Most people don’t want to think about living in a nursing home. Yet, 43 percent of persons over age 65 will use nursing home care before they die.[1] The average cost of nursing home care in the United States was $204 per day in 2006. In several regions of New York, the cost was much higher — as much as $311 per day (or over $113,000 a year).[2]

Relatively few people have private long-term care insurance to help cover nursing home costs. That may be why some people work with attorneys to divest their assets, so when they need nursing home care they can have it paid for by Medicaid, a public health insurance program for low-income people that is also the primary funding source for long-term care services like nursing home, personal, and home health care.

When persons apply for Medicaid funding for nursing home care, states are allowed to look back five years to see if the Medicaid applicant transferred assets. How many people transfer assets to qualify for Medicaid? Studies have tried to estimate this, but this information is difficult to track.

Using what data are available in New York State on persons once they apply for Medicaid-funded nursing home care, a recent Rockefeller Institute analysis showed that “of the average number of elderly Medicaid enrollees in New York State (outside the New York City area) 7 percent were found to have transferred assets and were denied Medicaid nursing facility services between 1998 and 2008.” [3]

It is hard to say whether this number is high or low since there are few comparable analyses. What is striking about the analysis, however, are the large disparities among counties in the state. Some counties showed relatively few cases where individuals were denied Medicaid funding for nursing home care because of asset transfers. Some other counties had relatively high numbers. For example, among larger counties, Suffolk and Rockland had rejection rates more than twice the statewide average, while Westchester, Erie and Broome counties had rejection rates less than half the average.

It is unlikely that these disparities exist because of differences in how applicants dealt with their assets. Maybe some counties have higher asset transfer rates because their residents are wealthier. Conversely, wealthy counties might have lower asset transfer rates because residents can afford legal assistance to help them divest assets before applying for Medicaid. Neither pattern emerged. There was no relation between county wealth or demographic factors and the rate of asset transfer.

It is possible that disparities result from differences in the level of effort that certain counties put forth in tracking asset transfers. Or there may be differences in the counties’ ability to track asset transfer information because of staffing or resources. Or perhaps there is some variation in the implementation of rules at the county level. Indeed, Medicaid eligibility processes are still largely a county responsibility.

Critics of the Medicaid program in New York and other states have often said that many wealthy individuals transfer assets unfairly, so that costs for care can be shifted to taxpayers. The Rockefeller Institute study does not conclusively measure the extent of any such abuse. The apparently dramatic variation among counties, however, raises important questions that might be answered with further research. A reasonable short-term agenda for policymakers and researchers could be to understand better the reasons for differences among counties, particularly given that many county officials express concern about the cost of Medicaid. Further research might improve program administration, while providing clearer answers on the nature and extent of asset transfers before Medicaid takes over payment for nursing home care.