Not enough to just talk about long-term care

  • Article by: GAYLE KVENVOLD
  • Updated: October 30, 2011 - 4:16 PM

The issues are very real. Perhaps Minnesota can be a state of action.

Recent news about the demise of the CLASS Act -- a first-of-its-kind voluntary national insurance program for long-term care -- is a frustrating example of the chasm that separates merely talking about the challenges we face and our ability to develop real, bipartisan solutions.

Against the steady beat of the coming "age wave" and its impact on public expenditures, the Community Living Assistance Services and Supports Act was a bold step to create a self-financed program designed to help us stay at home if we become disabled.

The modest daily benefit that CLASS would have provided could have been the foundation for private investments in wrap-around insurance policies and could have ushered in a new era of shared responsibility for long-term-care costs.

A recent study from AARP and the SCAN Foundation confirms that even with the excellent work that has been done in Minnesota to ensure consumer choice and quality in long-term care, the costs of those services are on average one to two times the median household income in our state.

There are very real technical challenges at the heart of the CLASS Act that have been the focus of insurance actuaries for some months. But the decision to discontinue this work -- to declare an initiative focused on personal responsibility and planning for our own long-term care all but dead -- raises an urgent question that no one seems able to answer: If not CLASS, then what? The question of how we as consumers will share more responsibility for our own long-term care must be addressed.

Minnesota lawmakers should take note. There are options worth pursuing in Minnesota that can help us begin the shift to greater personal responsibility -- for example, life insurance conversions that would allow individuals to convert the value of an existing life insurance policy to pay for their long-term-care needs, rather than receiving a cash benefit upon their death.

There also is merit in the idea of expanding the current opt-in long-term-care insurance benefit offered to state employees. This is a voluntary program with premiums paid by the individual. It is affordable and easy, which means that more young employees take advantage of it at no additional cost to the state.

As a part of the "Moving Beyond Medicaid" report, the Citizens League engaged Minnesotans across the state in discussions about other worthwhile options, such as a hybrid home equity/reverse mortgage product developed by or supported by the state that could be used to pay for care or help people remain in their homes.

Prize-linked savings accounts are another idea borne out of the Citizens League work and are especially popular among caregivers. For every $25 accumulated in a credit union savings account, a saver would be entered in a prize drawing. The individual could then transfer their savings and rewards to a Health Savings Account when needed to pay for care.

Changes to Minnesota's existing system of regulations also could go a long way toward increasing financial stability for individuals, families and the state. Minnesota is one of only two states that freezes private pay rates for long-term care to match the rates paid by Medicaid (rates that fall short of the actual costs of care by more than $25 per person per day). Modifying this outdated law would ensure that those who can afford to pay more toward the cost of their nursing home care do so, allowing us to maximize the reach of public dollars among those most in need.

Finally, we must reshape Minnesota's Medical Assistance program. Rather than a system that encourages "spending down" to qualify for public subsidy, we should evolve to a system that empowers and rewards people who take greater responsibility, and therefore greater control, over their own long-term care.

This is our future. We can get there kicking and screaming, denying the inevitable and living with the default system that evolves -- or, we can take the reins. Will Minnesota be up to the challenge?

Gayle Kvenvold is president and CEO of Aging Services of Minnesota, the state's largest trade association representing more than 1,000 long-term-care providers.

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