Growing Older / Liz Taylor
New report offers model for long-term care reform

E-mail this article Print this article Search archive

• "Plan for your aging when you're young so you can grow old with grace — and have some control."

• "How you pay for your care is the No. 1 factor that will determine its quality, your choices and how much control you'll have over what you get."

Like two peas in a pod, they work together. If you plan for your aging in your 40s and 50s — including how you'll pay for your care someday — you'll have access to better choices, plus more control over what happens to you.

But in recent years, an urban myth has taken hold that the government — Medicaid — pays for our care, no matter how wealthy we are. It's an attitude of entitlement that has numbed vast numbers of people into taking no responsibility for what's going to happen to them when they reach 85 (the fastest growing segment of the American population).

So, most people do nothing until a crisis hits — when it's too late to save or buy long-term care insurance — while many who are well-to-do play games and transfer their assets to family, making themselves eligible for free care under Medicaid.

The outcome? Imagine a speeding train going off a steep cliff. Medicaid budgets everywhere are soaring off the charts, increasing by 7 to 10 percent each year, while the quality of publicly funded care plunges to new depths, with no new taxes in sight. As I've written before, the system is not sustainable. But look out — we haven't even begun to care for 76 million aging boomers.

Every state is in trouble, and each must undo the perverse public policies that created this mess. One state has begun — Nebraska — and a recently published report, "The Heartland Model for Long-Term Care Reform," outlines what needs to be done. It's a fascinating study of the painful, politically and personally difficult, delicate steps that are needed everywhere. Authorized by the Nebraska Legislature and researched and written by Seattle's own Center for Long-Term Care Financing, a national non-profit think tank, the report is available at www.centerltc.com/pubs/Nebraska.pdf.

Here are some highlights:

In many ways, Nebraska is in better shape than most states, the report says, with the lowest Medicaid nursing-home census in the U.S. (although the second highest for percent of people age 65-plus in nursing homes), good-quality care, and a pioneer spirit of self-reliance and responsibility that has created the highest market penetration of long-term care insurance purchases — over 15 percent — plus a sense that Medicaid should be reserved for the truly needy.

However, there are growing problems. Nebraska's share of people age 85-plus is increasing faster than the national average — almost half again as fast. And its number of people dependent on Medicaid is creeping up. An increase of just 10 percent will add $54,000,000 to the state's Medicaid budget (already increasing by 7 percent a year) if it isn't stopped. Further, although many Nebraskans speak proudly of the state's pioneer spirit of self-sufficiency, the sale of long-term care insurance is flat, and more citizens are "sliding down a slippery moral slope toward an 'entitlement mentality,' " the report says, manipulating welfare (Medicaid) eligibility rules. With a $198 million budget deficit this year alone, the state is headed toward a fourth straight year of budget cuts, including Medicaid benefits and education programs.

What to do? The goal, the report says, is to reduce the number of Nebraskans dependent on public assistance (Medicaid) for their long-term care. By paying privately, more people will receive the care they prefer, and Medicaid will serve those who are truly poor.

The report offers eight recommendations. Among them is to significantly ramp up Nebraska's program for recovering the costs of care from the estates of Medicaid recipients who've died. While Nebraska recovers just $1.2 million a year, Oregon recovers nearly $7.5 million. Another is to join with other states to propose federal legislation to cut down on the inappropriate use of annuities and trusts for Medicaid eligibility. Another is to fight financial abuse of the elderly by prosecuting adult children (and others) who steal outright from their parents, forcing them onto Medicaid.

But my favorites use carrots to persuade the public to wake up and assume responsibility for their care. Nebraska should identify high-quality long-term care insurance, the report urges, and give its "stamp of approval" to the good ones, then offer a state tax incentive to people who buy them.

Another recommendation is to conduct a public-education campaign to convince Nebraskans of the need to pay for their care privately — and finance the study, the educational campaign and the tax deductions from the proceeds of the enhanced Medicaid estate-recovery program.

Every state faces Nebraska's dilemma, having allowed citizens to snooze while cruising into old age unprepared. The sooner we start, the less draconian the remedies will be. The Heartland Model gives us direction. The question is: Is anyone listening?

Liz Taylor's column runs Mondays in the Northwest Life section. A specialist on aging and long-term care, she consults with individuals and teaches workshops on how to plan for one's aging — and aging parents. E-mail her at growingolder@seattletimes.com or write to P. O. Box 11601, Bainbridge Island, WA 98110. You can see all of her columns at www.seattletimes.com/growingolder/.

Copyright © 2004 The Seattle Times Company