Some horrible news from the Center for Long-Term Care Financing about Medicaid and how a New Jersey court has upheld one of the various ways that adult children and their lawyers are scamming the system, eroding personal and family responsibility, and costing taxpayers huge amounts of money:

“The New Jersey Supreme Court ruled . . . that a guardian for a 90-year old woman who is now in a nursing home may give away some of the woman’s assets in order to qualify for Medicaid, rather than requiring the guardian to ‘spend down’ those assets on the nursing home until the woman qualifies for Medicaid.” (Source: Elder Law FAX, August 9, 2004, http://www.tn-elderlaw.com/prior/040809.html)

Who gets this windfall give away at the expense of taxpayers, Medicaid and the poor? You guessed it. The “guardian” and beneficiary of the transfer is the Medicaid recipient’s son, who will share the booty with his brother. Care to speculate whether these siblings will be in the market for private long-term care insurance for themselves any time soon?

Here’s how Hal Daub, the new President and CEO of the American Health Care Association described the problem in a September 3, 2004 letter to Senate Finance Committee Chairman Charles Grassley:

“In the In Re Keri case, the court held that an adult child of an incompetent patient in a nursing home could transfer to himself and his brother all or part of their mother’s assets in order to hasten her eligibility for Medicaid benefits, thus effectuating a decision their mother would have made if she had been competent. Further, the New Jersey Court agreed with New York case law stating that there exists ‘a presumption in favor of approving Medicaid spend-down proposals on the ground that a reasonable and competent person would prefer that the costs of [his/her] care be paid by the state, as opposed to his family.’ AHCA believes that the New Jersey case and New York law, if adopted by more states, will have the capability of promoting inappropriate use of state funds, which will result in a faster depletion of Medicaid monies that would otherwise be used for beneficiaries in need.”

More details are available here. The next time you hear or see one of those ads from attorneys challenging ?the myths about Medicaid and nursing homes,? remember that these con artists and their accomplices are ripping taxpayers off and helping to destroy what is left of personal freedom and responsibility in our society. Oddly, children of ailing parents actually believe they have an entitlement to an inheritance, regardless of what their parents need and deserve.