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August 12th, 2009

Health care reform: Who’s paying for it?



Sanford R. Altman

Question:

There has been a lot of talk about who will pay for the President’s proposed health care reform. Will it be our senior citizens?

Answer:

While we all agree that health care reform is necessary, and, in fact, a priority, no one denies that the expense will be great. The argument over whether it will cost one trillion or 1.2 trillion, as far as I’m concerned, is totally meaningless to those of us who need to decide if they can afford to see a movie this week. It means less to those who must decide if they can afford to pay for their prescriptions. The real question is just as our reader asked - "Who is going to pay for it?"

Along these lines, I recently received an interesting e-mail from the President. I suspect that it might have been a mass mailing but it was addressed personally to me. It was about the health care reform plan and was asking for donations. My first thought was, "My God, they are looking for a trillion dollars in donations!" With a more careful reading, I realized that they were trying to put together a grass roots organization to push the plan through. This inspired me to send back an e-mail which, in essence said, "If you want my money to support your plan, I want to know what’s in it." Specifically what I asked was, "If you are looking to cut costs on Medicaid. I want to be certain that there are no provisions which will make it more difficult for seniors to become eligible for Medicaid."

The basis for my concern was The Deficit Reduction Act of 2005 (DRA). As you may recall, hidden in this massive federal budget bill were provisions aimed toward making the unwary senior responsible for huge nursing home costs which previously were covered by Medicaid. An example of this was the penalty period for gifts. Under the old law, if you gave a gift to, for example, your son or daughter, and became eligible for Medicaid within three years after that gift, you would have to wait for Medicaid for as many months as you could have paid for in a nursing home with that gift. This penalty period, or waiting period, would start when you gave the gift so it may well end before you needed to apply for Medicaid and would have no impact on you. However, under the DRA the three years was lengthened to five years and it only started when you were otherwise eligible for Medicaid and needed the nursing home. So, if your penalty period was ten months, you would have to wait that long to get Medicaid even though you had no funds of your own and were in need of the very expensive nursing home care.

If this sounds complicated, think of how it must have appeared to Congressmen as part of a three hundred plus page budget bill. The potential devastating effects on seniors was not brought to light until rigorous analysis by elder law attorneys. By then it was too late. We fought against passage of the budget bill along with major senior organizations and many, many individual seniors and other concerned citizens but lost by one vote in Congress. We should not let this happen again. If they say that they are cutting Medicaid expenses we want to know how they plan to do this well in advance. As a senior, at some point in your life you may well be depending on help from Medicaid to cover extraordinary expenses. It should be there to help you.

As yet, I have not received a response to my inquiry regarding this issue with health care reform. However, if many of us take a few minutes and express the same concern to our public officials - president, senators and congressman - we will receive an answer. I urge all of you to do this. You can use the same language I used - I don’t mind. Seniors are now a very powerful force in this country. If we fail to do this, it will be the DRA all over again. Then, the answer to our reader’s question, "Who will pay?" will, once again, be "the seniors."

5 / 5 (1 Votes)

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Reader Response
  • Jeff Ondrey
  • August 13th, 2009 Well, if I believed that gifts given as one approaches the need for nursing home care were well intended as gifts rather than as a way to protect assets then I would agree with you. However, don't you find it interesting that the elder law attorneys are the ones protesting this change. A big part of the problem here is that no one thinks they should have to pay for long term care in a nursing home. Why is that? If one has assets to protect, then they should purchase long term care insurance. If children want to have an inheritance from mom or dad's assets, then they should think about taking care of mom or dad themselves. Long term care is not free. And good long term care is not even covered by Medicaid. Actually, healthcare is not free and the sooner we all realize that we must be willing to pay for care either through insurance premiums or fees for service, or if we expect government to pay for it then prepare to pay higher taxes.

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