Just a year ago, and by the slimmest of margins, Republicans in the U.S. House and Senate passed new legislation to curtail the availability of planning for eventual Medicaid eligibility. The legislators’ purpose was to reduce the cost of Medicaid to state and local governments, and to increase the use of insurance and personal savings in paying for the costs of long term care. Has it worked?

It is too early for studies to tell us exactly how many state and federal dollars (if any) have been or will be saved, but anecdotal information suggests that not much has changed—except that the involvement of good legal assistance has become more important and more expensive. The easy option previously available (making a substantial gift, retaining significant assets, and using the latter to pay for care while the ineligibility period occasioned by the former ran out) is no longer an option, at least in Arizona and most states. That approach may still be a choice in some states, however, as formal adoption of the Deficit Reduction Act’s requirements has been spotty in many jurisdictions.

That doesn’t mean there are no available planning choices, however. The remaining options are often unattractive, but faced with spending all of one’s assets on nursing home care, and encumbering even one’s home with the cost of care to be collected after death, many individuals will look at even less-attractive options. That, in fact, has been the experience for most elder law attorneys engaged in long term care planning.

Meanwhile, there was little hard evidence indicating that any significant portion of the Medicaid budget was affected by long term care planning even before the new law was adopted. Rather than a new focus on alternative care models, less medical (and presumably less expensive) placement options and providing support for the informal network of family and community that actually takes care of the majority of frail elderly adults, Congress decided to raise the specter of welfare cheats and greedy geezers. Sadly, the impetus for real reform of the way we care for our elders—and pay for that care—was probably lost to the Deficit Reduction Act’s mean-spirited “solution”.

Where should we go from here? We offer a New Year’s resolution for you: contact your new Congressperson and ask what he or she intends to do to help ease the terrible cost of long term care for the growing population of elders in this country. Offer your own suggestions for how those costs might be reduced—or at least for how increases in those costs might be limited. And, in the meantime, get yourself a quote for long term care insurance.

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