September 28, 2015
In This Issue
NAHU Member-Exclusive LTC Portal is Here!
The Affluent Do Not Want to Self-Insure for LTC!
A Free, Major LTCI Event is Coming!
HIU Magazine Now Features Excellent LTCI Articles
The Most Exciting Committee You’ve Never Heard Of
Legislative Update
The Role of Long-Term Care Protection in a Financial Wellness Program
NAHU LTCI White Paper
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The Most Exciting Committee You’ve Never Heard Of
by Steve Forman

To set today’s table let us first go back in time. Although most of your friends will remember the American Taxpayer Relief Act of 2012 (enacted January 1, 2013) as the law which averted our so-called “fiscal cliff,” for our purposes it’s noteworthy for two minor sections. Buried deep within were section 642 (just a few sentences which repealed the CLASS Act once and for all(1)) and section 643, which created the National Commission on Long-Term Care.

The commission was given just six months to do its work, and wasted most of that precious time selecting partisan members. In an ominous sign, when hearings were held over the summer of 2013, no one from private long-term care (LTC) insurance was invited to testify publicly. By September, the national commission issued its formal report to Congress, but, in a surprise move, a minority issued its own dissenting report. This was our national example: they’d failed to reach consensus on the financing of LTC, and failed to produce actionable recommendations.

Meanwhile, an overlapping—yet largely unknown—committee, dubbed the Long Term Care Financing Collaborative (LTCFC), had begun work a few months before. Formed of around two-dozen centers of influence from a wide range of interests and ideological points of view, this diverse collaboration believed they could succeed where others failed by utilizing an ace in the hole: a professional mediator (the Convergence Center for Policy Resolution). This was the same method that had brought the left and right together to achieve meaningful progress on welfare reform years earlier. Now they would point their considerable attention toward LTC with no less a goal than to “develop pragmatic, consensus driven recommendations for a public and private insurance-based financing system that empowers people of all incomes to receive high quality services and supports.”(2)

You will recognize many of the members(3): Stuart Butler (Brookings, Heritage), Sheila Burke (former chief of staff to Bob Dole), Paul Van de Water (CBP), Deb Whitman (AARP), Jennie Chin Hansen (former CEO of the American Geriatrics Society), Gail Wilensky (former director of Medicare & Medicaid), Susan Coronel (AHIP), Jonathan Westin (Jewish Federations of North America), Marc Cohen (LifePlans) and Al Schmitz (Milliman), to name just a few. Perhaps its most high-profile member is Howard Gleckman, Urban Institute Fellow and Forbes contributor, who seems to be everywhere—not only is Mr. Gleckman on the steering committee of the collaborative, but he’s done the greatest job publicizing its work thus far.

In July of 2015 the collaborative came out of the shadows, so to speak, and issued its first report. (The group also hinted that their next, more substantive report would be released this fall.) Their debut consists of a “Statement of Principles” identifying areas of broad agreement. These read like everything you and I would agree with, including support for patient autonomy and freedom of choice; support for family caregivers; improvements to our social safety net; a fiscally sustainable public program; improved mechanisms to save and insure for those who are able; and improved public awareness and myth-breaking.

Given the sorry history of long-term care committees in this country, it would be easy for producers to have misgivings about the collaborative’s mission. But so far, their level-headedness is promising. They acknowledge the systemic underfunding that stifles the current system (read: Medicaid), and commit that “any solution should, as much as possible, shift from the current welfare-based model to an insurance-based system.” So far, so good. And while the committee members have yet to reach consensus on the financing of LTC, they have laid out a vision for the delivery of services, built on four core pillars.

The foundation of these principles are support for family and community who form the backbone of our nation’s caregiving (more than 80% of those who require personal assistance at home do so only with the help of family and friends and without any paid assistance at all). Among the improvements recommended are better integration between “medical” and “chronic” care, more support for paid direct-care workers, more inclusive family support and relaxed licensing and regulations which will reform employers and communities.

The LTCFC is laying some new groundwork as well. With the financial backing of SCAN, AARP and Leading Age, a new LTC financing model is being developed.(4) This model will input a number of high-level policy ideas and output their individual and societal impacts, breaking down policy options by age, gender, income and other demographic status. Rather than each party bringing its own contentious data to the bargaining table, from now on we’ll use common data which everyone stipulates is agreeable. As Howard Gleckman explains, “While we might disagree on specific solutions, we could avoid battles—and confusion—over how to calculate how much proposals would cost, whom they’d benefit, and what they’d mean for government programs.”

As the collaborative tackles our national LTC financing challenge, it appears everything’s on the table, from varieties of public and private insurance to Medicare and Medicaid reform. When I asked a few years ago whether tax incentives to purchase LTCI would be viable, I was told the climate probably wouldn’t support them, but we’ll see what the official report says later this year. Among the options being examined are insurance designs, market reforms, and enhancements to the social safety net. Smartly, the collaborative has adopted the best of CLASS by recognizing that the needs of younger Americans with disabilities are very different than those of the elderly.

There may be fewer LTCI sales this year than last, but that’s no reason not to feel optimistic towards the future. The need is growing by the day, and carriers have responded with an array of choices like never before. But only within the last few years have the public and private sectors begun to speak with one voice, “We can’t do this alone.” I hope you’ll share my excitement to read the final report of the LTC Financing Collaborative and see what some of the brightest lights in LTC have in store for us.

(1) CLASS had been defunded since 2011, described thereafter as a “budget zombie.”
(2) In contrast to the National Commission—doomed by its 6-month timetable—the new Collaborative pledged to learn from the past by operating without a timeline.
(3) Some are consulting independently, and not as a representative of the organization with which they are normally affiliated.
(4) Under the direction of the Urban Institute and Milliman.

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