Minnesota's five state-owned veterans homes could save state taxpayers more than $4 million a year -- a tenth of the Legislature's annual appropriation -- by accepting federal Medicare and Medicaid payments for many of their residents, a new study finds.
But to fully reap the savings, the state would have to reduce the flexibility that veterans have in controlling their finances on entering a home and take residents based on need for care rather than a waiting list.
Both likely will be favored by some legislators, including Sen. Linda Berglin, DFL-Minneapolis, who has long pushed the homes for such a study. Any change would require legislative action. However, both suggestions are likely to generate strong dissent from commanders of nine powerful veterans groups, who will consider the options at a meeting next week.
While there's been no decision by the governing Department of Veterans Affairs, Deputy Commissioner Gil Acevedo hinted in an interview Tuesday that he may favor a scaled-back move to capture federal funds -- one that retains veterans' current perks and might yield savings of about $1 million a year.
He could do that without legislative approval, "but we certainly would talk first" with Berglin and other legislative leaders, Acevedo said, adding, "We need to think about what's best for our veterans" as well as protecting state coffers.
Benefiting most would be the flagship Minneapolis Veterans Home, with about 350 of the system's 800 residents, according to the report by Pennsylvania consultant Affinity Health Services. The firm was paid $246,000 for the study, which included inspections at all the homes, including Hastings, Fergus Falls, Luverne and Silver Bay.
The homes' current budget of $78 million a year comes from the state, the federal Department of Veterans Affairs and from individual residents.
Changing the rules
To get maximum benefit from Medicaid, the state would have to end a perk that is not available to people entering other nursing homes: qualifying for government-paid care by giving up assets as late as the day before entering the home.
If that changed, veterans entering the state-owned homes might fall under normal rules governing other Minnesotans: They might be disqualified for subsidized care for a time if they gave away assets within five years of applying for Medicaid, the government's health care program for the poor.
To reap the most benefit from Medicare, a federal health care program for the elderly and disabled, the homes would have to make another change: eliminate the current two-year waiting list and take new residents based on their need for care. Medicare does not cover long-term care, but it does pick up costs for the first 20 days in a nursing home after a three-day hospital stay.
"We need to think carefully about this," Acevedo said. Thirty-one states have Medicare-certified veterans homes, "but I'm not aware of any that have given up the waiting list" or the ability to give away wealth just before admission, he said. He came to Minnesota from California, where he was administrator at a Medicare-certified veterans home.
The study, distributed late last week to key legislators, says it would take about 18 months and $834,000 in start-up costs before the homes could begin billing Medicare and Medicaid.
'Looking for every dime'
The Legislature likely will discuss the issue in the session that starts Feb. 4, but probably will not take action this year, said Rep. Al Juhnke, DFL-Willmar, who heads the House Agriculture, Rural Economies and Veterans Affairs Finance Division.
"We've got a budget crisis to deal with first," he said.
"Minnesota's financial problems look like they're not getting better, and even in future years we'll be looking for every dime we can save," Juhnke said. "Nothing is going to be off the table, even veterans' services."
At the same time, he said, "I think there will be a lot of pressure not to harm veterans. We've got guys coming back right now from Iraq and Afghanistan," and they're not so different from servicemen who came back from World War II, Korea or Vietnam, he said.
"Cutting any benefits for veterans will be a big political issue," he said, "but balancing the budget is just as big."
Warren Wolfe • 612-673-7253