Nursing home proposal may run afoul of federal regulation

CARSON CITY -- Gov. Kenny Guinn's "nest egg" protection plan to help middle- and upper-income senior citizens to get into nursing homes at government expense is having trouble getting off the ground.

Guinn wants to prevent the drain on income of families, where a member may be forced into a nursing home where the cost can average $31,000 a year or higher.

But a legislative committee on the study of long-term care was told Tuesday that the federal government may not approve a waiver needed to use Medicaid money to pay the cost of the nursing home.

Janice Wright, administrator of the state Health Care Financing and Policy Division, said, "HCFA (Health Care Financing Administration) would probably not be receptive to a waiver looking at the income aspect. There is no sense in sending them something they won't approve."

She said a task force has been formed to come up with alternatives that would get federal approval.

Guinn suggested and the Legislature this year approved a bill providing that senior citizens would purchase private insurance that would pay the first three years of their entry into a nursing home. After that they would become eligible for Medicaid and the family would be able to keep up to $200,000 a year in income.

A problem arises with the word "income" in the law. Most other states which have tried this allow a person to keep his or her assets up to a certain amount -- not to realize a family income of $200,000 a year. Assets are things like bank accounts or property and are different from income.

Steve Abba, a legislative fiscal analyst, told the committee that four other states have enacted plans to protect the assets of an elderly person but allow him or her access to Medicaid to pay nursing home costs. These are California, Connecticut, Indiana and New York.

These are partnership programs, he explained. For each dollar that is paid by a private insurance company to a nursing home, an individual would be able to retain that much in assets when he qualifies for Medicaid. For instance, he said, an insurance policy may pay out $50,000 for nursing home care and the person would be able to protect $50,000 of his assets when he qualifies for Medicaid.

The asset protection program in the four other states got off to slow starts but have increased steadily, Abba said. But then Congress passed a new law that required the states to recover the money spent on nursing homes from the estate of the patient who died. "That stifled a growing interest," he said.

Guinn said it not only protected the family income but it delayed the individual from going on Medicaid for three years.

Wright said the task force is trying "to develop language to present to HCFA so they can approve it." The law was effective in July.

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