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Iowa Lawmakers Tap Fund Meant for Elderly

By The Associated Press

The New York Times, March 30, 2003

In their fight to balance the state budget, Iowa lawmakers are tapping a trust fund meant to keep the elderly out of nursing homes.

The $392 million fund, known as the Senior Living Trust, pays for meal deliveries, visiting nurses, transportation and other services that make it possible for many elderly people to live independently.

But with tax revenue down, lawmakers have turned to the trust for other uses. They took $48.5 million for 2002 Medicaid expenses and $36 million for such expenses in 2003. Gov. Tom Vilsack has recommended taking $65.6 million more by the end of 2004 fiscal year.

"At the present rate, you can be the least optimistic and say it's going to be out in 2005, or be maybe the most optimistic and say it's going to be out in 2007," said Joel Olah, executive director of the Aging Resources of Central Iowa.

The government estimates the fund could be $100,000 in the red by 2009.

For Ruth Ritter, 77, and others like her, it is more than disappointing.

"If it wasn't for this money, I couldn't stay in my home," Ms. Ritter said. She has diabetes and degenerative arthritis, and the trust pays for an aide to come to her home here as often as twice daily to help her bathe and do housework.

The trust was started with $95.6 million from the federal Health Care Financing Administration in 2001. Tom Lenz, a regional official with the agency, now called the Centers for Medicare and Medicaid Services, said there were no provisions on how the state should use it.

Mark Haverland, director of the Iowa Department of Elder Affairs, said the trust was intended to reduce the state's reliance on nursing homes and Medicaid by providing community services.

The strategy, he said, had two goals: One was to give money to nursing homes to convert unused beds to assisted living space, and the other was pay for in-home services like meal delivery and health care. Each year, $6 million to $8 million is spent on those services, he said.

If left intact, the trust could have drawn $10 million to $15 million each year in interest, he said.

"When you stop and think how much is being saved by keeping someone out of an institution and in their own home, which is much less expensive than Medicaid, it is a tremendous savings," said Nicola Gould, executive director of the Advocacy Network for Aging Iowans.

According to Elder Affairs, 19 percent of Iowa's population is 60 years and older, and that percentage is expected to grow.

"What they're doing now is undermining that in the long run because those funds are supposed to be there many years from now," Mr. Olah said.

The state auditor, David Vaudt, has cautioned lawmakers to come up with a clear repayment plan for the trust and other similar funds they have used. Senate President Mary Kramer said that using the trust was necessary.

"The money being used to support the increase in Medicaid is entirely appropriate," said Ms. Kramer, a Republican. "It is, after all, health care."

She said lawmakers had talked about paying back part of the trust after the state's cash reserves were restored. "It was never intended or believed it would last in perpetuity," she said.

Mr. Haverland, a former legislator, said the trust was raided because it was an easy source of money. "The danger is when you spend this one-time revenue it goes away," he said, "and then next year you've got to fill an even bigger hole."