Originally created 03/27/06

Analysis: Asset recovery causes chaos



ATLANTA - A letter sent to 40,000 old, poor people and their families across the state got a bigger reaction than was planned when it dawned on folks receiving it that the government aimed to take away Granny's house.

It's a new program in Georgia with the sterile name "asset recovery" that every other state is already using.

The frantic backpedaling that resulted on the issue shows more about the opportunism of politicians than it does their compassion.

The federal government, which works with states to provide medical coverage to poor people through Medicaid, began insisting 11 years ago that states recoup some of the taxpayers' money spent on keeping elderly patients in nursing homes. The idea is to sell off beneficiaries' houses after they have died.

If a spouse survives, Uncle Sam is patient enough to wait so that no one is kicked out into the snow.

Georgia finally was getting around to implementing the program, notifying people receiving benefits since 2001 that if they continued getting government aid after April 15 their homes would be sold off in repayment. Of course, it wasn't much of a choice: lose the nursing home or lose the family home.

WHEN THE LETTERS went out, lawmakers went berserk.

First came a bill by Rep. Jeff Brown, D-LaGrange, to exempt estates of less than $25,000. Bear in mind that to qualify for Medicaid in the first place, net worth besides the home must be less than $1,700.

Next, Democrats proposed an amendment on the House floor to raise that exemption to $100,000. And even though it effectively stripped the bill of its impact, the amendment was too politically charged for the GOP to oppose.

"What you're talking about is taking advantage of Georgia's most vulnerable," said House Democratic leader DuBose Porter, of Dublin.

Privately, Republicans thought Mr. Porter was referring to them as the most vulnerable.

The Democrats held a news conference on asset recovery, but they were disappointed it didn't generate more coverage. Reporters knew the Democrats had already succeeded in spinning the message to their point of view to the extent that Republicans felt they had to go along.

In fact, one of them, Sen. Greg Goggans, R-Douglas, introduced an amendment on the Senate floor that limited the program even more by restricting it to future Medicaid recipients. Presumably, the delay would allow potential aid recipients to do a little financial planning before they apply for help.

For decades, financial planners have been advising those who could afford their services to put all the assets into the children's name anyway to qualify for Medicaid. Residences, though, aren't included in the calculation for eligibility, and until the asset-recovery program began, they would remain protected for distribution to the heirs.

Asset shuffling is a common middle-class way to cheat the government. The only hitch is that the ink on the paperwork must have been dry for three years before applying for assistance. Giving assets to heirs early might be a small price to pay for a nursing home, which could cost $5,000 a month.

Many families rationalize that Granny would quickly spend her nest egg and qualify for Medicaid eventually, so why not shelter a little of that money?

Maybe it's the prevalence of that thinking that scared the Republicans.

Consider how the legislation could have been debated, like so many other conservative programs, as a way to get a little relief for taxpayers. After all, who pays for all that Medicaid?

What about the people who saved in order to pay their own nursing-home bills, sacrificed to take care of Grandpa at home or took out a long-term-care insurance policy early enough to get affordable premiums? Why weren't the Republicans pitching asset recovery as a program to give these people a little parity?

The reason is that the Democrats' argument carried the day, but it wasn't because of the power of their logic. Strategists on both sides of the aisle can see that older voters are a growing and increasingly powerful bloc, which explains this session's flurry of bills to grant various tax exemptions for senior citizens.

Still, it's not as much fun when political opponents cave in. The newspapers don't run big headlines when they sense there's little public disagreement, and so the Democrats will have to look elsewhere for an issue for their campaign commercials.

Reach Walter Jones at (404) 5889-8424 or walter.jones@morris.com.