Witness Minimizes Effect Of Medicaid LTC Asset Transfers

Are asset transfers for Medicaid long term care eligibility more myth than fact?[@@]

Judith Feder, dean of the Georgetown Public Policy Institute, told members of the Senate Finance Committee that she believes that some health policy specialists really are exaggerating the effect of asset transfers on Medicaid LTC costs.

“Analysis of transfers made by the elderly over time out of their accumulated assets show that only 1 in 100 of the elderly gave gifts to their children that would be large enough to qualify them for Medicaid nursing home coverage,” Feder said at a Finance Committee hearing on long term care finance issues.

Feder told committee members that taxpayers are far more likely to make asset transfers to keep estates under estate-tax filing thresholds than to qualify for Medicaid LTC benefits.

“Indeed, transfers have been least likely among elderly people with modest assets who are in poor or declining health, leading researchers to conclude that these elderly are actually holding on to assets in order to pay for care,” Feder said.

Feder reported that an estimated 44% of nursing home users pay for their nursing home care using only private funds. A total of 16% begin as private payers, exhaust their resources, and then convert to Medicaid, she said.

“That 27% of elderly nursing home users qualify for Medicaid at admissions reflects the limited resources of the elderly in the community, not the transfer of assets,” Feder said.

Private long term care insurance will play a growing role in decades to come, but it provides little relief for current needs now, Feder argued.

“In the future, it will be affordable and valuable for only a portion of the older population, most likely the better of,” Feder said.