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4 LTC ideas from a little to the right

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Pamela Villarreal, a senior fellow at the National Center for Policy Analysis (NCPA), has tried to come up with some ideas for improving long-term care (LTC) financing in Wisconsin.

Her ideas might get some attention outside Wisconsin, and even inside the U.S. Capitol, because the NCPA has tried to approach public policy development from a perspective that leans to the right. NCPA policy specialists testify frequently in hearings on Capitol Hill.

The NCPA describes itself as a nonpartisan public policy research organization that promotes “private, free-market alternatives to government regulation and control.”

Republicans will control both the House and the Senate in 2015, but they will have only 54 seats in the Senate. That means that, under normal rules, to move bills through Congress and have them adopted as law, they will need to win the support of at least six Democrats to get the bills to the Senate floor.

If Republicans fail to round up the support of at least six Democrats, a small group of senators who oppose a bill can, in theory, keep the Senate from voting on the bill by filibustering, or engaging in an endless round of debate.

If President Obama vetoes a bill, supporters need to scrape up 67 votes in the Senate to overturn the veto.

Policy specialists at the NCPA may have more ability than some other right-leaning groups to win over moderate Democrats because, traditionally, the NCPA has been polite to Democrats and have assumed that many programs that Democrats support, such as Medicaid and Medicare, will remain in place.

See also: Think tank offers 2 options to preserve Social Security.

For a look at some of the ideas in Villarreal’s commentary on ways to improve Wisconsin LTC financing system, read on.


1. Let each state set its own Medicaid home equity exemption limit however it wants

Villarreal notes that the federal government now makes the minimum exemption $543,000 and the maximum $814,000.

The federal government could encourage people with the means to prepare for their LTC costs to do so by letting each state set an exemption level based on its own median home price and its own residents’ income and asset levels, Villarreal writes.

See also: Real socialism.

Snowy house

2. Let a state Medicaid program require homeowners to take out reverse mortgages before tapping Medicaid nursing home benefits

Medicaid program managers now try to recover some of the money they spent on an older individual’s nursing home care by going through a slow, complicated, low-yield asset recovery process after the individual dies.

In place of using the balky asset-recovery approach, a state could replace the current balky post-death Medicaid asset recovery system with a mandatory reverse mortgage requirement, Villarreal says. Before homeowners could use a state’s Medicaid nursing home benefits, they would have to apply for reverse mortgages.

That way, Villarreal says, a homeowner would have to use most home equity before applying for Medicaid nursing home benefits.

See also: 4 reasons reverse mortgages are still LTC guppies. 

Older woman in an armchair

3. Make as much use of home care as possible

Both Democrats and Republicans agree that the government should try to save money by helping as many people as possible get care at home.

The Patient Protection and Affordable Care Act (PPACA) already encourages states to promote use of home-based and community-based programs in place of nursing home benefits.

In Wisconsin, Villarreal says, a semi-private room in a nursing home costs $87,363 per year, while having a home health aide work 44 hours per week costs only about $50,000 per year.

See also: Are continuing care communities the answer?.

Sumo wrestler

4. Replace the LTC partnership with a state LTCI purchase income tax credit

Through an LTC partnership program, a state can encourage people to buy LTC insurance by letting LTCI users keep more assets out of Medicaid nursing home eligibility calculations. Consumers in partnership states who buy qualified LTCI policies and use up their benefits may be able to keep some or all of their savings and still get government help with paying nursing home bills.

That approach is ineffective, because most people who are thinking about LTCI would rather protect income now than assets later, Villarreal says.

The program does more to help the highest-income people buy LTCI than to help lower-income people, Villarreall adds.

She says states should be able to replace the partnership program with a generous state income tax credit for LTCI premiums. 

See also: The Texas LTCI Outreach Program: A Site Report.


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