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GRAY MATTERS: Long Term Care

SaulFriedman75x75 Pulitzer Prize-winning journalist Saul Friedman (bio) writes the weekly Gray Matters column which appears here each Saturday. Links to past Gray Matters columns can be found here. Saul's Reflections column, in which he comments on news, politics and social issues from his perspective as one of the younger members of the greatest generation, also appears at Time Goes By twice each month.

Another piece of Ted Kennedy’s dream of universal health care may be lost in the compromise meat grinder that has produced a deformed, complicated, top heavy and unpopular pro-insurance company bill – his proposal to begin building, for the first time, a civilized policy for the long term care of millions of elderly and disabled Americans.

First, the apparent loss of a strong public Medicare-like choice among the insurance options, included in Kennedy’s bill, will likely mean that private insurers won’t offer younger workers and aging boomers long term care insurance at an affordable price. Only a few employers, including the federal government, offer such policies.

But more specifically, there is doubt that Kennedy’s measure, called the CLASS Act (for Community Living Assistance Services and Support) will survive in the health reform legislation strong enough to be any good.

The CLASS Act, though far from adequate, would provide for workers to voluntarily contribute to individual accounts that eventually would pay part (perhaps $100 a day) of the cost of their long term care. Some suggest this should be mandatory.

It would be the first, small step towards a public program to eventually provide long term care for every American who needs it. Naturally, it is opposed by long term care insurers and their allies among Republicans, and conservative Democrats who worry more about the bottom line than people’s well-being.

So far, the proposal does not have a high priority among advocates of health care reform, including the White House, for they’re concentrating their efforts on the 47 million middle and working class people, mostly young, who are without basic health coverage.

Yet AARP said years ago that the lack of a long term care policy was the nation’s “greatest unmet health care need.” And little has changed. Just as the young don’t plan for the infirmities of age, it’s easy for policy makers to ignore the needs of elderly American couples facing the terrible time when one or the other needs long term nursing care – at home or in an institutional setting.

It didn’t have to be that way. President Obama, mistakenly, I think, abandoned his own earlier views and refused, from the beginning, to consider the long-standing congressional proposals by the two most senior House members – Michigan Democrats John Dingell (1955) and John Conyers (1965) – to provide Medicare for All. It would have gradually eliminated the costs of health insurance, which, along with payroll taxes would have financed universal health care including long term care. See the text of the bill here

But Obama, who has since retreated on the public option, said the country was not ready for Medicare for All despite advice to the contrary from his own Chicago-area doctors. But I doubt he even read the Dingell or Conyers bills, nor did most interested Americans, for as I’ve written, most of the main stream press blacked out these single-payer proposals for months while the debate was taking shape.

The Washington Post ignored these bills. Even the Kaiser Family Foundation, the Commonwealth Fund and AARP declined to include the proposals in their discussions on the grounds that they did not have a chance to pass, thus guaranteeing that their self-fulfilling prophecy would be fulfilled.

But I have digressed, for I meant to emphasize that among the biggest gaps in Medicare coverage – which many older Americans don’t realize - is that it does not cover long term nursing care. After a three-day hospital stay, Medicare will cover – with high co-payments to be paid by the beneficiary or his/her supplemental insurance – up to 100 days in a skilled nursing facility for rehabilitation, say for a hip replacement or to recover from an accident. And that’s all.

If your partner, spouse or loved one needs long term care, meaning help with what are called the “activities of daily living,” or ADLs, such as bathing and dressing, Medicare will only help pay for medical needs. I repeat, for nursing care, at home or in an institutional settling, there is no rational, national public program for the long term care of the elderly.

In this, America is alone among most of the countries of Europe; we say we venerate the aged, but our policy doesn’t reflect that.

There is long term care insurance, but the cost for a 65-year-old is hardly affordable at about $3,000 a year – if he or he has no illnesses and can qualify. The long term care insurance industry exhorts workers to buy when they are young and the cost is relatively inexpensive.

But chances are a person will pay the premiums for 25 years and never use the policy; less than one in three need long term care and nursing home stays are relatively short. A long term insurance policy usually has limits, in dollar amounts or the length of stay. And as an investment it sucks for unless you spend considerably more, there is no surrender value. If you don’t use it, you lose the thousands you’ve spent.

In addition, many insurers raise the premiums when the beneficiary is old and can least afford it. Not surprisingly, some drop their policies. Several insurers have changed hands, or they have sought to save money by challenging claims, when the beneficiary is at a disadvantage seeking to appeal. Most of the very old in nursing homes tend to be widows. And despite inflation riders in some policies (which cost more), many do not keep up with the cost of a nursing home, now averaging between $79,000 and $125,000 a year depending on where you live.

The Bush administration and Republican congresses, which rejected any public long term care program, have sought to encourage the purchase of long term care insurance by allowing people to deduct portions of the premiums as part of their medical costs. They’ve even encouraged people to take out reverse mortgages on their homes or sell their life insurance policies to finance long term care policies.

But more important, the last Republican-led congresses have sought to make it more difficult for the middle and working class elderly to use the only public program that has become a vehicle for long term care – Medicaid. It may be demeaning for families and couples to turn to welfare to get long term nursing care for a loved one, but it has been the only alternative for millions of the elderly.

Medicaid, passed around the same time as Medicare, is a federal program, administered by the states, that provides comprehensive medical care, including medicines, for the poor – people whose incomes are beneath or just above the official poverty line. But over the years, with the help of elder lawyers, families have found that with planning, they can “spend down” the savings of a loved one, impoverishing him or her, to get long term nursing care. That’s called “Medicaid planning” and it has become an elder law specialty.

A few years ago, at the behest of the long term care insurance industry, the Republican congress made Medicaid planning a crime, but the “granny goes to jail” attempt was unenforceable and dropped.

Nevertheless, Congress has since made it tougher to take advantage of Medicaid requiring, for example, that a beneficiary wait five years and exhaust his/her savings before becoming eligible for Medicaid in a nursing home.

Thus you are poor, but have worked most of your life, Medicaid long term care is a blessing, but it means spending your last days on welfare. And even those funds are being cut by many states hard-hit by the recession. Nursing homes by law may not discriminate between the paying and Medicaid patients, but they do. And fewer doctors will take Medicaid patients because compensation rates are low.

Among couples or families with modest nest eggs, their problem is how to avoid impoverishing the spouses (most are women) who remain at home when a loved one must be sent to a nursing home.

Under the arcane law, the spouse may keep half the couple’s assets up to around $109,000 (not counting the home, a car and the spouse’s personal IRAs, if any). In addition, the spouse is limited to a monthly allowance of up to $2,739 a month – not a lot to pay for food and other bills, taxes and upkeep on the home while looking after a husband in nursing care.

Some states allow the spouse to refuse to pay any bills for his/her loved one in nursing care and keep all their next egg, if any. That means that a wife must sign an affidavit abandoning financial responsibility for the father of her children. But even then, hard-up states can and do sue to get the Medicaid money back from women whose savings are diminishing.

I’ve gone at length into this thicket to demonstrate that middle-class families, as well as working couples who have been the backbone of American society, are obliged to scheme and, yes, cheat and give up their savings and dignity to get loved ones on welfare to obtain long term nursing care. That is how America treats millions of its older citizens.

A few year ago a woman, a former gym teacher in the New York public schools, told me that she had just put her husband in a nursing home because he was suffering from rapidly advancing Parkinson’s. A lawyer helped her impoverish him to get him on Medicaid. After years of hard work in the garment industry, he was on welfare and she hoped, with her teacher’s pension and their savings, she would have enough to live on for the rest of her days.

“Who knew we would live this long?” she lamented. Little has changed in the years since. And now, with all the talk of health reform, there will be no long term care and few seem to care.



Thank you for speaking frankly about the latest elephant in the room. No one wants to take responsibility for elder healthcare and the long term "experts", insurance agents, financial planners and lawyers not to mention all sorts of opportunists, profit. We're at the point of paralysis with over a trillion dollars in the Medicare/Medicaid budget and no answer for extended care for seniors. Expect additional state budget cuts for all senior care. I am starting at the grass roots level to support a new system designed expressly for long term care. Good luck, you may say, but I feel I've got about 20 years left until I'm in the same position as those you describe and it's up to me not to expect any help from traditional and current models.

Saul--I agree with very nearly everything that you have written on the subject you tackled; but, I am getting the feeling that you think it unwise/wicked/whatever to require that one be impoverished before qualifying for welfare. If one is going on welfare, I believe that one should first exhaust their own resources. Yes, surviving spouses should be able to retain their own resources and a portion of joint resources; but, I disagree with hiding assets of the long-term care resident in order to qualify him/her for Medicaid. That is like the spouse who hides his assets just before divorcing his wife (which I, believe me, have seen acquaintances do!)

I agree with Cop Car. The money we worked to accumulate over our lives is supposed to go for our own care. Only if we outlive our resources should we ask for public assistance.

I know very comfortable people who are putting their money into trusts for their children, long before they might need nursing care, so the money won't be "wasted" on a nursing home.

What's wrong with some of these arguments is that private-pay nursing home patients, at least here in NY state, are paying for others' care in addition to their own.

Mom was "private pay" at a nursing home for several years before she went broke. She was paying an amount each month far in excess of what Medicaid would have paid for her. So we were helping the NH cover the gap between the income it needed to survive and the income it got from Medicaid patients.

She was "comfortable" - between her pension, my dad's pension, SS, and interest from her CDs, she had income in excess of $50K a year when she went into the NH. She had about $300,000 in the bank.

However, she was comfortable in her old age because my parents, Depression babies, were frugal. They paid cash for their cars; they didn't run credit card debts; they lived well within their means and saved all their lives.

My sister and I watched the money our parents had saved for us subsidize care for people who'd handled their money unwisely. For years, I wanted to run over seniors waiting to board buses outside the local casinos where said seniors piss away their income and savings. That's who's benefiting from the money my parents intended for us.

I read about a sensible compromise. Some place (maybe Denmark?) was taking only the income a person had, but leaving the principal intact. If my mother had handed over her entire income of nearly $5,000/mo, instead of being obliged to pay her entire private-pay bill of $8,000/mo, she could have paid over $50K+ a year, never gone on Medicaid, and left my sister and me the principal that would have let us be secure in our own old age.

She would still have been paying more than Medicaid paid (about $2000 a month, which supplemented her late-life income of about $2200 a month) during her entire six-year stay. And ironically, the public cost of her care would have been about the same either way.

Ah- and it can only get worse as the baby boomers age.

There is no question that the status quo with regards to health care will not work in the foreseeable future.

It time to change.

The greater problem, as I see it, is not with the person who needs the nursing home; he/she should deplete his/her savings to qualify for Medicaid. But what abot the spouse who remains at home; if the patient's savings are depleted, how does the spouse live? That's why we need a rational long term care choice among the Medicare benefits.

I got married in the 1980's to get medical coverage. I will probably get divorced so my husband can have medical coverage later. The worst of it is that once my grandfather earned good money and invested it well. That money, divided in two for his kids, did long term care for himself, my father, his mother, my mother, her husband, and now another generation is aging. By the time I die, there will be nothing left.

My parents paid for long term care insurance for years, so that "we won't be a burden". Dad's last illness was 2 weeks of hospitalization then 4 weeks of hospice care at home - all covered by his regular policy and Medicare. Had he needed less than skilled care, no benefits would have been paid at all, by any of the 3 "coverages" he had. "Covered"??? Hardly.

Now Mom is in Assisted Living, but since it's not skilled care she's paying out of pocket with the money realized from selling her home. She's lucky to be here in Tucson, where costs are lower than your stated national average. Still, at 87, she worries about outliving her money. And so do I.

A propos long-term care insurance:
1. It solves no problem--especially for those who could never afford it-- yet it needs to be said that many of those in need now had many years in which to plan ahead and purchase this insurance. That's what my wife and I did: we made sacrifices in other areas (because we are anything but "high rollers"), and bought the insurance ten years ago.
2. At some point, this discussion will have to give serious attention to something that won't go away: not only must we face the ever-extended life expectancies of people, but also the enormous cost of the technologies effecting this extension. It's like guns and butter: you can't have both indefinitely, unless you're willing to make meaningful sacrifices in other areas. What would those areas be?

"...and left my sister and me the principal that would have let us be secure in our own old age."

If parents can and wish to leave something to their children, that is fine; but, for a child to expect it is too much.

My own mother paid for her own care, to the end (1994), even though she was living on $8,000 SS and interest on her bank CDs. (Dad's pension stopped when he died - the pension having been set before the law was passed that gave the spouse an opportunity to have a reduced amount left to her. Although Mom worked most of her life, pensions were even less portable in those days and she drew none from her own employments.) Obviously, Mom didn't take a trip to Europe or a cruise, or have her hair and nails done every Thursday, or go to movies, or indulge in fine dining. And she had but one new car in her life. But, she knew how to live within her means and scrimp and save.

Like Barry Knister, I lived well below my "means" most of my life - just as Mom taught me to do. I did not take trips, buy a new car every 3rd year, or wear designer (or even store-bought, much of the time) clothes, or ever have a manicure nor have my hair done every Thursday.

I intend that my "sacrifices" and savings shall keep my children from having to worry about how I will be able to afford care during my later years (I am 72, now, just 7 1/2 years younger than my mother or her mother or her mother - for seven generations - lived to be).

I'll be darned if I expect my children to pay for my care and I'll be darned if they should expect to get anything when I die. They are capable of standing on their own two feet and know how to "sacrifice" and save for themselves!

Contrary to what has been alleged, not all low income Elders are in that position due to unwise monetary decisions. My children will attest to the fact that, as a Depression child, I learned to be frugal to a fault.

I never spent unwisely, but I was married to a man who had one business failure after another. He did not want me to work and I was a stay-at-home-mom until his last business failure forced me to enter the labor force. When he died I had a mortgage on my home. He had borrowed against his life insurance and I was left 'low income'. My only income is Social Security.

I am not complaining, because I prudently invested what little equity was left in his life insurance and I paid off my mortgage. However, an illness such as a stroke, would impoverish me and all of my frugality would be for naught while the insurance executives draw lavish bonuses.

I take umbrage at the implication that I am responsible for m;y plight.

Plan early. Save. Invest. Insure.

Darlene, I'm sorry to have offended you. I certainly don't believe that all low-income elders are broke because of foolish spending.

I'm agreeing with Saul's contention that long-term care should be part of medical coverage, whether the necessary long-term care is skilled nursing or custodial. (By "custodial," I mean assistance with medically necessary assisted living.")

The most common "medically necessary" assisted living I've seen is a result of dementia or chronic illnesses that make one unable to perform the "activities of daily living" - being able to be mobile independently, able to dress, able to feed yourself, able to take yourself to the bathroom, able to wash yourself.

And please note, my complaint is this: "What's wrong ... is that private-pay nursing home patients, at least here in NY state, are paying for others' care in addition to their own."

to Darlene:
I hope it's obvious that my comments have little or nothing to do with people like you. They refer to those baby boomers who lived the life of the consumer society, assuming imprudently that the good times would just keep rolling, and that everyone's 401k would bail them out in the Golden Years. They failed to plan for alternatives, spent freely, and now find themselves faced with less than perfect prospects for retirement. Prospects that lead them to decide "society" should pay for long-term insurance.

In the end, a society based on consumption develops bad habits, and we are reaping the fruits now. Millions denounce any government-managed health-care plan that reflects the high-taxation approaches to be found elsewhere, such as in England, Canada, and Scandinavia. But we can't provide health care without paying for it. Unless and until we are willing to sacrifice some or all of the huge profit motive built into private medical insurance, we will continue to "help" the health-care industry and its investors at the expense of the public good.

One legitimate way of judging a society is by looking at how it treats the vulnerable and helpless: the very young, the sick and the old. If we're willing to sacrifice, we can do it. Otherwise, things can only get worse.

Dear Darlene, and any other of Ronni's readers whom I've managed to insult--Please forgive my failure to clarify. I had not meant to paint all who might need a hand with the same broad categorization.

I should have taken more care in my to make it abundantly clear that I support Medicaid and other programs that lend a hand to anyone who needs it. There are varied legitimate reasons why one, because of the particular circumstances into which they were born, their inate abilities, their having been the victim of predators (relatives, included), and just plain bad luck, should be supported by those whose stations in life allow them to extend a hand.

My fraternal grandmother cared for a son who had multiple developmental handicaps, without aid, for nearly 50 years. In my mother's family, each frail elder was cared for by a daughter to the end of his/her (the elder's) life, without non-family aid - for four generations that I observed.

What I object to is those who have had every opportunity to provide for themselves in perpetuity but who have chosen to court the short-term gain and bedamn the long-term consequences of their decisions.

This is a great column. My sister and I are facing the problem of how to take care of my 90-year old mother. I'm afraid that those of you who are angry at those elders who have squandered their resources would want to run over my mother - there wasn't a face lift, casino, cruise, piece of jewelry or expensive thing that she passed up in her life. She still insists on driving although she's had two accidents. I tried to get her pastor to talk to her but he told me that he provides spiritual care, not advice on life style changes! We tried to get her hooked up with a van that picks elders up for shopping, appointments. Nope, she was having none of it.. Naturally, she never lifted a finger to help my sister or me but now expects us to move to where she is, give up jobs, leave family behind and devote ourselves to taking care of her 24/7. What a mess!

Wow this is some post. Very interesting. I just hope I die before I reach that need for long term care because we are broke. Living on just Soc. Sec. we meet our basic needs but that is it...oh well, have to hope for the best.

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