Medicaid Asset-Transfer Changes Would Affect Many Voters
CQ Today on Friday examined proposals that would reduce Medicaid spending by restricting the transfer of assets to achieve eligibility. According to CQ Today, restricting asset transfers -- an idea supported by the Bush administration and the National Governors Association and approved by a federal commission studying Medicaid -- might "prove politically unpalatable" because of the number of voters who could be affected by the change and opposition from AARP, CQ Today reports.
Under current law, seniors who transfer assets within three years of applying for the program are barred from Medicaid coverage for a length of time beginning at the date of transfer. The duration is based on the amount transferred. Under a proposal from the Bush administration, the three-year "look-back" period would be extended to five years, and the starting date for the disqualification period would be moved from the transfer date to the application date. The administration has estimated that savings from changing the starting date of the disqualification period would total $1.5 billion over five years, while lengthening the "look back" period would save less than $100 million.
NGA Executive Director Ray Scheppach said, "I think there is a feeling that there is a lot of gaming going on and it's not appropriate." He added, "I think you will find a provision in the final legislation on this."
However, AARP has said that the government should not base its cost-saving proposals on denying care to seniors and that seniors make asset transfers for reasons other than qualifying for Medicaid. AARP CEO Bill Novelli last month in a letter to lawmakers wrote that the plan is "unreasonable and may result in severe hardship" (Schuler, CQ Today, 8/19).
The "real problem" with Medicaid "isn't well-off seniors gaming the system," but rather "that few Americans have reliable and effective private alternatives that can protect them if they require long-term care," Jacob Hacker, a professor of political science at Yale University and a fellow at the New America Foundation, and Harold Pollack, faculty chair of the University of Chicago's Center for Health Administration Studies, write in a Los Angeles Times opinion piece. "Long-term care insurance will never work for millions of Americans" because in addition to being "complex, costly and often inadequate," consumers "will likely shun such policies even if government subsidizes them," Hacker and Pollack write.
They add that the "alternative is as obvious as it is difficult: The federal government should pay for long-term care through Medicare, openly, for every American." Hacker and Pollack conclude, "The real problem is that Medicaid forces people to gain through the back door what government should -- and only government can -- provide through the front" (Hacker/Pollack, Los Angeles Times, 8/21).