Tags: AARP | Grinch | Foiled | Congress

AARP Grinch Foiled by Congress

Tuesday, 20 December 2005 12:00 AM

AARP (formerly the American Association of Retired Persons) lacks the Christmas spirit. Once again, it tried, and continues to try, to be a Grinch by taking from the poor to hand out to its rich and middle-class members.

How is it doing this? AARP is giving reverse-Robin-Hood advice to its well-to-do and middle-class members on how to artificially impoverish themselves so they can dip into government Medicaid funds designated for nursing home care for the poorest among us. As a result, welfare programs have fewer resources for the truly poor.

Medicaid is a welfare program providing health and nursing home care for the poor, a means-tested public assistance program – not an inheritance-enhancement program for the rich.

Although many AARP members are middle class and wealthy and have savings for their retirement years, AARP encourages them to see if and how they might qualify for Medicaid nursing home services. With the help of lawyers, some people artificially impoverish themselves to qualify for Medicaid.

To artificially qualify, people disperse their assets to friends and relatives so that the government later pays for their nursing home care. This requires using other people's tax money, including tax money taken from the poor. These AARP suggestions abuse the intent of the Medicaid program.

According to Steve Moses, president of the Center for Long-Term Care Reform in Seattle, writing in last Saturday's Wall Street Journal, Medicaid spends over $300 billion every year. And the government projects spending to increase 7 percent to 8/ percent in future years.

Moses also notes that these elderlaw "legal scams" are used as "'inheritance insurance' for boomer heirs who ought to be planning responsibly for their own and their parents' long-term care needs."

AARP and the lawyers setting up these plans don't always tell their clients that this artificial poverty can result in real poverty and "severely limits an older person's options," as Seattle Times columnist Liz Taylor puts it. "Medicaid doesn't pay adequately for care – in the 30 years I've worked in the aging field, it never has, and I'm positive it never will."

Ignoring these observations, AARP implies that all nursing home care is created equal. Yet, if your nursing home needs change over time, you might not be able to buy what you want – and may end up truly poor by accident.

On top of this bad advice, AARP wasn't completely honest about the reforms passed this week in the Deficit Reduction Omnibus Reconciliation Act of 2005. AARP falsely claimed that these changes in the law "would deny long-term care services to people in need." Nobody would be denied care. Nursing home care would be provided and a person's estate might have to pay for it after death.

Before these reforms, a nursing home resident could own a multimillion-dollar home and still qualify for Medicaid nursing home coverage. By capping the home exemption at $500,000, requiring people to wait five years instead of three years after artificially impoverishing themselves before qualifying for Medicaid and other changes, the changes close some of the loopholes exploited by lawyers. This makes more resources available for the truly poor.

The current rules still allow people to keep their own home, automobile and even a business and still qualify for nursing home coverage. Maybe, instead of paying lawyers to set up these schemes (which may now have to be revised at even more legal expense), you should give the money to your kids directly instead of to your lawyers.

Because of the millions of baby boomers coming up to retirement and nursing home age, the future will bring more demand for nursing home facilities. But the legislators have already spent all of the taxes collected from the boomers during their productive decades. And the boomers themselves haven't had enough children to pay extra taxes to keep the system afloat.

AARP doesn't seem to mind people taking government money. AARP itself takes in $80 million every year from the federal government, despite its lobbying activity and false advertising.

These changes in the law will "slow Medicaid's growth by .3 percent (that is correct: .3 percent) over the next five years," according to Grace-Marie Turner, president of the Galen Institute and a member of the Medicaid Commission, writing in National Review magazine. Although this doesn't sound like much, we hope the reform reflects a change in the flood tide of people afflicted with an inherently dead-end entitlement mentality, including legislators as well as other citizens.

Finagling to get Medicaid nursing home coverage may be legal, but it's certainly not ethical or moral. Only the genuinely poor, not the artificial variety, should qualify for government welfare programs.


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AARP (formerly the American Association of Retired Persons) lacks the Christmas spirit. Once again, it tried, and continues to try, to be a Grinch by taking from the poor to hand out to its rich and middle-class members. How is it doing this? AARP is giving...
Tuesday, 20 December 2005 12:00 AM
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