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Addressing the Challenge: Public and Private Solutions for Long-Term Services & Supports
Long-Term Care Financing Advisory Committee Meeting
October 15, 2009For Advisory Committee
Policy Discussion Purposes
University of Massachusetts Medical School EBD Consulting
Services, LLC 2
Outline of the Presentation
Public Awareness Campaign Informal Caregiver Supports Setting the Stage for Comprehensive Reform
Goals and Principles Review of the Challenge
Solutions that hold Promise for Massachusetts The Long-Term Care Partnership Program (LTCP) The Contribution Program Cost & Impact Analysis MassHealth Data & Analysis
Committee Business
10/15/09 For Advisory Committee Policy Discussion Purposes
Public Awareness CampaignA public awareness campaign to increase
understanding of LTS options & financing
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For Advisory Committee Policy Discussion Purposes
Why Encourage Adults to Plan for LTS?
Complement other statewide I&R activities Address public concern that the demand for
LTS will exceed available resources• Educate about shared public/private responsibility
Improve quality of life in later years• Support individual preferences, choice and dignity• Enable families to support aging relatives
• Encourage proactive LTS planning• Help future generations to maintain financial security • Avoid/reduce Medicaid costs
4
For Advisory Committee Policy Discussion Purposes
Elements of CMS Campaign
State role Solicit Governor’s buy-in Pay for initial mailing of
letter/brochure Issue press release/ hold
press conference Other activities as desired
TV, radio ads Educational sessions Website-800AGEINFO
CMS role Print Governor’s letter/
brochure Arrange initial mailing Produce toolkit (booklet/CD) Staff call center Distribute toolkit to callers
(including mailing charges) Provide technical
assistance & other materials
5
For Advisory Committee Policy Discussion Purposes
Campaign Materials
Governor’s Letter
Brochure
Booklet and CD
6
For Advisory Committee Policy Discussion Purposes
Chapters of Campaign Booklet Introduction Embrace the future! Where should I start? Lifestyle planning Legal and estate issues Staying at home Financial Planning for
LTS
LTC Insurance Reverse Mortgages Additional options
available in Mass Planning for your Care For more information
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For Advisory Committee Policy Discussion Purposes
Planned activities
Initial Mailing • Approximately 450,000 households
Other components• TV/radio ads• Educational sessions• Website
8
For Advisory Committee Policy Discussion Purposes
Next Steps & Timetable Finalize campaign materials 10/23/09 Solicit Governor’s Buy-in 11/01/09 Print materials 12/15/09 Update 800AGEINFO Website 12/30/09 Launch campaign 1/15/10
Governor’s press conference Public service ads Initial mailing & responses
Regional educational sessions 4/10-6/10 Campaign funding ends 9/30/10
9
For Advisory Committee Policy Discussion Purposes
Informal Caregiver Support
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For Advisory Committee Policy Discussion Purposes
Informal Caregivers provide an immense amount of LTS in Massachusetts Informal Caregivers provide about 36% of the LTS received by
elders nationally1
In Massachusetts, there are about 690,000 informal caregivers of people of all ages at any given time, and about 1,040,000 at any time during the year2
These caregivers provide the equivalent of $8.9 billion worth of care Nationally, 17% of informal caregivers provide 40+ hours per week
of care, 8% provide 21-39 hours, 23% provide 9-20 hours, and 48% provide 8 hours or less3
1 Hagen, S. Financing Long-Term Care for the Elderly, Congressional Budget Office, April 2004.2 National Family Caregivers Association & Family Caregiver Alliance. (2006). Prevalence, Hours and Economic Value of Family
Caregiving: Updated State-by-State Analysis of 2004 National Estimated by Peter Arno, PhD. Kensington, MD & San Francisco, CA: FCA.
3 National Alliance for Caregiving and AARP. Caregiving in the U.S. Bethesda: National Alliance for Caregiving, and Washington, DC: AARP, 2004.
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For Advisory Committee Policy Discussion Purposes
The majority of Informal Caregiver supports are currently offered through Elder Affairs
* Respite is also disparately available through MRC and its SHIP program, MCB, and DDS
Types of Program Program Agency
Training and Support including counseling, support groups, and training
Family Caregiver Support Program
Elder Affairs
Information and Assistance, programs that assist caregivers in accessing supports in the community
Family Caregiver Support Program
800-AGE-INFOMADIL
Elder Affairs
Elder AffairsEOHHS
Respite* programs that provide informal caregivers with a break from their caregiving responsibilities
Family Caregiver Support Program
Home Care Respite ProgramHCBS Waivers
Elder Affairs
Elder AffairsMassHealth with Elder Affairs, DDS, MRC
Other Programs that can provide support to informal caregivers including financial assistance
Adult Day Health and Supportive Day
PCA (by paying family members)AFC (by paying family members)
Elder Affairs & MassHealth
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For Advisory Committee Policy Discussion Purposes
Given the number of Informal Caregivers in the state, very few are receiving publicly-funded services
Sources: Executive Office of Elder Affairs and MassHealth.1 Family Caregiver Support program expenditures include federal Title III-E, state and local funds. 2 FCSP utilization numbers are the only ones that are unduplicated. 3 Does not include DDS Expenditures
Programs that offer Caregiver-Specific Services
State Expenditures
Utilization2
Family Caregiver Support Program1
In-Home & Other Respite $611,500 1,046
In-home counseling, Support Groups, & Caregiver Training
$1,960,000 7,049
General Information and Referral $1,300,000 13,449
Home Care Respite Program $6,800,000 30,696
Elder & TBI Waiver $41,4443 134
Totals $10,712,944 52,889
Additionally, DDS provided 515 “respite opportunities” in 2009.
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For Advisory Committee Policy Discussion Purposes
There are other services that support Informal CaregiversAdult Day Health: provides daily respite for caregivers. No data
collected by MassHealth on how many participants have caregivers. FY08: $62,700,000 6,998 MassHealth clients in FY’09 - 923 in Complex level of care, which
means they meet NF LOC, and are therefore likely to have caregivers at home
Adult Foster Care: allows family members to be providers, paying them for providing care for individuals who live in their home. No data collected on how many providers are family members.
Personal Care Attendants (PCA): Allows clients to hire family members as PCA. In the past year, 5,005 PCAs were hired family members, which is 19% of
all PCAs hired.
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For Advisory Committee Policy Discussion Purposes
Training Informal Caregivers reduces other LTS costs
In one key study, training and support programs created a median delay in nursing facility placement of 577 days, or 1.5 years*
A randomized 17-year-long study of 406 spouse caregivers of individuals with Alzheimer’s Disease
Intervention was two individual and four family counseling sessions tailored to specific situation, encouragement of support group participation, and the availability of ad hoc telephone consultation.
* Mittelman, M.; Haley, W.; Clay, O.; Roth, D. Improving caregiver well-being delays nursing home placement of patients with Alzheimer disease. Neurology 2006;67(9):1592-9.
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For Advisory Committee Policy Discussion Purposes
Paying Informal Caregivers could address a number of issues related to LTS financing
Decrease other LTS costs1
Increase pool of possible workers Expand access to LTS for rural areas Raise questions about familial responsibility and
substitution of care
1 Dale, S., and Brown, R. Reducing Nursing Home Use Through Consumer-Directed Personal Care Services. Medical Care. 44(8):760-767, August 2006. Brown, R., Carlson, B., Dale, S., Foster, L., Phillips, B., and Schore, J. “Cash & Counseling: Improving the Lives of Medicaid Beneficiaries Who Need Personal Care or Home and Community-Based Services.” Princeton, NJ: Mathematica Policy Research, Inc., August, 2007
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For Advisory Committee Policy Discussion Purposes
Possible Short-Term Actions to improve Informal Caregiver Supports Increase awareness, and therefore utilization, of existing
supports through increased outreach and education
Understand whether and why many caregivers do not get information they need and can use about available supports
Encourage implementation of evidence-based programs for caregivers of people with disabilities across the lifespan
Press for full funding of the National Lifespan Respite Care Act
Press for increased funding for National Family Caregiver Support Act
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For Advisory Committee Policy Discussion Purposes
Setting the Stage for Comprehensive Reform
University of Massachusetts Medical School EBD Consulting
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CF Olmstead Plan goals1. Help individuals transition from institutional care.
2. Expand access to community-based long-term supports.
3. Improve the capacity and quality of community-based long-term supports.
4. Expand access to affordable and accessible housing with supports.
5. Promote employment of people with disabilities and elders.
6. Promote awareness of long-term supports.
1910/15/09
University of Massachusetts Medical School EBD Consulting
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For Advisory Committee Policy Discussion Purposes
LTC FAC Advisory Committee goalTo identify and prioritize short-term and long-term strategic
options for reforming the financing system for LTS for elders and individuals with disabilities in Massachusetts to support a range of LTS and a sustainable mix of personal and familial responsibility, private financing mechanisms and public assistance in a manner that:
maximizes independence; and assures access to the necessary continuum of LTS.
2010/15/09
University of Massachusetts Medical School EBD Consulting
Services, LLC
For Advisory Committee Policy Discussion Purposes
CF Olmstead Plan principles1. People with disabilities and elders should have access to community
living opportunities and supports.
2. The principle of “community first” should shape policy development and funding decisions.
3. A full range of long-term supports, including HCBS, housing, employment opportunities and nursing facility services, are needed.
4. Choice, accessibility, quality, and person-centered planning should be the goals in developing LTS.
5. Systems of community-based care and support must be strengthened, expanded and integrated to ensure access/efficiency.
6. Public and private mechanisms of financing LTS must be expanded.
7. LTS must address the diversity of individuals with disabilities and elders in terms of race, ethnicity, language, ability to communicate, sexual orientation, and geography.
2110/15/09
University of Massachusetts Medical School EBD Consulting
Services, LLC
For Advisory Committee Policy Discussion Purposes
LTS Financing Principles (Draft 2)The reformed LTS financing system will:
1. Ensure a strong public safety net for the poor and most vulnerable.
2. Limit financial pressure on the state financing system so that state funds are preserved for those most in need.
3. Encourage personal responsibility for financing LTS to the maximum extent possible.
4. Enable middle income people of all ages to access the LTS they need without becoming impoverished.
5. Ensure appropriate participation of and support for informal caregivers.
2210/15/09
University of Massachusetts Medical School EBD Consulting
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Other Olmstead Plan and Community First Activities
Olmstead Plan objectives available online at www.mass.gov/hhs/communityfirst
December meeting will include discussion of related activities around the following topics: Transportation Employment Housing Workforce Development Care Integration Information and Awareness Consumer Choice / Self-Direction
2310/15/09
University of Massachusetts Medical School EBD Consulting
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For Advisory Committee Policy Discussion Purposes
People with LTS Disabilities who need assistance with Self-Care or Every Day Tasks
*Does not include persons who were: institutionalized, in military group quarters or college dormitories, or unrelated individuals < age 15. Source: 2007 American Community Survey (ACS), US Census Bureau, tabulations by authors.
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For Advisory Committee Policy Discussion Purposes
Need for LTS Resources (Informal and Financial) Depends on Time in Need AND Type of Services UsedSimulated Distribution of Years of LTSS Need at 65
Kemper (2005)10/15/09 25
University of Massachusetts Medical School EBD Consulting
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For Advisory Committee Policy Discussion Purposes
Distribution of LTSS SpendingSimulated for 65-year-old (2004)
Kemper (2005)10/15/09 26
University of Massachusetts Medical School EBD Consulting
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For Advisory Committee Policy Discussion Purposes
University of Massachusetts Medical School EBD Consulting
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Low High
FINANCIAL RESOURCES
High
LTSNEED
Low
Medicaid & Other State
Programs Personal Resources(includes Informal Caregivers)
Medicaid Spend-down
Current LTS Financing System
LTC Insurance
State Programs
10/15/09
For Advisory Committee Policy Discussion Purposes
Zero in on the Challenges
The Elderly Substantial Need: 68% of the Elderly Need Care Medicaid is the Only Option for Many Private LTC Insurance is Unaffordable for Low/Middle Incomes Middle Income Spend Down to Medicaid Upper Income fare best today Limited community-based care
The Under 65 Disabled Private LTC Insurance is an option only before become disabled Limited community-based care MassHealth CommonHealth is only option for many
10/15/09 28
University of Massachusetts Medical School EBD Consulting
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For Advisory Committee Policy Discussion Purposes
Solutions That Hold Promise For Massachusetts
University of Massachusetts Medical School EBD Consulting
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For Advisory Committee Policy Discussion Purposes
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Today’s Presentation for the LTC FAC
Responds to the Goals of the Advisory Committee Responds to the LTS Financing Principles of the Committee Introduces Public & Private Models to Finance LTS Recommends a Model for Massachusetts
10/15/09
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How to Evaluate Each Model
Target Population How many people will benefit from the model? Who will not benefit?
Benefit Coverage What benefit does the model offer? Does it meet the need? How much long-term services & support coverage does it provide?
Costs (Costs and Savings Impact Analysis) Who bears the costs? Is it cost effective?
Is this a solution for today or tomorrow?
10/15/09
For Advisory Committee Policy Discussion Purposes
Cut to the Chase: There is No Silver Bullet!
Each existing model leaves someone out
Existing models offer partial solutions
Our Challenges: How can we design our model to achieve our goals? Can we combine models to improve coverage? How can we improve upon existing models?
10/15/09 32
University of Massachusetts Medical School EBD Consulting
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For Advisory Committee Policy Discussion Purposes
Preview: Where we might end up
A Complementary approach Private Insurance:
Expand to Middle Income people Public Insurance:
Meet the Challenge of Covering Disabled & Middle Income people Medicaid: Adjust to fill gaps
Massachusetts as a State Laboratory Massachusetts embraces its role as a State Laboratory for Change Take what exists and improve upon it Start small
10/15/09 33
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University of Massachusetts Medical School EBD Consulting
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Two Models that Hold Promise for Expanding Coverage
Two Models to Insure the Elderly & Disabled Privately sponsored: The LTC Partnership Program Publicly sponsored: The Contribution Program
“Walk-Through” of Each Model Background Key Bullets The Pros & Cons of Each Model Changes for Massachusetts Where does it leave us?
10/15/09
For Advisory Committee Policy Discussion Purposes
University of Massachusetts Medical School EBD Consulting
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Privately Sponsored: The LTC Partnership
Private Insurance for Long-Term Care (or LTS) Focused on currently healthy people planning for future LTS need Represents an alliance between State Government & Private Industry RWJF 1988 grants to states
Goals of the LTC Partnership Program Reduce Medicaid LTC Costs Protect Consumers from Impoverishment & Protect some/all assets Offer Consumers “back-end” protection: “Asset Disregard Incentive” Connecticut Case Study: An Early Pioneer in the LTC Partnership
Handout: “Connecticut Case Study: 101,”Prepared for Committee Meeting, 10/15/09
10/15/09
For Advisory Committee Policy Discussion Purposes
The Connecticut Case Study: Key Bullets
Who wins? Upper Income Persons Lower out of pocket costs for those who use care
Who loses? Middle Income and Disabled Persons Left Out
What about the costs and savings? The Verdict is Out on Medicaid Savings Program is solvent, so far
10/15/09 36
University of Massachusetts Medical School EBD Consulting
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Long Term Care Insurance Participation
10/15/09
University of Massachusetts Medical School EBD Consulting
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More people in Connecticut have LTC Insurance than in Massachusetts (includes group policies)
Connecticut MassachusettsPartnership 33,450 Non-Partnership 74,000 Total w LTC Insurance 107,450 152,051
% Adult Population (21+) with LTC Insurance 4.3% 3.2%
% Population 55-74 with LTC Insurance 17.5% 13.6%
For Advisory Committee Policy Discussion Purposes
University of Massachusetts Medical School EBD Consulting
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The Connecticut Case Study: Pros & Cons
The Pros of the Model Long-running program, 17 years & an experienced Director Great Consumer Protections Great Insurance for Upper Income
Comprehensive Care Policies (high premium cost) “Dollar for Dollar” Coverage/Asset Protection Lower out-of-pocket costs
The Cons of the Model Low rate of participation (unaffordable to many) Benefits accrue to Upper Income Elderly Persons Middle Income & Disabled left out of the program Consumers find the purchase decision to be a complex one Limited Portability
10/15/09 38
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Premiums Must be More Affordable for Middle Income
Higher income people buy LTC insurance (green) We need to make LTC insurance affordable for middle income (yellow)
A % FPL 100% 200% 300% 400% 500% 600% 1000% 2000%FPL (1) 10,836$ 21,672$ 32,508$ 43,344$ 54,180$ 65,016$ 108,360$ 216,720$ FPL (2) 21,672$ 43,344$ 65,016$ 86,688$ 108,360$ 130,032$ 216,720$ 433,440$
B AgeCT Premium for 1 Policyholder Connecticut Annual Premium as a Percentage of Annual Household Income:
25 2,122$ 19.6% 9.8% 6.5% 4.9% 3.9% 3.3% 2.0% 1.0%35 2,410$ 22.2% 11.1% 7.4% 5.6% 4.4% 3.7% 2.2% 1.1%45 2,662$ 24.6% 12.3% 8.2% 6.1% 4.9% 4.1% 2.5% 1.2%55 3,129$ 28.9% 14.4% 9.6% 7.2% 5.8% 4.8% 2.9% 1.4%62 4,280$ 39.5% 19.7% 13.2% 9.9% 7.9% 6.6% 3.9% 2.0%
67 6,079$ 56.1% 28.1% 18.7% 14.0% 11.2% 9.4% 5.6% 2.8%72 9,496$ 87.6% 43.8% 29.2% 21.9% 17.5% 14.6% 8.8% 4.4%77 15,323$ 141.4% 70.7% 47.1% 35.4% 28.3% 23.6% 14.1% 7.1%82 22,589$ 208.5% 104.2% 69.5% 52.1% 41.7% 34.7% 20.8% 10.4%85 28,848$ 266.2% 133.1% 88.7% 66.6% 53.2% 44.4% 26.6% 13.3%
C MA Population est'd 9% 12% 13% 66% ========================================>MA Population est'd 34% ==================> 26% ==================> 40% =========>
10/15/09 39
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For Advisory Committee Policy Discussion Purposes
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Low High
FINANCIAL RESOURCES
High
LTSNEED
Low
Medicaid & Other State
Programs
Medicaid Spend-down
LTS Financing System With LTC Partnership Program
Personal ResourcesConsumer ProtectionsInformal Caregiver Support
LTC InsuranceLTC Partnership
State Programs
10/15/09
For Advisory Committee Policy Discussion Purposes
University of Massachusetts Medical School EBD Consulting
Services, LLC 41
Where does the LTC Partnership Program Leave Us?
It will not meet everyone’s needs Those with current LTS needs or current chronic conditions Low income people who cannot afford to pay premiums
But with changes, it can be effective: Middle to Upper Income Individuals who can afford to pay premiums over a long period of time Healthy individuals who may need LTS in the future
10/15/09
For Advisory Committee Policy Discussion Purposes
University of Massachusetts Medical School EBD Consulting
Services, LLC 42
The Connecticut Case Study: Changes for Massachusetts
Prerequisite: Must enact NAIC Model Act Implement consumer protections
What would we want to do differently? Target middle income persons who are at risk to spend down
Question to FAC: Are these the design features we want to work on? Target middle income population Encourage more people to buy, and at a younger age Create an affordable benefit package Make purchase decision easy for consumers Consider incentives?
10/15/09 42
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Publicly Sponsored: The Contribution Program
Public Model for LTS A contributory program for paying for the cost of LTS Everyone included (large risk pool) Federal Plan Supported by Senator Kennedy, AAHSA Federal plan included in 2 out of 3 National Health Care Reform bills
(House & HELP; CBO scores as a savings)
Goals Provide some coverage in affordable way Offer consumers a life-time benefit for some of their future LTS needs Meets some – not all – of a person’s needs Spread the risk broadly across all persons, no health screen Example: The CLASS Act
10/15/09
For Advisory Committee Policy Discussion Purposes
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The CLASS Act: Key Bullets
Cash benefit
Everyone is included, with voluntary opt out
Vested in 5 years: People with current needs can begin drawing benefit in 5 years.
Portability from state to state
Big commitment on the part of the government to provide LTS financing over the long-term
10/15/09
For Advisory Committee Policy Discussion Purposes
University of Massachusetts Medical School EBD Consulting
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The CLASS Act: “Skinny” might be OK for some
Age 55 in 2009 Premiums = $65/Month = $780/Year Premiums are very likely to be raised over time Benefit = $50/day or $100/day (used $75, here)
Age 75 in 2029 Benefit = Assumes $75 cash daily/benefit in 2009 at 5% compounded
inflation
Premium Payments from 2009-2029
CLASS Benefit in 2009
CLASS Benefit in 2029
Monthly/Daily $ 65 $ 75 $ 199
Annual $ 780 $ 27,375 $ 72,635
10/15/09 45
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The CLASS Act: Solvency of a Contribution Program
Premiums must be sufficient to fund the program
Questions about the Solvency of the Program $65 may not be sufficient in the long run AAHSA: Yes, program is solvent CBO: Maybe, in the middle American Academy of Actuaries: No
10/15/09
For Advisory Committee Policy Discussion Purposes
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The CLASS Act: Pros & Cons
The Pros of the Model Everyone gets something Cash benefit based on need Complements other plans for LTC Benefits do not count against Medicaid eligibility Great way to provide some coverage for middle income individuals Great way to provide some coverage for disabled individuals
The Cons of the Model Concerns about sustainability over long-term Younger persons and/or upper income persons may opt out Lower rates of participation lead to adverse selection Program is viewed as serving “all” the needs Benefit too “skinny”
10/15/09 47
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Low High
FINANCIAL RESOURCES
High
LTSNEED
Low
Medicaid (Enhanced)& Other State Programs
LTS Financing System with Contribution Program Only
Contribution Program
Personal Resources(includes Informal Caregivers)
State Programs
LTC Insurance
Medicaid Spend-down
10/15/09 48
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Where does the Contribution Program Leave Us?
It will not meet everyone’s needs Those with current LTS needs or current chronic conditions Low income people who cannot afford to pay premiums
But with changes, a Limited Cash Benefit can: Address the need for home- and community-based care Individually-tailored needs that are not presently covered by insurance
or Medicaid Support the informal care network
10/15/09
For Advisory Committee Policy Discussion Purposes
The CLASS Act: Changes for Massachusetts
What would we want to do differently? Ensure solvency over many years Ensure high participation levels
Question to FAC: Are these the design features we want to work on? Lower premium contribution for low income individuals Portability for individuals who move to another state Pair benefit with Medicaid Asset Protection? Consider other incentives? Consider a mandatory program?
10/15/09 50
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Model Comparisons (Part 1 of 2)
Title: Partnership for Long-Term Care
Title: The CLASS Act
“Enhance Private Insurance” “Create Contribution Program”
Description Private Insurance Public Insurance Trust, could serve as a complement to Private
Insurance and/or MedicaidParticipation
Voluntary purchase Voluntary (opt out)
Target Population
Those who can afford a long-term care insurance policy and with assets to protect, meet health
screen
Workers age 18+ eligible to enroll; Can continue to be in the plan after retired (need to keep
paying premiums)Covered Covers Elderly and Adults
who buy before become disabledCovers both Elderly and <65
DisabledUniversity of Massachusetts
Medical School EBD Consulting Services, LLC 5110/15/09
For Advisory Committee Policy Discussion Purposes
Model Comparisons (2 of 2)
Title: Partnership for Long-Term Care
Title: The CLASS Act
“Enhance Private Insurance”
“Create Contributory Program”
Excluded Low income who cannot afford premiums, middle income whose out of pocket costs
would erode asset protection; disabled and others who fail to
meet the health screen
Persons too poor to pay “regular” premiums or too
“rich” for “subsidized” premium; also, persons with certain cognitive functional
limitations that fail to meet the test (triggers follow HIPAA
rules)
Health Screen Yes NoRisk/Selection Potential for “cherry picking” Potential for “adverse
selection”
Benefit 99% of policies are comprehensive, including both
NF and HC
$50 or $100 per day
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A Complementary Public-Private Model
A Complementary approach Private Insurance:
Expand to Middle Income people Public Insurance:
Meet the Challenge of Covering Disabled & Middle Income people Medicaid: Adjust to fill gaps
Massachusetts as a State Laboratory Massachusetts embraces its role as a State Laboratory for Change Take what exists and improve upon it Start small
10/15/09 53
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Low High
FINANCIAL RESOURCES
High
LTSNEED
Low
Medicaid (Enhanced)& Other State Programs
Medicaid Spend-down
LTS Financing System with LTC Partnership AND Contribution Program
Contribution Program
Personal ResourcesConsumer ProtectionsInformal Caregiver Support
LTC InsuranceLTC Partnership
State Programs
10/15/09
For Advisory Committee Policy Discussion Purposes
Next Steps & Timeline
Cost & Impact Methodology
MassHealth Data
November Meeting
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Highlights of Cost & Impact Methodology
Population Benefits Premiums/Costs Assumptions Assessment
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Cost & Impact Methodology & AnalysisMethodology for Analyzing and Costing out the Long-term services and support options
Step 1 Develop Baseline Costs of Current & Future Need, including Medicaid and State Programs
Population
Benefit Coverage
Step 2 Define Population Assumptions
Target Populations & Participation Rates
Step 3 Define Benefit/Programmatic Assumptions
Define Benefit
Establish Rules of the Program, e.g. no drop outs, all healthy at start of program,
Outline details, e.g. Number of years to compute, balance, benefit trigger, daily benefit
Step 4 Calculate Premium Collections
Step 5 Assess Impact on Other Financing Sources
Consumer Out of Pocket
State Programs, including Medicaid
Informal Care
Step 6 Perform Sensitivity Analysis by modifying assumptions
Modify Participation rates, e.g. changing benefits, introducing other incentives
Modify Risk Pool (range of risk - from cherry picking to adverse selection)
Step 7 Assess Model in terms of Meeting Goals
Burden on Medicaid Budget & Role of Government Programs
Effect on Consumers (Spend down/Asset Protection)
Adequacy of Benefit to Meet Needs of Consumer
Step 8 Confirm Solvency of Program
10/15/09
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MassHealth Data & Analysis
Review Population and Spending What we know about the Populations What we know about MassHealth Spending
How to Collect & Analyze MassHealth Data Examine populations by income, etc. Examine costs by type of LTS
External Data Sources
10/15/09
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A Quick Review of the Challenge:LTS Cost Pressures in Massachusetts
Numbers Illustrate Cost in 20 Years from Today MetLife Survey
Average Annual Nursing Home
Average Annual Assisted Living Costs
Home
Home Care Average Annual rate (5 hrs/week)
Home Care Average Annual rate
(20 hrs/week)
2008
Massachusetts 110,230$ 50,304$
National Average 77,380$ 36,372$ 5,200$ 20,800$
2028 (in 20 years)
Massachusetts 292,473$ 133,471$
National Average 205,312$ 96,506$ 13,797$ 55,189$
Source: The MetLife Mature Market Institute Survey of Nursing Home and Assisted Living Costs in 2008
Notes: Massachusetts is compared to the National Average, and also to Connecticut, since we
examine the Connecticut Insurance Partnership for Long-Term Care in this presentation.
10/15/09
For Advisory Committee Policy Discussion Purposes
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LTS Costs Unaffordable for Many
Massachusetts - 3 years in a Nursing Home in 2029 will run close to $900K
The Cost of Care in Massachusetts Home Care Nursing Facility Care
Age 55 Today (2009), daily rates 151$ 302$ Annual Cost 55,115$ 110,230$
Age 75 20 years (2029), daily rates 401$ 801$ Annual Cost 146,237$ 292,473$
In 20 years time, at age 75, if you need LTC care:
1 year 365 146,237$ 292,473$ 2 years 730 292,473$ 584,946$ 3 years 1,095 438,710$ 877,419$
4 years 1,460 584,946$ 1,169,892$ 5 years 1,825 731,183$ 1,462,365$
Can you afford the care? 25,000$ 100,000$
Age Year 5.0% 5.0%55 2009 25,000$ 100,000$ 75 2029 66,332$ 265,330$
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MassHealth Data: Members
Summary of MassHealth Population with Long-Term Stay, in FY 2008
Average MembershipDual Medicaid Only Total
21 - 59 2,404 1,371 3,775 60 - 64 908 515 1,423 65 + 28,879 710 29,589 Total 32,191 2,596 34,787 Ratio Dual:Medicaid Only 93% 7% 100%
65+ 90% 27% 85%Under 65 10% 73% 15%Total Member Months
Source: EOHHS data run June 11, 2009.
Notes: Data includes all MassHealth members on Standard FFS who had a long-term stay defined as 90+ days in a particular facility.
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MassHealth Data: Spending
Summary of MassHealth Spending for Persons with Long-Term Stay in FY 2008
FFS Data Only Total
SpendingLTC 113,258,546$ NF 1,564,288,526$ Chronic IP 243,329,977$ ICF-MR 236,079,079$ Acute 83,476,468$ Exclude 8,143,770$ Psych IP 16,108,241$ Semi-Acute IP 6,657,513$ All spending 2,271,342,120$
Source: EOHHS data run June 11, 2009.Notes: Data includes all MassHealth members on Standard FFS who had a long-term stay defined as 90+ days in a particular facility.Chronic & Psych facilitites may be underreported, if state owned/operated data is missing.
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Committee Business
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Committee Business
Public input process Save the Date:
Wednesday, November 18th 12 PM – 2:30 PM, MetroWest Area Monday, November 23rd 5:30 PM – 8 PM, Holyoke
Next meeting: Date: Thursday, November 12th, 2009 from 9:00 -11:30am Location: One Beacon Street, MassHousing Board Room
Future meeting reminder Additional meeting scheduled for Thursday, December 10th
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