Guest Opinion: Medicaid needs a dose of personal responsibility

In 1965, Congress passed and President Lyndon Johnson signed the law that created Medicaid. The program was enacted to provide care to impoverished citizens for their medical needs. Medicaid was never designed to offer subsidies for middle- and upper-class individuals at the expense of the taxpayers. That was until the lawyers got involved.

Today, we have a system in which some people view Medicaid as long-term care insurance, not for the poor, but for those who can hide their money so that it cannot be counted by the state. A cottage industry of “elder law attorneys” has sprung up to help these people, some with considerable wealth, become Medicaid eligible. This is simply wrong, and the taxpayers of New Hampshire are paying for it.

A recent example will illustrate this point. An elderly couple with roughly $700,000 in assets was able to have one spouse qualify for a Medicaid bed by transferring funds into annuities in the name of the other spouse. This leaves one spouse with a considerable monthly income and the other in a nursing home paid for by the state. Does anyone believe that a system that allows this isn’t broken?

In a recent opinion piece, a Manchester lawyer who heads the “elder law” division of the New Hampshire Bar Association, suggested that the current system is working for the state.

In his explanation, he cited as an example a couple with assets of $300,000 and stated that they would have to spend down to less than $100,000 before being eligible for Medicaid. Understand that Medicaid does not take into consideration either one’s primary residence or a vehicle in determining eligibility, so the $300,000 would consist of other assets.

I prefer to turn this question on its head. Why should the taxpayers of New Hampshire be forced to subsidize the nursing home expenses of someone with $300,000 in assets, in addition to a house and car? At what point do the policymakers of the state say that it should matter if one is truly poor and not if one can find good lawyers to hide one’s money?

The Department of Health and Human Services’ GraniteCare proposal was designed to offer an alternative path to huge tax increases to maintain the current system or face significant cuts in eligibility and benefits for our Medicaid program. Our hope is to begin a dialogue and open a debate that needs to take place. The bottom line is that the way we do business is unsustainable.

As such, we welcome the opportunity to shine a light on many issues that affect Medicaid, which is the largest program in state government. Our citizens should know how and where their tax dollars are being spent so they can judge if they are being used wisely. We believe that long-term care is one area that needs close examination. DHHS believes that personal responsibility must be a key component of any program in which the governments spend money. We don’t believe hiding assets so that the taxpayers can pay for one’s care is an example of personal responsibility.

This is not to say that GraniteCare is all stick and no carrot. In fact, one recommendation in the plan (available on our Web site, dhhs.nh.gov) is to allow a senior’s assets to be exempt from any “look-back” provision if that senior purchases a long-term care insurance policy of a certain duration and benefit level. This would offer an incentive to buy long-term care insurance, which benefits both the senior and the state.

Long-term care insurance must be an important part of solving seniors’ needs for medical care. However, for a variety of reasons, many have overlooked it as they consider their estate planning.

In New Hampshire, the market penetration for this insurance product is a mere 1 percent; while in other states, it is significantly higher. Nebraska, for example, has a 14 percent rate of purchase for this important insurance.

While we look to reform New Hampshire’s Medicaid program, we must also shift the public’s priorities around personal responsibility. There is no way any state, particularly one that guards its low-tax status, as we rightly do, can afford to pay for the costs of those who will not take responsibility for themselves. As Ronald Reagan said, “It is time to restore the American precept that each individual is accountable for his actions.”

John A. Stephen is commissioner of the New Hampshire Department of Health and Human Services.