Changing Aging Blog

Minnesota Can Be a Leader on Long-Term Care Financing
Date: Dec 8th, 2008 6:24am


Eric Schubert

Ecumen’s CEO Kathryn Roberts and Jan Malcolm, CEO of Courage Center and former Minnesota Health Commissioner, had a joint op-ed in today’s Minneapolis Star Tribune on developing a new way to finance long-term care. Below is the text of the

Minnesota Can Be A Leader on Long-Term Care

December 8, 2008

Designer Michael Graves gazed upon the crowd from his wheelchair at a Courage Center fundraiser and exclaimed, 'Welcome to the new normal.' He was referring to the unprecedented number of people living longer with physical challenges -- a reality that means we have to approach how we pay for tomorrow differently.Nearly a quarter-million Minnesotans -- young and old -- use an assistive service or need long-term care. They’re friends, family members and likely someday us. To be a healthy state -- physically and fiscally -- we must mix personal responsibility and the common good to transform how we pay for long-term care, those diverse services that help people maintain well-being amid physical challenges.Medicaid expenditures for long-term care in Minnesota are among the country’s highest -- nearly $2 billion -- and steadily growing. Our government care system is frustrating to navigate and are biased toward institutional living. Per capita, more people here live in nursing homes than do in most states. And while some nursing homes have rebuilt and diversified services to serve people better, others can’t afford to.Medicaid doesn’t cover what it actually costs to provide this care; hence, a continuous cycle occurs of scraping together financial Band-Aids at the State Capitol for a systemically underfunded care system. Cutting services is a short cut to a dead end, even in bad budgetary times. There’s no meat on this bone.
To go beyond this ineffective cycle, we must change how we fund long-term care and connect people to services that work best for them. Long-term care often isn’t care for the long term but rather a mix of services -- from technology to assisted living -- that support self-determination and independence. Needing such services is a risk, not a certainty. But many people -- even diligent savers -- find themselves bankrupted by today’s system. Private insurance policies are a solution for some. But relatively few people purchase long-term care policies, and many with preexisting health conditions can’t get them.To be an innovation state, we must create a comprehensive solution that lets people self-direct services that best fit their needs, increases personal savings and ensures a strong safety net. A Minnesota Empowerment Initiative could do that. It would be a public-private savings plan patterned after a framework in place by the American Association of Homes and Services for the Aging. A national solution would be wonderful, but we can’t afford to wait for Washington. Minnesota must lead.Affordable premiums -- not state general revenues -- would fund the savings plan with low overhead and an all-inclusive risk pool. Benefit levels would provide for a foundational level of services consistent with ensuring the plan’s actuarial strength. After vesting, a person of any age could access funds as demonstrated by physical need. Beneficiaries would self-direct cash benefits. Not all will use the benefit; others will use it longer. An independent state-chartered organization could manage the Minnesota Empowerment Initiative, which we’d see as funded largely by opt-out personal savings. People of very low income could receive a state match to participate. Not all expenses would be covered, opening a door for insurers' supplemental plans adorned with a State Good Housekeeping seal to increase product appeal.The Minnesota Empowerment Initiative would promote consumer choice, ease and equitable benefits; would ensure a safety net for those in poverty; would reward innovation, efficiency and competition; would integrate medical care and community-based services; would bolster family and informal caregivers, and would promote personal and state financial responsibility. Most importantly, however, it would allow people to access services and care in a place that they most want to call home. And that’s a new normal Minnesota can and must achieve.

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