In the United States, we discriminate in our delivery of health care based on the type of illness a senior has. If one has an illness like heart disease or cancer, Medicare provides comprehensive care. If one has a chronic illness like Alzheimer’s, Parkinson’s, ALS (otherwise known as Lou Gehrig’s disease), or Multiple Sclerosis, the government doesn’t help with most of the cost of your care unless you are impoverished and qualify for Medicaid.
However, until a comprehensive long-term care system for all Americans is in place, it is essential for Medicaid to continue its role as a federal-state program and continue to help pay for the long-term care needs of low and middle-income older individuals and individuals with disabilities. It is in this context that families needing long-term care services engage in financial planning to pay for those services.
Most families needing long-term care feel defeated by having to apply for a "welfare" program after years of working and saving. A colleague of mine from Illinois has stated that most middle-income seniors who turn to Medicaid for nursing home care are "people who are up against a wall because of a serious illness, who have never depended on a government handout in their lives.” Many are children of the Great Depression and are World War II veterans, our so-called "greatest generation." Most of them are women, who, after losing their husbands to the devastation of chronic illness, have to suffer the indignity of impoverishment and financial dependence on family or the government.
The bottom line is that our health care system penalizes people who have pursued the American dream, saved for retirement, and then get the wrong disease.
When seniors meet with me for long-term care planning, it is always a part of a larger planning process that examines the full range of long-term care options, issues and costs relevant to the client’s circumstances. For the clients who are implementing advance planning, I and many of my colleagues recommend long term care insurance as an option. Most often, the elder law attorney’s help is sought when the need for long-term care has already arrived and the senior is uninsurable. It usually involves spouses and children of a loved one needing nursing home care who have already been heavily invested in providing care to that person for an extended period. My clients’ goals typically include finding the best quality of health care for their loved one, supplementing the Medicaid personal needs allowance (typically $30 to $50 per month), and paying for non-covered Medicaid services and needs (e.g., dental care, hearing aides, eyeglasses, private duty nurse, clothing, books, flowers, etc.).
In response to the call to cut the deficit, elder law attorneys recommended changes to the Medicaid laws last year in order to tighten the rules which would save money, without hurting those who are already going through long-term care crises. We also supported expansion of the long term care insurance partnership program contained in the DRA and tax incentives for the purchase of long term care insurance. Now we should go back and repeal the most punitive changes of the DRA, such as the transfer start date and the lookback rule.
Under the DRA, making the asset transfer penalties more punitive by changing the transfer start date will mainly hurt seniors who are faced with horrific health and income security choices and who are acting in good faith. This has the practical effect of extending the penalty period for years beyond what it is now.
In addition, increasing the lookback period to five years will also punish seniors for everyday family transactions and poor recordkeeping. How many people maintain 5 years of financial records? Their records may not be available. How do we expect an elderly citizen (especially one with Alzheimer’s disease) to remember the purpose of a deposit or withdrawal that occurred many years ago? Failure to remember could result in a denial of necessary medical care.
The so called “Deficit Reduction Act” also seeks to punish the elderly, because of the rise of real estate values over the past decade. If home equity exceeds $500,000, the owner becomes ineligible for nursing home care. Our senior citizens don’t control real estate values. It is not appropriate to punish our seniors because our economy flourished and real estate values rose.
At the same time Congress works toward permanently repealing the estate tax for multi-millionaires and billionaires, the DRA endangers the elderly and people with disabilities who make gifts to help family members, churches, and charities. It also threatens the very homes that middle America has worked their entire lives to own and pass on to their children.
The real question raised by the so called “Deficit Reduction Act” is what has happened to our priorities. Have we allowed Medicaid expenditures to blind us to the contributions made by seniors to this nation? We now seek to punish them because they got old and sick. If we spend a lot on the long term care for our seniors, then we should do so gladly, because these are the people who took care of us, and now need us to take care of them. The medical care of our senior citizens is the last place we should look to reduce our growing budget deficit