Rethinking Annuities for Medicaid Eligibility
As a CPA and a member of the Mississippi state House of Representatives, I found the article “ Private Annuities Can Aid Medicaid Eligibility ” ( JofA , Jul.04, page 88) to be offensive.
Like most states, Mississippi is struggling to fund its Medicaid program to help truly needy citizens. Its program is one of the most generous in the country, but it is a poor state and almost 25% of the population qualifies for Medicaid. The program, therefore, is terribly expensive.
As the article states, “Medicaid was designed as a safety net for people with limited income and assets who are unable to pay for medical care.” It was not designed for people who can hire CPAs and lawyers to design schemes to take advantage of the system.
The Medicaid program is not free. It is funded with both federal and state tax dollars. The article would have people who are not eligible for this critical program “shed excess wealth” to qualify, thereby taking tax dollars to fund their medical needs instead of using their own assets.
In my opinion, encouraging people to game the system is unethical and should be discouraged by your magazine, not promoted.
Over the past few years the CPA profession has suffered numerous blows to its once pristine reputation by being half again too smart. This article follows in that unseemly recent tradition.
Cecil Brown, CPA/PFS
Jackson, Mississippi
Editor’s note: The JofA thanks Douglas Jackson, CPA, retired, Knoxville, Tennessee, and Randall J. Severson, CPA, Milwaukee, for their letters to the editor expressing a similar opinion.