Long term care financing in California versus New York

Introduction

New York and California have complex Medicaid systems, but one of them is more effective than the other. It is essential to understand how this has occurred so that improvements can be made.

Comparison

Eligibility for Long-term care financing through Medicaid in California (Medi-Cal) is determined by a range of factors. These include: one’s income status, assets, citizenship and residential status. California has placed an asset limit on people who qualify for Medi-Cal. One’s bank account, car, and other properties are examined before one can qualify.

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An institutionalized patient’s spouse cannot have more than 87,000 dollars if the patient is to receive Medicaid services (Street, 2001). Nonetheless, people who incur frequent medical expenses can be eligible regardless of their income status. In the state of New York, individuals with more than 13, 800 dollars are theoretically ineligible for Medicaid.

However, if one can prove that one has high medical expenditures that leave him or her with 787 dollars worth of remaining income, then he or she would qualify for Medicaid (Empire Centre, 2011). In other words, the state of New York has specific deductible figures that it considers prior to qualification while California is more general in their approach.

The two states also differ in terms of their expenditures. New York’s long-term care financing costs are the highest in the country. This has been brought on by a combination of factors.

First of all, the state has one of the highest percentages of elderly citizens in the country. The national average is 1.8% while New York’s elderly population accounts for 2% of the population (elderly citizens are all those people who are 85 years and above).

Furthermore, older New York residents tend to be disproportionately poorer than other people in the country. Medicaid accounts for 72% of all nursing facility services, yet the national average is 64%. All these factors cause the state’s expenditures to reach enormous levels.

It was reported that in 2009, New York spent 12.4 billion dollars in long-term care financing through Medicaid. Conversely, the state of California spent much less on this service. It used up seven billion dollars in 2008 thus showing that administrative functions may be more cost-effective in the latter state.

Long-term care financing in California occurs through private and public avenues. Medi-cal, Medicare, state aging programs, and county aging programs represent 60% of all expenditure.

Therefore, private funds account for 40% of all expenditure in California. On the other hand, New York is dominated by Medicaid funding. Privately funded long-term care services represent only 13%. This implies that a very huge burden has been placed on the federal government.

A major challenge that exists in both states is the component of spousal refusal. In all federal states, patients who target Medicaid funding can transfer their assets to their spouses. The beneficiary can then refuse to take responsibility for caring for that person (Pear, 2008).

Although spousal refusal was allowed in order to make sure that elderly patients were not placed at the mercy of their irresponsible spouses, the measure has caused more harm than good. States have the ability to sue spouses who steal this wealth, but not all of them are strict about it.

When it comes to the issue of spousal refusal, New York State is more relaxed than California. Perhaps this is one of the reasons why medical expenditure in long-term financing is much higher in New York than in California. Federal states can save about 50 million dollars in Medicaid if they sealed that loophole.

Conclusion

The Medicaid program in New York is more superfluous than California’s expenditures because of lower private insurance participation, excessive spousal refusal and flexible eligibility requirements.

References

Empire Centre (2011). Long term care financing in New York. Retrieved August 1, 2011 from http://www.empirecenter.org/Documents/PDF/LTC03.03.111.pdf

Long term care daily (2001). Long term care is too costly says report. Retrieved August 1, 2011 from http://longtermcaredaily.com/2011/03/long-term-care-is-too-costly-says-report/

Pear, R. (2008, November 27). New Medicaid rules allow states to set premiums and higher copayments. New York Times, 16

Street, L. (2001). Understanding Medi-Cal: long term care. Medi-Cal Policy institute, 1-35