The Role of the Public Sector in Financing Long-term Supports Long-term Care Financing Advisory Committee May 15, 2009.

The Role of the Public Sector in Financing Long-term Supports

Long-term Care Financing Advisory Committee

May 15, 2009

Section I:Policy Framework

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Restatement of high-level goals

• Goal of Community First• Empower and support people with disabilities and elders to live with

dignity and independence in the community by expanding, strengthening, and integrating systems of community-based long-term supports that are person-centered, high in quality and provide optimal choice

• Goal of Long-term Care Financing Advisory Committee• Identify options for reforming the financing system for LTS to

support a range of LTS and a sustainable mix of funding/support

• Goal of today’s Public Financing Session• Begin to assess capacity of public financing system to support

current and projected LTS needs

• Identify reality and limits of current public financing system and opportunities for improved/alternative public financing

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Working assumptions from previous meetings• Focus is on increasing access to & choice of community LTS

– While assuring access to needed facility-based care

• Financing LTS requires both public & private strategies

– Some form of core public financing is needed

– More private sector contribution/participation is necessary

• Financing strategies need to differentiate between what is insurable/not

• Scope of people/services is a subset of people with disabilities, but those with “LTS needs” (e.g., assistance with self-care and everyday tasks)– 10% of overall population; most served at least partially through

state programs

• Strategies must address federal & state-based opportunities4

Recap of Payer MixPublic LTS Financing - Mainly Medicaid

• Most LTS needs are met through private, individual and informal mechanisms and will continue to be (62-85%*)

• Medicare payments for long-term need for supports 0%

• Massachusetts state financing for LTS is spread across many agencies’ budgets

– Across all agencies, approximately $2.89B for community LTS and $2.13B for institutional LTS was spent in FY07-FY08

– The State gets FFP for all qualifying services to any Medicaid-eligible person all is recognized by CMS as federally-funded Title XIX spending

– LTS expenditures ineligible for FFP supplement “Medicaid” in 2 ways• around financial eligibility limits to access, e.g., ASAP services, and

• around service mix limits; e.g., home budgeting support to DDS clients

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*Depending on which study you rely on, how “Informal care” is defined, and whether study included all elders and people with disabilities

Policy questions to keep in mind

• How are we going to reform the public and private financing systems?

• What is the appropriate mix of individual vs. public responsibility?

• When can private insurance (or other private mechanisms) best provide coverage; when can government best provide coverage?

• What mix of incentives/mandates are necessary to achieve change?

• What is the political tolerance for the various alternatives? Is that an important part of our calculus?

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Section II:Medicaid Eligibility and Coverage Rules for LTS in Massachusetts

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Overview of Section II1. Medicaid eligibility and service coverage rules provide robust

LTS for needy elders and most people with disabilities

2. Many current Medicaid rules impede Community First goals

3. Specific examples of eligibility and coverage gaps/limitations

4. Summary of key gaps/limitations

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Medicaid eligibility for elders and people with disabilities• Elders (age 65+)

• At or below 100% FPL (with assets below $2,000 if single or $3,000 if couple) [access to community-based state plan services]

• Elders with income above 100% FPL after they spend-down their income to $522/month or ~58% FPL

• If need nursing facility (NF) level of care (NF or HCBS waiver) – special rules (discussed later)

• People with disabilities• If considered disabled by SSA or state criteria, no income or asset limit (but

income determines whether you get MassHealth Standard or CommonHealth)

• Sliding scale premiums apply at higher income levels

• One-time spend-down for non-working disabled adults in CommonHealth

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Medicaid coverage of LTS for eligible elders and people with disabilities • Medicaid state plan covers various medically necessary services:

• Institutional care (NF, ICF-MR, chronic/rehab hospital)• Community-based services: personal care services (special eligibility rules), home

health, private duty nursing, adult foster care/group adult foster care, adult day health, day habilitation, hospice, therapies, prosthetics, orthotics, DME/oxygen

• 4 HCBS Waivers* cover a wide range of additional community-based supports only for targeted groups at an institutional level of care (frail elders, adults with MR, adults with traumatic brain injury, children with autism):

• Examples: homemaker, respite, individual supports, companion, chore, home delivered meals, laundry, medication management, NF transition assistance, grocery shopping and delivery, transportation, residential habilitation, assistive technology, supported employment, home adaptation…

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*Funded through state agencies, but expenditures eligible for federal Medicaidreimbursement.

Other important MassHealth policies related to LTS coverage• MassHealth maximizes members’ access to other

coverage (Medicare, employer-sponsored insurance)

– MassHealth provides premium assistance and/or other cost-sharing for these individuals

– For MassHealth Standard and CommonHealth members, MassHealth “wraps” the other coverage (provides Medicaid-covered services that the other insurance does not cover)

– CommonHealth enables disabled children and working and non-working disabled adults of any income (with no asset limit) to “buy-in” to MassHealth by paying sliding scale premiums based on income

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Some current Medicaid policies impede Community First goals

• Patchwork eligibility rules for Medicaid and state programs leave gaps in coverage and access to key services

• Medicaid institutional bias drives utilization to NFs

• Other state and federal rules limit eligibility and coverage– Requirements regarding spend-down and treatment of spouse’s

income– Obligations regarding state plan coverage – Requirements regarding demonstration waiver budget neutrality

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Examples of current system limitations

• Age: 60+ are entitled to services, while most < 60 are not (unless MR, TBI, some LTS in MassHealth)

• Functional status: PCA not available to MassHealth members with mental or cognitive disabilities who do not require hands-on assistance

• Clinical status: Adults with developmental disabilities, but not MR, are not eligible for DDS services

• Also discrepancies by residency, legal class

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Income limits for eligibility are much lower than income needed to pay for supports

Most services have income limits of 200% of the federal poverty level (or 300% of SSI, which is roughly equivalent). Fewer than half of people with disabilities meet this eligibility requirement; many of the remaining 57% who need supports or services in the community cannot afford to pay.

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N = 5,847,225 N = 571,116

MassHealth financial eligibility rules create significant access inequities

Income Assets

$0

$2,000

$4,000

$6,000

$8,000

$10,000

Ass

et L

imit

$109,560

Community spouse of nursing home resident

CommonHealth

Elderly couple, not N.F. level of care

Single

0%

50%

100%

150%

200%

250%

300%

350%

Perc

enta

ge o

f Fe

dera

l Pov

erty

Lev

el

maximum

minimum

MassHealth income standard for deductible Elderly eligibility, MassHealth Standard Non-elderly disabled eligibility, MassHealth Standard Community spouse of nursing home resident CommonHealth

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Medicaid eligibility rules favor institutional care

* To be at a nursing facility level of care, an individual must require one skilled service daily, or require at least three nursing services or services to assist with ADLs

… and require "nursing facility level of care"*

If You Are

Age 65+

Age 60-64

Age <60

Age <60

with a physical disability (SSI standard)

with a physical disability (SSI standard), except TBI

To qualify for a nursing home To qualify for comprehensive HCBS

with a traumatic brain injury

N.A.†

† Only limited HCBS are available for people under age 60. (Exceptions: Kaileigh Mulligan, PACE)

‡ This is a range of monthly public nursing home rates, less a personal needs allowance of $72.80. (Other deductions may also apply.) May still be eligible for nursing home above this level, with a deductible.

$2,686 $2,000

$10,268

Your monthly income must be less than‡

Your assets must be less than

No cap on enrollment

$2,686 $2,000

$10,268

Your monthly income must be less than‡

Your assets must be less than

No cap on enrollment

$2,686 $2,000

$10,268

Your monthly income must be less than‡

Your assets must be less than

No cap on enrollment

$2,686 $2,000

$10,268

Your monthly income must be less than‡

Your assets must be less than

No cap on enrollment

$923 $2,000

Your monthly income must be less than

Your assets must be less than

Current TBI waiver enrollment: 91 (capped at 100)

˜ No asset limit for the State-only (non-waiver) portion of Enhanced Community Options Pgm (5,000 members)

$2,022 $2,000

Your monthly income must be less than

Your assets must be less than˜

Enrollment capped by waiver; total enrollment (age 60+) approx 12,000 as of 3/08

$2,022 $2,000

Your monthly income must be less than

Your assets must be less than˜

Summary of key gaps/limitations

1. Some people who should have access to publicly-funded LTS don’t due to eligibility factors:• financial status, functional status, type of disability or age

2. For those eligible, obstacles to accessing LTS, in setting of choice or “right” setting, still exist due to: • HCBS v. institutional LTS-bias

• Need for non-medical or quasi-medical LTS

• System navigation challenges

• LTS not available within affordable housing options

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Section III:Medicaid Policy Innovations

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Medicaid can be a powerful tool for innovations in funding LTS

State plan mechanisms, 1115 & 1915(c) waivers, can:• Expand coverage to populations with LTS needs• Streamline eligibility rules• Expand/target the services offered to eligible people• Promote flexibility in choice of LTS• Prioritize allocation of finite resources (by setting/service, by

acuity)• Leverage federal or private dollars

But:• Must consider entitlement expansions and budget limits• Each mechanism has advantages and constraints

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Medicaid policy innovations

1. “Rebalancing” initiatives that focus on moving financing to/expanding community LTS capacity

2. Coordinated/integrated financing and service delivery

3. Consumer-direction of LTS

4. Long-term Care Partnership programs

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Rebalancing initiatives maximize access to community-based LTS

• “Benchmarking”/affirmative shifting strategy• State legislative mandate – e.g., required reduction in NF beds; funding

targets; single budget for all LTS (OR, WA, VT)

• Expanding coverage of people or services• Comprehensive statewide 1115 Waivers (VT, RI)

• Enable coverage of more people, coverage of more community-based LTS, delivery system flexibility, changes to financial and clinical eligibility rules, simplify system navigation

• Administrative/regulatory changes• Presumptive eligibility for HCBS (WA, NE, PA)

• Ensuring that community LTS are available in diverse community settings (e.g., individual homes, assisted living, other settings (WA, OR)

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Coordinated/integrated systems promote access to needed LTS, minimizes cost-shifting

“Medical problems create [LTS] needs, and [LTS] needs exacerbate medical conditions” - Robert Kane

• Medicaid and Medicare: different coverage rules and provider networks result in parallel, uncoordinated care delivery for dual eligibles and cost-shifting between programs

• Integrate financing with care delivery/services to align incentives (fee-for-service or managed care; capitated or not)

• Social HMOs, Special Needs Plans, PACE, Medicare-Medicaid integration programs (e.g., MA’s SCO; MN Senior Health options)

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Consumer-direction of LTS promotes independence and flexibility in LTS

• Cash & Counseling model: option to manage an individual budget and determine a service mix that best meets your LTS needs (15 states)

• MA: some components available in EHS and EA (e.g., MassHealth PCA program, DDS programs, EOEA Home Care program)

• Pros: consumer control/preferences; flexibility (services tailored to needs); incentive to use LTS efficiently

• Cons: consumer protections concerns re: budget adequacy, quality of care, & management support and assistance; does paid care replace unpaid care?

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Long-term Care Partnerships leverage private dollars• Public-private partnership between Medicaid and private LTC insurance

companies

• Delay/avoid Medicaid-covered LTC by purchasing state-approved private LTC insurance policies – after policy benefits are exhausted, individual needing more LTS can qualify for Medicaid under special eligibility rules (asset protection: disregard assets up to certain level at eligibility and estate recovery)

• Started as a four-state demonstration in 1987 (CT, NY, CA, IA); option expanded under DRA in 2005

• Pros: potentially enabling states to spend fewer Medicaid dollars for these individuals over the long-run; minimizes impoverishment (spend-down of assets) for Medicaid eligibility

• Cons: targeting right consumers? Attract modest income at risk of spending down to Medicaid or higher income not at risk?

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Section IV:Committee Business

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Committee Business

• Dr. Connie Garner visit• Day: Friday, May 22nd (next Friday!)• Location: 29th Floor of One Beacon Street (MassHousing)

• Need list of names for security access• Planning for meeting

• Next Meeting: • Day: Thursday, June 18th • Location: Landmark Center

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