✯
✯
2003 National Health Policy ✯Conference
January 22-23, 2003
J.W. Marriott
Washington, D.C.
Long-Term Care in the
Era of Deficits:
Minnesota’s Story
National Health Policy Conference
Washington, D.C.
January 23, 2003
Long-Term Care in Minnesota
Outline of Presentation
O public financing of long-term care
• status of publicly-funded long-term care
in Minnesota
O
private financing of long-term care
• activities to promote private financing of
long-term care in Minnesota
Definition of Long-Term Care
“Assistance given over a sustained
period of time to people who are
experiencing long-term inabilities
or difficulties in functioning
because of a disability.”
--Kane et al, 2000
People of all ages can need longterm care - this presentation
looks only at the elderly.
Who Provides Long-Term Care?
Long-term care can be provided in a
variety of settings, not just nursing
homes.
The vast majority of long-term care
for the elderly is provided by family
members - especially spouses and
daughters and daughters-in-law.
Who Provides Long-Term Care?
5%
Families
95%
Agencies
Source: Survey of Older Minnesotans, Minnesota Board on Aging, 1995
Public Financing of Long-Term Care
Majority of long-term care that
is paid for is paid with public
funds.
O 58% of all paid long-term care is
publicly financed.
O Most of these funds are paid
through the federal/state
Medicaid program.
O
Long-Term Care in Minnesota
O
State of Minnesota spends $1.4
billion on basic and long-term
care for the elderly.
• $ 900 million pays for nursing
home care.
• $ 350 million pays for basic
medical care.
• $ 150 million pays for community
care.
Department of Human Services
Continuing Care Administration
DHS Expenditures to Serve Elderly Persons
FY 2002
Total = $1.4 billion (includes federal and state dollars)
Long-Term Care
Federal/state aging grants
25%
MA basic care
2%
73%
Source: November 2002 Forecast, Department of Human Services
Long-Term Care Issues
O
Minnesota Long-Term Care Task
Force met in 2000 to address
critical issues
• Issue: we are overly reliant on
institutional model of long-term care
• Issue: consumers prefer home and
residential options
Long-Term Care Reform in
Minnesota
Maximize peoples’ ability to
meet their own long-term care
needs.
O Expand capacity and availability
of community options
throughout the state.
O Reduce reliance on the
institutional model.
O
Long-Term Care Reform in
Minnesota
Achieve quality and good
outcomes.
O Support informal network of
family, friends and neighbors.
O Recruit and retain stable work
force.
O
Reshaping Long-Term Care
Highlights of 2001 Legislation
O Expansion of information and
assistance
O Design of long-term care
consultation services (aka Preadmission screening)
O Start-up of new communitybased housing and services
Reshaping Long-Term Care
Highlights of 2001 Legislation
O Increased funding for Elderly
Waiver and Alternative Care
services
O Incentives for voluntary nursing
home bed reduction
O COLAs for all long-term care
providers
Reshaping Long-Term Care
Highlights of 2001 Legislation
O Initiatives to strengthen long-term
care work force
O Initiatives to enhance quality and
improve consumer satisfaction
O Redesign of payment systems
O Planning and development by
counties and AAAs
Reshaping Long-Term Care
How long-term care reform was
funded
O Expand community care by
reinvesting money saved
through voluntary nursing home
closures
O The reinvestment concept was
necessary to gain support of
Ventura administration in 2001
Reshaping Long-Term Care
What has really happened?
O Fewer nursing home beds closed
than anticipated, but use is
declining
O Increase in elderly persons using
waiver and state programs, and
increase in average monthly
costs for community care
Long-Term Care Benchmarks
O
O
O
O
O
Percent of Total Long-Term Care
Spending for Nursing Home Care
Percent of Nursing Home Residents 65+
that are Case Mix A
Percent Non-Case Mix A Elderly in Elderly
Waiver/Alternative Care Programs
Ratio of Nursing Home Beds to Persons
65+ and 85+
Ratio of Senior Housing Units to Persons
65+
Percent of MA long-term care funds spent on
community-based services vs. institutional care
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
66.7
63.3
60
58.2
52.5
33.3
36.7
40
41.8
47.5
1998
1999
2000
2001
2002 Target
community
institutional
Percent of persons in nursing facilities that is less
disabled*
16
15.5
15.6
15.1
15.1
15
14.9
14.8
2001
2002 Target
14.5
14
13.5
13
12.5
12
11.5
11
10.5
10
1998
1999
2000
*Less disabled includes persons with fewer functional problems who are classified as
case mix A, on a scale of A to K.
Number of “supportive housing” units/1,000 persons
65+
120
115
115
111
110
105
100
98
95
90
85
1999
2001
2003 Target
Other Measures of Success
Paradigm has shifted from
“nursing home” to “staying at
home”
O Counties are transforming the
way they serve elderly persons
O Volunteer and community
resources are more closely
linked to formal long-term care
services
O
Private Financing for
Long-Term Care
Private financing includes:
O out-of-pocket expenditures
(28%)
O long-term care insurance (7%)
O charitable and voluntary
services offered to older
persons through churches,
United Way agencies, etc. (?)
O
Private LTC Financing
Most older persons and families
ask:
O “What is reimbursed by
insurance?”
O “What am I eligible for?”
O Still have sticker shock at price
of formal services.
O
Long-Term Care Insurance
LTCI is growing both through
individual plans and group plans
through employers.
O Minnesota offered LTCI to state
employees, spouses and
parents in 2000.
O It was very successful.
O
Growth in employer plans
Employer-Sponsored LTC Plans
2000
1500
1000
500
0
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
Number of Plans
2500
(Sources: Health Insurance Association of America, 1996)
Reasons for Buying
LTCI Coverage
Freedom of
Choice
5%
Guarantee
Affordability
10%
Likely to Need
5%
Protect Savings
30%
Protect Lifestyle
10%
Peace of Mind
15%
(Source: HIAA and LTCG)
Not Be Burden
25%
Overview of Minnesota’s plan
O
Available to:
• 61,000 employees and their spouses
and parents
• 25,000 retirees and their spouses
O
O
Fall 2000: On-cycle open
enrollment for employees
Fall 2001: Initial offering to
retirees, but no open enrollment
Group LTCI in Minnesota
O
O
O
O
O
O
O
O
Total employees in top 25 ERs
Minn. EEs (18-65) in 2000
# ERs offering LTCI
% ERs offering LTCI
# eligible
# eligible/Minn. Ees
# and % considering LTCI
# and % offering/consider LTCI
349,479
2,965,760
12
48.0%
193,768
6.5%
10/40.0%
22/88.0%
State of Minnesota
LTCI Enrollment
Very high enrollment, especially
compared to other states
O Median for other 21 states: 1.6%
O Minnesota: 18% enrolled
O
• 83.2% employees
• 16.6% spouses
• 0.2% parents
State of Minnesota
LTCI Enrollment
O
Age of enrollee slightly higher
than average
• Population: 45.1 yrs
• Enrollee: 48.4 yrs
O
Higher female enrollment:
• Population: 50%
• Enrollees: 57%
More LTCI Incentives
Minnesota offers $100 tax
credit for taxpayers who have
qualified LTCI policy
O Legislature gave $100,000 to
Minnesota Board on Aging to
further encourage employers to
offer group LTCI products to
employees
O
More LTCI Incentives
Contract with Long-Term Care
Group, Inc. to survey sample of
500 employers of various sizes
to determine interest and
incentives needed to increase
product offering
O Survey to be completed by
March 2003/ recommendations
made
O
More LTCI Incentives
More action on LTCI incentives in
2003 Legislature is likely
O Possible increases in individual
credit from $100 to $250 or more
O Possible tax credit for employers
that offer LTCI
O Popular idea with stakeholders
and politicians now in majority
Conclusions
Public financing will continue to be
major payer for LTC.
O We are shifting more and more to
community/consumer-directed care.
O Private options are growing but will
never close the gap.
O Need to maintain LTC reform
principles in era of deficits, and take
opportunities that arise.
O