GOP, with some Dems, targets long-term care provision

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Michael Hardy
Michael Hardy, 67, a retired Minneapolis resident, and his wife are paying $266 a month premium for a long-term care insurance coverage, a decision based in part on Hardy watching nursing home care costs of nearly $10,000 a month deplete his father's life's savings.
MPR Photo/Dan Olson

Even before Tuesday's election gave Republicans control of the U.S. House, Republicans and some Democrats in Congress had painted a target on the federal health care overhaul.

They want it repealed or at least changed -- and they've singled out a tiny provision which addresses a very big issue: how we will pay for our care when we get old.

While it's in the law, the long-term care provision could be described at the moment as more of an idea than a fact, as the language for how it will work is still being written.

It might be up and running by 2012, and the first benefits won't be paid for years.

And that's only if it survives the threatened repeal effort.

Even with all those unknowns, the idea of a national, voluntary, long-term care insurance plan that everyone qualifies for has some people excited.

One reason is because it offers an option for nursing home care, a huge emotional and financial drain for many families.

Take the case of Michael Hardy's parents.

Hardy says they worked hard to make a comfortable life for themselves and their children. And then dad's health failed, and he had to move to the nursing home.

"My dad is a big man and mom weighs 110 pounds and just couldn't take care of him in the home anymore," he said.

Hardy, 67, is retired and lives in north Minneapolis. His mother and father, both in their 90s, live 1,600 miles away on the East Coast.

Michele  Kimball
AARP Minnesota executive director Michele Kimball says the long term care insurance provision of the health reform act is intended as add-on, not total coverage, and it would be voluntary for employers to offer it to their employees.
MPR Photo/Dan Olson

Hardy laughs to avoid crying at the vision of his mother paying the monthly nursing home bill.

"My poor, old, tight, Yankee mother is making out a check for $10,000 every month and it just, yeah, right in the heart it gets you, and it gets her, too," he said.

At that rate, Hardy says his father's savings will be gone in a year and he'll go on public assistance -- Medicaid -- and federal and state taxpayers will foot the bill.

If Michael Hardy's parents had long-term care insurance, his father might have been able to use it to pay for care in his home, saving him, and eventually taxpayers, thousands of dollars a month.

His parents' plight moved Hardy and his wife just over a year ago to plunk down $266 dollars a month, or about $3,150 a year, for long-term care insurance. The policy's lifetime benefit is capped at $238,000.

American Association for Retired Persons Minnesota director Michele Kimball says coverage can help pay the cost of staying at home.

"Someone to do your grocery shopping for you if you are home-bound, a home health aid, perhaps you need someone to come in to clean your house," she said.

Right now most long-term care insurance in this country is sold by for-profit, private-sector companies, but most refuse to sell policies to people with existing health problems.

The national, long-term care insurance program would change that.

The Community Living Assistance Services and Support Act would be voluntary for employers and their employees who wanted to pay into it. Employees would have to wait five years before they could claim benefits. Many private insurance plans require policy holders to wait a year before eligible for benefits. People with health problems would not be excluded.

Minneapolis attorney Keith Halleland, who specializes in health care issues, said some kind of national long-term care insurance is a good idea.

The problem with the provision in the health care overhaul, Halleland said, is the details have yet to be written.

Keith Halleland
Minneapolis attorney Keith Halleland, who advises clients on health care policies and regulations, says a national voluntary long term care insurance is a step in the right direction but he worries that the number of sick people in the program will outnumber those who are healthy which may doom the insurance to insolvency.
MPR Photo/Dan Olson

"It's going to have to be cheap enough for people to buy in, right, I mean, we're not going to do it unless we think it's worthwhile," he said, "but it also has to pay for enough that we think it's a good deal and those things remain to be seen."

One estimate is a bare-bones, national long-term care insurance plan would pay a minimal home care benefit of $50-75 dollars a day.

That's not enough, Halleland said. He said he worries the program will self destruct because too many sick people and too few healthy ones will choose to join creating more expenses than revenue.

But Halleland is convinced long-term care insurance is important. He has it for himself and his wife.

The trade group for the long-term care insurance industry says about 8 million Americans have already bought coverage from for-profit companies. An estimated 15 million more are eligible.

In addition, hundreds of thousands of public sector workers already have coverage through the federal or state government employers. However, the trade group points out tens of millions more Americans aren't eligible for long term care because many of the companies don't sell to people with existing medical problems.

Why aren't more people buying in?

The AARP's Michele Kimball says they don't want to face the realities of growing old.

Denial, Kimball says, does not change the fact that one serious health problem like a stroke can devastate a person's finances.

"It is the very biggest, most expensive life changing event that can throw any hardworking, hard saving family into poverty quickly," she said.

Even before the election, a group of Republican senators said they'll try to repeal the long-term care provision.

They argue it competes with what the private sector already offers.