TESS VIGELAND: Here’s one of those nightmares that proves just how ridiculous and sad our healthcare system is. Imagine your spouse gets sick. Suddenly you’ve got to figure out how to pay for long-term care.
Medicaid is the most common option, but many lawyers say it’s getting harder and harder to qualify. So some couples are considering a radical move to make themselves eligible: Divorce. From WCPN in Cleveland, Mhari Saito reports.
MHARI SAITO: When Todd and Rosaland Gauchat married 21 years ago, they knew their life would be challenging: Todd has cerebral palsy, but was relatively independent and could communicate by typing. But in 2003, a spinal inflammation paralyzed him from the neck down. Now he uses his head to type into a computer that speaks for him.
TODD GAUCHAT: My wife and I want to thank you for coming here today.
Todd’s paralysis meant a lot of extra care and unraveled a carefully built financial plan centered around Rosaland’s job and an inherited trust.
ROSALAND GAUCHAT: I had to work and get the health care through the work so we were just paying mortgage and then the paralysis happened and then the trust really kicked in.
Rosaland quit her $50,000 a year job as a computer analyst to help care for Todd and a son with neurological issues. They went through their savings fast. Medicaid won’t pay for Rosaland to provide long-term care at home — that is, unless they separated.
ROSALAND: I said, “OK, this is ridiculous, let’s get a divorce.” I was the one saying “I want a divorce honey.”
The Gauchats are one of a growing number of families considering divorce so they can get state aid for long-term care. It’s not just the disabled or seriously ill looking for help.
Columbus lawyer Bill Browning says he’s seeing about three couples a week, often seniors who never got or couldn’t afford long term care insurance and are now struggling with nursing care bills.
BILL BROWNING: Especially on your lower end, clients with less than 100K in savings with total incomes between husband and wife of less than 2000 a month, divorce is becoming a more viable economic option.
The Federal Deficit Reduction Act aims to cut Medicaid spending by $4.7 billion by 2010. Some states like Ohio require people to spend down their savings, including retirement accounts, in order to qualify for medicaid.
Recent changes have lowered the amount a Medicaid recipient can now have saved. Browning says often he’s trying to protect the retirement of the wife from disappearing into her husband’s end of life care.
BROWNING: Under the old rules, she could have kept more of the assets — more than half of the assets. Under the new rules she can’t. Her impoverishment really occurs after he passes away and that’s what we’re trying to avoid many times and avoid now by doing more divorces.
Because women live longer than men, the burden of long term care financing often hits twice. Many women deal with the aging of a spouse, and then nearly half of all women who reach 65 will require some level of nursing care.
The AARP does not condone divorce for benefits, but policy director John Rother says there are few alternatives like affordable long term care insurance that encourage people to look beyond state aid.
JOHN ROTHER: If you get cancer, no one’s recommending you divorce to protect your future. If you have a heart attack, no one recommends divorce. That’s because we have an insurance that maintains people’s financial futures. We should have the same kind of arrangement if you get Alzheimers or break a hip.
The Ohio Department of Jobs and Family Services makes sure state Medicaid recipients are filing their claims legally. The agency says divorce for Medicaid could be considered fraud.
But Director Helen Jones-Kelley says she’s planning to work with the federal government to help those families.
HELEN JONES-KELLEY: We are now going to be seeking a waiver so we don’t have couples who are looking to divorce just to be eligible for assets. That’s certainly not something that we support. We’re looking to be able to allow spouses to provide that support without a liability to them for doing so.
Caregiver Rosaland Gauchat says the support she provides her family round the clock is worth the liability, even though she’s not sure how she’ll pay her bills. The Gauchats decided divorce wasn’t worth getting state aid.
ROSALAND: We’re stuck. We’re stubborn. We can’t . . . we can’t. We can’t move out of this marriage thing.
In order to support that marriage, the Gauchats say, they’ll use their savings, retirement and any luck they find on the way.
In Cleveland, I’m Mhari Saito for Marketplace Money.
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