LTC Bullet:  Financial Planning Made Easy 

Thursday, March 30, 2006 


LTC Comment:  Jane Bryant Quinn's latest book could spur you into financial planning action.  A review follows the ***news.*** 

*** HAPPY ANNIVERSARY to the Center on Saturday.  Stephen Moses and David Rosenfeld co-founded the Center for Long-Term Care Financing on April 1, 1998.  It's undergone some changes, and David works for Congress now, but the Center for Long-Term Care Reform remains a strong voice for rational long-term care financing policy and personal responsibility.  Despite our anniversary's date (April 1), no fooling! *** 

*** SPOUSAL REFUSAL is an egregiously abusive Medicaid planning technique indistinguishable from financial abuse of the elderly.  We wrote about it in "LTC Bullet:  They're Baaack, Part IV:  'Abandon Your Spouse . . . Get Medicaid,'" Monday October 29, 2001 at  It's good to see spousal refusal finally receive some well-deserved editorial excoriation.  Following are excerpts from Bill Hammond, "Time to Cut Off Rich from Fat Cat Feast," New York Daily News, March 28, 2006,  

"ALBANY - They talk tough about cracking down on waste and fraud in the Medicaid program, but lawmakers are closing their eyes to one of the worst scams in the state.  

"It's called 'spousal refusal,' and it has nothing to do with husbands and wives who suddenly develop headaches around bedtime.  Instead, it's a gaping loophole that makes it possible for millionaires to mooch off a government health plan for the poor and disabled.  

"It works like this:  When Thurston gets too old and sick to live at home, he transfers all of his money to Lovey.  Lovey then signs a letter declaring that she will no longer take financial responsibility for her husband.  And - bingo! - Medicaid picks up Thurston's nursing home tab.  

"Lovey gets to keep the house, the car, the yacht, etc., continue her plush lifestyle and leave a fat inheritance for Muffy and Chip.  Working-stiff taxpayers get stuck with a bill for upwards of $100,000 a year.  

"The rule started as a way of rescuing patients who truly were stranded by cold-hearted spouses, but quickly morphed into an entitlement for the rich and middle class.  Nassau County officials have identified spouses with as much as $1.9 million in assets - not including homes and cars - who have claimed spousal refusal. . . . 

"Because of these pitfalls, New York and Florida are the only states that permit spousal refusal, according to Stephen Moses of the Center for Long-Term Care Reform in Seattle.  

"Medicaid 'is supposed to be a safety net for the poor, not a hammock for the upper middle class,' Moses says.  

"Carl Young, president of the New York Association of Homes and Services for the Aging, says spousal refusal boils down to a taxpayer subsidy for private inheritances.  'We need to alter the wedding vow,' Young quips.  'Till death do us part - or until you become an inconvenience.' . . . 

"But there is another way for middle-class old folks to avoid poverty without relying on Medicaid:  long-term care insurance.  Under a state-subsidized program, the premiums for a 65-year-old average $2,600 a year.  

"But who's going to shell out for insurance when the state is giving away free nursing home care?  

"And if the Assembly and Senate won't say 'no' to Medicaid for the rich, what will they say 'no' to?"  

*** SPEAKING OF MEDICAID PLANNING ABUSE, we want to extend a hearty "thank you" to all the lawyers who answered our call for attorneys to attend and monitor the National Academy of Elder Law Attorneys "Symposium" scheduled for April 20 to 23 in Washington, DC.  NAELA recently prohibited attendance by non-lawyers in order to avoid public scrutiny of its recruitment and training program for Medicaid planner members.  We believe that continued monitoring of these NAELA meetings is critical to keep the media and vulnerable aging Americans apprised of dangerous practices like spousal refusal.  For dozens of "LTC Bullets" on Medicaid planning, including many of our reports on past NAELA conferences, go to *** 



LTC Comment:  "Don't let the perfect be the enemy of the good" is fine advice when it comes to things you hate to do but that really need doing.  For me, and many others I think, financial planning is one such thing.  It seems like the harder I've tried and the more complicated I've made it, the worse I've done investing.  So imagine my relief when the financial adviser I've known longest and for whom I have the highest possible regard published Smart and Simple Financial Strategies for Busy People (Simon and Schuster, 2006). 

Jane Bryant Quinn's earlier tome--Making the Most of Your Money--is excellent and comprehensive, but long and complicated.  You might read it, like most in its genre, and come away overwhelmed by the plethora of options and strategies.  Not so her latest effort.  Says she in the opening sentence:  "I think I can change your financial life, from muddle-along to easy, permanent success.  That's why I wrote this book." 

She delivers.  In eight chapters and 230 pages, Quinn covers the bare essentials of how to spend and save, eliminate debt, create a safety net, buy a house, pay for college, invest wisely, and keep score of your progress.  And she does it, according to the "concordance" at, with an easy-to-read-and-afford 1.5 syllables per word, 14.4 words per sentence, and 6,848 words per dollar! 

When I review a book, the first thing I read is the section on long-term care.  If the author can't get the one thing right that I know well, then why continue to read?  I had every reason to think Jane would nail this two-page section because she sent it to me in draft prior to publication and asked for my comments.  Hence the acknowledgement on page 229:  "My gurus include . . . Stephen Moses, president of the Center for Long-Term Care Reform and urgent voice for understanding your old-age needs . . .." 

Here's a sample of her sensible comments about long-term care: 

"There are two reasons to own LTC insurance today:  (1)  You don't want to use your own savings to pay the enormous nursing home bill.  (2)  You want to be able to pay for quality care in the private market rather than depending on rickety government programs."  (p. 86) 

She points out that LTCi policies also "cover care in your home or in an adult day-care center," but she clarifies that a long-term institutional stay is the real catastrophic financial risk:  "Don't be shocked by the price--a nursing home is a medical hotel, providing daily room and board as well as maid service, social services, entertainment, and custodial care.  Looked at that way, $190 isn't out of line."  (p. 86) 

What about Medicaid planning?  "Elder-care lawyers will help you give your property away, so you can look 'poor' and qualify for Medicaid.  It's not illegal but it's unethical and almost certainly unwise.  There's no telling what will happen with welfare budgets in the future or how much the taxpayers will be willing to pay for nursing home care.  You don't want to depend on it.  (It's risky to lose control of your property, too.)"  (p. 87) 

OK, the LTC section passes muster.  What about the rest of the book?  I was going to write a glowing appraisal, but in the spirit of "smart and simple strategies for busy people," I decided to borrow the following review by a reader on  Why reinvent the wheel when this fits the bill? 

"This outstanding book motivated me to overcome nine years of inertia regarding financial planning.  My husband and I have been vaguely worried about not saving enough for retirement or college, but we kept procrastinating research into the myriad of competing plans and investments and strategies.  

"Fortunately, Jane Bryant Quinn has done the research and makes clear, solid recommendations about how to manage family finances.  She covers all of the financial bases (including insurance and wills), so that you can be confident you haven't left anything out.  

"She helps you establish clear financial goals, and explains which type of investments work best for various goals.  Once you create your financial plan and set up automatic deposits into your investment/retirement accounts, she recommends you leave them alone and make adjustments as needed once a year!  No time and energy wasted on buy/sell decisions after each stock market wiggle.  

"Now granted, this investing program is unlikely to provide the spectacular returns that some lucky people have made in real estate or by timing the market.  But Quinn argues that people who earn huge returns on their investments are really few and far between.  Furthermore, she points out that those investors take on a lot of risk in order to get those kinds of returns.  

"Her book is more than 'common sense' however, - in fact, some of her ideas fly in the face of popular belief.  For example, I was convinced any financial plan would have to begin with a strict budget that would ruthlessly prune lattes etc... out of our lives.  Quite the contrary - Quinn says that the 'latte factor' is not a significant factor in a family's financial health - it's the big ticket items that show up on credit card statements.  

"Rather than attempt to budget and plan in ADVANCE where non-essential money goes, Quinn recommends you automate deposits to your savings/retirement accounts because you, in turn, will automatically, subconsciously, and painlessly start reining in your expenses to match the size of your checking account.  It's an interesting theory, and one I want to start ASAP, as my efforts to budget every expenditure and invest anything left at the end of the month have not been very successful.  She does say, however, that if you are habitually living beyond your means, racking up major credit card bills, etc..., you'll need to get that under control before you can really implement/benefit from most of the strategies in this book.  

"All in all, an excellent book full of sound, straight forward ideas that anyone can implement - no matter how busy." 

The reviewer signs herself "Horizon Homeschool 'book lover.'" 

Our thanks to Jane Bryant Quinn for another in her career-long series of contributions to sensible financial planning and self-responsibility.  Smart and simple financial strategy for busy people number one:  Buy this book!