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Government Shift to Care at Home

May 10, 2012 by Honey Leave a Comment

In “A Shift From Nursing Homes To Managed Care at Home” (New York Times, February 24, 2012) Joseph Berger notes that shrinking Medicaid and Medicare funds are forcing closure of more and more nursing homes – 350 nursing home have closed over the past six years nationally. For example, New York State plans to transfer 70,000 to 80,000 people needing over 120 days of Medicare-covered long-term care (LTC) to their homes. Studies suggest that care at home can cost less than in a nursing home, so such a policy may stretch scarce Medicaid funds a little further.

Shifting Medicaid funding from nursing homes to in-home care sounds great. Caregivers really like this idea. The whole notion of avoiding nursing home stays is very appealing.

Many policymakers cling to the notion that such a shift will save money, but this is far from the truth.

I quote the following from Steve Moses of the Center for Long-Term Care Reform:

When compared to an elderly population for whom traditionally available care is offered, recipients of expanded community-based services do not use significantly fewer days of nursing home care.[1]

An increasingly large number of studies, including the results of a national channeling demonstration program, have shown that non-institutional services typically do not substitute for nursing home care, but, rather, represent additional services most often to new populations.[2]

Although community-based LTC programs proved beneficial to both clients and informal caregivers in the LTC demonstrations, they did not prove budget neutral or cost effective.[3]

For Medicaid to afford quality home health care for all recipients it must have fewer recipients. By tightening eligibility, closing eligibility loopholes, preventing Medicaid planning, and enforcing estate recovery, the program can do a better job for fewer genuinely needy eligibles. When middle class and affluent people understand their savings and home equity are at risk for LTC, they will avoid Medicaid dependency by paying privately from savings, home equity conversion and private insurance.

Here are the footnotes:

[1] General Accounting Office, “The Elderly Should Benefit From Expanded Home Health Care But Increasing Those Services Will Not Insure Cost Reductions” (Dec. 7, 1982) p. 43, http://archive.gao.gov/f0102/120074.pdf.
[2] John F. Holahan and Joel W. Cohen, Medicaid: The Trade-off between Cost Containment and Access to Care, (Washington DC: The Urban Institute Press, 1986), p. 106.
[3] Kenneth G. Manton, “The Dynamics of Population Aging: Demography and Policy Analysis,” The Milbank Quarterly, vol. 69, no. 2, 1991, p. 322.

Ducking the Medicare Crisis, a Bitter Pill

April 26, 2012 by Honey Leave a Comment

In his April 13, 2012 New York Times op-ed piece, Steve Rattner explains how contentious political stalemates, band-aid solutions, and convoluted arithmetic may temporarily appease political constituents but simply cannot avert the rapidly approaching Medicare crisis.

Here’s a quote from the piece, “While the Obama legislation employs cutting-edge ideas for managing Medicare’s outlays, the program can’t be saved just by squeezing reimbursement rates to hospitals, laboratories and the like. In assessing the new law, the Centers for Medicare and Medicaid Services warned of exactly these risks.”

It should be obvious to readers that to ensure access to quality long-term care now and in the future, it will be necessary to either pay for it yourself, or own long-term care insurance.

The Cost of Entitlements Just Goes Up and Up

February 15, 2012 by Honey Leave a Comment

“Even Critics of Safety Net Increasingly Depend on It” (NY Times, Feb. 12, 2012, pp. A1, 24) presents frightening trends that threaten the well being of every American. A myriad of benefits programs provided over $6,500 for every man, woman and child in the US in 2009, a 69% increase from 2000. And although the primary objective of these programs was to keep Americans out of poverty, the poorest Americans no longer receive the majority of government benefits.

Trends in the need and cost of these programs are sobering. Nearly 50% of Americans lived in households receiving government benefits in 2010, up from 38% in 1998 and 44% just before the recession in 2007. And spending on medical benefits is projected to rise 60% over the next 10 years. As the baby boomers age, the number of Americans covered by Medicare will increase by one-third. These increases will make spending on medical benefits higher than every other expenditure in the federal budget expect interest on the national debt – higher even than the money invested in education or defense!

And where will the money come from to cover all these national expenses? Not from the taxes we pay. For example, “a 45-year old woman who earns $43,500 in 2010 will pay taxes worth $87,000 to the federal government by the time she retires, BUT the government will spend $275,000 for her medical care before she dies. As the economists say, “There is no free lunch.”

As the boomers age, increasing numbers of them will also need long-term care, which is covered by Medicaid or personal funds, NOT Medicare. And, of course, the demand for long-term care will continue to increase – even as Medicaid funds shrink. How sad…

One way to maintain your dignity in your final years AND to minimize physical, emotional and financial stress on your family is to own long-term care insurance to cover these expenses that can average over $70,000 per year. You owe it to yourself and your family to give this option careful thought.

Bargaining with your child for long-term care

January 26, 2012 by Honey Leave a Comment

In a January 15 Sunday Review article in the New York Times, “Bargaining for a Child’s Love,” Hendrik Hartog stated that the image from the early 20^th Century of adult children lovingly taking care of their parents during their decline has been somewhat romanticized. Yes, the custom was for family members to provide long-term care for their parents, but since over half the US population died before age 65, the burden was often relatively brief. But there were also either implicit or explicit bargains discussed – parents would pass on their homes and other assets to their family caregivers after their death. These often informal promises could lead to family strife, however, after the parent’s death. Hartog adds that “…of course what was at stake was never just an economic bargain between rational actors. Older people negotiated with the young to receive love, to be cared for with affection, not just self-interest.”

He goes on, “Dependency and disability still confront us as facts of life. There is little happiness in the inevitable but unpredictable decline that awaits all of us. And many younger people still experience themselves as trapped by a sense of duty to care for older relatives.”

Hartog argues that policy and bureaucratic supports such as social security, Medicare and Medicaid have softened the burden on today’s family members, but in a letter to the Editor on p. A20 in the January 19, 2012 New York Times (Caring for Elderly Parents) http://www.nytimes.com/2012/01/19/opinion/caring-for-elderly-parents.html?ref=todayspaper, Carole Levine cites dramatic statistics that many children provide long-term care for their parents with little or no assistance from government entities. Citing Hartog’s claim “…that today middle-class family members don’t do the work of cleaning bedsheets, helping a parent into a bathtub, changing a diaper,” Levine counters that “in fact, according to the 2009 National Alliance for Caregiving national survey, this is exactly what at least 21 percent of the country’s 48 million caregivers do, as well as managing complex medications, arranging transportation, financial and legal affairs, and countless other tasks.”

Levine correctly notes that “Most insurance, including Medicare, does not pay for this ‘custodial’ care,” and as I have pointed out many times in this blog, Medicaid provides funds only after families have depleted their own financial resources.

Sadly, neither contributor mentioned LTCi as a wise and reasonable option that will provide funds to pay for long-term care and alleviate the family conflict and stress so accurately described.

Medicaid Funding — Going, going… Gone?

December 26, 2011 by Honey Leave a Comment

Although our hearts are filled with the spirit of giving during this Holiday Season, our federal government and many states will increasingly resemble the Grinch in the very near future.

Facing the same dilemma of many other states whose Medicaid funds are drying up, Maine’s new Republican governor recently called the state’s entitlement system “a runaway train” (“Medicaid Cuts Are Part of a Larger Battle in Maine,” New York Times, Dec. 24, 2011, p. A11). His proposal to reduce Maine’s Medicaid rolls by 65,000 (18%) has generated outcries from citizens throughout the state. One specific cut is room and board at assisted living centers.

So Baby Boomers who are gambling on the availability of state Medicaid funds to defray the cost of their long-term care are seeing their odds of “winning” go down and down. In view of this Scrooge-like future, the need for US citizens to engage in sensible planning for their long-term care with reasonably priced Long-term Care Insurance is becoming more and more urgent!

Now that I have your attention, I’m sorry to add another statistic that we are all familiar with – 10,000 boomers are joining the Medicare rolls every day. In a Dec. 23, 2011 story in the Washington Post titled,“Medicare Spending Growth Rising Slower but Enrollment Will Rise,” we learn that projected growth in Medicare recipients will rise from 47 million in 2010 to 88 million in 2040. And medical costs for seniors also continue to rise.

So seniors who need long-term care will be competing for increasingly scarce funds with seniors who need medical care – a very sad predicament, indeed.

The clock is ticking, America!

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Government Shift to Care at Home

Ducking the Medicare Crisis, a Bitter Pill

The Cost of Entitlements Just Goes Up and Up

Bargaining with your child for long-term care

Medicaid Funding — Going, going… Gone?

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