With Medicaid, Long-Term Care of Elderly Looms as a Rising Cost
Medicaid has long conjured up images of inner-city clinics jammed with poor families. Its far less-visible role is as the only safety net for millions of middle-class people whose needs for long-term care, at home or in a nursing home, outlast their resources.
With baby boomers and their parents living longer than ever, few families can count on their own money to go the distance. So while Medicare has drawn more attention in the election campaign, seniors and their families may have even more at stake in the future of Medicaid changes — those proposed, and others already under way.
Though former President
overstated in his convention speech on Wednesday how much Medicaid spends on the elderly in nursing homes — they account for well under a third, not nearly two-thirds, of spending — Medicaid spends more than five times as much on each senior in long-term care as it does on each poor child, and even more per person on the disabled in long-term care.
Seniors like Rena Lull, 92, who spent the last of her life savings on $250-a-day nursing home care near Cooperstown , N.Y., last year, will face uncharted territory if Republicans carry out their plan to replace Medicaid with block grants that cut spending by a third over a decade.
The move would let states change minimum eligibility, standards of care, and federal rules that now protect adult children from being billed for their parents’ Medicaid care.
Now, like a vast majority of the nation’s 1.8 million nursing home residents, Mrs. Lull, a retired schoolteacher with dementia , counts on Medicaid to cover most of her bill. But her daughter Rena, 66, also a retired schoolteacher with a lifetime of savings, no longer knows what she can count on in her own old age.
“I get choked up thinking about this,” she said, recalling how her widowed mother had depleted $300,000 on five years of care in the community and one year in the Otsego Manor nursing home, before qualifying for Medicaid. “I’m so scared about what’s going to happen to me.”
The presidential election may decide Medicaid’s future. But many states faced with rising Medicaid costs and budget deficits are already trying to cut the cost of long-term care by profoundly changing Medicaid coverage, through the use of federal waivers.
Waivers sought or obtained by 26 states, including New York, California , Illinois and Texas , would affect some three million people, most of them eligible for both Medicaid and Medicare. Plans vary, but typically they try to cut costs by giving private managed-care organizations a fixed sum for a lifetime of care, from doctor and hospital visits to help at home to nursing home placement, expecting that more care will take place in less expensive settings.
Over all, 31.5 percent of Medicaid’s $400 billion in shared federal and state spending goes to long-term care for the elderly and the disabled. That ranges from less than 8 percent in Hawaii , where nursing home use is low, to more than 60 percent in North Dakota .
Many people assume that Medicare will cover long-term care, but at most it covers 100 days of rehabilitation, not so-called custodial care — the help with activities of daily life, like eating and bathing, that the aged can need for years.
To be eligible for Medicaid, however, a person typically can have no more than $14,800 in assets, and though some lawyers specialize in setting up trusts that shelter certain assets, the federal government has periodically closed loopholes that allowed it.
Mrs. Lull, who married her Ithaca College sweetheart, also a teacher, when he was in the Air Force in 1944, and carried their twin girls home in a laundry basket, is required to pay all but $50 a month of her $969 income from Social Security and a pension toward the Medicaid cost of her shared room. Her case is typical, in that she cared for her husband before his death at home at 83.
Few Americans buy private long-term care insurance , and such insurance was dropped from the Affordable Care Act last year as actuarially unsound or unaffordable.
“More than $80,000 a year on average for a nursing home — who can sustain that?” said Robyn Grant, director of public policy and advocacy for the National Consumer Voice for Quality Long Term Care. “We’re forced, most of us, to go onto Medicaid. People don’t realize this.”
No state has a more ambitious plan to overhaul Medicaid than New York, which has the biggest Medicaid budget in the country — $54 billion — and spends about 41 percent of it for long-term care, almost half on nursing homes. Jason A. Helgerson, the state’s Medicaid chief, calls the redesign “a multiyear march away from fee-for-service” that he says will flatten the spending rate even as the population ages.
By 2015, New York will start requiring some 78,000 nursing home residents to choose one of several managed care plans or be enrolled randomly. The plans are already enrolling tens of thousands of elderly and disabled New York City residents who now receive more than 120 hours a week of government-paid help at home, with those in other downstate counties next.
“We in New York are committed to using this as a force for good,” Mr. Helgerson said, noting that such services, including the largest home care program in the country, have long been exempted from managed care. “By keeping people healthy, by keeping them out of unnecessarily restrictive, institutional settings, we can keep the program sustainable in the long run.”