https://orcid.org/0000-0003-1492-9155
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ABSTRACT
Medicaid is the largest payer of long-term services and supports (LTSS) and millions of older Americans rely on this means-tested program, especially during late life. There has been longstanding concern that wealthy older adults may be accessing the program by opportunistically divesting assets in order to qualify for coverage rather than by having high medical or LTSS expenses on which they spend down their resources to eligibility levels. Few current studies analyze this question longitudinally. Thus, questions remain about whether states need to tighten asset eligibility rules to prevent opportunistic asset divestiture. This analysis explores robust longitudinal data to determine the extent to which older, wealthier Americans accessing Medicaid do so by engaging in opportunistic asset transfer. Our findings demonstrate that this may occur among a relatively small proportion of wealthy people, and that tightening Medicaid eligibility criteria would likely have only a very modest impact on program expenditures.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Key points
Only 7% of those 65 and over in the highest wealth quartile access Medicaid over a 20-year period.
Individuals from the highest wealth quartile only comprised 12% of all future users.
About 20% of the wealthy people accessing Medicaid do not have long-term services and supports needs or high medical expenses.
Initiatives targeting wealthy individuals may lead to very modest Medicaid program savings – between $2.7 billion and $4.4 billion.
Notes
1. Financial assets include retirement plans (IRA, Keogh accounts), stocks, mutual funds, investment trusts, checking, savings, money market accounts, government savings bonds, T-bills, bonds, bond funds and any other savings.