Thursday January 4, 2001
In a recent opinion ("Rainey v. Guardianship of Mackey," 4D00-2018, Fla. App. December 20, 2000), Florida's Fourth District Court of Appeal stated: "Courts must make room for the possibility that some children may try to pressure vulnerable parents into divesting themselves of assets so that the estate is not depleted by the costs of nursing home care." In so doing, the court rejected a request from the appellants in this case, guardians for an 86-year-old nursing home patient, to require Medicaid planning for long-term care on behalf of their ward. The court's statement bears witness to the fact that Medicaid planning is often initiated by adult children looking for an early inheritance from their vulnerable parents.
The Court of Appeal's opinion also makes clear that while people can engage in Medicaid planning to cover their long-term care costs, it may not be in their best interests to do so. As we at the Center for LTC Financing have argued time and again: the ability to secure Medicaid long-term care benefits after the insurable event occurs has anesthetized the American public to the risk of long-term care and is the primary reason people don't plan ahead to guarantee themselves quality care at the appropriate level.
Here's the story. The appellants, Thomas Rainey and Kim Deshazo, became guardians for Myrtle Mackey, an 86-year-old incapacitated nursing home patient, and petitioned a court to authorize Medicaid planning so Medicaid would pay for her care. Florida law requires court approval for such an action. Rainey and Deshazo intended to make monthly gifts to Mackey's daughter until Mackey became Medicaid-eligible. They also planned to pay themselves $10,000 from Mackey's money to serve as her guardians, but the lower court denied the request and this was not part of their appeal.
At the lower court hearing, Michael Conners, "a specialist in elder law" proffered on behalf of the guardians that "Medicaid planning is a common tool used to preserve the estate of a ward for intended beneficiaries, as well as a tool for estate and income tax planning." He also stated that "Medicaid planning was legally permissible and [in this instance] would not result in any [look-back period] penalty to Mackey."
The lower court held, however, that Medicaid planning was not "the best avenue for the well-being of the ward…that spending down her assets was neither necessary nor essential to maintaining Mackey's well-being."
This may all have been true. But the Court of Appeal reversed and remanded the case (subject to a final order), in part, because the lower court erred in applying the wrong standard to the guardian's intended Medicaid planning activities.
[FYI: states generally apply one of two standards for decision-making by guardians on behalf of wards. The "best interests" standard requires a guardian to decide independently what is in the ward's best interests. The "substituted judgment" standard requires a guardian to act as the ward would likely act under the circumstances if able to do so. Florida has adopted the substituted judgment standard. The Court of Appeal concluded the lower court language cited above demonstrated that the "best interests" and not the "substituted judgment" standard had been applied and, on remand, directed the lower court to apply the proper standard.]
What's likely to happen on remand? In its opinion, the Court of Appeal cited approvingly "Matter of John XX" (652 N.Y.S. 2d 329 (N.Y. App.Div.1996), leave to appeal denied, 681 N.E.2d 1301 (N.Y. 1997)). This is a New York case that applies the substituted judgment standard specifically to Medicaid planning. In so many words, the New York court concluded that only a moron would deplete his estate to pay for nursing home care when Medicaid was available to pick up the tab. On remand, the lower court in our Florida case is likely to do the same, especially because no one is apparently representing Ms. Mackey on the other side of the case. That's right! At the appellate hearing, the guardians' lawyers argued in favor of Medicaid planning, but nobody represented Ms. Mackey on behalf of the guardianship.
H-e-l-l-o State of Florida. Is anyone listening? Is this how you protect your most vulnerable citizens? Your scarce public dollars? Your struggling nursing homes? In case anyone at the Florida Attorney General's Office is interested, the deadline for filing a motion for rehearing is tomorrow, January 5, 2001.
Moreover, how interesting the result when the Court of Appeal's opinion and the lower court's opinion in this case are understood together! To wit, although Medicaid planning is not in one's best interests (the conclusion of the lower court), the typical person would likely do it anyway (a conclusion supported by the Court of Appeal's opinion).
This begs the question: "Why"? Why would someone with assets—who can pay privately at least for a while—seek out care from a welfare program with a notorious reputation for problems with access, quality, reimbursement, discrimination, and institutional bias?
Any number of the following reasons are likely at work--alone or in combination with others—almost every time a senior makes this seemingly irrational decision: (1) the senior is being unduly influenced by the beneficiaries of the Medicaid planning, such as adult children; (2) the senior has no idea that Medicaid-funding may affect the level and quality of care until it's too late; (3) the senior honestly believes he or she is doing the right thing by sacrificing himself or herself for the greater good of the family in a crisis situation; or (4) the senior is incapacitated and a guardian is calling the Medicaid planning shots.
No matter the reason or reasons, however, the result is the same:
*One more person depleting our scarce public resources who could otherwise have planned ahead to assure access to quality care at the appropriate level.
*One more person whose care provider may be reimbursed by Medicaid less even than the cost of providing the care.
*One more person whose lawyer (possibly the lawyer who helped with the Medicaid planning in the first place) may sue the very same struggling provider for providing allegedly negligent care.
*One more person taking a Medicaid bed away from a truly needy person who cannot afford such legal maneuvering.
All of these outcomes—which are repeated every day across the country—could be avoided if lawmakers would get serious about long-term care public policy reform. Americans must be encouraged to plan, save, and insure for their long-term care. This is the only way for people to avoid welfare dependency and loss of control. It is also the only way the Medicaid program will survive the baby boom onslaught. With most people planning ahead for their care, Medicaid
will survive and even prosper as a fiscally sound safety net program for the truly needy. Providers too will prosper with the infusion of more dollars into a competitive marketplace. For details on the Center for LTC Financing's recommendations for public policy reform, visit our website at www.centerltc.org.
Let's get serious soon. Remember Myrtle Mackey? She and the millions of other vulnerable seniors in America deserve better.
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