LTC Bullet: In the Lion's Den of Medicaid Planning

Tuesday, March 4, 2003


LTC Comment: Medicaid planners wave a magic legal wand and shift the cost of long-term care from affluent elders to taxpayers and LTC providers while delivering a financial windfall to client heirs. See how one senior advocate and health care columnist spoke truth to power in a lion's den of Medicaid planners, after the ***news***.

*** The Center for Long-Term Care Financing's LTC Graduate Seminars are filling fast for Green Bay, Wisconsin (7 CEUs approved) on March 13 and New York City on March 25. Please contact Amy McDougall ASAP if you wish to attend: or 425-377-9500. ***

*** Would you like to have the LTC Graduate Seminar offered in your area? With a little help from you -- we can make it happen! Just send the name of your employer or a company or organization contact (to include his/her email and phone number) to and we'll follow-up immediately to gauge their interest in sponsoring the LTC Graduate Seminar. We've had recent expressions of interest in the program from Atlanta, Dallas, Denver, Boston, Charlotte, Los Angeles, New Orleans, Sacramento, San Diego and Seattle. All we need is a corporate sponsor--such as an insurance carrier, brokerage, trade association or long-term care provider--to bring the LTC Graduate Seminar to these cities or anywhere else. ***

*** Our latest donor-only zone content sent during the past few days includes:

The LTC Reader #3-009--Fats Bad for Heart Also Double Risk of Alzheimer's

The LTC Data Base #3-005--Medicare Fiddles While Health Expenditures Burn


If you already qualify for The Zone, you can click the following link, enter your user name and password, and go directly to the latest donor zone content and the archives: . If you do not already qualify for The Zone, mail your tax-deductible contribution of $150 or more to the Center for Long-Term Care Financing, 2212 Queen Anne Avenue North, #110, Seattle, WA 98109. Then email your preferred user name and password (up to 10 characters each). You can also contribute online by credit card or direct withdrawal at . ***

*** Indiana exempts the first $125,000 of home equity from Medicaid estate recovery liability. Follow the link to read an editorial from the Indiana Star which concludes: "Our position is: Taxpayers shouldn't have to subsidize the inheritances of nursing home residents on Medicaid." ***


The following is an article published in the Seattle Times on February 10, 2003 by Liz Taylor, an expert and columnist on aging and long-term care. The article is based on a courageous talk Ms. Taylor gave at a Washington Bar Association program for elder law attorneys. When we asked what the audience's response to her criticism of Medicaid planning was, she responded "riveted attention throughout, followed by so much silence that a pin could have dropped, no questions (all the other speakers had questions), no eye contact . . . When I was done, the moderator said, 'Well, does everyone want to take a deep breath?!'" Read Ms. Taylor's column, see what YOU think, and ponder how you would feel confronting Medicaid planners with these truths face to face. If you have the gumption and the nerve, why not attend the next seminar on Medicaid planning you see advertised, and--politely but forcefully--let the presenter and the audience know the facts about Medicaid planning?

Growing Older / Liz Taylor: "Many Well-To-Do Expect a Free Ride in Old Age," Seattle Times, February 10, 2003, .

"All our lives, we pay for the things we use: our home, cars, clothes, toys, aspirin, the sheets on our bed, you name it. We even have a couple of sayings that remind us why it's important to pay our own way: 'There's no such thing as a free lunch,' and 'You get what you pay for.'

"Yet there's a strange and pervasive myth gripping much of the nation. It goes like this: When an older person needs care, the services they use - bathing, toileting, dressing - are free. Or if they're not, they should be.

"As a result, most people don't save for these expenses. If they do have savings, they don't intend for these funds to pay for their care because a companion myth says it's OK for well-to-do people to transfer their assets and savings (usually to their kids), then let the taxpayers - Medicaid - pay.

"And, this myth assumes, this care is high-quality, available and loving.

"It's time for a reality check.

"First, how you pay for care is the No. 1 factor that determines its quality, the choices you have, and the amount of control you have over what you get. Long-term care services are not free. In fact, they're costly - you might even say 'catastrophic.' Caring for frail older people is labor-intensive, involving many people over long stretches of time. The more care you need, the more it costs. Although caregivers are among the lowest-paid workers, they aren't volunteers. Somebody has to pay them.

"Second, the government does pay for some eldercare - for the poorest of the poor. It's called Medicaid, and it's part of each state's welfare program. Older people with assets are responsible for paying for their own care (as they've paid for everything else all their lives) - with savings, long-term care insurance or reverse mortgages. When these funds run out, Medicaid is the safety net that covers them.

"But today, large numbers of middle- and upper-income families are playing games to make their parents or spouses become eligible for free care under Medicaid. It's called, 'transfer of assets' or 'artificial impoverishment,' and it involves divesting thousands, hundreds of thousands, even millions of dollars in order to meet Medicaid requirements.

"There are lawyers and financial planners who specialize in making these arrangements. Capitalizing on the myth that eldercare should be free, these 'senior advisers' promise to 'save' well-to-do people (as one mailer puts it) from 'Medicaid's greedy henchmen.'

"Excuse me?

"'Medicaid's greedy henchmen' are you and I, the taxpayers. While it's no fun paying for care, the stark reality is, if you don't pay, we taxpayers do. That's why the rules limit Medicaid's coverage to those who are truly needy.

"And now Medicaid is going broke. Nationally - in almost every state - there just isn't enough money in the kitty for the millions of people who qualify, let alone those who don't.

"Which brings me to the third reality: If you think you'll get good-quality, loving, reliable care under Medicaid, think again. Medicaid doesn't pay adequately for care. In the nearly 30 years I've worked in the aging field, it never has, and I'm positive it never will. This is tax money - the thing voters love to cut. With less money available and a skyrocketing aging population, Medicaid has been squeezed to smithereens. The quality and choices of care under Medicaid have been abysmal for decades. Get ready for them to become worse.

"There are two victims here. The first are the people who are truly poor - for whom Medicaid was intended. Most either started out without funds, or they spent all their savings on care and now turn to Medicaid. Their choices - never great - are getting increasingly lousy because the pie just isn't big enough for all the people who want a piece.

"The second victim are the few high-quality care providers who strive to serve everyone, regardless of payment source. Having paid their staff decently, provided high staff-to-resident ratios, and done the other things that promote good care, they're now getting nailed because Medicaid pays so poorly, and now their survival - and quality - is at stake.

"These are the realities of what happens when well-to-do people who need care pretend to be poor. If you're tempted to join in, just remember: 'You get what you pay for,' and 'There's no such thing as a free lunch.'"

Liz Taylor, a specialist on aging and long-term care, counsels individuals and teaches workshops on how to plan for one's aging - and aging parents. You can e-mail her with questions at or write to Liz Taylor, The Seattle Times, PO Box 1845, Seattle, WA, 98111.

More on the author:

Liz Taylor is founder and principal of Aging Deliberately, a business that helps families learn how to be "wise consumers" in the aging market. For more than a quarter century, she has worked in a variety of positions in the field of aging. As one of the first geriatric care managers in the Pacific Northwest, Liz worked with thousands of older adults to choose high quality health care and housing services. Before that, she was a federal consumer fraud investigator for 11 years, appointed by Elizabeth Dole to direct a nationwide investigation of the nursing home industry. Blending these perspectives, she believes informed consumers are key to improving services for older people - and making life better for all of us as we age. Today, Liz writes, lectures, and works individually with families on a host of aging concerns. You can find her insightful column, "Growing Older," every Monday in The Seattle Times.