By skyforbes 
The Real Cost of Medicaid Abuse: Why DOGE Should Prioritize Nursing Home Reform Over Estate-Planning Exploits
As states across the nation face rising healthcare costs and budget deficits, the Department of Government Efficiency (DOGE) has taken a fresh look at one of the most expensive and controversial areas of Medicaid spending: long-term care. While much of the public discourse centers around access and affordability, one uncomfortable truth has quietly festered in the background — an entrenched system of estate planning tactics that allow affluent older adults to shift the burden of their care to taxpayers, while truly vulnerable populations remain locked out.
Nowhere is this moral distortion more stark than in the case of nursing home admissions.
Medicaid, Nursing Homes, and the Affluence Illusion
Medicaid was originally designed to serve the most vulnerable among us — the impoverished, the disabled, and those with nowhere else to turn. But in practice, a significant portion of Medicaid-funded nursing home beds are occupied by individuals who are, for all intents and purposes, not poor.
How?
Through aggressive estate planning. High-income seniors, often with the assistance of financial advisors and elder law attorneys, transfer assets to their children or irrevocable trusts in advance of applying for Medicaid. By the time their application is processed, their financial profile appears destitute — on paper. In reality, their families are sitting on property portfolios, retirement accounts, and substantial savings, all tucked neatly away beyond Medicaid’s reach.
This legal — but ethically questionable — maneuvering allows them to access full nursing home benefits while paying little or nothing out of pocket. The result: Medicaid foots the bill for individuals who never truly needed public assistance, while those in genuine crisis — like unhoused elderly people with no assets, no family, and often no advocates — remain on the street or on endless waiting lists for placement.
The Hidden Costs to Facilities and Staff
The impact of this deception isn’t just financial — it’s structural. These wealth-shielding Medicaid beneficiaries are often among the most demanding residents in nursing homes. With expectations born of prior affluence and agency, they request frequent visits to outside specialists, insist on brand-name medications that far exceed facility formularies, and demand concierge-style service from overworked and underpaid staff.
For frontline nursing home workers, the stress is tangible. Already stretched thin by staffing shortages, many facilities simply cannot meet the mounting expectations of these pseudo-private-pay residents. CNAs, RNs, and social workers find themselves caught between unrealistic family demands and the limitations of a Medicaid reimbursement system that barely covers the basics.
Medication costs spiral out of control, with off-formulary prescriptions straining budgets. Physicians are burdened with complex, multi-specialist coordination. And administrators are left juggling ethical questions with budget spreadsheets, often having to cut corners in one area to satisfy the elite preferences of residents who legally qualify as poor but behave like clients of a luxury spa.
Who Gets Left Behind? The Unhoused and Truly Vulnerable
Meanwhile, tens of thousands of elderly individuals experiencing homelessness — many of them with advanced chronic illness, psychiatric conditions, or cognitive impairments — languish without access to safe housing, let alone the intensive care of a nursing home.
These are people who did not have the luxury of asset transfers or strategic legal counsel. They are not attending estate planning seminars — they are trying to survive another night on a park bench.
Yet in many states, these individuals cannot access a bed in a long-term care facility because the system is clogged with Medicaid-qualified residents who had the financial wherewithal to game the rules. In the moral economy of long-term care, something has gone terribly wrong.
DOGE’s Role: Prioritize Equity Over Entitlement
DOGE’s emerging initiative to identify cost-saving strategies within Medicaid is both timely and urgent. But cuts must be guided by a core question: Who should Medicaid serve?
If DOGE is serious about protecting the program’s integrity and ensuring its sustainability, it must draw a hard line against asset-shielding abuses that privilege the wealthy at the expense of the truly poor.
This begins with three actions:
- Audit and Reform Medicaid Eligibility Rules: States must modernize their Medicaid eligibility frameworks to close loopholes that allow asset transfers to go undetected or unpenalized. Lookback periods must be enforced rigorously, and penalties for fraudulent declarations should be made meaningful.
- Prioritize Placement Based on Vulnerability, Not Paper Poverty: Long-term care admissions should be triaged according to clinical need, functional impairment, and social vulnerability — not just financial appearance. A 75-year-old man with Parkinson’s and no home should be prioritized over a 90-year-old woman who lives in a trust-funded condo she “gave away” to her children.
- Incentivize Facilities to Take the Truly Needy: DOGE and CMS must explore reimbursement reforms that reward nursing homes for serving high-need, high-risk populations, including the unhoused, formerly incarcerated, and those with severe behavioral health issues. These populations are often rejected due to “difficulty,” but they are precisely who Medicaid was meant to serve.
A Moral Imperative in Bureaucratic Clothing
This isn’t just about budget spreadsheets. It’s about values.
The distortion of Medicaid’s intent by estate-planning tactics turns public compassion into private entitlement. It robs nursing homes of financial viability, overburdens healthcare workers, and denies care to those whose lives literally depend on it.
Medicaid should not be a retirement subsidy for the well-advised. It should be a safety net for the desperate.
As DOGE considers where to draw the line in Medicaid reform, it must remember this: cutting waste is noble. But cutting injustice is urgent.
And in the American long-term care system, the greatest injustice of all is a warm bed filled by a millionaire’s mother while a war veteran dies cold and alone on the street.
If you found this article helpful, please consider sharing it with policymakers, health leaders, and those working in Medicaid advocacy. It’s time to reset the priorities of public care.