LTC Bullet: What is Medicaid For?

Friday, June 12, 2026

Seattle—

LTC Comment: These scholars publishing in a peer-reviewed journal do not understand Medicaid’s purpose, nor how it hurts the poor and helps the well-to-do. We explain after the ***news.***

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LTC BULLET: WHAT IS MEDICAID FOR?

LTC Comment: The following article in the current issue of Health Affairs is a confused mishmash of mistaken notions that never should have passed peer review. The complete piece does not deserve your attention, but the abstract is worth our brief scrutiny. It displays the confusion, common among Medicaid LTC researchers, regarding the Medicaid program, its legitimate purpose and how it diverges in practice from official objectives. Here’s the article, its abstract, and our line-by-line review.

“Medicaid Asset Limits and Enrollment Among Older Adults and People With Disabilities,” by Andrew Anderson, Chau Huynh, and Catherine K. Ettman, Health Affairs, 45, NO. 6 (2026): 708–715.

ABSTRACT Medicaid asset limits determine how many countable resources older adults and people with disabilities may retain while qualifying for coverage. Although intended to target benefits to those with the greatest financial need, these rules may discourage saving and create administrative barriers to enrollment. Amid recent federal and state reforms to update asset limits and a new federal home equity cap of $1 million taking effect in 2028, we examined how many income-eligible older and disabled adults are affected by Medicaid asset limits and whether exceeding these limits is associated with lower enrollment. Using nationally representative data for 2023, we estimated that among 6.2 million income-eligible adults not enrolled in Medicaid, 1.5 million (24.7 percent) exceeded their state’s financial asset limit and 387,525 (8.6 percent) exceeded the home equity limit. Regression discontinuity models indicated that exceeding financial asset thresholds was associated with lower enrollment among unmarried adults. Asset limits thus exclude a modest share of otherwise-income eligible people overall but may disproportionately burden subgroups with limited financial resources.

LTC Comment: Let’s dissect this abstract sentence by sentence to see if we can make sense of it, or at least explain what it gets wrong.

Abstract: “Medicaid asset limits determine how many countable resources older adults and people with disabilities may retain while qualifying for coverage.”

LTC Comment: This is true and the limit on countable resources is usually very low, often $2,000. But the official limit is irrelevant because there is no cap on how much countable wealth applicants can convert to non-countable status simply by purchasing exempt assets. Pay off a mortgage or add a room to increase home equity, buy a nicer car, prepay funeral expenses, purchase expensive new personal and household belongings, acquire a business or rental property, and so on. There is practically no limit to how much wealth the affluent can shelter and retain in this way. See “Medicaid’s $100+ Billion Leak for details.”

Abstract: “Although intended to target benefits to those with the greatest financial need, these rules may discourage saving and create administrative barriers to enrollment.”

LTC Comment: What a peculiar notion. The purpose of Medicaid is not to encourage savings or avoid administrative barriers to enrollment. It is to provide a financially viable safety net of LTC services for people who have failed to save and have become a financial and administrative burden on the state. Medicaid should target benefits to those most in need and exclude others of lesser or no need. These authors have Medicaid’s role upside down and backwards.

Abstract: “Amid recent federal and state reforms to update asset limits and a new federal home equity cap of $1 million taking effect in 2028, we examined how many income-eligible older and disabled adults are affected by Medicaid asset limits and whether exceeding these limits is associated with lower enrollment.”

LTC Comment: What kind of question is that? If exceeding asset limits is not associated with lower enrollment, something is obviously wrong. Otherwise, why set limits on assets in the first place? Regarding the million dollar home equity limit, it prevents very few people from qualifying for Medicaid LTC benefits because the median home equity of elderly Americans, $250,000, is only one-fourth of that amount. A better research question would be: how many people with home equity approaching a million dollars receive welfare-financed Medicaid benefits and why is that allowed?

Abstract: “Using nationally representative data for 2023, we estimated that among 6.2 million income-eligible adults not enrolled in Medicaid, 1.5 million (24.7 percent) exceeded their state’s financial asset limit and 387,525 (8.6 percent) exceeded the home equity limit.” 

LTC Comment: Yes, and so, what’s their point? Affluent people don’t qualify for Medicaid LTC benefits? If it were only that simple! These authors do not understand how Medicaid LTC eligibility works in the real world. Forget the low income and asset caps. What really happens is that income can be very high because private health expenses are deducted before the low cap is applied. Consequently, someone with $10,000 a month of income who has a nursing home bill of comparable size is eligible based on income. Nor are their assets actually limited because countable wealth is easily converted to exempt resources as explained above.

Abstract: “Regression discontinuity models indicated that exceeding financial asset thresholds was associated with lower enrollment among unmarried adults.”

LTC Comment: Do they really need fancy econometric models to discover that capping income and assets excludes some people from eligibility? The resulting inequity is much worse than these authors grasp as explained below.

Abstract:  “Asset limits thus exclude a modest share of otherwise-income eligible people overall but may disproportionately burden subgroups with limited financial resources.”

LTC Comment: Well, yes, of course. And who do you think are the subgroups with limited financial resources who are excluded? Answer. The poor, whom Medicaid was supposed to help first. Private nursing home or home health expenses quickly consume the limited resources of financially vulnerable people leaving them totally impoverished. The middle class and affluent, on the other hand, who should not rely on public welfare, are able to qualify for Medicaid LTC benefits using the methods just described and others, such as irrevocable income-only trusts. Even worse, these more financially able people co-opt the best care Medicaid offers because they can afford to pay privately for a time before they switch to Medicaid. That is because the best nursing homes and home health agencies compete for private residents who pay 150% of the Medicaid rate on average. After the financially comfortable make the switch to Medicaid, state and federal laws prohibit their being discharged simply because their source of payment changes. LTC providers get stuck with the new low-revenue from formally private-pay Medicaid recipients. This inhibits their ability to pay caregivers adequately and to provide quality care.

Closing LTC Comment: Is it clear now what is really going on? Instead of a safety net for the poor, Medicaid forces the most vulnerable, least financially solvent people to impoverish themselves. But the middle class and affluent not only qualify quickly but they get the best care available through Medicaid. Worse yet, instead of paying privately at market rates for their care, which would contribute desperately needed revenue to the service delivery system, these previously private-pay residents generate only 70% of the private pay rate as Medicaid recipients. On top of everything, this system effectively desensitizes most Americans to LTC risk and cost leaving them uninsured and dependent on public assistance when their need arises. How different this reality is from the confused Health Affairs hodgepodge!