Elder-Care Middle Ground
There’s no doubt that some elderly rich people, egged on by lawyers advertising “estate planning services,” have moved assets in order to get Medi-Cal to pick up the cost of their care in nursing homes. Loopholes should be closed to prevent this, but it will not be quite so simple for the state to save the $150 million the Legislature is hoping for.
The California Advocates for Nursing Home Reform is a nonprofit group that counsels thousands of people each month about qualifying for Medi-Cal, the state’s version of federal Medicaid. Its director says most elderly Californians shielding their assets are of moderate income -- retired teachers, salesmen and the like -- who risk seeing frugally accumulated savings wiped out within months by nursing home bills that can run to $100,000 a year for specialized care.
No one can say for sure how prevalent asset-shielding is or how much the state could actually save. Obviously, it would be a good idea to measure the problem before acting. The people most agitated about the problem are nursing home trade groups, because facilities can charge far more for private-pay residents than for Medi-Cal patients.
Though the state’s proposed fixes would capture some money that now hides in annuities and property transfers, estate lawyers will no doubt be seeking ways around any reforms before the ink is dry. Faced with a potential wipeout, people will stuff Hamiltons into their mattresses if need be.
The state, however, already has means of curbing Medi-Cal abuse that it doesn’t use effectively. It can claim a Medi-Cal recipient’s assets after death, but has been lackadaisical about doing so.
The state also works in partnership with private insurers that offer long-term care insurance at moderate prices to the elderly. Such policies guarantee that if the insurance runs out, people will qualify for Medi-Cal and be allowed to keep more assets. But officials have done a poor job of letting the public know this option exists, or helping them to afford it. Fewer than 20,000 of the state’s 3.4 million senior citizens buy in.
It’s also time to stop pretending that people who have more than $2,319 in the bank -- the absurdly low level for a single person to qualify for Medi-Cal -- can pay their own nursing home bills. If those limits, and federal spousal savings limits, were revised upward, asset stashing would be less enticing.
The elderly should help pay for their care on a sliding scale -- something that also would take federal intervention. Currently, it’s everything or nothing, and people who could and would pay a substantial amount are frightened into lawyers’ arms.
Medi-Cal was never intended to allow the ill elderly to use nursing home care as asset protection for their heirs. But should middle-class wage earners with some lifetime savings spend, or pretend to spend, all but $2,000 before getting a penny of help? There’s a middle ground out there waiting to be claimed.
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To Take Action: Find out more about the California Partnership for Long-Term Care at dhs.ca.gov/mcs/cpltc/default.htm.
