The Medicaid Gentrification Myth

Abstract

This paper examines the question of whether wealthy middle-class families are sheltering large sums of money in abusive financial arrangements in order to qualify for Medicaid benefits for nursing home patients, possibly endangering the fiscal integrity of the program. This paper argues that the high cost to the government of paying for the care of nursing home residents is caused by the large number of low-income, low-net worth nursing home residents. According to the author's analysis, Medicaid planning, i.e. the gentrification of long-term care Medicaid,is not a major cause of the growth of Medicaid spending. The author also argues that the restrictive new rules will punish many low-income, low-net worth Medicaid applicants who have not made transfers for less than full consideration.