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20–210 2017

EXAMINING THE FINANCING AND DELIVERY OF 

LONG-TERM CARE IN THE U.S. 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HEALTH 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

MARCH 1, 2016 

Serial No. 114–122 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

(II) 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

JOE BARTON, Texas 

Chairman Emeritus 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

GREG WALDEN, Oregon 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Ohio 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

LARRY BUCSHON, Indiana 

BILL FLORES, Texas 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

CHRIS COLLINS, New York 

KEVIN CRAMER, North Dakota 

FRANK PALLONE, JR., New Jersey 

Ranking Member 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

BEN RAY LUJA ́ N, New Mexico 

PAUL TONKO, New York 

JOHN A. YARMUTH, Kentucky 

YVETTE D. CLARKE, New York 

DAVID LOEBSACK, Iowa 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California 

(III) 

SUBCOMMITTEE ON HEALTH

JOSEPH R. PITTS, Pennsylvania 

Chairman 

BRETT GUTHRIE, Kentucky 

Vice Chairman 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

CATHY MCMORRIS RODGERS, Washington 

LEONARD LANCE, New Jersey 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

LARRY BUCSHON, Indiana 

SUSAN W. BROOKS, Indiana 

CHRIS COLLINS, New York 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

GENE GREEN, Texas 

Ranking Member 

ELIOT L. ENGEL, New York 

LOIS CAPPS, California 

JANICE D. SCHAKOWSKY, Illinois 

G.K. BUTTERFIELD, North Carolina 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

DORIS O. MATSUI, California 

BEN RAY LUJA ́ N, New Mexico 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California 

FRANK PALLONE, JR., New Jersey (ex 

officio) 

(V) 

C O N T E N T S 

Page 

Hon. Joseph R. Pitts, a Representative in Congress from the Commonwealth 

of Pennsylvania, opening statement ................................................................... 1 

Prepared statement .......................................................................................... 2 

Hon. Doris O. Matsui, a Representative in Congress from the State of California, opening statement .................................................................................... 3 

Hon. Michael C. Burgess, a Representative in Congress from the State of 

Texas, opening statement .................................................................................... 5 

Hon. Frank Pallone, Jr., a Representative in Congress from the State of 

New Jersey, opening statement .......................................................................... 6 

WITNESSES

Alice Rivlin, PHD, Co-Chair, Long-Term Care Initiative, Bipartisan Policy 

Center, Senior Fellow, Economics Studies Program, The Brookings Institution ........................................................................................................................ 8 

Prepared statement .......................................................................................... 10 

William J. Scanlon, PHD, Consultant, West Health Institute and National 

Health Policy Forum ............................................................................................ 13 

Prepared statement .......................................................................................... 16 

Anne Tumlinson, CEO, Anne Tumlinson Innovations LLC and Founder of 

Daughterhood.org ................................................................................................. 28 

Prepared statement .......................................................................................... 30 

SUBMITTED MATERIAL

Statement of Hon. Debbie Dingell, a Representative in Congress from the 

State of Michigan, submitted by Ms. Matsui ..................................................... 62 

Statement of the Christopher & Dana Reeve Foundation, submitted by Ms. 

Matsui ................................................................................................................... 63 

Statement of the National Academy of Elder Law Attorneys, submitted by 

Mr. Pitts ................................................................................................................ 65 

Statement of the American Health Care Association and the National Center 

for Assisted Living, submitted by Mr. Pitts ....................................................... 67 

Statement of America’s Health Insurance Plans, submitted by Mr. Pitts .......... 71 

(1) 

EXAMINING THE FINANCING AND DELIVERY 

OF LONG-TERM CARE IN THE U.S. 

TUESDAY, MARCH 1, 2016 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON HEALTH, COMMITTEE ON ENERGY AND COMMERCE, Washington, DC. 

The subcommittee met, pursuant to call, at 10:15 a.m., in room 

2322 Rayburn House Office Building, Hon. Joe Pitts (chairman of 

the subcommittee) presiding. 

Members present: Representatives Pitts, Barton, Guthrie, Shimkus, Murphy, Burgess, Lance, Bilirakis, Long, Ellmers, Bucshon, 

Brooks, Collins, Schakowsky, Butterfield, Castor, Sarbanes, Matsui, Schrader, Ca AE1rdenas, and Pallone (ex officio). 

Staff present: Rebecca Card, Assistant Press Secretary; Graham 

Pittman, Legislative Clerk, Health; Michelle Rosenberg, GAO 

Detailee, Health; Chris Sarley, Policy Coordinator, Environment 

and Economy; Jennifer Sherman, Press Secretary; Heidi Stirrup, 

Policy Coordinator, Health; Josh Trent, Deputy Chief Counsel, 

Health; Christine Brennan, Minority Press Secretary; Jeff Carroll, 

Minority Staff Director; Tiffany Guarascio, Minority Deputy Staff 

Director and Chief Health Advisor; Rachel Pryor, Minority Health 

Policy Advisor; Samantha Satchell, Minority Policy Analyst; Matt 

Schumacher, Minority Press Assistant; and Andrew Souvall, Minority Director of Communications, Outreach and Member Services. 

OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH 

OF PENNSYLVANIA 

Mr. PITTS. The subcommittee will come to order. The chair will 

recognize himself for an opening statement. 

Today the Health Subcommittee will examine the financing and 

delivery of long-term care in the U.S. Long-term care largely differs 

from health coverage or medical care. I know every member of this 

committee wants to ensure that frail, elderly seniors, or disabled 

individuals across the country receive high quality care. 

We want to see each person treated with the dignity and respect 

that they deserve, and we want a long-term care system that empowers each person and respects individual preferences. Unfortunately, as we will hear from our witnesses today, many experts 

warn that we are facing a coming crisis in the provision of longterm care. Most notably, we face a demographic headwind with 

10,000 baby boomers turning 65 every day. 

2 

Additionally, as life expectancy increases so too does the need to 

provide care for aging individuals, yet our private market is not as 

robust as needed. Our public payers are strained and many individual Americans face high out-of-pocket costs for providing a longterm care for themselves or a loved one. Unfortunately, too few 

Americans are currently prepared to pay for even a modest amount 

of long-term care whether through insurance or savings. 

As we engage in today’s hearing, I think it is important to remember our long-term care crisis affects all Americans. If the longterm care challenge is left unaddressed it will impact the elderly 

who require services, the middle-aged who are often responsible for 

caring for their aging parents, and the children who could be left 

responsible footing the bill for public programs. 

As we embark on examining how we can confront the long-term 

care challenge, it is important we learn from failed ideas of the 

past. For example, in 2010, the ACA created a new federal entitlement program called the CLASS Act. The statute required that the 

CLASS Act be solvent over a 75-year period, and the program 

failed to meet tests for actuarial solvency. CLASS Act was found 

to be fiscally unsound; was ultimately repealed in subsequent legislation. 

This committee knows all too well what financially unsound programs look like. Medicaid and Medicare are both facing growing financial strains as costs soar and demand increases. Medicaid is 

consuming increasing portions of state budgets, Medicare’s longterm unfunded obligations are estimated over $35 trillion in today’s 

dollars. So it is understandable that many members of this committee are wary of proposals that resemble a new entitlement, but 

caution against new entitlements does not equal close-mindedness 

to new approaches. 

There are many ideas about ways to improve the outlook for financing and delivering of long-term care in the country. For example, just in February, three bipartisan proposals have been offered. 

So today’s hearing provides members an opportunity to learn more 

about the state of long-term care in our country and to examine the 

types of policy choices facing Congress if it wants to reform the current system to provide high quality care without bankrupting future generations. 

Clearly, we need to find better ways to encourage private market 

solutions. We need to understand what the research tells us about 

what is working in the private and public sectors. We need to know 

barriers to efficient high quality care exist in our public programs, 

and we need to better understand how to encourage individuals 

and their families to plan for the future. 

I appreciate our witnesses being here. We look forward to your 

testimony. Is anyone seeking time on our side? If not, I yield back, 

and at this point recognize Ms. Matsui of California filling in for 

Ranking Member Green as ranking member. 

[The prepared statement of Mr. Pitts follows:] 

PREPARED STATEMENT OF HON. JOSEPH R. PITTS

The Subcommittee will come to order. 

The Chairman will recognize himself for an opening statement. 

3 

Today, the Health Subcommittee will examine the financing and delivery of 

longterm care (LTC) in the U.S. While long-term care largely differs from health 

coverage or medical care, I know every member of this Committee wants to ensure 

that frail elderly seniors or disabled individuals across the country receive 

highquality care. 

We want to see each person treated with the dignity and respect that they deserve. And we want a long-term care system that empowers each person and respects individual preferences. 

Unfortunately, as we will hear from our witnesses today, many experts warn that 

we are facing a coming crisis in the provision of long-term care. Most notably, we 

face a demographic headwind, with 10,000 Baby Boomers turning 65 each day. Additionally, as life-expectancy increases, so too does the need to provide care for aging 

individuals. 

Yet, our private market is not as robust as needed, our public payers are strained, 

and many individual Americans face high out-of-pocket costs for providing longterm 

care for themselves or a loved one. Unfortunately, too few Americans are currently 

prepared to pay for even a modest amount of long-term care—whether through insurance or savings. 

As we engage in today’s hearing, I think it’s important to remember our long-term 

care crisis affects all Americans. If the long-term care challenge is left unaddressed, 

it will impact the elderly who require services....the middle aged who are often responsible for caring for their aging parents...and the children who could be left responsible footing the bill for public programs. 

As we embark on examining how we can confront the long-term care challenge, 

it’s important we learn from failed ideas of the past. For example, in 2010, the ACA 

created a new federal entitlement program called the CLASS Act. The statute required that the CLASS Act be solvent over a 75-year period, and the program failed 

to meet tests of actuarial solvency. The CLASS Act was found to be fiscally unsound 

and was ultimately repealed in subsequent legislation. 

This committee knows all too well what financially unsound programs look like. 

Medicaid and Medicare are both facing growing financial strains, as costs soar and 

demand increases. Medicaid is consuming increasing portions of state budgets, and 

Medicare’s long-term unfunded obligations are estimated over $35 trillion in today’s 

dollars. 

So it is understandable that many members of this Committee are wary of proposals that resemble a new entitlement. But caution against new entitlements does 

not equal closemindedness to new approaches. 

There are many ideas about ways to improve the outlook for financing and delivering long-term care in the country. For example, just in February, three bipartisan 

proposals have been offered. 

So, today’s hearing provides Members an opportunity to learn more about the 

state of long-term care in our country—and to examine the types of policy choices 

facing Congress if it wants to reform the current system to provide high quality care 

without bankrupting future generations. 

Clearly, we need to find better ways to encourage private market solutions. We 

need to understand what the research tells us about what’s working in the private 

and public sectors. We need to know barriers to efficient, high-quality care exist in 

our public programs. And we need to better understand how to encourage individuals and their families to plan for the future. 

I appreciate our witnesses being here and we look forward to your testimony. 

I yield the remainder of my time to ————————————————————. 

OPENING STATEMENT OF HON. DORIS O. MATSUI, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Ms. MATSUI. Thank you, Mr. Chairman. And thank you very 

much for having this important hearing on a critical issue that affects millions of Americans—the financing and delivery of longterm care. And I want to thank our witnesses for being here today. 

Long-term services and supports are medical and personal care 

assistance services for people who have difficulty completing daily 

living activities over a prolonged period of time, from feeding or 

bathing to meal preparation or management of medications. Approximately 12 million Americans of all ages require long-term care 

4 

for medical needs associated with developmental disabilities, traumatic injuries, behavioral health or chronic conditions. Elderly individuals in particular are at increased risk requiring long-term 

care. 

So who is providing and paying for this care in our country? Unfortunately, we don’t have a robust system in place that works for 

families. In fact, much of both the care and financing often falls on 

the family. Unpaid caregiving service as a front line across the 

country, 70 percent of working adults provide unpaid care for family members or friends. This is an estimated $470 billion annually 

in labor costs. This lost productivity is estimated to the economy 

$34 billion a year. 

Oftentimes, women are the ones who disproportionately bear the 

burden of providing unpaid long-term care. Women often are called 

on to care for their family members at a time when they may not 

be able to reenter the workforce. Women also live longer. They find 

themselves unable to save for retirement when supporting family 

members. Our daughters, granddaughters, or mothers should not 

have to carry the weight of this broken system any longer. 

Despite the growing need for long-term care due to our aging 

population, there is no viable financing system in this country to 

support it. It is a common misconception that Medicare covers the 

long-term care in this country. However, it only covers limited circumstances such as care immediately following a hospital stay. 

In fact, Medicaid is the single largest payer of long-term care in 

the United States. However, most middle class families do not 

qualify for Medicaid and must pay out of pocket to spend down 

their assets before receiving benefits. And for Americans with disabilities, successful employment can lead to a loss of Medicaid coverage and thus create a disincentive to participate in the workforce. 

We need to create a system that allows recipients to receive services and support while remaining employed. 

Without Medicaid or private insurance, on average families are spending about $140,000 on long-term care for their loved ones. For 

working families who are trying to pay their mortgage, send their 

children to college and take care of the long-term medical needs of 

their loved ones these costs are devastatingly high. The reality is 

clear. Long-term care financing is in a crisis state in this country 

and is one of the greatest threats to retirement security for seniors 

and the adult family members who care for them. It is time for us 

to act to protect our seniors, people with disabilities and those who 

care for them. 

Today we will hear about major bipartisan reports which have 

independently agreed on three major actions Congress must take. 

First, we must strengthen and simplify Medicaid long-term care. 

Second, we need to build a more consumer-friendly long-term care 

private insurance market. Finally, we must create a program that 

will be there for those with catastrophic long-term care costs. Together we must commit to finding a sustainable means for financing and delivering quality long-term care to our loved ones because 

our families deserve more. 

Mr. Chairman, we received many statements for the record for 

this hearing. I ask unanimous consent to submit statements from 

our good friend and colleague Representative Debbie Dingell who 

5 

has certainly worked on these issues for a long time, the Christopher and Dana Reeve Foundation, and the National Academy of 

Elder Law Attorneys. And I ask that these be submitted for the 

record. 

Mr. PITTS. And I will add to those statements from the American 

Health Care Association, the National Center for Assisted Living, 

and America’s Health Insurance Plans. 

Without objection, so ordered. 

[The information appears at the conclusion of the hearing.] 

Ms. MATSUI. Thank you, and I yield back. 

Mr. PITTS. The chair thanks the gentlelady. Now in the place of 

Chairman Upton, the chair recognizes Dr. Burgess 5 minutes for 

an opening statement. 

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. BURGESS. Thank you, Mr. Chairman. I appreciate the recognition. I actually had not prepared or planned on delivering an 

opening statement, but it does occur to me that we have had similar hearings multiple times in the past. Ms. Matsui just asked the 

question who is paying for long-term care. Mr. Chairman, you wondered aloud if there was a private sector solution, and indeed there 

are private sector solutions. 

The private insurance market in long-term care was hurt by the 

introduction of the CLASS Act and then the abandonment of the 

CLASS Act. I think it was very disruptive in the market. Look, 

long before I ran for Congress, my father was disabled and my 

mother told me that I needed to get long-term care insurance. She 

said if you don’t buy it now before you are 50, you won’t be able 

to afford it when you really need it. And it turns out that was good 

advice that she gave. Long-term private long-term care policy is expensive. Premiums run between 1,500 and $2,500 a month. Yes, 

they are after-tax dollars. 

But I can really think of no more loving gift that a parent can 

give their child than to prepare for what may happen in the future. 

For me, it just seems like responsible financial planning and I do 

wonder why it is not more of the financial planning that people do 

in their lives. 

Look, 11 years ago, this committee, this subcommittee and this 

full committee passed language in the Deficit Reduction Act for 

what was known as the Partnership Program. This allowed for the 

protection of some assets in an estate. If a person had a private 

long-term care insurance policy, then the amount of the spenddown was protected to the extent of the private policy that they 

had. It was not as robust as perhaps providing full deductibility of 

a long-term care insurance premium, but it at least provided some 

incentive for people to consider a private long-term care insurance 

policy. 

Again the CLASS Act was very disruptive. It was disruptive to 

the marketplace. We have seen our premiums go up over the last 

10 or 15 years. That is unfortunate. But I do think this subcommittee and this committee should do what it can to get people 

my age to understand that this is important for you to do for your 

family. 

6 

Yes, there need to be safety net programs. No argument there. 

There need to be valuable programs for people who don’t have 

other resources or other places to go. But I just remember my 

mother who was the primary caregiver for my father who was disabled by a stroke in 1989 and lived until 2005. You need to be prepared for these sorts of things. They can happen to you. 

So Mr. Chairman, I appreciate the time that you have given me 

today. I will be happy to yield back and I am anxious to hear the 

testimony of our witnesses and what has happened over the last 

ten years in this space. I yield back. 

Mr. PITTS. The chair thanks the gentleman, and now recognizes 

the ranking member of the full committee, Mr. Pallone, 5 minutes 

for an opening statement. 

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY 

Mr. PALLONE. Thank you, Mr. Chairman, and thank you for holding this hearing today to discuss long-term care, an issue that is 

very important to me. 

Today we face a long-term care crisis that is forcing millions of 

Americans to drain all of their resources before they get any support from the federal government. This crisis is not only affecting 

those that need long-term care but also their families, sons and 

daughters who have no other choice than to spend hours every 

week caring for their parents. 

This simply cannot continue and I hope that today’s hearing is 

the beginning of an ongoing conversation that leads to real action 

to address this crisis. After all, the crisis is not new. Congress has 

been discussing a solution for decades. I worked with the late Senator Kennedy and Mr. Dingell on the inclusion of a public benefit 

for long-term care in the community setting as part of the Affordable Care Act. While this provision known as the CLASS Act was 

not a perfect piece of legislation, the ideas behind it were worth 

fighting for, namely, the idea that there is a desperate need for a 

strong federal program to help with long-term care costs. 

This hearing is timely in that it falls just weeks after three separate and independent reports authored by those across the political 

spectrum have agreed on just that point. The three reports have all 

independently agreed on three actions Congress must take. The 

first is to strengthen and simplify Medicaid long-term care; the second, to build a more consumer-friendly long-term care private market; and third, to create a strong federal program that will be there 

for those with catastrophic long-term care costs when they need it. 

And I could not agree more and that is why I plan to introduce 

legislation some time this year to provide a federal role in longterm care financing. Seventy percent of Medicare seniors will someday need long-term care services and support and they deserve a 

better option when faced with catastrophic out-of-pocket costs rising into the hundreds of thousands of dollars. Congress must do 

more to improve the quality and the affordability of these services, 

and I believe that we can achieve some of these goals by establishing a Part E option in the Medicare program to provide for this 

7 

care. Now this can be done in many different ways, but whatever 

form this effort takes we must act with a sense of urgency. 

The current system forces people to sell off all their assets in 

order to become eligible for Medicaid. While Medicaid was put in 

place to help our most vulnerable, it is currently funding 51 percent of long-term care expenditures, a full third of the program’s 

total spending. And because many people never purchase one of the 

available albeit expensive plans on the market, private insurers 

only pay for about eight percent of care. 

The fact that both public and private insurance plans provide so 

little in terms of long-term care benefits means that these costs are 

left to be shouldered by the elderly, the disabled and their families. 

These direct out-of-pocket costs account for $53 billion of long-term 

care spending and this is too great a burden for many who do their 

best to manage without care, who often depend on family caregivers to provide health assistance free of charge. 

An estimated 52 million unpaid caregivers make it possible for 

their loved ones to stay out of nursing homes and hospitals. As 

anyone who has ever cared for a loved one knows, this is often an 

arduous task and often means missing work. These costs to society 

add up and not fully tracked, but conservative estimates have 

found that 17 percent of working adults provide unpaid care for 

family members or friends providing an estimated $470 billion annually in labor costs. 

The federal government must be part of the solution and I stand 

ready to work with anyone on any of these options to start addressing this crisis because I think I simply can’t, I just don’t think we 

can afford to wait any longer. I thank you, Mr. Chairman. I yield 

back. 

Mr. PITTS. The chair thanks the gentleman. As usual, all members’ written opening statements will be made a part of the record. 

That concludes the opening statements and now we will go to our 

panel. And I would like to thank our panel for coming today. I will 

introduce them in the order of their presentation. First, Dr. Alice 

Rivlin, Ph.D., Co-chair, Long-Term Initiative, Bipartisan Policy 

Center, Senior Fellow, Economic Studies Program, The Brookings 

Institution. And then Dr. William J. Scanlon, Ph.D., Consultant, 

West Health Institute and National Health Policy Forum. And finally, Ms. Anne Tumlinson, CEO, Anne Tumlinson Innovations, 

Founder of Daughterhood.org. 

Welcome. Your written testimony will be made a part of the 

record. You will each be given 5 minutes to summarize. So at this 

point, the chair recognizes Dr. Rivlin 5 minutes for your summary. 

8 

STATEMENTS OF ALICE RIVLIN, PHD, CO-CHAIR, LONG-TERM 

CARE INITIATIVE, BIPARTISAN POLICY CENTER, SENIOR 

FELLOW, ECONOMICS STUDIES PROGRAM, THE BROOKINGS 

INSTITUTION; WILLIAM J. SCANLON, PHD, CONSULTANT, 

WEST HEALTH INSTITUTE AND NATIONAL HEALTH POLICY 

FORUM; AND, ANNE TUMLINSON, CEO, ANNE TUMLINSON INNOVATIONS LLC AND FOUNDER OF DAUGHTERHOOD.ORG 

STATEMENT OF ALICE RIVLIN 

Ms. RIVLIN. Thank you very much, Chairman Pitts. And glad to 

see my old friend, Congresswoman Matsui, and especially to have 

Mr. Pallone here because he has been such a champion for longterm care for such a long time. I am happy to be back before this 

subcommittee which is never afraid to take on complex issues and 

to work in a bipartisan manner. The last time I was here we were 

talking about the SGR, so you are not afraid of the tough stuff. 

I have worked on long-term care services and supports for a long 

time and I have recently had the privilege of co-chairing the LongTerm Care Initiative at the Bipartisan Policy Center along with 

several distinguished former elected officials. Nobody ever elected 

me to anything. But we produced just last month a report entitled 

‘‘Initial Recommendations to Improve Financing of Long-Term 

Care,’’ which is appended to my testimony and which is one of the 

three reports that have been referred to already. 

I don’t need to remind this committee that the need is increasing 

and that the burden on families, on seniors themselves and on the 

public programs, especially Medicaid, is increasing very, very rapidly and will certainly increase more as the baby boomers age. 

Many efforts have been made to find a comprehensive solution 

to long-term care financing. The chairman and several of you have 

referred to the CLASS Act. Recently, a growing consensus has 

formed among a number of groups that steps, incremental steps, 

could be taken to improve the availability and affordability of longterm services and supports to America’s most vulnerable populations. And so we have addressed ourselves to that problem. 

One thing that is important and this committee knows very well 

is that over the last few years the whole emphasis has shifted from 

institutional care and nursing homes to ways of keeping people in 

the community where they are happier and where they often can 

be served cheaper. 

So the group that I worked with addressed ourselves to the question, is there a set of practical policies that could command bipartisan support and improve care for older Americans with disabilities, take significant pressure off families and Medicaid and not 

break the bank? We came up with four proposals. One is a major 

effort to make private long-term care insurance more affordable 

and more available. Long-term care should be an insurable risk 

and if more people bought long-term care insurance during their 

working years there would be less pressure on their savings, their 

family resources and Medicaid when they became disabled. 

Our report recommends developing a new type of private insurance product, which we call retirement long-term care insurance, 

which would cover long-term care for a limited period after a substantial deductible or waiting period and would have co-insurance. 

9 

This is not Cadillac long-term care insurance. This is bare bones 

but we believe it would help. It would have inflation protection and 

a nonforfeiture benefit. Employers would be encouraged to offer 

such policies as the default option as part of a retirement package. 

These policies if offered through employers and public-private insurance exchanges could, we estimate, cut premiums in half. We 

also suggest that penalty-free withdrawals be allowed from retirement plans such as 401(k)s beginning at age 45 for the purchase 

of such insurance. 

We will also recommend designing a long-term care option, a federal long-term care option, for those with catastrophic costs. We 

would recommend streamlining the Medicaid home and community-based care options to encourage more effective care in lower 

cost settings. The Congress has already moved in this direction, but 

the waiver process is unbelievably complicated and we think it 

could be simplified. 

And finally, we recommend ensuring that working people with 

disabilities in need of long-term care services and support do not 

lose their access to those services under Medicaid as their earnings 

increase, a cheaper buy-in for just those services. Thank you, Mr. 

Chairman and members of the committee, and we will be happy to 

work with you over the longer run and to answer any questions. 

[The prepared statement of Ms. Rivlin follows:] 

10 


20210.015
11 


20210.016
12 


20210.017
13 

Mr. PITTS. The chair thanks the gentlelady and now recognizes 

Dr. Scanlon five minutes for your summary. 

STATEMENT OF WILLIAM SCANLON 

Mr. SCANLON. Thank you very much, Mr. Chairman and members of the subcommittee. I am very pleased to be here as you discuss the issue of financing and delivery of long-term care services. 

Long-term care services and financing have been an area of concern during my entire career on health policy which is now about 

a 40-year period. Much of what you are going to hear from me also 

will be in agreement of what you heard from Dr. Rivlin, because 

I think we have recognized the nature of the problem for the long 

term and that the issue is finding the right set of options in terms 

of trying sort of to address it. The need to address it has become 

more acute as the aging of the baby boomer generation sort of adds 

sort of to the numbers of people needing long-term care so that it 

is a critical issue today. 

In my view, long-term care is quite distinct from other health 

care services both in the nature and the provision of those services 

and its financing. Unlike medical care, which aims at treating or 

managing diseases or conditions, long-term care as you have heard 

involves assistance that determines how one lives one’s life in the 

presence of a disability. It is the assistance with activities to daily 

living like bathing, dressing, eating, and toileting that we all would 

do ourselves but those with disabilities cannot. Long-term care is 

not provided solely by health professionals, as you have heard family members are probably the principal suppliers of sort of longterm care services. Long-term care is also quite distinct in its financing. There is very little sort of insurance. The predominant 

payer is state Medicaid programs which constitute about two-thirds 

of all spending, with out-of-pocket spending comprising another 

one-fifth of total spending. 

Medicaid as the primary source of payment is problematic for 

both individuals and the programs. Only individuals with limited 

resources are eligible for Medicaid. Some people outlive their savings and become Medicaid-eligible when a long-term care need 

arises, others exhaust their savings paying for long-term care 

needs that they have incurred. 

What services a Medicaid beneficiary receives depends greatly on 

where one resides. The options for home versus nursing home care 

differ by state. Medicaid offered in-home services supplement what 

families provide, do not replace them. An individual’s preferences 

or relief of the burden on family caregivers may not be significant 

enough factors determining what services are offered. 

For Medicaid programs, long-term care is the largest share of 

their spending and generally has been the fastest growing part of 

the program. States have had some success in moderating spending 

growth as there has been a substantial shift from nursing homes 

to home and community care following the enactment of the Medicaid waivers. States have also restricted the number of nursing 

home beds through moratoria on new construction of new beds and 

sort of a stricter certificate of need. As a result, today we have one 

million fewer beds than we would have expected given the size of 

the elderly population. 

14 

The challenge for the future magnified by the Baby Boom generation involves reforming long-term care financing in ways that 

improve the well being of people with disabilities and their caregivers and that are affordable and sustainable. Unlike medical 

care, a solution is unlikely to be found in finding efficiencies that 

reduce spending. Medicaid programs efforts and individuals paying 

out of pocket sensitivity to costs have likely prevented considerable 

inefficiency already. 

The need to find another way to finance long-term care is not a 

new idea. Serious discussions about alternatives to the current system began in the early ’80s and with the primary focuses on expanding private long-term insurance. This seemed and is a reasonable approach as needing long-term care is an insurable event, a 

risk not a certainty, and insuring for that risk rather than saving 

for it makes more sense. 

Despite multiple efforts, the private long-term care insurance 

market remains limited. Only three percent of adults and 11 percent of elderly currently have any coverage at all, and recently the 

number of policies sold sort of annually has declined. While the 

limited growth in long-term care insurance has generally been seen 

as a demand problem, today there is a need to consider the potential for a supply side problem as well. In 2002, 102 companies were 

selling long-term care insurance. The number declined to 20 by 

2014 and additional companies have since left the market. 

Long-term care insurance has always been a difficult product for 

insurers. There was and is uncertainty about the likely benefit use 

with the presence of insurance. There is an additional problem now 

though and that is the limited returns on the investment of premiums that have been associated with the low interest rates we 

have experienced over the last 8 to 9 years. The ability to invest 

premiums is key for insurers in setting premium rates and having 

a sustainable product. 

I would like to conclude with some considerations that might be 

taken into account as you are examining sort of long-term care financing options. Encouraging personal preparedness should be a 

priority. While that might be perceived by some as limiting public 

expenditures, I see it as essential to providing individuals with 

more choice in how they live their lives when they have a disability 

and how their families will be impacted. 

Insurance as I mentioned is preferable to savings as the primary 

means of preparation, yet we now have concerns about insurer participation. What actions can be taken to assure that insurers will 

be interested and able to market long-term care policies with reasonable benefits and premiums? The proposals that you are going 

to hear today sort of offer some sharing of risk which may be sort 

of key to the participation of insurers. It may also be key to giving 

a clear message to individuals that preparation sort of is an important personal responsibility. 

Finally, what the Baby Boom generation means for state Medicaid programs deserves attention. States already differ significantly in the shares of their population needing long-term care and 

the cost of providing services. As the numbers needing long-term 

care increases and as economic activity may shift geographically, 

some states may be disproportionately affected. What assistance 

15 

they may need should be considered. Thank you very much, Mr. 

Chairman. 

[The prepared statement of Mr. Scanlon follows:] 

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Mr. PITTS. The chair thanks the gentleman and now recognizes 

Ms. Tumlinson 5 minutes for her summary. 

STATEMENT OF ANNE TUMLINSON 

Ms. TUMLINSON. Thank you. Chairman Pitts and members of the 

committee, thank you very much for the opportunity to testify 

today. I really appreciate your focus on this issue. 

The perspective that I am about to share comes from a variety 

of experiences over the past 25 years. I work at the Office of Management and Budget on the Medicaid program as a researcher and 

a consultant to long-term care providers and most recently serving 

as a facilitator between the economic modeling work done at the 

Urban Institute and Milliman and several of the very brave groups 

working on long-term care financing reform. I also write a blog for 

family caregivers. 

We have a very serious and significant financing gap between 

the services and supports that people need and the funds available 

to pay for them. I am going to make just three points that I hope 

will frame today’s discussion and shape the work of this committee. 

First, as we have heard already, having a need, a high need for 

long-term care in old age is not an inevitable part of old age. And 

what I mean by high level of long-term care need is when you get 

to the point that you need help with two or more activities, basic 

activities of daily living like bathing, eating or dressing, or if you 

are living with a severe cognitive impairment. 

And what we are learning from the recent work done by the 

Urban Institute and Milliman is that there is a huge variation in 

whether and the degree to which individuals will actually experience this high level of long-term care need in old age. The researchers project that over the older adult population there is roughly a 

50 percent chance that if you live to age 65 that at some point over 

the rest of your old age you will experience that high level of need 

for long-term care. 

Now there is also a smaller, a 15 percent chance that a person 

will live with that level of need for five or more years. Just imagine 

living with two or more activities of daily living limitations for five 

or more years. These situations are incredibly expensive. If you are 

among the top 15 percent of spenders, the Urban Institute projects 

that your care will cost at least, at least $250,000 over your lifetime. The bottom line is that the risk here is large and it is uncertain. 

So the second point I want to make is the way we finance these 

costs as we have all heard is inadequate to the need. Individuals 

and families face huge financial risks. Generally what the Urban 

Institute research is telling us is that on average over half of lifetime costs are actually financed through individuals’ income and 

savings through out-of-pocket spending. But when and if these resources run out, Medicaid plays a very important role. It finances 

about a third of lifetime costs on average and makes the biggest 

contribution for people who need care for very long periods of time. 

The reliance on individual resources and Medicaid has created 

huge gaps in the system. We have already talked about this, but 

we rely very heavily on unpaid family caregiving and this is in part 

29 

because this is often the only option that families feel like they 

have. 

But I want to talk about another gap that we see, which is that 

we often simply just fail to meet needs. In a recent survey, about 

a third of individuals with long-term care needs reported serious 

consequences from going without needed services. For example, individuals who have difficulty preparing their own food or difficulty 

eating and can’t get help with that often go without eating, and 

this unmet need gets addressed in the emergency room and the 

hospital which is of course where Medicare pays. 

So my third point is that the risk of needing long-term care is 

one that is well suited for insurance, but shifting all or even a part 

of our financing to insurance will be very challenging, so I am the 

Debbie Downer here. So even when we estimate a twofold increase, 

a twofold increase, in voluntary participation in long-term care insurance we still don’t see it moving the needle that much on how 

much we spend on Medicaid and how much out-of-pocket contributions are made. So I want to be careful here and say that this 

doesn’t mean it wouldn’t be helpful to increase insurance participation under a voluntary approach. It would. It just wouldn’t dramatically change the role of Medicaid or out-of-pocket spending. To 

do that, we need everyone to participate. But even when we assume that everyone is covered it is still hard because that new coverage soaks up so much of the unmet need that it increases overall 

spending almost as much as it offsets other sources of payment. 

So in grappling with these tough issues, where the groups I have 

worked with have landed as you have heard is that some sort of 

private market and public insurance partnership solution is needed 

and that the appropriate role of public insurance is to cover that 

catastrophic risk; that 5 years or 4 years or 3 years, but the part 

that is the most expensive for individuals. But that is only going 

to work, that catastrophic risk coverage will only work as long as 

we can stimulate the private market and reform Medicaid to better 

cover the earlier risk. 

But everyone has more work to do. We have to develop details. 

We still have to work on financing strategies. But we have to move 

forward no matter how challenging it might be, because our stopgap patchwork system has serious implications for future economic 

productivity, public program spending and for the functioning of 

the American family. Thank you. 

[The prepared statement of Ms. Tumlinson follows:] 

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Mr. PITTS. The chair thanks the gentlelady. That concludes the 

opening statements. We will now go to questioning and I will recognize myself 5 minutes for that purpose. 

Dr. Rivlin, you have suggested Congress create a state plan 

amendment for home and community-based services in Medicaid. If 

home and community-based services are more cost effective and 

offer preferred settings, why aren’t states making full use of existing authorities to provide such services under Medicaid? 

Ms. RIVLIN. I don’t know the answer to that for all states. Many 

states would like to and get caught in the complicated waiver process, and we are simply saying let us make it easier. Let us make 

it simpler for states to do this and hope that they do and that 

therein can be encouraged broadly to get with it and use the authorities that are there. 

Mr. PITTS. And why does the Bipartisan Policy Center feel the 

federal government needs to create incentives for states to increase 

the adoption of home and community-based options? 

Ms. RIVLIN. Because it is not happening and we think that some 

incentives might help. 

Mr. PITTS. OK. 

Ms. RIVLIN. And the simplification is really very important. The 

Congress has wanted to do this and has done it, but as so often 

happens in policy as you know we end up with a complexity that 

could be simplified. 

Mr. PITTS. Ms. Tumlinson, I was particularly struck by the sentence in your written statement, ‘‘it is important to remember that 

because the system is currently underfinanced, any change that ensures a significant portion of the population with need will result 

in more overall spending rather than less.’’ Would you explain 

more about what you are suggesting? Is it that there is cost shifting currently going on, or we just buckle up and spend more nationally, or are you suggesting we need to approve large new expenditures now for promised savings tomorrow? 

Ms. TUMLINSON. Oh, there we go. No. The way that our system 

works right now, we have a lot of care that is being financed so 

to speak without paying for it, so we are financing care through unpaid family caregiving. We are financing care through unmet need, 

so to speak, and we are financing care kind of back door through 

the health care system. 

So when we put an insurance program in place, what the modelers estimate is that we have something called induced demand. 

In other words that people do actually, who have been essentially 

kind of holding back will actually come in and use their insurance 

benefits as we would expect them to. And as a result of that we 

will see, absolutely, we will see a replacement of some Medicaid 

dollars. It does reduce Medicaid dollars. It reduces out-of-pocket 

dollars. 

But the insurance itself is, there is also kind of a place in the 

spending where the insurance brings in new dollars so we will have 

new dollars in the system. It is actually, it is good news. It is just 

that I think that this idea that our system somehow is, is we have 

out of control spending is a fallacy. We actually have a very tight, 

very efficient long-term care system right now. 

36 

Mr. PITTS. All right. Dr. Scanlon or Dr. Rivlin, do you want to 

comment on that? 

Mr. SCANLON. I would agree with Ms. Tumlinson. It is very clear 

that there have been pressures to control costs that are present for 

both Medicaid programs as well as individuals buying out of pocket. And the reason that we will have an expansion of spending if 

we were to get insurance is the fact that at this point families are 

probably doing more than they really can bear in terms of the burden of caregiving and if given an option they will seek to provide 

some additional outside resources. We don’t want to supplant family caregiving, but we want to make sure that we do not have it 

sort of create too much of a cost or burden on those family members. 

Mr. PITTS. Dr. Rivlin, do you have any thoughts on this? 

Ms. RIVLIN. No, I agree with that. 

Mr. PITTS. Dr. Scanlon, in your written testimony you state that 

Medicaid as a primary source of payment is problematic for both 

individuals and the programs. Can you explain why you believe it 

is problematic for Medicaid to be the primary payer for long-term 

care? 

Mr. SCANLON. I feel it is problematic for the Medicaid program 

because of the sort of the enormity of its obligation in terms of trying to deal with sort of long-term care as the only financer. Secondly, there is the difficulty of defining what services should be 

provided by Medicaid programs. 

Historically, we have relied exclusively on nursing home care and 

we recognize the shortcomings of that but as we move to having 

more care in home, we also have to face the difficulty of deciding 

how much care is appropriate to both benefit the individual as well 

as protect the program. And the reality there is we do not want to 

supplant sort of family care, we want to support it in a very positive way. 

Mr. PITTS. The chair thanks the gentleman. My time has expired. 

The chair recognizes Ms. Matsui 5 minutes for questions. 

Ms. MATSUI. Thank you, Mr. Chairman. Our long-term services 

and support system are challenges that threaten our seniors’ retirement security, young people with disabilities, the ability to both 

work and afford needed services, and our nation’s families who are 

attempting to either pay for their loved ones’ services or to provide 

the care themselves. 

Unpaid caregiving particularly impacts women, as daughters 

most likely step out of the workforce to take care of their aging 

parents and mothers are most likely to take care of their disabled 

children. This leaves women with less retirement savings and Social Security accrual, and women need more as we also live longer. 

As we know, approximately 12 million Americans require long-term 

care and that number is expected to grow as the baby boomer population ages. 

Given that the need for long-term care is driven by increased 

functional limitation whether it be from the aging process or untoward circumstances in life, isn’t it fair to assume we need to approach this issue from a point of universality so that all Americans 

have a safety net without being required to become poor and significantly disabled in order to access the services and supports that 

37 

they need? And I would like each of you to comment on that. Dr. 

Rivlin? 

Ms. RIVLIN. In an ideal world I think I would say yes, let us 

cover this in a universal way. But right now the idea of and creating a new entitlement program primarily for older people seems 

to me both unlikely to happen and probably not desirable. I worry 

that we are spending so much on older people for good reasons that 

we are squeezing out investments in the young and in education 

both at the federal level and at the state level and for which reason 

I think it was important to take some of the burden off Medicaid. 

Ms. MATSUI. Right. Mr. Scanlon? 

Mr. SCANLON. Yes. I agree that in an ideal world we would have 

a system where there is all needs that are going to be met, but I 

think that we need to also look at long-term care as something that 

is not just another health care service; that long-term care is about 

how you live your life in the presence of a disability. So it is not 

just the question of need, it is the question of your preference and 

your satisfaction. 

And while we can have insurance that is aimed at making, and 

public programs aimed at making needs being met, there is this 

question of what additional services one might want. That is where 

I think personal preparation comes into play, where individuals 

can be able to exercise their preferences and the preferences of 

their family. 

Ms. MATSUI. Ms. Tumlinson? 

Ms. TUMLINSON. Yes, thank you. Well, I can’t figure out how to 

change the current system unless everybody is in it. We have three 

different populations that need that universality—children born 

with developmental disabilities, adults who develop disabilities, or 

individuals who develop disabilities as adults and older adults. 

And I think that as somebody who has worked on the budget 

side of Medicare and Medicaid for many years, I share Dr. Rivlin’s 

concern about spending on older adults. At the same time, I think 

that we cannot back door finance this off of women who are giving 

up huge amounts of work time and their own financial resources 

in order to take care of their parents. 

I certainly know from my work with caregivers that not only do 

they spend a lot of time, they also spend a lot of their own money. 

And that is not even in our model right now. We don’t model that. 

Ms. MATSUI. I want to address long-term care insurance. The 

vast majority of employers as we know do not offer long-term care 

insurance to their employees. The federal government does offer 

long-term care insurance. However, over 80 percent in the general 

workforce does not have access through employers. Some have recommended requiring or incentivizing employers to offer long-term 

care insurance as an opt-out basis. What roles do you recommend 

employers play in education and enrollment in long-term care insurance? Dr. Rivlin? 

Ms. RIVLIN. I think employers could play a major role, especially 

if it were not so expensive and if they thought of it as the selling 

point as protect your retirement resources, your savings, by buying 

this relatively inexpensive long-term care insurance which we are 

offering you, and not only that we are enrolling you unless you opt 

out. 

38 

Mr. SCANLON. I agree that the employers would be a trusted 

source of information, and I think education is the key to sort of 

having consumers understand sort of the value of insurance. 

Ms. TUMLINSON. I agree with Dr. Scanlon and Dr. Rivlin. 

Ms. MATSUI. OK. Thank you, and I yield back. 

Mr. PITTS. The chair thanks the gentlelady. I now recognize the 

vice chair of the subcommittee, Mr. Guthrie, 5 minutes for questions. 

Mr. GUTHRIE. Thank you. Thank you for all being here for this 

important issue that we need to figure out a way to address. And 

I have a question for the panel, a couple questions for the panel. 

Generally, the home represents the individual’s largest asset. Medicaid payments prevent certain individuals with substantial home 

equity from receiving coverage for long-term care. After adjustments for inflation, states’ current home equity limits range from 

$552,000 of home equity to $828,000. 

I have introduced H.R. 1361, legislation to encourage the use of 

home equity to finance long-term care by eliminating the option for 

states to increase the home equity allowance above $500,000 adjusted for inflation. Are there other policies that could be implemented to encourage—this is a question. Are there are policies that 

could be implemented to encourage individuals, especially elderly 

individuals, to tap the equity interest in their home to help finance 

long-term care needs? 

Ms. TUMLINSON. OK. So first of all, thank you for that question. 

We also know that individuals—one of the ways, the main ways 

that individuals access assisted living is by selling their homes and 

getting access to the home equity and then spending that down. 

That is what we hear from assisted living providers. So it is a really important set of assets that we would like to be able to tap better. I think we have been around and around about reverse mortgages, and I think that that is definitely an area where we could 

definitely do some more work in understanding how to make those 

financial instruments that basically allow people access to that equity without having to move out of their house. 

Mr. GUTHRIE. OK. Thank you. OK, the second question then, use 

of personal care in home health services in Medicaid has been 

growing rapidly. For example, in 2011, Medicaid costs for personal 

care services totaled 12.7 billion, a 35 percent increase since 2005. 

At the same time, the Office of Inspector General found that fraud 

in personal care services is on the rise, representing more cases investigated by state Medicaid fraud control units than any other 

type of Medicaid fraud. 

Another bill I have introduced is H.R. 2446, which would reduce 

the level of fraud and improper payments in personal care services 

by requiring the adoption of electronic visit verification systems for 

personal care and home health services under Medicaid. We can 

protect some of the most vulnerable Medicaid beneficiaries and ensure they receive the care they need. 

Given most people’s preference to remain at their home and 

growing demand for long-term care services, do you each think it 

is important to use technology such as electronic visit verification 

systems to ensure that the vulnerable beneficiaries receive the 

services they need and for which Medicaid is paying? 

39 

Mr. SCANLON. I definitely do. I think that in the statistic that 

you have cited in terms of the growth of expenditures there is actually a positive side of that which is those expenditures have been 

growing because we have been reducing reliance on nursing homes. 

I saw some data recently that in 2013, while the numbers of dollars 

spent by Medicaid programs on home care increased significantly, 

the numbers of dollars spent on nursing homes had actually declined, which is rather surprising. 

Monitoring the integrity of home care is one of the most difficult 

things to contemplate if you are running a program when you 

think about it, this care being delivered in homes across one’s jurisdiction. Using any technology that would aid in that is a plus, but 

I also think we need to think for the future in terms of this, if we 

are talking about service delivery for long-term care, what other 

roles can technology play? 

To be quite honest, as the Baby Boom generation grows and 

needs more long-term care, the idea of withdrawing people from 

the labor force to provide that care has very serious implications 

for our economy. 

Mr. GUTHRIE. Yes. Thank you very much. And the third question 

for Dr. Rivlin, I understand the recommendations the Bipartisan 

Center released last month are just an initial recommendations in 

that the Center continues to work on additional recommendations 

regarding the financing of long-term care. Can you share with us 

some of the additional areas that will be the focus of the Center’s 

continued efforts? 

Ms. RIVLIN. The primary one is to work out some details for the 

catastrophic insurance. That we believe has to be a federal program and universal, but it is complicated to work out and we wanted to put some more effort into that. We also want to work on how 

long-term supports and services could be integrated with Medicare 

Advantage. 

Mr. GUTHRIE. Thank you very much and I yield back the balance 

of my time. 

Mr. PITTS. The chair thanks the gentleman. I now recognize the 

ranking member of the full committee, Mr. Pallone, 5 minutes for 

questions. 

Mr. PALLONE. Thank you, Mr. Chairman. I wanted to ask Ms. 

Tumlinson, we will see how much time there is. Maybe the others 

could respond as well. Two things about the spend-down provision 

and just about affordability of long-term care. I don’t want to put 

words into Dr. Burgess’ mouth because he is not here right now, 

but I think he said between $1,500 and $2,500 a month for longterm care insurance. Was that accurate? Let us assume it is 

$2,000, which is halfway between, right. 

Mr. SHIMKUS. For over 50. 

Mr. PALLONE. For over 50. So you think about that that is what, 

$24,000 a year, right. Will we say nursing home care now is about 

maybe $100,000, a little less than that? So I mean, it doesn’t even 

seem worth it, I mean in the sense that you could, say you are 50, 

or of course even if you were younger and you put away that 

$25,000 for 10 years or so that would be—I don’t know. That would 

pay for at least 2 years of nursing home care. 

40 

So it seems to me that—and then a lot of times those policies 

don’t even cover more than 6 months or a year of care. So I think 

a lot of people just look at this and say it is not worth it. In other 

words—and that is what I wanted you to comment. I think a lot 

of people just look at it and say, look, it is so expensive I could just 

as easily put the money in the bank or in some kind of a mutual 

fund and have enough to cover it. 

The real issue really is catastrophic, if you had to be in a nursing 

home for 5 years or so which I know is unusual but not totally unheard of. So I just wanted you to comment on that. I mean, I don’t 

see, practically speaking it doesn’t even seem like the long-term 

care insurance is even worth it given its cost and limitations. And 

is that why you talk, all of you were talking primarily about catastrophic and what would that catastrophic entail? 

Ms. TUMLINSON. All right. So I think it is the case that today it 

is very hard to buy private long-term care insurance for catastrophic risk. Most of the insurers are not interested in lifetime 

policies, selling lifetime policies anymore, so policies that would 

cover the care that you might need after a certain period of time. 

And so that is one of the reasons why we have all, all of these 

groups have been interested in a public program to cover the catastrophic risk. 

Mr. PALLONE. And the catastrophic would be covering like what, 

after a couple years? 

Ms. TUMLINSON. So, right. After, well, defining that is part of the 

work that we have to, still left to do, but in the modeling that we 

did we started it after 2 years. So you have 2 years of high need 

and that at year two that is when the catastrophic piece of the insurance would kick in. 

Mr. PALLONE. Well, see that seems to me to make the most sense 

if we are talking about a public program, extension of Medicare or 

something else after that 2 years, because otherwise from what I 

see on the market it is just not worth it. 

Well, let me ask you the second question. We haven’t really 

talked much about it, but to me the biggest scandal, if you will, in 

this whole system is the spend-down provision. I don’t like to talk 

about values, but I mean, from a value, we say that we are trying 

to instill certain values in what we do here, and it seems to me 

that that is like the most valueless, if that is the right word, thing 

that we ever created is the spend-down provision. And all I hear 

from my constituents is how do I get around it. What can I do to 

transfer my assets before the deadline so that I don’t have to spend 

my savings or whatever, and then I can go on Medicaid. 

I mean, I have to go be honest with you, practically speaking is 

one thing, but just from a value point of view I think it is outrageous because this is what people do. Yes, would you comment 

on that? I mean, in your experience this whole spend-down and 

people’s efforts to get around it and what does that do to the family 

and the fabric of things from a moral point of view, I guess, is what 

I am asking. 

Ms. TUMLINSON. Sure. Well, so what I observe in what we are 

seeing, I think, in the data, is actually that in part because of Medicaid, because access to, even though access to home and community-based services is much better than it used to be through MedVerDate Nov 24 2008 13:09 Feb 27, 2017 Jkt 037690 PO 00000 Frm 00046 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-122 CHRIS
41 

icaid, but because it is not guaranteed, in many cases, still, the 

only way you can use Medicaid is if you are in a nursing home. 

And many, many, many families, most of the families that I talk 

to or that I deal with would much prefer to spend their own money 

in assisted living, senior housing, they would prefer to provide unpaid caregiving. One of the home care providers in California told 

me they had folks maxxing out their credit cards to pay for home 

care themselves. So I don’t really see people really working to sort 

of get rid of their assets in order to qualify for Medicaid because 

in many cases that just simply means a nursing home for their 

family member and they would prefer to avoid that. 

Having said that there is a huge amount of diversity out there, 

and absolutely, once you have made that decision that a nursing 

home is where it is going to have to be there is, maybe the incentives are in place to try to figure out how to make that work in 

a way that is financially best for your family. But generally speaking, I don’t really see people gaming it given how much out-of-pocket spending is happening. 

Mr. PALLONE. I appreciate what you are saying, but I hear it so 

often and it just galls me to think that we have set up a system 

where people are encouraged to basically get around it. And I know 

we can talk about it another day, but it is one of my biggest concerns. Thank you. 

Mr. PITTS. The gentleman yields back. The chair recognizes the 

gentleman from Illinois, Mr. Shimkus, 5 minutes for questions. 

Mr. SHIMKUS. Thank you, Mr. Chairman. Welcome. This is a 

great hearing and something that we have been struggling with 

forever since I have been on the subcommittee. And I really appreciate Ranking Member Pallone’s comments, because I do have frustrations with that and elder law attorneys who try to find these 

ways to protect assets when those assets should be used. I mean, 

we can’t take it with us when we die, right. So I think maybe we 

will continue to talk about that because there has got to be a way 

to incent and keep and encourage, and I think a lot of different 

ideas are being thrown out here. 

And I have always been, I have spent a lot of time talking about 

the budget as a whole, Dr. Rivlin, and whatever 2014 numbers, the 

3.4 trillion and really the 1.900 billion or the 1.1 trillion discretionary budget that we always seem to fight about when the real 

challenge is our entitlements. People are entitled to these services 

and then the mandatory money then follows because you are entitled for these programs. So those are the right words and I think 

are rightly used. 

But in the Bipartisan Policy Center when we talked about the 

failure of the CLASS Act, because you all talk about the new programs, how would we fund something like a CLASS Act to help 

people coverage? I mean, what would be a possible funding mechanism? Or is that to be answered in—it is kind of a follow-up from 

the other discussions. 

Ms. RIVLIN. The CLASS Act was very expensive and that was 

one of the problems. If you are funding something less expensive 

like catastrophic care, then I think you still have the usual options. 

It could be a small payroll tax. It could be some other kind of tax. 

And I don’t know exactly what the cost would be because we 

42 

haven’t done that work yet, but I think it has to be funded, in my 

opinion, and the less pressure you put on the federal budget, the 

easier it is to fund it obviously. 

Mr. SHIMKUS. Because we are going to continue to fight budget 

debt, deficits, and the like and we will have to make sure that we 

have a funded program so it doesn’t add to the deficit because then 

we are just continuing in the spiral down. Let me also go, we know 

the benefits of employing our disabled community and keeping 

them, but long-term services and long-term support and services 

help them stay in the workforce. 

But there is that balance, right, of how you continue to provide 

Medicaid support so that they can then be active citizens and in 

employment without getting into the other—oh, now, you are making money or you are not making money and we are going to kick 

you off services or we are going to add you to services. So do you 

have any comments on that? 

Ms. RIVLIN. Yes. We suggest a limited buy-in to Medicaid just for 

the long-term supports and services not for the whole Medicaid 

package because they may not need that. They may, if they are employed have insurance. 

Mr. SHIMKUS. Ms. Tumlinson, you are smiling, so do you want 

to add? 

Ms. TUMLINSON. Well, I agree with the Dr. Rivlin side. The BPC 

has got a really interesting solution that they have put forward, 

but I go back to if we had, the other option of course is to create 

an insurance system that if you, so that if you sort of unexpectedly 

face a disability as a working age adult that you have access to 

those long-term support and services through that insurance program. That is what the CLASS Act was designed to do, but it was 

a voluntary program. 

Mr. SHIMKUS. Right. Thank you. And I want to finish up. There 

has also been debate, we are talking Medicaid, but recently we are 

also following the Puerto Rican debt crisis, health care dilemma, et 

cetera, et cetera, et cetera. But there is some confusion. I want to 

go to Dr. Scanlon. I don’t think all Americans understand that the 

Puerto Ricans do not pay federal income tax as a protectorate, but 

the question is does Puerto Rico even provide long-term care which 

is mandatory Medicaid service? 

Mr. SCANLON. My understanding of that and this is based on 

some GAO work that was done in 2000 and sort of in ’05, is that 

Puerto Rico does not cover either nursing facilities, or at that point 

it was identified as home health. The home health portion sort of 

is not really long-term care. I think one of the things in educating 

the public is to stop confusing them about sort of what home health 

is. In terms of the nursing facilities there is the question of whether they, outside of Medicaid, support any other types of residential 

care. 

Mr. SHIMKUS. Yes. So the only way—if Mr. Chairman, I will just 

in my summary—it is a debate between block grants and per capita grants and there is a confusion, then to lump what states are 

doing with what is going on in Puerto Rico is not appropriate. So 

with that I will yield back. 

Mr. PITTS. The chair thanks the gentleman and now recognizes 

the gentlelady from Florida, Ms. Castor, 5 minutes for questions. 

43 

Ms. CASTOR. Thank you, Mr. Chairman, and thank you to the 

panel for sharing your expertise with the committee. 

It is very important as you know to families across America and 

it is in our national interest to strengthen long-term care across 

the spectrum from home and community-based care to skilled nursing. And Dr. Rivlin, you suggested working on practical bipartisan 

solutions and I wanted to recommend one to my colleagues. 

Congressman Gregg Harper, my Republican colleague, and I are 

cosponsoring H.R. 3009. That is the RAISE Family Caregivers Act. 

RAISE means Recognize, Assist, Include, Support and Engage 

Family Caregivers Act. It would create a national caregiving strategy based upon the input from advocates and experts and families 

across the country. And the reason I really recommend it to you is 

it passed the Senate. The Senate version has passed, and we the 

House should take action. So I would ask my colleagues to take a 

look at that and help us move forward on some of these practical 

solutions. 

And Ms. Tumlinson, thank you very much for bringing up the 

fact that long-term care right now is often funded in a back door 

way by women and families who take time off their job, who cut 

into their salaries and overtime, and there must be a solution for 

that. And all of the witnesses have mentioned this as well. So 

thank you. 

Another concern I have is that American families do not fully understand the availability or more accurately the lack of availability 

of financed long-term care services. Specifically, many Americans 

mistakenly believe that Medicare provides for long-term care services. Ms. Tumlinson, in your testimony you described Medicaid’s 

role in long-term services and supports. Can you briefly talk about 

Medicaid’s current role, and if no Medicaid reforms are taken here 

in the near future what do you believe is the outlook for financing 

long-term care through Medicaid? 

Ms. TUMLINSON. So in other words what happens under status 

quo. 

Ms. CASTOR. Yes. 

Ms. TUMLINSON. We do nothing for Medicaid. So the modelers 

did what we call a baseline estimate of Medicaid, so what happens 

to Medicaid spending in the absence of current law, and it certainly 

starts to decline fairly rapidly. Just the long-term service and supports portion for older adults is the piece that they did, and it 

starts to decline very rapidly hitting 500 billion fairly soon, and so 

we are going to see rapid growth. But that is just kind of a modeler’s view of the world, not that there is anything wrong with that. 

But asking of myself practically, what does that mean because 

can states and the federal government actually really absorb that? 

And I think that what I worry about is that when you have all of 

these people coming through the system who are entitled to these 

services and you can’t change that entitlement, your only other 

choice is to use all of the leverage at your disposal to reduce spending on a per person basis. 

So that what we will start to see is this compression around 

what is available through Medicaid, further putting pressure on 

families and personal finances at exactly the same time when we 

are going to see this rapid decrease in the availability of family 

44 

caregivers relative to the number of older adults. So this is a perfect storm of unsustainability. 

Ms. CASTOR. So could you expand on some of the most promising 

Medicaid reforms going on at the state level? It would seem that 

to your point a moratorium on skilled nursing beds is a false reform. And that is what you are talking about is the compression 

and the—if we don’t have the ability to make these reforms it is 

simply going to shift costs to families. 

Ms. TUMLINSON. Right. That is a good example of ways in which 

it is, states can reduce spending on a per person basis for home 

and community-based services, they can increase waiting lists, they 

can put moratoriums on beds, they can reduce payments to nursing 

homes to the point where their margins are negative for Medicaid. 

But in the states that are very innovative, what we see, for example, in Minnesota is a combination of efforts to use sort of central information systems called aging and disability resource centers to help people who are starting to have a need for a long-term 

services supports and have potentially financial eligibility to actually get tracked into the right level of appropriate care for them so 

that they don’t end up in an institution unnecessarily, and so that, 

for example, if all you really need is a wheelchair ramp then you 

get a wheelchair ramp. You don’t get 12 hours of personal care a 

week if that is not what you need. So developing personalized care 

plans that are specific to the individual needs of the people. 

The thing about long-term care is that it is a universal. Universally it is an issue that we all in our families and our lives may 

face, but each situation is in fact fairly personalized. And so what 

I like about what Minnesota is doing is that it is allowing those individuals to get the right level of care. 

Ms. CASTOR. Thank you very much. 

Mr. PITTS. The chair thanks the gentlelady and now recognizes 

the gentleman from Texas, Dr. Burgess, 5 minutes for questions. 

Mr. BURGESS. Thank you, Mr. Chairman. And first off, let me 

apologize to Mr. Pallone if I misspoke, or if he misheard let me correct him. The premium that I pay for a long-term care insurance 

policy right now is $1,500 to $2,500 per month. Now I am used to 

talking about the exorbitant premiums I pay in healthcare.gov—did 

I say it is per month again? I meant per year. The healthcare.gov 

premiums are per month. 

And so I am used to the exorbitant premiums per month, but 

that is for the ACA coverage. The long-term care coverage is 

$1,500-$2,500 per year. Still a significant amount of money out of 

a household budget, $100 or $200 a month amortized over the 

course of a year, but an amount of money that perhaps is achievable for middle-class families. And what worries me about what we 

are doing or what we have done with the discussions we have on 

long-term care insurance is we pretty much have taken the middle 

class out of it. Sure, we are going to provide benefits, we are going 

to provide the safety net for the most vulnerable populations—the 

blind and disabled children—that continues unabated. But what we 

are talking about are people my age, people in the 55- to 75-year 

age group who are aging into a situation where their families now 

may be called upon to provide long-term care. 

45 

So wouldn’t it be great if people would at least consider whether 

or not that makes sense for them and their families? And again I 

am not even talking about the tax consequences. I am talking 

about the actual consequences for your family. Again, I referenced 

the loving gift that a father, mother, father can give their children, 

which is to provide for that care and not be a burden to their offspring at a time when, correctly, under the normal circumstances 

of living their offspring are actually raising their offspring and life 

goes on. 

But back to practicalities. Now, Ms. Castor just talked about bipartisan solutions, so Dr. Scanlon, let me just ask you. Independence at home was something that was worked on in this subcommittee and this committee. Actually, the demonstration project 

was then, I believe, extended and that was just signed into law 

during this Congress, so that is one of the achievements in health 

care that can be correctly attributed to this Congress. But can you 

perhaps fill us in a little bit more on the Independence at Home 

program and ongoing what it actually means for families? 

Mr. SCANLON. Certainly. The Independence at Home program 

also could be called the Home Based Primary Care program in 

which sort of individuals are enrolled in primary care practices 

that will deliver their medical care services in their homes. It is 

aimed at individuals that have very serious chronic conditions that 

make it very difficult to be receiving their medical care in physicians’ offices and other settings. 

The idea behind it is that it will generate savings by preventing 

these individuals from having their conditions be exacerbated 

where they will have to visit emergency departments or end up 

being hospitalized. As you mentioned, the demonstration is underway. I think we are now in the third year of that demonstration 

and the early results have been positive in a number of the practices. 

And so there is this question of how can we make this potentially 

practical on a widespread basis, what are the types of patients that 

are best served, what kind of practices should be serving them? 

Mr. BURGESS. And would you suggest that the results are positive? Not just positive from a family care-patient care standpoint, 

also positive from a standpoint that it was self-sustaining and in 

fact did result in a negative score by the Congressional Budget Office; is that not correct? 

Mr. SCANLON. In the first year results. We do not yet have the 

second and third year results. But I would say again, in terms of 

this hearing, this is about your medical care needs. This is not 

about your long-term care or long-term service and support needs. 

Mr. BURGESS. Well, let me just ask of the panel for anyone who 

wants to answer. I referenced the Partnership Program that we 

did, now, I guess, 10, 11, 12 years ago under the Deficit Reduction 

Act of 2005. Those hearings that led up to that inclusion in the 

Deficit Reduction Act, the inclusion of the Partnership Program, 

there are lawyers who make a business of impoverishing families 

so that they can then be Medicaid eligible. 

And the idea of the Partnership Program was there are a certain 

number of assets that you can then protect as a family and you 

don’t have to do this to yourself. And one of the unfortunate things 

46 

about people who enter into long-term care is most will not actually 

overspend or outlive, if you will, the ability of premiums to cover 

their term in long-term care. There are limits on the policies, but 

most people don’t exhaust those. Unfortunately, whatever the problem is that brought them to long-term care is going to claim them 

before the amount is exhausted. 

But for families to have that option to fall back on, to give an 

incentive for families to actually participate in this program, do 

any of you have any thoughts on that? 

Mr. SCANLON. Well, I think it is a positive to allow families to 

have this option. And in my discussions sort of with people in the 

insurance industry, they have said that it has had a positive impact in terms of the number of people buying policies with there 

is maybe a 15 to 20 percent increase sort of in sales of policies. 

The problem, overall, for what we are discussing today though is 

we are talking about a 15 to 20 percent increase on an incredibly 

small base. If you raise 5 percent by 15 or 20 percent, as you know 

we only are increasing it by one or two percentage points. 

Protecting your assets in order to pass them on to heirs is potentially one very positive thing that families may value in terms of 

partnership policies, but I also think that they shouldn’t overlook 

the fact that the policy is going to increase your purchasing power. 

It is going to be able to allow you to get more services that are potentially going to relieve families of some of the excessive burdens 

that they may be incurring. That is a second aspect of insurance 

that I think we really have to focus on. 

Mr. BURGESS. OK. Thank you, Mr. Chairman, I will yield back. 

Mr. PITTS. The chair thanks the gentleman and now recognizes 

the gentleman from Oregon, Dr. Schrader, 5 minutes for questions. 

Mr. SCHRADER. Thank you very much, Mr. Chairman. I appreciate it. I appreciate the hearing. This is a good area of bipartisanship. We can all agree that the rising cost of the baby boomers 

coming into long-term care need situation is going to be untenable 

and unacceptable. 

My state has been a pioneer, I guess, in the community-based 

services. We don’t emphasize nursing homes at all. We are primarily an assisted living, foster care, or in-home-based long-term 

care state. We have great success. It is wildly popular. People prefer to be in these settings than a nursing home, at least in my 

area. It is also a lot cheaper for the taxpayer and I think for the 

individuals that are at risk here. So I urge the rest of my colleagues to look at the Oregon program and maybe try and create 

some similar situations in their own home state. 

We have talked a lot about Medicaid. The ranking member and 

others have talked about the spending down provisions that seem 

relatively unconscionable. You can’t get good care until you are 

poor, until you spend yourself into poverty. And that is certainly 

not a great pattern for success, I don’t think. It is something that 

the greatest nation on earth should not be striving for as a way to 

provide long-term care services. 

And Medicaid is expensive for the taxpayer. Now, as was alluded 

to by several of my colleagues, it is one of the fastest growing parts 

of our budget. The safety net programs are the long-term debt deficit conundrums that we face. And I think it has also been said 

47 

here today that it is a little untenable to have another program 

added into these otherwise already slightly untenable programs at 

high cost to the taxpayer. 

So there has got to be some other alternatives out there. Dr. 

Rivlin, you mentioned very briefly about before we get into the 

higher cost Medicaid programs that maybe there is something that 

could be done in the Medicare Advantage arena for seniors seeking 

home and community-based services. Could you elaborate on that 

please? 

Ms. RIVLIN. I mentioned that in the context of a question of what 

else do we need to work on, and I think that is certainly one. A 

Medicare Advantage plan, which is a comprehensive approach to 

health care anyway or should be, could, if we figure out how to do 

it, offer long-term supports and services as part of a package and 

that would help with integrating the health care with the LTSS. 

Mr. SCHRADER. And I appreciate that. And to that end, there is 

a bill that Congressman Lance, Congressman Meehan, Congresswoman Linda Sanchez and I are putting forward, H.R. 4212. It is 

a bill based on Community-Based Independence for Seniors Act, 

and basically it is a demonstration project picking five MA plans 

across the country. It is budget neutral. 

Please look at a way that these MA plans, which we have great 

success with in the state of Oregon, most of our seniors are frankly 

on MA plans not fee-for-service, and see if they can’t integrate with 

a cap so you can’t spend too much, but a cap on how much senior 

per month so that they can get this in-home care in their home 

care setting or at least in their community before they have to 

spend themselves down into the much more expensive Medicaid 

programs, which are much more expensive for the individual and 

their family as well as the taxpayer. 

So I would urge the committee to please look favorably upon Mr. 

Lance and my proposal and see if we can’t at least get something 

going, one part of this problem with long-term care our country 

faces. So I appreciate the opportunity and would yield back my 

time then. 

Mr. PITTS. The chair thanks the gentleman and now recognizes 

the gentleman from New Jersey, Mr. Lance, 5 minutes for questions. 

Mr. LANCE. Thank you very much. And Congressman Schrader 

and I are working together and I hope the panel will look at the 

proposal we have. And our cosponsors are Linda Sanchez and Pat 

Meehan of Ways and Means, so we have Ways and Means and Energy and Commerce working together for precisely the reasons the 

distinguished congressman has suggested as a model moving forward. 

Does anyone on the distinguished panel know how many Americans age 65 or older are currently in nursing homes? 

Mr. SCANLON. It is probably about 1.75 million. 

Mr. LANCE. All right. And I know there are others who go to 

nursing homes, younger people, for other reasons, but the Medicare, Medicaid, the Medicare population 65 or older, about 1.75 

million. How many in those nursing homes in that age category are 

funded by Medicaid? 

Mr. SCANLON. About 60 percent of them are funded by Medicaid. 

48 

Mr. LANCE. Sixty percent of those 65 years or older in nursing 

homes funded by Medicaid, so not private payment at all? 

Mr. SCANLON. That is correct. But at the same time, one of the 

features of the Medicaid program is that if you become a nursing 

home resident that you pay your entire income less a personal 

needs allowance for your care, which in the personal needs allowance is around $50 a month. 

Mr. LANCE. Yes. Yes. And Medicaid is a program funded partially 

by the federal government and partially by the states. And in the 

state of New Jersey, for example, we fund it mightily. Our contribution is significantly higher than many other states. Is that accurate? 

Mr. SCANLON. That is correct. 

Mr. LANCE. And this may be a more difficult figure. Of the Medicaid population in nursing homes, 60 percent of almost two million 

so it is roughly a million people, I suppose, what percentage have 

had their assets spent down and have been impoverished? 

Mr. SCANLON. That is a number I can’t give you. I do not know 

it. 

Mr. LANCE. Yes. I come from a family law firm, and on occasion 

people come into the law firm saying we want to impoverish our 

parents. And I am vigorously opposed to that and we don’t do it, 

so they just go next door to somebody else who helps them. Has 

there ever been a study as to this phenomenon in the United 

States? 

Mr. SCANLON. There has been some GAO work sort of on this 

issue. It has been a number of years, I think, since it has been 

looked at. 

Mr. LANCE. And I want to work with others in the Congress on 

a program that helps senior citizens stay in their residences. I 

think it will be cheaper, vastly cheaper over the foreseeable future 

and that is why the congressman and I are working on a bill that 

we hope that you will examine. 

Is there any discussion in the academic community or the fine 

work you do at Brookings as to this challenge regarding impoverishing one’s parents? Dr. Rivlin? 

Ms. RIVLIN. I think we are all aware that we are not doing research on it. 

Mr. LANCE. Anyone else on the panel? Ms. Tumlinson? 

Ms. TUMLINSON. Yes. Well, I think a lot of people have tried really hard to research this because it is has been this persistent question for years and years, as long as I have worked on long-term 

care for 25 years, and it is hard to get any real conclusive evidence. 

And the reason is because there is so much—well, it is challenging 

to analyze what is really going on in people’s financial lives, and 

there is some data sets that we have used. 

But Josh Wiener and I did some work and we were not able to 

find evidence of a significant amount of asset transfer or improper 

use of assets in order to gain eligibility for Medicaid. And again, 

I would just emphasize that even though that certainly does happen and it sounds like quite a bit in New Jersey from what I am 

hearing from you—— 

Mr. LANCE. I don’t think in New Jersey to any differently from 

any other state that I might respectfully place on the record. 

49 

Ms. TUMLINSON. Certainly. Sorry. But that there is in fact quite 

a bit of—— 

Mr. LANCE. New Jersey is a state, if I might reclaim my time, 

that sends funds to Washington. We are either number one or 

number two in the percentage we send as opposed to what we get 

back. I am sure that this is a state where we send a lot of money 

to Washington, Ms. Tumlinson. 

Ms. TUMLINSON. So we know that at least a third of all spending 

on assisted living comes from adult children. So for as many children who are seeking to impoverish their parents there are probably just as many who are seeking to pay for them. 

Mr. LANCE. I am sure that is the case. That doesn’t mean there 

isn’t a problem with the former category. Thank you, Mr. Chairman. 

Mr. PITTS. The chair thanks the gentleman and now recognizes 

the gentlelady from Illinois, Ms. Schakowsky, 5 minutes for questions. 

Ms. SCHAKOWSKY. Let me just say I would hope that those who 

are interested in figuring out how many ordinary families are trying to figure out how to be able to pay for long-term care that we 

might look at how the wealthiest among us figure out how to pay 

lower taxes than many of their secretaries. So I would urge that. 

I just came from, the National Institute on Retirement Security 

is having their national conference. I spoke to them. And they just 

issued a report today, ‘‘Shortchanged in Retirement: The Continuing Challenges to Women’s Financial Future.’’ And among the 

things that I pointed out in my speech was that the average yearly 

out-of-pocket costs for a patient living with dementia is $61,522, 

and the average annual cost of a semi-private nursing home is over 

$80,000 a year. And we are talking about significant, ending up 

with significant out-of-pocket costs. 

But it is also as Bankrate tells us, two-thirds of Americans don’t 

have enough savings to handle a $500 emergency car repair. A lot 

of people are not able to set money aside for the kinds of contingencies that we are talking about, or perhaps inevitabilities that 

we are talking about. 

So I am really happy that we are having this conversation. I 

think it is just the beginning of how we can work together to truly 

improve or maybe even create a long-term care system in the 

United States. We have to improve the quality of our long-term 

care facilities. We need to increase access to community and homebased services. We need to drastically expand our caregiving workforce, and most importantly we need to have that serious conversation, in my view, about universal social insurance for long-term 

care. 

I would like to just address quickly one of the most persistent 

issues in long-term care and that is nursing home quality. And I 

believe one of the best ways to find efficiencies in our long-term 

care system and better protect taxpayer dollars is to improve the 

quality of patient care offered at long-term facilities and especially 

nursing homes and skilled nursing facilities. 

So currently, federal law only requires a nurse to be present 8 

hours a day at nursing homes and skilled nursing facilities. I personally was shocked to find that out and I think most Americans, 

50 

especially putting their parents in nursing homes, would be. This 

means that for 16 hours a day patients can be left without a nurse 

on staff at all, and as a result residents are experiencing avoidable 

injury, increased illness acuity and premature death due to the 

lack of direct care from an R.N. So I have legislation, H.R. 952, to 

put, it is called Put a Nurse in the Nursing Home Act that would 

require nursing homes and SNFs to have an R.N. on staff 24 hours 

a day. 

But Mr. Scanlon, do you believe that efforts to improve the quality of care offered at nursing homes and SNFs would improve efficiencies in our long-term care system and help save federal tax dollars? 

Mr. SCANLON. Those types of efforts to improve quality in nursing homes would certainly improve sort of our long-term care system. And in fact we actually have experience with what you are 

suggesting. If you go back into the 1980s, there was a demonstration program called the Teaching Nursing Home where the amount 

of nursing services in nursing homes was increased. What resulted 

was both an increase in the quality of care and a reduction in hospitalizations which are very expensive. Because the reality is that 

nurses in nursing homes can deal with many of the kinds of problems that lead today to hospitalizations such as pneumonia and 

other infections. 

Ms. SCHAKOWSKY. Thank you so much for telling me that because I think that would be good evidence for this legislation. 

The other thing, where was it that I wanted to ask you. So the 

National Association of Insurance Commissioners, again Mr. Scanlon, you mentioned, previously worked to develop model laws and 

regulations for long-term care insurance. Unfortunately, the regulations surrounding long-term care insurance have not been updated for over, well, a decade and a half. I previously introduced 

legislation with Congressman Lloyd Doggett to require HHS to ask 

the insurers to update their model laws and regulations for longterm care insurance every 5 years and to require their update to 

be incorporated into the model act and regulations used by HHS. 

Do you believe that Congress should work with NAIC to update 

the standards and regulations pertaining to long-term care insurance? 

Mr. SCANLON. I think we need to assure ourselves that the 

standards are up to date. I don’t know what is on NAIC’s agenda 

at this point. In the past it would appear that sometimes that they 

have updated the standards, the model laws and regs, in response 

to some crisis that has appeared. That has actually, might alleviate 

the problem for the future, but it has the negative effect of the crisis erodes consumer confidence and really undermines sort of the 

ability to convince people that long-term care insurance may be a 

positive idea. 

Ms. SCHAKOWSKY. Thank you. I want to thank all the witnesses, 

but I want to say a special welcome to Dr. Rivlin. It is so good to 

see you once again. 

Ms. RIVLIN. Very good to see you. 

Ms. SCHAKOWSKY. Just wanted to comment, if I could, Mr. Chairman. 

51 

Mr. PITTS. The chair thanks the gentlelady. I now recognize the 

gentleman from Florida, Mr. Bilirakis, 5 minutes for questions. 

Mr. BILIRAKIS. Thank you so very much, Mr. Chairman. Thank 

you also for holding this hearing, and I thank the panel for their 

testimony. 

This is a question for the entire panel. Back in the 1990s, Congress experimented with a demonstration program called the Cash 

and Counseling. This allowed Medicaid recipients with disabilities 

to pay for long-term services. The government provided funds to 

the beneficiary to establish a personal budget for personal assistance services that would best meet the personal needs and paid financial counseling services. This participant-directed personal assistance service allowed flexibility for caregivers and flexibility for 

beneficiaries to pay for nontraditional services such as respite services and hiring family members as the caregiver. Can you take lessons from this program and other programs to build a better system to promote greater flexibility within the long-term care program, and can we promote more home and community-based care 

so that seniors may tailor the program to best fit their needs? Who 

would like to begin? 

Ms. TUMLINSON. I will just go first. Yes, I think that that program, the Cash and Counseling programs have been game changers in the way that we think about how we finance and pay for 

long-term service and supports. In the sense that as I was saying 

earlier the experience of having a long-term care need is very personal and the individual and the family caregiver is very integral 

to that. And so making the funds available based on that person’s 

need as opposed to what the services that they buy is a way that 

we can actually incentivize, I think, a lot of innovation in the marketplace and give people control over their own personal care 

needs. 

Mr. BILIRAKIS. Very good. Thank you. 

Mr. SCANLON. I think this program illustrates an important aspect of long-term care that long-term care is not like medical care, 

where you are willing to accept a prescription because you hope 

there is science behind that prescription which says this is going 

to deal with your condition or your disease. Long-term care is about 

how you live your life. And having personal direction and sort of 

affecting sort of that is a critical dimension of sort of the satisfaction you are going to get sort of in terms of living your life. 

The counseling part of this, I think, is very important because it 

is not just a question of money. It is very difficult to navigate the 

market for long-term care services even if you have money. It is not 

the kind of very visible market that we have for many other services. So being able to assist people to be able to exercise their 

choices is a very critical piece. 

Mr. BILIRAKIS. Thank you. 

Ms. RIVLIN. I agree with all of that. Let me just pick up on one 

thing you mentioned and that was respite care. And I think that 

is in our list of things we would like to work more on because it 

is very important. 

Mr. BILIRAKIS. I agree. Thank you. 

Dr. Scanlon and Ms. Tumlinson, the Deficit Reduction Act of 

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52 

nership Program which is a joint federal-state policy initiative to 

promote the purchase of private long-term care insurance. What 

can you tell me about the success of this program both in terms 

of the extent to which it increased use of private long-term care insurance and the extent to which it reduced Medicaid costs? Are 

there changes that we could make to improve the program? Yes, 

please. 

Mr. SCANLON. At this point I think it is too early to look for its 

impact on Medicaid costs, because the issue of the long-term insurance is one buys a policy and then hopefully over, say, a 20- or 30- 

year period, there is going to be a 20- or 30-year period before one 

goes into benefit and starts to receive the benefits under the policy. 

My conversations, as I mentioned with the insurance industry 

executives, have indicated that the Partnership Program has a 

positive effect on the sale of insurance policies. It is a modest effect 

of maybe 15 to 20 percent on a base that is small, of maybe five 

or six percent. 

One of the difficulties in the Partnership, for while it has got 

positive aspects, actually adds to this problem. If you talk to brokers or agents for long-term care insurance they will tell you this 

is a complicated product to explain to consumers; that is not fun 

to try and sit down and convince somebody that they should buy 

a policy. The Partnership aspect of this creates additional value to 

that product, but is also another complexity to have to explain sort 

of how that is going to work. 

Ms. TUMLINSON. Yes. I will just add very quickly that part of the 

challenge is that brokers tell us is that they are both selling 

against Medicaid and then also for Medicaid at the same—so you 

want long-term care insurance to avoid Medicaid, but then if it 

runs out you get Medicaid. So that is a hard sell, but the concept 

of the partnership is a really powerful one, and I think it is one 

that the groups have built on to try to, maybe if it is not Medicaid 

as the backstop it is something else. So the idea that the private 

insurance could sell against a public backstop is still a really good 

idea. 

Mr. BILIRAKIS. All right. Well, thank you very much. I yield back, 

Mr. Chairman. 

Mr. PITTS. The chair thanks the gentleman and now recognizes 

the gentleman from Maryland, Mr. Sarbanes, 5 minutes for questions. 

Mr. SARBANES. I want to thank the panel. This is a fascinating 

and sobering topic. Speak a little bit to the actuarial dimension of 

needing to come up with some products, whether they be hybrid, 

public-private products or whatever they may be, sooner rather 

than later, just because the way the trajectory is going you are 

going to get this huge influx of people hitting at a certain time in 

terms of their needs and at that point it will be prohibitively expensive to try to solve the problem. You want to have had the benefit of people paying in obviously earlier when they are healthier. 

So against where we are headed with the demographic trends, I 

don’t know if anyone has computed with each passing year what 

the extra cost is that we are talking about in terms of even the 

kind of bare bones solution that you are offering up. But I imagine 

53 

that dynamic is something very present in all of these considerations, so maybe you could just speak to that. 

Mr. SCANLON. I think that is a very important point. One of the 

strong differences between medical insurance where actually premiums are covering the cost of services during a single year, what 

we are talking about with long-term care insurance is trying to 

build the reserves that are going to be able to pay for benefits 25 

or 30 years later. And as we talked about premiums for long-term 

care insurance here today, if you look at those premiums they rise 

dramatically with age, essentially telling everyone if you start too 

late this is going to become prohibitively expensive and that applies both at the individual level and for the population of the 

whole. 

Ms. RIVLIN. That is clearly right, and that is why we were looking for ways to get people in their earning years to more likely buy 

long-term care insurance, even if it is a limited long-term care insurance, and to establish a catastrophic program which will take 

some of the pressure off both the carriers and the beneficiaries. 

Ms. TUMLINSON. This is definitely one of the most challenging 

parts of thinking about the financing of anything that we are contemplating, because we have a lot of cross, what we call cross-cohort challenges with asking very young people to pay as much as 

we ask older people to pay who are going to be in that level of need 

much more quickly. And so there are ways in which I think we 

need to continue to work on the financing so that we can arrange 

it so that we have kind of the ability to not shift the costs for that 

population that is nearly there onto the younger people entirely, so 

we are asking them to pay more, for example. 

Mr. SARBANES. There is a little bit of a moral hazard dimension 

here in that you can imagine people saying, well, I don’t necessarily want to step in now and be the guinea pig if it doesn’t look 

like structurally the system is actually going to get fixed. I will just 

assume that at some point when the whole thing crashes we are 

not going to let people just be without any kind of recourse, and 

then I will step in and benefit from whatever that fix is at that 

time. So you have that dynamic at work too. 

It is not helped by the fact that people don’t really understand 

this product. That many as was mentioned, I think, by Representative Castor have gotten confused and assume that it is somehow 

bound up in Medicare and Social Security and these other programs and benefits that are available to them. So I appreciate your 

testimony. Thanks very much. 

Mr. PITTS. The chair thanks the gentleman and now recognizes 

the gentleman from Indiana, Dr. Bucshon, 5 minutes for questions. 

Mr. BUCSHON. Thank you, Mr. Chairman. I am going to take a 

little bit different approach. I am going to, well, our conversation 

today has mostly been addressing coverage and how to finance a 

system in a system that needs to be changed in another area and 

that is how much it costs on the front end, not just how to finance 

a system that has been growing in cost for decades much faster 

than the rest of our economy. The ACA addressed mostly coverage. 

That is one of the issues I have with it not really affecting cost. 

And what I mean by cost is I am not talking about the cost to 

a program overall, what I am talking about is the cost to the govVerDate Nov 24 2008 13:09 Feb 27, 2017 Jkt 037690 PO 00000 Frm 00059 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-122 CHRIS
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ernment or private insurance companies on an individual care 

basis when services are rendered. So even if less services are rendered overall, yes, the cost to the Medicaid program is down, but 

on a case by case basis that is probably not the case. The cost to 

the system continues to go up. 

And if we are going to reform many of these programs, one of the 

things we really are going to have to do is figure out on the front 

end how it costs us less, but rather than just talking about how we 

are going to figure out how to pay for what it currently costs or 

what the cost in the future will be. Does that make sense? 

Mr. SCANLON. Yes. 

Mr. BUCSHON. And so I am going to get to the question in a second. So one of the things that I am really focused on is trying to 

work on that and in a number of areas. Price transparency for the 

consumers is extremely important. Quality transparency for consumers is extremely important. And we are really going to have to 

look at a number of things that are in place legally and otherwise 

that are impinging on our ability to address those issues. 

Why can’t consumers know exactly what something costs? It 

starts all the way from the bottom at a hospital or at a long-term 

care facility, the cost of a gauze pad or the cost of a diaper or whatever in the health care system. It can be way up there compared— 

a gauze pad is essentially a little square of cotton fabric, but it is 

sterile and it—it costs almost nothing except if you have to buy it, 

if you are a hospital and you have to buy the product. I am a free 

market guy so we need to look at how to fix this in a free market 

way, in my opinion. Price fixing is not an answer to the question. 

So my question for all of you is, are any of you looking at what 

the actual cost of providing long-term care is on the front end and 

so that we can help decrease the actual outlay of payments on the 

back end, and what are the drivers, currently, drivers of the actual 

increasing costs to provide the care? Again, not the cost of what the 

insurance company or the government has to pay, but buying the 

product. What are the drivers? Have you looked at it? Because we 

are going to have to address that. 

Ms. TUMLINSON. One of the sad things about long-term care is 

that because so much of it is paid for out of pocket there is more 

natural transparency in the system. And so I would, I am sure Dr. 

Scanlon will want to say this too, but I just want to stress that 

there really are some—medical care and what we are used to in 

terms of the lack of transparency in medical care that is so frustrating to everybody, especially consumers, is it is medical care and 

long-term care act very differently sometimes. 

And one of the ways that they do is that much of the spending 

is out of pocket and the other way is that long-term care is primarily labor. It is not a high tech business, it is a hands-on business. So you really just have two things. There is a price for the 

hour of labor and then you have the amount that people are using 

per person. And so we know fairly well what it costs to hire a home 

care aide, for example, per hour. 

Mr. SCANLON. I have spent a lot of my caree looking at the differences between Medicare and Medicaid and looking at exactly at 

this issue that you are talking about which I will call unit costs. 

And I will have to say that the Medicaid programs, in terms of 

55 

nursing homes at least, have done sort of much more sort of effective job in terms of trying to keep those costs down. I wish that 

actually sometimes we could take some of the lessons from those 

Medicaid programs and apply them sort of within sort of Medicare. 

There is actually a concern that I think should be raised that relates to your question for the future, which is that as we have sort 

of more what I will call purchasing power, more people wanting to 

buy services, we have to worry about what is going to be the impact then on unit costs, because we don’t want to necessarily create 

a system that is so formalized that we build in a lot of overhead. 

That gauze pad is expensive in a hospital because you pay the 

overhead as well as the cost of the pad. And we want to avoid that 

when we are paying for more long-term care services. 

Mr. BUCSHON. Briefly, my time is running low. 

Mr. PITTS. The chair thanks the gentleman and now recognizes 

the gentleman Mr. Ca AE1rdenas for questions. 

Mr. CA AE1RDENAS. Thank you very much, and thank you, Mr. 

Chairman, for holding this hearing. But I just, for those of you who 

came here and had to change your schedule, I want to quote a very 

knowledgeable famous legislator in California, and I will clean up 

the phrase a little bit because it was made about 70 years ago. He 

says, hold on to your horses and your spouses, the legislature is in 

session. So let us just hope that we have some good constructive 

not only dialogue but outcomes from this hearing, this legislative 

hearing. 

My first question is for you, Ms. Tumlinson. Until the new policy 

options are available, what is your thoughts on ensuring that Medicaid remains stable and adequately funded? I mean, in our current 

environment. 

Ms. TUMLINSON. So I think that what probably the most productive thing that we can do around Medicaid right now is just continue to work on ways in which we can ensure that individuals who 

are eligible and for the program are getting the supports and services that they need in the most appropriate setting and the most 

efficient way possible through the use of aging and disability resource centers, for example. 

I think that from a budget perspective it is funded through general revenues and the challenge, really, is on the per person level 

for the states to manage those funds as efficiently as they can 

while at that same time ensuring access to high quality care. 

Mr. CA AE1RDENAS. Now when it comes to access to high quality 

care the dynamic is changing, because the demands on that care 

with the baby boomers seems to be shifting this whole environment. So that being the case, what should we not do right now before we have a more comprehensive solutions and changes? Yes, 

Ms. Rivlin. Dr. Rivlin. 

Ms. RIVLIN. Well, I think we should do some of the things that 

the three reports that have been mentioned are recommending. 

And one, to come back to the question of saving costs as well as 

improving quality, is to make it easier to use home and community-based care and make it easier for the states to do that because 

there is plenty of evidence that it is just better and cheaper if it 

is done well. 

56 

Mr. CA AE1RDENAS. And also, when it comes to home care I 

think of the information that I have received, not speaking ill of 

hospitals or what have you, just because it is an environment 

where you have so many people with an array of illnesses and reasons why they are there, there is a higher likelihood that somebody 

is going to catch an infection in a hospital, correct, than they would 

maybe if they were in a different adequate environment, et cetera. 

So there are other tertiary reasons why we should make sure 

that our panoply of solutions takes into account the whole range 

of reasons why it is a better solution, or better way in which we 

should deliver care. 

Ms. RIVLIN. Right. Hospitals are dangerous places to be. But I 

think working on hospital safety is another aspect. 

Mr. CA AE1RDENAS. And I just want to make sure that I am not 

casting aspersions on hospitals. One of the most unfair, dumbest 

statements I have ever heard is that more people die in hospitals 

than anywhere else. Well, for god’s sakes that is where the people 

are in the worst condition, but more people, their lives are saved 

because that hospital is there and they have the facility and the 

professionals to actually put people back together and keep them 

alive for god’s sakes. So I just want to make it clear that this is 

not a bashing point, it is just trying to remind everybody how involved this very important issue is especially with an aging population. 

You were going to say, Doctor? 

Mr. SCANLON. No, I mean, I am in total agreement, I think, and 

physicians and hospitals, I think, would also agree with you. I 

mean, we have seen this decline sort of in length of stay because 

they recognize that it is in their patients’ interests to have them 

out of there as quickly as possible. 

Mr. CA AE1RDENAS. And these are not funny issues. I will use 

a very personal example. My father used to say, why do I want to 

go to the doctor, so they can tell me I am sick? But little did he 

realize that when he finally went to the doctor he was 60-some 

years old, only God knows how long he was a diabetic and had he 

gone to a doctor and enlisted the help of professionals he would 

have had a better quality of life. He would have lived longer, et 

cetera. 

And it is not just about my father, it is about the kids and 

grandkids, et cetera, who don’t have him around because unfortunately he thought he was being funny and cute, but what he should 

have been is a little bit more responsible with all due respect. And 

so I just want to point out that this is incredibly serious. And 

again, seriously, Chairman, thank you for holding this hearing. 

Mr. PITTS. The chair thanks the gentleman and now recognizes 

the gentlelady from Indiana, Mrs. Brooks, 5 minutes for questions. 

Mrs. BROOKS. Thank you, Mr. Chairman. The figures I have seen 

and that we hear repeated over and over are that we have about 

10,000 Americans turning 65 every day and aging into the system, 

and so the numbers are off the charts. But what we also, I think, 

are realizing is that the retirees are astoundingly unprepared. 

In my district, in 5th district of Indiana, CNO Financial, one of 

the nation’s largest long-term care insurers is headquartered in my 

district, and I have talked with them on many occasions and they 

57 

have studied this issue pretty significantly and some of the stats 

they have found are pretty astounding. What they have found is 

that half of middle income boomers report investable assets of less 

than $100,000, with a third reporting assets of less than $25,000. 

And so they have found at CNO two-thirds of the middle income 

boomers express doubts whether or not they will have money to 

live comfortably throughout retirement, eight in ten have not received any specialized training or education on retirement financial 

security, and six in ten don’t receive any professional financial 

guidance at all. 

And so my question to the panel is, I think there is a severe lack 

of education and of understanding for middle income America 

about what is coming at them and what they should expect with 

respect to retirement, and so I am really curious as to what your 

thoughts are about how we as a country do a far better job. And 

I would like each of you, what do we need to be doing to share with 

people what is happening because so many people actually, I think, 

believe that Medicare is going to take care of them in long-term 

care and that is not the case. And so how do we bridge this gap 

of a significant under education? 

Dr. Rivlin, any ideas? 

Ms. RIVLIN. Well—— 

Mrs. BROOKS. The reports are great with a lot of ideas, but we 

just have so few Americans really understanding what is coming at 

them in retirement. 

Ms. RIVLIN. That is certainly true. And it is hard to know how 

to reach the people. It is the people in their middle earning years 

that you really need to reach. If you do education in school, nobody 

is going to pay attention because they are too young to worry about 

it. And so I don’t know exactly how we do this, but I think employers are key. 

One of the things that I think has come out of behavioral economics in recent years—economists do some useful things—is the 

notion that if you tell people you can opt out of this, whether it is 

a savings plan or a long-term care plan, we are not forcing you to 

take it but the default option is you are in that really works. More 

people save and we think more people would buy long-term care insurance if it were the default option. 

Mrs. BROOKS. Thank you, Doctor. 

Mr. SCANLON. I think approaching this as a retirement question 

is really the right way to go as opposed to thinking that this is only 

a health care issue. This is a portion of sort of your thinking on 

planning for retirement. Now the reality is that as some of the statistics that you indicated for us, it is a challenge to think about all 

your needs in retirement given the resources that you are going to 

have available. But we need to think about bringing this into the 

discussion so that people can recognize it and, if possible, prepare 

for it. 

On the issue of being confused that Medicare is going to cover 

this service, I think we have to stop doing a disservice to Americans at the federal level by talking about Medicare covering some 

long-term care. It covers no long-term care. Skilled nursing facilities and home health agencies may provide long-term care services, 

others, but they are paid by another source when they are proVerDate Nov 24 2008 13:09 Feb 27, 2017 Jkt 037690 PO 00000 Frm 00063 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-122 CHRIS
58 

viding long-term care services. The services they provide to Medicare are not long-term care. We cannot expect the public to read 

the footnotes to understand that Medicare is not covering long-term 

care. 

Mrs. BROOKS. Thank you. Ms. Tumlinson? 

Ms. TUMLINSON. Yes, I just agree very much with what Dr. 

Rivlin and Dr. Scanlon said. And the only thing I would add here 

is just that I think that this is an odd kind of silent crisis in every 

American family, and for whatever reason we are not having a national dialogue about the fact that our whole demographic structure is going to shift from now on and that retiring at age 65 is 

maybe not a reasonable expectation if you are going to live to be 

95. 

So we have to rethink how we think about work, how we think 

about our old age and that I guess my brilliant idea is I think we 

need to have much more of a public conversations in our districts, 

at national level with leadership and even among the private capital and investor community. 

Mrs. BROOKS. Experts—oh, I am sorry. I guess my time is up. 

Mr. PITTS. That is all right. 

Mrs. BROOKS. Thank you. 

Mr. PITTS. That is all right. 

Mrs. BROOKS. I yield back. 

Mr. PITTS. The chair thanks the gentlelady and now recognizes 

the gentleman from New York, Mr. Collins, 5 minutes. 

Mr. COLLINS. Thank you, Mr. Chairman. I want to thank the witnesses from coming in. I am the last one, I think, to ask questions. 

Just a little brief history in my case. My dad passed back in January of 2010, but prior to that he was through some levels of dementia unable to care for himself at all. So for 3 years we had a 

team of seven women who cared for him 24/7. It took seven fulltime individuals to care for one person 24/7. Six hour shifts with 

four individuals with him every second of every day, and then you 

throw in the weekends. That is the staggering amount of individual 

time it takes. And the cost for seven full-time individuals was a 

significant burden, but we determined in our family’s case my dad 

had earned money, it was the right thing to spend it for him to be 

safe, clean, and well fed. But that was not an easy thing to do. 

But when I come back again to what Mrs. Brooks was talking 

about and Dr. Scanlon, would you think it would make sense in the 

Medicare & You handbook in some bold print to point out Medicare 

pays no part of this? I mean, we have got a federal handbook that 

people get. 

Mr. SCANLON. I think the no has to be sort of in bold print. I 

mean, I think that this issue of trying to kind of split hairs and 

tell them what it covers and what it doesn’t cover is confusing people. Because years ago we were doing a survey and 80 percent of 

the people would say Medicare covers long-term care. It is now 

maybe around 50 percent would say that. 

Mr. COLLINS. Big bold letters right, top, bottom, in the middle, 

Medicare does not cover any type of long-term care. I think we 

have got a vehicle in the Medicare & You handbook that we could 

do a better job at. 

59 

My other question, really, carrying it in the same vein is about 

advance directives, individuals making sure the family knows. I 

know in our case again with my dad we had a DNR on the refrigerator for emergency personnel just to make sure the wishes of the 

family were well known, my dad’s wishes as well. 

But in that regard, I think the federal government now is trying 

to address that problem of very few people having these advance 

directives for long-term care in talking about paying physicians to 

have a small conversation. And Representatives Diane Black, Peter 

Welch and myself introduced H.R. 4059 which would actually have 

a small incentive paid by Medicare to individuals to put together 

a plan. If you are putting together a plan you have to be thinking 

it through. 

I mean, what we were just talking about with Representative— 

and myself is the lack of education, people being in denial and so 

forth. So the bill we are promoting is a very small payment to get 

somebody attention just would ask if you have any opinions on 

something like that. 

Ms. TUMLINSON. Yes, sure. I think that is really creative, actually. And it is absolutely the case that you can even, once somebody 

is even educated about advance directives that they are still very 

reluctant to have that conversation. Having that conversation between the family member and the older adult is very hard to do. 

I have tried to do it and my mom said, ‘‘do you think I am dying?’’ 

Not yet. 

So I think it is a really creative idea. I think we have to continue 

to come up with it those because ultimately having a good advance 

directive someplace can be cost saving. 

Mr. COLLINS. Well, it lets the family be more at ease with what 

we are talking about. End of life decisions is what our country 

seems to be unwilling to have discussed. 

Mr. SCANLON. I think our education efforts, some clearly is sort 

of not working, part of it is the message that we have been delivering, but also a part of it is getting the attention of the people 

that we want to deliver the message to. So your idea is very innovative. 

Ms. RIVLIN. And part of it is medical education in medical 

schools, getting young doctors to recognize this is part of your practice. You need to be talking about death and dying. 

Mr. COLLINS. Well, I want to just thank all the witnesses for 

coming in. This is a discussion we need to be continuing to have 

as more and more old folks are—since I was there last May I can 

joke about it. I have got my card. 

Mr. Chairman, I yield back. 

Mr. PITTS. The chair thanks the gentleman and now recognizes 

the gentleman from Missouri, Mr. Long, 5 minutes for questions. 

Mr. LONG. Thank you for recognizing me, Mr. Chairman, even 

though Mr. Collins failed to do so, and when you are talking about 

elderly you would think that you would at least recognize me. 

Dr. Rivlin, I am interested in the Bipartisan Policy Center’s recommendation for creating lower cost, limited benefit, retirement 

long-term care insurance policy options. Can you provide more details on what a policy like that would look like and how it differs 

from existing options? 

60 

Ms. RIVLIN. Yes. What we are suggesting, what we call retirement long-term care insurance, is a bare bones policy. It is not 

fancy. It would have a high deductible or waiting period and it 

would have co-insurance and a limited period for which it covered 

benefits. That doesn’t make it sound very desirable. It has other 

desirable features, but it would cost much less than long-term care 

insurance typically costs now. And we think if it was marketed 

properly as part of a retirement plan by employers, and if it were 

the default option in your retirement plan and if you were allowed 

to pay the premiums out of your 401(k) beginning at age 45, those 

are all small changes that we think would make it more attractive 

and more people would buy it. 

Mr. LONG. Are there any current statutory or regulatory barriers 

to preventing companies from offering those policies today? 

Ms. RIVLIN. Yes. 

Mr. LONG. There are? 

Ms. RIVLIN. There are in that as you know this kind of regulation 

is at the state level, and so what we are suggesting is that the 

NAIC be asked to prepare model regulations that states could then 

adopt. 

Mr. LONG. So legislative action that would be something that you 

would recommend even with at the state level? 

Ms. RIVLIN. Right. 

Mr. LONG. OK. And this is for any of you or all of you on the 

panel that want to respond. In recent years, state Medicaid programs have been shifting long-term care into a managed care environment. From 2004 to 2012, the number of states with managed 

long-term services and support programs doubled from 8 to 16, and 

the number of beneficiaries receiving these services grew from 

105,000 to 389,000. What have been the experiences of these new 

programs in terms of improving services for beneficiaries and controlling costs? 

Ms. TUMLINSON. So there is really a diverse set of experiences 

with managed long-term services and supports throughout the 

country, but certainly in certain states what we have seen is that 

the states have been able to use the managed care mechanism to 

enable a fairly dramatic shift out of nursing home setting and into 

home and community-based services settings, because the managed 

care plans are on the ground level with care managers helping to 

ensure appropriate, and with significant financial incentives to do 

so to ensure a persistent home care. 

I think that it is not, from my perspective, a way that necessarily 

the state is going to save money over the long term and in many 

cases the managed care plans are actually able to get paid based 

on their costs and their experiences, and so I am not sure it is— 

I think it is a great mechanism for shifting the services and maybe 

over time the state would realize some savings from that. But at 

the same time, I am not sure that I see it as an immediate cost 

saver. 

Mr. LONG. Dr. Scanlon, do you care to weigh in? 

Mr. SCANLON. No, I would agree, because I think that states 

when they have not used managed care have been still managing 

the benefits sort of much more than for medical care services. In 

looking to the managed care organizations, I think they are workVerDate Nov 24 2008 13:09 Feb 27, 2017 Jkt 037690 PO 00000 Frm 00066 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 114\114-122 CHRIS
61 

ing to sort of make sure that there is a capacity to continue to sort 

of manage that benefit as best as possible, but over time it is likely 

to be inflation in the numbers of people that need services is going 

to drive the cost. 

Mr. LONG. Dr. Rivlin, last 30 seconds, do you care to weigh in 

on that? 

Ms. RIVLIN. No, I think it is a work in progress. 

Mr. LONG. OK. Thank you all and thanks for being here today. 

Mr. Chairman, I yield back. 

Mr. PITTS. The chair thanks the gentleman, and I have a UC request. I would like to submit a statement from the National Association for Home Care & Hospice into the record, and without objection, so ordered. 

That concludes our questions of members present. We will have 

some follow-up questions in writing. We will send those to you. We 

ask that you please respond. I remind members they have ten business days to submit questions for the record and that means they 

should submit their questions by the close of business on Tuesday, 

March 15. 

Excellent, excellent hearing. Excellent testimony. Thank you very 

much for being here on this very important issue. This is a discussion that our society really needs to have today. Without objection, 

the subcommittee hearing is adjourned. 

[Whereupon, at 12:22 p.m., the subcommittee was adjourned.] 

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