LTC Bullet:  Spousal Refusal:  Who Wins?  Who Loses? 

Tuesday, April 18, 2006 

Seattle-- 

LTC Comment:  On the eve of the Medicaid planners' (NAELA's) national meeting in Washington, D.C. to lobby for loopholes, their most lucrative method to put millionaires on Medicaid is under attack from the media in New York.  Details after the ***news.*** [omitted] 
 

LTC BULLET:  SPOUSAL REFUSAL:  WHO WINS?  WHO LOSES? 

LTC Comment:  Our thanks to LTCi producer and Center member Arthur Rudnick of White Plains, NY for bringing the following article to our attention: 

Carl Campanile, "Suozzi Socking it to Medicaid Millionaires," New York Post, April 10, 2006, copies available from The Post for $3.95 here

Excerpts: 

"The party's over for Medicaid millionaires in Nassau County who illegally stuck taxpayers with hundreds of thousands of dollars in medical bills to care for their sick spouses, according to bombshell law suits obtained by The Post. . . . 

"It works like this: 

"First, the ill spouse transfers all his assets to his or her spouse or a sibling.  Then the patient applies for Medicaid for nursing-home care.  The healthy spouse then invokes 'spousal refusal' to dodge paying for the care, after disclosing financial assets. 

"But the independent spouse is still legally liable to pay medical bills of a loved one--if authorities enforce the law.  Investigations are spotty. 

"Nassau County is among the most aggressive in hunting down Medicaid millionaires who mooch off taxpayers. 

"In New York City, a spokeswoman for the Law Department said she was unaware of any recent cases filed in the city. 

"Details of the Nassau cases were obtained by The Post under the Freedom of Information Law." 

Here are the "big-buck 'moochers'" cited in the article: 

"1.)  Joseph Manganaro, Atlantic Beach; Worth:  $1.85 million; Sued for $82,681 in nursing-home costs for wife Rosalyn. 

2.)  Theresa Menkes, Port Washington; Worth:  $1.80 million; Sued for $27,509 in nursing costs for husband Harry. 

3.)  Charles Rehman, East Meadow; Worth:  $1.83 million; Sued for $27,509 in nursing costs for wife Gloria. 

4.)  Claire Stein, Great Neck; Worth:  $1.42 million; Sued for $83,871 in care for husband Benjamin. 

5.)  Florence Belfer, Highland, N.J.; Worth:  $1.59 million; Sued for $202,489 in nursing care for husband Ben. 

6.)  Doris Pizzino, Valley Stream; Worth:  $1.28 million; Sued for $80,221 in care for husband Michael. 

7.)  Catherine Chase, Massapequa; Worth:  $1.05 million; Sued for $24,937 in care for husband Arthur. 

8.)  Dorothy Regan, Great Neck; Worth:  $1.1 million; Sued for $29,108 in care for husband Peter. 

9.)  Viva Lubicich, Woodbury; Worth:  $1.07 million; Sued for $12,384 in care for husband William." 

So much for the Medicaid planners' oft-repeated insistence that they don't put millionaires on Medicaid.     

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LTC Comment:  Of all the shameful techniques Medicaid planners use to line their own pockets at the expense of public welfare, none is more despicable than "spousal refusal."  It is precisely this and other similar practices that led NAELA to close its conferences to non-attorneys in order to avoid scrutiny and criticism by the media.  But you can find the truth easily enough.  Just do an internet search for "spousal refusal."  Include the quote marks.  Read some of the content that pops up. 

In a little more detail than the New York Post article gave, here's how spousal refusal works.  A couple, or more likely the well spouse and heirs, consult a Medicaid planning attorney about a chronically infirm husband or wife.  Grandpa or grandma needs nursing home care but the responsible family members would rather not pay their fair share under the law. 

The lawyer says "no problem, here's what you can do."  Just transfer everything you own from the ill spouse's name to the well spouse's name and apply for Medicaid for the now-impoverished sick spouse.  (Medicaid allows interspousal asset transfers without triggering any eligibility penalty.)  When Medicaid asks for the well spouse's share of the cost of care, "just say no."  Under federal law, to wit the Social Security Act, Medicaid cannot refuse to cover the sick spouse's nursing home bills just because the well spouse refuses to pay.  "It's a great deal which you're a sucker not to take" is the Medicaid planners' sales pitch. 

Rest assured, Congress never intended this rule to be used to dodge the program's cost-sharing and spend down requirements in this way.  It was designed instead to protect infirm elders from losing their Medicaid eligibility because of expropriation by a criminally irresponsible spouse.  Therefore, Medicaid requires the ill spouse to assign to the state his or her rights to support from the well spouse when spousal refusal occurs.  The state then has the right to sue the well spouse to recover the stolen wealth.  But, unfortunately, some states don't take that action as often as they should because of the political sensitivity of "chasing" the well spouse.  (The worst abusers are New York and Florida.) 

That's how it works.  For all the details on spousal refusal including extensive quotes from two of its biggest practitioners (New York elder law attorneys both of whom are past presidents of NAELA) see "LTC Bullet: They're Baaack, Part IV:  'Abandon Your Spouse . . . Get Medicaid,'" October 31, 2001, http://centerltc.com/bullets/archives2001/310.htm and "NAELA Presentation Excerpts and CLTCF Comments," http://centerltc.com/bullets/current/naela.htm.  

Now, who wins and who loses? 

THE WINNERS:  The well spouse who keeps all the couple's wealth.  The heirs who get the money sooner or later.  The lawyer who charges hundreds of dollars for every hour it takes to perpetrate this legalistic swindle.  NAELA, which trains, supports, and publicizes the Medicaid planners and benefits from their membership and conference fees. 

THE LOSERS:  The sick spouse who can no longer purchase quality care in the private marketplace at the most desirable level and in the best available venue, but is rather dependent on whatever public welfare can afford and is willing to provide. 

Nursing home and other long-term care providers who are routinely paid inadequately by Medicaid, often less than the cost of providing the care, with the result that access and quality suffer for everyone, Medicaid and private-pay residents alike. 

The poor, who lack the "key money" to buy their way into the best long-term care facilities which are readily available to the wealthy clients of Medicaid planners.  Ironically, Medicaid is supposed to be their safety net, but the poor are the worst victims of the program's problems of access, quality, reimbursement, discrimination and institutional bias. 

Responsible taxpayers who not only have to support the Medicaid LTC safety net, but are somehow expected to buy private insurance against a risk the Medicaid planners are getting wealthy by covering at a fraction of the cost of LTCi and after the insurable event occurs. 

LTC insurance producers and reverse mortgage lenders whose markets are co-opted by unethical lawyers who skim their wealth from Medicaid by promoting spousal refusal and dozens of similar techniques of artificial impoverishment. 

QUERY:  If you are in that last category . . . if you're an AMG (altruistic, masochistic genius) trying to sell a product the government and Medicaid planners are giving away, then ask this question: 

What is my company doing to stop this abuse, give Medicaid back to the poor, and make by product saleable and my job doable? 

An acceptable answer would be "We support the Center for Long-Term Care Reform." 

But if the answer is "nothing," as it most likely will be, then demand that something be done.  To support the Center for Long-Term Care Reform is the most effective, least expensive action that your LTCi carrier or reverse mortgage lender can take. 

If your company is already a supporter of the Center, then you're part of the solution. 

If not, have them contact us and join.  Employees and agents of corporate members of the Center receive all the benefits of membership without having to pay dues individually.  

We've made great progress lately fighting the charlatans of long-term care but we can't do it alone.  Join the fight for rational long-term care public policy.