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Medicaid may force elderly to sell homes
By
DEBORAH YETTER FRANKFORT, Ky. -
Many elderly residents of nursing homes will be forced to sell their
houses to help pay for their care under changes state Medicaid officials
plan to implement Sept. 1. And the state
will no longer allow heirs a "homestead exemption'' of $50,500 when
it seeks to recover its costs from estates of nursing home residents who
have died, state Health Services Secretary Marcia Morgan said yesterday. The state also
will become much more aggressive in trying to recover its costs from
estates of deceased nursing home residents, she said. Those steps are
among several Morgan and state Medicaid Commissioner Mike Robinson
outlined yesterday as part of a continuing effort to reduce a multimillion
- dollar deficit in the federal-state health plan for the poor and elderly
in nursing homes. The measures would save the state about $18 million in
the fiscal year that began July 1 with increased savings in future years. Kentucky
currently has about 17,000 people in nursing homes . A bout 75 percent of
them are covered by Medicaid. Morgan
acknowledged the new steps are likely to be controversial with the public
and with lawmakers. "But we have
no good alternatives at this point,'' she said. The changes
prompted mixed reactions. "The bottom
line is that the cabinet is doing the best it can to make sure that
services are available to the most needy,'' said Rich Miller, president of
the Kentucky Association of Health Care Facilities, which represents 250
nursing homes. But a
representative for the A ARP in Kentucky denounced the plan and said it
might cause elderly people who need nursing care to be afraid to seek it. "The idea
that they would have to sell their homes is a frightening thought,'' said
Phil Peters, state director for AARP. Peters said the state should be
looking for more creative ways to assist elderly people in their homes
rather than penalizing them for seeking nursing home care. State Rep. Tom
Burch, D-Louisville, and chairman of the House Health and Welfare
Committee, said he expects lawmakers will question the move. Forcing the
elderly to sell their homes could prompt an emotional reaction , but Burch
said the legislature's refusal to raise taxes to provide more revenue
leaves Medicaid officials little choice. "We've done
cut everything we can cut,'' he said. "Now we're cutting into the
muscle and the bone.'' The changes come
after the state this year announced about $250 million in cuts to the $3.9
billion - per - year program , including eliminating nursing home or
in-home services for people deemed to need personal care but not in need
of nursing care. People at the personal - care level generally need help
with daily tasks such as eating, dressing or bathing. Advocates said
they already are seeing effects of those cuts as people lose services. Amy Turner, a
lawyer with the Legal Aid Society in Louisville who assists Medicaid
clients, said requiring seniors to sell their homes might be a
"necessary evil.'' "We're
looking at tight budget times,'' Turner said. "Everyone's getting cut
— — our Medicaid program is in serious condition.'' Turner said she
hopes the state will consider a "hardship'' when eliminating the
homestead exemption — — for example, poor relatives who could lose
their home if the state tries to recover its costs after the death of a
nursing home resident by forcing the person to sell the home. Morgan said the
changes are in line with what other states are doing as they struggle with
Medicaid deficits and are mostly aimed at allowing Medicaid to collect
funds from people who have some resources to help pay for their care. Under the changes
announced yesterday by Medicaid officials, the state would: · Require people who have been in nursing homes for six months
and are covered by Medicaid to sell their homes and use proceeds to pay
for their care. Currently, homes are exempt from assets Medicaid
recipients are required to spend on their care. The state
estimates that 4,600 Medicaid recipients in nursing home s own a home. But
nursing home residents wouldn't be required to sell their homes if a
spouse or relative is living there . · Eliminate the homestead exemption and increase efforts to recover costs from estates of nursing home residents who have died. Homesteads with a spouse or minor children in the home would be exempt. · Eliminate a provision that allows Medicaid recipients to share ownership of their property with someone else to protect it from Medicaid. The state will no longer recognize such an arrangement and will not consider someone eligible for Medicaid if the person has entered such an agreement within three years of seeking Medicaid benefits. · Create a new arrangement for a small group of people in nursing homes deemed "medically needy'' that would require them to put their assets — — such as pensions or Social Security benefits — — into a trust to help pay their expenses. This applies to about 1,000 people who have some income but are in nursing homes under Medicaid because of a n accident or illness that requires long-term care. T o stay in
nursing homes on Medicaid, those people will have to agree to put their
income in an irrevocable trust with the state keeping the balance after
their deaths. The trust pays the medical costs — — about $6,000 to
$8,000 per year — — and Medicaid pays the nursing home expenses. Morgan said the
trust agreement is complex and will take a "dramatic outreach
effort'' by Medicaid officials to explain it to those affected. Medicaid will
notify the roughly 1,000 people in Kentucky affected by the change and
will work with nursing homes, the residents' families and others to try to
explain the changes. Some may choose not to enter the trust and will be
forced to leave the nursing homes or find other ways to pay for the care,
she said. As for the other
changes, aimed primarily at elderly Medicaid recipients in nursing
facilities who own homes , Robinson said the goal is to try to collect
some money from those able to pay to preserve services for others. "We don't
really like making cuts or removing people from the program,'' he said. Morgan said that
Medicaid — — which had anticipated a deficit of about $450 million
this fiscal year — now is looking at a deficit of about $30 million,
thanks to cost saving and about $186 million in additional, one-time state
and federal funds. But the program
is serving a growing number of clients — — currently about 662,000
people — — and will face continuing shortfalls in future years, Morgan
warned. "We still
have a very serious budget problem in Medicaid in year 2005,'' she said. Copyright
© 2002 Global Action on Aging |
