In her article, “Beware of This Financial Advice About Aging Parents,” Carolyn Rosenblatt, a nurse, practicing attorney and an expert on elder care, warns that advising an elder to purposely become indigent in order to receive Medicaid benefits is an unwise choice for several reasons. Her blog, Aging Parents, is featured on Forbes.com.
First, she points to the precarious state of Medicaid due to county, state and federal cutbacks. “One state has already eliminated the program entirely for some of its citizens and many other states are slashing Medicaid mercilessly,” she writes.
Consequently, benefits are limited and might only pay for care in a nursing home, an option neither the senior nor his or her family may desire, Rosenblatt states.
Yet there are some instances, she relates, when “intentional impoverishment” to qualify for Medicaid may be a suitable alternative. Those would include such a high degree of cognitive impairment on the part of the client in question that long-term care in a nursing facility is required. It may also make sense if the family’s funds are so limited that it is impossible to keep an aging parent in the home.
However, Rosenblatt warns against recommending this route if the children of your client simply want to protect their inheritance.
She writes: “It does not make sense when you are trying to get a parent on Medicaid to keep a parent’s assets so the kids can inherit them at the sacrifice of quality of life for the aging parent.”
Her blog entry goes on to give some pointers to family members who may be considering this option, advice that applies to senior advisors as well:
- Ask the client what he or she wants in the long run. The ability to stay at home and leave an inheritance to children and grandchildren may not be possible. Some clients may not have sufficient assets to do both.
- Figure out the cost of care giving at home. There may be services available in the community that allow an aging client to live in their house, such as adult day care and meals-on-wheels. Investigate and see what the costs are.
- Compare the cost of home-care services with a client’s income and assets. In some cases, the cost may be beyond what the client can pay and there are no other resources on hand. If so, Rosenblatt advises getting legal advice about qualification for Medicaid. Conversely, if they have the resources and the ability to live at home, then they should be permitted to do so.
- Be realistic about expectations concerning inheritance. No one, says Rosenblatt, is “entitled” to an inheritance. Those assets belong exclusively to the parent–and your client-to do whatever they wish with them, including paying for in-home care. She points out that without long-term care insurance, monies may be depleted if the care lasts for an extended period of time.
Rosenblatt strongly recommends that the needs of the aging parent, your client, come first, before any inheritance they might leave to their children.
For on the cost of health care for seniors, see: