The letter came from the state Department of Human Services in July 2021. It expressed condolences on the loss of the recipient’s mother, who had died a few weeks earlier at the age of 88.
It was then explained that the deceased had incurred more than $77,000 in Medicaid debt and instructions were given on how to repay the money. “I was stunned,” said the woman’s 62-year-old daughter.
At first she thought the letter might be some kind of scam. That wasn’t it.
She asked not to be named because the case is unresolved and she didn’t want to jeopardize her chances of getting the bill reduced. The New York Times has reviewed the documents that support its account.
The daughter moved into the family’s Midwestern home years earlier when her widowed mother, who suffered from vascular dementia, needed help.
Her mother was well insured, with Medicare, private supplemental Medigap insurance, and long-term care insurance. The only reason she enrolled in Medicaid was because she enrolled in a government program that provided her daughter with modest payments for care.
However, this resulted in additional monthly fees from a Medicaid managed care organization, and now the state wants that money back.
The practice dates back to 1993, when Congress mandated that if Medicaid beneficiaries over age 55 received long-term services such as nursing homes or home care, states must attempt to recoup those expenses from beneficiaries’ estates after their death have taken.
“Medicaid requires beneficiaries to spend almost all of their assets” to qualify for benefits, said Eric Carlson, senior attorney at Justice in Aging.
In most states, Medicaid beneficiaries are only allowed to keep assets worth $2,000. However, if a beneficiary owns a home, it may be exempt from tax.
However, if Medicaid has paid for long-term care and there is still money left after death, government agencies will pick up the assets.
“When there are tens of thousands of dollars available to renovate, in most cases it’s the house,” Carlson said. Surviving family members may have to sell the home to pay off Medicaid, as the Midwestern daughter must, or the state may seize the property.
Medicaid “is the only nonprofit program in the United States of America that requires states to get money back,” said Rep. Jan Schakowsky, Democrat of Illinois. This month, she reintroduced a bill, the Stop Unfair Medicaid Recoveries Act, to end the practice.
Their staff has calculated that in Illinois alone, 17,000 families have lost their homes to Medicaid recovery since 2021. Comparable national figures are not available, but an independent agency that advises the federal government and states on Medicaid issues reported in 2021 that states collected $733 million through estate restructuring in fiscal year 2019.
According to MACPAC, Medicaid and the CHIP Payment and Access Commission, this represents only about half a percent of Medicaid long-term care spending. 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 actually trying to get the money could exceed the money repaid.”
When Congress set the mandate, advocates argued that estate restructuring would save money and promote justice because some higher-income seniors hired lawyers to protect their assets so Medicaid could pay their nursing home bills.
In most cases, however, states pursue claims against low-income families, including many Black and Hispanic families. Critics argue that the policy perpetuates poverty. The average net worth of deceased Medicaid recipients over age 65 is less than $45,000, the MACPAC report said, and the average home equity is $27,364.
“For many of these people, the home is the result of a lifetime of work and frugality,” Carlson said. “It could be a foundation for their children and grandchildren. This is what the family is deprived of under these demands. It forces compensation on the families and communities least able to pay it.”
(A surviving spouse or a minor or disabled child may continue to live in the home after the death of a Medicaid recipient, but estate recovery may occur upon the death of the survivor or after a child turns 21.)
Every state offers hardship waivers that reduce claims, but “the process is typically difficult or pointless,” Carlson said. “Depending on the state, the request is almost always unsuccessful.”
“I don’t think estate recovery was a policy intended primarily to impact low-income families, but that’s the impact it has,” said Natalie Kean, another senior attorney at Justice in Aging .
However, the restructuring of the estate can also affect middle-class families. Many turn to Medicaid because, given the cost of nursing homes (the average price was $8,669 a month last year), “your savings can quickly disappear,” Carlson said.
Brian Snell, an elder law attorney in Marblehead, Massachusetts, represents a family whose 93-year-old mother, who suffered from dementia, died in her North Andover condo in 2022. Her daughter had limited her hours as a beautician to care for her at home and wanted 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’s Medicaid program, she was enrolled in a state home care program that provided home health aides (though only sporadically, as the pandemic made workers and authorities reluctant to enter homes).
After her death, MassHealth sought to recover $292,000 for home care costs and program premiums. Because two of her children, including the caring daughter, were low-income, a government waiver would allow these two to receive $50,000 each from the sale of the mother’s condominium. 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 older adults from receiving the care they need, even if they are entitled to it.
“It is not uncommon for people to simply decline to apply for Medicaid benefits once they learn about the recovery program,” Matthew Portwood, an admissions manager at the Atlanta Regional Commission, which serves as the local agency on aging, said in an email. Mail. “Our consultants experience this almost every day.”
Some states are working to ease the financial burden on low-income families. Massachusetts, Georgia, South Carolina and Illinois, for example, will not seek recovery for estates valued at less than $25,000. Some states now provide applicants with more detailed explanations of the consequences of registration.
California allows hardship exemptions for a “homestead of modest value,” defined as a market value of up to half the median price of homes in the county. MACPAC recommended changing federal law to allow states to make recovery optional.
Rep. Schakowsky’s bill goes further and prohibits Medicaid estate recovery altogether. “It’s just a terrible idea,” she said.
Her bill faces an uphill battle in the Republican-controlled House of Representatives – all 13 co-sponsors so far are Democrats – and when she introduced it last session, it failed. But the congresswoman remains optimistic: People in red states also need long-term care.
Back in the Midwest, the daughter, who was billed $77,000, still hopes to stay in the two-story home where she grew up, where her mother lived for more than 60 years and where “in There is a memory in every corner.” Now she is looking for a lawyer. “I have to fight it,” she said.
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2024-03-16 13:56:23
www.nytimes.com
