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What the Long-Term Care Commission Needs to Know about Transitions to Medicaid

What the Long-Term Care Commission Needs to Know about Transitions to Medicaid. Joshua M. Wiener, PhD RTI International Washington, DC. Co-authors and Funders. RTI International: Wayne L. Anderson, Galina Khatutsky, Yevgeniya Kaganova , and Janet O’Keeffe

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What the Long-Term Care Commission Needs to Know about Transitions to Medicaid

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  1. What the Long-Term Care Commission Needs to Know about Transitions to Medicaid Joshua M. Wiener, PhD RTI International Washington, DC

  2. Co-authors and Funders • RTI International: Wayne L. Anderson, Galina Khatutsky, Yevgeniya Kaganova, and Janet O’Keeffe • Gratefully acknowledge funding from The SCAN Foundation • Gratefully acknowledge useful comments by Lisa Shugarman and Gretchen Alkema of The SCAN Foundation • Weblinks: http://www.thescanfoundation.org/sites/thescanfoundation.org/files/rti_medicaid-spend-down_3-20-13_1.pdf. http://www.thescanfoundation.org/sites/thescanfoundation.org/files/tsf_ltc-financing_medicaid-spend-down-implications_wiener-tumlinson_3-20-13_0.pdf.

  3. Issues • Lack of insurance coverage for long-term services and supports (LTSS) through Medicare or private insurance • High cost of long-term services and supports results in routine catastrophic out-of-pocket costs • Year of private room in nursing home: $84,000 • Year of 20 hours/week of home health aide: $19,740 • People who have been independent all of their lives are impoverished and must depend on welfare • From a fiscal perspective, people who spend down are a substantial part of Medicaid spending for LTSS • During 1990s, number of studies by Burwell, Meiners, and myself

  4. Study Goals, Data and Methods • Develop current estimates of transition to Medicaid and characteristics of people who do so • Look at whole population, not just LTSS users • 1996 to 2008 Health and Retirement Study merged with Medicare data to determine buy-in • Track 1996 cohort • Population age 50 and older • Track transitions to Medicaid • Not Medicaid spend down in technical sense, which relates to depletion of assets • Includes “partial” dual eligibles and younger people

  5. Medicaid Transitions by Age and Transition Status Source: RTI International analysis of Health and Retirement Study merged with Medicare data.

  6. Medicaid Transitions by Use of LTSS Source: RTI International analysis of Health and Retirement Study merged with Medicare data.

  7. Medicaid Transitions by Use of LTSS Source: RTI analysis of Health and Retirement Study merged with Medicare data.

  8. Socio-Demographic Characteristics of Non-Medicaid Population in 1996 Source: RTI analysis of Health and Retirement Study merged with Medicare data. *p <.05, **p <.01, ***p <.001

  9. Income and Wealth Characteristics at Baseline, 1996 Source: RTI International analysis of Health and Retirement Study merged with Medicare data. *Includes people with no housing assets.

  10. Financial Status of Long-Term Care Medicaid Transition Population at Baseline, by Quartiles, 1996 Source: RTI International analysis of Health and Retirement Study merged with Medicare data. Quartile classes are determined by the income and assets of the total population at baseline.

  11. Median Income (Respondent and Spouse), 1996-2008

  12. Median Wealth, Less IRA, 1996 to 2008

  13. Median Net Value Primary Residence, 1996-2008

  14. Transfer of Assets by Medicaid Status, 65+ Source: RTI International analysis of Health and Retirement Study merged with Medicare data. *p <.05, **p <.01, ***p <.001.

  15. Policy Implications • Medicaid spend down deserves to be higher on LTSS reform agenda • England and Australia are proposing to cap out-of-pocket costs for LTSS • Transitions to Medicaid not just a LTSS issue • Part of broader issue of retirement income security • Substantial number of people experience significant reduction in income and assets as they age, especially people who start out economically vulnerable • Any Social Security reforms need to take that into account

  16. Policy Implications (cont.) • Few people who transition to Medicaid likely to be able to afford private LTC insurance without large subsidy • Private long-term care insurance is unlikely to result in substantial Medicaid savings • Tax subsidies for private LTC insurance unlikely to pay for themselves • Intergenerational transfer of assets common among older Americans, but Medicaid transition population does it less • Wiener’s Iron Law: Cannot transfer large amounts of assets if you don’t have large amounts of assets

  17. Contact Information Joshua M. Wiener, PhD Distinguished Fellow and Program Director Aging, Disability and Long-Term Care Program RTI International 701 13th Street, NW Suite 750 Washington, DC 20005 jwiener@rti.org 202-728-2094

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