At present the main source of public financing for long-term care is medicaid, the joint federal-state program intended to finance medical care for the poor. To become eligible for medicaid, an elderly disabled person must prove both low income and low assets. Nursing home residents must turn over their social security checks and other income, except for a personal needs allowance of $30 a month. In some circumstances the spouse of a medicaid patient in a nursing home will be left with only minimal amounts of the couple's income and assets. Although the home is normally a protected asset, some states will force the sale of a house if it is unlikely the patient will be able to return to it and there is no spouse or minor child living in it.
Dissatisfaction with the current medicaid program is high. Not only does the demeaning means test often imply hardship for patients and their spouses, but low reimbursement rates mean that nursing homes frequently resist taking medicaid patients or provide poor care.
Despite these inadequacies, however, medicaid has come to serve as a last resort, not just for the poor, but for much of the middle class as well. After being in a nursing home for a while, many private patients use up their assets (spend down) and become eligible for medicaid. The Brookings-ICF Long-Term Care Model estimates that for the period 1986-90, 58 percent of all nursing home patients--and a higher percentage of long-stay patients--are or will be dependent on medicaid to help pay for their care, even though many were not poor when they entered the nursing home. Although the income of the elderly is projected to increase over time, the income for the population aged 85 and over will probably not rise as fast as the cost of nursing home and home care. Indeed, the Brookings-ICF model suggests that the elderly