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Since I published my previous diaries on Medicaid Estate Recovery and its implications for those of low income ages 55-64 who sign up for coverage through the Affordable Care Act and end up on Medicaid, I have received email with personal stories and state-specific information from people across the country who are being affected by this. Thanks to everyone who has written me.

Thanks to these fine folks who are doing their best to track down what is really going on with estate recovery, I can report that so far, at least 2 states have taken action to prevent estate recovery from going after the estates of newly-eligible 55-64 year olds enrolled in Medicaid through the ACA: Oregon and Washington.

Unfortunately I have to report that so far, I have not gotten any meaningful responses at all on this subject from my Congressperson, my Senator, or the White House, despite having contacted them about this issue some months ago.

In one news story, it was reported that the administration would issue some kind of clarification about estate recovery - "after January 1st."

That's pretty distressing, in that millions of people were having to make decisions about their participation in these programs before January 1st.

Also of course it is now January 20th and to the best of my knowledge, nothing has been heard on this yet from the federal government.

So let's get into the questions this raises:

Medicaid Estate Recovery is not terribly effective as a way to pay for Medicaid. According to factcheck.org, "The total recovered was 0.13 percent of total Medicaid spending for the year."

The most frequently given reason for why we should have estate recovery at all is not that it is a good method of cost recovery, but that we must prevent people from "gaming the system." People concerned about this ask: why should some very rich person get Medicaid and be able to shelter their assets? The logic is that that person's assets should at least be able to be collected against when they die.

However, with the ACA and the end of the asset test for enrolling in Medicaid, there is no longer any element of "gaming the system" for many people who have assets but have a low income. The intent and structure of the ACA is that these people should be enrolled in Medicaid.

But the ACA did nothing about estate recovery. So now, if you are low income, and 55-64, and have assets, and live in a state whose estate recovery rules include recovering for all health care expenses the state spends on you, including monthly "capitation charges" just for being enrolled - you may have just been swept into a system that entitles the state to your assets upon your death.

This is profoundly distressing to a lot of the people who are affected. If you have lived in poverty or on the edge of poverty, you know that the presence or absence of those assets of yours, in the lives of your heirs after your death, can make a profound difference to their health and safety, not to mention their choices in life.

And if you have worked for health care reform, and watched your friends and neighbors, who may make only slightly more money than you do, get subsidized health coverage without endangering their assets, your sense of betrayal may be profound.

So there are reasons to fight for fairness here. And fairness is exactly what we do not currently have.

We know that Oregon and Washington have issued "emergency regulations" saying that estate recovery will not apply to new Medicaid recipients enrolled through the ACA.

(Why this was an "emergency" when the laws were all on the books years before they issued these regulations last month, I don't know, but at least they did the right thing.)

Not so, according to my correspondents, in California. There estate recovery applies.

Let's also point out that if you are married, the Federal Poverty Level (per person) is lower. Thus people who are married can qualify for subsidized coverage they could not get if they were single. A couple in WA state got married for this reason last month, and their story made a splash in the news.

So single people are penalized in this system. Especially, I suspect, single women, since women still enjoy disproportionately low pay.

So: Why isn't this being addressed by the federal government? Why is it OK to take the house of a woman in CA but not her sister in Oregon, although they may have received the same kinds of medical care, all of it paid for by the same federal program?

And another question: where will the money go? From what I have read, states are supposed to pass on to the federal government the portion of money recovered that is due to money spent by the federal government. If the ACA has the federal government paying for 100% of Medicaid expansion for 3 years, slowly moving down to 90%, then the lion's share of money recovered by these states for ACA Medicaid enrollees actually should go back to the federal government.

That means it really should be up to the federal government to say: no, we don't want you to do estate recovery on people enrolled through the ACA.

Or is there some exception somewhere, do the states get to keep the "capitation charges" or some other portion of the money? And a larger question: will any of these agencies really be able to keep track of people's assets and who paid what and which entity should be reimbursed for what out of whose estate and why - for decades?

So those are tonight's questions. Thanks for sticking with me through this!

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Comment Preferences

  •  It's important to note that this would apply only (4+ / 0-)
    Recommended by:
    tardis10, Aunt Pat, deepeco, rl en france

    to those states that seek recovery for expenses other than long-term care. States have that option, but do you have data on which states do this and which don't? I think that this is important to know.

    •  there are at least 26 states (4+ / 0-)
      Recommended by:
      Aunt Pat, kck, ban nock, rl en france

      that seek to collect for all costs, and they are listed in one of my previous diaries.

      According to an AARP chart, states that seek to recover ALL costs, possibly including "capitation charges" (more on that in a minute) include:

      AL, AZ, CA, DE, FL, HI, IL, IN, IA, KY, ME, MD, MN, MT, NE, NH, NJ, NY, ND, OH, OK, OR, RI, TN, UT, VA.

      I think it's important to recognize that the trend over time has been towards states seeking to collect more, not less, until this latest action in WA and OR. So this list may not be entirely up to date, since the chart is from 2004.

      If you act out of anger, the best part of your brain fails to function. - the Dalai Lama

      by beverlywoods on Tue Jan 21, 2014 at 06:35:27 PM PST

      [ Parent ]

      •  my state CO is on there too, says right on the (2+ / 0-)
        Recommended by:
        rl en france, beverlywoods

        medicaid forms.

        “Conservation… is a positive exercise of skill and insight, not merely a negative exercise of abstinence and caution…” Aldo Leopold

        by ban nock on Tue Jan 21, 2014 at 10:55:34 PM PST

        [ Parent ]

      •  This is why consulting an elderlaw attorney (0+ / 0-)

        is so important.  My mother ended up in a nursing home for 5 years.  We consulted an elderlaw attorney who helped us protect a good portion of her estate.  This was in MD which is on that list.  

        “It is the job of the artist to think outside the boundaries of permissible thought and dare say things that no one else will say."—Howard Zinn

        by musiclady on Wed Jan 22, 2014 at 08:15:28 AM PST

        [ Parent ]

  •  at the rate of 0.13% (2+ / 0-)
    Recommended by:
    Aunt Pat, rl en france

    let's see, that means that for every $10,000 Medicaid spends, Estate Recovery brings in $13.00.

    If you act out of anger, the best part of your brain fails to function. - the Dalai Lama

    by beverlywoods on Tue Jan 21, 2014 at 07:13:44 PM PST

  •  I'd rather see prices regulated w/ or w/o ER. (2+ / 0-)
    Recommended by:
    Aunt Pat, rl en france

    I think estate recovery seems to be a coherent strategy - there's no public interest in "heirs" nor  "fairness" issue IMO. However the Medicaid provider/facility industry should be prevented from gaming the system and restricted to Medicaid rates. The parasitic practice of charging enormous rates for long term care intentionally running the estate dry and exhausted of funds and then accepting only Medicaid rates as the patient languishes is a scam that should be regulated and prevented. There is  bona fide Medicaid industry today, growing in assets and leverage, driving up prices, and that's unnecessary, optional, repulsive, and not in the public interest.

    •  that is another issue (8+ / 0-)

      that may have merit, but this is not what this diary is about.

      If you don't see a fairness issue between one person getting subsidized health coverage for little or no money, with no attempt at asset recovery, because they make $11,600 dollars a year, and another person having no option except to go on Medicaid and have their house taken by the state because they make $11,400 per year, well, then, I guess we disagree about what is fair.

      If you act out of anger, the best part of your brain fails to function. - the Dalai Lama

      by beverlywoods on Tue Jan 21, 2014 at 07:40:22 PM PST

      [ Parent ]

      •  Fair enough. (1+ / 0-)
        Recommended by:
        David54

        It ce3rtanly isn't the best way to do things - especially at the margins like your example - but I can see a fundamental difference between subsidizing health care costs for workers and public charity for people unable to work or who make so little they are poor. The principle is that we pay as we go with our assets - liquid or illiquid - which include income, wages, savings, home, cars, etc. before we appeal for charity which in this pathetic country requires we're in a free fall requiring a safety net of last resort.  The subsidies are the new part of the equation, a pretty weird contortion IMO designed to placate the private insurance market and acrobatically accommodate the realities of the "working poor".  

        I do think you're explaining a very important issue that needs to be better understood.

  •  Thank you (5+ / 0-)

    for staying on top of this issue. I think it's important.

  •  This Is A Really Important Diary (5+ / 0-)

    Sadly most folks won't have a clue that they will be hit by this extreme unfairness until it's too late.

    Once it does hit them or their family members, it will all become clear that they've been ripped off.

    The heartbreaking realization will occur when you receive a letter in the mail from your state's social service agency that says:  

    "Your home has had a lien put on it to allow the state to recovery the Medicaid health insurance subsidy you received associated with the Affordable Care Act.  As such, upon your death your home will be sold and the resulting funds from that sale will be handed over to the state social service agency.  In addition any other assets you may have, your car, any remaining bank account balance, jewelry, life insurance proceeds, etc will also be taken."

    Even more sad is that those people who have an income high enough to not need a subsidy through Medicaid will get a health insurance subsidy but have no obligation to pay any of it back upon death.  

    The penalty upon death only applies to the poorest of the poor.

    "I think that gay marriage is something that should be between a man and a woman.” - Arnold Schwarzenegger 2003

    by kerplunk on Tue Jan 21, 2014 at 09:23:20 PM PST

  •  Unconscionable that this issue has not been (5+ / 0-)
    Recommended by:
    ban nock, rl en france, beverlywoods, Skyye, FG

    addressed at the federal level in connection with the ACA.  One could labor for 30 years, have a house paid for, lose one's job during the 55-64 age time frame, be shunted into Medicaid due to lack of income, have a serious and expensive illness, recover, become employed again, work until age 65, become eligible for Medicare, die at age 68, and have your home taken by the state upon your death due to your having received the Medicaid "health insurance" back when you were 55. Turns out, it wasn't health insurance like the under-54s received; it was in fact a secured lien on your house.  Which would not have happened, presumably, if your temporary need for Medicaid for health insurance due to unemployment had happened when you were, say, 50, instead of 55.  

    This is a very different situation than Medicaid for long-term care for the elderly.  It's my understanding there is no means testing for health-care Medicaid--it's just based on income.  There is a glaring unfairness issue here.  Someone didn't think this through.  Or, more disturbing, perhaps someone did.

    A book must be the axe for the frozen sea within us. Franz Kafka

    by wordwraith on Tue Jan 21, 2014 at 09:50:55 PM PST

  •  Do you know if the over-54s are being informed (1+ / 0-)
    Recommended by:
    Skyye

    that this could happen if they are assigned to Medicaid?  It seems to have been a very under-the-radar issue, and would only come up in states that have accepted Medicaid expansion.

    A book must be the axe for the frozen sea within us. Franz Kafka

    by wordwraith on Wed Jan 22, 2014 at 08:00:48 AM PST

    •  this apparently also varies by state (1+ / 0-)
      Recommended by:
      Skyye

      A lot of people report that information is very hard to get. And if you did see that you were signing something that meant the state could attach your assets, everyone I have heard from who has tried to find out how much these bills would be has so far been unable to find out.

      If you act out of anger, the best part of your brain fails to function. - the Dalai Lama

      by beverlywoods on Wed Jan 22, 2014 at 02:29:02 PM PST

      [ Parent ]

  •  Thanks for reporting and staying on top of this, (1+ / 0-)
    Recommended by:
    Skyye

    Beverly. I've been reading all the blog posts you have here and it's been very informative. I'm wondering just why you haven't been able to get any response at all from your congressman, senator, or the WH? It's been quite a while since you contacted them, do they just stonewall you, say "I'll get back to you" or what? What's their excuse for not responding? This is an extremely important issue that affects many thousands of people, if not hundreds of thousands.

    I fall right into this "age trap", unfortunately. I'm 56 and have a sizeable estate (I worked hard for many years and saved to obtain it) and I have a very low income. So low, in fact, that I usually don't have to file a tax return. I'm basically living off my savings, and my house is paid for. Now it seems they want to force me into Medi-Cal (I'm in CA) and now, after knowing what they're up to with this asset-stripping scheme, I want no part of it.

    I'm tempted to move to WA or OR, but who's to say they won't change the law back retroactively? Not like there's anything to stop them from doing that. As you've rightly pointed out, this is extremely unfair to someone in my position, I don't want to be on the public dole and then my estate be "on the hook" after I'm gone for this so-called "care". I would be willing to pay a normal amount for real insurance, or better yet, negotiate with the hospital or Dr. directly for charges. Neither looks possible at this point. So far, I have not done anything one way or the other, and it's now past the first of the year.

    If I have to, I'll pay the penalty or look into one of the faith-based HC plans in order to resolve this, or move to another state. I didn't work hard my entire life to give it all to the state when I'm gone! I really hope there is some change to this unfair (and should be illegal) law soon. Otherwise, I have to do something to protect myself, my heirs, and my estate.

    Thanks again, please stay on top of this issue, your input and research is very helpful!

    •  re getting responses from people in government (1+ / 0-)
      Recommended by:
      Roundabout1

      about this, it seems to be easy enough for many of them just not to answer. I sent them all emails months ago and have simply never gotten a response to my concerns, not even "we're looking into it." Plainly it's time to call people and insist on the need for a response.

      And to AARP and Consumer Reports - WHY aren't you warning people about this, and making an issue of it?

      To Roundabut1, hanks for sharing your story.

      If you act out of anger, the best part of your brain fails to function. - the Dalai Lama

      by beverlywoods on Thu Jan 23, 2014 at 07:27:08 PM PST

      [ Parent ]

    •  It'll take a fair amount of effort to get (0+ / 0-)

      this issue remedied appropriately. I do see your point, especially for the claw-backs related to the capitation fees. Outrageous.
      But there are other factors to consider too, some of which have been raised above. One thing's clear IMHO: nothing will happen fast.

      Welcome from the DK Partners & Mentors Team. If you have any questions about how to participate here, you can learn more at the Knowledge Base or from the New Diarists Resources Diaries. Diaries labeled "Open Thread" are also great places to ask. We look forward to your contributions.

      Support Small Business: Shop Kos Katalogue If you'd like to join the Motor City Kossacks, send me a Kosmail.

      by peregrine kate on Thu Jan 23, 2014 at 08:57:14 PM PST

      [ Parent ]

    •  IRA withdrawals are considered income. (0+ / 0-)

      If you have sufficient funds in IRAs you may want to withdraw from those for living income rather than cash accounts/etc. Maybe qualify for govt subsidized health insurance rather than Medicaid.

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