Medicare Compliance & Reimbursement

Well-off seniors benefitting from Medicaid while state budgets languish, Scully says. 

Seniors have $1.5 trillion in paid-off home mortgages - a substantial national asset that should be tapped to pay for long-term-care costs to ease the burdens now borne by Medicaid. Centers for Medicare & Medicaid Services Administrator Tom Scully made that point at an Oct. 8. House hearing.

Nearly seventy percent of people in nursing homes are on Medicaid, and studies show that as many as 50 percent have transferred assets to reduce their incomes to Medicaid-eligible levels, Scully said. The draining of Medicaid funds to provide long-term-care to elderly who could use their own assets to pay their own LTC costs - at least initially in their period of need for LTC - endangers the program that was developed to provide vital health coverage for the neediest, he said. "If we are truly trying to help blind and disabled, truly poor women and children, and the truly poor who need nursing homes, we should make sure that all who go into nursing homes are truly poor."

About 80 percent of the elderly have fully paid-off mortgages - averaging $107,000 in equity - that could be used to help pay for various types of LTC, said Scully. The administration is currently working to develop a program that would encourage seniors to use so-called reverse mortgages - by means of which the owner can retain ownership while converting some of a home's value to cash - to pay for LTC and perhaps expand commonly available LTC options beyond nursing homes to the more popular home care and assisted living, he said.

Reverse-mortgage programs that already exist in the Department of Housing and Urban Development will provide the model or the infrastructure for the LTC initiative now in discussion, Scully suggested.