Impact of Asset Transfers on Medicaid Costs Is Scant

From the Georgetown University Long Term Care Project:

There is little evidence that large numbers of the elderly are planning their estates for the purpose of gaining easy access to Medicaid in the event they need nursing home care. There is no evidence that they use transfers or trusts to significantly shift cost burdens to Medicaid, and little evidence that those who do transfer sizable assets gain eligibility for Medicaid. Furthermore, there is little evidence that Medicaid interferes
with savings for future needs, or that it prevents people from purchasing private long-term care insurance. The elderly who expect to need nursing home care—and especially those of modest financial means who are likely to qualify for Medicaid—save more not less than those who do not expect to use nursing home care. Finally, generous Medicaid eligibility explains very little of the very low demand for private long-term care insurance.

The full report, entitled “Medicaid’s coverage of nursing home costs: Asset shelter for the wealthy or essential safety net” is available in .pdf format.