Medicaid Asset Seizure Rules Causing People to Avoid Coverage
This is from
Sandhya Somashekhar of The Washington Post:
Add this to the scary but improbable things people are hearing could happen because of the new federal health-care law: After you die, the state could come after your house.
The concern arises from a long-standing but little-known aspect of Medicaid, the state-federal program that provides health coverage to millions of low-income Americans. In certain cases, a state can recoup its medical costs by putting a claim on a deceased person’s assets.
This is not an issue for people buying private coverage on online marketplaces. And experts say it is unlikely that the millions of people in more than two dozen states becoming eligible for Medicaid under the program’s expansion will be affected by this rule. But the fear that the government could one day seize their homes is deterring some people from signing up.
“I was leaning toward not getting Medicaid, because there is somewhat of a stigma,” said Steve Olin, 60, a former copy editor from Eureka, Ill. “Then, when I heard about the estate recovery, I was really sure.”...
Asset recovery predates the health-care law, but the legislation makes it apply to a larger pool of people....
In 1993, concerned about rising Medicaid costs, Congress made it mandatory for states to try to recover money from the estates of people who used Medicaid for long-term care, which can cost taxpayers hundreds of thousands of dollars per person. They included exceptions in cases in which there is a surviving spouse, a minor child and other situations.
Congress also gave states the option to go further — to target the estates of all Medicaid recipients for any benefits they received after age 55, including routine medical care. Many states took that route, including Oregon, which from July 2011 to June 2013 recovered $41 million from about 8,900 people. ...
But after the Affordable Care Act made it mandatory for most people to carry health insurance, Oregon’s Medicaid office decided to change its approach because people scared about asset recovery were not signing up for coverage. ...
Other states have taken a much more lax approach to asset recovery in the past, hesitant to target poor people whose only valuable asset might be the farm that has been in their family for generations. Experts say there are no good, recent national data on how asset recovery is applied, with states differing drastically and working on a case-by-case basis. ...
Still, when it comes to something as central to middle-class identity as a home and what people can pass on to their heirs, it is perhaps not surprising that some people are not taking any chances.
A 54-year-old former lawyer from New York City, who spoke on the condition of anonymity because she will be looking for a job soon, said that despite the prospect of free insurance, she did not enroll in Medicaid because she owns an $850,000 apartment she hopes to bequeath to a family member.
“I don’t want my assets to be raided after my death,” she said. “The idea that someone can come after my house after I die — I just can’t do it.”
Advocates are pressing the Obama administration to specify that new Medicaid recipients nationally should not be subject to asset recovery.
Aaron Albright, a spokesman for the Centers for Medicare and Medicaid Services, said, “We recognize [the] importance of this issue and will provide states with additional guidance in this area soon.” ...
