LTC Bullet: Medicaid Planning Exposed
Friday July 17, 1998
In "The Tarnished Years" series which recently appeared
in the Indianapolis Star/News, reporter
Despite Raymond's stress and confusion over his wife's recent
placement in a nursing home, his
While it is difficult to fault Raymond for making a rational economic choice--letting taxpayers pick up the tab for his wife's bills--his experience clearly demonstrates why public policy should encourage people to plan ahead for LTC with private insurance. Raymond's wife would have been assured top-quality care in a first-class facility, while Raymond would have been spared such a difficult and humiliating process.
Reporter Fahy is given unprecedented access into the typically private process of transferring or sheltering assets to qualify for Medicaid's LTC benefits. Medicaid planners routinely deny encouraging Medicaid dependency. They claim to provide only objective information to inquisitive clients. Joe Fahy's article puts this myth to rest.
As long as Medicaid remains an option after the insured event has occurred -- regardless of asset or income levels, there is no incentive to plan ahead for the risk of LTC expenses. Medicaid planners will continue to prosper until public policy corrects these perverse incentives.
The following are several telling excerpts from the story:
"[Raymond's] attention was fixed on his attorney, Jean Kitley. Patiently, she explained ways to maneuver his finances and get the government to pay his wife's nursing home bills.
"But the lengthy discussion of numbers and rules was more
than the retired auto mechanic could grasp."
"Raymond was surprised to learn that provisions in the
Medicaid law could keep him from losing anything. "Though
he warmed to the idea, settling on a plan of action was not easy
for him. It took three lengthy meetings with his attorney. Even
then, he was unclear about details."
"[Attorney] Kitley outlined some possibilities.
"Or Raymond could keep virtually everything, shielding
assets instead of spending them. He could buy Series EE U.S. Savings
Bonds, which Medicaid would not consider in determining Evelyn's
eligibility. Six months later, when the bonds matured, he could
cash them in and
"'They don't question that?' said Raymond's daughter, Sandra Boring.
"'Nobody does,' Kitley replied."
"But Kitley declined to recommend a specific option.
"'It's how you philosophically feel about it,' she told Raymond. 'It's your call. I'm just explaining what the rules allow you to do.'
"Raymond churned his hands together as Kitley went over the options again.
"'I understand what you're trying to do,' he broke in. 'I can't handle it.'"
"Worried that her father would spend much of his savings
on nursing home bills, [Raymond's daughter] Sandra asked her sister
and brother-in-law to come to a third session with Kitley to help
Raymond make a decision."
"Kitley told him she had another plan that might make him 'a little more comfortable.'
"He could apply for Medicaid for his wife, knowing he
would be rejected because his assets exceeded the allowable limit.
Then his attorney could appeal the decision, arguing that he needed
all of that money to live on."
"Raymond's younger daughter, Sally Elston, mildly objected.
"'It seems like we're hiding money,' she said.
"A few weeks later, Raymond met with a caseworker at a Near-Eastside welfare office.
"'I've never been here before, and I hope I never have to come here again,' said Raymond, seated on a plastic chair in the cheerless waiting area, ahead of a group of young mothers and children.
"At the session with caseworker Michael Vaughn, Raymond and [daughter] Sandra answered questions on issues ranging from birth and marriage to property ownership and income. With shaky fingers, Raymond pulled from his wallet a sign of his long years of work: his first Social Security Card from 1937, so blackened from use that he had to get a replacement.
"Vaughn hardly seemed surprised that the Parishes had too much money to qualify. He said their lawyer 'apparently figured out the loophole or whatever to overcome that.'"
Fahy's article is a must read for anyone interested in the
truth about Medicaid planning. You can find it and a link to a
companion article "Law Allows Even Wealthy to Send Nursing
Home Bill to Government" at http://www.starnews.com/news/special/98/June/0624SN_parish.html.
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