Nursing home care is expensive- on average- about 70 thousand dollars a year.
The typical stay would wipe out many people's lifesavings.
Some people, though, have found a way to avoid that.
With the right legal strategy, they can shield their assets and go on Medicaid.
Many lawmakers and the state's Health and Human Services Commissioner would like to stop that practice.
New Hampshire Public Radio's Dan Gorenstein looks at who is using the so-called loophole and how much it costs the state.
Lisa Britt Solsky's job for Health and Human Services is to track down people who in her words have 'gamed' the system.
She says an entire cottage industry has been built around helping people transfer their stocks, bonds and bank accounts into trusts.
All just to avoid paying for nursing home care.
T.18
:36 there was an individual who applied for Medicaid for his own long term care. He and his spouse had an estate worth $715,000....what they were able to do. And this was perfectly legal, though many would argue very unethical, they exercised a provision in the federal law...
What that means is this:
First, the husband turned over all the assets to his wife.
Second, the wife handed over the money to a financial institution and bought what is called an annuity.
Third, the financial institution pays the wife a certain amount every month.
Presto, the couple has no cash, sort of.
1:34 there was then nothing liquid that could be contributed for this man's care. From the day he walked into the nursing home, he had three quarters of a million dollars, and in a matter of weeks he became eligible for Medicaid, where the taxpayers have to pick up the cost of his long term care. And his wife in the community, receives payments monthly that probably well exceed my and your salaries put together.
Solsky says the case is emblematic of the problem, but concedes most of the people who use this type of scheme aren't so wealthy.
They tend to have a few hundred thousand dollars squirreled away, she says.
Attorney David Ferber emphatically agrees the people using the loophole aren't rich.
Ferber is a partner in one of the state's largest long-term care law firms.
He says many of his clients are retired workers from disappearing blue collar jobs.
T.1
1:29 ... They worked in the shipyard, they worked in the mills, they worked in the factory. They were plumbers, they were electricians, they had small grocery stores, and most of these people...never made more than 20 thousand dollars a year their whole life, and now they have a half a million dollars in the bank. And they did that by conservative and frugal living.
Ferber says he understands that the Medicaid program was designed for the poorest seniors in the state.
But he says he doesn't believe he's cheating the system.
The attorney points out in all of this, often there is a spouse that doesn't go into a nursing home.
Under federal rules, that spouse gets to continue living in the house, drive the family car, and keep up to 95 thousand dollars.
But Ferber says 95 thousand isn't much of a financial cushion if the spouse lives another ten years.
T.2
6:16 I have spouses who have a spouse in the nursing home say, gee, I have to pay the nursing home, that's fine. I have to pay my bills, but I don't have enough to pay my property taxes, to fix my roof. Buy a car, and I have to live in near poverty the rest of my life. And that is not why my husband worked 40 years at the factory so I can live in poverty in my dying days. See, that's why I can sleep at night, b/c those are my clients.
But many lawmakers disagree.
If you've got the money, you've got the obligation to pay.
T.4
4:53... Medicaid is welfare, it's public assistance, it's just like food stamps.
That's state Representative Fran Wendleboe.
She is an ardent supporter of a bill that would make it much harder for people to use the loophole.
She says people shouldn't be allowed to shelter their money so they can pass it along to their families.
Wendleboe says people who do this lack a sense of shame.
6:33 maybe we need to go back to the town poor houses, and that it's very obvious when someone goes to the town poor farm to be cared for b/c they are indigent. And it's got that stigma. I think you would see a lot of people all of a sudden say, well, I'm not going to go to the town poor farm.
But the driving force behind the effort to tighten the loophole is more fiscal than moral.
Washington has cut its Medicaid funding to New Hampshire.
The baby boom generation is expected to drain resources as it ages.
And the cost of healthcare, of course, is only going up.
Considering all those factors, HHS's Lisa Britt Solksky says tightening those rules is just one small step in saving the Medicaid program.
T.21
4:19 ... Any cost avoidance we realize by reducing the loopholes, or reducing the popularity of those loopholes, is by no means going ot be a silver bullet and reduce overall Medicaid expenditure. b/c we can not keep up with the number of people in the next 20 years that need long term, and we are not going to be able ot keep up with the escalating cost of long term care. So this is one cork in one of the leaks in the barrel we call Medicaid.
The idea that people of means could end up on Medicaid makes some people angry.
Changing the rules may provide some emotional satisfaction, but not as much fiscal relief.
Solsky estimates that, at most, 10% of nursing home residents are gaming the system.
HHS projects, at least in the first year, the state would save two million dollars, that's less than 2% of the state's nursing home budget.
For NHPR News, I'm DG.
