Nursing Home Closures Set Stafe For 2-Class System

January 12, 2011.  A five percent drop in available nursing home beds across the United States have affected many but worst hit are poor, urban neighborhoods.

According to new research, the country's minority population is aging at a steeper rate compared with the white population.  The study conducted by the Center for Gerontology and Health Care Research at Brown University in Providence, R.I. found that the potential need for long-term care is rising fastest in minority communities, even as nursing home closings are happening more often in their areas.

"The impact of nursing home closings on minority and low-income communities will have all sorts of implications in terms of access and quality of care issues for all,"  states Jesse Slome, executuive director of the American Assopciation for Long-Term Care Insurance.  "We are heading to a twp-class society, those who can pay and those dependent on whatever government programs exist."

The study findings, published in the Archives of Internal Medicine, explored nursing home trends and analyzed information drawn from the National Online Survey Certification and Reporting database on closings of Medicare- and Medicaid-certified facilities between 1999 and 2008.

During that time, the research team found that 11 percent of stand-alone nursing homes (1,776) and almost half (1,126) of all hospital-based nursing homes in the country shut their doors. Together, they represented a loss of 16 percent of all Medicare/Medicaid-certified nursing homes and nearly 97,000 -- or more than 5 percent -- of nursing home beds.

Using U.S. Census data from 2000, the authors further noted that overall closure rates were about twice as high in zip codes that are home to low-income and minority (black/Hispanic) communities than in the richest zip codes.

Nursing homes in zip codes comprised primarily of Hispanic or black residents were 37 and 38 percent more likely, respectively, to close than those in areas with the fewest Hispanics or blacks.

The team concluded that nursing homes in minority and low-income communities are bearing the lion's share of financial pressures and closures, which raises concerns about rapidly diminishing senior care options and the quality of the remaining facilities in those places.

Experts explain that people in low-income neighborhoods who use nursing homes are generally Medicaid recipients, whose reimbursement rates are lower than the fees of private-pay patients. The result is that those places that care for these patients are more likely to close.

More than 27 million Americans will need long-term care by 2050, nearly twice as many as in 2000.  Either the federal government will have to increase the reimbursement rate for nursing home services, or state and federal policies will have to fund less expensive -- and perhaps more preferable lifestyle -- options, such as assisted living, the study researchers concluded.  Otherwise, only the wealthy will have access to nursing homes, the authors said.

Medicaid Must Change; Middle Class Most Impacted

The following is from an excellent story in the New York Times (link below).   The inability of taxpayer-paid programs (Medicaid specifically) to pay mounting bills for long-term care will mandate changes in the current system.
For that reason, the American Association for Long-Term Care Insurance urges education and advocates planning.  If you are age 50-to-60, and middle class this is especially vital.  If Medicaid (taxpayers) are strapped today ... you can only imagine what it will be in 20 or 30 years.
Here's the blurb from the NY Times and the link to the full article.

Last year, more than 1,200 people in New York City officially turned their backs on their husbands and wives to qualify for Medicaid, triple the number of people five years ago. The practice, known as “spousal refusal,” is becoming more common as the population ages and the cost of nursing care rises — and it is coming under increasing attack by government officials looking to curb ballooning Medicaid expenses.
In a recent report, Lt. Gov. Richard Ravitch warned that spousal refusal could be abused as “an entitlement for the less needy” and urged state officials to rethink it, noting that long-term care accounts for nearly half the state’s Medicaid spending.

Lawyers for the elderly argue the tactic of spousal refusal is legal nationwide, and it is most commonly used in New York and Florida, where 136 people refused to support a sick spouse last year.

Without the option of spousal refusal, lawyers say, American health care is like a ghoulish lottery. Those who need doctors’ care for illnesses like cancer or heart disease are covered by Medicare, the insurance program for the elderly, while those who need more custodial care for Alzheimer’s or stroke must pay for it themselves or dispose of their assets to qualify for Medicaid.

The federal government allows a healthy spouse to keep a house, a car, up to about $2,700 a month in income and up to about $110,000 in other resources. Anything above that must be spent on nursing care before Medicaid kicks in.

http://www.nytimes.com/2010/12/12/nyregion/12medicaid.html?_r=1

Read the American Association for Long-Term Care Insurance's guide about reducing the cost of long-term care insurance. Click here.  http://www.aaltci.org/free-guide.

Nursing Home Industry Fear Republican Medicaid Cuts

The nursing home industry is concerned about pending Medicaid cuts following the Congressional changeover.

A Republican-controlled House is unlikely to extend the enhanced Medicaid funding for states in last year's Recovery Act, the head of a nursing home trade association said Monday.

A return to the initial federal share would be particularly painful for nursing homes and assisted living facilities, who rely on Medicaid to pay about two-thirds of their patients' bills.  "Everybody wants the government to pay without raising taxes and that's not possible," explains Jesse Slome, director of the American Association for Long-Term Care Insurance.  "As people understand Medicaid doesn't pay or forces you to into unacceptable situations, more will see the value in private insurance."

At a roundtable discussion in Washington, Bruce Yarwood, president and CEO of the American Health Care Association, said the situation will force a discussion on long-term care, which he said was hardly addressed during the healthcare reform debate.

As lawmakers respond to voters' concerns about the deficit and cut back on Medicaid and Medicare, a long-term care sector that relies on government spending to cover about 85 percent of its patients faces a crossroads.

Looking ahead, I have to say I am concerned about the significant wrangling we already see developing between the state and federal governments in regard to Medicaid and the federal healthcare reform law, Yarwood stated.

Home Health Benefits Face Likely Medicare Cut

Medicare Home Health Benefits Likely Cut

Home health care providers face likely Medicare payment cuts next year according to experts.

According to a report published today, two companies, Gentiva Health Services and Amedisys are among the providers of at-home health care to receive lower Medicare payments next year under U.S. government changes to the program.

A 4.89 percent reduction in home health spending for the elderly is among annual modifications in Medicare affecting hospitals, doctors and providers in the United States. Most rates take effect in January, though payments for doctors start to drop Dec. 1, the Centers for Medicare and Medicaid Services said in a statement this week.

"Cuts are consistent with a need to reduce expenditures at the Federal level," explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance.  "The recent election showed that the populace doesn't want the government borrowing and spending money it doesn't have.  It's very likely more cuts will be coming."

A panel that advised Congress on Medicare issues found in 2008 that home health agencies were making 17 percent profits on their Medicare business.

"If you are in your 50s and counting on Medicare to look the same when you qualify for benefits, you are likely to be surprised," concludes Slome. 

Medicaid's Growth Will Strain States

While the federal government will pay much of the costs related to the Patient Protection and Affordable Care Act (PPACA), states will still find their share unaffordable. 

That's the analysis reported by Devon Herrick, a senior fellow with the National Center for Policy Analysis.

The Patient Protection and Affordable Care Act (PPACA) is expected to add up to 16 million more Medicaid enrollees and will significantly expand eligibility for families with incomes up to 133 percent of the federal poverty level. The PPACA requires states to streamline their enrollment process - making it easier for eligible populations to enroll and retain Medicaid coverage.

Initially, the federal government will pay 100 percent of the cost of the newly eligible, newly enrolled populations and 95 percent of costs through 2019. However, there are hidden costs that will strain state budgets.

According to various estimates, there are 10 million to 13 million uninsured people who are already eligible for Medicaid - but not enrolled. When the individual mandate to obtain health coverage takes effect in 2014, many of the uninsured are likely to be swept up in outreach efforts, Herrick reports.

Although the cost of enrolling newly eligible individuals will be paid by the federal government, the cost of covering those previously eligible for Medicaid must be paid for under the current federal matching formula. Many states will find the cost of their Medicaid programs higher as a result. 

For example, a decade after the PPACA's implementation, Texas Medicaid rolls are predicted by the Texas Department of Health and Human Services to rise by 2.4 million people.  Of these, only 1.5 million enrollees will be newly eligible. About 824,000 individuals will be those previously eligible but not enrolled. The federal government will contribute a much smaller share of the cost of these previously eligible enrollees compared to newly eligible enrollees.

On the average, reimbursements for Medicaid providers are only about 59 percent of what a private insurer would pay for the same service, but it varies from state-to-state.   The reports notes that New York pays primary care physicians only about 29 percent of what private insurers pay for primary care.

Many of the newly insured under Medicaid will likely be those who previously had private coverage. Research dating back to the 1990s consistently confirms that when Medicaid eligibility is expanded, 50 percent to 75 percent of the newly enrolled are those who have dropped private coverage. In addition, a 2007 analysis by MIT economist Jonathan Gruber, found, on average, about 60 percent of newly enrolled children in State Children's Health Insurance Program were previously covered privately. Thus, it is reasonable to conclude that much of the increase in Medicaid rolls will be individuals who were previously privately insured, meaning the number of uninsured will not fall as expected.

"Everyone wants something for nothing forgetting that someone ultimately has to pay the cost," explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance.  "In two decades we will have two classes of citizens.  Those with the means to pay will have choice and control of their care.  Everyone else will depend on whatever taxpayer-paid government programs exist."

Record Poor Will Impact Long Term Care Services

A record number of Americans signed up for Medicaid last year and experts warn it will impact those needing long term care.

According to a report released by the Kaiser Family Foundation enrollment in Medicaid, medical insurance program for the poor, increased to more than 48 million - a record 15.7 percent share of the U.S. population.  

"There will be two classes of Americans, those who will have to accept whatever care the government programs can afford, and those who have assets or insurance to pay," explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance.  "People in their 50s today are in for a real shock unless they expect things to get much better."

With the economy barely improving, states are forecasting a 6 percent increase in the rolls next year, meaning another strain on their cash-depleted budgets. The Medicaid numbers are the latest piece to emerge in a grim statistical picture of the recession's toll.

The ranks of the working-age poor climbed to the highest level since the 1960s last year, according to a recent Census report. Nearly 12 million households received food stamps, a record.

The $814 billion federal economic stimulus plan passed last year provided extra funding for states for Medicaid, in the hope of covering the costs of the increased number of enrollees and of freeing up state budgets for spending in other areas.

The plan helped states drop their spending on Medicaid, which can take up a third of their budgets, by 7.1 percent in fiscal 2010 and by 10.9 percent in fiscal 2009, Kaiser found. But even with the U.S. government shouldering a greater share of the burden, states were forced to make cuts. In fiscal 2010 48 of the 50 states made cuts to some part of their Medicaid programs, according to the report. In fiscal 2011, 46 states intend to cut back on Medicaid spending.

Altogether, 20 states restricted the types of benefits enrollees could use in fiscal 2010, the largest number since records began in 2001.