By Janice Barlow 

When Donald Trump was elected President last November, to the shock and dismay of many of us, the nation wondered what would happen to the key element of the Obama legacy, the Affordable Healthcare Act. Republicans cried out that they would repeal and replace it, but with what? They had just come from a two-year honeymoon of owning the House and Senate but had failed to reveal any detailed, viable solution.

To the Right, the very notion of not repealing and scrapping all of ACA would be admitting that there are some good tenets within Obamacare. The heart of the matter seems to be that there is simply SO MUCH material there – literally thousands and thousands of pages of legislation – that it would just be easier to start over.

There have been some leaks over the past couple of weeks of a replacement plan that strips Medicaid funding on some levels and taxes private corporate plans at top levels. It’s a piecemeal plan that is sadly lacking in detail because it was probably just thrown together with some people sitting around and brainstorming ideas. They were up against the clock. Trump said it would be repealed and replaced and nothing has happened to that effect after his first month in office has passed.

Without going into specifics about the replacement plan, as it is fluid and apt to change, or possibly not even come to fruition, I want to point out the irony of the conservative position on government subsidized healthcare. My view is from a lens just a tad to the left of a conservative position, not a liberal one. Unfortunately, the conservative grasp of healthcare seems to be one that is all right with denying coverage to millions of people, as long as it doesn’t affect their own families.

Case in point: Most people have a relative in a skilled nursing facility. Unless that person is self-funding, there is some subsidizing going on. Medicare does not pay for long-term skilled nursing home care. It covers the first 20 days fully, and then 80 percent of the next 80 days. It’s a misconception that people will be covered by Medicare in a nursing home other than those first 100 days. So what happens next?

What is supposed to happen is that the patient’s own funds are to be drained down to a low asset base, $2,000 in most states. Then he becomes Medicaid eligible if he does not have too high of an income. Usually, to reach this point, he is receiving Social Security and maybe Veteran’s benefits, but that’s it. If his income exceeds a target amount which varies state by state, (somewhere around $2,300 a month cap), then he becomes ineligible for Medicaid. It’s difficult for honest, hardworking families to place a loved one in skilled nursing if the patient is Medicaid ineligible. However, many skilled nursing homes will not boot a patient if he is able to surrender all of his own monthly income. Skilled nursing homes will work with families because the patient is established and has been paying out of pocket for some time.

But a loophole exists that is mindboggling. In many states, a patient’s family meets with an attorney, often referred to as an elder care attorney and a type of trust are drawn up that allows the family to divert literally up to hundreds of thousands of the patient’s monetary assets into it, so that he becomes Medicaid eligible! The lawyer makes out big time as well, charging somewhere around $5,000 to fill out a cookie cutter trust document and getting it notarized. As a financial advisor, I know many people who have done this. I’ve had many other people ask me about doing this.

I understand why a family would not want to lose all of their relative’s hard earned money in a few years of nursing home care (at about $70-85,000 a year in costs), but isn’t this rather unethical? These are the some of the same people who are ranting about Obamacare and want to see it repealed. The way to ethically divert this money would have been to gift it to the relatives while the person is healthy and younger, or to take out a Long Term Care insurance policy to cover part or all of their skilled nursing expenses should they require that care in the future.

If anything about Obamacare needs tweaking, it should be the banning of these trusts. Why should wealthy people be allowed at the last minute to shelter money and live off the government? But they do it by the thousands and they do it every day.

No plan is perfect. When automotive companies come out with new models every year, they are designed to improve upon the ones in the past. And if a model is simply not good anymore, it is retired and becomes a classic, like a Pontiac Grand Am, or a joke, like an AMC Pacer. The ACA now insures many people who were unable to get coverage before. But it has flaws that need to be repaired. It needs to be portable so when you leave a job you can take it with you, even across state lines. It needs to never lapse, no matter how sick you get. It needs to keep wealthy people from sheltering assets in order to take advantage of Medicaid.

Is replacing the ACA just something the Republicans want to do because of its size and because they believe they can build a better and more efficient system that will cost less to set in place? Or is it because they don’t want anything about Obamacare to succeed because it’s, well, Obamacare? The hypocrisy of wealthy people on Medicaid is astounding. It begs the question: How many Republicans in Congress demanding that Obamacare is repealed, has a relative on Medicaid in a nursing home with some form of sheltered asset trust?

 

 

 

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