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Cycles of Debt
Nursing Homes Become Debt Prisons

If you don’t pay the nursing home bill for an incapacitated loved one, the home may take away your guardianship. The NYT reports that nursing homes sometimes acquire legal guardianship over residents who aren’t payed for—and with that can come control over their assets:

In a random, anonymized sample of 700 guardianship cases filed in Manhattan over a decade, Hunter College researchers found more than 12 percent were brought by nursing homes. Some of these may have been prompted by family feuds, suspected embezzlement or just the absence of relatives to help secure Medicaid coverage. But lawyers and others versed in the guardianship process agree that nursing homes primarily use such petitions as a means of bill collection — a purpose never intended by the Legislature when it enacted the guardianship statute in 1993.

At least one judge has ruled that the tactic by nursing homes is an abuse of the law, but the petitions, even if they are ultimately unsuccessful, force families into costly legal ordeals.

Stories like this are part of a larger Dickensian nightmare that is far too common in too many parts of the country. The rebirth of debtor’s prisons, the structural debt injustice in places like Ferguson, MO, and nursing homes that seize assets through guardianship claims are all related injustices that call for major reform.

In a more particular way as well, these cases show just how terrible the cost problem is in American eldercare. Medicare often does not cover nursing home costs, while solutions like long-term care insurance have proven too expensive for many. The insane medical prices in America only make it worse. The NYT piece points to a case in which the spouse threatened with this measure had contested the nursing home’s bill, because a Medicaid recalculation found it to be too high. When you add on the fact that many Americans don’t realize how much they will need to prepare for end-of-life costs, you get a disastrous situation that we have not done enough thinking about, much less addressed.

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  • Fat_Man

    The guardian is a fiduciary for his ward. Using the guardianship to collect a debt would seem to be a betrayal of the fiduciary relationship, as the guardian’s first obligation is to care for the ward’s property and ensure that it is not improperly dissipated. In the proper case, the guardian could be surcharged for its misbehavior. Most likely, most of the victims of these guardianships do not have estates worth litigating over, but it is not a good risk for the nursing home.

  • FriendlyGoat

    “Most” Americans will only become emotionally and physically sicker if you tell them “how much they will need to prepare for end-of-life costs” because they don’t have that kind of money and have no way to get it. Planners can reasonably tell folks they need several hundred thousand dollars beyond what they think as being retirement assets. And most people are going to just cross their fingers and hope to die cheaper.

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