LTC Bullet: Special Alert, Time Sensitive, Please Read Now

Thursday, February 24, 2005


LTC Comment: Today's lead editorial in the Wall Street Journal exposes Medicaid planning abuse and encourages LTCi Partnerships. Read on. No other ***news*** today.


"Medicaid for Millionaires" is the lead editorial in today's Wall Street Journal. If you have an online subscription, you can read it at,,SB110920966481062758,00.html?mod=opinion%5Fmain%5Freview%5Fand%5Foutlooks . If not, pick up a hard copy at your newsstand today. Some excerpts follow below.

The editorial quotes Center for Long-Term Care Financing President Steve Moses. If you follow these LTC Bullets, you'll recognize our analysis and recommendations in the editorial's text.

The piece also encourages passage of legislation to unleash the long-languishing Long-Term Care Partnership program.

If the WSJ editorial piques your interest and you'd like to dig deeper, here are some ideas.

Check out the Center for Long-Term Care Financing's major reports at .

Listen to Steve Moses's February 2, 2005 testimony to the Washington State House of Representatives Appropriations Committee at

Special note to members of Congress, legislative staff, Administration officials, media, and policy makers interested in long-term care financing policy:

Steve Moses will be in Washington, DC from March 1 to 4. To schedule a briefing or meeting, reply to this Bullet, email Steve directly at or call him at 206-283-7036.


Excerpts from "Medicaid for Millionaires," Wall Street Journal, February 24, 2005, Page A-14,,,SB110920966481062758,00.html .

"Medicaid was established in 1965 with the worthy aim of providing medical care for the poor; it was never intended as a middle-class entitlement or as inheritance protection for the children of well-off seniors. Yet the latter is precisely what has happened -- to the point that sheltering assets and income to qualify for Medicaid is now as routine as writing a will. . . .

"Medicaid 'planners' often counsel well-to-do clients to save enough money to pay for a year of care at a private, high-quality nursing home, which under federal law can't kick you out if you then switch over to Medicaid. As Stephen Moses of the Center for Long-Term Care Financing points out, 'Poor people don't have key money, so they end up in the least desirable 100%-Medicaid facilities, while the lawyers' clients occupy the scarcer Medicaid beds in nicer nursing homes.' About 70% of nursing-home patients are on Medicaid. . . .

"An excellent way to keep seniors off Medicaid would be to encourage more to buy their own long-term care insurance. The Department of Health and Human Services was experimenting with a 'Partnership' program to do just that in the early 1990s, only to be shut down by Congressman Henry Waxman (D., Calif.).

"Under the Partnership program, a consumer who purchases, say, $100,000 in long-term care insurance can exempt that sum before drawing down the rest of his assets and, if necessary, going on Medicaid. Not only does this give the senior a guaranteed amount of money to preserve for his heirs, the insurance payouts give him the freedom to purchase the long-term care of his choice. If he wishes to use the money for home care, he can do so. . . .

"The Administration also wants Congress to update the look-back law, so that the three-year grace period for giving away assets doesn't begin until a senior enters a nursing home or goes on Medicaid. Other measures worth considering include eliminating the home exemption, and requiring seniors who need long-term care to take out reverse mortgages (borrowing against the value of their home) to pay for it. . . .

"Long-term care accounts for about one-third of federal and state expenditures on Medicaid, to the tune of $100 billion this year. It is the biggest driver of skyrocketing Medicaid costs that are bankrupting many states and localities. Medicaid was created 40 years ago to care for the needy. The rest of us have an obligation to pay for our own care -- or to protect our wealth with private insurance."


LTC Comment: The WSJ editorial approaches LTC financing from a conservative political slant. For balance, here's a quote from a New York Times editorial published a few years ago:

The New York Times editorialized against "the blatant and often unethical misuse of the [Medicaid] program by well-to-do patients in nursing homes. These patients exploit legal loopholes to transfer their wealth to their children, thus technically impoverishing themselves and providing themselves with inexpensive nursing home care. What was supposed to be a program for the poor has turned into a boondoggle for everyone else.... The system is a scandal." (NYT editorial, 4/14/96)