Families at Risk: If Elders Lose Medicaid Coverage

For months, AFSCME and other senior citizen advocates have decried the Republican-sponsored budget plan for Medicaid, pointing out that it would cause thousands of elderly to lose coverage for long-term care. Essentially, the GOP plan eliminates Medicaid—the federal/state safety net for health care and long-term care. It converts the program into a series of "MediGrants" to the states, cutting federal contributions by billions of dollars and wiping out nearly all federal guidelines—including eligibility rules and minimum benefit requirements. Also, the plan severely weakens nursing home standards.

But the damage caused by these changes will go far beyond the elderly. Families of elderly nursing home residents could be forced to pay for care if Medicaid won't. Consumers Union and the National Senior Citizens Law Center (NSCLC) describe the potential dilemma in a recent report called "What Congress Isn't Telling You: Families of Nursing Home Residents May Face Financial Ruin Under Federal Medicaid Bill." They emphasize that Medicare pays for nursing home care only after hospitalization, and even then for a very limited period. Few seniors can afford private long-term care insurance. So Medicaid is generally the coverage of last resort.

Under Medicaid, older persons in poverty immediately qualify for benefits if they need long-term care. Most other seniors qualify once they exhaust all their savings on care—which can happen quickly when nursing homes charge from $25,000 to $60,000 a year. But under the MediGrant plan championed by Republican congressional leaders Newt Gingrich and Bob Dole, coverage is no longer guaranteed for either group of seniors. The long-term care safety net disappears.

States Can Seize Family Savings

The "Families" report estimates that the MediGrant plan would deny coverage to nearly 400,000 seniors and disabled in its first year alone. In some cases, adult children may have to quit their jobs in order to take care of parents at home. But the Gingrich/Dole plan would hold families accountable in other ways as well. It would give states the flexibility to do the following:

• count the income of relatives in determining eligibility;
• recover costs from relatives;
• place liens on houses of family members; and
• seek recovery from beneficiaries' estates, even if family members need the proceeds for basic survival.

Nursing homes would also have increased flexibility. Here's what they'd be permitted to do:

• request contributions from a resident's family as a condition of admission or continued stay;
• ask relatives to sign an admission agreement as guarantors, even if they're not legally responsible for the resident;
• ask relatives to pay for services normally included in the daily rate; and
• require applicants to pay out-of-pocket for a specified time before applying for state assistance (if the applicant has no money of his own, the family may have to pay to gain the relative's admission).

None of this is legal under Medicaid, and with good reason. According to Consumers Union and the NSCLC, studies of families of average people who need long-term care show that most are of modest means. In Idaho, for example, a study showed 63% of the responsible relatives of Medicaid-covered nursing home residents had incomes under $20,000; 81% had incomes under $30,000. A 1991 study of adult-children caregivers found that two-thirds had incomes below $40,000 and most had dependent children at home or in college.

A Threat to Family Unity

If adult children are held responsible for parents' long-term care bills (and the Gingrich/Dole plan would exempt only those with incomes below a state's median), the huge costs could threaten their ability to educate their kids or prepare for their own retirement. In some cases, it could lead to bankruptcy.

AFSCME Pres. Gerald W. McEntee sees a clear irony in this scenario: "Here are Congressional leaders who claim to love 'family values,'" he said, "but they've come up with a surefire way to tear families apart. This plan threatens the economic security of nearly every American and should never become law."