Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, March 26, 1993 TAG: 9303260549
SECTION: EDITORIAL PAGE: A-15 EDITION: METRO
SOURCE: CLARK M. THOMAS
DATELINE: LENGTH: Long
DON'T EXPECT CLINTONS TO TAKE CARE OF YOUR OLD AGE
PRESIDENT CLINTON proposes slashing $91 billion from entitlements over the next four years. Medicare alone would be cut $52 billion, under his plan, and federal Medicaid spending would drop $10 billion.(Add to this the states' matching Medicaid cuts of $10 billion, for a total Medicaid/Medicare cut of $72 billion.)
Even after these cuts, Medicare and Medicaid will cause 50 percent of the growth in the federal deficit over the next four years, according to The Washington Post.
Long-term care is a significant component of Medicaid expenses. Still, reimbursements for Medicaid hardly match actual costs for these services, which is why many of the better long-term care facilities no longer accept Medicaid.
Even though Medicare pays little for long-term care, Clinton's budget still would cut out $1.9 billion. Of that total, extra payments for hospital-based home-health agencies would be cut $840 million.
The issue of long-term care is on the table because many families are being devastated by bills exceeding $30,000 for each of several years - in effect, seeing their entire life's savings vanish in a few months or years.
The following facts have been reported by The Associated Press:
President Clinton's health advisers are proposing that the government tax and spend a total of $34 billion over four years to subsidize long-term care and prescription drugs for the elderly. The transition report recommends raising premiums on Medicare for people with incomes over $100,000, which would raise about $9 billion over four years.
The wish-list program would shift some spending from nursing homes to "community-based services" providing medical care and other assistance to people living in their own homes. Not only the elderly would be helped. Much of the money would go to the disabled, mentally retarded, developmentally disabled and people with AIDS.
In 1991, the government paid $114 billion in medical expenses on behalf of Medicare patients. Expenditures are expected to grow to more than $302 billion a year by the end of the decade.
Oregon's revolutionary health-care rationing plan could be scuttled by sharp opposition to any new state taxes. Their plan would expand Medicaid coverage to 120,000 of the state's working poor, but not pay for every need and technology.
The price tag for this program is just $100 million, and Republicans and others are lining up against it. (Interestingly, 120,000 times 50 yields just 6 million, or about 30 million fewer people than Clinton would like to additionally insure.)
The national debt exceeds $4 trillion, more than $17,000 for every man, woman and child in America. Even Clinton's most optimistic projections will merely reduce the growth of, not eliminate, the annual deficit over several years. Only later would the national debt itself be tackled.
The strongly opposed Oregon program represents just one state. However, if we multiply $100 million by 50 states, the national price tag to ration health care for just 6 million people would be $5 billion.
In light of what happened to the Catastrophic Health Care program (which was rolled back by senior opposition to increased taxes), and in light of all the other outstretched hands in Washington, what is the probability of any meaningful increase in federal long-term care payments?
Everybody wishes that long-term care needs did not exist. Nobody likes to be frail and disabled. However, demographics are changing in America: More people are living to 85 years or older. At the same time, more "baby boomer" children are sandwiched between trying to provide for their children's college, their own retirement planning and their parents' long-term care expenses.
And then there is the "baby buster" generation that will be asked to shoulder an even greater demographic burden, plus the massive debt. Fortune magazine reports that 30 percent of the federal budget goes to seniors, who represent just 13 percent of the U.S. population. By 1998, the elderly's bill is expected to climb to about $650 billion in current dollars - a staggering 43 percent of the budget.
The Pepper Commission stated that a minimal home health-care program would cost $45 billion, and a meaningful nursing home benefit would add another $20 billion. This is on top of President Clinton's proposal to spend from $30 billion to $90 billion each year to add coverage for the 37 million Americans without health insurance. That's up to $155 billion more in new taxes each year. With the budget-slashing frenzy in Washington, where in Congress will those big bucks votes be found?
According to The Washington Post, President Clinton's advisers have told him it is virtually impossible to provide health care to Americans any time soon if he wants to finance it by using savings from overhauling the system, as he promised in his campaign.
Clinton could either delay universal coverage until 1997, or begin to provide it now - and count on another increase in government spending of up to $175 billion over the next four years.
However, Clinton already has said he will cut, not increase, Medicaid and Medicare entitlements. Only in an Alice-in-Wonderland world is it possible to reduce and expand at the same time.
Back to Oregon, where the legislature is gagging on just a $100 million bill for expanded health care . . . the equivalent one-state tax increase needed to raise $175 billion would $3.5 billion, or 35 times more than what may be voted down there.
That $175 billion does not provide for long-term custodial care. Long-term custodial care is another animal entirely.
The nation spends more than $50 billion annually for long-term care. Along with other health-care expenses, annual costs inflate for long-term care so that even an increased emphasis on home care will only blunt the increase in costs.
If somehow the tax money were found to come up with another $34 billion over four years for long-term care and for prescription drugs, what percentage will go to drugs and what to custodial care? Also, if more proposed services are to be made available to other categories of disabled people, what portion will be left for seniors?
Even if every penny went to long-term care for seniors (and zero for prescription drugs and zero for other categories of disabled people), that would leave more than $166 billion, or 83 percent, of the costs of long-term care at today's prices unfunded.
Even if more emphasis is placed on home care and community services, the fact remains that nursing homes are more cost-effective than providing around-the-clock home care: At $10 per hour for a custodial attendant from a home-care agency, the daily cost would be $240, and the annual cost would be $87,600. This is three times what the same care costs in a nursing home.
Yes, some seniors may be able to stay a while longer in their homes with supplemental government help, but not those who truly need around-the-clock care: advanced Alzheimer's patients, stroke victims in wheelchairs, women with crippling osteoporosis, and others.
Expecting a flood of new spending in today's financial climate is like asking a person who has blood gushing from his right arm to donate blood from his left arm.
If the proposed $34 billion tax increase over four years becomes law, the increased threat to some households would be modestly diminished. But the greatest single threat to the financial independence of middle-income and upper-middle-income Americans would not have been removed by such a token federal program.
Even Clinton's dreamers know this fact. That is why The New York Times has reported: "The working group on long-term care evidently wants to encourage people to buy private insurance to cover the costs of such care."
Those with assets to protect who procrastinate in hopes of manna from Washington endanger their financial security. Those who wait risk becoming medically uninsurable before they realize that Bill and Hillary cannot rescue them.
A prudent person with assets to protect will secure a long-term care policy that is renewable even if one's health deteriorates. It could be canceled at any time in the future if the government somehow recruits Santa Claus to the cause.
Clark M. Thomas of Roanoke is a long-term care specialist for AMEX Life Assurance Co.