Stephen Moses
Stephen Moses is president of the Center for Long-Term Care Reform, Inc., a private institute dedicated to ensuring quality long-term care for all Americans by promoting public policy that targets scarce public resources to the neediest, while encouraging people who are young, healthy and affluent enough, to take responsibility for themselves.
The Center’s efforts expand upon Moses’ seminal research as a senior analyst for the Health Care Financing Administration and for the Inspector General of the U.S. Department of Health and Human Services. Through frequent speeches to national audiences, hard-hitting reports, and its popular "LTC Bullets" on-line newsletter, the Center for LTC Financing quickly became the preeminent advocate for a rational and financially viable long-term care financing system.
Monday, June 30, 2008New Videos on Long-Term CareBy Stephen MosesCategories: Long-term careTwo new short videos about the financial problems associated with financing long-term care (LTC) are now available from the LTC Consciousness Tour Channel on YouTube. Check out the brief conversations on critical topics with Michael Cannon, director of health policy studies at the Cato Institute and with Paul Hewitt, executive director of Americans for Generational Equity. Take heed. These are two of the best minds in the business of finding rational public policy solutions for the retirement financing crisis America faces.
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Monday, June 2, 2008Medicaid and Home-Based CareBy Stephen MosesCategories: Long-term care, MedicaidThe federal law known as the Deficit Reduction Act of 2005 opened more opportunities for states to shift from institutional care to home and community-based and consumer-driven care. What's happened since its implementation? A study (PDF) from the National Association of State Medicaid Directors summarizes progress so far, which has been and will remain minimal. One key finding: eligibility for Medicaid was tightened under the DRA and state responded.
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Friday, May 30, 2008Medicaid and Crowding Out of Long-Term Care InsuranceBy Stephen MosesCategories: Long-term care, MedicaidA recent publication on long-term care (page down for citation) demonstrates a common misrepresentation of the analysis of the problems of long-term care I put forth in Aging America’s Achilles Heel: Medicaid Long-Term Care, which was published by the Cato Institute in 2005. First, the misunderstanding:
Now this is a typical misrepresentation of my analysis. The predominance of Medicaid financing of LTC has stopped people from thinking about LTC risk and cost. That's why Medicaid crowds out LTC insurance, not that consumers consciously think about the issue, which they don't until in crisis. Regarding transfer of assets, its prevalence is not critical to my analysis. It's only the straw that breaks the camel's back. The big problem is that most people qualify for Medicaid LTC without asset transfers or other kinds of Medicaid planning. * The NIC Compendium Project: A Guide to Long-Term Care Projection and Simulation Models, December 2007, Final Report Prepared for Robert G. Kramer and Anthony J. Mullen, National Investment Center for the Seniors Housing & Care Industry. Prepared by Joshua M. Wiener, Ph.D. Marc P. Freiman, Ph.D. David Brown, M.A. RTI International, Health, Social, and Economics Research. Proprietary, for sale, no URL.
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Wednesday, August 8, 2007Poor Subsidize the RichMedicaid match favors wealthiest states By Stephen MosesCategories: MedicaidWhile the federal matching formula for Medicaid is meant to assist less-prosperous states, it actually results in subsidizing the expansive programs of the wealthiest states. For example, while Kansas has a higher federal matching ratio than New York, New York gets twice as much per poor person as does Kansas. A policy brief for the Kansas-based Flint Hills Center for Public Policy, called Medicaid's Raw Deal, has more.
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Friday, March 9, 2007Do Health Care Partnerships Work?By Stephen MosesPeople often ask me how they can help promote adoption of a Long-Term Care Partnership program in their state. On February 20, Ralph Leisle, member of the Center for Long-Term Care Reform, Inc., took the proactive step of testifying in the Colorado state legislature in favor of a bill to implement the LTC Partnership. Here’s an slightly edited version of his testimony. ------------------------- To project future value of implementing LTC Partnership, let's analyze the impact of one age 55 Colorado resident purchasing LTC and needing care at age 81. If eventually eligible for Medicaid, without insurance, this individual will likely rely on Medicaid earlier and longer. For illustration purposes, let's assume a dollar for dollar benefit to Medicaid for each insurance claim paid. Likewise, we can project insurance value to the consumer versus self-funding a like care event. In the fall of 2006, the Colorado statewide average Medicaid reimbursement for facility care was $166 per day. Rounding that to $170 per day for 2007 and assuming a 5% average annual cost increase, we can make important projections. The following projections look at future cost of care; the cost of insurance to cover that care; and the relative value of insurance versus self-funding, or relying on Medicaid. CARE COST PROJECTIONS At age 81, daily cost will be $576, or $210,000 the first year and $662,000 for a three-year care event. This amount times however many people bought LTC insurance, avoiding Medicaid, will be the cost savings to Medicaid. INSURANCE DESIGN AND PREMIUM ASSUMPTIONS Insurance covering the 3 years except for a 30-day deductible at the beginning of care for a single individual will be about $2100. In other words, the insurance design for this scenario was created to cover the expected 3 years of insurable care fully, except for the deductible. The premium will be higher or lower depending on health ratings and discounts. For example, discounts of 30 to 50% if two insured in the same household. The policy quoted covers eligible services for the full continuum of care from home through assisted living and nursing home. IS LTC INSURANCE A GOOD DEAL? Assuming a 4% discount rate (investment opportunity cost or after tax rate of return) of all cash flows, we can project insurance value versus self-funding a like care event. Claims paid are $645,000 of the $662,000 cost of care, the balance being the 30-day deductible. The Net Present Value (NPV) of the premium and claims payment cash flows is $190,000. Another way to understand NPV is that if the consumer prefers the investment route, if assuming a 4% after tax rate of return, a lump sum deposit of $190,000 and adding to it the premium amount at the beginning of each year, will accumulate the same amount paid by the insurance carrier in claim payments at time of care. Internal Rate of Return (IRR) is 15.4%. If depositing only the premium amount to try and self fund a care event, a 15.4 % after tax rate of return will be needed all years through the care event. Premium break-even point is 165 days of claim payments. This means once claims begin, the insured will have received in claim payments the entire premium amount paid plus investment opportunity cost to that point in time. In this investment scenario, we are assuming care won't be needed for 26 years. In the event needed earlier, the investment strategy will be even more inadequate. The data indicates to the extent LTC Partnership is a catalyst for more citizens to be self-reliant and avoid, or reduce, dependence on Medicaid, everyone wins. An important but separate topic is the unsustainable financial course Medicaid is on as the demographics of our state and nation changes to proportionately fewer working taxpayers, supporting an increasing number of high needs citizens.
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