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Playing Medi-tag: the price of long term care

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 "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.

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