Bullet: Plain(s) Talk on
Medicaid and Long-Term Care
Thursday, November 2, 2006
LTC Comment: How
to save Medicaid and long-term care in Kansas, on the Great Plains, and
everywhere else. After the
*** WHAT'S THE DIFFERENCE? Story: "ORANGE CITY, Iowa -- A woman was sentenced Monday
to 10 years in prison for stealing her disabled father's inheritance and
disability payments. Sharon Ann Van Dorn, 43, of Orange City, pleaded
guilty in September to first-degree theft after an investigation found
she spent Social Security disability payments intended to pay for her
father's nursing home. Her father, Jeffrey Eppinga, received an
inheritance of about $60,000 in 2004, and Van Dorn spent that money as
well and didn't report the money to Medicaid authorities."
Read this story here.
Other than dotting legal "I's" and
crossing legal "T's," how does what this woman is going to
prison for differ from what Medicaid planning attorneys do?
The Balanced Budget Act of 1997 made it a crime, punishable by a
fine and incarceration, to recommend asset transfers to qualify for
Medicaid in exchange for a fee. That
law was deemed unenforceable after Congress repealed the "throw
granny in jail" provision in the Health Insurance Portability and
Accountability Act of 1996. But
it is still on the books and clearly shows the intent of Congress and
President Clinton at the time. ***
NH STAT YEARBOOK available on CD-Rom. Timely and comprehensive
statistical insights into the U.S. nursing home industry are now in
electronic format, on CD-Rom. Published
by Cowles Research Group, the Nursing Home Statistical Yearbook
is an annual digest of over 100 tables, charts and graphs gleaned from
the Center for Medicare and Medicaid Services' (CMS) databases.
Facility characteristics include payer mix, type of
certification, staffing, size, and survey deficiencies. Resident
characteristics include acuity levels and patterns of care. Data are
presented on a state-by-state basis and include trend data. For
research, advocacy, litigation, or public policy debate, the yearbooks
provide the only source of current, accurate data on both residents and
facilities. Yearbooks are
available for the years 2003 through 2005 on easy-to-use CD-Roms. Prior
years are available in book form. They can be ordered through the
METLIFE ALF SURVEY for 2006 has been posted to our "Long-Term Care
Cost Surveys" section in The Zone to make it easy for you to find
in the future. Find the
whole report here.
But here's the gist in case you missed it elsewhere.
living costs in the U.S. continue to rise, though moderately, according
to a new report by the MetLife Mature Market Institute. The private pay rate for an individual at an assisted living
facility, according to the 2006 MetLife Market Survey of Assisted Living
Costs, averaged $2,968 per month, or $35,616 yearly. That's up 2.2% or
$63 from 2005 and 17.6% from 2004. Rates range considerably by region
with North Dakota the lowest ($1,742 monthly) and the Bridgewater, New
Jersey area the highest ($5,197 monthly)." ***
LTC BULLET: PLAIN(S)
TALK ON MEDICAID AND LONG-TERM CARE
LTC Comment: Steve
Moses's article on Medicaid and long-term care in Kansas is republished
below with permission from Health Care News.
is The Heartland Institute's national monthly outreach publication for
free-market health care reform. The
Heartland Institute is a 501c3 charitable, nonprofit organization
devoted to discovering and promoting free-market solutions to social and
economic problems. Visit
Heartland at www.heartland.org.
Read Health Care News at http://www.heartland.org/Publications.cfm?pblId=2.
Find Steve's article in the November 2006 issue at http://www.heartland.org/Article.cfm?artId=19996.
article recounts findings and recommendations from a study conducted by
Moses and the Center for Long-Term Care Reform in Kansas with the
support and active participation of the Flint Hills Center for Public
Policy. The Flint
Hills Center, an influential think tank in Wichita, Kansas, is a dynamo
of analysis and activism on Medicaid.
Its adjunct scholars, including Matt Hisrich and Michael Bond of
the Buckeye Institute in Ohio and historian Greg Schneider, have
published dozens of op-eds, articles, and reports on Medicaid reform.
We particularly wish to thank Flint Hills Director George Pearson
for enthusiastically supporting this project and Dr. Schneider for his
work planning, participating in, and publicizing the study.
Flint Hills' long and detailed "Medicaid
Handbook," distributed to all state legislators and the media, is a
treasure chest of information, analysis and advice available at http://www.flinthills.org/content/view/37/1/.
The report described by the following article is at www.flinthills.org.
If your first thought is "What can I learn from
Kansas?," you have a very pleasant surprise coming on a whole range
of issues at www.flinthills.org.
Talk on Medicaid and Long-Term Care"
By: Stephen A. Moses
can a state cope with the growing cost of Medicaid long-term care? The
Flint Hills Center for Public Policy of Wichita, Kansas tackled that
question in a study I conducted for it in July 2006. The lessons we
learned--explained in "Plain(s) Talk on Medicaid and Long-Term Care
in Kansas"--apply to any state.
"Plain(s) Talk" conclusions and some quotes from the report
follow this summary.
most states, Kansas struggles to fund long-term care (LTC) through its
Medicaid program. Like Oregon and Washington, Kansas pushed hard to
reduce high-cost nursing home care and replace it with ostensibly
cheaper home- and community-based services (HCBS).
that strategy backfired. It made Medicaid more desirable, unleashed
pent-up demand for Medicaid-financed care, increased the problem of
Medicaid estate planning (artificial self-impoverishment to qualify for
Medicaid), and impeded demand for private financing alternatives such as
insurance (LTCi) and home equity conversion (HEC, e.g., reverse
Kansas' Medicaid program is sliding toward financial insolvency.
state should aggressively implement provisions in the Deficit Reduction
Act of 2005 (DRA) to discourage excessive dependency on Medicaid and to
encourage personal responsibility for and private financing of LTC. That
is, Kansas (and every other state) should quickly enforce:
the DRA's five-year transfer-of-assets look-back;
1: Medicaid's LTC and other medical services for the elderly place a
heavy strain on state finances, divert government resources from other
priorities such as children, and pose a fiscal challenge for the future.
increases of recent years in Medicaid funding are unsustainable for the
state," Kansas Senate President Steve Morris (R-Hugoton) said.
"In the 1960s Medicare was created by the federal government as a
safety net for seniors. Now state Medicaid programs ... are assuming a
large part of the financial burden for vulnerable seniors."
2: Generous and elastic Medicaid LTC eligibility criteria bode ill for
Kansas' ability to fund home-based and nursing home care in the future.
Medicaid LTC eligibility policy expert Jeanine Schieferecke told us,
"The general public is aware of Medicaid planning [artificial
self-impoverishment to qualify for Medicaid LTC benefits]. When my mom
came to me and asked about Medicaid planning, I knew it was big."
to identify the upper and lower ends of his firm's Medicaid planning
clientele, one elder law attorney said, "I have three cases sitting
on my desk right now; with $70,000 to $100,000 houses and pensions
around $2,000 per month. That's the lower end of the scale. At the upper
end, I have one with $450,000 in countable assets but no home
agreed: "My range is the same on the upper end. ... At the lower
end of the range would be a married couple in the $30,000 area who are
just terrified to deal with the state."
3: Kansas has cost-effectively evolved its LTC service delivery and
financing system toward less nursing home care and more home care (using
Medicaid's HCBS waivers), but future prospects for continued success are
Kansas Medicaid Director Scott Brunner, "One thing the [HCBS]
waivers do is create demand. People can live at home with support from
their family or go to [the] nursing home as a Medicaid entitlement, but
HCBS waivers create the option to get care and financial help from
Medicaid at home. So, there is not enough [Medicaid] money if everyone
4: Although operating a reasonably successful Medicaid estate recovery
program, Kansas is clearly not maximizing potential recoveries. To the
extent recoverable wealth remains unrecovered, Kansas Medicaid is
operating as "inheritance insurance" for heirs instead of as
an LTC safety net for people in need.
5: Home equity conversion is an enormous but largely untapped potential
funding source for LTC in Kansas that could substantially relieve fiscal
pressure on Medicaid and state taxpayers except that Medicaid exempts
the home and all contiguous property up to as much as $750,000.
reverse mortgage specialist said, "We're probably one of the last
states to get really involved [in reverse mortgages (RMs)]. At this
point in my experience, [using RMs to fund LTC] has come up only a
couple times. Medicaid is a given, so people don't worry about LTC."
6: Although quality affordable LTCi is available in Kansas, too few
people buy it--partly because of its cost and complexity, but mostly
because consumers do not perceive that LTC is a big financial risk for
them. In fact, they are right, because of the generous availability of
expert Claude Thau observed that Kansas' market share of annualized LTCi
premiums sold dropped 11 percent this year.
think it is reasonable to say Kansas was among the 10 states with the
largest drop," Thau said.
we also learned that a carrier dropped the LTCi plan for state employees
because of lack of participation.
LTCi agents we interviewed said, "[Medicaid planners are] very
strong here in Kansas. Potent competition. They run lots of commercials
on the radio: 'Do you have an Alzheimer's diagnosis? Then see an elder
law attorney. Come see us quick before you lose everything.' This
absolutely impairs the market for our product."
7: Kansas should implement, enforce, and publicize new federal rules and
guidelines from the DRA to restrict Medicaid LTC eligibility, discourage
Medicaid estate planning, and encourage private financing alternatives
such as HEC and LTCi.
report closes with this "Heartland Manifesto":
Kansas' public-assistance budget is limited. The state's first
responsibility is to take care of the truly poor and disadvantaged.
The middle income and well-to-do should pay privately for LTC to the
extent they are able without suffering financial devastation.
Homeowners who need LTC should pay for it privately by using their home
equity with the help of reverse mortgages.
Prosperous people who rely on public assistance for LTC should reimburse
the taxpayers before giving away their wealth to heirs.
Seniors and their heirs who wish to avoid such recovery from the estate
should plan ahead, purchase private LTC insurance, and pay privately for
care when the time comes.
Stephen Moses (email@example.com) is president of the Center for Long-Term Care Reform in Seattle.