Janice Eulau, assistant administrator of the Medicaid Services Division at the Suffolk County Department of Social Services, testified before a subcommittee of the the U.S. House Oversight and Government Reform Committee on the ease with which relatively wealthy New York residents protected their assets to get Medicaid to pay for nursing home or home care for the elderly.
The committee's report, "Billions of Federal Tax Dollars Misspent on New York's Medicaid Program," said roughly 60 percent of Medicaid applicants in Suffolk County -- on Long Island -- engage in estate planning to gain Medicaid eligibility:
"As a long-time employee of the local Medicaid office, I have had the opportunity to witness the diversion of applicants' significant resources in order to obtain Medicaid coverage. It was not at all unusual to encounter individuals and couples with resources exceeding $500,000, some with over $1 million. There is no attempt to hide that this money exists; there is no need," Eulau told the committee.
"There are various legal means to prevent those funds from being used to pay for the applicant's nursing home care. Wealthy applicants for Medicaid's nursing home coverage consider that benefit to be their right, regardless of their ability to pay themselves ... Individuals with resources above and beyond the level prescribed by law should not be allowed to fund their children's inheritance while the taxpayers fund their nursing home care."
The report noted Medicaid estate planning was a nationwide phenomenon and not unique.
"Although not specific to New York, David Armor and Sonia Sousa of George Mason University found nearly 80 percent of the non-disabled elderly population on Medicaid was above the poverty line, and about half of this population was over 200 percent of the poverty line," the report said.
Half to two-thirds of Medicaid pays for long-term care of the elderly in the states.
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