♪ ♪ ♪ ♪ >> FORGET LIONS, TIGERS AND BEARS.

LET'S TALK MEDICAID, EXPANDED MEDICAID, MANAGED MEDICAID RKTS MEDICARE AND 34-RBGD ADVANTAGE.

STAY WITH US AS WE GO THROUGH THE HEALTH INSURANCE JUNGLE WITH OUR GUIDE HEALTH ECONOMIST Mr. MARK CARTER NEXT ON "KENTUCKY HEALTH."

RAISE YOUR HAND IF YOU KNOW WHAT MEDICAID, EXPANDED MEDICAID, MANAGED Mc, MEDICARE AND MEDICARE ADVANTAGE ARE.

YOU GET EXTRA POINTS IF YOU CAN TELL ME THE DIFFERENCE BETWEEN THESE PLANS.

HAVING HEALTH INSURANCE IS A SERIOUS PROBLEM.

THE UNITED STATES RANKS 34th IN THE WORLD IN TERMS OF LIFE EXPECTANCY.

THOUGH THERE ARE MANY CONTRIBUTING FACTORS TO OUR POOR SHOWING, THE LACK OF AND TIME OF HEALTH INSURANCE IS THE MOST SIGNIFICANT CAUSES OF OUR POOR SHOWING.

INTERESTINGLY THOSE OLDER THAN 65 IS AMONG THE HIGHEST IN THE WORLD.

THE REASON IN MEDICARE ELIGIBILITY.

THE IMPACT OF HAVING HEALTH INSURANCE HAS BEEN WELL ILLUSTRATED HERE IN KENTUCKY.

AFTER THE EXPANSION MUCH MEDICAID ELIGIBILITY, WE SAW A SIGNIFICANT IMPROVEMENT IN BOTH HEALTH OUTCOMES AND REDUCTION IN HEALTH COSTS.

FINALLY, HEALTHCARE DEBT IS EITHER THE NUMBER ONE CAUSE OF BANKRUPTCY OR AT A MINIMUM, ONE OF THE TOP FIVE CAUSES.

IF YOU, LIKE ME, THOUGHT OUR GOVERNMENT SPONSORED PLANS WERE TO PROTECT PEOPLE FROM THIS, BUT LATER FOUND OUT THIS IS NOT TRUE,WELL, JOIN THE CLUB.

THERE ARE MANY THINGS TO UNPACK HERE AND FORTUNATELY WE HAVE MARK CARTER WHO IS A PARTER IN ACCOUNTING AND ADVISORY FIRM AND ERNST & YOUNG AND PAST VICE PRESIDENT AND CFO OF JEWISH HOSPITAL IN LOUISVILLE, KENTUCKY.

IMPORTANTLY TO TODAY'S TOPIC, HE WAS THE C.E.O.

OF PAST PORT HEALTH PLAN, A MANAGED MEDICAID HEALTHCARE PLAN.

CURRENTLY HE IS THE COMMISSIONER OF THE KENTUCKY DEPARTMENT OF AVIATION IN THE COMMONWEALTH OF KENTUCKY TRANSPORTATION CABINET.

MARK, Mr. CARTER, THANK YOU VERY MUCH.

>> THANKS FOR HAVING ME, WAYNE.

>> I GOT TO GO, MAN.

I KNOW YOU WERE IN THE HIGH STRATOSPHERE WHEN WERE YOU DOING HEALTH ECONOMIC STUFF AND NOW YOU ARE DOING PLANES?

>> WELL, IT'S A LONG STORY.

I GOT MY PILOTS LICENSE AT ABOUT AGE 40, A MID LIFE CRISIS, I GUESS.

AND AFTER THE COVID EMERGENCY WAS OVER, AND MY ROLE WITH THE DEPARTMENT OF HEALTH ENDED, IT WAS SOMETHING THAT I FOUND INTERESTING AND HAVE SPENT LAST THREE YEARS DOING.

AND HAVE HAD A GOOD TIME DOING IT.

>> EL WITH, I'M GLAD.

AND I REALLY-- I APPRECIATE THAT YOU ARE COMING BACK TO THE HEALTH SIDE OF THINGS, JUST FOR A FEW MINUTES.

THIS IS A REALLY PERPLEXING THING, THE VARIOUS GOVERNMENT INSURANCE PLANS THAT ARE OUT THERE.

SO LET'S START OFF FIRST, TELL ME WHAT IS MEDICARE?

>> MEDICARE IS HEALTH INSURANCE FOR THE AGED, IN ESESSENCE.

SO IF YOU ARE 65 OR OLDER, OR IN SOME CASES YOU COULD BE UNDER 65 AND DISABLED BUT GENERALLY SPEAKING, 65 AND OLDER, THAT'S WHAT MEDICARE COVERS.

IT'S A FEDERAL PROGRAM, A FEDERAL HEALTH INSURANCE PROGRAM THAT HAS EXISTED SINCE THE MID 60s, WAS PART OF THE GREAT SOCIETY LYNDON JOHNSON INITIATIVE BACK THEN.

AND STILL EXISTS IN THAT FORM TODAY.

>> SO THIS IS NOT A STATE PROGRAM IN ANY FORM OR FASHION?

>> IT IS NOT A STATE PROGRAM.

IT'S A FEDERAL PROGRAM.

THERE ARE VARIATIONS OF IT THAT THERE IS MEDICARE SPECIAL NEEDS PLANS, WHICH COMBINE MEDICAID AND MEDICARE COVERAGE FOR REALLY CHRONICALLY ILL, USUALLY DISABLED PATIENTS.

BUT GENERALLY, IT'S JUST A FEDERAL PROGRAM THAT COVERS FOLKS THAT HAVE REACHED AGE 5.

>> YOU-- 65.

>> WELL, YOU GOT THAT STRAIGHT.

TO MAKE THINGS INTERESTING, IS DIVIDED INTO PARTS A, B, C AND D. >> PART A IS ESSENTIALLY COVERING HOSPITAL CARE.

SO IF YOU ARE OVER 65, YOU HAVE TO GO IN THE HOSPITAL, YOU PAY A DEDUCTIBLE, BUT GENERALLY THAT STAY, WHICH THE NATIONAL AVERAGE, I THINK IS AROUND $17,000 A STAY FOR MEDICARE PATIENT, SO IT WOULD COVER ALMOST ALL OF THAT.

90% OR BETTER OF IT.

PART B COVERS WHAT WOULD BE CALLED OUTPATIENT SERVICES OR PHYSICIAN OFFICE VISITS.

THOSE KINDS OF THINGS.

THEY'RE DONE OUTSIDE OF THE HOSPITAL.

PART C IS MEDICARE ADVANTAGE, WHICH IS A MANAGED CARE PLAN FOR MEDICARE BENEFICIARIES AND WE CAN TALK ABOUT THAT MORE.

>> YES.

>> AND PART D IS, COVERS THE PHARMACY BENEFIT.

SO AND THAT, YOU KNOW, WAS PASSED, I THINK IN THE GEORGE BUSH ADMINISTRATION, GEORGE W., AND YOU KNOW, THAT COVERS THE DRUG COSTS THAT A SENIOR MIGHT INCUR.

>> SO, LET'S GO THROUGH A COUPLE OF THINGS.

SO EVEN THOUGH ONE HAS MEDICARE, WE STILL HAVE TO PAY A DEDUCTIBLE WHEN WE ARE SEEING THE PHYSICIAN?

>> THAT'S RIGHT.

THE COST ASSOCIATED WITH MEDICARE FOR THE INDIVIDUAL, FOR PART A, YOU HAVE A DEDUCTIBLE YOU HAVE TO MEET.

AND I DON'T REMEMBER OFF THE TOP OF MY HEAD THE AMOUNT OF THAT DEDUCTIBLE, BUT YOU KNOW, IT'S PROBABLY AROUND ONE THOUSAND DOLLARS.

AND WHEN YOU COMPARE THAT TO $17,000 AVERAGE STAY, THAT'S A PRETTY REASONABLE DEDUCTIBLE.

PART B HAS A MONTHLY FREEM PEOPLE QUALM AND-- A MONTHLY PREMIUM AND THAT DEPENDS ON THE INDIVIDUAL BUT THAT IS TYPICALLY DEDUCTED FROM AN INDIVIDUAL'S SOCIAL SECURITY CHECK.

AND IN PART D, THE PHARMACY BENEFIT, HAS CERTAIN CO-INSURANCE AND OUT OF POCKET COSTS.

BUT THE NET NET OF ALL OF THAT FOR THOSE THREE COMPONENTS, THE MEDICARE BENEFICIARY HAS VERY LITTLE OUT OF POCKET COSTS SO LIKELIHOOD OF BECOMING BANKRUPT WHEN YOU ARE ON MEDICARE IS PRETTY LOW AND THE QUALITY OF CARE THAT YOU ARE GOING TO RECEIVE, BECAUSE MOST HOSPITALS AND PHYSICIANS, YOU ARE GOING TO RECEIVE GOOD QUALITY OF CARE.

>> INTERESTINGLY ENOUGH.

THIS IS A PLAN FOR PEOPLE 65 AND ABOVE, BUT TO MY MIND'S EYE, BEING ABOVE 65, GOT VISION TROUBLE?

HEARING TROUBLE AND DENTAL TROUBLE AND IT DOESN'T COVER THESE THINGS.

>> IT DOESN'T COVER THOSE THINGS.

AND SO THERE ARE TWO WAYS YOU CAN ADDRESS THAT AS A SENIOR.

YOU CAN EITHER BUY WHAT IS CALLED A SUPPLEMENT FROM A PRIVATE INSURER, SO AETNA, HUMANA OR ONE OF THEIR COMPETITORS.

THEY WILL SELL SUPPLEMENTS THAT WILL COVER SOME OF THE COSTS, NOT ALL OF THEM.

THE DENTAL, FOR EXAMPLE, WOULDN'T BE COVERED.

BUT THAT'S ONE THING YOU CAN DO WITH MEDICARE WHERE YOU ARE USING THE TRADITIONAL MEDICARE PROGRAM.

THE OTHER OPTION IS THE PART C PROGRAMS OR MEDICARE ADVANTAGE PROGRAMS.

AND SO FOR THOSE PROGRAMS, THEY'RE MORE LIKE A COMMERCIAL MANAGED CARE PLAN AND WHAT THE PROVIDERS DO, THE INSURERS TO TO DO, IS THEY'LL BUNDLE SOME OF THE OTHER BENEFITS TOGETHER WITH THE HOSPITAL PHYSICIAN PHARMACY BENEFIT.

SO THEY'LL OFFER TO THE MEDICARE POPULATION, YOU KNOW, A PLAN THAT WILL PROVIDE THE SAME COVERAGE AS TRADITIONAL MEDICARE PLUS SOME DENTAL COVERAGE OR VISION COVERAGE, THINGS THAT ARE NOT TYPICALLY OFFERED COVERED BY MEDICARE.

MANY TIMES WITH NO PREMIUM.

SO AT NO UP FRONT PREMIUM I SHOULD SAY FOR THOSE PLANS.

THE DOWNSIDE OF THOSE PLANS IS UNDER TRADITIONAL MEDICARE, YOU CAN PRETTY MUCH GO TO WHICH EVER HOSPITAL, WHATEVER PHYSICIAN YOU WANT TO.

MEDICARE ADVANTAGE PLANS FUNCTION MORE LIKE COMMERCIAL MANAGED CARE PLANS.

THEY'LL HAVE THEIR OWN PROVIDER NETWORK.

YOU MAY BE LIMITED, IF YOU GO OUT OF NETWORK, YOU MAY HAVE HIGHER OUT OF POCKET COSTS.

IN FACT YOU PROBABLY WILL.

SO THERE IS SOME DECISION MAKING TO MAKE THERE.

FOR EXAMPLE, IF YOU HAPPEN TO SPEND PART OF YOUR RETIREMENT IN ONE COMMUNITY AND PART OF IT IN ANOTHER, A LOT OF TIMES THOSE MEDICARE ADVANTAGE PLANS AREN'T REALLY ADVANTAGEOUS BECAUSE ONE OR THE OTHER, YOU ARE GOING TO BE OUT OF NETWORK.

>> SO, ANDITE STRIKES ME-- IT STRIKES ME-- AND I DON'T MEAN THIS IN A NEGATIVE SENSE TO THE INSURANCE COMPANIES BECAUSE I THINK IN MANY CASES IN TERMS OF TRYING TO CONTROL COSTS OF HEALTHCARE, WHICH ADMITTEDLY, CAN GET OUT OF HAND, BUT THERE HAS GOT TO BE-- I'M WONDERING, IS THERE A LIMITATION OF SERVICES IN SAY STANDARD MEDICARE VERSUS A MEDICARE ADVANTAGE, OR AT LEAST ONE HAS TO GO THROUGH MORE MOOPS IN ORDER HOOPS TO GET THINGS DONE.

>> THE THEORY BEHIND THE MANAGED MEDICARE IS THAT THERE WOULD BE SOME CONTROLS ON UTILIZATION.

SO IF, YOU KNOW, IF A PATIENT HAD A CHOICE BETWEEN TWO THERAPIES, THE PLAN MIGHT GUIDE THEM TOWARDS THE LESS EXPENSIVE ONE.

AND SO THAT DOES OCCUR WITHIN THE MEDICARE ADVANTAGE PLANS.

THERE IS ALSO THE POSSIBILITY THAT CARE THAT YOU MIGHT BE SEEKING MIGHT BE DENIED AS NOT MEDICALLY NECESSARY.

SO THAT IS A COMPONENT OF THOSE PLANS.

SO YOU KNOW, WHEN A SENIOR IS CHOOSING BETWEEN THE TWO, IT'S SOMETHING TO KEEP IN MIND AND TO CONSIDER.

THERE WON'T BE THE SAME KINDS OF MANAGED CARE CONTROLS ON THE TRADITIONAL MEDICARE.

>> SWITCHING GEARS FOR A MINUTE.

PROBABLY GOING TO COME BACK TO TALK ABOUT PART D IN A FEW MINUTES BUT I WANT TO TALK ABOUT MEDICAID.

WHAT IS THIS AND HOW DOES IT DIFFER FROM MEDICARE?

>> SO MEDICAID IS HEALTH INSURANCE FOR THE POOR, IN ESSENCE.

TRADITIONALLY, MEDICAID, I THINK A LOT OF PEOPLE THINK MEDICAID COVERED YOU IF YOU WERE BELOW A CERTAIN INCOME LEVEL.

BUT THAT'S NOT TRUE.

IT ACTUALLY FUNCTIONED MORE LIKE A WELFARE PROGRAM.

THERE WERE WHAT WERE CALLED CATEGORIES OF AID.

SO, FOR EXAMPLE, AID TO FAMILIES WITH DEPENDENT CHILDREN WOULD BE AN EXAMPLE OF THAT.

AND YOU HAD TO ESSENTIALLY QUALIFY FOR ONE OF THOSE CATEGORIES OF AID TO BE ELIGIBLE UNDER MEDICAID.

AND WHAT THAT AMOUNTED TO IS THAT WHILE IT WAS FOCUSED ON THE POOR, IT REALLY ONLY COVERED THE VERY POOR.

AND REALLY THE VERY POOR IN CERTAIN CIRCUMSTANCES.

WHEREAS WHEN OBAMACARE PASSED, IT SAID IF YOU WERE BELOW-- A FAMILY OF FOUR, SAY BELOW A CERTAIN INCOME LEVEL, YOU WERE CATEGORICALLY ELIGIBLE.

AND SO THAT IS STILL TRUE TODAY FOR STATES THAT DID ADOPT THE EXPANDED MEDICAID PROGRAM.

SO, IN KENTUCKY, KENTUCKY IS A STATE THAT DID THAT.

KENTUCKY HISTORICALLY HAS BEEN A STATE THAT HAS PROVIDED GOOD COVERAGE FOR MEDICARE THAT, YOU KNOW, FOR EXAMPLE, THEY, KENTUCKY PAYS FOR PHARMACY, WHERE THAT IS NOT A REQUIRED BENEFIT UNDER MEDICAID SO SOME STATES DON'T PAY FOR DRUGS.

SO KENTUCKY DOES, AND THAT'S GOOD BECAUSE YOU KNOW, AS YOU KNOW, IF A PATIENT GOES TO THE DOCTOR AND THEY GET A SCRIPT, IF THEY DON'T FILL THE SCRIPT, THEY'RE PROBABLY NOT GOING TO GET WELL OR AT LEAST NOT AS FAST.

SO THAT'S ONE GOOD THING ABOUT KENTUCKY IS THE ADOPTION OF OBAMACARE, THE EXPANDED MEDICAID COVERAGE AND THE GOOD ROBUST BENEFIT PACKAGE.

AND THAT HELPS WITH THE HEALTH OF THAT POPULATION.

>> DOES THE STATE PICK UP ALL THE CHARGES FOR MEDICAID, OR IS THERE SOME PART OF IT PICKED UP BY THE FEDERAL GOVERNMENT?

>> IT IS A FEDERAL-STATE PARTNERSHIP.

AND SO THERE IS A FORMULA THAT-- AND IT'S INDIVIDUAL BY STATE-- BUT THERE IS A FORMULA AS TO HOW MUCH OF IT IS PUT UP BY THE STATE AND HOW MUCH BY THE FEDERAL GOVERNMENT.

I THINK IN KENTUCKY, WE GET ABOUT $2 OF FEDERAL MONEY FOR EVERY $1 THE STATE PUTS INTO MEDICAID.

WE ARE THE BENEFICIARY OF WHAT IS CALLED A NICE FEDERAL MATCH.

SOME STATES, CALIFORNIA, FOR EXAMPLE, OR NEW YORK, WOULDN'T GET QUITE THAT SAME SPLIT.

THEY MAY BE MORE LIKE 50/50 OR LESS.

>> YOU KNOW, I HAVE TO TELL YOU, I AM AN UNABASHEDLY BIG FAN OF GOVERNOR STEVE BESHEAR WHEN HE EXPANDED MEDICAID.

I THINK IT HAD TREMENDOUS IMPACT ON THE HEALTH.

SO ONE COULD ARGUE OTHER THINGS BUT I THINK IT WAS GREAT.

NOW, HAVING SELD THAT, I'M-- HAVING SAID THAT, I'M ALSO A BIG FAN OF WHAT YOU DID AT PASS PASSPORT, WHICH WAS A MANAGED MEDICAID PLAN.

PASS PASSPORT, YOU CREATED A GREAT DEAL OF COVERAGE FOR PATIENTS AND DID IT VERY WELL, I THOUGHT.

WHILE YOU WERE THE LEADER.

>> WELL, I ACTUALLY-- YOU HAVE TO GIVE CREDIT FOR PASSPORT TO THE PHYSICIANS AT THE UNIVERSITY OF LOUISVILLE BECAUSE THAT WAS WHERE THE VISION CAME FROM FOR THAT PLAN.

AND WHAT DIFFERENTIATED IT FROM OTHER PLANS IS THAT IT WAS PROVIDER-- WHAT WE CALL PROVIDER SPONSORED.

IT WAS PHYSICIAN DRIVEN.

AND YOU KNOW, BECAUSE IT WAS DRIVEN BY PHYSICIANS, THE FOCUS WAS MORE ON THE HEALTH OF THE MEMBERS AS OPPOSED TO THE PROFITABILITY.

I NEVER HAD TO MANAGE THE PLAN TO A CERTAIN PROFIT LEVEL.

I HAD TO KEEP IT FINANCIALLY VIABLE, BUT YOU KNOW, I DIDN'T HAVE A TARGET I HAD TO HIT.

MY BONUS WASN'T TIED TO SOME TACTOR.

AND THAT WAS TRUE OF MY PREDECESSORS.

AND SO IT WAS A MEDICAID MANAGED CARE PLAN WHERE THE STATE PAID A PREMIUM TO PASSPORT AND PASSPORT WORKED WITH THE PHYSICIAN COMMUNITY AND THE HOSPITALS TO MANAGE THE CARE FOR THOSE PATIENTS IN THIS REGION.

>> BUT, YOU KNOW, WHEN YOU TRY TO BRING THINGS INTO THE COMMUNITY, I THOUGHT IT WAS IMPRESSIVE.

>> THANK YOU.

>> I WON'T EMBARRASS YOU TALKING ABOUT HOW GREAT... HAVE WE BENEFITED FROM THE EXPANDED COVERAGE FOR MEDICAID?

BECAUSE IT REQUIRES DOLLARS UP FRONT.

>> RIGHT.

>> ARE WE SEEING A BENEFIT ON THE BACK END?

>> I THINK-- I HAVEN'T LOOKED AT THE MOST RECENT STATISTICS BUT WE SAW AN IMMEDIATE INCREASE IN ACCESS TO CARE, WHERE PEOPLE COVERED BY MEDICAID WERE ABLE TO SEE THEIR DOCTORS.

THERE IS A ROBUST-- OUT IN THE STATE THERE IS A ROBUST SET OF CLINICS THAT ARE QUALIFIED UNDER SOME FEDERAL RULES.

ALL OF THAT, THE ACCESS ALMOST IMMEDIATELY EXPANDED AND PEOPLE, MORE PEOPLE WERE SEEING THEIR DOCTORS EARLIER IN THE ONSET ON SOME ISSUE.

AND SO THAT GIVES YOU A BETTER CHANCE TO CONTROL IT AND IMPROVE PEOPLE'S HEALTH.

AND I THINK WHAT, DURING MY TIME ON THE FOUNDATION FOR HEALTHY KENTUCKY BOARD, WE SAW IMPROVEMENTS IN OUTCOMES STATISTICS THAT MEASURED ACROSS THE STATE.

SO YOU KNOW, WHEN YOU LOOK AT IT, WE PUT UP A DOLLAR FOR EVERY $2 THE FEDERAL GOVERNMENT GIVES US.

THAT'S A PRETTY GOOD BUSINESS DEAL JUST BY ITSELF.

AND WE'VE SEEN INCREASED ACCESS FOR THAT POPULATION AS WELL AS IMPROVED OUTCOMES.

I THINK THAT'S A PRETTY GOOD DEAL.

>> BUT ONE WOULD ARGUE THAT THOUGH WE ARE PUTTING UP A DOLLAR FOR TWO DOLLARS, THIS IS TAX MONEY, TAXES DOLLARS THAT WE ARE PUTTING OUT AND SOMEBODY IS PICKING UP THE COST.

>> RIGHT.

>> FROM MY PERSPECTIVE, I SEE THAT INVESTMENT IN HUMANS AS SAVING US MONEY DOWN THE ROAD, BUT NOT EVERYBODY QUITE SEES IT THAT WAY.

>> NO, AND THAT'S-- THAT'S RIGHT.

MY PHILOSOPHY ABOUT IT IS THE SAME AS YOURS.

IN FACT, WHEN WE WERE AT PASSPORT, WE WERE PUSHING THE IDEA OF MOVING OUR HEADQUARTERS TO THE WEST END, YOU KNOW, I MADE A COUPLE OF TALKS WHERE I COMPARED IT TO BUILDING A BRIDGE ACROSS THE OHIO RIVER.

YOUR INFRASTRUCTURE BROADLY DEFINED WOULD INCLUDE OUR PEOPLE AND OUR COVERS AND IT'S WORTHY OF INVESTMENT BUT THERE ARE THOSE THAT WOULD ARGUE THAT, YOU KNOW, IT IS TAXPAYER FUNDED AND I THINK THAT'S TRUE, BUT IT'S ALSO HIDDEN IN YOUR PRIVATE INSURANCE PREMIUM.

AND, YOU KNOW, THAT'S WHERE THE COST SHIFTING AND THE DISSATISFACTION FROM SOME-- FROM A PORTION OF THE POPULATION, I THINK, REALLY COMES FROM.

>> AND I THINK WE ALSO TEND TO FORGET THAT THERE IS NO SUCH THING AS UNCOMPENSATED CARE PER SE.

A HOSPITAL HAS TO PICK UP THAT COST AND IF THEY'RE NOT GETTING THE DOLLARS, THEY'RE NOT GOING TO BE IN BUSINESS MUCH LONGER.

>> THAT'S RIGHT.

AT THE SAME TIME THAT'S TRUE, THAT'S ONE OF THE OTHER BENEFITS, THAT THE LEVEL OF QUOTE UNQUOTE UNCOMPENSATED CARE HAS BEEN BROUGHT DOWN SIGNIFICANTLY: SO A LOT OF OUR HOSPITALS HAVE BENEFITED FINANCIALLY FROM THAT COVERAGE AS WELL, PARTICULARLY RURAL HOSPITALS.

>> THAT'S WHAT I THOUGHT.

YEARS AGO THERE WAS THIS THING THAT WAS TALKED ABOUT CALLED A DEATH TAX.

IT ALWAYS-- I WAS ALWAYS FASCINATED BY THE TERM.

IT GOT A LOT OF PEOPLE RILED UP BECAUSE THE CONCEPT WAS YOU DIE AND THE GOVERNMENT IS GOING TO COME IN AND SWEEP UP ALL YOUR MONEY.

I THINK IN REALITY, WE ARE TALKING ABOUT LESS THAN .01 OF THE POPULATION WOULD BE AFFECTED BECAUSE RIGHT NOW IT'S OVER $12 MILLION THAT HAVE YOU TO HAVE.

NOW, HAVING SAID THAT, THE REAL DEATH TAX, WHAT HAPPENS TO INDIVIDUALS, ESPECIALLY ELDERLY, AS WE MAY BE TAKEN CARE OF IN OUR HOMES BUT HAVE TO GET INTO NURSING HOMES.

THERE IS A THING CALLED SPEND DOWN THAT I HEAR ABOUT.

TELL ME WHAT HAPPENS IF I'M IN A HOSPITAL AND HAVE I TO GO INTO A NURSING FACILITY?

HOW DOES THAT WHOLE PROCESS WORK?

>> WELL, MEDICAID WAS THE PRIMARY GOVERNMENT INSURER FOR NURSING HOME CARE.

THERE WAS A SLIGHT LONG-TERM CARE BENEFIT UNDER MEDICARE PART A.

IT'S 60 DAYS AND IT'S REALLY DESIGNED AROUND THE PATIENT THAT'S GOING TO GO INTO A NURSING HOME FOR REHAB AND IT'S GOING TO BE DISCHARGED TO HOME.

MEDICAID COVERS NURSING HOME CARE.

AND THE WAY THAT WORKS IS IF I'M AGED, CAN'T TAKE CARE OF MYSELF ANYMORE MY FAMILY CAN'T HELP, THEN THEY START LOOKING FOR A NURSING HOME.

SO WHEN I GO INTO THAT NURSING HOME, IF I HAVE ASSETS, I HAVE TO PAY AS A SELF PAY INDIVIDUAL WHEN I GO IN SO I PAY FULL RATE, WHICH, FOR A NURSING HOME, THESE DAYS, THE FULL CHARGE PER MONTH CAN BE SOMEWHERE BETWEEN FOUR AND $8,000 A MONTH.

>> AND THAT'S CHEAP.

>> YEAH SO HAVE I TO SPEND-- I EFFECTIVELY HAVE TO SPEND DOWN MY ASSETS.

IF I HAVE $100,000 IN THE BANK IN A SERIES OF MONTHS, I SPEND ALL THAT, NOW I'M BROKE.

NOW ONCE I'M BROKE, THEN MEDICAID WILL PICK UP THE TAB.

>> GOTCHA.

>> THE WAY THE MEDICAID PROGRAM, IF I'M GETTING A SOCIAL SECURITY CHECK, THAT IS FIRST APPLIED TO MY NURSING HOME CARE TO REDUCE THE AMOUNT THAT MEDICAID PAYS.

SO ESSENTIALLY, YOU END UP A WARD OF THE STATE.

AND, YOU KNOW, THERE ARE ALL KINDS OF POLICY IMPLICATIONS TO THAT, AND FOR FAMILIES, AND PEOPLE GOING THROUGH THAT-- MY FATHER IS 90 YEARS OLD.

AND THANK THE LORD, HE IS STILL-- HE STILL LIVES ALONE AND IS ABLE TO DRIVE AND HIS MIND IS GOOD.

BUT, YOU KNOW, FOR PEOPLE THAT ARE NOT THAT LUCKY-- AND HE LIVES IN FLORIDA, SO TAKING CARE OF HIM WOULD BE A CHALLENGE FOR US.

SO WE ARE LUCKY IN THAT REGARD.

BUT A LOT OF PEOPLE ARE NOT.

THEY END UP HAVING TO CHOOSE BETWEEN NURSING HOMES, WHICH CHOOSING BETWEEN A QUALITY NURSING HOME AND ONE THAT ISN'T, ISN'T THE EASIEST THING FOR FOLKS TO DO AND WE END UP WAREHOUSING OUR SENIORS IN NURSING HOMES WHILE THEY WAIT TO PASS AWAY.

>> SO WHAT HAPPENS IF THERE IS AA SPOUSE.

DOES THE SPOUSE-- MONEY IN THE BANK, DOES IT STAY WITH THE SPOUSE?

IF NOT, DO YOU LOSE THE HOUSE?

>> WELL, I'M NOT FAMILIAR WITH THE DETAILS, BUT I DO KNOW THAT, YOU KNOW, FOR SPOUSAL ASSETS THAT ARE CLEARLY THAT, THOSE DON'T HAVE TO BE USED FOR THE SPOUSE AND I THINK THERE ARE RULES AROUND THE HOME AND THINGS OF THAT NATURE.

ONE THING THAT PEOPLE DO TO TRY TO PLAN FOR IT IS THEY'LL TRY TO DO A ESTATE PLANNING AND IT WILL BE A COMPONENT OF THAT WHERE THEY WILL LOOK AT PUTTING TRUSTS TOGETHER TO TRY TO PROTECT THEIR ASSETS.

BUT EVEN IF YOU DO THAT, HAVE YOU TO DO IT I THINK WITHIN OR MORE THAN FIVE YEARS FROM THE TIME YOU GO INTO A NURSING HOME BECAUSE THE STATE CAN LOOK BACK AT THAT AND GO, YOU KNOW, AND ACQUIRE THOSE ASSETS TO TAKE CARE OF THAT CARE.

>> YOU KNOW, I THINK THAT THAT IS ONE OF THE TRAVESTIES, TO MANY PEOPLE, MIDDLE, LOWER INCOME GROUPS BECAUSE THEY WIND UP SPENDING ALL THEIR ASSETS, AS YOU SAID, AT THIS VERY CRITICAL POINT.

AND IT'S HARD TO ANTICIPATE FIVE YEARS FROM NOW.

AND THE OTHER QUESTION IS HOW WELL DO YOU TRUST YOUR KIDS?

[LAUGHTER] >> THERE IS THAT.

SO LET'S GO BACK TO PART D FOR A MOMENT.

WE HAVE A FEW MINUTES LEFT.

HOW DOES THAT COVER DRUG COSTS?

WITH MEDICAID?

>> WELL, IT'S MANAGED SIMILARLY TO PART C, YOU ESSENTIALLY BUY DRUG PLAN AND, YOU KNOW, ALL THE MAJOR HEALTH INSURERS SELL THEM.

AND YOU KNOW, IT DEPENDS ON A LOT OF THINGS.

LIKE HOW MANY SCRIPTS DO YOU HAVE?

WHAT ARE THEY FOR?

WHAT ARE YOUR CONDITIONS?

THAT DRIVES THE COST OF THE PLAN; BUT IT DOES PROVIDE HEALTH INSURANCE.

IT DOES KEEP YOU SAFE FROM SOME OF THE MORE ESOTERIC THERAPIES WE HAVE NOW WITH THE COSTS ASSOCIATED WITH THEM.

SO, YOU KNOW, IT WAS A GOOD THING TO EXPAND MEDICARE TO INCLUDE THAT DRUG BENEFIT.

>> GIVE ME THE 45-SECOND ANSWER.

IS THERE WAS A LOT OF DISCUSSION WHEN MEDICARE CAME ON BOARD.

AND MEDICAID ARGUING THE BENEFITS.

DO YOU THINK THESE HAVE BEEN GOOD PROGRAMS FOR US AND/OR DO WE NEED SOME TWEAKING?

>> I THINK IN THE CASE OF MEDICARE, IT'S BEEN A GOOD PROGRAM.

IT'S BEEN CHALLENGING TO MANAGE COSTS; YOU KNOW, AND THE CRITICS OF THE PROGRAM WOULD POINT TO WILL INCREASING COSTS EACH YEAR.

IT'S INEXORABLE.

BUT AT THE SAME TIME I THINK IT'S DRIVEN SOMEWHAT BY THE POPULATION, THE FACT THAT WE HAVE HAD BOOMERS AGING, NEW THERAPIES, NEW APPROACHES TO PROCEDURES, NEW MEDICAL EQUIPMENT.

IT'S-- AMERICANS PRIORITIZE THEIR HEALTH AND IT'S REFLECTED IN OUR ECONOMY.

SO I THINK MEDICARE IS UNABASHEDLY BEEN A SUCCESS.

AND WAYNE, I BELIEVE MEDICAID HAS AS WELL, ESPECIALLY UNDER THE EXPANDED MEDICAID UNDER THE AFFORDABLE CARE ACT OR OBAMACARE.

IT'S FUNNY, OBAMACARE AT THE TIME WAS USED AS A SORT OF A DERICIVE DERISIVE MONIKER IN THE POLITICAL SPHERE AND NOW IT'S REALLY, IT'S ALMOST REVERSED AND THE IDEA OF OBAMACARE BEING REPEALED, I THINK, IS JUST POLITICALLY IMPOSSIBLE.

>> WELL, MARK, I WANT TO THANK YOU VERY MUCH FOR BEING WITH US.

YOU HAVE TAKEN-- CLEARED SOME THINGS UP FOR ME ON SOME VERY DIFFICULT SUBJECTS.

THANKS FOR BEING WITH US TODAY.

I WANT TO THANK YOU FOR BEING WITH US TODAY.

I HOPE THAT YOU HAVE A BETTER UNDERSTANDING OF THE DIFFERENCES BETWEEN MEDICARE AND MEDICAID AND THE MANAGED CARE OPTIONS AVAILABLE WITHIN BOTH.

EQUALLY IMPORTANT, I HOPE THIS WILL STIMULATE THE DISCUSSION AMONG FAMILIES TO TAKE STEPS TO AVOID MEDICAL BANKRUPTCY.

IF YOU WISH TO WATCH THIS SHOW AGAIN OR WATCH AN ARCHIVED VERSION OF PAST SHOWS PLEASE GO TO WWW.ket.org/HEALTH.

IF YOU HAVE A QUESTION OR COMMENT ABOUT THIS OR OTHER SHOWS, WE CAN BE REACHED AT KYHEALTH@ket.org.

I LOOK FORWARD TO SEEING YOU ON THE NEXT "KENTUCKY HEALTH" AND PLEASE SIT DOWN AND TALK ABOUT YOUR PLANNING FOR HECK HEALTHCARE AS WE GET OLDER.

SEE YOU NEXT WEEK.