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There are financial predators in this same area of Medicaid Planning ready to sell to you products or investments with the promise of "guaranteed" eligibility for Medicaid and/or VA eligibility.‚Äč BEWARE: The Supreme Court of Florida, in an effort to protect the elder public against these predators, has recently ruled that it is ...
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January 2006

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Monday, January 30, 2006

Vote on Budget Set for Feb. 1; Group Seek to Sway GOP Moderates

Vote on Budget Set for Feb. 1; Groups Seek to Sway GOP Moderates

Last Updated: 1/13/2006
Topic: Medicaid

House Speaker Dennis Hastert (R-Ill.) has tentatively scheduled a re-vote on the 2006 budget reconciliation bill (S 1932) for February 1, the day after the House reconvenes following its winter recess. Moderate Republicans are feeling mounting pressure from groups like AARP to change their votes.

Among other provisions in a bill that cuts back federal entitlement programs for the first time in a decade, the legislation would impose punitive new restrictions on the ability of the elderly to transfer assets before qualifying for Medicaid coverage of nursing home care. (Click here to read these provisions.)

The Senate passed the bill before Christmas, with Vice President Dick Cheney casting the tie-breaking vote. However, procedural moves by Senate Democrats require the House to vote on the bill a second time after having passed it by a 212-206 margin at the end of an all-night session.

Although House Republicans "expect to narrowly approve the bill again, boosted by President Bush's State of the Union speech the night before," according to CongressDaily, groups opposed to the bill's cuts are working hard to convince moderate Republicans to vote against it. Brian Riedl, a budget analyst for the Heritage Foundation, says, "[N]othing is guaranteed over a six-week break."

Leading the fight against the bill is AARP, which strongly opposes the transfer restrictions and has vowed to make lawmakers who vote for them pay a political price. "This budget represents bad policy and AARP will now work to explain the full impact of this vote to its more than 36 million members," said AARP's CEO William D. Novelli.

Joining AARP is a temporary umbrella group, the Emergency Campaign for America's Priorities (ECAP). Spokesperson Brad Woodhouse said, "If they win, and we're not convinced they will, we want to spill blood in the process so that they are gun-shy about turning around and doing this again in the next budget." ECAP has targeted some moderate Republicans at local vigils and is organizing phone blitzes in advance of the vote.

"Clearly, moderate Republicans in the House were reluctant to vote in favor of these drastic changes to Medicaid," reports theNational Senior Citizens Law Center (NSCLC). According to NSCLC, several Republicans who did not vote against the bill the first time around delivered a letter in December to the congressional leadership expressing objections to the scope of the Medicaid cuts.

Meanwhile, in his weekly radio address Saturday, January 7, President Bush said Congress should "finish its work" and pass the budget bill. Bush said that passage would show that the "people's representatives can be good stewards of the people's money." Bush also urged Congress to make all his tax cuts permanent. In an opinion piece in the San Jose Mercury, Sen. Barbara Boxer (D-CA) said that House Republicans should "scrap this poor excuse for a budget" and "instead cancel some of the tax cuts for millionaires," which "would accomplish the same thing -- deficit reduction -- but without harming our kids, our elderly and the middle class."


Monday, January 23, 2006

Democrats Split on Medicaid Changes

Last Updated: 12/12/2005

The National Governors Association, whose membership includes both Republican and Democratic governors, sent a letter to Congress on Monday mostly endorsing the House's budget reconciliation package that contains changes to Medicaid transfer rules. The endorsement of the House bill by Democratic governors is a split with Democratic members of Congress. Every Democratic member of Congress voted against the bill when it passed by a slim 217 to 215 vote in November.

Among other things, the House bill includes a measure that would extend Medicaid's "lookback" period for all asset transfers from three to five years and change the start of the penalty period for transferred assets from the date of transfer to the date of Medicaid application. In addition, the House version allows states to increase co-payment increases on Medicaid beneficiaries with incomes above the federal poverty level. The House version differs from the Senate budget bill, which makes only modest changes in the asset transfer rules and doesn't include an increase in co-payments. The two bills now have to be hashed out in a joint House-Senate conference committee.

The NGA's letter specifically approved of the changes to transfer penalties in the House bill, saying the final bill should "include critical House provisions that would increase the look-back period and begin the penalty period at the time of application for services." The letter also endorsed the co-payments provision and a provision in the house bill making any individual with home equity above $750,000 ineligible for Medicaid nursing home care.

For the full letter, click here. An article in the Dec. 12, 2005, New York Times reports that "Medicaid is a flash point" as House and Senate conferees sit down to reconcile the two budget bills. The article focuses on provisions in the House bill that would allow states, for the first time, to deny care or services because of a person's inability to pay premiums or co-payments.


Monday, January 16, 2006

House GOP Leaders Fail to Muster Majority for Bill Containing Medicaid Transfer Changes

Last Updated: 1/11/2006

Topic: Medicaid

Facing a revolt among Republican moderates, House GOP leaders pulled their budget-cutting bill containing $9.5 billion in Medicaid cuts off the House floor on Thursday rather than put it to a vote.

The bill, the House version of fiscal year 2006 budget reconciliation legislation, would impose harsh new restrictions on the ability of the elderly to transfer assets before qualifying for Medicaid coverage of nursing home care. The asset-transfer changes are reportedly among the provisions that may be adjusted as the House leadership scrambles to forge a compromise that could win the support of both moderate and conservative party members.

The bill's withdrawal signals that GOP leaders could not muster the 218 votes needed to pass the budget measure. Republicans said they would try again after the Veterans Day weekend to find a bare majority for more than $50 billion in spending cuts and policy changes.

On Nov. 3, the House Energy and Commerce Committee approved the budget reconciliation package that includes restrictions on asset transfer rules. It would extend the "lookback" period for all transfers from three to five years and change the start of the penalty period for transferred assets from the date of transfer to the date of Medicaid application. It also would make anyone with more than $500,000 in home equity ineligible for Medicaid-funded long-term care. TheSenate's version of the budget bill does not include these provisions.

In an effort to win passage of the bill on the House floor, Republicans dropped a controversial provision that would allow oil drilling in the Arctic National Wildlife Refuge, but even this failed to win enough votes for the bill's approval.

Reps. Sherwood Boehlert (R-N.Y.), Michael Castle (R-Del.) and Vernon Ehlers (R-Mich.) said they want some of the Medicaid cuts to be removed from the bill. According to CongressDaily, the House leadership was discussing Medicaid with Republican moderates, focusing on provisions that would tighten restrictions on asset transfers and increase copayments for Medicaid recipients.

Stunning Reversal The vote cancellation was a stunning reversal for a Republican majority that heretofore has maintained iron discipline among its members. But that was before President Bush's plummeting poll numbers, last Tuesday's election results, and the electorate's growing discomfort with Republican budget priorities.

"The fractures were always there. The difference was the White House was always able to hold them in line because of perceived power," Tony Fabrizio, a Republican pollster, told theWashington Post. "After Tuesday's election, it's 'Why are we following these guys? They're taking us off the cliff.' "

Opponents of the Medicaid asset transfer changes have a formidable ally in AARP. In a statement, AARP said it could not support the House bill because of the asset transfer provisions. These provisions, the senior advocacy group said, would penalize people who have simply helped family members or given to charity.

"We agree that steps should be taken to close real loopholes that allow people to improperly qualify for Medicaid," AARP said. "However, the extended look-back period and the change in the penalty date would deny coverage to those eligible for Medicaid at precisely the time they need assistance and have no remaining assets, leaving them no other way to pay for needed long-term care."

AARP also said that the provision denying Medicaid nursing home coverage to those with substantial home equity will force the elderly "to either take an expensive reverse mortgage or sell the home in order to get long term care coverage."

Meanwhile, the Congressional Budget Office estimates that the provisions in the House bill changing the treatment of asset transfers and home equity would reduce Medicaid outlays by about $2.5 billion over the next five years. In its report on the bill's budgetary impact, the CBO notes that under the current law, "very few of the applicants for Medicaid incur penalties for prohibited asset transfers."

Even if House Republicans are able to pass the budget cuts, the bill could be doomed by the determination of some House and Senate Republicans to add drilling for oil in the Arctic to any final bill. Some GOP moderates have said they will oppose any bill that permits Arctic drilling.
For an article in the Chicago Tribune on the politics of the House reconciliation measure, click here


Monday, January 09, 2006

New Study Finds That Few Nursing Home Residents Transferred Assets

Last Updated: 1/09/2006

Agreeing with earlier results, a study by the Kaiser Commission on Medicaid and the Uninsured finds that asset transfers by individuals entering nursing homes are relatively small.
The study found that 9.2 percent of Medicaid recipients entering a nursing home had transferred assets within two years of admission. The mean amount transferred was $5,380 and the median was $1,400. Researchers also discovered that 18.7 percent of Medicaid nursing home patients had transferred assets more than two years before they entered a facility. The mean amount transferred by this group was $8,202 and the median was $3,000.

The study also found that Medicaid nursing home residents had minimal assets before entering the nursing home. For example, half of unmarried residents had less than $4,000 of non-housing assets before entering nursing homes as Medicaid patients.

The study confirmed the findings of earlier studies on the impact of asset transfers. The Government Accountability Office (GAO)released a study in October that reported the level of assets being transferred by the elderly were relatively insignificant. The Georgetown University Long-Term Care Financing Projectreached a similar conclusion in May.

These studies indicate that changes to asset transfer rules proposed by the Medicaid Commission may not save much money. The commission, which was established to advise Congress on how to cut $10 billion from Medicaid, proposed rules that would extend the "lookback" period for all transfers from three to five years and change the start of the penalty period for transferred assets from the date of transfer to the date of Medicaid application. These changes in the law have been incorporated into the House version of the 2006 budget bill.

The Kaiser study on asset transfers is part of a group of studies on Medicaid released by the Kaiser Commission. Other studies look at the distribution of assets in the elderly population and strategies for keeping individuals out of nursing homes, among other topics. For a full list of all the reports, click here.

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December 2005


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Monday, December 26, 2005

Bush Administration Reportedly Endorses House Transfer Changes

Last Updated: 12/24/2005

Topic: Medicaid

The Bush administration has given its blessing to provisions in the House budget reconciliation bill (H.R. 4241) that would make it far more difficult for the middle-class elderly to gain Medicaid coverage of nursing home care, according to McKnight's Long-Term Care News. Such support, says McKnight's, "increases the likelihood these provisions will remain in the final budget."

McNight's source is a Nov. 23 Bureau of National Affairs article stating that "The Bush administration has announced support for most of the key Medicaid elements in the House fiscal year 2006 reconciliation bill (H.R. 4241), particularly the provisions to tighten rules regarding asset transfers and to give states greater flexibility to administer Medicaid programs."

The House measure would extend Medicaid's "lookback" period for all asset transfers from three to five years and change the start of the penalty period for transferred assets from the date of transfer to the date of Medicaid application. The bill also would make any individual with home equity above $750,000 ineligible for Medicaid nursing home care.

Speaking to the National Association of State Medicaid Directors on Nov. 8, Centers for Medicaid & Medicare Services Administrator Mark McClellan said that as the bill goes to conference committee with a Senate budget bill (S. 1932) that makes only modest changes in the asset transfer rules, the administration will continue to work closely with legislators. Congress is expected to begin work on resolving the starkly different proposals in early December.

Meanwhile, the Washington Post is reporting that while Democratic lawmakers in Washington are united in their opposition to the Medicaid cutbacks in the House bill, "Democratic governors are quietly supporting the provisions and questioning the party's reflexive denunciations." The Congressional Research Service (CRS), the public policy research arm of Congress, has produced a 192-page side-by-side comparison of the Medicaid and Medicare provisions of S. 1932 and H.R. 4241. Although the CRS does not distribute its reports to the public, the National Senior Citizens Law Center says the report is or will be available on its Web site. Go tohttp://www.nsclc.org/

Monday, December 19, 2005

House Approves Bill Substantially Changing Asset Transfer Rules

Last Updated: 11/21/2005

Topic: Medicaid

By the narrowest of margins, the House has voted to approve a budget plan that cuts about $12 billion from Medicaid, including imposing harsh new restrictions on the ability of the elderly to transfer assets before qualifying for Medicaid coverage of nursing home care.

The Deficit Reduction Act of 2005 (HR 4241) was approved by a 217 to 215 vote in the early hours of Friday, November 18. The bill maintains provisions aimed at making it even more difficult for the middle-class elderly to receive long-term care coverage. The measure would extend Medicaid's "lookback" period for all asset transfers from three to five years and change the start of the penalty period for transferred assets from the date of transfer to the date of Medicaid application. The bill also would make any individual with home equity above a certain limit ineligible for Medicaid nursing home care, although in a concession to Republican moderates that limit was raised from $500,000 to $750,000. The final measure retains a provision imposing co-payment increases on Medicaid beneficiaries with incomes above the federal poverty level.

The bill now must be reconciled in conference committee with aSenate budget bill that makes only modest changes in the asset transfer rules. (For an ElderLawAnswers article explaining the effects on America's elderly of the two competing proposals,click here.)

Last week, Republican leaders were forced to pull the bill from the floor because of a lack of support. In the final vote, after some of the bill's cuts had been softened, 14 House Republicans and all House Democrats opposed the bill. (For a tally of votes on the bill, click here.) The Center on Budget and Policy Priorities estimates that the eleventh-hour changes only eased the cuts aimed at the poor by 2 percent from the original version.

The House bill would also:

Codify the income-first rule.

Establish new rules for the treatment of annuities, including a requirement that the state be named as the remainder beneficiary.

Require Medicaid applicants to provide "full information . . . concerning any transaction involving the transfer or disposal of assets during the previous period of 60 months, if the transaction exceeded $100,000, without regard to whether the transfer or disposal was for fair market value."

Allow Continuing Care Retirement Communities (CCRCs) to require residents to spend down their declared resources before applying for medical assistance. Set forth rules under which an individual's CCRC entrance fee is considered an available resource. Extend long-term care partnership programs to any state.

The Associated Press predicts that the upcoming conference committee negotiations with the Senate will be "arduous." The negotiations, writes the Los Angeles Times, "are likely to test [President] Bush's ability to work his will in Congress when his approval ratings are at an all-time low." The conference committee has not yet been named and no timetable for its deliberations has been set.

The final version of HR 4241 is still unavailable. For a version of the bill that does not reflect last-minute changes (such as the shift from $500,000 to $750,000 in home equity), click here. Scroll down to Title III, Chapter 2 for the asset transfer rule changes. Meanwhile, a survey for the National Academy of Social Insurance finds that 7 in 10 Americans age 40 and over think the federal government should do more to help people meet the cost of long-term care.

Monday, December 12, 2005

State Budget Pressures Easing, But Medicaid Still Faces Long-Term Challenges, Surveys Show

Topic Medicaid
[Oct 20, 2005]

Sustained state cost-containment actions and a stronger economy have improved the outlook for Medicaid and SCHIP, but factors contributing to Medicaid's cost growth continue to present long-term challenges, according to a new state surveys released Wednesday by the Kaiser Commission on Medicaid and the Uninsured. According to the survey, state Medicaid officials say that rising health costs, declining employer-based coverage, demographic trends and other factors raise concerns about future Medicaid cost growth.

Budget In a survey of state officials, KCMU and Health Management Associates found that growth in Medicaid spending slowed to an average of 7.5% in fiscal year 2005, the third year of decreased growth. The survey indicates that a decline in enrollment growth in fiscal year 2005 to 4% combined with spending reduction measures taken at the state level contributed to the slowdown in spending growth. Enrollment growth is expected to slow for the fourth consecutive year to 3.1% in fiscal year 2006 (KCMU release, 10/19). The gap between Medicaid spending increases and state tax revenue growth fell to 2.6%, the lowest level since 1999. According to the survey, despite the improved fiscal outlook, states are planning new cost-control measures, such as provider rate reductions or freezes, the Washington Post reports (Washington Post, 10/20).

In addition, many states are expanding coverage (CQ HealthBeat, 10/19).
Drug Benefit In addition, KCMU and Georgetown University'sHealth Policy Institute surveyed state officials regarding the outpatient prescription drug benefit, finding that all surveyed states actively managed their benefits and imposed a variety of cost-control mechanisms. More than two-thirds of responding states use preferred drug lists. Sixteen of 37 states surveyed placed limits on prescription refills, but only two states automatically denied refills that surpassed limits.

Enrollment Procedures KCMU and the Center on Budget and Policy Priorities conducted a survey that focuses on state actions regarding Medicaid and SCHIP eligibility, enrollment and renewal procedures, as well as cost-sharing requirements for low-income families (KCMU release, 10/19). According to the survey, Missouri and Tennessee have made large cuts in eligibility. The survey also found that 20 states reported taking actions expand coverage by simplifying procedures and requirements for beneficiaries, expanding eligibility or reducing premiums for children's coverage (CQ HealthBeat, 10/19). However, 10 states either increased premiums or lowered the level at which they begin charging premiums for children's coverage, according to the survey.

Reaction Diane Rowland, executive director of KCMU and executive vice president of the Kaiser Family Foundation, said, "These studies affirm the basic countercyclical nature of Medicaid. Its costs increase most rapidly when it is most in demand -- in a sluggish economy," adding, "While the fiscal crisis has subsided, state budget pressure remains because the nation relies on Medicaid to forgive the failures of our larger health system." (KCMU release, 10/19). Alan Weil, executive director of the National Academy for State Health Policy, said, "We are at a turning point in how much with think of (Medicaid) as a national program," adding, "There is tension between state and federal government, ... we need to think about who the burden is going to fall upon" (CQ HealthBeat, 10/19).

Monday, December 05, 2005

20 Common Nursing Home Problems ? Can You Help?

Last Updated: 11/25/2005

Topic: Nursing Home Issues

In December, the National Senior Citizens Law Center (NSCLC) will publish a new guide to nursing home laws, entitled 20 Common Nursing Home Problems, and How to Resolve Them. The guide is an adaptation and expansion of NSCLC attorney Eric Carlsons Fifteen Falsehoods presentation.

In order to publicize the guide, NSCLC would like to be able to quote nursing home residents, family members, or advocates who have encountered any one (or more) of the Twenty Problems. If you or your client has heard any one of the nursing home falsehoods listed below, please contact Eric at (213) 639-0930, ext. 313, or This email address is being protected from spambots. You need JavaScript enabled to view it.. NSCLC will not mention you or your client without express permission.

1. Medicaid does not pay for the service that you want.
2. The nursing staff will determine the care that you receive.
3. We dont have enough staff to accommodate individual schedules. You will be woken up every morning at six a.m.
4. We dont have enough staff. You should hire your own private-duty aide.
5. If we dont tie your father into his chair he may fall or wander away from the nursing home. Theres just no way we can always be watching him.
6. Your mother needs medication in order to make her more manageable.
7. We must insert a feeding tube into your father because he is taking too long to eat.
8. Your children can visit you only during visiting hours.
9. We cant admit your mother unless you sign the admission agreement as a Responsible Party.
10. Please sign this arbitration agreement. Its no big deal. Arbitration allows disputes to be resolved quickly.
11. Medicare cant pay for your nursing home care because we have determined that you need custodial care only.
12. We must discontinue therapy services because you arent making progress.
13. We cant give you therapy services because your Medicare reimbursement has expired, and Medicaid doesnt pay for therapy.
14. Because you are no longer eligible for Medicare reimbursement, you must leave this Medicare-certified bed.
15. Even though youre now financially eligible for Medicaid payment, we dont have an available Medicaid bed for you.
16. We dont have to readmit you from the hospital because your bed-hold period has expired.
17. You must pay any amount set by the nursing home for extra charges.
18. We have no available space in which residents or family members could meet.?
19. You must leave the nursing home because you are a difficult resident.?
20. You must leave the nursing home because you are refusing medical treatment.?

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November 2005


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Monday, November 28, 2005

U.S. Gives Florida a Sweeping Right to Curb Medicaid

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Published: October 20, 2005
WASHINGTON, Oct. 19 - The Bush administration approved a sweeping Medicaid plan for Florida on Wednesday that limits spending for many of the 2.2 million beneficiaries there and gives private health plans new freedom to limit benefits.

The Florida program, likely to be a model for many other states, shifts from the traditional Medicaid "defined benefit" plan to a "defined contribution" plan, under which the state sets a ceiling on spending for each recipient.

Children under the age of 21 and pregnant women will be exempt from the limits.
The Florida plan says, "The state will set aside a specific amount of money for each person enrolled in Medicaid," based on the person's medical condition and historic use of health care.
Michael O. Leavitt, secretary of health and human services, approved the proposal 16 days after it was formally submitted to him, with strong support from Gov. Jeb Bush.

After meeting here on Wednesday afternoon with Governor Bush, Mr. Leavitt said: "Today will be remembered as a day of transformation for the Florida Medicaid program. Florida's framework will be helpful to other states."

Joan C. Alker, a senior researcher at the Health Policy Institute of Georgetown University, said: "Florida's proposal is one of the most far-reaching and radical proposals we've seen to restructure Medicaid. The federal government and the states now decide which benefits people get. Under the Florida plan, many of those decisions will be made by private health plans, out of public view."

Vernon K. Smith, a former Medicaid director in Michigan who is now a consultant to many states, said: "Florida's program is groundbreaking. Every other state will be watching Florida's experience. South Carolina has developed a similar proposal.Georgia and Kentucky are waiting in the wings." In his state of the state speech to the Florida Legislature in March, Mr. Bush called for transforming Medicaid, saying it was unsustainable in its current form. "Over the last six years," he said, "Medicaid costs have increased an average of more than 13 percent annually. State revenues grew an average of 6 percent a year." The plan, to be put into effect over five years, will significantly increase the use of managed care. Questions and answers prepared by federal officials say that a principal aim of the Florida program is "to bring predictability to Medicaid spending and to reduce Medicaid's rate of growth." President Bush has proposed similar changes at the federal level for several years, but Congress has not accepted those ideas. In Congress, Democrats and some moderate Republicans resisted the president's proposals on the ground that they would have allowed states to reduce coverage for very poor and very sick people. On Wednesday, Mr. Leavitt waived many provisions of federal law, letting Florida make the changes in a demonstration project.

Under the waiver, Florida will establish "a maximum per year benefit limit" for each recipient and fundamentally change its role. The state will largely be a buyer rather than a manager of health care.

In an interview, Alan M. Levine, secretary of the Florida Agency for Health Care Administration, estimated that no more than 5 percent of Medicaid recipients would hit their annual limits. At that point, Mr. Levine said, "the health plan will still be responsible for providing services to the consumer, but the state's reimbursement would be limited to that amount." Asked whether the beneficiary would be responsible for paying costs beyond the limit, he said: "That can happen today. There are arbitrary limits and caps embedded in the state Medicaid program, limits on home health services, doctors' visits, prescription drugs."

For each beneficiary, Florida will pay a monthly premium to a private plan. Insurance plans will be allowed to limit "the amount, duration and scope" of services in ways that current law does not permit.

The Florida Medicaid director, Thomas W. Arnold, said he believed that insurers would tailor benefits for different groups like people with AIDS and children with chronic illnesses. About half of Medicaid recipients in Florida are children, but they account for less than 20 percent of the costs.

The Florida program includes these features, approved Wednesday by the federal government:
If a recipient does not choose a private plan, the person will be automatically enrolled in one that the state selects.

Medicaid recipients can "opt out" of Medicaid altogether and receive subsidies to help pay the employee's share of the premium for employer-sponsored health insurance. Those beneficiaries will have to pay co-payments and deductibles like other employees in the same plan, even if the charges exceed normal Medicaid limits.

The state will deposit money into individual accounts for recipients who enroll in programs to help lose weight, stop smoking and lead healthier lives. Florida and the federal government will establish a pool of money providing up to $1 billion a year to help hospitals and other health care providers who treat large numbers of uninsured people.

A spokeswoman for Mr. Leavitt, Christina Pearson, said the decision on the Florida plan was not influenced by the fact that Governor Bush is the president's brother. Federal officials are prepared to approve similar innovative solutions from other states, Ms. Pearson said.
Medicaid provides health insurance to more than 50 million low-income people. The states and federal government jointly finance it.

Lawsuit Filed to Protect Poor From Losing Drug Coverage Jan. 1

Last Updated: 11/15/2005

Organizations representing the interests of impoverished older and disabled Americans with Medicare filed suit November. 14 in federal district court in Manhattan seeking an order assuring that people do not lose access to life-preserving medication when the Medicare drug benefit takes effect on January 1.

Under Bush Administration plans, 6.4 million people enrolled in both Medicare and Medicaid will be denied their existing Medicaid drug coverage on January 1. The Bush Administration is then required to provide coverage to these men and women through the new Medicare Part D program.

The lawsuit seeks protections for people who are not seamlessly and immediately switched to the Medicare drug program.

The poorest, sickest, and oldest Americans face grave risk of losing their life-saving medications once the clock strikes twelve on New Years, said Robert M. Hayes, president of the Medicare Rights Center, a national consumer service group. This lawsuit seeks to force creation of an essential safety net to protect the health and lives of the frailest Americans.
The suit warns that countless numbers of poor men and women will fall through the cracks of this massive program transition,? and that these impoverished people will face the loss of medicines needed ?to function or survive.

It also says that the characteristics of the people at risk  nearly 40 percent are cognitively impaired and only 39 percent have a high school diploma will prevent up to a million poor seniors from immediately mastering the complexity of the new Medicare drug benefit so they can maintain their access to needed medicine.

Protecting the oldest, poorest and sickest Americans through this transition is a legal and moral imperative, Hayes said. If the government transitions 99 percent of these men and women flawlessly, there will still be 64,000 people without their medicine come January. That cannot be allowed.

Among the organizations that have filed the suit are: Action Alliance of Senior Citizens of Greater Philadelphia, Congress of California Seniors, Massachusetts Senior Action Council, National Alliance for the Mentally Ill: Maine, New York Statewide Senior Action Council, The Coalition of Voluntary Mental Health Agencies, Inc., United Senior Action of Indiana and the Medicare Rights Center. The organizations are being represented by volunteer attorneys with the law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP, and the Medicare Rights Center.
A copy of the complaint filed in federal district court in Manhattan is available athttp://www.medicarerights.org/complaint.pdf; also online is the Medicare Rights Centers report Protecting the Poorest Americans During the Medicare Drug Transition.

To read a Cleveland Plain Dealer article on the suit, click here.

Monday, November 21, 2005

Major Asset Transfer Restrictions Dropped From Senate Bill

Last Updated: 10/24/2005

Topic: Medicaid

Republican members of the Senate Finance Committee have reached an agreement on Medicaid and other health care budget cuts that does not include an extension of the "lookback" period for asset transfers or a change in the start of the penalty period for transferred assets.
The transfer-of-asset proposals, which many elder law attorneys viewed as harmful to their clients, were among the recommendations of the Medicaid Commission which was established to advise Congress on how to cut $10 billion from Medicaid, as called for in the 2006 budget reconciliation bill approved earlier this year.

The agreement, released by Senate Finance Committee Chair Charles Grassley (R-Iowa), does attempt to close a number of "loopholes" in Medicaid transfer rules, changes that taken together would save Medicaid an estimated $305 million over five years. Among the changes:
The purchase of a life state would be included in the definition of "assets" unless the purchaser resides in the home for at least one year after the date of purchase.

Annuities purchased by a Medicaid applicant would be subject to transfer penalties unless they are irrevocable, non-assignable, actuarially sound and provide for equal payments. Also to avoid being classed as an improper transfer, the annuity must name the state as the remainder beneficiary for at least the total amount of Medicaid expenditures or the state must be named as beneficiary after the community spouse, providing the spouse does not dispose of any of the remainder for less than fair market value.

Annuities would be Included in the definition of assets that are subject to estate recovery unless the annuity was purchased from a business that regularly sells annuities.
Funds to purchase a promissory note, loan or mortgage would be included among assets unless the repayment terms are actuarially sound, provide for equal payments and prohibit the cancellation of the balance upon the death of the lender.
States would be barred from "rounding down" fractional periods of ineligibility when determining ineligibility periods resulting from asset transfers.
States would be permitted to treat multiple transfers of assets as a single transfer and begin any penalty period on the earliest date that would apply to such transfers.

The proposed bill would also require states to give more information about undue hardship exceptions, including notice and appeal rights, and it would exempt from estate recovery individuals enrolled in either an existing or future Long-Term Care Insurance Partnership plan.
Grassley's plan cuts Medicaid by $7.6 billion over five years but adds $3.3 billion, including $1.9 billion for Medicaid coverage for hurricane victims. About $5 billion of the Medicaid savings would come from changing the payment formula for pharmacies. The plan also would provide new savings of $5.76 billion in Medicare costs, although the bill does away with a scheduled 4.4 percent cut in Medicare payments to doctors and instead gives them a 1 percent raise for a year.

The Finance Committee must vote on the plan on Monday, Oct. 24. The plan is expected to become part of a $35 billion measure of spending cuts that will be debated in the full Senate next month. The House Energy and Commerce Committee takes up similar legislation later this month. The committees cuts are expected to predominantly come from Medicaid instead of Medicare.

Capitol Hill Watch Senate Conservatives, Moderates Still Divided on Medicare, Medicaid Cuts in Reconciliation Package
[Oct 24, 2005]

The Los Angeles Times on Monday examined support and opposition among Senate Finance Committee members for committee Chair Chuck Grassley's (R-Iowa) budget reconciliation package to cut $10 billion over five years from Medicaid and Medicare (Havemann/Simon, Los Angeles Times, 10/24). The plan includes $25.1 billion in proposed spending reductions and about $15 billion in spending increases for Medicaid and Medicare. It would provide a net savings of $4.26 billion in Medicaid costs and a new savings of $5.76 billion in Medicare costs (Kaiser Daily Health Policy Report, 10/21). Committee members are scheduled to vote on the package Tuesday, a move that "could be crucial to this year's effort to rein in federal spending," the Times reports. Some conservative Republicans "are reportedly upset that the [Hurricane] Katrina aid is too generous," according to the Times. Democrats are unified in opposition to the package, meaning that Grassley must win support from all finance committee Republicans (Los Angeles Times, 10/24).

Republican Opposition Sen. Craig Thomas (R-Wyo.) is said to be "balking" over additional spending outlined in the package, CongressDaily reports. A Thomas spokesperson said he did not know how the senator will vote but indicated that Thomas has serious reservations. In addition, Sen. Jim Bunning (R-Ky.) reportedly wants the bill to include language barring specific types of intergovernmental transfers of Medicaid funds, which states sometimes use to increase federal contributions. A Bunning spokesperson said, "As it stands, he would vote against it. But we're working with the committee to try to get his concerns addressed." Finance committee moderates "insist" that language on intergovernmental transfers should not be included in the reconciliation package, CongressDaily reports. A spokesperson for Sen. Gordon Smith (R-Ore.), a committee moderate, said, "If you put language [on intergovernmental transfers] in the statute, CMS loses flexibility, states lose out and it ultimately harms beneficiaries" (Heil, CongressDaily, 10/21). Smith and Sen. Olympia Snowe (R-Maine), a fellow moderate, favor Grassley's package, according to the Times (Los Angeles Times, 10/24).

House Leaders 'Struggling' In related news, House leaders are "struggling" in their attempt to increase budget reconciliation savings from $35 billion to $50 billion, CQ Today reports. The targeted cuts include an additional $7 billion from the House Ways and Means Committee, which has some oversight of Medicare (Dennis/Higa, CQ Today, 10/21). Rep. Jeff Flake (R-Ariz.) said, "The leadership is saying they will only go to the floor if they know they have the votes. They don't have the votes" (Los Angeles Times, 10/24). Analysts from the Center on Budget and Policy Priorities on Friday in a conference call with reporters said the committee likely will look for cuts in programs other than Medicare. Robert Greenstein, executive director for CBPP, said, "There are clear indications that the House Republican leadership is reluctant to have any cuts in Medicare in reconciliation." A spokesperson for the committee on Friday said no final decisions had been made on which programs will be targeted (CQ HealthBeat, 10/21). "Even if both chambers can settle on their own totals [for cuts], they may have difficulty compromising on a package that is neither too robust for the Senate nor too anemic for the House," the Times reports (Los Angeles Times, 10/24).

Monday, November 14, 2005

Asset Transfer Limits Reportedly Part of Finance Committee's Latest Medicaid Proposal

Last Updated: 10/14/2005Topic: Medicaid

Senate Finance Committee Chair Chuck Grassley (R-Iowa) has presented to Republican committee members a proposal to reduce mandatory health care spending by $12 billion over five years, while making only minor cuts to the Medicaid program. Although this is $2 billion more in cuts than Congress called for, Grassley would reportedly still further tighten Medicaid's asset transfer rules.

According to CQ Today, Grassley is considering a spending package that would achieve most of its savings by shrinking Medicare payments to private insurance plans and home health agencies. For example, $6.8 billion would be saved by eliminating an incentive fund for insurers to participate in the new Medicare prescription drug benefit program. Another $5.4 billion would be saved by giving higher Medicare payments to insurers covering sicker patients and lower payments to insurers that enroll healthier patients.

But among his Medicaid reductions, Grassley would save a projected $1.5 billion to $2 billion by making it more difficult for the elderly to transfer assets and qualify for Medicaid. His proposals would presumably follow the recommendations of theMedicaid Commission, which was established to advise Congress on how to cut $10 billion from Medicaid, as called for in the fiscal year 2006 budget resolution agreement earlier this year. The Commission proposed moving the start date of any penalty period from the date of the transfer to the date of application for Medicaid or the nursing home admission date, whichever is later, and increasing the "lookback" period for all transfers to five years. (The Senate Finance Committee had not replied to inquiries at press time.)

In an October 7 letter to Grassley, AARP CEO William Novelli said that while AARP could accept steps to encourage people to save money for long-term care, changing asset transfer rules could result in the denial of care.

The budget resolution agreement also requires $70 billion in tax cuts.
The House Energy and Commerce Committee also is reportedly considering an adjustment to Medicaid prescription drug payments that is similar to what the Senate Finance Committee is proposing. House leaders delayed the fiscal year 2006 budget reconciliation deadline until October 28 to give authorizing committees time to reach a new target of $50 billion in cuts (up from $35 million) from mandatory programs, including Medicaid. The Senate so far has no plans to amend the budget resolution and is scheduling an October 26 markup by the Senate Budget Committee.

According to the National Senior Citizens Law Center's Oct. 14 Washington Weekly, an unsigned document titled "21st Century Medicaid Reforms" circulating through Capital Hill was identified as the Republicans? Medicaid-cutting blueprint. Among other provisions, the document proposes to strengthen the penalties for asset transfers and grant states the flexibility to narrow the package of Medicaid benefits.

Monday, November 07, 2005

A 'Low-Frills' Long-Term Care Insurance Policy May Be Better Bet

Last Updated: 11/7/2005

Topic: Long-Term Care Insurance

When it comes to long-term care insurance, many people are intimidated by high costs and the bewildering array of benefit levels, deductible periods and other features, according to a recent article in The New York Times that examines the low popularity of this insurance.

In fact, only 10 percent of people over 65 own policies. Long-term care coverage often requires a lifetime commitment to one insurer; premiums can rise sharply if the policyholder switches, and policyholders can pay premiums for decades with no way to predict if their coverage is what they will need.

The article suggests that a lesser-frills policy, though still costly, may provide a more attractive safety net for many risk-averse elderly people.

For example, a new study shows that only a small percentage of policyholders need long-term care for long periods -- four years or more. The study, released in April, found that only 3.6 percent of claims filed for nursing home, assisted living and home services were for care that lasted four to five years, and 4.3 percent were for care lasting more than five years. In 76.7 percent of claims, care lasted less than two years.

So a growing number of specialists recommend more modest policies for which the policyholder pays a bigger share of the costs.

"Some insurance agents still strongly believe that people should buy the maximum possible for a policy to be worthwhile," said Dawn Helwig, a principal of Milliman Inc., and co-author of the study on insurance claims. "But those policies are very expensive. It puts you into the Cadillac market all the time, and a lot of Chevy owners are missed."

"I would go for four or five years of coverage, but for someone who has limited income and assets, three years should be satisfactory," Helwig said. Also, the article points out that not everyone needs long-term-care insurance. People with a net worth of $1 million to $1.5 million, not including the family home, could pay the cost out of their pocket, said John E. Ryan of Ryan Insurance Strategy Consultants in Greenwood Village, Colorado.

At the other extreme, those with a net worth of less than $250,000 may not have enough liquid assets to warrant paying premiums for years, Ryan said. They may be better off receiving benefits from state Medicaid programs.

To read the full New York Times article, click here or here.

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Monday, October 31, 2005

Medicaid Commission Submits Propodals for Program Cuts

 Medicaid Commission Submits Proposals for Program Cuts

Last Updated: 10/31/2005

Topic: Medicaid

Charged with the task of finding ways to trim $10 billion from the Medicaid program over five years, the federal Medicaid commission has submitted a report to Congress that it says will reduce Medicaid spending by $11 billion.

To no one's surprise, among the commission's recommendations are proposals to delay Medicaid eligibility for individuals who transfer assets for less than fair market value. Taken together, the transfer rule changes would allegedly save about $1.5 billion over five years.

The commission would save $1.4 billion of this by "moving the start date of penalty period from the date of the transfer to the date of application for Medicaid or the nursing home admission date, whichever is later." The panel also recommends increasing the "lookback" period for all transfers from 36 months to 5 years. This would save "less than $100 million" over five years, according to the commission.

The lion's share of Medicaid savings -- $4.3 billion over five years ? would come from changing the way state programs buy drugs and how pharmaceutical companies report data. Also, Medicaid beneficiaries above the federal poverty level would be required to contribute more to the cost of prescription drugs not on a state's preferred list, a change anticipated to save another $2 billion.

The Medicaid cuts were called for in the 2006 budget resolution agreed to by the House and Senate earlier this year. In addition to the Medicaid spending reduction the first sustained by the program since 1997 the budget resolution called for the creation of a study commission to recommend where the cuts should be made and offer advice on longer-term changes to the Medicaid program.

The commission, appointed by Health and Human Services Secretary Michael Leavitt, took a little more than a month to study the Medicaid program and issue its recommendations. The commission held two meetings over three days and heard presentations from a total of five individuals, according to the Centers for Medicare & Medicaid Services' Web site. A second commission report, focusing on recommendations for stabilizing Medicaid over the long term, is due Dec. 31, 2006.

Senate Finance Committee Chair Chuck Grassley (R-Iowa) called the commission's recommendations "constructive" and said his committee would consider them as it explores ways to reduce Medicaid's growth by $10 billion over five years. As previously reported, Republican members of the Senate Finance Committee appear headed for a fight over whether to spare the Medicaid program drastic cuts by trimming the growth of Medicare.

See GOP Senators Split on Whether to Cut Medicaid By $10 Billion.

For the full commission report, click here.

Two days before the commission issued its recommendations, The National Governors Association (NGA) weighed in with its own guidance for Congress on how to secure the $10 billion in Medicaid savings. The NGA recommendations include the following:

"Asset Transfer. States should have increased ability to prevent inappropriate transfer of assets by seniors to qualify for Medicaid. To that end, 1) the look-back period should be increased from 3 to 5 years; 2) penalty periods should begin at the time of application; and 3) the sheltering of excess resources in annuities, trusts or promissory notes must be prevented."

The report goes on to state that "Home equity should be considered a countable asset in order to require individuals to use home equity to off-set long-term and other medical expenses that would otherwise be paid by Medicaid." It also calls for reforms to facilitate the use of reverse mortgages to convert home equity into cash, as well as the expansion of Long-Term Care Insurance Partnership programs.

For the NGA's recommendations, click here.

Monday, October 24, 2005

Homestead Property Not Specifically Devised in Will Passes To Residuary Devisees

Last Updated: 10/16/2005

The Florida Supreme Court rules that if a decedent does not have a surviving spouse or child, homestead property that is not specifically devised passes to the residuary devisees, not the general estate. McKean v. Warburton (Fl., No. SC04-1243, September 8, 2005).

Henry Pratt McKean II had a will leaving a specific cash bequest of $150,000 to Peter Warburton and the remainder to his brothers. When he died, he had only a homestead property valued at $140,000 and nominal assets. Without the homestead property, the estate's assets did not satisfy creditor's claims and the specific bequest.

Mr. Warburton argued that the homestead property should be used to fund his specific bequest. Mr. McKean's brothers argued that it should pass to them through the residuary clause.

The court of appeals ruled that Mr. Warburton was entitled to the property (Warburton v. McKean, January 19, 2004). It held that because a homestead can be freely devised if there is no surviving spouse or minor child, the homestead becomes property of the estate and is subject to division in accordance with the established classifications giving some gifts priority over others.

The Supreme Court of Florida reverses, holding that if a decedent is not survived by a spouse or minor child, the decedent's homestead property passes to the residuary devisees, unless the testator specifically orders the property to be sold and the proceeds made a part of the general estate. According to the court, "while it is true that a decedent may devise protected homestead property in his or her will if there is no surviving spouse or minor child, the property may only pass as a general asset of the estate by a specific devise."

To download the full text of this decision in PDF format, go to: http://www.floridasupremecourt.org/decisions/2005/sc04-1243.pdf and click on "Opinions." (If you do not have the free PDF reader installed on your computer, download it here.)

Monday, October 17, 2005

Hurricane Katrina Now Affecting Medicaid, Medicare and Social Security Legislation

Last Updated: 10/17/2005

Senate Majority Leader, Bill Frist (R-Tenn.), says that $10 billion in cuts to Medicaid requested by the Bush administration will have to be weighed against the need to provide health care to victims of Hurricane Katrina. Thousands of people have lost health insurance through their employer, so the demand on Medicaid may grow, according to an article in the Palm Beach Post. In May, the House and Senate passed a budget resolutionto reduce Medicaid spending by $10 billion over five years. Frist said that Congress should still look at reducing Medicaid costs by considering changes that would eliminate waste, fraud, and abuse, but not by cutting back on care.

While cuts to Medicaid may not be made, the costs associated with Hurricane Katrina are having the opposite effect on efforts to reverse a scheduled 4.3 percent reduction in Medicare physician payments. According to the Kaiser Daily Health Policy Report, several Senate staffers have questioned whether Congress will be willing or able to reverse the payment reduction because reversing the pay reduction would cost between $153 billion and $183 billion over 10 years. However, many doctors have said they will no longer treat Medicare recipients if the cuts go through.

Hurricane Katrina is also having an effect on proposed reforms to Social Security. According to an article in the Washington Post, Republican Congressional Committee Chairman, Thomas Reynolds (R-N.Y.), will recommend that the party drop efforts to restructure Social Security. He told a group of Republicans that now that Congress had Hurricane Katrina legislation to deal with, it would be difficult to mount an effective public relations campaign to restructure Social Security.

Meanwhile, the Senate is moving to provide Medicaid coverage to survivors of Hurricane Katrina. Senate Finance Committee Chair Chuck Grassley (R-Iowa) and Senator Max Baucus (D-Mont.) have introduced a bill to temporarily extend Medicaid coverage to displaced residents of Louisiana, Mississippi, and parts of Alabama. According to the Kaiser Daily Health Policy Report, the bill would require the federal government to pay 100 percent of Medicaid costs for five months, with an option to extend coverage for an additional five months.

In addition, the federal government would pay through 2006 100 percent of the costs for Medicaid beneficiaries in the affected states. Other provisions in the bill would eliminate asset tests, establish a fund to help survivors with private health insurance bills, and eliminate penalties for missed application deadlines for survivors.

Monday, October 10, 2005

Opinion Piece Calls for Full Federal Coverage of Long-Term Care

Last Updated: 9/2/2005

Topic: Medicaid

Medicaid "has become a lifeline for millions of people who require nursing home care," and "simply cutting the program won't work," two professors write in a Los Angeles Times opinion piece that has been widely reprinted around the nation.

Jacob Hacker, a professor of political science at Yale University, and Harold Pollack, faculty chair of the University of Chicago's Center for Health Administration Studies, write that the real problem with Medicaid "isn't well-off senior citizens gaming the system" but rather that "few Americans have reliable and effective private alternatives that can protect them if they require long-term care." The authors say that long-term care insurance, touted as an alternative to Medicaid, "will never work for millions of Americans." Insurers themselves cannot reliably price such insurance due to uncertainties about the future costs of care, they contend.

Rather than pursuing the home equity of widows with Alzheimer's disease, "the federal government should pay for long-term care through Medicare, openly, for every American," Hacker and Pollack say. Doing so would give the elderly and disabled through the front door what they are now gaining through the backdoor under Medicaid, and would "protect everyone from one of life's most frightening risks."

To read the full Los Angeles Times article, "Health cuts are the real 'death tax'," click here.

Monday, October 03, 2005

GOP Senators Split on Whether to Cut Medicaid By $10 Billion

GOP Senators Split on Whether to Cut Medicaid By $10 Billion

Last Updated: 10/3/2005 Topic: Medicaid

Republican members of the Senate Finance Committee appear headed for a fight over whether to trim the growth of Medicare in order to spare the Medicaid program from drastic cuts. Congress's fiscal year 2006 budget resolution calls for cutting Medicaid by $10 billion over the next five years, but the resolution left open where the reductions should be made. Among the proposals is to tighten restrictions on the ability of the elderly to qualify for Medicaid coverage of nursing home care by transferring assets. The Finance Committee must submit a final proposal by September 16.

Committee Chair Chuck Grassley (R-Iowa) favors a proposal that would reduce Medicaid spending only, while Sens. Olympia Snowe (R-Maine) and Gordon Smith (R-Ore.) "have been working on ways to reduce the Medicaid cuts," such as finding ways to trim Medicare spending, according to CQ Today.

Demetrios Karoutsos, a spokesperson for Sen. Smith, said, "We certainly think there is room to reduce Medicare," adding, "Smith's goal throughout this entire process is to find ways that don't impact beneficiaries." A spokesperson for Sen. Snowe, Antonia Ferrier, said, "Taking $10 billion from Medicaid would be a wrong-headed approach. There are a lot of other things that we are open to exploring. That could very well be savings from Medicare as well."

AARP is urging lawmakers not to slash $10 billion from Medicaid, arguing that seniors will have more difficulty qualifying for nursing home care if the funds are cut. The organization suggests that savings can be realized through more efficient prescription drug spending by Medicaid.
In a letter to Congress, AARP and close to 40 other members of the Leadership Council of Aging Organizations (LCAO) opposed the proposals to further restrict the ability of the elderly to transfer assets, stating in part that the proposals "will create unacceptable new obstacles to nursing home admission for vulnerable, frail elderly and disabled persons" Other signatories to the letter included the National Senior Citizens Law Center, Families USA, the National Academy of Elder Law Attorneys, the AFL-CIO, AARP, and the National Citizens Coalition for Nursing Home Reform.

New Hampshire Seeks to Restrict Transfers on Its Own While Congress considers changing the asset transfer rules for the entire country, New Hampshire will soon be asking the federal Centers for Medicare and Medicaid Services for permission to impose on its residents the same restrictions. The New Hampshire Medicaid agencys proposal, among other things, increases the "lookback" period for all transfers from 36 months to 60 months and begins the Medicaid penalty period on the date on which an applicant applies for coverage or meets all eligibility requirements, whichever is later. (Currently, the penalty period begins on the first day of the month of the transfer.)

To review the New Hampshire draft waiver request, go to:http://www.dhhs.nh.gov/DHHS/OCOM/GraniteCare/HB691-waiver-assets.htmsee

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