Steve Moses, our new Fellow on Healthcare Policy, made the rounds with me visiting a variety of stakeholders in the Medicaid system. We met with everyone involved including politicians, senior advocates and attorneys and insurance representatives. Needless to say it was an informative week.
Most people we spoke with know what the vast majority of the public does not - that Medicaid is not a welfare program designed to help the poor obtain healthcare when they get old - Medicaid operates as an entitlement program that provides for just about everyone who takes the time to fill out the forms correctly. And if they don't presently qualify for Medicaid there is a whole industry of lawyers who can help them qualify.
Of course, the system was never intended to be a universal healthcare program for the elderly, but that is what it is. And that's the reason it is unsustainable and must be changed.
For those of you who are like 99% of the population that does not understand how the system works, let me give you a brief outline why we say Medicaid is operated as an entitlement.
The income qualifications for Medicaid are such that the applicant can't have a monthly income greater than the cost of one month in a nursing home (which is $6000 nationally, over $7000 in Rhode Island). That's $84,000 per year or 775% higher than the Federal Poverty Level for a single-person household (which is the majority of Medicaid recipients).
The asset qualifications vary depending on the asset.
There is a $500,000 cap on home assets that can be exempt. For those whose home is worth more than a half million, creative financing such as "reverse half-loaf" arrangements are made so the total home asset value of the Medicaid recipient falls under the guideline.
Business assets are unlimited. A Medicaid applicant can own a multi-million dollar business and as long as their "income" is under the threshold listed above they will qualify for Medicaid.
There is also an automobile exemption. And because these don't count towards assets whose transfer is countable towards the program, the applicant can purchase a Mercedes and give it away, purchase another Mercedes and give it away, and so on.
Plus there are trusts, term life policies and other financial products that can artificially impoverish the wealthy. As you can see, qualifying for Medicaid isn't hard. As one retirement publication wrote, 'if you have an extra $82 million just buy a Rembrandt because once you hang it on the wall it becomes "furnishings" and doesn't count against you when qualifying for Medicaid.'
You might be saying, 'so what. I paid into the system with my taxes. Shouldn't I be able to take out of it?'
Well the reality is that we just don't have the money to do so (besides the philosophical objection we would hope you had against this form of government dependency).
And compassion should be an influence, too. For two reasons -
One - if we spend the money providing help for everyone, we won't have enough to provide adequate help for anyone. This is already taking place.
Second - this system creates inequitable facilities. The better nursing homes roll out the red carpet for private pay clients. So when the creative financing is done to ensure Medicaid eligibility, they withhold "key money" that will be used to pay for the first few months in the nursing home. Once in, they funding is cut off and they shift to Medicaid. Unfortunately, the poor don't have the resources to do this and end up in the less desirable nursing homes.
Throughout the week there were two things that we could all agree on. Medicaid is not sustainable in its current form and Medicaid should be available for the poor. We can't fix those things without changing eligibility requirements. So, now that we know what must be done will we have the political will to do so?
Onward and upward,
UPDATE: The 2nd Annual ATF Party, which had tentatively been scheduled for July 11th, has been POSTPONED due to government intervention (really!). We are working to reschedule the event for early fall, and we hope that you will still join us when we gather to enjoy our liberties (and some good food, beverages and 2nd Amendment activities).