Bullet: Kaiser Cover-Up Continues
Thursday, April 27, 2006
LTC Comment: Urban Institute "scholars," aided and abetted by the Kaiser Family Foundation, employed an underhanded straw man argument in the foundation's latest unsuccessful attempt to debunk the impact of Medicaid planning abuse. More after the ***news.*** [omitted]
LTC BULLET: KAISER
LTC Comment: My
favorite logic text defines the straw man logical fallacy as one which
"occurs in debate when someone distorts an opponent's position, usually
stating it in an oversimplified or extreme form, and then refutes the distorted
position, not the real one." (David
Kelley, The Art of Reasoning: Second
Expanded Edition, W.W. Norton & Company, New York, 1994, p. 151.)
Even more intellectually dishonest than the simple straw
man fallacy, is a version I call the "underhanded" straw man argument.
That's when someone distorts an opponent's position, refutes the
distorted position instead of the real one, and doesn't even have the
professional courtesy to identify the opponent.
That leaves readers unable to compare and contrast the underhanded straw
man argument to the real argument it misrepresents.
A new issue paper by Urban Institute policy advocates
Timothy Waidmann and Korbin Liu titled "Asset Transfer and Nursing Home
Use: Empirical Evidence and Policy
Significance," published April 2006 by the Kaiser Family Foundation at http://www.kff.org/medicaid/upload/7487.pdf,
employs the underhanded straw man fallacy with impunity.
Here's the story.
Waidmann and Liu attack a simplistic argument while
ignoring the carefully reasoned case they distort and failing even to cite the
legitimate argument's source. That's
the very definition of the underhanded simple straw man fallacy.
The straw man argument Waidmann and Liu employ is that
"many 'well-to-do' elderly Americans transfer assets to gain Medicaid
coverage for nursing home care . . . [and thus] distort the intent of the
Medicaid program and unnecessarily inflate public spending."
On the face of it, that statement is true, but it is only a
small part of the case against overutilization of Medicaid and Medicaid estate
planning. Therefore, even if the
authors refuted the straw man argument they pose, which they don't, the real
argument would be unaffected.
We have a lot, and could soon have more than enough, hard
evidence to support the statement that asset transfers to qualify for Medicaid
are commonplace. Last week's "LTC
Bullet: Spousal Refusal:
Who Wins? Who Loses?"
documented nine cases of millionaires using a single asset transfer gimmick
("spousal refusal") to divest hundreds of thousands of dollars in just
one county of a single state. Thousands
more examples of asset transfers to qualify for Medicaid could easily be
identified by proper scholarly methods, i.e. by investigating a valid random
sample of actual Medicaid long-term care cases and projecting to a reasonable
estimate of the true incidence and cost of the practice.
The Urban Institute and the Kaiser Family Foundation have sufficient
financial resources to undertake this much-needed research, but they don't.
Instead, Waidmann and Liu equivocate on the word
"many," employ a useless research strategy, and commit a serious error
of fact and interpretation.
They equivocate on the word "many" by implying
that their unnamed interlocutor believes asset transfers are the only problem,
that such transfers are rampant across the whole population of Medicaid
long-term care recipients and that asset transfers alone cost Medicaid many
billions of dollars. Certainly,
I've never made such a specious case, and I'm unaware of anyone who has.
As I've explained so many times here and elsewhere, asset
transfers and other fancy Medicaid planning techniques are only the "tip of
the iceberg." The real problem
is that most elderly Americans qualify for Medicaid even without sheltering or
divesting assets and without spending their resources for long-term care.
Last week's other LTC Bullet, titled "Who Still Gets Medicaid
Without Spending Down" at http://www.centerltc.com/members/ltcbullets/628.htm,
explains in detail how that happens. Medicaid's
income and asset limits are so generous that only the top 10 percent or so of
seniors even need to transfer assets, or engage in other, more sophisticated
methods of Medicaid planning, to qualify.
So, when Waidmann and Liu conclude that the "pursuit
of transferred assets would recover only about 1 percent of total Medicaid
spending for long-term care," I say "Wow!"
That's over a billion dollars. I
think the real figure is much higher for reasons explained below.
But when opponents of my position try to defeat it by misrepresenting it
and yet they still concede savings in ten figures from pursuing asset transfers
alone, that is a huge victory for our side indeed.
let's get down to brass tacks. The
research methodology Waidmann and Liu used for their paper is worthless for
their present purpose. The
"Health and Retirement Study (HRS)" on which their findings are based
is derived from self-reporting by study participants and their families.
Although the surveyors carefully examine, cross-check and benchmark the
data they collect, no independent research or verification is done with outside
sources to determine whether or not all asset transfers are reported and
reported in the correct amount.
know from examining many hundreds of actual public welfare and Medicaid case
records since the early 1970s that people frequently fail, both unintentionally
and intentionally, to disclose all relevant information about their income,
assets and wealth transfers when they apply for public assistance.
The only way to get the whole truth is to query financial institutions
and public records on a valid random sample of cases and project reasonable
estimates of the total incidence and amounts of asset transfers and other
artificial self-impoverishment techniques therefrom.
Survey data of the kind employed for this paper is worse than useless
because it undeservedly implies credibility, reliability and accuracy without
Waidmann and Liu make a serious error of fact and interpretation.
They say "approximately 43% of all nursing home residents eventually
become Medicaid eligible, while the balance remains 'always private pay.'"
The truth is very different.
any given time, roughly two-thirds (65.7 percent) of all nursing home residents
in the United States, and the vast majority of all expensive long-stayers, are
covered by Medicaid. Another 12.4
percent are covered by Medicare. Other
payers, including the Department of Veteran's Affairs (DVA), major medical
insurance, private long-term care insurance AND finally private payers account
for only 21.8 percent of all payers. (Source:
Reimbursement and Research Department of the American
Health Care Association, The State Long-Term Health Care Sector Data Resource
Book, 2005, "Nursing Facility Patients by Payor - Percent of
Patients," p. 92, based on CMS
OSCAR Current Survey, June 2005.) The
only way the authors' statement that 43 percent of nursing home residents
eventually qualify for Medicaid and the rest remain private pay could be true is
if they count everyone who spends even one day in a nursing home and they
consider Medicare and the DVA to be "private payers."
Neither such assumption makes sense because the first one illogically
mixes expensive long-stayers with inexpensive short-stayers and the other one
corrupts the meaning of private pay. Any
conclusions these authors reach based on such faulty assumptions and mistaken
reasoning are spurious.
me make an invitation and offer a challenge.
I invite the authors of this latest paper, and those of the dozen or so
others of the same ilk published in the past year by the multi-million dollar
Kaiser Family Foundation, to read and I challenge them to refute a serious
articulation of the argument that over-utilization of Medicaid is undermining
the program and driving up costs unnecessarily.
It's titled "Aging America's Achilles' Heel:
Medicaid Long-Term Care" and you'll find it on the Cato Institute's
website at http://www.cato.org/pub_display.php?pub_id=4376.
does anyone really believe these advocates of public financing posing as
objective scholars have not read that paper already?
Of course they have. Instead
of confronting its arguments frontally, however, they would rather ignore the
real arguments and attack a distorted, and un-cited position that is easier to
defeat. Even at that, they failed.
that is precisely why we're winning the big public policy battles--witness the
Deficit Reduction Act--with our tiny war chest, augmented by strong evidence and
logic, in spite of their specious sniping, funded by deep pockets.