The cost of financing long-term care (LTC) through Medicaid is on track to become “a crippling burden” for New York State unless steps are taken to reform the program, a report issued today by the Empire Center for Public Policy warns.

The report, written by Stephen A. Moses, suggests that New York’s Medicaid program could ultimately save up to $2.9 billion in combined federal, state and local funds by tightening eligibility criteria, enforcing federally mandated recovery of paid benefits, promoting home equity conversion prior to Medicaid eligibility, and encouraging the purchase of private long-term care insurance.

“Access to Medicaid funding for LTC in New York State has been too easy for too long” the report says. “The combination of an aging population with greater care needs, a flagging economy, and dwindling federal support will soon bring Medicaid LTC spending up short. Instead of trying to provide a full range of LTC services to nearly everyone in the state, New York Medicaid will have to prioritize.”

“The preferable course is to funnel scarce Medicaid resources to the neediest people and encourage wealthier individuals to plan early and save, invest, or insure against the risks and costs of LTC,” it concludes.

Entitled “Long-Term Care Financing in New York: How to Save Money While Serving the Needy,” the exhaustive 28-page report is a joint product of the Empire Center and the Seattle-based Center for Long-Term Care Reform, of which Moses is president. In the course of his research, Moses interviewed 58 people directly involved in the long-term care field in New York, including senior state and local Medicaid administrators, social workers and policy analysts; insurance industry executives and consultants; and representatives of organizations representing practitioners and providers.

Several of the report’s key recommendations have been adopted by Governor Andrew Cuomo’s Medicaid Redesign Team. These include:

• Close the “spousal refusal” loophole, through which the assets of a chronically ill elderly person can be shifted to his or her spouse, who can then refuse to take responsibility for paying for that person’s long-term care;
• more aggressive efforts to pursue estate recoveries on a statewide basis; and
• stronger incentives to promote the purchase of private long-term care insurance.

Adoption of the governor’s amended Medicaid proposals would equate to “important steps in the right direction, but much remains to be done to put long-term care policy in New York on an economically and financially sustainable footing,” the report says.