Tuesday, July 12, 2005
Estate recovery key to Medicaid solvency
["The Legal Responsibility of Adult Children to Care for Indigent Parents," NCPA Daily Policy Digest, 12 June 2005.]
A new report from The National Center for Policy Analysis highlights the importance of states following through on their responsibility to see that taxpayers are not left to foot the bill of those who have assets but take advantage of Medicaid services. The other side of the coin, of course, is that this is not a long-term solution. Ultimately, individuals need to take greater responsibility for their needs later in life whether that be through savings, new tools such as HSAs, or simply using assets to cover expenses:
Less than one-third of older Americans are able to pay for two or three years of nursing home care, according to a recent study published by AARP. As baby boomers who have failed to adequately prepare for old age retire, there will be fewer seniors with the means to pay for such care says legal researcher Matthew Pakula.
Medicaid, the joint federal-state health care program for the poor, is the major funder of long-term care in the United States. For example, when seniors in nursing homes exhaust limited Medicare benefits, those who have not purchased long-term care insurance must pay for their care themselves. If they consume their financial assets and their incomes are low enough, they qualify for Medicaid coverage.
- Long-term care cost Medicaid $60 billion in 2002, according to Centers for Medicare and Medicaid Services data.
- Federal and state laws allow Medicaid to seek reimbursement from recipients’ estates, and under current laws the states now collect $350 million a year, according to the AARP.
Unfortunately, most Medicaid recipients have no estate when they die, and an increasing proportion of those who receive assistance are sheltering their financial assets to meet the definition of poor under the Medicaid statutes. So while their children receive the benefit of these assets, taxpayers pick up the tab for their care, says Pakula.
More than 30 states have statutes that make adult children responsible for the care of indigent elderly parents, but the laws are seldom enforced. Enforcement of filial responsibility statutes could discourage much of this asset shifting, says Pakula.
[Stephen Moses, "Nursing home system in need of reform," The Pittsburg Morning Sun, 22 May 2005.
Matthew Hisrich, "First Things First: Kansas Medicaid Program Must Get its House in Order Before Expanding Home-based Care," The Flint Hills Center, 20 August 2004.]
["The Legal Responsibility of Adult Children to Care for Indigent Parents," NCPA Daily Policy Digest, 12 June 2005.]
A new report from The National Center for Policy Analysis highlights the importance of states following through on their responsibility to see that taxpayers are not left to foot the bill of those who have assets but take advantage of Medicaid services. The other side of the coin, of course, is that this is not a long-term solution. Ultimately, individuals need to take greater responsibility for their needs later in life whether that be through savings, new tools such as HSAs, or simply using assets to cover expenses:
Less than one-third of older Americans are able to pay for two or three years of nursing home care, according to a recent study published by AARP. As baby boomers who have failed to adequately prepare for old age retire, there will be fewer seniors with the means to pay for such care says legal researcher Matthew Pakula.
Medicaid, the joint federal-state health care program for the poor, is the major funder of long-term care in the United States. For example, when seniors in nursing homes exhaust limited Medicare benefits, those who have not purchased long-term care insurance must pay for their care themselves. If they consume their financial assets and their incomes are low enough, they qualify for Medicaid coverage.
- Long-term care cost Medicaid $60 billion in 2002, according to Centers for Medicare and Medicaid Services data.
- Federal and state laws allow Medicaid to seek reimbursement from recipients’ estates, and under current laws the states now collect $350 million a year, according to the AARP.
Unfortunately, most Medicaid recipients have no estate when they die, and an increasing proportion of those who receive assistance are sheltering their financial assets to meet the definition of poor under the Medicaid statutes. So while their children receive the benefit of these assets, taxpayers pick up the tab for their care, says Pakula.
More than 30 states have statutes that make adult children responsible for the care of indigent elderly parents, but the laws are seldom enforced. Enforcement of filial responsibility statutes could discourage much of this asset shifting, says Pakula.
[Stephen Moses, "Nursing home system in need of reform," The Pittsburg Morning Sun, 22 May 2005.
Matthew Hisrich, "First Things First: Kansas Medicaid Program Must Get its House in Order Before Expanding Home-based Care," The Flint Hills Center, 20 August 2004.]
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