Remember Clifford, the Big Red Dog? Emily Elizabeth's tiny puppy who unexpectedly grew to the size of a house? As an elder law attorney, I've come to see Clifford as the perfect metaphor for the long-term care challenges many families face.
Just as Emily Elizabeth never expected her small puppy to outgrow her home, most of us don't anticipate how quickly healthcare needs can expand in our later years. We plan carefully for retirement—creating budgets based on modest healthcare needs, setting aside emergency funds, perhaps even purchasing long-term care insurance. But like Clifford's unexpected growth, a dementia diagnosis, a stroke, or a serious fall can transform modest healthcare needs into enormous financial burdens virtually overnight.
Consider this: The national median cost of long term care is $9,733 a month, or $116,796 a year. The median retirement savings for Americans aged 65-74? Just $164,000. The math is devastating: a lifetime of careful saving consumed in less than18 months.
Imagine if Emily Elizabeth's story took a different turn. What if caring for Clifford cost nearly $10,000 every month? What if she was told: "You must spend every penny you've saved before the community will help with Clifford's care. Your future security, your home, the college fund for your children—all must go to Clifford's care first."
This impossible choice mirrors what many families face: deplete everything providing for a loved one's care, or find legal ways to protect some assets while still obtaining necessary care.
Here's where the ethics get interesting. Our current laws are essentially based on the premise that people shouldn't be "taxed" just because they die (given the current exemption of $13.9m per individual). Estate planning to minimize “death taxes” is considered prudent, not unethical. Yet somehow, when someone faces catastrophic long-term care costs, we often suggest they should willingly impoverish themselves rather than plan to protect assets.
Ask yourself: Why should a lifetime of careful saving be completely consumed by the misfortune of illness, when we wouldn't accept the same for the inevitability of death?
The person who saved diligently for decades shouldn't face financial devastation while a neighbor who spent freely easily qualifies for assistance. Medicaid planning creates equity between these situations—not by gaming the system, but by accessing benefits within the clear boundaries of the law.
Remember how Clifford's entire neighborhood had to adapt to his enormous size? Similarly, long-term care is too big a challenge for most families to handle alone. That's why Medicaid exists as part of our social safety net.
Unlike many developed nations, America lacks a comprehensive long-term care system. Instead, we have Medicaid—a program with complex rules that were deliberately crafted with certain exemptions and planning opportunities. Using these provisions follows the program's design, not subverts it.
Consider this: You've paid taxes your entire working life partially to fund this program. Is it wrong to access it legally when you need it?
Perhaps the most compelling argument for appropriate Medicaid planning involves asking where finite family resources create the most societal benefit.
When modest assets are preserved rather than consumed by care costs, they typically:
- Fund education for younger generations
- Provide security that enables entrepreneurial risk-taking
- Prevent the next generation from depleting their own retirement savings to supplement parents' care
- Create financial stability that improves health outcomes and reduces future care needs
Like Clifford using his size to help build community projects, preserved family resources often build stronger futures through education, housing, and opportunity. They create an economic multiplier effect that one-time care spending cannot match.
Our current system creates an unintended paradox:
- The wealthiest families can afford care without assistance
- The poorest already qualify for assistance
- The middle class bears the highest relative burden without planning
Ethical Medicaid planning doesn't exploit loopholes—it creates more equitable outcomes across socioeconomic groups. It recognizes that middle-class families who preserve modest assets contribute more to economic stability than families driven to poverty.
So what does ethical Medicaid planning look like? It means working with qualified attorneys to:
- Understand the actual rules, not just rumors or oversimplifications
- Create a plan that protects spouses from impoverishment
- Consider appropriate asset transfers within legal timeframes
- Utilize exempt assets and allowable planning techniques
- Ensure care needs are met while preserving family stability
Like Emily Elizabeth finding creative ways to accommodate Clifford while respecting her neighbors' boundaries, ethical planning respects both program rules and the need for family financial survival.
The hard truth is this: Long-term care costs are so catastrophically expensive that they are simply beyond the means of average Americans. When a policy problem is this large, individual families cannot reasonably be expected to bear the entire burden alone.
Until our nation addresses this fundamental gap in our social safety net, ethical Medicaid planning represents a necessary bridge between the world as it should be and the world as it is.
In my twenty years of law practice, I've seen families torn apart by care costs—siblings fighting over who contributes what, spouses working well into their 80s to pay for care, grandchildren's education funds emptied for grandparents' care. I've also seen families thrive despite care challenges when proper planning was in place.
Like Emily Elizabeth's love for Clifford regardless of his challenges, our commitment to our elders shouldn't come at the cost of our family's future. With proper planning, it doesn't have to.
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