The focus of this page will be on businesses and organizations which straddle the line between what is ethical and what is legal. As you may recall from your college philosophy course, the law and ethics are not one and the same. (Check out our section on Admirable, Questionable and Downright Bad companies) This raises the question, not only for businesses, but for individuals as well, as to whether they should do something even if they are legally entitled to do so. We cannot always trust companies to do the right thing, so it’s important to keep this distinction in mind.
We will start with a topic which is near to everyone’s heart: elder law and medical care. It may not be immediately evident, but health care and growing old are subjects which have an impact on EVERYBODY. Let’s start with some background information on Medicaid and then we’ll delve into the strategies some use during “Medicaid Planning” which are of dubious ethical standing.
Note: We have chosen this topic as we feel it’s something which impacts near everyon. Either indirectly, because we have parents and grandparents, or directly because we may some day find ourselves in this position.
Medicaid is a joint state and federal program which allows access to medical care for those who meet certain circumstances.
The Health Insurance Association of America states, “Medicaid is a government insurance program for persons of all ages whose income and assets are insufficient to pay for required health care.”
It’s a government health care program for individuals with low income and limited assets. This means individuals must pass an asset AND income test to qualify. Though, the Affordable Health-Care Act (ACA), or Obamacare, has in some cases done away with the asset portion of the test and expanded the Medicaid coverage to not just the elderly, but all ages. We agree with the expansion, but find it hard to understand why there is no asset test. Can we always trust people to do the right thing? Is this really the most efficient way to protect people?
Is Medicaid Free?
The honest answer is that it depends upon from which perspective you view the situation. For example, the health care is free for the individual because they do not pay anything. It’s not free, however, for the government. That means it’s not free for the tax-payer, which means everybody!
What’s the Issue?
The issue essentially boils down to this. Medicaid is meant to provide for families and individuals who do not have the means to provide for themselves. Everyone should, in theory, provide their own medical care. These Medicaid trusts, though, are structured to merely reshuffle assets, with little real effect, so as to enable an elderly person to qualify for Medicaid, while still being able to give away their assets to whom they wish as part of their estate planning process.