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Retirement Planning > Retirement Investing

Retirement Community Director Attacks Medicaid LTC Transfers

By Steve Tuckey

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Retirement Community Director Attacks Medicaid LTC Transfers

Asset manipulation by upper-income and middle-income seniors slows innovation at long term care service providers. [@@]

A senior housing executive made that assertion Wednesday at a Senate Finance Committee hearing on long term care issues.

Daniel O’Brien, senior vice president at Erickson Retirement Communities, Baltimore, said asset manipulation has contributed to the Medicaid LTC funding crisis.

“Despite rising enrollment and escalating costs, federal and state policy continues to permit middle-income and wealthy seniors, or their adult children, to manipulate complex eligibility rules and inappropriately shift the costs of their care to the American taxpayer,” O’Brien said.

Current law stifles innovation and interferes with efforts to create high-quality, affordable senior housing, O’Brien said.

“Health care providers are forced to chose between providing care on an exclusively private-pay basis to the wealthy, or be forced into the reality of virtually all residents becoming Medicaid-eligible,” O’Brien said.

One relatively new type of facility, the continuing care retirement community, combines housing and health care services for seniors.

“CCRCs provide tangible value to senior health care and the Medicaid program,” O’Brien said. “But this approach can only work if Medicaid is truly the payer of last resort.”

Because Congress has yet to opine on the matter, the courts have looked favorably on the practice of asset-shifting to gain Medicaid eligibility, O’Brien said.

“The adult children of CCRC residents have successfully challenged the private-pay financing structure for middle income and wealthy seniors,” O’Brien said. “Under interpretations of current law, a CCRC or a state recovery program cannot enforce contracts signed by seniors who disclose assets and pledge those assets to fund their own care.”

O’Brien proposed that Congress encourage seniors to fund their long term care needs privately, by making it clear that CCRC contracts that require residents to spend disclosed assets prior to applying for Medicaid are enforceable.

“I believe it should also be clarified that it is the intent of Congress that Medicaid is the payer of last resort,” O’Brien said.

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