Are Wealthy Older Adults who use Medicaid Opportunistically Accessing the Program?

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.