Many States Do Not Track Asset Transfer Data for Medicaid Applicants, GAO Report Finds
Many states do not maintain data on the number of residents who transfer assets in order to qualify for Medicaid, according to a report released Monday by the Government Accountability Office, CQ HealthBeat reports (CQ HealthBeat, 10/3). For the report, GAO investigators surveyed Medicaid programs in nine states and reviewed data on cash transfers by individuals over age 65 from the 2002 Health and Retirement Study, a national survey sponsored by the National Institute on Aging and conducted every two years by the University of Michigan.
House Energy and Commerce Committee members John Dingell (D-Mich.), Henry Waxman (D-Calif.) and Sherrod Brown (D-Ohio) requested the GAO report with the aim of gathering data on Medicaid applicants who transfer assets to qualify for long-term care. However, because the survey did not include data on the reason for transfers, GAO determined that "no conclusions can be drawn regarding the extent to which the survey respondents transferred cash for purposes of establishing Medicaid eligibility for long-term care."
In addition, because the survey only looked at cash transfers, GAO noted that its report "understates the extent and amount of all transfers by excluding transfers of property and other types of assets" (CQ HealthBeat, 10/3).
Using HRS data on households that included at least one member over age 65, GAO estimated the level of assets -- including income and resources -- held by the household; the extent to which members of the household transferred cash; and the amount they transferred. HRS did not assess whether individuals were Medicaid beneficiaries or were seeking Medicaid coverage.
GAO found that about 22% of households reported transferring cash during the two years prior to HRS, with a median transfer amount of $3,000. According to the report, "[i]n general, households with higher asset levels were more likely to have transferred cash." In addition, households that did not include a member with disabilities were "most likely" to transfer cash, according to the report (GAO, "Medicaid: Transfers of Assets by Elderly Individuals to Obtain Long-Term Care Coverage," September 2005).
Dingell said in a release, "This report again demonstrates the myth of the 'Medicaid Millionaire' is indeed just that -- a myth" (CQ HealthBeat, 10/3).
GAO investigators also surveyed officials from Medicaid programs in Arkansas; Washington, D.C.; Florida; Hawaii; Montana; Ohio; Oregon; South Carolina; and Wisconsin. According to the report, most officials surveyed "reported that some individuals transferred assets for purposes of qualifying for Medicaid coverage for long-term care."
However, the report found, "none of these [officials] systematically tracked or analyzed data that would provide information on the incidence of asset transfers and the extent to which penalties were applied in their states" ("Medicaid: Transfers of Assets by Elderly Individuals to Obtain Long-Term Care Coverage, September 2005).
The report is available online. Note: You must have Acrobat Reader to view the report.