Medicaid: A Safety Net for the "Wealthy"

Abstract

At a time when the cost of long-term nursing home care is exceptionally high, most older middle-class Americans are struggling to foot the bill for the care they require. For wealthy Americans, on the other hand, this is a time of opportunity. Medicaid is a public assistance program initially intended to be a safety net for the truly needy, i.e., the individuals with low income and the medically needy. However, Medicaid has become the primary payer for long-term care in the United States despite its intended role as a “safety net.” Due to medical technology advancements and increases in life expectancy, long-term care has become so expensive that only a few can afford it. Those facing a lengthy nursing home stay have two choices: deplete their lifetime savings until they are poor enough to qualify for Medicaid or engage in Medicaid planning to protect their assets. Wealthy couples quite easily can, and do, choose the latter. As with everything in life, those with greater means have greater options. So, while the government takes measures to restrict Medicaid for the needy, members of the upper class have uncovered a slew of alternative legal strategies to qualify them for Medicaid benefits, nonetheless. During her 2011 congressional testimony, one 36-year career Medicaid eligibility supervisor provided a witness account of wealthy individuals repositioning significant resources to qualify for Medicaid: