The other day, long-term care insurance gadfly Stephen Moses called me “an advocate of more government financing and an enemy of private LTC financing alternatives.” I assume he said this because I believe that reforms such as the CLASS Act, which would create a national long-term care insurance system, would be a far better way to pay for this assistance than the costly and inefficient mess we currently have.
Today, far too many Americans pay for care out of their own pockets until they run through their financial assets, then they go on to Medicaid, a welfare-like government program. Medicaid pays for their care in nursing homes, where they don’t want to be, or, if they are lucky, provides some limited home care benefits. Almost no one buys Steve’s preferred alternative, private long-term care insurance, because they can’t afford it, don’t understand it, and don’t want to think about it.
While Moses runs what he calls The Center for Long-Term Care Reform, he is an outspoken opponent of nearly all actual proposals for long-term care financing reform (George Orwell, phone home). His blog is bankrolled by the insurance industry, and his favored solution is to push more people to buy private LTC coverage by limiting their eligibility for Medicaid. Dude, the Democrats won the election.
He and I agree that Medicaid is a poor solution for those who need long-term care. For many, the benefit is both parsimonious and inappropriate, and care is poorly coordinated for those chronically-ill “dual eligibles” who receive both Medicare and Medicaid benefits. In addition, Medicaid is breaking the back of state budgets and putting enormous fiscal pressure on Washington.
That’s why I like the idea of a national insurance program. Properly designed, it would give people more choice in the care they receive, ease the cost pressures on Medicaid, and substitute the personal responsibility of broad-based insurance for the welfare-like Medicaid system. So how does this make me “an advocate of more government financing?”
The CLASS Act can, and should, be designed to be self-financing. People would pay market premiums and get, in return, a benefit. No taxpayer dollars involved. If consumers chose, they could buy additional private long-term care insurance to supplement the CLASS benefit, much as they buy Medicare Supplement (Medigap) coverage today. And to the degree they’d be covered by a national insurance plan, some people could avoid Medicaid. That means less government financing of long-term care, not more.
I’d go a step further and make the insurance mandatory, but as long as it is self-financed through premiums there would be no new government costs.
Steve’s rhetoric echoes the absurd claims of a “government takeover” of insurance that we hear from some conservatives in the broader health debate. This argument is even more ridiculous in the context of long-term care reform. Private insurance pays only 7 percent of long-term care costs. Medicaid pays nearly half. It has already “taken over” paying for most of this assistance. In the real world, if your goal is to get Medicaid out of the long-term care business, a broad-based, financially stable, self-funded national long-term care insurance program isn’t a bad place to start.
Oh, by the way Steve, despite your deepest wishes, I don’t think the CLASS Act is dead. Far from it. The proposal faces an uphill battle this year–no surprise there–but it remains very much alive.