The Fleecing of Medicaid and the Taxpayers





NASGA is a public benefit/civil rights 501(c)(3) nonprofit organization seeking reform of unlawful and abusive guardianships and conservatorships of the vulnerable elderly and disabled.

Our members are victims or family and friends of these individuals who, as “wards of the state,” are subjected to abuse, neglect and financial exploitation by their very “protectors,” under color of - and quite contrary to - law. 

Our first white paper to Congress
[2] discussed unlawful and abusive guardianships,[3] the long history of studies and reports detailing the problems, the lack of progress in reform, and the potential escalating number of cases nationwide as Boomers turn 65. 

Our second paper
[4] focused on the growing threat of false or fraudulently denominated “emergency hearings” and temporary guardianships which may never end until the ward dies.

Now, we submit our third paper advising Congress that guardianship abuse not only exploits those whom it is designed to protect – the vulnerable elderly and disabled – but also overburdens and fleeces Medicaid and every American taxpayer.


It is not just Medicaid fraudsters who are filing claims with government and cheating the taxpayers. Exploited guardianships are a direct and growing menace to the health and wealth of our vulnerable elderly and disabled - and to our nation’s economy!

The “conserve” directive of guardianship law is all but totally ignored in a growing number of courts across the country.  Judges, the ultimate decision makers and protectors of wards of the state, fail to monitor their appointed fiduciaries and guardian cases adequately, permitting unethical guardians to deplete their wards’ assets by means of excessive, exorbitant and even fraudulent fee billings for legal, administrative or nonexistent “services.”

Without meaningful oversight by court administrators and strong law and enforcement by the legislative and executive branches, previously ample estates can be systematically “protected” into indigence.  The guardians then place these wards on Medicaid for the remainder of their lives – leaving the American taxpayers holding the bag.

This appalling practice is not Medicaid fraud per se.  It is, however, an unaddressed breach of fiduciary duty, resulting in an unforeseen and improper load on the Medicaid system and an unlawful burden on the American taxpayers who are supposed to be protected against this very thing happening - a primary purpose of the “protective” statutes.

Additionally, the excessive cost of needlessly supporting individuals who don’t belong on Medicaid threatens those persons without adequate assets who need essential Medicaid services, which are now jeopardized by threatened budget cuts during our country’s economic crisis.


Arizona octogenarian ward Marie Long’s guardianship
[5] exemplifies the impetus of this paper:

  • Marie Long had accumulated assets of approximately $1.3 million when she was taken into guardianship for her “protection.”

  • In only four years, her assets were gone due to exploitative billings and she was forced into a substandard facility against her will.

  • Her court-appointed guardian withdrew from her case 12 days after her assets ran out.

  • During their tenure, the fiduciaries collected nearly $840,000.00 from Marie Long in blatantly overbilled “fees” - all approved by the judge

Marie Long, a proud woman who could have well afforded to pay for her care through end of life before the guardianship “protected” her into indigence, is now on the Medicaid rolls at taxpayer expense, much to her personal embarrassment and distress.  

The guardianship, by law, was supposed to protect and conserve Long’s assets for her lifetime care.  Instead, it exploited her financially (a paramount definition of “elder abuse”). 

Surprisingly, the perpetrators of this insidious bilking were not charged with any crime (financial exploitation) because the judge in the case approved the outrageous fees, thereby “sanctioning” the misuse of Long’s assets.

The guardianship, ironically, exploited more than the obvious victim - Marie Long; it also exploited the American taxpayers by passing the costly burden of Long’s remaining lifetime of care onto their already strained backs. 

As NASGA has previously stated, guardianship law was not and is not designed to be a Medicaid spenddown.  Fiduciaries picking the financial bones of vulnerable people and then sticking it to the American taxpayers is not technically Medicaid fraud per se, but the Medicaid program and the taxpayers are fleeced all the same, along with the elderly or disabled “wards.” 

The lack of meaningful monitoring and oversight has been permitted to go on for years despite numerous studies and reports of problems by guardianship practitioners and advocates.  An unethical fiduciary, despite having sworn to conserve the assets of his/her wards' estates, is thus largely free to misuse the court appointment for sheer self-enrichment.

Millions can be made on a single estate.  The cliché “the pen is mightier than the sword” appropriately describes assets pilfered with and sometimes without court approval, by unnecessary and inflated fee and commission billings.  The judicially ignored plundering of assets by fiduciaries - persons to whom property and power is entrusted for the benefit of another - constitutes a shocking and ironic misuse of the protective statutes, the intent of which was to protect the public against an incompetent person becoming a public charge.


The sworn duty of judges and their court-appointed fiduciaries is to carry out and obey the protective statutes of the various states, promulgated in the public interest to:

      GUARD incompetent people against harming themselves or others;

       CONSERVE their assets (by means of prudent investment); and·
       PROTECT the taxpaying public from those individuals becoming public charges.

To do otherwise is elder abuse.


In its September 2010 report,
[6] Congress’ “Watchdog” - the Government Accountability Office (“GAO”) - addressed the lack of oversight: 

 “State Courts Failed to Adequately Oversee Guardians After Their Appointment. 
 In 12 of our 20 case studies, state courts failed to oversee guardians after their appointment, allowing the abuse of vulnerable seniors and their assets to continue. Courts ignored criminal and/or financial problems of guardians who served multiple roles with conflicting fiduciary interests.  They also failed to review irregularities in guardians' annual accountings or sanction delinquent guardians.”


Thanks to the Census Bureau, government was long warned of the coming Boomer wave.  Problematic guardianships have gained increasing media attention for several years, signifying a growing awareness that the graying Boomers will swell the rolls of "wards of the state."  Dubbed “the last generation of wealth,” Boomers will be the largest new group of victims of unethical fiduciaries and unprincipled or incompetent judges in our state courts if Congress does not step up to the plate and take immediate action!


GAO’s March 2011 report, “Elder Justice:  Stronger Federal Leadership Could Enhance National Response to Elder Abuse,"[6] 
opened with this statement:    

"In addition to the physical, psychological, and economic harm elder abuse inflicts on older adults, it imposes an economic burden on all Americans. Victims of elder abuse and neglect can incur higher health care expenses, further  straining already overtaxed  Medicare and Medicaid resources and increasing the demand for a range of supportive services.      

[A]buse can occur repeatedly over time and can involve a relationship of trust between the victim and the perpetrator.  Thus, the perpetrator may be a family member, a caregiver, or a guardian appointed by a judge. This relationship between the victim and the perpetrator can make identifying, investigating, and resolving cases of elder abuse a challenging endeavor.”

This failure of government – judicial, legislative and executive - to strengthen and enforce the law to protect the public, has permitted an escalating involvement by court-appointed fiduciaries of "wards of the state" in a Machiavellian type of exploitation; thus converting guardianship into a profit industry where fiduciaries can engage in a feeding frenzy.

These fiduciaries are mining the gold while giving their wards, their wards’ families, and the taxpayers the shaft.


Medicaid spending grew at an average rate of 8.8 percent in fiscal year 2010 across all states and the District of Columbia, according to  the tenth annual survey of state Medicaid directors by the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured (KCMU), “Medicaid Spending Growth Exceeds Expectations.

The bleeding of assets from a financially able ward’s estate and resultant application by a fiduciary for Medicaid benefits for the ward does not comport with the protective statutes or with the law controlling Medicaid.

The Medicaid spenddown is designed to protect families - not to unjustly enrich court-appointed fiduciaries - or to further burden taxpayers as a result of breach of fiduciary duty.


Another sly stratagem used by unethical fiduciaries coming to light is based on their use of a federal law known as OBRA (Omnibus
Budget Reconciliation Act of 1993).  The irony with OBRA trusts, as in court-managed guardianships, is the same exploitation resulting in benefit to the fiduciaries instead of the ward. 

Unlike the protective statutes, which require judicial approval for fee taking, OBRA permits asset transfers to “pooled trusts,” where the assets are held by a nonprofit organization, hidden from the court proceedings and the public. 

Not considering assets when applying for Medicaid, ironically and unwittingly permits their use for exploitative billing of "administrative" fees by unethical fiduciaries.  Pooled trust funds are specifically designed to be used for "care"; instead, the intended beneficiaries of said funds wind up in inadequate facilities with their care needs not met and paid for by Medicaid (at taxpayer expense), instead of by their own previously ample assets which were "shielded" in these pooled trusts.

One of our members reports of the fees billed to – and paid by - her mother’s OBRA trust in 2010, a stunning $68,000 was described as “legal and administrative” fees.  Her mother, the ward, received only a mere $500 for her actual benefit.   Shockingly, because the guardian placed $100,000 of her mother’s assets in the OBRA trust, that $100,000 was  “hidden,” and her mother was approved and placed on Medicaid - and taxpayers, once again, are footing the bill while the fiduciaries profit. 

Her mother could well have afforded to pay her own way for care at home or in an upscale facility but sadly, instead, she was forced into inferior care at a substandard facility where she does not want to be --and there’s nothing she or her family can do about it. 

OBRA requires Medicaid be repaid upon the death of the ward, but how often are funds left for repayment given the ease of milking the fund assets?  Is Medicaid keeping track?


In January 2011, NASGA wrote to all 50 state Governors and the Governors’ Association to alert them to the unnecessary and free-flowing drain of Medicaid dollars from their state coffers directly related to the unfettered proliferation of unlawful and abusive guardianships. 

Since then, in ongoing communications with the states, we have yet to find a state currently reviewing Medicaid applications made on behalf of wards of the state to determine if assets were wrongfully depleted by the guardianship prior to application.


As with guardianship in general, no one appears to be aware of or watching as untold dollars gush down the Medicaid drain like a gaping hole in the Hoover Dam. 

There are no statistics to quote, nor has anyone or any entity looked at this form of Medicaid fleecing for the purpose of documenting the unknown dollars lost and/or wasted, nor has the subject been brought up to Congress for review and discussion by anyone but NASGA,[8] and we bring it to you in depth today. 

Due to the impossibility of getting 50 states to quickly amend their statutes and practices, NASGA urges Congress to take immediate action as follows:  direct state governments to set in place special steps for screening of Medicaid applications made by fiduciaries on behalf of their wards, including a “lookback” as to how the assets were spent, dissipated or transferred, whether kept in a guardianship account or a pooled trust, and with or without court approval as to reasonableness or need. 

Additionally, there should be new penalties for misuse of assets and failure to conserve as required by law, including appropriate means for recovery against the fiduciaries. 

Federal law controls this area, which brings us, once again, to Congress and its duty to the public. 



We remind Congress once again:  MAKE GOOD THE FORGOTTEN PROMISE of 42 U.S.C. 3001 of The Public Health and Welfare law to protect the vulnerable people of
our nation against abuse, neglect and exploitation. 

Depleting the assets of an estate and forcing the ward onto Medicaid at public expense is not a demonstration of the good faith and fairness required by 42 U.S.C. 3001.  Instead, such action constitutes an open and unaddressed breach of fiduciary duty and is an odious form of elder abuse which MUST BE STOPPED for the sake of the health and wealth of our nation! 

For our vulnerable elderly and disabled - and for their families who are forced to fight, at great cost (both financially and emotionally)
for their freedom and safety - Congress must make good that declaration of intent (particularly paragraphs six and ten of that section
of law) because the States continue to fail in their duties as parens patriae of their vulnerable citizens. 


Finally, we continue to remind Congress that Boomers turn 65 this year.  As they age, the demand on our healthcare system and programs will only increase.   Congress must STOP:

           • the current enormous and free-flowing drain of Medicaid funds caused by unlawful and abusive guardianships;

          • the unethical fiduciaries who are fleecing the system, the wards and taxpayers; and

          • the courts who fail to obey and properly apply the law and to protect our vulnerable elderly and disabled citizens, their families,   
      and  the American  taxpayers.  

Sincerely submitted,

/s/ Elaine Renoire
President, NASGA



[1] The term “guardianship” will be used herein to indicate both guardianship and conservatorship.


[3] Guardianship law, promulgated in the public interest, is critical to the welfare of the people. It is a necessary law, but abuse over the years has made it detrimental to the welfare of the very citizens it was designed to protect.



[6] This report focused on Adult Protective Services, as did the hearing by the Senate Special Committee on Aging, where Mickey Rooney testified.  


[8] Briefly addressed in our first Open Letter to Congress 

[9] Quoted from NASGA’s first Open Letter to Congress,  



Download the Entire Document

Read NASGA's First Open Letter to Congress and the White House:
"Protecting Our Citizens from Unlawful and Abusive Guardianships and Conservatorships"

Read NASGA's Second Open Letter to Congress and the White House:
"A Review of  Unlawful 'Emergency' Guardianships"

Read NASGA's Fourth Open Letter to Congress and the White House:
"Judicially Sanctioned Financial Exploitation of Vulnerable Elderly and Disabled Citizens
by Non-Family Court-Appointed Fiduciaries"

Read NASGA's Warning to Baby Boomers:
"Boomers Beware of Guardianship Abuse"

"Boomers Beware of Conservatorship Abuse"



Read the September 2010 Governmental Accountability Office's (GAO) report to the Senate Special Committee on Aging: 
GUARDIANSHIPS:  Cases of Financial Exploitation, Neglect, Abuse of Seniors


“Most of the allegations we identified involved financial exploitation and misappropriation of assets. Specifically, the allegations point to guardians taking advantage of wards by engaging in schemes that financially benefit the guardian but are financially detrimental to the ward under their care. Also, the allegations underscore that the victim’s family members often lose their inheritance or are excluded by the guardian from decisions affecting their relative’s care.”



Read NASGA's Press Release:  NASGA Releases Third Open Letter To Congress and the White House




Guardianship abuse / conservatorship abuse IS elder abuse!


© NASGA - Stop Guardian Abuse 2006