According to The Kaiser Commission on Medicaid and the Uninsured,
“Medicaid is the nation’s primary payer for long-term care (“LTC”)
services and supports both in institutions and in the community.”
Although the elderly and those with disabilities only make up 25% of
Medicaid rolls, they account for two-thirds of spending. Medicaid
costs have grown at an average rate of 7.2% annually versus state tax
revenues which have grown only about 3.9% annually. It is the second
largest state budget item and the third largest domestic program in
the federal budget. Therefore, it’s not surprising that states and the
federal government have a strong incentive to control Medicaid costs.
State approaches to controlling costs have varied and include
prescription cost containment measures, expanded home health care,
stricter eligibility requirements and co-pays to name a few. The first
major attempt by the federal government was the Deficit Reduction
Omnibus Reconciliation Act of 2005, signed by President Bush on
February 8, 2006, which made the following changes:
Tightened
the Medicaid Eligibility Rules:
Increased penalties for seniors who transfer assets within five years before
applying for long-term Medicaid coverage.
Seniors with home equity of more than $500,000 would be ineligible
for nursing home benefits.
Allowed for the Nationwide Expansion of the (LTC) Partnership Program.
A second attempt was made with the Community Living Assistance
Services and Supports (CLASS) Act, which would have provided lifetime
LTC benefits for a modest premium. However, it became apparent that
the tax costs for the CLASS Act were unsustainable and it was
repealed.
Despite these efforts to curb the current system, Medicaid loopholes
continue to allow middle income individuals to impoverish themselves
through asset transfer. Medicaid has become the default long-term care
insurance for many and will become an unsustainable program.
Recently, Congressman Charles W. Boustany, Jr., M.D. introduced
legislation that calls for the study and reform of Medicaid LTC
eligibility and estate recovery rules. The bill’s sponsors sent
letters to governors asking four questions.
Should the federal government give states greater flexibility to
consider assets, including substantial home equity, when determining
eligibility for long-term care coverage through the Medicaid
Program? Why or why not?
Please provide examples of barriers to effective Medicaid Estate
Recovery Programs and tools that might help states in this area.
Should state and federal governments encourage middle-income
Americans to anticipate and plan for their future long-term care
needs, instead of relying on Medicaid, a safety net for the poor?
Why or why not?
Do
you consider Medicaid estate recovery planning to be a significant
problem that takes resources from the truly needy in your state?
Please explain and provide examples.
The handwriting is on the wall. Americans will need to plan
differently for their long-term care needs, and this is a tremendous
opportunity for annuity agents to present the AnnuiCare® product as a
completely unique approach to long-term care.
AnnuiCare®, exclusively offered by Guaranty Income Life, is
specifically designed for the annuity agent. It was created because
the majority of people self-insure. Traditional long-term care is
expensive and underwriting can be rigorous and lengthy. In addition,
seniors are reluctant to purchase something they may never use.
In the future, a significantly larger number of seniors will be
required to plan for their LTC needs, rather than depend on Medicaid.
Many seniors will find it more attractive to buy asset based long-term
care (AnnuiCare®) because the new regulations will make it less
attractive to fully self-insure and more difficult to qualify for
Medicaid. There is a better way to self-insure. AnnuiCare® provides
safety, liquidity, and three times the annuity value for long-term
care needs at approximately one-third the cost of traditional LTC
plans. Getting their money back plus interest if they don’t need LTC
benefits is an added advantage that makes AnnuiCare® the best choice.
Guaranty Income Life has fourteen
years of experience with:
Fast
Underwriting
High
Issue Rates
Policy Owner Satisfaction
Producer Satisfaction
NO
LTC Premium Increases
AnnuiCare® provides your healthy clients with a choice. It gives
them the ability to remain at home without being a burden to their
loved ones. Give your clients the gift of security and dignity. They
depend on your advice.
Call your Sales Support Team 800.535.8110 ext. 292 for supplies,
information and training.
