[Congressional Record Volume 140, Number 7 (Wednesday, February 2, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: February 2, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                      LONG-TERM HEALTH CARE REFORM

  Mr. FEINGOLD. Madam President, I rise today to briefly continue my 
series of statements commenting on the President's health care reform 
package and specifically the long-term care reform portions that are in 
that package.
  As I had a chance to say in earlier statements, long-term care reform 
is essential if we are to realize the goals of overall health care 
reform. That to me means establishing consumer-oriented and consumer-
directed flexible benefits, as well as making fundamental reforms to 
the linkages that should exist between long-term care and acute-care 
systems.
  Central to this whole effort is creating a new system of community 
and home-based, flexible services that, again, respond to individual 
consumer choice and preference. That should start from the initial 
assessment of the person right on through to ongoing services. It 
should involve case managers and others who are regularly consulting 
with the consumer and family members to be sure that the needs of the 
individual consumer are met in a satisfying manner; that the consumer's 
needs are met first rather than the provider's.
  This is exactly what I think President Clinton has proposed to do in 
his health care plan. The new home and community-based long-term care 
benefit provided for in the plan can be the basis for the kind of 
fundamental long-term care reform that I and many other people are 
interested in.
  Madam President, today, though, I want to focus on just one aspect of 
the long-term care portion of the President's health care plan, which 
has to do with the long-term care insurance provisions. By that I mean 
not public insurance, I mean private insurance policies that still 
might be sold after the President's plan is enacted.
  The President is correct to identify the problems of long-term care 
financing as part of the overall health care problem. Medicaid, the 
Federal-State program that provides almost all of the Government-funded 
long-term care in this country, is growing at a dangerous rate. That 
growth is aggravated by the disproportionate reliance we have in this 
country on expensive institutional settings, and it is also aggravated 
by the failure in the past in most States to develop home and 
community-based alternatives. These home and community-based 
alternatives are often preferred by many consumers and are very often 
less expensive for taxpayers than having somebody go into a nursing 
home.
  President Clinton's home and community-based long-term care proposal 
will be a fundamental step in addressing the long-term care financing 
crisis. But the President's plan goes a little bit beyond that and, in 
a way, seeks to promote private long-term care insurance policies 
through, among other means, tax incentives to both employers and 
consumers. Regulation of these policies is left largely to the 
individual States, but the plan does include a variety of specific 
consumer protections, which I will mention in a little while.
  Madam President, I do have some concerns about this piece of the 
President's long-term care private insurance proposals. As chair of 
Wisconsin's Senate Aging Committee for 10 years, I had a chance to 
preside over some hearings relating to this matter. Those hearings 
showed there are some real flaws in relying too much on long-term care 
private insurance as an answer to the long-term care financing crisis.
  First, long-term care insurance policies really do nothing to stem 
the mushrooming costs of Medicaid. It provides little or no coverage to 
that population that is most likely to use that entitlement because 
they cannot afford it. Private long-term care insurance is only 
affordable to those individuals who are most likely to be able to pay 
for long-term care out of savings and, therefore, least likely to use 
Medicaid.
  As an alternative to Medicaid, private long-term care insurance just 
fails to contain costs. It can actually encourage disparate pricing 
systems that have led to the ever-increasing private pay costs in our 
nursing homes. Private insurers and, through the process of deductibles 
and copayments, consumers will end up paying the higher private pay 
rate in nursing homes. That has been and will continue to be much 
higher than the Medicaid rate. This, in turn, may further aggravate the 
problems of lower income long-term care consumers who then sometimes 
face discrimination in access to and quality of care.
  A second concern about these long-term private policies is that long-
term care insurance is a poor mechanism to address overall cost 
containment. There is no reason to believe that the administrative 
costs of long-term care insurance policies, as with other health care 
insurance policies, will not continue to be very high. I think they 
will be.
  It is precisely this administrative cost of the current acute health 
care system, having these 1,500 insurance companies competing and 
having it not work competitively, that is one of the reasons we are 
looking for reform right now. It is one of the reasons I supported a 
single-payer system.
  So what could be happening here is if we encourage these long-term 
care private insurance policies, we may be creating the same mess in 
the long-term care area that we are trying to dig ourselves out of 
right now in the acute care area. That would be a mistake in the 
opposite direction that we should be going.
  Third, Madam President, and maybe most importantly, the private 
insurance model restricts benefits and has gatekeeping mechanisms that 
obviously have some relevance to the medical model of acute care. But I 
think it is fundamentally inconsistent with a proconsumer, flexible 
benefit approach to have private insurance be the engine for long-term 
care reform.
  The central strength of the President's long-term care proposal is 
the ability of the long-term care provisions to be tailored to the 
individual needs and preferences of long-term care consumers. Instead 
of having consumers select from a limited set of benefits, case 
managers should be able to create a case plan. It should be designed in 
cooperation with the consumer, and it should respond to the consumer's 
needs, not to what the consumer's insurance company happened to decide 
to give as a benefit. Long-term care insurance policies that cover a 
limited list of benefits will provide a tremendous temptation to case 
managers to design a plan that is based on the insurance policy 
coverage rather than the needs and preferences of the consumer.
  So again, instead of helping, these provisions can do just the 
opposite; they can defeat the whole purpose of having a consumer-
driven, consumer-based system. If this happens, consumers will be 
denied the opportunity to participate in designing their own plan of 
care that is responsive to individual needs. And we will lose the 
opportunity for cost containment that has been demonstrated time and 
again to flow from consumer-oriented approaches. We will end up again 
with a provider-driven program rather than a consumer-driven program.
  To his credit, the President has included minimum standards that 
States will be required to include if they have private, long-term care 
insurance policies. They include provisions for nonforfeiture of 
benefits in the event the policy lapses, inflation protection, 
protection against preexisting condition limits, protection against 
limits on commissions paid to agents, and defining eligibility for 
benefits is included based on an independent professional functional 
assessment.
  If we are to encourage this kind of system at all, which I question, 
these insurance plans should be clearly distinguished as long-term care 
nursing home and home health care policies, each with their own well-
established minimum standards.
  With respect to coverage for the new home and community-based long-
term care program, I do not think we can allow long-term care insurance 
to impose restrictions on otherwise flexible benefits by overly 
limiting those benefits that will be covered. Ideally, long-term care 
insurance coverage would be triggered by a person's participation in 
the new program with the private insurance then covering the consumer's 
share of the costs that they have under the program. This would be 
similar in many ways to the current Medicare supplemental insurance 
policy that fortunately has undergone significant reform in recent 
years. Consumers should be able to choose from uniform policies that 
substantially cover the long-term care consumer's cost of the new home 
and community-based long-term care program.
  The simplest and most effective approach would be to permit only 
those long-term care policies that completely cover the consumer's cost 
sharing under the new home and community program. The policy would be 
triggered when a consumer becomes eligible for the program and it would 
cover all services provided for in the consumer's plan of care. If we 
cannot get that approach, which I prefer, I think we risk the 
fundamental advantage of the President's plan, and that is we lose the 
consumer responsive benefits and significant cost savings.
  Finally, if somehow we do not get that, if long-term care insurance 
is permitted in a form other than the one I have just outlined, we 
better add some others to the President's list of minimum standards. 
Additional standards we should include are the following: We should 
explicitly prohibit prior hospitalization or institutionalization 
requirements. We should prohibit exclusion of coverage for irreversible 
dementia for such illnesses as Alzheimer's disease. We should 
explicitly require that coverage must be provided without regard to 
medical necessity. We should require a 30-day right-to-return policy or 
rider and, finally, we should require that these policies, if they 
exist at all, are guaranteed renewable for life so people cannot be cut 
off.
  Because the nature of discussing President Clinton's health care 
package means we tend to focus on what we want to change in it, it is 
too easy for us to miss the larger picture, which is that the President 
and First Lady have really moved us in the direction we have to go.
  With respect to long-term care, I would like to conclude by 
underscoring my strong support for what the President is attempting to 
do. The fundamental reforms he envisions in our long-term care system 
are essential to any health care reform package, not just his own.

  Despite this, President Clinton's plan is one of the few that 
provides fundamental long-term care reform. It is because of the 
underlying soundness of his proposal that I think it is the one with 
which we should work, the one we should modify, and the one we can make 
one of the greatest parts of reform, that I offer these suggestions and 
that we take a good hard look at the private, long-term portion of it.
  I thank the Chair.
  The PRESIDING OFFICER (Mr. Robb). The Chair recognizes the Senator 
from Maryland [Mr. Sarbanes].
  Mr. SARBANES. I thank the Chair.

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