LTSS Center researchers Marc Cohen and Jane Tavares answered this question in a recent edition of the Journal of Aging and Social Policy.
A recently published article by LTSS Center researchers Marc Cohen and Jane Tavares addresses the long-standing concern that wealthy older adults may be accessing the Medicaid program by opportunistically transferring their liquid assets to their children rather than by spending down their resources for needed health and long-term care until they meet the program’s eligibility requirements.
“Our findings demonstrate that this may occur among a relatively small proportion of wealthy people, and that tightening Medicaid eligibility criteria would likely have only a very modest impact on program expenditures,” the researchers write in the Journal of Aging and Social Policy (JASP).
To assess the degree to which higher income older people qualify for Medicaid, the researchers analyzed multiple waves of the Health and Retirement Survey. The survey is conducted every two years and provides information on the health and wealth of middle-aged and older adults over time.
For their analysis, Cohen and Tavares followed a cohort of 65-year-olds from 1998 to 2018. None of the individuals were enrolled in the Medicaid program in 1998.
“The analysis of this longitudinal data suggests that the vast majority of enrollees 65 years of age and older accessing the Medicaid program have very low levels of liquid assets many years before they accessed the program,” write the authors. “Thus, their capacity to divest assets to gain Medicaid eligibility for long-term services and supports (LTSS) or other reasons is quite limited.”
Consequently, write the authors, “tightening financial eligibility rules would do little to improve the financial outlook of the Medicaid program.”
The authors recommend other strategies that states could use to improve the financial outlook of their Medicaid programs. These include:
- Supporting managed LTSS programs, new state-based social insurance strategies, and federal, insurance-based LTSS financing initiatives.
- Adopting new strategies to support the growth and development of the private long-term care insurance market.
The research described in the JASP article was funded by the National Council on Aging. You can learn more about the study findings by reading the full article, which is available, free of charge, through Nov. 30.