Letter From AARP to Don Young
7 November 2005This letter addresses an important public policy issue that affects Alaskans. The letter was written by Pat Luby, Advocacy Director for AARP Alaska. It is a good letter, and is an important read if you have not seen it before. Pat has the highly valued ability of making difficult public policy issues easy to understand in a pleasantly conversational way…
November 4, 2005
Honorable Don Young
Member of the House of Representatives
2111 Rayburn House Office Building
Washington, DC 20515Dear Representative Young;
On behalf of the 83,000 AARP members in Alaska, we would like to encourage you to oppose changes in Medicaid that have been raised as part of the budget reconciliation bill when it comes before you for a vote.
AARP does support changes that strengthen Medicaid, like getting better prices for prescription medications. As you know, Alaska’s Department of Health and Social Services has done a very good job getting the best buys for our Medicaid dollars.
FMAP Increase: Alaska has had a favorable federal match for Medicaid (as have another 29 states). We lost about 7% of our federal match on October 1. If this holds true, our Medicaid budget would suffer significantly during this and subsequent budget years. The Senate yesterday approved an amendment that stopped the cut in federal matching funds. AARP hopes that you will vote to keep the match as it was and not cause Alaskans to lose this valuable federal funding.
There are several other Medicaid items which concern us. These are all included in the budget version passed by the House Energy and Commerce Committee.
Extending the “look-back†period for asset transfers: Extending the “look-back†period from three to five years for asset transfers would likely penalize Medicaid beneficiaries who have helped their families or given to charities like hurricane relief. Any asset transfer for less than fair market value, such as tithing to a church, donating to the Red Cross, or helping a grandchild pay for college tuition would be considered improper and result in denial of Medicaid coverage, regardless of the need for coverage and lack of other financing options.
We have many AARP members who are currently making significant donations to charities for the hurricane victims. Research also tells us that older persons are ten times more likely to be giving money to help younger family members than receiving it from them. Within a five year period, some of these older Alaskans could very well need long- term care, use up their available assets, and qualify for Medicaid. A three year “look-back†is already quite significant. Extending it to five years will undoubtedly harm those who may simply intend to help charities or family members.
These are not citizens who are trying to avoid personal financial responsibility for long term care. As you well know from looking at Alaska’s fees for long-term care, it is growing increasingly difficult for older Alaskans to cope with the spiraling costs of all health care, acute and long-term. Please vote “no†on extending the “look-back†period to five years.
Changing the penalty date: This would deny coverage when people really need it. The current penalty date starts at the point a person makes an asset transfer. The penalty period lasts for as long as care could have been paid for by the amount transferred. For example, an older Alaskan who transfers assets equal to the cost of one year of care is ineligible for Medicaid coverage for one year from the date of the transfer. If the transfer occurred more than one year before applying for Medicaid, the penalty period is over and the individual is not denied coverage. The proposed change being submitted by the House Energy and Commerce Committee would start the penalty at the time of application for Medicaid, so if a person transfers enough to pay for one year of care at any time during the “look-back†period, the person would still be denied coverage for one year from the date of application, regardless of the need for coverage and lack of other financing options.
Eligibility restrictions for individuals with home equity: It has been proposed that the protected status of the home be removed for Medicaid eligibility. Older homeowners would be required to use their home equity, such as taking out reverse mortgages, before becoming eligible for Medicaid benefits. While using home equity to finance long-term care may be a good option for some people, AARP opposes requiring older homeowners to use their home equity to pay for long-term care or medical expenses in order to be eligible for Medicaid.
Home ownership is part of the American dream, a source of pride and economic security for most older people. Americans should not be forced to forfeit their homes to secure the care they need. Further, exhausting home equity could jeopardize the spousal impoverishment protections in current law and leave the spouse in the community—who may also need care one day—more vulnerable.
Reverse mortgages are costly, and mandating reverse mortgages would do nothing to reduce the high costs of these loans. These costs can amount to a very high percentage of the equity potentially available, especially for older homeowners with modest home values who are most likely to need Medicaid. AARP believes that any use of home equity or reverse mortgages should be voluntary, should focus on reducing mortgage costs, and should be done on a trial demonstration basis to measure the effects before launching major changes in the rules.
Demographics tell us that moderate income older women often become poor because of the illness of their husband. These are often couples who tried to “save for the rainy day.†As you well know, any older Alaskans who have tried to put money away in savings often have found those savings destroyed by the health care costs of one of the spouses. Over the years you have been in Congress, much good work has been done in the area of “spousal protection.†We hope you will continue your conscientious oversight and, as you deal with proposals on Medicaid changes in the federal budget, you will keep spousal protection in mind.
Thousands of Alaskans rely on Medicaid’s safety net. While some change is needed to make the program as effective as possible, we hope you will reject those changes that simply shift costs or deny needed care to vulnerable populations.
Our AARP members in Alaska stand ready to work with you, Senator Murkowski, and Senator Stevens to enact policy changes that will strengthen this critical health care program for our most vulnerable fellow citizens and to address the larger health care system shortcomings that are putting so much strain on this critical safety net.
Thank you for your consideration.
Patrick Luby
Advocacy Director
AARP Alaska
3601 C Street, Suite 1420
Anchorage, AK 99503
907-762-3314
jluby@aarp.org
As Advocacy Director, Pat is not in the habit of simply sending out a letter to his constitutents. He typically wants us to act as well as read, to influence the policy issues of the day as well as simply understand them. So, here’s Pat’s advice…
Please help keep the Medicaid program strong by calling Rep. Don Young at 1-800-928-8084. Yesterday, Senator Lisa Murkowski joined nine other Republicans and Democrats and the Senate voted to keep the FMAP as it was before October 1. This was a courageous vote opposed by the President and the Senate Republican Leadership. It was also a vote that will keep Alaska from losing over $50 million in Medicaid funding for this year.
Now we need your help with Rep. Young. Please call the 800 number and encourage him to vote to keep the FMAP at the 57% level and, if you are so inclined, please ask him to also vote against measures that would hurt older Alaskans from becoming eligible for Medicaid (see letter below for further details).
Rep. Young’s vote will be important on this issue. Please make the call now. (1-800-928-8084)
Thank you for your help.