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Medicaid outlook bleak for providers in 2012

January 2, 2012 by Honey Leave a Comment

A new report by Eljay LLC (A Report on Shortfalls in Medicaid Funding for Nursing Home Care, © 2011 Eljay, LLC. All rights reserved), on behalf of the American Health Care Association, states that the unprecedented state of budget deficits will result in historically low Medicaid nursing home reimbursements. Because of this, the report projects nursing homes will average a $19.55 shortfall, per patient, per day in 2011, up from $16.54/day in 2009.

Many nursing facilities have counted on profitability from Medicare patients to offset the profit they lose on Medicaid patients. In 2012, Medicare payments to nursing homes will be scaled back, effectively eliminating this “profitability patch.”

Recent LTCQueen blogs have predicted that the quality of government financed long-term care would diminish; here’s evidence that it will, sooner than many are willing to admit. These tragic circumstances make long-term care insurance ownership more compelling than ever.

CLASS Act LTC Dead

October 17, 2011 by Honey Leave a Comment

On October 14, 2011, the Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced her recommendation to halt implementation of the Community Living Assistance Services and Supports (CLASS) Act.

Those of us who specialize in long-term care insurance (LTCi), including the Society of Actuaries and the head actuary of the US Dept of HHS, recognized from the outset that CLASS Act long-term care (LTC) was unsustainable as proposed. It was to be a voluntary program that was going to accept everyone in the workplace who applied, regardless of their insurability. This would have resulted in the most classic example of adverse selection ever. Had CLASS Act LTCi been enacted, there was budget to publicize the need for responsible planning. For healthy applicants who shopped, CLASS Act LTC would obviously not have been competitive with existing LTCi plans in either price or benefits. These two things would have been, in the short term, financially beneficial to advisors. However, in the long run, CLASS would have turned into one more giant government money-hemorrhaging entitlement program.

RIP, CLASS Act!

One More Study Confirms Public Unprepared

October 3, 2011 by Honey Leave a Comment

NPR aired a story this week called “Boomers’ Delusion About Health in Retirement”. It reports on a study they did in conjuction with Robert Wood Johnson Foundation and the Harvard School of Public Health. The article reports that some experts worry that when it comes to their health, boomers are still woefully unprepared — or worse, in denial.

“The mismatch between how people think the next 10 to 15 years is going to go and what current retirees experience is something that’s very consistent,” says Jeff Goldsmith. “There is no question that one distinguishing feature of our generation is this extraordinary, almost genetic optimism. And the poll results look to me like a lot of that optimism was drawn from a deep well of self-delusion.”

Here’s an example of the public’s denial, “only 1 percent of those not yet retired said they expect the amount of exercise they get to decrease in retirement, while 34 percent of retirees said they actually are getting less exercise.”

Here’s another: “only 13 percent of people over age 50 but not yet retired said they expect their health to be worse in retirement than it is currently. Yet 39 percent of retirees said their health is worse than it was in the five years before they retired.”

The report goes on to indicate the public is still unclear about who pays for long-term care. In the poll, a majority of those both retired and not-yet-retired thought Medicare, private savings and private insurance would be the primary payers if they needed nursing home stays longer than 100 days. In fact, the primary payer for nursing home care across the nation is the joint federal-state Medicaid program. Yet that was identified as the most likely payer for their own long-term nursing care by only 7 percent of retirees and 10 percent of not-yet-retired boomers.

There’s already evidence that people are starting into this retirement era with burdens. A third of the generation is obese, and another third is overweight. And even though people talk a good game in terms of exercise, it’s not clear the numbers actually support it.

The only “silver lining” the linked article gives is that when it comes to long-term care, the boomers are considerably more aware of the possibility of the crushing cost than previous generations have been. More than two-thirds recognize the threat of long-term care expenses to their financial futures.

The public is still choosing not to act to ensure their dignity, options and choices by doing responsible long-term care planning. I am very scared for them.

Dear Public,

Take heed. Make it safer for yourself and less stressful for those you love. Be empowered by being responsible. Stop making excuses to avoid planning for the future.

Sincerely,

Honey

Gaming the System, Screwing the Country

August 12, 2011 by Honey Leave a Comment

It’s amazing but true: lawyers like Alice Reiter Feld in her newsletter, (Center for Asset Preservation and Long Term Care Planning, 5701 N. Pine Island Road, Suite 260, Tamarac, FL 33321) blatantly advertise how easy it is to shield, insulate and exempt assets from Medicaid spend down. Then the government (actually, we taxpayers) gets to pick up the tab for their long-term care (LTC) when people who follow Ms. Feld’s advice become eligible for Medicaid.

She writes, “At a recent meeting, the subject of nursing home care came up. One pastor in the group opined that, in order to get Medicaid to pay for such care, a person must have spent all his money. My husband (who’s been enlightened by his elder-law attorney/wife!) immediately corrected the pastor, advising him that this was not true. He then also advised him to get Nursing Home Medicaid advice from an elder law attorney.”

The truth is that Medicaid eligibility is riddled with loopholes, enabling many people to legally shield and divest their wealth, then get Medicaid to pay for their long-term care. I am all in favor of Medicaid-paid long-term care for those who are truly indigent. That is, after all, what Medicaid is supposed to be: a safety net for the poor. Nowadays, however, it’s taken advantage of by Medicaid planners like Ms. Feld, who make a nice living helping people with means gain access to Medicaid.

When people with home equity and other assets game the system as described, the federal government must find more revenue to meet the increased demand for Medicaid, which in turn increases our national debt or the tax burden on all of us.

Perhaps more importantly, Medicaid-paid long-term care is often very sub-standard. I strongly encourage Ms. Feld and her complicit husband, Rabbi Mitch, to visit a Medicaid-paid facility in a large city. They can then provide accurate, detailed descriptions of the Medicaid-paid long-term care facilities their clients are planning to spend their final years in. Perhaps Ms. Feld’s clients, including her husband, will consider alternative facilities before they divest and shield their assets.

Click here to see my recent article describing what Medicaid-paid nursing home care is like.

To Ms. Feld: I know you are making a good livelihood doing Medicaid planning, but I encourage you to expand your practice to other areas. You will sleep better. To me, you are a “bottom feeder,” doing what is legal, but is it ethical? To your husband and others enthusiastic about this approach, I urge them not only to consider the ethics of saddling the US taxpayer, including themselves, with the bills for this slight of hand, but also to become better educated about the lack of options and poor quality that have unfortunately become synonymous with Medicaid-paid LTC.

Is Warehoused Long-Term Care Imminent?

August 9, 2011 by Honey Leave a Comment

For those who refuse to plan responsibly for long-term care, the nightmare of warehoused care that I think is a certainty in years to come, may be a very unpleasant reality sooner than I thought.

The July 29, 2011 edition of McKnights Long-Term Care News reports that Medicare payments to nursing homes would be trimmed by 11.1% beginning Oct. 1, under a corrective proposal the federal government issued.

The call for reduced funding comes amid reports that providers have been paid more than $2 billion above federal projections since a new payment system took effect late last year.

The recalibration will result in a reduction to skilled nursing facility payments of $4.47 billion or 12.6%, according to CMS. However, that drops to an 11.1% cut when offsetting increases are factored in.

Medicaid outlook bleak for providers in 2012

CLASS Act LTC Dead

One More Study Confirms Public Unprepared

Gaming the System, Screwing the Country

Is Warehoused Long-Term Care Imminent?

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