Hearing testimony suggests Medicaid abuse attracts all income levels

 Hearing testimony suggests Medicaid abuse attracts all income levels

November 27, 2011

In October of this year, ElderLawAnswers.com featured a post, House Panel Hunts the Elusive ‘Millionaire on Medicaid’, that examined a September 21 congressional hearing on alleged abuses of Medicaid long-term care eligibility rules.

It opened quoting Rep. Trey Gowdy (R-SC), chair of the House Oversight and Government Reform Subcommittee on Healthcare, who reportedly contended how some Americans are trying to “turn the [social] safety net into a hammock or a trampoline.” With growing program usage numbers, tinkering with eligibility rules and increasing American embracement of an entitlement mentality, that seems a reasonable enough assertion.

“Millionaires should not be on welfare,” Gowdy concluded. On which we also agree – but are they? In all likelihood, some are and that’s atrocious. That’s the nature of today’s thriving entitlement mentality. Its inherent danger stems from too often fostering a baseless or unfounded belief that one (or oneself) is deserving of a specific reward or benefit – regardless the consequence it generates for others.

Testimony at the hearing thankfully didn’t seem to support this contention, but it provided interesting perspective on another American population segment. This is cause for concern as American taxpayers cannot afford to increasingly take on financial burdens once funded via personal responsibility and pride in self-sufficiency.

Here’s what we found interesting with this post:

Lead witness Stephen Moses, President of the Center for Long-Term Care Reform, chose to focus the committee’s attention on reforming Medicaid’s “generous” eligibility rules that allow the middle class to qualify, and he characterized “egregious Medicaid planning” by the wealthy as just “the tip of the iceberg.”

“Income almost never disqualifies anyone from Medicaid long-term care eligibility,” Moses told the committee, and he went on to claim that there is “no meaningful limit” on how many exempt assets applicants may retain and still qualify for benefits.

“Because of these very generous basic eligibility rules, the vast majority of America’s elderly qualify easily for Medicaid when they need long-term care,” he said. Such easy qualification discourages most people from planning early to “save, invest or insure for long-term care.”

As an example of the changes he would recommend, Moses claimed that Medicaid could save up to $30 billion a year if people had to consume their home equity before qualifying for public benefits.

David A. Dorfman, who said that he was a “Medicaid planning attorney” in New York until this past January, called the alleged abuse of Medicaid eligibility rules by the well-heeled “a myth. That’s not really what’s happening. That’s not what any of my clients wanted. None of them wanted to game the system.”

“Soup kitchens are free and nobody checks five years’ worth of bank statements, and millionaires don’t go there for lunch,” Dorfman said. ”We can’t mandate abject poverty, because that’s what people are terrified of. And if that has to be created, no matter what the rules, people will do whatever they have to do to get the necessary health care for their loved ones, or they’ll suffer and die without care. . . Let’s create a system that invites people in who need health care, not one that punishes them.”

The third witness, Janice Eulau, the Assistant Administrator of the Suffolk County (New York) Department of Social Services, was the only one to claim that alleged abuses of the Medicaid system are a significant problem. Conceding that her county is relatively affluent, Eulau said that “people often come in and they have total resources of $300,000 to $400,000 beyond their home” and other exempt assets. She singled out promissory notes as a legal tool most often used, at least by single clients. For couples, she said spousal refusal is the most common method for preserving resources.

The last witness, Julie Hamos, Director of the Illinois Department of Healthcare and Family Services, also declined to climb aboard the “millionaires on Medicaid” bandwagon. “What we are finding in Illinois is that this is more of a middle class family issue than millionaires. Let’s say there’s a saving of a little pot of money, say $100,000, the family doesn’t want all of that to go into nursing home care.”

Hamos said that there is bipartisan acceptance of these practices in her state. She then said that her department was looking to another front to exact savings: ending Medicaid’s institutional bias.

Legal practices as illustrated here are why we see Medicaid planning promoters as culprits helping to threaten the well-being of honest Americans who understand that real integrity does not include shifting one’s financial responsibilities to friends and other taxpayers.

Here in Texas we see school districts and community colleges incorporate Medicaid planning presentations into their continuing education programs. Talk about helping to legitimize this form of Medicaid abuse. Our 2009 Medicaid abuse – looting of a different type told of a California attorney who formerly specialized in coaching seniors on gaining Medi-Cal (state health insurance for the poor) eligibility while simultaneously preserving their assets. The column opened asking “When a cheater cheats soon-to-be cheaters out of services designed to perpetrate cheating, is anyone involved a sympathetic figure?”

The last decades have encouraged expectation of a lifestyle many Americans want, but can’t afford. Upon recognizing the prospect of unfulfilled expectations, an accommodating government run by bureaucrats happy to simultaneously welcome new “takers” into the fold and further justify the “importance” of their positions stands ready to assist. Only the taxpayers expected to fund this new class of self-professed oppressed already struggle with care of their own families and current tax burden.

Unfulfilled expectations also seem to fuel many of the abusive probate actions seen here at Estate of Denial®. Lines of respect for our fellow Americans’ effort and accomplishment are fading. Involuntary Redistribution of Assets actions are about nothing less. Respect for American end-of-life directives with regard to previously enjoyed individual liberties and certainly their property rights is also on the decline.

Lou Ann Anderson is an advocate working to create awareness regarding the Texas probate system and its surrounding culture. She is the Online Producer at www.EstateofDenial.com, a Policy Advisor with Americans for Prosperity Foundation – Texas and a Director of Women on the Wall. Lou Ann may be contacted at info@EstateofDenial.com.

Editor's note: Many thanks to Estate of Denial.com for this fantastic article.  Medicaid fraud is at epidemic levels in the incubating, fertile, corrupt atmosphere of the Cook County Probate Court.  This criminal activity could not proceed without the complete knowledge and cooperation of the judges of the Cook County Probate Court. Lucius Verenus, Schoolmaster,  ProbateSharks.com