Stephen Moses, a man who has spent years fighting the rules that let relatively affluent people qualify for Medicaid nursing home benefits, got a chance today to explain his position to members of Congress.
Moses, president of the Center for Long-Term Care Reform, Seattle, spoke at a hearing on Medicaid planning organized by the House Oversight and Government Reform Committee’s health care subcommittee.
Moses, who worked for the inspector general of the U.S. Department of Health and Human Services in the 1980s, note that state rules for Medicaid – an insurance program for the poor funded by states and the federal government – encourage people to make complicated arrangement with assets to qualify for Medicaid nursing home benefits, rather than using annuities, private long term care (LTC) insurance or savings to pay for LTC services.
Technically, Moses said, federal rules let people who use Medicaid LTC benefits keep just $2,000 in cash or negotiable securities.
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But a couple with one spouse needing care can keep $2,739 per month in income and half of joint assets up to $109,500.
“But it doesn’t matter how people spend down to that level as long as they don’t give their money away,” Moses said. “Financial advisors frequently tell clients to purchase exempt assets, take a world cruise, or throw a big party, all non-disqualifying spend down methods.”
Moses said that, today, the following resources are exempt from the Medicaid LTC benefits qualification test:
- One business including the capital and cash flow.
- Individual retirement accounts (IRAs).
- One automobile.
- Prepaid burial plans for the Medicaid recipient and immediate family members.
- Term life insurance, which allows recipients to evade Medicaid’s estate recovery mandate.
- Household goods and personal belongings.
Janice Eulau, a Suffolk County, N.Y., Medicaid administrator, said she sees couples with $500,000 in resources, and some with more than $1 million in resources, qualifying for Medicaid LTC benefits.