Group working to steer Medicaid from disaster

Friday, May 1, 1998 | 10:05 a.m.

Much like Monday's spectacular demolition of the Aladdin hotel-casino, the state and federally funded program that pays for long-term care for the elderly and disabled is in danger of imploding if steps are not taken to defuse the economic time bomb that has begun ticking.

The hands of the clock are moving relentlessly closer to the hour in which Medicaid, a sibling of the federal Medicare program, will collapse under the weight of the heavy demand for long-term care as the nation's population continues to grow older.

"The demand soon will surpass the ability to pay," said Tammy McDermott, president of the Nevada Health Care Association and a member of the American Health Care Association's legislative subcommittee.

According to a study prepared in 1997 for the National Governors Association, Medicare -- whose destiny has a direct impact on Medicaid -- will deplete its hospital trust fund by 2001 if Congress does not intervene.

And with the approaching retirement of the baby-boomer generation, Medicare can expect even more strain on its resources by 2010.

The American Health Care Association, of which the Nevada Health Care Association is an affiliate, represents nursing homes and the long-term care industry and has a front-row seat from which to view the impending disaster.

Since institutional long-term care consumes more than 25 percent of the Medicaid budget, according to the National Governors Association's study, the nursing home industry has a vested interest in the program's financial health.

"Medicaid cannot and will not continue as our nation's primary source of financing long-term care," said Paul Willging, executive vice president of the American Health Care Association in Washington, D.C.

Willging calls Medicaid, which originally was created as a source of medical assistance to the poor, a welfare program.

"This federal-state welfare system, which now pays nursing home bills for two out of three Americans, is beyond repair," Willging said.

Winthrop Cashdollar, executive director of the Nevada Health Care Association, says most people don't realize before they can qualify for Medicaid they must impoverish themselves, if they have not already done so.

Since Medicaid is intended for the poor, a person who has assets putting him or her above the poverty level must get rid of all those assets before qualifying.

"Medicaid requires those who have worked and saved and paid taxes for a lifetime to spend all they have -- and go on welfare -- before they can get help with long-term care," Cashdollar said.

Those closest to the problem say Medicaid became the nation's long-term care system by default, not by design.

Medicare was created to help the elderly in medical treatment; Medicaid to help the poor, not the elderly.

Medicare covers nursing home care for the elderly only following a hospital stay and then they are only allowed to stay in the nursing home for a maximum of 100 days before they must either leave or get help through Medicaid.

Long-term care forces elderly middle-class people onto the welfare roles.

According to figures supplied by McDermott, the average age of American pioneers was 33; in 1991 the average American man lived to be 72 and the woman to 79.

In 1994 one in eight Americans was 65 or older and by the year 2030 that figure will be one in five.

Again, in 1994 7.3 million Americans needed long-term care; by 2000 it will be 9 million and by 2060 it will be 24 million.

Two out of five people will be cared for in nursing homes at some point in their lives, and, on an average, that care will cost in excess of $40,000 per person, per year.

The fastest growing segment of the population is 85 and older -- and that group is the heaviest users of long-term care.

McDermott called the figures frightening, especially in light of the fact that Medicaid will not be able to pay for the care under the present system.

McDermott explained that long-term care insurance, or SecureCare, is one part of the overall plan of the American Health Care Association to rescue Medicaid.

"There are four principles of SecureCare to preserve the safety net for poor, elderly and disabled Americans," she said.

The four-point program being pushed by the AHCA includes:

"Congress won't do anything until it has the permission of its constituents," he said. "And since the constituents still are not concerned, we've got to do a good job of letting them know a crisis is out there.

"Although Congress is spending a lot of time worrying about Medicare and Social Security, Medicaid will be bankrupt before either of those."