Posted by Post Authored By: Hannah Werner
In 1965, the United States established Medicaid to provide medical care for those that met a low-income requirement. The U.S. created this program so those that otherwise could not afford medical care could receive it for free. All medical care is covered until Medicaid. However, Medicaid has become a middle-class interest, especially for those that expect to have high medical bills toward the end of their life.
Medicaid has evolved to become a middle-class interest. Low-income individuals are already recipients of it, and those with high economic status can afford the medical bills that they receive for their care. However, those in the middle class have an interest because while they may be in the middle class now, if they are faced with high medical bills (as many that receive care in the United States often are), that may force them into low economic status.
Some estate planning attorneys establish a Medicaid Asset Protection Trust that creates eligibility for Medicaid for those that otherwise would not be entitled to government-provided coverage. The ethics of this are questionable, as people may be making themselves appear less wealthy to the government so they do not have to pay for their own health care. This bears the questions- does the creation of this trust take away funds from those that the program was started for? Is there an actual harm done to those in low economic groups?
This matter is not cut and dry. If people that are not covered under Medicaid pay their own medical care, they may go bankrupt paying these medical bills. These people will then truly be eligible for Medicaid and the government will cover all subsequent medical bills. So, these people will pay for their medical bills while they are ineligible for Medicaid, but at what cost? Do we want to be a part of a society that forces people into bankruptcy instead of providing them with medical care?
Attorneys must decide if they want to create these trusts that will benefit their clients when others might consider such trusts. This process is ‘loophole lawyering,’ but isn’t most of what attorneys do?
About the Author:
In May of 2020, Hannah graduated with a B.A. in Public Relations and a B.A. in Psychology from Auburn University. After working at Ankin Law Office for almost a year, Hannah discovered an interest in law and joined the Chicago-Kent community. Hannah is currently a 2L representative for the Society of Women in Law, as well as a member of various organizations matching her passions, such as the First-Generation Law Student Association and the Chicago Kent Animal Legal Defense Fund. Following graduation, Hannah looks forward to a career in estate planning, real estate, or business law.