Long-Term Supports in Massachusetts Long-Term Care Financing Advisory Committee Meeting March 5, 2009

Long Term Supports (LTS) in Massachusetts  Massachusetts has a lengthy history of supporting the long- term care needs of elders and people with disabilities across the lifespan.  The Patrick Administration’s long-term care policy is community first, an approach that emphasizes maximizing independence in home and community settings while assuring access to needed institutional care. 2

Key Facts Illustrate Why We Are Here

People who need LTS are represented among all age groups Figure 1: People with Disabilities in Massachusetts, by Age Group * “Any disability” refers to an individual self-reporting any of 6 types of disabilities, as defined by the ACS survey. ** “Self-care disability” refers to an individual reporting difficulty with dressing, bathing, or getting around because of a physical, mental, or emotional condition lasting 6 months or more. Ages Total Non- Institutional Population 5 Years and Older With Any Disability* With a Self- Care Disability** Self-Care as % of Any Disability Any Disability as % of Total Population ,349,33497,56113, %7.2% ,120,128162,04221, %7.6% ,708,314275,90950, %16.2% ,382294,37472, %36.2% All 5 and Older 5,990,158829,886158, %13.9% 4

The population with disabilities is projected to grow significantly in the next decade Figure 2: Comparisons of the 2004 Actual and 2015 Projected Number of Disabled Year Old Persons in Massachusetts (in 1000s) 5

The elder population is projected to grow significantly in the next decade Figure 3: Comparisons of the 2005 Actual and 2020 Projected Number of Year Old Persons in Massachusetts 2020 Projected % ofT Total Population 2005Actual % ofT Total Population % Change inAge Group Population % of total population % change in age group population 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% T otal % 10% 20% 30% 40% 50% 60% 70% 80% T otal % 6.1% 4.8% 5.0% 2.5% 2.2% 16.9% 68% 3% 21% 36% 13.3% 6

LTS spending is projected to increase with the changes in the population Figure 4: Projected National Spending on Long-Term Care Expenditures for the Elderly, 2000, 2020, 2040 (in 2000 dollars) Note: comparable figures on spending for non-elderly individuals with disabilities are not currently available. 7

The current LTS system is heavily dependent on institutional care… Figure 5:Comparison of Massachusetts Licensed Nursing Facility Beds to Census (All Payers),

…but community LTS spending is increasing Figure 6: MassHealth Nursing Facility Spending as a Percent of Total MassHealth Long-Term Care Spending 9

Unlike “acute” care, there is little employer/commercial insurance participation in financing LTS Figure 7: Estimated Percentage of Share of Spending for Long-Term Care for the Elderly * Values are calculated on the basis of how much such care would cost if it were provided through formal means. Estimates are from Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation, Administration on Aging, Informal Caregiving: Compassion in Action (June 1998), inflated to 2004 dollars. Note: comparable figures on spending for non-elderly individuals with disabilities are not currently available. Without Informal CareWith Informal Care* Other 3% Private Insurance 4% Medicaid 35% Medicare 25% Out-of- Pocket 33% Other 2% Private Insurance 3% Medicaid 22% Medicare 16% Out-of- Pocket 21% Informal Care 36% 10

Medicaid is the primary payer of LTS nationally and in Massachusetts Figure 8: National Spending for Long-Term Care, by Payer (2005) 11

Community First Olmstead Plan

The MA Community First Olmstead Plan Olmstead v. L.C decision (U.S. Supreme Court, 1999)  Americans with Disabilities Act (ADA) requires states to provide services in the most integrated settings appropriate to the needs of individuals with disabilities The development of the Plan:  An Olmstead Planning Committee was convened in late Fall 2007  Olmstead Plan was approved by the Governor in Fall

CF Olmstead Plan principles 1. People with disabilities and elders should have access to community living opportunities and supports. 2. The principle of “community first” should shape policy development and funding decisions. 3. A full range of long-term supports, including HCBS, housing, employment opportunities and nursing facility services, are needed. 4. Choice, accessibility, quality, and person-centered planning should be the goals in developing LTS. 5. Systems of community-based care and support must be strengthened, expanded and integrated to ensure access/efficiency. 6. Public and private mechanisms of financing LTS must be expanded. 7. LTS must address the diversity of individuals with disabilities and elders in terms of race, ethnicity, language, ability to communicate, sexual orientation, and geography. 14

CF Olmstead Plan goals 1. Help individuals transition from institutional care. 2. Expand access to community-based long-term supports. 3. Improve the capacity and quality of community-based long-term supports. 4. Expand access to affordable and accessible housing with supports. 5. Promote employment of people with disabilities and elders. 6. Promote awareness of long-term supports. 15

Select Related Community First Activities  Systems Transformation Grant  State Profile Tool Grant  Long Term Care Options Counseling  Massachusetts Aging and Disability Information Locator  Aging and Disability Resource Center Expansion Grant  CF 1115 Waiver  Real Choice Pilot  Person Centered Planning Grant  Medicaid Infrastructure and Comprehensive Employment Opportunities Grant (MI-CEO)  EOHHS Agency Internal Housing Working Group  EOHHS Agency Internal Quality Working Group  Personal Care Attendant Improvement Workgroup  Personal Care Attendant Quality Workforce Council 16

The Advisory Committee’s Role in the Olmstead Plan

Advisory Committee role Reform of the LTS system is “contingent upon the availability of re-aligned as well as new public and private long-term support funding.” Community First Olmstead Plan, p. 3 "A Long-Term Care Financing Advisory Group will be established to determine a roadmap for public and private financing development.” Community First Olmstead Plan, p

Advisory Committee problem statement The financing system for long-term care supports (LTS) in Massachusetts is: 1) fragmented among various public and private payers and unpaid informal caregiver supports; 2) centered on insurance-based programs that primarily cover services that are medically necessary, when most individuals’ LTS needs and preferences are for community-based social supports; 3) insufficient to support current and projected needs; and 4) heavily dependent on state public assistance programs that have limited resources and base access to LTS on an individual’s income, age, type of disability, etc. Projected increases in the population of elders and individuals with disabilities who will need LTS, a projected decline in the availability of informal supports for LTS, and continued insufficient workforce capacity to provide LTS will exacerbate these problems. 19

Overarching critical questions 1. What is an appropriate mix of public and private financing mechanisms for the whole system of LTS, given the current and projected needs and preferences of the populations to be served? 2. Assuming that some form of public-private partnership will remain as the predominant model for financing LTS, what is the role of a public safety net system that provides a minimum set of LTS for all who demonstrate need? 3. Within these parameters, what innovative formal or informal financing models exist or can be developed that will ensure that these LTS needs are met? 4. What investments or system reforms are necessary (and under what timeframes) to implement these financing models? 20

Advisory Committee goal To identify and prioritize short-term and long-term strategic options for reforming the financing system for LTS for elders and individuals with disabilities in Massachusetts to support a range of LTS and a sustainable mix of personal and familial responsibility, private financing mechanisms and public assistance in a manner that:  maximizes independence; and  assures access to the necessary continuum of LTS. 21

Framework for Reform Discussion

Merlis: Reforming LTS financing involves a series of decisions about… 1. Sources of funding 2. Mix of funding 3. Eligibility for benefits 4. Nature/extent of covered services 23

These LTS financing reform decisions relatively value…  Shared responsibility  Pool/spread risk through public or private insurance  Strong safety net for the poor  Focus on consumer needs and preferences  Popular support  Flexibility  Support for family caregivers  Integration of medical and social services  Quality  Access  Efficiency 24

Possible high-level strategies for designing an alternative system Private at its core: 1. Improve and promote private long-term care insurance for the “middle” income 2. Establish public catastrophic long-term care insurance and improve/promote private long-term care insurance to “fill the gap” Public at its core: 1. Improve and expand the public safety net for people with low-to-modest income 2. Establish universal public long-term care insurance 25

Things to Consider  These approaches are not mutually exclusive!  In deciding direction, we need to ask:  Who is most likely to benefit?  Who will be “left out”?  How broad is the risk spread?  How will costs be distributed? 26

Committee Business

 Public communications  Committee communications  Future meetings  Time change: all subsequent meetings will be from 9:00AM – 11:30AM  Location: most meetings will be on the 21 st floor of One Ashburton Place. The April 17 th meeting will be in the Ashburton Café on the basement floor of One Ashburton Place. 28 Business items

Addendum 1 Feedback from the Advisory Committee  Content:  Additional perspective (either on Committee or at specific session) is needed: Federal, other States, health economist, international  Existing government/agency structure and data systems may not be optimal  All financing options should be on the table, including private strategies beyond LTC insurance and reverse mortgages  Process:  Additional educational opportunities are needed between meetings  We should not answer policy questions (e.g., need for rebalancing) that already have been answered  Deliverable should have concrete, tangible options for the State 29

Addendum 2 Sources for Slides  Allen, K. “Long-Term Care Financing, Growing Demand and Cost of Services are Straining Federal and State Budgets,” U.S. Government Accountability Office (April 27, 2005).  Feder, J., H. Komisar, and R. Friedland. “Long-Term Care Financing: Policy Options for the Future.” Georgetown University Long-Term Care Financing Project (June 2007).  Gleckman, H. “How Can We Improve Long-Term Care Financing,” Center for Retirement Research at Boston College (June 2008, Number 8-8).  Merlis, M. “Long-Term Care Financing: Models and Issues.” Prepared for the National Academy of Social Insurance Study Panel on Long-Term Care (April 30, 2004).  National Commission for Quality Long-Term Care. “From Isolation to Integration. Recommendations to Improve Quality in Long-Term Care” (December 3, 2007).  Washington State Task Force on Long-Term Care Financing & Chronic Care Management, Final Report (January 2008). 30