[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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