if that's enough. yes but go ahead. it's a good point. i think it's critical to understand. people think we have medicaid. i'll be okay. if there's a problem throughout. 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 whey see people doing in the marketplace right now which is essentially using their savings to purchase something that will keep them from being on the medicaid program eventually. in other words it's not -- in theory you want it to be enable you to purchase the services you need in a setting most appropriate for your needs. where as a safety net program is really, again, kind of designed simpletly to absorb sort of in the most, you know, custodial and where -- warehousing situation that bare bones funded. it's really, again, the opposite what you expect an insurance product. a good insurance product to do. and when my own parent, when i encouraged them to buy insurance. it was really my dad said my federal pension will cover the cost of a insuring home. i said, well, but wouldn't you like to stay at home? and, you know, let's talk about let's ensure against being in a nursing home. >> thank you. i agree. people are living much longer and will live with more serious chronic illness of limitations. the reality is the public policy hasn't kept up with that. the reality is that medicaid -- i agree with ann's sort of discrepancies of the rule of medicaid. i offer to all of you the null hypothesis if we do nothing is incredibly expensive and medicaid will bear the burden of that. we will all bear the burden. families will bear the burden, states bear the burden, federal government bears the burden in an unstructured way. so i think, you know, as you think about the work of the commission, while we didn't make a specific financing recommendations and having a broad discussion here about the ranges of ways one might consider solving. every commissioner thinks there needs to be a solve. one that addresses the confront the long-term care as a way of taking pressure off some of the public programs. what would it really take. what would it really take to design a program that fundamentally actually shores up certainly medicaid but also medicare to a degree. but i will say as a doctor on my last point and i'll stop. i promise. the night light in this system is the emergency room. so i get the point that medicare doesn't pay for long-term care. but at the end of the day when something hang -- happensesome shall be's family and you throw up your hands, it's a trip to the emergency room. i will tell you that the emergency room doctor takes one look at the person and says upstairs we go. and the process begins. i think what we are having together as a view is a fundamental discussion a about the need to think about a different structure to take on the issue than the process of shoring up the public program. thank you. the question addressed earlier about how are we paying for this. you give us all the reminder. if we don't design a program we still are going to pay for it. we're going pay for it in really terrible way. thank you. it. >> senator white house. >> well, i hesitate to jump in because as far as closing words go as senator warren said, if we don't do something we're going pay for it. but i go after you. i get to go ahead and foul up what was a great closing. i didn't want to followup about what we're seeing in rhode island is people who have made the responsible choice invested their money in to a long-term care insurance policy are now finding that the premium is going up pretty dramatically mat for some people it's no longer do able. that's particularly frustrating. because it paid in all the time. you kind of have a qerks to the policy to bail on it. it makes everything you paid already look like money down the drain. had which in fact, it is. so it strikes me that in term of relying on the private sex or -- sector to handle the program. they are going the wrong way in terms of where the prices are headed and the likely market share of affordable long-term care coverage is headed. is that your feeling? is that just -- >> no. that's definitely national. my parent's premiums went up quite a bit. it was in a good program and a really about the best run, i think, employer-based long-term care insurance program that exists. not necessarily the private sector is not up to the task. but we don't have -- we don't have enough people in the risk pool for it to be a stable financial bet for an insurance company particularly when you're paying benefits on a set of products that are coming due 30 years after sold them. it's a very, you know, when we mojtd it -- model challenging thing to do. really to the insurance companies, you know, -- >> did the actuarial frontier. >> it is. [laughter] >> yeah. i wish i had thought of that. exactly. [laughter] that's where we've been standing. t not very comfortable. >> given the problems they have, let me turn to ms. fetter, we have known each other awhile. welcome, judy. great to see you. you talk in your testimony about private public models. what would a cup the of -- you think the most likely and sensible models look like very generally in terms of bringing private contribution and public participation in to this. thinking of a limited public benefit that could be available to people after a waiting period. that would be determined -- this is i'm thinking now of the retiree population. we would adapt it for the younger disabled population. but what the waiting period would depend upon what you're earning -- lifetime earnings looked at like retirement it would give insurance companies i was interested to see recently they have been talking -- you know in advance would have a longer waiting period. it would be adjusted to income. and what i think -- looking at something like this. because the insurance companies insurance industry has the biggest problem when you out on the actuarial frontier was the you're give l them some protection at the back end. it may be less comfortable for them. i think we need to look at the opens and see what is it that the public sector can do and guarantee that creates some space for private sector innovation. that is where i would like to see us explore. >> okay. the last thing i ask. it's a question for the record, is if any of the witnesses have information on what you believe the government's present exposure in term of trying to work with cbo and other people to figure out if we are going to pay for it. and there's a smarter way to do it. i would like to have the cfghts bearing in mind what the experts perts are say we pay for it anyway. >> senator, what i seem to real that cms at one point, present value calculation sort of a minitrustee's report for that number. i don't know if they continue to do it. >> that's why i knead a question for the record. if anybody with info can get back. i appreciate it. i yield back to the chairman and thank him and the ranking member for the wonderful leadership on the issues. >> well, not clear to me where we go. we've had two different opinions expressed. doctor fetter argues that a public benefit is the answer. dr. mark -- why don't you give us an opinion by setting aside the financial and political difficulties. why wouldn't the public benefit help? >> i feel like people need to be given choices. i feel like they need to design things as best fit their situation, and to be given the support they need in a prudent way. so certainly there is a role for government. i think they need to be provided as much in the way of the choices and opportunities -- i think many can to finance these costs, and to ensure these costs they do so. and that is not burden it's not an unfair burden on others for that to happen. and further more, i think they need -- i think it is a strong possibility, a strong likelihood that the private sector with the right structure would design different options and different policy designs that would appeal to, you know, different needs which i think is impossible far public program to do. public programs in order to be efficient and able to be administrated. we're seeing this right now in the aca have to be very simple and have to be very straightforward. give people choices for the public program. it's extremely different. and herein lies the dill dilemma. it is another public program we would be creating. but i can tell you from my experience is before i came to the senate, i was the elected insurance commissioner of florida, and the behavior of humans with regard to buying insurance unless they think they absolutely need it, they're not going buy it. and this is almost out of sight, out of mind. if you want to spread that base by getting the young as well as the old in to it was very hard to get people to buy this insurance. private insurance and long-term care we look at -- we're at the same time looking at our experience with the nongroup, the individual insurance market for health care. and we know that is a market that is rigidded with -- riddled with problems because of in part with insurers to avoid people with preexisting conditions and to limit their risk. that is what you see unless you have everybody participating. and my -- the idea that i was discussing with senator white house i put before the commission and hope we will all consider in the future is that is that i think there is based on a view that we can better educate and help people prepare and help an industry respond as we do set up a structure that creates some clarity how you can prepare. if the public program takes on the risk in some ways, and tells people based on their resources what they have to prepare for you can better educate around participation and preparation. but that back end federal program is one that ann emphasized that everybody is participating in. whether through taxes or premiums or whatever we're calling it. it needs to be a shared risk. >> if that sounds familiar, we've just had quite a debate about that. it was declared constitutional by the supreme court. it's not easy. let me ask you on a completely different kind of subject. what -- we really had some problems in florida with assisted living facilities basically taken advantage of seniors. nursing homes, you have any suggestions? , i mean, we have people that are starting these things up that are unlicensed, obviously, they're breaking the law. we've talking about the care and nurturing of our seniors. did your commission suggest anything that we ought to be doing? we don't understand how to think about or measure quality in the space. it is -- this is is a space that has a lot of resources that are paid for privately or come out of voluntary services. and so it lives in a different place in the rest of health care lives. it didn't specifically go to great detail about the alternative forms of community-based support or oversight regulation. >> actually, i think we -- have more testimony on that than you're remembering. i think that we've had at lough discussion about had it on the work force side. and we have a great deal of discussion and concern about -- we also actually have testimony as to problems quality problems inadequate standards and poorly trained staff, and because assistant medicaid doesn't cover doesn't finance assisted living facility, there's a real concern about ab sense of standards, as you say. so i believe that we heard a lot of testimony. we addressed it on the staff in the training side. there's been an expose of particularly assisted living of grossly inadequate training for staff while claiming to be offering specialized care for alzheimer's patients or residents. and it was both embarrassing and a-- appalling when it you saw it on national tv. it's not a lone testimony. we did hear testimony not only for the need for but examples of training programs. i believe one that we heard from was the state of washington. both better standards and training for workers who -- which is better for obviously for the patients that whom they serve and also creates better jobs along -- company by better pay for the workers who were relining on to care for our families. >> but i would say, and the commission made many recommends on work force. your specific question, senator, was the oversight regulation and management of the new delivery entity. while we did hear a little bit of testimony in that space, that is not a place where the commission made any recommendations. and the work force piece is only a part of what it means to operate the different kind of environment. the health care perspective people are only one specie of -- piece and the thing like assisted living organizations and other kinds of residential care options that are sort of multiplying in front of our eyes. that's a completely different question. it's important but only one piece of that discussion. so the question you raise merits a lot of careful thought. and candidly, the commission itself didn't get that far to the issue. for seniors who had disabilities. does the system work? >> well, that's a great question, senator. also let me back it up this time. the system we have now doesn't work well for hardly anybody. it is a very fractured very provider-centric system. it leaves individual and their families to do the care coordination which is basically missing from most models and system of care. we heard about some models that were better. and there sort of -- better processes of care. but the commission lays out a series of recommendations of things that could be better. many of the systems may have been built for older people or a different population. i think for younger individuals with serious functional limit taste or cognitive impairment they have their whole live ahead of them. they at the different place in their life fra trajectory than an older person is and have different desires and family work. and so, you know, i think we have a long way to go. it is a particularly long way to go for younger folks with serious needs. >> suppose we enacted a plan for private insurance. then the question comes, who is going regulate it. would we turn it over to the state insurance commissioners? or the state health regulatory agencies? >> well, that's a good question. so, you know, i think if we move in the direction of creating -- or reform the market place to improve demand and supply and all of those kinds of things, i think we would continue to regulate at the state level the way it has been. there has to be more of a federal -- there has to be more of a federal role of setting the bare bone standards and i guess parameters around which some of the policies would be designed and how they would work. because fundamentally the marketplace is not working. so we need some actual marketplace reforms and i think those have to come from a federal level. i think, you know, issues around the regulation around the insurance pools and that kind of thing continue to operate at the state level. >> senator nelson, i'll point out in the current setup regulatory setup the state has the main responsibility. but as part of tax issues, the federal government already does have some role in terms of what design a design of long-term care insurance policy. one would imagine that if there were additional tax incentives provided, just naturally it would go there would be an increased responsibility. i'll also note one other reason for the increases of premiums is related to federal policies. the policy of the federal reserve board with very local interest rates. the policies were priced assuming 6% interest rate. which are nowhere near that. there's an interesting mix of federal and state issues at hand. >> commission recommended that you remove the requirement that a patient must stay in the hospital for three days before they can receive services in a skilled nursing facility. now there are a few of us up here that agree with that. can you tell us why you ended up recommending that? >> sure. i think there was a sense that rule was created in a different time and place. i would say that the commission felt when it needs to be as revisited it needs to be replaced but it -- needs to be revisited in sort of a model of care. because the reality is the state has come down over time that we. the goal should be to get people by the right provider. so by having this three-day length of stay requirement there are people that maybe could step down to a lower level of care sooner but aren't able to access that level of care. and/or put in a higher level of care. the higher level or different level of care, for example, acute rehab which is actually more expensive than the skilled nursing facility might be. so i think our call was for there to be an opportunity to revisit and remove the three-day length of stay and replace it with an approach more sensible and squint current care practices. again, being mindful that it was put there for a reason. which was more cost control. and taking it away creates more opportunity. i think in current environment it isn't serving that cost control goal that was originally put in place to try to achieve. >>ly add it was a consensus of the commission. and another element of it was that there's been a trend of patients being in hospitals thinking they were admitted and actually being admitted. and therefore, that does not count. even if they're in the hospital for five days nap -- that struck us as plain wrong. it does raise the question of what is a mechanism that does control that next phase as bruce indicated. and we didn't have enough time to sort of figure out the replacement but the three-day rule struck us as not the right one. >> we are going include, in the record, an article by bloomberg news that illustrates how difficult it is for seniors to be able to afford long-term care. and this is our last hearing of the year! for some unusual thing we might be in session on new year's eve like we were last year. [laughter] >> you bring the champagne, if we are. >> as a matter of fact, you remember new years' eve we're all on the floor, and i spotted one of my dear friends in his tux sitting in the gallery, and i went over to him and said charlie what in the world are you doing here? he said, jackie and i went out to dinner and we decided this was the best entertainment in town! [laughter] >> except for perhaps for the performers. [laughter] >> well, you all have been great. thank you. it's a tough issue, and so thank you for helping us get in to it and start to peel back the onion. we appreciate it. happy holidays, merry christmas, happy new year. the meeting is adjourned. [inaudible conversations] tonight on c-span2 booktv in prime time. up next a look at the rise and fall of gally and group. $7 billion hedge nawnd collapsed amid an insider trading scandal. then finance professor offering her thoughts on financial regulation. ..