Advocates for seniors are fighting a proposal by the Malloy administration that aims to save close to $30 million a year by reducing the amount of assets a person can keep if his or her spouse is in a nursing home and receiving Medicaid coverage.
They say the proposal, which would reverse a change made last year, won’t save the state money and would leave seniors outside nursing homes with less money to live on. Supporters say it would lead people to put money toward their own nursing home care before Medicaid begins paying, easing the burden on taxpayers.
It’s a dispute about costs and policy, but it also points to larger questions about who should receive Medicaid coverage and how long-term care should be funded. Currently, 69 percent of Connecticut nursing home residents are covered by Medicaid. Last fiscal year, their care cost the state $1.2 billion.
The idea behind the Malloy administration’s proposal, contained in the budget, is to delay the point at which Medicaid begins paying the cost of a person’s nursing home care by requiring some people to spend down more of their assets before qualifying for coverage. The proposal would affect married couples with one spouse in a nursing home and the other still living in the community.
States can set their own limits–within a range set by the federal government–for assets that the spouse in the community, known as the “well spouse,” can keep while the other spouse receives Medicaid coverage. A house, car and personal belongings are excluded from the calculations.
Until last year, state regulations allowed the well spouse to keep half the couple’s assets, up to the federal maximum, currently $109,560. The other half was considered to belong to the spouse in the nursing home, and would have to be spent down before Medicaid coverage took effect.
Lawmakers changed the regulation last year, eliminating the requirement that assets be split between the spouses. The well spouse now can keep all the assets up to the federal maximum.
For a couple with $150,000 in assets, the old law would leave the well spouse with $75,000, while the new law would let him or her keep $109,560. For a couple with $80,000 in assets, the well spouse would get to keep $40,000 under the old law and the full $80,000 under the current law.
The Malloy administration has proposed returning to the previous requirement. The administration projected that doing so would save $61.3 million over the next two fiscal years, based on the premise that couples would spend down some of the assets on nursing home care before Medicaid begins paying for it.
Sen. Edith G. Prague, D-Columbia, co-chairwoman of the legislature’s Aging Committee and a longtime advocate for seniors, said she isn’t happy about the proposal and would rather the asset limit remain as it is. But she said the state is not in a position to do so.
“The reality is we just don’t have the money,” she said. There are ways for well spouses with hardships to receive additional money from the spouse in the nursing home, she added.
But elder law attorneys say that reversing the change isn’t likely to save the state money because people will spend down their assets on home improvements, a new car, a prepaid funeral contract, or other items, rather than paying the nursing home.
“I really have never seen a case where the well spouse says, ‘Well, I’ll just give the $34,000 to the nursing home that will pay for three months and then the state can come in and pay,’” said David Craig Slepian, a Fairfield attorney who testified against the proposal on behalf of the Connecticut Chapter of the National Academy of Elder Law Attorneys. “They’re going to try to accomplish what’s for their own benefit first.”
Elder law attorneys said the proposal would leave well spouses with fewer resources to pay for their own care later on, potentially leading them to enter a nursing home sooner. Under the old requirement, some seniors left with only half the couple’s assets were forced to sell their homes because they couldn’t afford to live in their communities, said Amy E. Todisco, a Fairfield elder law attorney and past president of the elder law attorneys’ group who pushed for the change last year.
“To me it’s pennywise and pound foolish,” said Sen. Kevin C. Kelly, R-Stratford, an elder law attorney and ranking member on the Aging Committee. “It’s not going to achieve the results we’re trying to and it’s going to accelerate an admission into a nursing home of the surviving spouse when that person goes through the exact same aging process.”
But Anne Foley, undersecretary for policy development and planning at the Office of Policy and Management, the governor’s budget office, said it’s not the level of assets that leads a person into a nursing home.
“It’s chronic medical needs,” she said.
Foley said the savings figures are based on the idea that half the assets being spent down would go toward nursing homes.
“We do assume that if people are incurring debts to nursing homes, that that is one of the things that they will use their assets to pay for,” she said.
And Foley said the state is encouraging people who can afford it to buy long-term care insurance as an alternative to relying on Medicaid to pay nursing home bills.
“Typically, Medicaid is reserved for low-income families and individuals,” she said. “The state is actively encouraging middle- and upper-income individuals and families to use other options to pay for long-term care, in particular, the state’s Partnership for Long-Term Care insurance.”
Nationally, Medicaid paid for 49 percent of long-term care costs in 2005, significantly below what it pays in Connecticut. The state’s Long-Term Care Plan calls for easing the reliance on Medicaid, warning that if it does not change, more seniors will have to impoverish themselves to receive coverage and the Medicaid safety net will erode. Medicaid typically pays below the cost of care, and nursing homes are struggling to get by on Medicaid rates, which have not increased since 2007.
Matthew V. Barrett, executive vice president of the Connecticut Association of Health Care Facilities, which represents nursing homes, testified in favor of the administration’s proposal, which he said will save the state money and help the already-stressed Medicaid program.
Barrett also emphasized the need to move beyond Medicaid to pay for nursing home care. Why should taxpayers bear the costs, and nursing homes receive the lower Medicaid rates, he asked, when there are private resources available to pay for it?
“The private sector ought to be bearing a greater share of these costs,” Barrett said.
Elder law attorneys agreed that long-term care insurance is a good option for people who can afford it. But it can be prohibitively expensive for people to buy policies when they’re older, they said.
“You need to get people into the long-term care market when they’re young, in their twenties and thirties,” Kelly said.
Medicaid long-term care coverage is intended to prevent the well spouse from becoming impoverished, Kelly said. And attorneys said the people affected by the asset limit change aren’t wealthy.
“These are people who’ve paid taxes all their lives,” Todisco said. “They now need this money to live at home. We’re not looking to be able to give it to anyone else. We’re just saying let that spouse keep it because when she needs to go into a nursing home, she’s going to have to spend it on the nursing home.”