LTC Bullet: Santa Fe Rules

Tuesday, March 8, 2005


LTC Comment: State legislators in New Mexico's capital "city different" have some excellent ideas about Medicaid and long-term care. More after the ***news.***

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LTC E-Alert #5-015--GAO Gives Long-Term Warning (Hard facts on the impending insolvency of entitlement programs underscore the importance of personal responsibility.)

The LTC Data Update #5-007--Who Cares and How Much? (Financial and emotional stress on caregivers argues strongly for long-term are insurance protection.)

LTC E-Alert #5-016--LTC Embed: Report from the Front, Washington, DC
LTC E-Alert #5-017--LTC Embed: Report from the Front, Washington, DC, #2
LTC E-Alert #5-018--LTC Embed: Report from the Front, Washington, DC, #3

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New Mexico ranked poorly in the Center for Long-Term Care Financing's study "The Realist's Guide to Medicaid and Long-Term Care" . We found the state to have easy eligibility for Medicaid long-term care, a generous Medicaid benefits package including extensive home and community-based care, and virtually no estate recoveries. These conditions affected the state's very low long-term care insurance market penetration (1% to 5%), relatively low home equity conversion (17th in the country), and high Medicaid nursing home census (70.5%).

We concluded that "New Mexico is struggling currently with an over-extended Medicaid program . . .. Unless the state can divert more people toward private long-term care financing and away from Medicaid dependency, Medicaid will continue to consume a larger and larger proportion of a very limited state budget."

We recommended that "New Mexico should mobilize to control Medicaid long-term care eligibility more effectively by studying best practices in other states, discouraging the further development of a Medicaid estate planning bar, and educating eligibility workers on the importance of controlling eligibility to preserve Medicaid for the needy. . . . The state should immediately implement and publicize a strong and effective Medicaid estate recovery program and use the substantial nontax revenue likely to accrue to fund a public education campaign on the importance of early planning for long-term care financing."

For once, someone was listening. The following is a "Memorial," i.e. a sense of the legislature resolution, introduced by New Mexico Senator Dede Feldman. The proposed legislation speaks for itself. Suffice it to say, if New Mexico pursues the course recommended in the Memorial, the state will make huge strides toward protecting Medicaid as a long-term care safety net for the poor. It will help financially starved long-term care providers, including nursing homes and home and community-based services providers. It will unleash the potential of private long-term care insurance and home equity conversion to finance all levels of long-term care. And it will relieve the growing, and unsustainable fiscal burden on taxpayers to support a fiscally out-of-control entitlement program.

We encourage all states to adopt this approach to long-term care financing policy.




Dede Feldman


WHEREAS, the population of New Mexicans over the age of sixty-five is growing and will almost double by the year 2020; and

WHEREAS, due to medical advances, people are living longer, but not necessarily healthier, lives; and

WHEREAS, the population of people over the age of eighty-five is growing twice as fast as that of people over sixty-five, and these are the most frail of the elderly; and

WHEREAS, a large and growing number of aging people are suffering from the ravages of Alzheimer's disease and are unable to care for themselves; and

WHEREAS, the medicaid program in New Mexico covers the cost of nursing home care and home- and community-based services for the elderly and disabled and provides in excess of two hundred twenty-one million dollars ($221,000,000) in combined state and federal funding for these services; and

WHEREAS, the private cost of nursing home care is unaffordable for most people in need of nursing home care and therefore most families have come to rely on medicaid to fund this level of care for their elderly relatives; and

WHEREAS, people are finding it relatively easy to qualify for medicaid long-term care services, despite seemingly restrictive eligibility rules, and this relaxed access has resulted in an entitlement mentality regarding the financing of these services; and

WHEREAS, use of private, out-of-pocket and insurance financing of these long-term care services has languished while medicaid costs have skyrocketed; and

WHEREAS, long-term care insurance, home equity conversion and other alternative mechanisms for private financing of long-term care services have been little utilized;

NOW, THEREFORE, BE IT RESOLVED BY THE SENATE OF THE STATE OF NEW MEXICO that the aging and long-term services department be requested to lead a study with the cooperation of the human services department and appropriate statewide organizations representing aging and long-term care services to study the financial impact of facility-based and home- and community based care on the medicaid budget and identify alternative models of financing such care; and

BE IT FURTHER RESOLVED that this study identify appropriate incentives to encourage self-care and the use of insurance, explore potential ways to limit asset identification and asset transfers and promote maximum medicaid estate recovery; and

BE IT FURTHER RESOLVED that the aging and long-term services department support the efforts of a statewide organization representing the needs of people with Alzheimer's disease, and others as appropriate, to hold a conference exploring alternative models of financing long-term care services; and

BE IT FURTHER RESOLVED that the aging and long-term services department develop recommendations on implementation of alternative mechanisms for financing long-term care services and report its findings and recommendations to the interim legislative health and human services committee at its October 2005 meeting; and

BE IT FURTHER RESOLVED that the aging and long-term services department and the human services department provide copies of the report to appropriate statewide organizations representing aging and long-term care; and

BE IT FURTHER RESOLVED that copies of this memorial be transmitted to the aging and long-term services department and the human services department.