Have a Piece of Cake. . .

It’s Medicaid’s 50th Birthday!

Q.  My son, Sam, turns 50 this year. Besides his birth, I know that something else significant happened in 1965 — President Lyndon Johnson signed Medicaid into law. I know you help people apply for Medicaid to protect their hard-earned assets from the catastrophic costs of long-term care, so I thought you would be the right person to ask. With all the budget cuts, is it likely that Medicaid will be around for another 50 years (and hopefully even longer than that)? Thanks!

A. In 1965, President Johnson addressed a joint session of Congress asking that we honor a basic commitment to our seniors. He asked that the later years of their lives not be filled with “despondency and drift, or fear of financial hardship in the event of illness,” but rather with “security and dignity.” His words were followed that year by the signing of Medicaid (and Social Security and Medicare) into law.

Fifty years later, we’re a stronger country because nearly 70 million Americans (6 million seniors) are covered by Medicaid. Since its passage in 1965, Medicaid has become the nation’s main source of coverage and financing of long-term care services for the middle class — both the elderly middle class  and individuals with disabilities at all income levels.  Medicaid plays many different roles in our healthcare system and was recently expanded significantly as a base of health care coverage for low-income persons under the Affordable Care Act.  But it is vitally important to understand that the type of Medicaid that covers long-term care is NOT a program for those with low income, but rather is available to cover the vast majority of middle class Americans — so long as the Medicaid applicant’s income is below the cost of private nursing home care.

A Sampling of Medicaid History

Watch this video for a more in-depth look at Medicaid’s first 50 years.

1965: President Johnson signs H.R. 6675 (Public Law 89-97) to establish Medicare and Medicaid. Medicaid (Title 19 of the Social Security Act) becomes a federal-state partnership program, in which voluntarily participating states receive grants for eligible residents to access a defined set of medical and long-term care benefits.

1971: States are given the option to cover both services in intermediate care facilities (ICFs) for the elderly and individuals with disabilities with lower level of care needs than those available in skilled nursing facilities and to cover services in facilities for individuals with mental retardation (MR).

1972: President Nixon signs the Social Security Amendments of 1972 (Public Law 92-603), which establishes the Supplemental Security Income (SSI) program for individuals with disabilities.

1981: Joe Califano, Secretary of the Department of Health, Education and Welfare, creates the Health Care Financing Administration (HCFA) to administer both the Medicare and Medicaid programs.

1982: Arizona becomes the last state in the country to start participating in Medicaid. The Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA, Public Law 97-248) expands states’ abilities to impose nominal cost-sharing on certain Medicaid beneficiaries and services.

1987: The Medicare and Medicaid Patient and Program Protection Act of 1987 (Public Law 100-93) is signed into law with the goal of improving antifraud efforts and strengthening beneficiary protection programs.

1993: The Omnibus Budget Reconciliation Act of 1993 (OBRA 93, Public Law 103-66) lays the groundwork for allowing Medicaid asset protection for he middle class through use of an “income-only trust,” which later forms the basis for my proprietary Living Trust Plus(TM) Asset Protection Trust.

1996: The Personal Responsibility and Work Opportunity Act of 1996 (PRWORA, Public Law 104-193) develops the Temporary Assistance for Needy Families (TANF) block grant to states, ending the formal linkage between cash assistance (welfare) and Medicaid eligibility.

1999: The U.S. Supreme Court rules in Olmstead v. L.C. (527 U.S. 581) that the Americans with Disabilities Act (ADA) can, under certain circumstances, require states to provide community-based services to individuals for whom institutional care is inappropriate.

2001: Secretary of Health and Human Services, Tommy Thompson, renames HCFA to The Centers for Medicare & Medicaid Services (CMS).

2003: The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173) establishes a new Medicare Part D prescription drug program.

2010: President Obama signs into law The Patient Protection and Affordable Care Act of 2010 (ACA, PL 111-148) to reform the country’s health care system and extend health coverage to uninsured individuals across the country.

2014: Coverage becomes effective for millions of those who have enrolled through the new Marketplaces and who have become newly eligible through Medicaid expansion.

2015: By January 2015, a total of 28 states and DC had adopted Medicaid expansion. Medicaid now covers 69 million people nationally and enrollment has grown by ten million from the period leading up to year 1 of open enrollment to the following open enrollment period.

Medicaid Today

Over the last five decades, both Congress and the states have expanded and reformed Medicaid significantly to more effectively cover the nation’s uninsured and underinsured citizens. The following describes Medicaid today:

Medicaid for Seniors:

• The Medicaid long-term care program is a federal-state program that covers medical expenses for aged, blind, and disabled individuals.

• The federal-state Medicaid partnership has served to advance a variety of both federal and state goals. However, it has also led to substantial state variation with large implications for access to coverage and care for those who qualify.

• The Medicaid program is the second-largest item in state budgets, after elementary and secondary education, and the third-largest federal domestic program, after Social Security and Medicare. In FY 2013, combined state and federal Medicaid spending totaled $438 billion.

• Medicaid covers close to 2 million elderly beneficiaries who use long-term care services – about 1 million who mostly use institutional care and another 1 million who mostly use home and community-based services and supports.

• Medicaid revenues provide core funding for health and long-term care institutions and providers, including a safety-net for hospitals, emergency departments, health centers, the mental health system, and nursing homes.

• Most elderly Medicaid recipients have multiple chronic conditions, such as hypertension, heart disease, and diabetes; nearly one-quarter have Alzheimer’s disease or another kind of dementia; and 1 in 5 have depression.

Medicaid for people with disabilities

Although Medicaid beneficiaries with disabilities make up only 15% of all enrollees, they account for more than 40% of total Medicaid spending. This is how Medicaid helps those with disabilities:

• Medicaid helps children with significant disabilities remain with their families and receive services at home or in community settings.

• Working adults with disabilities with modest earnings can retain their Medicaid coverage or buy it at low cost, an outcome that promotes independent living and more integrated workplaces and communities.

• The availability of home and community-based services in Medicaid prevents unnecessary and unwanted institutionalization of people with physical impairments, severe mental illnesses, developmental and intellectual disabilities, and other disabling conditions, and fosters community integration, as desired by many.

Please read more about special needs planning and eligibility for Medicaid, SS,I and SSDI benefits on our Website.

The future of Medicaid for seniors

With no benefits for long-term care coverage under the Medicare program and few affordable options in the private long-term care insurance market, Medicaid continues to be the main payer for institutional and community-based long-term services and supports for eligible seniors. This trend is likely to continue into the foreseeable future, because with increased life expectancy and advances in technology and medical care, the demand for long-term services will continue and financing needs will grow.

Medicaid Asset Protection

Medicaid planning can be started while you are still able to make legal and financial decisions, or can be initiated by an adult child acting as agent under a properly-drafted Power of Attorney, even if you are already in a nursing home or receiving other long-term care.  In fact, the majority of our Life Care Planning and Medicaid Asset Protection clients come to us when nursing home care is already in place or is imminent.

Generally, the earlier someone plans for long-term care needs, the better.  But it is never too late to begin the process of  Long-term Care Planning, also called Lifecare Planning and Medicaid Asset Protection Planning.

Planning for long-term care will not eliminate the risk of needing it, but it enables you to sort options and make smarter decisions ahead of time. As a result, you’ll have the peace of mind that no matter what happens, you will know what to do as a family. If you or your parents have not done Long-Term Care Planning, Estate Planning, or Incapacity Planning (or had your Planning documents reviewed in the past several years), please call us as soon as possible to make an appointment for a no-cost consultation:

Fairfax Medicaid Planning Attorney: 703-691-1888
Fredericksburg Medicaid Planning Attorney: 540-479-143
Rockville Medicaid Planning Attorney: 301-519-804
DC Medicaid Planning Attorney: 202-587-2797

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