[Senate Hearing 111-64]
[From the U.S. Government Publishing Office]
S. Hrg. 111-64
HEALTH CARE REFORM IN AN AGING AMERICA
=======================================================================
HEARING
before the
SPECIAL COMMITTEE ON AGING
UNITED STATES SENATE
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
WASHINGTON, DC
__________
MARCH 4, 2009
__________
Serial No. 111-2
Printed for the use of the Special Committee on Aging
Available via the World Wide Web: http://www.gpoaccess.gov/congress/
index.html
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SPECIAL COMMITTEE ON AGING
HERB KOHL, Wisconsin, Chairman
RON WYDEN, Oregon MEL MARTINEZ, Florida
BLANCHE L. LINCOLN, Arkansas RICHARD SHELBY, Alabama
EVAN BAYH, Indiana SUSAN COLLINS, Maine
BILL NELSON, Florida BOB CORKER, Tennessee
ROBERT P. CASEY, Jr., Pennsylvania ORRIN HATCH, Utah
CLAIRE McCASKILL, Missouri SAM BROWNBACK, Kansas
SHELDON WHITEHOUSE, Rhode Island LINDSEY GRAHAM, South Carolina
MARK UDALL, Colorado
KIRSTEN GILLIBRAND, New York
MICHAEL BENNET, Colorado
ARLEN SPECTER, Pennsylvania
Debra Whitman, Majority Staff Director
Michael Bassett, Ranking Member Staff Director
(ii)
C O N T E N T S
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Page
Opening Statement of Senator Herb Kohl........................... 1
Statement of Senator Mel Martinez................................ 3
Panel I
Statement of Thomas Hamilton, Director, Survey and Certification
Group, Center for Medicare and Medicaid Services, Washington,
DC............................................................. 5
Statement of Karen Timberlake, Secretary, Wisconsin Department of
Health Services, Madison, WI................................... 26
Statement of Holly Benson, Secretary, Florida Agency Fore Health
Care Administration, Tallahassee, FL........................... 31
Panel II
Statement of Henry Claypool, Washington Liaison, Public Health
Institute, New York, NY........................................ 43
Statement of Melanie Bella, Senior Vice President for Policy,
Center for Health Care Strategies, Hamilton, NJ................ 58
Statement of Judy Feder, Senior Fellow, Center for American
Progress, Washington, DC....................................... 64
APPENDIX
Prepared Statement of Senator Robert P. Casey, Jr................ 85
Testimony of Richard Grimes, the President and CEO of Assisted
Living Federation of America................................... 86
Written Testimony of Charles W. Gould, Chief Executive Officer,
Volunteers of America.......................................... 89
Statement submitted by AARP...................................... 94
(iii)
HEALTH CARE REFORM IN AN AGING AMERICA
---------- --
WEDNESDAY, MARCH 4, 2009
U.S. Senate,
Special Committee on Aging,
Washington, DC.
The Committee met, pursuant to notice, at 10:05 a.m. in
room SD-562, Dirksen Senate Office Building, Hon. Herb Kohl
(chairman of the committee) presiding.
Present: Senators Kohl [presiding], Wyden, Udall and
Martinez.
Index: Senators Kohl, Martinez, Udall and Wyden.
OPENING STATEMENT OF SENATOR HERB KOHL, CHAIRMAN
The Chairman. Well, good morning to everybody. It's so good
to see so many of you here today. I know many of you come quite
a long distance to be at this hearing. So we express our
deepest appreciation to each and every one of you who have made
this trip to be with us.
We're pleased to welcome everybody here to this first
hearing on the issue of national health reform. Our message
today is a simple one. Any serious health reform proposal must
address long-term care. With America aging at a rapid rate and
with the high and rising cost of caring for a loved one, it's
crucial that long-term care services are addressed.
Today we'll initiate a conversation about how we can work
together to improve long-term care services while also taking
steps to make them more cost effective. We all know family
members, friends and neighbors who have struggled to recover
from a bout of severe illness or a serious accident and need
care for a prolonged period or even for the rest of their
lives. These individuals need long-term care services and
supports to help them with day to day activities.
But let's be clear that the ultimate goal of long-term care
is to allow older or disabled Americans to live as
independently as possible. However, as we know, one size does
not fit all. Given the variety of circumstances requiring long-
term care, any update to our current system must be flexible,
and must offer choices tailored to everybody's needs. With the
help of our outstanding witnesses today we're going to try to
spark some creative ideas about how this can be accomplished in
a way that will also get costs under control.
Today we'll be focusing most of our attention on the
provision of long-term care through Medicare, a Federal
program, and Medicaid, which is administered jointly by the
Federal and the state governments. Some states have expressed
concern that their aging and disabled Medicaid populations are
swamping their budgets. This financial strain will only worsen.
Yet a handful of states, including my own state of
Wisconsin, are addressing long-term care in a proactive,
thoughtful manner. These states have made important strides in
not only expanding the range of services, but also in
controlling costs. Though it's not easy, it is achievable. It
requires strong leadership and political commitment.
We will hear today from HHS about a range of innovative
grant programs that the Federal Government has created to
provide several states with financial resources and incentives
to broaden the range of Medicaid services offered to roughly a
million people in their homes and communities. However, we need
to make sure that our economic troubles do not lead to
diminished services. The recently enacted stimulus bill
provides states with an additional $87 million dollars in
Medicaid funding. I believe some of this funding should be used
by states to strengthen these popular and vital home and
community-based programs.
We also need to find ways to coordinate and approve care
for the more than seven million beneficiaries who are eligible
for both Medicare and Medicaid, which includes some of the
sickest and the poorest of our citizens. The care that these
dual eligibles receive is very often not coordinated well and
is very costly. Today we'll examine ways to deliver more
comprehensive and fully integrated care at a lower cost.
We should acknowledge that the rising costs of health care
and long-term care do not only affect the government. More than
one-fifth of all long-term care spending comes directly out of
the pockets of individuals and their family members. We also
know that tens of millions of family caregivers provide long-
term care to loved ones every day, yet have little or no access
to support for themselves. As part of our long-term care
strategy, we need to provide support for family caregivers
through entities such as the Aging and Disability Resource
Centers which were pioneered in Wisconsin.
On that note, I recently introduced bicameral legislation
to expand education and training opportunities in geriatrics
and long-term care for licensed health care professionals,
direct care workers and family caregivers. Our country is
facing a severe shortage of health care workers who are well
trained and prepared to care for older Americans. This too must
be addressed by the President and by Congressional leaders as
they move forward with national health care reform. My
colleagues on the Finance and HELP Committees do not have an
easy task ahead. But my hope is that the lessons we learned and
the ideas we generate in this Committee will be a resource for
them.
We thank our witnesses for being here. Before I turn the
microphone over to the Ranking Member, Senator Martinez, I have
a statement from Senator Edward Kennedy.
He writes, ``A major goal of health reform must be to give
our citizens a chance to lead full and independent lives. That
means that reasonable health care should include services to
help individuals maintain their function and prevent
deterioration of their condition, just as it should cover
services for acute illness and injury. So I join Senator Kohl
in expressing the importance of including long-term services
and supports in any health care reform initiative. I applaud
him for holding this hearing today.''
We thank Senator Kennedy for that inspirational message. We
turn now to Senator Martinez from Florida who is the Ranking
Member.
STATEMENT OF SENATOR MEL MARTINEZ, RANKING MEMBER
Senator Martinez. Thank you, Mr. Chairman. I wanted to
welcome all of you who've joined us here today for this
important hearing. I want to thank Chairman Kohl for calling
this hearing and focusing attention on this very important
issue. The issue of what we here at the Federal level can do to
enhance and improve long-term care is a very timely subject.
The issue of sustainable quality and long-term care in
America is an important issue for most states. For states like
Florida it's absolutely a vital issue. Looking at the
demographic you will see the percentage of Floridians over the
age of 65 is nearly 40 percent higher than the national
average. The number of Floridians age 85 and older--those most
likely to need more acute, long-term care services--is nearly
two times the national average.
With the annual growth of Florida's low-income elderly
population at 80 times the national average, more focus has to
be put on long-term care issues and ensuring that the elderly
and disabled will be able to age with dignity and peace of
mind. I believe Florida is a microcosm of what America will
look like in the coming decades. So I look forward to working
with President Obama and my colleagues in the Senate to address
these issues in a bipartisan way.
While reform is desperately needed, we also need to change
the way reform has been talked about in the past. The
discussions of Medicaid reform both here in Washington and in
state capitals tends to involve only four options, cut
eligibility, cut reimbursement rates, cut benefits or ask
Congress for more money. Rather than remaining focused on these
limited choices I think we should begin our discussion with a
focus on what is best for patients. We must look for ways to
improve the consistency and coordination of care to best assist
this vulnerable population.
Ultimately our goal should be to improve the health of low-
income Americans and ensure that those in need of services have
access to the services they need. An improved Medicaid long-
term care program will be able to serve more people with better
results. We should be giving state officials a range of options
to pursue that will improve the delivery of care including
support for innovations which prevent people in need of long-
term care from spending all of their savings and then have no
other option but to go onto Medicaid to access care.
I know that my state of Florida has been working on these
issues and remains focused on finding new ideas to guarantee
success. Florida has chosen to invest in initiatives focused on
ensuring our elderly and disabled will be able to age with
dignity. We must work to transform the health care
infrastructure so that it is focused on the quality of life and
on a person's needs rather than those of state or Federal
accountants.
We ought to build on the innovation occurring in some
states and ensure patients are in control of how and where they
receive services. Florida, like many states, has experimented
with consumer driven and nursing home diversion models of care
delivery with positive results and has saved money while
flattening the growth curve for nursing home bed days. Florida
has one of the original cash and counseling demonstration
states and now has more than 1,000 consumers managing home-
based services to meet their long-term care needs. By focusing
on what is best for each patient and providing flexibility, we
can create a model that works for an aging population in states
across the nation.
I thank you for being here. I thank you for this hearing,
Mr. Chairman. I look forward to hearing the testimony from the
witnesses.
The Chairman. Thank you very much, Senator Martinez. We
will have the privilege today of hearing from experts as well
as many experienced public officials.
Our first witness today will be Thomas Hamilton from the
Centers for Medicare and Medicaid Services. Mr. Hamilton is the
Director of the Survey and Certification Group within the
Center for Medicare and State Operations. He previously served
as the Director of CMS' disabled and elderly health programs.
In that capacity he led the development of Medicaid policies
for low-income elderly and adults with disabilities. For 21
years prior to joining CMS, Mr. Hamilton was one of the
principal architects of the Wisconsin long-term care system.
Our second witness today will be Karen Timberlake. She
serves as Wisconsin's Secretary of Health and Human Services.
Ms. Timberlake provides direction for the state's health
agency, which is charged with ensuring the health, safety and
well being of Wisconsin citizens while also emphasizing
prevention and protecting consumers.
Ms. Timberlake also chaired the Governor's task force on
autism in 2004 and served on the state's group insurance board
from 2000 through March 2007. We welcome you, Madame Secretary,
and look forward to your testimony.
Senator Martinez, our next witness is from Florida.
Senator Martinez. Yes, Mr. Chairman. I want to very much
welcome Secretary Holly Benson, who is here with us today from
Florida. Secretary Benson is a great Floridian and a good
friend, and someone who has a long and distinguished career in
public service.
She has served as Governor Charlie Crist's Secretary of the
Agency for Health Care since 2008, February of 2008. She is
also the former Secretary for the Florida Department of
Business and Professional Regulation.
Before serving on the Governor's Cabinet, she practiced law
in her hometown of Naples. She is a graduate of Dartmouth
University, and has her law degree from the University of
Florida.
Secretary Benson, we're so happy to have you here today.
Welcome.
The Chairman. Thank you. Mr. Hamilton, we'd love to hear
from you.
STATEMENT OF THOMAS HAMILTON, DIRECTOR, SURVEY AND
CERTIFICATION GROUP, CENTERS FOR MEDICARE AND MEDICAID
SERVICES, WASHINGTON DC
Mr. Hamilton. Good morning, Chairman Kohl, Senator
Martinez. Thank you for initiating a national conversation
about improving the nation's long-term care system. Such a
conversation is very timely. Within 10 years the proportion of
elderly people in this country is expected to increase from the
current 13 percent to 16 percent and then to 19 percent a mere
10 years after that.
To draw forth the implications of this trend for our long-
term care system, the U.S. Census Bureau estimates that about
4.2 percent of elderly people require help with activities of
daily living such as bathing, dressing, toileting and
ambulating. But, the need for direct assistance increases more
than threefold to 14.4 percent for those aged 75 plus. Among
the elderly it is precisely the cohort age 75 plus that is
fastest growing.
While the challenges are considerable, so too, are the
opportunities for Federal leadership. So too are the
opportunities for Federal partnership with States and with
members of the aging and disability communities. We have seen
such leadership and partnership before.
In 1981, for example, Congress observed the pioneering work
of a few States such as Oregon, Wisconsin and New York as they
took initiative to demonstrate the feasibility of statewide,
organized, community-based, long-term care systems. Congress
subsequently enacted Section 1915(c) of the Social Security
Act, otherwise known as the home and community-based service
waiver program, to provide Medicaid matching funds and make
such community-based systems a national possibility rather than
simply a local phenomenon. More recently, Congress provided
states with Real Choice Systems Change Grants, year after year,
and enacted a self-directed services option for State Medicaid
plans.
Congress enacted the largest Medicaid demonstration program
in history in 2005, the $1.75 billion dollar ``money follows
the person rebalancing initiative.'' This initiative is helping
States transition to the community more than 36,000 people who
have been residing in nursing homes or other institutional
settings.
Have these partnerships with states made a difference?
Unequivocally, yes. Consider, for example, the problem of
institutional bias in Medicaid. In 1981 the national proportion
of Medicaid funds devoted to community-based care ranged from
10 to 20 percent. The rest was spent on institutional care. By
2007, however, the community care proportion nationally had
increased to 47 percent.
Have these partnerships with states been cost effective?
Yes. To illustrate this point, as the Chairman indicated, prior
to my Federal career I had the privilege of directing the
Wisconsin ``community options program'' from its start in 1981
to 1998. During that time the elderly population in Wisconsin
increased by 30 percent.
But the Medicaid population in nursing homes declined by 17
percent. Community options made a difference. An important part
of the cost effectiveness of community programs is the greater
involvement of family and friends in such programs, engendering
a greater amount of control of the use of funds that the
programs permit people who require long-term care, as in the
programs indicated by Senator Martinez.
As a colleague said to me in 1980 when we were first
designing our program, I don't think we can go wrong trusting
the cost containment instincts of 87 year old widows. He was
right. A few years later I actually found myself visiting with
an 87-year-old widow who went by the nickname of Frenchie.
As we sat around her kitchen table in the trailer in which
she and her husband had raised eight children--the trailer in
which we were helping her age in place--her case manager asked
her, Frenchie, ``how's that new prosthesis working out?''
Frenchie reached down and unsnapped her leg, plunked it on the
kitchen table and said, ``it don't fit too good.'' [Laughter.]
Mr. Hamilton. ``Well,'' beamed her young case manager,
``we'll just get you another one.'' ``No,'' replied Frenchie.
``You've given me enough. You spend that money on someone
else.''
In the January 2009 issue of Health Affairs, Steven Kay
examined this very question of cost containment overall for the
long-term care system and reached a similar conclusion about
the cost containment effects of community programs nationally.
Sadly there remain serious problems. While a few states devote
up to 73 percent of their long-term care dollars to community
supports, in many other states the proportion is less than 30
percent. In one state it is a mere 13 percent.
There are also serious challenges to the ability of some
community programs to function as true, effective alternatives
to institutional care. Nursing homes, after all, are obliged by
law to offer care that is comprehensive and reliable, and
operates in a system in which complaints are investigated by
independent, trained individuals with authority to require
correction if the complaint is substantiated. Effective
community programs match those attributes and more. They tend
to be comprehensive with a wide array of potential services and
supports.
These programs also tend to be organized and individually-
tailored programs, organizing what can otherwise be a confusing
array of community services. They offer the beneficiary a
coherent package of understandable supports tailored to each
person's needs and preferences. They offer the ongoing help of
a case manager to access the services they need and resolve any
problems that might arise.
Effective programs are community integrated. They promote
active participation and community life and the maintenance of
relationships with family, friends and community members. For
younger people with a disability, they support employment such
as helping with needed transportation to the job site.
They are person centered. The programs make the elderly
person, or a person with a disability, the center of services,
funding and decisionmaking. This is the essence of ``money
follows the person'' rather than the person being required to
live where the money is.
They tend to be cost effective and offer flexible funding.
By maintaining the involvement of family and friends, providing
flexibility in the use of funds in a manner that promotes cost
effective solutions, and keeping decision-making close to the
individual, community programs can provide very cost effective,
long-term care that have helped states restrain the growth of
Medicaid expenditures.
Last, they tend to be quality committed. The programs have
internal quality improvement systems, formal mechanisms by
which complaints must be investigated. A formal system by which
independent, trained individuals visit with program
participants in their own homes to review the quality of care,
first hand.
Chairman Kohl, Senator Martinez, thank you for the
opportunity to share these thoughts with you today. I would
welcome any questions you may have.
[The prepared statement of Mr. Hamilton follows:]
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The Chairman. Thank you very much, Mr. Hamilton. Ms.
Timberlake.
STATEMENT OF KAREN TIMBERLAKE, SECRETARY, WISCONSIN DEPARTMENT
OF HEALTH SERVICES, MADISON, WI
Ms. Timberlake. Good morning, Chairman Kohl, Mr. Martinez
and Committee Members. It's my pleasure to be with you today to
talk a little bit about the future of long-term care. In
particular what Wisconsin has been doing over a decade or more
to really lead the way in this area.
I also would like to take the opportunity to thank you,
Chairman Kohl, for your support of our innovative ``senior
care'' program which offers affordable prescription drug access
for Wisconsin seniors. We look forward to a partnership with
you and with the new Administration to make sure that that
program continues.
Mr. Hamilton has certainly set the stage for you well in
terms of the demographic challenges that are facing Wisconsin,
as they are every other state. What I think we have seen in
Wisconsin-- not only the ``community options'' program that Mr.
Hamilton spoke so eloquently about, but also our innovative
Family Care and Family Care partnership and Aging and
Disability Resource Center programs, is that we can, in fact,
provide more and better care to our frail elders and to people
with disabilities.We can do it in a cost effective way by
focusing on four really key principles.
One is consumer choice, making sure that individual
consumers achieve their desired outcomes. How do they want to
live? How do they want to work? How do they want to spend their
time? That really is the center of what we try to do for people
as we design their long-term care needs.
Second, we focus on access. The ``family care program is in
fact, a Medicaid state entitlement. It serves all who qualify.
In Wisconsin we are well on our way to eliminating the
thousands of person long waiting lists for home and community-
based services.
Third, Family Care and related programs have an emphasis on
quality. We want to make sure that as people are supported in
the community that the care that they receive is of the highest
quality, that their needs are met, and that we make sure that
they are in fact achieving the outcomes that they desire for
themselves.
Fourth, Family Care is cost effective. We actually are able
to serve more people. We're able to eliminate waiting lists
within the confines of our Medicaid long-term care budget which
right now accounts for more than half of the dollars that we
spend on Medicaid. So while the proportion of spending on long-
term care in the Wisconsin Medicaid program is unlikely to
change, the way those dollars are distributed is in fact being
rebalanced from a heavy emphasis on institutional settings to a
much heavier and growing emphasis on community-based settings.
Family Care does all this by combining the dollars that are
available to spend on long-term care services and certain
health care services like home health care, skilled nursing
care where it's needed, mental health services, physical and
speech therapy, putting all of those dollars, if you will, into
one purse that can then be used to design a care plan for each
individual consumer. That care plan is designed with the
consumer's engagement and with a multi-disciplinary care team
that includes in every case a social worker and a registered
nurse. Where the consumer has other needs, other experts are
brought into that care team.
So what we find is again, by putting consumer choice and
consumer desired outcomes at the center, by bringing that
multi-disciplinary care team together, we are able to identify
the most cost effective ways of achieving the outcomes the
individual member desires. For people who are dually eligible
for Medicaid and Medicare, we also have in Wisconsin what we
call the ``family care partnership'' program which takes the
Medicaid long-term care services and also takes acute and
primary care services offered under Medicare and bundles all of
that into a capitated rate that can then be used to provide not
only the long-term care services that people need, but also
fully integrated care management of their medical needs as
well. That similarly is providing excellent support for people
with some of the most acute needs in our state.
The front door to all of these services, if you will, is
our network of ``aging and disability resource centers'' that
many of you have mentioned. The benefit of these centers in our
view is that they really emphasize prevention. So the goal of
this effort really is to make sure that we can provide all the
long-term care services that people need through the publicly
funded system. But a secondary goal, which is just as
important, is that we help people avoid needing those publicly
funded, long-term care services for as long as possible.
So we want people to remain healthy. We want people to
remain independent. We want people to be able to make good
choices about their own assets and how they might choose to
support themselves.
So anyone in Wisconsin is eligible to come to an Aging and
Disability Resource Center to get basic information about long-
term care options that might be available to them. To get
questions answered about prescription drug benefits, about ways
to access good preventive services. They also can have a
benefits counseling and assistance in enrolling in the various
benefit programs that are available to this population. Then
should they be eligible for Family Care or Family Care
Partnership the Aging and Disability Resource Center will help
them actually enroll in those programs. So we think that
further expansion and further support of Aging and Disability
Resource Centers would be an excellent focus for this Committee
and for the Congress' work as it considers what to do with the
future of Older Americans Act funding.
So as we all know, and I think everyone in the room agrees,
the future of long-term care in this country and certainly in
Wisconsin is not about the nursing home of the future. It is
about the community of the future. It really is a question of
how can we make sure that we can provide the right care to each
individual consumer in their home, if possible, in another
community setting, if possible, while making sure that their
health is maintained, and that their independence is maintained
to the greatest extent possible.
We, in Wisconsin, under Governor Doyle's leadership with
Chairman Kohl's support, are very proud to be among the leading
states in this area. I thank you very much for the opportunity
to speak with you briefly today.
[The prepared statement of Ms. Timberlake follows:]
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The Chairman. Thank you very much, Ms. Timberlake. Now we
turn to Ms. Benson.
STATEMENT OF HOLLY BENSON, SECRETARY, FLORIDA AGENCY FOR HEALTH
CARE ADMINISTRATION, TALLAHASSEE, FL
Ms. Benson. Thank you, Mr. Chairman, members, Senator
Martinez. Thanks very much for the invitation to join you
today. Ensuring access to quality care and empowering seniors
with tools to manage their care have long been priorities in
Florida. On behalf of Governor Crist, I would like to thank you
for your partnership in our efforts.
Today I've been asked to give you an overview of several
programs in Florida, the Cash and Counseling Program, the
Nursing Home Diversion Waiver and the PACE Program. The
flexibility offered by these programs has served Florida well.
It has allowed us to meet the needs of a diverse range of
beneficiaries.
Senator Martinez put the Florida problem in context. We're
home to 18.3 million residents. Seventeen percent of our
population is 65 or older as compared to 12.6 percent of the
Nation as a whole.
We serve 2.3 million Medicaid beneficiaries. Fifteen
percent of them are 65 or older. They account for 27 percent of
our expenditures.
In order to meet the needs of the most vulnerable, Florida
sought several waivers. Our goal in seeking these waivers was
to empower Medicaid beneficiaries to have more control over
their care. Provide them with the most appropriate and better
coordinated care. Use taxpayer's resources most responsibly.
The first program I'd like to discuss is the Cash and
Counseling Program. This program gives consumers who qualify
for home and community-based assistance with a personal care
monthly allowance that they may use to hire workers and
purchase care related goods and services. The pilot began in
2000 as a Robert Wood Johnson grant and now serves over 1,100
people.
Mathematica Policy Research Institute conducted an
independent evaluation of this program and they made a number
of findings. But one of them is particularly important.
Treatment group members those who purchased their own services
were more likely than control group members to have their care
needs met, to be satisfied with their care, and to report that
the program had greatly improved their lives. This program has
been successful in empowering our beneficiaries, increasing
their satisfaction and containing costs. We're in the process
of applying to expand enrollment in the waiver.
The second program I'd like to discuss is the Nursing Home
Diversion Waiver. It is broader than the Cash and Counseling
Waiver and is designed to provide frail elders with an
alternative to nursing facility placement by offering
coordinated acute and long-term care services to frail elders
in a community setting. Under this program, applicants 65 and
older who are dually eligible for Medicaid and Medicare Parts A
and B and who meet certain facility criteria, can choose to
continue living in their own homes or in community settings
such as an assisted living facility.
The waiver provides case management, for acute care and
long-term care services. All participants select a case manager
who helps them develop a care plan with a nursing home
diversion provider. These service providers are managed care
organizations that are approved for each county.
Florida's Office of Program Policy Analysis and Government
Accountability reviewed the diversion program and found that
the program successfully delayed participants entering nursing
homes. It also found that participants who entered a nursing
home for an extended stay had shorter stays on average than
similar non-waiver clients.
The final program that I'd like to discuss is the program
of all inclusive care for the elderly, which I'll refer to as
the PACE program. This program is a capitated benefit that
features a comprehensive service delivery system and integrated
Medicare and Medicaid financing. Within the capitated rate,
providers have flexibility to deliver all services that
participants need rather than being limited to those that are
reimbursable under the Medicare and Medicaid fee-for-service
systems.
This program allows beneficiaries to continue living at
home while receiving services rather than being placed in a
nursing home. PACE organizations provide primary care, social,
restorative and support services for Medicaid and Medicare-
eligible individuals aged 55 and older who meet nursing home
level of care criteria. PACE programs provide social and
medical services primarily in an adult day health center
supplemented by in-home and referral services in accordance
with the participant's needs.
All Medicare and Medicaid services must be available,
including personal care, acute care services, recreational
therapy, nutritional counseling, meals and transportation. The
services also include adult day health care, home care,
prescription drugs, nursing home and inpatient care.
PACE, nursing home diversion and consumer directed care
represent three of the ways that we have used the flexibility
you have granted us to meet the needs of our Medicaid
beneficiaries. Through these programs we have allowed
beneficiaries to design benefit packages that are more tailored
to meet their needs and that are better integrated. We have
allowed more beneficiaries to receive care in their homes and
institutional settings. We've increased consumer satisfaction
and we have not increased costs to taxpayers.
Thank you, Mr. Chairman, Senators.
[The prepared statement of Ms. Benson follows:]
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The Chairman. Thank you very much, Ms. Benson.
Senator Martinez, would you like to start the questioning?
Senator Martinez. Thank you, sir. I appreciate that very
much. I want to thank all the witnesses for the very good
testimony you've given us today.
I wanted to just maybe follow up with Secretary Benson and
ask you, Secretary, how do you believe that the Federal
Government can help to better support your community-based care
initiatives through Medicare and Medicaid?
Ms. Benson. Well, Mr. Chairman you all have done a really
nice job of doing that. I think you have heard that we've had a
lot of flexibility. These are just some of the programs that we
have offered.
Ms. Timberlake talked about some of the home and community-
based services. We've seen some great success with that. We
have seen that by offering those kinds of services you can also
decrease the cost of the Medicaid program.
I think some of our concerns internally are how do we
incentivize States to achieve those savings in our home and
community-based services and share those savings with the
Federal Government. So we look for ongoing partnerships in
those efforts.
Senator Martinez. You know I'm intrigued by the program
that where you allow a case worker, a case manager, if you
will. How is that working? Is that an experience, Ms.
Timberlake, that you also have shared in Wisconsin? I mean,
that to me seems to be a very, very good way of allowing an
individual to have some flexibility in the way they get their
care while at the same time keeping costs down.
Ms. Timberlake. Right. Absolutely. I think one of the
common themes that's cutting across all the health care reform
discussions including the discussion of long-term care reform
is about doing the best possible job of care management and
case management.
I think we all would agree that lots of money is being
spent. The question is, is it being spent on the right services
for people at the right time and in the right setting? So what
we have found with Wisconsin's Family Care program and with the
Partnership program is that it really is that inter-
disciplinary team that works with the individual consumer, and
with a family member, if that's appropriate.
As I said, it always includes a social worker and a
registered nurse. Because even in the long-term care only side
of the equation many of these consumers have health needs that
need to be well managed and well addressed. So by putting that
inter-disciplinary care team together, by working with that
individual consumer, again at the level of goals and of
outcomes that are desired to be achieved, the care team can
then work through with the consumer what is the most cost
effective way of achieving those desired goals.
I'll give you a real concrete example. We had a consumer
who was living independently in her own apartment. One day she
came to her care team and said she wanted to move into a more
expensive assisted living facility.
The care team said well, why is that? It turns out that
this consumer had a good friend who had previously resided in
the apartment complex who had recently moved to the assisted
living facility. She wanted to move there too, to be closer to
her friend. The care team said how about if we arrange for
transportation for you every day so that you can go and visit
your friend. That was perfect for her, it met her needs.
So that's a simple example, an easy problem to solve. Would
that they were all that easy, but in fact it's a good
illustration of this idea of focusing on the outcomes that the
consumer wants and then putting the right people around the
consumer to help think through how to get those desired
outcomes.
Senator Martinez. Any comment from you?
Ms. Benson. I think Ms. Timberlake covered it very well.
But I think that we've seen in all sorts of health care people
generally know what's best for them. One size doesn't fit all.
I mean, I think the Frenchie example was outstanding
because frequently we find that our consumers consume less
health care if they're given the power to control their care.
So I think that we've covered it pretty well, Senator.
Senator Martinez. Thank you. Mr. Chairman, I'll turn it
over back to you.
The Chairman. Thank you. Senator Udall, would you like to
make a statement, or ask a question?
Senator Udall. Thank you, Mr. Chairman. I too want to
welcome the panel. Thank you for your very insightful comments.
I did want to acknowledge the leadership of the Committee.
This Special Committee on Aging will play an increasingly
important role, I believe, as we all do something about getting
older every day. I remember, Chairman Kohl, Robert Kennedy when
he ran for President. We had been celebrating his legacy given
that it was some 40 years ago that he ran for President in the
1968 cycle.
One of the criticisms of him was that he was too young to
be President. He said well, I'm doing something about that
every day. [Laughter.]
We all find ourselves in that boat. I did want to ask you a
question that I think the next panel will also address. Which
is when you look at the long-term care insurance world and the
incentives that we've tried as a Congress to put in place and
that society has tried to put in place, would you give us a
grade on how we're doing?
I know that you interact in your various state programs
with long-term care insurance policies. Maybe we can work from
left to right and start with Mr. Hamilton and move across.
Comments you have on ways to provide greater incentives for
long-term care insurance and how important that is as one of
the elements in a comprehensive policy?
Mr. Hamilton. With regard to any form of social insurance
there are hazards that people are trying to insure themselves
against. There are benefits that they're trying to move toward
as an alternative. So, one of the challenges for long-term care
insurance is, what is it that people would get as an
alternative to what they're trying to insure themselves
against, and to the extent that people are really focused on
being able to maintain themselves in their own homes, the
challenge is that in the community system, you've got a
disparate array of individualized services that are very
difficult to organize. So what's so very important, I think,
about what Secretary Benson and Secretary Timberlake are doing
in their states, is actually using the Medicaid program as a
foundation to build an organized system.
So what individuals can purchase is not simply a little bit
of home health care, a little bit of personal care, a little
bit of transportation, but actually a package of coherent
services that has the benefit of the case manager approach that
Senator Martinez observed. So that there's a coherent package,
it can come together, that makes long-term care much more
feasible. In the early days of long-term care insurance, the
only benefit was nursing home care. The policies didn't sell
very well.
But if you've watched the evolution of the long-term care
insurance industry you've seen a broadening of the benefit
packages, and it's becoming much, much more acceptable to
individuals. So, the more of the infrastructure and foundation
that the states can create through this partnership with the
Federal Government, leveraging Medicaid, the more possible
those social insurance models will become.
Senator Udall. That's helpful. Secretary Timberlake, would
you like to comment?
Ms. Timberlake. The thing I would add to that is what we've
seen in Wisconsin is that the sort of myriad of long-term care
insurance options that are out there are often very confusing
and very difficult for consumers to go through and to make good
decisions about. So we need to be careful that just as we want
to help people make good decisions about managing their own
personal assets over time so that they avoid becoming our
customers in the Medicaid program for as long as possible.
Similarly, we want to make sure that we're helping them not
purchase insurance that in fact they don't need and spend lots
of money up front to avoid--as Mr. Hamilton says--a risk that
in fact in a cost benefit analysis is not worth it.
So I think that something we can work together on between
the states and the Federal Government is making sure that we
have very clear information for consumers and a very sort of
methodical way to help people think through what those risks
really are. What is the range of options for managing those
risks and where long-term care insurance fits in that suite of
solutions.
Senator Udall. Thank you, Secretary Benson?
Ms. Benson. Thank you, Senator. You know that majority of
Floridians over 45 really don't understand long-term care
coverage. AARP did a survey. They found that 74 percent of
Floridians don't have any idea how much nursing home care costs
on a monthly basis.
Fifty-four percent assume that Medicare will pay for a
long-term nursing home stay. So there's a real lack of
information out there. You all worked in partnership with the
states to give us the ability to do long-term care insurance
partnership programs.
Florida's legislature did the legislation to do that. My
agency does that in partnership with the Office of Insurance
Regulation. Our system went live in January 1, 2007. But we've
only had 15,000 people take up this offer.
I think you know that really in exchange for purchasing
these partnership policies, if individuals later exhaust those
benefits and apply for Medicaid long-term care services, they
get to keep more of their assets than normally they would be
allowed to when qualifying for Medicaid. I think all the states
see a problem with people spending down their assets in order
to qualify for Medicaid. So, you know, while we believe
Medicaid is an important part of the safety net, if we can
strengthen the private sector, it matters.
Senator Udall. Yes.
Ms. Benson. So in terms of what you could do to help the
states, I think all states are facing these challenges with
budget crunches, although you've just recently made a
difference on that issue for many of us. But over the long-
term, it will be a challenge.
So there are two things that I think would help. I think
for all the states who are trying to encourage individuals to
buy long-term care insurance, and then we're all in the
campaign, might make a difference. I think in addition, looking
to tax credits to help those individuals and incentivize them
to purchase long-term care insurance, I think that would make a
difference too.
Senator Udall. Thank you very much, Mr. Chairman.
Thank you.
The Chairman. Thank you very much, Senator Udall. Mr.
Hamilton, Wisconsin as you know is one of 40 states with aging
disability resource centers. Is there a model for these centers
that all states to follow or are there variants between what
can and cannot be done from state to state?
Mr. Hamilton. There's a variety of models and approaches
that states are taking. There's certain common elements, one of
which is to ensure that the aging disability resource centers
can help organize the information about all of the options
available to people. This has been an area of great partnership
between the Administration on Aging who are represented here in
the front row and the Centers for Medicare and Medicaid
services. So the two agencies have combined resources to then
partner with states to develop more and more aging and
disability resource centers.
At the present time these occur in particular geographical
areas. But the goal is to broaden them. So eventually, more
states can be on the road that I think Wisconsin is at, which
is to have state-wide availability of Aging and Disability
Resource Centers that are available to people regardless of
income or assets.
So, again, it builds that foundation that's available to
the private long-term care insurance market as well as the
public payers, so that every individual who needs long-term
care is able to go to one good environment where they get good,
free information about all of the choices available to them. In
addition, in a really organized system, those Aging and
Disability Resource Centers are interposed in the places of
decision-making. Secretary Timberlake can correct me if I'm
wrong but I believe that in Wisconsin, no one enters a home and
community-based program or a nursing home without the benefit
of that good, free information coming from the ADRC.
The Chairman. Would you like to expand on that, Ms.
Timberlake?
Ms. Timberlake. I think that what we have seen is exactly
as Mr. Hamilton has alluded to which is that the ADRCs are
serving the entire range of consumers in Wisconsin. So it isn't
just people who believe that they are or might become Medicaid-
eligible. It literally is any person who has a question about
their long-term care needs, and benefits that might be
available to themselves or a family member or a friend or a
colleague who has a disability that they need some assistance
with.
Then at the other end of the continuum, the ADRC is in fact
the place where people go through the eligibility determination
process if in fact they are eligible for a Medicaid or
Medicare-funded long-term care program. So as we have been able
to open ADRCs across the state, we really are finding that
we're addressing thousands of consumers questions every week.
We believe we are doing good prevention as well as connecting
people to the programs and services that they're eligible for.
The Chairman. Thank you. Ms. Benson, would you like to make
a comment?
Ms. Benson. We don't have ADRCs exactly in Florida. We have
moved down the path of aging resource centers. You know,
getting old and navigating the senior care system is
particularly difficult.
I recently read that book, Nudge, that is out on the market
that talks about the complexities of navigating Medicare Part
D. So you all were great, and said we want to give people
choices. But I think that in some states, the choices were more
than 50 plans. You know, I had to sit down with my grandmother,
and my father is a doctor, and while I'm Secretary of the
Agency for Health Care Administration, and it was hard.
I just outlined three programs for you today. But that's
just a small sample of what we offer in Florida. So I think
everything we can do to make sure we have infrastructure in
place to help people make the right choices for them will
really make a difference. We appreciate your leadership on that
issue.
The Chairman. Well, we thank you so much, all three of you.
You've added a lot to the discussion. We appreciate your coming
here. Thank you so much.
Mr. Hamilton. Thank you.
Ms. Timberlake. Thank you.
Ms. Benson. Thank you.
The Chairman. We will turn now to our second panel.
We're pleased to welcome first Henry Claypool. Mr. Claypool
is currently the Washington liaison to the Public Health
Institute and a Senior Advisor for Disability Policy to the
Administrator of CMS. During his time at HHS, Mr. Claypool
played a key role in implementing policies to respond to the
U.S. Supreme Court's Olmstead decision and expanding Medicare's
coverage of assistive technologies.
Next we'll be hearing from Melanie Bella who is a Senior
Vice President of Policy and Operations at the Center for
Health Care Strategies. In this position, Ms. Bella leads the
organization's efforts to improve the quality of care for
people with chronic illness and disabilities. She also serves
as a health care advisor to the Kennedy School of Government
Innovations in American government awards program. Previously,
she served as Medicaid Director for the State of Indiana from
2001 through 2005, where she championed a state chronic disease
management program.
Finally, we'll be hearing from Professor Judy Feder, who is
currently on the faculty of Georgetown University's Public
Policy Department, serving as Dean for three years. She also
currently serves the Center for American Progress as a senior
fellow. Ms. Feder is one of the nation's leaders in health
policy and she's an expert in ways to improve our nation's
health system. We thank you all for being here. We'll listen to
you first, Mr. Claypool.
STATEMENT OF HENRY CLAYPOOL, WASHINGTON LIAISON,
PARAPROFESSIONAL HEALTH INSTITUTE, NEW YORK, NY
Mr. Claypool. Chairman Kohl, Senator Martinez, good
morning. I'm Henry Claypool, the Washington liaison for PHI,
which promotes quality care through quality jobs within the
elder care disability services delivery system. Thank you for
inviting me to testify today to share my perspective on the
importance of addressing long-term services and supports in
health reform efforts.
My testimony is also informed by my personal experience as
a former Medicaid beneficiary and as someone that continues to
rely on the supports provided by direct care workers today.
Frankly, without the assistance of others with routine and
often intimate tasks, I wouldn't be able to be here today, much
less work, pay taxes and lead an active life in my community.
These services are, in short, are what enable many Americans
like me to work and contribute to the nation's economy.
The wages paid to direct care workers likewise spur the
economy. Direct care jobs constitute a $56 billion dollar
economic engine fueled by personal income that over three
million direct care workers spend largely on locally produced
goods and services in their community. That is why we believe
health reform including long-term services reform must be an
integral part of our efforts to restore and revitalize the
economy.
Therefore we applaud the leadership of the President, for
recognizing that health reform is key to addressing the
nation's economic distress and making it a priority in his
budget proposal. We urge Congress to ensure that long-term
services reform is addressed along with making affordable
health insurance available to all Americans this year. If the
needs of those who rely on long-term services and supports are
not addressed in health reform, it is difficult to see how our
country will ever effectively curb the rate at which medical
expenses rise.
We believe health reform must include: one, reforms to make
more community based, long-term services and supports available
to Americans in need. Two, efforts to build capacity and a
direct care workforce which provide these critical community
living services.
Health reform should strengthen Medicaid long-term services
by: one, ensuring that the Federal Government provides enhanced
matching payments for long-term services and supports to
gradually assume a greater proportion of the costs associated
with long-term services. Two, require that states in return
provide a certain level of service making it possible for
beneficiaries to lead meaningful lives in the community.
Enacting the Community Choice Act as part of health reform
would be an important step in this direction. [Applause.]
Three, streamlining eligibility rules to make it possible
for beneficiaries to have access to community living services
when they need long-term services and supports.
Four, creating additional incentives for states to
measurably reduce and gradually eliminate service access
disparities that currently exist within states, across
different groups of beneficiaries and throughout the country.
A needed and complementary measure that should be taken is
to create the public insurance program envisioned in Senator
Kennedy's CLASS Act. [Applause.]
This program would help individuals and family members
safeguard their financial future against the economic
devastation and hardships that often accompany the loss of
certain functional abilities.
Addressing long-term services program design and financing
is only part of the answer. As you've recognized, Mr. Chairman,
equal attention must be paid to building and strengthening the
workforce needed to provide these services. In order to provide
services and supports to an increasing number of Medicaid
beneficiaries in the community and develop service delivery
systems that are more cost efficient and effective in promoting
positive health outcomes we need: one, to improve direct care
worker compensation by increasing wages and ensuring access to
affordable comprehensive health care for workers.
Two, to upgrade training and advance opportunities for
direct care workers by passing the Chairman's proposed
Retooling the Health Care Workforce for an Aging America Act,
an important next step which PHI is pleased to support.
Three, explore new health management practices that target
behavior, habits and daily activities of people with chronic
conditions and the direct care staff that work with them, since
these individuals often see each other every day. It is likely
that with the right resources, consumers and workers together
can reshape habits, and promote more healthy lifestyles.
Mr. Chairman, I appreciate the opportunity to testify and
be pleased to answer any questions.
[The prepared statement of Mr. Claypool follows:]
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The Chairman. Thank you very much, Mr. Claypool. Ms. Bella.
STATEMENT OF MELANIE BELLA, SENIOR VICE PRESIDENT FOR POLICY,
CENTER FOR HEALTH CARE STRATEGIES, HAMILTON, NJ
Ms. Bella. Thank you, Mr. Chairman, Senator Martinez. My
name is Melanie Bella. I'm the Senior Vice President for the
Center for Health Care Strategies which is a non-profit health
policy organization in New Jersey.
We do considerable work with state Medicaid agencies. One
of the main areas of our work has to do with integrating care
for complex and special populations. So I'm delighted to be
here today to talk to you.
You've heard from Secretary Timberlake about one of the
most innovative managed long-term care programs in the country,
Wisconsin's Family Care. So I'm going to focus on two other
areas of opportunity. One being fully integrated care for dual
eligibles and the second being person-centered community-based
home and community service programs for individuals.
For many in the field of publicly financed care, myself
included, fully integrated care for dual eligibles represents
the most important and the greatest policy opportunity for
health care reform that we could possibly tackle today. It's
been pursued literally for decades with an evolution of
programs, starting with PACE and On Lok, going into social
HMOs, moving into Medi/Medi demonstration programs, now with
the Special Needs Plans that have recently been created.
The problem remains that very few people are benefiting
from these types of programs. I want to just tell you a quick
story about the type of person that needs this type of program.
I'm indebted to a good friend, Bob Master, who runs a program
called Commonwealth Care Alliance in Massachusetts which is a
fully integrated program. One of his patients, and she's very
representative, is a woman named Maddie.
She's 77-years-old. She has diabetes. She has hypertension.
She has depression and she suffered from multiple strokes. She
has many different caregivers, has frequently been hospitalized
and was facing institutionalization in a nursing home primarily
because it was so difficult for her and her caregivers to
navigate the fragmented system that she receives her care in.
Thankfully, she found this fully integrated program,
Commonwealth Care Alliance. Now instead of three separate
identification cards, one for Medicaid, one for Medicare and
one for her drugs, three different sets of benefits, three
different provider networks, she gets all of that in one place.
She has a multidisciplinary care team as Secretary
Timberlake talked about. Her wishes drive her care plan. Some
of the key components that Henry talked about and because of
that, decisions are based on what she needs. She's been able to
reduce hospitalizations and stay at home.
So not only is it good for Maddie. It's cost-effective for
both the state and Federal taxpayers. We need to get programs
like that to scale.
There are only 120,000 people like Maddie in fully
integrated programs today. That's in large part because of the
difficult financial and administrative challenges that exist
between the Medicaid and Medicare programs. However there are
many innovative states out there that are making great progress
in these areas. I would call your attention to a little chart
that shows you ten examples of what states are doing that have
fully integrated programs.
I also should mention although the primary driver for this
is obviously getting consumers what they need and where they
need the services, we're also spending a tremendous amount of
money on the fragmented system for dual eligibles. There are
only seven million full dual eligibles, out of Medicaid's over
55 million beneficiaries. But they drive 42 percent of cost in
total Medicaid expenditures and 24 percent of Medicare
expenditures. In 2008 that will equate to about 250 billion
dollars.
So there is an imperative to do better for the people we're
serving. There's a fiscal imperative to do better than we're
doing today.
So what could Congress do? You could dramatically
accelerate progress in this area by requiring CMS to test ways
to overcome some of the fragmentation in the system. There's a
very innovative demonstration underway that North Carolina is
pursuing that would address some of the financial misalignments
between the two programs. It would be nice maybe even to get
out of demo status and to have a certain core set of elements
and safeguards in place to help push states along in this arena
to fully integrate care while removing some of the barriers for
doing so.
I also want to talk about Medicaid's progress in home and
community-based services. These actually have gotten to scale
over the past 30 years, although more could be done.
Development of HCBS is a tremendous example of states serving
as laboratories of innovation, if you will.
You've maybe heard of Vermont's program. It's called
Choices for Care. It has established different tiers based on
people's needs. For some folks nursing home care is no longer
an entitlement, but there has been increased access to home and
community-based services.
Tennessee recently launched a bold new act to rebalance its
long-term care system. Again, all of these efforts share the
core features of increasing access to home and community-based
services and decreasing institutional care. Small steps
Congress has taken in the past including the Money Follows the
Person, Real System Change grants and the Long-Term Care
Partnership with CMS.
Those things are great. More substantial changes are
necessary which might include consolidating waivers, allowing
states to manage HCBS services in totality. Modifying some of
the outdated payment and benefit structures would allow
innovation like this really to blossom across the country.
So I appreciate the opportunity to share some of these
ideas with you. I would gladly answer any questions or fill
your ears with all sorts of little and bigger changes that
could really make a difference in this arena. Thank you very
much.
[The prepared statement of Ms. Bella follows:]
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The Chairman. Thank you very much, Ms. Bella. Ms. Feder.
STATEMENT OF JUDY FEDER, SENIOR FELLOW, CENTER FOR AMERICAN
PROGRESS ACTION FUND, WASHINGTON, DC
Ms. Feder. Chairman Kohl and Senator Martinez, it is a
pleasure to be part of the hearing you're having on such an
important issue; the need for public action to improve long-
term care services and supports.
We hear a lot today about the need for health reform as
critical to restoring the nation's economic and fiscal health
and that is a really good thing. But you know that we can't
achieve health or fiscal security unless health and entitlement
reform address the need for affordable long-term care. People
who need health and long-term care don't distinguish between
the two. They need both. Our Medicare and Medicaid programs
devote substantial resources as you just heard to people who
need both. We've got to fix both our health and long-term care
financing systems and delivery systems to promote economic
stability for our nation and our families.
Unfortunately, ignorance about long-term care has long
impeded effective long-term care policy. The facts are, as
you've heard and can see today, that young as well as older
people need long-term care, and that even among older people
the need for extensive long-term care, extensive and expensive,
is an unpredictable, catastrophic risk. Families are giving
their all to providing the bulk of care at home that people who
need long-term care are receiving.
Contrary to what is sometimes claimed, the problem with
today's long-term care system is not that individuals and
families fail to take enough responsibility. Rather they just
don't have enough to give. That's why we need better public
support, support that spreads the risk and the burden of long-
term care financing rather than as in our current system,
concentrating it so heavily on the people, the individuals and
the families, who actually need care.
As you've heard today, we are fortunate in that there are
many ways to move forward. We can only do better. So let me
give you very briefly four examples. Two focus on the low-
income population and improving Medicaid while lowering costs,
which we've heard much about this morning. Two would phase in
broad public long-term care insurance for the future.
First on my list and on the list of many here today is to
assure broader Medicaid support for care at home where people
want to be rather than in nursing homes where they don't. There
are lots of different proposals to do this in different ways.
The Community Choice Act is one such proposal. [Applause.]
Recent research suggests that, once established and
accompanied by policies to reduce nursing home use, broad
availability of home care through Medicaid programs can
actually slow the growth of total spending on long-term care.
If supported by Federal dollars, changes in Medicaid can assure
better service at potentially lower cost no matter where people
live in every state and within states all across the country.
Second on my list, as Melanie has been talking about and
affect in both Medicaid and Medicare, is to better integrate
acute and long-term care for the Medicaid/Medicare or dual
eligibles who depend on both. Dual eligibles are the poster
children for what we can achieve in terms of coordinating acute
and long-term care to promote better quality, reduce waste and
gain greater efficiency in our health care system. Models exist
using a single delivery system, as in Wisconsin as we heard
earlier.
We can build on and extend those models while remembering,
as we've heard this morning, that it's not enough or can be
actually not so helpful just to change financing. What we need
is to assure that we're developing and supporting delivery
systems that are really effective in providing quality care.
For the future I've got two more options. Both would phase
in public insurance protection across the income scale to
prevent underservice or impoverishment for all Americans. One
would add a long-term care benefit to Medicare for the future--
phased in, that is not available to current beneficiaries over
the age of 60, and prefunded, that is, with contributions today
put into a trust fund so that future elderly would be financing
their own benefits--paying now to support future needs.
A second option, the CLASS Act, would create a new long-
term care program--again starting with the working age
population and financed through voluntary deductions from
payroll. Unlike Medicare, the CLASS Act would provide a cash
benefit, which we've heard about today as well, that would
allow people maximum flexibility in using their dollars to meet
their needs, supported by good public policies.
Mr. Chairman, Senator Martinez, assuring efficient,
adequate and equitable long-term care financing is part and
parcel of building our nation's economic future and assuring
economic stability. The need to address this problem will only
grow as our nation ages and as younger people with disabilities
live longer. Living longer is a good thing, if we match that
accomplishment with policies that enhance the quality as well
as the duration of life.
Given the scope of the demographic changes before us, we
cannot consider ourselves stuck with the inadequate long-term
care system we have. We should consider ourselves on the ground
floor of the long-term care system we want to build. Now is the
time--with new national leadership, a powerful need to invest
in rebuilding our nation's prosperity, and a new excitement
about our nation's and our government's potential, to build a
better future--now is the time to confront the policy,
political and fiscal challenges of building a better long-term
care system.
I applaud your effort to do just that. I look forward to
working with you to achieve it. Thank you. [Applause.]
[The prepared testimony of Ms. Feder follows:]
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The Chairman. Thank you so much. Alright. Senator Martinez,
go ahead.
Senator Martinez. Mr. Chairman, thank you so much. You're
unusually deferential for a Chairman, but thank you.
[Laughter.]
Ms. Bella, I wanted to ask if you could enlighten us a
little more on the case for fully integrated care for dual
eligibles. I was very intrigued by some of what you had to say
and for coordinated patient centered home and community-based
services. It is enticing to consider that these two approaches
will help better serve the vulnerable dual eligible population.
It might even save money for the taxpayers.
How do you recommend that the Federal Government approach
this particular challenge and do you have any solution besides
the current waiver system that's in place today?
Ms. Bella. Well I could go on forever on that. So I'll try
to be brief. Really the only option a state has today to do
fully integrated care and it's actually virtually integrated is
through the Special Needs Plan program created under the MMA.
It that allows the state Medicaid agency to contract with one
of those SNP plans. That plan is also serving that individual
on the Medicare side. So that plan gets both streams of funding
and is able to combine the dollars to provide all of the
services from Medicaid and Medicare.
While that's an interesting model and some of the plans are
very good because they understand this population well, there
are a lot of those plans that don't necessarily understand this
population so well and/or there are a lot of places across the
country where Special Needs Plans will never be an option.
So for example, what I mentioned in North Carolina. North
Carolina has decided to start providing care management to its
dual eligibles. In the past, North Carolina hadn't done that
because any financial benefit from that would accrue to
Medicare. The state would be paying for these services but
wouldn't be seeing any of the benefit.
In partnership with CMS, North Carolina and the Federal
Government have entered into an agreement to remedy some of
that financial misalignment. As a result, all of the dual
eligibles in North Carolina will get the services that will
move toward an integrated benefit. So that's an example of some
other alternatives that could be explored for states that are
interested, particularly states with rural areas and some
provider or plan challenges.
I think at a minimum what you would probably find is
consensus on the types of elements you want to see in an
integrated care program. That has to do with patient
centeredness, the multidisciplinary care teams, strong
performance standards, consumer governance, and involvement in
the benefit and in the structure of the plans.
Those are elements that you could see would form some
structure for what you would want to see in states across the
country that Congress and CMS and states could work on in
partnership to say these are the things that we expect to see.
In return for seeing these we can eliminate some of these
barriers or consolidate some of the authorities that it takes
today to do some of these things.
In return, again, for putting the bar pretty high at what
we expect these programs to look like and for having a core
level of accountability in performance standards and
measurements and those types of incentives even getting rid of
some of the barriers to doing that today. For example, some of
these states, New Mexico for example, has a very innovative
integrated care program. It had to get two different waivers to
do that on the Medicaid side alone.
Those two different waivers have different time periods.
They have different financial tests. They require different
paperwork. They require showing some cost demonstrations that
don't take into account anything on the Medicare side.
So without getting into too much detail, it's some
administrative things like that that could be changed that
would free up a lot of the inability for states to go forward.
But then more broadly and, I think, a bigger vision would be
working with consumers of these services, providers of these
services, states and the Federal Government to establish those
core elements and safeguards and providing incentives for
states to implement such programs.
Senator Martinez. Just to follow up. What type of front end
funding do you envision to move toward a goal like budget
neutrality for integrated care?
Ms. Bella. Well part of the challenge today as has been
demonstrated especially in some recent articles is, as you
know, it costs money up front to get the money back. But until
we make those investments we're never going to start getting
the money back. So the way the Federal/state match is
structured, states may need a little help getting over that
initial funding hurdle.
So, for example, I don't think we would be suggesting that
the budget neutrality concept would change. But if we're
looking at a five-year period, perhaps the Federal Government
share is higher in the first years and the states' becomes
higher in the fourth and fifth years. So on balance you get the
same outcome, but you're helping states who have to spend a
dollar before they can get the dollar.
You're helping them get over that hurdle of the initial
investment. There are other mechanisms that would allow states
to count some of the savings that Medicare might experience
through some of these programs for the Medicaid waiver cost
effective test as well. So those are two examples.
Senator Martinez. Thank you, Mr. Chairman.
The Chairman. Thank you very much, Senator Martinez. We're
joined today by Senator Wyden from Oregon. Senator Wyden.
Senator Wyden. Thank you very much, Mr. Chairman. I very
much look forward to working with you and our colleague from
Florida on this. I'm sorry that I've missed much of what has
happened already.
We're down in the Finance Committee talking with the
Treasury Secretary on this very subject as well. I think what
is so constructive about the leadership of you, Mr. Chairman
and Senator Martinez and all of the people who have come here
today is this helps ensure that long-term care is not an orphan
in this health care reform debate. What has been so troubling
about the discussions in the past is you see volumes and
volumes written on everything except long-term care.
I'm interested in doing following up on the good work of
Chairman Kohl and Senator Martinez are exploring with the three
of you some of the ways that we can actually start tomorrow at
the Summit. Because we're all going to be at the White House
tomorrow focusing on health reform making sure that our hope
now of getting long-term care reform into the reform package
goes forward. My real question, and perhaps we'll start with
you, Ms. Feder, is financing the improvements that are so
critical. In the Healthy Americans Act, the first bipartisan
universal coverage bill we've had in the history of the Senate,
we take two baby steps.
One is we make improvements in the various public programs
so that folks who need long-term care have more choices. I
think that's critically important--to have flexibility, so if
you're seeking adult day care or in-home services that you
empower the individual and their families to be able to make
those choices.
The second thing we do is on the private side with respect
to long-term care insurance. We put in place consumer
protections for people who buy these private long-term care
policies. A lot of them end up not worth the paper they're
written on because inflation eats away any coverage.
Can we take additional steps to make it more attractive to
buy these policies? Now you have been at this for a number of
years. I want to start with something that really began with
somebody that you and the people on this panel admire very much
from Senator Martinez's home state and that is the late Claude
Pepper's idea.
What Claude Pepper suggested on a number of occasions is
starting a model so that people on a voluntary basis could
start putting aside money for private, long-term care coverage.
Perhaps through pools that would be organized by the
government, so that the person who purchased it when they
needed it would get more for their money. It would be private
coverage.
They would have private choices. But the money would be
pooled, so that the older person when they needed it would get
more for their money. You've been looking at these ideas for
funding long-term care in the past. What about this idea of
setting up a voluntary model that people could start setting
aside money for at a relatively early age?
Ms. Feder. Well, Senator Wyden, it's a pleasure to see you
today. I appreciate your wanting to highlight long-term care at
the Summit tomorrow, so it's not forgotten in the health reform
debate. The ideas you've mentioned are important ones.
I have some questions. I would have to look in greater
detail at what Senator Pepper actually proposed, although I
trust your rendition. Definitely the first part of it makes a
great deal of sense, allowing people to put aside resources
into a pooled fund. In fact that is the model that is included
or embodied in the CLASS Act that Senator Kennedy has
introduced.
I think that putting it into a fund and relying then on
building a public insurance program has more promise than
trying to build private, long-term care insurance. Private
long-term care insurance policies are there and will play a
role in our system. But we've been calling them new kinds of
policies for 20, 30 years and we know from the health insurance
market--and looking at long-term care and acute care together
helps us--that private insurance is a really risky basis for
building a system. It's kind of why in part we're in the mess
we're in today in terms of our health insurance system. We're
having to stitch it together and make better rules.
So my view is that the voluntary, approach say putting
aside of funds and pooling of risk is a very good approach. But
that if we want a strong foundation in long-term care, the
public insurance system has to be at the core. Then the private
insurance comes around it.
Senator Wyden. Let me get your colleagues into this topic.
Ms. Feder goes right to the heart of the philosophical debate
here in the Congress. I think it is fair to say that I wouldn't
have any Republican sponsors on the Healthy Americans Act if I
had tilted this effort to the public side.
What has attracted bipartisan support for the Healthy
Americans Act has in fact been that it is largely a private
delivery system which of course is what Members of Congress
have. In other words, Ms. Feder has made a very good point. It
goes right to the heart of this philosophical discussion about
what's the right role for government? What's the right goal for
the private sector?
But there is a group of people who don't complain at all
about their health coverage in this country and that's Members
of Congress. They have private health choices. So as we try to
grapple about this role of a public/private partnership, Ms.
Feder is certainly right that there's an important role for
government. We certainly recognize that for low-income people.
How do you all see integrating private coverage and the
public role? Mr. Claypool.
Mr. Claypool. Well, building off Ms. Feder's comments about
the CLASS Act, I think having a public insurance program like
the CLASS Act really does build a very solid base. If
individuals desire greater insurance they could seek a policy
to wrap around the benefit that might be available to them
should they need the CLASS Act. But it's vital to have a large
pool that really is only available through a public program to
make sure that we can safeguard, frankly, other Americans from
what we're experiencing now in this country.
Unfortunately, people are being economically devastated. A
large public program may hold up better under the test that
we're currently experiencing. I think Ms. Feder's comments
about what we're witnessing in the health care arena also back
that up.
Senator Wyden. The only thing I would say--and let's go to
Ms. Bella, is Members of Congress belong to large pools as
well. I mean it is possible to have large pools and do that in
the private sector. You see it with Members of Congress. I
think that's what this debate is going to be all about.
I mean you saw, particularly in the Presidential campaign,
the debate about the individual market. I wouldn't send a soul
into that broken individual market because you look at the kind
of discrimination people face if they've had a preexisting
condition or something like that. Nobody is talking about that.
But Members of Congress belong to very large pools. They're
in the private sector. They make choices among the various
kinds of coverage that they have. As I say, there's a group of
people in this country who don't complain a bit about their
health care coverage. It's families of Members of Congress, Ava
Rose Wyden, 15 months old, William Peter Wyden, 15 months old--
pictures available after the hearing on my I-phone. [Laughter.]
They can get health care through a private plan, a private
plan. So I just want to go to you, Ms. Bella. We're going to
obviously follow up on this and Judy Feder, in particular, is
just as good as it comes as it relates to these kinds of
issues.
Ms. Feder. Thank you.
Senator Wyden. Finding this right niche on the public and
private side is going to be key.
Ms. Bella?
Ms. Bella. I'm not sure how much I have to add to what my
colleagues have said. My bias obviously is that you need to
have a strong public system. I would argue that all of the
markets are broken today.
Senator Wyden. Sorry, I couldn't hear that.
Ms. Bella [continuing]. That all of the systems are broken
today.
Senator Wyden. You won't get much disagreement on that.
Ms. Bella. It is interesting when we look at the foundation
for coverage expansion. In this country right now, we're
looking at Medicaid. While Medicaid can certainly be shored up
it is, as, you know, a vital anchor to the healthcare system.
The market fails for some of the folks who need it the most if
we rely only on, I think, some of the private choices that you
and I might have.
So I guess it's not mutually exclusive, obviously. It has
to all be part of a well-functioning system. But at its core
again, my bias is that a strong public system is what's going
to really give us the foundation we need for those who need it
most.
Senator Wyden. Could I ask one other question, Mr.
Chairman? How would you three propose paying for it?
Ms. Feder. The proposals that are on the table that we
talked about, the CLASS Act and the option that I offered this
morning from our Robert Wood Johnson Project on a new Medicare
benefit, propose different mechanisms of financing. In the
CLASS Act it's voluntary deductions from payroll. The future
elderly are paying for ourselves, as I said in my testimony.
One other proposal was to redistribute resources whether
it's general revenues or other sources now going to Medicaid
and other spending to actually fund the benefit for the future,
phased in--so that actual resources are built up in advance
before the services are needed. I think you will find some
promising potential funding mechanisms associated with these
proposals.
I can't resist one word about when you were talking about
what Members of Congress have and Federal retirees or wives of
Federal retirees have. In the health insurance system we
absolutely can build on our private insurance system. That is
what we've got. When you look at long-term care, as I said
earlier, we're on the ground floor. We don't have to
accommodate a system that already exists. We can build
something that is a public/private partnership--inevitably--but
that has public benefits at the core.
Senator Wyden. You know what it is striking about this is
it's almost a question of semantics as opposed to anything
else, because what Ms. Feder has just described through the
Federal employee system has a role for a public type of
function. Because the government is playing a role in ensuring
consumer protections and the like, and the people are getting
private choices. So to some extent this is really about nailing
down the details.
You all have a very good case. I'm just hoping that after
60 years of yakking about the subject and having wonderful
people like the advocates we have here in the audience, that
this is the time when the health care needle gets threaded. My
sense is that, and I've talked with the Chairman and Senator
Martinez about this, there's something of a philosophical truce
coming about in the country.
Both political parties have been right. Democrats have been
right about the idea that you cannot fix this system unless you
expand coverage. You've got to expand coverage to stop costs
shifting and to meet these unbelievable human needs that we're
seeing in areas like long-term care.
Republicans have a valid point about how you can't turn it
all over to the government. You can't just have a government-
run operation. That is why we're talking about things like the
Federal Employee Health Benefit Plan that has a role for
government and a role for the private sector.
So you all are doing good work. Senator Kohl and Senator
Martinez, you have two of the best allies in the business.
Starting tomorrow, starting tomorrow at the Health Care Summit
I want you three and the advocates who have come here today to
know that we're going to have some advocates at the White House
tomorrow prosecuting your case. I'm going to be one of them.
Thank you, Mr. Chairman. [Applause.]
The Chairman. Well to just sum it up: We'd like to ask all
three of you health care reform, long-term care--what are the
principles, two or three principles that we must not forget?
Who is first? Ms. Feder?
Ms. Feder. Everybody needs protection. We've got to have
quality care. It's got to be affordable to all of us.
The Chairman. Ms. Bella?
Ms. Bella. I would say two. Fragmented, unintegrated,
uncoordinated systems cost money and are bad for people. The
second thing I would say is I would urge you to keep asking
yourselves why are we talking about waivers to keep people at
home or in their community when it's so easy to go into nursing
homes?
I think that's a fundamental question we have to ask
ourselves.
The Chairman. Thank you. Mr. Claypool. [Applause.]
Mr. Claypool. I would echo Melanie's comments. I really do
think we have a challenge in terms of integrating the delivery
systems. As long as we keep long-term care separate from acute
care, we're never going to be able to tame these costs. We
really have to look at people holistically.
Second, I think it does require to answer a question from
Senator Martinez earlier an investment on the front end by the
Federal Government to make sure that this happens.
The Chairman. Thank you. Well, the importance of this topic
is illustrated by the enthusiasm and the energy that all of you
who've traveled to be here with us today have demonstrated. You
make it very clear that this is a subject that needs our urgent
attention. You can take, I think, a lot of conviction from what
you've seen this morning in terms of what our witnesses have
said as well as we Senators who are sitting up here have also
said. We'll take care of your needs. That's a promise and a
pledge that we make to you. Thank you so much for being here.
[Applause.]
[Whereupon, at 11:30 a.m., the hearing was adjourned.]
A P P E N D I X
----------
Prepared Statement of Senator Robert P. Casey, Jr.
I would like to thank Chairman Kohl for calling this
important hearing on Health Care Reform in an Aging America.
For the first time in over a decade the Senate will be taking a
close look at the American health care system and enacting
reforms to help improve coverage, access, and quality of care
for all Americans. Long term care will be an important part of
this debate.
Over ten million Americans need long-term services and
support to assist them with the activities of daily living.
That's 5 percent of the total adult population. The cost of
this care is high. A year in a nursing home costs $70,000 on
average. Assisted living facility expenses can be $36,000 per
year, not including home health care aides who are paid about
$29 an hour. These are astronomical costs that our older
citizens are not always aware of or able to pay for. We've seen
this first hand in Pennsylvania.
The proportion of Pennsylvanians aged 85 and older--those
most likely to need assistance in daily living--is growing at a
rate 20 times faster than our overall population. We've seen an
aging boom that most other states will not see for another 10
to 15 years. We've also helped the 162,000 Pennsylvanians under
the age of 60 that need similar assistance. I look forward to
working with my colleagues in the Senate to turn dire
predictions of financial disaster and human tragedy into a
unique opportunity for change.
Last year, the Penn State Center for Survey Research
interviewed nearly 3,000 individuals to determine how prepared
they were for long-term care. Nearly all believed Medicare will
pay for their long-term care expenses. Over half believed they
wouldn't need any long-term care services. This research
reveals unreasonable expectations that could become a harsh
reality when discussed with their families and health care
providers.
As we all know, while Medicare provides limited home health
benefits after injuries or hospitalizations and some coverage
for skilled nursing home care, state Medicaid agencies pick up
the tab for 40% of long-term care expenses--and only after
personal life savings are depleted. Financial and family
pressures all too often result in nursing home placement even
though over 90% of older citizens wish to remain in their
homes.
For these and other reasons, Pennsylvania has been a leader
in federal-state partnerships to help seniors and consumers
have more options--and more knowledge about these options--so
they can plan ahead with their families. I look forward to
hearing more about other state programs and other ideas from
our impressive list of expert witnesses, so we can incorporate
their work into the Senate's health care reform activities.
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