Medicare Proposes Cut To Aid LTC Insurance Growth

Since 70 percent of nursing home operating costs are labor-related, the proposed Medicare cuts will affect the ability of nursing homes to care for America’s seniors experts predict. “When these regulatory cuts are considered in addition to possible Congressional Medicare cuts, nursing homes will have to face very difficult decisions, including the possibility of staff reductions,” states an American Health Care Association (AHCA) Yarwood executive.

The long term care leader noted that Medicare and Medicaid funding are inextricably linked, and the combination of cuts to both programs squeezes local facilities in a way that could harm elderly beneficiaries’ care, negatively impact caregiver jobs and be detrimental to local economies.

“Everyone would like the government to pay but no one wants to pay more taxes," states Jesse Slome, executive director of the long-term care insurance trade group. "As more people recognize the importance of planning for the risk of needing long-term care, insurance will become an increasingly attractive and affordable option."

The insurance industry expert notes that some 40,000 insurance professionals sell approximately 350,000 policies yearly. The industry hopes to see the number of insurance professionals marketing coverage increase by 10,000 in 2010 and, as a result, some experts believe sales will increase by as much as 20 percent.

Another study by AHCA finds, seniors' Medicare cuts will total $44 billion over ten years. The cuts will vary by state. Seniors in Texas requiring nursing and rehabilitative care will face total funding cuts of more than $2.7 billion over that same time period, which equals the 4th-highest state cut across the 50 states.

Other states with cuts exceeding $1 billion over ten years include California, Florida, New York, Ohio, Illinois, Pennsylvania, New Jersey, Massachusetts, Michigan, Indiana, North Carolina, Virginia, Connecticut and Tennessee.