ETHICAL ISSUES IN MEDICAID PLANNING
Most people are uncomfortable getting something for nothing. They are happy to pay their fair share for the blessings bestowed by being an American. Our government has established Medicaid rules and fairness exceptions to those rules that are designed to allow a recipient to get quality long term nursing home care and pay a fair share.
Medicaid Eligibility and Asset Protection with self-respect and high ethical standards is achievable with proper planning. Medicaid recipients do not get a free ride. Everyone is required to pay a resident=s responsibility share which amounts to almost all of the resident=s income. Only $105 of the resident=s income per month is left to the resident for personal use. If the nursing home resident has a healthy spouse whose independent income is too low to live upon, that spouse may obtain a portion of the nursing home spouse’s income to live on and to prevent impoverishment.
We should also bear in mind that Medicaid is a government program, and most of the elderly, through their tax dollars, have financially supported our government in all of it=s aspects throughout their earning years: Why should the infirmity of old age and ill health allow that government to strip the elderly entirely of their life=s efforts, dignity and self-esteem?
There is a myth that the very wealthy can artificially impoverish themselves to get on Medicaid. If that were true it would be wrong and un-ethical. The reality is, however, that the use of Medicaid fairness exceptions to preserve assets and to qualify for Medicaid don=t work for the very wealthy. The reasons is that converting countable assets to non-countable by use of the fairness exceptions allowed by Medicaid has tax consequences for the very wealthy that do not apply to those in the middle class and lower tax brackets.
To analogize, we are accustomed to strategies that reduce income taxes. We understand the difference between legitimate tax planning including taking appropriate deductions and timing, and tax cheating. Often, however, in the Medicaid arena there is confusion about the distinction between legitimate planning to qualify for Medicaid and protect assets and Medicaid fraud.
Understanding of Medicaid Rules and the fairness exceptions provided by the government is the key to facing and coping with the devastating effects, both psychological and financial of the need and cost of Long-Term Nursing Home Care to the elderly and their families.