Much of the following is taken from a report of the New York State Bar Association Elder Law Section:

Most New Yorkers are aware that state and county expenditures on Medicaid coverage have been a source of budget woes, but how many are aware that our representatives may be inclined to adopt measures to restrict the rising costs that will put millions of people in harm’s way? Governor Pataki, for instance, has submitted a 2005-2006 budget that may be applauded to the extent that it explores affordable nursing home insurance for able-bodied citizens. Unfortunately, the Governor’s budget also makes proposals that seek to alter Social Security provisions of the federal Medicaid program eligibility rules that ignore the plight of frail, elderly New Yorkers facing the daunting task of paying for long-term care. The process followed by the Governor in developing his recommendations is notable for the almost complete absence of any input from consumers or organizations other than those representing various health care providers or the insurance industry.

This space is too limited to detail all the adverse impacts that may result, but here are a few:

  • Low-income elders may be denied admission to a nursing home because of inadequate record keeping even if they have been suffering from dementia;
  • Older family members may be inhibited from providing financial assistance to younger members with such things as down payments on homes and college tuition;
  • Frail elderly and disabled people may find themselves uprooted from their homes and familiar surroundings and have to live with a caregiver family member;
  • Healthy spouses may have to seek divorce in order to keep their assets and keep their frail spouse at home.
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The elderly did not cause the rate hikes in health care that have greatly outpaced inflation and should not be blamed for the high cost of their care.

The current Medicaid eligibility provisions should not be changed until there is a comprehensive long-term care program for the elderly. As the New York Court of Appeals has summarized: “No agency of the government has any right to complain about the fact that middle class people confronted with desperate circumstances choose voluntarily to inflict poverty upon themselves when it is the government itself which has established the rule that poverty is a prerequisite to the receipt of government assistance in the defraying of the costs of ruinously expensive, but absolutely essential medical treatment.”

The lesson to be learned is that planning by middle class individuals for potentially devastating long-term care expenses is no less respectable than estate tax planning by wealthy taxpayers (who, ironically, have already been afforded one of the biggest gifts of all time by President Bush’s championing of the elimination of the “death tax,” which only affects marital estates over $3 million, and who don’t really have to worry about the costs of long-term care).