Cutting Medicaid With a Chainsaw
Bob Mason
Originally published in the Randolph Guide (12/28/2005)
Are big changes to Medicaid nursing home rules on the way? Stay tuned. We should know soon. As I write this column (Monday, November 21) the House and Senate have adopted competing versions of new rules that would affect the ways in which individuals would qualify for Medicaid nursing home benefits. The Senate committee considering the changes backed away from a harsh version similar to the House version and passed it on to the entire Senate for eventual adoption. The House passed its rather hard version of the bill by a bare 217 to 215 vote just after midnight on Friday, November 18.
A House/Senate Conference committee has not yet been appointed and no timetable has been set. Commentators predict the negotiations will be “arduous” and will begin immediately after the Thanksgiving recess.
Current rules generally provide three year “look back” periods and begin ineligibility (or sanction) periods back on the first day of the month in which transfers were made. For example, $40,000 transferred two years before an application would create an 8 month sanction period that expired 16 months ago.
The House bill requires states to look at family transfers occurring within five years of an application to determine whether an ineligibility period should apply. If an eligibility period should apply, then it would begin to run at the time of the application. Under the example above, the $40,000 transfer made two years ago would create an 8 month ineligibility period beginning currently.
What prompted the current brouhaha are plans by the current Administration to slash record budget deficits . . . a worthwhile endeavor, as long as care is taken and intelligent choices are made. But in his first speech as new head of the Department of Health and Human Services, Secretary Mike Leavitt said that Medicaid “must not become an inheritance protection plan. Right now, many older Americans take advantage of Medicaid loopholes to become eligible for Medicaid by giving assets away to their children.” This seems a rather astounding assertion given that the same Administration is proposing repeal of the estate tax, which would benefit the estates of about 1 out of every 1,400 people dying each year in the US and result in the loss of about $17 billion in annual revenue.
On the other hand, the House proposes to just $2.5 billion over five years with the new asset rules. By the way, the same budget bill may also set aside $3 billion to help millions of Americans (without regard to income) buy converters for their old TV sets. That way no one will be deprived of television when broadcasting goes all digital.
Make no mistake; I believe the subject of paying for long term care should be a high priority. A very high priority. With plenty of aging boomers and great health care to help everyone live longer, a trip to the nursing home could be a reality for millions. The status quo is not sustainable.
On the other hand, the way to “fix” the system is not to hit the problem with a budgetary chainsaw. All sorts of new problems will be created and nothing will be done to solve the current problem. It will create misery. It will penalize people who have done everything “right” and by the rules.
Secretary Leavitt has also said that “There are ways families can preserve assets without shifting costs of long-term care to Medicaid. We must close these loopholes and focus Medicaid’s resources on helping those who really need it.” For some families, there are no other options.
I agree that citizens must be encouraged to purchase long-term care insurance; for someone who is insurable, choosing to forego that option is irresponsible. Longer term, that may be the key to “fixing” Medicaid. But not everybody is insurable. I also believe some thought ought to be given to adding long term care benefits to Medicare. After all, Medicare will do a great job of paying for Grandpa’s brain surgery . . . but if he develops Alzheimer’s disease instead and needs to go into a nursing home, the family could lose everything.
Simply slashing benefits will hurt those folks who have worked hard for years, paid for their homes, and amassed a “fortune” worth perhaps a hundred thousand dollars or so to see them through so they wouldn’t be a “burden”. They bought health insurance and they paid their Medicare premiums every pay day. The questions that need to be asked during any debate are: Should the family lose great-granddad’s farm? Mom’s and Dad’s home? All $100,000 in CDs? Should Grandpa be penalized because he helped pay for a grandchild’s education years ago, or helped the kids buy a home? If these people try to protect what they have before losing everything (before eventually going on Medicaid in any event), are they shirking? Failing to carry their share? Using Medicaid as a middle class entitlement? Many people believe that to be the case . . . until it is his Mom or her Grandpa.
If this concerns you, perhaps there is time you can do something. Call or write Congressman Coble and let him know that Medicaid cuts, especially to long term care benefits (nursing home benefits) concern you, maybe even scare you. Tell him you do not approve of the new asset transfer rules in H.R. 4241. Representative Coble voted for the Bill. Perhaps as a voter you can appeal to him.
Honorable Howard Coble
2468 RHOB
Washington, DC 20515-3306
Phone: (202) 225-3065
Fax: (202) 225-8611
You should also call or write Senator Dole and Senator Burr.
Honorable Elizabeth Dole
SD-555
Washington, DC 20510-3301
Phone: (202) 224-6342
Fax: (202) 224-1100
Honorable Richard Burr
SR-217
Washington, DC 20510-3306
Phone (202) 224-3154
Fax (202) 228-2981
Bob Mason is a certified elder law attorney with a law practice in Asheboro.
