 LTC Bullet: You Pay for California’s LTC Profligacy and Structural Racism Friday, August 25, 2023 Seattle— LTC Comment: California’s Medicaid program (Medi-Cal) says come one, come all for free LTC, sends the bill to federal taxpayers, and institutionalizes structural LTC racism. What’s happening, after the ***news.*** *** HELP us change LTC financing policy for the better. Whenever you see an article or report that says something like: “Only low-income people qualify for
Medicaid.” Forward the source to me (smoses@centerltc.com) or to Damon (damon@centerltc.com). We will contact the author, explain why those commonplace beliefs are false, provide evidence to back up our conclusion, offer correct information, recommend public policy solutions, and propose to become a source for the author’s future publications on LTC. With the Paragon Health Institute’s publication of our monographs “Long-Term Care: The Problem” and (soon) “Long-Term Care: The Solution,” the time is right again to address and correct misconceptions about LTC financing among reporters, analysts, and policy makers. Let’s fix long-term care once and for all. ***
LTC BULLET: YOU PAY FOR CALIFORNIA’S LTC PROFLIGACY AND STRUCTURAL RACISM LTC Comment: California is eliminating one of the last remaining reasons people have to plan privately for long-term care risk and cost. The state already lifted Medi-Cal’s countable asset limit from $2,000 to $130,000 in 2022. Effective January 1, 2024, the Golden State will eliminate the asset limit entirely. This change applies to people receiving LTC benefits in the community or nursing homes. It will add 18,000 new recipients without their having to spend down or prove their wealth. (McKnight’s Senior Living). Why should you care? After all, California is notorious for crazy public policies. (Have you been to San Francisco lately?) You may not have to pay for most of their well-intentioned, unintended consequences. But you are paying for this one. The way Medicaid (including Medi-Cal) works, the state puts up part of the program’s cost and the federal government pays the rest. For California this match rate is 50/50. So, for every wealthy Californian newly eligible for Medi-Cal LTC benefits, we federal taxpayers in New Mexico, Illinois, New York, etc., etc. are paying half. Surely the federal government will not stand for this fiscal inequity. But, no, the Centers for Medicare and Medicaid Services (CMS) approved the state plan amendment removing the asset limit, calling it a “first of its kind.” Will other states follow in California’s footsteps? Will yours? Maybe you’re thinking “Oh well, at least people have to be ‘low income’ before California can make me pay for their long-term care.” But, no again, the state has “no income limit” for “institutional / Nursing Home Medicaid,” although: “All of a beneficiary’s monthly income, with the exception of a Personal Needs Allowance of $35 / month, Medicare premiums, and a Spousal Income Allowance (if applicable), must be paid to the nursing home as a Share of Cost.” (American Council on Aging). Think of income as kind of a “deductible,” a small price for the asset rich to access government-funded LTC. Playing fast and loose with welfare-financed LTC benefits is nothing new for California. I documented many examples 12 years ago in Medi-Cal LTC: Safety Net or Hammock? On pages 25-28 of that report, check out the ways California ignored federal mandates from the Omnibus Budget Reconciliation Act of 1993 and the Deficit Reduction Act of 2005. You paid for all this “generosity” also. Medi-Cal’s Structural LTC Racism On average, Medicaid pays LTC providers less than the cost of care, roughly 70 percent of what private payers must contribute. Consequently, Medicaid often provides deficient care access and quality compared to what affluent private payers command. Financially underprivileged minorities tend to end up on Medicaid and in nursing homes that are more dependent on Medicaid than nicer, mostly private-pay skilled facilities or assisted living. Thus, Medi-Cal’s more favorable treatment of affluent people in terms of eligibility and access has led to charges of structural racism. According to an open access article in Health Affairs*: Structural racism in coverage and financing has created a two-tier system of racially segregated care in which minority people receive poorer-quality care.… Inequities in nursing home care provide a particularly vivid example.… Stark racial segregation in nursing homes persists today. Awful as that sounds, the full story is even worse. If Medicaid and Medi-Cal care is so poor, why would people who can afford to pay privately want to qualify for it? Elder law attorneys who specialize in “Medicaid planning,” the legal practice of artificially impoverishing affluent clients to qualify them for publicly funded LTC benefits, have a ready answer. Nursing homes are desperate for revenue because Medicaid (Medi-Cal) pays them so little. They will roll out the red carpet for anyone who can pay privately at rates half again as much as Medicaid pays. So lawyers advise clients to hold back enough “key money” to pay privately for a while. That’s how their upscale clients can get into the nicer facilities that accept only a few Medicaid recipients. Then after a short period paying privately, the attorney implements a plan to impoverish the client on paper by means of common legal steps, such as: to purchase unlimited exempt assets; set up a Medicaid Asset Protection Trust; buy a Medicaid-compliant annuity; or use other methods described here, while legally avoiding estate recovery. Voila. Another well-to-do person enters a rare, top-quality facility paid for by Medicaid. Once in, the placement is permanent: Keep in mind that, once you have been admitted to a Medi-Cal certified facility, you cannot be transferred or evicted simply because of a change from private pay to Medi-Cal payment status even when a (illegal) duration of stay contract has been signed. This applies while the Medi-Cal application is pending, as well. (CANHR, pps. 6-7) Unfortunately, poor people don’t have the key money to buy their way into the nicer nursing homes in this way. That’s why they end up in the less desirable places that are more likely to be featured in tabloid exposes of deficient care. Worse, the poor on Medi-Cal may be unable to access care in California at all. According to the California Advocates for Nursing Home Reform (CANHR): Over the past 5 years, one of the most disturbing violations of state and federal laws has been the increase in discrimination against Medi-Cal beneficiaries who need nursing home care. Call a nursing home and tell them that your mother, a Medi-Cal beneficiary, has dementia along with other medical issues and that her doctor has recommended a nursing home– good luck in finding a placement within 200 miles – or at all! … Nursing home discrimination against Medi-Cal beneficiaries and residents has become epidemic in California, and the state regulatory agencies do nothing to contain it. (Source: Medi-Cal Discrimination In Nursing Homes – Getting In Is Half The Battle) By making it even easier than it was already for affluent people to crowd out the poor from better LTC, Medi-Cal has exacerbated the problem of structural LTC racism which in fact afflicts Medicaid nationwide. If you want to know why these problems persist, read the Paragon Health Institute’s paper “Long-Term Care: The Problem.” If you want to know what to do about it, watch for “Long-Term Care: The Solution,” coming soon from Paragon and the Center for Long-Term Care Reform. * Ruqaiijah Yearby, Brietta Clark, and José Figueroa, “Structural Racism in Historical and Modern US Health Care Policy,” Health Affairs, vol. 41, no. 2 (2022). |