State's long-term care rules strip seniors of assets

By N. Clark Judd

Claire Sandorf is covered.

A frequent visitor to the Van Cortlandt Senior Center, Ms. Sandorf, 70, has her Medicare, she’s got her Medigap, she has her catastrophic insurance. She knows to prepare for every eventuality because she’s seen what happens to people who are not prepared.

“We went through a terrible time with my mother,” she said, while visiting friends at Riverdale Senior Services in the Century building on Netherland Avenue.

“She had Alzheimer’s, and I couldn’t get any help for her. I had to pay it out of pocket to take care of her. She couldn’t feed herself, she couldn’t shop, she was homebound with nobody to take care of her. Not even homebound,” Ms. Sandorf continued. “At first she would wander.”

Like many older New Yorkers, Ms. Sandorf had to sign away some of her mother Bessie Reznitsky’s assets to put her under the threshold to qualify for Medicaid, stateand federally-subsidized coverage for people with low incomes. Ms. Reznitsky died in 1999. The practice, called “spending down,” is just one of many problems policymakers and industry experts see with the way Medicaid works in New York. State officials are now deciding how to react to over $10 billion in increased support for Medicaid coming from the federal government this year as part of the American Recovery and Reinvestment act, and Gov. David Paterson has already placed large cuts to Medicaid spending on the table as a way to help balance the state’s massive budget deficit.

Policy solutions are emerging to tackle these problems. But some experts call the current budget process a missed opportunity to reform a fragmented system that affects the lives of seniors throughout the state — especially since Congress has recalibrated the way the federal government calculates how much money it will give New York for Medicaid for approximately the next two years.

“It’s a 27-month gift, if you will, to the state,” said Carl Young, president of the New York Association of Homes & Services for the Aging, “that is a real opportunity to energize genuine reform in the system. The state wants to get nursing home beds, wants to reduce our dependence on nursing home beds. We support that,” he said.

Most Medicaid money goes to nursing homes, and nursing homes lose money on Medicaid patients.

When “spending down” occurs — and he estimates that as much as 10 percent of Medicaid patients do it — it shifts the cost of health care from the patients to the taxpayers.

But there are few alternatives. To qualify for Medicaid for institutional long-term care, patients must have no more than $4,200 in non-exempt resources, which would include a home, and $700 in monthly income. Patients in nursing homes can keep no more than $50 a month as an allowance, according to a recent study by state Sen. Jeff Klein’s office.

Debbie Drelich, a geriatric care manager based in Riverdale, says that allowance has not increased in the 25 years she has worked in elder care.

Mr. Klein’s study found that only 291,556 New Yorkers held active longterm care policies in 2006, out of 18 million people, 3 million of whom were seniors. The report blamed that in part on price: In 2004, the premiums for that type of insurance averaged $3,324 annually, or $277 a month, the report found.

That leaves a yawning gap in coverage between New Yorkers that can afford long-term care insurance and New York’s very poor. Elder law attorneys have increasingly been advising clients to slough assets so as to make it into the second category, Mr. Young said.

An untold number of people simply assume that Medicare, the federal program that provides health care for seniors, will cover long-term care, several experts interviewed for this article said.

But Medicare will pay for up to 100 days of rehabilitative care after a hospitalization, which includes care in the home. Medicare won’t otherwise cover long-term care, experts say.

And after a certain amount of spending on a patient, Medicare stops paying. Ms. Sandorf and many other seniors have acquired “Medigap” insurance that will pick up the balance, which she can afford thanks to her pension and union benefits. After a few thousand more dollars, Medicare kicks back in again. Experts call this the “doughnut hole.”

None of this takes into account the maze of pharmaceutical coverage programs funded by two separate federal and state programs.

Julia Schwartz-Leeper, executive director of Riverdale Senior Services, says her staff spends an average of two hours with clients to help them navigate their Medicaid and Medicare entitlements.

There are options on the table to change the way the system works.

Mr. Klein, the state senate deputy majority leader and a representative of Riverdale, parts of Westchester and the East Bronx, is promoting one such alternative.

He plans to introduce legislation that would allow life insurance policyholders to use their policies to pay for long-term care if they develop chronic illness.

“It would actually make it mandatory that in every life insurance policy, be it term life or cash value life, that there would be what’s known as an accelerated death benefit,” Mr. Klein said.

He estimates this would save $1.1 billion for the state over four years, and says the majority of the increase in cost to insurers will not be passed on to the consumer.

State Sen. Ruben Diaz of the West Bronx has introduced legislation that would empower the state to purchase drugs in bulk from pharmaceuticals’ Canadian branches rather than buy drugs exported to the United States.

Vivian Conan, who is caring for her 94-year-old mother, Beatrice, is closely watching the way New York legislators handle the future of health care for seniors. After a year and a half paying $15,000 monthly to live at Schervier, Beatrice Conan’s assets have been spent away almost completely. Ms. Conan believes the nursing home is the best place for her mother to be, and will soon turn to Medicaid to help keep her there.

Ms. Conan is rankled by the idea that Medicaid funding for her mother, who worked for 60 years, would be reduced. At one point Beatrice Conan was bound by her wrists in a hospital bed, and Ms. Conan thought it might even be better if her mother were to die.

When Beatrice Conan becomes eligible for Medicaid, all her income will go towards her stay at Schervier, while Medicaid should pick up the rest, her daughter said. Beatrice Conan’s stay at Schervier is a long-awaited right, Ms. Conan believes.

“It’s not like she’s taking a handout, she has to contribute $7,000 a month,” Ms. Conan said Feb. 9. “I want people to understand that Medicaid is not just a handout.”

This is part of the February 19, 2009 online edition of The Riverdale Press.

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