Filed Under:Life Insurance, Life Planning Strategies

LTCI Watch: Mr. Moses Went to Washington

The Visit Was Not Fun

Stephen Moses took a thumping recently when he tried to testify at a congressional hearing on abuses of Medicaid eligibility rules.

Moses, who worked for the inspector general of the U.S. Department of Health and Human Services in the 1980s and is now president of the Center for Long-Term Care Reform, Seattle, spoke at a hearing on Medicaid planning organized by the House Oversight and Government Reform Comittmee's health care subcommittee.

Moses submitted written testimony explaining his argument that he believes the government should do more to reserve Medicaid nursing home funding for people who are genuinely poor, or, at least, not affluent, and keep people from using loopholes in Medicaid eligibility restrictions to shield large amounts of assets.

He made a great argument on paper, and, in the virtual world, the committee posted his testimony on its website, along with testimony from David Dorfman, a New York elder law lawyer who said he thinks reports about eligibility abuse are exaggerated, and that the real problem is that people who need help with paying for the cost of long-term care are not getting it because the rules are so complicated.

But the committee also posted testimony from Janice Eulau, a Suffolk County, N.Y., Medicaid administrator who said she sees couples with $500,000 in resources, and some with more than $1 million in resources, qualifying for Medicaid long-term care benefits.

We here covered the written testimony.

In the real world, at the actual flesh-and-blood hearing, Democrats on the subcommittee asked so many questions about the funding sources for the Center for Long-Term Care Reform that Moses never got to make his case out loud, in the form of spoken words.

Lawyers have an important lesson about how to proceed in life: When the law is in your favor, pound on the law. When the facts are in your favor, pound on the facts. When neither the law nor the facts are in your favor – pound on the table.

At the Medicaid planning hearing, Moses seemed to be standing in for the table.

Outside of hearings, Moses said during an interview, he tends to have a somewhat easier time winning over Republicans than Democrats, but he said he feels he has had a great deal of success with members and staffers from both parties.

“Nobody challenges my facts or my figures or my arguments,” Moses said.

Democrats tend to be more sympathetic to the plight of families facing the cost of long-term care – which can be daunting even for families that have thought of themselves as being solidly middle class – but, Moses said, they tend to change their minds when he explains that, “The people getting those benefits are Republicans. They’re the ones doing the Medicaid planning.”

Letting a family with $500,000 or $1 million in home equity use Medicaid nursing home benefits, rather than requiring it to get a reverse mortgage or use other assets, is a form of estate protection that helps the affluent at the expense of genuinely needy nursing home patients and against the low-income and middle-income workers who help pay the taxes that fund Medicaid, Moses said.

Moses said he decided not to talk about his center’s funding at the hearing, because he though his center’s funding sources were none of the committee’s business.

But he said he gets about one-third of the center’s revenue from selling memberships, one-third from corporate memberships and sponsorships, and one-third from consulting, grants and other sources.

He keeps expenses low by living in a 16-foot trailer on a campground.

Congress is frozen on the issue because the Democrats have decided not to Medicaid be changed in any way, and Republicans are using that decision as an excuse not to try to do anything about Medicaid, Moses said.

The atmosphere in Congress “is bad already, and it’s going to get worse,” Moses said. “The money is gone.”

Giving out money is fun and leads to good feelings, while cutting funding leads to bad feelings, Moses said.

But Moses said he does think people are listening to him better now that times are bad because they are more interested in ways to make programs more efficient.

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Note: This is my first time doing the LTCI Watch blog.

My experience with LTCI is that, so far, all of my grandparents made sure to die before using up their Medicare skilled nursing facility benefits.

My great-grandfather – who was a Socialist, and eventually was buried in a Socialist cemetery – did live for several years in a nursing home. But, fortunately for him, he was a rich Socialist and could pay for his care out of his own pocket.

My Great Aunt Zelda had one of the early LTCI policies, and it paid handsomely for home care benefits. Her brilliant move to buy the policy was the talk of the family for several years.

I personally am one of the oldest members of Generation X, and my own personal attitude as someone who grew up watching post-apocalyptic movies is that I’m stunned that civilization still exists. It’s very hard for me to grasp the idea that banks, money, insurance companies and stores could still exist in, say, 2055. My instinctive approach to long-range financial planning is to buy the good version of the survival gear that comes from the camping store instead of the cheap versions they sell at the discount store. But, of course, they probably will, and, by then, I’ll probably have bought an LTC insurance policy that will end up costing me many times more than it would cost if I would buy a policy today.

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