Governors Issue Tentative Proposals for Changing Medicaid

A task force of eleven governors has released a set of proposed changes to the Medicaid program, the latest stage in an effort by the nation's governors to agree on a blueprint to restructure Medicaid. Although the "interim policy," as it is called, says Medicaid is "a vital source of long-term care coverage for many individuals," it calls for added restrictions on the ability of the elderly to transfer assets in order to qualify for Medicaid coverage of nursing home care.

The interim policy, which has been unanimously adopted by the National Governors Association's (NGA) Executive Committee, will now go before all 50 governors at the NGA's annual meeting in July. The new policy was developed by a bipartisan working group led by NGA Chairman Virginia Gov. Mark Warner and NGA Vice Chairman Arkansas Gov. Mike Huckabee.

The interim policy includes the following language:

"16.2.2 Asset Policy. While Medicaid remains a vital source of long-term care coverage for many individuals who cannot receive that care elsewhere, there is growing concern that many individuals are utilizing Medicaid estate planners or other means in order to shelter or transfer assets and therefore qualify for Medicaid funded long-term care services. Medicaid reform must include changes that increase the penalties for inappropriate transfers, restrict the types of assets that can be transferred, and encourage reverse mortgages, as well as other policies that encourage individuals and their families to self-finance care rather than rely on Medicaid."

The policy also calls for other changes to slow the growth of Medicaid long-term care, including tax credits and deductions for long-term care insurance, repeal of a law restricting long-term care insurance partnership programs to only four states, and improved access to home- and community-based care.

Meanwhile, the NGA's executive committee has also unanimously agreed not to join a new Medicaid study commission created by the fiscal year 2006 budget resolution approved by Congress in April. The commission will recommend ways to cut $10 billion from Medicaid over five years and also propose long-term solutions to slow the program's growth. Health and Human Services Secretary Michael O. Leavitt, who will appoint members of the commission, had listed the governors as possible appointees.

"We think the commission will take a bit longer to get going than the governors are," said Huckabee. "We have things ready on the table." Huckabee said that to "start all over with the commission will only slow the process down."

Earlier, Democratic lawmakers announced that they will not be part of the study commission, which they say lacks "even the air of bipartisanship." (See "Democrats Refuse Participation in Medicaid Study Commission," ElderLawAnswers, May 27, 2005.)

For a copy of the NGA's interim policy, click here.

For a Washington Post article on the NGA's decision not to join the Medicaid study commission, click here