At least once a week, someone will post a question on this board that basically amounts to asking how to “protect” some parental asset or amount of money and still apply for/qualify for Medicaid. Inevitably, such a poster gets jumped on by numerous people replying that trying to protect assets is “cheating” and grossly unfair to other taxpayers.
I’m not so sure. I'm not advocating trying to circumvent the system -- but I would like to start a discussion about whether it's immoral. I’d like to explain why I’m not so sure, and then I’d like to know what other people think.
Imagine two identical families. We’ll call them Family A and Family B. In both families, Mom and Dad work. Both Parents A and Parents B have identical jobs and identical incomes, and both families have three kids.
That is where the similarities end.
In Family A, even before the kids are born, Dad and Mom scrimp and sacrifice to save money. This an old-fashioned phrase for an old-fashioned concept, but Dad and Mom are 100% dedicated to it, and their commitment does not change as the kids grow.
The family goes on vacation every third year instead of every year. These vacations are usually “road trips” and involve camping in tents and peeing in terrifying, spider-infested outhouses to save money on hotels. Getting to eat out once a month is a huge treat, and usually occurs only at low-end chain restaurants with a mid-week “kids eat free” night. For their entire public-school education, the kids dress primarily in clothes that their mother sews by hand instead of wearing clothes bought from the store ... and sure, maybe they get teased and made fun of at school, because they’re wearing polyester pants instead of blue jeans, but Mom and Dad decide it’s a worthwhile sacrifice because the money that is being put away will make a difference in the kids’ lives later, when it really “matters.”
The family drives a beat-up old car that Dad manages to keep running year after year because hey, maybe the upholstery is all split open and the windshield is cracked, but at least it’s paid for. Cable TV is out of the question, so if a show doesn’t come in over rabbit ears to the family’s one small TV in the living room, no one watches it.
The house, which is uncomfortably small for the family and not in the best neighborhood – and which certainly does not feature hardwood floors or a kitchen with granite counters or stainless steel appliances! – is one that can be managed on a mortgage that still leaves a fair amount of each month’s paycheck available to go into savings instead. The family COULD qualify financially for a “nicer” place, but Dad and Mom believe that it’s better to put the money away so that it will be there to make a difference for their kids down the line – maybe by buying a college education or by helping them to buy their own homes when the time comes. Everyone sacrifices, sacrifices, sacrifices. Eventually, even the modest mortgage is paid off. Gradually, the little nest egg grows.
In Family B, by contrast, just about every dime that ever comes in is spent immediately. The family motto is “Instantaneous Gratification Isn’t Soon Enough!” The family denies itself nothing, ever.
The whole family goes on vacation to Disney World every year, always staying at an official Disney resort (where the kids get their own room). At home, all the kids have their own TVs (which get every premium channel imaginable), laptops and iPads and get new iPhones every time Apple releases an “upgrade.” Eventually, the kids get driver’s licenses, and guess how the family celebrates this rite of passage? You got it! Mom and Dad buy them their own cars. The family eats out at nice restaurants three or four times a week. The family car is replaced at least every two years, and loaded with every option the family’s creaking credit score can support.
The kids get designer clothes and shoes and the latest video games and pretty much whatever else they want at every gift-giving holiday. The family lives in a huge house in a nice neighborhood, with a pool and a hot tub, and yes, they’re carrying a lot of debt on their credit cards, and yes, they’re quite a bit overextended on the mortgage and the car notes, but what the heck – isn’t that the American way? Sure, there’s no nest egg ... but what does that matter? Living life in the moment is what it’s all about.
Fast-forward. Dad is now 75. Tragically, Mom died 6 years ago from cancer, and Dad has now been diagnosed with a progressive dementia, and will likely soon need very expensive long-term memory care in a facility.
In Family B, there are next to no savings. After retiring, Mom and Dad B traveled a bit, and spent every dime that came in in pension and Social Security income. After Mom B died, the overextended mortgage on the house turned completely upside down, and Dad B abandoned the equity in the house and walked away ....
(Continued in Part B, first post)
Supposing you are strolling down a street somewhere in America, minding your own business, and a car veers out of control and runs you over, splat, and you happen not to have any ID on you and you're clean unconscious and pretty mangled. So presumably the ambulance forms up, you are scraped off the pavement, taken to hospital and put back together.
Then the bill is presented, and the car driver's insurer pays; or your travel insurer pays; or you pay if you have the funds - but what if you haven't, and you're not insured, and the car driver can't be traced?
Or, what if it's an orphan child this happens to?
Do hospitals insure themselves against defaulting patients?
I can understand the concept and am grateful that such a law exist for those who are actually living in poverty. It's the patients that feel the government owes them the care, who if you went to their house have newest and brightest items, brand new car, cable TV, iPhones, etc. That is what is wrong with this picture.
As for having some types of insurance coverage that won't pay out when it's needed, that was covered in some of the YouTube videos under elder financial abuse, exploitation and predatory guardianship abuse. Somewhere along the line this was mentioned so I'm not a bit surprised by the Yahoo article jacobsonbob found. Retirees actually have every reason to be very concerned, especially with the information showing up on the World Wide Web we know as the Internet. The information is out there for the finding, we just need to find it and really wise up to what's going on that most people don't even know about. It sounds like someone may be just trying to throw people off guard through some of these articles and i'm not one of those kinds of people who will let down my guard now that I know what's really going on behind the publics backs and right under our noses. Abusive guardianship is a real white-collar crime that goes unpunished because abusive guardians are never held liable as evidence is destroyed in cases where after the last dollar, the patient conveniently dies and the elder's body is cremated to destroy evidence, all without the family knowing until later. and it's time the public start fighting back and bringing stuff like this to a screeching halt. I don't blame retirees for being ridiculously worried about running out of money and trying to put things in place to protect themselves because as you get older, you tend to become more vulnerable but not in all cases. I had someone who was like a grandpa to me and he was real sharp right to the end and even ran his own 16 acre farm in a neighboring town. Yes, he even had his own horses and we even went trail riding one day. We used to ride on the 16 acre farm and he did pretty much all the chores, and even maintained his own garden in his 70s or 80s. I love my pappy to this day even though he's gone. He was one of the few World War II vets even left and he was definitely wise for his age. Yes, he probably had some money tucked away and I don't blame him for saving his money and providing for his own needs. He was responsible enough to make sure he had enough money to last the rest of his life after retiring from a nearby steel mill he worked at for a number of years. He made a good retirement in order to have the horse farm, and he knew how to stay healthy. We can all learn quite a bit from our elders whether or not it fits our unique situations. Knowledge is power and our elders are our teachers. What they teach may not fit our unique situations right now, but someday you never know when you may end up needing that information. Yes, it's very wise to save now while you can because even a small savings can be built up with time
First, anytime you get behind the wheel, you're required to have your drivers license, registration and proof of insurance with you. Lacking any of these can get you a hefty fine and possibly your car impounded if the cop really wanted to confiscate your car. If a car is impounded, it's up to the owner to prove they have a valid drivers license, proof of insurance, and the registration proving rightful ownership.
If you get behind the wheel of a car and have no insurance on your car, your car can be confiscated if you're involved in an accident. Not only can your car because if it's gated but you can also be slapped with a very heavy fines and maybe even some jail time. You can get in very serious trouble for not having insurance on your car before putting it on the road. I know Ohio is very strict about that for starters, they are very serious about drivers having required documents before even getting behind the wheel.
Now, let's say you're involved in an accident and you have your license, registration and proof of insurance but no health insurance. The bill will go to you once they find out who you are because all they have to do is run your plate during the investigation and find the car is registered to you. If you were at fault, you'll definitely be paying out of your own pocket for any damages you caused.
Now, let's say you're not at fault. There'll still be an investigation but the only difference is the other driver will be liable. Now, let's say the other driver doesn't have any insurance or maybe even not enough of it. Now it rolls over to your insurance company and your premiums may increase (unless you have accident forgiveness). With Allstate, I recall when I had three bikes on the road and every so often my money order would be returned and I would get a break of about three or four months. I don't know how they run things now, it's been years since I was with Allstate. However, I hear you where you mention a car veering out of control. Our town just had an incident where a car went left of center on one of our main highways and crashed head-on into an oncoming car going in the right direction. There was also another situation where there was a demented elderly person who got pulled over for going the wrong way on one of our interstates. I don't know how she ended up on the other side going the wrong way on I 71, but she did because I heard about it. She could've easily gotten in a head on collision on 71 and she could've killed not only herself but someone else. Needless to say, her license was permanently revoked and she's no longer allowed to drive but she may still have the car. It was said she won't let the car go, but at some time someone is going to have to take it from her because she can no longer drive it. I don't know what her family is going to do or how they will handle this, but you do have a very strong point on cars getting into accidents with unsuspecting victims. Our area has seemingly more accidents during summer and we just had a life flight pick up someone late last night. You can just about bet the patient was probably in some kind of car wreck, we have a lot of them through the summer but most of them seem to be out of town oddly enough from what I've noticed. Wherever there is high speed, there is more of a risk for accidents especially when 71 is now 70 mph, whereas it was 65 before. I think it should be dropped weight around to 50 mph and left there because lower speeds mean fewer accidents. Another thing to consider is higher speeds means your car becomes lighter on the road because the air passes underneath the car, lifting up the car a bit, making the car even easier to maneuver. Power steering is called "power" steering for a reason, because high-speed's make power steering even easier. If you don't believe me, take a new modern car and go out on the interstate for a spin. Now, tap on the break and pay close attention to the suspension as the car slightly lowers back toward the ground. See what I mean? I've driven enough that I notice this, cars have a suspension system for a reason, it serves a specific purpose through its function. It not only makes the ride easier, but it's also involved in weight adjustment on the tires as you're going down the road at a higher speed and your car gradually lifts up with the air passing not only around but also under your car. The force of that wind actually does lift up your car a bit as you're going down the interstate. This is what makes higher speeds and accidents so dangerous, so I hear you! Remember, my dad worked his whole life for Ford and we have no dummies in the family.
Probably why hospitals don't keep you in there long either so they can turn over the bed to a paying consumer. And of course hospitals prefer commercial insurance (in the US that is any other insurance besides Medicare & Medicaid as they are allowed to charge more since Federal & State reimbursement rates are much lower.
May I just ask how you know that it's Medicaid patients -- and not NH CEOs -- who are driving up the cost of nursing home care? I'm asking because my grandpa was in a Medicaid bed and the place was terribly understaffed and the aides got paid about $10/hr (many worked two jobs) and yet the company that owns the place is enormously successful. BTW, my grandpa was a WWII vet, worked the same job his whole life till he retired at 65, then started working again till he was 80, and went on Medicaid when he was 96. He paid into the system and like most families, applying for Medicaid was a last resort.
Is your screen name is ironic? If not, you might need to do a read through of your scripture. Nowhere does it mention or criticize socialism, but it does have an awful lot to say about how we should treat the poor and infirm.
It would be better if middle and upper class people refused to invest in companies who do not pay their workers fairly, and offer affordable insurance packages so they don't need Medicaid. It would be better if we demanded that CEOs and business owners who cheat people and break the law were held accountable to the same rules and laws as everyone else. It might be better if we shifted away from "for profit" medicine -- at least where primary care and chronic conditions are concerned -- and had a system where everyone paid in and everyone had the same access to at least a minimum standard of care. That is a socialist practice and one that most modern societies embrace. "Socialist" programs -- Medicare, Medicaid, a state-funded education system, taxpayer-funded police and emergency -- were enacted because there was a need for them.
Medicaid pays for medical care for poor people. It does not provide housing except for the frail elderly. Is there really a lifestyle incentive to be on Medicaid?
The dates you cite for the advent of Income Tax and Medicaid are accurate for the US, but people have been required to pay forms of taxes and/or tariffs since Ancient times (e.g. "Give to Caesar that which is Caesar's.") The difference is that through centuries of philosophical, religious, and scientific examination, and hard work by spirited people, we reached a point in history where we could say as a society that we want our citizens to be housed, we don't want the ill to be suffering on the streets or in prison-like institutions, etc. There will always be poverty and misfortune, but in a just society we do our best to ensure that we are not the cause of it, and that we help each other.
The statistics I read said we spend about $450 billion (from both federal and state funds) a year on Medicaid. That is an incredible amount of money. They said it's split almost evenly between children, working poor, the disabled, and the elderly as numbers of enrollees, but with actual dollars spent tipping toward the elderly quite a bit. But people are living a lot longer than they expected. The dollar is not worth what it was 30 years ago when some of these people retired, and the cost of their care has increased as well. And as a point of reference, the uninsured losses after Katrina were estimated to be about $200 billion. That's for ONE natural disaster, and we are just talking about part of the damage.
What billionaires and climate money are you talking about? Do you remember when the Cuyahoga River caught on fire? Cleveland was a joke for decades after that. And it was at least part of what prompted the creation of the EPA. We don't talk about acid rain much anymore because of environmental regulations, the Clean Air Act, the development of alternative energy, etc. I don't know what "climate money" is going to which billionaires. But I have seen with my own eyes that when legislators choose to fund research and enact regulations limiting pollution, it makes a difference for all of our benefit. Otherwise we are all subsidizing clean-ups and treatment of health problems caused by pollution.
Health care is a business. Why shouldn't it be allowed to earn profits like other businesses?
And if Medicare were "free to all", who would pay the costs? As it is, Medicare offers a lot for a nominal premium - a little over $100 per month for us. Who do you think would be willing to pay extra taxes to fund Medicare for everyone?
Just curious.
I read the original post about famillies A and B.
It was an interesting story but was it in the best interests of family A to deny themselves so many luxuries? What kind of stress did it put on them emotionly.
I am not suggesting that everyone should spend everything they earn and I am a great advocate of living within one's meansand being very frugal.
I read an article in M****** E**** N*** About a family living off the grid. They of course did not believe in family Bs life style they felt there was enough enjoyment to be had living on the farm and enjoying the animals. Each child was encouraged to start their own business at about 10 years old and ranged from raising shep and chickens to selling the eggs and crafts. They were encouraged and supervised but allowed to make their own mistakes. By the time they were 20 the two elder ones had $20,000 each in the bank from their own endeavors. Now the grandchildren are following the same path. They never received an allowance and had to buy their own supplies from their profits.
We are fortunate to be old enough for Medicare which we have paid for handsomely through the years plus plus a PPO plan which picks up a lot of the rest. Even so we spend around $7,000 a year in additional cost especially for expensive drugs in the donut hole and premiums for the PPO currently $150 a month each. In 2015 I had a serious illness and my medical bills amounted to just under a million $s.
Would I qualify for medicaid for long term care? Not till I had spent between $24,000 to $84,000 a year which would not take very long.
I don't think either family behaved morally, they both took different paths and ended up in the same place long term care however it is financed
Then the elder needs to move into a skilled facility.... oops, the elder already handed out much of the funds throughout those years and deeded over the house to an heir or two where the elder had continued to live. Good grief, these Assisted Living and Skilled nursing homes are expensive....
Now what? Ok, lets look into Medicaid. Then and only then do the grown children realize that Mom or Dad should have kept their money and kept the house to help pay for this care.
I know for myself, I never heard about Medicaid paying for skilled nursing homes until I came to this forum a few years ago. So I planned accordingly whenever my parents gifted me money, I never spent a dime, I could give it back for their care.
As for my parent's house, I was glad they didn't give it to me prior to passing. Quit Claim deeding it to me would have cost me mega bucks in Capital Gain Taxes if I sold it as the house would have been an "investment" and the rules are different compared to being my "residence". Plus my parent would have had to pay a Gift Tax by doing so as it would have been more than the annual $14,000 gift tax exemption. Was so happy when my Dad sold the house while he was in Independent Living, the equity helped pay for his rent and his caregivers.
How can we educate the public to help guide them on the ins and outs of the financial implications of elder care???
Google "gift-tax-implications-putting-children-quitclaim-deeds"
If your son doesn't pay you for the property, you are giving him a gift. The IRS imposes a gift tax on practically any gift made during the tax year. There are some exclusions to this tax; however gifts to children are not included. Individuals are allowed up to $13,000 per year in nontaxable gifts, as of 2012. Married couples can claim $26,000. In regard to property, the fair market value is used to assess the value of the gift. At tax return time, you will need to fill out a gift tax return using Form 709.