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June 30, 2005
MONEY FOLLOWS THE PERSON
This past Wednesday I made a trip into the State House to testify at a public hearing on Bill #H3100 regarding long term care insurance. Not wanting to be late, I left over an hour early to make the 10-mile ride from Saugus. Wouldn’t you know that as soon as I got over the bridge, the traffic was all backed up, basically stopped. After taking some of the less traveled roads through Boston, I finally arrived for the hearing about 10 minutes early. After signing in as a speaker, I entered the room and waited for the hearing.
The hearing started off with Bill #H2781, which was about pediatric nursing homes. I never heard of a pediatric nursing home but I guess just as some seniors are not able to remain at home; there are some children that also are not able to remain at home. Maybe it’s just something I don’t want to think about.
The hearing progressed taking each Bill in numerical order and before I knew it, Bill #H3100 was called. This Bill, if passed, would make a person's home an exempt asset if they purchased a long-term care insurance policy that meets the minimum requirements of 2 years of coverage and $125 per day benefit. Under the current regulations, your policy is examined on the day that you enter the nursing home. Because most long-term care insurance policies allow home care benefits, if you purchase a minimum policy and use one day of home care benefits when you enter the nursing home, your home is no longer protected. That is because you have one day less than the minimum 2 year required coverage.
My testimony was that there is a feeling among elders that they want to be able to protect their home. When I discuss long term care insurance with elders, they always ask me if it will protect their home. My answer is “It depends.” When it comes to protecting the home, “It depends.”, doesn’t cut the mustard. People want to hear me say either yes, or no. Another point that I made was that if someone really wanted to protect their home and they had a long term care insurance policy, that perhaps they might decide to enter a nursing home earlier than needed, just to protect the home. My final point was that it is in the Commonwealth’s interest to remove any roadblocks from people purchasing long term care insurance for financial reasons. If everyone had long term care insurance, the state budget would be eased tremendously.
Bill #H2893, Nursing Home Relocations, was also on the schedule for the hearing. And no, this is not about a nursing home in Revere that wants to move to Saugus. This is about a nursing home resident on Medicaid that wants to go home and have Medicaid pay for help at home instead of paying the nursing home. This Bill is also known as “Money Follows the Person” and is similar to “Rider 28”, a Texas law passed in 2003.
Let’s face it. No one wants to go to a nursing home but sometimes a person needs so much care that there really isn’t any other option. Here is what happened in Texas;
Late in 2003 Texas passed a law called “Rider 28” that allowed people in nursing homes to leave to a less restrictive setting and have the money that the state that was paying for their care (Medicaid funds) “Money Follows the Person” into the community. Instead of Medicaid paying the nursing home, the same amount of money was channeled into the community.
After one year, nearly 3,200 people had left the nursing home and went back to the community thanks to being able to use their Medicaid funds to provide care at home. Of the 3,200 people:
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6 people now living in the community were over 100 years old.
· Another 245 people were between 90 and 100 years old.
· Total of 65% were over age 65
· 35% were under age 65
· 37 were children under 17 years old.
Where did they move?
· 20% live alone
· 43% live their family
· 32% live in “alternative living/residential care”
· 106 persons live with other persons who are in a Medicaid Waiver Program.
How did this program come about? In 1999 the United States Supreme Court heard the case, Olmstead v. L.C. and E.W. In this case, L.C. and E.W. were mentally retarded women who were institutionalized primarily because there was not sufficient funding to allow them to live in the community, even though their doctors said that they could exist in a less restrictive setting. Olmstead was the Commissioner of the Georgia Medicaid department. Justice Ginsberg said that states are required to place persons with disabilities in community settings rather than in institutions when:
1. the state’s treatment professionals have determined that community placement is appropriate
2. the transfer from institutional care to a less restrictive setting is not opposed by the affected individual, and
3. the placement can be reasonably accommodated, taking into account the resources available to the state
If Massachusetts Bill #H2893 passes, it does not mean that nursing homes will all of a sudden be empty. In Texas, their annual survey of nursing home residents, about 20% wanted to move out and go back to the community. Let’s hope that our legislators get behind this Bill to make this a reality in Massachusetts.
This article gives general information and not specific advice on individual matters. Persons wanting individualized advice on matters discussed should contact an advisor experienced in those matters. To the extent this article provides information on legal matters, it is based on law in effect in Massachusetts on the date of posting (laws in effect in other states are often quite different).
Ronald H. Surabian is a CPA and attorney who works at the Elder Law Center in Saugus, Massachusetts. He also holds masters in accounting and a masters in tax law. He currently serves on the board of directors of the Massachusetts Chapter of the National Academy of Elder Law Attorneys. If you have any questions please call me at the Elder Law Center, One Essex Street, Saugus, MA 01906 (781)233-4444. To view this or any prior article, please visit our web site at www.elderlawcenter.org