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Davidow, Davidow, Siegel & Stern, LLP
Long Island's Elder Law, Special Needs & Estate Planning Firm

Wednesday, May 17, 2006

Report: Strict asset transfer rules are not an answer to controlling Medicaid spending

A Kaiser Commission on Medicaid and the Uninsured has issued a report, Asset Transfer and Nursing Home Use: Empirical Evidence and Policy Significance, which concludes that, “Eliminating asset transfers for Medicaid nursing home coverage will not substantially alter the private market for long-term care and is not the answer for controlling growth in Medicaid spending.”

The University of Michigan’s Health and Retirement Study produced data for the study to determine the extent to which individuals needing nursing home care make asset transfers. Four categories of individuals were screened: (1)those eligible for Medicaid in the community prior to entering a nursing home; (2)those who became Medicaid eligible within a year of admission; (3)those who became eligible more than a year after admission; and (4)those who never received Medicaid coverage and resided in a nursing home for more than a year.

Forty-three percent of the approximately 2.6 million individuals entering nursing homes between 1998 and 2002 received Medicaid assistance at some point during their stay. Nearly half of these were eligible prior to entering the facility, and only 5 percent of this group transferred more than $50,000 in cash in the six years preceding their admission to the facility. When including transfers involving deeds for this group, only 20 percent made gifts of more than $50,000. For the rest of the Medicaid population, the vast majority made transfers of less than $50,000 within the same time period (including transfers involving deeds).

By contrast, individuals who never received Medicaid assistance for their nursing home care made transfers with greater frequency and higher value. Half of these individuals made gifts in the six years leading up to their institutionalization, and two-thirds of the transfers were cash transfers exceeding $5,000.

All told, the report notes that $6.6 billion in liquid assets were transferred by the Medicaid population within the six years leading up to their qualification for Medicaid. Medicaid spent $100 billion in fiscal year 2004, so Medicaid would recover only six percent of its costs if it blocked all of these transfers. However, the report reviewed activity dating back six years (one year longer than the five-year- look-back period of federal law), so some of these transfers could not be blocked by Medicaid. Also, potentially inflating the amount that Medicaid could save is the evidence that individuals who never attained Medicaid eligibility after lengthy stays in institutions made the most frequent and highest value transfers. This evidence suggests that transfers made prior to entry are frequently not made for the purpose of attaining Medicaid eligibility. Federal law does not allow a penalty for a transfer not made for the purpose of establishing Medicaid eligibility, so other transfers netted in the analysis could not be restricted by Medicaid.

Source: Washington Weekly, Volume XXXII, Issue No. 16, April 28, 2006.

Thursday, May 11, 2006

Caregiving: A growing field

Usually one family member is the primary caregiver. Women make up 75% and are either a spouse or an adult daughter. Nearly two-thirds of caregivers are working full or part-time.

Spouses, on average, provide 40-60 hours of care per week and adult children provide 15-30 hours of care per week.

The Economic Value of the care provided by families is $196 billion nationwide (1997) - $13.5 billion in New York.

Caregiving costs U.S. businesses an estimated $11.4 billion per year in lost productivity by contributing to the following: replacing employees, absenteeism, partial absenteeism, workday interruption, eldercare crisis, supervisor’s time.

Caregivers adjust their work schedules due to caregiving responsibilities by incorporating the following: making phone calls at work (84%), arriving late/leaving early (69%), taking time off during the day (67%), making up work on weekends/evenings (29%), using sick days (64%), decreased hours (33%), taking a leave of absence (22%).

In 2000, New York had 3.2 million people over the age of 60. By 2010, New York will have 5.5 million people over the age of 60. Also in need of caregiver assistance are families with a disabled child or an older person with disabilities under the age of 60.

The fastest growing segment of the aging population in New York are those 75+ and those 85+. These individuals will need more supportive services, including caregiver supports if they are to remain independent.

The average monthly out-of-pocket expense for a family caregiver is $171 (food, transportation and medication expenses account for top 3 expenses). Total un-reimbursed monthly expenses for family caregivers is $1.5 billion.

Most caregivers start out providing a small amount of care, gradually taking on more responsibility. Caregivers also underestimate the number of hours that would be required and the duration of caregiving responsibilities. The average length of care provided is about 8 years.

Caregiving responsibilities take a toll on the health of the caregivers, and on employee productivity due to increases in absenteeism, early retirement and turnover. Half of surveyed caregivers made additional visits to their health care practitioners. Half reported more than 8 additional visits per year.

Source: Caregiver Fact Sheet