Assembly Budget Committee Panel Asks Medi-Cal Officials To Close Asset Requirement Loopholes
An Assembly Budget Committee panel on Wednesday asked state officials to "crack down" on seniors with total assets that exceed Medi-Cal eligibility guidelines who are "increasingly exploiting loopholes" in tax laws to qualify for state-funded health care, the Los Angeles Times reports. Under state guidelines, individuals with assets of less than $2,319 are eligible for nursing home benefits under Medi-Cal. Seniors who have a spouse not receiving Medi-Cal benefits can have assets of as much as $94,760 and qualify for nursing home benefits under the program (Halper, Los Angeles Times, 5/6). A "cottage industry" of lawyers has been advising seniors who exceed the Medi-Cal asset requirements on how to qualify for state-funded nursing home coverage. Nursing home fees paid by the state have increased by 50% to $3.4 billion this year from $2.2 billion in 1994. Officials for the California Association of Homes and Services for the Aging estimate that providing nursing home care to seniors who are shifting assets costs the state as much as $150 million per year (California Healthline, 5/3). Legislators at Wednesday's hearing urged Medi-Cal officials to "work harder to find ways to get reimbursement from seniors who have money in investments off the Medi-Cal rolls -- or to at least recover those funds from people's estates after they die," according to the Times.
Assembly members "expressed frustration" with a proposal to close legal loopholes that Medi-Cal officials introduced Wednesday, the Times reports. The legislation would save the state $237,000 in fiscal year 2004-2005 and not more than $4 million the next fiscal year. Some Democratic Assembly members said "while there are savings to be achieved by curbing waste and fraud, the returns are in the tens of millions of dollars -- not the billions that [Gov. Arnold] Schwarzenegger [(R)] and other Republicans have suggested," according to the Times. Committee Chair Darrell Steinberg (D-Sacramento) said the limited savings "def[y] what everybody knows is going on. People are making a full-time living advising people how to do this." Medi-Cal officials said they "pla[n] to work harder to recover funds" where they can, the Times reports.
In addition to Medi-Cal oversight, the Assembly panel discussed other "waste and fraud" issues at the meeting, including a request that legislators impose more restrictions on the spending of state money for child care and programs for people with developmental disabilities, the Times reports. The panel will forward its final report to the full Assembly Budget Committee on Monday (Los Angeles Times, 5/6).
Lawyers and estate planners "have created a profitable new market for themselves by helping even those with hundreds of thousands -- if not millions -- of dollars worth of assets to qualify for Medi-Cal," a San Diego Union-Tribune editorial states. Because of the recent attention to abuses in the system lawmakers may "get around to closing the loopholes" that allow some lawyers to "artfully rearrang[e] affluent clients' assets" and "take advantage of an entitlement that is supposed to only go to the poor," the editorial states (San Diego Union-Tribune, 5/6).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.