House and Senate Get Down to Business

As we go to press, the House and Senate are back from their breaks and are set to begin work hammering out an agreement to Medicaid changes.

Medicaid costs have skyrocketed by 54% over the last five years and presently top $300 billion per year, prompting many state and federal officials to declare it "unsustainable in its current form."

The Senate bill aims to keep benefits intact, whereas the House version proposes these major changes:

States could increase co-payments and charge premiums for various benefits.
States could decrease coverage, limiting or abolishing coverage for services currently assured by federal law.
States could refuse coverage to participants who are 60 or more days late in paying their premiums.
Doctors and hospitals could refuse services and pharmacists could deny medicines to those who did not make the required co-payments. Currently, health care providers cannot refuse to provide care or services because a person cannot pay.
Most devastating for the elderly is the change in the gifting penalties for nursing-home Medicaid. Currently, if an elder makes a gift, the lookback period is three years, and the penalty begins when the gift is made. The penalty corresponds roughly to how long the elder could have paid for nursing home care with the gifted money. In other words, the penalty is proportionate to the gift: the more you give, the longer the penalty. The House bill would apply to all gifts made after the date of enactment, and would extend the lookback to five years. But most devastating, the penalty would begin later: when the elder has less than $2,000 of assets (but not before actually applying for Medicaid). This, in effect, imposes a flat five year penalty on even small assistance to family members trying to pay mortgages or send their children to college.

Source: NYTimes.com, 12-12-05

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