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LTC Bullet: Prominent Attorneys Discuss Criminalization

Tuesday November 24, 1998


Although one federal district court has spoken to the contrary (New York State Bar Association v. Reno, No. 97-CV-1768 (Northern District of New York)), the law criminalizing assistance with certain Medicaid asset transfers remains the law of the land (Section 4734 of the Balanced Budget Act of 1997, P.L. 105-33).

Why hasn't Congress responded to the pleas of Medicaid planners to repeal the law in light of the New York court decision? Allan Bogutz, former President of the National Academy of Elder Law Attorneys (NAELA) has a sneaking suspicion.

In the Nov. 1998 issue of the American Bar Association's ABA Journal, Bogutz states "its awkward for [Congress] because it would seem to give the Congressional imprimatur for this kind of estate planning, which they don't want to be seen as approving."

The article also quotes William McAlpin, Chair of the ABA Commission on Legal Problems of the Elderly, on the continued chilling effect the law is having on some Medicaid planning practitioners. "Some lawyers are going to be reluctant and shy away from advising their clients on this," McAlpin said.

While most lawmakers would agree that criminalization is not a long-term solution, Congress doesn't want to appear soft on the issue. Three Presidents and eight Congresses have gone after Medicaid planning with progressively more restrictive laws. The incoming 106th Congress will not likely back down on criminalization without an alternative plan to stop egregious Medicaid planning.

The Center for Long-Term Care Financing has developed such a plan with its most recent public policy paper entitled, "LTC Choice: A Simple, Cost-Free Solution to Solving The Long-Term Care Financing Puzzle." The implementation of "LTC Choice" recommendations would remove the perverse incentives that drive people to Medicaid planners in the first place and ensure quality LTC for all Americans.

Congress must leverage the success of criminalization in raising awareness of Medicaid's deficiencies to pursue solutions to the underlying problems. The Center's "LTC Choice" proposal provides the road map.

The greatest irony is that nothing has done more to raise awareness of this issue and build support against Medicaid planning than the public relations efforts of the Medicaid plan-
ners themselves. More self promotion of their legal sleight of hand to qualify non poor clients for Medicaid may even result in the current chilling effect becoming down right frigid!

Terry Carter, "Counseling Granny Now OK," ABA Journal, Vol. 84, November, 1998.

Copies of "LTC Choice" can be purchased from the Center by contacting Amanda Cooke at 206-447-1340 or by sending an e-mail to