for states to expand these benefits.

Baucus also added a separate proposal that would allow hospice patients to receive full Medicare benefits. This three-year demonstration project would make it possible for hospice patients to get both hospice benefits and treatment for their terminal illness. 

Baucus added the changes as the Finance Committee began drafting its 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.