1. “Improving the System of Financing Long-Term Services and Supports for Older Americans” Working Paper Discussion by Mark J. Warshawsky, Ph.D. Senior Research Fellow, Mercatus Center Long Term Care Discussion Group February 22, 2017 AHIP, Washington, D.C.

2. Agenda Follow-up to 2013 Federal LTC Commission Literature Review
Estate Medicaid Recovery Efforts by State
State Rules on Countability of Retirement Assets
Asset Holdings by Elderly Households
Policy Recommendations

3. Follow-up to 2013 Federal LTC Commission
CLASS Unsustainable (Warshawsky (2009))
Commission Concerns
Unmet Needs Modest (LaPlante, et al. (2004))
Medicaid LTSS Financing Increasingly Burdened
Declining Availability of Uncompensated Family Caregivers
Medicaid is Poorly Designed Insurance; Crowds Out Insurance (Brown and Finkelstein (2007,2008))
Compressed Timetable Precluded Investigation of Key Issues

4. Literature Review De Nardi, French, Jones (2013) GAO (2012)
Greenhalgh-Stanley (2012)

5. Medicaid Estate Recovery Efforts by States
Found Data,
Georgia, Michigan, Texas, New Mexico, Washington, D.C., Very Weak Efforts
Efforts Relative to Estimated Net Worth
Efforts Relative to Spending
Efforts Relative to Best Efforts

6. LTSS Medicaid Estate Recovery Amounts as a Percentage of Estimated Net Worth of Senior Medicaid Beneficiaries, 2003–2011

7. Medicaid Estate Recovery Amounts as a Percentage of LTSS Expenditures, US Aggregates, 2002–2011

8. Actual and Potential Estate Recovery Amounts Assuming Replication of Highest State Recovery Rates, 2002–2011

9. State Rules on Countability of Retirement Assets
Wide Variability – Nine Categories
Countable or Not
Spouses Included or Not
Type of Retirement Accounts
Dollar Limits
Accessed or Not
Distributed or Not
Countable, US Average, 71%
Most States Exempt at Least Some Retirement Assets

10. Percentage of Retirement Assets Deemed Countable toward Medicaid Asset Limit in 2011, by State and Rules Grouping
Table 3

11. Asset Holdings by Elderly Households
Housing is Widespread (80%)
Housing is a Liquid Asset, Median Net Value is $100,000
Most Have Retirement Assets (52%), Median Value is $90,000
Median Net Worth is $213,000
At 40% Percentile, Net Worth was $88,000
Retirement and Housing are Widespread Across Income Groups
Some Poor Households Have Considerable Housing Assets

12. Distribution of Non-annuity Wealth Components for Households Age 65–67, 2012
Table 6

13. Select Retirement Resources for All Retired Households Age 65–67, by Income Quintile
Table 7

14. Percentiles of Primary Housing Assets by Potentially Annuitizable Wealth Deciles, Retired Households Age 65–67

15. Policy Recommendations
All Retirement Assets Countable
Electronic Verification of Assets; Five-Year Look-back
Housing Asset Exclusion at $100,000
State Recovery Efforts – Minimum Set at 1%, Increasing to 2%, Enforced by Penalty
Liens Mandatory

16. Bridging the gap between academic ideas and real-world problems