Planning for Life

Hartstein Describes Massachusetts Long-Term Care Challenge

Posted by Harry S. Margolis on February 11, 2012

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By Harry S. Margolis

We were delighted when Secretary of Elder Affairs Ann L.Ann L. Hartstein Hartstein spoke at our office last week about the report and recommendations of the Massachusetts Long-Term Care Financing Advisory Committee.

They were charged with finding a solution to the challenge of an increasing number of aging baby boomers needing an increasing level of long-term services and supports (LTSS), estimated to cost $28 billion a year by 2030.  By then, all baby boomers will be over 65 and the oldest will be hitting age 85, at which point the need for LTSS will skyrocket.  With much of LTSS in Massachusetts covered by MassHealth, the costs to state government would be unaffordable without significant changes.

According to the Committee's report, Securing the Future, in 2005, LTSS costs in Massachusetts were paid from the following sources:

MassHealth               45%

Medicare                  19%

Out-of-Pocket          17%

Other public sources  10%

Private insurance       9%

The advisory committee supported a three part solution to be phased in over 10 years, to include:

  • Incentives for residents to purchase long-term care insurance.

  • Expansion of MassHealth coverage so that there could be cost sharing between residents' savings and MassHealth rather than the current system which encourages sheltering assets in order to depend entirely on MassHealth.

  • Promotion of programs like the CLASS Act.

Unfortunately, the CLASS Act which was part of health care reform and promoted by the late Senator Kennedy has been set aside as not fiscally viable.  This was due to its voluntary nature, which would have led inevitable to adverse selection.  In other words with only those needing long-term care signing up it would quickly run out of money. 

One possible respone would be for Massachusetts to create its own mandatory (naughty word these days) version of the CLASS Act.  One of the biggest problems, however, for a state to take this step is the fact that people move around.  Those who paid into the system for years might move south when the retire, getting no benefit.  And should others who move in from out of state be able to particpate?  These are some of the touch questions policy makers are trying to answer.

Secretary Hartstein handed out to the crowd copies of Embrace Your Future, a planning guide for long-term supports in Massachusetts.  It can be read on line or ordered by clicking here.

Topics: long-term care planning, long-term care insurance

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