Because of the Trumpcare bill, everyone is talking about Medicaid but few have any understanding of what it is all about. I worked as a social worker for 20+ years and then as a health insurance professional for another 20+ years . . . along the way, I learned a lot about Medicaid and Long Term Care.
Long Term Care (LTC), including nursing home care, is expensive. Basically, there are three ways people can pay for LTC: Long Term Care Insurance, personal savings, and Medicaid.
Medicaid was established in 1965 basically to assure health care for the poor, including nursing home care for indigent elderly. Today Medicaid insures more Americans than any other form of health insurance, including Medicare. And 41 percent of all Medicaid funds go to nursing home care; that was $236 billion in 2016! Certainly there are plenty of poor elderly in nursing homes who could not afford LTC insurance and do not have significant savings, but a large number of seniors receiving LTC through Medicaid are neither poor nor unable to obtain LTC insurance. They are seniors who have figured out a way to cheat.
Almost from the beginning of Medicaid, some lawyers recognized a new niche market for their manipulative skills by offering “eldercare” planning which primarily focused on teaching well-to-do seniors how to transfer their assets and make other changes that would qualify them for Medicaid. Ads from law firms offering “Medicaid Planning” appear in The Villages Daily Sun all the time. These free legal seminars are very popular.
Of course, most of the seniors who take advantage of this unethical manipulation could have taken personal responsibility for the possibility of needing long term care by simply purchasing LTC insurance in their 40’s or 50’s, the optimal age for buying LTC insurance (because at those ages costs are low, typically do not increase over time, and health is generally good). But most people don’t even think about it until they are too old or too sick to qualify. Or, if their health has remained good, the premiums are very high because they are so much older. That, or course, leaves only their savings (or their children’s savings) to pay for nursing home care. Unless, of course, you can find a way to “become poor” by the timely transfer of assets and then getting the government (taxpayers) to pay the bill.
Enter the lawyers . . .
The “Medicaid eligibility planning” aspect of eldercare services is not unlike someone declaring himself a “church” just so he can take advantage of all the tax breaks available only to houses of worship.
The government estimates that Medicaid fraud cost the US taxpayers $140 billion in 2016, almost all of it the result of unprincipled medical practitioners who over-bill Medicaid for real services or bill for services never provided (not, as most conservatives believe, as a result of lazy able-bodied Americans lying their way into Medicaid eligibility).
And this does not include the cost of seniors who unethically worm their way into Medicaid nursing home coverage through an “eldercare planning” scheme. How this is legal is beyond me. Why these law firms that teach this unconscionable welfare fraud are not stopped by regulators is also beyond me.
But the impact on the national cost of Medicaid is clear. And, since this manipulation of Medicaid regulations taught by lawyers is apparently legal, the amount of Medicaid dollars siphoned off by these undeserving rich is not known. Trumpcare boasts that it will save $800 billion in Medicaid costs over the next 10 years . . . not by cracking down on Medicaid fraud and this dishonest manipulation used by so many seniors, but by taking essential Medicaid care away from the truly poor and disabled. The government could save a lot more than that by simply doing a better job of stopping Medicaid fraud, including the practice of teaching well off seniors how to transfer assets so they can leach off the government.
So next time you hear someone deriding poor people for relying on government handouts, ask them what method they have in place to cover possible long term care. If they have set up an eldercare Medicaid eligibility plan, suggest they look in the mirror if they really want to see the face of a welfare cheat.
Gerry Sherman is a resident of The Villages.