Obvious unintended consequences: Grandma as a permanent houseguest

One of the things that I've heard coming up as part of the ambitions of the Trump administration is the desire to turn more stuff over to the states, like converting programs such as Medicaid into block grants. Medicaid is the federal program that funds health care for extremely poor people. You know, our fellow Americans who too many of us assume are shiftless, lazy, and unwilling to work. If you ask the typical right-wing conservative what they think of government-funded health insurance for persons living in poverty, the likely response is going to be "they should get jobs and pay for insurance like those of us who are willing to work do." Only one problem with that thinking.

You know where the bulk of Medicaid funding goes? It's not so to some kids or people of working age. It goes to keep old people in nursing homes. Observant readers may have noticed a proliferation of attorneys specializing in "elder law" in recent years. There was a time when only the wealthy worried a whole lot about estate planning or what was going to happen to their assets such as real estate once they hit their golden years. Since life expectancies crept up and more people started living long enough to develop the wide array of chronic morbidities that hit with age (i.e., diabetes, heart disease, hypertension, arthritis, dementia, . . . ) families of the elderly began realizing that it was quite possible that whatever Mom and Dad managed to accumulate during their working lives was going to vanish as the medical bills piled up. Instead of inheriting the old family home or a stack of T-notes, the potential heirs realized they'd have to accumulate their wealth the old-fashioned way: earn it themselves. Unless, of course, they could shelter assets through estate planning. Hence the proliferation of elder law specialists.

Elder law specialists do more than draft wills to help prevent heirs from squabbling over who gets Great Grandma Clara's Wedgewood china. They help people with assets (real estate, cash, whatever) figure out ways to shelter it so that if the day comes when they've got to go into a nursing home the cost of their care is going to fall on society as a whole, aka taxpayers, and not on the individual elderly and their immediate family. The initial legislation for Medicare and Medicaid was passed in 1965. It took a decade or two, but people eventually realized that if their elderly parent qualified as "poor" that Medicaid would pick up the tab for the nursing home. The trick was making the parent poor enough, which is where the elder law attorneys enter the picture.

It can be a rude awakening for most folks when they discover (a) Medicare does not pay for nursing homes; (b) when the government says you have to be poor to qualify for Medicaid, they mean it. Absolutely bare bones no assets whatsoever worth mentioning. If you own real estate, if you can't sell it before you die, it's going to have a government lien on it when you do go. If you have a whole life insurance policy, you're going to have to cash that sucker in, although you will be allowed to use a chunk of it to pre-pay for a funeral. And, as any good elder law specialist will tell you, the earlier you realize those facts of life, the better. The government can go back several years searching for reimbursement for the cost of your care. It used to be three years; it might be more now. That particular aspect of Medicaid law is, of course, intended to prevent people from trying to milk the system the day after they require nursing home care.

So what happens if the conservative Republicans succeed in their plans to turn Medicare into a voucher system and Medicaid into a grant block program? I can tell you. I've seen it. I remember it. Back when I was young, in those days of yore when dinosaurs roamed the earth, when someone's elderly relative became too fragile or feeble to live independently, they took up residence with a relative. If they had multiple adult children, families would engage in "pass Gramps around." The old person would spend a month here, a month there, until whoever was hosting the old geezer or geezette would decide they'd had enough and pass the aging parent on to the next unlucky sibling. In some cases, PawPaw or MawMaw would become permanent houseguests. Family members would find themselves having to bathe and diaper their now senile and incontinent parent or grandparent. Without having to think about very hard, I can recall at least half a dozen friends who had a grandparent living with their families. For most, it was not a happy situation.

You don't find many elderly chronically ill people living with their descendants these days. They're in nursing homes. How many would be there if not for Medicaid is debatable. Until the reality slaps you in the face, the typical person has no idea just how incredibly expensive caring for the elderly can be. Back in the '90s I served as my aunt Thelma's financial representative. She had to go to a nursing home after she had a stroke following by-pass surgery. She was a frugal woman and did have the cash stashed away to be private pay. At that time, the basic monthly cost was about $3500 a month. It would easily be double that today.

So what happens when the greedy heirs who have pushed their parents into estate planning and signing away their assets discover that the reason for doing it -- Medicaid -- no longer is an option? Are they going to be willing to start liquidating the stuff they'd anticipated inheriting? (I'm guessing probably not.) And what about the elderly who were genuinely poor to begin with, the old folks who maybe have a small life insurance policy and not much else? Families have gotten smaller -- it's no longer possible to play pass the grandpa -- and most don't have the ability to pay for outside help, like an aide to stay with the senile parent while the adult child goes to work. What happens when Medicaid goes away and the nursing home tells you to come pick up your senile parent or grandparent because they're about to close their doors  because without Medicaid payments they can't operate and the old person has to go somewhere? Every so often there'll be a story on the news about an aged relative being abandoned at a highway rest stop or other odd location because the family hadn't been able to get that person into a nursing home but could no longer cope on their own. How much more common will that scenario be if Medicaid vanishes?

We live in interesting times. Here's hoping that enough politicians can be persuaded to look at real world consequences instead of blindly behaving like lemmings and following The Donald and Paul Ryan off a cliff.