The author of the letter, “ Rethinking Annuities for Medicaid Eligibility ” ( JofA , Nov.04, page 13) found the article, “ Private Annuities Can Aid Medicaid Eligibility ” ( JofA , Jul.04, page 88) offensive and said that “encouraging people to game the system is unethical and should be discouraged by your magazine, not promoted.” He added, “Mississippi is struggling to fund its Medicaid program to help truly needy citizens.”
Funding struggle! The Mississippi state legislature elected to place in a rainy day fund its substantial share of the billions of dollars in tobacco settlement monies designed to offset the medical costs of the state, opting instead to currently appropriate only the future income stream.
Game the system! Several state legislatures, including that of Mississippi, enacted a tax specifically upon health care providers designed to increase the states’ share of the federal matching Medicaid reimbursement dollars—an annually adjusted “match” for poor states that often has exceeded 80%. Should taxpayers be offended when state legislatures “game the system” by artificially inflating reimbursed Medicaid costs with a provider tax, which does not provide any health care for needy citizens, but simply adds tax dollars to the state’s revenues as well as increasing federal matching dollars without delivering a tangible health care benefit or incurring a real expenditure of funds to help truly needy citizens?
I found the original article to be an accurate portrayal of one aspect of the complicated federal Medicaid eligibility criteria, which also permits recoupment of the state expenditures from the recipient’s resources without the state’s necessarily returning the federal matching funds it had previously received.
I trust the letter writer’s outrage is motivated by genuine concern for the Medicaid system to help truly needy citizens, that he is a CPA legislator in the process of learning the complicated system and not simply making a political statement.
John Suter, CPA