Bullet: LTC Bombshell
Wednesday, June 29, 2005
LTC Comment: Results
from a poll of state Medicaid programs by a Congressional office with subpoena
power may blow the lid off a carefully orchestrated cover-up of Medicaid
LTC BULLET: LTC
Comment: "What, Me
Worry?" So said Mad
Magazine's Alfred E. Neuman. You'd
think he was the team mascot for all the academics pooh-poohing the impact of
Medicaid planning abuses on the welfare program's exploding long-term care
there was the Georgetown Long-Term Care Project's report titled "Medicaid's
Coverage of Nursing Home Costs: Asset
Shelter for the Wealthy or Essential Safety Net?"
Read it at http://ltc.georgetown.edu/pdfs/nursinghomecosts.pdf
. We debunked that fruitless
attempt to minimize the impact of asset transfers with "LTC Bullet:
Where There's Smoke, There's Fire."
Center members can read our rebuttal at http://www.centerltc.com/members/ltcbullets/558.htm
. If you aren't a member of the
Center for Long-Term Care Reform, then join, get our publications regularly, and
access our password-protected website Members Only Zone.
Just call or email Damon at 206-283-7036 or firstname.lastname@example.org
and he'll get you registered post-haste.
recently, the Kaiser Family Foundation published "The Distribution of
Assets in the Elderly Population Living in the Community," which attempts
to show that older people who need long-term care don't have many assets beyond
their home equity. Read this report
here. Well, duh, of course really old
people on the cusp of needing nursing-home level of care don't own much besides
their home equity. That's why we
need public policy that incentivizes them to save and insure for long-term care
when they are still young, healthy and affluent enough to prepare responsibly
for that risk. The fact that older
people in need of long-term care own little more than their home equity is
precisely why public policy should encourage the use of home equity to help
people remain in their homes, pay for their own home and community-based care,
and stay off Medicaid as long as possible.
Finally, see AARP's new study
titled "Medicaid Estate Recovery: A
2004 Survey of State Programs and Practices," which attempts to minimize
the potential nontax revenue that could accrue to Medicaid by recovering
benefits paid from the estates of deceased recipients and their spouses.
Read that report at
. Unfortunately, this latest study
was conducted for AARP by the American Bar Association's Commission on Law and
Aging, a strong advocate of expanding public financing of long-term care and no
friend of private financing alternatives. The
study was actually directed by Charles Sabatino, a former president of the
National Academy of Elder Law Attorneys (NAELA), the Medicaid planners' trade
association! Talk about the foxes
guarding the henhouse!
tackle substantive rebuttals of these latter two studies when time permits, but
for now just understand them in this context:
they represent the last best effort of the defenders of a dysfunctional
and collapsing status quo to preserve and expand an obviously failed long-term
care service delivery and financing system.
for the important news. We may soon
have findings from a study that will give the lie to the academics' LTC
cover-up. The Oversight and
Investigations Sub-Committee of the powerful (and critical to Medicaid) House
Energy and Commerce Committee has polled all state Medicaid programs about their
experiences with Medicaid estate planning. How much of it goes on?
What are the most common techniques used? How much does Medicaid planning cost taxpayers?
What is the potential for Medicaid estate recoveries?
questions have all been asked of and answered by state Medicaid programs in the
past. The Center has done several
such national surveys ourselves. Generally,
however, states have been very reluctant to respond to such queries.
They fear reprisals if the "feds" find out they have difficulty
enforcing Medicaid's complicated, elastic income and asset eligibility rules.
What is different this time around is (1) the Governors have openly
acknowledged that Medicaid planning is a huge problem, (2) state budgets are so
pinched by skyrocketing Medicaid costs that states can no longer afford to
ignore the problem nicknamed "asset transfers," and (3) the entity
asking the questions this time is an arm of United States Congress with subpoena
if the state Medicaid programs queried are forthcoming, and we have every reason
to believe they will be, the results of this study could eclipse the attempts by
others to cover up the Medicaid planning, transfer of assets, artificial
self-impoverishment and Medicaid estate recovery problems.
Now that we've explained the potential significance of this study, here's
a copy of the letter of inquiry that went to all state Medicaid directors.
We've learned that results are pouring in but they remain confidential
until formally released. We've
asked to be apprised as soon as any findings become available to the public. The moment we know, you will too. Stay tuned.
Director's Name and Address
The Committee on Energy and Commerce is examining various
rules, programs, and practices that States have implemented under their
respective Medicaid programs. We
are committed to diligent oversight of Medicaid in order to ensure that the
program's resources are appropriately and effectively used. Medicaid beneficiaries are among the most needy in our
society, and it is imperative that the Federal resources allocated for Medicaid
are actually used to provide these individuals with vital care.
The single greatest expense in most State Medicaid budgets is payments
for nursing home care. We are
concerned that some individuals who seek nursing home care under Medicaid may be
engaging in certain financial practices - through their attorneys and financial
planners - that are forcing the States and the Federal government to absorb the
medical costs of individuals for whom Medicaid was never intended to cover.
These financial practices, often referred to as "Medicaid estate
planning," may allow individuals to shelter their assets in ways that are
exempt from consideration when a State determines Medicaid eligibility.
Recently, a bipartisan group of governors and State officials raised
serious concerns about "Medicaid estate planning," and a number of
States are assessing measures to curb some of these activities.
Some States have requested Medicaid waivers from the Federal government
to prevent this circumvention of Medicaid's purpose and intent.
Pursuant to the Committee's jurisdiction over the Medicaid program, the
Committee is writing to each of the fifty States in order to determine the
extent to which they are taking action to address "Medicaid estate
planning" or similar activities. Therefore,
pursuant to Rules X and XI of the U.S. House of Representatives, please provide
the Committee with the following records and information by Friday, May 20,
Describe the extent to which individuals in your State have utilized financial
planning designed to transfer or shelter an individual's assets or income prior
to applying for Medicaid nursing home benefits.
With regard to Medicaid nursing home benefits, does your State expend Medicaid
funds on individuals who have sheltered or transferred assets or income to
achieve eligibility? If so, provide
a detailed estimate of the amount of Medicaid funds being expended by your State
on such individuals that would be otherwise offset by those individuals' assets
or income as well as a statement as to the legality of such shelters and
Describe in detail the most common techniques individuals in your State have
utilized when attempting to transfer or shelter assets to become Medicaid
Describe in detail any actions your State has taken to address the sheltering or
transferring of assets by individuals attempting to qualify for Medicaid nursing
home benefits and/or to limit penalty periods associated with Medicaid nursing
Describe in detail your State's actions to address the use of annuities for
"Medicaid estate planning" purposes.
Describe in detail your State's actions to address the use of trusts for
"Medicaid estate planning" purposes.
Describe your State's attempts to address the voluntary divestiture of assets
and income by potential beneficiaries of Medicaid nursing home benefits during
the process to obtain eligibility for Medicaid nursing home benefits, including:
(1) what your State's applicable gift rules are; (2) what penalties are
associated with the "spend-down" process; and (3) whether your State
has altered the timing for the calculation of the penalty period.
Describe in detail your State's Medicaid recovery procedures upon the death of a
beneficiary receiving Medicaid nursing home benefits.
List any measures that could be taken by the Federal government to assist your
State in its efforts to address "Medicaid estate planning" and related
services and maximize State recovery of assets or income.
Describe in detail any waiver requests submitted by your State to the Centers
for Medicare and Medicaid Services (CMS) in any way relating to "Medicaid
estate planning" practices, including, but not limited to income and asset
breadth and timeliness of this investigation require each respondent to prepare
and submit complete written responses, as appropriate; answers that simply refer
to other documents will be insufficient and incomplete for the purposes of this
investigation. Please note that,
for purposes of responding to this request, the terms "relating" and
"regarding" should be interpreted in accordance with the attachment to
appreciate your prompt attention to this request. If you have any questions, please have your staff contact . .