Why we don’t need long-term care insurance

Bloomberg
November 12, 2014
Maybe You Don't Need Long-Term Care Insurance After All
By Ben Steverman

The biggest threat to a retiree's nest egg isn't a stock market crash.
It's a long illness requiring round-the-clock care.

The statistics behind that scenario -- $81,000 a year for a nursing
home, $184,000 for 24-hour home care -- are what sells long-term care
insurance policies. But while past research suggested that many more
people needed the coverage than bought it, a new study suggests that
most people should just skip it.

The study, by Boston College's Center for Retirement Research, focused
on singles, who now make up the majority of Americans. Long-term care
insurance makes financial sense only for the richest 20 to 30 percent of
unmarried people, it finds. For the rest, it makes more sense to go
without. If they need care, spending down their assets and then letting
Medicaid pick up the tab is the most practical solution.

Long-term insurance can pay off for wealthier singles, even under the
Center's new math. It takes $260,405 in assets, or about $90,000 in
annual income, to put a household in the top 25 percent, the Russell
Sage Foundation and the Congressional Research Service estimate. These
affluent customers can afford the premiums, and insurance can protect
their heirs' inheritance if that's a goal. The same logic works for
couples, but only if they're even wealthier. Webb warns that forthcoming
research will show long-term care insurance makes even less sense for
married couples than it does for singles.

http://www.bloomberg.com/news/2014-11-12/maybe-you-don-t-need-long-term-care-insurance-after-all.html

Report from Center for Retirement Research at Boston College
http://crr.bc.edu/briefs/long-term-care-how-big-a-risk/

Medicaid.gov - Community-Based Long-Term Services & Supports
http://www.medicaid.gov/affordablecareact/provisions/community-based-long-term-services-and-supports.html

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Comment by Don McCanne

The Affordable Care Act included Senator Ted Kennedy's Community Living
Assistance Services and Supports Act (CLASS Act) which would have
provided long-term care. Unfortunately the specifics of the CLASS Act
proved to be unworkable and thus it has been suspended. But according to
this new study, unless you are wealthy, you do not need long-term care
insurance anyway. Most of us can simply spend down our assets and then
Medicaid will take care of us.

Think about how that could apply to the increasing use of patient
cost-sharing, especially the ever-higher deductibles. We could eliminate
individual health insurance coverage. When individuals are faced with
expensive acute or chronic conditions, they could simply spend down
their assets and then go on Medicaid to cover their future health care
costs.

The obvious flaw in all of this is that it would require near
destitution for us to have our heath care expenses covered. Other
nations automatically cover these expenses for everyone without forcing
them to relinquish their assets. It is a sad commentary that we accept
the policy that a person must go broke before we will provide them with
long-term care. This should not happen in a caring society.

But what are we doing with moderate-income individuals and families
right now? We are requiring cost-sharing, especially deductibles, at a
level that wipes out liquid assets for many of them, if they even have
such assets. Financial hardship has become an expected consequence for
far too many people who have significant medical needs. It is primarily
wealthier individuals and families who have the assurance of being able
to obtain health care without losing their assets.

Long-term care should be covered by our health care financing system,
and significant cost-sharing should be eliminated. A single payer system
would ensure that all of us could get the care we need, including
long-term care, without adverse financial consequences.

If we really do expect that people should use their personal assets to
contribute to the financing of health care, do it through estate taxes,
but make the taxes equitable, that is, progressive. Do not take away
from our seniors what little they have in the final years of their lives.

And do not charge the estate specifically for the amount of health care
that was given. We shouldn't deprive families of their modest
inheritances just because medical bills were high late in life. Estate
tax rates should not apply to smaller estates, but then the rates should
increase with the size of the estate, unrelated to whatever health care
costs the family faced. Yes, the rich would pay more, but that's the way
it should work in a caring society.

Medicaid improving access for the homeless, but…

Kaiser Family Foundation
November 13, 2014
Early Impacts of the Medicaid Expansion for the Homeless Population
By Barbara DiPietro, Samantha Artiga and Alexandra Gates

The Affordable Care Act (ACA) Medicaid expansion offers a significant
opportunity to increase coverage and improve access to care for
individuals experiencing homelessness, who historically have had high
uninsured rates and often have multiple, complex physical and mental
health needs.

* The Medicaid expansion has led to significant increases in coverage
that are contributing to improved access to care and broader benefits
for homeless individuals. Providers reported that these coverage gains
have enabled patients to access many services that they could not obtain
while uninsured, including some life-saving or life-changing surgeries
or treatments. Participants also identified other broader benefits for
homeless individuals stemming from Medicaid coverage gains. For example,
providers noted improvements in individuals' ability to work and
maintain stable housing due to better management of health conditions.
In addition, participants said individuals have reduced financial stress
and improved access to other services and programs, including disability
benefits.

* Providers reported having access to a broader array of treatment
options as a result of Medicaid coverage gains among their patients.
With these increased options, providers said they are better able to
provide care based on the best courses of treatment rather than based on
the availability of charity or discounted resources.

* Gains in Medicaid revenue are facilitating strategic and operational
improvements focused on quality, care coordination, and information
technology. In addition, administrators indicated that Medicaid revenue
gains supported staff increases and led to changing staff roles to meet
increased administrative and billing needs. However, participants
emphasized that, even with Medicaid revenue gains, other funding sources
remain vital for supporting the full range of services needed by the
homeless population.

* Participants from the non-expansion site (Florida - did not expand
Medicaid) indicated that their patients remain uninsured and are
continuing to face significant gaps in care that contribute to poor
health outcomes. Participants also said they are facing an increasingly
challenging financial situation because they are missing out on Medicaid
expansion revenue gains and other funding sources are declining.

* As homeless patients gain Medicaid coverage and are enrolled in
managed care, some challenges are emerging. Participants commented that
some patients are being auto-assigned to providers with whom they do not
have an existing relationship and/or they may have difficulty accessing
due to lack of transportation. Additionally, working within provider
networks can be difficult given the complex needs of individuals, lack
of transportation, and the limited experience among other providers in
serving this population. Lastly, participants emphasized that prior
authorization requirements and limited and/or changing drug formularies
are leading to delays in care for individuals and creating substantial
administrative burdens for providers.

http://kff.org/uninsured/issue-brief/early-impacts-of-the-medicaid-expansion-for-the-homeless-population/

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Comment by Don McCanne

The experience of the homeless population under the Affordable Care Act
(ACA) demonstrates both the benefits of reform under ACA and the flaws
of ACA that call for replacement with a single payer system. ACA was
better than nothing, but we can have so much more through enactment of a
single payer system.

The primary ACA benefit for the homeless is that most of them in
expansion states qualify for Medicaid and thus have improved access to
health care without financial barriers. Some of the homeless who access
health care have been noted to have an increased ability to work and to
maintain stable housing. Financial stress is reduced and some have
gained access to appropriate disability benefits. These benefits to the
homeless are more reasons why calls for simple repeal of ACA are bad
policy, devoid of compassion.

Yet the last paragraph from the excerpts above explains why Medicaid
managed care is often a poor choice for the homeless (and many other
lower-income individuals as well). Homeless patients often are unable to
see the health care professionals who would be most accessible and
appropriate for them. Transportation concerns are more likely. Essential
specialized services may not be available. Managed care intrusions such
as prior authorization requirements, limitations and changes in
formularies, or other perverse managed care innovations may impair
access to important health care services or products. Further, those
states that refuse to expand Medicaid are leaving most of the homeless
without any coverage and therefore reliant on often inadequately funded
safety-net institutions.

There are those who believe that we should merely proceed with
implementation of ACA and try to obtain legislative and administrative
patches along the way. Compared to the deficiencies in our dysfunctional
system, patches have only minimal beneficial impact while increasing the
administrative complexity that already overburdens our system. Patches
fall way too short of what we need.

We should not repeal ACA since it does provide some temporary benefit
until we can implement a single payer system. But we should not let ACA
implementation divert us from instituting what we really need - a single
payer national health program. Not only would that benefit the homeless,
it would benefit all of the rest of us as well.

International comparison of patients over 65 - impact of Medicare

Health Affairs
November 2014 (online)
International Survey Of Older Adults Finds Shortcomings In Access,
Coordination, And Patient-Centered Care
By Robin Osborn, Donald Moulds, David Squires, Michelle M. Doty and
Chloe Anderson

Abstract

Industrialized nations face the common challenge of caring for aging
populations, with rising rates of chronic disease and disability. Our
2014 computer-assisted telephone survey of the health and care
experiences among 15,617 adults age sixty-five or older in Australia,
Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden,
Switzerland, the United Kingdom, and the United States has found that US
older adults were sicker than their counterparts abroad. Out-of-pocket
expenses posed greater problems in the United States than elsewhere.
Accessing primary care and avoiding the emergency department tended to
be more difficult in the United States, Canada, and Sweden than in other
surveyed countries. One-fifth or more of older adults reported receiving
uncoordinated care in all countries except France. US respondents were
among the most likely to have discussed health-promoting behaviors with
a clinician, to have a chronic care plan tailored to their daily life,
and to have engaged in end-of-life care planning. Finally, in half of
the countries, one-fifth or more of chronically ill adults were
caregivers themselves.

Comparative US Performance And Challenges Going Forward

Despite having Medicare coverage, older US adults remained much more
likely to face financial barriers to care than their counterparts in
other developed countries. This may be surprising, as other studies have
found that Medicare offers more stable and protective insurance than
other forms of coverage in the United States, including
employer-sponsored private coverage. However, it is still clearly less
protective than the universal coverage offered in the health systems of
other countries surveyed. This finding likely reflects limitations in
Medicare coverage, including substantial deductibles and copayments,
especially for pharmaceuticals, which are often more expensive in the
United States than elsewhere. The absence of limitations on catastrophic
expenses and long-term care coverage likely play a role as well.

Financial barriers aside, elderly Americans also face comparatively poor
access to primary care and after-hours care, relatively high dependence
on the ED, and large gaps in care coordination. Yet the survey also
captures areas where the experience of US older adults is favorable.
Both comparatively and objectively, Americans reported good access to
specialists. The US health care system also performed relatively well
when it came to hospital discharge planning and on the more
patient-centered measures of health promotion, self-management support
for chronically ill patients, and support for end-of-life planning.

Finally, the US elderly population is sicker than the comparable
population in other surveyed nations, reporting a much higher incidence
of chronic disease. This higher disease burden will pose critical
challenges for US policy makers in years to come. The United States
already significantly outspends all of the other countries in the
survey—often by a two-to-one margin—despite having the youngest
population. Although the growth in health care costs has slowed in
recent years in all of these countries, these considerations suggest
that the United States will face growing cost pressures. It will be hard
to maintain the current low-growth trajectory unless the United States
successfully implements delivery and payment system reforms that reduce
the cost of care and finds a way to narrow the health gap between itself
and other countries.

http://content.healthaffairs.org/content/early/2014/11/13/hlthaff.2014.0947.abstract

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Richard Gottfried, Chair, Committee on Health, New York State Assembly,
made the following observation: "The lesson: Living 65 years with
American insurance companies leaves you sicker. Then, transitioning to
American social insurance gives you quicker access to specialists."

(Personal communication, 11/19/14)

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HealthDay
November 19, 2014
U.S. Seniors' Health Poorest, Global Survey Shows
By Steven Reinberg

Dr. Steffie Woolhandler, co-founder of Physicians for a National Health
Program, said American seniors are sicker because of the inadequate care
they received before they turned 65.

"The health care system for the under-65 population is full of gaps, and
lots of people fall through the cracks," she said.

Woolhandler, who is also a professor of health at CUNY School of Public
Health at Hunter College in New York City, added that Medicare is also
leaving many Americans underinsured and that the Affordable Care Act
will not make a major difference.

"We need to be providing much more comprehensive coverage to everyone,
including lower co-pays and deductibles," she suggested.

http://consumer.healthday.com/senior-citizen-information-31/senior-citizen-news-778/u-s-seniors-health-poorest-global-survey-shows-693917.html

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Comment by Don McCanne

This international comparison of health care in older adults in eleven
nations is the latest in the series sponsored by the Commonwealth Fund.
For the United States, it is unique in that it compares only patients
over 65 in our public Medicare program with older patients in other
nations that already have universal health care systems.

Perhaps the most remarkable finding for the United States is that
patients enter the Medicare program sicker than older patients in other
nations, but, once there, they have better access to health care than
those younger than 65. But even our Medicare program leaves our elderly
exposed to greater financial barriers to care than do the systems of
other nations.

This study once again shows what the United States needs is obvious. We
need to improve Medicare so that it provides better coverage, and then
we need to expand it to cover everyone.