Nursing Home Costs Drive Many Families Into Poverty

Douglas Lewis, a retired tanker captain, and his wife, Florence, once lived comfortably on an income of $1,746 a month from his oil company pension and Social Security. But when Alzheimer’s disease forced him into a nursing home, the state of Maine demanded almost all of the family’s money to help pay the bills, leaving Mrs. Lewis with a $325 monthly living allowance.

“Even in Maine, you can’t live on $325 a month,” said Timothy Vogel, the lawyer who is representing her in a lawsuit against the state.

Long before her husband’s death in 1986, when the disease had wasted his 6-foot-5, 260-pound frame to 90 pounds, Florence Lewis had become a “nursing home widow,” one of the thousands of middle-income persons sentenced each year to fall into poverty.

Now, however, Congress is preparing to help spouses such as Florence Lewis avoid penury. The House and Senate have approved bills allowing the healthy spouse at home to keep a higher level of income and still qualify for the federal welfare program, Medicaid, which pays nursing home bills.

At the same time, advocates for the elderly are mobilizing to win even broader protections for elderly spouses, and are increasingly optimistic that future changes will let the spouses more fully keep their life styles without huge sacrifices.

For the aged in America today, the nursing home, not the hospital or the doctor’s office, has become the true scene of financial catastro phe. With improvements in health care helping more Americans live to an advanced age, 23% of those over 85 are now spending their final years in a nursing home.

But neither Medicare, the health care program for the elderly and handicapped, nor private insurance will help in any significant way with nursing home bills, which average $22,000 a year.

That leaves Medicaid, and because the joint federal-state program is designed for the poor, the states now insist that a family exhaust all savings except for $1,800 and then assign virtually all income to the nursing home. The healthy spouse at home may keep a severely limited share of income, which ranges from $162 a month in Delaware to $640 in Alaska.

California’s Medi-Cal program is relatively generous, because it is linked to community property laws, allowing the spouse to keep half the savings accounts and half the family income, with a minimum level of $534 monthly.

The new plans before Congress would establish a uniform standard for the nation.

Such a standard would “be of particular benefit to older women, who, in the current generation at risk of nursing home care, have often worked at home all their lives and have little income other than their husbands’ pension benefits,” said a report by the House health subcommittee that developed the House legislation.

The House bill would permit the healthy spouse to keep $925 a month in family income, while the Senate bill would assure $750. A compromise is to be worked out in a House-Senate conference as part of major revisions in the Medicare system.

The new standard is expected to pass easily, and win the approval of President Reagan, because it would not impose any additional cost on the government--it would be funded entirely through increases in the premiums that senior citizens pay for Medicare coverage.

But some in Congress and in the powerful senior citizens lobby already are anticipating the next step--expanded government funding to keep spouses out of the welfare system entirely--in response to the emergence of nursing home costs as a ripe political issue.

Despite concern over aggravating the federal deficit, “It’s no surprise that long-term care has become a major issue in the 1988 presidential campaign,” said Iowa Sens. Tom Harkin, a Democrat, and Charles E. Grassley, a Republican, who have appeared in television commercials pressing the issue prior to the state’s key presidential caucus vote.

“All across the country, families are facing deep emotional stress and financial crises. . . . It isn’t a Democratic issue or a Republican issue. It’s an American family issue that sooner or later affects nearly every American family,” they said in a joint statement recently.

Among the presidential contenders, Republican Sen. Bob Dole of Kansas and Democratic Sen. Paul Simon of Illinois have already made pledges of support for improved benefits a high-profile part of their campaigns, and several other candidates also have signaled their backing.

Vote Campaign

The 28-million-member American Assn. of Retired Persons, which is calling for a broad new federal long-term care benefit, is running a costly get-out-the-vote campaign in both Iowa and New Hampshire. AARP does not endorse candidates, but it does supply its members with a voters’ guide featuring candidates’ views on major senior citizens issues.

The proponents are touching on the deep chord of fear of financial catastrophe among the middle class.

According to the latest federal statistics, the elderly had to spend about $13 billion from their own pockets in 1984 for nursing home care. By contrast, they had to pay personally only $1.7 billion for hospital stays and $9.4 billion for doctors’ bills, both broadly covered by Medicare.

On average, those who required nursing home care wound up staying 456 days, with bills of $1,000 to $2,000 a month.

For many seniors who have lived comfortable middle-class lives, with their own homes and with financial nest eggs put away for retirement, the nursing home episode has been a quick ticket to poverty. Medicare pays only for skilled nursing care--cases in which a person suffered an acute illness and is receiving rehabilitation or therapy to recover.

Those rendered helpless by strokes or Alzheimer’s disease, who instead need long-term custodial care, are left to the grim regime of Medicaid, with its requirements for exhaustion of virtually all assets. Some families have supplemental insurance policies, but most of those also sharply restrict custodial care. Fewer than 500,000 persons are covered by insurance with true nursing home coverage.

Although Florence Lewis in Maine was the trustee for her husband, who had been incompetent since 1983 because of his brain degeneration, she was not allowed to keep any of his pension. She could keep her home and the state-set allowance--barely enough for food.

“She is a middle-class lady who has raised seven children,” said attorney Vogel, who works for Legal Services for the Elderly Inc., in Portland. “The shock of going to $325 a month was impossible to deal with.” Considering the cold winters in her hometown of Wiscasset and the medication she needs for her emphysema, “She wouldn’t have been able to pay her bills. She would have had to choose between eating and heating and paying the taxes.”

She has challenged the Maine law, insisting that she had rights to marital support, and has kept $800 a month for her personal needs. The state has been trying to get the money from her in court.

Capitola McCaskey of San Pablo, Calif., put her husband Ralph into a nursing home in 1979 after he suffered a series of strokes, and then had to wipe out their savings, sell the half-acre set aside for their retirement home and cash in three life insurance policies to pay for it. (The state’s law applying community property standards to Medi-Cal was not passed until 1985).

Divorce a Solution?

With poverty imminent, a state welfare worker had one suggestion: “ ‘Have you thought of divorcing him, so you could sue him for a share of the house and part of his Social Security?’ I wouldn’t think of it. He has been a beautiful husband, father and grandfather.”

Instead, she lives on her meager living allowance and visits her husband daily. “I feed him with a spoon at noon, my brother feeds him at night. I tend to his nails and things like that,” Mrs. McCaskey said. “He hasn’t said my name for three or four years. But I’ll give him a drink and say, ‘Is that good, Ralph?’ and he seems to say, ‘Uh-huh.’ ”

After she dies, the state--as a legacy of the law under which Ralph McCaskey went into a nursing home--will sell her house and use the money for his outstanding nursing home bills.

Opinions differ on how to remedy the problem, but no one--federal officials, families or the nursing home industry--supports the welfare connection.

“This is the most despised feature of the health system,” said Ronald F. Pollack, executive director of the Villers Foundation, which is promoting Long Term Care ‘88, a drive by 100 organizations to get more federal support for nursing home care.

“You only get help if you are poor--that’s not a sensible way to provide protection for people,” he said.

However, there are great fears in government of changes that might duplicate the experience of Medicare, which was created in 1965 on the now-obsolete premise that hospital costs and doctor bills were the biggest threats to the elderly. With government commitments to pay the bills combined with often ineffective controls on prices, spending for the program has soared.

“If the money is paid up front, if the federal government guarantees the bills, costs will go out of sight,” said Richard Teske, assistant secretary of Health and Human Services. “There will be a feeding frenzy in the nursing home industry, with no controls on huge construction. It’s like a sponge. It will take as many dollars as you pour into it.”

The Reagan Administration supports a private sector approach; one possibility is a provision for tax-free individual medical savings accounts, in which people could save money over the years toward possible long-term care expenses and to purchase nursing home insurance policies.

Otis R. Bowen, the secretary of Health and Human Services, whose mother died last year after three years in a nursing home, has ordered his staff to prepare a study of long-term care issues. It seems likely to echo previous suggestions for financing aimed toward stimulating the sale of private insurance to avoid a big new drain on the federal Treasury.

Influential Democrats share the Administration’s worries. “I’m not sure we’re in the business of protecting assets for inheritance purposes,” said Rep. Pete Stark (D-Oakland). “We’ve all heard of the cheating cases where parents deed houses to kids and apply for Medicaid.”

Stark said it might be feasible to “divide the cost and spread it over the younger years with an increase in taxes. . . . But I’m concerned about a mammoth system of federal support for all nursing home costs coming into being overnight.”

General Population

Senior citizens advocates are pushing for a system that would shift the cost burden from the families with members in nursing homes to the general taxpaying population. This could involve the federal government paying more of the bill through the Medicare system or raising “sin” taxes on alcohol and tobacco, with the proceeds earmarked for custodial care for the elderly.

Another option discussed would be a private/public approach in which insurance companies would provide coverage for the first two years and the government would pick up the nursing home bills after that period.

Although it will be hard to reconcile conflicting concerns and priorities, some long-term solution for the nursing home widows’ plight should be developed, experts agree.

“Let’s depend on families to care for their own, but let’s not exploit them,” said Lou Glasse, president of the Older Women’s League. “Let’s see that people are protected in their time of greatest need.”