Long-term Care Fraud Haunts Medicaid

Posted by Stephen Moses in Long-term care on Oct 29th, 2009 | no responses

Medicaid planning has been around for as long as the federal and state governments have tried to prevent affluent people from ripping off welfare-financed long-term care. But every time public officials close a loophole, the elder lawyers open new ones for their well-heeled clients. Sometimes Medicaid planners re-open old loopholes that responsible officials thought they’d closed.

There is nearly always a way to qualify for Medicaid after the insurable event has occurred without spending down much money for care. Whether you work the legalized swindle as an annuity, a trust, a reverse half-a-loaf, a life care contract, a purchase of exempt assets, an early divestiture, or whatever . . . it’s easy to do. Plenty of attorneys of dubious repute will be happy to take big fees for getting you an early inheritance by putting you or your parents in a nursing home on welfare.

I’ve spent the past 25 years of my professional career helping to close loopholes like those. We’ve been successful getting federal legislation passed in 1988, 1993, 1997 and 2005 to do just that. But bottom line, if you want to game the system and you’re willing to accept the consequences, it’s still easy to do.

So, what really matters are the consequences. Medicaid is a means-tested public assistance program. It is welfare. It was intended as a safety net for the poor, but has become instead the dominant payer for long-term care in the United States for all economic classes. Because Medicaid tries to do too much for too many, it has a dismal reputation for problems of access, quality, reimbursement, discrimination, institutional bias, loss of independence and welfare stigma. Worst of all, Medicaid cannot continue to do even what it’s done in the past, however inadequate, for long-term care. In the future, access to quality LTC, especially in settings other than nursing homes, will require the ability to pay privately.