Bullet: JBQ in Newsweek:
Use LTCI or RMs, Not Medicaid
Tuesday, March 20, 2007
LTC Comment: Syndicated
columnist and best-selling financial author Jane Bryant Quinn urges
three million plus Newsweek readers to plan for LTC with
insurance or use home equity so they don't end up gaming Medicaid.
LTC BULLET: JBQ
IN NEWSWEEK: USE
LTCI OR RMs, NOT MEDICAID
LTC Comment: It
doesn't get any better than this!
Whether your professional mission in life is (1) to
restore Medicaid as a quality long-term care safety net for the poor,
(2) to protect seniors from the risk and cost of LTC with private
insurance, or (3) to help the elderly "age in place" and
maintain their standard of living with a reverse mortgage, nothing
advances the cause like a positive article by an award-winning
syndicated columnist in a leading mass-market magazine.
That's exactly what we have to report today.
Here's the citation and a hyperlink to the whole story.
Jane Bryant Quinn, "How You Can Pay for Costly
Old-Age Care," Newsweek, March 26, 2007, http://www.msnbc.msn.com/id/17662287/site/newsweek/.
Sub-titled "Gaming the Medicaid system is legal, but I hate
it. New rules, effective last year, make it harder for the rich to get
on the rolls."
So what? A
study of the news media (reported on journalism.org at http://www.stateofthenewsmedia.org/narrative_magazines_audience.asp?cat=3&media=7)
found that news magazines are holding up commercially better than other
magazine genres; their readerships (and hence advertising targets) are
getting older (44 years on average up from 41 in 1995) and more affluent
($65,000 up from $46,000). All
the major news magazines have lost circulation over the years, but
"Newsweek has been the most stable of the three,
experiencing a smaller drop of 3 percent in circulation since
has a circulation of over three million and its readership is getting
older and more affluent, exactly the right demographic for LTC insurance
and reverse mortgages.
Bottom line: out
of Newsweek's multi-million readership, we have every reason to
believe that many thousands will take Ms. Quinn's sage advice and choose
to plan responsibly for long-term care instead of ending up on public
welfare by default.
Next, some of my favorite clips from the column
followed by comments on the painstaking process that created it and
finally some quotes from nearly 20 years of Ms. Quinn's distinguished
coverage of these issues.
"The majority of Americans can get
Medicaid—maybe even you. . . . It's
a public-welfare program for those (mostly elderly) who need custodial
care but can't afford it."
"Not only are middle-class people accepted,
some of the affluent have squeezed in, too, thanks to attorneys who use
gifts, trusts, annuities and other strategies to disperse their wealth.
Gaming the Medicaid system is legal, but I hate it. New rules, effective
last year, make it harder for the rich to get on the rolls."
"People with higher incomes and assets will
have to take another tack. They never belonged in a welfare program in
the first place and now will find it even harder to wiggle in."
"The focus of planning continues to be the
spouse at home. She (it's usually a she) may have a valuable house but a
small income and shrinking assets, as her husband's nursing-home bills
eat into their savings. But that doesn't mean that taxpayers should step
in and help. Affluent couples can and should protect themselves."
are at least three ways of ensuring the security of an at-home spouse .
Buy long-term-care insurance (LTCI). But hardly anyone does. Individual
sales have been slipping since 2000. 'Why buy LTCI and take the risk you
won't ever need the policy when a lawyer can get you onto Medicaid if
you actually get sick?' asks Stephen Moses of the Center for Long-Term
Care Reform. (The center lobbies for restricting Medicaid to the truly
poor.) But Congress warned affluent people last year that they'd find
Medicaid harder to get. Take the advice and apply early for LCTI. If you
wait until 65 or 70, you might not be in good enough health . . .
Buy one of the newer 'combination' products-insurance packaged with
benefits for long-term care, says insurance adviser Richard Sabo of
Gibsonia, Pa. You might put a chunk of money into a cash-value policy,
with the right to withdraw 2 percent of the death benefit each year, to
cover nursing-home and home-care expenses. Your heirs get any remaining
insurance proceeds tax-free. . . .
Tap your home equity, using a reverse mortgage. This is a loan against
your home that doesn't have to be repaid until you sell or die. The
older you are, the more you can borrow. Take it as a line of credit,
which the spouse at home could use to pay bills."
avoid these complications, a few couples divorce, says William Browning
of Browning & Meyer in Columbus, Ohio. But that's a sad outcome,
when you could have protected yourself with long-term-care insurance.
It's expensive, but can save your marriage and your peace of mind."
LTC Comment: Jane
Bryant Quinn goes to great lengths to make her columns succinct,
accurate and fairly balanced. On
this particular piece, I first heard from Quinn's intrepid researcher
Temma Ehrenfeld months ago. She
asked me a long series of questions by phone and email which I answered
fully with links to the back-up documentation on the Center's website at
Last week, Ms. Quinn herself called.
She challenged me on a number of points mostly related to
Medicaid long-term care eligibility.
She also talked with several elder law attorneys who made the
seductive case (unsuccessfully) for Medicaid planning.
She hit me with their arguments, and vice versa, I'm sure.
With fewer than 1000 words to tell a complex story, Quinn is
unequaled for making a story pithy, pointed and poignant.
Wouldn't you know it though? Click on one of the "sponsored links" at the end of
the online version of Ms. Quinn's column and what do you get?
A long list of links to the websites of Medicaid estate planning
attorneys! When I clicked
on one of those links, I was informed "Server is too busy."
Maybe that's why Jane Quinn told me once that she hates to write
about Medicaid planning because, no matter how critical she is of the
practice, her phone rings "off the hook" for months with calls
from people who want to know where they can find one of those lawyers
who can get you on Medicaid.
And did you catch that reference to using divorce
to qualify for Medicaid? I
debated the author of that quote, former NAELA president Bill Browning,
at a long-term care insurance conference in 2002.
You can still hear us do verbal battle over the relative merits
of Medicaid planning and private insurance.
Find a link to that "Great Debate" at http://www.centerltc.com/media.htm.
Want to see some earlier examples of Jane Bryant
Quinn's coverage of the Medicaid and long-term care financing issues?
Here are a bunch with quotes from my favorites.
"One of America's great financial shell games
is played, unseen, in the offices of lawyers and accountants who counsel
the elderly. One minute you
see a pile of money. Zip,
zip, zip, the next minute it's gone."
(Jane Bryant Quinn, "Staying Ahead:
Dealing with the Medicaid Shell Game," San
Francisco Chronicle, December 19, 1988)
"On the matter of nursing-home costs, the law
is quite clear. The bills
are your responsibility as long as your money lasts.
When you run out, you're rescued by the Medicaid program....
Thousands of older people resent that arrangement.
They'd rather get support from the taxpayer right from the start.
In this low endeavor, they're counseled by an army of
"poverty makers"--law firms, accounting firms, legal-aid
offices, social-service centers, nursing homes, even some Medicaid
offices." (Jane Bryant
Quinn, "Do Only the Suckers Pay?," Newsweek, December 18, 1989)
syndicated financial columnist Jane Bryant Quinn called the
attorney's artificial impoverishment techniques 'immoral, outrageous,
unprincipled, but...legal.' (Summary
of Frontline national TV
special "Who Pays for Mom and Dad?," which aired April 30,
News & Comment, June 1991)
Bryant Quinn, "How to Plan Ahead for the New Tax Hit," Newsweek,
August 16, 1993, pps. 24-25. Notes
legislation to close Medicaid loopholes.
Bryant Quinn, "Paring Loopholes that Let the Well-Off into
Medicaid," Washington Post, October 3, 1993.
First of two part series. Also
published as "10 Fewer Loopholes Now in Medicaid" in The
Press Democrat, September 16, 1993.
Bryant Quinn, "States Work to Cut Abuse of Medicaid," Seattle
Post-Intelligencer, September 21, 1993, p. B-6.
Bryant Quinn, "It's Middle Class Vs. Poor in Medicaid Fight," Seattle
Post-Intelligencer, December 14, 1995, p. E1; JBQ's syndicated
column for the Washington Post Writers Group derides Medicaid planning.
Bryant Quinn, "Congress Takes Aim at Abuse of Medicaid," Seattle
Post-Intelligencer, September 10, 1996, p. B5.
Bryant Quinn, "Aging: The
Endgame, Why Pay for Nursing-Home Insurance, as Long as the Public Will
Pick Up the Bill?," Newsweek, Vol. CXXVIII, No. 14,
September 30, 1996, p. 53.
Bryant Quinn, "Time Has Come for Long-Term Care Insurance," Seattle
Post-Intelligencer, October 10, 1996; article recommends long-term
Bryant Quinn, "Long-Term Care:
Figure You're On Your Own," Seattle
Post-Intelligencer, March 6, 1997, p. B4; Quinn's syndicated column
for the Washington Post
Writers Group encourages purchase of private long-term care insurance.
In a 1999 interview with then-NAELA President
Rebecca Morgan, was asked about Medicaid planning and answered thus:
Q: (Morgan) "You
know some of our members do Medicaid planning for their clients and I
know you have written on the issue of Medicaid planning and transfers.
Do you see a case where Medicaid planning would be
A: (Quinn) "I
think that there is a legitimate concern, where there's a spouse at
home. However, there are
already many protections for the spouse at home, which need to be
examined before you do Medicaid planning.
I also think that if planning is done to protect the spouse at
home, and the other spouse does indeed go into a nursing home, it would
be proper for states to recover the Medicaid money from the estate, when
the second spouse dies. I
believe very strongly that people ought to pay for themselves, instead
of pushing the bill onto the taxpayers.
I think it's shocking that people with money still want the
public to pay."
"Some have suggested that if we are going to change Medicare
we ought to add a part D for long-term care.
Do you think people would be willing to accept more taxes for
"I think we need to consider taxes for the basic medical
system before we even begin to think about long-term care.
To me, long-term care is something people need to save for or
cover with personal insurance. You save money all your life to take care
of yourself in your old age. Well,
long-term care is taking care of yourself in your old age.
I think that should still be a private responsibility, unless you
truly have no money. I
strongly support the Medicaid program.
I just don't support people going on Medicaid artificially."
See "LTC Bullet:
Jane Bryant Quinn on Medicaid Planning, September 13, 1999"
"As the population ages, Medicaid spending on
nursing homes could easily get out of control. That is, unless it's
limited to the people who really need it.
Medicaid is supposedly for the poor. But increasingly it's being
exploited by the well-to-do. Instead of buying nursing-home insurance or
using their savings, they're getting the government to cover their
bills. . . . They're
willing to take care of themselves as long as they maintain their
health. If a nursing home looms, however, they decide to quit being
responsible. They look for ways of leaving their own money to their
children, while forcing the taxpayer to provide their care. . . .
In general, their gambits are legal. The state laws on who's
eligible for Medicaid conceal many weak points that let moneyed people
onto the rolls. To me,
exploiting these weaknesses is unethical. The question for families is
whether money will always trump morals.
. . . That turns
Medicaid into an 'inheritance insurance plan for the middle class,' says
Stephen Moses of the Center for Long-Term Care Financing in Bellevue,
Wash. Parents go on welfare so they can leave their money to their kids.
. . . The bottom line:
Medicaid is in serious trouble. The government isn't spending enough for
quality care. The more people with money exploit the system, by not
paying for themselves, the worse the care is going to be for
everyone." (Jane Bryant Quinn, “Shame of the Rich: Making Themselves Poor,” Washington Post, June 3, 2001, P.
H 2. Online at http://www.washingtonpost.com/ac2/wp-dyn/A13425-2001Jun2?language=printer;
also discussed in "LTC Bullet:
JBQ Decries Exploitation of Medicaid," June 7, 2001, at http://www.centerltc.com/bullets/archives2001/279.htm.)
"Whether to spring for LTC isn't an easy call.
People who earn enough to afford the premiums might gamble that
they can pay their own way. Others
choose an unethical route: they
give their money to their kids, then claim poverty and apply for help
from Medicaid, a welfare program that covers nursing-home care.
But as the boomers age, Medicaid will be overwhelmed. The reach
and quality of welfare services will decline.
Even now, some nursing homes are reducing the number of Medicaid
patients they'll take, and shuffling current residents into other
facilities. BELIEVE ME:
YOU'RE GOING TO WANT TO PAY PRIVATELY FOR CARE, AND LTC INSURANCE
IS ONE WAY OF DOING IT." (Emphasis added.) (Jane
Bryant Quinn, "Insurance: Is
Yours Safe," Newsweek, September 2, 2002, cited in "LTC
Bullet--The New Retirees," Thursday, August 29, 2002, http://www.centerltc.com/bullets/archives2002/381.htm.)