Tools to balance the fight between health care costs and bankruptcy?

[pb4uski]

Quote:

Originally Posted by Emerson11 Is OP asking whether there are legal ways to get someone else to pay for Dad's care so that his family can get an inheritence? I know some people game the Medicaid system for that purpose, but I suspect folks don't usually admit such a goal. Someone has to pay, shouldn't it be the person receiving the care?

No, OP is not asking for Dad at all.

OP is asking whether there are legal ways to get someone else to pay for their care so that his heirs can get an inheritence?

I agree with you on the last part which is why I refused to offer the OP any advice.

[MarieIG]

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Originally Posted by CRLLS I am late to this discussion but will add one or two points. The first is that a family member might be able to care for the elder for a while before around the clock medical care is necessary. I know it is very hard to do, but it is a way to preserve the $$ as long as humanly possible. My 2nd point is that if somebody thinks that LTC facility is expensive, try hiring 24/7 home care. Way more expensive than LTC. In LTC, typically the home is the last thing to be sold off for care. The costs of maintaining that asset while in LTC is in addition to the LTC fees.

Been there, done that, no regrets. (This was in addition to daily care provided by family.)

[sebvad]

This was a thread that sparked a great deal of interesting discussion.

To those that provided insightful commentary - thank you for your insight.

To those who that responded with a breathtaking level of judgement based on inferred scenarios leading to morale righteousness - this is why i hate the internet.

[target2019]

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Originally Posted by razztazz Ahem. Wealthy People wrote the tax codes. The end

The secret of what troubles many. Thank you for the reminder!

[target2019]

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Originally Posted by sebvad This was a thread that sparked a great deal of interesting discussion. To those that provided insightful commentary - thank you for your insight. To those who that responded with a breathtaking level of judgement based on inferred scenarios leading to morale righteousness - this is why i hate the internet.

Sometimes I need to filter noise, snark, and so on. Sometimes there are tools to help one do that with little effort. Good luck with the search.

[audreyh1]

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Originally Posted by marko Here's the kicker: they told me that they hadn't had a self pay patient in over 10 years and we're trying to figure out how to accept payment. Took them over a week to figure out how I could pay them. Everybody there was on Medicaid. To make it worse, despite his top of the line insurance, a therapist took me aside and strongly encouraged me to find a way to get him on Medicaid. "I could do so much more for him if he was on Medicaid; I could give him so much more time". He wasn't able to do that due to his income and assets but I found the whole thing interesting.

In that scenario couldn’t you come to some other financial arrangement with the therapist?

[pacergal]

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Originally Posted by sebvad Original Poster here. So a few things stand out to me from the responses: 1) I may not have been clear - my father in laws scenario is just fine. I'm not looking for advice for his scenario, and we have elder law and estate planning legal resources plugged into this for quite some time here. I noted this as a scenario that has opened our eyes to something that we didn't quite understand, but know is coming for us, which bring us to the second point 2) The ask is what legal instruments are available are for us - not my father in law - for future scenarios where we have sufficient money to meet their requirements - but desire to take advantage of - again - legal pathways for us to optimize our overall financial scenario. We are not looking to short the future care facility - but we're also not looking to give them more than the contract dictates. In my view - from what we've observed with my FIL's experience - this business model represents a transfer mechanism to siphons generational wealth away from families and to institutions - yes, there is an exchange (care in exchange for $) - and while I acknowledge that this is quiet literally the deal - I also want to give sufficient consideration to *how* that happens to be sure I'm optimizing for my family while adhering to the tenets of future care in exchange for $ (funding the minimum we are required to fund). I'm in no way interested in entering into a morale debate - I think it's fair to assume in any post there's never a full scenario/picture painted, and as another posted acknowledged, the inquiry has parallels to using existing tax laws to optimize ones tax scenario - I know of no one who willingly pays more taxes than they are required to. 3) While evaluating the above posts - it sounds like an irrevocable trust has arisen as a potential option to explore with an estate attorney. Are there other instruments that we should consider? Thank you

Definitely a consult with an estate attorney is warranted to understand all of the legalities of trying to preserve wealth, yet still pay and receive quality medical care needed.
Understanding the different levels of a CCRC for potential future living/medical expense if you go that route
Understanding exactly what an irrevocable trust entails.
All I can relate is one of my relatives had one. His spouse was unable to receive any more $ from the trust when she wanted, even though it was legally hers. Their children are unable to receive any more $ than allowed yearly, even though two of them have medical issues that cost a lot to monitor and care for. As I stated, I don't know the details, I only know the consequences of that particular relatives trust.

[pb4uski]

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Originally Posted by pacergal ...Understanding exactly what an irrevocable trust entails. All I can relate is one of my relatives had one. His spouse was unable to receive any more $ from the trust when she wanted, even though it was legally hers. Their children are unable to receive any more $ than allowed yearly, even though two of them have medical issues that cost a lot to monitor and care for. As I stated, I don't know the details, I only know the consequences of that particular relatives trust.

Yeah, sometimes trying to be too clever can backfire.

[athena53]

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Originally Posted by ncbill Yes, Medicaid rules should be changed so a couple only has to use up half of their combined resources. Essentially the same as if they went through a divorce.

I totally agree with this. It's one of the reasons I'm unlikely ever to marry again. The guys who are wealthy enough to fund their own LTC are looking for women 10-15 years younger and I'm not gonna start looking for guys in the 80+ age bracket.

[pb4uski]

^^^ Sounds like age discrimination to me.

[RetiredAt55.5]

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Originally Posted by sebvad This was a thread that sparked a great deal of interesting discussion. To those that provided insightful commentary - thank you for your insight. To those who that responded with a breathtaking level of judgement based on inferred scenarios leading to morale righteousness - this is why i hate the internet.

Good thing is that all the info was free. That's what's great about the Internet.

Take whatever you find useful, and discard the rest.

[marko]

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Originally Posted by audreyh1 In that scenario couldn’t you come to some other financial arrangement with the therapist?

I tried. Apparently in Massachusetts, it's illegal. She would lose her license.

You cannot go beyond a set amount of sessions when self paying. I was told it prevents unscrupulous operators from taking advantage of people with money.

Also you cannot have more therapy sessions than what Medicaid patients get for the same reason. "Well....if you could come up with a few hundred bucks, maybe we could work something out....". It's highly regulated and 'for my own protection' (ha!)

Any therapy my brother would have would have had to be in the facility because he was physically unable to leave at the time, so no sneaking him out for a few hours.

Believe me, short of dropping hundred dollar bills on the floor, I tried 8 ways to Sunday and I'm a big believer in 'money talks' (and my brother has a lot of money); went up and down the command chain.

Quite an eye opener at the time.

[pb4uski]

^^^ looks like this should be posted in the nanny state thread

[imnontrad]

I believe there is a "spend down amount" before he is eligible for Medicaid. If he is a veteran, he would also be eligible for care there and there is an "Aid and Attendance" benefit for those with limited means.

[Music Lover]

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Originally Posted by sebvad Which has us thinking about generational wealth protection. We're not billionaires by any stretch - but we've done ok. We'd love to be able to 'carve out' enough from a nest egg to qualify for entry into such a facility should the need arise - but 'carve out' the rest to shield/protect it to fund inheritances, charitable gifting, etc so that - again if the need arises and we find ourselves in a care facility - they don't take it all.

I'll be blunt. Don't be greedy. You have the money, suck it up and pay for your own care instead of looking for ways to hide assets hoping that someone else will pick up the tab.

[MarieIG]

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Originally Posted by pb4uski While you have a fair point, I see a big difference between someone that manages their income for ACA purposes to receive a $800/monthly or $9,600 annual benefit for a few years between ER and Medicare at 65 vs someone who gains a $120k benefit annually for 3-10 years. The other difference is that to manage income all one needs to do is to withdraw from taxable rather than tax-deferred whereas for Medicaid planning you need to set up irrevocable trusts, retitle assets into the trust, etc. Big difference IMO. FWIW, I haven't done either... I chose not to take ACA subsidies so I could do more low tax cost Roth conversions and I will not do Medicaid LTC planning either even though our heirs might benefit significantly. We've always paid our own bills and will continue to do so as long as we have money to pay them.

I reserve the right to respectfully disagree with this line of reasoning. IMHO taking subsidies from either program should be based upon genuine need. (No, we've done neither.) Obviously, YM does V.

[pb4uski]

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Originally Posted by MarieIG I reserve the right to respectfully disagree with this line of reasoning. IMHO taking subsidies from either program should be based upon genuine need. (No, we've done neither.) Obviously, YM does V.

Ok, we can agree to disagree. While I agree with you that subsidies from either program should be based on genuine need, the problem is with the way that both of those programs have been designed. While I think we agree that the ACA tax credits should have been designed so someone with wealth doesn't receive them, I think that Congress decided that it would add too much complexity to find a way to exclude those relative few situations of wealthy people getting premium tax credits.

Another nuance of a difference is that legally ACA subsidies are a premium tax credits according to SCOTUS and it is well established in the law that a taxpayer is free to arrange their financial affairs in a manner to reduce taxes (or increase tax credits whch reduces their taxes).

Quote:

"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.” ~ Judge Learned Hand (1872-1961), Judge, U. S. Court of Appeals in the case of Gregory v. Helvering 69 F.2d 809, 810 (2d Cir. 1934), aff'd, 293 U.S. 465, 55 S.Ct. 266, 79 L.Ed. 596 (1935)

Medicare LTC planning is not related to taxes in any way so it is a whole different kettle of rotten fish.

[ncbill]

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Originally Posted by Music Lover I'll be blunt. Don't be greedy. You have the money, suck it up and pay for your own care instead of looking for ways to hide assets hoping that someone else will pick up the tab.

They should buy LTCi now, then while young...cheaper & easier to qualify.

Those who have the money but don't buy LTCi often see the healthy spouse ruin their health trying to "save money" rather than spend it on LTC.

[MarieIG]

Yes, PB4uski, I understand your point of view. And I do remember learning about Learned Hand.

[MarieIG]

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Originally Posted by ncbill They should buy LTCi now, then while young...cheaper & easier to qualify. Those who have the money but don't buy LTCi often see the healthy spouse ruin their health trying to "save money" rather than spend it on LTC.

Not everyone can qualify. Buying and maintaining good LTCi, especially today, can be dicey.