NCCPPR North Carolina Center for Public Policy Research

Key Issues and Opportunities for the Aging in North Carolina
Senior Tar Heel Legislature
Brownstone Hotel, Raleigh
March 16, 2011

Ethel and Fred were Christians, and without any children of their own, they chose to give all of their discretionary income to their local Methodist church, which they attended every Sunday, often hosting bible school in the basement of their home. Once they became homebound, they began to watch “church shows,” as Ethel called them, on TV. Day and night, they would sing along with the choir, hands in the air, praising God. Somewhere along the way, they saw a televangelist who wanted to spread Christianity to the Middle East. They started giving money to the minister, and over time they became acquainted, and then the minister started flying across the country to visit them in Western North Carolina.

Fred was frail, and eventually he had to be moved into a nursing home. One day, the minister visited them there. He brought with him legal documents for them to sign: health care powers of attorney, general powers of attorney, wills, and a deed to their house, reserving for Ethel only a life estate. The owner of the nursing home called the sheriff. The documents were destroyed, and Medicare fraud charges were investigated. However, Fred passed away shortly thereafter, and Ethel was not able to testify because of early Alzheimers. The charges were never filed.

The minster returned within weeks of Fred’s death, and Ethel signed all of the legal documents again. This time, there was no one there to protect her, no one to call the sheriff. Tragically, stories like this are rampant and appalling.

My name is Mebane Rash, and I am an attorney with the North Carolina Center for Public Policy Research. The Center is a nonpartisan nonprofit that studies the most important public policy issues facing North Carolina. Part think tank, part watchdog, our Board of Directors looks just like our state in terms of gender, race, political party affiliation, from the East, West, and Piedmont.

There are several things in my mind that distinguish the work of the Center: we are independent, our policy analysis is research-based, and we never lose sight of the public in public policy, like Ethel and Fred. We take our research to policymakers, the media, and interested citizens across the state, just like this group, because we want our work to make a difference.

The Center’s study of aging (hold it up) is available on our website. I also would like to invite all of you to become members of the Center.

Today, I plan to share with you our research on North Carolina’s aging population, with a special focus on fraud against the elderly, and I will also talk about the changes at the legislature and priorities for 2011. But first, let me tell you what happened to Ethel. Extended family became aware of the situation, and they hired an attorney. To avoid litigation, the family settled with the minister. He got almost $50,000 for his ministry – money that could have been used for her care. In exchange, the minister agreed to void the other legal documents and never to contact Ethel again. The attorney who had prepared the legal documents said he knew something was amiss when the minister said as he walked out of the attorney’s office, “I have a lot of money invested in that woman.”

I. ISSUES AND TRENDS AFFECTING THE AGING IN NC
A. Demographics and the Growth in the Elderly Population in NC
In terms of sheer numbers, the biggest demographic change in North Carolina is not immigration but the aging of our population. In 1900, North Carolina had one of the nation’s youngest populations with half our people younger than 18. Only 3½ percent of all Tar Heels were 65 and older. Even in 1960, North Carolina was still an extremely young state with just 7 percent of all residents 65 or older. But now, North Carolina has about 1.2 million people who are 65 years old or older. That’s about 13% of our population. 28 of North Carolina’s 100 counties have more people over 60 than young people under 25.

And by the year 2030, our 65 and over population will likely increase by 80 percent – almost doubling – to about 2.1 million – and constituting almost 18% of our population. In 4 counties, more than 30 percent of the population will be 65 and older – Carteret County on the coast, and Cherokee, Clay, and Transylvania counties in the mountains. In 15 other counties, more than 25 percent of the
population will be 65 and over. This includes 6 counties along the coast – Brunswick, Dare, Hyde, Pamlico, Perquimans, and Tyrrell; it includes Moore County in the Sandhills; and 8 counties in the mountains – Alleghany, Ashe, Avery, Haywood, Henderson, Macon, Polk, and Yancey counties.
The second reason is that North Carolina is a retirement mecca. How many of you moved to North Carolina to retire? Although migration fell significantly during the recent recession, we still expect it to account for more than 60 percent of the state’s total population growth in the next two years.
And, the third reason for this growth in the 65 and over population is the aging of the Baby Boomers – those born between 1946 and 1964. The Baby Boom generation is the second largest generation in American history. It is like a pig in a python, a big lump passing through the population, which creates various issues as it ages. For example, the Baby Boom generation created a huge demand for public school construction when it was young, and now Baby Boomers’ children are having babies and creating a huge demand for day care. The aging of Baby Boomers will increase the demand for nursing home care, pharmaceuticals, and all programs serving the elderly.

So the number of people 65 and over will explode in 2011 when the first Baby Boomers turn 65. Globally, by 2050, the number of elderly will exceed the number of children for the first time in human history.

B. The Nursing Shortage
A second issue that affects the aging is work force shortages – shortages of nurses, doctors, social workers, pharmacists, physical therapists, and other health care workers to take care of us as we age. The question is, how can we attract people to work in these fields, and how can our colleges, universities, and community colleges gear up quickly to help the state fill these shortages?

For example, North Carolina will need about 104,000 nurses by 2016 – about 25,000 more than we have now. Nearly a third of our nurses are 41 to 50 years old, and most retire at age 55, so that means things are going to get worse fast in 5 to 10 years. The shortage will be much worse in our rural areas. And, the highest turnover rates (57%) are for nurses who work in long term care, the field of greatest need.

C. Medicaid and the State Budget

Two other big issues affecting the aging are the growth in the Medicaid program and the impact of aging on the state budget. The Medicaid program has been the fastest-growing program in the state budget for the last 10 years. Ten years ago, it was 8% of the total state budget. Today it is 16%. That’s due to double digit increases in the cost of health care almost every year, the rise in prescription drug costs, and increases in the nursing home population.

Medicaid pays for a lot of nursing home care in North Carolina. The elderly represent only 13% of Medicaid recipients, but receive more than 21% of total Medicaid spending. Almost half (46%) of that money was spent on nursing home care. Two other things you need to keep in mind about Medicaid. As many as 700,000 more North Carolinians will be eligible for Medicaid under health care reform. Also, for the past 2 ½ years, North Carolina only has been paying 25% of Medicaid expenses, thanks to the federal stimulus funds. But this June the enhanced federal match will end, and our percentag will go back up to 35%.

II. THE MOST SIGNIFICANT LEGISLATION IN 2010
Now I want to review a few of the most important pieces of state legislation affecting the aging passed in 2010 and then describe what faces the 2011 legislature.

A. Significant Legislation #1: The 2010 State Budget
1. Cut in the Personal Services Program
The Great Recession has hit state budgets hard. Two years ago, the state faced a $4.5 billion revenue shortfall, and we, like most states, have a constitutional requirement to pass a balanced budget. 45 states faced shortfalls then. Most states cut spending, raised taxes, and were glad to have federal stimulus money. The federal stimulus money both helped pay for rising Medicaid costs and avoid cutting jobs.

In North Carolina, legislators closed that $4.5 billion deficit by cutting spending by $2 billion, raising taxes by $1.3 billion, and using $1.2 billion in federal stimulus money.

For the current fiscal year, the legislature faced a $1.2 million shortfall, and they closed this gap almost entirely with cuts in spending. One of the most significant cuts affects the elderly because the budget cut $51 million in the Personal Care Services Program. This program helps about 18,000 elderly and disabled people stay in their homes by helping with activities of daily living – bathing, going to the bathroom, dressing, and eating. The goal is to help people avoid more expensive care in nursing homes and other institutions. The legislature’s cut is intended to focus the program on people who need more help with activities of daily living, those most at risk of needing to move to a nursing home, and as a result fewer people will be eligible.

2. Cuts in Medicaid Spending
Second, I mentioned earlier that the Medicaid program has been the fastest-growing program in state government over the last 10 years, so, as you might expect, the 2010 legislature made cuts in Medicaid spending. Some of these cuts were not offset by federal dollars – mostly by assuming that the Community Care Network was going to save the state $45 million and by assuming that an initiative to curb Medicaid fraud was going to save another $40 million. The Community Care Network of North Carolina manages health care for patients by giving them a medical home – typically a family doctor – to control health care costs, improve care, and minimize trips to expensive hospital emergency rooms.

B. Money for Allied Health Programs in Community Colleges
In the 2010 budget, the legislature also added some money to help address shortages in the work force serving the elderly. In a separate Center study of community college programs, we concluded that the community colleges were the cheapest and fastest way to produce nurses and other allied health workers. Remember I said earlier that the state is going to need 25,000 more nurses by 2016.

The General Assembly responded to our recommendations – and in one of the few instances where they appropriated new funds instead of cutting – they appropriated $4 million in 2008, $4.8 million in 2009, and $6.2 million in 2010 for programs in community colleges to produce more nurses and other allied health workers.

The 2010 General Assembly did several other things of note for seniors. They established the Long-Term Care Partnership Program to be administered by the Department of Medical Assistance, which manages Medicaid for the state. The program allows individuals who apply for Medicaid and who have a qualified long-term care policy to protect a portion of the individual’s assets for the purposes of determining eligibility and for estate recovery actions. They also required the Division of Aging to develop and implement annually a plan for Project CARE (Caregiver Alternatives to Running on Empty). This is a nationally recognized respite program for caregivers of people with dementia, and it is cost effective as compared to institutional care. This program has five sites and operates in 23 western counties. And finally, the legislature required the Department of Health and Human Services to apply for a Medicaid waiver from the federal government for those living in adult care homes that need personal care services.

III. THE NEW POLITICAL LANDSCAPE IN NC
So let’s look at the new political landscape. On November 1st, the day before the elections, Democrats in the state Senate held a 30-20 majority. The next day, voters gave Republicans a 31-19 majority. That’s more than 3/5 of the Senate – enough to override a Governor’s veto. Republican Phil Berger, an attorney from Eden, is the new Senate President Pro Tem and the leader of the state Senate.

Now to the state House. The day before election day, Democrats held a 68-52 majority. The next day, voters gave Republicans 67 seats. One unaffiliated candidate was also elected, and he says he will join the Republican caucus, so Republicans will end up with a 68-52 majority in the House – an exact reversal. But Republicans in the House are short of the 72 votes needed to overturn a Governor’s veto. The House Republicans elected Thom Tillis from Charlotte as the new Speaker of the House.
The priorities this session include the Republicans first 100 day agenda, redistricting, and addressing a $2.4 billion budget shortfall.
Overall, the new 170-member legislature includes:
•
about 48 people with business backgrounds,
•
38 lawyers,
•
about 29 retirees,
•
38 female legislators,
•
25 African Americans,
•
2 Hispanics – one each in the House and Senate, and
•
44 new legislators who weren’t there last session. That’s a fourth of the General Assembly.
The House combined many of its committees, and the former standing committee on aging was subsumed into a committee on health and human services. It meets at 10am on Tuesdays. In the Senate, there is a standing committee on pension, retirement, and aging. It meets upon the call of the chair.

The Governor’s budget cuts the Division of Aging much less than other agencies of state government. Most agencies were cut 7-15%. The Division of Aging stands to have a net change of just $560,000 – 1.5% of its budget of about $37 million. Governor Perdue proposes the elimination of the volunteer development program operating in 11 counties. And 85 senior centers that are not certified may lose a little over $5,000 each. She includes over $500,000 in her budget to continue Project CARE, which I mentioned earlier. The House will vote on the budget on April 22nd, the Senate will vote on it May 13th, and the final vote is scheduled for June 1st.

IV. OPPORTUNITIES FOR ADVOCATES FOR THE AGING IN 2011
Now I’m going to shift to 5 areas of opportunity for you as advocates for the aging in the years ahead.
A. Preventing and Reducing Fraud Committed Against the Elderly
The first opportunity is to find ways to prevent and reduce fraud committed against the elderly. Remember my story about Ethel.

North Carolina ranks 26th among the 50 states in the number of fraud complaints per capita and 24th in the number of identity theft complaints. The Federal Trade Commission says that people over 50 account for more than a third (38%) of all consumer fraud complaints and 28 percent of all identify theft complaints.

Many scam artists specifically target seniors because they are more likely to respond to telephone or door-to-door calls, they are more trusting of others, their memory can be poor, and their assets often are easily converted into cash. But just as often, this crime is perpetrated by loved ones. The boundaries are not clear, and this is where public education could make a difference. It is clear that the intentional theft of money is not ok, but it is also not ok to borrow money without any real intention of repaying it; to withhold services or medical care to preserve assets; to sell property without permission; to misuse ATM or credit cards; or to force seniors to sign legal documents.

We at the Center made 4 recommendations to prevent and reduce fraud committed against the elderly in North Carolina.
1. First, in 1973, North Carolina enacted the nation’s first elder abuse law. But that act [Protection of the Abused, Neglected, and Exploited Disabled Adult Act] has not been updated since 1981. The Center recommends that the General Assembly clarify and strengthen the laws to support a broader system of protection for older adults for abuse and fraud.
2. Second, the Center recommends that the legislature require reporting on the statewide incidence and prevalence of fraud and mistreatment of the elderly. We said North Carolina needs better data if it is going to tackle fraud against the elderly and know whether it’s succeeding. We need to know who is committing these crimes if we want to prevent them.
3. Third, the Center recommends that the General Assembly establish a study commission to examine how the N.C. Commissioner of Banks, the financial management industry, and law enforcement agencies can partner to prevent fraud against the elderly. The purpose of the study commission would be to assess whether training for bank employees can help them recognize, report, and reduce the incidence of fraud against the elderly. We think banks are the first line of defense against these scams because they are in the best position to give consumers information at the key moment they need it – when they are depositing checks or withdrawing money.

Efforts in other states have demonstrated the value of bankers’ roles in preventing fraud. For example, a bank in Illinois reduced losses to these scams by 85 percent. There is a similar success between Ohio’s Attorney General and its banks and credit unions. And, four states (California, Florida, Georgia, and Mississippi) require bank employees to specifically report financial abuse of elders.
4. The Center also recommends that the legislature give the Attorney General the authority to initiate prosecutions for fraud against the elderly. We’re one of only five states that do not give their Attorney General any authority to initiate local prosecutions of any kind (North Carolina, Arkansas, Connecticut, Texas, and West Virginia). So, criminal prosecutions for fraud against the elderly have to be referred either to federal authorities or to local district attorneys. But both of these options can cause problems in prosecuting fraud against the elderly.

The Aging Study Commission included in its recommendations to the 2011 legislature the creation of a Task Force on Fraud Against Older Adults. This task force would include representatives of the Division of Aging and Adult Services, the Consumer Protection Division of the Department of Justice, the NC Senior Consumer Fraud Task Force, and the NC Association of Directors of Social Services.

B. Addressing Our Work Force Shortages
Remember I said one of our state’s biggest challenges is developing the work force that will be needed to serve more seniors. And, remember we’ll need 25,000 new nurses by 2016. We’ll also need more nurse practitioners, pharmacists, physical therapists, and other workers. Our conclusion was that the community colleges are the cheapest and fastest way to produce these workers. We all need to urge the state to set specific goals for its production of nurses.

C. Helping the Aging Stay in Their Homes
Another opportunity and goal for the state should be to help the aging stay in their homes and avoid more costly care in rest homes, nursing homes, or hospital emergency rooms. The state has been moving in that direction with In-home services, with the new federal grant to train home health care aides, and with the Community Care Program of North Carolina under Medicaid. But, the rapid growth in the 65 and over population means we’ll have to do 2 things – speed up development of such programs that help the aging stay in their homes, and evaluate the results of these programs to see what works well for our seniors.

D. Better Serving the Elderly in Rural Areas
A fourth challenge and opportunity is how to better serve the elderly in rural areas. Earlier, you heard me say that there are 19 rural counties where the elderly will constitute a fourth or more of the total population in those counties. Rural counties are already home to 57 percent of our older population – almost 612,000 people.

The counties with the youngest populations are either large urban counties like Mecklenburg and Wake or counties with military bases like Cumberland and Onslow. With the oldest populations growing in the west and east, seniors in these rural counties are more apt to be single, poor, and ill. Yet those places often lack needed services. For example, transportation for the elderly who are spread out in rural counties – especially on mountain roads – is already a major problem.

E. Utilizing the Aging as Civic Resources
One huge opportunity for the state is to better utilize our elderly as a civic resource – to tap seniors’ talents in helping the state increase volunteerism, voter turnout, charitable contributions, and other forms of civic engagement. People 65 and over already vote at higher rates, return the census at higher rates, and give a higher percentage of their income to charity. Now we’ve got to motivate Baby Boomers to meet the standards of the Greatest Generation, especially in volunteering.

And here’s why: Overall, North Carolina ranks only 38th among the 50 states in volunteering, since only about a quarter of our citizens volunteer. We rank 37th in volunteering by those 65 and over, (22%) we rank 34th in volunteering by Baby Boomers (28.5%) and we rank a dismal 44th in volunteer retention rates (59.5%). Even more discouraging, our rate of volunteering has declined over the last two years.
Now, our opportunity here is that in December 2009, Governor Perdue re-established the North Carolina Commission on Volunteerism and Community Service in an Executive Order (#41). This Commission, under the leadership of Kaye Gattis, adopted a State Service Plan for 2010-2013 which specifically aims to harness the experience of Baby Boomers. We need to find a way to match seniors with opportunities to volunteer at nonprofits and public agencies. For example, what if you use Baby Boomers as volunteers to provide those transportation services that are needed in rural areas?

F. The State’s Aging Policy Plan
On March 30th last year, the Governor signed another Executive Order, (#54), to require all Cabinet agencies under her to, and I quote, “assess their readiness to serve our aging population” and to “develop strategies and proposals to strengthen their preparedness for and response to our aging population.” She also requested other state agencies under separately-elected officials to do the same.
I want to praise the Governor for taking this step. She has often said that aging issues are what got her into politics, and it shows.

Now this Executive Order set 4 gears in motion. First gear was for each agency to name someone as their aging liaison. Second gear was the set of six policy roundtables held across the state last spring on key issues affecting the aging, including health and aging, the economics of aging, access and choice in services and supports, lifelong engagement and contributions, homes and neighborhoods, and safe communities. Third gear is that those six topics were further explored at the Governor’s conference. And now, the plan is to take the assessments from the agencies and the information from the policy roundtables, combine them with information from the conference, and develop the state’s Aging Policy Plan for 2011-2015.

This is a huge opportunity. We have to remember that the state is short-term poor in its budget challenges, but also remember that we must plan for the long term between now and 2030. The question is, what progress can we make in 2011-15 toward our long-term goals in 2030 and beyond.
These are all great opportunities, but if the state does not act soon, the sheer demographics of the Baby Boom will overwhelm both policymakers and the state budget. I want to leave you with a passage from North Carolina’s Thomas Wolfe and his great novel Of Time and The River: He writes
“I believe that we are lost here in America, but I believe we shall be found. I think the true discovery of America is before us. I think the true fulfillment of our spirit, of our people, of our mighty and immortal land, is yet to come. I think the true discovery of our own democracy is still before us. And I think that all these things are as certain as the morning, [and] as inevitable as noon.”

Thank you for your support for the work of the Center for Public Policy Research, thank you for your interest in issues affecting our aging population, and thank you very much for inviting me to be with you today.
Helpful links:
The N.C. Center for Public Policy Research
http://www.nccppr.org
N.C. Commission on Volunteerism and Community Service
http://www.volunteernc.org/
Link to the State Service Plan for the N.C. Commission on Volunteerism and CS
http://www.volunteernc.org/library/pdfs/Publications/SSP%202010.pdf
[Note that focus area four is on harnessing baby boomers’ experience.]
North Carolina Department of Justice Elder Abuse Victims
http://www.ncdoj.gov/Help-for-Victims/Elder-Abuse-Victims.aspx
North Carolina General Assembly
http://www.ncga.state.nc.us/