Paul Thissen: Innovation in Action

Opinion Piece: Welcome Teamwork on Long-Term Care

WELCOME TEAMWORK ON LONG-TERM CARE

Jill Burcum, Star Tribune, January 19, 2009

A shout-out goes to the bipartisan team of Rep. Laura Brod, R-New Prague, and Rep. Paul Thissen, D-Minneapolis, for jumping on a pioneering idea from Nebraska: state-sponsored long-term care savings plans.

Last summer, Nebraska Treasurer Shane Osborn flew to the Twin Cities and pitched his state’s unique savings plans at an event sponsored by the Minnesota Chamber of Commerce, Citizens League, 2020 Conference and Ecumen. The long-term care accounts work a lot like the well-known tax-advantaged 529 college savings plans that many people already have. State income tax deductions — up to $2,000 for couples filing jointly in Nebraska  — provide an incentive to save for nursing home care, assisted living or home health services that family members may need down the road. Brod and Thissen plan to introduce legislation that would allow Minnesotans to open up this type of account.

Most people will need long-term care at some point. Yet relatively few people have long-term care insurance and far too many rely on Medicare to pick up the bills.

Unfortunately, the federal health plan for seniors usually doesn’t cover these costs. A lifetime of savings can evaporate quickly with the annual bill for a year of nursing home care in a shared room averaging $49,000. Once personal assets are gone, the state/federal Medicaid program for the poor usually pays the bill for long-term care. Minnesota was expected to spend $1.4 billion on Medicaid long-term care for the elderly in 2008. The long-term care bill for all 50 states is expected to more than double to $115 billion by 2027.

The proposed long-term care savings accounts certainly aren’t a silver bullet. In this economy, many people are focused just on paying monthly bills, much less putting money aside for an unglamorous expense down the road. Still, creative small-scale solutions like these savings plans will help by spurring some people to act. Publicity about the savings plans will also raise awareness about long-term care costs and who pays the bill. Brod and Thissen’s plan is timely and their teamwork is especially welcome. Hopefully, it’s a harbinger of future political collaboration ahead as the state and nation grapple with the massive fixes needed by the health care system.