When Medicaid attacks the family home

The letter came from the state Department of Social Services in July 2021. It expressed condolences for the loss of the recipient's mother, who had died a few weeks earlier at the age of 88.

It then explained that the deceased had incurred Medicaid debt of more than $77,000 and provided instructions on how to repay the money. “I was stunned,” the woman’s 62-year-old daughter said.

At first, she thought the letter might be some kind of scam. This was not the case.

She asked not to be identified because the matter is unresolved and she doesn't want to jeopardize her chances of getting a reduction in the bill. The New York Times reviewed the documentation supporting his account.

The daughter moved into the family's Midwest home years earlier, when her widowed mother, who had vascular dementia, began needing help.

His mother was well insured, with Medicare, a supplemental private “Medigap” policy and long-term care insurance. The only reason she signed up for Medicaid was because she enrolled in a state program that allowed her daughter to receive modest payments for her care.

But that triggered additional monthly charges through a Medicaid managed care organization, and now the state wants that money back.

This practice dates back to 1993, when Congress required that when Medicaid beneficiaries over the age of 55 used long-term services, such as nursing homes or home care, States must try to recover these expenses of the estate of the beneficiaries after their death.

“Medicaid requires beneficiaries to spend almost all of their assets” to qualify for benefits, said Eric Carlson, managing attorney at Justice in Aging.

Most states allow people eligible for Medicaid to keep assets worth just $2,000. But if a beneficiary owns a home, it may be exempt.

Yet if Medicaid funded long-term care and there is money left after death, state agencies will come in and collect the assets.

“If there is going to be tens of thousands of dollars available for rebuilding, in most cases it will be the house,” Mr. Carlson said. Surviving family members may have to sell the house to repay Medicaid, as the Midwestern daughter could be forced to do, or the state could seize the property.

Medicaid “is the only public policy program in the United States of America that requires states to seek recovery of money,” said Rep. Jan Schakowsky, Democrat of Illinois. This month, she reintroduced a bill, the Unfair Medicaid Collections Actto end the practice.

His team calculated that 17,000 families in Illinois alone have lost their housing because of the Medicaid rollback since 2021. Comparable national figures are not available, but an independent agency which advises the federal government and states on Medicaid-related issues reported in 2021 that states collected $733 million through estate collections in fiscal year 2019.

That's only about half a percent of Medicaid long-term care spending, according to MACPAC, Medicaid and the CHIP Payment and Access Commission. Only eight states collected more than 1 percent of spending.

“This is a truly harmful and cruel program,” Ms. Schakowsky said. “And it doesn’t work. The cost of trying to get the money could exceed any money that would be returned.

When Congress established the mandate, supporters argued that estate recovery would save money and promote fairness, since some older people with higher incomes hired attorneys to help them protect their assets so Medicaid can pay their nursing home bills.

But for the most part, states file lawsuits against low-income families, many of whom are Black and Hispanic. Critics argue that this policy perpetuates poverty. The average wealth of deceased Medicaid recipients over age 65 is less than $45,000, the MACPAC report notes, and the average home equity is $27,364.

“For many of these people, the house is the product of a lifetime of work and scrimping,” Mr. Carlson said. “This could be a foundation for their children and grandchildren. This is being taken away from the family due to these claims. It imposes relief on families and communities least able to pay it.

(A surviving spouse or minor or disabled child may continue to live in the home after the death of a Medicaid recipient, but after the survivors die or after a child turns 21, estate recovery may have place.)

Every state offers hardship waivers that reduce claims, but “the process tends to be difficult or futile,” Mr. Carlson said. “Depending on the states, the application almost always fails. »

“I don't think estate recovery was a policy created primarily to impact low-income families, but that's the impact it has,” said Natalie Kean, another managing attorney at Justice in Aging.

But estate clawbacks can also affect middle-class families. Many turn to Medicaid because, given the cost of nursing homes (the the median price last year was $8,669 per month), “your savings can disappear quickly,” Mr. Carlson said.

Brian Snell, an elderly lawyer from Marblehead, Massachusetts, represents a family whose 93-year-old mother, who suffered from dementia, died in 2022 in her North Andover apartment. Her daughter had reduced her hours as a beautician to care for her at home, wanting to keep her out of a nursing home because “that was her mother's wish”, Mr Snell said .

When the mother qualified for MassHealth, the state Medicaid program, it enrolled her in a public home care program that provided in-home aides (but only sporadically, as the pandemic made workers and agencies hesitant to enter homes).

After his death, MassHealth sought to recover $292,000 for the cost of home care and program premiums. Since two of her children were low-income, including the daughter who looked after them, a state waiver would allow those two to receive $50,000 each from the sale of the mother's condo. But more than half of the $335,000 sale price will go to the state and federal governments.

The prospect of such clawbacks prevents some low-income seniors from receiving needed care, even if they are eligible.

“It's not uncommon for people to simply refuse to apply for Medicaid services once they learn about the recovery program,” said Matthew Portwood, an intake supervisor at the Atlanta Regional Commission, which makes office of local agency on aging, in an email. “Our advisors face this almost daily. »

Some states are working to reduce the financial burden on low-income families. Massachusetts, Georgia, South Carolina and Illinois, for example, will not pursue recovery of estates valued at less than $25,000. Some states now provide applicants with more comprehensive explanations of the consequences of their registration.

California allows exemptions for hardship for a “modestly valued property,” defined as a market value of up to half the county’s average home price. MACPAC recommended changing federal law to allow states to make recovery optional.

Rep. Schakowsky's bill goes further by completely banning Medicaid estate recovery. “It’s just a really bad idea,” she said.

Her bill faces an uphill battle in the Republican-controlled House — all 13 of its co-sponsors so far are Democrats — and it got nowhere when she introduced it last session. But the congresswoman remains optimistic: People in red states also need long-term care.

Back in the Midwest, the girl who was charged $77,000 still hopes to stay in the two-story house where she grew up, where her mother lived for more than 60 years and where “there's a memory in every corner. She is now looking for a lawyer. “I have to fight this,” she said.

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