The Fallacy of Impoverishment

Findings from several recent studies suggest that the magnitude of asset spenddown is much smaller than previously believed and their significance to the long-term care financing crisis is explored.

Abstract

Several recent studies have challenged the assumption that Medicaid requires impoverishment. Although two-thirds of the elderly poor are not covered by Medicaid, many nursing home Medicaid recipients retain sizeable assets, which pass to their heirs without repayment of public costs. The magnitude of asset spenddown is much smaller than previously believed. This article discusses these findings and explores their significance to the long-term care financing crisis.