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Millionaires on Medicaid

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Expanding Medicaid coverage to an estimated nine million more Americans — as mandated by the Affordable Care Act — reinforces the idea that Medicaid only serves the poor. That perception is not accurate. And it distracts from a looming budgetary threat to the program: long-term care.

More than two-thirds of annual spending on long-term care for the elderly is paid by state and federal governments, $60 billion of which flows from Medicaid. With 10,000 baby boomers reaching retirement age every day for the next 19 years, the Congressional Budget Office projects that spending on long-term care will more than double by 2050 — to 3 percent of GDP from 1.3 percent.

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We might accept these rising costs if benefits flowed only to the elderly poor, as originally intended. But that is not the case. Significant long-term care benefits flow to individuals in the top 20 percent of retirement earnings, enabled by Medicaid’s generous asset-exclusion limits.

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