Little Hoover A Bust On Long-Term Care

MAY 11, 2011

By K. LLOYD BILLINGSLEY

California needs new bureaucracies and a “champion” to oversee long-term care under Medi-Cal, according to A Long-Term Strategy for Long-Term Care, a recent report from the Little Hoover Commission, a state watchdog agency. Those and other strategies won’t work, according to Steve Moses, author of a different study.

“Reorganizing, creating new bureaucracies, or appointing a ‘long-term care Czar’ won’t help,” said Moses on Tuesday, in testimony to the Senate Human Services Committee.

Moses heads the Center for Long-Term Care Reform in Seattle and is the author of Medi-Cal Long-Term Care: Safety Net or Hammock? released this year by the Center and the Pacific Research Institute, CalWatchdog’s parent think tank.

Moses testified that the Little Hoover Commission report left him “a little puzzled by what that report includes, and even more so by what it leaves out.” The report, he said, “attributes California’s catastrophic long-term care service delivery and financing problem to inadequate central planning.”

The three major recommendations of A Long-Term Strategy for Long-Term Care are to create a new state department,  pursue “visioning and strategy-building” to “create a seamless continuum” of care, and find a long-term care “champion.”

Baby boomers will soon be retiring in huge numbers, and like current retirees many will be looking to Medi-Cal for long-term care. But according to Moses, “Medi-Cal is finished as the dominant payer of long-term care in California.”

Medi-Cal, he testified, is a public-assistance program, and not suitable as the dominant payer for long-term care. The cost of Medi-Cal is “bankrupting the state” by allowing the wealthy and middle class to exploit a program intended for the poor.

“California has a plague of so-called Medi-Cal planners, attorneys and other financial advisors who artificially impoverish clients to qualify them for Medi-Cal benefits using techniques such as trusts, transfers, ‘Medi-Cal friendly’ annuities and ‘life care’ contracts.

Moses added that “by making long-term care basically a free publicly provided good, the state of California has anesthetized consumers to the risk and cost of long-term care.  People don’t worry about LTC until they need it.  Then it’s too late to save, invest or insure.”

Some Californians still  prefer to pay their own way, Moses testified, because “Medi-Cal has such a poor reputation for problems of access, quality, reimbursement, discrimination, institutional bias and loss of independence, that some people are willing to pay privately for quality home care.”

Public officials can recognize those realities and preserve a “much smaller safety net program,” Moses said. “Or you can ignore the problem, watch the system fall apart, and end up with the same attenuated public system by default.”

His recommended reforms included establishing “the principle that long-term care is a personal responsibility, not a social right.” He wants to “identify and eliminate policies that encourage public dependency.” California should “get out of the way of private markets. Encourage private-sector sources of financing such as greater asset spend-down, estate recovery, home equity conversion, and private long-term care insurance.”

Moses warned the California senators about continuing the current course under Medi-Cal.

“If you keep doing what you’ve always done, even if you do it marginally better, you’ll keep getting the same result,” he testified. “Expecting otherwise is Einstein’s definition of insanity.”