LTC Bullet:  Aging America's Achilles' Heel 

Thursday, September 1, 2005 


LTC Comment:  Today, the Cato Institute published Steve Moses's monograph titled "Aging America's Achilles' Heel:  Medicaid Long-Term Care."  The press release and a hyperlink to the paper follow the ***news.*** 

*** MAJOR DEVELOPMENT.  The nation's Governors have formally recommended the single most important change in Medicaid eligibility to save that program as a safety net for the poor and unleash the potential of private LTC financing.  According to the National Governors Association's latest policy paper, titled "Short Run Medicaid Reform" and published August 29, 2005 at : 

"Home equity should be considered a countable asset in order to require individuals to use home equity to off-set long-term and other medical expenses that would otherwise be paid by Medicaid."   

If implemented, that reform would relieve Medicaid's fiscal crisis, improve the program's ability to provide quality care for the genuinely needy, create a stronger demand for LTC insurance and reverse mortgages, and pump desperately needed private revenue immediately into America's nursing homes, assisted living facilities, and home care providers.  Bravo NGA! *** 

*** GREAT DEBATE on Medicaid and long-term care.  Limited seating is filling fast for Steve Moses's debate with Vincent Russo, a major New York Medicaid planner and former president of the National Academy of Elder Law Attorneys.  The debate will take place at the Cato Institute (1000 Mass. Ave., NW in Wash., DC) on Wednesday, September 7 at noon.  Free lunch is included.  Details and a registration form (required) are available online at  Marilyn Werber Serafini of the National Journal will moderate the debate and Cato's Michael Cannon, whose book on health policy will be released September 19, will offer comments.  *** 

*** FLASH UPDATE:  The Cato Institute has already received an unprecedented 100-plus pre-registrations for the Moses/Russo debate (described above) on "Who Should Pay for Long-Term Care?"  If you can't be there in person, be sure to catch the webcast live or in the Cato media archives at *** 

*** CAPITOL HILL BRIEFING on Medicaid and long-term care financing.  On Friday, September 9 at noon (free lunch to follow), Steve Moses will give a briefing titled "The Trouble with Medicaid" in Room B-354 of the Rayburn House Office Building.  Details, an online registration form and special instructions for news media may be found at  Cato's Jagadeesh Gokhale, Senior Fellow and Michael Cannon, Director of Health Policy Studies will also speak at this event, which is open to the public. *** 


LTC Comment:  Following is the Cato Institute's press release announcing publication of a new "policy analysis" titled "Aging America's Achilles' Heel:  Medicaid Long-Term Care."  Read and download the paper at


September 1, 2005 

Media Contact: (202) 789-5200 

Medicaid Long-Term Care Abuse Is Rampant 

Study urges Congress to eliminate loopholes for long-term care recipients 

WASHINGTON -- Medicaid is a fiscal crisis waiting to happen, warns a study released today by the Cato Institute.  In "Aging America's Achilles' Heel:  Medicaid Long-Term Care," Stephen Moses, president of the Center for Long-Term-Care Reform, exposes how Medicaid is exploited to finance nursing home care for many seniors who could have financed such care themselves. 

Moses explains that while Medicaid's financial eligibility rules are relatively tight for poor women and children, "for people over the age of 65 who have medical need for nursing-home-level care, Medicaid's eligibility rules -- contrary to conventional wisdom -- are very loose."  

Long-term care (LTC) accounts for one-third to one-half of total Medicaid expenditures in most states.  A relatively small number of Medicaid LTC recipients -- including middle and upper class seniors -- consume a disproportionate share of total program expenditures. 

Moses argues that the highly technical and varied strategies for Medicaid planning enable and encourage LTC abuse.  They allow seniors to shield unlimited resources in their home or business when applying for long-term care benefits and include divorce as a means to hide assets from eligibility screeners.  Writes Moses, "There is no limit to how much wealth people can stash in exempt assets or jettison by means of a calculated divorce settlement to become eligible for Medicaid LTC subsidies." 

The author calls on Congress to eliminate loopholes that force taxpayers to finance LTC for seniors who could finance their own care.  This entails reducing Medicaid's open-ended home exemption for LTC recipients and placing reasonable limits on the amounts of other assets people can shelter while applying for Medicaid LTC benefits as well as curtailing Medicaid estate planning abuses. 

Policy Analysis #549:  

The policy forum "Medicaid and the Long-Term Care Crisis -- Who Should Pay?" will be held at the Cato Institute on Wednesday, September 7 at noon.  Speakers include: Stephen Moses, Vincent J. Russo, a Certified Elder Law Attorney, and Michael F. Cannon, director of Cato's health policy studies.  To register for this event, please email or call (202) 789-5229 by Tuesday, September 6, 2005. 


Stephen Moses, president, Center for Long-Term Care Reform, Inc.,, 206-283-7036,  

Kristen Kestner, media manager, 202-789-5212,  

Evans Pierre, director of broadcasting, 202-789-5204,