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"Medicaid's Dark Secret" - Financing Long Term Care

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  • "Medicaid's Dark Secret" - Financing Long Term Care

    Interesting article about medicaid for long term care, especially for me as a geriatrician.  While most people on this forum should financially plan for this not to happen it could happen to your parents or siblings.  Article: https://www.theatlantic.com/magazine/archive/2019/10/when-medicaid-takes-everything-you-own/596671/

    TLDR - If you need medicaid long term care, medicaid will go after your estate and all assets including your home.  Only your spouse gets to remain in the home, domestic partners and adult children will be kicked out. It prevents the intergenerational sharing of wealth.

  • #2
    Well aware of this and we are dealing with this presently. My mother is fighting tooth and nail not to have this happen. She is my father's 24/7 caregiver and nurse (he is completely dependent in all ADLs) and has health issues of her own. She's obviously hoping that the caregiver stress does not kill her before he dies, else wise my sister is kicked out of the house (she helps with the caregiving) and we end up with nothing.

    It's a travesty when we consider how much Medicaid money is being laid out to illegal immigrants, people who cause their own diseases through lifestyle choices and chronic medication noncompliance, etc. And it's the next financial crisis that will hit American society once the A-bomb of student loans comes to full fruition.

    I can see it already: a whole generation of student loan-destroyed middle aged people who continue to receive outpatient financial care from their better off parents, now saddled with caregiving duties which threaten their own health, and the unsavory prospect of losing their own retirement (via legacy from parents) should Medicaid become their fallback option for long term care.

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    • #3




      Well aware of this and we are dealing with this presently. My mother is fighting tooth and nail not to have this happen. She is my father’s 24/7 caregiver and nurse (he is completely dependent in all ADLs) and has health issues of her own. She’s obviously hoping that the caregiver stress does not kill her before he dies, else wise my sister is kicked out of the house (she helps with the caregiving) and we end up with nothing.

      It’s a travesty when we consider how much Medicaid money is being laid out to illegal immigrants, people who cause their own diseases through lifestyle choices and chronic medication noncompliance, etc. And it’s the next financial crisis that will hit American society once the A-bomb of student loans comes to full fruition.

      I can see it already: a whole generation of student loan-destroyed middle aged people who continue to receive outpatient financial care from their better off parents, now saddled with caregiving duties which threaten their own health, and the unsavory prospect of losing their own retirement (via legacy from parents) should Medicaid become their fallback option for long term care.
      Click to expand...


      Undocumented immigrants are not eligible for medicaid long term care.  In fact in my work I rarely see even our documented/citizen large immigrant population rely on medicaid for long term care.  They almost always stay with family members even with severe dementia and needing 24/7 care.  It is almost 100% in my practice citizens born in the US who are having to turn to medicaid long term care.

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      • #4


        It prevents the intergenerational sharing of wealth.
        Click to expand...


        Factually this is correct. However, I noticed the mention of reparations and no mention of how "intergenerational sharing of wealth" can be intentionally misused. A financially irresponsible BIL had a stroke at 64. MIL and FIL moved in when he refused to go to a nursing facility. My wife is one of 7 siblings, the hospital had kindly had a caseworker arrange for some state provided home health assistance. When she asked me to look at the papers after a week, I told her this needed to stop immediately. This went on for about 5 years. Then FIL passed. Now we leave her for a weekend for visits and one of the brothers lives for free (same as before) in a garage apartment.

        Now that 2 out of 3 are gone, MIL can see all the kids and grand kids. It's amazing when someone asks a 93 year old lady to give them money for a truck or mentions that Grandma now owns two houses and she has plenty of assets. Sure!

        Not one offered to payoff the reverse mortgage (noticed for foreclosure), the property taxes, utilities, food, medicare, supplemental, drug coverage, roof replacement, utilities and repairs or maintenance for going on 10 years. It pisses me off when grandma needs cash because she gave someone "gas money" for walking across the street to buy groceries with a credit card I pay. The brother's assets will be distributed as he wished, taking care of mom or dad and then to my wife. Grandma's assets will be distributed split evenly between her kids. Please not these assets are out of my pocket, there is no way she could pay the property taxes or food.

        5 inlaws view medicaid or a BIL as an available benefit (free) that they are entitled to.

        Intergeneral wealth transfer is a two way street. Do not kid yourself, "free money" is irresistible for for many people. That is the reason for the rules. That does not make them right, just good intents on medicaid would lead to poor behaviors. I personally have funded more than my fair share. I do not by the "dignity or leaving an estate" to be governments role.

         

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        • #5
          Plan accordingly to avoid such scenarios as above.   If your plan is to have medicaid as your LTC plan, there are ways to asset protect the estate for future generation.

          If you've seen the medicaid facilities, you'll probably want to think twice on this fallback option.

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          • #6
            Nursing homes have a specific number of beds. Some are private and some medicaid eligible. Guess which one pays more?When someone runs out of private funds they may get kicked out. Like everything, "Tweeners" are difficult. Some have commented about side gigs as "Medical Director" before. Judging facilities and the care is extremely difficult.The 5 year look back is a problem as well. Plan in advance.

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            • #7
              I think this is crazy, and don't think it's a good idea, but I'd be way more in favor of having younger Medicaid recipients (families, for the most part) have to pay back their expenses rather than elders who may have worked hard all their lives only to be stricken with a terrible illness.

              The healthy young folks having kids on the government dollar should pay, if anyone, not these people. There are jobs with health insurance. But there's no other recourse for many people in this situation.

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              • #8


                But there’s no other recourse for many people in this situation.
                Click to expand...


                The person needing medicaid is provided for (to some extent). The complaint is their property is left in place until death.

                Then the suggestion is let the kids have it, its their "inheritance". The elder and spouse are exempt. The kids want the house.

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                • #9
                  There is no free lunch -- unless you game the system-- ahem ---- play by the rules of the finger-on-the-scale system.....

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                  • #10
                    I didn't read the whole article, just skimmed it...but the whole pulling on the heartstrings approach did not have the intended effect for me--my heartstrings remain unpulled.  The whole "so terrible, he/she worked their whole life and has nothing to show for it because the government is taking the house leaving nothing for his children" is way overblown.  Generational wealth/legacies are fine if you're so lucky (although there are plenty of sad stories where they don't work out either or the division of the estate leads to more heartache than goodwill) but why do we as a culture think that adult children deserve to inherit money from their parents?  The parent's job, assuming children are not disabled, is to raise functioning adults who can provide for themselves.  The main concern as I see it is when one spouse spends down everything to care for their sick husband/wife and then is left destitute for possibly many more years of their own life.  But the kids not inheriting the house because the person could not afford to pay for their own needs and so relied on government assistance?  I lean liberal, but that seems totally reasonable to me.  Some (adult) children act like they are entitled to an inheritance.  I really don't get it.

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                    • #11


                      why do we as a culture think that adult children deserve to inherit money from their parents?  The parent’s job, assuming children are not disabled, is to raise functioning adults who can provide for themselves.
                      Click to expand...


                      +1000
                      Erstwhile Dance Theatre of Dayton performer cum bellhop. Carried (many) bags for a lovely and gracious 59 yo Cyd Charisse. (RIP) Hosted epic company parties after Friday night rehearsals.

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                      • #12




                        I didn’t read the whole article, just skimmed it…but the whole pulling on the heartstrings approach did not have the intended effect for me–my heartstrings remain unpulled.  The whole “so terrible, he/she worked their whole life and has nothing to show for it because the government is taking the house leaving nothing for his children” is way overblown.  Generational wealth/legacies are fine if you’re so lucky (although there are plenty of sad stories where they don’t work out either or the division of the estate leads to more heartache than goodwill) but why do we as a culture think that adult children deserve to inherit money from their parents?  The parent’s job, assuming children are not disabled, is to raise functioning adults who can provide for themselves.  The main concern as I see it is when one spouse spends down everything to care for their sick husband/wife and then is left destitute for possibly many more years of their own life.  But the kids not inheriting the house because the person could not afford to pay for their own needs and so relied on government assistance?  I lean liberal, but that seems totally reasonable to me.  Some (adult) children act like they are entitled to an inheritance.  I really don’t get it.
                        Click to expand...


                        I do much more than lean liberal but I completely agree with you.

                        Taxpayer money is not there to make sure you pass along a bit to the kids, you need to spend all of your money before falling back on the gov't.

                        The parts of this article about people going broke are sad, the parts about the nest egg being cracked.... Well nest eggs are there to be eaten.

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                        • #13


                          The main concern as I see it is when one spouse spends down everything to care for their sick husband/wife and then is left destitute for possibly many more years of their own life.
                          Click to expand...


                          I just completed a "weird" discussion with my spouse. The topic was need for "term life". YUP, paper money syndrome. The fear is REAL. The problem is sometimes fear becomes a reality. That is when I would hope the younger generation would transfer some wealth. Aging can be graceful or difficult. I hope things workout for everyone. I am sure hope is not a plan, that's life.

                           

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                          • #14




                            The main concern as I see it is when one spouse spends down everything to care for their sick husband/wife and then is left destitute for possibly many more years of their own life.
                            Click to expand...


                            A second, less common concern is the adult child who has to drop out of the workforce in order to care for an aging parent, at the cost of building up his/her own retirement savings.  There ought to be some way to compensate that person for the unpaid and very demanding job they are performing (to everyone’s benefit except their own).

                            But in general I agree:  this is one of the reasons we build up a nest egg in the first place.  The bigger issue is how we are going to care for all those disabled elders who DON’T have a nest egg to crack.  When the Boomers start entering their 80s, the incidence of dementia is going to skyrocket.  Many people with advanced dementia cannot be safely cared for in a residential setting.  How are we as a society going to pay for this?

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                            • #15
                              Rational compassionate care, and higher taxes eventually to cover all the demands even if regulated somehow will overtake any reasonable savings from care coordination and cutting out middleman

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