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URL:  http://boards.fool.com/you-cover-yourself-with-traditional-or-30618816.aspx

Subject:  Re: shelter those dollars Date:  4/2/2013  2:28 PM
Author:  2gifts Number:  71666 of 76418

you cover yourself with traditional or asset-based LTC (if you are insurable) for the gap.

I was under the impression that the OPs mom didn't want to spend any money on her own care, and I thought that included LTC. DH and I actually have LTC, and it was something that I considered as part of our overall financial strategy, so I agree with you that this would be a good thing for the OPs mom to investigate, and it would allow her to keep her money to herself and not have to spend much of it on a nursing home, which seems to be her goal. But that is very different from wanting Medicaid to pay for her care while she has assets that could be used for that.


I take a different perspective. M&M benefits are really refunds of directly-assessed taxes paid by the reclamation of direct benefits. Indirect general taxes (real estate taxes, inflation, etc.) are appropriate for indirect general benefits (roads, armies, etc.) Direct taxes (income taxes, primarily) are appropriate for direct benefits (individual entitlements.)

If I am reading this right, you are saying that Medicaid is just people getting back taxes they have paid over their lives, but the cases that I have seen were for people who pretty much never worked or paid taxes, and lived on the public dole their entire lives. I guess I don't see these things the same way you do, and I still have a fundamental problem with people who have assets expecting the government to pay for their services. In the case of people who have not worked and gotten significant benefits, I consider these programs to have been designed for folks like that, and I am OK with us as a society caring for the less fortunate. But the OPs mom is not someone who appears to me to be in that 'less-fortunate' category.

When you are productive, young & strong and times are good, you pay direct taxes and claim little to no direct benefits... then, when the inverse occurs, you pay in less and begin reclaiming what you have paid for. The goal is to arrange your affairs *OVER YOUR WHOLE LIFE* to have net tax expenses (paid out, minus benefits recollected) as low as possible.

I have no problem at all with keeping taxes to a minimum, but the OPs question asked about nursing home care, and her mom didn't want to use her own assets to pay for that. Instead, she prefers to take from a limited pot to cover something she could pay herself, and as the dollars are limited, it leaves me wondering about where the dollars come from to pay for the people who really do not have any assets and need that assistance.

It just seemed more like greed to me than careful planning to minimize taxes, but others may have a different impression.
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