Subject: "Long-Term Care Compact" Legislation - A. 10634-A

Monday, December 4, 2006
10:00 AM
Assembly Hearing Room, Room 1923
250 Broadway
New York, NY

Paying for long-term care (home care, personal care, nursing home care, adult day care, respite etc.) is a major concern and burden for senior citizens, people with disabilities, and their families. It is also a major concern and burden for taxpayers, and federal, state and local governments, as the cost of Medicaid grows. Medicaid covers about 80% of the patients in nursing homes in New York State. Long-term care accounts for about 40% of Medicaid spending in New York. Because so few seniors have long-term care insurance, such coverage pays for only about 10% of total nursing home costs nationally. Besides out-of-pocket spending, Medicaid is the primary financer of long-term care.

Under the current Medicaid system, "poverty" status is required to be eligible for long term-care coverage. Most seniors and people with disabilities in need of long-term care must either "spend down" their assets and income or transfer their assets to children or other relatives.

However, to restrict eligibility for Medicaid, the system limits and penalizes these transfers of assets. Congress has recently required even tighter limits and penalties.

Some say we need to crack down and control Medicaid spending. Some say that people who are "not truly needy" should not "take advantage" of Medicaid. Some say people should not have to "impoverish themselves" just to pay for long-term care. Sometimes the same people say all these things.

The "Long-Term Care Compact" would be a dramatic change in state policy that is intended to help seniors, people with disabilities, families, and taxpayers equitably share the burden of paying for long-term care.

The cornerstone of the Long-Term Care Compact is to create a contract between the applicant (the senior or person with a disability) and the government. The applicant pledges to contribute one half of his/her countable assets (up to a specified limit) for the purchase of long term care services, in exchange for then being entitled to retain a protected amount of personal assets while receiving government assistance for long-term care.

When an individual is diagnosed as requiring long-term care (needing assistance with at least 2 activities of daily living for 90 days or more or have a cognitive impairment), instead of spending down assets to qualify for Medicaid, he or she would pledge to use a defined amount of existing assets to pay for long-term care. Until this pledged amount is spent, the individual remains responsible for his or her own care, independent of Medicaid, while retaining full access to his or her income and assets. Once the pledged amount is spent, the person would then become eligible for the Compact Subsidy to pay for approximately 90% of his or her long-term care costs. At this point, participants would pay 25% of their monthly countable income to Medicaid, using the remaining 75% to pay the portion of their long-term care expenses not covered by the Compact Subsidy as well as any other ancillary medical expenses.

For an explanation of the Long-Term Care Compact, see:

Assembly bill A. 10634-A (Englebright) and the sponsor's memorandum of support, available at: http://leginfo.nysa.us/INDEX3.html. You do not need to log on. Under "bill number" enter "a10634," and click "status." Then click "text" and "search. Also see:

• http://www.nysba.org/Content/ContentGroups/Kathy_Plogs_Section_info/CompactArticleAugust152005.pdf

• http://www.scaany.org/resources/documents/holubinka_ltc_compact_000.pdf

• http://www.pierrolaw.com/documents/elder-ltcreport_001.pdf

Those who do not have Web access may contact the Assembly Committee on Aging for information - 518-455-4804.

The Long-Term Care Compact proposal raises many important issues, which this hearing is intended to consider. Among these are:

• Would the Compact create an equitable "partnership" and sharing of risks and burdens between recipients and the state?

• Would the Compact help maintain or reduce the growth of Medicaid costs? If so, would it increase the cost of long-term care for recipients? Would it do so fairly and equitably for people at different economic levels?

• What impact would the Compact have on people's personal behavior and financial planning?

• Would the Compact encourage more people to buy long-term care insurance? If so, is that a good thing? What other actions should New York consider to make long-term care insurance more accessible and affordable, or to encourage purchase of this insurance?

• How common is the transfer of assets for Medicaid eligibility purposes (based on evidence)? Would the Compact allow people to retain their assets that would otherwise be transferred to enable them to become eligible for Medicaid? Would transfer of assets still go on?

• What would be the effect of the Compact on providers of long-term care?

• What would be the effect of the Compact on people with low incomes or few assets?

• What would be the political effect of the Compact? Would it primarily benefit middle and upper income families? If so, would it undercut political support for Medicaid coverage for low income people by isolating them politically?

• How can the current Compact design be improved?

Persons wishing to present testimony or attend should complete the hearing reply form below and return as indicated as soon as possible, but no later than Tuesday, November 28. It is important that the form be fully completed and returned so that persons may be notified in the event of emergency postponement or cancellation.

Oral testimony will be limited to ten minutes in length. All testimony is under oath. In preparing the order of witnesses, the Committees will attempt to accommodate individual requests to speak at particular times in view of special circumstances. This request should be made on the reply form or communicated to Committee staff as soon as possible. Ten copies of any written statement should be submitted at the hearing registration table.

In order to meet the needs of those who may have a disability, the New York State Assembly, in accordance with its policy of non-discrimination on the basis of disability, as well as the Americans with Disabilities Act (ADA), has made its facilities and services available to all individuals with disabilities. For individuals with disabilities, accommodations will be provided, upon reasonable request, to afford such individuals access and admission to Assembly facilities and activities.

Questions about this hearing may be directed to Greg Olsen of the Assembly Aging Committee staff at 518-455-4804 or olseng@assembly.state.ny.us.

"Long-Term Care Compact" Legislation - Public Hearing Reply Form

Respond by Tuesday, November 28
Mail to: Assembly Committee on Aging
824 Legislative Office Building
Albany, NY 12248
Or fax to: 518-455-5795

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