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Title: Medicare premiums and out-of-pocket expenses. Medicare HMOs


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

3
Agenda
  • Presentation Overview
  • Existing Options
  • Contemplated Options
  • Potential Options
  • Discussion

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

5
Long Term Care
  • - Yes, but do we care?
  • - Isnt that a thing only old people worry about?
  • Or is it different now, than 10 years ago?

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)

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.

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

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

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

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

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

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

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?

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)

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

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

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)

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.

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

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

22
Care Delivery Continuum
Continuum of Care
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

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

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

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

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

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.

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

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

34
Social HMOs
  • MedicareChoice standard benefit set
  • Plus
  • Privately financed expanded home-and
    community-based and institutional care benefits
  • Plus
  • Prescription drugs (some limitations)

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

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)

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.

38
Also
  • Baby boomers and, clearly, our Gen-Xer children
    will not be satisfied with the choices currently
    available .

39
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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

41
Fix the payment, but also fix
  • An 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

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_at_halleland.com
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