Thursday, February 17, 2005
Long-term care lessons from Minnesota
["Public and Private Financing of Long-Term Care: Options for Minnesota," A Report to the Minnesota Legislature, Minnesota Department of Human Services Continuing Care Administration, 15 January 2005.]
Identified as a "leader" in the area of Medicaid long-term care reform by The Center for Long Term Care Financing, the state of Minnesota recently released a review of financing options for long term care that contains some revealing language:
At the heart of the issue of long-term care financing is the concern that, by 2030, more people than ever before will turn to Medicaid as the way to finance their long-term care. This could include those who are already “Medicaid-bound” as well as those who have been called the “tweeners,” that is, a group with lifetime income and assets adequate for retirement but inadequate for long-term care costs. Even the “financially independent” boomers, those who could self-fund their long-term care, may feel a sense of entitlement to a public program like Medicaid, because it pays for an expensive product that most people do not like and do not want to pay for with their own money.
Another motivator to reform long-term care financing is the current structure of Medicaid. Its current structure as a “welfare” program presents a number of perverse incentives to the elderly and their families faced with long-term care costs. Critics claim that there are strong incentives to transfer assets using a number of legal mechanisms. Critics also claim that the program insulates individuals against the true risk of long-term care because they assume that “the state” will help pay for long-term care if all else fails. This attitude works against the message from insurance agents, financial planners and the government about the need to protect oneself privately against the risk of long-term care. A recent study goes even farther and concludes that the existence of Medicaid in its present form as a payer of last resort presents a fundamental impediment to the growth of any private coverage, and that changes in the structure of Medicaid are necessary but not sufficient to spur expansion in the private long-term care markets.
[W]e need to eliminate the mixed messages that the general public receives about its personal responsibility for long-term care on the one hand, and perceptions of easy access to publicly funded long-term care on the other.
[See Stephen A. Moses, "Project Proposal: Controlling Medicaid Long-Term Care Costs," The Flint Hills Center.
Also, Matthew Hisrich, "First Things First: Kansas Medicaid Program Must Get its House in Order Before Expanding Home-based Care," The Flint Hills Center, 20 August 2004.]
["Public and Private Financing of Long-Term Care: Options for Minnesota," A Report to the Minnesota Legislature, Minnesota Department of Human Services Continuing Care Administration, 15 January 2005.]
Identified as a "leader" in the area of Medicaid long-term care reform by The Center for Long Term Care Financing, the state of Minnesota recently released a review of financing options for long term care that contains some revealing language:
At the heart of the issue of long-term care financing is the concern that, by 2030, more people than ever before will turn to Medicaid as the way to finance their long-term care. This could include those who are already “Medicaid-bound” as well as those who have been called the “tweeners,” that is, a group with lifetime income and assets adequate for retirement but inadequate for long-term care costs. Even the “financially independent” boomers, those who could self-fund their long-term care, may feel a sense of entitlement to a public program like Medicaid, because it pays for an expensive product that most people do not like and do not want to pay for with their own money.
Another motivator to reform long-term care financing is the current structure of Medicaid. Its current structure as a “welfare” program presents a number of perverse incentives to the elderly and their families faced with long-term care costs. Critics claim that there are strong incentives to transfer assets using a number of legal mechanisms. Critics also claim that the program insulates individuals against the true risk of long-term care because they assume that “the state” will help pay for long-term care if all else fails. This attitude works against the message from insurance agents, financial planners and the government about the need to protect oneself privately against the risk of long-term care. A recent study goes even farther and concludes that the existence of Medicaid in its present form as a payer of last resort presents a fundamental impediment to the growth of any private coverage, and that changes in the structure of Medicaid are necessary but not sufficient to spur expansion in the private long-term care markets.
[W]e need to eliminate the mixed messages that the general public receives about its personal responsibility for long-term care on the one hand, and perceptions of easy access to publicly funded long-term care on the other.
[See Stephen A. Moses, "Project Proposal: Controlling Medicaid Long-Term Care Costs," The Flint Hills Center.
Also, Matthew Hisrich, "First Things First: Kansas Medicaid Program Must Get its House in Order Before Expanding Home-based Care," The Flint Hills Center, 20 August 2004.]
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