If you want you or your loved one to qualify for Medi-Cal long-term care (LTC), it may get tougher in upcoming years. This on the heels of thousands who were dropped from Medi-Cal (mostly due to paperwork issues) in July 2023.
There is a push to simplify Medicaid LTC eligibility rules and make them more consistent. If it goes into effect, this will also make it harder for middle-class homeowners to qualify for long-term care.
January’s Panel Discussion on Long-Term Care
On January 9th, 2024, Paragon Health Institute held an online panel discussion about the future of long-term care with several industry experts.
Paragon Health Institute is led by President and Founder Brian Blase, a former special assistant for economic policy who has argued in the past that the Affordable Care Act increased health insurance costs.
Panel participants were:
- Stephen Moses, President of the Center for Long-Term Care Reform
- Mark Warshawsky, Senior Fellow at the American Enterprise Institute (AEI)
- Richard Johnson, Urban Institute Retirement Policy Director
- Moderator Ken Dychtwald, CEO of Age Wave
During the discussion, Stephen Moses argued, “Long-term care in America is broken,” citing the unfair financing system, which he said encourages high-income people to hide their assets to qualify for public benefits.
For example, the asset test currently exempts primary residences, but the same doesn’t apply to renters who have significant savings. This puts homeowners at an unfair advantage over renters, since they can tap into their home’s equity for extra assistance.
Stephen Moses believes that, as a result of the unfair system, there have been quality issues and care shortages with government-funded medical aid programs like Medi-Cal.
The solution he has called for Congress to enact is threefold:
- To simplify eligibility rules and make them more consistent on the state level
- To reduce the ability to keep assets out of LTC eligibility calculations
- To change the “lookback period” for asset transfers from five years to 20 years
Moses believes that private long-term care will be a good solution for those who fall off Medi-Cal eligibility if those changes are enacted. Other participants (namely, Stephen Warshawsky) disagreed with him.
Johnson thought a LTC program that was designed better could be the solution.
One thing all three panelists agreed upon, however, was the need to tighten Medicaid LTC eligibility rules, and that more homeowners should spend down home equity by using reverse mortgages or home equity loans to pay for care before qualifying for Medicaid LTC.
The Other Side of the Coin: California Seniors Already Struggling
Unfortunately, tightening Medi-Cal eligibility criteria will likely make it tougher for thousands who fall in the gray area of being too high-income to afford Medi-Cal due to new eligibility rules, but too low-income to afford to save for private long-term care.
A month before the January 2024 panel, another group of experts came together to discuss how to expand Medicaid and increase the availability of long-term care insurance following the “Dying Broke series,” which highlighted the issues middle-class citizens face.
Many have concerns that it will be even harder for middle-class seniors to survive.
“Our society does not have an adequate answer in place to help those whose savings are insufficient or who do not qualify for Medicaid assisted living,” American Seniors Housing Association (ASHA) President and CEO wrote in November 2023.
In 2023, the cost of private long-term care in California started at $1,924 a month for adult day health care and soared to $12,908 for a private room in a nursing home. Assisted living averaged about $5,570.
Contrast this number with the average annual retiree income in California, which was $34,737 in October 2023. The monthly income in October averaged about $2,894.75—well under what a person would need to pay for an assisted living facility.
It’s easy to see why two-thirds of people over 50 are worried about whether they can afford assisted living!
Reed Abelson and Jordan Rau of KFF Health News discovered that many people are grappling with the question of how to get long-term care for themselves or their family members. If you’re struggling with this, “You’re not alone. In fact, you’re not an outlier. You are the norm,” Jordan said.
Bottom Line: Talk About It Now and Get Creative
Whether the qualification process stays the same or changes in the coming years, it’s good to start planning now.
Despite the challenges many face to obtain long-term care for their loved ones, Jordan Rau and Reed Abelson were also encouraged by the admirable resilience and community that people displayed as a result of these challenges.
Reed said, “I was amazed at how people were able to find solutions. They … were very creative and self-sacrificing. They moved into their old childhood bedroom … they figured out how to get a network of people to watch over someone … people really rose to the occasion.”
Jordan noted that there was even reconciliation between families that were previously estranged. “We talked to people who were alienated from their parents, had barely spoken to them … and they made, as [Reed] said, tremendous sacrifices.”
If you are a senior, it would be wise to talk to your family now about the steps they might take to help even if you don’t qualify for long-term care through Medi-Cal. You could also build up a network of people you can trust so that the responsibility of your care is shouldered equally.
Of course, part of planning for your care includes a discussion with your insurance agent. At Susan Polk Insurance, we have over 30 years of experience helping people like you navigate different insurance plans and changes at the federal and state levels. We can look over your options together, discuss the plan you’re currently using, and let you know what’s available and how much it costs.
Don’t wait until it’s raining to start planning for a rainy day! Get started today, and let us help you make sure you have the coverage you need when you need it most.