LTC Bullet:  LTC Insanity 

Tuesday, February 14, 2006 


LTC Comment:  Like the persistent paramour in "Fatal Attraction," mindless opposition to the Deficit Reduction Act just won't die.  Is the DRA the law of the land or not?    Details after the ***news.***  Happy Valentine's Day. 

*** TOLD YOU SO. ran a story February 9 titled "Remaking the Medicaid rules:  New law governing coverage and those eligible is expected to steer more adults to long-term care policies."  Read it,0,1316278.story?coll=ny-business-headlines.  Here's a quote:  "Jesse Slome, director of the American Association for Long-Term Care Insurance, predicts the new, tougher provisions will double the number of long-term care insurance policies to 14 million in five years, the 'most significant' impact of anything that's come down the pike in years for long-term care insurers.  'It has not been a level playing field,' said Slome, whose group has about 2,000 members nationwide.  'Up until now, you had so many Medicaid loopholes.  Medicaid planning gave middle income and affluent people the ability to have the government pay for them to leave an inheritance for their children.'"  Just as LTC Bullets predicted, the center of gravity in long-term care financing is shifting from abuse of welfare to responsible financial planning.  But our job isn't done yet.  See the next item. *** 

*** LONG-LIVED LOOPHOLES.  The Sunday (2/12/6) New York Times ran a story about the new half-million dollar limit on Medicaid's home equity exemption:  "New Medicaid Rules on Home Ownership,"  The Times' story quoted no one except Medicaid planning attorneys, two of the three of whom were members of the National Academy of Elder Law Attorneys.  (NAELA is the Medicaid planners' trade association.)  Here's a sampling of their comments:  "Linnea Levine, a [NAELA] lawyer in Harrison, N.Y., said that homeowners, including those with more than $500,000 in equity, can use a life estate to protect the home while remaining eligible for Medicaid."  "Ralph M. Engel, a Manhattan lawyer, said that another option for a homeowner with more than $500,000 in equity would be to take out a mortgage to reduce that equity.  And what should one do with the proceeds of that mortgage?  'You could give it to your kids and hope you won't need Medicaid in the next five years,' he said. 'Or you could take a trip around the world.'"  It seems New York's omnipresent practitioners of artificial impoverishment will continue to gorge on filthy lucre from Medicaid if public officials and tax payers let them.  We must stay the course. ***  

*** NEW MEXICO MOVES ON MEDICAID.  The sense of the Senate "memorial" in New Mexico which we highlighted in "LTC Bullet:  State Moves Toward Private LTC Financing Alternatives," Tuesday, February 7, 2006 passed on a vote of 42 to nothing.  The memorial urges consideration of LTC insurance and home equity conversion to relieve Medicaid's fiscal woes and proposes a study and conference toward that end.  Members of the Center can find our Bullet on New Mexico's progress in The Zone at *** 

*** NOT A MEMBER?  Join the Center for Long-Term Care Reform now so you don't miss another minute of our constant daily coverage of long-term care financing policy.  Sign up at or contact Damon at 206-283-7036 or  He will Zone you in immediately.  To schedule a conference call with Steve Moses about the Deficit Reduction Act and how to capitalize on its provisions to protect more Americans from the risk and cost of long-term care, call or email Steve at 206-283-7036 or *** 



LTC Comment:  Faithful reader, if you've been with us from the start, you know what a tortuous route the Deficit Reduction Act of 2005 took on its way to enactment.  

Months of hearings in the House and Senate, followed by edge-of-your seat votes in both chambers, leading to a miracle in the conference committee that actually strengthened the bill, on to passage in both houses by a hair's-breadth only to have the House forced to re-vote because of a technical change in the Senate version, and at long last passage in final form by two votes in the House, leading to a signing into law by the President. 

Done deal?  We all thought so.  But now there may be a glitch.  According to media reports of dubious accuracy, a clerk accidentally changed a number in the Senate bill after it passed the Senate, but before it passed the House.  If that's true, for the second time the versions passed by the Senate and House were not identical.  And for a second time, the difference has nothing to do with the meritorious Medicaid and LTC Partnership provisions that interest us most.  Déjà vu all over again, except that this time President Bush signed the bill. 

According to the Constitution, bills must pass both houses of Congress before the President can sign them into law.  That's always been interpreted to mean they must pass both houses in identical form, but the Constitution doesn't say so explicitly.  Here's what the Constitution does say:  

"Every Bill which shall have passed the House of Representatives and the Senate, shall, before it become a Law, be presented to the President of the United States; If he approve he shall sign it, but if not he shall return it, with his Objections to that House in which it shall have originated . . .."  (Article 1, Section 7) 

Evidently, clerical errors have occurred before but they were always caught and corrected before the White House signing ceremony.  Not this time according to reports.  But are the reports accurate?  

We've also heard from a reliable source that the clerical glitch may have occurred after both Houses passed the law in identical form but before it went to the President for signature.  If that's true, it would seem a simple resigning by the President would solve the problem. 

But even if a jot or tittle was off kilter in the versions passed by Congress, one can reasonably ask "So what?"  It was obviously just a clerical mistake by some poor Congressional staff functionary who is probably mortified by his or her highly publicized boo-boo.  What sort of perverted soul would rub salt in a wound like that by throwing the whole government into turmoil just to cause trouble? 

According to National Public Radio, people and organizations are standing in line eager to do just that.  "If Congress doesn't revote . . . there is a long line of people who could sue, starting with those affected by the billions of dollars in cuts to Medicare and Medicaid, said Sara Rosenbaum, a law professor at the George Washington University School of Public Health."  Never mind that the purpose of those "cuts," actually slight reductions in the their rate of growth, is to save those health care entitlement programs from inevitable financial collapse otherwise.   

You can read and/or listen to NPR's coverage of this fiasco at  

So, what now?  Could the profiteers on poverty who oppose the historic reforms in the Deficit Reduction Act actually find a judge willing to enjoin enforcement of this law on such technical, legalistic grounds?  Answer:  probably yes, most likely in some backwater district of the ninth Circuit.   

At the very least, 5000 Medicaid planning attorneys won't rest until they locate a promising plaintiff and a flexible judge willing to initiate such mischief.  Well, that's what we get for passing legislation that saves Medicaid for the poor by reducing the lucrative livelihood of well-to-do Medicaid planners.   

Is there a silver lining?  Sure.  This will probably all blow over quickly.  Even if the passed versions were not identical and even if the dark side sues and even if an appeals court agrees, odds are the Supreme Court would quickly set a constitutional issue like this straight.   

In the meantime, everyone who matters is proceeding on the assumption that the DRA is law.  That holds for the Congressional leadership, for the Centers for Medicare and Medicaid Services (CMS), the federal agency charged with enforcing the law, and for your Center for Long-Term Care Reform. 

Political reactionaries fighting to preserve Medicaid planning abuses should also realize that the 2007 budget process is well underway.  Members of Congress may not appreciate their efforts to undermine the Deficit Reduction Act which just resolved so many key issues, albeit to their perceived detriment.   They have much at stake this year too.    

"LTC Bullets" is confident these new complications will all work out in the end.  But it never ceases to amaze us how viciously the opposition will fight to defend the corrupt status quo--Medicaid as golden goose for the affluent instead of safety net for the poor.  

So, we must endure one more slash at the DRA from the zombies of political obstructionism.  Patience and reason will prevail in the long run.  But keep a hardwood stake and a heavy mallet ready just in case. 

We'll keep you posted on developments as they unfold.