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64–223—PDF 2009

S. HRG. 111–855 

THE ROLE OF LONG -TERM CARE 

IN HEALTH REFORM 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HEALTH CARE 

OF THE

COMMITTEE ON FINANCE 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

MARCH 25, 2009 

( 

Printed for the use of the Committee on Finance 

COMMITTEE ON FINANCE 

MAX BAUCUS, Montana, Chairman 

JOHN D. ROCKEFELLER IV, West Virginia 

KENT CONRAD, North Dakota 

JEFF BINGAMAN, New Mexico 

JOHN F. KERRY, Massachusetts 

BLANCHE L. LINCOLN, Arkansas 

RON WYDEN, Oregon 

CHARLES E. SCHUMER, New York 

DEBBIE STABENOW, Michigan 

MARIA CANTWELL, Washington 

BILL NELSON, Florida 

ROBERT MENENDEZ, New Jersey 

THOMAS R. CARPER, Delaware 

CHUCK GRASSLEY, Iowa 

ORRIN G. HATCH, Utah 

OLYMPIA J. SNOWE, Maine 

JON KYL, Arizona 

JIM BUNNING, Kentucky 

MIKE CRAPO, Idaho 

PAT ROBERTS, Kansas 

JOHN ENSIGN, Nevada 

MICHAEL B. ENZI, Wyoming 

JOHN CORNYN, Texas 

RUSSELL SULLIVAN, Staff Director 

KOLAN DAVIS, Republican Staff Director and Chief Counsel 

SUBCOMMITTEE ON HEALTH CARE

JOHN D. ROCKEFELLER IV, West Virginia, Chairman 

JEFF BINGAMAN, New Mexico 

JOHN F. KERRY, Massachusetts 

BLANCHE L. LINCOLN, Arkansas 

RON WYDEN, Oregon 

CHARLES E. SCHUMER, New York 

DEBBIE STABENOW, Michigan 

MARIA CANTWELL, Washington 

BILL NELSON, Florida 

ROBERT MENENDEZ, New Jersey 

THOMAS R. CARPER, Delaware 

ORRIN G. HATCH, Utah 

OLYMPIA J. SNOWE, Maine 

JOHN ENSIGN, Nevada 

MICHAEL B. ENZI, Wyoming 

JOHN CORNYN, Texas 

JON KYL, Arizona 

JIM BUNNING, Kentucky 

MIKE CRAPO, Idaho 

(II) 

C O N T E N T S 

OPENING STATEMENT 

Page 

Rockefeller, Hon. John D., IV, a U.S. Senator from West Virginia, chairman, 

Subcommittee on Health, Committee on Finance ............................................. 1 

WITNESSES 

Feder, Judy, Ph.D., senior fellow, Center for American Progress Action Fund, 

Washington, DC ................................................................................................... 4 

Scheppach, Raymond C., Ph.D., executive director, National Governors Association, Washington, DC ...................................................................................... 6 

Smith, Dennis G., senior research fellow in health care reform, The Heritage 

Foundation, Washington, DC .............................................................................. 8 

Wiener, Joshua M., Ph.D., senior fellow, RTI International, Washington, DC .. 10 

ALPHABETICAL LISTING AND APPENDIX MATERIAL 

Enzi, Hon. Michael B.: 

Prepared statement .......................................................................................... 31 

Feder, Judy, Ph.D.: 

Testimony .......................................................................................................... 4 

Prepared statement .......................................................................................... 32 

Hatch, Hon. Orrin G.: 

Prepared statement .......................................................................................... 43 

Rockefeller, Hon. John D., IV: 

Opening statement ........................................................................................... 1 

Prepared statement .......................................................................................... 45 

Scheppach, Raymond C., Ph.D.: 

Testimony .......................................................................................................... 6 

Prepared statement .......................................................................................... 48 

Smith, Dennis G.: 

Testimony .......................................................................................................... 8 

Prepared statement .......................................................................................... 51 

Wiener, Joshua M., Ph.D.: 

Testimony .......................................................................................................... 10 

Prepared statement .......................................................................................... 62 

COMMUNICATIONS

Assisted Living Federation of America .................................................................. 83 

Deland, Jennifer A. .................................................................................................. 86 

Kapp, Marshall B., J.D., M.P.H. ............................................................................. 88 

(III) 

(1) 

THE ROLE OF LONG-TERM CARE 

IN HEALTH REFORM 

WEDNESDAY, MARCH 25, 2009 

U.S. SENATE, SUBCOMMITTEE ON HEALTH CARE, COMMITTEE ON FINANCE, Washington, DC. 

The hearing was convened, pursuant to notice, at 2:35 p.m., in 

room SD–215, Dirksen Senate Office Building, Hon. John D. Rockefeller IV (chairman of the subcommittee) presiding. 

Present: Senators Wyden and Cantwell. 

Also present: Democratic Staff: Jocelyn Moore, Legislative Assistant, Health; Brian Hensel, Fellow, Health; David Schwartz, Health 

Counsel; and Kate Gross, Legislative Assistant. Republican Staff: 

Patricia Deloatche, Health Policy Director; and Kelly Whitener, 

Fellow. 

Also present: Chris Hildebrant, ADAPT. 

OPENING STATEMENT OF HON. JOHN D. ROCKEFELLER IV, 

A U.S. SENATOR FROM WEST VIRGINIA, CHAIRMAN, SUBCOMMITTEE ON HEALTH, COMMITTEE ON FINANCE 

Senator ROCKEFELLER. Welcome, everybody. 

The attendance today is actually the fullest that I have seen it 

in 24 years. That was a joke. [Laughter.] We are all here, all of us, 

for exactly the same purpose. Just as a point of mild pique, a statement, I have either been chairman or vice chairman of the Health 

Subcommittee for 14, 15, 16 years, something of this sort, and this 

is the second committee meeting we have had, which tells you, 

sometimes, how things do not work the way they should. Because 

we have the whole health care thing before us and we want to do 

it all, then long-term care has to be a part of it or else it does not 

work. 

The President wants to do the budget and everything—environment, energy, health care, education, everything—all at once. And 

he is exactly right: you have to do them all at once. No matter 

what it costs, you have to do it because, if you do not, you fail in 

the future. You can fail because you cannot pay your debts, or you 

can fail because you just never get there. 

So again, I do welcome all of you. I am just trying to find my 

opening statement; it is prosaic, but it is passionate. 

A long time ago, somebody by the name of Dr. Judy Feder had 

this thing called the Pepper Commission—and it had a much 

longer name than that. Unfortunately, Claude Pepper died, and 

they had all of the sort of ‘‘bigs’’ in the Senate on it, except for me. 

2 

But I cared. So nobody wanted to be chairman. I said, well, I do, 

because I figured that was my way to learn health care. This was 

in 1989 and 1990. We produced the only comprehensive health care 

bill that has ever been produced by the U.S. Congress. It did all 

of acute care and all of long-term care, and we won both. We won 

quite closely. 

But the long-term care we passed rather easily, 11:4, and it was 

declared by those who did not like it ‘‘dead on arrival,’’ because 

health care’s time had not arrived, evidently. So this is now, as we 

launch into the Obama—and that is not to be political. This is because he is President, and one sort of recognizes presidents. He 

wants to do health care, and he wants to do the whole thing. I really like that. Judy Feder became my mentor. Well, you did. I do not 

think you have any particular reason to be proud of that, but I am. 

Dr. FEDER. I am. 

Senator ROCKEFELLER. And we have expert witnesses who will 

not get similar praise, which is not fair, because I worked with Ray 

Scheppach for years, and others. The actual name of that commission was the U.S. Bipartisan Commission on Comprehensive 

Health Care. Why do we name things that are important with such 

awful names as that? So we just called it the Pepper Commission. 

Anyway, in the 20 years since we made those recommendations, 

we have done nothing. Congress has done nothing, the administration has done nothing. If they have done something, it has not been 

with any intensity. To me, the whole business of achieving anything in health care, whether it is acute care or long-term care, is 

intensity, is just voracious intensity, moral outrage that does not 

stop. 

To get health care, that is what you have to have. Benefits are 

severely limited. I can remember, we used to talk—as we still have 

to—if you are going to fit into long-term care now under Medicaid, 

you have to spend yourself into poverty. I remember we started 

talking about that back in those days, and we are still talking 

about that, because that is still the only way you can do it. Except 

that the numbers on long-term care have jumped so enormously— 

so enormously—and the baby boomers are 2 years away, I think— 

am I right, my four panelists?—before they all qualify for getting 

this. A lot of long-term care is not for people who are older, it is 

for people who are between the ages of 16 and 60. A lot of it, something like 46 percent. 

So they make the mistake—I am going to an Alzheimer’s dinner 

tonight. My mother had Alzheimer’s, and my wife Sharon’s father 

has Alzheimer’s, and we are going to get an award, with a lot of 

other people, from Sargent Shriver, who is one of my ultimate heroes, one of the five great people in American life, as far as I am 

concerned, who himself has Alzheimer’s. His daughter, Maria, is 

going to present it to us. I think back to when my mother had Alzheimer’s. 

Our family could afford to get her all the care that she needed, 

which was endless numbers of oxygen tanks and fights with doctors over this, that, and the other thing, and biting down on feeding tubes and advanced directives. We just went through endless, 

endless fury to keep somebody alive who did not want to be kept 

alive, and who finally made that clear by biting down on her feedVerDate Nov 24 2008 14:46 Feb 17, 2011 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 R:\DOCS\64223.000 TIMD
3 

ing tube. That was her signal. All of her children were around, all 

of her children agreed. If one of the children had not agreed, then 

we would not have been able to do it under New York State law. 

So we took her home, and she died 3 weeks later, but very peacefully, with morphine and Bach, Mozart, and Handel. That was the 

way she wanted to go, and that is the way she went. The way that 

she would have wanted to go. 

Payments for long-term care are so disjointed. Why is that? Because we do not focus on it, because we do not talk about it. Young 

people, a lot of people, just do not think long-term care is obtainable. People do not offer it, or, if they do, it is too expensive. 

We have all these silos. I mean, in the intelligence community 

they talk about, the CIA would not—after 9/11, we had to pass a 

bill saying that it was all right for the FBI and the CIA to talk to 

each other. Well, that is kind of the way it is in health care, and 

particularly in long-term care. Insurance companies, of course, do 

their best to stay away from being a part of anything to do with 

this. 

So, when long-term supports and services are available, they are 

always extremely expensive. In 1988—this is interesting to me; 

that is when we were doing our work—a short stay in a nursing 

home cost more than $2,500 a month, on average, and exceeded 

most Americans’ incomes. In 2008—20 years later—the average annual rate for a private nursing home was $76,000. That is more 

than $6,300 a month, on average. 

So in 1988 we spent $53 billion on long-term care. What does it 

get us? We are not sure. Does it have anything that anybody can 

depend upon? No. Does anybody really understand it? No. Does 

anybody have the political will to undertake it? No. The chairman 

of this committee has what is called a white paper, which is meant 

to be very good, but it has no long-term care in it. It is not mentioned. It is not mentioned. Long-term care is the one thing every 

single person will face. Every single person faces. Nobody does not 

do long-term care unless they die in a head-on crash. I mean, that 

is the way I look at it. 

So we are trying to do better. This is our first hearing on this 

subject. I will stop talking and we will have questions, and some 

people will come, hopefully. If they do not, that is fine with me. 

Then I will get to ask all the questions. 

First, we have Dr. Judy Feder, who is senior fellow at the Center 

for American Progress Action Fund. I keep saying you are dean at 

Georgetown. 

Dr. FEDER. I am a former dean. 

Senator ROCKEFELLER. I know you are a former dean. 

Dr. FEDER. But I am still a professor of Public Policy at Georgetown. 

Senator ROCKEFELLER. All right. Well, that helps a lot. 

Then we have Dr. Raymond Scheppach, whom I knew when I 

was Governor. He is executive director of the National Governors 

Association. He has been working on this problem. 

Then we have Mr. Dennis Smith, who is number three, who is 

the senior fellow in health care reform at The Heritage Foundation 

Center for Health Care Policy Studies, where he is working on 

4 

ways to improve the Medicaid program, including the future of 

long-term care. 

Then, fourth, Joshua Wiener. He is a senior fellow at Research 

Triangle Institute International. I guess that is, if you take Duke 

and North Carolina University, incorporate them, and then internationalize them. Is that what that is? It is kind of a limited partnership. Something like that. Anyway, he is the program director 

there of Aging, Disability, and Long-Term Care at RTI international. 

So I look forward to statements and conversation. We will start, 

amazingly enough, with Dr. Judy Feder. 

STATEMENT OF JUDY FEDER, Ph.D., SENIOR FELLOW, CENTER 

FOR AMERICAN PROGRESS ACTION FUND, WASHINGTON, DC 

Dr. FEDER. Thank you, Mr. Chairman. It is a great pleasure to 

be with you today and to continue the effort that you have been 

championing for a long 20 years, to have health reform include 

long-term care reform so that everybody, the people who need both, 

can get both. You called for that 20 years ago, said the time was 

‘‘now’’ then, but the time is clearly ‘‘now’’ now. So I am sure many 

in the room join me in thanking you for this hearing. 

Sadly, the mythology about long-term care that the Pepper Commission report sought to counter still inhibits our ability to move 

forward. As you have said, the facts are that young, as well as 

older, people need long-term care. It is true that many, many people will need long-term care if they live long lives. But actually, 

even among older people, there is tremendous variability in the 

likelihood of needing long-term care, extensive care. It remains an 

unpredictable catastrophic risk. Despite claims to the contrary, 

families are giving their all in caring for their loved ones who need 

long-term care. 

Senator ROCKEFELLER. And I totally forgot to mention that. 

Thank you. 

Dr. FEDER. Well, I think you demonstrated it with your comments on your own family, and I thank you for that. 

I think that you know the problem with today’s long-term care 

system is not that individuals and families are not giving enough, 

it is that they do not have enough to give. That is why we so desperately need public support that actually spreads the risk and the 

burden of needing long-term care rather than leaving it concentrated and such a heavy burden on just those families who experience it. 

Fortunately, we have ways we can go. We proposed some 20 

years ago—and I have a few proposals that I wanted to lay out for 

you today, because we definitely have options. I am going to give 

you four examples. Two focus on the low-income population—on improving Medicaid while slowing the growth in its costs—and the 

other two, a phase-in broad public long-term care insurance for the 

future so that people do not remain underserved and at risk of losing everything. 

So, first on my list for consideration is to assure broader Medicaid support for care at home, where people want to be, rather 

than in nursing homes. Home care was a focus of the report 20 

years ago. Different proposals do that in different ways. I think we 

5 

have a lot of advocates for the Community Choice Act with us. [Applause.] 

So you know I hate to modify your eloquent statement, but I do 

believe that Senator Baucus, in the white paper, does have a mention of improving Medicaid for long-term care for home- and 

community-based services, so we will look at that. 

Senator ROCKEFELLER. Good. 

Dr. FEDER. Good. And if supported by Federal dollars and 

changes in Medicaid, we really can make a significant difference in 

assuring that people, no matter where they live, no matter what 

State they live in or within States, that they have access to services. 

Now, a second proposal that affects both Medicaid and Medicare 

beneficiaries is to better integrate acute and long-term care for the 

Medicare/Medicaid, or as you know, dual eligibles, who need both. 

Now, dual eligibles are really the poster children for the population 

who can benefit from what we are talking about in better coordinated and better chronic care. 

There are many models that exist. There is sometimes a quick 

move to just changing payment for services, but I would urge us, 

as we move toward that model, to make sure that we are focused 

on what we are actually delivering and on supporting a delivery 

system that works. But I believe there is promise in that regard. 

Now, for the future. That is what I would like to see us do this 

minute. Well, I would like to see us do it all this minute, but that 

takes care of the low-income populations. I believe that what we 

can do is start today to take care of all of us in the future by phasing in public insurance protection across the income scale. 

One option that we received, developed for our Robert Wood 

Johnson long-term care financing project, was to develop a Medicare benefit that would be phased in, so today, not available to people who are currently 60 years of age or older, but pre-funded, so 

that contributions are made today, and we are essentially paying 

for ourselves when we get older. 

A second option, the CLASS Act, would create a new long-term 

care benefit, again, starting with the working-aged population and 

financed through a voluntary deduction from payroll, and, unlike 

Medicare, providing a cash benefit. Again, although available to 

people in nursing homes, it’s focused on people at home, just as the 

social insurance recommendations of the Pepper Commission report 

did years ago. 

Now, you know better than anybody how challenging it is to 

move forward. But as you wrote, and I wanted to quote what you 

wrote 20 years ago, after the Pepper Commission reported out, you 

said the following: ‘‘The President and the Congress have a choice. 

We can continue to duck our heads and hope this issue will not 

bring the Nation to its knees, or we can use the Commission’s recommendations as the rallying point for building the political consensus that can make universal coverage for health and long-term 

care a reality. I—you—opt for the latter course, not just because it 

can work, but because it is the only responsible means to take action that we know is imperative.’’ 

Mr. Chairman, now is the time. With new presidential leadership, a powerful necessity to invest in rebuilding our Nation’s prosVerDate Nov 24 2008 14:46 Feb 17, 2011 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 R:\DOCS\64223.000 TIMD
6 

perity, and new excitement about our Nation’s and our government’s potential to build a better future, now is the time to confront those policy, political, and fiscal challenges you know so well, 

to build a better long-term care system. I look forward to continuing to work with you to do just that. 

Senator ROCKEFELLER. See, we are breaking all rules today, all 

right? Because I am the only person here, so I cannot be voted out 

of order. The fascinating thing to me is that the President understands better than anybody else that you cannot have a recovered 

economy unless you have done health care, that the two are just 

like this. 

Dr. FEDER. Absolutely. 

Senator ROCKEFELLER. Excuse me. 

Dr. FEDER. Thank you. 

Senator ROCKEFELLER. You are not finished? 

Dr. FEDER. I am finished. 

Senator ROCKEFELLER. You did not say that. 

Dr. FEDER. I said I looked forward to continuing to work with 

you. [Laughter.] That was meant to be—so I am now finished with 

this statement and look forward to continuing to work with you. 

[Laughter.] 

Senator ROCKEFELLER. I see. I see. I have never heard you short 

before, Judy. 

Dr. FEDER. Well, I was trying to do the 5 minutes, Senator. 

Senator ROCKEFELLER. Well, we could be relaxed about that. 

Dr. FEDER. All right. 

[The prepared statement of Dr. Feder appears in the appendix.] 

Senator ROCKEFELLER. Dr. Scheppach? 

STATEMENT OF RAYMOND C. SCHEPPACH, Ph.D., EXECUTIVE 

DIRECTOR, NATIONAL GOVERNORS ASSOCIATION, WASHINGTON, DC 

Dr. SCHEPPACH. I am beginning now. [Laughter.] 

Mr. Chairman, I appreciate the opportunity to appear before you 

today on behalf of the Nation’s Governors to discuss the critical 

issue of long-term care and the need to include this issue as part 

of general health care reform. 

To put it simply, failure to reform the under-funded, uncoordinated patchwork of long-term care supports and services is a failure to truly reform health care. This is an opportunity and a responsibility to do so now as part of the general health care discussions under way. On behalf of the Nation’s Governors, I urge you 

to give equal attention to this critical component of the Nation’s 

health care system. 

The broader reform discussion so far has focused on improving 

the coverage, cost, and quality aspects of primary and acute care 

services, with an emphasis on prevention. These are the exact 

same issues with respect to reforming long-term care, and thus 

make it both a moral and fiscal imperative to undertake both simultaneously. 

Mr. Chairman, I would like to make three primary arguments in 

favor of including long-term care with general health care reform. 

First, if we were starting anew to build a national long-term care 

public program, it would not look anything like the current proVerDate Nov 24 2008 14:46 Feb 17, 2011 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 R:\DOCS\64223.000 TIMD
7 

gram. Currently, as elderly individuals’ health status and income 

deteriorate, they get services from two different programs, Stateadministered Medicaid and federally administered Medicare, with 

very little coordination and little ability for the individual to understand which level of government is providing which services and 

which one should be held accountable. 

This is further complicated by the fact that there are often limited incentives for cost containment, since the action by one level 

of government often accrues only savings to the other level of government. The bottom line is that, from a quality, efficiency, and accountability standpoint, the structure of the existing system gets 

very poor grades. 

The second point is that, unfortunately, the wrong level of government has financial responsibility for most of long-term care. 

From a federalism standpoint, a national division of responsibilities 

has emerged in the Nation, starting with Social Security in 1935, 

and then through enactment of Medicare and Medicaid in 1965, to 

the present. 

Essentially, the Federal Government took 100 percent of the responsibility, both administratively and financially, for the elderly, 

for those over 65. This is seen in both Social Security and Medicare. 

This has been a distinct advantage in that it allowed the Federal 

Government, through its taxing and spending authorities, to redistribute funds for a mobile program so that no State that had an 

unusually high level of elderly would be held responsible. That 

seems to be a traditional role of the Federal Government. 

States, on the other hand, took administrative, and to a large extent financial, responsibility for working Americans and their children through education, job training, nutrition, welfare, and other 

programs. When Medicaid was essentially a health care program 

for low-income women and children, this was a rational division of 

responsibilities, as States could coordinate health care with other 

similar programs for that population. 

Long-term care, however, with substantial State financing is inconsistent with this basic federalism division of responsibilities. 

Long-term care, which is mostly—at least a majority of it—for the 

elderly, should be a Federal responsibility. 

Third, not only is it the wrong level of government—meaning 

States—that has the major financial responsibility, but also States 

cannot sustain this program financially. I know States have made 

this point a number of times, but we all know the demographics 

in long-term care. It is the fastest-growing component and is likely 

to accelerate in the foreseeable future. 

Unfortunately, both the short- and long-run fiscal viability for 

the current arrangement has eroded substantially for States over 

the last couple of years. My best estimate is, even after you factor 

in the recovery plan that you just enacted, States still face shortfalls of well over $200 billion over the next 3 years. Even after that 

period, I suspect the U.S. economy will emerge in a very different 

form than we entered this recession. Unfortunately, I suspect slower growth is probably highly likely. 

This means States probably, going forward, cannot even fund the 

current level. Unfortunately, I would argue that, from this point 

8 

on, expansions, or just the normal growth in level of care, will be 

paid for by cuts in elementary, secondary, and higher education. 

The bottom line, Mr. Chairman, is that the structure of our longterm care system in this country is broken. It does not deliver quality service, and it is uncoordinated. Not only is it inefficient, but 

it has perverse incentives. It is financed by the wrong level of government, which is unable to sustain it. 

Our fear is that, if the Congress does not include meaningful 

long-term care reform at this time, it will be 20, 30, or 40 years 

before it is on the table again. It would be unfair to the Nation’s 

most vulnerable citizens and irresponsible to the Nation to not incorporate it at this time. 

Thank you, and I am finished. [Laughter.] 

[The prepared statement of Dr. Scheppach appears in the appendix.] 

Senator ROCKEFELLER. All right. Thank you, Ray. And I do not 

agree with you that it will be another 20 or 30 years. I think we 

are going to be on this until we have done it. It is like climate 

change, it is like giving veterans the health care they deserve, this 

kind of thing. I just think it is with us until we get it done, no matter how much it costs. And incidentally, on the States and Medicaid, I am a big non-believer in Medicaid waivers, which either 

you do or do not agree with, but I know Judy does. 

You cannot hold States harmless. Everything changes. Everything changes. EPA has come out with some administrative announcement about Mountaintop removing West Virginia, which I 

am not unsupportive of. I think the coal industry has not changed 

in 150 years. There has been no reason to. Everything has been 

profitable. Now everything is different. Everything is different, everywhere. States are going to be run differently. The Federal Government is going to be run differently. We are going to be living 

under debt, deficit. So I do not hold anybody harmless on anything. 

I do not think we can at this point. We may come to that point. 

Dr. SCHEPPACH. That is fair. 

Senator ROCKEFELLER. All right. 

Mr. Smith? 

STATEMENT OF DENNIS G. SMITH, SENIOR RESEARCH FELLOW IN HEALTH CARE REFORM, THE HERITAGE FOUNDATION, WASHINGTON, DC 

Mr. SMITH. Thank you, Mr. Chairman. It is great to be with you 

again. First, let me say that my testimony reflects the views of only 

myself, not of my current employer, and not of my previous employer, the Federal Government. So you all posed four great questions, and I have tried to come up with four, what I hope will be 

recommendations for serious consideration to reflect the changes 

there have been. 

First, I would like to say there has been some progress for which 

I think that we can be proud of, part of it attained through waivers. Quite frankly, I think the greatest credit goes to the families 

themselves, very much so when you look at the increase in the percentage of Medicaid spending on long-term care for people with disabilities. That has now shifted to where a majority for that popuVerDate Nov 24 2008 14:46 Feb 17, 2011 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 R:\DOCS\64223.000 TIMD
9 

lation is spent in home- and community-based care rather than institutional care. 

In the year 2000, of total long-term care spending, 72 percent 

went to institutions. In 2007, that had dropped to 58 percent. So, 

we have made progress. But I think it is very interesting to note 

that 63 percent of the Medicaid spending on long-term care is now 

in the community rather than in institutions. But for the elderly, 

69 percent of their long-term care spending under Medicaid continues to be in the institutions. I think for a large part, people with 

disabilities, it is the families who demanded the change and who 

I think really led the way. 

In terms of recommendations, first, I would say Medicaid needs 

to be reorganized, in itself. That should start by leveling the playing field between institutional and community-based care. It makes 

no sense to me why an institution is a mandatory service under 

Medicaid, but to live in your own home and in your own community is an option for which you have to go to the Federal Government, saying, may I please? We have now had over 25 years of experience with home- and community-based waivers. I think it is 

time that the statute itself keep pace with the people that it serves. 

People with disabilities account for 51 percent of the Medicaid 

long-term spending. I think you need an agency that is prepared 

to lead the way for the future. In all due respect to my former colleagues at CMS, I believe that CMS is too big and too slow to lead 

the change. 

Picking up on your opening remarks, I believe there should be 

a consolidation of functions in an entirely new agency that is focused on the needs of people with disabilities, to provide them with 

the assistance that you need. If you asked a person with a disability, what type of assistance do you need from the Federal Government, chances are pretty good the answer would be ‘‘a job.’’ 

They want to become taxpayers. They want to work. 

If we change our institutions at the State and Federal level for 

them to attain what they want, then they will not only become 

more satisfied with the way government is serving them, they will 

also become taxpayers as well, reducing the cost of Medicaid, SSI, 

food stamps, et cetera. But I think you do need a new agency to 

lead the way. 

I would not, though, distinguish policies in terms of people with 

disabilities versus our elderly, because I think they basically want 

the same thing, which is person-centered, money-follows-the-person 

types of arrangements, even though there might be different selections. A young person with a disability, for example, is much more 

likely to choose employment-supported type of activities than perhaps an elderly person, but then they would have an equal choice 

of what type of services that they want. 

Our current programs’ basic message to people with disabilities 

is, do not work, do not become independent, do not plan for the future. For that remedy, I would recommend that we create what we 

called previously Living with Independence, Freedom, and Equality 

Accounts, or LIFE Accounts, which would be tax-exempt special accounts where people can build assets to plan for the future. Under 

current law, if you build assets, you lose your health insurance. I 

10 

think that is exactly the wrong message to send people with disabilities. 

My final point—I see my time is expiring—is to look specifically 

at the models that I think are very successful out there that 

achieve two principal things that we are trying to achieve, which 

is to give people the choices they want, but also to make it more 

cost-effective. I would encourage the committee to look at Washington and Oregon, which have long been considered the leaders in 

home- and community-based services, and yet they also spend considerably less on a per capita amount. Washington spends 30 percent less than the U.S. per capita for people with disabilities; Oregon spends 21 percent less per capita than the U.S. average. 

I think what we also need, at the final round, though, is to 

change Medicaid financing. I saved financing for the last, because, 

if you talked about financing first, you tend not to get to the other 

issues. But I think we need to recognize (A) the current financing 

system is not working for States to begin with, and (B) it also actually becomes a barrier to move to home- and community-based 

services, because institutional providers themselves have an advantage under the current financing situation. Institutions can put up 

a non-Federal share of the match. 

Institutions can pay what are called provider taxes, or assessments, so they become part of the financing solution, so they have 

an advantage over community-based care. There are good reasons 

to want to change the reimbursement structures. Again, over the 

past, it has been considered good public policy not to pay for an 

empty bed in a nursing home, for example. But in a movement towards home- and community-based services, though, in order to 

maintain quality of care while a facility is down-sized and taken 

offline, there are very good reasons to want to change the reimbursement system. To be able to do that in a more cost-neutral 

way, you then are also going to have to change the financing. 

I am well over time. I look forward to your questions. 

Senator ROCKEFELLER. Do you see any blinking red lights? We 

turned them off. [Laughter.] 

Mr. SMITH. Oh, you are very kind. Thank you. 

Senator ROCKEFELLER. Thank you very much. 

[The prepared statement of Mr. Smith appears in the appendix.] 

Senator ROCKEFELLER. Dr. Wiener? 

STATEMENT OF JOSHUA M. WIENER, Ph.D., SENIOR FELLOW, 

RTI INTERNATIONAL, WASHINGTON, DC 

Dr. WIENER. Thank you, Mr. Chairman. I appreciate this opportunity to testify today on financing reform and long-term care. 

During my time today I would like to make five points. First, 

long-term care should be part of health reform for four reasons. 

First, with the aging of the population, the number of people with 

disabilities is sure to grow substantially. The number of older people with disabilities will approximately double between 2000 and 

2030. Second, the Federal and State governments spend substantial amounts of money on long-term care. In 2006, the public sector 

spent about $150 billion on long-term care for people of all ages, 

primarily through Medicare and Medicaid. The government’s fiduciary responsibility requires it to spend its money wisely. Third, 

11 

not only do older people and younger persons with disabilities use 

expensive long-term care services, they have high medical care 

costs related to their underlying chronic illnesses. Addressing 

chronic illnesses solely through the medical care system is certain 

to fail in terms of controlling those costs. Finally, the current system is broken and needs to be fixed. The system is biased towards 

institutional care, the financing system forces people onto welfare 

in the form of Medicaid, it is the leading cause of catastrophic outof-pocket health care costs, and all too often the quality of care is 

poor. 

Second, the aging of the baby boom generation will increase 

spending for long-term care, but these higher expenditures will be 

manageable. We can afford to improve the long-term care system. 

Too often, people have viewed the potential increase in demand for 

long-term care—— 

Senator ROCKEFELLER. Dr. Wiener, why do you say that they will 

be manageable? 

Dr. WIENER. That is exactly the point I am getting to now. 

Too often, people have viewed the potential increase in demand 

for long-term care in apocalyptic terms and used that as a reason 

to avoid the problem. They say we cannot afford what we are doing 

now, so obviously we cannot afford any improvements. But total 

public and private long-term care expenditures were about 1.5 percent of Gross Domestic Product in 2005. Projections done before the 

current economic downturn suggest that they are likely to increase 

to about 3 percent of GDP in 2040, assuming that we have modest, 

but positive, economic growth. If we do not return to positive economic growth, then I am sure this committee will be concerned 

about many other things. 

Third, many other countries, such as Sweden, Japan, Germany, 

and England, already have populations that are much older than 

ours, without dire results. Sweden, which has over 17 percent of its 

population over the age of 65, compared to our 12 percent, spends 

3 percent of the Gross Domestic Product for long-term care. So my 

point here is not that we should not be concerned, because we 

should. My point is that it is a substantial problem, but one that 

we can, in fact, afford to fix. 

Third, long-term care financing reform should be designed to 

shift the service delivery system towards home- and communitybased services. The vast majority of older and younger people with 

disabilities live in the community and want to be there. Only about 

17 percent of people with disabilities live in nursing homes. 

Yet, in 2002, only 37 percent of older people who needed assistance with the activities of daily living received any paid home care. 

As Dennis alluded to, although Medicaid home- and communitybased services for older people and younger persons with physical 

disabilities have been increasing, only 31 percent of Medicaid longterm care expenditures were for non-institutional services in 2007. 

Fourth, private sector initiatives can do more, but they are not 

likely to be a major source of financing without large public subsidies. A private long-term care insurance market has existed since 

about the mid-1980s, but in 2005 only about 7 million policies were 

in force, covering between 8 to 10 percent of older people and much 

less than 1 percent of the non-elderly population. The major barrier 

12 

is cost. A good-quality policy purchased at age 65 costs more than 

$2,800 per year, too expensive for most older people. 

There are many options to reduce price, but unless they radically—and I underline the word radically—reduce the costs, they 

are unlikely to substantially increase the number of insurance purchasers. 

The qualities of policies have improved over the years, but far too 

many policies still provide no inflation projection, and almost none 

have non-forfeiture benefits. More regulation is needed, and that 

can be accomplished here in this committee. 

Fifth, and finally, the limitations of private initiatives means 

that long-term care financing is likely to continue to be dominated 

by public programs. Three-quarters of people in nursing homes 

have their care paid for by either Medicaid or Medicare, and much 

of the private payment is, in fact, Social Security and other public 

programs. 

According to the Organization for Economic Cooperation and Development, public programs dominate long-term care financing in 

virtually all developed countries. There are a wide range of possible 

options. We could start minimally with demonstration programs 

that include initiatives that provide integrated care, including longterm care for people with disabilities. I would recommend breaking 

out of the budget neutrality requirements that have hampered 

many demonstrations under the Medicare and Medicaid program. 

We can increase funding for appropriated programs such as title 

20, or the Older Americans Act, to fund home- and communitybased services. We can expand Medicaid by requiring States to 

cover more home- and community-based services, and easing financial eligibility requirements such as proposed in the Community 

Choice Act. [Applause.] 

Senator ROCKEFELLER. Dr. Wiener, are you willing to—— 

Dr. WIENER. I am almost done. 

And finally, we can establish a social insurance program for the 

long-term care, as has been done in Germany, Japan, and the 

Netherlands, and as is proposed by Senator Kennedy’s, and others’, 

CLASS Act. 

Senator ROCKEFELLER. All right. 

[The prepared statement of Dr. Wiener appears in the appendix.] 

Senator ROCKEFELLER. I am embarrassed, but I have 5 minutes 

left on a vote. It will take me 5 minutes to get there. These days, 

you just do not miss votes. We are debating community service all 

this week, and at least I want to send the President, when he goes 

abroad, let him be able to sign a bill increasing the Peace Corps, 

Vista, Americorps, Teach for America, every type of community 

service available, working with everybody here. That is what I 

think the vote is on, and I want to go vote. 

So Senator Hatch will be coming, but in the meantime, with your 

permission, I would like to recess the hearing, and I will be right 

back. I am not a fast runner. I will be back as fast as I can. Thank 

you. 

[Whereupon, at 3:17 p.m., the hearing was recessed, reconvening 

at 3:34 p.m.] 

Senator ROCKEFELLER. Just for your information, Senator Hatch 

actually is doing a very important thing. He is managing, for the 

13 

Republicans, on the floor, this community service bill. That is what 

he should be doing. It is so important that that pass. 

For Dr. Feder and Dr. Wiener, paying for long-term care. We sort 

of figured out a way to do that, did we not? 

Dr. FEDER. There are ways in which we could do it. 

Senator ROCKEFELLER. Well, that sounds like maybe we did not, 

then. We put forward a lot of options. 

Dr. FEDER. Some said that we did not do it. It was said at the 

time, we did not make a choice. But I think that with the proposals, what is interesting about the proposals, the two social insurance proposals that I offered in my testimony, both of them are 

talking about, in many ways, pre-funding. 

So the Medicare option that I talked about has contributions 

today, whether from general revenues or some other mechanisms, 

that go into a trust fund so that you prepay, and separates it from 

government so it is not like the way we do the Medicare trust fund. 

So that is one proposal about paying in advance. 

The CLASS Act is talking about, or proposes that, the voluntary 

reductions from payroll, that those be made 4 or 5 years before any 

services are available under the program. So, there is the concept 

of essentially paying for the benefits in advance. 

Senator ROCKEFELLER. Do you remember, we had the big dispute 

about activities of daily living, and at one point there was an argument, should it be four ADLs or three ADLs, and we decided on 

three ADLs. I forget how that worked out. I apologize to the rest 

of you. I just see Judy, and I reminisce. 

Dr. FEDER. I would have to double-check what we actually chose. 

Senator ROCKEFELLER. You do not remember, Dr. Feder? 

Dr. FEDER. It is horrifying. 

Senator ROCKEFELLER. I love that. 

Dr. FEDER. It is horrifying, but that is true. 

Senator ROCKEFELLER. Yes. 

Dr. FEDER. But I think that there are specifications in both proposals I put before you, and I would have to check. Although I 

know there are many in the audience who know, and Josh may 

know, or others on the panel may know what the specifications are. 

The concern is that limitations in three activities of daily living is 

really pretty severely disabled, and that the desire is, of course, to 

get services to people while they are in the community, so that you 

can keep them in the community. So our desire is to go down from 

that high a level of severity. 

Dr. WIENER. Clearly it is just a question of how much money you 

are willing to put on the table. There are more people who have 

two or more problems with activities of daily living than three. So 

depending on how much money the committee is willing to spend, 

then you can kind of slice it and dice it to meet that level of need. 

Senator ROCKEFELLER. Yes. And it is not a casual process, because each ADL is a humongous task. 

Dr. FEDER. Right. 

Senator ROCKEFELLER. Whether it is toileting, or bathing. 

Dr. FEDER. Right. And the concern actually with some of the 

Medicaid rules currently is that, if you only give home- and 

community-based services to people who are nursing home-eligible, 

you are not able to help them remain at home, which is what you 

14 

want to do. So it is both a goal for people’s quality of life, as well 

as for properly using our resources. 

Senator ROCKEFELLER. Let me ask—look, we are just here talking, all right? I remember a couple of times in West Virginia, when 

I was Governor, we had these huge floods. Since only 4 percent of 

the land is flat and all the rest is mountain, you can imagine what 

a flood does and what it wipes out. 

So I opened up all the national guard armories, at least in the 

affected areas. Nobody came. Nobody came. Why did nobody come? 

Because everybody took everybody from their neighborhood in or 

they moved up 50 feet on a mountainside, and moved in somebody’s house. And it was not just a question of your relatives, it 

was a question of belonging to a community and the community 

acting to protect you. This is what you were talking about, Mr. 

Smith. 

That is the whole concept of personal responsibility, which liberals here say, well, that is avoiding giving the service, or it is not. 

In West Virginia, which is a very, very value-oriented mountainous, and therefore very close—all the communities are very 

small and very close and tucked into mountains. The sun does not 

come up until noon in some places. People are close and they do 

take care of each other, and there is a sense of community responsibility that really works. 

But then as the economy begins to go sour, you can make two 

arguments. One is that people have more time to do that and 

therefore they can exercise their nature, or you can argue people 

become deeply frustrated out of their own situation, they are trying 

to find jobs, and are less inclined to do that because they have to 

be self-interested to protect any chance they have of a future. 

I am kind of wondering what you think about that and the idea 

of—because I saw all kinds of examples, and we used to talk about 

this—of families that would move back from Ohio to take care of 

their mother or their father who had Alzheimer’s or some other debilitating long-term disease. Then they would go broke. They would 

spend down. It was not a question of qualifying for Medicaid, they 

would just spend down. 

What would happen is, their children could not go to college and 

all of their dreams went right out the window because they were 

doing what children in Appalachia and the Midwest, et cetera, tend 

to do, and that is, be good to their families, take care of their families. But then there comes a point at which that becomes counterproductive. 

So my question to you all, sort of philosophically, what is the relationship between the downturn in the economy, do you think, and 

the willingness now of people to participate in community 

caregiving, family caregiving, exercising personal and community 

responsibility? What do you predict? 

Dr. WIENER. Well, I think the fundamental thing is what you 

have underlined, which is that people do not abandon their relatives. I think that basically happens. People have that commitment in good times and bad times because that is what families do. 

If you look historically at survey data, people have continued to 

provide substantial amounts of help to disabled relatives for as far 

15 

back as we have data. It always comes out as the overwhelming 

amount. 

People do, as you noted, move back or they move the relatives 

closer in. About two-thirds of older people with disabilities have a 

relative within 20 miles of where they live. But it, as you pointed 

out, can be an unfair burden on the family in terms of what it 

means for their future and their ability to live a life, and especially 

for younger people with disabilities. It means living a life in which 

you are perhaps dependent on a family caregiver, when other people your age are independent and able to live on their own and free 

from having to answer to their parents or those kinds of things. 

Not every family gets along perfectly all the time. 

Senator ROCKEFELLER. And that is correct. This can undo family 

relationships as well as it can bond family relationships. It just depends. I mean, for example, when my mother got Alzheimer’s, I am 

of that generation when my father simply felt he could not tell his 

children that our mother had Alzheimer’s. We found out 2 years 

after she had it. That was just the way it worked back then. I was 

not very happy about it, but I was not going to blame him, because 

that is what happened. 

But another question I have is, being a community caregiver, 

being a family caregiver is not just a question of loving somebody 

and helping somebody or moving somebody from place to place. It 

also has to do with a good deal of medical knowledge, when you 

get to the use of oxygen and knowing what medications are to be 

used. That is not a casual event, and people are not trained for 

that, as far as I know. 

Dr. FEDER. No. Also, what it raises, I was going to share with 

you that the most recent survey we have had of people who have 

long-term care needs in the community and whether they are getting their needs met is that 1 in 5 are reporting that they are not 

getting the care that they need and are more likely to report that 

they are suffering serious consequences as a result, such as not 

being able to eat, or to bathe, or soiling themselves, or falling. 

So independent of the medical, but even in the services, the support services, even if the families are doing a great deal, it is not 

sufficient to meet the needs of the people who need the care. That 

is a very real problem. We had some evidence that, in States where 

there is greater paid care, there is a lesser level of unmet need. So 

it matters to be able to draw on people who are paid to be 

there—— 

Senator ROCKEFELLER. Or trained. 

Dr. FEDER [continuing]. And have the skills to be there. 

Senator ROCKEFELLER. Yes. 

Dr. WIENER. In general, in the United States—— 

Senator ROCKEFELLER. Josh, let me just call on Mr. Smith and 

Ray Scheppach, how you would answer that. I do not mean to be 

rude. 

Dr. SCHEPPACH. It is interesting. There has been a fair amount 

of research on what happens to communities when a major manufacturer or other plant tends to move out, and what are the impacts. A lot of times what you find is that there is great stickiness 

originally—that the community holds together. They try to, in fact, 

find other firms to come in. They do not, in fact, move away. But 

16 

as the situation continues to deteriorate, then it breaks loose and 

people abandon a particular area. So I think, up to a point, economic hardship can be a plus in terms of bringing community together, but further deterioration from that begins to break it apart. 

Mr. SMITH. I think this is an area where we have to really 

change our entire outlook from the current rules that we have in 

the program from the Federal level that spill on down. A large part 

of long-term care has to deal not only with the individual, what is 

happening to the individual, but also to somebody else. Whether 

you still have a living spouse who can help take care of the spouse 

who has a disability—your family arrangement is extremely important in determining what is happening to you. 

I think part of a lot of this, and again, from your earlier question 

about trying to move away from the current standards about meeting an institutional level of care, or how many ADLs do you need— 

you may have only two ADLs, but have a greater need because you 

have no family or no support system. You may have three or four 

ADLs, but being in a large family with a large support group, your 

needs are being better taken care of. 

So I think we need to move to a truly different model, where we 

are talking about a needs assessment, a comprehensive needs assessment. Housing is maybe a huge factor in what happens to the 

individual. So I truly think we just need to have an entirely different model. 

In terms of the economy, actually, it works somewhat backwards. 

When I ran Virginia Medicaid, and looking at long-term care in 

Northern Virginia, the likelihood was that your nurse’s aides, your 

home health aides, et cetera, were going to have very high turnover 

within a year because there was a lot of competition for your work. 

You move from a home health aide in an agency to a nursing home, 

to a hospital, because you had competition for your services: good 

for the individual, but very high turnover, which also affects quality. 

We generally did not have that problem in Southwest Virginia, 

though, where a nursing home, in fact, was one of the best and 

most stable employers. So you have a lot of economic dynamics that 

go into the workforce itself. As I said right now, it actually is helping to stabilize the status quo when, again, in my estimation, we 

need to move beyond the status quo. 

Senator ROCKEFELLER. Yes. 

We have been joined by Senator Cantwell, who has a great interest in this subject. We welcome you. 

Senator CANTWELL. Thank you, Mr. Chairman. I am sorry I was 

not able to get here earlier, because I was chairing a subcommittee 

in the Energy Committee. But I do very much appreciate you holding this very important hearing on this subject. I think there is lots 

of opportunity for us to continue to make investments that will 

help deliver better care, and at more effective rates. 

I wanted to mention that my State, Washington, has been working to improve the long-term care system for a couple of decades 

now. I was in the legislature when we made some of those reforms, 

but we are really, I think, a leader now in providing high-quality, 

cost-effective alternatives to nursing home care, because I think we 

do a good job at the education benefits of keeping people in their 

17 

homes longer. Nursing home care is almost 70 percent more expensive than the home care approach. We now, in Washington State, 

provide almost twice as many people as we would have been able 

to cover if we had not reformed our long-term care system. 

So, unfortunately, as Dr. Feder was mentioning in her testimony, 

these States almost get penalized for that effectiveness, and the national programs have not evolved to that point. 

So we certainly want to work with the committee on how we 

might be able to take some steps at the Federal level that would 

support these kinds of reforms, similar to what Washington State 

made, and that we do a better job on the Medicaid/Medicare dual 

eligibility population. 

But I know, Dr. Wiener, you discussed in your testimony the role 

that aging and disability resources play in the resource center, and 

that is a program obviously that provides a great deal of support 

to anybody, but it really does help them avoid that nursing home 

care. 

So I was wondering, if we help increase that role of the Aging 

and Disability Resource Center, how that can help us in actually 

saving dollars and how we can make that clear to people, as we 

have this population that is reaching retirement that is going to demand more for these services, how critical it is that we reform the 

system and get a program in place where we are giving the right 

information to people to really actually keep them out of these 

long-term care facilities. 

Dr. WIENER. Well, I think one of the key factors in long-term financing is that the financing is fragmented. There are a variety of 

State programs, as well as Medicaid, as well as a number of private organizations providing services. So one of the things that the 

Aging and Disability Resource Centers try to do is to be a single 

point of entry into the overall long-term care system so that people 

can see the complete range of options that are available to them 

and put together a package of services that makes sense for them. 

As you alluded to, most people want to stay in the community if 

it is possible. It is not possible for everyone, but certainly Washington State is a State that has done a great deal to try to make 

home- and community-based services available. 

The Centers for Medicare and Medicaid Services and the Administration on Aging have had a grant program that provides funds 

to 43 States to try to start to develop these Aging and Disability 

Resource Centers, but in most cases they are operating only in a 

couple of counties in each State. I think Federal funds, infrastructure funds for this to help the States go to scale, go to State-wide 

status, would be a big help and I think would help to provide consumers with the information they need to choose the services that 

make the most sense for them. 

Senator CANTWELL. Dr. Feder, do you have any comments on the 

reforms that we have had in long-term care in Washington State 

and how they might be applied? 

Dr. FEDER. Oh, absolutely. In the testimony earlier, I think that 

Dr. Wiener talked about Washington State as an example of, just 

as you have said, shifting from institutions to home- and community-based services. What I advocated in my testimony was that we 

make changes in Medicaid law and rules, as well as support with 

18 

Federal dollars—so both the dollars and the regulations—so that 

other States are more likely and better able to move in your direction. I think, without the Federal changes, we are always going to 

have States that do far more than others. What matters is that, no 

matter where people live, that they have the opportunity to get the 

services they need, ideally, at home where they want to be. 

Senator CANTWELL. But if this can save at least a billion, if not 

billions, why have we not implemented it sooner? 

Dr. FEDER. Well, I think the challenge is, and we do have some 

recent research that shows that—and I am sure that Washington 

is one of the States that is being looked at—when programs are 

mature, the home- and community-based service programs are mature, and they are accompanied by other policies to limit the use 

of nursing homes and the development of nursing homes, that the 

growth in total spending is slower than it would otherwise be. 

The initial investment, however, appears to cost in the first instance as we, as you said, serve more people. Sometimes we serve 

them with the same dollars, sometimes initially we will serve them 

and we will take more dollars if it takes a while to get the system 

in balance. I think what history tells us is that it depends on how 

aggressive States are in accompanying the new availability of 

home- and community-based services with restrictions on the use 

of nursing homes. 

Senator CANTWELL. But in this case we know we are going to 

have a growing population demand. We know that, so this is almost prevented if we are looking at that increase in the number 

of people who are going to be demanding services, and say, how can 

you provide them at a more cost-effective—— 

Dr. FEDER. I think you are absolutely right. 

Senator CANTWELL. Thank you. 

Thank you, Mr. Chairman. 

Senator ROCKEFELLER. Thank you very much for being here. I 

am honored. 

The whole problem is people available to provide services, 

community-based, nursing home. I sort of think of all the geriatricians who are trained in this country, and then they practice geriatrics for a couple of years, and then there is some other specialty 

that pays a lot more money, and they go into that and they leave 

geriatrics. I think that is the case. That is a very unfortunate statement. 

You go back to the Hippocratic oath. There is nothing in it about 

curing people, it is about not doing harm, which means taking care 

of people, responding to their needs. You would think that, with 

the present economic downturn, people having to depend upon each 

other more, that there would be a greater instinct, and maybe just 

the theory that America works in cycles, that people would feel a 

responsibility to help each other. But I am not sure that is going 

to be true. 

In other words, we have agreed, as Mr. Smith said, people in Appalachia do have that obligation, they do feel that, and they do 

elsewhere in the country. But they have to be trained. They have 

to know what they are doing, which means they have to take a 

course, which means they have to pay money and they cannot learn 

on the job. 

19 

I think I can remember, Dr. Feder—I have to call you Dr. 

Feder—that we talked 20 years ago about the fact that there were, 

across America at that time, some 9 million seniors living in completely inappropriate 2- or 3-story old housing on the tops of hills. 

There had to be sort of a check-in system. People would call every 

other day to find out, how are you doing? That was their form of 

community service, that they would just call. And, of course, if 

there was no answer, the question was, they would then go and 

check it out. That is a pretty shoddy system. 

I am just trying to think, what does the fact of the training that 

people have to get in order to provide this service at a time that 

I hope, and I think Senator Cantwell hopes, there is a new sort of 

sense of obligation to each other, to our families, to each other as 

we go through this really horrible period—that people do have to 

get trained to do this stuff. 

Dr. FEDER. Yes. People do have to get trained. People have to 

want to go into this field. 

Senator ROCKEFELLER. Right. 

Dr. FEDER. It is across the spectrum of professions. So you are 

starting with geriatricians. I would take us back to the purpose of 

your hearing, which is to make long-term care reform a part of 

health reform. 

Senator ROCKEFELLER. Yes. Right. 

Dr. FEDER. And there is a concern, a medical concern, and it affects very much people who need long-term care, that we have an 

insufficient emphasis on primary care and prevention, and much 

too great an emphasis on specialty services and specialists. So, I 

think that, in part, as we look at changing that balance in the medical field, that we are doing a service, which I think we will do as 

part of health reform. We will be looking at what we can do, or 

that those efforts can be very beneficial to people who need longterm care. It is not just the geriatricians, but doctors trained in primary care. 

Senator ROCKEFELLER. No, I understand that. 

Dr. FEDER. I was going to go down the—— 

Senator ROCKEFELLER. I was just trying to make the point with 

them. 

Dr. FEDER. Yes. Absolutely. Which is why I take back my language. I would go to other people and professions. We could involve 

more nurses and physician’s assistants in care, and the direct service workers who, in many cases, are earning subminimum wage 

and get no health insurance benefits. How can we expect them to 

be good caregivers if they are not adequately taken care of? So 

even those who are dedicated to service need to live quality lives, 

so we need to look across the spectrum of the workforce. It is a 

very, very important issue. 

You will remember that Robyn Stone was on the staff of the Pepper Commission and is now doing a great deal of work that I am 

happy to share with your staff, but I am sure they have already 

seen, in that area. I think there is a lot we can do. 

Senator ROCKEFELLER. So it is a problem. It is a problem. 

I made a statement earlier which you corrected, and that is that 

everybody at some point in their life is going to need long-term 

care. I tend to continue to believe that, in spite of what you said, 

20 

which is an amazing statement in and of itself. You were not so 

sure about that. I am very interested in why. 

Dr. FEDER. Yes. You had—— 

Senator ROCKEFELLER. I mean, if you have a head-on crash and 

two people die immediately, obviously that is—— 

Dr. FEDER. The reality is, it is much more than head-on crashes 

that lead people to die without needing long-term care. 

Senator ROCKEFELLER. Yes. 

Dr. FEDER. I was just looking for the numbers, which are in my 

testimony; I will find them in a second. 

Dr. WIENER. Sixty-nine percent. 

Dr. FEDER. Thank you. Go ahead, Josh. You give the Senator 

numbers. Oh, here it is. I found it. Never mind. [Laughter.] You 

can do it, too. But 3 in 10 people turning age 65 today—so even 

looking just at older people—are expected to die without needing 

any long-term care. If you die of a heart attack, you may need no 

long-term care. 

Senator ROCKEFELLER. Of course. Of course. 

Dr. FEDER. There are other illnesses where you do not need those 

services. 

Senator ROCKEFELLER. Of course. 

Dr. FEDER. And then at the other end of the spectrum, we have 

1 in 5 who need 5 or more years of care. So, there is variability, 

even among people who are turning age 65 now, which is why we 

say the need for extensive long-term care is an unpredictable catastrophic event. 

Dr. WIENER. I think the key point, though, is that it is not a rare 

instance. Somehow the American people think it is, that it is something that happens to somebody else in some rare instance, when, 

as the figures that Judy was citing clearly indicate, it is a normal 

life risk and one that most of us will have to deal with. Most people 

do not believe that. Most people do not know that, and certainly 

most people do not prepare for that or arrange their life around 

that. 

Dr. FEDER. It is why, Senator, the variability. I mean, it is something that can happen to any of us. When you live to a very old 

age, it is very likely to happen to you. 

Senator ROCKEFELLER. I think the major problem on long-term 

care is that somehow the Congress and the press and the American 

people think that it is just unaffordable, and somehow acute care, 

to them, because it is around them and visible a lot, is affordable. 

It does not necessarily last, so there is an end point in long-term 

care, though the end point may be some point off. 

I can remember Dick Darman—I think we have talked about 

this—when he was President Reagan’s Director of Office of Management and Budget, an absolutely brilliant person. He had testified before the Finance Committee, and he just disappeared for a 

week or 10 days, nobody could find him. He was just completely 

learning health care. He said—this was back in, I guess, what, the 

1980s—that we were going to go up to 36 percent of Gross Domestic Product, and that was unsustainable. Where are we now? I 

would ask somebody other than Dr. Feder. 

Dr. WIENER. We are at 18. 

21 

Mr. SMITH. Going up to 20 percent on health care. I think this 

is one of the areas that is unsustainable. I think Senator Moynihan 

used to say, actually, we could spend everything on health care because the demand is so insatiable. We could spend everything. Obviously that cannot happen from an economic standpoint. I think 

it is well short. 

When you look at what families can afford as a percentage of 

their family income, when you look at what States can afford as 

a percentage of their budget, they cannot go beyond what is currently being spent. We had two States in the past, Missouri and 

Tennessee, that got up to as much as 30 percent of their entire 

State budget being spent on Medicaid. They found that that was 

unsustainable, and they had to take very dramatic action to reduce 

that. 

So I think we are very close to the tipping point now. But I think 

part of the problem for long-term care is in the existing model. 

When CBO and OMB put their baselines together, they assume increased costs, for example, due to flexibility. The budgeteers tend 

to score flexibility as costing money versus the flexibility that I talk 

about in terms of training family members, having people be able 

to self-direct. Those things save money in the longer term. 

If you can delay an individual’s going into a nursing home or if 

you can shorten that length of stay in a nursing home, you can 

save money, as States like Washington, for example, have demonstrated. Vermont has a very interesting experiment going on 

right now, again, where they have leveled the playing field between 

services. They have actually moved to a model to help prevent 

going into a need for a higher level of care. 

The current system is based on, we are going to wait until you 

are as sick as possible, until you have the absolutely highest need, 

then we will step in and help you, versus a more, helping you 

through the continuum. Much of long-term care has a medical element to it if, for example, you need to learn how to help care for 

a catheter. But so much of long-term care is a social service and 

helping families just know who to call, giving them peace of mind, 

helping them to understand that there are people out there just 

like them who want to support them, giving them the skills, training them to help deal with some of these conditions. 

Again, this is very much a family issue. The rates of divorce 

among families with a disabled child are extraordinarily high. So 

the more we can do to help support them in staying together as a 

family—again, those are things that will save money and lead to 

higher quality of care, much higher. 

The satisfaction rates among people who self-direct are extraordinarily high. So, these are things that we can do, but it does mean 

changing. Just adding on to the system as we now have it, yes, is 

going to cost an extraordinary amount of money, so you have to 

change the underlying structures of the current system. 

Dr. SCHEPPACH. And I might argue, Mr. Chairman, that this industry is very unique, largely because productivity change is negative. There is almost no other industry, in America where productivity change is negative. That is a double-edged sword. When you 

talk about creating jobs and employment, I suspect that, when we 

22 

look back at this year, 2009, there will be only one industry that 

has created jobs. 

The flip side of that is, we are not able to bring capital to make 

productivity changes in this industry, and ultimately that is the 

problem. It is so labor-intensive. Capital investment is costincreasing as opposed to cost-decreasing. It is partly inherent, I 

think, in the industry. But until we get to a point where we can 

use capital and have a positive productivity change, we are stuck. 

Dick Darman will eventually be right. 

So what Dennis talks about, I tend to agree with. I would probably define the model somewhat differently. We have to find a way 

of using capital intensely to get the cost controls that are necessary. Otherwise it is going to increase as a share of GNP. That 

may be the right thing to do as a Nation, but the cost is ultimately 

going to be lower productivity for the Nation. The only increase in 

real wages we have as a Nation is increases in productivity. 

Senator ROCKEFELLER. Judy, just before you say what you were 

going to say, there are four parts to the President’s program. One 

of them, obviously, is cost containment, another of them is early 

intervention. Now, it is pretty well known, whether it is early 

childhood education, or whether it is Early Periodic Screening, Diagnosis, and Treatment—which was not in the first Children’s 

Health Insurance Program bill, and which, happily, is in the second. I mean, it was shocking that it was not for 5, 6 years. 

You have to make a balance between what you spend early and, 

if you take life into two sections, you take long-term care and you 

take acute care, when you are taking acute care you tend often to 

be getting to young people, and you are talking about immunizations and all the rest of it. Then there is a distinct relationship between what you do now and what you save later because of what 

you do now. That is a little more complicated, I would think, in 

long-term care. Help me understand. 

Dr. FEDER. Well, I think some of it is similar. If you can invest 

to prevent falls, for example, or to manage chronic conditions, then 

it is very similar to what you are thinking in terms of seeing a payoff to immunizations. You really can prevent people from suffering 

circumstances that are going to make their health decline. 

The reality of long-term care for an elderly person toward the 

end is that conditions are going to deteriorate. You can help them 

deteriorate more slowly perhaps, you can keep them in more comfortable circumstances, but you cannot prevent the ultimate ending. Your mother died, right? So you cannot prevent that. 

Senator ROCKEFELLER. Let me ask one more question, and then 

I have to adjourn. I went through a big, long spine operation several years ago at Johns Hopkins, and I was under anesthesia for 

11 hours, for which I am still mad because I have no idea what 

they do. I mean, you put your chin on a thing, and I have still got 

a scar from that, and then in 11 hours you wake up and you have 

absolutely no idea what is in you, what it does to you. That is actually something that needs to be understood by the American people. Anesthesiologists have to tell you that, and they do not. And 

they make a lot of money in doing what they do and not telling you 

about what they are doing to you. But in any event, not falling was 

a huge part of my early rehabilitation. 

23 

Dr. FEDER. Yes. 

Senator ROCKEFELLER. A huge part. 

Dr. FEDER. Yes. 

Senator ROCKEFELLER. Because they put this massive amount of 

titanium in my back, which actually gave me a lot of confidence. 

But it had to graft with the bone. So now I sort of feel impregnable 

on that front. On the other hand, there is the whole question of, 

you have to keep physically healthy. 

Dr. FEDER. That is right. 

Senator ROCKEFELLER. So 6 days out of 7, I go out and walk for 

an hour. I call it ‘‘Rockefeller at midnight,’’ just because I like the 

sound of that, rather than ‘‘Lincoln at midnight.’’ It is when I like 

to walk. I just go out, and I climb hills and come back and sweat, 

and then go to bed and show up for work, and I am happy and I 

am in condition. That is one thing, as you are growing up or go 

through what I went through. It is quite another thing if you have 

lost a limb, or you are suffering paralysis, as some of our ADAPT 

members. The whole question is, how do you handle staying physically fit in order to compensate for the other acts of care that you 

are taking or are being helped with? Physical fitness is important. 

Dr. FEDER. Absolutely. 

Senator ROCKEFELLER. Maybe somebody from ADAPT wants to 

answer that. 

Mr. HILDEBRANT. Always being shy, I will speak up. As far as 

health, you certainly have a point. 

Senator ROCKEFELLER. I have been watching you. You have been 

going up and down like this. 

Mr. HILDEBRANT. Distracting you with my fidgets. 

Senator ROCKEFELLER. No, not at all. Educating me. 

Mr. HILDEBRANT. I am Chris Hildebrant. I am with ADAPT. I am 

out of Rochester, NY. Obviously with the shirts, we are here primarily supporting the Community Choice Act. But in particular, I 

am a person who has lived with spinal cord injury for 19 years 

now. I am 33, and physical fitness is something that I do not do 

very well. I move around a lot, as you are identifying. I am an incomplete injury; I have some of my sensation, but not a lot of motor 

control. So I feel my butt—and let us be honest—being uncomfortable, and I do my lift and get up. As we have kind of been talking 

about, it is preventative. 

Senator ROCKEFELLER. So that is not just discomfort, that is a 

deliberate act. 

Mr. HILDEBRANT. Right. Folks with that loss of sensation, that 

loss of movement, one of the very real risks—whether you are in 

the community or, I mean, there is a prevalence of it in nursing 

homes—is pressure sores. If you do not move enough, whether you 

are in bed, or whether you are in a wheelchair, if you do not move 

enough, your skin dies, and a sore, necrotic flesh will just eat away 

inside. It is a very real and very dangerous risk for folks. 

So, that physical well-being is important, but also having the 

supports to help you do that, so some of our folks can use their attendant services, whether consumer-directed or otherwise, to do 

like PT-type exercises. I know Terry who works with us has her attendants help her do those shifts because she is not as physically 

mobile as I am, but she can use her community supports to help 

24 

her relieve that pressure so that she stays healthy and so that she 

does not have to go to the hospital for that expensive acute care, 

or go to the nursing home, ultimately, which some of our people get 

stuck doing because they do not have those supports in the community. 

Senator ROCKEFELLER. All right. I appreciate that. Thank you 

very much. 

Mr. HILDEBRANT. Absolutely. Thank you, sir. 

Senator ROCKEFELLER. Let me ask you one final question. I am 

a big believer in hospice. That has been slow to get off the ground 

in West Virginia, but we are getting it off the ground. This is a 

delicate question, but how does a health care professional describe 

when it is that somebody decides to go to hospice who would also 

have other choices, but decides to go to hospice because that is the 

best thing to do medically, or for the condition, and in so doing, 

what does one give up if one decided not to do that, but to continue 

in another path? I mean, that is complicated phrasing, but you understand my question. Or you do not? Nobody understood it. I could 

try again. 

Dr. FEDER. When you choose—and I am going to need help from 

others on the panel—what I think what you value about hospice, 

and you hear it from many people, is that there is a focus on what 

is called palliative care, making you feel better and comfortable 

and not over-providing care when you know that the course of an 

illness is going to end in death. I think that we all can imagine, 

if we have not seen directly, what that choice means. You described 

it: you brought your mother home so she could listen to Bach and 

Handel and have her family around her rather than having her 

feeding tubes, and all of her tubes. 

So those are the alternatives. I think what we want for people, 

and need to do better with, is for people to truly have the choice 

of doing it their way and not simply, because of ignorance, not 

being offered opportunities, ending up dying in a way that is lacking in dignity, is inconsistent with what they would choose, and involves also a lot of costs—you would call them costs, not value. 

Senator ROCKEFELLER. Well, who makes that judgment, that it 

is time now to go to hospice? What if the doctor does? The doctor 

made the decision that my mother should not go home, and we just 

told him, you know what, and took her home. That was when she 

bit down on her feeding tube. Now, that was not a medical decision, that was her decision. There was some kind of a reaction that 

just came from deep inside of her, what was left of her. But there 

was nothing medical about it. It was a choice. But could you say 

it was an informed or uninformed choice? I do not know. So who 

makes that decision? 

Dr. SCHEPPACH. I just happened to go through this personally 

with my mother. Basically, it is a discussion among the person, the 

family, and the doctor. My experience was, it was a pretty good discussion, that most doctors are comfortable with it. It is also true 

that you do not necessarily have to go to hospice. You can have 

hospice come to you, either in your nursing home that you are in 

or in your home itself. 

Senator ROCKEFELLER. All right. 

25 

Dr. SCHEPPACH. Mother’s situation was, she was in a nursing 

home. It ended up a very positive thing because we did not have 

to worry about the nursing home calling emergency and taking her 

to the hospital, making her very uncomfortable for 48 hours, sending her back to the nursing home, and 30 days later doing it again. 

It forced them to call me, and we jointly made a decision of whether she went there or, if she decided to go to the hospital, they had 

a special hospice care wing on it. So I think it is, from my personal 

experience, very supportive. It made a lot of sense. The decisionmaking was a lot of counseling. 

Senator ROCKEFELLER. But if there were, in my case, four of us 

who made the decision to take her home, and therefore could, to 

the great displeasure of the New York hospital, and the doctor visited and had beads of sweat on him—and I am not sure why, 

whether he thought we were going to sue him, or what. I never 

really figured that out. But he was terribly nervous because we 

were going to make her comfortable, i.e., use morphine. They did 

not love that. So we did that. 

But it always stuck to my brain that if any one of the four of 

us had objected, she would have stayed in the hospital. Now, that 

strikes me as—now, I will not say amoral or immoral, but if you 

have a child who has a particular grudge—oh, my heavens. Ron, 

I apologize. It is the purple tie that caught my attention, and your 

handsome profile. I will shut up in a minute. But that rule, that 

if one child objects, that therefore determines the future of your 

mother, is very strange to me. 

Dr. FEDER. But you know circumstances where I could imagine, 

independent of thinking about my siblings, that I knew what was 

right, and they were all wrong. If they wanted to do something different from what I did, I could understand that it is difficult to get 

agreement. You want to get agreement, because what is right can 

be controversial. Not everybody has the best interests of the sick 

individual at heart. So, I understand that. 

Dr. WIENER. I think that underlines why it is important for people to make clear what their preferences are before they get into 

that kind of circumstance. 

Dr. FEDER. In advance. 

Dr. WIENER. The other point I just would like to make is that, 

because of reimbursement for Medicare versus other things, we 

have drawn this line between hospice and long-term care. But hospice is just good, long-term care and good, long-term care is good 

hospice care. It is one and the same thing. There are lots of people 

in nursing homes and home care who die all the time, and somehow we have to bring the lessons of hospice into those other settings so that we can get those advantages and have good long-term 

care and hospice care in both settings. 

Senator ROCKEFELLER. Senator Wyden? My apologies to you. 

Senator WYDEN. Not at all, Mr. Chairman. And thank you, first 

of all, for doing this hearing. I think we both know that long-term 

care has essentially been the forgotten stepchild in this whole debate, and you have consistently been prosecuting this cause. I know 

that on your watch we are not going to have a health reform bill 

in this session of Congress that leaves long-term care behind, and 

I just want you to know that I am going to be your ally in this 

26 

fight, because you have been at it year after year after year. I also 

want to join in welcoming all the folks from Community Choice. 

[Applause.] 

They have been great advocates. The reality, as they know lots 

better than any member of Congress could know, is we are spending $2.6 trillion on health care in our country this year, and more 

ought to go into community-based services. 

Too much of it is going into institutional care. I am going to be 

Chairman Rockefeller’s advocate in this cause to kind of balance 

the scale. 

Just a couple of questions, if I might. Mr. Scheppach, you have 

been doing good work in these fields for a long time. I want to ask 

you a little bit about Medicaid, because what is so striking about 

Medicaid today is that, if you are poor, you have to go out and try 

to squeeze yourself into one of these boxes in order to get covered. 

Every time something changes in your life, you have to go off and 

reapply, and redo it, and all the rest. It just seems so degrading 

to vulnerable folks. I have always thought it is not in the taxpayers’ interests, either. 

What do the Governors think in terms of Medicaid reform and 

how it fits into the agenda of Chairman Rockefeller? 

Dr. SCHEPPACH. Well, I think that the focus here, of course, was 

on long-term care. I think they do believe that that ought to be a 

Federal responsibility. We think we cut a deal with the Federal 

Government a long time ago, that States sort of took responsibility 

for working poor and children, and the Federal Government took 

responsibility for the elderly population. This is the case with respect to Medicare and Social Security, but it does not work for 

long-term care. 

So I think that, now, obviously it is difficult to do, but over some 

long transition, it seems to me it should be phased into Medicare. 

Having two levels of government provide services is really an awful 

system—no accountability, poor quality, and so on. 

On the other components of it, I think in that case the Governors 

would probably be open to at least discussing taking over some 

more of the acute care if the Federal Government were willing to 

take over more of the long-term care. I think it is a difficult conversation because, as you know, Medicaid has evolved into 50 different State programs, and therefore getting equity, I think, between 50 States in the transferring of programs is, in fact, difficult. 

We would probably agree that the categorical nature of the program is pretty obsolete, that one should move over time, perhaps, 

to some income-based program. Although, again, I think they worry 

about the ability to fiscally sustain the program even if the Federal 

Government were to take over more of long-term care, because I 

think we are really getting to a position now of—I mentioned previously, just over the next 2 to 3 years, the State deficits, this is 

after the stimulus—are clearly over $200 billion. We are very fearful that economic growth is going to be slower, going forward. So 

the fiscal problems, I think, are very significant. 

Senator WYDEN. Let me move on to Josh Wiener. He has been 

doing yeoman work over the years, and particularly looking at 

some of the financing options. What do you think, Josh? What are 

the best ways and tough financial circumstances to try to finance 

27 

this public/private partnership that is going to be so important to 

long-term care? 

Dr. WIENER. Well, I think it really depends on how much money 

you are willing to spend. There is a very broad range of options, 

from simply increasing funding for appropriated programs, such as 

title 20, or Older Americans Act programs. Clearly, the Community 

Choice Act would do a lot to expand home- and community-based 

services. We could go towards a social insurance program, and that 

is an affordable thing to do. Japan has done that, Germany has 

done that, the Netherlands has done that. That would increase expenditures. It would increase the role of government in the program, but it would have the advantage of covering everybody. 

As Dr. Feder has often pointed out, private insurance can do a 

substantial amount, but at the end of the day maybe 20 or 30 percent of the population will have private insurance, if we are lucky, 

and that would only come after very substantial subsidies. 

So, if we are serious about doing something about long-term care, 

then I think we have to start with thinking about what we want 

our public programs to be, fixing Medicaid in a variety of ways and 

trying to move into some ways that recognize that long-term care 

is a normal life risk, and that you should not have to impoverish 

yourself in order to get the services you need. 

Senator WYDEN. I certainly am interested in that kind of approach. I also hope that we will put more effort in long-term care, 

and generally in health reform, in looking at trying to spend the 

existing dollars in the system more efficiently. As you know, on any 

given day something like 10 percent of the population in this country uses more than 50 percent of the health care dollar, and a lot 

of those folks are people with chronic conditions—heart, stroke, diabetes—and often end up needing long-term care. 

Yet, we have not done much to boost doctors and health care providers in terms of the coordination of those chronic cases. You have 

been a master over the years at coming up with innovative ways 

to address financing. I hope, whether it is chronic care or some of 

the other options in long-term care, you can give us some more of 

those creative Josh Wiener ideas as we go forward. 

Let me ask you one question, Dr. Feder, if I could, because you 

have been out in these fields doing good work for a lot of years, and 

that is your thinking about consumer protection. My sense is that 

a lot of the private long-term care insurance, not unlike what we 

were dealing with back in the Medigap days—and Chairman 

Rockefeller remembers that we would find seniors with a shoebox 

full of health insurance policies, and a lot of them were not worth 

the paper they were written on. A lot of these private long-term 

care insurance policies, because they do not have inflation protection, basically do not give seniors much of a benefit. So what is the 

latest thinking in the field about consumer protection in this whole 

area? 

Dr. FEDER. Senator Wyden, actually, I think Josh may know that 

better than I. Josh, you want to go? 

Dr. WIENER. Well, I have testified before this committee and the 

House Ways and Means Committee on numerous occasions, recommending that the two highest priorities are to make mandatory inflation adjustments a requirement for private long-term care insurVerDate Nov 24 2008 14:46 Feb 17, 2011 Jkt 000000 PO 00000 Frm 00031 Fmt 6633 Sfmt 6633 R:\DOCS\64223.000 TIMD
28 

ance policies, because there is no circumstance in which it makes 

sense to have your best financial protection now right after you 

have bought a policy, after you have been medically underwritten 

and are healthy. 

Inflation, especially in private long-term care insurance, is very 

important because you are buying a policy 20 or 30 years in advance of using it, so, without inflation protection, the policy is nearly worthless. I have recommended that. The industry has resisted 

it because it usually roughly doubles the premium, so it reduces 

sales, and they would rather have the sale and hope that people 

will buy additional coverage over time. But to me, that is the single 

most important thing that needs to be done. 

The other is establishing some kind of non-forfeiture benefit, 

again, because people are buying policies 20 or 30 years in advance. Even if you have relatively low lapse rates, compounded 

over 20 or 30 years, that gets to be a very large number, and it 

means that people will have overpaid for the protection that they 

have received. They ought to be able to get something back. 

The industry says it would cost too much to do it, but at the 

same time they say lapse rates are not a problem. Those two things 

cannot go together. If it is not a problem, then it should not cost 

much to put in the benefit. 

Senator WYDEN. Sensible ideas. 

Dr. Feder, did you want to add anything? 

Dr. FEDER. Yes. I just wanted to comment and to thank Josh. 

But what Josh is describing to you are improvements in these policies that likely limit the number of sales because they are going 

to raise the price, and even when the inflation protection goes in, 

it is an estimated amount of inflation. It is not guaranteed to actually be what the price is. We are all trying to slow cost growth, but 

you are not guaranteed. 

So even when you improve these policies, the limitations to them 

remain substantial and, most important, the number of people who 

will be able to take advantage of them remains relatively modest 

and at the upper end of the income scale, which is why it is so important to move forward with a public insurance or public program 

so that we really do protect everybody. 

Senator WYDEN. It is a fair comment. The National Association 

of Insurance Commissioners has raised a lot of the same concerns 

that Dr. Wiener and Dr. Feder have raised, too. 

The only other point I wanted to make, Mr. Chairman, is I am 

so glad that you also brought up hospice, at least during the part 

that I was here. One of the things that, for the life of me, I cannot 

figure out is why in the world someone would have to give up curative care in order to get hospice care under the Medicare law. I 

have actually put that into the legislation I have that we talked 

about, and you are going to be our champion on the hospice and 

the long-term care issue. I would like to work with you to make 

sure that we do not put Americans in this ridiculous Hobson’s 

choice, where they have to literally give up the prospect of curative 

care to get the hospice benefit. The hospice advocates are very 

much in favor of that, and I would like to work with you on it. But 

I feel badly about coming in late, and just look forward to working 

with you, Mr. Chairman. 

29 

Senator ROCKEFELLER. You are wearing your Alzheimer’s tie, so 

all is forgiven. [Laughter.] And I think that point is one that I was 

trying to make earlier: what is that point? Is there that point or 

is it just a non-point? 

Dr. FEDER. My recollection of the rules is that there has to be 

a presumption of death within a certain period. 

Senator ROCKEFELLER. Made by? 

Dr. FEDER. Made by the doctor. 

Senator ROCKEFELLER. A doctor? 

Dr. FEDER. I believe it has to be certified. I assume it is by a 

physician, but I would have to check that for you. I am getting 

nods. 

Dr. WIENER. That is correct. You have to have 6 months to live 

or less. 

Senator ROCKEFELLER. Yes. All right. 

Well, look. This has been terrific. I thank all of you. I thank 

ADAPT for being here. I thank everybody for being so patient. This 

went on longer than I thought, but not longer than I wanted. I am 

grateful to you, Senator Wyden and Senator Cantwell, for being 

here. 

It is my conclusion, it is like the stimulus package. We may have 

to do another one, the President says, and everybody blanches. We 

basically barely got the first one through, and that was, as you 

know, by one vote, or two votes. Maybe it was not enough. Now 

there is the question of the banks. People say, well, you cannot do 

banks because they have AIG on their mind. But the banks have 

something to do with housing and, if they do, is that not something 

that you have to do? 

Then what do you do about energy? There is a particular technology that takes the carbon release from burning coal from 70 percent immediately down to 5 percent, which is where nuclear power 

is, which is considered a clean source of energy. So, that is going 

to cost money. Everything is going to cost money. Health care is 

going to cost money. If we do long-term care, that is going to cost 

money. 

People talk about cost containment, and in a funny way it is an 

oxymoron, because you cannot do what you need to do to have a 

health care system which keeps, overall, people healthier, therefore 

more productive and all the rest of it, and does early screening and 

prevention and advanced directives, and all of those things. You 

cannot have that without spending more money. Yet, we always 

think we can do things by somehow saving, and we cannot. We 

cannot. That is a fundamental decision that Americans are going 

to have to face. 

Then they look at their long-term grandchildren and great-grandchildren. Then I look at climate change. I think, well, if we have 

not done anything about climate change by the year 2060, all of my 

children are going to be under water, so they are not going to have 

to worry so much about debt. So, I mean, everything is relative. I 

think this is our opportunity to strike at all of it to make a whole 

solution, and I think it is the only way to be done. I think the 

President is right about that, not because I am a Democrat, but because I think he is right. A lot of my colleagues do not, so we will 

30 

see what happens. But you have certainly made your contribution, 

and your passion is well known. I thank you all. 

This hearing is adjourned. 

[Whereupon, at 4:40 p.m., the hearing was concluded.] 

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(83) 

COMMUNICATIONS


64223052.eps
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Æ 


64223072.eps