Friday August 13, 1999
The following is a letter to the editor of the New York Times by Center for Long-Term Care Financing President Stephen Moses commenting on an editorial in today's (8/13/99) issue.
August 13, 1999
Letters to the Editor
To the Editor:
Your excellent editorial in today's paper ("Protecting Rich Bankrupts," August 13, 1999) observes that unlimited homestead exemptions in Florida and Texas enable bankrupts to "protect their homes from creditors no matter how much they are worth." Did you know there is much more to this problem than just another way "the formerly wealthy have of stiffing creditors"? Taxpayers and the elderly are victimized by the same phenomenon.
The Omnibus Budget Reconciliation Act of 1993 required all state Medicaid programs to recover the cost of nursing home benefits from the estates (including the homes) of deceased recipients. The idea was to protect Medicaid (a program to help the needy) from being abused by cash-poor, house-rich, middle class people who stash their wealth in a home in order to qualify for Medicaid-financed nursing home benefits.
Because of the unlimited homestead exemptions in Florida and Texas, mandatory Medicaid estate recovery has no such positive effect in these states. Consequently, (1) state and federal taxpayers are footing the bill for a lot of extra long-term care unnecessarily, (2) heirs are collecting windfall inheritances by dodging nursing home costs, (3) Medicaid estate planning attorneys are doing a "land office" business, (4) the vulnerable elderly are dying in nursing homes (for which Medicaid pays) instead of spending their wealth for top-quality home care and assisted living (for which Medicaid does not pay), and (5) the next generation is receiving a perverse message that they do not need to plan or insure for long-term care because the government will provide.
In other words, this is just another example of "the blatant and often unethical misuse of the [Medicaid] program by well-to-do patients in nursing homes" against which you editorialized on April 14, 1996. To the oxymoron of "rich bankrupts" add the equally moronic "wealthy welfare recipients."
Stephen A. Moses