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Long-Term Care Reform in 2004 Health Insurance Options

Long-Term Care Reform in 2004 Health Insurance Options. Presented by: Jeanne Ripley Halleland Health Consulting September 10, 2004. Session Focus. Options for providing insurance coverage for health and medical care with coverage for long term care. Agenda. Presentation Overview

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Long-Term Care Reform in 2004 Health Insurance Options

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  1. Long-Term Care Reform in 2004Health Insurance Options Presented by: Jeanne Ripley Halleland Health Consulting September 10, 2004

  2. Session Focus Options for providing insurance coverage for health and medical care with coverage for long term care Halleland Health Consulting

  3. Agenda • Presentation Overview • Existing Options • Contemplated Options • Potential Options • Discussion Halleland Health Consulting

  4. Long Term Care • Definition: “A broad range of supportive services needed by persons of all ages with physical or mental impairments who have lost or never acquired the ability to function independently. They include: nursing care, personal care, habilitation and rehabilitation, adult day services, care management, social services, transportation, and assistive technology.” Across the States 2000: Profiles of Long-term Care Systems; Public Policy Institute; AARP Halleland Health Consulting

  5. Long Term Care - Yes, but do we care? - Isn’t that a thing only old people worry about? – Or is it different now, than 10 years ago? Halleland Health Consulting

  6. Long Term Care • Two main sources for paid LTC services: • Out of pocket – 1/4 of all spending (estimated $18.7 million in ’99) • Medicaid – 3/4 of all spending (estimated $62.2 billion in ’99) Halleland Health Consulting

  7. Twin Cities Business MonthlySeptember Edition “LTC is the largest un-funded liability facing the baby-boom generation with the cost of care averaging $50,000 per year.” Halleland Health Consulting

  8. Long Term Care Insurance • 4 million Americans had purchased LTC insurance in 2000 • Mostly purchased by affluent elderly or near-elderly (or their families) as an estate protection mechanism Halleland Health Consulting

  9. Adding LTC to Med Supp: 1999 Minnesota Legislature directed MDH to report on the fiscal impact of mandating coverage of LTC for Medicare Supplemental products. Finding: “adding LTC benefit to Medicare supplemental policies would drive the price up substantially, likely causing current purchasers to drop their coverage.” Report to the Legislature, January 2000, MDH Halleland Health Consulting

  10. Health Savings Accounts • Must be used in conjunction with a ‘high deductible plan’ defined as: • Minimum deductible: $1,000/$2,000 • Annual out-of-pocket not higher than: $5,000/$10,000 • Have first dollar coverage for preventive care • Higher out-of-pocket for non-network services Halleland Health Consulting

  11. Health Savings Accounts • Contribution Rules: • Max contributed annually is the lesser of: • Amount of deductible Or • Max specified in law - $2,600/$5,150 for 2004 • Those 55+ can have ‘Catch-Up’ contributions: $500 - $900/year Halleland Health Consulting

  12. Health Savings Accounts • Distributions: • Is tax-free if taken for ‘qualified medical expenses’ • Can be used for: • COBRA continuation coverage • Health plan coverage while receiving unemployment compensation • Medicare premiums and out-of-pocket expenses • Medicare HMOs, new prescription drug coverage and qualified long-term care insurance* * Cannot pay Medigap premiums Halleland Health Consulting

  13. Health Savings Accounts • Created by MMA ’03 signed into law on December 8, 2003 • Special account owned by an individual to pay for current and future medical expenses • Focused on those not eligible for Medicare Halleland Health Consulting

  14. Twin Cities Business MonthlySeptember Edition • “A New Age in Senior Housing: Baby-Boomer Demand has Moved Developers Toward More-Livable Options” • “Prescription for Premiums: Can Health Savings Accounts Alleviate Rising Medical Costs?” Halleland Health Consulting

  15. Current Bills in Congress • Long -Term Care Act of 2004 (H4502): • Amends the Internal Revenue Code to allow distributions from an individual retirement plan, a section 401(k) plan, or a section 403(b) contract used to pay long -term care insurance premiums to not be includible in gross income to the extent. • In House Ways & Means Committee (06/04) • 16 sponsors (including C. Peterson and M. Kennedy) Halleland Health Consulting

  16. Current Bills in Congress • ‘Long -Term Care Support and Incentive Act of 2004’ (H4432) • Amends the Internal Revenue Code to allow individuals a deduction for qualified long-term care insurance premiums, use of such insurance under cafeteria plans and flexible spending arrangements, and a credit for individuals with long -term care needs • In House Ways & Means Committee (05/04) • 2 sponsors Halleland Health Consulting

  17. Current Bills in Congress • ‘Long -Term Care Insurance Partnership Program Act of 2004' (S2077) • Amends Title XIX of the Social Security Act to permit additional States to enter into long-term care partnerships under the Medicaid Program in order to promote the use of long-term care insurance • In Senate Finance Committee (02/04) • 6 sponsors Halleland Health Consulting

  18. Current Bills in Congress • Ronald Reagan Alzheimer's Breakthrough Act of 2004 (H.R. 4595 & S 2533) • A bill to amend the Public Health Service Act to fund breakthroughs in Alzheimer's disease research while providing more help to caregivers and increasing public education about prevention. • In Senate Finance and House Subcommittee on Health (07/04) • 63 cosponsors in Senate (including Coleman & Dayton) and 63 cosponsors in House (including Ramstead) Halleland Health Consulting

  19. Twin Cities Business MonthlySeptember Edition “Long-term care insurance is one of the newest employee benefits being offered…. Up to $29 billion a year is lost annually be companies due to elder care.” Halleland Health Consulting

  20. Twin Cities Business MonthlySeptember Edition • Expect to see long-term care insurance for employees, their spouses, their parents and even their in-laws become a standard employment benefit. • Offering LTC insurance can help employers recruit and retain employees Halleland Health Consulting

  21. Twin Cities Business MonthlySeptember Edition • Employer/Employee Benefits: • Employees can receive 25% tax credit on LTC insurance premium, up to a max of $100 (State) • Employees can deduct the cost of premiums and medical expenses, if they exceed 7.5% of the adjusted gross income (Federal) • Employers can deduct the total cost of LTC insurance they offer as part of their benefit package Halleland Health Consulting

  22. Medicaid Services Community/ EW Services Medicare Services Home Care Subacute Care Adult Day Care Meals on Wheels Outpatient Drugs OutPatient Services Assisted Living Facilities Social Services Specialists Long Term Care Physician Hospital Care Delivery Continuum Continuum of Care Halleland Health Consulting

  23. Bridging the Gaps between Medicare and Medicaid • From Medicare side: • Social HMOs • PACE • From Medicaid side: • Minnesota Senior Health Options • Other State Demonstrations • 48 states with waivered demonstrations (mostly for community based care)

  24. LTC Services & Medicaid • Medicaid funds services in three programs • Home Health Care • Personal Care Services • Home and Community-based Waiver Services • States are required to: • Make home health available to those who are eligible for nursing facility care Halleland Health Consulting

  25. PMAP Program • Minnesota was one of five state approved for 1115 demonstration waivers in 1983 • Began operations in 1985 • 40,022 seniors now enrolled • 44% of enrollees in NH or at risk of placement as of March ‘04 Halleland Health Consulting

  26. PMAP Covered Services • Medicare copayments and deductibles • Drugs • Some therapies • Medical transportation • Preventive physician services • Limited number of nursing facility days • Plans for including elderly waiver services into plan responsibililty

  27. Minnesota Senior Health Options Project • Fully capitates Medicare, Medicaid and waivered services (6 months of NH care) • Current enrollment of 5,217 in 10 counties (primarily metro) • Contracts with 3 HMOs to provide insurance and delivery systems • Enrollment of both community and institutional members (73% at risk of or in NH settings) • Plans to expand statewide – waiver application has been submitted Halleland Health Consulting

  28. MSHO's Covered Services • PMAP Services: • Dental • Prescription Drugs • Vision Care • Transportation • Limited NH Coverage • Elderly Waiver: • Adult Day Care • Lifeline • Homemaking • etc. • Medicare Advantage Services: • Medicare Part A • Medicare Part B • Preventive & Diagnostic • Skilled Nursing Facility

  29. Programs for All-Inclusive Care for the Elderly (PACE) • Focused only on nursing home certifiable • Mostly dually eligible enrollees • Contractors are responsible for all Medicare and Medicaid services - including lifetime need of nursing home care • Typically enroll 200 - 400 at each site • Now a State option under Medicaid Halleland Health Consulting

  30. PACE Programs • Programs for All-inclusive Care for the Elderly • Currently, 32 sites which provide services to over 12,000 seniors (7/04) • Enroll chronically ill Medicare and/or Medicaid beneficiaries who are at risk of nursing home placement Halleland Health Consulting

  31. PACE Philosophy • PACE programs are ‘centered around the belief that it is better for the well-being of seniors with chronic care needs and their families to be served in the community whenever possible.’ Halleland Health Consulting

  32. PACE Programs • All Medicare Covered Services Plus • All Medicaid Coverage Services (including prescription drugs) Plus • Lifetime coverage for Long Term Care Stays Halleland Health Consulting

  33. Social HMOs • Currently 4 sites: • Elderplan, New York • Kaiser Permanente, Oregon • SCAN, California • Sierra/HPN, Nevada • Serve over 90,000 beneficiaries • Enroll full range of well and ill Medicare and/or Medicaid beneficiaries Halleland Health Consulting

  34. Social HMOs • Medicare+Choice ‘standard’ benefit set Plus • Privately financed expanded home-and community-based and institutional care benefits Plus • Prescription drugs (some limitations) Halleland Health Consulting

  35. SHMOs • Findings: • Preventing or delaying long-term nursing home admissions • Improving access to preventive and supportive services • Integrating a geriatric approach to care • Coordinating medical and ‘expanded’ care services Key: While 21% of members are eligible for nursing home care, only 1/6th to 1/5th of this group actually use the benefit Halleland Health Consulting

  36. Other State Efforts • Colorado – the Integrated Care and Financing Project (full capitation for Medicare, Medicaid and Waiver Services) • Arizona – AHCCCS and ALTCS (two capitated Medicaid programs that coordinate services for NHC populations) • Texas – Star+ (Integrates acute and LTC into managed care for NHC and voluntary NH) Halleland Health Consulting

  37. What have we learned? • Community based and facility based long-term care need to be offered together • Financing needs to be available ‘up stream’ of Medicaid allowable finances • The baby-boomers will drive insurance options because they will ‘feel it’ sooner – through their parents and then themselves • Integrated continuum of care delivery and support is vitally important for chronically ill - insurance products should be designed to allow for this. Halleland Health Consulting

  38. Also • Baby boomers and, clearly, our ‘Gen-Xer’ children will not be satisfied with the choices currently available ……. Halleland Health Consulting

  39. Halleland Health Consulting

  40. The Industry Response – The Imperative • The future of LTC depends upon: • Providing opportunities to establish new services • Changing the financing structure • Reforming the regulatory oversight structure • Ability to enhancement of worker recruitment and retention options Halleland Health Consulting

  41. Fix the payment, but also fix: ‘[A]n institutional structure with few choices. It is a government-controlled approach that is expensive and does not meet consumers’ needs or desires.’ The Long Term Care Imperative:Principles for Change, 2003 Update Halleland Health Consulting

  42. About the Speaker Jeanne Ripley advocates passionately for the senior population. Simply put, Jeanne pursues all avenues to provide care options for seniors. She'll build the new options herself if need be, as evidenced by her role as Executive Director of one of the original Social HMO pilot sites, the nationally-recognized Seniors Plus. Jeanne is the speaker of choice on Medicare and Medicaid dual eligibles. She navigates the tricky terrain of financing and policy with ease: Jeanne was intimately involved in obtaining a twenty million dollar grant for an integrated health campus in rural Minnesota. She also works with a U.S.-wide coalition of seniors, payors and providers--the Medicare Justice Coalition--to assure fair payment from Medicare. For over 20 years, Jeanne's commitment has been to serve seniors and their families. Ms. Ripley can be reached at 612.204.4178 or by e-mail at jripley@halleland.com Halleland Health Consulting

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