Playing Medi-tag: the price of long term care

 “I cried for three months,” says Nova
Robbins.

            The 74-year-old Fairport resident
had helped her husband, Robert Robbins, get necessary long term care after a
paralyzing stroke.

            But the crying that Robbins mentions
here was connected to other terrible difficulties: the paperwork she needed to
wade through, and the money she needed to survive on her own.

The Robbins
family had
abruptly moved into a brave — no, a banal — new world. One fraught with
extra-medical complications.

            Unaccustomed to such things, Nova
Robbins learned the hard way.

            First she saw to it that Robert was
admitted to a Pittsford nursing home; later she moved him to the Fairport
Baptist Home, where he still resides. Then she had to take care of herself. She
moved out of the family home and into a townhouse. It was tough, she says, to
say goodbye to the place where she and Robert lived for 35 years and raised two
daughters.

            You might see these transitions as
inevitable, if unpleasant. But soon enough, Nova was wrapped up in a most
artificial struggle: coming up with detailed records so she could apply for
Medicaid assistance, and laying out great gobs of money in the meantime.

            “We went through all the money my
husband had in retirement, well over $100,000 in one year,” Nova says. “I got a
letter in the beginning that said, you will pay us $20,000 up front or we will
sue you,” she says. There was also, she says, a requirement to pay $3,500 per month
indefinitely.

            Nova Robbins is not as poor as they
come, but for a long time she feared going broke.

            She says she gets $484 per month
from Social Security, plus part of Robert’s Kodak pension. But she’s got to
keep an eye on expenses. “Everything is starting to go up,” she says,
mentioning medigap insurance for herself, monthly maintenance fees for the
townhouse, and the routine costs of keeping body and soul together. “I would
love to go out and get a job, but I can’t,” she says. “I’d have to hand everything
over to the nursing home.”

            The Robbins family didn’t wait for
the inevitable. In 1998, they took the state Department of Health to court,
asserting that Medicaid was after too much of her own savings. Finally, in late
2000, a federal Court of Appeals decided in Nova’s favor. The judgment allowed
her to keep assets that would generate enough monthly income to keep her head
above water.

Wait a minute, you say. Why
is a family like this one messing with a program designed to pay medical bills
for poor people, not nursing home bills for the middle class?

            There are actually two forms of
Medicaid, says David Kaiser, corporate counsel for Family Service of Rochester:
One form serves the destitute, for example, those on SSI (Supplemental Security
Income). The other form, “chronic care Medicaid,” helps people like Robert
Robbins. Each form has its own complex rules and procedures. But however it’s
structured, Medicaid is caught in a warp of contradictions. It’s been enlisted
to defray the huge costs of nursing-home care (now at more than $8,000 per
person monthly in New York, on average), something it wasn’t originally
designed to do.

            As with health insurance, the United
States has no coherent national policy on long term care. According to AARP
(formerly spelled out: American Association of Retired Persons), a great many
people assume that Medicare will
cover their nursing home costs. But Medicare, quite distinct from Medicaid,
covers only hospital and medical bills.

            In any case, people like Nova and
Robert Robbins are turning to Medicaid by default. They’ve certainly been
contributing to society and supporting a range of social programs for their
whole lives. Now they feel society owes them something back. “I’ve been working
since I was 13,” says Nova, describing jobs at Kodak and other workplaces, as
well as decades raising a family. “We’ve been paying taxes for 40 or 50 years,”
she says, “and they’re screwing us just as they do the welfare people.”

            She cites an old aphorism: “The
judgment of a nation is how they treat the very old and the very young.”

            It’s clear the family doesn’t aim
any resentment at the Fairport Baptist Home. “The institution itself is
marvelous,” says Nova Robbins. The living space, she says, is “well-kept and
beautiful.”

            Susan Alexander, one of Nova and
Robert’s two daughters, has seen what happens to middle-class seniors who turn
to Medicaid for long term care — and plain survival. “People’s life savings
are being eaten up quickly,” she says. When all the debits and credits and
household income are counted, she says, her mother is paying around $1,500 a
month to the nursing home.

            Alexander expresses sympathy for the
DSS staffers who deal with the paperwork. “The cuts they’ve taken over there,
and the [increasing] caseloads — it’s unbelievable!”

            And she ought to know the inside
scoop. Not only has she experienced the system firsthand, as part of the
Robbins family. She’s also a paralegal — specializing in Medicaid issues —
with Woods Oviatt Gilman, the law firm that represented Nova Robbins in court

What’s
happening here? An unusual case?

            Hardly.

            A state Department of Health report
says that in August 2002, there were 5,400 “aged” on Medicaid in Monroe County,
apart from seniors enrolled in various public assistance programs. (The 5,400
aren’t all in nursing homes necessarily, but most of them are. An AARP
backgrounder says that nationally, around 70 percent of seniors in nursing
homes get help from Medicaid. And staff at Lifespan, a local agency for
seniors, confirm that Monroe County’s numbers are close to the national
average.)

            Medicaid recipients in the county
total around 85,000 today, says a memo from US Senator Chuck Schumer’s office.
Monroe County will pay around $125 million for Medicaid next year, says the
memo. And the county’s contribution, says the memo, increased 103 percent
between 1990 and 2001, putting much strain on the county budget. In New York
(which incidentally is known as a “Medicaid-rich” state because of its high
benefit levels), each county must kick in 25 percent of Medicaid costs. Albany
kicks in 25 percent, too, and Washington pays the remaining half.

            Nursing homes are sometimes caught
in a crunch, too. Most do accept Medicaid-funded residents, though this, as
AARP says, is not mandatory. But Medicaid reimbursements don’t come close to
matching the levels of private-pay.

            Susan Alexander says private-pay
rates in Monroe County range from $180 to $275 per day, or roughly $5,400 to
$8,250 a month. Moreover, she says, a newly-enacted nursing home tax (levied
with the justifiable purpose of raising the salaries of many underpaid health
workers) will soon add a few percent to these fees. On average, she says,
Medicaid pays around $4,400 a month.

            This means that private-pay
residents are, in a sense, subsidizing residents on Medicaid. But of course,
that sort of thing is implicit in health insurance and similar structures of
shared risk: We all pay for each other ultimately.

            But we’re paying through a Rube
Goldberg apparatus, for sure.

            “Fundamentally, this is a pretty
screwy way to pay for [long term] health care,” says René Reixach, a Woods
Oviatt attorney who shepherded Robbins v.
DeBuono through the courts. The current system “leaves people in the
lurch,” Reixach says. “If you get cancer, the hospital will be taken care of.
But if you need long term care, basically there’s no protection for you.” (Many
people carry long term care insurance, of course, but for most folks this is
prohibitively expensive, especially on top of private health insurance
premiums, co-pays, Medicare payroll deductions, and so forth.)

            The rich don’t sweat it. “If you
have $2 million and you’re earning $100,000 per year from investments… I guess
you shouldn’t complain,” says Reixach. Conversely, if you’re poor enough, he
says, there’s no problem getting long term care coverage. It’s people “in the
middle” who get stuck, he says.

            What about a single person? Reixach
explains that in New York, if you’re on your own and obtain Medicaid coverage
for nursing home expenses, you can keep a total of $3,850 in savings, plus IRAs
and the like; you’re also allowed $50 per month in income.

            Finally — and here’s some
especially cold comfort — you can keep a pre-paid account for funeral
expenses.

Surveying the
national scene, AARP shows how Americans are prepared or unprepared for the future.

            Only a few have long term care
insurance, and around a third of families “pay all the costs out of their own
pockets,” says an AARP backgrounder.

            Of course, as the backgrounder makes
clear, individual circumstances change over time. For example, many families
and single persons initially pay the costs out of pocket, then turn to Medicaid
when their well runs dry. Coping strategies abound. For example, with legal
help, some families set up annuities and other means of sequestering wealth.

            There are rules in place that stop
Medicaid applicants from “voluntarily impoverishing” themselves, says Reixach.
He points to various limitations regarding personal assets: for example, a
36-month exclusionary period on assets. That is, if you hold certain assets —
apart from your home — during the three years before applying for benefits,
your eligibility can be delayed. Reixach emphasizes that holding assets won’t
disqualify you necessarily. (There are also ways to set up trusts, etc. Again,
it takes a professional to sort it all out.)

            Yes, we’re paying for each other —
or for ourselves. But nothing in the process is inevitable. A person looking at
a nursing home stay has got to stick with the process. And help is out there,
sometimes for the asking.

            Ann Marie Cook, chief operating
officer with Lifespan, says the group’s doors are open. “We will sit down with
[people] and explain what Medicaid and Medicare will and will not pay,” she
says. “There’s a lot of information that Medicaid requires by law, so families
have to get their act together.” Yes, says Cook, “the process is just backed up
right now.” But she makes it clear that this isn’t the Medicaid workers’ fault.

            Over at Family Service of Rochester,
corporate counsel David Kaiser says much the same. “The person left in the
community is often scared to death that they’ll be left out in the street,” he
says. Counseling and legal assistance can erase, or at least lessen, the fears.
But are counselors and lawyers just helping people milk the system?

            A lot of Americans feel it’s
immoral, if not illegal, for middle-class seniors to fall back on Medicaid.
“The legal profession has received criticism for this,” Kaiser concedes. He
says, though, that lawyers would be committing malpractice if they didn’t
inform their clients of all the legal options regarding Medicaid and
preservation of wealth.

            “Ideally, I’d like to see [the
system] move toward more of an insurance plan instead of a welfare plan,” says
Kaiser. As things stand, he says, the paperwork and procedures waste lots of
money and labor. “I tell people, if you don’t like it, talk to your legislators
and get it changed.”

What would the
insurance model entail?

            Kaiser mentions one possibility:
expanding Medicare to cover long term care in nursing homes and other settings.
He adds there should be some kind of cost-sharing — that is, reasonable
co-pays.

            As trends in long term care collide
with the demography of the Baby Boomer Bulge, the US and individual states and
localities will have to do something, somehow. (But it’s easy to overstate the
Bulge’s effects. In reality, the US is more than wealthy enough to handle any
demographic trend with ease.)

            Bette Davis said “getting old is not
for sissies.” Less famously, her tombstone reads: “She did it the hard way.” No
one will doubt the truth of Davis’s first proposition, or the inevitability of
age-related problems. But nothing says long term care financing must be done
the hard way, as it is now.

This article appears in Dec 18-24, 2002.