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Nursing Home Care Could Cost Estates Seniors' use of Medicaid is a drain on state March 15, 2004 BY CHRIS CHRISTOFF LANSING BUREAU CHIEF Michigan's budget squeeze has Gov. Jennifer Granholm and lawmakers considering how to recoup Medicaid money from the estates of nursing home patients after they die. In many cases, the losers would be children or other heirs who can now inherit homes and automobiles -- no matter how valuable -- while the state pays the cost of nursing care for their elderly relatives. Michigan is one of two states that do not recover Medicaid payments for the cost of nursing home care for patients 55 and older after they and their spouses die. Although federal law requires what is called estate recovery, Michigan lawmakers have balked, fearing a political backlash. "We're going to have to take a hard look at it," said Sen. Tony Stamas, R-Midland, chairman of the Senate health subcommittee that oversees Medicaid. Liz Boyd, spokeswoman for Granholm, said the state must comply with the federal rule or risk losing federal Medicaid funds. "We want to pursue a reasonable solution," Boyd said. The issue illustrates how the need to cut state spending can collide with popular support for a government program that helps not only the poor, but the middle class as well. Going after estates could unleash the ire of voters and elder- care advocates who view Medicaid recovery as a slap at families who struggle to care for older loved ones. "It's a dirty rotten shame," said Arthur Keller, 72, a retiree from Milan who put his wife, who has Parkinson's disease, in a nursing home seven months ago. Keller said an attorney helped him shelter his assets and qualify his wife of 52 years for Medicaid coverage. He said it wouldn't be right for the government to take what remains of their modest estate after they're both gone. Keller said he spent a lifetime paying taxes. "If you're a person who has worked all his life and saved a couple nickels, now the state wants to take it away from you," Keller said. Medicaid will spend $1.1 billion to care for about 44,000 people in Michigan nursing homes this year. That cost represents a 35-percent increase in the past four years and accounts for 70 percent of all bills for the state's 450 nursing homes. Although Medicaid largely provides health care for poor and disabled people, it also pays for nursing home care for those who spend their savings or legally transfer assets to qualify for government assistance. Without Medicaid, many could not afford nursing home care, which costs an average of $48,000 a year in Michigan, not including prescriptions. The average stay in a Michigan nursing home is about a year. Nursing home care for elderly people is the fastest-growing cost in the state's $7-billion Medicaid system. And Medicaid for nursing homes accounts for about a quarter of the state's estimated $1-billion deficit for 2005. One of seven Michigan residents -- almost 1.4 million people -- receive Medicaid assistance. Three-fourths of those are in low-income families with children and pregnant women; 40 percent of all births in Michigan are paid for by Medicaid. What the critics say Although the number of nursing home patients isn't increasing, the cost of caring for them is. Critics of recouping Medicaid from nursing home patients said it brings in relatively little money in other states. They said it's unfair to force elderly people and their families to give up the vestiges of a life's work -- often a house -- to get proper care. Doug Chalgian, an East Lansing attorney who chairs the State Bar of Michigan's section on elder law, said recouping the cost of nursing home care from estates is a regressive approach for a difficult issue. "Long-term care is crushing every state. Nickel-and-dime solutions are not the answer. Even if the state could suck in $17 million, what difference is that going to make?" he asked. Granholm's proposed 2005 budget counts $17 million from recovered Medicaid money as revenue, but there is no mechanism to collect it. The administration considered -- but then dropped -- a plan to place a small assessment on all home mortgages to reimburse Medicaid for nursing home payments. Chalgian said using Medicaid for nursing home care for Alzheimer's disease or other degenerative conditions is no different from relying on Medicare to cover treatment of heart disease. The problem, Chalgian said, is that the health system doesn't adequately address elderly people's long-term care needs. "It's difficult for families to place a person in a nursing home," Chalgian said. Getting around the system Don Rosenberg, an attorney in Bloomfield Hills who specializes in Medicaid planning, helps families keep assets but still qualify for Medicaid. "If you don't, it's like telling them not to take the mortgage deduction on their income tax because it will save the government money," Rosenberg said. "Why do I have an obligation to drive a loved one into poverty until the government gives them a hand?" He said that in most cases, families aren't trying to cling to large inheritances. Next month, Granholm will appoint a task force to develop plans for reining in costs. Jan Christensen, state deputy director for health policy, said the state should offer more options to care for people in their homes or in settings that are less expensive than nursing homes. Benefit to the state Paul Reinhart, state Medicaid director, said the state could recoup $40 million a year if it was as aggressive as Oregon. He said the state likely wouldn't pursue estates worth less than $50,000 or those of current nursing home patients. A criticism of Medicaid is that it covers nursing home care for those who keep large assets such as an expensive house, or who are savvy enough to legally transfer assets to family members. It's an abuse of the system, said former state Sen. Joel Gougeon. Now a lobbyist, Gougeon tried unsuccessfully to enact a Medicaid estate-recovery plan when he chaired a Senate health committee in 2002. "There's an entitlement mentality for Medicaid," Gougeon said. "Do taxpayers have a right to attempt to recover the tax dollars that were spent to take care of you?" Senate Majority Leader Ken Sikkema, R-Wyoming, said it may be time for Michigan to comply with federal rules and recoup Medicaid money for nursing home care. "If it was too hot to handle in the past, then I would say we're at a point where we've got to handle it. The other choices aren't very good, either." Yet the U.S. government is not twisting the arms of states to collect the money. A spokesperson for the Center for Medicaid and Medicare Services said no penalties are pending for Michigan. A 2002 report by Democrats on Congress' Joint Economic Committee criticized estate recovery of Medicaid payments for nursing home care. It said that the individuals most affected have very small estates, and that states recovered less than 1 percent of the money spent on nursing home care. One state that has aggressively sought to recoup the costs is Connecticut. Nursing homes account for almost one-third of Connecticut's $3-billion Medicaid program. Last year, the state recovered nearly $14 million from the estates of deceased nursing home patients who received Medicaid. Connecticut state Democratic Sen. Toni Harp said some states are considering ways to reduce the use of Medicaid, especially for elderly patients whose families could pay more of the cost for their care. "It has become an entitlement," said Harp, a Democrat who chairs the health committee of the National Conference of State Legislatures. "The problem is, we have this huge bubble in the baby boom generation that's growing older . . . I don't know if we, as a country, can continue thinking about this in this way." Contact CHRIS CHRISTOFF at 517-372-8660 or [log in to unmask] SOURCE: Detroit Free Press, United States http://www.freep.com/news/mich/medi15_20040315.htm * * * ---------------------------------------------------------------------- To sign-off Parkinsn send a message to: mailto:[log in to unmask] In the body of the message put: signoff parkinsn