Should You Buy Inflation Protection For Long-Term Care Insurance?

Should you buy inflation protection for long-term care insurance? Absolutely. In fact, if you don’t think you can afford that extra coverage, you should probably rethink whether you should buy the insurance at all.

The issue of inflation protection was just one of the subjects that I, along with financial adviser Michael Kitces and insurance industry spokesman Jesse Slome, discussed on a Wall Street Journal webcast on Monday. The Journal’s Anne Tergesen wrote a nice article this week that also touched on the inflation issue.

Finally, Modest Progress Toward Long-Term Care Financing Reform

For the first time in years, there is hope that the U.S. can create a new model to help families finance long-term supports and services.  The solution isn’t yet visible, and lawmakers won’t address the issue any time soon. But a wide range of private interests including long-term care providers, consumer groups, the insurance industry, and policy analysts seems to be moving toward a broad consensus on how to address this important and difficult issue.

And that solution is likely to include some mix of private insurance and a public safety net beyond Medicaid—the current government program that is the single biggest payer of long-term services and supports.

The Real Value of ObamaCare Has Nothing to do with Enrollment

The loud debate over how many people have gotten health insurance under the Affordable Care Act misses the point. Yes, reducing the number of uninsured was one goal of the ACA. But only one. The law’s most enduring legacy will come from its historical—but largely unnoticed—changes in the way health care is delivered.

Unlike the insurance expansion, which largely excludes Medicare, many of those delivery reforms affect seniors and younger people with disabilities. In some cases, they are remaking the care people get through Medicare. In others, they change the way care is delivered through Medicaid, which is critical for many receiving long-term services and supports.

How A New Alzheimer’s Test Could Kill Long-Term Care Insurance—Or Make It Cheaper

A team of researchers at Georgetown University and six other medical centers has developed a simple blood test  they say can predict, with 90 percent accuracy, whether an individual will develop Alzheimer’s Disease within 2-3 years.  If it works as advertised, such a test could have a profound impact on the long-term care insurance market.

The study results, published in the journal Nature Medicine, are very preliminary. If the test works as hoped, it has enormous potential benefits, including the ability to advance efforts to find a treatment for the disease. If it makes early intervention possible, this test could dramatically reduce long-term care costs.

We All Want To Live At Home In Old Age, But Know Nothing About the Quality of Care We’ll Get There

The other day, I wrote about a troubling report on the high likelihood of falls or medication errors in skilled nursing facilities. The problem is real and serious, but at least we can measure it– which is a first step towards fixing it.

In contrast, there is home care. More than eight of every 10 people who need long-term supports and services receive this care at home rather than in nursing homes or other institutional facilities. And nearly all the assistance they receive at home is provided by family members, not paid aides or nurses.  Yet, we know nothing at all about the quality of that family help.

Addressing the Dangers of Nursing Facilities

Earlier this month, the federal department of Health & Human Services concluded that more than one of every five skilled nursing facility (SNF) patients suffered serious harm from events such as medication errors, falls, or infections in 2011. Half were sent to the hospital as a result of these events. Six percent died. And 60 percent of these adverse events were deemed “clearly or likely” preventable by medical experts.

The findings have important implications for a major trend in the care of the frail elderly: the growing partnerships between hospitals and skilled nursing facilities. Increasingly, under financial pressure from Medicare payment rules and through new relationships such as Accountable Care Organizations and bundled payments, hospitals are transferring patients to SNFs faster than ever.

Senior Services Take a Hit in Obama Budget

Federal senior services programs are in for another very difficult year. In the 2015 budget he released yesterday, President Obama proposed freezing or even cutting spending for many key programs. And Obama’s blueprint may be the highwater mark for many initiatives, which are likely to see even deeper cuts as the budget works its way through Congress. Key House Republicans have already signaled that several programs are on their chopping block.

Obama proposed to reduce overall funding for the Administration for Community Living (ACL), the federal office that oversees most–though not all–senior services programs. He’d trim the agency’s budget to $2.062 billion, about $35 million below last year’s spending level. The National Council on Aging has a nice table here describing the budget numbers.

Better Coordinating Long-Term Care and Medical Treatment

The most important trend in care for the frail elderly and younger people with disabilities may be what’s called managed long-term supports and services, or MLTSS. This effort to combine medical care with long-term care would replace today’s disorganized, ineffective, and even dangerous system with one that can bring together complex care that’s being delivered by many different providers.

Done well, this model has the potential to improve the quality of life for those receiving care and save money. Done poorly, it puts an extremely vulnerable population at even greater risk than it is today–and may not save money.

Should You Self Insure Against Long-Term Care Risk Or Buy Insurance?

Should young people self-insure against the risk of needing long-term care later in life, or should they buy insurance?

In a Feb 13 Wall Street Journal commentary (behind a pay wall), Manisha Thakor, chief executive of Santa Fe, N.M.- based MoneyZen Wealth Management LLC, argued they should self-insure.  “By taking the money you would have put in long-term-care premiums and investing them in a low cost 60/40 balanced index fund, you can create your own pool of funds to draw on down the road if need be–and avoid the dreaded “claim denied” scenario,” she wrote.

It is Very Hard to Move People Out Of Nursing Homes

It sounds like a great idea: Move people out of long-stay nursing facilities and back into their communities, and give them flexibility to spend government dollars on the care they need. Such a change could make care more person-centered and reduce costs. But a federal/state demonstration aimed at achieving that goal has moved very few people.

For six years, the federal government and state Medicaid officials have been giving people the opportunity to return to their communities through a $4 billion demonstration program called Money Follows the Person. Although 41 states are participating, less than one percent of nursing home residents have successfully made the transition, and most of them were younger people with disabilities.