Medicaid Planning: Stealing from America?

There are at least two sides to every story. For many people, Medicaid planning is the only methodology available to preserve their estate for their or their family’s benefit. The cost of long-term care is staggering, costing as much as $7,000 a month. Few middle or working class families could afford to pay for such care for an extended period of time, without completely depleting their assets. For others, Medicaid planning – while legal – is immoral.

In this week’s edition of Newsweek magazine, there is an article by Diana Conway, entitled My Turn: Cheating Uncle Sam for Mom and Dad. The article is about Medicaid planning. Essentially, Ms. Conway opines that Medicaid planning is legal but unethical. She dubs Medicaid planning to be a methodology that artificially impoverishes upper-middle class Americans, so they can qualify for a welfare program that was designed to benefit only the truly needy. In her opinion, Medicaid planning is stealing from your fellow American.

To bolster her opinion, Ms. Conway tells the story of her mother who was reduced to tears when she had to enter an assisted living residence. Her mother believed that the cost of her care at the assisted living residence would completely deplete her life’s savings and leave her with no legacy to pass on to her children. States Ms. Conway: “My mother was lucky. She died quickly enough to leave her grandchildren some college money, scraped together from her pitiful salary as a secretary and her miniscule Social Security pension.”

Those of you who read my column on a regular basis know that I agree with Ms. Conway – to some extent. I’ve said it before and I’ll say it again: Medicaid planning is a methodology that can be employed to qualify individuals for the Medicaid program sooner than they would qualify without planning, preserving some of their assets for their benefit or the benefit of their family. Medicaid planning is legal. But whether or not someone thinks Medicaid planning is morally correct is completely a matter of personal opinion.

Every year, hundreds of people come to my office to protect their estate – or a portion of their estate – from the cost of long-term care. For those who aren’t as “lucky” as Ms. Conway’s mother to just die, I accomplish the task that these people hire me to perform, and I do save some or all of their estate from those costs.

One thing I cannot do and which I do not attempt to do is to convince people that Medicaid planning is or is not morally correct. To me, it’s equivalent to attempting to convince someone that their political beliefs are correct or incorrect. Since Medicaid planning is legal – being specifically permitted by the very law that created the Medicaid program – the ethics of engaging in such planning can only be described as a matter of personal opinion.

Ms. Conway recounts the story of her own mother who needed to enter a long-term care facility. Ms. Conway describes her mother as a hard-working individual, a child of the Great Depression, a person who “scraped together [her savings] from her pitiful salary as a secretary and her miniscule Social Security pension.” Yet, the author begins her article with the opinion that Medicaid planning is a methodology for artificially impoverishing upper-middle class Americans, so they can steal from their fellow American and qualify for a program that is designed for the truly needy.

Is a secretary who received a “pitiful salary” and Social Security benefits a member of the upper-middle class?

The truth is, most of my clients are people with finances similar to Ms. Conway’s mother. And, it was Ms. Conway’s mother who was worried about saving her estate from the ravages of the cost of long-term care, not Ms. Conway. If engaging in Medicaid planning would have made her mother happy, is Ms. Conway saying that it would be unethical to bring her frail, elderly, and upset mother to a lawyer to help her engage in a completely legal process that would have made her very happy?

Well, “lucky” for Ms. Conway her mother died quickly.