Saturday, July 08, 2017

People with million dollar nest eggs wind up on Medicaid if they are in nursing homes with dementia long enough

In Massachusetts, a woman retires with $600,000 in savings, inherits a house through a trust, sells it, moves to an apartment, at age 76, in 1998.  In 2016 she dies at 94, after about three years supported by Medicaid in a nursing home.

A New York Times story in Business Day by Ron Lieber Saturday gives a tale of how increased longevity, especially for women, in increasing the likelihood of dementia and how a very comfortable nest egg can disappear.  The link is here.  But all of this follows years of corporate employment culture (until about the time of 9/11) where it had become acceptable and expected to “retire” after 55 with corporate downsizings and mergers (as happened with me).  The narrative also covers the filial piety of her adult children. All of this despite having long term care insurance and lots of retirement pros helping. (Is that the kind of job I was supposed to take?)

This is one reason why Medicaid cuts proposed by the GOP have become controversial.  Medicare doesn’t pay nursing home costs (except for short stays in skilled nursing facilities when you will get better), but Medicaid pays for it when assets are spent down enough – and the rules for giving away assets to adult kids to qualify for Medicaid have understandably gotten much stricter in the past 15 years.

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