Bullet: Legal Abuse of
Medicaid LTC Rife Post-DRA
Wednesday, May 16, 2007
Santa Fe, NM--
LTC Comment: Medicaid
planners still shift scarce Medicaid resources from rightful recipients
(the poor) to affluent clients (and boomer heirs).
Read on to find one of the sleaziest Medicaid planning come-ons
by a NAELA member I've ever seen, after the ***news.***
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LTC CONFERENCE. IIR's Long
Term Care Business Improvement Conference, July 10-12, 2007, Baltimore,
MD is an independent long-term care event bringing together providers,
payers, associations and policy leaders to enhance the quality and
reduce financial stress for the long-term care industry.
Stephen Moses, President, Center for Long Term Care Reform will
be presenting a session titled "What Can We Expect the Economics
for LTC to Look Like in 1,5,10 & 20 Years? Are We Prepared?"
Mention priority code P1258MOSES and receive 15% off the current
registration price. For
more information visit the event website at www.iirusa.com/LTC.
LTC COMPACT PROPOSAL. After
last week in Albany, NY doing the research, I'm in Santa Fe this week
writing the Center's report on the New York Long-Term Care Compact
Proposal. So, much more
soon on that innovative public policy plan.
For now, check out Kevin Wrege's op-ed titled "Long-Term
Gift to Elder Bar" in yesterday's New York Sun at http://www.nysun.com/article/54481.
If you're really interested, you might also take a peek at "LTC
Bullet: New York Medicaid
Planners Are Coming Around," April 14, 2005, http://www.centerltc.com/bullets/archives2005/549.htm.
LTC BULLET: LEGAL
ABUSE OF MEDICAID LTC STILL RIFE POST-DRA
LTC Comment: Some
people just can't take a hint. I
started studying Medicaid eligibility and long-term care financing in
the early 1980s. Since then
the government has tried everything short of capital punishment to stop
the elder law bar and other Medicaid planners from robbing Medicaid to
pay big benes to their clients and themselves.
Here's how a dozen Congresses and four Presidents have tried to
stop these Robin-Hoods-in-reverse:
Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA
'82): Encouraged state
Medicaid programs to impose asset transfer penalties, lien real
property, and recover from deceased recipients' estates.
Consolidated Omnibus Budget Reconciliation Act of
1985 (COBRA '85): Discouraged
the abuse of Medicaid qualifying trusts.
Medicare Catastrophic Coverage Act of 1988 (MCCA
'88): Made asset transfer
penalties mandatory and extended the look-back period from two years to
Omnibus Budget Reconciliation Act of 1993 (OBRA
'93): Extended the
look-back period to three years, dropped the 30-month cap on the
transfer of assets penalty making it potentially unlimited, and required
estate recovery as a condition of state Medicaid participation.
Health Insurance Portability and Accountability Act of 1996 (HIPAA '96): Made it a crime to transfer assets for less than fair market value to qualify for Medicaid.
Balanced Budget Act of 1997 (BBA '97):
Repealed the infamous "throw granny in jail law" and
replaced it with the unenforceable "throw granny's lawyer in jail
law," which attempted to make it a crime for an attorney to
recommend Medicaid asset transfers for a fee.
Deficit Reduction Act of 2005 (DRA '05):
Extended the transfer of assets look back to five years; capped
the home equity exemption at no more than $750,000; eliminated the most
egregious Medicaid planning dodge (half-a-loaf); and tightened up the
rules against many other gimmicks, e.g. annuities, abusive promissory
notes, life estates, rounding down, etc.
That's a long and distinguished history of almost
totally failed efforts to save Medicaid for the needy.
But after all that, wouldn't you think responsible members of the
bar would at least get the point? Guardians
of the public purse intend Medicaid (public welfare after all) to help
the poor, not to indemnify affluent elders and their heirs against the
need to plan for long-term care.
Well, forget that.
Medicaid planning is still going strong. A recent survey of Medicaid planning attorneys found the
DRA '05 "has generated more work for some practitioners and
prompted many of their clients to plan earlier, according to the results
of ElderLawAnswers' recent survey of subscribers to its attorney
"A slim majority (52 percent) of attorneys responding to the
survey said that their Medicaid planning work has stayed at about the
same level . . . and 28 percent citing an increase. . . . Six percent
have seen Medicaid planning work jump 50-75 percent."
under half of the respondents said that more clients are hiring them to
do more work after the initial meeting, and 55 percent report that more
clients are taking planning steps while healthy."
Luckily, the news from this survey isn't all bad:
"Perhaps the biggest and most significant change is that 78
percent of respondents said that they are recommending long-term care
insurance more frequently than they did prior to passage of the DRA."
And one New Jersey attorney actually said:
"I used to do frequent Medicaid eligibility planning. I have
lost that work thanks to DRA."
ElderLawAnswers Monthly, 4/30/7
the bottom line is that Medicaid planning--the intentional artificial
impoverishment of people who would not otherwise qualify for public
assistance--continues to boom, while responsible long-term care
planning--with private insurance and/or reverse mortgages-- continues to
just exactly how are the Medicaid planners continuing to make fools of
Congress, the President, state Medicaid officials and the hapless
marketers of private long-term care planning products who can't sell
what the government has been giving away for 40 years?
following list is from an internet ad for a book titled "How
to Keep Nursing Home Costs from Wiping Out Your Life Savings and Your
Family's Assets" by K. Gabriel Heiser, J.D. of Boulder, CO.
More about Mr. Heiser and his book in a bit.
The following material was extracted on May 15, 2007 from http://www.longtermcarelink.net/a16Medicaid_secrets_book.htm.
It purports to reflect all changes in Medicaid eligibility policy
deriving from the DRA '05.
"Discover what single legal document can make
a huge difference in your Medicaid planning, possibly saving your family
thousands of dollars (page
"How to make gifts that incur no penalty
period -- even if made within the lookback period
"How to reduce your home equity if you are
over the $500,000 limit without incurring a penalty -- and why a reverse
mortgage is not a good way to do this
"How to put your assets in various trusts in
order to qualify a family member for Medicaid immediately -- and still
have the assets available to be spent on the family member's
supplemental care (page 67)
"A clever technique of creating a living trust
that enables a nursing home spouse to immediately qualify for Medicaid
-- and allow the other spouse to keep the full Community Spouse Resource
Allowance of $101,640. This
seems counter-intuitive, but it works like a charm!
"Why annuities are such a powerful Medicaid
planning technique -- When you buy the right kind of annuity, suddenly
all the money you used to purchase the annuity has 'disappeared' for
Medicaid eligibility purposes! (page
"When to apply for Medicaid: How applying a
day too early can cause years of penalties to be imposed unless you know
the rules! How applying too
late can cause you to lose substantial Medicaid benefits for which you
could have qualified sooner. (page
"How you can lose your home if you're not
careful -- and how to protect your home!
"How to shelter a significant amount of cash
by buying a new car or a larger car (perhaps a van that is wheelchair
accessible) for the Medicaid recipient
"This single secret allows you to protect
thousands of dollars by benefiting your children, brothers, sisters,
in-laws, without causing you to be penalized for making a gift! (page
"Avoid losing your home! How to title your home so that it will not have to be sold to
pay back the state at your death (pages
100 and 162)
"Ingenious ways to reduce your excess income
in order to qualify for Medicaid (page
"How to avoid questionable techniques -- These
ploys are risky, banned by many states, or deemed as penalty-causing
activities (page 90)
"How to make transfers to family members that
won't disqualify you from Medicaid
"When you should use a life estate purchase --
and what technique is better and avoids the one-year residency
requirement (page 102)
"How to avoid one of the most common and
expensive mistakes -- Do this and the Medicaid recipient could be
disqualified and lose both nursing home Medicaid and medical coverage. (page 35)
"How to use a certain type of 'IOU' to make
money virtually disappear by lending it to someone else -- this is
particularly important so that you don't run afoul of the new federal
rules (page 123)
"Why purchasing a 'Medicaid-friendly' annuity
is a wonderful way to convert countable assets to non-countable for
Medicaid qualification purposes (page
"This single technique can easily double the
amount of assets that your family can protect -- sssshhhh, most
attorneys aren't aware of how this works!
"How to avoid having your family member
transferred out of the nursing home after finally getting on Medicaid (page 142)
"In many states you can exempt an unlimited
amount of certain types of property--and it's not the home I'm talking
about -- but only if you know how to claim this exemption!
"How to protect an additional $213,840 without
making any gifts, when your spouse is in the nursing home (page 47)
"What to change in your will to save thousands
of dollars if your spouse ever needs nursing home care (page 150)
"Why you can always protect at least 50% of
the value of your house if you do this simple technique prior to
applying for Medicaid (page
"What's the right -- and wrong -- way to title
your car, so the state cannot attach it following your death
"Eleven clever ways to protect your interest
in your home, to prevent the state from taking it following your death
"Smart tricks to 'spend down' your resources
-- This means that instead of spending your money on things that
Medicaid can ultimately pay for, you pay for something that will benefit
you and your family yet not have it considered a gift or a countable
asset. (page 75)
"Who should be the owner of the annuity?
Who should be the 'annuitant'?
When is a promissory note superior to an annuity?
(pages 114 and 124)
"How to protect your assets using the popular
'Half-a-Loaf' gifting technique (page
"How to get your farm--including all the land,
tool sheds, and equipment--to be excluded when you apply for Medicaid,
no matter what their current value is
"What to do when you have too much income to
qualify for Medicaid -- but not enough income to pay for nursing home
care privately (page 24)
"and much, much more!"
LTC Comment: All
right, LTC insurance producers and reverse mortgage lenders, how are you
going to compete with that? And
how about you politicians and Medicaid administrators?
What hope do you have to keep Medicaid solvent as a safety net
for the needy while shysters like this are giving it away to any and
Now, here's the pitch for Mr. Heiser's book, also
extracted on May 15, 2007 from http://www.longtermcarelink.net/a16Medicaid_secrets_book.htm.
Note there is not a word about planning responsibly or paying
privately for long-term care:
"There are ways to arrange your affairs in a
way that will enable you to build a fortress of protection around your
family's assets and have Medicaid pay for most, if not all, of your
nursing home expenses.
"If you're someone who is facing the reality of an elderly parent or family member heading toward a nursing home -- and you want to qualify for Medicaid without first spending down your parent's life savings (or yours) paying the nursing home privately, or going broke, this may be the most important article you'll ever read.
"In the next 5 minutes, as you read this
article in its entirety, you will learn how to uncover secrets that will
qualify your elderly parent or family member for nursing home Medicaid. I'll also reveal a first-of-its-kind resource that costs less
than half of a single day's stay in a nursing home -- but can save you and your family thousands of dollars in
nursing home costs and enable you to protect and preserve your family's
"CLICK HERE TO ORDER NOW! . . .
"The Medicaid system is extremely complex and
usually cumbersome for the layperson to understand.
Nonetheless, it's not difficult to qualify for Medicaid -- when
you know exactly how to go about it -- and when you have the proper
"That's why I've compiled all the Medicaid
insider secrets that I've accumulated over 23 years into a
first-of-its-kind resource titled How to Protect Your Family's Assets
from Devastating Nursing Home Costs:
Medicaid Secrets. . . .
"It is the definitive guide to nursing home
Medicaid qualification and is the only resource that is completely
up-to-date. It includes all
the massive changes brought about by the federal Deficit Reduction Act
that was signed into law on February 8, 2006 and later amended on
December 20, 2006. That law changed many of the 'rules of the game' -- including
the rules affecting qualification for the Medicaid program.
"It's important to note that every technique
and option presented in the book is 100% legal -- unlike a lot of the
advice you might get elsewhere. It
gives you planning options that will enable you to steer clear of making
the kinds of transfers or blunders that can get you in trouble down the
road. . . .
"One would think that because an estimated 40%
of people over 65 will require nursing home care at some point in their
lives, that there would be an abundance of books on how to qualify for
Medicaid. This is not the
"Because it takes a top-caliber attorney with
years of experience in elder law to write such a book -- and, like
myself, these attorneys are all too busy charging $250-$300 per hour
giving legal advice to an endless parade of people seeking to qualify
"So busy, in fact, that no one has ever
bothered to sit down and write a book -- until now.
"I took the time out of my busy schedule to
write the book because over the years, I began to realize that I wanted
to help more people qualify for Medicaid than just those who live in
Colorado, where my law practice is based.
"So for the first time, I spilled my secrets
in the pages of How to Protect Your Family's Assets from Devastating
Nursing Home Costs: Medicaid
Secrets. . . .
"CLICK HERE TO ORDER NOW!
"I'm convinced that any one of the powerful
techniques I reveal in Medicaid Secrets has the potential to save you
thousands of dollars in nursing home costs.
This book will easily pay for itself over and over again for
months and years to come. . . .
"What is the value of owning the only
reliable, completely up-to-date resource available on the market that
reveals secrets about how to qualify for nursing home Medicaid --
without going broke?
"What price can you put on the inside
information that can qualify your elderly parent, a family member or you
for Medicaid -- and getting Medicaid to pay the entire cost of a
long-term stay in a nursing home?
"What is it worth to save tens of thousands --
even hundreds of thousands -- of dollars in nursing home costs -- and
not drain your life savings, or lose your home and other family assets?
"Knowledge like this could easily be worth a
small fortune to you over just a few months.
But you won't have to pay $10,000, $8,000 or $6,000 for this
"No, you won't even have to pay $2,500 to
$5,000 (which is what I charge for a complete plan that positions my
clients to qualify for nursing home Medicaid).
"I know you'll find it hard to believe this,
but How to Protect Your Family's Assets from Devastating Nursing Home
Costs: Medicaid Secrets is
only ... $47.
"Yes, your investment in this treasure trove
of Medicaid secrets is just $47. This
introductory price is only a fraction of the $250 that I charge for a
one-hour consultation, in which I cover only a tiny part of what my book
LTC Comment: Get
the picture? Scan the web
and you'll find much more just like the preceding.
The author of this ad and the book it promotes, K. Gabriel Heiser,
is a member of the National Academy of Elder Law Attorneys, according to
its membership directory at www.naela.org.
NAELA is the trade association of Medicaid planning lawyers. The organization claims professional respectability and it
has fooled many in the media. But
ask yourselves this:
Would Harley Gordon grant the "CLTC"
designation to an LTC insurance producer who used such Genzo-knife-style
Would AHIP support an "LTCP" who showed
such contempt for responsible long-term care planning?
Would Ed Pittock renew the "CSA"
certification of someone promoting a product so detrimental to seniors
and hurtful toward the poor?
Of course not.
But NAELA gives its union card to Mr. Heiser and many others of his ilk. It's high time to expose NAELA and those of its members who spread this kind of self-righteous, self-promotional, profit-seeking exploitation of seniors. Don't let another positive reference in the media toward NAELA go by without forwarding this LTC Bullet to its author and the editor.