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Question 174: May a man impoverish himself to get public funding for long-term care?

My father-in-law, Walter, is seventy-seven. He has been living for eight years with my wife and me, and our daughter, Melanie, now twenty. Devoting much of her time and energy to her grandfather, Melanie became his favorite.

Next month, she will be marrying a fine young man, a naval officer, and moving out of state, and Walter now needs more care than we will be able to give him here at home. So, he will have to go into a nursing home for long-term care, which will cost about a hundred dollars a day. If he pays for this with his income and savings, he will be impoverished in about four years, and then Medicaid will pay the difference. If he had no savings, he would receive the same care, and Medicaid would pay from the start.

All Walter’s savings are in a mutual fund currently worth around one hundred thousand dollars; since retirement, his only income has been his monthly social security payment, which he has contributed to our household, and a very small pension, which he has been using for pocket money. Yesterday, Walter told me what none of us had known—he made a will a few years ago in which he made Melanie his sole heir.

But though Walter wanted all his savings to go to Melanie, if he keeps them, the nursing home will get everything and she will get nothing. He is thinking of giving her his savings now, before making arrangements to enter the nursing home. He asked me whether I thought there would be anything wrong in that, and I really didn’t know what to say. What do you think?


This question calls for application of the norms regarding obedience to laws. Federal law limits the extent to which the government pays for the care of people who voluntarily impoverish themselves, and one may not lie to circumvent that limitation. Arguments can be made both for and against the view that one may voluntarily impoverish oneself insofar as that can be done within the letter of the law. On the one hand, what the law permits can be presumed just; on the other hand, the spirit of a just law, which reflects the common good, can require more of conscientious citizens than the letter of the law does.

The reply could be along the following lines:

The purpose of Medicaid is to provide necessary care, not for everyone, but only for people too poor to afford it. Someone might argue that some provisions of the law establishing and regulating Medicaid are unfair, but, like other laws, this one should be presumed just unless the contrary is shown. Moreover, it seems to me that, at least as they apply to someone in Walter’s situation, the legal provisions regulating Medicaid payments are in fact just.

You should check into the relevant legal provisions for yourself. But my understanding is that, if Walter gives his savings to Melanie, Medicaid will not pay for his care in a nursing home until thirty-six months have passed.385 This rule plainly is meant to prevent what Walter is thinking of doing: voluntarily impoverishing himself by transferring his savings to Melanie, and so shifting the cost of his long-term care to taxpayers. Perhaps Walter is aware of the rule and hopes to circumvent it. But he can hardly do that without lying, which is morally excluded and, in a matter of such importance, surely would be grave matter.

Suppose he gives his savings to Melanie with the understanding that she will pay the cost of his care insofar as it exceeds his income until the thirty-six months are up and Medicaid kicks in. Assuming such an arrangement lawful, would it be morally acceptable? There seem to me to be plausible arguments on both sides. I am not sure which is the sounder, but shall sketch both of them out for your consideration.

The argument that it would be morally acceptable is comparatively brief and simple.386 Laws are to be presumed just not only when they establish requirements but also when they are permissive. Just as taxpayers may take advantage of the loopholes provided by tax law, so, one might conclude, people may arrange their affairs so as to minimize how much they must pay for long-term care before Medicaid kicks in.

However, at least in cases like Walter’s, an argument also can be made for the contrary view, and the remainder of my response to your question articulates and defends this alternative without claiming that it is certainly or more probably the sounder.

Underlying the obligation to obey just laws is society’s common good, and often it is clear that going beyond what is required by the letter of the law will serve the common good. In such cases, a citizen’s moral responsibility can be to forgo taking advantage of what the law permits, and to act instead for the good it was meant to promote. Since welfare programs transfer some of the nation’s always-limited wealth from the more affluent to the needier, people eligible for benefits from these programs should recognize that the amount budgeted must be limited and should be fairly shared with others who need help. That responsibility may be overlooked by those who try to obtain as much as the law allows from every program.

In making Melanie his sole heir, Walter wanted her eventually to have his savings, but he did not give them to her at that time. His reason obviously was that he might need the money for necessities in excess of his income. His long-term nursing home care is just such a necessity, and he will be able to cover its cost for about four years. Thus, it seems that his sole purpose in giving Melanie his savings before entering the nursing home would be to preserve part of them for her by shifting to taxpayers as much of the cost of his care as he can. Even if that is in accord with the letter of the law, it seems to violate its intent—to provide care for people who cannot afford it—and so seems to take unfair advantage of the thirty-six-month limit.

Still, if Walter owed someone ten or twenty thousand dollars, it would be right for him to use part of his savings to pay that debt before spending everything on his care in the nursing home. He might argue that he owes Melanie a debt of gratitude for what she has done over the years, and giving her his savings is his way of discharging it. He might bolster the argument by pointing out that, had he hired an outsider to do for him what the girl did gratuitously, he would have exhausted his savings years ago.

That argument would have some initial plausibility, since Walter no doubt does owe his granddaughter a debt of gratitude, and such a debt, while not legally binding, is a serious moral obligation. On this basis, he would have good reason to give Melanie a substantial gift, as a token of his appreciation, when he leaves the household. Might not that gift be the residue of his savings remaining at the end of thirty-six months?

Probably not. By contributing his social security income to the household, Walter has compensated the family as a whole for the expense of his living with them, and no doubt has used some of his pocket money for small gifts and treats for Melanie. Moreover, debts of gratitude can be paid in nonmonetary ways, such as words of thanks, signs of affection, and small acts of kindness, and Walter no doubt has been generous with these. Besides, he already has shown his gratitude by naming her his heir, and she will receive the residue of his savings if he dies before they are exhausted. Then too, surely not all the benefits deriving from this relationship have been on Walter’s side. By goodheartedly devoting much time and energy during her adolescence to caring for her grandfather, Melanie has matured in character and acquired skills that will serve her well for the rest of her life.

Therefore, while he will be justified in giving Melanie a substantial gift on the occasion of his departure from the household and her marriage, the gift’s value probably should not be determined by the limit of his legal obligation to use his own resources to pay for his care in the nursing home. Rather, he should judge conscientiously what he would give her if his income were adequate to meet his expenses without drawing down his savings, and should limit the value of his gift to that amount.

If Walter accepts this reasoning, he might well consider serving the common good by donating the portion of his savings not needed to pay for the first thirty-six months of care in the nursing home to a good cause that public programs do not support—for example, an organization defending the right to life. If he gives Melanie only a modest gift, he ought to explain to her the basis on which he formed his conscience in the matter. By doing so, he will both teach her a valuable moral lesson and more perfectly manifest his gratitude: “If my conscience did not forbid it, I would give you all my savings.”

385. This would be the effect of the law in force in January 1997, as I understand it, assuming Walter straightforwardly transferred his savings; if he used a trust, the waiting period would be sixty months.

386. See qq. 97 and 169, above, for other discussions of the possible moral acceptability of impoverishing oneself.