Slide 1

Long-Term Supports in Massachusetts
Long-Term Care Financing Advisory Committee Meeting
March 5, 2009

Slide 2

Long Term Supports (LTS) in Massachusetts

•	Massachusetts has a lengthy history of supporting the long-term care needs of elders and people with disabilities across the lifespan. 

•	The Patrick Administration’s long-term care policy is community first, an approach that emphasizes maximizing independence in home and community settings while assuring access to needed institutional care. 

Slide 3

Key Facts Illustrate Why We Are Here
 	
Slide 4

People who need LTS are represented among all age groups 

A chart entitled “Figure 1: People with Disabilities in Massachusetts, by Age Group” contains the following data.

Ages	Total Non-Institutional Population 5 Years and Older	With Any Disability*	With a Self-Care Disability**	Self-Care as % of Any Disability	Any Disability as % of Total Population	
5 - 20	1,349,334	97,561	13,360	13.7%	7.2%	
21 - 44	2,120,128	162,042	21,983	13.6%	7.6%	
45 - 64	1,708,314	275,909	50,187	18.2%	16.2%	
65+	812,382	294,374	72,544	24.6%	36.2%	
All 5 and Older	5,990,158	829,886	158,074	19.0%	13.9%	

A note at the bottom states:

* “Any disability” refers to an individual self-reporting any of 6 types of disabilities, as defined by the ACS survey.
** “Self-care disability” refers to an individual reporting difficulty with dressing, bathing, or getting around because of a physical, mental, or emotional condition lasting 6 months or more.

Slide 5

The population with disabilities is projected to grow significantly in the next decade

A bar chart is entitled “Figure 2: Comparisons of the 2004 Actual and 2015 Projected Number of Disabled 16-64 Year Old Persons in Massachusetts (in thousands).”
The chart shows that for the age group 16-24, there were 42,000 people with disabilities in 2004 and 53,000 people with disabilities projected for 2015.  This is a 28% positive change in population.  For the age group 25 – 44, there were 135,000 people with disabilities in 2004 and 123,000 people with disabilities projected for 2015.  This is a 9% negative change in population.  For the age group 45-64, there were 224,000 people with disabilities in 2004 and 271,000 people with disabilities projected for 2015.  This is a 21% positive change.  For all ages 16-64, there were 401,000 people with disabilities in 2004 and 447,000 people with disabilities projected for 2015.  This is a 12% positive change.

Slide 6

The elder population is projected to grow significantly in the next decade

A bar chart is entitled “Figure 3: Comparisons of the 2005 Actual and 2020 Projected Number of 65-85 plus Year Old Persons in Massachusetts.”  The chart shows that 6.1% of the population was in the age group 65-74 in 2005. In 2020, this age category is projected to be 9.6% of the population.  This is a 68% positive change for the category of people age 65-74.  The chart shows that 5% of the population was in the age group 75-84 in 2005.  In 2020, this age category is projected to be 4.8 % of the population.  This is a 3% negative change.  The next group, 85 plus, was 2.2% of the population in 2005. In 2020, this age category is projected to be 2.5% of the population.  This is a 21% positive change from 2005 to 2020. The last group is 65 and over.  13.3% of the population in 2005 was 65 and over.  The projected number for 2020 is 16.9 percent for this age group.  This represents a negative change of 36% between 2005 and 2020.

Slide 7

LTS spending is projected to increase with the changes in the population

A bar chart entitled “Figure 4: Projected National Spending on Long-Term Care Expenditures for the Elderly, 2000, 2020, 2040 (in 2000 dollars)”.  The chart shows that for Medicare spending, the expenditures were $29.4 billion in the year 2000 and $50.6 billion is projected for 2020.  Medicaid spending for 2000 was $43.3 billion and $75.4 billion is projected for 2020.  The numbers for Private Long-term care Insurance are $5 billion for 2000 and $36.2 billion is projected for 2020.  Out of pocket expenses were $42.8 billion for 2000 and $42.9 billion is projected for 2020.  The totals for all groups were $123.1 billion for 2000 and a projected figure of $207.3 billion for 2020.  The projected spending figure for all payers for 2040 is $346.1 billion.  It is noted that comparable figures on spending for non-elderly individuals with disabilities is currently not available.          

Slide 8

The current LTS system is heavily dependent on institutional care…

This bar graph is labeled “Figure 5: Comparison of MA Licensed Nursing Facility Beds to Census (All Payers), 1995-2008.”  The bar graph has bars for years 1995, 1997, 2000 through 2008 for licensed beds, census, MassHealth, and empty beds.  The graph shows a gradual decline from approximately 54,000 licensed beds to approximately 48,000 licensed beds between years 1995 and 2008.  The graph shows a gradual decline from approximately 50,000 census to approximately 43,000 census between years 1995 and 2008.  The graph shows a gradual decline from approximately 36,000 MassHealth beds to approximately 30,000 MassHealth beds between years 1995 and 2008.  The graph shows a very minor increase in empty beds from years 1995 to 2008.

Slide 9

…but community LTS spending is increasing

Figure 6 is labeled “MassHealth Nursing Facility Spending as a Percent of Total MassHealth Long-Term Care Spending.”  A bar graph shows total community and institutional spending for FY 2003 – FY 2008.  Institutional spending remains fairly constant while community spending increases each year.  For FY 2003, total spending was approximately $2.2 billion, of which, 73% was on institutional spending.  For FY 2004, total spending was approximately $2.35 billion, of which 72% was on institutional spending.  For FY 2005, total spending was approximately $2.45 billion, of which, 71% was on institutional spending.  For FY 2006, total spending was approximately $2.55 billion, of which, 68% was on institutional spending.  For FY 2007, total spending was approximately 2.65 billion, of which, approximately 64% was on institutional spending.  For FY 2008, total spending was approximately $2.8 billion, of which, approximately 60% was on institutional spending.

Slide 10

Unlike “acute” care, there is little employer/commercial insurance participation in financing LTS

Figure 7 is labeled “Estimated Percentage of Share of Spending for Long-Term Care for the Elderly.”  Two pie charts are labeled “Without Informal Care” and “With Informal Care.”  The pie chart for “Without Informal Care” is on the left side.  This shows that 35% of spending is from Medicaid, 25% is from Medicare, 33% is out-of-pocket expenses, 4% is from private insurance and 3% is other.  The pie chart for “With Informal Care” is on the right side.  This shows that informal care is 36% of spending, Medicaid is 22%, Medicare is 16%, Out-of-pocket is 21%, Private Insurance is 3%, Other is 2%.  This chart has a note stating that values are calculated on the basis of how much such care would cost if it were provided through formal means. Estimates are from Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation, Administration on Aging, Informal Caregiving: Compassion in Action (June 1998), inflated to 2004 dollars.

Below the figure is a note stating that comparable figures on spending for non-elderly individuals with disabilities are not currently available.

Slide 11

Medicaid is the primary payer of LTS nationally and in Massachusetts

A pie chart is labeled “Figure 8: National Spending for Long-Term Care, by Payer (2005).”  The following payers are listed:
•	Medicaid pays 48.9% of al Long-Term Care nationally
•	Medicare pays 20.4% of all Long-Term Care nationally
•	The Out-of-pocket component is 18.1% of all Long-Term Care nationally
•	Private health insurance and LTC insurance pay 7.2% of all Long-Term Care nationally
•	Other private pays for 2.7% of all Long-Term Care nationally
•	Other public pays for 2.6% of all Long-Term Care nationally

Slide 12

The Community First Olmstead Plan

Slide 13

The MA Community First Olmstead Plan

Olmstead v. L.C  decision (U.S. Supreme Court, 1999) 
•	Americans with Disabilities Act (ADA) requires states to provide services in the most integrated settings appropriate to the needs of individuals with disabilities
•	
The development of the Plan:
•	An Olmstead Planning Committee was convened in late Fall 2007
•	Olmstead Plan was approved by the Governor in Fall 2008

Slide 14

CF Olmstead Plan principles

1.	People with disabilities and elders should have access to community living opportunities and supports.
2.	The principle of “community first” should shape policy development and funding decisions.
3.	A full range of long-term supports, including HCBS, housing, employment opportunities and nursing facility services, are needed.
4.	Choice, accessibility, quality, and person-centered planning should be the goals in developing LTS.
5.	Systems of community-based care and support must be strengthened, expanded and integrated to ensure access/efficiency.
6.	Public and private mechanisms of financing LTS must be expanded.
7.	LTS must address the diversity of individuals with disabilities and elders in terms of race, ethnicity, language, ability to communicate, sexual orientation, and geography.

Slide 15

CF Olmstead Plan goals
1.	Help individuals transition from institutional care. 
2.	Expand access to community-based long-term supports.
3.	Improve the capacity and quality of community-based long-term supports. 
4.	Expand access to affordable and accessible housing with supports. 
5.	Promote employment of people with disabilities and elders. 
6.	Promote awareness of long-term supports.  

Slide 16

Select Related Community First Activities
•	Systems Transformation Grant	
•	State Profile Tool Grant
•	Long Term Care Options Counseling
•	Massachusetts Aging and Disability Information Locator
•	Aging and Disability Resource Center Expansion Grant
•	CF 1115 Waiver
•	Real Choice Pilot	
•	Person Centered Planning Grant	
•	Medicaid Infrastructure and Comprehensive Employment Opportunities Grant (MI-CEO)
•	EOHHS Agency Internal Housing Working Group
•	EOHHS Agency Internal Quality Working Group
•	Personal Care Attendant Improvement Workgroup
•	Personal Care Attendant Quality Workforce Council

Slide 17

The Advisory Committee’s Role in the Olmstead Plan

Slide 18

Advisory Committee role

Reform of the LTS system is “contingent upon the availability of re-aligned as well as new public and private long-term support funding.”	 			Community First Olmstead Plan, p. 3	

"A Long-Term  Care Financing Advisory Group will be established to determine a  roadmap for public and private financing development.”		Community First Olmstead Plan, p. 10

Slide 19

Advisory Committee problem statement

The financing system for long-term care supports (LTS) in Massachusetts is:
1)	fragmented among various public and private payers and unpaid informal caregiver supports;
2)	centered on insurance-based programs that primarily cover services that are medically necessary, when most individuals’ LTS needs and preferences are for community-based social supports;
3)	insufficient to support current and projected needs; and
4)	heavily dependent on state public assistance programs that have limited resources and base access to LTS on an individual’s income, age, type of disability, etc.
Projected increases in the population of elders and individuals with disabilities who will need LTS, a projected decline in the availability of informal supports for LTS, and continued insufficient workforce capacity to provide LTS will exacerbate these problems.

Slide 20

Overarching critical questions

1.	What is an appropriate mix of public and private financing mechanisms for the whole system of LTS, given the current and projected needs and preferences of the populations to be served?
2.	Assuming that some form of public-private partnership will remain as the predominant model for financing LTS, what is the role of a public safety net system that provides a minimum set of LTS for all who demonstrate need?
3.	Within these parameters, what innovative formal or informal financing models exist or can be developed that will ensure that these LTS needs are met?
4.	What investments or system reforms are necessary (and under what timeframes) to implement these financing models?

Slide 21

Advisory Committee goal

To identify and prioritize short-term and long-term strategic options for reforming the financing system for LTS for elders and individuals with disabilities in Massachusetts to support a range of LTS and a sustainable mix of personal and familial responsibility, private financing mechanisms and public assistance in a manner that:

•	maximizes independence; and
•	assures access to the necessary continuum of LTS.

Slide 22

Framework for Reform Discussion

Slide 23

Merlis: Reforming LTS financing involves a series of decisions about…

1.	Sources of funding
2.	Mix of funding 
3.	Eligibility for benefits
4.	Nature/extent of covered services  

Slide 24

These LTS financing reform decisions relatively value…

•	Shared responsibility
•	Pool/spread risk through public or private insurance
•	Strong safety net for the poor
•	Focus on consumer needs and preferences
•	Popular support
•	Flexibility
•	Support for family caregivers
•	Integration of medical and social services
•	Quality
•	Access
•	Efficiency

Slide 25

Possible high-level strategies for designing an alternative system 

Private at its core:
1.	Improve and promote private long-term care insurance for the “middle” income
2.	Establish public catastrophic long-term care insurance and improve/promote private long-term care insurance to “fill the gap”
Public at its core:
1.	Improve and expand the public safety net for people with low-to-modest income
2.	Establish universal public long-term care insurance    

Slide 26

Things to Consider

•	These approaches are not mutually exclusive!
•	In deciding direction, we need to ask:
•	Who is most likely to benefit?
•	Who will be “left out”?
•	How broad is the risk spread?
•	How will costs be distributed?

Slide 27

Committee Business

Slide 28

Business items

•	Public communications
•	Committee communications
•	Future meetings
•	Time change:  all subsequent meetings will be from 9:00AM – 11:30AM
•	Location:  most meetings will be on the 21st floor of One Ashburton Place. The April 17th meeting will be in the Ashburton Café on the basement floor of One Ashburton Place.

Slide 29

Addendum 1
Feedback from the Advisory Committee
•	Content:
•	Additional perspective (either on Committee or at specific session) is needed: Federal, other States, health economist, international
•	Existing government/agency structure and data systems may not be optimal
•	All financing options should be on the table, including private strategies beyond LTC insurance and reverse mortgages
•	Process:
•	Additional educational opportunities are needed between meetings
•	We should not answer policy questions (e.g., need for rebalancing) that already have been answered
•	Deliverable should have concrete, tangible options for the State

Slide 30

Addendum 2
Sources for Slides 23-26
•	Allen, K. “Long-Term Care Financing, Growing Demand and Cost of Services are Straining Federal and State Budgets,” U.S. Government Accountability Office (April 27, 2005).
•	Feder, J., H. Komisar, and R. Friedland. “Long-Term Care Financing: Policy Options for the Future.” Georgetown University Long-Term Care Financing Project (June 2007).
•	Gleckman, H. “How Can We Improve Long-Term Care Financing,” Center for Retirement Research at Boston College (June 2008, Number 8-8).
•	Merlis, M. “Long-Term Care Financing: Models and Issues.” Prepared for the National Academy of Social Insurance Study Panel on Long-Term Care (April 30, 2004). 
•	National Commission for Quality Long-Term Care. “From Isolation to Integration. Recommendations to Improve Quality in Long-Term Care” (December 3, 2007).
•	Washington State Task Force on Long-Term Care Financing & Chronic Care Management, Final Report (January 2008).