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Charles's avatar

Would you work the system? Medicare for Millionaires?

Asked by Charles (4815points) January 15th, 2012

People can protect their assets, millions of dollars, big time real estate, etc by making those assets ineligible to be counted as assets and qualify for Medicare – Medi-Cal (the government funds for paying for nursing homes). There are two tests, an income test and an assets test which a person must pass in order to qualify. If a wealthy person gifts away money (to heirs, friends, children, whatever) soon enough (typically five years) those aren’t counted as assets. A primary residence isn’t counted either (though there’s a risk a lien could be placed on it after death).

By obtaining a long term care policy a person can pick the nursing home they want to be in and when that policy expires (if it expires) then medi-cal picks up the rest of the tab. Not sure if a person would be forced to move to a cheaper SNF at that point as long as the initial home was a medi-cal home.

So, a realistic scenario in a nursing home is, one guy who has a net worth of $600K including a $250K home has to spend down almost $350K to the nursing home because he doesn’t have LTC insurance and he didn’t do any medi-cal planning. Meanwhile, the guy in the next room over has [had] a net worth of $3.8M including a $1.9M home but the government is paying his nursing home costs because he maneuvered his assets in such a way as to not make them countable and his home is not in his name [anymore] so it is protected from liens.

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5 Answers

zenvelo's avatar

I don’t know all the ins and outs of moving assets in order to have the Medicaid pay for nursing home care. But someone worth millions is not going to want to be in a facility that is covered solely by Medicare, they’d want to be in something a bit nicer.

And the cost of long term care insurance, if the policy is started by age 60 or so, is much more affordable than the exercise of moving assets around, and the chance that you have done so sufficiently in advance to qualify.

Besides, you can still use Medicaid as a supplement even if you have all your assets.

john65pennington's avatar

I have read all of the above and the word FRAUD sticks out pretty strong.

If these people had put their criminal minds to something productive for the country, maybe, just maybe, our economy would not be in the shape it is in.

I know the above happens everyday, but its so wrong to the honest people that truly deserve what the government is offering, without going around or using the system for their own benefit or their families.

Good question.

Charles's avatar

the word FRAUD sticks out pretty strong…....their criminal minds…

It is perfectly legal. (By the way, one of my favorite internet searches is the phrase “Perfectly Legal”.)

dappled_leaves's avatar

A similar question was asked here maybe a year ago. I’ll repeat what I said then – as a Canadian, I expect millionaires to use our government-run healthcare. We all pay taxes towards it, and it is generally seen as bad manners for the rich to “jump the queue” by getting private healthcare elsewhere. You should see the stink we put up when anyone in government chooses to have an operation outside of Canada.

gondwanalon's avatar

YES! I would work the systems when I get old. After all the system milks us continually all of our working lives.

Life is tough and then you die. Most folks would want to get the best possible living conditions that they can for their last few years on Earth. I must admit that that includes me also.

A lot of old folks worked hard all their entire lives. They are hard working contributors to our society. If a person has a couple million dollars in investments and also has good elder care attorney then what is wrong if he/she protect his assets? Why should they just hand over what they have saved and paid taxes on and then have to live in a less than desirable living situation?

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