CHA Blog

A growing number of older Americans are selling their life insurance policies to help pay for retirement expenses and/or long-term care (LTC). These transactions are also known as “life settlements,” “senior settlements,” or “viatical settlements” if a person is terminally ill. While this may be an appealing option for some, people should use caution.

In a recent AARP article, Selling Your Life Insurance? Proceed With Caution, Bonnie Burns, our Training and Policy Specialist, comments that most people don’t realize: 1) there may be tax consequences to selling a policy, and 2) money from a life settlement could affect their ability to qualify for public assistance like Medicaid.

The CLASS Act is part of the legislative legacy of Senator Ted Kennedy, is an important legislative piece for planning for the long-term care needs of our country and is included in both the Senate and the House versions of health care reform.

Bonnie Burns posted this summary of the CLASS Act — it gives a broad overview of the major provisions of the Act, with notations where the Senate and House versions differed as of its writing on January 15, 2010.

More than one million Californians, including adults, children with disabilities, and the elderly, used some type of long-term care (LTC) service in 2007. This number is projected to rise exponentially as the population ages and the number of working-age people with disabilities grows.

To address this growing population, the California HealthCare Foundation (CHCF) recently launched a new website rating thousands of the state’s long-term care providers on a wide range of quality of care measures — information that will help consumers and their families make important choices in the planning of their health care.

The free online service, CalQualityCare.org, rates the care provided by nursing homes, hospice programs, and home health agencies, where data is available to evaluate performance. The site also provides information on many other kinds of long-term care, including assisted living, retirement communities, and day care options. CalQualityCare.org features an easy-to-use “Long Term Care Assistant” tool that helps consumers choose among long-term care options by asking 10 simple questions.

This website is completely independent with no commercial relationships that might bias ratings systems. The data are collected exclusively from federal and state agencies.

Here’s some frequently asked questions (PDF) about this new tool.

See our Long-Term Care section for more information in general on LTC and LTC insurance.

Yesterday, a federal judge in Oakland, California issued a preliminary injunction order stopping November 1, 2009, cuts to In-Home Supportive Services (IHSS) for more than 130,000 people statewide.  The court decided that plaintiffs were likely to succeed in a lawsuit challenging the state’s use of “functional index” score and ranks, and that the state is prohibited from implementing cuts while the case proceeds.

This is good news for these 130,000 Californians and their families. To help get the news out and relieve the confusion and fear many IHSS consumers have had about the possibility of IHSS cuts, the court has ordered the state to send a “don’t worry” letter explaining that the cuts will not take place November 1 as previously thought.

To find out more about IHSS functional index appeals and the status of IHSS cuts, you can join in on the National Senior Citizens Law Center webcast next Monday, Oct. 26th at 12 noon. Contact NSCLC for registration info.

For more information on Medi-Cal benefits and coverage in general, see our Medi-Cal section.

California’s older adults and people with disabilities who qualify for state-funded adult day health care (ADHC) may be some of the hardest hit from the recent state budget cuts. Governor Schwarzenegger signed the budget revisions last week that reduces the amount of days covered for adult day health care from 5 to 3 days per week. In addition, the budget revision eliminates funding for Alzheimer’s disease programs.

These cuts pose a significant challenge for many families who may not be able to afford private caregivers. They also create a paradox, as the cuts may, in the long-term, end up costing the state much more money. Adult day health care services help many people continue living at home in their communities, versus living in an institutional setting like a nursing home. With a 40% cut in services, many beneficiaries have to move into an institutional setting, costing the state more than twice the amount of money per person for each day of care. For example, Medi-Cal, California’s Medicaid program pays $76.50 per day for ADHC services, compared with $170 to $200 per day for nursing home care. 

For updated information on the California budget, see:

• California Department of Finance
• California Disability Community Action Network
• Health Access

For information on Medi-Cal and long-term care, see:

• our section on Medi-Cal 
• our section on long-term care 

The recently proposed budget cuts, particularly those to the In-Home Supportive Services (IHSS) program, will disproportionately affect immigrants and communities of color. Of those people enrolled in IHSS, over 49% of them speak a language other than English at home.

IHSS provides assistance to seniors and individuals with disabilities that enables them to live safely in their home instead of a nursing home. Yet with the proposed budget cuts, over 404,000 seniors and people with disabilities will be cut off from these important benefits. Immigrants and people of color are more likely to live at home and use their IHSS benefits  for personal assistance care (such as help with bathing and eating) than live in a nursing home. In contrast, however, the majority of nursing home patients are white. As over 60% of IHSS recipients aged 65 and older are people of color, the state’s proposed cuts will have a greater, more devastating impact on these communities and their families.

As stated in a recent article from the National Senior Citizens Law Center (NSCLC) on the proposed IHSS cuts, no good alternatives exist for ethnic elders affected by these cuts.  Most people would rather live at home than be isolated and pay the high cost of a nursing home. Also, statistics show that ethnic elders often receive lower quality care in nursing homes than white elders, further contributing to the gap in health disparities and health care equality. In addition, California does not have enough nursing home beds to house all the people who will be cut off from their IHSS benefits if the proposed cuts go through. This means that people who are not able to pay for or find a nursing home for their required assistance with dressing, bathing, preparing food, etc, will be left to fend for themselves. The results can be devastating to ones health, quality of life, or even their ability to live. 

These proposals only offer short-term ‘budget relief’ and would most likely cause a health crisis and undermine the stability of thousands of families who currently care for their vulnerable and elderly immigrant parents and grandparents.

For more information on the proposed cuts, see our recent article:

• Governor Proposes $9 Billion in New Massive Cuts; Entire Programs Targeted for Elimination

For updated information on the California budget, see:

• California Department of Finance
• California Disability Community Action Network
• Health Access
• California Budget Project

This article was edited in part from NSCLC’s article, California Budget Cuts Target Ethnic Elders.

On June 3, 2009, Bonnie Burns, Training and Policy Specialist, testified on the need for greater consumer protections, standardization of policies and regulation of long-term care (LTC) insurance products and marketing practices. Her written testimony also includes a detailed discussion on Partnership policies and the unique situation and precautions needed in regulating and marketing a state-endorsed product.  Client case studies and highlights on rate increases from 2 major players in the LTC insurance industry, Conseco and Penn Treaty Network America, are discussed as well. 

Senator Herb Kohl (D-WI) chaired this hearing entitled “Boon or Bane: Examining the Value of Long-Term Care Insurance.” Policymakers are investigating the role LTC insurance could play in financing our country’s growing LTC needs, as the strain of the recession affects both consumer and government budgets, and the gap between the long-term care services people require and the public and private programs to cover those services is growing wider. About 6 million people currently have LTC insurance. 

The 4 other people who testified in this hearing were: Diane Rowland, Executive Vice President, Henry J. Kaiser Family Foundation; Sean Dilweg, Insurance Commissioner, Wisconsin Department of Insurance; Carol Cutter, Chief Deputy Commissioner, Indiana Department of Insurance; and Thomas Stinson, President, Genworth Long-Term Care.

• Read Burns’ testimony, Gambling on Consumer Ignorance: Comprehensive Consumer Protections and Regulatory Scrutiny Are Required To Protect Purchasers of Long-Term Care Insurance Products. 
• View the archived webcast of the hearing and other presenters testimonies posted on the Senate Special Committee on Aging’s website.

For more information on long-term care (LTC) and LTC insurance, see the LTC section of our website.

The Centers for Medicare & Medicaid Services (CMS) now has quality ratings for each of the nation’s 15,800 nursing homes that participate in Medicare or Medicaid.  Facilities are assigned star ratings from a low of 1 star to a high of 5 stars based on health inspection surveys, staffing information, and quality of care measures. The ratings are publicly available on the agency’s Nursing Home Compare website at medicare.gov.

You can search for nursing homes by state, county, or city, or by a specific nursing home’s name. For example, in searching for nursing homes in Oakland, California, 20 results come up with the easy-to-view star ratings on each nursing home. It also lists whether the nursing home participates in Medicare and/or Medicaid, how many beds the facility has, and its type of ownership (i.e. whether it is for profit or non profit).

Of the 20 nursing homes that came up in Oakland’s search – 12 of 20 (or 60%) had an overall rating of 4-5 stars, 25% had a rating of only 1-2 stars. 

Such a quality rating system provides families with a relatively easy-to-navigate, straightforward assessment of nursing home quality. The website has suggested questions for beneficiaries and their family members to ask nursing homes, and also has additional information on paying for nursing home care and alternatives to nursing homes. 

Based on consultations with academic experts, patient advocacy and nursing home provider groups, CMS developed the rating system based on each nursing home’s performance in 3 critical areas:

• Health inspection surveys   Each year state and federal surveyors conduct about 15,800 on-site, comprehensive assessments of each nursing home’s health care services and compliance with federal/state rules.   These surveys are designed to help protect the health and safety of residents, including resident’s rights and general quality of life. Surveyors also conduct about 50,000 complaint investigations each year.  Information from the most recent three years of survey findings were used to develop the ratings. 
• Quality measures The quality rating system uses 10 key quality measures out of the 19 that can be found on the Nursing Home Compare website.  Areas examined include the percent of at-risk residents who have pressure ulcers (bed sores) after their first 90 days in the nursing home, the number of residents whose mobility worsened after admission, and whether residents received the proper medical care.
• Staffing information There is strong evidence that low staffing levels can comprise the level of patient care in a nursing home and is considered an important indicator of quality.  This measure reports the number of hours of nursing and other staff care per patient per day.  This measure is adjusted to account for the level of illness and services required by each facility’s residents.

A 5 star designation means the facility ranks “much above average,” 4 star indicates “above average,” 3 means “about average,” 2 is a “below average” ranking with a 1 indicating that a facility ranks “much below average.”  Rankings are dynamic and will be updated monthly. 

In this first round of quality ratings about 12% of the nation’s nursing homes received a full 5 star rating while 22% scored at the low end with one star.  The remaining 66% of facilities were distributed fairly evenly among the 2, 3 and 4 star rankings.

CMS also publishes a list of the nation’s nursing homes with consistently poor performance records.  Nursing homes selected as such “Special Focus Facilities (SFF)” are provided with increased oversight, including onsite inspections that occur twice as often as better performing homes.  Homes with the SFF designation are clearly marked on the Compare website.

CMS recently published an updated version of its Guide to Choosing a Nursing Home which can help families through the process. You can also find up-to-date information about hospitals at Hospital Compare and dialysis clinics at Dialysis Facility Compare, as well as information about Medicare health and prescription drug plans.

You can also see our website for more information on options long-term care, including some information on nursing homes.