By David Michael Goldfarb, Esq.
Politics defines the law and thereby your clients’ livelihood.
If there’s one lesson from 2017 for NAELA members to take away, it’s that politics is unavoidable. Politics defines the law and thereby your clients’ livelihoods.
NAELA and its membership must engage policymakers by offering our expertise on how particular laws work and their impact on Americans in need of long-term services and supports (LTSS).
Preventing Limits to Community Spouse Annuities
In 2017, NAELA got into the Medicaid debate early. In late January, House Republicans put forward the use of annuities to protect community spouses as an example of why Congress must impose per-capita caps on Medicaid. H.R. 181, the Close Annuity Loophole in Medicaid (CALM) Act, would have made half of a community spouse annuity available to the institutionalized spouse, except in the instance of a spouse’s IRA annuity. NAELA spent much of February and March lobbying the House Energy and Commerce Committee on the issue. In particular, how the new restrictions could lead to an increase in divorce. Ultimately, House Republicans put the annuities proposal on hold (for now) and kept it out of their health reform bill, the American Health Care Act (AHCA).
Stopping Restrictions to Home Equity and Retroactive Coverage
AHCA, which, if passed as written, would have repealed and replaced the ACA, would also have cut federal Medicaid spending by nearly $1 trillion over 10 years. It also included two smaller changes that impacted Medicaid LTSS: the repeal of three-month retroactive coverage and ending the ability of states to expand the home equity exemption above the federal minimum.
NAELA chose to focus on these smaller items — the repeal of three-month retroactive coverage and limits to home equity — given its unique expertise and with the understanding that a whole range of other powerful groups from AARP to the American Medical Association opposed structural Medicaid reform.
With regard to the repeal of three-month retroactive coverage, NAELA focused on how retroactive coverage provides a smoother transition into a nursing home while individuals and their families get the necessary documentation together.
NAELA raised a number of concerns regarding new limits to home equity. The provision was premised on the notion that these individuals could easily take out a reverse mortgage or line of credit. But the ability to get such a credit is in question, particularly in emergency situations where the individual is already in a nursing home. This puts the home at risk of liquidation entirely.
Thanks to NAELA advocacy, the Senate dropped from its health reform bill, the Better Care Reconciliation Act (BRCA), new limits to home equity. The Senate also modified the repeal of retroactive coverage to exempt persons with disabilities and those over 65.
Combating Harmful Waivers
While Congressional Republicans sought to limit funding, the Trump administration in March signaled their willingness to allow states to create their own eligibility rules for Medicaid using an 1115 waiver.
Section 1115 of the Social Security Act allows states to waive the mandatory requirements of Medicaid. Theses waivers must test a hypothesis that comports with the purposes of the program.
A month after the Trump administration letter, Maine proposed a waiver with sweeping restrictions to its Medicaid program, including repeal of quarterly retroactive coverage and new term limits to annuities.
NAELA had some success at the state level. Working with Maine NAELA members and the local elder law section, Maine’s final submission to CMS did not repeal retroactive coverage for LTSS.
However, Maine sought an unprecedented move of adding a new requirement to the annuity rules. Annuities would now need to be at least 80 percent of the life expectancy of the person receiving the income.
The policy primarily targets short-term annuities for community spouse cases, shifting more of the risk onto the spouse away from the state. However, the policy would also impact single individuals as well.
A major concern is that merely because a state does not like some aspect of federal law, that doesn’t give it the right to get rid of it. NAELA submitted comments to CMS in September. Future litigation may be required to combat this unprecedented move.
Saving the Medical Expense Deduction
In September 2017, Republicans released an outline that implied the elimination of the medical expense deduction. NAELA began preparations in the event the implication proved correct.
On November 7, 2017, our worst fears were realized when the House bill eliminated the medical expense deduction.
NAELA focused on how ending the deduction would impact LTSS. Many individuals would not be able to pay for both LTSS and a new tax. Those who could afford both would see their life-savings dwindle more rapidly, spending down to Medicaid faster.
NAELA quickly mobilized with AARP and a few others to educate Congress, and importantly, other health organizations. Our loose coalition quickly grew from just a handful to more than 60 groups in a few weeks.
Ultimately, NAELA helped change the public debate on the medical expense deduction by focusing attention on its impact on LTSS.
After intensive lobbying, the Senate passed a bill that not only retains the deduction, but thanks to Senator Susan Collins, temporarily lowers the threshold to 7.5 percent of adjusted gross income for the next two years.
The final compromise bill kept the Senate provisions. In the end, advocates helped save and expand the medical expense deduction, an incredible feat considering the speed by which Congress passed the legislation.
About the Author
David Michael Goldfarb, Esq., is NAELA’s Senior Public Policy Manager.