Back when the Christian church and extended families were accorded a more prominent place in American society, families would take care of their own members when they were sick and unable to take care of themselves. And for those in need who did not have families or for families who did not have the means to care for their own, the church stepped up and helped. It was a process that maintained family ties and built cohesion in the community.
Then people got too busy, and someone decided that government could do a better job of taking care of people than the local community. Thus, Medicaid was born.
Now anyone who has taken an honest look at history realizes that governments do very little as well or as efficiently as private citizens and private organizations. The government generally goes with a one size fits all approach that is cumbersome, slow, inefficient, and expensive. And the government doesn’t pay for their waste. The government just raises taxes on private citizens who, if they were doing things themselves, would do the job much more efficiently, economically, and effectively.
A couple of years ago, Virginia was enticed by the federal government to expand Medicare to cover more poor Virginians. That seems like a great idea until you realize that the federal government’s financial enticement to the state only lasted a couple of years. Now we can’t reduce the number of people on Medicaid, but we can’t pay for it either. Therefore, taxes have to go up. So not only does Medicaid serve more people, but it creates more poor people – who will also need Medicaid – by unfairly taking money from otherwise self-sufficient people to pay for other people’s healthcare and by taxing small businesses out of existence, which puts their employees out of work as well. It’s a wicked, downward spiral that provides further evidence that the government cannot do much of anything as well as the private sector.
One really does have to be poor to be eligible for Medicaid. For example, to have Medicaid pay his/her nursing home bill, a person must reduce his/her assets down to a maximum of $2,000, with marginal exceptions for a private residence when a spouse or dependent children still live there. They are not allowed to just give it away, because after the patient and the spouse die, the government will come after the estate and force the heirs to repay any money that the Medicaid recipient left them or even gave to them years before becoming eligible for Medicaid. The government wants to recoup what they spent on the patient’s nursing home care.
Medicaid is a bad deal for anyone who actually has much of value such as a car, a home, their mother’s jewelry. There will be no inheritance except for what is left after the government recoups their costs.
Virginia did adopt a law about fifteen years ago that provides a way to escape some of the assault on a recipient’s “estate” no matter how small. It’s called Virginia’s Long-Term Care Partnership Program. The legal language is found in Virginia’s Administrative Code (14VAC5-200-205). I don’t suggest you look it up. A licensed insurance agent has to take an eight-hour course to understand it, never mind someone just trying to make sense of it.
To illustrate, imagine a person who buys a “qualified” long-term care insurance policy that has a maximum benefit of $100,000. (The average nursing home costs $125,000 per year, and the cost goes up about five percent per year.) When the patient enters a nursing home, the money for the patient’s care has to come from the policy first. After the benefit has been exhausted, Medicaid kicks in. The difference here is that because the partner policy paid $100,000 toward the patient’s care, the patient only has to reduce their assets down to $102,000 instead of only $2,000. Since the patient provided $100,000 toward their own expenses through a “qualified” plan, the state considers that the money from the policy replaces the assets that would otherwise be seized by the government to pay for care.
It is complicated with lots of ins and outs. Anyone considering such a move must consult a licensed agent who is also trained in long-term care to figure out how and whether such a plan would help them keep the government out of their family’s pockets.
This all sounds complicated because government always complicates things. Imagine how much simpler life was when families, with support from their churches, took on themselves the responsibility for their own. It was certainly more relaxing than having the government messing up the process and spending far too much in the process.
Steve “Doc” Troxel, Ph.D.