Help me understand, because my perspective on our entitlement today is we cant afford the ones we have. The construct we work with is forget the multiple debt. The real challenge we have with our Pension Plans are underfunded, our health care weve are already exposed to come so were talking about a couple hundred trillion dollars of unfunded liability. I just dont know how thats a great question and im glad you asked because i will tell you, again because my professional background, the last thing you ever imagine myself doing as a budget analyst is suggesting we needed a new Government Program both trying to control the ones we had. But after looking at this for many, many years, and truly the idea ive been a pretty big fan, theres got to be a way we can add to work with the private longterm Care Insurance market to create both changes on the demand and supply side that would, in fact, really give many more americans a true opportunity to ensure. Because right now its my view that there really isnt we say people are unprepared. How can they prepare . Is not their fault they are not prepared. I dont have longterm Care Insurance. I know a lot about it. Although my parents i know some agents who can help you today. My parents are signed up under the federal longterm Care Insurance program. Thank you for that. I really appreciate it, especially. But i think that there are ways in which we can work with an Insurance Program so that it is financed in a way that it is selffunding. And we worked on this a lot actually out my company when we were modeling a class act just a year ago. So we were dealing with a situation where were trying to analyze what the premium levels would be under a voluntary approach. And the big problem we ran into over and over and over again was that he set the premiums low enough if you set the premiums to higher not going to get enough people to enroll and you end up with this actuarial adverse risk. Exactly. So the fact of the matter is i havent been able to figure out a way to come up with a Public Policy that we do what we need, what this country needs without going in that direction. I really do think we know enough now to set it up in a way that the premiums would cover or the tax base or however it is you choose to finance, and there are so many different ways could, in fact, pay for the benefits that we would expect to pay out. Youre right, its a risk. I completely understand and agree with that. My dear in headlights look is authentic. Israel to my office will call your office and figure out what in the world you just said. Thank you, maam. Senator baldwin. Thank you. About to again thank and welcome our witnesses today. And also offer my gratitude to our chairman and Ranking Member for bringing us together today. Not only do you recognize that the Current System of longterm care financing, et cetera, is unsustainable but you have a resolve to continue the committee to focus in on this and i appreciate that very much. Im hoping to maybe sneak into questions to the whole panel, if i dont have too long of a runon. Im kidding. The first focus id like to have is sort of the role and value of state innovation in this come in looking at this at the national level. Obviously, we have to tackle and debate longterm care financing at the national level. But i dont lots of things are going on in the states. In wisconsin we have a program called family care, currently operates in 57 of our 72 county counties with plans to expand it all. The gist of it is that it improves the Cost Effective coordination of longterm Care Services by creating a single flexible benefit. It includes a large number and range of health and longterm Care Services that would otherwise be available in separate programs. So just as one example of what a state is doing, i wonder what we can learn from innovation thats going on in the states on how to address our longterm care crisis. I dont know if yall want to take a stab at it. Maybe ill start on behalf of the commission as a whole. I think when it comes to Delivery Systems and workforce, the answer is absolutely. Mother something that can be done on the national level, care is delivered locally. They are delivered based on the kinds of providers and irate services you have any community, in the city, in a state. It is based on the kinds of needs and desires of specific communities, and theres wide variation amongst the states. We, in conjunction with the commonwealth fund, produced a report card that the aarp put out looking at the performance of various states across the country. Wisconsin is one of the top performers. That was number five in the country. It is the robustness and creativity and personal centeredness of those programs that really drives wisconsins results. So are there opportunities to leverage state innovation, particularly what comes to how we deliver services, how we support families and how we address some of these operational workforce questions . Absolutely. The single biggest challenge in building teams, the ability to delegate function from doctors and nurses to other members of the Caregiving Team is all safe haven, all professionally driven within state law. So there are many opportunities come in wisconsin is a real leader. I do think the financing question quite honestly is one that sort of comes back to the federal level. I think the notion of a broader find the right framework which is part of what our discussion is here today, the role of the federal government in providing leadership in thinking about that would be important. States are where that care is delivered, and i think there is a lot we can learn from it. A lot of success out there. Senator baldwin, i pick up on what was said about financing because i think that really in many respects is the ballgame. I think weve seen a lot of innovation in some states, including many states towards much greater reliance on communitybased care. That is encouraged through the Affordable Care act but we need more encouragement in terms of incentives to states to support that. But as an i noted at the outset, states are already facing enormous pressure on their Medicaid Programs and are not you can innovate their way out of budget tightness. As we seem innovation in some states, we see tremendous variation across states. That means that there is home and committee based care available fairly widely to some populations in some places, and very little, particularly to the elderly, and others. So the states, and as bruce said care is delivered at the local level, so is medical care delivered at the local level. We can have delivery is between the person and the caregiver. But the financing is critical to making the services available. What we see the state level, and again, i emphasized it at the outset, is that the states in order to control their obligations create waiting lists. It is not about state innovation and delivery. They farm it out and managed care plans that may or may not have any capacity and too often do not have the capacity or experienced to deliver care. And so what he becomes is a shift of the risk, and a decline in Insurance Protection rather than any kind of protection. And, finally, i would say as we go forward, and im happy to provide you, we did some analysis of fortified the scan foundation to look at the future demands and the importance of federal financing, as bruce said, for longterm care. If you look at the aging population, in every state the numbers of elderly and the share of elderly grows substantially, but we continue to see enormous creation across states. All states having fewer young people to support more older people. But again, tremendous variation. And i can say and endorse what anne said at the outset that if we continue to financing that weve got, we already have tremendous variation in tremendous and efficacy in many places. That in equity is only going to grow. If we dont create a federal financing support. I pretty much agree with everything that bruce and judy said. Ill just quickly know that the commission did hear testimony on some of these states programs. Rhode island gaming. They have a medicaid waiver, and many of us were very impressed by the. That program is intended to improve care and to save on costs. Minnesota also came in and gave an excellent presentation, and that is on our website. Its true rhode island, when they talked about a waiver, it actually give them more money, not less money whereas what we are seeing about federal policy to change medicaid, we are seeing a proposal to take a whole lot of money out. Mr. Chairman, as the rhode island president we basically got paid to have a waiver because i thin think the administration at the time wanted to encourage waivers so they wanted to get rhode island and. I dont think thats going to be the common outcome. You all are very progressive in rhode island. In so many ways. Senator ayotte. Thank you, mr. Chairman. I want to thank the Ranking Member, and i just want to also thank paul who is here from Portsmouth New Hampshire who is someone who works in this area and i appreciate him being here today on this important issue. I wanted to follow up on this issue of waivers because i think its related certainly to the important issue that senator collins raised, which is how do we make sure that the definition fits to about more communitybased and homebased treatments so that we are allowing obviously people to stay in their homes longer because the average cost for care in a nursing home is approximately 80,000 a year. So i can see this being certainly important terms of cost but also in terms of people having a better quality of life. With regard to the rave the waiver issue, is it based on the commission found, should we give states greater flexibility in this area for innovative programs that are going to allow more flexible on home and Community Based care . Because i think that also fits in with this, to be defined by the overall federal definition that we would come up with, but i see this as an area where perhaps states are going to come up with a better idea than what we would come up with in washington. Maybe ill start on behalf of the commission and fellow participants can weigh in as well. This was a place the commission gave a lot of thought to, and i think as we listened to the states it was an area of real interest for us. I think the takehome message from that are two things. There is a recommendation that talks really about civil fining the labor process. There so many different kinds of waivers. Wafers work in conflict with one another. Sometimes they are just that far apart with the problem is youre the person caring for family members thats in a little white space between us to waivers. Youre in real trouble. Are not sick enough for this, not needy enough for that. So i think this notion of a much simpler approach to waivers was one that was endorsed by the commission. I think the other concerned that was raised in that, obviously is the issue of individual protections, beneficiary protections, that the waivers deliver on the services that need to be provided. So in that balancing test is how do you create the kinds of flexibility so you get programs like some of the ones that we heard from, but also make sure in the process of providing more flexibility that we are not actually losing services to those who need them and that theres adequate oversight. If i may, just to followup p on that point, my experience in reviewing waivers and think about ways in which the federal government could do a better job has been that over the years, over the last maybe five to six years weve seen really a lot of loosening of those restrictions to the point where states, in fact, have a tremendous amount of leeway and our the degree to which people did not have access to services has a lot more to do with budget issues and the need to keep waiver programs limited to sort of numbers of people instead of spending per person has to do with flexible the around the federal requirements about what states can do. Senator, with regard to cost, whether the waiver process and particularly moving people from Nursing Homes to home care would save money or cost money was debated, and we heard evidence on both sides. Both from witnesses that came in. Once said we would, in fact, save costs, but some of the Commission Members themselves who are providers of longterm Care Services and supports were skeptical of that. They said, you know, the system is pretty much, puts people in the right space is already. So we did not hear a consensus in terms of whether that would be a cost saver or a spender. Your point . Just to build on that, i think we got a lot of experience with home and committee based care over the many years weve been trying to expand. I think there is general agreement we get better value for the dollar when were able to serve people at home. And not in institutions when they dont need them. But we have so many people in need that we frequently, we need to build those systems and were under serving today. When we offer more services at hihome we serve more people, whh is a good thing but it costs. And with respect to the issue of flexibility and savings, i think ive heard representatives of the governors and the medicaid directors say that flexibility is not enough. Theyve got flexibility. What they dont have are the dollars. And for many, many years, until recently, and i think thats a function of politics. Governors in both parties have joined together to call on the federal government to take over the longterm care responsibility for dual eligibles, or medicaid beneficiaries who are also medicare beneficiaries. Recognizing that they are lacking the resources to do that job. Does it mean they cant be involved as we said in the delivery and there can be individually on the ground, that they are looking to the fed for dollars spent since i got one question, i appreciate all othef your answers i will submit some questions for the record. And some of the followup on something she sits i appreciate all of you being here. Thank you. Senator warren. Thank you, mr. Chairman. Ranking member, for holding this hearing, another important one. It just seems like to me this is another example of how middleclass families are getting squeezed. Its hard enough for any family to put aside anything for savings today, given the squeeze on families. Now we expect families to save for retirement and for longterm care at the same time that many are absorbing the costs of caring for an elderly family member. We just doubled up. Theres a growing conversation about the Retirement Crisis in america. And in the face of this, the lack of a basic safety net on longterm care is just more fuel to the fire on the kind of problems were going to face. And as youve made clear, retiring baby boomers are illequipped to cover the full cost of their longterm care needs. Weve got fewer people theyve got lower savings than their parents did. Only 80 have retired benefit plans. A third of all seniors have less or as they approach their senior years have less than a years worth of income to a third have no savings at all. So that leaves us with medicaid. As sort of the backup program here, which can cover some of the costs, but the Current System forces seniors to spend most of their assets in order to qualify. Every bit helps but to qualify when it got to sell off all their assets, this has other economic implications. So where i wanted to start is asking, dr. Feder, can you tell us a little about the financial instability . When people talk about seniors relying on savings, i think that they come to finance longterm care, i think their incentive to the variety of risks that come with getting older. There is the risk, a concerned that having adequate resources to cover your needs. You dont know how long youre going to live so youve got to plan for that. The our ups and downs in what happens to your assets, as we seem painfully with the recent economy, what happened to resources in that period. It is the ability to deal, to assist your children in taking on their new lives and enabling them to do what parents did for grandparents did for the now parents. In dealing with the fact that weve got many young people, even those with an education, not able to get jobs. And so need more assistance from parents as they age. And i am a grandmother and looking forward to supporting my grandchildren, and encouraging them in their education and building their independent lives. And there is uncertainty all the way around. When people talk to relying on your assets, in order to take care of those needs, what youre saying is that one lump. When you use them, they are gone. You have sony risks including, i didnt even mention the health care risk, uncovered Health Care Costs that seniors face. You are using your assets. Thats what youve got to protect you against a whole array of risks. And a catastrophic risk like a serious need for intensive longterm care is just beyond the capacity of this little, this nest egg, low or moderate, or in some cases larger, to take care. Thats why its important that we need some kind of insurance mechanism to which people can contribute in order to give everybody security. Let me just build on that and frame the question of a little bit differently and asked if i can, ms. Tumlinson, if you could explain why medicaid is not a very good substitute for a predesigned, well functioning longterm care system. If you could just summarize that for us. Ill be thoughtful in this response. So i think the primary when you think about what medicaid was really designed to do, it wasnt designed its not designed to protect individuals against risk. Its really designed to be there when Everything Else has failed. Which is really the opposite of insurance. Is that succinct enough . The go ahead. Its a very good point and i think its critical to understand. A lot of people think weve got medicaid, so ill be okay. And maybe another way to say it is to ask, is this a sustainable path that is counting on medicaid to be the safety net . And at best only modest savings that people are putting aside during their working years. When i think about also from the perspective of what i see people to in the market place right now, whic