And while we're on the subject of the Medicaid asset tests, "Legal Memorandum" asks a quite insightful question about the potential relationship between the asset tests and the private investment accounts proposed as Social Security reform:
Anyway, today, with Social Security, if you are pre-benefits (IE, you are say, 40 years old, and not collecting), you receive no social security income (so that doesn't get factored into your resources), and you also technically have no specific interest in a sum of money held by the government in the "social security trust fund". So there really is no way for the state (the administrator of medicaid) to go after that money (whereas if you were 70 and collecting defined social security payments, that would factor into your resource calculation).
In other words, switching from Social Security to some private account scheme would allow medicaid to have yet another resource to factor into denials, and another resource to force you to spend down your resources (good luck, spouse - you have 90k to live on for the next 30 or 40 years!).
"Solving" the Social Security "problem" could solve the Medicaid problem as well!
Quick & dirty reaction? Legal Memorandum is right. Moreover, the advocates for private accounts now have two nasty choices:
- Deal with the overlap by exempting the new private accounts from the Medicaid asset calculation. This would instantly change investment calculations because these assets would be protected in ways that others are not. Politics being what they are, that in turn would encourage advocates for other types of investments to seek the same type of legal protection. Those with assets would become the advocates for universal public health insurance -- at least for nursing home care. What a twist.
- Not deal with the overlap, weakening the argument for private accounts. As they are being sold as belonging to individuals, that would also mean that they could be tapped by creditors for other liabilities of those individuals. In fact, I'm a bit surprised not to have heard anyone tying the proposed private accounts to the proposed changes in the bankruptcy laws.
No doubt there are a whole series of related questions we ought to be thinking about.
Guess, I have to go finish the draft post on the tie-in between nursing home care, the Medicaid asset test, and universal coverage.