Medicaid - a welfare program

Our welfare system, which started in 1966, provides complete medical related care for the indigent and is called Medicaid. General regulations for Medicaid are established at the federal level and the determination of who qualifies is made by the state. Funding (about 50/50) comes from state and federal.

It is the only government program which pays for on going day to day assistance, called custodial long term care services.

Medicare on the other hand was developed to just cover acute medical situations such as sickness and accidents and only pays when the person is improving.

Some points about what happens when Medicaid is used for Long Term Care services:

• The ability to receive help at home where most people want, is limited if available at all, since Medicaid primarily provides care in a Nursing Home. In Connecticut services at home or in Assisted Living are only covered in some pilot situations focused on disabled individuals under age 65.
• Connecticut's welfare program only pays nursing homes 50% or less of cost. This under funding has been going on for a long time and has done three things:
  • First - some facilities stopped taking any Medicaid patients and many have limited the number they will admit. The result - fewer beds are now available to those entering with Medicaid and it may be some distance away.
  • Second - the low payment level makes it difficult for facilities to hire enough caring and quality staff. In addition, turn over in nursing homes is high since staff, once trained, move on to other medical facilities for a better salary.
  • Third - Studies show the qualify of care under Medicaid has declined. To add to this - when a care related problem develops - the facility gets sued which drains more dollars away from care delivery.

  Nursing homes have offset a small part of Medicaid's low payment with the more reasonable income from rehabilitation care paid by Medicare. However, they still face significant economic issues and trends:

  • The chance Medicaid nursing home payments will be increased is quite limited.
  • The number of people who will need care is growing rapidly.
  • Medicaid eligibility was restricted as a result of a law Congress passed February 1, 2006. Some of the changes include:
    • The look back period for transfers and gifts is now 5 years vs 3.
    • Ineligibility periods now begin from the date an individual applies for Medicaid. It is no longer back on the date the transfer was made.

    In addition to all this impacting the quality of care 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."

    Because of all this the Parker Agency believes coverage under Medicaid (welfare) is not the type of care or lifestyle most people want! To be in control, have quality help, and protect your nest egg the solution is to buy Long Term Care insurance. It provides a contractual agreement to pay policy benefits. There is no long term commitment to pay in the Medicaid program. Thus, everyone should ask themselves:

    • Is it wise to count on Medicaid since funding is unknown and it has no guarantee that it will be available?
    • Is this what I want for myself or family?