Slide 1__________________________________________________________________

Addressing the Challenge:  Public and Private Solutions for Long-Term Services & Supports

Slide 2__________________________________________________________________

Outline of the Presentation
•	Public Awareness Campaign 
•	Informal Caregiver Supports
•	Setting the Stage for Comprehensive Reform
•	Goals and Principles
•	Review of the Challenge
•	Solutions that hold Promise for Massachusetts
•	The Long-Term Care Partnership Program (LTCP)
•	The Contribution Program
•	Cost & Impact Analysis
•	MassHealth Data & Analysis
•	Committee Business

Slide 3__________________________________________________________________

Public Awareness Campaign

A public awareness campaign to increase
understanding of LTS options & financing

Slide 4__________________________________________________________________

Why Encourage Adults to Plan for LTS?

•	Complement other statewide I&R activities
•	Address public concern that the demand for LTS will exceed available resources
•	Educate about shared public/private responsibility
•	Improve quality of life in later years
•	Support individual preferences, choice and dignity
•	Enable families to support aging relatives
•	Encourage proactive LTS planning
•	Help future generations to maintain financial security 
•	Avoid/reduce Medicaid costs

Slide 5__________________________________________________________________

Elements of CMS Campaign

CMS Role
•	Print Governor’s letter/brochure
•	Arrange initial mailing
•	Produce toolkit (booklet/CD)
•	Staff call center
•	Distribute toolkit to callers (including mailing charges)
•	Provide technical assistance & other materials

State role
•	Solicit Governor’s buy-in
•	Pay for initial mailing of letter/brochure
•	Issue press release/ hold press conference
•	Other activities as desired
•	TV, radio ads
•	Educational sessions
•	Website-800AGEINFO

Slide 6__________________________________________________________________

Campaign Materials

•	Governor’s Letter
•	Brochure
•	Booklet and CD

Slide 7__________________________________________________________________

Chapters of Campaign Booklet

•	
•	Introduction
•	Embrace the future!
•	Where should I start?
•	Lifestyle planning
•	Legal and estate issues
•	Staying at home
•	Financial Planning for LTS
•	LTC Insurance
•	Reverse Mortgages
•	Additional options available in Mass
•	Planning for your care
•	For more information

Slide 8__________________________________________________________________

Planned activities
•	Initial Mailing 
•	Approximately 450,000 households

•	Other components
•	TV/radio ads
•	Educational sessions
•	Website

Slide 9__________________________________________________________________
Next Steps & Timetable

•	Finalize campaign materials				10/23/09
•	Solicit Governor’s Buy-in					11/01/09
•	Print materials						12/15/09
•	Update 800AGEINFO Website				12/30/09
•	Launch campaign						1/15/10
o	Governor’s press conference				
o	Public service ads
o	Initial mailing and responses
•	Regional educational sessions				4/10-6/10
•	Campaign funding ends					9/30/10

Slide 10_________________________________________________________________

Informal Caregiver Support

Slide 11_________________________________________________________________

Informal Caregivers provide an immense amount of LTS in Massachusetts

•	
•	Informal Caregivers provide about 36% of the LTS received by elders nationally

•	In Massachusetts, there are about 690,000 informal caregivers of people of all ages at any given time, and about 1,040,000 at any time during the year

•	These caregivers provide the equivalent of $8.9 billion worth of care

•	Nationally, 17% of informal caregivers provide 40+ hours per week of care, 8% provide 21-39 hours, 23% provide 9-20 hours, and 48% provide 8 hours or less

Slide 12_________________________________________________________________

The majority of Informal Caregiver supports are currently offered through Elder Affairs

Types of Program	Program	Agency	
Training and Support including counseling, support groups, and training 	Family Caregiver Support Program	Elder Affairs	
Information and Assistance, programs that assist caregivers in accessing supports in the community	Family Caregiver Support Program
800-AGE-INFO
MADIL	Elder Affairs

Elder Affairs
EOHHS	
Respite* programs that provide informal caregivers with a break from their caregiving responsibilities	Family Caregiver Support Program 
Home Care Respite Program
HCBS Waivers	Elder Affairs

Elder Affairs
MassHealth with Elder Affairs, DDS, MRC	
Other Programs that can provide support to informal caregivers including financial assistance	Adult Day Health and Supportive Day
PCA (by paying family members)
AFC (by paying family members)	Elder Affairs & MassHealth	

* Respite is also disparately available through MRC and its SHIP program, MCB, and DDS

Slide 13_________________________________________________________________

Given the number of Informal Caregivers in the state, very few are receiving publicly-funded services

Programs that offer Caregiver-Specific Services 	State Expenditures	Utilization2	

Family Caregiver Support Program	 	  	
 	In-Home & Other Respite	$611,500 	1,046	
 	In-home counseling, Support Groups, & Caregiver Training	 $1,960,000		7,049	
 	General Information and Referral	$1,300,000	13,449	
Home Care Respite Program	 $6,800,000 	 30,696 	
Elder & TBI Waiver	$41,4443	134	
Totals	$10,712,944 	52,889 	

Slide 14_________________________________________________________________

There are other services that support Informal Caregivers

Adult Day Health: provides daily respite for caregivers.  No data collected by MassHealth on how many participants have caregivers.  
o	FY08: $62,700,000 
o	6,998 MassHealth clients in FY’09 - 923 in Complex level of care, which means they meet NF LOC, and are therefore likely to have caregivers at home 

Adult Foster Care: allows family members to be providers, paying them for providing care for individuals who live in their home.  No data collected on how many providers are family members.

Personal Care Attendants (PCA): Allows clients to hire family members as PCA.  
o	In the past year, 5,005 PCAs were hired family members, which is 19% of all PCAs hired.  

Slide 15_________________________________________________________________

Training Informal Caregivers reduces other LTS costs

In one key study, training and support programs created a median delay in nursing facility placement of 577 days, or 1.5 years*
o	A randomized 17-year-long study of 406 spouse caregivers of individuals with Alzheimer’s Disease
o	Intervention was two individual and four family counseling sessions tailored to specific situation, encouragement of support group participation, and the availability of ad hoc telephone consultation.

*  Mittelman, M.; Haley, W.; Clay, O.; Roth, D.  Improving caregiver well-being delays nursing home 	placement of patients with Alzheimer disease.  Neurology 2006;67(9):1592-9.

Slide 16_________________________________________________________________

Paying Informal Caregivers could address a number of issues related to LTS financing

•	
•	Decrease other LTS costs
•	Increase pool of possible workers
•	Expand access to LTS for rural areas
•	Raise questions about familial responsibility and substitution of care
Slide 17_________________________________________________________________

Possible Short-Term Actions to improve Informal Caregiver Supports
•	Increase awareness, and therefore utilization, of existing supports through increased outreach and education
•	Understand whether and why many caregivers do not get information they need and can use about available supports
•	Encourage implementation of evidence-based programs for caregivers of people with disabilities across the lifespan
•	Press for full funding of the National Lifespan Respite Care Act
•	Press for increased funding for National Family Caregiver Support Act
Slide 18_________________________________________________________________

Setting the Stage for Comprehensive Reform

Slide 19_________________________________________________________________

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 20_________________________________________________________________

LTC FAC 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 21_________________________________________________________________

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 22_________________________________________________________________

LTS Financing Principles (Draft 2)
The reformed LTS financing system will:
1.	Ensure a strong public safety net for the poor and most vulnerable.
2.	Limit financial pressure on the state financing system so that state funds are preserved for those most in need.
3.	Encourage personal responsibility for financing LTS to the maximum extent possible.
4.	Enable middle income people of all ages to access the LTS they need without becoming impoverished.
5.	Ensure appropriate participation of and support for informal caregivers.

Slide 23_________________________________________________________________

Other Olmstead Plan and Community First Activities

•	Olmstead Plan objectives available online at www.mass.gov/hhs/communityfirst

•	December meeting will include discussion of related activities around the following topics:
•	Transportation
•	Employment
•	Housing
•	Workforce Development
•	Care Integration
•	Information and Awareness
•	Consumer Choice / Self-Direction

Slide 24_________________________________________________________________

People with LTS Disabilities who need assistance with Self-Care or Every Day Tasks

A similar grid to the one in the previous slide shows the number of individuals in each age and income category by self care and everyday tasks needs.  

Low-income category (258,823 individuals or 46% of all people with an LTS disability)

There are 9,941 children with LTS disabilities aged 5-18 in the low-income category.  5,601 need assistance with self-care and 4,340 need assistance with everyday tasks. 

There are 144,718 adults with LTS disabilities aged 19-64 in the low-income category.  39,597 need assistance with self-care and 105,151 need assistance with everyday tasks. 

There are 104,164 seniors with LTS disabilities aged 65 and above in the low-income category.  33,400 need assistance with self-care and 70,764 need assistance with everyday tasks. 

Middle-income category (204,331 individuals or 36% of all people with an LTS disability)

There are 7,709 children with LTS disabilities aged 5-18 in the middle-income category.  4,650 need assistance with self-care and 3,059 need assistance with everyday tasks.

There are 97,437 adults with LTS disabilities aged 19-64 in the middle-income category.  23,496 need assistance with self-care and 73,941 need assistance with everyday tasks. 

There are 99,195 seniors with LTS disabilities aged 65 and above in the low-income category.  26,609 need assistance with self-care and 72,586 need assistance with everyday tasks. 

Higher-income category (99,221 individuals or 18% of all people with an LTS disability)

There are 3,366 children with LTS disabilities aged 5-18 in the higher-income category.  2,248 need assistance with self-care and 1,118 need assistance with everyday tasks.

There are 52,884 adults with LTS disabilities aged 19-64 in the higher-income category.  9,938 need assistance with self-care and 42,946 need assistance with everyday tasks. 

There are 42,971 seniors with LTS disabilities aged 65 and above in the higher-income category.  12,535 need assistance with self-care and 30,436 need assistance with everyday tasks. 

* Note: The total number of people with an LTS disability, 562,385, does not include persons who were institutionalized, in military group quarters or college dormitories, or individuals < age 15.  

Source:  2007 American Community Survey (ACS), US Census Bureau, tabulations by authors

*Does not include persons who were: institutionalized, in military group quarters or college dormitories, or unrelated individuals < age 15.
  Source:  2007 American Community Survey (ACS), US Census Bureau, tabulations by authors.

Slide 25_________________________________________________________________

Need for LTS Resources (Informal and Financial) Depends on Time in Need AND Type of Services Used

Simulated Distribution of Years of LTSS Need at 65

A bar graph shows the percentage of people nationwide that will need LTSS at age 65 and beyond.  31% of people will need no LTSS, 17% of people will need less than a year of LTSS, 12% of people will need 1-2 years of LTSS.  20% of people will need 2-5 years of LTSS, and  20% of people will need 5 or more years of LTSS.

Kemper (2005)

Slide 26_________________________________________________________________

Distribution of LTSS Spending Simulated for 65-year-old (2004)

A bar graph shows future projected LTSS spending for people who turned 65 in 2004. 
For those turning 65 at age 2004, 42% will spend $0 on LTSS, 19% will spend less than $10,000 on LTSS, 8% will spend $10,000-$25,000 on LTSS, 14% will spend $25,000-$100,000, 11% will spend $100,000 to $250,000, and 5% will spend $250,000+.

Slide 27_________________________________________________________________

Current LTS Financing System

A graphic is entitled “Current LTS Financing System.”  This graphic visually shows the LTS financing options available to individuals based on their clinical/functional and income status.  Medicaid is available to low-income individuals with low through high clinical/functional need.  LTC insurance is most available to individuals of middle-high and high income.  However, LTC insurance is typically not able to meet all of the needs of individuals with the highest clinical/functional need.  Personal resources are used to finance the needs of individuals in the low-middle to middle-high income.  Individuals with lower income and individuals with higher clinical/functional need are at greater risk of Medicaid spend down.  State programs are also available.

Slide 28_________________________________________________________________

Zero in on the Challenges
•	The Elderly 
•	Substantial Need:  68% of the Elderly Need Care 
•	Medicaid is the Only Option for Many
•	Private LTC Insurance is Unaffordable for Low/Middle Incomes
•	Middle Income Spend Down to Medicaid
•	Upper Income fare best today
•	Limited community-based care

•	The Under 65 Disabled
•	Private LTC Insurance is an option only before become disabled 
•	Limited community-based care 
•	MassHealth CommonHealth is only option for many

Slide 29_________________________________________________________________

Solutions That Hold Promise For Massachusetts

Slide 30_________________________________________________________________

Today’s Presentation for the LTC FAC
•	Responds to the Goals of the Advisory Committee 
•	Responds to the LTS Financing Principles of the Committee
•	Introduces Public & Private Models to Finance LTS 
•	Recommends a Model for Massachusetts 

Slide 31_________________________________________________________________

How to Evaluate Each Model
•	Target Population
•	How many people will benefit from the model?  
•	Who will not benefit?

•	Benefit Coverage
•	What benefit does the model offer?  Does it meet the need?
•	How much long-term services & support coverage does it provide?

•	Costs (Costs and Savings Impact Analysis)
•	Who bears the costs?
•	Is it cost effective?

•	Is this a solution for today or tomorrow?

Slide 32_________________________________________________________________

Cut to the Chase:  There is No Silver Bullet!
•	Each existing model leaves someone out

•	Existing models offer partial solutions

•	Our Challenges:  
•	How can we design our model to achieve our goals?
•	Can we combine models to improve coverage?
•	How can we improve upon existing models?

Slide 33_________________________________________________________________

Preview:  Where we might end up
•	A Complementary approach
•	Private Insurance:  
•	Expand to Middle Income people
•	Public Insurance:  
•	Meet the Challenge of Covering Disabled & Middle Income people
•	Medicaid:  Adjust to fill gaps

•	Massachusetts as a State Laboratory
•	Massachusetts embraces its role as a State Laboratory for Change
•	Take what exists and improve upon it
•	Start small

Slide 34_________________________________________________________________

Two Models that Hold Promise for Expanding Coverage

•	Two Models to Insure the Elderly & Disabled 
•	Privately sponsored:  The LTC Partnership Program
•	Publicly sponsored:  The Contribution Program

•	“Walk-Through” of Each Model
•	Background
•	Key Bullets
•	The Pros & Cons of Each Model
•	Changes for Massachusetts
•	Where does it leave us?

Slide 35_________________________________________________________________

Privately Sponsored:  The LTC Partnership
•	Private Insurance for Long-Term Care (or LTS)
•	Focused on currently healthy people planning for future LTS need
•	Represents an alliance between State Government & Private Industry
•	RWJF 1988 grants to states

•	Goals of the LTC Partnership Program
•	Reduce Medicaid LTC Costs
•	Protect Consumers from Impoverishment & Protect some/all assets
•	Offer Consumers “back-end” protection:  “Asset Disregard Incentive”
•	Connecticut Case Study:  An Early Pioneer in the LTC Partnership 

Handout:  “Connecticut Case Study:  101,”Prepared for Committee Meeting, 10/15/09 

Slide 36_________________________________________________________________

The Connecticut Case Study:  Key Bullets
•	Who wins? 
•	Upper Income Persons
•	Lower out of pocket costs for those who use care

•	Who loses?
•	Middle Income and Disabled Persons Left Out 

•	What about the costs and savings?
•	The Verdict is Out on Medicaid Savings
•	Program is solvent, so far

Slide 37_________________________________________________________________

Long Term Care Insurance Participation

•	More people in Connecticut have LTC Insurance than in Massachusetts  (includes group policies)

	Connecticut	Massachusetts	
Partnership	33,450		
Non-Partnership	74,000		
Total w/ LTC Insurance	107,450	152,051	
			
% Adult Population (21+) with LTC Insurance	4.30%	3.20%	
			
% Population 55-74 with LTC Insurance	17.50%	13.60%	

Slide 38_________________________________________________________________

The Connecticut Case Study:  Pros & Cons
•	The Pros of the Model  
•	Long-running program, 17 years & an experienced Director
•	Great Consumer Protections
•	Great Insurance for Upper Income
•	Comprehensive Care Policies (high premium cost)
•	“Dollar for Dollar” Coverage/Asset Protection
•	Lower out-of-pocket costs 

•	The Cons of the Model 
•	Low rate of participation (unaffordable to many)
•	Benefits accrue to Upper Income Elderly Persons
•	Middle Income & Disabled left out of the program
•	Consumers find the purchase decision to be a complex one
•	Limited Portability

Slide 39_________________________________________________________________

Premiums Must be More Affordable for Middle Income 
•	Higher income people buy LTC insurance (green)
•	We need to make LTC insurance affordable for middle income (yellow)

A		% FPL	100%	200%	300%	400%	500%	600%	1000%	2000%	
 	 	FPL (1) 	 $ 10,836 	 $ 21,672 	 $ 32,508 	 $ 43,344 	 $ 54,180 	 $ 65,016 	 $108,360 	 $    216,720 	
 	 	FPL (2) 	 $ 21,672 	 $43,344 	 $65,016 	 $86,688 	 $108,360 	 $130,032 	 $ 216,720 	 $       433,440 	
 	 	 	 	 	 	 	 	 	 	 	
B	 	CT Premium for 1 Policyholder	 	
Connecticut Annual Premium as a Percentage of Annual Household Income:

 	Age	 $     2,122 	19.6%	9.8%	6.5%	4.9%	3.9%	3.3%	2.0%	1.0%	
 	25	 $     2,410 	22.2%	11.1%	7.4%	5.6%	4.4%	3.7%	2.2%	1.1%	
 	35	 $     2,662 	24.6%	12.3%	8.2%	6.1%	4.9%	4.1%	2.5%	1.2%	
 	45	 $     3,129 	28.9%	14.4%	9.6%	7.2%	5.8%	4.8%	2.9%	1.4%	
 	55	 $     4,280 	39.5%	19.7%	13.2%	9.9%	7.9%	6.6%	3.9%	2.0%	
 	62	 $     6,079 	56.1%	28.1%	18.7%	14.0%	11.2%	9.4%	5.6%	2.8%	
 	67	 $     9,496 	87.6%	43.8%	29.2%	21.9%	17.5%	14.6%	8.8%	4.4%	
 	72	 $   15,323 	141.4%	70.7%	47.1%	35.4%	28.3%	23.6%	14.1%	7.1%	
 	77	 $   22,589 	208.5%	104.2%	69.5%	52.1%	41.7%	34.7%	20.8%	10.4%	
 	82	 $   28,848 	266.2%	133.1%	88.7%	66.6%	53.2%	44.4%	26.6%	13.3%	
 	85	 	 	 	 	 	 	 	 	 	
C	 	 	9%	12%	13%	66%	 ====>	 	 	 	
 		 	34%	====>	 	26%	 ====>	 	40%	  ====>	

Slide 40_________________________________________________________________

A graphic is entitled “LTS Financing System with LTC Partnership Program” 
Like the earlier graphic, this graphic shows the LTS financing options available to individuals depending on their clinical/functional and income status.  This graphic shows how the financing system would change if the LTC Partnership Program is implemented.  Increasing numbers of middle income individuals would be able to purchase LTC Insurance which changes the graphic to reflect a growing portion of middle income individuals utilizing insurance covering LTC and fewer individuals using personal resources.  

Slide 41_________________________________________________________________

Where does the LTC Partnership Program Leave Us?

•	It will not meet everyone’s needs
•	Those with current LTS needs or current chronic conditions
•	Low income people who cannot afford to pay premiums

•	But with changes, it can be effective: 
•	Middle to Upper Income
•	Individuals who can afford to pay premiums over a long period of time
•	Healthy individuals who may need LTS in the future

Slide 42_________________________________________________________________

The Connecticut Case Study:  Changes for Massachusetts

Prerequisite:  Must enact NAIC Model Act
•	Implement consumer protections

What would we want to do differently?
•	Target middle income persons who are at risk to spend down

•	Question to FAC:   Are these the design features we want to work on?
•	Target middle income population 
•	Encourage more people to buy, and at a younger age
•	Create an affordable benefit package 
•	Make purchase decision easy for consumers
•	Consider incentives?

Slide 43_________________________________________________________________

Publicly Sponsored:  The Contribution Program
•	Public Model for LTS
•	A contributory program for paying for the cost of LTS
•	Everyone included (large risk pool)
•	Federal Plan Supported by Senator Kennedy, AAHSA 
•	Federal plan included in 2 out of 3 National Health Care Reform bills (House & HELP; CBO scores as a savings)

•	Goals
•	Provide some coverage in affordable way 
•	Offer consumers a life-time benefit for some of their future LTS needs
•	Meets some – not all – of a person’s needs
•	Spread the risk broadly across all persons, no health screen
•	Example:  The CLASS Act

Slide 44_________________________________________________________________

The CLASS Act:  Key Bullets
•	Cash benefit

•	Everyone is included, with voluntary opt out

•	Vested in 5 years:  People with current needs can begin drawing benefit in 5 years.

•	Portability from state to state

•	Big commitment on the part of the government to provide LTS financing over the long-term

Slide 45_________________________________________________________________

The CLASS Act:  “Skinny” might be OK for some
•	Age 55 in 2009
•	Premiums = $65/Month = $780/Year
•	Premiums are very likely to be raised over time
•	Benefit = $50/day or $100/day (used $75, here)
•	Age 75 in 2029
•	Benefit = Assumes $75 cash daily/benefit in 2009 at 5% compounded inflation

 	Premium Payments 
from 2009-2029	CLASS Benefit
 in 2009	CLASS Benefit
 in 2029	
Monthly/Daily	65	75	199	
Annual	780	27,375	72,635	

Slide 46_________________________________________________________________

The CLASS Act:  Solvency of a Contribution Program
•	Premiums must be sufficient to fund the program

•	Questions about the Solvency of the Program
•	$65 may not be sufficient in the long run
•	AAHSA:  Yes, program is solvent
•	CBO:  Maybe, in the middle
•	American Academy of Actuaries:  No

Slide 47_________________________________________________________________

The CLASS Act:  Pros & Cons
•	The Pros of the Model  
•	Everyone gets something
•	Cash benefit based on need
•	Complements other plans for LTC
•	Benefits do not count against Medicaid eligibility
•	Great way to provide some coverage for middle income individuals
•	Great way to provide some coverage for disabled individuals

•	The Cons of the Model 
•	Concerns about sustainability over long-term
•	Younger persons and/or upper income persons may opt out
•	Lower rates of participation lead to adverse selection
•	Program is viewed as serving “all” the needs
•	Benefit too “skinny”

Slide 48_________________________________________________________________

A graphic is entitled LTS Financing System with Contribution Program Only.  Like the earlier graphics, this graphic shows the LTS financing options available to individuals depending on their clinical/functional and income status.  This graphic shows how the financing system would change if a contribution program is implemented.  Individuals of low to middle clinical/functional need would be able to finance LTS through a contribution program.  The individuals with higher clinical/functional need would continue to use the same financing options; however, Medicaid would be enhanced.

Slide 49_________________________________________________________________

Where does the Contribution Program Leave Us?

•	It will not meet everyone’s needs
•	Those with current LTS needs or current chronic conditions
•	Low income people who cannot afford to pay premiums

•	But with changes, a Limited Cash Benefit can: 
•	Address the need for home- and community-based care
•	Individually-tailored needs that are not presently covered by insurance or Medicaid
•	Support the informal care network 

Slide 50_________________________________________________________________

The CLASS Act:  Changes for Massachusetts
What would we want to do differently?
•	Ensure solvency over many years
•	Ensure high participation levels

•	Question to FAC:   Are these the design features we want to work on?
•	Lower premium contribution for low income individuals
•	Portability for individuals who move to another state
•	Pair benefit with Medicaid Asset Protection? 
•	Consider other incentives?
•	Consider a mandatory program?

Slide 51_________________________________________________________________

Model Comparisons (Part 1 of 2)

 	Title:  Partnership for Long-Term Care	Title: The CLASS Act	
 	“Enhance Private Insurance”	“Create Contribution Program”	

Description	
Private Insurance	
Public Insurance Trust, could serve as a complement to Private Insurance and/or Medicaid	
Participation	Voluntary purchase	Voluntary (opt out)	
Target Population	Those who can afford a long-term care insurance policy and with assets to protect, meet health screen	Workers age 18+ eligible to enroll; Can continue to be in the plan after retired (need to keep paying premiums)	
Covered	Covers Elderly and Adults 
who buy before become disabled	Covers both Elderly and <65 Disabled	

Slide 52_________________________________________________________________

Model Comparisons (2 of 2)

 	Title:  Partnership for Long-Term Care	Title: The CLASS Act	
 	“Enhance Private Insurance”	“Create Contributory Program”	

Excluded	
Low income who cannot afford premiums, middle income whose out of pocket costs would erode asset protection; disabled and others who fail to meet the health screen	
Persons too poor to pay “regular” premiums or too “rich” for “subsidized” premium; also, persons with certain cognitive functional limitations that fail to meet the test (triggers follow HIPAA rules)	
 	 	 	
Health Screen	Yes	No	
Risk/Selection	Potential for “cherry picking”	Potential for “adverse selection”	
 	 	 	
Benefit	99% of policies are comprehensive, including both NF and HC	
$50 or $100 per day	

Slide 53_________________________________________________________________

A Complementary Public-Private Model
•	A Complementary approach
•	Private Insurance:  
•	Expand to Middle Income people
•	Public Insurance:  
•	Meet the Challenge of Covering Disabled & Middle Income people
•	Medicaid:  Adjust to fill gaps

•	Massachusetts as a State Laboratory
•	Massachusetts embraces its role as a State Laboratory for Change
•	Take what exists and improve upon it
•	Start small

Slide 54_________________________________________________________________

A graphic is entitled LTS Financing System with LTC Partnership and Contribution Program  Like the earlier graphics, this graphic shows the LTS financing options available to individuals depending on their clinical/functional and income status.  This graphic shows how the financing system would change if a contribution program and LTC Partnership were implemented.  Individuals of low to middle clinical/functional need would be able to finance LTS through a contribution program.  The individuals with higher clinical/functional need would continue to use the same financing options; however, Medicaid would be enhanced.  Also, more middle to high income individuals will utilize insurance covering LTC which decreases the number of individuals using personal resources only.

Slide 55_________________________________________________________________

Next Steps & Timeline
•	Cost & Impact Methodology

•	MassHealth Data

•	November Meeting

Slide 56_________________________________________________________________

Highlights of Cost & Impact Methodology
•	Population
•	Benefits
•	Premiums/Costs
•	Assumptions
•	Assessment

Slide 57_________________________________________________________________

Cost & Impact Methodology & Analysis

Methodology for Analyzing and Costing out the Long-term services and support options	
 	 	
Step 1	Develop Baseline Costs of Current & Future Need, including Medicaid and State Programs 	
 	Population	
 	Benefit Coverage	
Step 2	Define Population Assumptions	
 	Target Populations & Participation Rates	
Step 3	Define Benefit/Programmatic Assumptions	
 	Define Benefit 	
 	Establish Rules of the Program, e.g. no drop outs, all healthy at start of program, 	
 	Outline details, e.g.  Number of years to compute, balance, benefit trigger, daily benefit	
Step 4	Calculate Premium Collections	
Step 5	Assess Impact on Other Financing Sources 	
 	Consumer Out of Pocket	
 	State Programs, including Medicaid	
 	Informal Care 	
Step 6	Perform Sensitivity Analysis by modifying assumptions	
 	Modify Participation rates, e.g. changing benefits, introducing other incentives	
 	Modify Risk Pool (range of risk - from cherry picking to adverse selection)	
Step 7	Assess Model in terms of Meeting Goals	
 	Burden on Medicaid Budget & Role of Government Programs	
 	Effect on Consumers (Spend down/Asset Protection)	
 	Adequacy of Benefit to Meet Needs of Consumer 	
Step 8	Confirm Solvency of Program 	

Slide 58_________________________________________________________________

MassHealth Data & Analysis
•	Review Population and Spending
•	What we know about the Populations
•	What we know about MassHealth Spending

•	How to Collect & Analyze MassHealth Data
•	Examine populations by income, etc.
•	Examine costs by type of LTS

•	External Data Sources

Slide 59_________________________________________________________________

A Quick Review of the Challenge:
LTS Cost Pressures in Massachusetts
•	Numbers Illustrate Cost in 20 Years from Today
•	MetLife Survey

 	Average Annual Nursing Home	Average Annual Assisted Living Costs 	Home Care Average Annual rate                    (5 hrs/week)	Home Care Average Annual rate                    (20 hrs/week)	
2008	 	 	 	 	
Massachusetts	 $               110,230 	 $                   50,304 	 	 	
National Average	 $                 77,380 	 $                   36,372 	 $                5,200 	 $                  20,800 	
 	 	 	 	 	
2028 (in 20 years)	 	 	 	 	
Massachusetts	 $               292,473 	 $                133,471 	 	 	
National Average	 $               205,312 	 $                   96,506 	 $             13,797 	 $                  55,189 	

Source:  The MetLife Mature Market Institute Survey of Nursing Home and Assisted Living Costs in 2008	
Notes:  Massachusetts is compared to the National Average, since we 				
examine the Connecticut Insurance Partnership for Long-Term Care in this presentation.		
examine the Connecticut Insurance Partnership for Long-Term Care in this presentation.		

Slide 60_________________________________________________________________

LTS Costs Unaffordable for Many

•	Massachusetts - 3 years in a Nursing Home in 2029 will run close to $900K

The Cost of Care in Massachusetts	 	Home Care	Nursing Facility Care	
Age 55	Today (2009), daily rates	 $           165 	 $                               330 	
 	Annual Cost 	 $      60,225 	 $                        120,450 	
Age 75	20 years (2029), daily rates	 $           438 	 $                               876 	
 	Annual Cost 	 $    159,795 	 $                        319,590 	
 	 	 	 	
In 20 years time, at age 75, if you need LTC care:	 	 	 	
1 year	                                         365 	 $    159,795 	 $                        319,590 	
2 years	                                         730 	 $    319,590 	 $                        639,179 	
3 years 	                                      1,095 	 $ 479,385 	 $                      958,769 	
4 years	                                      1,460 	 $    639,179 	 $                     1,278,359 	
5 years	                                      1,825 	 $    798,974 	 $                     1,597,949 	

Can you afford the care?	 	 $    25,000 	 $                      100,000 	
Age	Year	5.0%	5.0%	
55	2009	 $      25,000 	 $                        100,000 	
75	2029	 $    66,332 	 $                      265,330 	

Slide 61_________________________________________________________________

MassHealth Data:  Members

Average Membership	 	 	 	
 	 Dual 	 Medicaid Only 	 Total  	
21 - 59	                  2,404 	                  1,371 	                  3,775 	
60 - 64	                     908 	                     515 	                  1,423 	
65 +	                28,879 	                     710 	                29,589 	
Total 	                32,191 	                  2,596 	                34,787 	
Ratio Dual:Medicaid Only	93%	7%	100%	
 	 	 	 	
65+	90%	27%	85%	
Under 65	10%	73%	15%	
Total Member Months	 	 	 	

Slide 62_________________________________________________________________

MassHealth Data:  Spending

FFS Data Only	Total 	
 	 	
Spending	 	
LTC	 $                                                         113,258,546 	
NF	 $                                                      1,564,288,526 	
Chronic IP	 $                                                         243,329,977 	
ICF-MR	 $                                                         236,079,079 	
Acute	 $                                                           83,476,468 	
Exclude	 $                                                             8,143,770 	
Psych IP	 $                                                           16,108,241 	
Semi-Acute IP	 $                                                             6,657,513 	
All spending	 $                                                  2,271,342,120 	

Slide 63_________________________________________________________________

Committee Business

Slide 64_________________________________________________________________

Committee Business
•	Public input process
•	Save the Date:
•	Wednesday, November 18th 12 PM – 2:30 PM, MetroWest Area
•	Monday, November 23rd 5:30 PM – 8 PM, Holyoke

•	Next meeting:
•	Date:  Thursday, November 12th, 2009 from 9:00 -11:30am
•	Location: One Beacon Street, MassHousing Board Room

•	Future meeting reminder
•	Additional meeting scheduled for Thursday, December 10th