The health-care law President Barack Obama signed in March 2010 created a program that will pay a daily cash benefit that averages $50 or more to those who can no longer care for themselves, for workers who enroll in and contribute to the program. Details of the plan, called the Class Act, such as the cost of premiums for workers who enroll, haven't been released, said Lauren Shaham, spokeswoman for LeadingAge.
In April Senator John Thune, a Republican from South Dakota, and Senator Lindsey Graham, a Republican from South Carolina, introduced a bill that would repeal the Class Act.
'Ponzi Scheme'
"The Class Act is a Ponzi scheme that would make Bernie Madoff blush," Graham said in a press release. "It's billed as an insurance program for long-term care, but really it's just a huge and very costly government accounting trick."
Medicaid is the largest single payer for long-term care and makes up 42 percent of total spending, according to LeadingAge. Medicare pays for stays of up to 100 days at skilled nursing facilities when medically necessary, after a patient has had an inpatient hospital stay of three days or more, said Ellen Griffith, spokeswoman for the Washington-based Centers for Medicare & Medicaid Services.
To qualify for Medicaid, an individual over age 65 generally would need to have assets of less than $2,000, excluding home equity of up to $500,000, said Molly O'Malley Watts, principal consultant for Watts Health Policy Consulting.
"You truly have to impoverish yourself to qualify," said Watts, who's based in Milton, Florida. Medicaid officials will also look at any assets individuals have transferred out of their control in the five years prior to applying for Medicaid. "You can't transfer all your assets to a child and then qualify," she said.
Not Bothered
That prospect doesn't bother Harry Davis, 90, another resident of VillageCare who's paid for his five years at the center with the proceeds from the sale of his home in Bergenfield, New Jersey. Davis said he has enough money to pay for another four to five years at VillageCare, after which he would go on Medicaid.
"Not that much would change," said Davis, who owned a home decorating business before he retired. "If I do run out of funds, I'll still have a place to live."