Category Archives: Medicaid Recipients Over 55
Medicaid, Medicare, Nursing Facilities, and Death and Taxes: Our Uncertain Future for Our Aged Population
There are few “knowns” in life. In 1789, Benjamin franklin penned a correspondence to Jean-Baptiste Leroy, in which he wrote, “Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.”
Certainly the phrase “death and taxes” had existed prior to Franklin’s 1789 usage, but considering how famous Franklin became in history for our country, many people attribute the phrase to Franklin.
Think about it. Nothing is certain, but death and taxes. It is a rather bleak view of the world. Why not “nothing is certain except happiness and sadness?” Or “nothing is certain but you being alive and dying?” Why do both “certain” items have to be bleak?
For purposes of this blog, I am using my own phrase:
“Nothing is certain except old age, unless you die early.”
For one day, we will all be old (unless we die early). And when we age, as much as we would love to ignore the fact, the fact is that most of us will be placed in an assisted living facility (ALF) or a nursing home of some sort.
But what will the world of ALFs look like 20…30…40 years from now? With the low Medicare and Medicaid reimbursement rates for personal care services (PCS), how many nursing homes will exist in the future?
Already, in Massachusetts, nursing homes are dropping like flies due to low reimbursement rates. What does this mean to the aged population?
In NC, our PCS reimbursement rate continues to be slashed. What will this mean for our aged population?
In the past few years, with approval from the Center for Medicare and Medicaid Services (CMS), NC Department of Health and Human Services (DHHS) has lowered the reimbursement rates for non-medical PCS provided both in the home and in a facility.
In October 2013, DHHS officials proposed to CMS a cut in the Medicaid PCS hourly rate by $2.40 per hour, down to $13.12 per hour, retroactive to July 1 (At the time, the PCS hourly rate was $15.52 and allowed up to 130 hours of care per month or, roughly, 4 hours a day).
Interestingly, DHHS has the PCS reimbursement rate for facilities and for home health care providers the same. Yet, facilities face much higher overhead, staffing costs, and building and equipment costs than does a home care provider. So why do both different types of providers receive the same reimbursement rate?
Prior to 2010, DHHS had two separate PCS rates, one for facilities and one for home health care providers. Obviously, the reimbursement rate in facilities was higher than the PCS rate for home health care providers to account for the additional overhead costs.
However, Disability Rights of NC warned DHHS that paying lower reimbursement rates for people living in the home versus a facility violated the Americans with Disabilities Act (ADA). The U.S. Department of Justice (DOJ) agreed, and, in 2012, the General Assembly (GA) had to make a decision: (1) lower the reimbursement rate for PCS in facilities; (2) increase the reimbursement rates for PCS in the home; (3) or come up with some innovative way to not violate the ADA.
Feeling pinched, the GA passed legislation that made it more difficult for recipients to qualify for PCS and decreased the number of allowable hours of PCS to from 130 to 80 hours per month, although if a person suffered from dementia, the PCS provider could get an extra 50 hours/week.
Plus, starting January 1, 2014, the shared savings plan went into effect, which decreased reimbursement rates by 3% across the board.
What does all this mean? It points to a couple of things.
Nursing facilities are facing financial distress.
In Massachusetts nursing facilities have already begun to close down. As of May 19, 2014, within 5 months, 4 nursing homes have gone out of business. According to The Boston Globe, the 4 nursing homes closed because they were “unable to make ends meet with the money they get from Medicaid because reimbursement rates have not increased in nearly a decade, according to the Massachusetts Senior Care Association, the industry trade group. Scores more are on the edge of shutting down.”
Scores more are on the verge of shutting down? For those of you who do not recall Lincoln’s speech, “Four scores and seven years ago…,” a score equals 20. According to the Boston Globe scores are on the verge of shutting down??? 40? 60?
With our aged population growing by the day, what does the future look like for nursing homes and the aged population?
Nothing may be certain except death and taxes, but I think it is certain that you will grow old, unless you die early.
Have you ever wondered about warning labels? I mean, some of them are so ridiculous that you have to wonder who the person was that created the need for such a ridiculous warning label.
For example, the warning label on the sleep-aid Nytol warns, “May cause drowsiness.” I hope so!
This weekend my husband and I let friends borrow our chainsaw. The warning on the chainsaw says, “Do not hold on wrong side of chainsaw.” Really? What moronic person would grab a chainsaw by the saw blade? But the warning is there, so there must have been at least one person who held the chainsaw by the saw blade, turned on the saw and…you know.
Then comes my personal favorite…my egg carton from the grocery store states, “This product may contain eggs.” My egg carton! Really?
Medicaid cards should come with warning labels. Multiple warning labels. Such as:
“Warning: You may not be able to find a physician willing to accept Medicaid.”
“Warning: This may not be your card. Review the name prior to use.”
“Warning: This card could lead to you losing your home.”
For most people, your home is your biggest investment in your lifetime. Many people want to pass their houses down to children, or, at least, give the children the right to sell the home and keep the money. To some, the home is the biggest inheritance…maybe the only inheritance.
So how can NC take your home if you are on Medicaid?
According to NC Department of Health and Human Services (DHHS), the estates of Medicaid recipients may be subject to estate recovery if (1) The Medicaid recipient applied on or after October 1, 1994. (Considering it is 2014, I would guess that most people fall into this category); and one of the following:
(a) is under age 55 and an inpatient in a nursing facility, intermediate care facility for the intellectual developmentally disabled, or other medical institution, and cannot reasonably be discharged to return home; or
(b) is 55 years of age or older and is living in medical facility and receiving medical care services, or home and community-based services, or In Home Care Services (IHC).
Also, In Home Care Services (IHC) claims for SA recipients ages 55 and over are subject to Medicaid Estate Recovery.
This estate recovery is not new. Recently, I have seen a few articles on the internet that state that this estate recovery is a new addition to the Affordable Care Act (ACA). This is incorrect information. In 1965, estate recovery was optional and states could only recoup Medicaid costs spent on those 65 years or older. In 1993, Congress passed a budget bill that required states to recover the expense of long-term care and related costs for deceased Medicaid recipients 55 or older. The 1993 federal law also gave states the option to recover all other Medicaid expenses. The only change that the ACA made to the estate recovery rule is, by expanding Medicaid, providing more estates to be recovered.
“Warning: Medicaid can take your home!”
The estate recovery oddly seems to disproportionately affect people over 55 years of age.
DHHS does state that it will NOT seek a lien on your property while you are alive. DHHS only seeks the estate recovery after your death. DHHS also states that estate recovery is waived in some circumstances. What circumstances are those? And why wouldn’t those circumstances apply to everyone?
What exactly can the state seek to recover?
“At a minimum, states must recover amounts spent by Medicaid for long-term care and related drug and hospital benefits, including Medicaid payments for Medicare cost sharing related to these services. However, they have the option of recovering the costs of all Medicaid services paid on the recipient’s behalf. The majority of states recover spending for more than the minimum of long-term care and related expenses.” (emphasis added). See HHS’s website.
Isn’t Medicaid intended to be free health care for low-income and needy people? If the state can recover from a person’s estate after death, did that person really receive free health care? Or was the health care merely a loan?
Warning on the Medicaid card: “Warning! By accepting Medicaid, you are authorizing the state to recover from your estate, and, in some circumstances, your home.”
But the warning is very tiny print.