Long-Term Care Financing Reform: The AAHSA Plan
Following are highlights of the American Association of Homes and Services for the Aging (AAHSA) framework for financing long-term care, which was presented at the recent forum at the University of Minnesota Humphrey Institute. Earlier we outlined the AARP plan here. To read more about The Long-Term Solution by AAHSA, go here:Key Features
- Cash should be the one, if not the only, choice of benefits to be used at the beneficiary’s discretion.
- Benefits should be tied to a simple level of need based on functional status, not age.
- Benefit levels should provide for a foundational level of services for people in the community and in residential settings, consistent with keeping the program actuarially sound.
- Systems to ensure that beneficiaries can access with appropriate help selecting and securing needed services must be available.
The Solution: National Insurance Trust Financed by PremiumsThe foundation of a long-term financing strategy should be a broad-based national insurance trust with low overhead costs and an all-inclusive risk pool. This insurance should be financed by premiums, not by general tax revenues, with premiums and benefits aligned to produce an actuarially sound program. This approach would allow baby boomers to prefund their long-term care needs. An independent, federally-charted organization could manage the premiums, investments and payments to ensure the funds are used only to pay benefits for this program.Benefits Available Regardless of SettingBenefits should be available regardless of setting. The dollar value of benefits should be tied to simple level-of-need determination that consumers can easily understand and focuses on a person’s need for assistance with activities of daily living (ADLs), including bathing, dressing and eating.Even if all or most Americans are enrolled, the benefits would not cover all long-term care costs. Some may wish to purchase extra wraparound insurance to cover full costs, and some may pay the difference with private funds. People with very low incomes will continue to need financial assistance.Wraps Around Medicare, Doesn’t Replace ItThe optimal financing plan is one that wraps around and extends, rather than replaces, existing Medicare benefits, which will continue to provide for the more intensely medical and shorter-term rehabilitation needs.Future expected Medicaid costs could be mitigated, helping to ensure the sustainability of Medicaid as a safety net. But near universal participation will be required, which could be achieved through a mandate or - perhaps more likely - through a strategy in which people are automatically enrolled in the plan and can opt out if they wish.Could a National Insurance Trust Work? Yes, For the Cost of a Cup of Coffee a DayAAHSA commissioned The Moran Company, a nationally known economics consulting firm, to model a long-term care insurance trust that would provide a daily cash benefit for people needing assistance with two or more ADLS and be fully funded for at least 75 years. The model provided premium prices for one, two, three and five-year benefits as well as a lifetime benefit. For simplicity, participation was determined to be mandatory for all adults.The study found that for about the cost of a large cup of coffee each day for each of us, we can create a national insurance trust that would pay a benefit of about $27,000 per year to each adult who needs assistance with two or more ADLs.
The New Old Age: With The N.Y. Times' Jane Gross
Here’s another sign that aging and aging services is elevating on the national scene. Distinguished N.Y. Times writer Jane Gross (left) earlier this week launched a blog called 'The New Old Age.' One of her first posts already has 492 comments … Thanks, Jane. Below is her inaugural post, which gives you a flavor for her writing. If you’re in aging services and you want some free market research, follow the comments on her blog …
Jim’s mother-in-law has fallen again. For the fourth time this year.He and his wife meet the ambulance at the emergency room, then try to keep the frightened, old woman distracted through the long wait. They check her into the hospital with several broken bones and an unsteady heartbeat. They spend days at her side, jolly her through the rigors of rehab and finally take her back to her apartment, as they have so many times before.Along the way, the 60-something couple, friends of mine in Los Angeles, learn which pain medications make an 87-year-old woman delirious and which leave her in a stupor. They learn that Medicare covers orthopedic surgery but not long-term care at home. They learn about stage-three bedsores. They learn that out-of-town siblings can be summoned for a few days respite but don’t fully grasp the relentlessness of the caregiving task.Nobody wants the old woman to die, but her misery is a heavy blanket muffling many lives. Each mad dash to the ER, each hospitalization, takes a toll. On top of the cost of assisted living, Jim’s mother-in-law needs private duty home care, or else the next fall could be her last. But what happens if and when even 24/7 help isn’t enough? A nursing home? Who pays, at upwards of $100,000 a year? And how long will the money last?These are the trials many of us face during the final years of our parents’ lives, as we lurch, ignorant, from crisis to crisis. When my brother and I began this journey with my mother, who went from feisty independence to utter reliance on her children in a matter of months, we were making it up as we went along.We knew nothing about entitlement programs. What do you mean Medicare doesn’t cover the cost of home care or assisted living or a nursing home? We knew nothing about the advantages and disadvantages of hiring companions and aides through agencies or word-of-mouth. What do you mean that the agency aide needs permission from a supervisor before picking my mother off the floor if she falls?We knew nothing about hospital discharge planning. What do you mean she has to leave tomorrow when we have no place to take her? We knew nothing about geriatric medicine. What do you mean emergency rooms and intensive care units can cause a form of psychosis in the elderly, or that a catheter can lead to an undiagnosed urinary tract infection and even death?We knew nothing about Medicaid spend-downs, continuing care retirement communities, in-hospital versus out-of-hospital do-not-resuscitate orders, Hoyer lifts, motorized wheelchairs or assistive devices for people who can neither speak nor type. We knew nothing about “pre-need consultants” who handle advance payment for the funerals of people who aren’t dead yet, or “feeders” whose job it is to spoon pureed food into the mouths of once-dignified men and women.At the time, between 2000 and 2003, my brother and I felt terribly isolated. As leading edge baby boomers and the children of older parents, we were the first of our friends to go through the drawn-out process of watching a mother or father grow more helpless with each passing day until the role reversal put us squarely in charge of everything. Once in charge, we had to rely on each other as never before €” sometimes perfectly in synch, other times at each other’s throats.At work, the assistance available to new parents did not readily extend to our situation, which was as laborious as child care but without the joy or the promise for the future. When I asked for a four-day week here at The New York Times, exhausted from my dual labors, the person in charge of such matters, who readily agreed, noted that I was the first employee to make such a request but surely wouldn’t be the last.How right he was. Today, in the newsroom at The Times and at places of business everywhere, middle-aged men and women in growing numbers are juggling their jobs, their parents’ increasing needs, frequent emergencies and all the other moving parts of their lives. They look stunned and very tired. I remember it well. Because I chose to write about aging and caregiving in the wake of my mother’s death, gaining a level of expertise I didn’t have when I needed it, they come to me with questions.How can they find a reliable home health aide? What should they look for in an assisted living community? How long is the waiting list at top-notch nursing homes? How onerous is the paperwork for applying for Medicaid? Is it worth spending money for the guidance of a geriatric case manager? How do you persuade a parent that it is no longer safe to drive, or that the time has come for live-in help at home? What can be done about siblings who won’t carry their weight? Or about siblings who disagree over end-of-life or financial decisions?The experience of fielding those questions inspired this blog. I intend for it to be a source of information and community for grown children faced with these new responsibilities, for the elderly adjusting to unwelcome limitations and dependency, to employers interested in easing the burden, for professionals in the field and for anyone else who wants to chime in. Whining is permitted. Wisdom, and humor, are especially welcome.But most of all, I hope you will tell me, and each other, what problems you face and how you have solved them; what changes in American health care policy, in the workplace and in the community would make your lives easier; what has surprised and inspired you; and how your family has changed, for better or worse, as a result of this intergenerational experience.
Seeking Study Participants in Caregiving Dementia Study
HealthPartners' research foundation and the Center for Spirituality and Healing at the University of Minnesota are recruiting participants through the summer for a study that will seek better means of stress management for people who are caregivers to a family member with dementia. To learn more or sign up, contact Dana McGree at 952-967-5031 or dana.a.mcgree@healthpartners.com.
10 Reasons Long-Term Care Financing Needs to be Reformed in America
Here are 10 reasons why we have to change the way our country pays for long-term care. Please add others:1. The Age Wave is Unprecendented: About 10 million Americans need long-term care today. (Note: Long-term care is an array of services, from home care to assisted living, not simply nursing home care.) By 2020, 12 million older Americans will need long-term care.2. Americans Want More Choice: People want more choices than ever in how they live and receive care. The nursing home isn’t a place they want to choose. Guess what? Many states rely on institutional nursing homes for long-term care. To pay for choices that today’s consumer desires, we have to have new ways to pay for care.3. The Costs are Unsustainable: According to the independent, non-partisan Government Accounting Office (GAO), Medicare, Medicaid (which pays nearly half of all long-term care expenditures)and Social Security will nearly double as a share of the economy by 2035. Today long-term care alone costs federal and state governments $116.8 billion every year. We’ve been able to sustain these entitlements because of a low-depression era birth rates and a large postwar workforce. No more. Absent substantive change, Medicaid, Medicare and Social Security will overwhelm the rest of the Federal budget.4. America’s Savings Rate is Deplorable: Americans are horrible savers. In fact, 2005 and 2006 marked the first time since the Great Depression that American’s charted a negative savings rate in back-to-back years. By 2030, many retirees will not have enough income and assets to cover basic expenditures or any expenses related to aging services.5. Business Production is Taking a Hit: According to the Metlife Mature Market Institute and National Alliance for Caregiving, American businesses lose as much as $33.6 billion in annual revenue because of employees' need to care for their loved ones. That is approximately $2,110 per full-time employee who is also a caregiver.6. Busting State Budgets: On average, state governments spend 18% of their budgets on Medicaid, which pays for all most half of all long-term care costs. These costs are only rising and if left unchecked will crowd out all other spending.7. Americans are Clueless as to What Care Costs: In 2006, according to AARP study, only 8 percent of Americans over 45 could estimate the average monthly cost of what care costs within 20 percent of its actual cost. In an Ecumen study of baby boomers, nearly a third of boomers think that they will use Medicare to pay for their long-term care costs. Sorry … . Medicare won’t pay for costs such as memory care and assisted living.8. Long-Term Care Insurance isn’t the Whole Answer. Only one in five Americans can afford the long-term care insurance policy needed to meet their long-term needs. And even if everyone purchased the best private coverage he or she could afford, Medicaid costs still would triple by 2045.9. A Worker Shortage: According to the U.S. Department of Health and Human Services, the next four decades will see a need for more than 4 million care professionals in the U.S. Who will pay their salaries? We need to change the financing system to attract great professionals to this profession for the long-term. 10. Voters Want Change: The vast majority of Americans say that our health care system is broken and they desire a well-coordinated, integrated, cradle-to-grave system. To have such a system, long-term care/aging services must be part of the solution. According to a 2007 national poll by Genworth and the Mellman Group, voters want long-term care/aging services to be part of national health care reform. Nearly 8 in 10 voters (78%) stated that the presidential candidates should make this part of their health care proposals.
Ecumen CEO Kathryn Roberts Talks Technology in Costco Connection
Costco Connection, the publication for Costco members nationally, recently interviewed Ecumen CEO Kathryn Roberts in an article about how technology is transforming aging and aging services. You can read it here. (Note: you’ll need Adobe Acrobat Reader)
Do You Have $85,000 for Long-Term Care?
Fidelity Investments estimates in a new study released Thursday that a 65-year old couple in 2008 will need $85,000 to insure against long-term care expensesDo you have your $85,000?
Talking Aging With One of Advertising’s Most Strategic Minds
Changing Aging is pleased to interview creative and strategic guru Fred Senn. Fred began his advertising career by managing advertising for First Bank System. Pat Fallon recruited Fred to the agency side at Martin/Williams Advertising and then asked him to be one of the founding partners of Fallon in 1981. Since then, Fallon Worldwide has grown to become one of the world’s most critically acclaimed and creatively driven branding companies. Clients include Sony, Nestlé Purina, Travelers, TIME Magazine, NBC Universal, Holiday Inn Express, and New York Stock Exchange. Fallon Worldwide is a global network of Publicis Groupe, based in Paris, and has 500 employees worldwide. The company has offices in Minneapolis, London, Singapore, and Tokyo.
Fred’s many rolls at the agency included Director of Account Services and later, Chief Learning Officer, running Fallon University, and guest lecturing at the University of Minnesota’s Carlson School of Management.
To mark the 25th anniversary of the firm they founded together, Fred teamed with his partner, Pat Fallon, to write “Juicing the Orange,” a book about applied creativity to business problem-solving, published by Harvard Business School Press.
How do you think the advertising industry is going to have to change for the age wave?
There are three dimensions of change happening simultaneously; first, the demographics, as you suggest. Secondly, even bigger than the age wave changes are the technology advances that change the way we communicate with each other, and how we get our news and entertainment. And third, we are beginning to see a values shift from a consumption based society to more of an experiential based society. These changes are so radical they will render our traditional business model obsolete. Nimble evolving organizations will prosper.
We hear that people are going to work longer. The ad industry has been one that seems to be dominated by youth. Do you think we’ll see more people working longer in advertising?
With these changes, especially in technology, it’s going to be hard for those of us who are older to maintain our relevance. The tool kit has changed, and too few of us are facile with the new technology tools. What we do bring to the table is strategic wisdom, and the ability to focus on the horizon. But, we have got to keep learning ourselves if we hope to have a voice.
Some commentators say today’s advertising misses the mark is ageist. What do you think?
I don’t see that we are misrepresented more than any other demographic group. We are in an era of equal opportunity misrepresentation. I work in a place where the average age is younger than my kids. I take hits about being in the seventh decade of life every day. Get used to it, and get beyond it.
The Dove Real Beauty campaign has been very successful. Do you envision more advertising featuring 'real people?'
Yes. Any form of storytelling asks its audience to identify with the characters. For too long we relied on aspirational characters €“ actors and models younger and prettier than those that inhabit our everyday world. People are jaded by that cliché. Smart communicators will rely on people with whom their audience can relate.
What do you think will be the characteristics of the new 'consumer majority,' those people 60+?
I think the very term €˜consumer’ is losing its relevance. As the bumper sticker says, “The most important things are not things.” Our own society is going to have to shift away from consuming, because we are going to be sharing resources with millions of others emerging from poverty around the world. I hope those of us who are over 60 can set the example, and reassure others that it’s the right thing to do, and not all that much of a sacrifice in the big picture. Our consumption habits in this country have created some very odd behaviors that we’d be better off without.
What is your vision for living in your 80s or 90s?
I’ve been inspired by my elders who do three things simultaneously. They are learners. They are teachers. And they are active beyond imagination, physically, mentally and emotionally. I’m going to try and follow their example.
I have learned that I make countless little choices every day that matter. The best way to make sure I get the big ones right is to practice on the little ones.
Changing Aging in America: It’s in Our Hands Says Ecumen CEO Kathryn Roberts
I encourage you to take a few minutes to read two articles that appeared in the Minneapolis Star Tribune on Sunday (links below). They provide insightful context to the tremendous opportunities for innovation in our profession, and Ecumen’s role in living our mission, vision and values to help lead and shape that change.
We Want to Be the Choice for Customers’ New Choices
The first story, The New Idea in Elder Care: Membership, outlines the work we and another Twin Cities-based senior services provider, DARTS, are doing to adapt Boston’s Beacon Hill Village “virtual retirement community” model in Minnesota. The Ecumen project is in Minneapolis, and it’s called Mill City Commons. It’s being designed to empower people to “age in place,” so they have the choice not to leave the neighborhood they love if they don’t want to. It also leads with the social dimension of successful aging rather than the medical dimension, while integrating both. Mill City Commons is paradigm-shifting work that’s challenging us to deliver our mission of creating home in a new way, while underscoring our vision for changing aging: We envision a world in which aging is viewed and understood in radically different ways.
We’re Making Change, Instead of Waiting for it to Happen
Star Tribune political columnist Lori Sturdevant writes in the second column Budget-Hungry Nursing Homes are So Last Century how 70% of the government dollars spent on long-term care in Minnesota goes to nursing homes. That’s not sustainable public policy, and it doesn’t match up with what consumers want. That’s why we’ve been diversifying €“ and will continue to diversify - our services across Ecumen.
The column commends our profession for “looking forward,” and highlights a citizen’s workshop held last week by the Citizens League, a leading non-partisan public policy organization. The workshop, which involved several Ecumen people focused on shaping ideas for providing and financing aging services. Ecumen helped convene the workshop as part of our commitment to shaping “what’s next.”
Two forces are coming full speed at our profession and country: new consumer expectations and needs to finance senior services in new ways. What an incredible time to be where we are today: making change instead of waiting for it to happen to us.
Changing the Aging Services Paradigm at Ecumen: Vitalize! Wellness Center
Yoga. Massage. Tai Chi. A salt-water pool. Personal trainers. Bike racks. And a Wii machine.What could be mistaken for an upscale spa or gym is actually a glimpse of the future of aging unfolding in Chisago City. Read the Minneapolis Star Tribune article on the Vitalize! Wellness Centre at Ecumen’s Parmly LifePointes community. Or see the Vitalize! video here.
Long-Term Care Financing Solutions: AARP
Earlier we blogged here about the long-term care financing forum at the University of Minnesota. One of the solutions put forward came from AARP. Here are highlights from Enid Kassner, director, Independent Living/Long-Term Care Public Policy Institute. Next we’ll share an approach from the American Association of Homes and Services for the Aging.AARP’s Goal:Create an affordable, consumer and caregiver-focused system providing coverage for, and access to, high quality long-term services and supports for independent living.1. Promote - nationally and in the states - reform of delivery and financing for long-term services and supports.2. REFOCUS reform debate on providing: long-term services and supports for independent living … rather than on 'long-term care' or 'Medicaid Reform.'3. Include ALL opulations, people with: developmental disabilities and physical disabilities . . . while improving services for seniors.4. Defin 'long-term services and support system' as FOUR separate, but related components:1. Caregivers2. Housing3. Health Care4. Long-Term and Community-Based Supportive Services… . plus mechanisms to finance each component.FIRST: Revamp Medicaid- Revamp Medicaid as one vehicle for both: System financing ---- structural reform.- See that proposed reforms: promote increased home and community-based services and cover additional services, populations- Eligibility: move from 'categorical' to 'financial means plus functional need.' Oppose restrictive changes to eligibility and services- Oppose mandatory, risk-based managed care, but recognize managed care can be vehicle for reform.SECOND - Delivery Reform- Support for family caregivers: respite services, financial help, single point-of-entry, navigation assistance- Workforce development and quality: recruitment, retention; enhancing image of workers; promote workforce training by U.S. schools, esp. community colleges- Consumer-directed programs for obtaining needed services- Quality measures and incentives- Regulations and standards- Support Innovative Models for long-term services and supports: - Endorse, help expand and fund effective, existing, new or demonstration models and promising state models for financing and care delivery. - Use states' efforts as means for galvanizing a national FOCUS ON REFORM- Encourage personal planning for and family conversations about long-term care- Motivate consumers to demand more options for long-term services and funding- Promote products and services that help consumers with decision making, navigationTHIRD - System Reform- Federal disablity-based insurance system that protects ALL Americans.- Expanded chronic care coverage and management under all insurance programs- Navigation help - and financial help - for informal caregiversLONG-TERM CARE REFORMED1. Rebalanced Medicaid to emphasize home and community-based care2. Single point of entry and navigation help3. Supports for informal caregivers4. Chronic care management under Medicare5. Quality improvement throughout6. Consumer-driven options7. Workforce development8. Insurance against disability for allFINANCING THIS APPROACH1. Medicaid Rebalancing- Older Americans Act and state funding2. Delivery System Reforms- Medicare with chronic care funding- Tax credits for caregivers- Home equity options- Private insurnance3. Federal InsuranceValue added tax dedicated to health care and long-term care