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LTC Bullet: New York LTC Executive Speaks Out

Friday June 19, 1998

Seattle--

Carl Young, President of the New York Association of Homes and Services for the Aging, replied to our most recent LTC Bullet regarding the chilling effect of Medicaid asset transfers on private LTC insurance. Mr. Young's provocative response is quoted below verbatim:

"In New York, you don't know the half of it. If we assume that there is only one resident per nursing facility who is on Medicaid by virtue of accelerated asset divestiture per year, the cost to the taxpayers is at least $28 million per year (630 nursing homes X $45,000 average annual
Medicaid cost). You could fit into the average phone booth the number of facility operators who believe that there is ONLY one per facility. If we assume only one per cent of residents abusing the system (more accurately, their families and their lawyers), the number jumps up to over $50 million (115,000 beds X .01 X $45,000) There is not a single week in the Albany area when there is not AT LEAST one "seminar" going on. The bureaucrats are a poor source of information on this issue. They have no way of knowing. Nursing home administrators who have face-to-face interaction with the families and the residents have a better fix on the magnitude of this activity. My counterparts from a number of states tell me that there is more activity than officials think."

The previous LTC Bullet to which Mr. Young is responding is reprinted below:

LTC Bullet: States Put LTC Puzzle Pieces Together

In the current issue of the prestigious journal "Health Affairs," Josh Wiener and David Stevenson of the Urban Institute confirm: "state officials believe that reducing [Medicaid] asset transfer is a critical prerequisite to motivating citizens to purchase long-term care insurance policies and, more generally, to viewing long-term care as a private responsibility."

The complete quotation follows: "Over the past several years policy-makers and the media have focused attention on middle-class and wealthy elderly persons who transfer, shelter, and
underreport assets--so-called Medicaid estate planning--to appear poor enough to qualify for Medicaid-financed nursing home care. Congress has legislated against these practices on numerous occasions (most recently in the Balanced Budget Act [BBA] of 1997), but some argue that the legislative prohibitions are easy to circumvent.... Although the rhetoric surrounding the issue is passionate and all states acknowledge it as somewhat of a problem, Massachusetts, New Jersey and New York were the only ANF [Assessing the New Federalism study] states in which asset transfer was thought to be a major public policy issue. It is of particular concern in New York, where there are approximately 1,200 elder-law attorneys and where newspaper and magazine advertisements relating to asset transfer are said to be ubiquitous. The litigious culture and the hostility of the state courts to rules requiring middle-class citizens to impoverish themselves make cracking down on asset transfer difficult.
Nonetheless, state officials believe that reducing asset transfer is a critical prerequisite to motivating citizens to purchase long-term care insurance policies and, more generally, to viewing
long-term care as a private responsibility." (Joshua M. Wiener and David G. Stevenson, "State Policy on Long-Term Care for the Elderly," Health Affairs, Vol. 17, No. 3, May/June 1998,
p. 86.)

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