    [House Hearing, 112 Congress]
    [From the U.S. Government Publishing Office]

                 EXAMINING ABUSES OF MEDICAID ELIGIBILITY RULES

    =======================================================================

                                    HEARING

                                   before the

                    SUBCOMMITTEE ON HEALTH CARE, DISTRICT OF

                   COLUMBIA, CENSUS AND THE NATIONAL ARCHIVES

                                     of the

                             COMMITTEE ON OVERSIGHT

                             AND GOVERNMENT REFORM

                            HOUSE OF REPRESENTATIVES

                          ONE HUNDRED TWELFTH CONGRESS

                                 FIRST SESSION

                                   __________

                               SEPTEMBER 21, 2011

                                   __________

                               Serial No. 112-90

                                   __________

    Printed for the use of the Committee on Oversight and Government Reform

              Available via the World Wide Web: http://www.fdsys.gov
                          http://www.house.gov/reform

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                 COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                     DARRELL E. ISSA, California, Chairman
    DAN BURTON, Indiana                  ELIJAH E. CUMMINGS, Maryland,
    JOHN L. MICA, Florida                    Ranking Minority Member
    TODD RUSSELL PLATTS, Pennsylvania    EDOLPHUS TOWNS, New York
    MICHAEL R. TURNER, Ohio              CAROLYN B. MALONEY, New York
    PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of
    JIM JORDAN, Ohio                         Columbia
    JASON CHAFFETZ, Utah                 DENNIS J. KUCINICH, Ohio
    CONNIE MACK, Florida                 JOHN F. TIERNEY, Massachusetts
    TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
    JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
    JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
    ANN MARIE BUERKLE, New York          GERALD E. CONNOLLY, Virginia
    PAUL A. GOSAR, Arizona               MIKE QUIGLEY, Illinois
    RAUL R. LABRADOR, Idaho              DANNY K. DAVIS, Illinois
    PATRICK MEEHAN, Pennsylvania         BRUCE L. BRALEY, Iowa
    SCOTT DesJARLAIS, Tennessee          PETER WELCH, Vermont
    JOE WALSH, Illinois                  JOHN A. YARMUTH, Kentucky
    TREY GOWDY, South Carolina           CHRISTOPHER S. MURPHY, Connecticut
    DENNIS A. ROSS, Florida              JACKIE SPEIER, California
    FRANK C. GUINTA, New Hampshire
    BLAKE FARENTHOLD, Texas
    MIKE KELLY, Pennsylvania

                       Lawrence J. Brady, Staff Director
                    John D. Cuaderes, Deputy Staff Director
                         Robert Borden, General Counsel
                           Linda A. Good, Chief Clerk
                     David Rapallo, Minority Staff Director

       Subcommittee on Health Care, District of Columbia, Census and the
                               National Archives

                      TREY GOWDY, South Carolina, Chairman
    PAUL A. GOSAR, Arizona, Vice         DANNY K. DAVIS, Illinois, Ranking
        Chairman                             Minority Member
    DAN BURTON, Indiana                  ELEANOR HOLMES NORTON, District of
    JOHN L. MICA, Florida                    Columbia
    PATRICK T. McHENRY, North Carolina   WM. LACY CLAY, Missouri
    SCOTT DesJARLAIS, Tennessee          CHRISTOPHER S. MURPHY, Connecticut
    JOE WALSH, Illinois
                                C O N T E N T S

                                  ----------
                                                                       Page
    Hearing held on September 21, 2011...............................     1
    Statement of:
        Moses, Stephen, president, Center for Long-Term Care Reform;
          David Dorfman, attorney, Law Offices of David A. Dorfman;
          Janice Eulau, assistant administrator, Medicaid Services
          Division, Suffolk County Department of Social Services; and
          Julie Hamos, Director, Illinois Department of Healthcare
          and Family Services........................................     9
            Dorfman, David...........................................    16
            Eulau, Janice............................................    21
            Hamos, Julie.............................................    25
            Moses, Stephen...........................................     9
    Letters, statements, etc., submitted for the record by:
        Dorfman, David, attorney, Law Offices of David A. Dorfman,
          prepared statement of......................................    18
        Eulau, Janice, assistant administrator, Medicaid Services
          Division, Suffolk County Department of Social Services,
          prepared statement of......................................    23
        Gowdy, Hon. Trey, a Representative in Congress from the State
          of South Carolina, prepared statement of...................     4
        Hamos, Julie, Director, Illinois Department of Healthcare and
          Family Services, prepared statement of.....................    27
        Moses, Stephen, president, Center for Long-Term Care Reform,
          prepared statement of......................................    12

                 EXAMINING ABUSES OF MEDICAID ELIGIBILITY RULES

                                  ----------

                         WEDNESDAY, SEPTEMBER 21, 2011

                      House of Representatives,
    Subcommittee on Health Care, District of Columbia,
                      Census and the National Archives,
                  Committee on Oversight and Government Reform,
                                                        Washington, DC.
        The subcommittee met, pursuant to notice, at 10 a.m. in
    room 2247, Rayburn House Office Building, Hon. Trey Gowdy
    (chairman of the subcommittee) presiding.
        Present: Representatives Gowdy, Gosar, DesJarlais, Davis,
    Clay, and Cummings [ex officio].
        Staff present: Brian Blase, professional staff member; Will
    L. Boyington and Nadia A. Zahran, staff assistants; Christopher
    Hixon, deputy chief counsel, oversight; Sery E. Kim, counsel;
    Mark D. Marin, senior professional staff member; Jaron Bourke,
    minority director of administration; Yvette Cravins, minority
    counsel; Ashley Etienne, minority director of communications;
    Devon Hill and Adam Koshkin, minority staff assistants; and
    Jennifer Hoffman, minority press secretary.
        Mr. Gowdy. Good morning. Welcome to everyone.
        This is a hearing on examining abuses of Medicaid
    eligibility rules. Pursuant to committee rules, I will read the
    mission statement.
        We exist to secure two fundamental principles. First,
    Americans have a right to know the money Washington takes from
    them is well spent. Second, Americans deserve an efficient and
    effective government that works for them. Our duty on the
    Oversight and Government Reform Committee is to protect these
    rights. Our solemn responsibility is to hold government
    accountable to taxpayers because taxpayers have a right to know
    what they get from the government.
        We will work tirelessly in partnership with citizen
    watchdogs to deliver the facts to the American people and to
    bring genuine reform to the Federal bureaucracy. This is the
    mission of the Oversight and Government Reform Committee.
        I will now recognize myself for an opening statement and
    then the gentleman from Illinois, ranking member, Mr. Davis.
        As this committee's mission statement just made clear,
    Americans have a right to know the money Washington takes from
    them is well spent. Americans also have the right to know
    whether social programs that were designed for a specific
    purpose have been hijacked wittingly or unwittingly by those
    who have figured out how to game the system.
        Today, we will examine alleged abuses of Medicaid
    eligibility rules. As we do, we are guided by the principle
    that each dollar taken from a private citizen has a real cost
    and government needs a compelling rationale for taking that
    dollar.
        To be clear, this country has a rich history of providing a
    social safety net for the elderly and the indigent. Some seek
    to turn the safety net into a hammock or trampoline. Not only
    is this fiscally irresponsible, it erodes the very little
    public trust people have left in the institutions of
    government.
        Without question, the Medicaid program is on an
    unsustainable course. Over the past two decades, national
    Medicaid spending has increased from less than $75 billion per
    year to over $400 billion per year. At the State level,
    Medicaid growth has put tremendous pressure on budgets and is
    crowding out other State priorities such as education and
    public safety. At the Federal level, Medicaid growth has the
    same effect. Plus, it is contributing to our national debt at
    more than 40 cents of each dollar is borrowed.
        Medicaid is a means tested welfare program designed to
    provide medical care to the poor and disabled. But, today's
    testimony will reveal that Medicaid is not being used solely by
    the indigent. Although Medicaid technically has income and
    asset tests, these tests are easy to circumvent and abuse. In
    fact, an entire cottage industry has arisen seeking to educate
    the wealthy on how to transfer or hide assets, so taxpayers can
    pay for their long term care.
        In 1982, Congress made it clear all of the resources
    available to an institutionalized individual, including equity
    in a home which are not needed for the support of a spouse or
    dependent children, will be used to defray the costs of
    supporting the individual and the institutions. Despite this
    congressional intent, all the resources available to the
    institutionalized individual are not being used to defray the
    taxpayers' cost of supporting these individuals.
        According to the CMS, less than 1 percent of the money
    spent on nursing home care is recovered. The art of
    artificially impoverishing oneself to gain Medicaid coverage
    has spawned a stand alone industry. Medicaid planning is
    pervasive. A Google search which includes quotes around
    Medicaid planning yield over a half million hits. Popular books
    are available like the one entitled, ``How to Protect Your
    Family's Assets from Devastating Nursing Home Costs: Medicaid
    Secrets.''
        This book includes tips on how to title your homes so you
    don't lose it to the State, how to make transfers to family
    members that don't disqualify you from Medicaid, how annuities
    make assets disappear, smart tricks for spending down your
    assets, what to change in your will to save thousands of
    dollars if your spouse ever needs nursing home care to avoid
    the State's reimbursement claim, following the nursing home
    resident's death. Government programs should not have secrets
    and artificially impoverishing oneself to become eligible for a
    program that was not designed for you is wrong.
        In 2006, the Europost ran an article about Medicaid
    millionaires in one county in the State. In that year, nine
    millionaires had taxpayers paying for their Medicaid bills. One
    man, worth nearly $2 million, had Medicaid pick up over $80,000
    in nursing home costs for his wife. One woman, worth $1.6
    million, had Medicaid pick up over $200,000 in nursing home
    costs for her husband.
        Since half of New York's Medicaid bill is financed by
    Federal taxpayers, taxpayers in my home State of South Carolina
    are paying for millionaires on Medicaid in New York.
        About once a decade, Congress revisits the eligibility
    rules for Medicaid to crack down on their abuse. In 1993 the
    Omnibus Budget and Reconciliation Act, Congress required States
    to do a State recovery. In the 2005 Deficit Reduction Act,
    Congress closed some loopholes and extended Medicaid's look-
    back period. Today's testimony will reveal whether previous
    congressional action in this area has worked.
        We all know that tough choices are coming and that there
    will be strong partisan differences about the way forward.
    Today's hearing offers us an opportunity to explore an area
    where there should be genuine bipartisan agreement. Medicaid
    was intended for the poor and the disabled. Millionaires should
    not be on welfare. If the rules of Medicaid allow individuals
    with sizable portfolios to qualify for the program and protect
    the inheritance of their children, then Medicaid needs
    reforming.
        [The prepared statement of Hon. Trey Gowdy follows:]
        [GRAPHIC] [TIFF OMITTED] T1967.001

        [GRAPHIC] [TIFF OMITTED] T1967.002

        Mr. Gowdy. With that, I now recognize the gentleman from
    Illinois, the ranking member, Mr. Davis.
        Mr. Davis. Thank you very much, Mr. Chairman. Let me thank
    you for holding this very important hearing.
        I also want to thank all of the witnesses for being here. I
    would especially like to thank Ms. Julie Hamos who probably
    just came in this morning on the flight that I usually take
    when I want to get here by 10 a.m. And, sometimes the traffic
    is difficult and you have a hard time making it. Thank you very
    much, Julie.
        Mr. Chairman, I appreciate the importance of this hearing
    and I am happy to have dialog on this very critical issue.
        Since its inception in 1965, I have always said that
    Medicaid and Medicare were the best things that happened to
    health care, especially for elderly and low income people in
    this country, since the Indians discovered corn flakes. I am a
    firm believer that those individuals who have no other
    recourse, who have no other way to be cared for, should, in
    fact, be cared for by the resources that we make available to
    them.
        The Medicaid Program funds one of six of all personal
    health spending in the United States. Additionally, Medicaid
    spending has increased to over $400 billion last year. This
    number gives us pause. Those of us who continue to view
    Medicaid solely as a budget challenge are missing the mark.
    This program involves real people and is about real people and
    their needs.
        Policy solutions that focus only on limiting public
    obligations or long term care financing do the citizens of our
    country a great injustice. Realistically, individuals and
    families bear the majority of care giving and financial
    consequences. Families and friends provide upwards of 80
    percent of long term care in the United States. I am open to
    new ideas to facilitate the care of people across all age
    groups who are needy and certainly not for those who are simply
    greedy.
        But these discussions cannot be filled with flawed
    assumptions about peoples' resources. The vast majority of
    Medicaid's enrollees have limited resources, including the 33
    million children, the 11 million persons with disabilities, the
    17 million non-disabled adults and the 6 million seniors.
        In Illinois, more than 2.7 million Illinois seniors,
    children and individuals with disabilities rely on Medicaid
    services and programs. Long term care is a valued program. It
    includes medical as well as non-medical care to those who have
    a chronic illness or disability. Long term care helps meet
    health or personal needs. Most long term care is to assist
    people with support services such as activities of daily living
    like dressing, bathing and using the bathroom. Long term care
    can be provided at home in the community, in assisted living or
    in nursing homes. The dignity and peace of mind given to people
    who utilize these services is immeasurable.
        Certainly there are those who attempt to misuse the system,
    but the vast majority of enrollees are simply those who
    otherwise would not have the wealth or income for such personal
    daily care. These bad actors must not cause us to throw up our
    hands and surrender.
        I have a term that I often use that says, ``I don't ever
    want to throw out the baby with the bath water.'' I want to
    throw out all of the waste, abuse and misuse of the program
    that we possibly can. Medicaid must continue to provide
    coverage based on Federal standards that ensure maximum access
    for low income and special needs populations with funding
    allocations based on the needs of these populations.
        A meaner Medicaid is not a sufficient solution. Now is not
    the time to reduce access. Compassion and common sense must
    prevail. Affordable, accessible quality health care should not
    be a partisan or political issue but a human one.
        Last, I am proud that Ms. Hamos has agreed to join us and I
    am delighted again that she was able to make it.
        I agree with you, Mr. Chairman, I agree wholeheartedly that
    those individuals who are misusing the system, those
    individuals who are using it as a way to make sure that they
    can transfer wealth, all of those efforts that are underway to
    provide subterfuge, to provide ways to deny access to
    individuals who really need the services. I will work with you
    and other Members of this body to exercise, to carve out and
    get rid of all those individuals and those opportunities.
        Again, I thank you for the hearing and look forward to the
    testimony of the witnesses.
        Mr. Gowdy. I thank the gentleman from Illinois.
        I would now recognize the gentleman from Arizona, the vice
    chairman of the subcommittee, Dr. Gosar.
        Dr. Gosar. Mr. Chairman, I would like to echo the concerns
    that you shared about the unsustainable growth in Medicaid
    spending.
        This is a significant problem in my State of Arizona. The
    crippling recession of late has affected my State tragically,
    reducing the money in the General Fund by $2 billion in only a
    couple short years. The Governor and legislature are finding of
    the biggest expenses the State has is its Medicaid Program.
        In a time when this program meant for low income people in
    need of basic health care is facing deficits, we need to
    explore critical reforms that will ensure limited Medicaid
    dollars reach those who need it most. I think we will find
    today that long term care eligibility standards in current
    Federal law do not achieve this goal.
        I also agree with you that this hearing should be
    bipartisan. We have strong disagreements with the massive
    Medicaid expansion contained in the President's takeover of
    health care, but we should be able to find common ground. The
    taxpayer program should not serve as inheritance protection and
    that the rules that can be navigated so millionaires can
    qualify for welfare are in desperate need of reform.
        According to the law firm, Wright, Abshire in Houston, TX,
    even if a client's assets are substantial, the firm will be in
    almost every case be able to successfully achieve a
    satisfactory plan for the client to preserve assets. An
    organization in California called Nursing Home Solutions
    states, ``We get middle class families excellent nursing home
    care funded by Medi-Cal.'' This advertising makes Medicaid
    planning sound like the proverbial free lunch.
        But while the individual family benefits from taxpayers
    supporting long term care services received by that individual,
    there are also clear costs. The obvious cost is to future
    generations and business owners who will have to pay this bill
    and who have the result of less capital to invest in the
    economy. The less obvious cost is that nursing homes and long
    term care providers are harmed by more individuals receiving
    Medicaid's low reimbursement rate.
        So the policy question is, who should bear the burden of
    paying the cost of long term care? It would be convenient to
    say the other guy, but what happens when the other guy is
    tapped out? Taxpayers are simply tapped out and our Nation is
    running a $1.6 trillion deficit for the third straight year.
        Our friends on the other side of the aisle may say this
    cost should be socialized, but that solution is misguided for
    two reasons. The first is that we need to be figuring out ways
    to reform Medicare and Medicaid, not to expand it. The second
    is that it runs counter to the obvious principle that
    individuals spend their own money better than they spend other
    people's money. Since the private sector does most things
    better than the government, can the private sector play a role
    in figuring out a way out of this problem?
        I respectfully assert that the free market solutions have
    never been able to take hold in the market for long term care
    because of Medicaid. Since it is so easy to get taxpayers to
    foot a person's long term care needs, individuals don't have
    any incentive to plan for these expenses.
        Don't take my word for it, whoever, In 2008, Jeff Brown at
    the University of Illinois and Amy Finklestein of MIT wrote an
    article entitled, ``The Interaction of Public and Private
    Insurance, Medicaid and a Long Term Care Insurance Market.''
    This article appeared in the Nation's most prestigious peer-
    reviewed economics journal, American Economic Review.
        The findings are that all but the wealthiest households in
    the country have virtually no reason to purchase long term care
    insurance. This is because a private policy pays for many
    benefits that simply replace benefits Medicaid would have paid
    for. It is important to note that Brown and Finklestein did not
    even account for the art of Medicaid planning. They assumed
    that people actually have to spend down their assets in order
    to qualify for Medicaid.
        Therefore, it is unfair to criticize the private, long term
    care insurance industry for lack of policies. A private insurer
    is not competing on a level playing field with Medicaid since
    Medicaid is so heavily subsidized.
        The way I see it is, the choice is clear. We can fail to
    reform these rules. This would continue to allow relatively
    affluent individuals on welfare to discourage all of us from
    taking seriously the possibility of needing to take care of
    long term care in the future. This failure will doom the whole
    system as a whole.
        The alternative is to reform the rules and reduce the
    loopholes. Real reform should prevent affluent people from
    qualifying for welfare with the effect of preserving the
    inheritance of their adult children. Real reform would also
    promote personal responsibility and awaken Americans to the
    fact that while living longer is a great thing, it comes with
    the possibility of requiring assistance. Real reform would
    preserve taxpayer dollars to assist genuinely needy individuals
    in getting care. Real reform would reduce Medicaid burden on
    State budgets and the Federal budget and would decrease the
    amount of money that Washington borrows from abroad.
        Mr. Chairman, thank you for calling this hearing. I eagerly
    await the testimony of our witnesses to learn more about this
    issue and steps that can be taken to reform the program.
        I yield back.
        Mr. Gowdy. I thank the gentleman from Arizona.
        I would also like to recognize and thank the gentlemen from
    Missouri and Tennessee, respectively, for their presence and
    their contributions to this subcommittee.
        Members may have 7 days to submit opening statements and
    extraneous material for the record.
        It is now my pleasure to welcome our distinguished panel of
    witnesses. I will introduce you at once and then we will go
    from my left to right, your left to right, in terms of opening
    remarks.
        Mr. Stephen Moses is the president of the Center for Long-
    Term Care Reform. Mr. David Dorfman is an attorney with the law
    offices of David A. Dorfman. Ms. Janice Eulau is the assistant
    administrator, Medicaid Services Division, Suffolk County
    Department of Social Services. My friend, Mr. Davis, joins me
    in introducing and welcoming the Honorable Julie Hamos,
    director of the Illinois Department of Healthcare and Family
    Services.
        Pursuant to committee rules, all witnesses will be sworn
    before they testify, so I would ask you to please rise and
    raise your right hands.
        [Witnesses sworn.]
        Mr. Gowdy. Let the record reflect that the witnesses
    answered in the affirmative.
        Mr. Moses, we will start with you. The lights, which I hope
    you can see, mean what they traditionally mean. Green means go.
    Yellow, unlike in real life does not mean speed up and see if
    you can get under it, means you have about a minute left and
    then, red means conclude your last comment if you can.
        With that, again on behalf of all of us, thank you. We are
    honored to have such a distinguished group of witnesses.
        Mr. Moses.

     STATEMENTS OF STEPHEN MOSES, PRESIDENT, CENTER FOR LONG-TERM
     CARE REFORM; DAVID DORFMAN, ATTORNEY, LAW OFFICES OF DAVID A.
       DORFMAN; JANICE EULAU, ASSISTANT ADMINISTRATOR, MEDICAID
        SERVICES DIVISION, SUFFOLK COUNTY DEPARTMENT OF SOCIAL
      SERVICES; AND JULIE HAMOS, DIRECTOR, ILLINOIS DEPARTMENT OF
                     HEALTHCARE AND FAMILY SERVICES

                       STATEMENT OF STEPHEN MOSES

        Mr. Moses. Thank you, Mr. Chairman and members of the
    committee. Thank you for inviting me to speak to you about
    Medicaid and long-term care financing today.
        I have worked in this field since 1981, first as a career
    U.S. Government employee with the Health Care Financing
    Administration, the predecessor of the current CMS; then for
    the Inspector General of the U.S. Department of Health and
    Human Services; and since 1989, in the private sector. I am
    currently president of the Center for Long-Term Care Reform.
        In each of these roles, I conducted national and State
    studies of Medicaid and long-term care financing. My remarks
    today are fully developed and documented in published reports
    available on our Web site at centerltc.com.
        Medicaid is supposed to be a long-term care safety net for
    people in dire financial need. Instead, it has become the
    dominant payer for most Americans who require extended care at
    home or in a nursing, including the middle class and even the
    affluent. How can this be true if Medicaid is a means-tested
    public assistance program? That is the key question before you
    today. Here is the answer.
        Although everyone says Medicaid eligibility requires low
    income, that is untrue for people over the age of 65 who need
    long term care. Federal rules require most States to deduct
    medical expenses, including the cost of nursing home care, from
    applicants' income before determining eligibility. Some States
    apply income caps but these are easily evaded by means of
    special income diversion trusts. Bottom line, income almost
    never disqualifies anyone for Medicaid long term care
    eligibility.
        What about assets? It is true that cash and negotiable
    securities over $2,000 are disqualifying in most States, but it
    doesn't matter how people spend down to that level as long as
    they don't give away their assets. Financial advisors
    frequently tell clients to purchase exempt assets, take a world
    cruise, throw a big party, all non-disqualifying spend-down
    methods.
        Just how many exempt assets can applicants retain and still
    qualify for Medicaid long-term care benefits? There really is
    no meaningful limit. Exempt home equity is capped at $500,000
    to $750,000 which is 13 to 20 times the amount protected in
    England's socialized health care system.
        The following resources are exempt without any limit: one
    business including the capital and cash-flow; individual
    retirement accounts or IRAs; one automobile; prepaid burial
    plans not only for the Medicaid recipient but for all immediate
    family members; term life insurance which allows recipients to
    evade the Medicaid estate recovery mandate; and household goods
    and personal belongings, all without any capped limits.
        The Federal regulations and policies that require these
    exemptions are documented in our report entitled, ``Medi-Cal
    Long-Term Care: Safety Net or Hammock.'' Medi-Cal is Medicaid
    in California and these problems and issues apply nationwide.
        Married applicants for Medicaid LTC benefits can retain
    substantially more income and assets than single people, up to
    $2,739 per month of income and half the joint assets of the
    couple up to $109,500. If the healthy spouse's personal income
    and assets are below these levels, the Medicaid spouse's income
    and assets are transferred to bring him or her up to the limit.
    These spousal impoverishment protections increase annually with
    inflation.
        Because of these very generous basic eligibility rules, the
    vast majority of America's elderly qualify easily for Medicaid
    when they need long term care. The conventional wisdom that
    people must spend down into impoverishment before Medicaid will
    help is demonstrably untrue. Only the most affluent need to
    consult Medicaid planners and use special legal techniques such
    as trusts, transfers, annuities, life estates, life care
    contracts and promissory notes to qualify.
        The other panelists will discuss Medicaid planning. The key
    point I want to make is that we need to remember that egregious
    Medicaid planning is only the tip of the iceberg. The bigger
    problem is that Medicaid's basic eligibility rules allow most
    people to qualify after they need long term care and without
    spending down their wealth first.
        To conclude, easy access to Medicaid has the effect of
    desensitizing the public to long term care risks and costs.
    Medicaid's home equity exemption prevents people from using
    reserve mortgages to finance home care. With most of their
    assets protected by Medicaid, few people plan early to save,
    invest or insure for long term care.
        Well intentioned public policy has turned into a perverse
    incentive discouraging responsible long term care planning.
    Furthermore, consuming scarce public welfare resources to
    indemnify affluent baby-boomer heirs of well-to-do seniors
    hurts the poor instead of helping. It is like friendly fire in
    the class war.
        Medicaid could save up to $30 billion per year if people
    had to consume their home equity before qualifying for public
    benefits as is true in England. The program's most expensive
    dual eligible recipients could be reduced by 20 percent.
    Reverse mortgages to fund long term care would thrive and
    generate new jobs and tax revenue.
        The private long term care insurance market would expand
    creating even more jobs and revenue, but most importantly,
    relieving the financial pressure on Medicaid in this way would
    enable the program to survive as a quality safety net for those
    who are truly in need.
        My analysis explaining how Medicaid can save $30 billon per
    year by encouraging financing of long term care through private
    financing alternatives has been made available to the
    committee.
        Thank you.
        [The prepared statement of Mr. Moses follows:]
        [GRAPHIC] [TIFF OMITTED] T1967.003

        [GRAPHIC] [TIFF OMITTED] T1967.004

        [GRAPHIC] [TIFF OMITTED] T1967.005

        [GRAPHIC] [TIFF OMITTED] T1967.006

        Mr. Gowdy. Thank you, Mr. Moses.
        Mr. Dorfman.

                       STATEMENT OF DAVID DORFMAN

        Mr. Dorfman. Good morning, Mr. Chairman, and members of the
    committee. Thank you so much for having me here this morning.
        My name is David Dorfman and for about the last 20 years
    until January of this year, I practiced Medicaid planning law
    in Manhattan, Brooklyn and Queens.
        I came to elder law out of a family experience. My
    grandmother and her two sisters all went to Portia Law School,
    the first law school for women in Boston in the 1930's. I grew
    up with elder law around the house, when her friends would come
    over to probate their husbands' wills, to transfer keys to the
    children, to take care of those family matters that her senior
    friends had.
        When I began my practice, OBRA 93 had just become the law
    and I attended Bar Association meetings, met leaders in the
    Medicaid legal field and began teaching other people how the
    system works because while Medicaid is certainly not a secret
    program, it is so difficult for people to understand how it
    works, given the massive unfairnesses and confusion in
    qualifying for benefits.
        My clients would come to me typically because they had a
    spouse who had Parkinson's or Alzheimer's, a parent who needed
    care, and they didn't know what to do. They weren't sure what
    their options were. What we set about doing was educating
    people as to how the system works and creating an individual,
    tailored plan, much like for health care, what was the best
    thing for that particular individual to do.
        It might be trusts or annuities, changing title to the
    home, investing in pensions or insurance, but I am going to
    suggest that the abuse is a myth. That is not really what is
    happening. That is not what any of my clients wanted. None of
    them wanted to game the system. They all wanted to know what
    should I do, the same way a woman whose husband has had a
    stroke says to the doctor, what am I supposed to do, they say
    to the social worker, what am I supposed to do, how am I
    supposed to live, where will I be living, what will happen to
    the pension, the social security, who is going to provide the
    care?
        Soup kitchens are free and nobody checks 5 years worth of
    bank statements and millionaires don't go there for lunch.
        In terms of creating a health care system, we don't need a
    punishment health care system, periods of ineligibility or
    penalty periods. We need a system that has a cost sharing
    approach that invites people in so they can access necessary
    care and share in the costs. That is what people want, not an
    all or nothing approach. We can't mandate abject poverty
    because that is what people are terrified of. If that has to be
    created, no matter what the rules are, people will do whatever
    they have to do to get the necessary health care for their
    loved ones or they will suffer and die without care.
        I saw people who were increasingly afraid to get care as
    Medicaid laws became more onerous, people who qualified for
    benefits, people who were poor and needed health care but
    didn't fill out the application because they didn't have the
    bank statements. Let us create a system that invites people in
    who need care, not one that punishes them.
        Thank you.
        [The prepared statement of Mr. Dorfman follows:]
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        [GRAPHIC] [TIFF OMITTED] T1967.009

        Mr. Gowdy. Thank you, Mr. Dorfman.
        Ms. Eulau.

                       STATEMENT OF JANICE EULAU

        Ms. Eulau. Good morning, Chairman Gowdy, Ranking Member
    Davis and members of the subcommittee. Thank you for the
    opportunity to speak to you today about this important topic.
        My name is Janice Eulau and I have been employed by the
    Suffolk County, New York Department of Social Services for the
    past 36 years. I currently serve as the assistant administrator
    for the Medicaid Program in that county.
        Approximately 180,000 individuals receive Medicaid in
    Suffolk County with 5,300 in receipt of nursing home care. In
    2010, the nursing home care costs for those 5,300 individuals
    was $429.9 million with a Federal cost of $213.7 million.
        As a long-time employee of the local Medicaid office, I
    have had the opportunity to witness the diversion of
    applicants' significant resources in order to obtain Medicaid
    coverage. It is not at all unusual to encounter individuals and
    couples with resources exceeding $500,000, some with over $1
    million.
        There is no attempt to hide that this money to exists,
    there is no need. There are various legal means to prevent
    those funds from being used to pay for the applicant's nursing
    home care. Wealthy applicants for Medicaid's nursing home
    coverage consider that benefit to be their right, regardless of
    their ability to pay themselves. There is limited understanding
    that Medicaid nursing home care remains a means tested program
    not an entitlement program. This misunderstanding seems to be
    perpetuated by the elder law and Medicaid estate planning
    industry.
        The two most often used by single clients is the promissory
    note. Half of the applicant's excess resources transfer to the
    children without compensation. This transfer results in a
    penalty period where Medicaid will not pay for nursing home
    care, approximately 1 month for every $10,000 transferred. The
    other half of the excess resource is also transferred to the
    children but in return for a promissory note which will produce
    an income stream to cover the cost of care during the penalty
    period. Our county regularly sees promissory notes in excess of
    $150,000 with matching, uncompensated transfers.
        For couples, the most common method of preserving resources
    is spousal refusal. In this case, the spouse in the nursing
    home transfers all resources beyond those he is allowed to keep
    to the well spouse living at home, since transfers to a spouse
    do not incur a penalty period. In New York, the
    institutionalized spouse may retain $13,800. The spouse living
    at home can retain up to $109,000. In addition, the home and
    prepaid burial expenses are exempt.
        Any amount in excess of these resources is deemed available
    to meet nursing home costs. However, Federal law allows the
    spouse at home to refuse to support the applying spouse and
    requires States to then base Medicaid eligibility determination
    on the income and assets of only the applying spouse.
        States then have the right to bring support proceedings
    against the refusing spouse. My county has pursued the refusing
    spouse in the past. However, in family court, we are only
    allowed to address the excess income and attach resources for
    past Medicaid payments. Any future proceedings would need to be
    addressed in New York Supreme Court, a process that would take
    months or years for each case and severely strain our limited
    local resources.
        The remedy for these abuses lies in education as well as
    changes to law. Many seniors believe that Medicare and their
    supplemental insurance policy will pay for the nursing home
    care when in fact these policies will only pay up to 100 days
    of care and only under certain circumstances.
        Medicaid communication through their annual handbook and
    their official Web site is woefully lacking information in this
    area. Not surprisingly, wealthy seniors fail to realize the
    value or need for long term care insurance. Having a better
    understanding of the limits of Medicaid would enable seniors to
    make timely and informed decisions regarding their future care
    needs. In addition, incentives for the purchase and use of long
    term care insurance should be provided by the Federal
    Government.
        I also respectfully suggest that the law allowing spousal
    refusal be adjusted to enforce the current resource limit and
    allow the spouse at home to petition court for higher resource
    levels should his or her circumstances call for such an
    increase instead of requiring the State to address each
    refusal. Allowing wealthy spouses to ignore their financial
    responsibility to one another is a policy we cannot afford.
        In closing, I would hope that the Medicaid Program can
    fulfill its original mission, to provide quality health
    coverage to individuals who are unable to afford such care or
    the insurance to pay for this care. However, individuals with
    resources above and beyond the level prescribed by law should
    not be allowed to fund their children's inheritance while the
    taxpayers fund their nursing home care. I strongly believe this
    is not a partisan issue. I also believe in the merits of the
    Medicaid Program but feel just as deeply that these issues
    regarding resource diversion need to be addressed.
        Thank you.
        [The prepared statement of Ms. Eulau follows:]
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        Mr. Gowdy. Thank you, Ms. Eulau.
        Ms. Hamos.

                        STATEMENT OF JULIE HAMOS

        Ms. Hamos. Thank you.
        Good morning, members of the subcommittee and Mr. Chairman.
        I am Julie Hamos, director of the Illinois Department of
    Healthcare and Family Services, which among our other
    responsibilities, manages one of the largest Medicaid programs
    in the Nation. Illinois serves 2.7 million clients through
    Medicaid and SCHIP at an overall program cost of $16.6 billion.
        Today, we are talking about eligibility policies for
    Medicaid long term care and this, for us in Illinois, is a most
    propitious time to be talking about this since we are tackling
    this exact issue. As a new director of HFS last April, I
    learned that Illinois' previous administration had not yet
    implemented the Federal DRA that passed in 2006.
        Accordingly, almost immediately when I came in, we set to
    work to create rules involving Medicaid eligibility for long
    term care, rules that incorporate the DRA but go beyond it to
    actually deal with the loopholes that you are hearing about
    today since we have now learned from the experiences of other
    States.
        Some of those loopholes are, in fact, spelled out in the
    Council for Long Term Care Report that I have read very
    closely. I have to be honest and tell you that this is a
    struggle in Illinois to convince our legislative rulemaking
    committees to adopt these rules. This is not a Democrat nor
    Republican problem. There seems to be, much to my surprise, a
    bipartisan acceptance of the so-called Medicaid estate planning
    practices that allow people to divest their assets in order to
    qualify for Medicaid nursing homes. The paper, I think,
    articulates the problem which is that there is no stigma
    attached to this.
        We agree with you that it is our responsibility to
    eliminate any abuse in the Medicaid Program and we are working
    hard right now to move along on some of these reforms. Today, I
    would like to touch on two other issues that have the potential
    to drive down Medicaid costs for long term care.
        Of our 2.7 million clients, 14 percent are seniors and
    adults with disabilities, yet these 14 percent of Medicaid
    clients incur 54 percent of the costs. Many of these same
    clients are also expensive dually eligible Medicare clients.
    While we are fully committed to providing for their care and
    maintenace, most of them really are low income and very
    vulnerable people, and they need long term care, but our focus
    is all about service delivery reform.
        Illinois historically has had an institutional bias
    building up state-operated institutions and nursing home beds.
    We currently have an excess of 15,000 empty nursing home beds,
    so we have overbuilt on that side but we have failed to invest
    in home and community-based services, obviously at a much
    better cost.
        We believe that we can achieve Medicaid savings and promote
    a higher quality of life for seniors and disabled who prefer to
    stay in their homes by rebalancing our long term care system to
    shift from nursing homes and make investments in home and
    community-based services.
        In addition, many health care services are fragmented for
    both Medicaid and Medicare and result in unnecessary and
    wasteful hospitalizations with the revolving door of admissions
    and readmissions to acute care hospitals, to psych wards of
    hospitals and to free-standing psychiatric hospitals.
        In order to drive down these costs, Medicaid must, in
    conjunction with Medicare for those who are dually eligible,
    provide care coordination for these most complex and expensive
    clients who have chronic health and behavior health conditions
    with the goal of keeping them healthier, stable in the
    community and not in hospitals but in community-based long term
    care.
        I just want to convey to you that in this period of the
    Affordable Care Act planning, we are spawning an era of
    innovation in the health care delivery system. Federal CMS is
    offering incentives and guidance almost daily to encourage us
    to focus on quality healthcare and health outcomes in home and
    community-based settings that will ultimately result in cost
    savings for both Medicaid and Medicare.
        I urge you to maintain the Federal funding for State
    Medicaid programs and funding for these Federal demonstrations,
    waivers, innovations and policy initiatives. They present the
    unique opportunity to truly transform the Medicaid Program into
    a more effective and efficient health care system.
        Thank you.
        [The prepared statement of Ms. Hamos follows:]
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        [GRAPHIC] [TIFF OMITTED] T1967.013

        Mr. Gowdy. Thank you.
        I will recognize myself for 5 minutes of questions.
        Mr. Dorfman, what is the purpose of Medicaid?
        Mr. Dorfman. The purpose of Medicaid is to provide health
    care.
        Mr. Gowdy. Universal health care or just for the indigent?
        Mr. Dorfman. The program has financial qualifications
    which----
        Mr. Gowdy. I hadn't gotten to those yet. I am just asking
    you a general question. Do you think the purpose of Medicaid is
    to provide universal health care or only for the indigent?
        Mr. Dorfman. Health care for anyone who qualifies for the
    program.
        Mr. Gowdy. Do you agree with me that there is a difference
    between actual indigency and legal indigency?
        Mr. Dorfman. Absolutely, there is an incredible
    distinction.
        Mr. Gowdy. So people can voluntarily impoverish themselves?
        Mr. Dorfman. People can voluntarily impoverish themselves.
        Mr. Gowdy. To become eligible for government programs?
        Mr. Dorfman. Absolutely.
        Mr. Gowdy. Do you think that is consistent with the
    underlying purpose and mission behind Medicaid?
        Mr. Dorfman. It absolutely can be, yes.
        Mr. Gowdy. You seem to take exception to my
    characterization of people gaming the system. You don't believe
    that millionaires who voluntarily impoverish themselves so
    their heirs can inherit money and taxpayers can provide for
    their Medicare, you don't consider that gaming the system?
        Mr. Dorfman. No, because that is not most of what happens
    or the way it happens. There are those aberration cases.
        Mr. Gowdy. Are there millionaires who have voluntarily
    impoverished themselves so their children can have an
    inheritance and we can pay for their long term care?
        Mr. Dorfman. That is not the typical experience across 20
    years of doing Medicaid planning, although there are certainly
    exceptions.
        Mr. Gowdy. When people come, and I am not trying to violate
    any attorney-client privilege, but when people come to seek
    your counsel, how often do they come by themselves and how
    often do they come with their adult children?
        Mr. Dorfman. They frequently come with their adult
    children. It is almost always with either a spouse or an adult
    child, unless it is an isolated individual who doesn't have
    family.
        Mr. Gowdy. You consider your client to be whom, the
    individual or the children?
        Mr. Dorfman. The client is always the individual, but the
    individual is almost always concerned about what is going to
    happen to their spouse or family members.
        Mr. Gowdy. Speaking of spouses, Mr. Moses, what is spousal
    refusal?
        Mr. Moses. Well, that is a practice recognized primarily in
    New York and Florida whereby the well spouse, as Ms. Eulau
    explained, simply refuses to contribute under normal Medicaid
    requirements for the cost of the care of the Medicaid
    recipient. Under the law, the Medicaid recipient has to have
    assigned his or her rights to the wealth in essence so that the
    State can go after the well spouse for what is legally owed but
    this rarely happens because it is so complicated to do.
        The Elder Law Bar in frequent annual conferences urges the
    rest of the country to take advantage of what they consider our
    right under the Federal law to simply have the spouse refuse to
    contribute to the cost of the care. It is very, very expensive
    in New York and Florida. Frankly, I don't think most of the
    other States have the impunity to try to pull that off.
        Mr. Gowdy. Before I ask you about key payments, Mr. Dorfman
    and I disagree a little bit about the purpose of Medicaid. I
    think it is for the indigent, he thinks it is for whomever
    qualifies. What do you think?
        Mr. Moses. Well, there are problems in how Medicaid
    eligibility is determined so that there are what some people
    call loopholes but there are provisions in the law that make it
    quite easy and feasible for people with substantial wealth to
    qualify. As I explained in my testimony, the real problem is
    not just the tip of the iceberg which is the egregious Medicaid
    planning millionaires onto welfare, as Mr. Dorfman was saying,
    the real problem is that the median elderly person in terms of
    income and assets walks right onto Medicaid because of all of
    the exempt assets without limit.
        So really it is difficult to characterize the program as a
    program for the indigent because over the years through the
    intent of Congress, the program has been expanded. I call it
    eligibility bracket creep to the point where virtually anyone,
    if they don't plan ahead to prepare to pay their own long term
    care, can get Medicaid relatively easily no matter how much
    money they have.
        Mr. Gowdy. My time has expired. The gentleman from
    Illinois, Mr. Davis.
        Mr. Davis. Thank you very much, Mr. Chairman.
        I think there is generally some consensus that individuals
    should not gain Medicaid eligibility by inappropriately
    shielding their wealth. In the studies I have looked at by GAO
    as well as Kaiser, and some others, it would suggest to me that
    the numbers of individuals who are able to shield large wealth
    portfolios is relatively small.
        Could I ask if your experiences would indicate that that's
    the way it goes? Are we finding large numbers of individuals
    who are millionaires or close to who have large sums who are
    able to get around the requirements and are inappropriately
    receiving Medicaid benefits?
        Mr. Moses. Mr. Davis, as I just explained, the egregious
    Medicaid planning of the millionaires, that is just the tip of
    the iceberg. What GAO looked at was just one technique of
    Medicaid planning, transfer of assets. That is not even the
    most common form of Medicaid planning. There are annuities,
    life care contracts, the reverse half a loaf strategy using
    promissory notes. There are any number of ways to get people
    qualified, but the transfer of assets technique, minor as it
    is, is still a $1 billion a year according to GAO.
        As I can't reiterate enough, the real problem is that most
    people don't have to use fancy legal planning because they are
    eligible anyway. This has the effect of having sent the message
    since 1965 when Medicaid became part of the law to the public
    that you can ignore the risk of long term care, you don't have
    to save, invest or insure for the risk, and when the time
    comes, may be you die with your boots on and you are home free,
    but if you do get one of the chronic illnesses of old age--
    Alzheimer's, Parkinson's and stroke--and you need the expensive
    care, families who provide 80 percent, as you said in your
    opening remarks, 80 percent of the care for free, if you have
    to have the expensive care, then virtually everyone ends up on
    Medicaid.
        The program cannot sustain that weight now so the secret is
    to target it to the people who need it most and thereby insure
    a quality safety net for the truly indigent.
        Mr. Davis. Mr. Dorfman.
        Mr. Dorfman. Millionaires don't want Medicaid. Millionaires
    still have other law planning issues but not Medicaid planning
    issues. They want fancy care, they want care that they control.
    They want to be able to fire the people they don't like and
    hire the people they do like. Millionaires never come in for
    Medicaid planning. They do want planning, they do need
    surrogate decisionmakers as they suffer the illnesses of aging,
    but they don't want Medicaid.
        Ms. Eulau. We find that about 60 percent of the people that
    come in for nursing home care have done some type of Medicaid
    estate planning. Suffolk County is a fairly affluent county in
    New York State. That is what we are seeing.
        In terms of people receiving long term care in the
    community, we don't see it as often but we still are seeing it
    because transfers, if you transfer your money out of your
    control for community long term care, there is no penalty. We
    are seeing that as well, may be about 15 percent of the cases.
        As soon as I joined AARP, I started receiving invitations
    in the mail to come to free seminars to talk about Medicaid
    estate planning.
        Mr. Davis. Ms. Hamos.
        Ms. Hamos. Congressman Davis, what we are finding in
    Illinois is that this is more of a middle class family issue
    than millionaires. I agree with Mr. Dorfman that the
    millionaires don't want to live in our Medicaid nursing homes.
    I think that what we are seeing is that middle class families,
    say if there is a savings, a little pot of money of $100,000,
    somewhat modest by some peoples' standards, the family doesn't
    want all of that to go into nursing home care and it is eaten
    up almost immediately in nursing home care.
        That is why in Illinois what we are struggling with our
    legislative rulemaking committee is that there seems to be this
    widespread acceptance of that on behalf of middle class
    families and that is who they are representing but we are
    learning from other States and we really want we think there
    are reasonable ways to impose and tighten the eligibility rules
    that we need to put in place immediately while also maintaining
    a better service delivery system and reducing the cost of long
    term care generally.
        We are trying to do it at both ends because there are so
    many costs for low income people that are wasteful and
    unnecessary. We could do a better job just by revising and
    reforming our service delivery system.
        Mr. Davis. Thank you very much. I yield back, Mr. Chairman.
        Mr. Gowdy. I thank the gentleman from Illinois.
        The gentleman from Arizona, Dr. Gosar.
        Dr. Gosar. Mr. Dorfman, can you please give me the typical
    assets of a client that would qualify for Medicaid that comes
    to you?
        Mr. Dorfman. A typical client that comes to me has a home,
    a co-op, a condominium worth approximately $500,000; they have
    approximately $100,000 in retirement savings; they are a
    married couple and they have approximately $30,000 in cash
    assets.
        Dr. Gosar. Ms. Eulau, would you kind of agree with some of
    those, could you confirm those?
        Ms. Eulau. We are seeing assets much greater than that.
    People often come and have total resources of over $300,000-
    $400,000 total beyond their home, beyond prepaid burial
    expenses, beyond those things they are allowed to have. In New
    York, we take the Federal resource standard, choose the highest
    resource standard for the community spouse in a nursing home
    care situation. They are allowed to keep $109,000 of the
    combined resources and we very often find that it is
    significantly higher than that.
        Probably most of the people that do some kind of Medicaid
    estate planning could at least pay for 3 to 6 months of care on
    their own and many could pay for 2 years or more.
        Dr. Gosar. Staying with you, when you see someone that
    genuinely needs Medicaid long term care and cannot afford it,
    do you see an average person come in like that? How many times
    do they not qualify or not get it? Do you see someone like
    that?
        Ms. Eulau. That should qualify for resources that don't get
    it?
        Dr. Gosar. Yes.
        Ms. Eulau. No, we don't. If they qualify, they would be
    receiving it.
        Dr. Gosar. Ms. Hamos, you talked about the rebalancing
    aspect of care. Can you tell me a little bit more about that,
    kind of like a home care aspect and what's your idea and kind
    of give me some balance about why that would reduce the cost of
    long term care?
        Ms. Hamos. In Illinois, we really do have this
    institutional bias. I guess again, there are some powerful
    special interests behind maintaining State operated facilities
    as well as nursing homes and that is why we really did over
    invest in those over time that we have 15,000 empty nursing
    home beds right now. We paid three times as much at least to
    maintain someone per month in a nursing home bed than what we
    are providing with a limited set of services for seniors who
    stay at home.
        What we are really working on now is looking at how we
    could increase the package of services to keep people in their
    home to keep them from having to go into nursing homes which is
    obviously a much more expensive form of long term care.
        Dr. Gosar. If we paid for this rebalancing, can you
    actually cite examples that would actually show us that we save
    money?
        Ms. Hamos. Yes. We will be able to.
        Dr. Gosar. We would be able to. Is there something right
    now you can point to, a State that actually shows we save
    money? It seems to me there isn't. Actually, there isn't, is
    there, because we can't find it. What we will actually do in
    rebalancing is open the exposure to more expenses for folks at
    home.
        Ms. Hamos. That hasn't been our experience yet. We are
    putting place a different kind of system and the kind of
    services people need in their home. Yes, sometimes it is very
    expensive to keep people in their homes, people who are really
    chronically ill or have very severe disabilities but there are
    people who can maintain themselves in their home and have a
    higher quality of life, at a much reduced cost, and we are
    going to show not just cost neutrality but real savings in this
    arena.
        Dr. Gosar. But it doesn't exist.
        Mr. Moses, can you actually answer that question too?
        Mr. Moses. I am not aware of any State that has actually
    reduced the cost of long term care due to rebalancing. There
    are certain countervailing factors to consider such as people
    would rather get their care at home. You make a popular form of
    service delivery available under Medicaid, it creates a
    stronger incentive for people to find ways to qualify, not to
    say we shouldn't provide home and community-based care. We
    should but you need to understand why we have an institutional
    bias in long term care.
        That is because Medicaid made nursing home care free in
    1965 and resulted in there being no market for privately
    financed home and community-based services. That is why that
    infrastructure isn't out there. It is why we are trying to
    retrofit the home and community-based system on a nursing home-
    based system funded by welfare which never has enough money to
    provide adequate financing.
        So it is I think not a very satisfactory solution to expand
    home community-based care under Medicaid unless and until you
    get the eligibility hemorrhage that this hearing is about under
    control. Otherwise, you will just create more and more
    incentives for people to rely on Medicaid.
        The best way to get access to home and community-based care
    is to be able to pay privately. Then you get red carpet access
    to the best possible care.
        Dr. Gosar. It is more about the qualifying than anything?
        Mr. Moses. Yes.
        Mr. Gowdy. I thank the gentleman from Arizona.
        I would now recognize the gentleman from Maryland, the
    ranking member of the full committee, Mr. Cummings.
        Mr. Cummings. Thank you, very much.
        Ms. Hamos, in Maryland there is an organization in my
    district, Visiting Nurses Association, you know you might want
    to credit them that has home care. That is what they do. They
    are one of the few organizations in Maryland who are increasing
    jobs by leaps and bounds because they are saving people money,
    allowing people to stay in their homes and most of these people
    are seniors. So it does work. I just visited them about 2 weeks
    ago. We just have to be innovative and I think you are going in
    the right direction.
        Mr. Moses, so you would have the government pay less money
    with regard to Medicaid and then for patients to do what? What
    would you have them do? Be brief because I have a lot of
    questions.
        Mr. Moses. You have scarce public welfare resources
    available. All I am suggesting is that you target them to the
    people who are most in need and create incentives for the
    affluent and the middle class before they are too old to and
    too infirm to plan for long term care and prepare to pay
    privately so they don't become dual.
        Mr. Cummings. So you would advocate for them getting
    insurance?
        Mr. Moses. Well there are many ways to prepare, you can
    save and invest, but insurance is one way. Home equity is the
    huge pot of money out there.
        Mr. Cummings. With people losing their homes in my district
    big time, value going down, I am not sure about that one.
        I want to go back to something Mr. Davis said. He said this
    is a multifaceted problem but one that we can find a reasonable
    solution. I want to thank you, Mr. Chairman, for calling this
    hearing, but I want us to be clear on where we are.
        Mr. Moses, you were invited by the majority and your bio
    states that you are the president of something called the
    Center for Long-Term Care Reform. I guess this is meant to
    sound like a think tank. Your bio also states that you have
    testified before most of America's State legislatures,
    something that think tanks often do, is that right?
        Mr. Moses. Yes.
        Mr. Cummings. Mr. Moses, when I asked my staff to learn
    more about you, to try to understand where you were coming
    from, it seems that your views are really nothing more than the
    views of the insurance industry, hardly a disinterested or
    objective observer. Isn't it true that the policy advocacy
    center you operate is a for profit company? Is that right, is
    it for profit?
        Mr. Moses. Yes.
        Mr. Cummings. Isn't it true that when you applied to IRS in
    2000 for recognition for tax exemption, your group was told it
    was better classified as a ``business league`` for the long
    term care insurance industry?
        Mr. Moses. No. The organization was originally certified as
    a 501(c)(3) charitable nonprofit. I didn't feel I could carry
    the overhead of that, so I decided to become what I call a no
    profit because I just couldn't carry the overhead of being a
    nonprofit.
        Mr. Cummings. I understand. Isn't it true that your
    organization stated in June 2000 in correspondence to the IRS
    that historically all the Center for Long-Term Care Reform's
    funding has been contributed by the long-term care insurance
    industry? Is that right? Did you report that?
        Mr. Moses. I have a membership organization, so individual
    members contribute $150 a year in order to get my publication
    and I have corporate members as well.
        Mr. Cummings. I just want to make sure we understand who is
    funding you.
        Was the funding to originate the Center paid for by the
    long-term care insurance industry?
        Mr. Moses. Some of the funding for the Center.
        Mr. Cummings. When you say some, was that 50 percent, 90
    percent?
        Mr. Moses. Probably most in the early stages, all the first
    year and less over time.
        Mr. Cummings. Isn't it true that your organization's
    principal purpose is to advocate for the purchase of long-term
    care insurance?
        Mr. Moses. No, that is not true. If you can permit me to
    answer the question fully, I will explain.
        Mr. Cummings. Sure, briefly, because I have a lot of
    questions and what I may have to do is just get your written
    response, but I want to be fair to you.
        Mr. Moses. Maybe another Member will allow me to answer
    your question in such a manner that can appease you.
        My roots are, sir, in government service. I was an 18 year,
    U.S. Government employee. I discovered that Medicaid is
    intended to be for the poor and was not being so used
    effectively. I have become an advocate first as a Federal
    employee working for the Health Care Financing Administration,
    then for the Inspector General, writing national studies that
    have led to changes in Federal law.
        When I decided I couldn't get it done within the Federal
    Government, I left to be on the outside but my mandate, my
    mission is to preserve Medicaid as a safety net for people who
    need it such as the people in this room.
        Mr. Cummings. Then you and I are in agreement on that. On
    that point, I have to ask you this consistently with what you
    said so you can have further opportunity to explain. In a fund-
    raising appeal letter, does your organization brag that it may
    be ``long term care industry's top producer'' and isn't it true
    that in your fiscal year 2000 fund-raising letter, you assert
    ``the Center would open the floodgates of demand for your
    products?'' In your 2000 fund-raising appeal, you were
    attempting to raise $1 million, and requested $10,000 from
    brokers and $20,000 from small carriers. Will you provide this
    committee with a comprehensive list of donors to your
    organization?
        Mr. Moses. You are talking about 11 years ago. That
    organization, the Center for Long-Care Financing doesn't exist
    anymore. That was a 501(c)(3) charitable nonprofit. We are now
    a no-profit, as I explained, and I do not have to and will not
    disclose all of my donors. Most of them, about a third, are
    individuals who just believe in what we are doing and make a
    contribution annually. There are corporate members, some from
    the insurance industry, some from the provider industry.
        Mr. Cummings. Were Charles and David Cook included in it?
        Mr. Moses. No.
        Mr. Cummings. Thank you very much, Mr. Chairman.
        Mr. Gowdy. The gentleman from Tennessee, Dr. DesJarlais.
        Dr. DesJarlais. Thank you, Mr. Chairman, and thanks to the
    panel.
        Mr. Moses, I think we will just kind of continue where we
    left off there because I find this really an interesting and
    important hearing. Clearly, we are facing Federal deficits that
    are unsustainable. We have health care programs that are in
    jeopardy whether it is Medicare or Medicaid. I think what we
    are trying to do here today is preserve Medicaid for those that
    really need it.
        We have a large group in here who should have been very
    interested in this because clearly those are the ones who need
    it. For the past two decades as a primary care physician, I
    have struggled with the frustration of getting care for people
    who really need it and everybody knows people getting it who
    don't need it. To me this hearing should be a very bipartisan
    thing.
        Mr. Dorfman mentioned the wife who is talking to the doctor
    of a husband who has just had a stroke, wondering what do I do
    and indeed, that is a frightening time. Clearly, if the
    government isn't there, then what indeed does she do, who does
    she turn to? Does she turn to family, does she turn to her
    resources?
        We are hearing talk right now that the rich need to pay
    their fair share. This hearing is about people being
    responsible for themselves and not relying on the Federal
    Government when they can afford to do it. I applaud you and
    everyone who is here today trying to solve this problem because
    clearly our government cannot afford to pay long term care for
    everybody in this country. We have to have a better solution. I
    think that is why we are here.
        Do you think it is better that people have insurance and
    prepare for long term care than not?
        Mr. Moses. Yes. Here is my problem. My goal is to preserve
    Medicaid as a safety net for people in need. Unfortunately,
    people in need don't have money to donate to organizations like
    mine. The people who don't are the ones who might benefit from
    a change in Medicaid policy that protects the program for the
    poor.
        Where would we go if there weren't a $500,000 home equity
    exemption? Families would tap their home equity after age 62
    through products like reverse mortgages which enable them to
    remain in the home and purchase that home and community-based
    care that we would rather people have.
        Once home equity becomes something that is at risk in case
    you have a long term care problem, once Medicaid stops being
    free inheritance insurance for the baby boom generation, then
    the boomers will plan ahead and will be more likely to buy the
    insurance that enables them to pay privately.
        If we could divert only 20 percent of the people who are
    likely to become the dual eligibles that are only 15 percent of
    the Medicaid population but 39 percent of the cost, 70 percent
    of their costs are long term care, if we could divert only 20
    percent of them from ever becoming dual eligibles, it would
    save Medicaid $30 billion a year which is enough by the way to
    cover the doc fix.
        Dr. DesJarlais. Briefly, the way things stand now with
    proper legal counsel, somebody like even Bill Gates or Warren
    Buffet could qualify for Medicaid?
        Mr. Moses. You could as long as you transferred all your
    assets 5 years in advance.
        Dr. DesJarlais. So there is means for people like that to
    do it if they wanted to do that?
        Mr. Moses. Yes.
        Dr. DesJarlais. Ms. Eulau, how often do you think someone
    who is genuinely poor, may be someone who cannot privately
    finance more than a quarter or so of their long term care has
    assistance qualifying for Medicaid long term care?
        Ms. Eulau. I am sorry?
        Dr. DesJarlais. I am sorry, that wasn't very clear. How
    often do you think someone who is genuinely poor, may be
    someone who cannot privately fund more than a quarter or so of
    their long term care, has assistance in qualifying. How often
    do they get help qualifying for Medicaid long term care?
        Ms. Eulau. If they fit under the income resource standards,
    they would get it all the time.
        Dr. DesJarlais. Would you say that most of the individuals
    in nursing homes on Long Island could privately finance at
    least some of their care?
        Ms. Eulau. Yes.
        Dr. DesJarlais. How difficult is it to recover assets from
    an estate of an individual who has used Medicaid services?
        Ms. Eulau. It is very difficult, especially for spousal
    refusal, once they have done the refusal and separated out the
    resource, quite often if the spouse in the community does not
    need care, they then transfer that money out to their children
    prior to their death. We can't go after the resources if there
    is still a spouse in the community and quite often they are
    doing their own Medicaid estate planning.
        Dr. DesJarlais. Do you get the sense that people are afraid
    of the idea of estate recovery? Is that something they fear or
    not?
        Ms. Eulau. I don't think they think about it.
        Dr. DesJarlais. I was thinking about this hearing and the
    idea of getting people on insurance. I think people are very
    naive. I think a lot of people think Medicare will pay for
    this. Do you think this would be an area that public service
    messaging, if they knew this was going away and they didn't
    have this option, public serving messaging to help get people
    to obtain long term health coverage might be useful?
        Mr. Moses. It can't hurt but the problem is the public
    doesn't fail to buy long term care insurance or plan for long
    term care because they aren't aware of the problem. All the
    surveys show people know it is a big risk, but they still don't
    buy. Why, because ignore the risk, avoid the premiums, wait to
    get sick and the government pays.
        Dr. DesJarlais. So all the loopholes right now are allowing
    people to skirt the system, maybe even cheat the system?
        Mr. Moses. Not just the loopholes, just the basic
    eligibility rules let most people on.
        Dr. DesJarlais. Once again, it is a case of our government
    enabling people to skirt the proper channels?
        Mr. Moses. Well intentioned, perverse incentives.
        Dr. DesJarlais. I yield back.
        Mr. Gowdy. I thank the gentleman from Tennessee.
        I would now recognize the gentleman from Missouri, Mr.
    Clay.
        Mr. Clay. Thank you, Mr. Chairman.
        According to a 2009 report by the Non-partisan Kaiser
    Commission on Medicaid and the Uninsured, the number one reason
    that people who shop for but do not buy long term care
    insurance is cost. In 2009, the Kaiser report found that long
    term care insurance premium costs vary significantly depending
    on the age of the purchaser.
        For individuals aged 60 with no partner, the annual
    premiums for a typical policy average $2,329. For a couple the
    same age, premiums for the same policy design averaged $3,096
    combined for the two people. If purchased at age 70, premiums
    would cost on average $4,515 per year for an individual and
    $6,010 for a married couple.
        Another Kaiser study published in June of this year found
    that half of all Medicare beneficiaries had incomes below
    $21,100 in 2010. Furthermore, many elderly individuals are
    already spending a significant amount of their income on health
    expenses. In 2006, Kaiser found that 1 in 4 Medicare
    beneficiaries spent 30 percent or more of their income on
    health expenses and 1 in 10 beneficiaries spent more than half
    of their income on health expenses.
        Ms. Hamos, given that a significant number of Medicare
    beneficiaries are already spending a large part of their
    relatively small income on health care expenses, do you think
    it is realistic to ask your average senior citizen to purchase
    long term care insurance which is cost prohibitive for many?
        Ms. Hamos. I think you hit the nail on the head. It is cost
    prohibitive, but I think the key to long term care insurance is
    that young people need to buy it when it is affordable and they
    need to be thinking ahead to their own futures and their
    families' futures. Young people, as we all know, don't think
    that way. That is the big problem. If people wait until they
    become seniors, even middle age and close to being seniors, I
    think most people don't start down that road because it is very
    expensive.
        Mr. Clay. It is my understanding that long term care
    insurance premiums have increased significantly above the
    overall rate of inflation. Isn't it true, Ms. Hamos, that from
    1995 to 2005, average age adjusted premiums have increased 59
    percent above the overall rate of inflation for individuals
    aged 55 to 64 and by 32 percent for those aged 65 to 69?
    Between 2000 and 2005, the more comprehensive policies which
    often included inflation protection, raised premiums on average
    30 percent. Have you found that in your studies?
        Ms. Hamos. This is not my expertise at all but I have read
    those studies and I have learned that as well about long term
    care insurance. We would all like to encourage more use of long
    term care insurance quite honestly I think if it is out there.
    The insurance companies tell us there is not a robust market
    for it.
        I think what we are hearing today is that in part because
    Medicaid policy has impacted that, but I would say part of the
    problem is that it is a costly purchase for a lot of low income
    and middle income families and they don't really think ahead
    far enough to be able to buy and hold on to it and maintain it
    throughout their lives. That is why it is so cost prohibitive
    and that is why it is increasing because the insurance
    companies don't see a big market for it.
        Mr. Clay. Thank you for that response.
        Mr. Moses, I noticed that your fund-raising solicitation
    ends by asserting that ``Our established credibility as an
    independent third party voice allows us to perform an essential
    role that no one else can fill for reasons perceived by self
    interests.'' Do you normally disclose to congressional
    committees and State legislatures that you have testified
    before the details of your ties to the long term care insurance
    industry?
        Mr. Moses. It is public knowledge. As your researchers have
    determined and provided you the information, that is out there.
    But as I explained earlier, I am not about selling insurance. I
    am about saving Medicaid. The problem is, as one of the
    testimonies explained, between two-thirds and 90 percent of the
    potential market for long term care insurance is crowded out by
    the availability of Medicaid. That was in the American Economic
    Research Journal.
        As long as that is the case, as long as the public can
    ignore the enormous cost of long term care, no financial
    product is affordable if you don't think you need it.
        Mr. Clay. Will you provide the subcommittee the names of
    your corporate donors?
        Mr. Moses. No.
        Mr. Clay. Thank you and I yield back.
        Mr. Gowdy. I thank the gentleman from Missouri.
        Given the impressive panel of witnesses that we have, with
    your indulgence, we would like to have a second round of 2
    minutes each if that is amenable to you all. We are so
    fortunate to have witnesses like yourselves. We want to be good
    stewards of your time, so if you have time, 2 minutes. My
    math's not great, maybe 8 minutes.
        Mr. Moses, key payments, is that a phrase you are familiar
    with and what is it?
        Mr. Moses. The idea of key payments, the notion is that if
    you are doing Medicaid planning and sheltering or divesting
    hundreds of thousands of dollars, you don't want to end up in
    one of those awful Medicaid nursing homes.
        Mr. Gowdy. That is exactly why I asked you because there
    have been two witnesses who have said wealthy people don't want
    to wind up in one of those gosh awful Medicaid places. The good
    news for them is there is a way around that.
        Mr. Moses. Absolutely, there is.
        Mr. Gowdy. Tell Mr. Dorfman how he can keep his rich
    clients from having to stay in one of those horrible Medicaid
    facilities.
        Mr. Moses. This is routinely recommended in the Elder Law
    Journal articles. Don't worry Mr. and Mrs. Client, we can get
    you into a nice place because when we divest the rest of your
    assets, we will hold back $50,000 to $100,000 so that you can
    pay privately for 6 months to a year. Why does that make a
    difference? You will get red carpet access to the best quality
    care because nursing homes, for example, only get about two-
    thirds from Medicaid what they would get from a private pay
    resident, so they will roll out the red carpet to attract
    people who can pay privately. They may have only a few Medicaid
    beds and be mostly private pay and Medicare. They are the
    really nice nursing homes and the Elder Law Bar always knows
    which ones those are.
        The problem is while the nicest beds and the best
    facilities are being filled by people who could have, would
    have and should have paid their own way, Medicaid people, the
    appropriate indigent people, can't get into the nice places and
    they end up in the 100 percent Medicaid places that are the
    kind of places that 20/20 goes in with the minicams showing
    people lying in their own waste with bed sores down to the
    bone.
        Mr. Gowdy. To summarize it, because I only have a couple
    seconds, just save back enough money to be a private pay
    patient for 3 months at a minimum, perhaps up to 6 months, then
    quit paying your private pay, that very nice facility can't
    kick you out because of your former payment, you could just
    live off your Medicaid?
        Mr. Moses. Correct.
        Mr. Gowdy. There is a way contrary to what has been said
    this morning. Wealthy people don't have to wind up in those
    gosh awful Medicaid facilities, they can be at a super nice
    place if they just get the right legal counsel, right?
        Mr. Moses. A Medicaid planner simply flips the switch, the
    Medicaid plan kicks in and your private payer becomes a
    Medicaid recipient overnight.
        Mr. Gowdy. I would recognize the gentleman from Illinois,
    Mr. Davis.
        Mr. Davis. Thank you very much, Mr. Chairman.
        We noticed a number of individuals here earlier in
    wheelchairs who are part of the disabilities community. For a
    number of years now, Senator Harkin and I have been working
    very hard trying to get something passed called Community
    Choice, which would allow these individuals to live at home and
    still get the nursing care or the medical care they needed and
    not have to live in nursing homes to do so.
        Of course we have not fared very well with that
    legislation. We have not been able to get it passed. Since we
    are looking for ways to save money from Medicaid, what would
    each one of you think of that? Would that be a way to save some
    of the money we are currently spending because nursing home
    care, the average cost, is about $75,000 a year. If individuals
    could live at home and we pay for the medical services, then it
    seems we would save a lot of money.
        Mr. Moses. You would indeed target Medicaid to the people
    who really need it and you will have more than enough resources
    to provide a full continuum of care from home, community-based
    care, assisted living and nursing home care but only when it is
    needed.
        Mr. Dorfman. There is a system we run through VA, the
    Community Senior Foster Care Program. It is the kind of program
    that could be duplicated across the entire Medicaid spectrum.
    An example of what it might do is take three senior veterans
    suffering from Alzheimer's and Parkinson's, put all three
    together in a community setting in someone's home and pay them
    for providing care. It cost a fraction of institutional care
    and is a model that could be replicated across the system to
    provide community care.
        Ms. Eulau. New York has a waiver program, a long-term home
    health care program that services clients at home, giving them
    all the nursing home services they would normally get in a
    facility in their home, nutrition care, therapy and such. The
    program itself requires that it not cost more than 75 percent
    of what it would cost in a nursing home setting. We do try to
    do that.
        Could I also say that I don't really think in my county
    there are Medicaid nursing home facilities. All of our nursing
    facilities have about 80 percent Medicaid patients.
        Ms. Hamos. That was surprising to hear. Every State really
    does have different experiences.
        I wanted to reflect on the chairman's questioning before,
    in our case in Illinois, there are some nursing homes that
    actually do figure out ways to kick out people when they are
    done with their resources. They figure out how to transfer them
    to hospitals and then don't invite them back. It is risky to
    start out in the fancy nursing home and not know where your
    granny is going to be a year or 10 months later.
        I would say again we think that home and community-based
    care is more cost effective and a higher quality of care kind
    of approach for people who are low income, disabled and that is
    the preponderance of the clients we deal with. I think exactly
    what Ms. Eulau was talking about is what we are finding too,
    that we can set a standard for what nursing home care would
    cost and go below it and meet that standard and provide a
    higher quality of care.
        Mr. Davis. Mr. Chairman, I have a couple questions I would
    like to submit.
        Mr. Gowdy. Yes, sir, without objection.
        The Chair would now recognize the gentleman from Arizona,
    Dr. Gosar.
        Dr. Gosar. Mr. Dorfman, do you worry that Medicaid planning
    exploits taxpayers?
        Mr. Dorfman. No. Medicaid planning is the way to protect
    the individuals who need the government program set up for
    their benefit.
        Dr. Gosar. So it doesn't undermine personal responsibility
    and contributes to a free rider culture?
        Mr. Dorfman. No, not at all. What it is doing is taking an
    individual in any circumstance and looking at what are the most
    responsible choices at that moment given the existing
    government program. Sometimes that means transferring the money
    to protect the wife who is still living at home when you need a
    nursing home.
        Dr. Gosar. Mr. Moses, do you worry about the exploits to
    the taxpayer contributing to a free rider culture in this
    Medicaid planning?
        Mr. Moses. Yes. The research shows that people don't plan
    for long term care because Medicaid pays for most of the
    expensive care later on. It is not that the public knows all
    there is to know about long term care and plans to go on
    Medicaid, it is the fact that Medicaid has always paid for most
    expensive long term care that has kind of desensitized the
    public to the risk.
        That is why all the survey studies show that people are
    aware that they should have a plan for long term care but they
    think Medicare covers it which doesn't, but Medicaid does and
    that is the simple, basic fact that is you could change that,
    we could preserve Medicaid as a safety net for people in need
    and if you had to spend some of your own resources before you
    got help from the government, as you do in England, England
    only protects $38,000 worth of all assets including home
    equity. If you had that in place, then you would have a demand
    for planning, saving, investing and insuring.
        Dr. Gosar. Ms. Eulau, how would you feel about that?
        Ms. Eulau. I agree that people don't know enough before
    they get to that point in their lives about what is going to
    pay for their care, so I really think there needs to be a lot
    more education out there. I see commercials every day for
    Medicaid estate planning on the television and in print. Like I
    said, I received free seminar invitations myself just as an
    AARP member in the community. I think there needs to be more
    education.
        The other thing is it really could teach people who is
    paying for it and I think once people find out that the
    taxpayer is funding wealthy recipients of care, there's going
    to be some changes.
        Dr. Gosar. I just want to say I have heard some things here
    today. I was raised from immigrant grandparents. The American
    dream was about personal accountability and personal
    responsibility. When did we lose honor, when did we lose ethics
    and when did we lose character? What I have heard today
    astonishes me.
        In the other aspect of selling insurance, what is so wrong
    about selling an insurance plan for somebody to take care of
    themselves? What is wrong with that?
        I am from Arizona and I have seen a group of people who
    have been on the government dole for the longest period of time
    fighting to get off it and that is Native Americans. Something
    is wrong with government provided health care when it can't
    look at these aspects.
        I look at Ms. Hamos, we had DRAs that we were supposed to
    follow and we are still not there because it is a bipartisan
    problem. Something is wrong here and we have to look at the
    whole core. It started in 1965 when we did not identify those
    proper rules, proper protocols and etiquettes. I am
    apologizing.
        Thank you.
        Mr. Gowdy. I thank the gentleman from Arizona.
        The Chair would now recognize the gentleman from Missouri,
    Mr. Clay.
        Mr. Clay. Thank you, Chairman Gowdy.
        Mr. Moses, going back to the point about the names of your
    corporate donors, I just don't find you as a disinterested,
    public policy expert expressing a personal opinion but in fact,
    a paid, long term care industry advocate. In the interest of
    full disclosure, why wouldn't you want to provide the names of
    your corporate donors to this subcommittee?
        Mr. Moses. I am not required and I choose not to do it. The
    point is that kind of argument, Congressman Clay, is a logical
    fallacy. It is called the ad homonym to attack somebody based
    on aspects other than the quality of their work. I would
    encourage you to read the many reports that are on our Web site
    and make a judgment based on facts and not personal attacks.
        Mr. Clay. Mr. Moses, before I came here, I was a State
    legislator for 17 years and I see the trends of what is going
    on in the States, that they are quickly shirking their
    responsibility to take care of the disabled and the people that
    are older because, first of all, they don't want to raise the
    necessary revenues to pay their share of Medicaid and are
    putting less and less in annually to pay for those people who
    helped build those States and build this country, especially
    our seniors who happen to be in a long term care facility. You
    don't want to provide the subcommittee with full disclosure for
    whatever reason.
        Mr. Moses. I spent 30 years, my career, trying to find ways
    to save Medicaid for people in need. The only tools I have are
    private sector industries that stand to gain from a system that
    would save Medicaid for people in need. If we save Medicaid for
    people in need, others, the more affluent people, will need to
    spend their money instead of hiring attorneys.
        They will need to use their home equity through things like
    reverse mortgages so they can get quality care in the private
    market. Once their home equity is at risk, they will see the
    need to buy the insurance and we will take some of the burden
    off the public programs currently unable to provide guaranteed
    access to quality care across the whole spectrum of care for
    people truly in need and we will increase the jobs in the
    private sector and the tax revenue that enables Congress to do
    worthwhile things. Right now, we are operating a system that
    does not achieve its original intent.
        Mr. Clay. I thank you for your response.
        Mr. Gowdy. I thank the gentleman from Missouri and on
    behalf of all of us, we want to thank each of our panelists. It
    has been informative for all of us and we appreciate your
    expertise, your professionalism and how you interacted with one
    another and especially how you have interacted with
    questioners.
        With that, the committee is adjourned and we thank you
    again.
        [Whereupon, at 11:40 a.m., the subcommittee was adjourned.]
        [Additional information submitted for the hearing record
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