Of Medicaid, sham divorces and Russian Internet brides

By Stephen D. Forman (LTCA)

Long Term Care Associates, Inc.

​Michael Cannon of the Cato Institute wrote a piece in the National Review Online last month discussing various forms of Medicaid fraud — thanks go to my colleague and friend Stephen Moses of the Center for LTC Reform for calling this to his readers' attention.

Mr. Moses quotes the NRO piece about Medicaid fraud as follows, "'It's brazen, it's ubiquitous and it's other people's money, so nobody cares.' It touches LTC too: 'And there are other forms of fraud. An entire cottage industry of elder-law attorneys has emerged, for instance, to help well-to-do seniors appear poor on paper so that Medicaid will pay their nursing-home bills. Medicaid even encourages the elderly to get sham divorces for the same reason. It's all perfectly legal. It's still fraud.'"

The National Academy of Elder Law Attorneys has been advocating sham divorces as a Medicaid planning tool for nearly 20 years -- and as if there were no other alternatives. You should read how people spin these scams into the most wrought, emotionally heartstrung tales of misery!

But I've often wondered why — as long as we're playing matrimonial gamesmanship — no one proposes sham marriages as well?

Where NAELA argues that Medicaid "encourages" divorce, one could make the equally ludicrous yet just as plausible argument that Medicaid encourages just as many marriages through its generous spousal asset allowances. After all, if I'm single with $208,800 in countable assets, I'm on a one-way fast-track to $2,000 before I can qualify, costing me $206,800.

But if I get married (thank you Russian Internet bride industry) my community spouse can keep $104,400. (Rules obviously vary by state.) That's a huge win.

I'm sure attorneys who are clever enough to wend their way through the byzantine maze of Medicaid are also whip-smart enough to ensure that these sorts of marriages of convenience (it's not like we don't have such a tradition in America) can be constructed for the protection of both parties. It's also not like there's a huge population of elderly singles who may just enjoy making that romantic connection with someone new in their golden years.

Think about it.