Search Results for: nursing homes

The Beginning of Warehoused Long-Term Care

July 7, 2011 by Honey Leave a Comment

An article from the July 5, 2011 Chicago Tribune by John Keilman and Amy Alderman describes how nursing homes in Illinois are struggling to stay afloat and maintain their mission to provide compassionate long-term care to residents.

About 75% of the residents in Winchester House, the nursing home described in the article, are on Medicaid. While Medicaid revenues have been stagnant, long-term care costs have kept rising.

The articles discusses measures that must be taken to keep this facility open. One solution will be to turn this county-run facility over to a private company that is able to lower labor and other costs. This will obviously affect the quality of care residents receive.

Due to national and state revenue shortfalls, I anticipate that trends like this will increase over time.

Steve Moses is a Sage

June 23, 2011 by Honey Leave a Comment

My friend and colleague, Steve Moses, of the Center for Long-Term Care Reform beautifully describes why sales of long-term care insurance (LTCi) continue to languish. It’s impossible to explain it better than Steve can, so I’ve re-published his blog, with permission, below. I want to encourage readers to visit The Center for Long-Term Care Reform site.

LTC BULLET: LTC MIXED MESSAGES

LTC Comment: Happy first day of summer!

Today we’ll examine four seemingly unrelated issues and show how they fit together like pieces in a puzzle.

Issue #1: Medicaid planning lives. Despite the welfare program’s diminishing financial prospects and dismal reputation for poor access and quality, Medicaid planners continue to hawk Medicaid Asset Protection Trusts (MAPT). Example:

6/19/11, “Protecting Your Future: Address all the issues in estate planning,” by Bonnie Kraham Times Herald-Record: “[Clients] might . . . wish to change from a revocable trust to a Medicaid Asset Protection Trust (MAPT) because they were unable or unwilling to obtain long-term care insurance and the time has come to protect their assets from nursing home costs.”

Issue #2: Maintenance of effort (MOE) prevails. Federal law does not allow state Medicaid programs to constrict loose LTC eligibility rules without penalty. Background:

6/17/11, “Medicaid Mandate Targeted in Debt Talks, but Savings Are Questionable,” by John Reichard, CQ Today: “As talks intensify over reducing the nation’s debt, there is a real chance that negotiators could end up eliminating a 2009 rule requiring states to maintain current levels of Medicaid eligibility.”

Issue #3: Reverse mortgages retrench. The two biggest banks issuing reverse mortgages have left the business. News:

6/17/11, “2 Big Banks Exit Reverse Mortgage Business,” by Tara Siegel Bernard, New York Times: “Wells Fargo, the largest provider, said on Thursday that it was leaving the business, following the departure in February of Bank of America, the second-largest lender. With the two biggest players gone – together, they accounted for 43 percent of the business, according to Reverse Market Insight – prospective borrowers may find it more difficult to access the mortgages. . . . ‘We are not allowed, as an originator, to decline anyone,’ added Mr. Codel of Wells Fargo. We ‘worked closely with HUD to find an alternative solution and we were unable to find one with them, which led to this outcome.’ . . . MetLife, the third-largest provider of reverse mortgages, declined to comment on its business.” (Emphasis added)

Issue #4: LTC insurance lags. Despite the obvious risk and cost of long-term care, most people don’t plan for it or purchase private LTC insurance. I don’t think any readers of these LTC Bullets would need further evidence of that point.

So, what’s the connection between MAPT, MOE, RMs, and LTCI?

The problem of LTC financing isn’t complicated. Medicaid and Medicare co-opted LTC financing in 1965 by making nursing home care basically free and easy to obtain. That crowded out both a private home care industry and LTC insurance to pay for it resulting in the system’s “institutional bias” and Medicaid dependency. Desensitized to the financial risk, consumers didn’t worry about LTC, ended up in welfare nursing homes by default, and in time, bankrupted the provider system and its primary payers, Medicaid and Medicare.

The government tried to help us and this is what we got. Easy access to Medicaid for LTC after the insurable event occurs (Medicaid planning). Crazy federal rules that prevent states from closing Medicaid loopholes and stopping the abuse (maintenance of effort). Up to $750,000 of home equity exempted from Medicaid spend down and regulations that undercut home equity conversion in other ways (reverse mortgage industry setbacks). A public in denial about LTC risk right when the cost is about to explode off the charts (LTCI doldrums).

So, what’s to be done? Two possibilities.

The preferred approach: Fix the problem through responsible public policy by removing the causes. Get rid of the maintenance of effort restriction so states can target scarce Medicaid funds to those who need them most. Eliminate or radically reduce Medicaid’s home equity exemption so people will see the real risk and cost of LTC. Do these things and both the reverse mortgage and LTC insurance industries will take off, creating jobs and generating tax revenues, even as Medicaid LTC costs plummet and more people have better access to a wider continuum of higher quality, privately financed long-term care.

What’s the other possibility? Continue to ignore these realities, let the current system fall apart, watch a lot of people (especially the poor) get hurt, and end up in the same place anyway: with a radically reduced LTC safety net, with savings and home equity used to fund most routine long-term care, and with the public finally worried about LTC risk and buying private LTC insurance in droves.

Funny Video Explains Medicaid Paid Care

January 12, 2011 by Honey Leave a Comment

Here’s a brief youtube video posted by the Pacific Research Institute that makes me chuckle.

With humor, it concisely points out the glaring Medicaid loopholes that are being abused by the American middle class.

Medicaid, a program established for the indigent and handicapped, pays for approximately half the long-term care in the US.

This video explains how middle class people can “game the system” and get Medicaid to pay for long-term care. With proper legal guidance, it’s just not that difficult.

This is a big reason why sales of long-term care insurance (LTCi) languish. Even though Medicaid-paid care usually takes place in under funded nursing homes, many Americans are seduced into getting the government to pick up the tab via Medicaid. Why spend money on LTCi premiums, they reason, even though LTCi gives a full spectrum of choices and options far more appealing than a Medicaid facility?

I have two questions for these people. First, how much longer do they think government funded Medicaid will pay for the care of people who are not really indigent? Second, why would anyone choose to wait until they need care to discover the difference between a Medicaid funded facility and the luxury of a facility funded via LTCi?

Who Buys Long Term Care Insurance?

November 8, 2017 by Honey Leave a Comment

A report by AHIP and Lifeplans, two highly reputable entities, came out at the beginning of 2017 that studied which consumers chose to purchase long term care insurance (LTCi) over the last 25 years. They wanted to determine “Who Buys Long Term Care Insurance” and what has changed in the marketplace over time.

They looked at purchasing trends, attitudes around the need for long term care, the perceived role of the federal government, family responsibility and protecting a legacy. One thing is certain: the need for long term care is being more widely recognized.

This report has a ton of valuable information. To read the juicy details, you can read the full results here. For now, let’s take a look at Buyers vs. Non-buyers.

Do You Fit the Profile?

Demographics

Buyers are more likely to be married, college-educated, working, and have high income and assets.
Non-buyers have slightly lower assets. This is echoing what we see every day in our business. There has been a shift in LTCi sales to a much more affluent client than 25 years ago.

Opinions & Attitudes

Buyers are planners. Buyers are more likely to think that they will need LTC in the future in comparison to non-buyers. Conversely, non-buyers choose not to plan for their future medical needs.
Buyers worry less about paying for LTC services than non-buyers. Non-buyers understand that if they need LTC services, the government will not be paying for it, although many non-buyers mistakenly believe that their needs will be provided for by the government.
Buyers tend to believe that they will probably require care in a nursing home or in their own homes at some point in the future. Non-buyers don’t think this is need will likely arise in their lives.

Cost Factors

For non-buyers, cost is the major barrier to becoming a buyer. This hasn’t changed in 25 years. Other reasons include: skepticism about insurance companies, lack of understanding of the real risk of LTC and confusion about what the state and federal governments will or won’t pay for.
Most buyers would prefer smaller, more frequent rate increases than larger, less frequent rate increases.
More than ¾ of non-buyers would be interested in purchasing LTCi if they could deduct the premium from their taxes. They believe that the government should encourage people to buy LTCi by making it fully tax deductible.
Non-buyers favor a government stop loss program of catastrophic coverage where they would buy a smaller LTCi policy that would wrap around a public program. Members of the general population believe in the public financing of LTC.

Other Decisions

For non-buyers, ⅓ don’t plan to purchase in the future, but ⅔ do plan to become buyers at a later date. These later buyers view LTCi as part of a retirement plan and believe that they can postpone becoming buyers until they are closer to retirement.
Most buyers understood that waiting resulted in higher premiums, so they started years before The majority of buyers cited the reason they didn’t delay this purchase until retirement was their understanding that the cost of insurance would increase in the future.
Most buyers don’t buy without seeking advice from other people. Those who most impacted their LTCi buying decision were their spouses/partners and their insurance agents. Most recently, financial advisors are becoming more influential in this decision-making process.
70% of non-buyers say they would be more interested in becoming a buyer if they were able to comparison shop on the internet.

What we see consistently, for over 25 years, is that the #1 reason people buy LTCi is for preservation of assets.

So… Who buys long term care insurance? Maybe you!

Click here to receive a free quote for long term care insurance.

Impending Alzheimer’s Disease Epidemic

April 17, 2015 by Honey Leveen Leave a Comment

We talked about the immense physical, economic, and psychological toll Alzheimer’s Disease (AD) will take on caregivers.

Also from the newly released 2015 Alzheimer’s Disease facts, we learn AD will cost our nation dearly.

In 2015, the direct costs to American society of caring for those with Alzheimer’s will total an estimated $226 billion, with half of the costs borne by Medicare.
Average per-person Medicare spending for people age 65 or older with Alzheimer’s and other dementias is three times higher than for seniors without dementia. Medicaid payments are 19 times higher.
Nearly one in every five Medicare dollars is spent on people with Alzheimer’s and other dementias. In 2050, it will be one in every three dollars.

Unless something is done, in 2050, Alzheimer’s is projected to cost over $1.1 trillion (in 2015 dollars). This dramatic rise includes a five-fold increase in government spending under Medicare and Medicaid and a nearly five-fold increase in out-of pocket spending.

This blog often correlates tragic long-term care (LTC) outcomes with Medicaid’s low nursing home reimbursement. Medicaid pays for most of our nursing home care.

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