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Bruce Bialosky

Mayor Pete’s Plan for Seniors

Senator Warren is the queen of plans — about sixty at current count. However, she is not the only Democrat running for President who has plans for how to improve our lives. Mayor Pete has his Dignity and Security in Retirement. It is time to delve into this plan and see what he intends to offer if he becomes President.

I applaud Mr. Buttigieg for addressing this issue. People are living longer lives and our government is doing little to address the issue. No society has ever faced this many older individuals; thus, there is no guidance on how to care for so many elderly people. In recent legislation they allowed people to contribute to their IRAs past the retirement age and raised the age for the time people must take distributions from those IRAs from 70.5 years to 72 years of age. This is just a drizzle of activity when what we need is a flood.

Mayor Pete’s plan addresses two principal issues. One is Long-Term Care Insurance and the other is the cost and quality of care for seniors with limited abilities to care for themselves. I am familiar with both issues. I have advised clients to buy Long-Term Care insurance for over 30 years and personally have a fully paid up plan. I have worked extensively with people in the senior housing market with its various levels of care for 37 years. I consulted with the experts I know from both areas for this article addressing Buttigieg’s 19-page plan.

“In a historic effort, we will fundamentally transform our long-term care system by establishing a new, historic long-term care program, Long-Term Care America, which will provide eligible seniors a benefit of $90 a day for as long as they need it.” That is the pledge of the plan with no offer of how payment for that plan will be made.

“Older people are often not prepared for the consequences—both financial and emotional—of aging, leaving them exposed to potentially catastrophic costs. This can happen for a variety of reasons, from our predisposition to underestimate the risk of needing long-term care to the difficulty of thinking about losing one’s independence. Further, over 40 percent of people wrongly believe that Medicare covers long-term care, and the existing private long-term care insurance market is grossly inadequate, covering only eight percent of long-term care costs nationally. Only a handful of insurers offer meaningful coverage policies, and the market has shrunk considerably in the last decade. The private long-term care insurance market is failing people.”

The first couple of sentences were agreed to wholeheartedly by the experts. Where the problem begins is where the plan states 40 percent of people wrongly believe Medicare covers long-term care. The plans’ solution is to nationalize this instead of educating Americans early on that this is not covered by Medicare and they must seek their own coverage that can be encouraged by education and tax benefits.

The other part of the statement in the plan addresses the inadequate market for private plans. This is largely because of government restrictions on policies, mainly at the state level. California now has just six companies offering plans instead of the multitude which offered previously. This limitation in competition is caused by one main reason — the oversight of the Insurance Commissioner.

Later in the plan, Buttigieg makes the claim that insurance companies restrict payment for Home Care which is favored by many Americans. One expert said “That is total bull.”

The plan does call for strengthening the private insurance company market and working with employers to expand benefits provided to employees regarding long-term care. Both are important, but they are not addressed beyond that. Rather the emphasis is on government solutions.

The plan then addresses the care of seniors with physical limitations. Taking care of an aging senior can be a major challenge for families. But isn’t it really the responsibility of family members to take care of mom and dad? Why should the government intervene? One of the proposals is that unpaid caregivers be “awarded credit toward Social Security benefits.” This would act as if they were being compensated and further tax a retirement system that already has no money. Why do people need to get paid for taking care of their aging parents?

“Home caregivers are often paid poverty wages.” Whether that be true or not, Buttigieg’s solution is to pass a national minimum wage of $15 per hour for all workers. This completely ignores the struggles that exist already from that high minimum wage in places like Seattle and San Francisco. Can you imagine what that would do to the cost of care givers in Duluth, MN, or Hot Springs, AR? The plan also calls for facilitating the unionization of home caregivers. So much for addressing the high cost of taking care of the physically challenged elderly. These two proposals would explode the cost of care.

Then there is the nationalization of the whole process. “Pete will establish core competency training requirements for all paid care workers who provide care through publicly funded programs.” Since the federal government will have its hands in it, these new national standards will often conflict with state standards, creating confusion for operators. “A Buttigieg administration will create a National Direct Care Workforce Standards Board to work with the Departments of Labor and Health and Human Services on direct care workforce issues, including rate setting recommendations, compensation and benefits, training and credentialing, and recruitment and turnover.”

He does recommend raising the limits for assets and income to qualify for Medicaid for elderly, but the recommended change is far too small to really accomplish his goal. But he does get a gold star for addressing this issue which causes many families to confiscate the assets of seniors to have them qualify for government assistance. Maybe he should propose just dumping this requirement.

“A Buttigieg administration will set federal standards for residential care communities, including staffing ratios, required access to mental health clinicians, and annual inspections.” There you go, the nationalization of all senior care facilities. While often in the plan it speaks of coordination with local communities, it then lurches to statements like this and funding through various laws which always comes with strings attached and federal intrusiveness.

“Yet there are no federal quality standards in place, and state-level standards vary considerably. In some states, residential care communities are given weeks to report resident abuse or deaths. Others allow people without appropriate training to be caregivers, or don’t require clinicians to be on staff. “ The plan is riddled with assertions like this that have little basis in fact. There are always problems in any system, but the report paints these broad-based allegations against private industry or state regulations to justify federal control over another aspect of our lives when they fail so often at the tasks with which they are already overwhelmed.

Mayor Pete has some good intentions and acknowledges a major challenge here, but ends up in the same place as Senator Warren does with her plans – expansion of the federal government overseeing our lives with costly new programs where the federal outlays are surely underestimated.

It would be nice to read one of these plans that gets the federal government out of our lives by telling us to take responsibility for our lives and our families. This can easily be done through employer based programs, education, and tax credits aimed to help people shoulder the cost of taking care of their own families. There is already too much micromanagement of many aspects of this issue at the state level that has exacerbated the problems.

Leveling a federal cannon at the problem will only makes things worse. The federal government is not the answer to every challenge Americans face.