The Ethics of Medicaid Planning

Why Medicaid Planning is Ethical

If you or a loved one become a client of the Farr Law Firm, you may rest assured that everything that we do is absolutely, unquestionably, 100% legal and ethical. Attorneys in general have the highest ethical rules of any profession, and as a member of NAELA and a Certified Elder Law Attorney, we and our Elder Law colleagues subscribe to the NAELA Aspirational Standards for the Practice of Elder Law, which articulate ethical standards that raise the level of practice above the floor established by the basic rules of professional conduct.

The “magic” that Elder Law attorneys are able to perform is not based on sleight of hand. We attorneys do not “hide” assets. On the contrary, we provide total disclosure of everything we do to the relevant Medicaid agencies when we file the Medicaid application, as failure to provide full disclosure of all assets and all transfers would be a federal crime.

The ways that Elder Law attorneys are able to shelter and protect assets may seem like “magic” to you, but that’s only because you don’t possess our legal knowledge and experience.  It’s the same with magicians — the magic only appears to be “magical” because you don’t know how the trick is done.

Just as magicians study and train and practice for years to become good magicians, Elder Law attorneys also study and train and practice for years to become experts in our field. To become a Certified Elder Law Attorney, attorneys must:

  • Spend an average of at least 16 hours per week practicing elder law during the three years preceding their application
  • Must handle a minimum of 60 elder law matters, in 13 different areas of elder law, during those three years
  • Participate in at least 45 hours of continuing legal education in elder law during the preceding three years
  • Submit five references from attorneys familiar with their competence and qualifications in elder law; and must pass a full-day certification examination (one of the most recent exams had a 19% pass rate)

Done with respect for the law and compassion for the elders that are being protected, Medicaid planning is not only ethically justified — it is often imperative to the individual’s quality of life.  Within the United States, no one yet has a right to basic long-term care.

Paradoxically, we do give seniors virtually universal coverage for certain types of health problems. Treatment and surgery for health conditions such as heart disease, lung disease, kidney disease, bone disease, cancer, and hundreds of other medical conditions will not impoverish most seniors because Medicare and private health insurance cover these diseases, and we all pay our fair share for such coverage.

But Medicare and private health insurance does not cover chronic illnesses such as Alzheimer’s disease or other type of brain diseases causing dementia or loss of the ability to function independently. For these types of diseases, seniors must become officially “impoverished” under federal and state Medicaid rules in order to gain access to basic long-term care.

Is this an ethical social policy that arbitrarily distinguishes among these different types of diseases? Is this an ethical social policy that provides full coverage for most diseases but forces elders with certain conditions to become impoverished in order to gain access to basic long-term care? Is it a surprise to anyone that most seniors will want to look for legal ways to preserve the efforts of their lifetime in order to protect themselves from this unfair and arbitrary social policy?

Ethical Medicaid planning is not about “cheating” or “gaming” the system; it is about preserving a client’s dignity and self-worth in the face of an unfair and arbitrary social policy. The ethical scandal is America’s public policy, not the desire of seniors to avoid poverty.

For seniors over the age of 65, Medicaid has become equivalent to federally-subsidized long-term care insurance, just as Medicare is equivalent to federally-subsidized health insurance.

Congress accepts the realities of Ethical Medicaid Planning through rules that protect spouses of nursing home residents, allow Medicaid Asset Protection via the purchase of qualified Long-Term Care Insurance policies, allow the exemption of certain types of assets, and permit individuals to qualify even after transferring assets to a spouse or to a disabled family members or to a caregiver child.

To plan ahead and accelerate qualification for Medicaid is no different than planning to maximize your income tax deductions to minimize your income taxes.   It is no different than taking advantage of tax-free municipal bonds.  It is no different than planning your estate to avoid estate taxes.

For two additional and more lengthy articles on why Medicaid Planning is ethical, please see:

Medicaid Complexity

Medicaid eligibility rules are extremely complex and confusing, and impossible to understand without highly experienced legal assistance.

– What the Courts Say
The United States Supreme Court has called the Medicaid laws “an aggravated assault on the English language, resistant to attempts to understand it.” Schweiker v. Gray Panthers, 453 U.S. 34, 43 (1981).

The United States Court of Appeals for our own Fourth Circuit (just below the U.S. Supreme Court), in a case arising out of Virginia, has called the Medicaid Act one of the “most completely impenetrable texts within human experience” and “dense reading of the most tortuous kind.” Rehab. Association of Virginia v. Kozlowski, 42 F.3d 1444, 1450 (4th Cir. 1994).

– What You Can Do
Get help! Without proper planning and legal advice from an experienced elder law attorney, many people spend much more than they should on long-term care, and unnecessarily jeopardize their future care and well-being, as well as the security of their family.

– What We Do
The Farr Law Firm is an Elder Law and Estate Planning firm dedicated to helping protect seniors and their families by preserving dignity, integrity and family unity.

We help our elderly clients and their families with issues involving long-term care. We help clients find, get, and pay for the best possible long-term care; if a nursing home is the only option, we help clients find and get the best possible care while preserving and protecting their assets, including their homes, from the forced liquidation that is typically required in connection with entry into a nursing home. When needed, we complete the complex documents required for entry into a nursing home and for Medicaid. Please click here for more information.