[Congressional Record (Bound Edition), Volume 154 (2008), Part 1]
[Extensions of Remarks]
[Page 407]
[From the U.S. Government Publishing Office, www.gpo.gov]




                AMERICA'S LOOMING LONG-TERM CARE CRISIS

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                            HON. DAN BURTON

                               of indiana

                    in the house of representatives

                       Thursday, January 17, 2008

  Mr. BURTON of Indiana. Madam Speaker, while I was back home in 
Indiana for the recent congressional recess, I came across an excellent 
op-ed in the Indianapolis Star written by the CEO of Conseco Inc--one 
of our Nation's premier insurance, annuity and financial security 
firms--C. James Prieur. The topic of this op-ed was a subject that I 
have been deeply concerned about for some time, namely, the question of 
long-term health care. Not since the days of Hillarycare back in the 
early 1990s has the issue of health care been raised to such prominence 
in political and civic debates all across the country. However, one 
aspect of health care that I believe is still not garnering the kind of 
attention it should is long-term care, LTC, insurance.
  Back in December 2006, the AARP released a shocking survey, which 
found that a full 59 percent of American adults age 45 and older 
overestimate Medicare coverage for long-term care. Other studies have 
shown similar results. Taken together, the implication is clear; far 
too many Americans do not have a clear perception of long-term care 
costs or to what extent long-term care is covered by public programs. 
For example, Medicare pays for care delivered in skilled nursing 
facilities to patients who require longer term medical treatment, but 
Medicare does not pay for custodial care needed to assist frail and 
disabled beneficiaries with eating, bathing and other activities of 
daily living. Medicaid only covers those types of services if you are 
impoverished or become impoverished, and it provides far fewer quality 
care choices than are offered through typical long-term care insurance 
plans.
  With the impending retirement of roughly 76 million baby boomers in 
the next 10 to 20 years, and the average cost of a private room in a 
nursing home running about $75,000 a year, in current dollars, we are 
facing a potential long-term care train wreck. Fortunately, the 
solution is already in place, and it is not a Government-run insurance 
program; it is the private insurance industry. As Mr. Prieur clearly 
says in his op-ed, and I agree with him, long-term care insurance isn't 
for everyone. But, millions of Americans have already put their trust 
in LTC insurance, and when 97 percent of long-term care claims 
submitted to private insurers are being paid out--which is the finding 
of a survey of the leading LTC insurers done by America's health 
insurance plans--the facts seem to show that this trust is well placed.
  I urge my colleagues to read this op-ed and to talk to your 
constituents about Medicare and long-term care issues. And I urge my 
colleagues to come together to enact simple, commonsense changes in 
Federal policy that can help Americans take an important step towards 
preparing for their long-term care and retirement security needs. One 
of the easiest things we could do is to allow long-term care insurance 
to be offered among employer-sponsored cafeteria plans and flexible 
spending arrangements, FSAs. Currently, benefits such as medical 
insurance, disability income, life insurance, and a variety of other 
voluntary benefits are cafeteria style but long-term care insurance is 
not. Moreover, long-term care insurance cannot be purchased using FSA 
dollars. That simply makes no sense.

              [From the Indianapolis Star, Dec. 31, 2007]

               Let's Work To Avoid Long-Term Care Crisis

                          (By C. James Prieur)

       Here's a question: What percentage of the long-term care 
     claims submitted to private insurance companies were paid in 
     2006? 10 percent? 25 percent? 50 percent? The actual answer--
     according to a survey of the leading LTC insurers by 
     America's Health Insurance Plans--is 97 percent. If that high 
     percentage surprises you, it may be because a small number of 
     problem LTC insurance cases have been grabbing the headlines.
       Public attention is focusing as never before on the 
     important issue of how Americans will pay for their long-term 
     care needs. Soaring health care costs, the looming retirement 
     of millions of baby boomers, and the fear that Medicare and 
     Medicaid will be dangerously strained are behind this 
     concern. Unfortunately, misleading media accounts may be 
     driving away the very people who would benefit most from LTC 
     insurance.
       Far-sighted leaders in Congress who are pushing to broaden 
     the number of Americans who have LTC insurance are doing so 
     for good reason. The cost for providing long-term care will 
     be a major, potentially crippling expense for many 
     households. Contrary to what many think, government programs 
     will pay only part of the tab. Sen. Chuck Grassley of Iowa 
     noted recently that ``preparing for long-term care needs can 
     make a big difference in both the quality of life for 
     individuals and the solvency of Medicaid.'' How the success 
     of these products and their new variations will affect public 
     programs is a serious issue. Many seniors mistakenly believe 
     their LTC costs will be covered by Medicare. In fact, 
     Medicare does not cover home health care, nursing home care 
     or the type of care one may need for a severe cognitive 
     impairment like Alzheimer's disease.
       This means that most seniors will have to bear a meaningful 
     share of their own long-term care costs, and that's where 
     private LTC insurers enter the picture. It is our mission to 
     provide seniors with the assurance that their long-term care 
     needs will be covered and their legacy will be preserved.
       Millions of Americans have put their trust in LTC 
     insurance, and the facts show that this trust is well placed. 
     Overwhelmingly, insurers are meeting their obligations. 
     Across the country in 2005 (the most recent full-year data 
     available), the LTC industry paid more than $3 billion of 
     claims.
       LTC insurance isn't for everyone. If you are among the 
     wealthiest of Americans, you might be able to afford to pay 
     your own LTC expenses. If you have a very low income or few 
     assets, Medicaid may help you. If you fall somewhere in 
     between, LTC insurance may be the smart choice to relieve the 
     financial strain on your family and help you protect assets.
       LTC insurance is getting more expensive. Many LTC insurers 
     today are asking state insurance departments for authority to 
     raise their LTC insurance rates. Policyholder premiums are 
     based on several factors that have changed significantly over 
     time, and in ways that few anticipated.

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