Monday, August 02, 2010

Is Medicaid Planning for Elders Ethical?





** I recently alerted Time Goes By blogger, Ronni Bennett, to a study I found online regarding the forced government management of elder finances, a "financial driver's license", if you will. She definitely ran with that ball: Big Brother Is Out To Control All Elders' Money. And please note the following true story is not in any form an affirmation of that ominous study's conclusions; it is important to remember the financial decisions made by our family were shaped by choices both in and out of our control, but they were not overseen by some governmental bean counter in D.C.

"Where the market permits planning which results in a reduced net price, a purchaser cannot be faulted for availing himself of the lower price even if he could pay more. In a health care system in which the commodity known as health is bought and sold, there is no reason why any market participant should value another person's property (that is, health) more than his own. Until the United States elevates health care to a moral right, instead of a property right, Medicaid planning is morally and ethically justified." Elder Law Attys Timothy L. Takacs & David L. McGuffey


When my grandmother started going downhill physically and mentally to the point it wasn't safe to leave her alone in the house all day, my aunt (her only daughter) began to investigate how Medicare/Medicaid might be able to help pay for a full time nursing home care. Nursing homes become the only remaining alternative available when families do not have the personal wealth necessary for private duty nursing nor have a family member who can devote 24 hours a day to care giving of an elderly relative.

Medicare coverage for long-term nursing is a joke, and does not hold out an option for more than a hint of in-home care. Nor does it cover much more than a few weeks in a convalescent facility.

Yes, my grandmother owned her home outright, the only true asset she possessed and even that was wasn't worth more than $38,000 in a good market.

Doubly troublesome, my aunt had lived with my grandmother for 30+ years, and had been pretty much her sole caregiver for more than half of those years. The house was home to my aunt as well though her name was not on the deed.

Thus, the question loomed as how to pay for grandmother's care without a forced sale of the house which not only would have wiped out my grandmother's only source of material wealth, but also would have denied my aunt a home she had lived in for many years.

And by this point, my grandmother was not mentally competent to execute legal documents. Luckily for our family, she had signed a power of attorney a few years prior and my aunt could make necessary legal decisions for her.

Some might argue that we were "gaming the system" when we set about to try and preserve the house from being sold to cover medical bills, but in truth, the result was going to end the same - grandmother would spend down every last cent of her assets, and then would be a Medicaid patient inevitably. That $38K hundred-year-old house in a very small dead and dying Texas town wouldn't even cover six months worth of nursing home bills, and my aunt who needed to live near my grandmother would be without a roof over her head.

The cost of long-term care is often catastrophic for elders and their families. So, is it “wrong” to help the elderly protect their assets by engaging in Medicaid planning?

For our family, the short answer was no.

Though we didn't use lawyers, we did avail ourselves of been-there, done-that advice of friends and family, and managed to keep the house intact for my aunt who continues to live in the home. My grandmother received adequate (though far from stellar or even desired) care and my aunt was able to keep working and provide the other essentials not covered by Medicaid (i.e. better quality adult diapers, etc.). Trust me when I say it is important to visit an elder loved one who is living in a nursing home; the work is hard with low-pay, and the nursing home staff stays more attentive to patients whose families are personally involved in the day-to-day care.


Contrary to the perceptions of some, Medicaid is not just a lifeline
for America’s poorest citizens. Rather, for America’s seniors, Medicaid is now also very much a middle class program. Funded jointly by the states and the federal government, Medicaid today pays nearly two thirds of all nursing home and long-term care bills. So when Medicaid is in trouble, so too is middle America.


The Economic Downturn & Its Effects on Seniors, Testimony to the Senate Special Committee on Aging (2002) (opening statement of U. S. Senator Larry Craig, Ranking
Member of the U.S. Senate Special Committee on Aging), http://aging.senate.gov/events/hr79lc.htm.


I wouldn't wish nursing home care on anyone, but unfortunately, that becomes the only alternative for the majority of American families. Did we behave unethically by not selling my grandmother's home?

Would I consider someone who owned say, a half-million dollar home and another half-million or more in cash holdings a deadbeat citizen if they sought ways to avoid "spending down" their wealth? Good question, but I seriously doubt someone with that amount of wealth wouldn't be able to afford better in-home care and most likely would have expensive long-term assisted living insurance coverage; is it truly an apples to apples comparision between that individual and someone with far less monetary means?

I suppose it could be determined by whether you see the issue in black and white, or in shades of gray.

I can only say I didn't lose any sleep over our family's decision.

7 comments:

Ronni Bennett said...

Wow - there's a lot to consider here. No blame for gaming the system. What's really wrong is having a system that treats health care as a commodity. That could have been changed with reasonable health care reform, but that's not what we got. It is still only about money, not health care.

One of the important things here is that for simple survival, people are forced, essentially, to lie - which is not a position most of us like to be in.

Good post, Pattie, and an important one.

Joe said...

Gaming the system? Far as I'm concerned that Aunt has already saved the system about 15 years of care bills, and for that she winds up with a $38,000 house that a member of her family already paid for with after tax bucks.

I think "the system" has been gaming all of us for a long time now.

Cowtown Pattie said...

Ronni, it is too bad the Obama administration didn't hold out for the best healthcare option - a universal one modeled on the Medicare system.

Joe, I feel the same way! "Hey, G-man, look how much we REALLY saved you..."

Peter said...

Long term care (LTC) insurance is an option that sometimes allows asset preservation without the need for Medicaid. Unfortunately it's quite expensive, especially for people who are old enough to be thinking about the need for long term care. The insurance company where I used to be an agent had been one of the first companies to sell LTC insurance, back in the 1970's I believe, and actively markets them. Even so, most agents are lucky to sell two or three policies a year.

Cowtown Pattie said...

Peter,
My mom does have an LTC policy, and she has used it in the recent past. She is back home now, but it is some comfort to know that policy is there.

Having said that, it was like pulling out four eye teeth to work through all the paperwork and requirements necessary to kick start her coverage when she needed assisted living. The policies are typically worded to make it all but impossible for anyone but an attorney to figure out the ins and outs.

Talk about red tape, it was more like a red sea full of beartraps.

Cowtown Pattie said...

Peter,
My mom does have an LTC policy, and she has used it in the recent past. She is back home now, but it is some comfort to know that policy is there.

Having said that, it was like pulling out four eye teeth to work through all the paperwork and requirements necessary to kick start her coverage when she needed assisted living. The policies are typically worded to make it all but impossible for anyone but an attorney to figure out the ins and outs.

Talk about red tape, it was more like a red sea full of beartraps.

Anonymous said...

It's a trial. In our own family, only two people have ever been in long-term care - my maternal grandmother and her disabled son, my uncle. Reporting to the court how he was handling their estates, during the (13 & 6, respective) years during which they were in long-term care, became a regular chore for Dad & Mom.
Good luck to your family.
Cop Car