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Why Are We Willing To Discuss Fixing Social Security & Medicare, But Not Medicaid?

December 10, 2012 by Honey Leave a Comment

In his November 15, 2012 New York Times editorial, Paul Krugman demonstrates again that neither party is addressing the changes that will be truly necessary to curb growing budget deficits.

The only solutions to Medicare and Medicaid’s skyrocketing budgets that I’ve seen recommended are lowering Medicare and Medicaid reimbursements, and increasing Medicare eligibility ages. These are merely band-aid solutions.

Neither party is willing to address the hard changes that will be necessary to remove Medicaid from its economically dire predicament. I address this in my blogs Medicaid in deep trouble, no matter who wins the election and Neither party has a solution for the oncoming deluge of Medicare/Medicaid services.

For one thing, Medicare and especially Medicaid are complicated programs that most legislators and the public do not understand well. Furthermore, many of the most intelligent people I meet appear to suffer from resistance to discussing depressing sounding future events, such as planning for their elder years. And, tragically, this lack of planning frequently has dire consequences. More specifically, we know conclusively that very few middle-class Americans have done responsible long-term care planning.

Mr. Krugman argues, and I agree, that raising eligibility requirements for collecting Social Security and qualifying for Medicaid is needlessly cruel and would be hardest on our most vulnerable citizens – those who work in physically demanding jobs for little pay. And these changes would have little impact on the bottom line because those who depend the most on Social Security will not live as long as more affluent Americans since longer life spans are related to education and income levels. Raising the Medicare eligibility age a couple of years will also save the federal government little because seniors in their mid-to-late 60’s generally have decent health and cost Medicare far less than the very old.

Readers will note that few pundits write about how to fix Medicaid, nor do legislators approach Medicaid reform. Medicaid is our most expensive and threatened entitlement program. It is Medicaid-paid long-term care that will cause the most catastrophic budget shortfalls as the Baby Boomers continue to age.

WSJ Advice Demonstrates Lack of Insight

November 11, 2012 by Honey Leave a Comment

In the December 4, 2012 issue of the WSJ entitled “Time for Elder Care?”, Kristen Gerencher offered advice for children of elders needing long-term care (LTC), but included only one questionable strategy about how to prevent LTC from bankrupting Mom and Dad (and possibly reduce the kids’ inheritance to $0.00!).

Obviously timed for those family get-togethers during the holidays, the story advises adult sons & daughters to take a good look to see if Mom & Dad are slipping, either mentally or physically, and may need some LTC assistance. If so, Gerencher lists professionals who can help find the right level of assistance.

Grencher suggests that the adult children look into options, ranging from voluntary services such as nutritional programs to more expensive (but unmentioned) alternatives such as moving to an assisted living facility or nursing home.

The reporter notes – correctly – that “Medicare doesn’t cover most LTC costs” and adds that “Medicaid covers them under certain conditions.” But she fails to add that the “conditions” are typically after Mom and Dad have spent their worldly assets (the kids’ inheritance) paying for long-term care and are impoverished. She does add, however, that the kids can consult an elder law attorney to make sure that their parents’ assets are properly sheltered, but then helpfully notes that any clever actions like cash gifts or transfers of assets to junior MUST be made at least five years before the parents apply for Medicaid. Ah, hah, the first reference to planning to avoid financial ruin!!

Sadly for her readers, Gerencher does not even mention long-term care insurance LTCi), which requires frank discussion and careful planning between parents and adult children! With reasonably priced LTCi, Mom & Dad will have the funds to retain their dignity and options to defray the cost of a wide range of LTC, based on their needs. Furthermore, the whole family will be able to gather during the holidays and at other times with peace of mind and a definite plan of action if the kids notice a need for care, which research has shown will happen to about 70% of elders.

Sounds like a plan to me!

Neither Party Has A Solution For The Oncoming Deluge of Medicare/Medicaid Services

September 25, 2012 by Honey Leave a Comment

I was happy to see in Steven Rattner’s September 16, 2012 New York Times Op-Ed column at least a faint acknowledgement of a looming catastrophe. Because of its highly unsavory political nature, neither Democrats or Republicans really want to address the oncoming deluge of aging Americans who will further glut our already hobbled Medicare and Medicaid programs.

Mr. Rattner sticks to describing Medicare in his peice, although he does refer to the oncoming deluge of ill-prepared aging parents who will need long-term care.

Politicians are even less inclined to discuss Medicaid, which pays for more than half of all long-term care in the US. However, I have recently blogged about Medicaid’s bleak future, no matter which party wins the election.

Medicaid payments affect the quality of Medicaid-paid long-term care. Medicaid-paid nursing homes count on Medicare covered expenses to offset the money they lose on every Medicaid patient.

In past blogs I have explained why budget shortfalls make Medicaid-paid long-term care inferior in many regards. With this knowledge, why aren’t more people motivated to act responsibly and protect themselves and families against the high costs, high risks of needing long-term care? This remains a mystery to me. Reasonably priced long-term care insurance is still the cheapest way to access and pay for the long-term care options people want, and that are preferable to Medicaid-paid care.

I’ve added the bolded type below, for emphasis.

Mr. Rattner writes, “The Obama and Ryan plans are not without common ground; both propose an identical formula for capping the growth in Medicare spending per beneficiary. And both dip into the same toolbox (particularly lower payments to providers) to achieve a reduction of nearly $1 trillion in Medicare expenditures over the next decade from projected levels.”

“Mr. Ryan believes that meeting the goal over the long term requires introducing more competition into Medicare through vouchers to purchase private insurance. But Ryan’s approach was rendered toothless when the issue’s brutal politics forced him to retreat from his initial tough plan to simply cap the growth in government spending on Medicare and stick the inevitable overage onto beneficiaries. Under his revised plan, private insurers would be required to offer the same level of benefits as traditional Medicare, meaning that any savings would have to come from unidentified efficiencies (the ever-popular “waste, fraud and abuse”).”

“To be sure, health care cost increases have moderated, in part because of the recession and in part because Medicare has been tightening its reimbursements. But those thumbscrews can’t be tightened forever; Medicare reimbursement rates are already well below those of private providers.”

Mr. Rattner concludes, “the Independent Payment Advisory Board should be allowed to offer changes in services and costs. We may shrink from such stomach-wrenching choices, but they are inescapable.”

Government-paid long-term care will get worse before it gets better. Be forewarned with this knowledge and act accordingly and responsibly. If you want to be assured greater dignity and options, buy reasonably priced long-term care insurance NOW!

The Government Doesn’t Pay For Long-Term Care!

September 17, 2012 by Honey Leave a Comment

I can’t say it any better than William Gaston in the fall edition of Democracy: A Journal of Ideas (818 18th Street, NW Suite 750 Washington, DC 20006): “Medicaid already constitutes the single largest share of state budgets—24 percent, a figure that rises relentlessly year by year. State spending on the program rose by 20 percent in the most recent reporting year and by even more—23 percent—in the previous year. By the end of fiscal year 2013, total Medicaid enrollment for low-income Americans and the dependent elderly will have risen by 12.5 percent in just three years.”

“Because state revenues are growing much more slowly than Medicaid outlays, other priorities are getting squeezed. In many states, for example, public higher education—key not only to future prosperity and competitiveness but also to opportunity and mobility—is reaching a breaking point.”

“I had no idea how long-term care was financed. I soon learned that Medicare paid for at most 100 days of rehabilitation (useless in my mother’s case) and that Medicaid required beneficiaries to “spend down” nearly all their assets. Private long-term care insurance policies were available, I learned, but my parents—along with most Americans who can afford them—had not purchased one.”

Please take heed and plan responsibly, ahead of time, for a possible long-term care need.

At End of Life, Medicare Beneficiaries Spend Thousands Out of Pocket

September 14, 2012 by Honey Leave a Comment

At end of life, Medicare beneficiaries spend thousands out of pocket is the title of an article by Sarah Kliff, published on September 10, 2012, in the Washington Post.

This article reports on a recent study performed by Amy Kelly, a professor at Mt. Sinai School of Medicine.

“As more Baby Boomers retire,” Kelley writes, “A new generation of widows or widowers could face a sharply diminished financial future as they confront their recently-depleted nest egg following the illness and death of a spouse.”

This is because Medicare is among the fastest growing line items in the federal budget, already paying out $500 billion a year in benefits. But Medicare does not pay for all health care expenses.

Dr. Kelly reports that a quarter of Medicare beneficiaries spend all of their wealth paying for medical and long-term care expenses during the last five years of their lives, with the average beneficiary spending $38,688.

My guess is that most of the $38,688 spending average comes from long-term care expenses, not from medical care or treatments. In her report, Dr. Kelly mentions that dementia patients have the highest out-of-pocket expenses. The American Association for Long-Term Care Insurance (AALTCI) concurs and has plenty of statistics proving that the longest lasting, most expensive long-term care insurance claims are from dementia patients. Medicare does a decent (but imperfect) job of paying for acute medical problems and treatments, but Medicare’s biggest shortcoming is in the area of payment for long-term care.

It is tragic to have a long decline after a long, healthy, active life. It is doubly tragic to decline and then see your money fly out the window paying for long-term care expenses. This is rarely what anybody plans to do. However, if you don’t converse about long-term car ahead of time, you are failing to plan. If you fail to plan, you plan to fail.

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WSJ Advice Demonstrates Lack of Insight

Neither Party Has A Solution For The Oncoming Deluge of Medicare/Medicaid Services

The Government Doesn’t Pay For Long-Term Care!

At End of Life, Medicare Beneficiaries Spend Thousands Out of Pocket

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