Pitfalls of Medicaid, long-term care planning

Health care costs continue to be a top retirement concern, yet few Americans know about their options and the potential pitfalls.

Instead, there are many misconceptions about long-term care.

A case in point: Currently about 42% of financial advisers say their clients are considering giving away their assets to their children so they can qualify for Medicaid and avoid paying for a nursing home, according to a survey of financial advisers by Nationwide Financial released Friday.

"Medicaid was created to help low-income Americans and not to supplement middle-class and affluent families," says John Carter, president of distribution and sales for National Financial.

It's not against the law to give away assets to qualify for Medicaid, and Carter says there are some circumstances when such steps are appropriate.

But many Americans do not understand the consequences of relying on Medicaid such as the fact they will be giving up control of their long-term care planning. That flies in the face of another finding of the Nationwide Financial survey: Many clients tell their advisers that maintaining control is the most important aspect of retirement health care planning.

"I always tell parents that if you give the money to your kids you have to understand that you are irrevocably parting with it and you may never see it again," says K. Gabriel Heiser, an elder law attorney and author of How to Protect Your Family's Assets From Devastating Nursing Home Cost: Medicaid Secrets.

And they must comply with Medicaid rules. For example, the nursing home they would like to stay in may not accept Medicaid patients. Although Medicaid programs vary by state, few will pay for home health care. And a third of doctors do not accept Medicaid patients, according to an August study by Health Affairs.

Married couples need to know that Medicaid rules provide some protection to the spouse who is healthy and still at home while their partner is in a nursing home. Among other things, they can keep a certain amount of money and their home. But it's a modest amount and may not provide them the lifestyle they expect, Carter says.

Options besides giving away assets to qualify for Medicaid include:

• Paying your own way. Wealthy people who want to retain control of their finances may decide to foot the bill themselves. Experts say that if someone has several million dollars in assets, they can afford to pay for nursing home care given that the average stay is less than three years.

"If you've got the money to pay for it, then that's where it should go," says Jim Miller, the Savvy Senior syndicated columnist. "If not, they are using the system to protect their money, pass it on to their kids, and then the taxpayers pick up the cost."

• Buying long-term care insurance. These plans often provide other options, such as home health care. The one drawback of this is somebody might put a lot of their savings into something that they may never need.

However, some insurance companies can add a long-term care insurance rider to life insurance policies. Then if the policyholder never needs long-term care they still can provide income to their heirs.

• Set up a trust. Those who want to protect their assets also can consider setting up an irrevocable trust instead of giving money to their children. And there are some irrevocable Medicaid annuities that provide an income stream.

Long-term care planning is clearly complicated and it's not easy to find the best option. Although Heiser's book helps consumers understand the rules, even he says that "it is definitely not a do-it-yourself project."

Source: USAToday.com
 

Government Programs Have Become One Big Scammer Fraud Fest

Amongst all the polls about how various groups view their prospects going into 2014, I’d like to see one polling people who habitually defraud the government.  I bet it would be off-the-charts positive, as they look for a banner scammer year.

 

We are being inundated by news stories of fraud perpetrated against numerous government programs.  The feds themselves put Medicare and Medicaid fraud at approaching 10 percent of the programs’ budgets, or about $100 billion a year for the two programs.  And I’m betting that’s on the low side.

And yet instead of solving this problem, President Obama harangues the country, and especially Republicans, for being unwilling to throw even more money at the federal government’s Fraud Fest.

Let’s review some of recent stories.

Medicaid — There’s so many Medicaid fraud stories it’s hard to choose the “best.”  Perhaps the most egregious, though far from being the most expensive, is a December Wall Street Journal story explaining that “the Manhattan U.S. attorney accused 49 current and former Russian diplomats of participating in an alleged scheme that garnered nearly $1.5 million in fraudulent Medicaid benefits.”

The diplomats are charged with underreporting their incomes so they could qualify for Medicaid.  The story says that over the last decade 92 percent of New York-based Russian diplomats’ childbirths were paid for by Medicaid, a program created to cover poor U.S. citizens.  So highly paid foreign diplomats are allegedly having babies at U.S. taxpayer expense.

Several years ago the New York Times ran a series on Medicaid fraud wherein one New York City official estimated that about 40 percent of the city’s Medicaid expenses were fraudulent. And yet the problem still isn’t under control.

Long Term Care — While we’re on Medicaid fraud, let’s include Medicaid’s program to cover poor seniors in nursing homes—at least, they’re supposed to be poor.  American Enterprise Institute adjunct scholar Mark Warshawsky recently wrote in the WSJ that Medicaid pays for about two-thirds of the elderly’s long-term care costs.  That money is meant for poor seniors, but many seniors in nursing homes have significant assets in homes—up to $802,000 worth in some states—cars and savings.  Indeed, there is a legal specialty known as “elder care attorneys” who help families hide grandma’s assets so she can qualify for Medicaid.

Medicare — Last week the Miami Herald ran a story about a South Florida woman found guilty of Medicare scams costing taxpayers $20 million.  In December a Houston doctor was charged with defrauding Medicare of $158 million, involving false claims for mental health treatments.

Earlier stories explain that Italian, Russian and Nigerian mobsters have moved in to Medicare fraud because it’s so easy, lucrative and, if you get caught, lighter jail time.  That’s why when CBS’s 60 Minutes covered Medicare fraud a few years ago one of the criminals who had been caught boasted he had been making $20,000, $30,000, $40,000 a day!

Unemployment — Obama and the Democrats are pushing hard for an extension of long-term unemployment benefits, making one wonder if they just like to throw away taxpayers’ dollars.

The U.S. Department of Labor recently released a report claiming that there was some $7.7 billion in “improper” unemployment benefit payments in 2013.  Among the most fraud-ridden states, Nebraska wins with an 18 percent improper payment rate, followed by North Carolina (17.5%), New Jersey and Louisiana (16%), Maine and Ohio (14%).

Why are Republicans and conservatives heartless for not wanting to expand these fraud-ridden programs, while Democrats are compassionate for letting your hard-earned tax dollars be stolen by the fraudsters?

Source: Forbes.com

 

New York Medicaid Fraud Attorney Explains The Investigation Process & What Police Might Do

New York Top Asset Protection Attorney

The College Degrees With The Highest Starting Salaries

The final results are in for the class of 2013: Bachelor’s degree graduates are earning salaries that are 2.6% higher than they were in 2012. The average: $45,600. Though engineering majors still earn more than grads with other degrees, with an average starting salary of $62,600, their compensation dipped slightly from 2012, down 0.1%. Per usual, humanities and social science majors had the lowest starting salaries of seven majors tallied, at $38,000, but their paychecks increased more than any other discipline since 2012, up 2.9%.

The data come from the National Association of Colleges and Employers (NACE), a non-profit group in Bethlehem, PA that links college placement offices with employers. NACE gets its information from a compensation management firm in Topanga, Calif., called Job Search Intelligence, which pulls numbers from some 400,000 employers and from the Bureau of Labor Statistics and the Census Bureau. In September, I last reported on NACE’s 2013 salary survey, which included data collected through April. This latest survey is a final tally with updated numbers from November.

Computer science majors make the second-highest salaries, at $59,100, but like engineers, their salaries slipped a bit from 2012, down 0.2%. The third-highest-earning major: business, at $55,100. That salary is up 2.3% from 2012, the second-highest jump after humanities majors.

This chart shows the average salaries in each discipline with the change since last year:

While the starting salary news is good for most grads who have found jobs, the overall employment picture is tough. NACE runs an employment survey from February through the end of April that asks students whether they have found work. In 2013, only 29.3% had landed jobs prior to graduation. NACE also follows up post-graduation with a survey that asks recent grads whether they have landed a job. In 2011, the last year it compiled figures, NACE reported that 59% of grads had found jobs 6-8 months after graduation, meaning more than 40% were unemployed. This year that figure may be higher. In April, the Associated Press reported data it had gathered from government sources showing that 53.6% of the class of 2012 were jobless or underemployed 10 months after graduation.

 

Though NACE doesn’t do a post-graduate survey showing employment rates by major, it released a survey in November showing which majors in the class of 2013 had gotten at least one job offer. Not surprisingly, the highest percentages roughly match the high compensation in the salary survey. Some 69% of computer science majors had gotten offers. Economics majors came next, at 62%, with accounting at 61% and engineering at 59%. Not surprisingly, liberal arts majors fared worse with 40% of history majors getting offers, 33% of English majors, and at the bottom, 28% of visual and performing arts majors.

Source: Forbes.com

Speculations on Medicaid Fraud in the New Year

Happy New Year and welcome to a new era in American Society.

The year 2014 has ushered in immense changes in government policy, with the implementation healthcare coverage for Americans nationwide under the Affordable Care Act, or Obamacare. 

One significant consequence of Obamacare, foretold in official channels yet overlooked by many Americans until this past fall, is a spike in Medicaid enrollment.  Upon closer scrutiny of healthcare.gov, individuals and families across America have discovered themselves unable to include supposedly affordable healthcare in their already stringent budget.  The minimum monthly payment outlined in Obamacare’s Bronze plan (the lowest amount outside of a Catastrophic plan, provided for US citizens under the age of 30) is still over $300, a crippling figure for the millions of Americans still recovering from the 2008 recession.

The government’s solution has been to offer subsidies to make up the difference in costs or, as a simpler alternative, to expand Medicaid coverage to those with income that falls within 133 percent of the US poverty line.  Medicaid, once an option of last resort, has become a great equalizer.  The percentage of new enrollments who have elected Medicaid over Obamacare has been astronomical, with 82 percent in Kentucky, 87 percent in Washington, and 64 percent in New York State favoring Medicaid.

As an attorney who specializes in Medicaid fraud, I can only shake my head and speculate at the likely influx on my caseload come 2015.  Medicaid officials promise a new, more stringent program to prevent fraud.  Given the crackdown that has been in place the past three years I do not doubt their voracity.  However, the system as it stands is full of holes and oversights that enables fraudsters to thrive and erroneously persecutes low-income clinics or Ambulette services that have served their patients for decades. 

Can we bring balance to this system in the New Year? Or will Medicaid continue its cycle of charitable entrapment?   With millions of newcomers flooding public healthcare, human error is unavoidable; thousands of Americans will misreport their medical records, or miss deadlines to file their proof of income.  The government will be forced to either re-calibrate what constitutes Medicaid fraud, or fill the courts years into the future.  Only one thing is certain as we learn alongside our national leaders – adequate legal counsel will become a necessity for all.