    [Senate Hearing 107-689]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 107-689

                           LONG-TERM CARE FINANCING:
                             BLUEPRINTS FOR REFORM
    =======================================================================

                                    HEARING

                                   before the

                           SPECIAL COMMITTEE ON AGING
                              UNITED STATES SENATE

                          ONE HUNDRED SEVENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                 WASHINGTON, DC

                                   __________

                                 JUNE 20, 2002

                                   __________

                               Serial No. 107-27

             Printed for the use of the Special Committee on Aging

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    81-856                          WASHINGTON : 2002
    ___________________________________________________________________________
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                           SPECIAL COMMITTEE ON AGING

                      JOHN B. BREAUX, Louisiana, Chairman
    HARRY REID, Nevada                   LARRY CRAIG, Idaho, Ranking Member
    HERB KOHL, Wisconsin                 CONRAD BURNS, Montana
    JAMES M. JEFFORDS, Vermont           RICHARD SHELBY, Alabama
    RUSSELL D. FEINGOLD, Wisconsin       RICK SANTORUM, Pennsylvania
    RON WYDEN, Oregon                    SUSAN COLLINS, Maine
    BLANCHE L. LINCOLN, Arkansas         MIKE ENZI, Wyoming
    EVAN BAYH, Indiana                   TIM HUTCHINSON, Arkansas
    THOMAS R. CARPER, Delaware           JOHN ENSIGN, Nevada
    DEBBIE STABENOW, Michigan            CHUCK HAGEL, Nebraska
    JEAN CARNAHAN, Missouri              GORDON SMITH, Oregon
                        Michelle Easton, Staff Director
                   Lupe Wissel, Ranking Member Staff Director

                                      (ii)

                                C O N T E N T S

                                  ----------
                                                                       Page
    Opening Statement of Senator John Breaux.........................     1
    Statement of Senator Ron Wyden...................................    30
    Statement of Senator John Ensign.................................    31

                                    Panel I

    Hon. John Rockefeller IV, a U.S. Senator from the State of West
      Virginia.......................................................    33
    Hon. Howard Dean, Governor, State of Vermont.....................    45
    Hon. David Durenberger, Chairman, Citizens for Long-Term Care
      Coalition, Washington, DC......................................    52
    Carol O'Shaughnessy, Specialist in Social Legislation,
      Congressional Research Service, Washington, DC.................    91
    Steven Chies, Vice Chair, American Health Care Association,
      Washington, DC.................................................   113

                                    Appendix

    Statement for the Record submitted by the American Association
      for Geriatric Psychiatry.......................................   129

                                     (iii)

                LONG-TERM CARE FINANCING: BLUEPRINTS FOR REFORM

                                  ----------                              --

                            THURSDAY, JUNE 20, 2002

                                           U.S. Senate,
                                    Special Committee on Aging,
                                                        Washington, DC.
        The committee convened, pursuant to notice, at 9:32 a.m.,
    in room SD-192, Dirksen Senate Office Building, Hon. John
    Breaux (chairman of the committee) presiding.
        Present: Senators Breaux, Wyden, and Ensign.

                OPENING STATEMENT OF SENATOR JOHN BREAUX

        The Chairman. The Select Committee on Aging will please
    come to order. This morning, we have a very distinguished panel
    of witnesses who we are very anxious to hear. I am joined by
    our colleague, Senator Wyden, and other Members of the Special
    Committee on Aging will be with us in just a moment.
        I would just point out in opening remarks that our
    committee has the responsibility to look ahead and see that, as
    a nation, we are prepared to handle the long-term care needs of
    the pending age wave of the 77 million baby boomers.
    Unfortunately, our country, arguably the strongest nation in
    the history of the world, still lacks a comprehensive long-term
    care system, and that is why this Committee on Aging has
    devoted 13 separate hearings in the 107th Congress to the issue
    of long-term care, examining what is currently available in our
    country, how we finance long-term care, and what we still need
    to do to guarantee a wide range of quality, affordable services
    to all disabled and elderly persons.
        To capture the highlights of all the expert witnesses who
    have testified before our Aging Committee, we have produced a
    Findings Report, which I have in my hand, which members have
    seen and I think is available outside. This Findings Report is
    kind of a road map. It is a road map on how we can hopefully
    get from here to where we as a nation would like to be as far
    as providing services to our nation's seniors.
        [The Findings Report follows:]
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        The Chairman. Today, we will be hearing from another group
    of expert witnesses who will talk about reform options to pay
    for a comprehensive long-term care system. Much good work has
    already been done and we want to take advantage of that wisdom.
    Other witnesses have come up with new approaches that are
    worthy of our time and attention, and equally important is the
    chance to learn what other developed countries around the world
    are doing to finance their long-term care service, as well.
        While we have talked about this issue in terms of billions
    of dollars that are spent each year on services and the
    institutional bias that exists and the unmet need for the
    services that exist, what we really need to remember is that
    the issue of long-term care is very personal for individuals
    and their families and their relatives and their friends. It
    affects each and every one of us and our families at some point
    in time. It will affect all of us, if it already has not done
    so.
        I would just like to read a short copy of a letter that I
    received which is really typical, unfortunately, of many of the
    hundreds and hundreds of letters that this committee has
    received from families around the country expressing their
    concern. This one is from a constituent of mine from Louisiana,
    and she says, ``My name is Frances Stevenson. I am 73 years old
    and I live in Napoleonville, LA, with my husband, Dave. Dave is
    76 years of age, is insulin-dependent diabetic who has had
    several mini-strokes, high blood pressure, dementia, and has
    had a feeding tube since May 1999 when his blood sugar elevated
    above 400. He wears diapers and must be bathed and changed at
    least twice a day. I must monitor his blood sugar at least
    three times a day, must bathe him in the evening, change his
    feeding bag daily, give medicine, insulin, and tend to his
    oxygen tank.''
        ``Last May, Dave had surgery to remove his gallbladder, and
    at that time, he spent several days in an intensive care unit
    and a few more days in step-down. Home health care is allowed
    to come in for a few weeks at a time after each stay in the
    hospital and then I am on my own. My family helps me as often
    as they can, but each of them have jobs. My son is an Army
    officer stationed in Washington, DC. He gets to come home only
    about once a year. I have tried to get the VA to give us some
    aid since Dave is a World War II veteran. He served in the
    Marines for 5 years.''
        ``I have been paying for an aide to come in and bathe him
    every morning for the last 4 years. Dave and I worked very hard
    throughout our whole lives and we felt that we would be all
    right in our later years. I can barely make ends meet with the
    costs of medicine, insurance, diapers, pads, bandages, a
    nursing aide, et cetera. The Council on Aging put Dave on a
    program in February, but that will end in a few weeks. He had
    24-hour sessions of respite care, 34 hours of personal care,
    and 18 hours of sitter care.''
        ``I want him to be cared for at home because I know that is
    where the best tender loving care will be given. I need home
    health care and someone to help with home living. Please give
    us some help.''
        I think you would agree with me that this story of one
    person from Louisiana is far too typical of literally hundreds,
    and indeed thousands of Americans throughout this country as we
    struggle with the process of aging. If it is bad today, I would
    only point out that by the year 2040, we are projected to be
    spending some 75 percent of our nation's entire financial
    budget on Medicare, Medicaid, and Social Security. If we have
    problems today with about 40 million Americans over the age of
    65, we can only wonder what it will be like when 77 million
    additional baby boomers become seniors who are going to be
    living a lot longer than their children would have expected.
        So we have a challenge that I think is not insurmountable,
    but it indeed is one of the biggest issues facing us as a
    nation. Hopefully, this report will move us toward the process
    of looking at what we have done in 13 hearings and hopefully be
    able to come together in a bipartisan fashion to determine what
    some of the answers are.
        I am delighted that I am joined by my two colleagues, who I
    will introduce in just a minute. I want to recognize a group of
    intern teachers that we have from Louisiana who work in our
    office for a short period of time to try and learn a little bit
    about how Congress works. Hopefully, being at our hearing today
    will give them a little sense of how hearings work in the U.S.
    Senate.
        I would recognize Senator Wyden for any comments that he
    might have.

                     STATEMENT OF SENATOR RON WYDEN

        Senator Wyden. Thank you, Mr. Chairman.
        The first question, of course, that comes up when somebody
    talks about long-term care is can America afford such a
    program, particularly now with the war on terrorism, the claim
    on funds in a variety of areas. I think that is going to be the
    key question.
        To me the question is not can America afford it, the
    question is can America afford not to do it, given this
    demographic tsunami that is coming. I think the answer is
    clearly yes. People can go through $40,000 a year easily on
    long-term care now. Given the population trends that you have
    outlined, it is obvious that the costs are just going to get
    worse.
        So I would like to just touch very quickly on a couple of
    areas that I think are particularly important as we explore by
    way of trying to lay out a structure for new public and private
    partnership.
        The first area that I feel very strongly about is making
    much more aggressive use of waivers so that programs at the
    State and local level can stretch the public dollars that are
    available for long-term care. One of the things that I am
    proudest of, when I came to the House after 7 years as Director
    of the Gray Panthers--I had a full head of hair and rugged good
    looks--Senator Rockefeller, who my guess is did not even know
    who I was, helped me with a program that really helped to start
    the assisted living field. It was a waiver program so that you
    could use Medicaid dollars that were then earmarked for nursing
    home care for home health care, and a number of States around
    the country have used it. Governor Dean is going to talk today
    about more aggressive use of waivers with home health and I
    support what the Governor is talking about, as well.
        However, I think we should also look in a multi-
    disciplinary way at waivers. For example, I do not see any
    reason why we do not allow waivers so that the VA, HUD, and
    Medicaid, could not team up on some innovative approaches in
    terms of long-term care. Those would be using existing dollars.
    They could come out of the State and local level. This is an
    area I will want to explore with our witnesses. So more
    aggressive use of waivers would be a top priority for public
    funds.
        Then on the private side, where I know a number of Senators
    had an interest, I would like to see us allow penalty-free
    withdrawals from private retirement accounts for long-term
    care. We allow those penalty-free withdrawals for a whole lot
    of other stuff that America feels strongly about, like college
    and saving for a home and that sort of thing. I would like to
    see us take a look at penalty-free withdrawals from retirement
    plans for long-term care so that we could shore up a little bit
    of what is going on the private side in terms of saving for
    retirement.
        Finally, a third area that I know Senator Rockefeller has a
    lot of history on, I would like to see us go back to explore
    the idea of a voluntary Part C of Medicare. As all you know, we
    have got Part A, the hospital portion, Part B, the outpatient
    portion. We have talked over the years sort of sporadically
    about a voluntary Part C of Medicare that could be designated
    for long-term care, where perhaps government contributions
    could be matched by private contributions, as well.
        Your report in my view, Mr. Chairman, gives us a very good
    outline. I am looking forward to having a lot of people at that
    witness table who I have worked with over the years give their
    views and working with you, and Senator Ensign has had a long-
    term interest in this, as well, so I think we have got some
    bipartisan opportunities here.
        The Chairman. Thank you, Senator Wyden.
        Senator Ensign of Nevada?

                    STATEMENT OF SENATOR JOHN ENSIGN

        Senator Ensign. Thank you, Mr. Chairman. I will keep my
    remarks brief. I am looking forward to hearing from the panel.
        Anybody who has gone around their States--who has spent any
    time at all looking into this issue-realizes that there are
    some serious concerns not only today, but even more so into the
    future. I think the demographics show as the Chairman mentioned
    this morning, as we go into the future, that if we do not start
    addressing this problem now, we are going to be behind the
    biggest eight-ball that we could possibly imagine.
        The continuum of care that is out there, and there are a
    lot of innovative things being done in the continuum of care,
    is such a big issue. This is because almost everybody is
    thinking about their continuum of care as they are getting
    older. Obviously, the closer you get and the more gray hair
    that you get, or the less hair, whichever the case may be----
    [Laughter.]
        The more that we have the fear that we may be in a
    situation where the care is not good. The care is something
    that is not only inadequate, but sometimes neglectful. There
    are a lot of people doing a lot of good stuff out there, but I
    think a lot of people, as they get older, have a big fear of
    the type of care that is going to be available.
        So I think that this is an incredibly important issue for
    us. Unfortunately, we are not getting enough younger people
    thinking about the issue yet and I think that that is going to
    be one of the keys. Government has an important role in this,
    but the more that we can get the private sector involved and
    get individuals when they are younger to start saving and
    buying long-term care insurance--I think that that has got to
    be a big part of the answer.
        Then as innovative ideas come forward and we figure out the
    best ways that we can use preventative medicine to keep people
    out of assisted care, the better off that we are going to be.
    This is because more people will be able to take care of
    themselves. A great example of this is the physical therapy
    cap. Now, there is a budgetary reason. If we do not get people
    back to being more on their own or maybe in a less-intensive
    health care situation, the more expensive it is for us and the
    worse their quality of life is.
        So preventative medicine, to me, as part of this whole
    thing, has to be stressed, where we have dietitians teaching
    diabetics and cancer patients and heart patients how to eat
    better, not only how to shop for the food, how to buy the food,
    how to prepare the food. We have got to have physical
    therapists and speech therapists and occupational therapists
    involved in these things and then communities and non-profits
    involved. I think that if we look at this from a holistic
    approach, I think that we are all going to be better off and
    that is all going to be part of the solution for the future.
        I appreciate the Chairman's interest in this issue. I think
    you need to be applauded for this because this is such an
    important issue.
        The Chairman. Thank you, Senator Ensign.
        You mentioned long-term care insurance. I would note for
    the first time that the Federal Employees Health Benefit Plan
    will be offering long-term health care insurance for the nine
    million Federal employees, not only Members of Congress, but
    also nine million others. As well, and I think that will be a
    very important test to see how it works. It is already
    available in the private sector and I think people are just
    becoming aware of the need for it.
        We have a very distinguished panel of witnesses, as I
    mentioned. I will introduce them all collectively. It starts
    with a very distinguished colleague who has a long history of
    service in the health care areas. He chaired the Pepper
    Commission a few years back which dealt with the question of
    providing health insurance for the millions of Americans who
    are uninsured, outlining a blueprint for the future.
    Unfortunately, Congress has not really acted on those
    recommendations. We still have about 44 million Americans who
    have no insurance at all. We talk about Medicare not being
    enough. There are 44 million Americans who have nothing and
    that is still a problem and Senator Rockefeller was one of the
    leaders on that Pepper Commission.
        Howard Dean will be our next witness. He is back to the
    Aging Committee. He has been before us on a number of occasions
    with his ideas and suggestions. He is testifying on behalf,
    really, of his own views, but also representing the National
    Governors Association, which has really gotten involved in this
    issue, and is incredibly important. We are looking forward to
    his testimony.
        Our former colleague of this committee, as well as, and the
    Senate Finance Committee, David Durenberger, is back as
    Chairman of the Citizens for Long-Term Care Coalition, which
    has done outstanding work in trying to put together all of the
    health care groups to address this problem collectively
    because, really, we all have the same goal in mind. So your
    work in that coalition is outstanding.
        Carol O'Shaughnessy will be testifying. She has been around
    on the Hill a number of times before this committee, and has a
    real expertise in health care and aging issues in particular.
    The work that they have done over at CRS, the Congressional
    Research Service, which provides us with information, has been
    most helpful.
        Steve Chies is Vice Chairman of the American Health Care
    Association, which is a federation of all of the nonprofit as
    well as the for-profit assisted living facilities, nursing
    homes, residential services, et cetera, who have a major role
    in this area of helping us with long-term care. He also will be
    testifying.
        I know Senator Rockefeller has a busy schedule, so Jay, if
    you would like to give your testimony, maybe we can ask you a
    few questions and you can leave. Welcome to the committee.

    STATEMENT OF HON. JOHN ROCKEFELLER IV, A U.S. SENATOR FROM THE
                         STATE OF WEST VIRGINIA

        Senator Rockefeller. Actually, I do not have a busy
    schedule, Mr. Chairman, but I am delighted that----
        The Chairman. But you want to get out of here anyway?
    [Laughter.]
        We are glad to have you.
        Senator Rockefeller. Thank you, Mr. Chairman, and both of
    your colleagues here. I am very happy to be here.
        We did, in fact, and Senator Durenberger was a member of
    the Pepper Commission, which passed out a long-term care policy
    11-to-4, and this was a very, very split commission
    ideologically, but not split on the concept of doing long-term
    care and doing it in a real and workable way.
        We are delivering what I would say would be fiscally
    irresponsible tax cuts for the next decades. Americans
    throughout this country are dealing with other kinds of
    problems, and that is when are they going to sell their homes?
    When are they going to raid their savings, get rid of their
    retirement benefits because of long-term care problems?
    Families come in to take care of them, and then their assets
    get depleted, exhausting personal resources, having to get rid
    of properties in order to get people qualified for Medicaid.
        So government coverage for nursing home care operates
    primarily and substantially through the Medicaid program, which
    is fraught with problems, as Governor Dean knows better than
    anybody, and it is the safety net for the poor, always has
    been, and is now grossly underfunded and States are suffering
    because of unwise actions on our part here in Congress.
        Medicare, and everybody knows this, is not designed to do
    long-term care. It does lots of things, but it does not do
    prescription drugs and it does not do long-term care and those
    are probably two of the biggest needs in the country, along
    with mental health coverage.
        So accessing the Medicaid program, by definition, getting
    into it requires impoverishing yourself. We know that, but it
    needs to be said and said and said again. It has not changed
    since the late 1980's when we were dealing with this. It is
    still the problem of demeaning yourself and giving up what you
    have.
        We have serious issues of quality. We are faced with a
    system which encourages care in institutions rather than homes.
    People want to stay at home. I had a mother who died from
    Alzheimer's and she wanted to die at home, or we wanted her to
    die at home. She was not sure at that point where she wanted to
    die, but we wanted her to die at home. That becomes an
    enormously emotional things within families.
        It was more than 10 years ago that this bipartisan
    commission called the Pepper Commission issued its ``Call to
    Action'' and nothing has really changed. We had three basic
    concepts which we put forward. Home and community-based care
    should be available and they should be affordable, that is No.
    1. No. 2, those who need nursing home care for short periods
    should have enough resources, $30,000 for a single person,
    $60,000 for a couple, preserved intact in order to return home,
    so they are not depleted entirely. That was true then, is still
    needed now. No one should fear impoverishment if they must end
    their lives in a nursing home. Now, woven throughout the
    recommendation is the requirement that people would have to pay
    some, according to their ability to do so. That seemed fair
    then, the same now. So I want to talk just briefly about each
    of those ideas.
        First, a strong home care benefit was included in the
    Pepper Commission recommendations because people who need long-
    term care want to stay at home. They do not want to be in an
    institution. They want to stay at home. Individuals with three
    or more impairments--and we used to call those, and still do,
    measures by acts of daily living, ADL, it is a way of measuring
    how impaired people are--should be eligible for home care
    services. Our expansion did not cap the hours of service, but
    we did include individual budgeting caps set for each
    beneficiary. The trick is to encourage informal caregiving
    rather than to displace it, and researchers believe that a
    strong home health care benefit would help on this.
        Today, the home health care benefit offers skilled care and
    possibly home health aides on a part-time or intermittent
    basis. Under current requirements, beneficiaries also must be
    confined to the home, despite the fact that many could leave
    home with assistance. So you get this question, if they are
    home, they cannot leave. So 24-hour care is not covered, nor is
    personal care covered, and if that is the only care a person
    needs, we can do a whole lot better.
        Today, in fact, I am going to be introducing legislation
    which is the first step to improve home care, the modernization
    of the benefit, which allows for increased mobility out of the
    home. Let us not forget that the next step must be to change
    the home care benefit fundamentally to allow those in need to
    remain in the home and then to fix this bias that we have,
    which we are, incidentally, curing in the Veterans
    Administration where we have taken this on. We have made the
    first change in long-term care in the VA system since the
    1960's without a whole lot of fuss, not that they have
    implemented it, but we have changed the law and they are in the
    process of rules and regulations, getting people out of
    institutions.
        Second, the Commission members recommended coverage of
    short stays in nursing homes regardless of income and we
    allowed at that time, I think, David, it was about 3 months and
    you did not have to pay. Income was not a factor. Most people
    who enter nursing homes can return home and public insurance
    for a 3-month stay provides the protection to do that.
        At present, nursing home residents with any savings simply
    do not qualify for Medicaid-financed nursing home care, and
    under certain limited conditions, Medicare will pay some
    nursing home costs for Medicare beneficiaries--this is
    Medicare--but that is sort of the skilled nursing and
    rehabilitation services caveat which does not get at the basic
    problem.
        So again, in this legislation, we are going to provide
    options to nursing home care under the Medicare benefit that
    would be payment for adult day health care. Paying for adult
    day care will provide a measure of respite, will reduce the
    bias toward institutionalization, and encourage people to stay
    at home. The next step, obviously, will be full coverage of a
    short stay in a nursing home without the condition of poverty.
        Third, the Pepper Commission recommended a measure of asset
    protection, and I discussed that. That is the idea that one in
    four Americans who have to stay 3 months or longer, that you do
    not deplete them. They can go to the nursing home, but you
    allow them to keep $30,000 if they are single, $60,000 if they
    are a couple, keep their assets. It is so horrible, what we do
    to people.
        In this legislation, we are going to give States the option
    of whether or not to pursue and sell off the homes of Medicaid
    recipients, and Governor Dean will probably have something to
    say about this. It is something that can be done in the short
    term. In the future, we will have to address the larger
    problem, as I say, of spending down to poverty.
        I was going to talk about the Pepper Commission is relevant
    today, and you did. You basically said, Mr. Chairman, yes, they
    are. It is just that everything is worse. The cost of nursing
    homes has doubled, all the rest of it.
        So I will close with a final thought. A long-term fix
    cannot be done without the government. That, we have to
    understand. We cannot ignore the government. The government is
    already involved. We need the Federal dollar and we need
    Federal leadership. The Pepper Commission concluded that
    Federal action is, ``essential to change the nation's
    fundamentally flawed approach to long-term care financing.''
    End of testimony.
        The Chairman. Thank you very much, Senator Rockefeller.
        [The prepared statement of Senator Rockefeller follows:]
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        The Chairman. I think if we have a question or two for Jay,
    we can go ahead and do it now, if the other panel members do
    not mind.
        One of the things you put in your testimony that I find
    very interesting and I think a lot of Americans do not really
    understand is the chart that you put on the last page about how
    things have changed just since the Pepper Commission, in terms
    of the demographics of how this nation looks in the year 2000
    as opposed to what it looked like in 1990. We have a 12 percent
    increase in the number of people 65 years of age and older over
    1990. We have a 38 percent increase in the number of people 85
    years of age and older, which is the fastest-growing segment of
    our population and therein lies part of the problem. There is a
    17 percent increase, Senator Rockefeller points out, in people
    living alone and a 70 percent increase in the total U.S.
    expenditures on nursing home care just in that 10-year period.
    I mean, those are astronomical numbers that are only going to
    continue to get worse.
        Jay, let me just ask one question, and that is you
    mentioned the question of providing in the home health care
    areas. You also recommend, I think, as the Pepper Commission
    did, apparently, the coverage of short stays in nursing homes
    by Medicare, and you point out, regardless of income. It seems
    to me that we have to face a problem that we are looking at
    prescription drugs for seniors which I support, but it is going
    to come out of Social Security surplus. If we increase other
    Medicare benefits like covering nursing home stays, it is going
    to come out of Social Security surplus. We are rapidly spending
    the surplus for retirement on these programs that are very,
    very worthwhile.
        It seems to me at some point we have to consider, with the
    limited amount of money we have, are we, in fact, going to use
    tax dollars to take care of the nursing home for Warren
    Buffett? I am just using him as an example. I could probably
    use the Senator.
        Senator Rockefeller. Somebody else. [Laughter.]
        The Chairman. I could probably use someone else as an
    example, but it seems to me that as a nation, when we have
    limited resources, we have to say, all right, we are going to
    take care of those who need the help, but we are not going to
    use tax dollars to subsidize someone who is financially well
    off. Can you comment on that? I'm talking about means testing.
        Senator Rockefeller. Yes, I would be happy to. I think your
    point is well taken and adjustments like that could be made. I
    remember I started something called the Golden Mountaineer
    Discount Card program when I could not think of anything else
    to sort of help West Virginia during the depths of the recent
    recession and the legislature was all over my case because they
    said, what do you mean? We have got all these rich people who
    are going to be taken care of. So we did a little survey of
    that and discovered about 2 percent of West Virginians
    qualified as being wealthy and everybody else did not.
        But that still does not answer your point, and your point
    has merit and I can live with that. I think the important part,
    however, is that when people need to go for a short period of
    time, we talk about 3 months to a nursing home, that they
    should not have to go through all of what you would otherwise
    have to go through if you were going to qualify under Medicaid
    for long-term care and have to strip down everything, you know,
    get rid of your car, get rid of your house, all the rest of it.
    So you sort of create this window for people who are short-
    termers wherein you say, OK, you have got your 3 months based
    upon your acts of daily living analysis and for that we are
    going to go ahead and pick up the cost, not 6 months, not 5
    months, not 10 months, but for 3 months.
        Yes, that is social cost, and yes, we have budget problems,
    and yes, we have terrorism, homeland security, and I cannot
    help you in that, Mr. Chairman, except to say that if we are
    talking about long-term care, these are the kinds of things you
    have to do.
        The Chairman. Thank you.
        Are there any questions of Senator Rockefeller?
        Senator Wyden. Just one. I think Senator Rockefeller has
    done an excellent job in terms of outlining the history and I
    think particularly your last point was important. This is an
    area that absolutely must have a useful government role. There
    are steps that can be taken in the private sector. I mentioned
    one I am interested in, and that is the idea that you could
    have penalty-free withdrawals from private retirement accounts
    in order to pay for long-term care, so it moves toward what
    Senator Ensign was talking about, which is trying to use the
    private sector to the greatest extent possible. But there must
    be a role for government here and the question is really
    whether government is going to be smarter or whether the
    government is going to continue to just sort of dawdle along.
        My question for you, Senator, is given the history here,
    why do you think that there has been commission after
    commission and yet nothing seems to happen after the latest
    report----
        Senator Rockefeller. I think the answer to that, Senator
    Wyden, is that Americans have a virtually unlimited capacity
    for denial on certain very tough issues that have to do with
    health care. We are also risk averse when it comes to health
    care. We were made risk averse by two events. One was
    catastrophic health care, which was a fantastic program which
    the House shot down after all those people chased Danny
    Rostenkowski down the street. We denied that from happening in
    the Senate three times and finally had to give up, so that was
    one. Then along comes the Clinton plan. Everybody goes
    ballistic, and now we have become totally incrementalist.
        In the process of that, we do CHIPs, but we cannot take it
    on to the parents, so that we are sort of frozen, one, by risk
    aversion, second, by always the excuse that this is going to
    cost money, it is going to come out of Social Security, going
    to come out of Medicare, et cetera. We have all these other new
    things going on post-September 11.
        But I think the most important thing that needs to be said
    is I do not think there is a bigger health care problem in this
    country that we have absolutely failed to deal with, face up
    to, even discuss, because it does not make for a particularly
    interesting discussion. You know, prescription drugs, you can
    get into some really good battles. The verbal part is colorful
    and all the rest of it.
        Long-term care affects everybody at some point. It is the
    most overwhelming health care problem, in my judgment, in the
    country and is entirely unaddressed because it is considered
    too expensive, it is considered too oriented toward the
    government for whatever number of reasons, and so we choose
    simply to deal with lesser problems, a little bit like mental
    health, except mental health is now changing. People are
    getting more friendly toward mental health. Nothing has
    happened in long-term care except, as I say, what we have done
    in the Veterans Administration, nothing.
        Senator Wyden. I think your answer is a thoughtful one.
    There is no question that part of this has just been being risk
    averse and being unwilling to take on tough issues. I think the
    one thing that I hope will be different now is that the country
    does have a history of moving when there is a crisis on the
    porch. In other words, you put it off if it looks like the
    crisis is even three doors down the block. I think you and
    others have laid out that the crisis is on the porch and I
    commend you for all of your good work and look forward to
    working with you.
        Senator Rockefeller. Thank you, Senator.
        The Chairman. The system is hanging on a string. I just
    hope we do not have to wait for the string to break before we
    do something.
        Senator Ensign, do you have a question for Jay?
        Senator Ensign. Yes. I actually want to explore with you
    maybe just a little different angle because I think it is
    something that we need to think about. The cases are so
    individualized, and we have talked about the continuum of care,
    as well, some type of short-term solution, and in my opening
    remarks, I talked about the need for physical therapy and the
    need for preventative medicine.
        But what I want to explore with you is the family
    responsibility. My grandmother, just turned 82 years of age. My
    parents are in their mid-60's, and between myself and my
    brothers and sisters, We are looking at the potentials for her
    care. She is still living on her own and she still wants to
    live on her own. However, if she did not want to live on her
    own, we are in a position to be able to afford to do those
    things. I agree with Senator Breaux as far as my grandmother
    goes she should not be one of these people that are helped by a
    government program. It should be some type of a means testing
    for this. But I still want to use her as the example. Let us
    just say we could not afford what we can afford. Maybe we are
    questionable.
        We know that older people, and you mentioned this, want to
    stay in their own homes. My grandmother does not want to move
    even into some of the wonderful private assisted living
    facilities. She does not even want to go to that first step. I
    have been to many of those places and they are absolutely
    wonderful and I think she would actually like it there, but she
    does not want to, so we are working with that right now.
        But there is this mentality with younger people, in how
    they are looking at this type of situation. It is a long way to
    say this, but it is easy to just kind of ship grandma off, and
    that is what I want to kind of explore. If we get more and more
    into, ``Well, the government can take care of them, that
    relieves me of my responsibility,'' that will we, in fact, be
    setting up a situation where families will be taking less and
    less responsibility for grandma or grandpa just because it is
    easier.
        It is hard work to take care of our elderly relatives. At a
    certain point, you cannot do it with Alzheimer's patients. I
    mean, you know that the family cannot do it. But there are a
    lot of times where it is hard work, but that is what part of
    life is. When you are a parent, you have children. Then when
    you are a parent and you get older, you have got your parents
    or your grandparents, and part of that is just the
    responsibility as a human being to help in those situations.
    But if there is a government program, you know what? We are
    such a selfish society that we will just let the government do
    it.
        Senator Rockefeller. I am anxious to reply to that. I do
    not think we are. I think we can be a society which ignores
    problems and which denies problems, but I do not think we are a
    selfish society. In fact, I think the families that you
    referred to have, in fact, been the government because it is--
    and I do not think that West Virginia is particularly unique,
    but those who know Appalachia know that it is extremely family
    oriented, but everybody can say that.
        Kids come back. First of all, kids are dispersed all over.
    I have three sisters. When my mother had Alzheimer's, they were
    in four different States, all of them long ways away from where
    she was. So they are dispersed. They did not used to be.
        Families come back. I mean, the history of long-term care,
    say where I live, is families coming back from Oregon, from
    Ohio, from Kentucky, and they bring their kids for whom they
    have been saving for college tuition money desperately, they
    move into the house, they take the responsibility. They become
    the government. They relieve the government. They do this
    almost without exception, and then they get destroyed
    psychologically, financially, emotionally by this process of
    caregiving, which they cannot measure up to because of the lack
    of respite care, because of the lack of experience, because of
    the lack of people, because they are meant to be working, and
    they get caught up in it.
        My response would be somewhat the opposite, that the
    American people have been bailing out the government through
    their caregiving for all of these years. I am not saying that
    the government has to do all of this. That is why we put in
    that the people should pay something. Everybody should pay
    something.
        But, no, I do not buy that at all, Senator, that the
    American people would choose the easy way out. I think people
    do try. It is not Ozzie and Harriet anymore, and I recognize
    that, but people are pretty serious about their parents when
    they get in trouble and they are pretty willing to come back
    and do everything that is required. As long as that happens,
    there is less pressure on the government, and the explanation
    of that is who talks about long-term care? You have got a group
    of people here who are going to talk about long-term care, but
    how often do you hear it discussed at your town meetings and
    other things? People are talking about prescription drugs, they
    are talking about other things, but they are not talking about
    long-term care.
        Senator Ensign. Just to conclude, I guess we will have to
    agree to disagree. I think that there is some potential for
    that, for what I laid out to happen. I agree with you, though,
    it is very difficult on a lot of families depending on the
    level of need. That is why I believe that there is a need out
    there--a severe need--for more long-term care assistance.
        I guess all I am trying to raise is cautionary flags that
    we do not make it so easy, to not take responsibility. My
    grandmother was incredible when my parents were divorced when I
    was very young, letting us live with her for summer after
    summer after summer while my mom was trying to save a little
    money as a single mom, carrying change at Harrah's in Reno. I
    will never forget what my grandparents did for us, and so
    because of that, I feel a very, very strong commitment to her
    to making sure that she is taken care of.
        But in a situation where if the help can be like respite
    care, when you see people with disabled kids or with parents or
    grandparents or whatever it is, I think that is the way to go.
    All I am saying is that when we are going forward, I think that
    we need to be very careful that we do not just say, OK, here is
    the benefit, you are relieved of all of your responsibility at
    this time, instead of trying to set it up to where we can give
    the help that is needed, but still the family has the
    responsibility. That is all I am trying to raise as a point.
        Senator Rockefeller. All I would say back, and I do not
    want to abuse my time, is that that is, Senator, with all due
    respect, kind of the classic way that legislation thereby never
    takes place, because it is the cautionary flag. If we do this,
    is there a chance that the government becomes a substitute for
    the family? If people are disposed to worry about that
    sufficiently, I guarantee you there will not be anything
    happening in terms of a long-term care policy that works.
        So that is what I would fire back at you. I mean, it is the
    same thing, and the Chairman can remember this on Medicare
    reform. I remember we had a vote in the Finance Committee and I
    was one of two who voted against means testing. Now, should my
    mother--obviously, she should have been means tested. But what
    I did not want--the reason I voted against it, Senator, was
    because I did not want Medicare reform, and the means testing
    back at the time of this vote would have saved $3 or $4
    billion, but it became sort of the way you defined, were you
    serious about doing something about Medicare. Were you a
    serious player in this intellectual and cerebral and emotional
    argument. So if you were for means testing, that meant you
    were, and it was $3 or $4 billion.
        So it became an excuse, and what I do not want is the so-
    called cautionary red flag that you raise, I do not deny that
    possibility episodically, but I do not want it to become
    something which then prevents us from dealing with what I
    consider to be the largest most intractable health care problem
    in this country.
        Senator Ensign. Thank you.
        The Chairman. Jay, thank you very much for your testimony
    and for responding to a very interesting series of questions
    and dialog. We thank you very much, and if you have to go back
    to work, we will be happy to excuse you.
        We will next hear from Governor Howard Dean. Howard, thank
    you and all the witnesses for being patient.

       STATEMENT OF HON. HOWARD DEAN, GOVERNOR, STATE OF VERMONT

        Governor Dean. Thank you, Mr. Chairman. I want to thank the
    Senator from West Virginia, who is very good on these issues
    and has been for a long time.
        I have written testimony which I will submit and I am just
    going to go through some of the talking points.
        In our State, we have 120,000 people on Medicaid out of a
    population of 600,000. I did that on purpose. We insured 96
    percent of all our children under 18, and of the 4 percent that
    are not insured, 3 percent are eligible for the program. So we
    essentially have universal health insurance in our State for
    those under 18.
        More than 50 percent of all Medicaid recipients, because we
    have universal health insurance, are under 18. They use 14
    percent of all the money. Out of the 120,000 people we have on
    Medicaid, we have 2,500 receiving long-term care assistance.
    They use nearly 50 percent of the money. This is an enormous
    financial problem for the States, and since you match our money
    in every State--different rates, obviously, for different
    States--it is an enormous problem for the Federal Government.
        We have actually done some of the things that you are
    talking about doing. Let me make some suggestions. First of
    all, I think the notion that you have to be very careful that
    was raised by Senator Ensign is a very good notion. I agree
    with Senator Rockefeller that we ought not to let cautionary
    red flags prevent us from doing anything about this, but I
    think if you create the wrong program, you are going to create
    a need that is going to eclipse any ability to finance any of
    this, so we have to do this right.
        I am going to recommend two things, one of which we have
    done. Institutions use up a huge amount of money. We do not
    think we need any more nursing home beds in this country for
    the foreseeable future, because if you do what we did, you will
    not need it. We passed a bill about 5 or 6 years ago that
    reduces the number of nursing home beds by 10 percent and we
    think we can take another 10 percent of our nursing home beds
    out. How can we do this with an aging population? Because of a
    waiver.
        Now, we do not want more waivers. What we want is a law
    that allows us to do what we are doing without any waivers and
    allows every State to do it. We have basically said, we will
    take the Medicaid money that is going to skilled nursing
    facilities and we will use it in assisted living facilities. I
    think we are the only State in the country that uses Medicaid
    in assisted living facilities, and more importantly, in home
    health care. I think we have now 1,000 slots where we can take
    care of people in their own homes and they can get Medicaid
    assistance. The qualification is that you have to be eligible
    for nursing home entry.
        The Chairman. Do you have a waiver for both of those?
        Governor Dean. Yes.
        The Chairman. For home health care and for assisted living?
        Governor Dean. Yes. So we are basically able now to use the
    financing that we have to take care of more people. For every
    Medicaid dollar that we get, we can take care of twice as many
    people as we can if we did not have this waiver. So with the
    money that we get, we can simply take care of a whole lot more
    people.
        Now, something like 30 percent of all the people in nursing
    home-type care are, in fact, taken care of in their own homes
    by using Medicaid dollars for skilled nursing care that needs
    to come into the house, respite care, which I think everybody
    agrees is necessary because families really do struggle when
    they are taking care of their folks, and it really is not easy
    on these people.
        I think we all have our stories. I certainly have seen
    people, particularly with Alzheimer's, who are otherwise
    healthy but who are very difficult to take care of. If you try
    to do that on your own without any kind of support, you are
    basically asking for a situation where you and your family and
    your kids get burned out as you are trying to take care of your
    elderly parent whose Alzheimer's is deteriorating.
        So these services are necessary, but even if you have
    respite services and even if you have long-term care in the
    home and skilled nursing care in the home and all these things,
    you can still take care of twice as many patients as you can
    inside a skilled nursing facility because the money is
    reallocated.
        Now, this is not to say we do not need skilled nursing
    facilities. Of course, we do. This is a gradual aging process.
    People who have serious conditions like Alzheimer's or many
    conditions when you get to be in your 70's, 80's, and 90's,
    these conditions are not usually reversible. So as folks
    continue to transition, they do need more care and they do need
    to go from home into assisted living or oftentimes into a
    skilled nursing facility.
        But right now, we put folks in this country into skilled
    nursing facilities who do not need to be there and we do it
    because everybody lives in Ohio and the mom is in Nevada and
    they cannot come back and they cannot leave their lives and
    they cannot, for most people, cannot decide they are going to
    move to Nevada or move her to Ohio or whatever, and so they end
    up in the nursing home.
        The most common way people get in the nursing home is they
    go into the hospital. They get sick. They do not need to be in
    the hospital anymore, and then everybody wants to get them out
    of the hospital. They cannot go home because we do not have the
    back-up, so they end up in a nursing home. Once you are in a
    nursing home, it is almost impossible to get out, because
    basically what happens is that the level of care that a patient
    needs will rise to the level of the institution that they are
    in.
        This is why I started off by saying, be careful what you
    create, because if you simply create a long-term program that
    stresses nursing homes, guess what? You are going to have a
    whole lot more nursing home beds and you are going to be able
    to take care of half the number of patients.
        So the first thing I would ask for, Mr. Chairman, is a
    program which actually eliminates the necessity for us to get
    waivers and allow people and encourage States to put people in
    their own homes with the kind of back-up care that is
    necessary, augmenting the kind of family care that Senator
    Rockefeller and Senator Ensign were talking about, because if
    you augment the family care, most families do want to do the
    right thing, but they cannot because it is just an overwhelming
    task in many cases. You can eliminate the need for a skilled
    nursing facility in many, many cases by simply supporting the
    desire of families and the patients themselves to stay in their
    own homes.
        The next piece is more controversial. I am going to start
    out speaking for the NGA, but let me just be really clear that
    I really do not, because I am going to go beyond what the
    testimony is. I believe we ought to have health insurance for
    every American. That is something I have been very up-front
    about for a long time as a physician. It is something that I
    got into politics because of.
        One of the pieces of that is this so-called swap which has
    been talked about for many years, which is the notion that
    States ought to be responsible for making sure all children, I
    think up to the age of 22, get health care, and we ought to
    have some flexibility as to how to do that and we ought to have
    some financial responsibility, and then the Federal Government
    ought to take over responsibility for all those over 65,
    including dual-eligibles.
        The numbers work very well. If you tell States they have to
    insure everybody up to 22, they will yell and scream and say it
    is an unfunded mandate, but it turns out that you are within $1
    billion in the States' favor if the Federal Government, in
    turn, takes over responsibility for dual-eligibles and nursing
    home/long-term care.
        So I would urge the committee to look at that, although
    look at it carefully, because the biggest single problem here
    is that States generally, I think, do a better job than the
    Federal Government will be able to do in terms of inspecting
    and regulation of nursing homes. If you have one enormous
    entity regulating all the nursing homes in the country, I think
    you are going to have some problems.
        Now, you have problems in States. From time to time, there
    is a big issue in one State where there is an investigation and
    the people are being treated badly in nursing homes and so
    forth and so on, but while that is going on in that State,
    presumably 40 out of the other 50 are doing a very good job.
        We do a pretty good job. We make mistakes and so forth.
    Everybody makes mistakes. But I think having that flexibility
    of somehow keeping the regulation at the local level and having
    some partnership aspects, or at the State level, will serve you
    and serve the Federal Government and, most important of all, of
    course, serve the patients best.
        But the biggest reason for the Medicaid costs being out of
    control in this population is the institutional bias of the
    program. The program is biased, heavily biased toward
    institutional care and it makes it very, very difficult without
    going through the hoops that are required in the waiver program
    to get the OK to spend the same amount of money taking care of
    more people in the area that they want to be taken care of,
    which is their own home.
        Let me just close by thanking you very much for doing this,
    by saying this is a very difficult area, because when you are
    talking about long-term care insurance, what you are talking
    about is not making sure people get adequate health care, you
    are talking about asset preservation.
        We have long-term care insurance in this country. It is
    called Medicaid. If you go to a nursing home in this country,
    you do not get kicked out if you suddenly cannot pay the bills.
    Most States--all States, as far as I know--prevent that from
    happening. Medicaid simply takes over. The issue is, for
    middle-class people, do you want to force them to impoverish
    themselves and impoverish their spouse in order to survive in a
    nursing home?
        I am not trying to say we do not need long-term care
    insurance. We do need long-term care insurance. But I think we
    have to recognize that this is not an issue like universal
    health care, where there are 40 million people who do not have
    it and, therefore, they get bad care because they end up in the
    emergency room after ignoring a problem for 3 months and it
    ends up costing the system more money. This is an issue where
    it is not access, where it is asset preservation. It is an
    important issue. There is a role for the private sector here.
    There is a role for the government here and I wish you good
    luck in sorting it out.
        The final word is that I think Senator Rockefeller is
    absolutely right. This is an issue that somehow has been pushed
    to the back burner for a long time. It is a major issue
    confronting this country. It is certainly a major issue
    confronting the budgets of all of our States, every single one
    of which is in one form of deficit or another these days.
    Medicaid is the biggest driver in the State budgets, all 50 of
    our budgets, and in Medicaid, the biggest drivers are long-term
    care and pharmaceutical prices.
        So I think these hearings have been very timely. I know you
    have put an enormous amount of effort and time into this and I
    sincerely hope that you will get a bill that will give the
    States more flexibility to spend both your money and our money
    more wisely, cover more people in the circumstances that they
    want to be covered, and also to be careful when you create a
    long-term care program that it not have a bias that is contrary
    to the wishes both of the patients and of those of us who end
    up budgeting for the care. Thank you.
        The Chairman. Thank you, Governor. As a medical doctor, you
    certainly bring a unique perspective to this issue.
        [The prepared statement of Governor Dean follows:]
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        [GRAPHIC] [TIFF OMITTED] 81856.006

        [GRAPHIC] [TIFF OMITTED] 81856.007

        The Chairman. Next, we will hear from our former colleague,
    Senator David Durenberger. David.

      STATEMENT OF HON. DAVID DURENBERGER, CHAIRMAN, CITIZENS FOR
                LONG-TERM CARE COALITION, WASHINGTON, DC

        Senator Durenberger. Good morning. Thank you, Chairman
    Breaux and members of the committee. Thank you for holding this
    hearing today, but more importantly, thank you for your
    continued leadership on long-term care issues. You will
    eventually be honored for all 13 of those hearings. I greatly
    enjoyed my years of service on this committee and I am honored
    to be testifying.
        As Chairman of Citizens for Long-Term Care, I have been
    privileged to represent more than 60 national organizations
    representing seniors, people with disabilities, long-term care
    providers, labor unions, insurers, and other professionals.
    Last year, this diverse group of organizations coalesced behind
    the development of a national framework for reforming long-term
    care financing. Among its recommendations was the strong
    assertion that long-term care is an insurable event, and so it
    requires an insurance-based solution as opposed to the current
    welfare-oriented approach.
        Today, we are releasing an analysis that provides a new
    perspective on how policymakers should view long-term care
    within the context of national entitlement program reform. In
    short, it concludes that as the nation's population ages, it
    has become increasingly clear the Nation needs an expanded
    national financial security policy for access to both health
    and long-term care just as much as it needs a national energy
    policy or a national defense policy.
        The major findings are: long-term care spending is growing
    rapidly and the costs threaten Medicaid and family budgets. In
    2002, 40 States anticipate budget shortfalls because of growing
    Medicaid budgets.
        Second, Social Security and Medicare reform will be
    threatened unless long-term care financing is included.
        Third, we must develop a national commitment to long-term
    care financing that includes a limited social insurance cash
    benefit, generous incentives for private insurance, increased
    personal savings and some of the tax policy changes that
    Senator Wyden mentioned, and a Medicare program better designed
    to treat chronic illness.
        Finally, the inclusion of long-term care in Social Security
    and Medicare reform will increase efficiency, promote family
    caregiving, increase private resources, lower the cost of care
    per beneficiary, and better treat chronic illness, among other
    benefits.
        The fiscal challenges Federal and State legislators face
    with the growing pressures on financing, on workforce issues,
    and on the care quality have been articulated both by Governor
    Dean and by the NGA's request for a Commission on Medicaid. Our
    report makes the case for including long-term care financing
    reform in the Social Security and Medicare reform dialog over
    our nation's financial security goal.
        In our judgment, the time to begin is now. The chairman
    referred earlier to how do we deal with spending the surplus.
    The reality, Mr. Chairman, is it is time to bring 1935 and 1965
    programs into the realities of the 21st century. It is that
    simple.
        In the past, when health and income security of our seniors
    and people with disabilities were threatened, society responded
    with the development of Social Security in the mid-1930's, and
    Medicare and Medicaid in the mid-1960's. These programs were
    designed and built on what we knew in the early and mid-20th
    century. But by the end of the 1970's, policymakers were well
    aware of new realities and the need for change in the programs'
    responsibilities.
        In 1982, President Ronald Reagan proposed a new federalism
    as his effort to clarify inter-governmental responsibility for
    financial security. The heart of this proposal, endorsed by the
    National Governors' Association and led by Dick Snelling, would
    have made the Federal Government responsible for financing
    supportive services for the elderly and for people with long-
    term disabilities. State government would have taken
    responsibility for the financial commitment to non-disabled
    low-income individuals, those eligible for short-term public
    assistance, or as we know it, welfare.
        In 1990, under the direction of Senator Rockefeller, the
    Pepper Commission made a recommendation that was much like the
    CLTC recommendation, that there be an insurance premise under
    long-term care financing. The need for long-term care would
    exceed the ability of Medicaid State-Federal financing system
    to keep pace with demand, and we said in 1990, you have to move
    to an insurance system.
        As a member of the Senate's Committee on Finance, I
    participated in both of these efforts and I am well aware of
    the politics of health and financial security. I am convinced
    that President Reagan and the NGA were right in 1982, that the
    Democrat and Republican House and Senate leadership on the
    Pepper Commission were right in 1990. I am convinced the many
    national long-term care associations who make up CLTC are right
    today.
        The combination of demographics and cost increases that are
    driving calls for Medicare, Medicaid, and Social Security
    modernization require we look for new solutions to address the
    future needs of people with disabilities and our aging
    population. We cannot expect our elected officials to undertake
    the bruising political battles associated with Medicare and
    Social Security reform only to have the same issues again
    several years later in the form of long-term care financing
    reform.
        If Congress reforms Social Security and Medicare without
    addressing long-term care financing, they will have missed a
    unique opportunity to fully address the health and financial
    security of society's most vulnerable members.
        The important analysis that CLTC releases today represents
    the consensus of nearly every association with a stake in
    improving access to and the quality of long-term care services
    and supports in this country. Despite the usual differences
    between the many associations, they all share the belief that
    long-term care financing must be reformed before the current
    situation becomes more critical, and to that end, they
    recognize they inherent reasonableness and the rationality of
    integrating this issue with any entitlement reform discussion.
    We hope the work that CLTC has produced helps generate much-
    needed interest and understanding in this regard.
        I thank you for the opportunity to testify and will be
    happy to answer any questions.
        The Chairman. Senator Durenberger, thank you very much for
    your work as well as your testimony. It is very, very critical
    to finding a solution.
        [The prepared statement of Senator Durenberger follows:]
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        The Chairman. Next, we will hear from Ms. O'Shaughnessy.

        STATEMENT OF CAROL O'SHAUGHNESSY, SPECIALIST IN SOCIAL
      LEGISLATION, CONGRESSIONAL RESEARCH SERVICE, WASHINGTON, DC

        Ms. O'Shaughnessy. Thank you, Senator Breaux. Good morning,
    Senator Breaux and Senator Ensign. Thank you for the
    opportunity to testify. Today, I am going to take a little
    different tack and talk about international trends for long-
    term care financing, which I know you are interested in.
        The first point is that population aging is a worldwide
    phenomenon. The aging of societies over coming decades has
    commanded the attention of policymakers worldwide and will have
    dramatic implications on pension plans, income programs, and
    health and long-term care systems. While growth of the elderly
    population in industrialized countries of North America and
    Europe is well recognized, developing countries are also
    experiencing rapid growth in their older populations, predicted
    to increase by two- to fourfold by 2030.
        By 2015, in 9 of 11 Western European countries, older
    persons will represent 18 percent or more of the total
    population, and by 2015, an astonishing one-quarter of Japan's
    population will be 65 and older. While the United States,
    Canada, and Australia are relatively young by world standards,
    a large growth rate will come in coming years, as members of
    the panel have discussed.
        These demographic factors will have immense impact on
    public and private spending for pensions, social welfare, and
    health and long-term care systems. Policy makers worldwide are
    planning, or have already taken steps to change their long-term
    care financing and service delivery systems. Although countries
    differ in approach, many have recognized that the provision of
    long-term care is one of three pillars of social support for
    the elderly, along with retirement income and medical care.
        Comparison among countries is challenging because of the
    different economic and political circumstances of each country
    and the nature of the social contract that each country shares
    with its citizens. For example, two countries that have
    instituted long-term care reform, Germany and Japan, have
    certain characteristics that differ from other countries.
    Germany has more than a century-old tradition of public
    responsibility for health care of its citizens. Japan unlike
    many other countries, has a long tradition of filial
    responsibility for older family members. Older family members
    usually go to live with their oldest son, with the daughter-in-
    law providing most of the care.
        A landmark study prepared for the Organization for Economic
    Cooperation and Development, OECD, for its 29 member nations,
    indicated that comprehensive reform to address the economic and
    social implications of aging populations will be necessary, and
    OECD noted that there is a limited window of opportunity for
    many nations to take action.
        Regarding long-term care, OECD recommended a number of
    things that have been talked about in the hearings over the
    course of the last year. First, OECD recommended that financing
    schemes should be developed to share the financial burden
    jointly by the working age and older populations.
        Second OECD recommended coverage of catastrophic costs,
    which Senator Rockefeller just spoke about; third, there should
    be wide support for home care programs and family care rather
    than institutional care, and, fourth, there should be a
    harmonizing of long-term care services with health care policy.
        A key challenge according to the OECD for its 29 member
    nations is to develop systems that can provide chronic care and
    improve the balance between health care and chronic care,
    between family and formal care systems, and between medical and
    social services. As in the United States, many nations have
    found this very difficult to accomplish.
        During the 1990's, a number of nations enacted major
    legislation to change long-term care systems. Some details of
    some of those systems are in my written testimony, but I would
    like to highlight certain aspects of programs in Germany and
    Japan that have drawn attention in the U.S.
        In 1994, Germany created an employer-mandated social
    insurance program where employer and employee share in a 1.7
    percent tax on wages to pay for long-term care on a pay-as-you-
    go basis. The program is a capped entitlement with maximum per
    person benefits; it provides nearly universal coverage. Over 90
    percent of persons in Germany are covered by the plan, and
    eligibility for assistance is not related to income and assets.
        However, the program was not intended to be fully
    comprehensive. Cost sharing by recipients is a key element.
    When costs of care exceed the benefit maximums, the difference
    must be paid by the individual or his or her family, and if the
    individual cannot pay, a means-tested welfare system kicks into
    place.
        The German plan provides both cash and services up to
    maximum amounts for various multi-levels of care; home care
    services are specifically designed to supplement family care.
    Cash has been a predominant choice of long-term care clients,
    but recent trends show that people prefer a combination of cash
    as well as formal services.
        Japan, which has a very large elderly population
    implemented a social insurance program in 2000. The program
    provides both home care and institutional care according to
    five levels of need. As in the German program, benefits for
    care are fixed, depending on the level of need that is
    required, and public subsidies pay for one-half of the care.
    The other half of the cost is funded through income-related
    premiums and a flat 10 percent copayment by individuals. So
    there is a mix of public-private funding in this program.
        In summary, Mr. Chairman, reviews of various countries have
    found some similarities in the goals of reform. These include
    the following. Policymakers are attempting to find the right
    balance between public and private responsibilities, as in the
    U.S. Countries are striving to create a more balanced approach
    to home and community-based care. In some cases, the desire to
    control institutional care, as Governor Dean had mentioned, has
    been a propelling reason for seeking out home and community-
    based care.
        Countries recognize the important role of unpaid care
    provided by family and friends and a key feature of these
    designs in various countries is to avoid creating, as Senator
    Ensign was talking about, disincentives to family support and
    to supplement the informal care that is provided. A number of
    countries are developing systems that allow consumers greater
    choice between services and cash payments, as we are
    experimenting with in this country.
        Responsibilities for administration are generally
    decentralized. Also, in terms of financing, in some countries,
    eligibility is based on need, not ability to pay. But on the
    other hand, as in Germany and Japan, those reform programs
    require individuals to pay for a portion of their costs, either
    through fixed or variable rate schedules, either through
    premiums or cost sharing.
        Just to conclude, Mr. Chairman, Senator Rockefeller talked
    a lot about adult day care programs; adult day care is a
    blossoming industry in this country. We actually got the idea
    for adult day care from Britain and from Russia in terms of the
    experimentation that they had done, in the early part of this
    century. This is an example of a model that we have transferred
    from other countries.
        So that concludes my statement. I will be glad to answer
    questions.
        The Chairman. Thank you very much, Ms. O'Shaughnessy.
        [The prepared statement of Ms. O'Shaughnessy follows:]
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        The Chairman. Our final witness will be Mr. Steve Chies.

      STATEMENT OF STEVEN CHIES, VICE CHAIR, AMERICAN HEALTH CARE
                      ASSOCIATION, WASHINGTON, DC

        Mr. Chies. Thank you, Senator. Let me also extend my thanks
    to the committee for the substantial amount of time that you
    have invested in examining the many aspects and future
    implications of our nation's long-term care financing crisis.
        As baby boomers approach retirement age, millions of
    Americans will be confronted by the need for long-term care and
    confounded by the inability to pay for the care that they will
    demand. Consider this fact. The average cost of a year's stay
    in a nursing home is in the range of $50,000, far too much for
    many Americans to pay, and it is fair to say that in America,
    the greatest long-term care risk that you face for financial
    and societal is to stay in a long-term care facility, as
    Senator Rockefeller mentioned.
        It is also fair to say that the heart of the nation's long-
    term care financing structure, Medicaid, is quickly becoming
    one of the most underfunded government programs we have in
    relationship to its mission and mandate. A recent report by BDO
    Seidman showed that the Medicaid program is underfunding
    skilled nursing care by approximately $3.7 billion in the year
    2000.
        AHCA and NCAL have spent a great deal of time and resources
    examining the nation's long-term care financing structure. To
    assist us, we engaged the health policy experts of Abt and
    Associates, a well known, highly regarded public policy
    research firm based in Boston. Working with Abt, we developed a
    sophisticated micro simulation model that we have been using to
    test and analyze various approaches toward long-term care
    financing reform, and here are some of our observations.
        Because of demographic changes, Medicaid spending for long-
    term care as a percentage of gross domestic product will double
    during the first half of the 21st century. The continuum of
    long-term care services will need to be greatly expanded to
    meet the needs of aging baby boomers, and access to this
    continuum is essential. Reliance on family caregiving will be
    strained simply because there are too few family members
    available to provide the care.
        To address these challenges, we concluded the following.
    Congress must not only continue to endorse and support the
    growth of a long-term care insurance market through changes in
    the tax code, but it must do so in a specific way to target
    assistance to low- and moderate-income Americans to help them
    purchase and maintain insurance. We believe a public-private
    program should be created to help all Americans prepare for
    their long-term care needs. Not only will this entail changes
    in the tax code to promote long-term care insurance, but should
    also include restructuring of our current patchwork system of
    financing long-term care into an effective, efficient public
    policy program at the Federal level.
        Mr. Chairman, our research shows that a national voluntary
    public-private program for financing long-term care is possible
    and can provide better access to the range of long-term care
    needs for Americans elderly and disabled. We believe it is
    possible to ease the growing dependence on Medicaid with
    policies to make it possible for a majority of individuals to
    pay privately for care they receive in the future. This could
    be accomplished by shifting the role of government from
    government paying for care services to government helping
    individuals and families plan for their long-term care needs.
        Tax incentives can be an important component in shifting
    the role of government. One incentive is the above-the-line
    deduction now being considered by this Congress and supported
    by you, Mr. Chairman, and other members of the committee. But
    more importantly, we see a critical need for a refundable tax
    credit, one that is targeted toward low- and moderate-income
    Americans, those who have the greatest need for government-paid
    long-term care services by Medicaid. If a major goal is to
    reduce dependency on the Medicaid program, then we see this as
    the best way to reach it.
        Once tax incentives allow for greater reliance on long-term
    care insurance, it becomes much more feasible to shift the
    government's role of the coverage of long-term care to the
    Federal level, thereby relieving the States of the increasingly
    onerous budgetary burden. This restructuring will allow for the
    coordination of both acute and long-term care services of the
    elderly and long-term care for the disabled. Coordinating the
    long-term care at the Federal level will eliminate today's
    failed patchwork financing system, thus creating a more
    efficient and seamless system for covering the care.
        Finally, Mr. Chairman, the key element necessary to
    establish the legitimacy and awareness of this program must be
    public education. The comments from Senator Rockefeller really
    hit home for me. A national effort designed to help individuals
    understand the risk they face and what options they have. Once
    they do, we believe they will choose to act responsibly and
    plan for their long-term care needs.
        That being said, we neither support nor advocate any system
    in which individuals do not take some financial responsibility
    for their care. This is the American way, and if you want to
    control your destiny, you must take some responsibility. This
    approach provides all Americans with the means to do just that.
    AHCA and NCAL believe the components of this financing model
    are viable and maximize the best the public and the private
    sectors have to offer for the good of all.
        This obviously cannot be implemented overnight but is
    likely to take several years. This is why it is important for
    all elected officials to recognize the severity of this
    problem, just as you do, Mr. Chairman and the members of the
    committee, and begin addressing this situation today,
    regardless of what the final approach we ultimately decide on.
        Again, thank you for this opportunity and for your
    dedication to try to help the elderly and disabled in this
    country.
        The Chairman. Thank you very much, Mr. Chies, and all the
    members of the panel for excellent testimony.
        [The prepared statement of Mr. Chies follows:]
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        The Chairman. Governor Dean, I think that the story in
    Vermont has been unique and I think it has been highly
    successful. I was really impressed with the fact that you said
    that because of the waivers you have received, that you have
    been able to essentially spend the same amount of money and I
    think you had talked about actually covering almost twice as
    many people with the same amount of money through the use of
    alternatives other than just skilled nursing facilities. Do I
    understand that correctly?
        Governor Dean. That is true, although you have to throw in
    cost-of-living, so it is not the same dollar amount, but it is
    the same adjusted dollar amount. We can take care of twice as
    many people outside a skilled nursing facility as we can inside
    and they are just as sick.
        The Chairman. You have had to come to the Federal
    Government----
        Governor Dean. Excuse me. They are just as sick as the ones
    who would have been in. We are not talking about really ill
    people who clearly need to be in skilled nursing facilities.
        The Chairman. Now, you have come to the Federal Government
    to request the authority to have those waivers, right?
        Governor Dean. Right. I think the first waiver is not
    uncommon--I am pretty sure there are other States that have
    it--which allow us to spend Medicaid money on home health care.
    We happen to have a fair number of slots. It is about a third
    of all our slots.
        The Chairman. You can also spend it for assisted living
    facilities?
        Governor Dean. Yes. That, I think, is relatively unique,
    and certainly some of the members of the panel have more
    expertise than I do, but I am not aware of another State that
    has that, although there may be----
        The Chairman. Your recommendation is that you should not
    have to come to Washington to get the waivers, that the State
    ought to have the flexibility to use the money as they see fit
    within the options that are out there?
        Governor Dean. Not only that, although I am never in favor
    of Federal mandates. Certainly, anything that you can do to
    push States to take care of the maximum number of people
    outside the skilled nursing facilities and even assisted
    living. Somebody mentioned the least restrictive environment.
    That is what people want. People want to be in their own homes
    if they can be.
        Obviously, at some point, it does not make sense to spend
    $250,000 keeping somebody in their own home when they could do
    it for a good deal less in a skilled nursing facility. But for
    most people, we can keep them in their own homes for about half
    of what it costs to put them in a skilled nursing facility, and
    they can be pretty sick, particularly if family is willing to
    participate in their care, or able or they are present in town,
    which is the case for most people.
        The Chairman. Mr. Chies, you have heard Governor Dean's
    recommendations. On behalf of your association, what do you
    think about them?
        Mr. Chies. We have supported waivers in the past and will
    continue to support the waiver process. I think, Governor, I am
    aware of at least 38 States that have similar waiver programs
    for assisted living and home-based services, so it is being
    done extensively out there and I think the Governor's
    recommendations probably to allow States to do that on a much
    more broader basis is probably indicative of what the States
    are demanding out there.
        The Chairman. So I take it what Governor Dean is suggesting
    is that the current waiver process, whereby they have to come
    to Washington and officially request a waiver to use Medicaid
    funds for things other than skilled nursing facilities, that
    that be made a sort of permanent waiver? I take it you are not
    trying to get away from some kind of Federal guidelines----
        Mr. Chies. No.
        The Chairman [continuing.] Because that is not going to
    happen. I mean, if we are going to have my State get 70 percent
    of the Medicaid money, from the Federal Government, then we
    want to make sure that we have a responsibility to see that the
    money is being spent responsibly. I mean, this is a partnership
    here. We do not just toss it up in the air and hope it comes
    down and does good, but we have a responsibility to make sure
    that we are doing what we intend to do. Do you support that
    concept, Mr. Chies?
        Mr. Chies. Yes. Mr. Chairman, I think you will find that
    most long-term care providers would agree substantially with
    what the Governor has presented here. I think the Medicaid
    waivers is a short-stop effect here. It is not really where we
    need to be as a society. We need to look at a much broader
    program of getting people the resources and letting them
    control it. The discussions from Carol about Germany and Japan,
    about the ability for people to have cash payments to go out
    and buy the service that they want makes a lot of sense from
    our perspective and allow the marketplace to drive the quality
    and the quantity of services that people receive.
        The Chairman. Are your nursing home owners moving into
    other types of long-term care facilities? If I was in the
    nursing home business, I would be broadening my base of
    operations as fast as I possibly could into assisted living
    facilities and home health care, as well as the traditional 24-
    hour-a-day, 7-day-a-week skilled nursing facilities. In some
    States, there is a group of operators of nursing home
    facilities operators that are very much against the being able
    to use waivers for other types of facilities, because they feel
    it takes business away from them. Can you comment on that?
        Mr. Chies. I think that is a fair rendition of what is
    going on in the field out there. I think the reason you will
    see a lot of operators oppose assisted living is because of the
    pinched State budgets we have had in the Medicaid program and a
    concern that there will not be sufficient funding to adequately
    care for the people that do require nursing home care. But many
    long-term care providers who are in various segments of the
    business--the organization I work for right now has a number of
    assisted living and housing units and we believe they are very
    compatible in terms of how you move people through a continuum
    of providing care and services.
        The Chairman. I thank you for that answer. I would just
    suggest that all of them look to the future and that is where
    some of the answer is going to be, not only from a service
    standpoint, but also from an economic and business standpoint.
    People are going to be demanding that type of care. They are
    already demanding that type of care. So it is good to hear that
    they are moving in that direction and that the association
    essentially supports the waiver process that Governor Dean, I
    think, has so well outlined for us.
        Governor Dean. Mr. Chairman, if I might just add one thing,
    just to make sure this does not get glossed over, because this
    was a real point of contention between ourselves and the
    industry when we did this, we did pass a bill mandating that
    over a period of years we reduce the total number of nursing
    home beds by 10 percent and we are now in the process of taking
    it down another 10 percent and nursing homes, smaller, weaker
    ones, have started to close.
        The Chairman. That does not mean 20 percent less care.
        Governor Dean. No.
        The Chairman. It means----
        Governor Dean. It actually means 20 percent more care
    because you take down 20 percent of the beds and you can add 40
    percent more care capacity outside the system by using the
    money. But this is not painless for nursing home operators. The
    smaller ones cannot get into the health care business because
    they are mom-and-pop organizations with maybe 30 beds. The
    larger chains could, if they wanted to, and some of them have
    done that and some of them have not.
        The Chairman. David, you know the problem we struggle with
    up here. We are trying to add a prescription drug benefit to
    Medicare and we have got ranges from $1 trillion to $190
    billion on how much we are going to spend in that area. We
    still have 44 million Americans who have no health insurance at
    all. At least if you are on Medicare, you have got about 53
    percent of your health care being paid for through Medicare. If
    you are one of the 44 million Americans who have no health
    insurance, you are subject to emergency rooms as your principal
    provider for health care in the country. Now we are talking
    about long-term care.
        The money is coming out of the Social Security trust fund,
    and that is where it is coming from. You can say, well, I want
    a $1 trillion drug program. I can write you a great drug
    program for $1 trillion, free drugs for everybody, and some
    would endorse that. But you have got to realize where it is
    coming from. It is coming from your children and our
    grandchildren's Social Security retirement.
        All of this is a money problem as much as anything. Long-
    term health care insurance, which Steve has endorsed and I
    think I have introduced, is a refundable tax credit approach.
    That is going to cost money. That money is going to come out of
    Social Security retirement funds right now.
        Do you have any suggestions? You have outlined some really
    good suggestions. The question is, how do we pay for it? If you
    had the answer, we would make you king for a day or maybe for
    the rest of your life.
        Senator Durenberger. First, if you take a look at this Abt-
    produced study called Life Plan, I think it gives you an
    example of how you might do this, if you want something other
    than my opinion. There is an example of how, over time, we
    might do it.
        Second, and I am speaking only for myself, part of the
    reason that we are all recommending dealing with long-term care
    financing reform at the same time we deal with the others is
    there are a lot of resources available. They may not all be in
    the Federal Treasury, but the Federal Treasury decisions are
    being run by our predecessors in 1935 and 1965, basically. So
    you have to tackle the realities of that in the context of the
    21st century. What do we know now compared to what we knew
    then?
        We have in retirement today, including myself, I guess,
    although I am not retired, a huge amount of wealth that is
    about to be transferred to another generation. We have
    something like $14 trillion in home equity in America today. I
    do not know what we have in savings and 401(k)s and (b)s and
    all that sort of thing, and I think Ron Wyden already spoke to
    that. Some changes in the tax code enable people to make
    different decisions.
        So the point of changing this from a ``wait until you have
    got a problem and then make a decision'' to a system in which
    we make the financial security decisions when we are young or
    when we go to work, and then when the occurrence of need
    comes--maybe within a year, you have a developmentally disabled
    child, or 7 years from now, when like my mom, you have a
    dementia called Alzheimer's, but you have prepared financially
    for that eventuality and you have not waited until the need
    arises to make these decisions.
        That is why, when I listen to this conversation, with all
    due respect to all my colleagues who are in government, much
    better decisions are made by people in families than are made
    by Governors, or Congressmen, or Tommy Thompson at HHS, or Tom
    Scully at CMS, and the idea of an insurance system which is
    partially social insurance, partially private insurance, the
    idea of the Germany system, which, at Carol's suggestion, I
    went over and looked at last week, is that families make these
    decisions, and if they make them in advance, there are lots of
    resources in this country, privately held as well as the
    retirement plan surpluses, that can, over time, be committed to
    meeting these needs.
        The Chairman. Senator Ensign, any questions?
        Senator Ensign. First of all, I just want to say thank you
    to all of you. It has really been a terrific hearing and I
    think some great suggestions here. Obviously, there are some
    incredible challenges for us as policymakers up here.
        Governor Dean, I think that your suggestion is probably the
    easiest one of everything that has been talked about up here as
    far as being able to do, and if the only thing we can do is
    incremental, that is at least an incremental step we ought to
    be taking. I want to try to work with you on that and the
    Chairman trying to be able to do that in a bipartisan way. It
    is short term but it has shown real progress. You have shown
    leadership on this, and that it could be done across the
    country.
        Ms. O'Shaughnessy, I thought it was really fascinating,
    some of the things that you were talking about. I am glad that
    you studied them and I want to follow up with a question on the
    experience. I was talking to Senator Rockefeller about the
    family incentive. What have those other countries found,
    because, for instance, Japan is famous for how they take care
    of their parents, their grandparents. They are known all over
    the world for how they revere the elderly. We sometimes are a
    throw-away society for our elderly and that is the cautionary
    flag I was trying to raise is that we do not encourage more of
    that, but that we actually get more to the incentive of keeping
    family to-family decisions and types of care as much as we
    possibly can.
        What has been the experience of Japan and Germany as far as
    that? Has anybody looked at that aspect of it?
        Ms. O'Shaughnessy. Well, in terms of Japan, with the
    demographic factors and the lower fertility and increasing
    number, I mean, 25 percent in just a few years of the total
    population will be elderly, and what has happened is that women
    in Japan going into the workforce more dramatically than
    before--all these factors have put a huge amount of pressure on
    the family structure there. So they recognized after some years
    of thought, that they needed to incrementally assist
    individuals through a formal care system.
        I looked at it a little bit in terms of evaluation, which
    the Japanese government puts out, and basically, they are
    saying that people seem to be very satisfied with the care that
    they are getting through the formal system, but, you know, you
    still have this strong family network that has got to be there
    just to serve the number of people.
        Also in Germany, realizing that the German plan is not
    comprehensive--it is universal but it does not provide
    comprehensive coverage--the levels of care, I think the highest
    they can pay, except for one exception, is something like
    $1,400 a month for care. Most people are either at level one or
    level two, so you are still relying upon the informal support
    system a great deal even though you have a minimum benefit that
    helps take off the pressure, and perhaps is for nursing care at
    home that the families do not know how to do.
        In terms of looking at countries, Austria and Australia
    also enacted national family caregiver programs in terms of a
    limited benefit. I think that is the way at least OECD sees the
    issue going--enact programs that will assist families, not
    supplant them.
        Senator Ensign. Mr. Chairman, I will just conclude with an
    observation. My son has a wonderful piano teacher and they have
    a severely disabled son who is now about 16 years of age. A
    couple of comments on them.
        First of all, it is unbelievable to see the difficulties
    that they go through with this child. He is the typical child
    that most families would probably not be able to handle and
    would institutionalize. A lot of families would, anyway. Maybe
    not most, but certainly a lot of families would. But to see the
    relationship with him and his siblings, who are younger, and
    the way that they interact with him is awesome to see, and I
    know that these kids are going to be better people because of
    learning to serve him.
        But also, watching mom and dad and financial hardships that
    it has been on their family, there is no question about that.
    They are making it through it. They are doing OK. But part of
    the help that is really needed is a lot of what has been talked
    about, here such as respite care.
        I do not want to get away from encouraging people, and that
    is the point I was trying to make, by setting up a system where
    it is just easy. You know, just put them in an institution
    where it is more expensive, the care and all that kind of
    thing. Rather let us get people the help that they need so they
    can stay together as a family with much home care as is needed.
    If they need to go into a facility or whatever, get them out as
    quickly as possible. But keep as much of the incentive there as
    possible to keep families together.
        I think, overall, if we set that out as one of our main
    goals, I think that we can form the right policies up here to
    take care of the problem that people are concerned about. The
    problem of impoverishing themselves by going in and then once
    they go into a facility they are stuck there, and they know
    they are going to be there for the rest of their lives. We need
    to go toward where they know that there is some hope, where
    they are not afraid to get the help because maybe they can end
    up worse than before; where they were actually a little more
    independent and those kinds of things.
        I think that if we put our heads together and not let
    ideology get in the way we can get there. It is just a question
    of how we get there, and I think that if we are willing to work
    together, I think we can really come up with some policies that
    will be good for the country and that will be more affordable.
    I do not think any of it is affordable, especially with our
    aging population. But it is a question of what is going to be
    more affordable, and I think that doing the right thing and
    trying to keep family as much together as possible and doing
    the things like Governor Dean is doing, is a more affordable
    way to do those things. You help more people and you keep them
    in situations where the quality of life is better as well.
        So I think, overall, all of those goals can work together
    and I really want to applaud your leadership, Mr. Chairman. You
    have really done a great job.
        The Chairman. Thank you very much, Senator Ensign, and
    thank you for being with us for the entire hearing.
        I think today's hearing really represents a wake-up call to
    America about the enormous challenge and the enormous problems,
    but also at the same time the enormous opportunities that those
    challenges present us in addressing something that is not going
    to go away. The Congress can talk about it, but until we start
    acting, the problem will only increase in its severity and the
    challenge of helping to solve it.
        Again, the Aging Committee has done a summary of all 13
    hearings we have had with ideas and concepts, and hopefully, we
    can build on that report that we have presented and move
    forward aggressively with legislation to try to address this
    problem. It is one of the top priorities, I think, that this
    Congress should face.
        I want to also recognize the son of Frances Stevenson, a
    woman from Napoleonville in Louisiana. Her son, Major
    Stevenson, is here and we thank him for attending our hearing,
    and also, again, my wife and our teacher interns from Louisiana
    who have sat through this long hearing and hopefully have an
    idea of how their government works.
        The panel has just been terrific. We thank each and every
    one of you very much for your presentations, and with that, the
    committee will stand adjourned.
        [Whereupon, at 11:06 a.m., the committee was adjourned.]
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