Why Block Grants Are Bad for Medicaid
Sometimes we become so accustomed to things as they are we cannot conceive of them differently. At this point we have become so accustomed to believing that government will contribute to the cost of serious care if we need it that we take it for granted. This could change. Vice Presidential Candidate Paul Ryan’s budget proposal to change Medicaid to a block grant program instead of the program we know it to be now could radically change long term care and, in particular, in Pennsylvania, could leave adult children on the financial hook for their parents’ care.
In addition, protections that are built into federal law so that spouses would not be impoverished if a husband or wife goes to a nursing home and files for Medicaid, the so-called “spousal impoverishment rules” need not apply. As Medicaid now stands, a spouse does not need to give up her home or, in Pennsylvania, have a lien placed against his home when her or his spouse goes on Medicaid. In addition, spouses are allowed to keep an amount known as the CSRA or Community Spousal Resource Allowance or simply “Spousal Share.” This protection is federal, not state.
One reason we were protected from knowing how serious some changes to the Medicaid program could be is that, when the federal government distributed stimulus money to the States to help cover the Medicaid programs, it required states not to change their Medicaid rules if they accepted the money. This requirement, known as the “maintenance of effort” rule was a basis for advocates to preserve some protections that are now in the rules.
A block grant would be an amount that the federal government gives to the State and tells the State they can use as they see fit. This means that the federal protections need not apply.
Superficially, it has some appeal. In theory, the government officials closest to the problem could decide how to use the money. This means that, if the State decided to eliminate payment for nursing home care completely or wait list it so that only a few could qualify, or pay only for those currently receiving care, or require spouses to give up their spousal share, or require applicants to give up their homes before qualification or require adult children to pay for their parents’ care, it could do it. This assumes that the Governors and legislatures of the various states will know the issues and will care. Also, one might question whether Philadelphia County and Elk County, Pennsylvania would have the same viewpoints. Why not take it the next round and have each municipality then decide or, for that matter, why not make it a true “block” grant and have each “block” decide?
There are some issues too basic to leave to game playing. Families, and in particular, spouses, need protection. For millions of Americans the Medicaid program is something they believe they do not need – until they do. Despite all of the information that says that Medicare, the program that covers seniors most notably for hospital care, does not cover after an initial period up to 100 days for rehabilitation, and then it is private pay or Medicaid, people are stunned to find this is true. This is when, to use an old phrase “the rubber meets the road.”
True, nursing home residents could go home. The cost for 24 hour home care for seriously ill clients is generally higher than nursing home. Assisted living (now referred to as “personal care home”) may be less expensive but, beyond a certain level of care, an assisted living will not accept a resident or may require families to hire supplemental aides. This can drive up the cost of an assisted living/ personal care home stay to the same cost as nursing home care and without the possibility of Medicaid as an eventual payment source.
It is a life altering experience to receive a first nursing home bill for one month of somewhere between $8,000 and $10,000 when Medicare comes to an end. After 15 years of working in this field, I have seen one common change in that people do what they can to avoid nursing care. If the person in the next bed receives Medicaid faster than another family, the chances are good that he or she first exhausted assets paying for care at home or in assisted living. I have heard and believe that people should plan ahead. Many of them did and still need Medicaid as the backup source of payment
For more, listen to “50+ Planning Ahead” a weekly radio program on WCHE 1520 on every Wednesday from 4:30 pm to 5:00 pm with Janet Colliton, Colliton Law Assocs., PC, and Phil McFadden of Home Instead Senior Care.
About the Author Janet Colliton
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.