April 25, 2000
In his article, "Need Grows for Skill in Medicaid Plan- ning," (National Underwriter, April 10, 2000), Gary Underwood argues in favor of Medicaid planning for clients who don't own long-term care insurance. Specifically, he recommends using annuities and life insurance as Medicaid planning strategies. Mr. Underwood is a vice president with American General Life Insurance Co. which sells annuities and life insur- ance.
In the article, Mr. Underwood writes, "Some experts question the merits of this [Medicaid] planning which places a heavier financial burden on federal and state budgets. However, most clients are not interested in a public policy debate. They simply want to know the legally permissible options that can accomplish their objectives."
It's hard to imagine that the objective of any client is to lose control of his or her assets to obtain care from a welfare program with a notorious reputation for problems with access, quality, discrimination, reim- bursement and institutional bias. Rather, most clients likely would prefer to receive the best possible care at the most appropriate level. The only way to guarantee this result is to pay privately--out-of-pocket, with long- term care insurance or with some other planning vehicle which allows people to leverage their resources such as the proceeds from a reverse annuity mortgage.
Mr. Underwood may be correct that many long-term care planning clients are only interested in them- selves. They couldn't care less about the disastrous consequences of Medicaid planning for the health care system or for the needy for whom Medicaid was intended. Even so, Medicaid planning won't satisfy anyone remotely selfish about securing high quality care and maintaining control of his or her life. This begs the question, "Whose objectives are really being served when people plan for Medicaid?"