Posts Tagged ‘ALTCS’

Pending Insurance Claim Is Not “Available” to ALTCS Applicant


It makes sense that someone seeking to qualify for public benefits would want to argue that they do not have assets available to them. Sometimes, however, an applicant will want to argue that more assets are available, as Charles Smith and his wife did—unsuccessfully.

Mr. Smith, an Arizona resident, was injured in a motorcycle accident in April, 2000. As a result he was hospitalized and ultimately moved to a nursing facility. A year after his injury his wife applied for coverage from the Arizona Long Term Care System (ALTCS), Arizona’s Medicaid program for long-term nursing care.

The ALTCS system calculated that Mr. and Mrs. Smith had assets of $108,421.98 on the date of the accident. That meant that Mr. Smith would not be eligible for ALTCS coverage until the total available assets reached $56,210.99—the so-called Community Spouse Resource Deduction (or CSRD).

Meanwhile, the driver of the car that struck Mr. Smith admitted fault for the accident. Unfortunately, he had no liability insurance. Mr. Smith, however, was covered by two uninsured / underinsured motorist policies, with total coverage of $125,000. Those policies paid out to the Smiths in July, August and December of 2000.

Mrs. Smith, on her husband’s behalf, argued that the insurance coverage should have been counted as an available resource as of the date of the accident. Because the CSRD (the amount the couple would be allowed to keep) is calculated based on the total available resources, inclusion of the insurance proceeds would mean that they would have been entitled to retain $87,000. That would have meant that Mr. Smith would have qualified for ALTCS coverage in February, 2001, rather than May of that year (as he ultimately did), resulting in reimbursement for three additional months of nursing facility bills—perhaps a $10,000 to $15,000 benefit.

Although a hearing officer agreed with Mrs. Smith, ALTCS did not, and the agency set enrollment in the program for the later date. A Maricopa County (Phoenix) trial judge reversed the agency and ruled in the Smiths’ favor.

The Arizona Court of Appeals, however, restored the ALTCS interpretation. The insurance proceeds weren’t actually available on the date of the accident, said the judges—as evidenced by the fact that it took nine months before the claims were finalized and payments received. ALTCS was right to calculate the Smiths’ assets at the lower number. Smith v. Arizona Long Term Care System, January 22, 2004.

Arizona Restricts Use of “Self-Settled” Special Needs Trusts


Last week Elder Law Issues described how a “Special Needs” trust can be used to protect the beneficiary’s access to public benefits programs like Supplemental Security Income (SSI) and Medicaid (in Arizona, AHCCCS or ALTCS). There is one glaring problem with Special Needs trusts just now in Arizona, however—the Arizona Long Term Care System (ALTCS) has aggressively attacked the use of Special Needs trust planning.

It is important to clarify at the outset that ALTCS’ scrutiny of Special Needs trusts has been limited to those funded with personal injury settlements or other funds once belonging to the beneficiary. So far, at least, ALTCS seems to understand that trusts established by parents with their own money for the benefit of children with disabilities should not be challenged.

What are often called “self-settled” Special Needs trusts, though, have come under increasingly intense attack by the ALTCS administration. The government challenges range from demands that the trusts be amended each year, to insistence that the trustee predict exact expenditures for a year in advance, to registering objections to payments for the benefit of the trust’s beneficiary.

ALTCS takes the position that they are not constrained by the straightforward language of federal law on self-settled Special Needs trusts. Although the State will be entitled to receive most, if not all, of the trust assets on the death of the beneficiary, the administrators’ approach seems to be calculated to make the use of Special Needs trusts as unattractive as possible.

Although federal law clearly contemplates that personal injury settlement money, for example, could be used to purchase a home for the beneficiary or pay for caretakers in addition to the care provided through the Medicaid benefit, Arizona imposes severe limitations on both types of expenditures. The State’s demand for an annual budget and its insistence on no deviation without 45 days’ advance notice makes it difficult (if not impossible) to employ the flexibility necessary in administration of the care provided to most disabled beneficiaries.

The practical effect of Arizona’s assault on self-settled Special Needs trusts has been to substantially increase the cost of administration of such trusts and to reduce the benefit to beneficiaries. It would be incorrect to say that Special Needs trusts are no longer useful for Arizona residents, but the ALTCS position makes it imperative that any proposal to establish a Special Needs trust be reviewed by an experienced attorney.

Eligibility, Benefits Figures Increase With Cost of Living


Each year Social Security benefits are raised automatically to keep up with the increased cost of living. Benefit increases are pegged to standard measures of inflation, and take effect on January 1. Social Security figures, however, are not the only automatic increases affecting seniors and the disabled.

Beginning January 1, 2002, Social Security beneficiaries will see their monthly checks go up by 2.6%. Supplemental Security Income (SSI) recipients will also see a 2.6% increase, with the largest federal checks going up to $545 (some but not all states contribute an additional amount to SSI benefits).

That SSI increase will have an indirect effect on Arizona nursing home residents. The Arizona Long Term Care System (ALTCS), Arizona’s Medicaid program for long-term care subsidies, is available only to those with incomes less than three times the maximum SSI benefit.

As a result ALTCS recipients with more than $1635 in monthly income will need to take additional steps to qualify for assistance. In most cases that will mean establishing a “Miller” Trust, though it may be more complicated for some long-term care recipients. Some ALTCS patients who have already established Miller Trusts may no longer need them if income has failed to keep up with the automatic increases.

Participants in the federal Medicare program will also see some increases in program numbers. Perhaps most importantly (or at least most immediately apparent) will be an increase in the Part B premium paid by Medicare beneficiaries. That premium is usually deducted from Social Security benefits, which means that a portion of the cost of living increase will be withheld from checks automatically. The Part B premium is slated to increase from $50 to $54 per month.

Other Medicare numbers will also change, with most of the changes pegged at 2.5% over 2001 figures. Increased figures will include the deductible for hospital stays (rising to $812 per month), and the coinsurance amount for nursing home stays between the 21st and 100th day of the stay (rising to $101.50 per day).

Some state government figures have also increased. Arizona annually calculates the average cost of nursing home care for purposes of determining whether gifts made by ALTCS applicants should disqualify them from coverage. In most cases the value of a gift is divided by the state-calculated figure to determine a period of months of disqualification. Arizona’s calculation of the average cost of care increased, effective October 1, 2001, to $3,540.67. In other words, if an ALTCS applicant gave $35,406.00 to his children in 2001, he would be ineligible for ALTCS for 9 months (the ineligibility period is rounded down). The figure for counties other than Pima, Pinal and Maricopa is lower, at $3,290.17.

It can be a chore to keep track of the regular changes in benefits levels and rates. At Elder Law Issues we will try to keep you current; let us know if there are other benefits figures you have difficulty locating.

Questions and Answers About Arizona’s “Beneficiary Deed”

MAY 7, 2001 VOLUME 8, NUMBER 45

Last week Elder Law Issues reported on Arizona’s new “Beneficiary Deed” statute. A law passed by the Arizona legislature this year creates a new, simpler way to pass title to real property, without any requirement of probate and avoiding the cost of establishing a living trust.

A number of readers had questions about the new deed form. Questions included:

When can I sign a beneficiary deed?

Most laws take effect 90 days after the legislature adjourns. Adjournment is now scheduled for Thursday, May 10. If the legislature actually adjourns that day, the new law will be effective (and beneficiary deeds will become an available choice) on August 3, 2001.

Will the recipients under a beneficiary deed receive the benefit of stepped-up basis for income taxes?

Yes. To explain: when you inherit property from another, you usually do not have to pay income taxes on the increase in value of that property during the prior owner’s life. For purposes of calculating the income tax on capital gains, your “basis” in the property is said to have been “stepped up” to its value on the date of death of the person who left it to you. Beneficiary deeds will reach the same result.

How will beneficiary deeds affect ALTCS (Medicaid) recovery rights?

ALTCS is Arizona’s long-term care Medicaid program. When it provides benefits, the program has a claim against the recipient’s estate. Under current law that claim can only be collected in a probate proceeding. Since the beneficiary deed will avoid the probate process, ALTCS’ claim will not be levied against the property. This makes beneficiary deeds particularly attractive to ALTCS recipients and their families.

It is worth noting that a different law passed by the legislature this year may undo some of this benefit. “Non-probate transfers” (including beneficiary deeds, living trusts and joint tenancy bank accounts, but not real estate held as joint tenants) may now be challenged by creditors, including ALTCS.

Why would anyone want to create a living trust now?

Beneficiary deeds will be a valuable new estate planning tool, but will not replace other options. Perhaps most importantly, a beneficiary deed will not help a married couple take advantage of the maximum estate tax exemption if their combined estates exceed the taxable level (currently $675,000).

Trusts remain a more effective way to control property after death (for a disabled or spendthrift child, for example). Trusts can be used for real property outside Arizona. Another advantage for trusts: a single amendment can change your entire estate plan, rather than requiring new deeds and beneficiary designation changes on each individual asset.

For those who already have established living trusts, the beneficiary deed probably represents a step backward. For those now considering their options for the first time the beneficiary deed may be an attractive, low-cost choice for estate planning.

Guardianship Fees Deducted From Patient’s “Share of Cost”


Mary Perry was admitted to a Massachusetts hospital in 1991. After treatment was completed, the hospital sought her discharge to a nursing home that November. Unfortunately, Ms. Perry lacked both capacity and resources.

The Massachusetts court appointed a guardian to make placement decisions for her, and she was promptly placed in an appropriate nursing home. A Medicaid application was completed, and Ms. Perry qualified for government assistance with her nursing home expenses.

Once Ms. Perry’s care was arranged and eligibility obtained, the Medicaid agency turned to the question of how much Ms. Perry would need to contribute (from her monthly Social Security check) toward her care. Ms. Perry’s “share of cost” was calculated, and payments began.

Meanwhile, Ms. Perry’s guardian sought approval of the fees and costs incurred in securing the guardianship, making (and implementing) the placement decisions and applying for Medicaid coverage. The Massachusetts court approved the guardian’s fees, and ordered that payments could be made from her monthly Social Security check.

Unfortunately, Ms. Perry’s personal needs allowance (the state Medicaid program was leaving her only a small amount each month) was insufficient to both provide for her personal needs and pay the accumulated guardianship fees. Ms. Perry’s guardian therefore applied for a reduction in the “share of cost” amount to permit the guardian’s fees to be paid. In support, the guardian argued that the fees were required to obtain medical care, and that medical expenses may be deducted from the share of cost amount.

Massachusetts’ Medicaid agency denied the request, citing HCFA (Health Care Financing Administration) regulations categorizing guardianship expenses as not related to medical costs. The guardian appealed to the state courts.

The Massachusetts judge has now ruled that guardianship costs are “necessary medical expenses” when they are required to obtain consent to medical treatment. Under the law of informed consent, Ms. Perry’s treatment could not be undertaken without approval from a surrogate; since she had made no provision for surrogates herself (such as by executing a power of attorney for health care), the guardianship was required before treatment decisions could be made. Perry v. Bullen, Mass. Super. Ct., May 31, 1996.

Arizona law is similar to Massachusetts’ provisions, and a similar result might be expected. ALTCS regulations provide that the share of cost may be reduced by a “noncovered medical or remedial expense” incurred during the three months before application, but then makes a list of allowable expenses. Not surprisingly, guardianship (or legal) fees are not included. ALTCS does permit “other non-covered medically necessary services which the member petitions AHCCCS for and which the Director approves,” (ALTCS Eligibility Policy and Procedure Manual §1016.2.C.2.b.vii) but it seems unlikely that would quickly concede the point.

Nonetheless, guardianship may legitimately be required before nursing home placement can be secured and an ALTCS application completed. How can these expenses be paid if the ward has no assets? One obvious choice is to make a referral to the Public Fiduciary’s office, but if family are actively involved they may be instructed to initiate their own proceeding. If family members are reluctant (or have insufficient resources to pay for the guardianship themselves), the facility may find itself at an impasse.

Relying on the logic of the Perry case, an argument can be made that the costs of securing the guardianship should be paid from the patient’s ultimate share of cost calculation. While this result might not be easily obtained, Perry gives valuable support.

Gifts By Medicaid Applicants Are Not The Problem, Study Says


It is (as of January 1) a federal felony for those facing nursing home placement to make gifts for the purpose of becoming eligible for Medicaid (in Arizona, ALTCS) coverage. Much has been written about the ambiguity and unenforceability of the new law. For example, Elder Law Issues, November 25, 1996, and August 19, 1996, focused on the meaning, history and poor drafting of the new enactment.

Now Congress is considering repeal of the two-week old criminalization provision. Congressman Steven La Tourette, a second-term Republican from Ohio, has introduced House Resolution 216, which would strike the new section of Medicaid law before the first prosecution could be threatened. Powerful forces in Washington, including the AARP and other advocacy groups, have lobbied forcefully for the repeal. Indications are that the threat of jail for middle-class seniors will now fade away.

The legislative assumptions underlying the original enactment of this punitive law have remained unchallenged, however. According to some in Congress (and, more importantly, lobbyists for the long-term care insurance industry), the practice of making gifts to qualify for Medicaid is widespread and is costing state and federal governments millions of dollars. Sadly, Congress appears to have bought into this myth without question, and in spite of the actual evidence.

In a study prepared for publication in the periodical Generations, Washington researcher Joshua Wiener of the Urban Institute has analyzed the actual incidence of transfers by seniors. His conclusion: both the numbers of persons making transfers and the amount of money transferred to obtain Medicaid eligibility are much lower than commonly thought.

Wiener notes earlier research which shows that three quarters of nursing home admittees are already impoverished, with less than $50,000 in assets other than their homes. Over half had less than $10,000 of cash available. In other words, the typical nursing home admittee is able to pay for less than six months of nursing home care (and less than two months in many communities, with sharply higher nursing home costs) in any event. It is unrealistic to expect any substantial cost savings for the Medicaid program from further restrictions on transfer rules.

Furthermore, historical data indicates that seniors infrequently give away their assets to become eligible for nursing home assistance. Between 1988 and 1992, Congress substantially liberalized the rules for married couples to become eligible for Medicaid, while simultaneously clarifying the transfer rules. During that time, the portion of nursing home residents covered by Medicaid increased by only two percentage points. Wiener notes that the increase should be almost entirely attributable to the change in married couple rules, suggesting that the number of people making gifts to become eligible must be almost insignificant.

Finally, Wiener notes that the administrative costs attendant on any plan to reduce transfers must be considered. In the case of Congress’ ill-conceived plan to criminalize gifts, for example, the costs of administrative rule-making, prosecution and incarceration might exceed any reduction in Medicaid costs.

On a related issue, Wiener also assesses the effect of new, stronger federal rules on estate recovery. As a practical matter, estate recovery programs rely on Medicaid recipients retaining an interest in their homes throughout their nursing home stay; research suggests that only 14% of Medicaid recipients own their homes at the time of institutionalization, so the possibilities for recovery are not high. In Oregon, the state with the best record of estate recovery, about 2.5% of Medicaid costs are recovered.

HMO Patient’s Survivors Not Limited To Medicare Appeal


William and Cynthia Ardary lived in rural California. In 1991, they attended a seminar sponsored by Aetna Health Plans of California; the seminar was part of Aetna’s marketing plan for its Medicare HMO, Aetna Senior Choice.

Mr. and Mrs. Ardary were interested in the HMO alternative, but were concerned about the availability of care in their rural area. They particularly asked about access to emergency care and more sophisticated treatment. According to Mr. Ardary, the Senior Choice representative reassured them that, if the need arose, they would immediately authorize transfer to a larger hospital or more specialized treatment facility.

Attracted by the excellent benefits and lower prices (compared to Medigap coverage), the Ardarys changed from “regular” Medicare to the Senior Choice HMO. Two years later, Mrs. Ardary suffered a serious heart attack.

Mrs. Ardary was first treated at a small rural hospital near her home. The local facility did not have either cardiac or intensive care capabilities. According to Mr. Ardary, both he and his wife’s physician repeatedly requested that Aetna authorize an airlift transfer to a larger medical center, but Aetna declined. Mrs. Ardary died in the local hospital.

Mr. Ardary and his children brought a wrongful death action against Senior Choice and Aetna. In their lawsuit, they alleged that the HMO was negligent in denying the transfer to a larger, more advanced treatment facility. Aetna argued that the Ardarys’ only recourse was to appeal the alleged denial of Medicare benefits through the administrative appeal process.

The U.S. District Court agreed with Aetna and dismissed the Ardarys’ lawsuit. The Ardarys appealed, arguing that they were not seeking review of the denial of Medicare benefits itself, but the alleged negligence of the treatment team in failing to secure proper medical care.

The Ninth Circuit Court of Appeals now agrees with the Ardary family. The appellate court finds that the claims are not “inextricably intertwined” with the denial of benefits, and the Ardarys may seek to prove their claims at a trial in the District Court. Ardary v. Aetna Health Plans of California, October 21, 1996.

[Note: The Ninth Circuit includes Arizona, so the same result would clearly be reached in Arizona.]

ALTCS and SS Figures for the New Year

Last week, Elder Law Issues reported on the new 1997 figures for Medicare copayments and benefits. Many Medicaid and Social Security figures will also change with the new year. Some new numbers:

Income Cap (single applicants earning more than this amount do not qualify for long-term care Medicaid–ALTCS– unless they create special trust arrangements) $1,452.00 /mo

Minimum Community Spouse Resource Allowance (in Arizona this is called the CSRD–this is the minimum amount a community spouse is permitted to retain while permitting the institutionalized spouse to still qualify for long-term care/ALTCS) $15,804.00

Maximum Community Spouse Resource Allowance (the community spouse is permitted to retain one-half the total available resources of the couple, up to this amount–but always retains at least the minimum amount above) $79,020.00

One other ALTCS eligibility number will not change. The Minimum Monthly Maintenance Needs allowance (the MMMNA), the figure used in calculating share of cost for married ALTCS recipients, will remain at $1,295 until July 1, 1997.

Monthly exempt earning amount (Social Security retirees may earn this amount without having any reduction in benefits):

Under age 65 $720.00

Ages 65-69 $1,125.00

Court Denies Family Claim For Unwanted Medical Treatment


When Edward H. Winter was hospitalized with heart problems in 1988, he told his doctor he did not want to be resuscitated if he suffered cardiac arrest. Mr. Winter had watched his wife slowly deteriorate and die from a heart condition a few years before, and he was adamant that he did not want to suffer the same fate.

Mr. Winter’s doctor agreed with his wishes, and took care to note on the hospital chart that no extraordinary life-saving procedures should be administered to Mr. Winter. Then his treatment at Franciscan Hospital in Cincinnati, Ohio, continued.

Shortly after his admission, Mr. Winter’s heart slipped into a potentially fatal arrhythmia. A nurse revived him with a defibrillator, and his heart rate was stabilized. Two days later, Mr. Winter suffered a stroke. His right side paralyzed and requiring total care, Mr. Winter lived for two more years.

Mr. Winter’s daughters sued the hospital for the $100,000 his two months of hospitalization after the stroke had cost. The trial court agreed, and awarded the family damages for the aftermath of the unwanted treatment. Franciscan Hospital appealed.

Ohio’s Supreme Court reversed the judgment, and ordered that the family should receive no damages. Although the court agreed that resuscitating Mr. Winter had been in violation of his wishes, they ruled that “there are some mistakes that people make in this life that affect the lives of others for which there simply should be no monetary compensation.”

The Ohio court decision was not unanimous. Three of the seven justices disagreed. Still, the result was described by the daughters’ attorney as showing that “the right to refuse treatment is a joke.”

What steps might Mr. Winter have taken to ensure that his wishes were honored? Apparently, he had discussed the matter with his physician, but that was not enough. Hospital staff should have been brought into the discussion as well. Perhaps the physician on call needed to be specifically advised.

Would the same result occur in Arizona? Very likely, unless Mr. Winter was adamant, his family was involved and the medical staff had been given clear and unequivocal instructions.

New ALTCS Eligibility Numbers Released

The Health Care Financing Administration has released new Medicaid long-term care (ALTCS) income eligibility figures for 1997. After January 1, applicants will be permitted to have income of up to $1,452 per month before becoming ineligible for long-term care. Last year’s eligibility number had been $1,410.

The new figures mean that a married couple can have up to $2,904 in monthly income and still have either spouse qualify for ALTCS eligibility. Of course, if the institutionalized spouse’s income is less than $1,452, he or she will still qualify regardless of the income of the community spouse.

Several other eligibility numbers will also change effective January 1. Those interested in more detail on ALTCS eligibility, the new figures and the application process (along with Medicare, guardianship and conservatorship and other legal issues) should consider the Arizona Long Term Care seminar presented by HealthEd, LLC.

“Letter To The Editor”: Long Term Care for the Poor


In our August 19, 1996, Elder Law Issues, we reported on recent changes in federal law which will make it a crime to give away assets (in some circumstances) to qualify for Medicaid long-term care eligibility (ALTCS in Arizona). For another perspective on the issue, consider the comments of one of our readers.

Tucson businessman Bruce Ash has given careful consideration to the larger problem of society paying for long-term care costs. In a letter to Elder Law Issues, he writes:

“Health care professionals are facing a staggering task today as the cost of providing health care to America’s aging continues to rise. Not only are Americans living longer, but due to their advanced age many are presenting themselves at hospitals and long term care facilities with multiple illnesses and oftentimes little or no funds (or insurance) to pay the bills.

“Most of the elderly poor I have become familiar with over the past several years have honestly spent down their modest assets and are truly indigent. As a witness to the efforts of the Jewish and Catholic community’s efforts to provide charity care to the elderly poor, I am proud to report that Tucsonans provide millions of dollars to support charity healthcare every year through their generous gifts.

“There are some, however, who along with their family members and advisors have used the system to gain unfair advantage to all those who are truly in need. If this practice were to gain acceptance in Tucson as it has elsewhere it would cause great financial distress for hospital and long term care facilities alike.

“Is the Kennedy-Kassebaum bill the answer? Who knows. But, what I do know is that if America does not come to grips with the overall issue of elder healthcare soon we will certainly face national crisis by the time most of those born from 1945-1965 come of age. We do very little to defuse the ticking bomb unless we develop new, revolutionary ideas to better serve elder Americans in need. The medical, legal, religious, legislative and insurance fields must come together to design cost effective and humane models to deliver prevention, health and living environments which will substitute for the bloated and short sighted way we are dealing with the elderly today. The time has arrived where we must begin putting our heads together to solve this issue instead of skirting it with fancy legal footwork. I hope you will agree as Americans we are up the challenge.”

Thank you, Bruce, for your thoughtful comments. Indeed, we agree that Americans are up to the challenge; now we need to devote our collective energy to finding that solution.

Your comments and contributions are always welcome, and we hope to hear from more of you on this difficult subject.

PA Federal Court Settlement May Affect Arizona’s ALTCS


A settlement finalized last month in a Pennsylvania Federal Court may have some effect on Arizona’s ALTCS program. The settlement was reached in a three-year-old class action filed by Medicaid long-term care recipients and their non-institutionalized spouses.

Under federal Medicaid law, the non-institutionalized spouse of a Medicaid recipient is entitled to retain sufficient income to ensure basic necessities of life. Currently, this means that the community spouse is entitled to at least $1,295 per month; if the community spouse’s own income does not reach that amount, he or she is entitled to special treatment in the application process.

Pennsylvania previously interpreted that Federal provision the same way as Arizona currently does: when the community spouse’s income is insufficient, he or she was permitted to retain a portion of the institutionalized spouse’s income to make up the difference. The lawsuit challenged that approach. Instead, argued lawyers for Pennsylvania Medicaid recipients, the community spouse should be first permitted to retain additional assets (beyond those already permitted by separate Medicaid provisions, usually referred to as the “Community Spouse Resource Allowance”). The additional assets should be sufficient, they argued, to provide the required additional income. Only if the couple’s total assets were insufficient to ensure the $1,295 per month to the community spouse should the institutionalized spouse’s own pension income be tapped.

The effect of this approach would be to permit the spouses of many Medicaid applicants to retain significantly larger portions of their joint assets. In cases where the institutionalized spouse is the first to die, this would also help the surviving, community spouse to afford living expenses after Medicaid eligibility no longer made any difference.

Pennsylvania’s Medicaid agency has now admitted that its approach to calculating the “share of cost” (which was identical to Arizona’s methodology) was incorrect. Instead, community spouses will be entitled to keep sufficient assets to purchase an annuity large enough to make up the difference in income between the community spouse’s pension and $1,295. Hurly v. Houston, U.S. District Court, Eastern District of Pennsylvania, July 1, 1996.

Increases in Health Care Spending Slowed in 1994

Federal figures for 1994, recently released, show that the cost of medical care continue to rise at a rate faster than inflation. Still, the good news is that the increase was the smallest in three decades.

According to HCFA Review, the quarterly journal of the Health Care Financing Administration, the 1994 increase in medical costs was 6.4%. The smaller increase, however, was larger than the general increase in cost of living, with the result that the portion of our Gross Domestic Product devoted to health care also increased slightly, from 13.6% to 13.7%.

Of the $949.4 billion spent on health care in 1994, the federal-state Medicaid program accounted for $122.9 billion (or about 13%). Of that figure, the federal government contributed $78.4 billion and the remaining $44.5 billion came from state governments.

While overall health care costs increased 6.4%, Medicaid costs increased by 7.7%. This figure, like the overall health care costs, represented a decrease in the growth rate. Medicare, the federal insurance program for health care for the elderly and disabled, increased its outlays during the same period by 11.4%.

The 1994 figures represent an expenditure of $3,510 by each American on health care costs.

©2021 Fleming & Curti, PLC