Bullet: The DRA Bullets
Tuesday, January 9, 2007
LTC BULLET: THE
LTC Comment: Two Medicaid planners lament the DRA we praised and defended in 21 LTC Bullets last year. Their whining, our replies plus links to all the DRA Bullets, after the ***news.*** [omitted]
LTC BULLET: THE
LTC Comment: Attacks
on the Deficit Reduction Act's long-term care and Medicaid eligibility
provisions started early and still occur, although muted by the law's
Here's the latest from two prominent Medicaid
Michael Gilfix and Bernard A. Krooks, "Asset
Preservation and Long-term Care: Assault
in the Name of Deficit Reduction," Probate & Property,
Vol. 20, No. 6, November/December 2006, pps. 34-39, read it here.
Excerpts from the article with our comments follow.
After that, you'll find a list of 21 LTC Bullets
responding in detail to all the criticism lodged by opponents of the DRA.
objective of shifting greater responsibility for paying the cost of care
to elders is transparent. For example, DRA provisions mandate expansion
of long-term care insurance as a means of financing the cost of
long-term care." (p.
LTC Comment: Right,
the DRA was an evil plot by the insurance industry to sell more of their
product by yanking Medicaid away from poor people. That's so much nonsense.
First of all, while the insurance industry did support LTC
Partnerships, it did not advocate for the critical Medicaid eligibility
reforms. Second, the
purpose of the DRA Medicaid reforms was to protect Medicaid as a safety
net for the poor by preventing its overuse and abuse by affluent clients
of Medicaid planners like the authors of this article.
DRA places a punishing cap on the 'equity interest' an institutionalized
individual can have in a residence if it is to retain its exempt status.
That cap is $500,000, a figure so low as to strip elders of home
ownership protection in many parts of the nation. DRA § 6014. Each
state has the option of increasing this cap to as much as $750,000. In
the current political climate, few states are expected to take this
step." (p. 35)
LTC Comment: Medicaid
planners display their total lack of concern for the poor when they
advocate letting their affluent clients shelter even more than
half-a-million to three-quarters-of-a-million dollars in home equity.
Nothing in Medicaid policy does more to prevent responsible
long-term care planning than the program's continuing exemption of huge
amounts of real estate equity from the risks and costs of long-term
care. Just think what
Medicaid could do for the needy if it weren't being used as inheritance
insurance for the well-to-do.
agencies may deny ongoing eligibility, creating a difficult, challenging
circumstance for elderly nursing home residents and for the nursing home
itself. Facilities will then be deprived of a source of payment because
such elders will be without funds, yet suddenly deprived of Medicaid
eligibility because of illiquid home ownership interests." (p. 35)
LTC Comment: That's
ridiculous. Nursing home
residents with a spouse (or other exempt relative at home) aren't
affected by the home equity cap. Single
Medicaid recipients can sell their house or work out a private reverse
mortgage arrangement with heirs. If
they can still manage at home, they can use a commercial reverse
mortgage to help them stay there. Whatever
they do, by paying privately they'll get better access to higher quality
care across a wider range of LTC services.
And the nursing home or home care provider will get a higher
market rate of reimbursement than Medicaid would have provided.
DRA provision is unduly burdensome and unnecessary. Existing law
provides that each state Medicaid agency must establish a program to
obtain reimbursement from the estates of Medicaid recipients at the time
of their deaths. If an individual owns an exempt residence, a lien or an
estate claim would be asserted and the state would be repaid for
Medicaid dollars expended on her behalf. This approach, which avoids any
fiscal damage to the Medicaid program, dramatically enhanced the ability
of family members to raise money and save the family home."
LTC Comment: Don't
worry about exempting home equity on the front end because Medicaid will
grab it on the back end from estates?
This argument shows the Medicaid planners' cynicism and
hypocrisy. They know they
can charge clients $300 per hour to dodge Medicaid's estate recovery
"requirement" and they know that most states recover only a
small fraction of the wealth recipients have sheltered or divested.
Furthermore, these same characters and their trade association
(the National Academy of Elder Law Attorneys or NAELA) fought us as
aggressively over mandating estate recoveries in 1993 as they fought us
over the DRA this time around.
example, a couple’s combined monthly income is $2,500, in excess of
the $2,489 MMMNA [minimum monthly maintenance needs allowance]. If all
income is attributed to the community spouse, her CSRA [community spouse
resource allowance] could not be increased. If her institutionalized
spouse’s income is ignored, however, her income is so modest as to
justify an increased CSRA so that additional assets would generate
additional income that would be secured for her future. In some cases,
this could justify a modest increase in the CSRA. . . .
By depriving elders of this approach, modest levels of income
protection for truly needy elders are eliminated."
LTC Comment: Before
the DRA, lawyers could help their clients shelter hundreds of thousands
of dollars over and above the spousal impoverishment protection of up to
$101,640 (as of 2007). They
used the "asset first" strategy which the DRA has now
prohibited. They'd search
out the lowest possible interest on a CD and use that to justify
shifting extra assets from the ill spouse to the well spouse in order to
take the well spouse up to the monthly maintenance allowance.
It was a boondoggle for affluent clients and their lawyers that
was rightly eliminated by the DRA.
the DRA focuses on restricting access to Medicaid, it simultaneously
elevates the role of long-term care insurance. More specifically, it
calls for the expansion of programs that offer long-term care insurance
in conjunction with state-approved Medicaid programs."
LTC Comment: Finally,
they get something right. That's
exactly what the DRA did. But
now, check out their interpretation of this positive development.
a very large extent, passage of the DRA was an achievement by deeply
partisan politicians and the long-term care insurance industry.
Supporters of the DRA and others who attack attorneys who advocate for
the rights of America’s elders have successfully distracted Congress
from the real issue and the real culprit: the horrific and economically
unmanageable cost of long-term health care."
LTC Comment: If
you think everyone has a right to free long-term care at everyone else's
expense--and that Medicaid planners should get rich guaranteeing such a
benefit to only a lucky few--then you should agree with the authors of
this article. But if you
think Medicaid is best preserved as a safety net for the poor by getting
everyone besides the poor to take personal responsibility for their own
long-term care, then you belong on the side of the Center for Long-Term
Care Reform in this debate.
Here's our take on all the complicated DRA issues
in a series of 21 LTC Bullets on the Deficit Reduction Act.
LTC Bullet: LTC Demagogy Wednesday, December 7, 2005, http://www.centerltc.com/bullets/archives2005/589.htm: LTC Comment: Pearl Harbor Day is a good time to reveal a sneak attack on rational long-term care policy. (Critique of AARP's specious attack on the DRA.)
LTC Bullet: On
Asset Transfers, Charitable Giving and Nursing Homes, Tuesday, January 10, 2006, http://www.centerltc.com/bullets/archives2006/600.htm:
LTC Comment: Concerns that new Medicaid eligibility rules pending final
passage in Congress could hurt charitable giving and nursing homes'
finances are understandable but mistaken.
LTC Bullet: Opponents
of Medicaid Reform Advocate Reverse Robin Hood Policies
Friday, January 20, 2006, http://www.centerltc.com/bullets/archives2006/603.htm:
LTC Comment: Profiteers on the status quo are mobilizing to stop Medicaid
reform. Fight back!
LTC Bullet: LTC
January 24, 2006, http://www.centerltc.com/bullets/archives2006/604.htm:
LTC Comment: Medicaid planners and their academic and media enablers are
talking out of both sides of their mouths:
asset transfers are rare but preventing them will devastate
seniors. Say, what?
LTC Bullet: Georgetown,
GAO and Kaiser: The Bermuda
Triangle of Good LTC Policy Wednesday,
January 25, 2006, http://www.centerltc.com/bullets/archives2006/605.htm:
LTC Comment: LTC doubletalk is not the exclusive province of Medicaid
planners and AARP lobbyists. Otherwise
often reliable analysts get long-term care policy wrong too.
LTC Bullet: As
LTC Climax Approaches, CBO Estimates Savings
Monday, January 30, 2006, http://www.centerltc.com/bullets/archives2006/606.htm:
LTC Comment: With the critical Deficit Reduction Act vote coming day after
tomorrow, the future of long-term care financing hangs in the balance.
LTC Bullet: LTC
Showdown Tuesday, January
31, 2006, http://www.centerltc.com/bullets/archives2006/607.htm:
LTC Comment: One day before the historic vote on Medicaid and long-term
care financing, here's a summary of why it matters in five sentences.
Bullet: LTC Embed--Report
from the Front Wednesday,
February 1, 2006, http://www.centerltc.com/bullets/archives2006/608.htm:
LTC Comment: Over-the-top Medicaid planner maxes political contributions
to pliant Republican Congressman who opposes DRA's Medicaid reform.
LTC Bullet: LTC
Victory Thursday, February
2, 2006, http://www.centerltc.com/bullets/archives2006/609.htm:
LTC Comment: The Deficit Reduction Act of 2006 passed yesterday curbing
Medicaid abuse and unleashing LTC Partnerships. Celebrate? Sure.
But don't take a victory lap until you consider what can go
LTC Bullet: LTC
Insanity Tuesday, February
14, 2006, http://www.centerltc.com/bullets/archives2006/612.htm:
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?
LTC Bullet: The
Plot Thickens Thursday,
February 16, 2006, http://www.centerltc.com/bullets/archives2006/613.htm:
LTC Comment: A NAELA Medicaid planner in Alabama has sued the federal
government to enjoin enforcement of the Deficit Reduction Act of 2005.
LTC Bullet: The
Brave New World of LTC Financing Thursday,
February 23, 2006, http://www.centerltc.com/bullets/archives2006/615.htm:
LTC Comment: What hath Congress wrought?
The brave new world of LTC financing since the Deficit Reduction
Act of 2005.
LTC Bullet: "Analysis:
Congress Strengthens Long-Term Care"
Thursday, March 9, 2006, http://www.centerltc.com/bullets/archives2006/617.htm:
LTC Comment: Read Steve Moses's article on Medicaid reform, LTC
Partnerships, and the Deficit Reduction Act in Health Care News.
LTC Bullet: NAELA's
New Nadir Thursday, March
16, 2006, http://www.centerltc.com/bullets/archives2006/619.htm:
LTC Comment: Medicaid planners, as represented by their trade association
NAELA, have sunk to a new low.
LTC Bullet: The
Deficit Reduction Act of 2005 Wednesday,
April 5, 2006, http://www.centerltc.com/bullets/archives2006/624.htm:
LTC Comment: The DRA is the most important legislation affecting long-term
care service delivery and financing in over a decade. Find out what it all means.
LTC Bullet: Who
Still Gets Medicaid LTC Without Spending Down?
Thursday, April 20, 2006 http://www.centerltc.com/bullets/archives2006/628.htm:
LTC Comment: Do you think Medicaid requires impoverishment?
Think again. Even after the Deficit Reduction Act, the vast majority of
seniors who need long-term care can get it from Medicaid without
spending down their own assets for care.
Explore the evidence and the consequences.
LTC Bullet: LTC
Embed Report from the Policy Front in Hagerstown, Maryland
Monday, July 10, 2006 http://www.centerltc.com/bullets/archives2006/643.htm:
LTC Comment: Medicaid planners have unfairly attacked members of Congress
for their votes in favor of the DRA '05.
We fight back in their behalf at a hearing this morning.
LTC Bullet: Untangling
the Deficit Reduction Act Wednesday,
July 26, 2006, http://www.centerltc.com/bullets/archives2006/646.htm:
LTC Comment: When Congress passes and the President signs a law, the hard
work of interpreting and implementing it begins.
See what a struggle that is for the DRA's complicated changes to
Medicaid and long-term care.
LTC Bullet: Bravo
CMS! Monday, July 31, 2006,
LTC Comment: Implementation
of the DRA '05 probably seems agonizingly slow to most observers.
But to those of us in the public policy trenches for decades, new
CMS guidance to states on long-term care partnerships and Medicaid
eligibility arrived in record time.
Bullet: The Long-Term Care
DRAma in Congress Friday,
September 1, 2006, http://www.centerltc.com/bullets/archives2006/653.htm:
Comment: Moses defends
Maryland congressman's vote for the Deficit Reduction Act before a
LTC Bullet: What States Should Do About the DRA, LTCi and HEC Tuesday, October 3, 2006, http://www.centerltc.com/bullets/archives2006/655.htm: LTC Comment: New report by Steve Moses from the Flint Hills Center for Public Policy is a guidepost for states on DRA implementation, Medicaid savings, and private LTC financing growth.