Can We Tolerate Millions of Elderly People Living in Cars?

Dr. Joanne Lynn last week warned members of Congress that enormous misery is coming, in about 10 years, if the country fails to improve support programs for the elderly. Lynn, a geriatrician, is the head of the long-term services and supports (LTSS) team at Altarum, an Ann Arbor, Michigan-based health policy research center. She's the equivalent of a retirement income and long-term care insurance product (LTC) designer for the nonprofit sector. She testified at a full House Ways & Means Committee hearing on caring for aging Americans that the country has a huge number of people who will arrive at old age with inadequate finances, and who eventually will live with serious disabilities. "Without changes," Lynn said, "within a decade, most people who live their working years in the middle class will be unable to afford housing in retirement." (Related: Regulators Brainstorm About Medigap LTC Benefits) Lynn asked the committee members to think about the implication of typical middle-income Americans not being able to afford housing. "Will we really tolerate millions of elderly people on the streets, and living in cars and tents?" Lynn asked. "Will we still pay for expensive hospitalizations and drugs for people who cannot get lunch? Will it be okay for me to write a prescription for a thousand dollar drug for an elderly person living in a car without food?" The U.S. Constitution requires that all bills for raising revenue start in the House. The House Ways & Means Committee is in charge of shaping House bills for raising revenue. The committee's role gives it the potential to create, or block, everything from tax credits for long-term care insurance to funding streams for new Medicare- or Medicaid-based long-term care finance programs.

Democrats and Republicans

House Ways & Means Chairman Richard Neal said it was appropriate for the committee to address care for the elderly this month because November is both Alzheimer's Awareness Month and U.S. National Family Caregivers this month. "This is a deeply personal issue for many of us in the room," Neal said. Rep. Kevin, Brady, R-Texas, blasted Democrats' Medicare for All proposals, but, before that, he said Republicans have a long history of working with Democrats to support seniors. Edo Banach, president of the National Hospice and Palliative Care Organization, said hospice — a form of support for people who appear to be near death — has never been, and should never be, a partisan issue. "We all get sick at some in our lives, and we all die," Banach said. Several lawmakers talked about the impact of the aging of the U.S. population on federal finances. Robert Blancato, national coordinator of the Elder Justice Coalition, said the aging population is already having a noticeable impact on U.S. spending. "A Gallup West Health poll showed that seniors withdrew an estimated $22 billion from long-term savings, just in the last 12 months, to pay for health expenses," Blancato said.

Caregiver Stories

Kristina Brown, a witness who represented caregivers at the hearing. talked about her experience with caring for her mother when she herself was just 16, and her mother lost the ability to walk due to multiple sclerosis. Brown said she had to care for mother for 10 hours per day for six years. "Despite what many may think, having a disability does not guarantee access to resources," Brown said. Because her mother has an income of $36,000 a year from a divorce settlement, is younger than 65, and lacks a 10-year employment history, she has been denied Medicare, Social Security disability insurance and Medicaid, Sanchez said. Committee members talked about their own experiences with caregiving at the hearing. Rep. Linda Sanchez, D-Calif., talked about seeing her own father, Ignacio, struggle with Alzheimer's disease, for 15 years. Some members talked about private long-term care insurance. Rep. Tom Suozzi, D-N.Y., said his parents both had LTCI. His mother died when she was 93, and his father died, with dementia, when he was 95. "We had home health caregivers," Suozzi said. His sister than came to live at the parents' house for the last three months of their mother's life. Rep. Ron Kind, D-Wis., talked about helping his parents, who are in their 90s, with their private LTCI coverage. "My dad was paying into a long-term health policy for over 30 years, and checking all the right boxes, now that he's in a care placement facility, to make sure that he qualifies for it," Kind said. "And, even having gone through that process, it's only a fraction of the overall cost."

Paying for Care

Suozzi talked uneasily about discovering Medicaid planning — the craft of artificially impoverishing people so that they can qualify for Medicaid nursing home benefits more easily. "It's legalized fraud, quite frankly," Suozzi said. "But it's legal." Many of the hearing participants spoke fondly of stand-alone private long-term care insurance, and of the fragile state of the current LTCI market. Blancato said he would like to see the government provide a tax credit for private LTCI. Suozzi said he would like to work with both Democrats and Republicans to develop a bipartisan proposal to promote sales of private LTCI. "Let's work with industry," Suozzi said. "The storm's coming," he said. "It's right around the corner, and it may be here already." But Kind, Suozzi and Suozzi also talked about the financial difficulties LTCI issuers are facing. Kind said LTCI issuers have had problems partly because of the difficulty of getting consumers to buy coverage early enough, and partly because of ever-rising premiums. "As they get older, the premiums go up, and they're making these difficult decisions," Kind said. "Do I still write that monthly check, or should I just let the policy lapse? And and it's hard to predict what long-term care is even going to look like 15, 20, 25 years from now." Lynn said she believes the government probably has to play a role in reviving or providing insurance for paying for long-term care. "The long-term care marketplace is effectively dead, outside of a very few arenas," Lynn said. "I dropped my own long-term care insurance earlier this year, when the premium doubled." Federal employees still have access to a decent LTCI program, "but almost no one else does," Lynn said. "It's the only huge risk that we do not insure for." That's partly because it's hard to tell whether people will need three days of care or 30 years of care, Lynn said. One way might be for the government to create the kind of public LTCI program Washington state is setting up, and another approach could be to attach LTCI coverage to something people really buy, like Medicare supplement insurance policies, Lynn said. The government could also help by providing reinsurance, to cap the amount of risk a private long-term care insurance issuer has to take on, Lynn said. Rep. Suzan DelBene, D-Wash., said her state's Long-Term Care Trust Act will generate revenue from a new payroll tax and provide support services. Actuaries have estimated the program will save the state's Medicaid program $4 billion by 2050, DelBene said. Hearing participants said they believe California, Hawaii and Minnesota are also working on developing LTCI programs.

Resources

Links to information about the House Ways & Means long-term care finance hearing, including a video recording of the hearing, are available here. — Read Maybe Traditional Medicare Should Cover Chronic Care: Hearing Witnesses, on ThinkAdvisor. — Connect with ThinkAdvisor Life/Health on Facebook, LinkedIn and Twitter.