The internet and, now, chat agents are wonderful things. I use both continuously throughout the day, every day. I have often thought kids nowadays were lucky to always have this technology, but I actually think people like me, who grew up in the ’80s, might be the luckiest because we know both what it is like to not have the technology and what it is like to have it. When I was in college, personal computers were just becoming ubiquitous. When I started college, no one used a computer, and when I finished college, almost everyone did.
To me, technology is a helpful assistant. If I want to know something, I don’t have to go to the Encyclopedia Britannica to look it up, not that I ever really did. Kids who grew up with technology seem to take it for granted, and they seem to use it more for entertainment (TikTok) than information. Hence the Gen Z stare. Look that up. It’s a real thing, and it’s scary.
But information can also be a bad thing, and chat agents sometimes make that information even worse because they convince people that they are right. “AI told me I was right.”
In the past year or so, I have noticed a number of people coming to me expressing opinions about the law that I know they got from an AI chat agent. I use chat agents all the time. I even use them for elder law issues even though I have been practicing elder law exclusively for twenty-six years. And let me let you in on something: chat agents are often wrong.
We have all experienced a chat agent telling us something only to say, “Oh, I’m sorry. You are right,” when we tell the agent why its answer is wrong. The problem with chat agents is that, unlike a basic web search, the agent seems like a person who is confidently giving us the right answer. With a basic web search, we look for the answer ourselves and come to our own conclusions.
In this vein, I want to discuss an issue of Medicaid planning that someone recently brought up to me in a consultation: retirement plans as an asset for purposes of determining eligibility for the Medicaid program.
Medicaid is a health payment plan for needy individuals. To qualify for Medicaid, a person must have no more than $2,000 in resources and must have insufficient income to pay for his care (such as the cost of the nursing home). If the individual is married, his spouse can retain a certain amount of countable (cash, stocks, bonds, IRAs) and non-countable (house, car) assets.
For purposes of determining the individual’s eligibility for Medicaid, both his assets and the assets of his spouse are counted against his eligibility. As stated, Medicaid allows him to retain no more than $2,000 in assets and his spouse no more than approximately $160,000 in assets. All of the couple’s assets (stocks, bonds, bank accounts, IRAs, annuities, 401(k)s) count toward those asset limits.
In some states, a retirement account in payout status is not a countable asset. For instance, if the well spouse has a $500,000 IRA and the spouse is of an age at which she has to take the required minimum distributions from her IRA, then her $500,000 IRA is a non-countable asset. At least, that’s the way I believe it works, because this is not the law in New Jersey and it hasn’t been the law in New Jersey since the New Jersey Supreme Court decided the issue in the mid-1990s. I have never practiced elder law during a period when retirement accounts were non-countable assets.
If a person searches the internet using a chat agent, the agent may very well tell the person that retirement accounts in payout status are exempt. They are in a number of states, but New Jersey is not one of them.
Technology is great. I love it. But it’s also beginning to sound like a confident know-it-all, and like most confident know-it-alls, it’s often wrong.
[C1]Please confirm my reading: “can always be” read as a typo for “can also be,” since the sentence is contrasting the good side of information.
[C2]Not a proofreading point: this figure changes annually, so please confirm it is current at publication.