1. State Conversation Exploring Pathways for LTSS Financing Reform
September, 2014

2. Meeting goals
Raise awareness of LTSS financing challenges and the need to address them
Explore potential federal responses to the challenges
Identify potential state-level responses
Discuss interest in pursuing state-level action

3. Long Term Services and Supports (LTSS) Landscape: Are we heading into the Perfect Storm?
We have learned from other countries with older populations, that when certain conditions align, a country can find itself in a social and economic crisis regarding LTSS that must be addressed. When we compare those experiences with where the U.S. is today, we appear to be heading towards a perfect storm that will break families, employers, insurers and state and federal budgets. This is what the landscape looks like:

4. What constitutes LTSS? LTSS:
Assistance with activities of daily living (ADLs) and Instrumental activities of daily living (IADLs) for people who cannot perform these activities on their own due to a physical, cognitive, developmental or chronic health condition that is expected to last for an extended period of time, typically 90 days or longer.
First, we need a shared definition of Long-term services and supports (LTSS). We are calling this LTSS because long-term care is too narrow of a definition.  What we used to call long-term care has really evolved into a diverse mix of supportive services that make it possible for millions of Americans to experience much greater independence, a better life quality, and stay out of the hospital and other institutional settings. 
LTSS are defined as assistance with activities of daily living (ADLs) including bathing, dressing, eating, toileting, transferring and continence, and Instrumental activities of daily living (IADLs) including meal preparation, money management, house cleaning, medication management, transportation, to people who cannot perform these activities on their own due to a physical, cognitive, developmental or chronic health condition that is expected to last for an extended period of time, typically 90 days or longer.
LTSS include such things as human assistance, supervision, cueing, and stand-by assistance, assistive technologies, workplace supports, and care and service coordination for people who live in their own homes, community residential settings, or institutional settings.
LTSS are a distinct set of services from healthcare services, although they may include health-related services.
Commission on Long-Term Care-Report to the Congress, September 30, 2013

5. Who uses LTSS in the U.S. today?
12.7 million Americans need LTSS 80% of which is provided in home and community settings
12.7
million
Americans
Need LTSS
80%
of which is provided in home and community settings
Today, mm Americans need LTSS; This number of people needing LTSS ; this number will more than double by 2050 to 27MM1
53 % are Elderly
40% are working age adults
Contrary to popular belief ~ 80% of LTSS care is provided in home and community settings versus institutions
Population Needing LTSS, by Age Group and Level of Need (Millions)
Source: S. Kaye, data from 2012 NHIS, 2010 Census, Nursing Home Data Compendium 2010

6. What are expected future needs for LTSS?
Even though 70% of people over 65 will need some LTSS help the nature and duration of the need is highly variable and highly unpredictable
2 in 10 will need 5 or more years of care
4 in 10 will need 2 or more years of care
12% will need 1-2 years of care
17% will need 1 year or less of care
70% of People 65+ will need some LTSS
Source: Kemper, Komisar and Alecxih, Outputs of model using March 1993 and March 1994 CPS data.

7. What are the perfect storm conditions?
Demographic imbalances Economic pressures Social norms Absence of adequate options to address needs
Demographic
Imbalances
Economic Pressures
Absence of Adequate
Options
Social Norms

8. Demographic Imbalances
Although we are a younger country than many of the countries that have faced this issue, we are nearing the same tipping point they experienced in terms of demographics. Most countries with LTSS systems have 15% or more of their citizens over 65. The US is currently at 13%.

9. The aging U.S. population increases need for LTSS
A 300% plus increase in the population age 85+ by 2050
Age 85+ have higher rates of disability and are more likely to be without someone to care for them
Today ~ 50% of that age group has symptoms of dementia-the single largest contributor to the need for LTSS
The age 65+ population will more than double to 89 mm by 2050
Projected Growth in the Older Population in the United States as a percentage of 2012 population, by Age Group
AARP “Across the States, Profiles of Long Term Services and supports- 2012”

10. The caregiver dilemma 1/2
as many caregivers
will be available in 2050
½ as many caregivers will be available in 2050
Today the majority of LTSS is provided by family members, but the supply of potential caregivers is not going to keep pace with the future need
1990 to 2010-Was marked by boomers aging into prime caregiving years
Will be a period of transition as boomers age into old age and are not replaced with younger potential caregivers
Remaining boomers age into high care risk ages of 80+
Ratio of Potential Caregivers to Those Needing Care1
1. Ratio of # people in most common caregiving age ( ) to those at most risk for needing care (80+)
AARP PPI “The aging of the baby boom and the growing care gap: A look at future declines in the availability of family caregivers

11. Economic Pressures
Economic Pressure in the LTSS area impact us at an individual and a systems level.

12. U.S. LTSS expenditures 2011 $363 billion Long-Term
2011 LTSS Spending: $363 billion in 2011 Cost does not include unpaid family care Valued at $450 billion annually
2011
Long-Term
Services and Supports =
$363 billion
Systems level impact:
LTSS is a significant component of US healthcare spending
In 2011 spending for LTSS was ~ $363 Billion
His number is derived from a combination of service types but does not include unpaid family care valued at $450 billion per year
Source: Manard, B., Analysis of data in National Health Expenditures (2011); U.S. Census Bureau 2007 Economic Census; and National Health Expenditure Accounts Methodology paper, 2011; Feinberg, et.al, “Valuing the Invaluable, 2011 Update

13. LTSS funding sources 2011 $363 billion
Figure does not include unpaid family care valued at $450 billion annually
2011 funding sources include Medicaid and state and local funding (45%)
Private insurance (6%); Medicare (21%); other private sources (24%)
Non of this reflects that unpaid family caregivers provide $50 billion in care annually
2011
Long-Term
Services and Supports =
$363 billion
Medicaid is the Primary Payer of Long-Term Care, however some LTSS funding comes from Medicare, private insurance, other private and public funds
Today long-term care insurance represents only 6-7% of the LTSS spend
Non of this “funding” reflects that unpaid family care provided annually is valued at $450 billion
LTSS Funding by Program
Source: Manard, B., Analysis of data in National Health Expenditures (2011);
U.S. Census Bureau 2007 Economic Census; and National Health Expenditure Accounts Methodology paper, 2011

14. Cost of paid care Median Annual Rate Five-Year Annual Growth
Homemaker Services
Hourly Rates
$ 43,472 1%
Home Health Aide Services
$ 45,188
Adult Day Health Care
Daily Rates
$16,900 3%
Assisted Living Facility
(One Bedroom, Single Occupancy)
Monthly Rates
$42,000 4%
Nursing Home (Semi-Private Room)
$77,380
Nursing Home (Private Room)
$87,600
HOME
COMMUNITY
The cost of paid care nationally is high and increasing
According to the 2014 Genworth Financial Cost of Care survey the median costs for a year of paid LTSS care range from ~ $17,000 to over $87,000
For many adults 65+the cost of one year in a nursing home exceeds their annual income by 2-3X.
The annualized cost increases of 4% per year for facility care continue to exceed national inflation rates
This study’s annualized rates for homecare assume 44 hrs. of care per week.
FACILITY

15. Unpaid caregivers provide most LTSS today
Types of Paid Long-Term Care Providers:
20-30% Physicians, nurses, and therapists
70-80% Home health aides, certified nursing assistants, and personal care aides
While paid care is expensive, unpaid caregivers provide most LTSS today
The SCAN Foundation estimates that 87% of care for the 12 Million Americans Who Use
Long-Term Care Services are provided by unpaid caregivers
* Unpaid caregiving valued at $450 billion per year; Lynn Feinberg, Susan C. Reinhard, Ari Houser, and Rita Choula, “Valuing the Invaluable, 2011 Update,” and Lynn Feinberg, Testimony to the Long-Term Care Commission, Populations in Need of LTSS and Service Delivery Issues, July 27, 2013
Unpaid Caregiving valued at $450 billion annually
Source: SCAN Foundation, Who Provides Long-Term Care in the US? October 2012; Feinberg, et.al, “Valuing the Invaluable, 2011 Update

16. Impact on Medicaid budgets
LTSS =
27%
of federal Medicaid expenses in 20131
Medicaid has become the default LTSS funding source
LTSS = 27% of federal Medicaid expenses in Medicaid has become the default LTSS funding source
Even though the majority of LTSS care is provided by unpaid caregivers, LTSS spending is having an enormous impact on state Medicaid budgets
LTSS represented 27% of federal Medicaid expenses in 20131
Medicaid has become the default LTSS funding source
Funding for HCBS is rapidly catching up to institutional care
The impact is already being felt at the Federal and STATE levels
Growth in Medicaid Expenditures,
1. Congressional Budget Office “Baseline Projections 2014”
Source: KCMU and Urban Institute analysis of CMS-64 data

17. Federal and State Medicaid spending
Medicaid spending will more than double in the next
10 years
Year
Total Medicaid $
Federal Medicaid $s
State Medicaid $s
Avg. Federal %
2011
$ 427.4
$ 270.7
$156.7
63%
2012
$ 431.0
$ 248.8
$182.2
58%
2013
$456.4
$262.2
$194.2
57%
2022
(est.)
$853.8
$511.1
$342.5
60%
Medicaid spending will
more
than
double
in the next
10 years
Federal and State spending on Medicaid will more than double in the next 10 years1
The federal share has averaged ~ 60% recently due to recession offsets1
State spending on Medicaid is very significant to their budgets, representing 23.7% of state expenditures nationally2
1. The 2013 CMS Actuarial Report- “The Financial Outlook for Medicaid”
2. National Association of State Budget Officers “Report of the State Budget Crisis Task Force 2012

18. Impact of Medicaid on state budgets
2012
Medicaid became the largest single component of state spending, nationwide.
In 2012, Medicaid spending accounted for 23.7% of total state spending. It became the largest single component of state spending, nationwide.
National Average % of State Spending;
National Association of State Budget Officers “Report of the State Budget Crisis Task Force 2012”; “State Expenditures Report ”

19. Medicaid is beginning to crowd out other expenditures in state budgets
Medicaid has surpassed K-12 education as the largest expenditure item in state budgets
Note: Figures are for total state expenditures, including both general fund spending and federal funds
Source: National Association of State Budget Officers (NASBO), State Expenditure Report, 2010

20. Social Norms: Awareness, Knowledge, Planning and Policy Heritage
Consumer awareness, knowledge and planning continues to hamper growth of non-governmental funding sources for LTSS.

21. Less than 1 in 5 Boomers have taken any action to prepare for LTSS care.
In the U.S. we spend as much on LTSS as some countries that have formal systems, without the benefit of controls and intentional design. If we are going to spend the money anyway, it seems that we should spend it with greater intention.

22. More Boomers prepare for death than life
Approximately 5x more Boomers have taken action to prepare for death vs. life
Approximately
5x more Boomers have taken action to prepare for death vs. life
Boomers are 5X more likely to have taken action to plan for their death than for living
Actions to prepare for their death include:
Funeral arrangements (56%)
Burial location (50%)
Insurance to cover final expenses (50%)
Create a will (48%)
Action Taken to Prepare for Life vs. Death
Source: Retirement Care Planning: The Middle-Income Boomer Perspective, Bankers Life and Casualty Company Center for a Secure Retirement, August 2013

23. Boomers are poorly informed regarding LTSS need
Boomers underestimate their need for LTSS by about ½
8 in 10 boomers are uncertain about the costs of nursing home and home care
52% of boomers think Medicare will pay for LTSS-the next largest source is don’t know (26%)
Boomer Long-Term Care Expectations and Reality
Source: Retirement Care Planning: The Middle-Income Boomer Perspective, Bankers Life and Casualty Company Center for a Secure Retirement, August 2013

24. 80% Boomers Are Poorly Informed Regarding LTSS Cost Approximately
of Boomers don’t know
estimated costs of care
Boomers underestimate their need for LTSS by about ½
8 in 10 boomers are uncertain about the costs of nursing home and home care
52% of boomers think Medicare will pay for LTSS-the next largest source is don’t know (26%)
Pervasive Care Cost Uncertainty
Source: Retirement Care Planning: The Middle-Income Boomer Perspective, Bankers Life and Casualty Company Center for a Secure Retirement, August 2013

25. Boomers are poorly informed regarding LTSS payment
Boomers underestimate their need for LTSS by about ½
8 in 10 boomers are uncertain about the costs of nursing home and home care
52% of boomers think Medicare will pay for LTSS-the next largest source is don’t know (26%)
Perceived Methods for Funding Ongoing Long-Term Care
Source: Retirement Care Planning: The Middle-Income Boomer Perspective, Bankers Life and Casualty Company Center for a Secure Retirement, August LTCi = Long Term Care Insurance

26. LTSS policy confusion in U.S.
Safety net heritage ?
Personal responsibility expectation
Public expenditure reality
In addition to social norms related to consumer awareness, knowledge and planning for LTSS, influential social norms based in our U.S. policy heritage around LTSS is at play in the storm:
Safety Net: many Americans think that Medicare will cover their LTSS needs, or if not, the Medicaid safety net will, without thought to the impoverishment they will have to undergo first
Personal expectation versus public funding reality: Even though as a country we espouse personal responsibility for LTSS, in reality 70% of all LTSS costs are covered through public expenditure; ? This comment what about personal caregiving which is largest amount?
People unconsciously, or not, have come to rely on this heritage in their inaction
Other social norms in the equation:
Our public system has covered costs primarily through paid caregivers in institutional settings but we are now shifting to home and community based care that is highly reliant on unpaid, family/friends caregiving
People want to decide where and when they get care and have the flexibility of cash versus being locked into a set of formal services

27. Absence of Adequate Options to Address LTSS Needs
Long-term care (LTC) insurance hasn’t emerged as a viable source of LTSS financing.
Overall long-term care insurance has contributed ~ 7% to LTSS financing

28. Sales of LTC insurance are declining
The long-term care insurance market is going thru a market consolidation
Prominent carriers have left the market, unwilling to deal with uncertain risk and profit concerns
The product, already expensive has seen significant price increases, consigning it to high-end niche status.
Annual Sales of Individual LTC Insurance Decline Since 2002
Source: LifePlans. LifePlans analysis based on AHIP, LIMRA and LifePlans sales surveys, Beginning in 2009, LTC Partners data for annunitants
included in counts.

29. The current LTCi situation = void for middle income consumers
Life Plans data confirms that share of sales to middle and low income buyers has been falling while sales to higher income consumers has been increasing
The biggest reason for not purchasing long-term care insurance has been price, which would impact that group more
The industry has favored products that were rich in terms of benefits but difficult to accurately price
Most People Choose Not to Buy Policies Because They Are Viewed as Too Costly

30. The current LTCi situation = void for middle income consumers
Well meaning regulation that sought to protect consumers, may have in-advertently limited carrier options for simpler, less costly offerings that would appeal to middle income residents
The Share of LTC Sales to the Middle Market Age is Declining

31. Savings and other potential LTSS financing options fall short? $
Savings for LTSS
Difficult to save enough unless you start very early
For most, overall rates of savings inadequate to fund LTSS in addition to other retirement costs
Regulations prohibit using deferred savings funding to purchase LTC insurance without tax penalties
Incentive proposals tend to favor higher incomes
Home Equity:
Current reverse mortgage programs lack strong consumer protections
Equity tends to be get used up earlier on day to day expenses, before the need for LTSS arises
For many, accessible home equity not sufficient to fund more than a minimal amount of care
Medicare LTC
Historically Medicare has NOT paid for LTSS except on very limited basis
Tax incentives
Don’t significantly help those who really need options (middle class)
Sometimes are a wash or a loss for state budgets ç
Savings for LTSS
Medicare LTC
Home Equity for LTSS

32. Why does this matter and to whom?
Current and future older Americans
Caregivers
Families
Employers and employees
States
Federal government
Taxpayers
Current and future older Americans
Who will need LTSS in dramatically higher numbers
For whom the current system is not working well- especially for those in the middle income segment
Caregivers
Who are already stretched and stressed
Whose numbers compared to the need will put even more stress on them
Families
Who will increasingly take on the burdens of caregiving, despite lack of adequate training and geographical dispersion
Employers and Employees
Facing reduced workplace productivity due to family caregiving needs totaling approximately $34 billion nationally in lost revenue/productivity in the workplace 
Juggling jobs and trying to care for family members; caregiving valued at $450 billion annually in unpaid caregiving.
States
Where Medicaid is already a significant contributor to their budget crisis
Which will see less available federal support in the future
Federal government
Which is struggling to get the federal deficit under control, now and in the future

33. How Might We Weather the Storm?
Many countries that have tackled this issue have done so as a result of the culmination of these perfect storm conditions
Building on a sense of urgency and clearly defining the problem moved them on a path to LTSS reform

34. Define the problem
America has no long-term care financing system yet we continue to spend as much as some countries that do. We are relying on Medicaid to do what it was never meant to do when it was created in 1965 – that is, serve as our country’s long-term care insurance policy. Neither family caregiving nor Medicaid can handle America’s 21st Century care needs. Needs that will only grow.
Our country and its people cannot meet their long-term service and support needs.

35. Address the problem
Pathways to LTSS Reform LeadingAge initiated Pathways to foster federal and state reform.
In 2012, LeadingAge initiated Pathways to address the problem. In studying experiences from other countries, it became clear that finding a policy entry point under almost any of the pathways is critical for our country to move forward on this issue. Since 2012, Pathways has expanded to become a multi-stakeholder collaboration seeking to find an entry point to reform LTSS before we reach a breaking point as a nation.

36. Pathways: overall initiative summary
WHAT?
Foster state and federal LTSS reform that helps our country and its people prepare and pay for LTSS.
Messaging/Mobilization
Federal Proposal Development
State Conversations and Action
Political Alignment
HOW?
The goals of the Pathways initiative are two-fold.
Foster state and federal LTSS reform that helps our country and its people prepare and pay for LTSS. We will do that through four main strategies
DESIRED OUTCOMES

37. Pathways: desired outcomes
2017
A federal LTSS reform package is signed into law. At least 5 states adopt LTSS reforms that foster preparing for and financing LTSS.
2016
Outcomes we are seeking include:
A federal LTSS reform package signed into law by 2017 that aligns with “priority pathways”
Priority pathways are those that most resonate with people AND that analysis shows are the most promising for our country in terms of getting people care and support they need in ways that minimize stress on federal and state Medicaid budgets
Adoption of LTSS reforms at the state level

38. Pathways: Federal Reform Foster Adoption of Federal LTSS Package
In developing the Pathways, participants in the process were not seeking one solution, but instead a range of possible solutions for federal reform, any of which might foster LTSS reform, even if incrementally.
We took a scenario planning approach, recognizing that different social, political and economic conditions could foster different solutions.
We learned from other countries that moving forward even incrementally on solutions is better than nothing and allows for improvements over time.

39. Federal Reform Pathways
Status Quo Personal Responsibility Private Market Private Catastrophic Public Catastrophic Public Front End Public Comprehensive
Private-Public Spectrum
This resulted in the development of 7 Pathways
The pathways principally differ in levels of government and private sector roles..

40. Pathway 1: Status Quo Expectation of personal responsibility
Public support is primarily safety net (must be impoverished) through Medicaid
70% of expenditures are paid through public sources
We currently spend as much as some countries with formal LTSS systems
Pathway 1: Status Quo. This was not a pathway the Task Force created, but one they recognized needed to be acknowledged to better understand our starting point. Its attributes include:
• An expectation of personal responsibility with respect to meeting LTSS needs
• Public support is primarily a safety net (Medicaid) available only after one is impoverished paying for LTSS
• Despite the expectation of personal responsibility, 70% of expenditures are paid through public sources
• We spend as much through this “non-system” as do some countries with formal LTSS systems.

41. The U.S. is spending $ anyway, so can we do it better?
In the U.S. we spend as much on LTSS as some countries that have formal systems, without the benefit of controls and intentional design. If we are going to spend the money anyway, it seems that we should spend it with greater intention.
The U.S. is spending $ anyway, so can we do it better?

42. Pathway 2: Personal Responsibility
Tighten safety net with intention to spur more private savings and purchase of insurance
Gov’t does little to encourage/support private market options
Pathway 2: Personal Responsibility. This pathway proposes that we:
Tighten the Medicaid safety net with intention to spur more private savings and purchase of insurance
Gov’t does little to encourage/support private market options so people do not have more affordable or new products or options to choose from
We recognized that this approach has serious limitations given that tightening the safety net without providing additional and affordable tools to plan and prepare for LTSS is a risky combination.

43. Pathway 3: Private Market
Gov’t seeks to activate personal responsibility by encouraging new and more affordable products
Gov’t may offer subsidies and tax incentives for purchase
May be some vehicle for re-insurance (gov’t or private)
Pathway 3: Private Market. Under this pathway:
Gov’t seeks to activate personal responsibility by encouraging new and more affordable products and new vehicles and incentives for savings
Gov’t may offer subsidies and tax incentives for purchase
Gov’t would offer or sponsor a reinsurance pool to encourage new insurance entrants in the market and assist insurers with limiting liability, which would increase affordability and stability of insurance products

44. Pathway 4: Private Catastrophic
Individuals required to purchase private catastrophic LTC insurance
Gov’t may offer subsidies and tax incentives
Safety net (Medicaid) becomes primarily for those who can’t get covered in private market
Reinsurance through portion of catastrophic premium
Pathway 4: Private Catastrophic. Under this pathway:
Individuals are required to purchase private catastrophic LTC insurance
Gov’t may offer subsidies and tax incentives for purchase of the insurance
Safety net (Medicaid) becomes primarily for those who can’t get covered in private market
Possible reinsurance vehicle through premium pooling

45. Pathway 5: Public Catastrophic
Individuals required to contribute to and participate in public catastrophic LTC insurance
Gov’t may offer subsidies and tax incentives for front-end coverage
Pathway 5: Public Catastrophic. Under this pathway:
Individuals are required to contribute to and participate in public catastrophic LTC insurance
Eligibility would be triggered once individuals have reached a threshold of qualified LTSS expenses and meet functional need criteria for coverage
Gov’t may offer subsidies and tax incentives for front-end coverage

46. Pathway 6: Public Front End
Public program offers basic “front-end” cash and services
Limited dollar and/or time limit
Reaches more people, more immediately than catastrophic coverage
Pathway 6: Public Front End (Common Good). Under this pathway
A public program would offer basic “front-end” cash and services for a limited dollar amount and/or time period
The intent is to reach more people, more immediately than catastrophic coverage; yet may inadvertently help those who are in a position to help themselves on early LTSS costs

47. Pathway 7: Public Comprehensive
Combines public front-end and catastrophic coverage in a comprehensive program
Participation mandatory or voluntary opt-out
Safety net serves only those who can’t afford co-pays/deductibles/out-of-pocket
Pathway 7: Comprehensive. This pathway
Combines public front-end and catastrophic coverage in a comprehensive program
Is either mandatory or heavily incentivized (voluntary opt-out)
The safety net serves only those who can’t afford co-pays/deductibles/out-of-pocket

48. Evaluating Pathways in Terms of Potential Outcomes
Gets people care
Supports family caregiving role
Achieves “right” balance b/n private vs. public and individual vs. shared responsibility
Achieves “right” balance across generations
Addresses stress on federal/ state budgets
More likely to be adopted/ accepted
STATUS QUO
PERSONAL RESPONSIBILITY
PRIVATE MARKET
PRIVATE CATASTROPHIC
PUBLIC CATASTROPHIC
COMMON GOOD/PUBLIC FRONT END
PUBLIC COMPREHENSIVE
In small groups:
Think across each of the Pathways and the possible outcomes they might foster
Ask yourselves which Pathways most resonate with you and why using the suggested outcomes
After your discussion, we will ask you to weigh in individually using the clickers

49. Which Pathway most resonates with you?
Personal responsibility/ Private market
Private catastrophic
Public catastrophic
Public front-end
Comprehensive
Using your small group discussion as a foundation, respond as individuals on the Pathway that most resonates with you

50. Which Pathway least resonates with you?
Personal responsibility/ Private market
Private catastrophic
Public catastrophic
Public front-end
Comprehensive
Again, using your small group discussion as a foundation, respond as individuals on the Pathway that least resonates with you

51. In weighing the options, what outcome is most important to you?
People get care and support family caregivers
“Right” balance b/n private/public and individual/ shared responsibility
“Right” balance b/n LTSS costs of this generation and future generations
Address federal/ state budget pressure
Adopt some policy that moves us forward
In weighing the options, which outcome was most important to you?

52. What outcome is second most important to you?
People get care and support family caregivers
“Right” balance b/n private/public and individual/ shared responsibility
“Right” balance b/n LTSS costs of this generation and future generations
Address federal/ state budget pressure
Adopt some policy that moves us forward
In weighing the options, which outcome was second most important to you?

53. What outcome is least important to you?
People get care and support family caregivers
“Right” balance b/n private/public and individual/ shared responsibility
“Right” balance b/n LTSS costs of this generation and future generations
Address federal/ state budget pressure
Adopt some policy that moves us forward
In weighing the options, which outcome was second most important to you?

54. Implications of Discussion?
In terms of federal reform, what implications arise from this discussion?
Future State involvement in federal solutions?
Next steps?
Other thoughts or guidance?

55. Pathways: State Reform Support State-Level Conversations Regarding LTSS Reform

56. State conversation goals
In addition to weighing in on LTSS Federal Reform Pathways: 1
Build capacity in states to engage in LTSS reform discussion
If feasible, foster state level LTSS reform with emphasis on middle class solutions 2

57. Conversation approach
Develop and offer a starter conversation for a state 1 2
If there is momentum, follow up with 2 additional conversations and technical assistance that may aid a state in getting traction for state level reform

58. Theory behind conversations
Community engagement consists of multiple stages:
Leadership
Organizing
Initiate broad based coalition
Establish structure
Educate and build capacity for action
Plan for action
Implement
Monitor progress
Activism
If states want to foster change at the state-level, there is research that supports optimal ways to organize and work across sectors
Community engagement consists of multiple stages. The state conversation series is designed to help a state move through the foundational stages to get traction for subsequent reform
OUTCOMES
Florin, P., et. al Identifying training and technical assistance needs in community coalitions: a developmental approach (1993); Goodman, R. et.al. A construct for Building the Capacity of Community-Based Initiatives in Racial and Ethnic Communities: (2008)

59. Process map for developing a state approach to LTSS financing
Identify and Convene Key Stakeholders
Analyze State LTSS Situation
Clarify Problem, Goals, and Guiding Principles
Develop and Review Potential Concepts
Evaluate Highest Potential Concepts
Enact State Legislation and Regulatory Changes
As a state moves along steps, need to build in growing avenues for awareness building, engagement and advocacy at grass roots and grass tops levels

60. Criteria for target states1
Conditions within the state ripe for reform 2
Willingness of LeadingAge Executive to champion
Engagement and commitment of high level policy maker in the state (Governor; Commissioner) 3
Presence of federal champion or other means to align federal and state stakeholders
For state conversations to be successful, a state “driver” – someone of sufficient rank to influence policy change and sustain the state’s process – must be in place. 4 5
Entry point such as a forum, conference or other natural convening opportunity

61. Potential stakeholder involvement
High Level State Support -
Governor, Legislators
Champion Organization –
i.e. State Human Services
Care Recipients /Caregivers, Families
Local Advocacy Orgs
Stakeholders
State Budget Office
Employers
Stakeholders must include those highly impacted by the issue and those able to leverage change—aim for strange bedfellows
Consumers
Insurance Carriers
Medicaid/Medicare
Expertise
National LTC Policy Expertise
State Insurance Dept.
Actuarial Expertise
State Aging Dept.
LTC Experts

62. Potential state actions
Awareness/Education Re-energize LTCi and Other Private Market Options Public Insurance or Health Insurance and Medicare Medicaid Reform or Regulatory Changes
Awareness/
Education
Re-energize
LTCi and
Other Private
Market
Options
Medicaid
Reform or
Regulatory
Changes
There are a number of approaches that states can take in addressing LTSS financing reform and the Pathways initiative does not presume what any state will or should do
In addition to these “financing” approaches, states will ideally undertake service delivery and work force reforms to assure comprehensive and effective systems change
Public Insurance or Health Insurance and Medicare

63. Potential state actions
Awareness/
Education
Awareness/Education
Own Your Future Campaigns
State-Employer joint education
LTCi counseling through Health Exchanges
Re-energize
LTCi and
Other Private
Market
Options
Medicaid
Reform or
Regulatory
Changes
Public
Insurance or Health Insurance and Medicare

64. Potential state actions
Re-energize LTCi and Other Private Market Options
New private insurance options/or regulatory reforms
Incent LTC purchase or savings via tax policy
Reinsurance pools
Other insurance, savings, tax approaches
Improve utilization of others consumer assets
Awareness/
Education
Re-energize
LTCi and
Other Private
Market
Options
Medicaid
Reform or
Regulatory
Changes
Public
Insurance or Health Insurance and Medicare

65. Potential state actions
Public Insurance or Health Insurance and Medicare
Public catastrophic or front end coverage
Improve LTSS integration with health insurance, Medicaid and Medicare
Awareness/
Education
Re-energize
LTCi and
Other Private
Market
Options
Medicaid
Reform or
Regulatory
Changes
Public
Insurance or Health Insurance and Medicare

66. Potential state actions
Medicaid Reform or Regulatory Changes
Re-evaluate spend down requirements
Evaluate impact of tighter/looser eligibility
Evaluate impact of HCBS rebalancing
Develop earlier intervention model to minimize NH stays
Awareness/
Education
Re-energize
LTCi and
Other Private
Market
Options
Medicaid
Reform or
Regulatory
Changes
Public
Insurance or Health Insurance and Medicare

67. State action discussion framework
Admin Technical Feasibility
Political Feasibility
Cost to Implement
Projected Budget Benefit
Potential Solutions
Awareness Education
Re-energize Private LTC Insurance
Other Private Insurance Approaches
Other Consumer Assets
Social Insurance Options
Medicaid Reforms
Health Insurance and Medicare
Legislative Regulatory Changes

68. Improving state awareness and knowledge of LTSS
Educational campaign
Establish and direct residents to a single source for information, counseling, and support
Include full range of resources and viable solutions
Educational campaign
Spell out the emerging crisis for residents, stakeholders and the state overall
Point out the costs of not taking action
Provide financing and service solutions tailored to individual circumstance and problems
Establish and direct residents to a single source for information, counseling, and support
Interactive Website with decision-support tools
One-on-one phone and in-person consulting capability
Proactive links to solution providers
Include full range of resources and viable solutions
Public, private, and non-profit assistance
Service providers
Full range of funding options

69. Re-energizing the LTCi market
Affordable
Easy to Grasp
Easy to Sign-up
Age and Income Target
Expected Participation
Potential LTCi Concepts
Up-front Short Term Care
Streamlined Intermediate Plan
High-Deductible Catastrophic Plan
LTC Medicare Plans
Lower Cost Life/LTC Hybrid Plans
Public First Dollar Concepts
Public Catastrophic Concepts
Public Re-insurance Concepts
Long-term care insurance has fallen short of expectations as a viable source to finance LTSS for many. Recognizing that, states can take a proactive role in helping re-vitalize the market for this product by:
* Encouraging innovative approaches by insurers, financial service providers and health plans to develop more affordable solutions that work that work for a range of ages and income levels
* Providing more meaningful consumer protections through enhanced transparency and focus

70. Other potential actions to incentivize consumers and markets
State directed tax incentives
State or regional re-insurance facilities
State directed Tax Incentives
Credits to offset federal taxes for use of deferred savings accounts- i.e. 401K, 403B, IRA accounts
Tax credits for purchasing long-term care protection
Tax credits for caregiving
State or regional re-insurance facilities
Evaluate state Medicaid or other state agency as catastrophic re-insurer

71. Actions to improve utilization of existing consumer assets for LTSS$ ç
Deferred
Savings
Whole and Universal Life Insurance Policies
Lobby for Tax Code and Other
Changes
Home
Equity
Deferred Savings Home Equity Whole & Universal Life Insurance Policies Lobby for Tax Code & Other Changes
Evaluate changes to laws and regulations that better encourage use of deferred savings for LTSS
Lobby for changes to NAIC and federal tax codes
Evaluate changes to state laws and tax codes
Evaluate ways for seniors to better access their home equity to pay for LTSS
Analyze creative uses of other potential assets i.e. whole and universal life insurance policies to fund some LTSS

72. Evaluate reforms to Medicaid and medicare programs at state level
Medicare waivers and/or programs that incorporate LTSS funding into Medicare gap programs
Re-define/clarify Medicaid program
Re-evaluate spend down requirements
Evaluate impact of tighter/looser eligibility
Evaluate impact of HCBS rebalancing
Develop earlier intervention model to minimize NH stays
Potential state level options
Medicare waivers
Design programs that incorporate LTSS funding into Medicare gap programs
Re-define and clarify Medicaid program in light of overall state funding plan
Re-evaluate spend down requirements
Evaluate impact of tighter/looser eligibility
Evaluate impact of further encouraging HCBS vs. institutional care when feasible
Develop earlier intervention model to minimize NH stays

73. State legislative and regulatory initiatives
Examples
Authorizing language and funding for LTSS education and awareness
New/modified regulations to provide consumer protections for new and existing insurance, savings or home equity concepts
Regulatory changes that broaden the definition of LTSS funding products
Legislation/regulations to modernize state Medicaid
Medicare waivers for LTSS integration
Authorizing language and funding for state LTSS education and awareness programs
Language and funding authorizing further research, analysis, and state demonstration projects
New or changed regulations to provide consumer protections for new and existing insurance, savings or home equity concepts
Regulatory changes that broaden the definition of LTSS funding products not currently considered long-term care-i.e. short-term care, catastrophic protections, certain kinds of combination products
Legislation and regulations that re-define and improve state Partnership programs
Legislation/regulations to modernize state Medicaid programs
Legislation/regulation to pursue Medicare waivers for desirable LTSS integration options
Advocate for updates to NAIC Model Act
Encourage innovation in new financing models
Broaden definition of what is acceptable LTCi
Remove emphasis on high cost built-in inflation

74. State commitment to process1
Engage and convene stakeholders 2
Provide meeting space and support logistics 3
Help plan and support meetings
Serve as coordination/communication hub for 3 meeting process
For state conversations to be successful, a state “driver” – someone of sufficient rank to influence policy change and sustain the state’s process – must be in place. 4 5
Assist with between-meeting research and due diligence

75. Pathways commitment to process
Meeting planning, facilitation, summarization of 3 meetings series 1
Support regarding LTSS reform process and options 2 3
Assist in developing action plan
For state conversations to be successful, a state “driver” – someone of sufficient rank to influence policy change and sustain the state’s process – must be in place. 4
Serve as occasional advisor beyond 3 meetings

76. Next steps discussion Is there an appetite for moving forward?
If so, how will we:
Resource/organize our effort (human and financial)?
Analyze our situation?
Prioritize and decide on which options to include?
Conduct “due diligence” on options?
Develop support for recommendations?
Facilitate brain writing and discussion on following statements:
I want to do this because….
Barriers I foresee include….
The first step of action is to….

77. Next steps planning
Additional stakeholders needed at table Future meeting schedule Additional questions/concerns/ideas ?