LTC Bullet: KFF Hoisted Again

Friday, June 28, 2024

Seattle—

LTC Comment: A series of KFF “issue briefs” intended to show how poor Medicare beneficiaries are prove the opposite. We explain after the ***news.*** [mostly omitted]

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LTC BULLET: KFF HOISTED AGAIN

LTC Comment: To set the stage, read “LTC Bullet: Hoist with Its Own Petard,” April 28, 2017. In it we critiqued KFF’s April 2017 “Issue Brief” titled “Income and Assets of Medicare Beneficiaries, 2016-2035.” KFF argued that “Medicare beneficiaries are so poor that it behooves policymakers not to consider ‘decreasing federal Medicare spending’ when they are ‘addressing the federal debt and deficit.’” We explained that “what they inadvertently prove instead is that most Medicare beneficiaries are actually quite well off” and “what they miss entirely is that affluent [Medicare] beneficiaries capture a disproportionate share of Medicaid’s long-term care benefits.” Neither income, assets nor home equity stand in their way.

We concluded: “This KFF issue brief tries to sidetrack policymakers from addressing Medicare’s fatal fiscal flaws by focusing on beneficiaries below the financial median. But, contra the KFF argument and conclusions, most Medicare beneficiaries are doing quite well financially. Furthermore and ironically, with tragic consequences for the genuinely needy half of beneficiaries, the better off group is co-opting desperately needed long-term care resources that should go to the needier group. The fact that affluent whites live longer than poor minorities, consume a disproportionate share of Medicaid’s scarce resources, and plan for that eventuality as a result of incentives created by existing policies raises serious ethical questions—not because Medicaid forces people into impoverishment as usually assumed, but for precisely the opposite reason.”

That’s where we left the matter seven years ago. But KFF is back again with another issue brief promoting the same mistaken views: “Income and Assets of Medicare Beneficiaries in 2023,” by Alex Cottrill, Juliette Cubanski, Tricia Neuman, and Karen Smith, published February 5, 2024. Here’s a quote from the press release for that publication: “A new KFF analysis shows that most Medicare beneficiaries live on relatively low incomes and have modest financial resources for retirement – posing a risk to their economic well-being, particularly if they were to have a major, unanticipated expense, such as a need for long-term nursing home care. The financial picture is especially bleak among Black and Hispanic Medicare beneficiaries, who tend to have lower incomes, savings, and home equity than White beneficiaries, the analysis shows. Women have lower incomes and less savings than men, and beneficiaries’ income and savings tend to decline with age. … Some Medicare beneficiaries may be eligible for additional support from Medicaid, including those with very low incomes and limited savings, and others who spend down their assets to pay for their medical or long-term care costs. Medicaid offers coverage for nursing home care and other long-term care services and supports that are not generally covered by Medicare. However, for lower and middle income beneficiaries who do not qualify for Medicaid, the high cost of unanticipated medical and long-term services and supports may simply be unaffordable.”

This is cock-eyed analysis. The truth is that most Medicare beneficiaries are eligible for Medicaid LTC benefits. They do not have to have “very low incomes and limited savings” and they do not have to “spend down their assets to pay for their medical or long-term care costs.” Medicaid does not require applicants/recipients to spend down assets for care. They can reduce wealth to the countable level allowed, usually $2,000, by purchasing anything. As long as what they purchase is something Medicaid considers exempt, their eligibility is unobstructed and their net worth undiminished. What does Medicaid exempt? Almost every large asset the affluent elderly possess, including most home equity, home repairs and updates, a business, a car, prepaid funeral expenses for the whole family, and many more listed on websites and provided by Medicaid planning attorneys.

To make sense of what’s really wrong with LTC in the USA, read the Paragon Health Institute’s “Long-Term Care: The Problem” and “Long-Term Care: The Solution” and watch this “virtual LTC event” featuring age wave visionary Ken Dychtwald and leading LTC researchers.