Legislation referenced as “H.R. 6300: Medicaid Long-Term Care Reform Act of 2012” was introduced on August 2, 2012 by a Louisiana congressman and three others. It has no chance of passing this year. But it does introduce some sobering statistics and suggestions.
According to the bill’s language, the Congressional Research Service reports that Medicaid long-term care spending has grown at an average annual rate of 6.5% since 1995, and will grow from the current annual amount of $73 billion to reach $1.148 trillion in 2021. That’s sixteen times more than the current amount!
The bill suggests that Congress should repeal the CLASS Act, which is the national long- term care insurance component of the Affordable Health Care Act (a.k.a. Obamacare) that both the Congress and President Obama agreed in October 2011 is economically not viable. Instead, the proposed act encourages middle-income individuals to purchase long-term care insurance by offering better incentives. Currently only 10% of Americans over 55 have done so.
Other cost saving changes proposed would be to make it harder to re-characterize assets as income, and require a ten year lookback instead of five with respect to gifting penalties. The amount of home equity that can be retained from the present $536,000 would be reduced to as low as $50,000; and presumably, home equity would need to be accessed with reverse mortgages. Aggressive estate recovery techniques would be taught to state administrators.
The insurance industry supports the proposed Act. The National Academy of Elder Law Attorneys (NAELA ) opposes it. We at Keystone are a part of both groups. What do you think?
Should Elder Law attorneys such as our firm continue to be able to help middle class families get Medicaid early to save their family assets, even though we are expanding the national debt to do so? If it weren’t legal, we wouldn’t do it. Or, should the law be changed so that anyone in his or her right mind would accept the incentives to buy long term care insurance, and if they did not, they would need to first exhaust all of their assets without any loopholes or exceptions? And after all assets would be depleted, should the states have more discretion in the level of care that they provide to the truly indigent?
If you want to read the legislation, which is about 12 pages long (less than 1% of the Obamacare legislation!) you can do so here.