Medicaid - a welfare program
Our welfare system was developed to provide complete medical related care for indigent individuals. It's called MedicAID and started in 1966. General regulations for what MedicAID covers, etc. are established at the federal level. Specific determination of who qualifies is made by the state. Funding comes from state and federal and is usually about 50/50.
A couple points:
- MedicAID is the only government program, which will pay for long term services when a person needs on going day to day assistance. This assistance is called custodial services.
- The other government program MediCARE is for individuals 65 and older and only pays for treatment expenses when the person's condition is improving, such as recovering from a sickness or accident. These are called acute care.
What happens when MedicAID is used for long term care services?
- In Connecticut MedicAID normally only covers needed on going long term care services in a Nursing Home. The ability to receive help at home where most people want to be, is limited if available at all. MedicAID coverage for home services has normally been just for special pilot situations. For example, one focused on disabled individuals under age 65.
MedicAIDs under funding has been going on for a long time and the significant overspending at the state and federal level over recent years makes the current level of support a significant issue. Nursing homes are paid in the range of 50% or less of their cost. This has done three things:
First- some facilities stopped taking any MedicAID patients and others have limited the number they will admit. The result - fewer beds are available for those entering with MedicAID and an available space may be some distance away from where you live.
Second - the low payment level makes it difficult for facilities to hire enough caring and quality staff. Turn over in nursing homes is also high since staff, once trained, move on to another medical facility for a better salary.
Third - studies show the quality of care under MedicAID has declined. Another study found individuals with no insurance received better care than those on MedicAID! ! !
To add to this when a Nursing home has a care related problem:
- The facility gets sued, which drains more dollars from care delivery.
- Nursing homes have in the past offset a small part of MedicAID's low payment with the more reasonable income from rehabilitation care paid by MediCARE.
Today the state/federal MedicAID program faces significant economic trends:
- The chance MedicAID nursing home payments will be increased is limited.
- The number of people who will need care is growing rapidly and the number of available care givers is not growing. To add to this the health care reform law expands the level of income, which will be eligible for MedicAID thus adding additional people who do not now have medical coverage.
- Eligibility for MedicAID long term services and support was restricted as a result of a law passed in early 2006. For example, the look back period to exclude transfers and gifts is now 5 years vs 3. The ineligibility period now begins on the date an individual applies for MedicAID and it is no longer back to the date the transfer was made.
In addition, to all this another factor to consider is the statement in Connecticut's regulations which indicates - "MedicAID payments are considered a loan from the State and must be repaid, if possible, at time of death".
The Parker Agency consequently believes MedicAID coverage is not the type of care or lifestyle most people want! Thus, everyone should ask themselves:
- Is it wise to count on MedicAID's unknown funding in a program, which does not have a guarantee it will be available to pay?
- Is this what I want for myself?
Because of all this the most effective thing to do is to invest in a Long Term Care insurance plan. This means you can be in control, can pay for quality help, and protect your savings nest egg. Because it is insurance the special kind of financial protection does provide a contractual agreement to pay the policy benefits you select.
John C Parker, has achieved professional designations as a Long Term Care Insurance professional and a Registered Health Underwriter. John is licensed to conduct business in CT (644135) and RI (1058420) and does not solicit or sell in other states.
This site shares insights from extensive involvement in professional associations, industry conferences, working with leading Long Term Care Insurance organizations, and individual research. These pages do not advocate a specific company or plan.