Tuesday, January 22, 2013
Sheena J. Knox recently published her note entitled Eldercare for the Baby-boom Generation: Are Caregiver Agreements Valid?, 45 Suffolk U.L. Rev. 1271 (2012). The introduction to the note is below:
Behind the current cacophony of concerns about the unemployment rate, slow economic recovery, and U.S. budget deficit, is the ever-present murmur of the impending economic impact baby boomers will have as they retire and rely on government benefits. In 2010 Social Security went “cash negative,” states threatened to drop out of the Medicaid program, and more individuals dipped into their 401k plans for current needs. The “silver tsunami” looms closer as the first members of the baby-boom generation turned sixty-five in 2011, and concerns over how to manage long-term care for elders increase at an individual, state, and federal level. State and federal governments' concerns come from the heavy burden long-term care for boomers will put on government-funded health services at a time when governments face pressure to cut these services to decrease deficits. Individuals' worries stem from the need to provide long-term care for themselves or for aging family members.
Individuals who care, or will care, for an aging relative must consider how long-term care duties can decrease both their earning potential in the workplace and their savings as they pay for an elderly relative's necessities. Caregivers often cannot afford to cut down their time or quit their job outside the home. In order to continue caring for an elderly relative, an increasing number of caregivers are asking elder-law attorneys to draw up agreements in which the caregiver helps the elder for a certain number of hours each week in exchange for an hourly wage. These caregiving agreements benefit both parties by relieving financial strain on caregivers and by keeping elderly relatives out of nursing homes.
While caregiver agreements may reassure individual caregivers, these same agreements are a concern for states. State Medicaid agencies claim these agreements are often a front for elders to gift assets to their children, impoverish themselves, and qualify for the state to pay for long-term care in a nursing home. The high price of nursing home care would quickly deplete most seniors' accumulated wealth; however, if elders can transfer their assets to their children via a “caregiver contract,” elders may qualify to have Medicaid pay for nursing home care, while ensuring that their posterity will receive an inheritance. States want to preserve scarce resources for those who truly cannot afford care.
This Note will explore the benefits and burdens of courts acknowledging and upholding caregiver agreements, ultimately arguing for more recognition of caregiving agreements to encourage greater numbers of caregivers for the burgeoning elder population. First, this Note will examine the parties to caregiver agreements and what influence their identities may have on a court's evaluation of the agreement. Parties to a caregiver agreement are typically family members, so the initial discussion of the parties' identities will lead to a discussion of the cultural and legal presumptions against family-member contracts. Then, turning more specifically to caregiver agreements, this Note will outline the considerations a Medicaid agency uses when deciding if an elder qualifies for benefits. State Medicaid agencies decide long-term care benefits; therefore, this Note will use Massachusetts as a case study to review caregiver agreements evaluated by the Office of Medicaid Board of Hearings and state courts. In light of the decisions in Massachusetts, this Note will propose clarifications to the Massachusetts Medicaid regulations to give Massachusetts and other states direction about how to allow caregivers who truly are rendering services to contract for their services, while avoiding giving elders Medicaid services if their “contract” was merely a gift. In addition, this Note will analyze current presumptions about family members and contracts. Finally, this Note will argue that acknowledging caregiver agreements will benefit caregivers, the elderly, and the state.