How Much will Medicaid and Medicare Budget Cuts Save?

Trump’s 2021 fiscal year include major Medicaid and Medicare budget cuts which will have a big impact on those programs if successfully implemented.

President Trump’s proposed fiscal year 2021 budget will include substantial Medicaid and Medicare budget cuts.  The HHS budget notes that taxpayers could save $756 billion in Medicare through 2030 by reducing fraud and waste and relying on lower payments to hospitals through “site-neutral” payment policies. For Medicaid, the Health and Human Services Department’s annual budget proposal presumes that expanded work requirements, tighter beneficiary eligibility screening and capped or “block grant” state funding will all be in effect.  These types of Medicaid and Medicare budget cuts will have a big impact, if successfully implemented.

Also for references, Medicaid and Medicare accomplish different goals, so see here for the differences.  https://www.galliganmanning.com/practice-areas/elder-law/

These approaches show how the White House will change entitlement programs in an election year, if Trump’s budget is approved. His administration would like to see able-bodied adults who enroll in Medicaid to have a work requirement imposed. If this requirement was implemented, it would probably decrease the population of recipients and more of those receiving benefits would be physically unable to work.

“As part of the President’s Health Reform Vision, Medicaid spending will grow at a more sustainable rate by ending the financial bias that currently favors able-bodied working adults over the truly vulnerable,” the HHS budget document said.

The Centers for Medicare & Medicaid Services (CMS) has okayed 11 state work requirement programs and is in the process of looking at nine others. These state work mandates are being challenged in court, but the administration still contends they’ll save Medicaid $8 billion in 2021 alone.

CMS would like to implement Medicare’s “site-neutral” payment policy. This would pay the same lower rate for services whether provided at a doctor’s office or in a hospital outpatient setting. It’s a priority to see it go into effect. However, a federal court scrapped the policy last year, saying it was a programmatic overreach. Nonetheless, the Trump administration again implemented it this year and is facing more lawsuits from the hospital industry. The Trump White House says the site-neutral Medicare payments would save more than $164 billion over 10 years.

The administration also wants to cut Medicare payments for doctors’ residency training programs and hospitals’ uncompensated care. Those moves would save about $52 billion and $88 billion, respectively, over 10 years, the budget document explains.

The administration also estimates that overhauling Medicare payments for care after a patient leaves the hospital would save more than $101 billion over the next 10 years.

We’ll continue to watch these developments as they will have a big impact on Medicare and Medicaid programs.

Reference: Bloomberg Law (Feb. 11, 2020) “Trump Projects Saving Billions From Medicare, Medicaid Policies”

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Choosing a Nursing Home

Choosing a nursing home is more than looking at the website and brochure, examine the data on the homes before you need them to find the right place for you.

Choosing a nursing home may be a daunting task, but the best time to shop for a nursing home is when you do not need one. If you wait until you can no longer safely or comfortably live on your own, you probably will not be in a position to do a lot of legwork to investigate facilities. Do your research well ahead of time, so you know the nursing homes in your area that provide high-quality care and, more importantly, the ones that have significant problems.

As AARP suggested in a recent article, you need to know how to spot problems at nursing homes when comparing and choosing a nursing home.  The marketing brochure, website and lobby might be lovely, but you should base your decision about a long term care facility on much more data than those things.  My article on what to look for at assisted living facilities may also be helpful: https://www.galliganmanning.com/checklist-when-visiting-assisted-living-facilities/ Here are some tips on how to dig for possible issues and resources to review when choosing a nursing home.

  • Online search. Check out the facility’s website to get an overview of the services it offers and the industry affiliations or certifications it has. Look at the daily menus to see if the meals are nutritious and have enough variety. Most people would not enjoy eating the same main course two or three times a week. Look at the activities calendar to see if you would be happy with the planned social events. On some websites, you can view the floor plans of the resident rooms.
  • Ask your primary care doctor to name a few facilities he would recommend for his parents, and those where he would not want them to live.
  • Local Office on Aging location. Every state has an Office on Aging. Contact them to get as much information as you can about safety records, injuries, deaths, regulation violations and complaints about local facilities.
  • Your state’s Long-term Care Ombudsman (LCO). Every state also has an Ombudsman who investigates allegations against nursing homes and advocates for the residents. Your state LCO should have a wealth of information about the facilities in your area.
  • State Online Database or Reporting System. Some states have online databases or collect reports about nursing homes.
  • Medicare’s Nursing Home Compare website. Medicare maintains an online tool, Nursing Home Compare, that provides detailed information on nursing homes. Every nursing home that gets any funding from Medicare or Medicaid is in this database. You can enter the name of a specific nursing home or search for all the facilities in a city or zip code. The tool includes information about abuse at long-term care facilities. On the webpage, you can explore the Special Focus Facility section to find nursing homes with a history of problems.
  • Word of mouth. Ask your friends, relatives and neighbors to recommend a quality nursing home. Personal experience can be extremely valuable in this context.
  • Make a short list of the top candidates. After you collect as much information as you reasonably can, narrow your options down to four or five facilities that best meet your needs and preferences.
  • Visit your top choices. There is no substitute for going to a nursing home and checking it out in person. Pay attention to the cleanliness of the place throughout, not just in the lobby. Give the facility the “sniff” test. Determine whether they use products to mask unpleasant odors, instead of cleaning thoroughly. See whether the residents are well-groomed and wearing fresh, clean clothes. Observe the interaction of the staff with the residents. Notice whether people who need assistance at mealtime, get the help they need without having to wait.
  • Take online reviews with a grain of salt. Fake reviews are all over the internet. If you see a nursing home with only a few reviews, and they are all five stars, be skeptical.  But, hundreds of excellent reviews is a great sign.

Once you gather this information, you will be ready in the event you need to stay in a nursing home for a short recuperation from surgery or longer term.

References:

AARP. “Finding a Nursing Home: Don’t Wait Until You Need One to Do the Research.” (accessed December 5, 2019) https://www.aarp.org/caregiving/basics/info-2019/finding-a-nursing-home.html

CMS. “Find a nursing home.” (accessed December 5, 2019) https://www.medicare.gov/nursinghomecompare/search.html

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Long Term Care Insurance in your Retirement Plan

Include long term care insurance in your retirement plan to protect your legacy from rising costs such as the nursing home, assisted living and in-home care.

Roughly 60% of those turning 65 can anticipate using some form of long term care in their lives, according to the U.S. Health and Human Services Department. It may be a nursing home, assisted living, or in-home care.  Long term care insurance is a great way to cover those costs.

CNBC’s recent article, “Not having long-term care insurance can be ‘the single biggest devastator’ of your financial plan,” reports that over 8 million Americans have long term care insurance. However, the cost of that insurance is rising. This increase is because of several factors, including the fact that companies underpriced their policies for years and misjudged how many would drop coverage.

Because of those rising premiums, some individuals may choose self-insurance. That means saving a pool of money to earmark for long term care. Coverage is also available through Medicaid, which has eligibility requirements.

Even with these increases, you should consider purchasing some form of coverage. This is because not being insured can be the biggest devastator of a financial plan.

The rule of thumb has been to buy LTC coverage at age 55. However, it really depends on your situation. The big unknown is health, and the odds of being able to qualify for coverage at age 60, compared to age 30 or 40 is vastly different.  See here for a fuller description.  https://www.galliganmanning.com/when-should-i-consider-long-term-care-insurance/

A traditional LTC policy will cover the costs of care for a certain period of time, generally up to six years. The amount of coverage is based on the average cost of care for your location. Most insurers offer it in the form of a monthly benefit, and possibly with some inflation protection.

There’s also a hybrid policy that covers long term care costs but becomes life insurance paid to heirs, if it’s not used. Of the 350,000 Americans who purchased long term care protection in 2018, 85% chose the hybrid coverage. It’s also called combo or linked-benefit. The big difference is price: you’ll pay more for the hybrid policy.

Medicaid is another option, particularly if you don’t have a way to save. To be eligible, you must meet financial guidelines.  Medicaid also looks back five years into your finances, so if you have given away any money during that period of time, it may be subject to penalty.

Long term care insurance is a great tool to address rising long term care costs in your retirement.  If you don’t have or can’t get a policy that’s right for you, an elder law attorney can help explore Medicaid or other benefit options to cover your long term care needs.

Reference: CNBC (October 14, 2019) “Not having long-term care insurance can be ‘the single biggest devastator’ of your financial plan”

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