Medicaid - Medicaid and Long Term Care

COMMENTS OF PATRICIA B. NEMORE ON MEDICAID AND LONG TERM CARE

CAPITOL HILL BRIEFING
SPONSORED BY NATIONAL COMMITTEE TO PRESERVE SOCIAL SECURITY AND MEDICARE
FRIDAY, MARCH 28, 2003

Good morning.

I am delighted to have the opportunity this morning to share presentations with Judy Feder and Barbara Kennelly. I’ve known and enjoyed working with Judy for many years; I just met Ms. Kennelly for the first time this morning. But we share common interests.

First Ms. Kennelly has been a long time champion of the people of Connecticut, whom she represented in the Congress for sixteen years. My employer, the Center for Medicare Advocacy, is based in Mansfield, Connecticut and, since the mid-1980s, has advocated on behalf of Connecticut’s Medicare beneficiaries. That advocacy includes recovering for Connecticut’s Medicaid program $150 million from Medicare for services provided to beneficiaries eligible for both programs.

Second, Ms. Kennelly holds a special place in the hearts of die-hard Medicaid mavens. In 1987, she successfully advocated for continued Medicaid eligibility for widows and widowers who lost their SSI benefits (and thus their automatic entitlement to Medicaid) due to receipt of early widows’ benefits from the Social Security program. Such individuals are, to this day, referred to in Medicaid lingo as Kennelly widows.

It is both interesting and right that two organizations -- the National Committee to Preserve Social Security and Medicare and the Center for Medicare Advocacy -- that do not even have Medicaid in their name are briefing Congressional staff about Medicaid.

Medicare and Medicaid - together serving over 80 million Americans - are our two national public programs that offer secure and stable access to health care to their beneficiaries and peace of mind to the families of those beneficiaries. They both represent, in the words of President Bush, the binding commitment of a caring society: Medicare to older people and people with disabilities; Medicaid to older people, people with disabilities, pregnant women and families with children. Medicaid matters for the more than six million Medicare beneficiaries who are eligible for both programs.

I have been asked to talk about Medicaid and long-term care. I want first to talk about long-term care.

Most of the long-term care provided in this country is provided in the community and informally. According to the Urban Institute, in 1994, of the 3.9 million individuals age 65 or older who received long-term care in the community, 57% received it only from unpaid care givers. Of the 3.4 million adults under 65 receiving long-term care in the community, 71% received their care only from unpaid care givers. Providing long-term care to family members is a source of absenteeism on the job and is a significant drain on family financial and emotional resources. This is important to know in the context of Medicaid long-term care because much attention is given to the idea that millionaires are giving away money to get Medicaid to pay for their nursing home care. Medicaid, in fact, serves families who have become emotionally and financially worn out providing informal services to loved ones.

Another important thing to know is that nursing home care now costs, on average, between $50,000 and $60,000 per year. Some estimate home care to cost between $18,000 and $70,000 per year. The need for long-term care for family members often coincides with adult children planning for their own retirement - over half of nursing home residents are age 85 or older - or putting their children through college.

How does Medicaid cover long-term care?

First, it pays for far more care in a nursing home than Medicare does. Medicare coverage is limited to 100 days of skilled care; Medicaid covers both care that is skilled and care often referred to as custodial and has no durational limit. Medicaid pays for over 48% of the total personal health care spending for nursing homes, making it a significant support of the nursing home infrastructure in the United States. It is notable that most of the rest of personal spending for nursing homes is out of individual residents’ own pockets.

Second, it pays for care in the community that Medicare does not cover at all. Both programs cover home health services as a required benefit. But only Medicaid covers personal care attendants - terribly important to people of all ages with disabilities. Only Medicaid covers - through so-called waiver programs - a package of community-based services tailored to each individual’s medical, personal and social needs, including chore aides, adult day health, case management and respite care.

It is important to note that before Medicaid will pay for long-term care - either in a nursing home or in the community - an individual must have used up all his or her resources except for $2,000 in cash. Once personal resources have been exhausted, the individual is still required to pay nearly all her or his income for the long-term care services. Medicaid then pays the difference between that payment and the cost of the services. Because nursing home care is so expensive and so quickly depletes the resources of all but a few families, Medicaid pays a portion of the care for 60% of nursing home residents.

How does Medicaid long-term care provide peace of mind for families of beneficiaries?

Yesterday’s New York Times Editorial reminded us that Senator Patrick Moynihan constantly urged us to learn from the past. Looking at the nearly forty years since the Medicaid program came into being, we see that Congress has continuously improved the Medicaid program to include numerous provisions assuring that frail, elderly and disabled individuals are able to receive long-term services they need without requiring their spouses or families to become impoverished or homeless. And, in 1987, Congress enacted the Nursing Home Reform Law which entitles all residents of facilities participating in Medicare or Medicaid to high quality of care and quality of life.

These statutory protections assure that

the income or resources of relatives are not counted in determining eligibility;
recovery of Medicaid payments made is not sought from relatives under state relative responsibility laws, sometimes called "poor laws";
recovery is not sought from the estates of relatives under these same laws;
liens are not placed on houses occupied by family members;
recovery from Medicaid beneficiaries’ estates does not occur when family members need the proceeds from those estates for basic survival.

These protections also assure that

families cannot be asked for contributions to a nursing facility as a condition of admission or continued stay;
relatives cannot be asked to sign an admission agreement as financial guarantor when they have no legal financial responsibility for the resident;
relatives cannot be asked to pay extra for items or services that are included in the Medicaid daily rate;
applicants for admission cannot be required to demonstrate that they can pay privately for a period of time before they will apply for Medicaid, so that family members do not have to pay if the applicant does not have enough money
individuals must be told of the possibility of applying for Medicaid, so that family members do not have to pay when the individual is eligible for state assistance;
family members must be told of their right to apply for protection of income and resources for the individual’s spouse.

The Nursing Home Reform Law

assures all residents in Medicare or Medicaid participating facilities a national standard of care including standards concerning nutrition, hydration, mental and psycho-social functioning, the use of naso-gastric tubes, vision and hearing, incontinence and pressure sores;
guarantees residents honor, respect and individualized services;
guarantees that residents will receive appropriate care, based on individualized assessments;
assures that aides working in nursing facilities receive training;
assures that residents are free from chemical or physical restraints except those required to treat their medical symptoms;
requires that residents be given choices about their food, their daily schedule, activities, clothing;
requires that residents cannot be moved from a facility except for specified reasons and that they must get a notice and opportunity for a hearing before being moved;
protects residents from abuse, neglect and unsafe conditions;
protects residents from financial exploitation;
provides for a system of survey, certification and enforcement that assures that nursing facilities follow the requirements of the law.

The Administration’s Medicaid Proposal may strip away every one of Medicaid’s protections for beneficiaries and their families.

The Administration’s proposal undermines the federal financing of Medicaid and allows states complete discretion concerning the treatment of those beneficiaries and those services whose coverage is not required by federal law. These groups and services are commonly referred to as

"optional" because states can choose whether or not to cover them, but they are not optional in importance or need. For older people and people with disabilities, required coverage only covers people with incomes less than $545 per month, 73% of the federal poverty level.

While nursing home care is a federally-required service, most long-term care services in the community are not. Moreover, about 85% of all Medicaid nursing home residents and virtually 100% of those receiving care in the community are covered at the option of the states. Thus, states will have complete discretion to determine which of those people they cover and what services they are offered.

It is unclear whether protections of the nursing home reform law would be retained for everyone or only for the 15% of residents whose care must be covered by the states. It is also unclear whether the special income and resource protections for spouses of nursing home residents would be retained, or the limitations on estate recovery and the use of liens.

But even if they are retained in the statute, the proposal’s financing mechanism, which does not assure that states receive matching funds for all their expenditures, can undermine program protections because of reduced payments to providers and the elimination of an entitlement to coverage for all those who are eligible under a state’s plan.

Decades of financial hardship for families of people needing long-term care and decades of nursing home quality of care scandals led to the current protections in the Medicaid law. We need to heed the lessons of history and not recreate the conditions that led to hardship and suffering in the past.