Back, with an observation

Sorry to have disappeared for a couple of days, I have been disconnected from Your Intertubes.

The curse of longevity threatens to become an insuperable burden for society, unless we can find ways of reducing the rate of disability requiring long-term care for elderly people. Dementia is the biggest problem, because people with severe dementia can live for many years, requiring very expensive custodial care. There aren't any major breakthroughs in sight, unfortunately, so we have to find better ways of coping with a growing social and financial crisis.

The vast majority of people who require long-term care do not have nearly enough personal resources to pay for it. Long-term care wipes out innumerable family fortunes -- nursing homes cost on the order of $100,000/year or more -- and most people who require it eventually end up on Medicaid. As I assume my readers know, the cost is shared between the state and federal governments.

In an effort to reduce the burden on the public treasury, Congress has made eligibility requirements increasingly draconian, if not cruel. It has also created some perverse incentives which are both unjust and counterproductive.

Many people with dementia can do very well in non-nursing facilities that only provide support for daily living. However, Medicaid will not pay for such assisted living facilities, even though they cost half as much as nursing homes. Spouses can retain half of a couple's savings as of the date one member applies for Medicaid, which happens when they become medically indigent, i.e. when the person enters a nursing home. This creates an incentive to move from an assisted living facility to a nursing home as early as possible, even though the nursing home is more expensive. The reason is that if the couple waits as long as possible, while continuing to spend their assets on the assisted living facility, there will be less money left over for the non-disabled spouse. Not only does this increase the burden on the public, it forces people into nursing homes who would be better off staying out of them.

The law also punishes people who make gifts -- not only to their children, which might be seen as a way of shielding assets from the state. For example, someone who helps pay college tuition for a grandchild, or niece or nephew, or a deserving but poor neighbor, will be severely penalized when it comes time for her husband to go onto Medicaid. If this happened any time in the past five years, even if the later need for long-term care was not yet anticipated, the state will consider this an attempt to cheat the public and force the surviving spouse to pay the amount of the gift to the nursing home from her half of the assets.

Forcing people into poverty because their spouses develop Alzheimer's disease should not be a goal of public policy. There has to be a better way. Universal, comprehensive, single payer national health care would do it. It would also make a lot more sense to pay for assisted living if it is necessary, including home-based as well as institutional services. But this just makes too much sense.