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From Governing’s The Promise of Coverage
Medicare does not provide long-term care for the chronically debilitated, but Medicaid does. And that can be a problem. There is concern that, in an effort to make sure they have access to care, some elderly citizens are artificially impoverishing themselves to qualify for Medicaid. While it is illegal for someone to give away money for the purpose of making himself eligible for Medicaid, there are huge loopholes, and there are attorneys and financial planners who specialize in what is sometimes called “Medicaid estate planning.” The effect of this, asserts Stephen A. Moses, president of the Center for Long-term Care Financing, “is that people with very substantial income and assets qualify routinely for Medicaid.” How routine and how substantial a problem this is for Medicaid is uncertain. But several states are trying to fight the problem and help plan for the financial burdens of long-term care by encouraging citizens — middle-aged and older — to invest in an alternative: long-term care insurance. Right now, under 10 percent of the elderly, and a smaller portion of middle-aged adults, have purchased private health insurance to cover their long-term care. That said, the number of people buying long-term care insurance is increasing, and the policies themselves are much improved. More policies are now comprehensive and have a better balance of institutional and home-based coverage. States are also coming up with assistance. In 2002, about half the states offered some form of tax incentive for people who buy long-term care insurance. And some states, such as Minnesota and North Carolina, include long-term care insurance benefits for their own employees. “They get quality coverage for their constituency, and they serve as a role model for other employers,” says Mark Meiners, associate director of the University of Maryland Center on Aging. Four states have been particularly aggressive in pushing long-term care insurance. California, Connecticut, Indiana and New York started programs in the early 1990s that offered double protection for those who buy the insurance. Someone who purchases, say, $100,000 of insurance is able to shield $100,000 in personal assets. That means that after the $100,000 in insurance is used up, the shielded assets are not counted against eligibility requirements for Medicaid. Congress barred other states from instituting similar programs in 1993 but grandfathered these four in. The Bush administration has indicated an interest in revisiting this approach. Copyright © 2004, Congressional Quarterly, Inc. Reproduction in any form without the written permission of the publisher is prohibited. Governing, City & State and Governing.com are registered trademarks of Congressional Quarterly, Inc. |
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nsurance for long-term health care has yet to make it into the mainstream of financial planning. Most Americans carry health insurance that covers them, whatever their age may be, in case of a heart attack or the onset of diabetes — but not if they come down with Alzheimer’s or suffer the aftereffects of disabling events that often occur with the onset of old age.