Morning Read: Saying no to family, yes to big government

I’ve been hearing about this problem for years, and it seems like a last gasp of the ugly old version of dependency-welfare that we mostly reformed a decade ago.

Because of the way Medicaid works, families have a huge economic incentive to literally abandon — at least financially — their loved ones.  This from the New York Times:

Last year, more than 1,200 people in New York City officially turned their backs on their husbands and wives to qualify for Medicaid, triple the number of people five years ago.

The practice, known as “spousal refusal,” is becoming more common as the population ages and the cost of nursing care rises — and it is coming under increasing attack by government officials looking to curb ballooning Medicaid expenses.

The Times article — titled “Full Wallets, but Using Health Program for Poor” — profiles one man who cut ties to his wife financially while he still had half a million dollars in the bank.

Which left taxpayers to pick up the bill.

This then sets up an even more ugly situation where New York state sues people — often the elderly spouses of sick people — in an attempt to recoup some of that money.

This kind of dodge also happens regularly in estate planning.  People gift away their assets to children, so that they appear penniless, leaving taxpayers to foot the bill for nursing home and medical care.

The Times articles notes that “many state and local governments do not openly acknowledge the spousal refusal option.”

But I’ve heard local officials in the North Country complain privately that too many people with means are choosing this path.

What do you think?  Is it a reasonable way for people to avoid bankrupting themselves and their children?  Or should people spend up their own assets on medical care, before turning to the state?

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21 Comments on “Morning Read: Saying no to family, yes to big government”

  1. Bret4207 says:

    I believe in most cases it’s the spouses responsibility to bear any reasonable costs for their spouses care. I can understand why someone would dispute costs and billing practices, but to abandon responsibility outright is…criminal in my mind. If nothing else it shows a decided lack of character.

    Estate panning is another can of worms. Again, I think the individual should provide for their own care, but leaving the remainder to their families, even if it’s tens of millions of dollars, should not be subject to ridiculous taxes.

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  2. Mervel says:

    What are the options. 1/2 a million is not enough to cover years of nursing home care. So you can spend a 1/2 million and bankrupt your family so your spouse can spend another five years with dementia not knowing who is even in the room or where they are? The average cost of nursing home care in the US is around 75,000-100,000 PER YEAR! So you spend all of your assets to keep them in this place, then what? Then you have to go to the state because you are now dependent and penniless?

    The problem is the outrageous costs of nursing home care and medical care for the elderly in general. This is what happens and it will continue to happen until we get a handle on exactly why this is so expensive and figure out how to bring it way way down in price.

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  3. Bill G says:

    This phenomenon underlines the fact that a broken healthcare system accounts for an incredibly large portion of our problems. It also puts focus on the fact that a disproportionate amount of healthcare cost is crowded into the last years of life. That places people in a position to make some very unattractive choices. In answer to your question, Brian, I believe most people given that choice would protect the future of their families. This is especially the case when one is going to leave behind an aging spouse or small children.

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  4. john says:

    I have watched many people walk this walk. Each time, I found myself thanking the good lord that it wasn’t me having to make these wrenching decisions. Our health-care and elder-care system leaves people in a position of having to make the best choice among terrible choices.

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  5. mary says:

    My mother hired an elder lawyer so that she could continue to live in the house she had lived in for 55 years. My father’s nursing home care appeared to be about 350k a year or so…. at least that what it looked like just seeing the monthly bills.

    Do you think it was wrong for her not to give up her only place to live to pay the bill?

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  6. mary says:

    I reread you article and I don’t believe you have the facts right. Maybe 5 years ago they were correct.

    I think you should talk to an elder lawyer. I can give you the name of two good ones on Long Island, but I doubt they talk for free.

    It is not so easy to get medicaid if you are elderly. Someone with millions of dollars could easily just buy the fancy insurance for their relatives much easier than hiring legal help and doing all the accounting needed to get their family member on medicaid.

    The folks with millions can do it either way… but the middle class is probably the ones doing it more and hiring the elder lawyers to negotiate all the steps to do it. It is not fun.

    I don’t think you can read a couple of news articles and then just write you opinion against it.

    Sorry Bret4207 — you are just plain wrong.

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  7. Pete Klein says:

    It is a sad solution but for myself, don’t worry. My plan is simple. It won’t cost you a dime.
    If I get sick and can no longer work, I’ll just let the sickness kill me or take a long walk deep into the woods if I can still walk.
    If I could lower my health insurance costs by getting rid of coverage for all the expensive life saving junk, I would.
    It would be nice if you could do with health insurance bt deleting certain coverage to lower your premiums. I would retain efforts to fix bones, stop blood loos and get the best pain killers available. Beyond that, forgetaboutit. I have no interest is giving money to the hospitals, doctors and drug companies much beyond those basics.
    A nursing home? No way. Just take me out back and shoot me.

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  8. mary says:

    Pete — the topic really was not about health insurance since it does not pay for nursing homes…. My father had the best health insurance…

    But you answer still would work at saving the government some money!! But leave a good note so no one goes to jail for your death.

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  9. phahn50 says:

    this is one of those terrible choices that sounds bad, but we would probably all seriously consider “spousal refusal”. The situation: you are retired and your spouse suddenly needs long term care. You can spend down all your retirement savings till you qualify for state aid for the poor or you can go the “spousal refusal” route. If you spend down all your retirement savings, then you are desperately impoverished for the last years of your life and a burden on your children (if you are so fortunate).

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  10. Mervel says:

    But that won’t happen Pete. The fact is if you get really sick you will first go to the hospital. If you are old and unable to go home they will send you to re-hab from re-hab you will be sent to long term care. They will then use all of your assets to pay that tab, then you will go on medicaid who will pay your remaining years until you die.

    Anyway the system is broken and I have no problem with people protecting some of their assets in this case.

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  11. Pete Klein says:

    First, sorry for the misspellings in the earlier post.
    Mary, sorry for including health insurance into the nursing home mix. I guess I’m one of those liberals who is wildly against just about everything when it comes to any form of the current health care landscape. All I see is doctors, hospitals, drug companies, nursing homes and lawyers all in cahoots to make money.
    When they say it’s not about money, I ask, “Then why do you want more and more.”
    Read in the Post Star today about a young man, paralyzed since 3, who would like to die. Hospital says he must be depressed and needs mental therapy for a year before they consider his request to turn off the ventilator. Of course he is depressed. He can’t do anything for himself. Of course they want to keep him alive. If he dies, the cash stops flowing to them.
    If you don’t have the right to die, you really don’t have the “Right to Life” because life without choice is takes away free will and you might be better off being a horse. They still shoot horses to put them out of their misery. Humans? Suffer. It’s good for you and we want your money.

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  12. Mervel says:

    The bizarre thing is that many of those actors pete are not making the big bucks. Nursing homes are barely making it many are closing. Hospitals are not in great financial shape. Doctors do “ok” but your general internist or family doctors do not make that much for the training they undergo and the hard hard stressful work they face. Yes some of the specialists I think make over the top dollars.

    But the groups that seem to be really doing well are the drug companies and the health insurance companies.

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  13. Bret4207 says:

    Mary, could you please explain what is “just plain wrong” about expecting people to take responsibility for themselves and their families? I’m not talking about insurance or Medicare or anything else. I’m talking about the idea of abandoning your spouse simply because you don’t want to accept responsibility for them.

    BTW- I’m with Pete on this. The last thing I want to be is a burden on my family, much less on my neighbors.

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  14. phahn50 says:

    so Bret – you are going to take your spouse out back and … if your spouse needs long term care, so you wont have to spend all your money and become a burden on your family?

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  15. Bret4207 says:

    Nice. No, I’ll do whatever I can to take care of her or my kids. If I lose my farm, so be it. If it’s me, I’d probably solve the problem for them long before it got that far.

    I fail to see the point some of you are trying to make. Are you saying it’s alright with you for people to just dump their loved ones on your back and walk away? I can understand the cost objections from hospitals and nursing homes, but some seem to think it’s fine to simply abandon your responsibility entirely.

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  16. phahn50 says:

    I think the point is that this isnt as simple a decision as it looks. Your choice may be whether you want to be a burden on society or a burden on your family.

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  17. mary says:

    Bret4207 : abandoning your spouse is just a legal term. No one is abandoned except in paper. My father had money for some months on the nursing home. He had to go on medicaid to remain there. It was pretty intense care — I can tell you he had needs beyond any home care, including amputations.

    So, you are wrong on the abandonment part. He owned a small cape cod on 1/4 acre built in 1950 — he paid 11,000 for it. He worked for 30 years on the highway and had Empire (state) insurance that only paid for hospitals not nursing home. My mother would have been turned out of the house when the cash ran out. That is the point you seek a lawyer.

    It is not personal “abandonment”. It is what you do when you don’t want your spouse to have to relocate out of the area or be homeless in their hometown. My mother wanted to stay near the nursing home, of course and drove there daily and took care of many of his needs, like feeding and laundry. She was a nurse before retirement at age 65. It is hardly abandonment. You can’t expect someone in their 80’s to care for someone who has Alzheimers, strokes, diabetes, MSRA, and then no legs. So maybe that is what you need to understand about some of the patients that cannot be cared for by their families.

    That is why you are wrong about it. And the articles written about the rich people doing abandonment can not really describe the real problems the middle class is facing without planning for a health catastrophe. Maybe my parents should have taken their pensions and bought long term care insurance … but by the time he was sick it was really too late to do that.

    If you want to cover yourself for this, then you need to get the long term care insurance. Most people cannot afford it. It is cost prohibitive for most people on smallish pensions.

    I am not in favor of the rich cheating the system. But Medicaid is needed by the elderly middle class in some cases.

    Hopefully, I will remain healthy or just suddenly drop dead. But I could be facing the same thing as my father.

    BTW, when you go on Medicaid for this reason, the government takes you assets except the house and something like 75k if the spouse is still alive.
    If there is a pension, they cash it in. My father’s pension was taken from my mother as a result. She at least had a roof over her head.

    I do not think my father was an unusual case. I have spoken to other people in the same type of situations. One person did not consult a lawyer until after he lost his house and had to rent a house trailer. He had been a manager at a manufacturing book publisher and was laid off before his wife became critically ill. He did not get her on Medicaid until he was actually homeless.

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  18. Bret4207 says:

    I stand corrected, I was under the impression you were basically dumping your spouse off at a nursing home or hospital and vamoosing. I took that idea from Brians line- “Because of the way Medicaid works, families have a huge economic incentive to literally abandon — at least financially — their loved ones.”Literally abandon”. That stuck with me.

    My inlaws are on Medicaid, have nothing but their home and Social Security. MY FIL was a self employed autobody man, my MIL a part time typist. He had a stroke, followed by many, many more strokes. He’s been unable to move anything on the left side of his body for more than 20 years. Then Alzheimers set in. He’s not terrible, but he’s not good either. My MIL is recovering, we hope, from pancreatic cancer. They still care for each other, have family and neighbors that help out. They plan on selling the house and moving to an assisted living home in spring if the market is better. We’ve tried to get them to move up here with us (150 miles away) or in with another sister but they won’t do it. We send money, help where we can and we all get by. So while I may not have your exact situation I have a fair idea of how much elder care is. My mother is also recovering, (we hope), from double lung cancer and a small stroke. Her husband is in moderately good health and cares for her. Again, we do what we can but they’re a long ways from here.

    My point is you and your parents made a choice. You didn’t abandon your spouse, you abandoned your responsibility to care for them and put it off on the taxpayers of NYS. If you feel that’s okay, fine. I understand. It doens’t make it right, just understandable. Personally, if I did that I wouldn’t be able to show my face in the nursing home for the shame. But that’s just me. I’m still hung up on things like character and responsibility. I’m sure it’s a tough choice and I regret that things are the way they are. I still don’t see anything “right” about doing it. That people are forced by circumstance to have to make choices like this just solidifies my opinion that gov’t supplied healthcare is a larger problem than ever. More of the same isn’t going to fix it.

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  19. Pete Klein says:

    When people argue hospitals and nursing homes aren’t doing well, it’s like saying GM wasn’t doing well until it got a bailout.
    When I picked on them, I wasn’t picking on them as companies. I was talking about their presidents and CEOs. Think of the US Government. It is wildly in debt but our lovely leaders are doing just fine.
    On the so called abandonment issue – people do whatever they need to do to survive. I would suggest the problem is the result of unintended consequences. We have figured out ways (the marvels of modern medicine) to keep people alive. By alive, doctors and the law mean “has a heart beat and is breathing.” In earlier days, many who are in nursing homes now would have died of natural causes.
    I just don’t understand why people who claim to believe in a next life are so afraid of dying. I am not suggesting we take anyone out back and shoot them. I am just suggesting we have become slavish to the idea of keeping people alive no matter the cost in money or the quality of the person. The law doesn’t ever care what the person might want.
    Forgive me for thinking the patients are viewed as cash cows to be milked for as long as medically possible.

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  20. Bret4207 says:

    Very true Pete, and what I fear may one day become true is even more distressing. We get some sort of wonderful healthcare program from gov’t and eventually the costs of keeping the barely “alive” become a great burden. How long till some bean counter proposes euthanasia? Call it a death panel or call it simple economics, giving over power to gov’t eventually costs you everything.

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  21. Pete Klein says:

    Bret and all,
    Have you ever wondered why Medicare part B wasn’t Medicare part A?
    If I had a choice, after I stop working if that ever happens, I would prefer getting B for free and paying for A if I had the choice.

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