Divorce, Medicaid, and Long-term Care
Nicholas Kristof published a piece titled "Until Medical Bills Do Us Part." (You can read it here.) Kristof's argument is that because high LTC costs make divorce an often-recommended technique to self-impoverish and qualify for Medicaid LTC benefits, therefore expanding government financed health care is necessary and desirable.
His line of reasoning is odd and inverted. Health reform proposals under consideration in Congress contemplate expanding Medicaid or adding a Medicare-like "public option." Yet it is Medicaid and Medicare financing of long-term care that have gotten us into the mess we're in.
Why does Kristof's friend "M" in the column feel compelled to divorce her early-onset-Alzheimer's husband? Because that's what the hospital and her attorney recommend that she do in order to dodge the high cost of his long-term care.
Now think about it.
Why exactly is "M" in this bind? Neither she nor her husband purchased private long-term care insurance. Why not? Could it be because Medicaid has paid for most expensive LTC since 1965 and Medicare covers some nursing home care and lots of home care?
Remember, Brown and Finkelstein (www.nber.org) have shown that Medicaid alone–not counting Medicare, VA, and other government funding sources–crowds out 2/3 to 90% of the potential market for private LTC insurance.
So, since Medicaid and Medicare are the cause of the long-term care financing problem, how exactly does it make sense in Kristof's reasoning to launch health reform based on expanding Medicaid and Medicare?
It doesn't. Simple as that.
The correct way to approach health reform in general and LTC reform in particular is to restrict public subsidies to people truly in need and use the savings to encourage everyone else–through tax incentives and education–to plan early and save, invest or insure for the risk of catastrophic health and LTC costs.
3 Responses to “Divorce, Medicaid, and Long-term Care”
Leave a Reply
| Marc Kilmer Maryland Public Policy Institute View Posts |  |
| Beverly Gossage Show-Me Institute View Posts |  |
| Sally Pipes Pacific Research Institute View Posts |  |
| Donald R May Surgeon View Posts |  |
| Joseph D. Coletti John Locke Foundation View Posts |  |
| John LaPlante The Prometheus Institute View Posts |  |
| Peter Nelson Center of the American Experiment View Posts |  |
| Grace-Marie Turner Galen Institute View Posts |  |
| Nathan Benefield Commonwealth Foundation View Posts |  |
Posts on Innovation
People need to start investigating long term care insurance and get serious about it.
Don’t believe this article. It is flat wrong. Historically, less than 18% of LTC nationally has been covered by Medicaid and almost none by Medicare – and you have to be impoverished to get Medicaid coverage. LTC is another private insurance fraud perpetrated by the free-market politicos. First, it takes a while before most people catch on to the fact that all that expensive health insurance you and/or your employer bought won’t cover LTC. When I found out, I purchased LTC based on what I reasonably could afford and the expected costs of long term care to be at the time I purchased it. By the time I realized that health care costs were bound to go through the roof, my wife was diagnosed with MS (age 40) and I had been diagnosed with heart disease (age 45). That ended our eligibility for additional LTC. All the thousands paid into Social Security, Medicare and health insurance is basically in vain if and when we need LTC, as my wife surely will.
Kristoff may be wrong, but Stephen Moses is just as wrong. Neither probably has the answer. You are on your own in the jungle.
I need to amend the above. It was Medicare that covered 18% of LTC. I don’t have the figure for Medicaid. But Medicaid does not drive out private insurers, because people on Medicaid are not going to afford LTC insurance no matter what.