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For some weeks now, we've been waiting to hear what the Centers on Medicare and Medicaid Services (CMS) would say regarding those newly qualifying for Medicaid because of the Affordable Care Act. Friday they finally released a letter to state Medicaid programs, but that letter does not seem to clarify much.

You can read about it here: Implementing Health Reform: Medicaid Asset Rules And The Affordable Care Act and the actual letter they sent is in pdf form here.

The letter begins:

Dear State Medicaid Director:

This letter provides guidance to states on how the long-term services and supports-related rules, including the estate recovery rules, in section 1917 of the Social Security Act (the Act), and federal regulations at 42 C.F.R. 435.700, et seq., apply to individuals who are eligible for Medicaid under Modified Adjusted Gross Income (MAGI) eligibility rules (“MAGI individuals”) and receive coverage for long-term services and supports (LTSS). The vast majority of people in need of Medicaid-covered LTSS will qualify under eligibility categories related to age or disability. The MAGI rules do not apply to these categories, and states generally are not required to offer LTSS in the Alternative Benefit Plans (ABPs) that are available to MAGI individuals. However, some people who need LTSS may qualify for Medicaid under MAGI rules. In particular, MAGI individuals who are medically frail or otherwise meet one of the benefit plan exceptions listed in 42 C.F.R. 440.315 must be offered the option of a benefit plan that includes Medicaid state plan services. For most adult beneficiaries receiving state plan services, medically necessary nursing facility and home health services must be covered. Additionally, some states have chosen to include LTSS in their ABPs.

The letter continues for several more pages in similar fashion. Between all those acronyms it might not be easy to extract the meaning, but for starters, we can see that in the first sentence their focus at least at the start is not on the average new Medicaid enrollee aged 55-64 who may be subject to estate recovery, but mostly on those people who "receive coverage for long-term services and supports (LTSS)."

Further along, they do say some things that seem to apply to perhaps more than just people who receive LTSS:

For the second group—those who were 55 years old or older when they received medical assistance and are described in 1917(b)(1)(B)—the rule is not limited in its application to individuals who were subject to post-eligibility income rules, or to individuals who received services to which the post-eligibility income rules apply (i.e., institutional services and HCBS). MAGI individuals who were 55 years old or older when they received medical assistance are therefore not exempt from the estate recovery provision in section 1917(b)(1)(B), although all of the estate recovery limitations and exceptions described in other parts of section 1917(b), including those described in section 1917(b)(2), and the exception in situations of undue hardship described in section 1917(b)(3)(A), apply.
If I understand this correctly, the new ACA enrollees are the "MAGI individuals."

And in case you're wondering, as far as I have been able to find out, there exists no standard in any state that practices estate recovery as to what exactly constitutes "undue hardship."

Due to the potential barrier to enrollment that future estate recovery may create for some individuals, CMS intends to thoroughly explore options and to use any available authorities to eliminate recovery of Medicaid benefits consisting of items or services other than long term care and related services in the case of individuals who are determined eligible for Medicaid benefits using the MAGI methodology.
That seems clear enough: they noticed that estate recovery was a barrier to enrollment. They will use "any available authorities" to limit estate recovery to long term care and related services. So, by this point in the letter, they are apparently talking about all affected MAGI enrollees, not just those in long term care.

The question is: does CMS have any "available authorities" in this regard?

In the meantime, states have some existing authority to limit the scope of recovery for Medicaid beneficiaries. They may limit recovery based on the eligibility categories in which the beneficiaries are enrolled; for example, a state may limit estate recovery to the services under section 1917(b)(1)(B)(i) for people enrolled in the new adult group – that is those relating to LTSS.
"In the meantime" - that sounds like if they do have any "available authorities" they don't expect to be able to find them and exercise them quickly. Can CMS overrule laws passed by state legislatures saying the state will apply estate recovery to all expenses, given that a federal law told the states they were welcome to pass such laws?

It appears that this letter confirms that MAGI/ACA Medicaid enrollees are in fact subject to estate recovery; that CMS is not sure whether it can do anything about that; that they hope states will take action to exempt MAGI/ACA Medicaid enrollees who are not receiving long term care from estate recovery.

Of course, some states (OR, WA) have already done this. Many others don't seem to be in a hurry to do so. (See Estate Recovery and the ACA: drastic differences between states ). So the CMS letter confirms what we already know, and leaves most of the big questions up in the air, twisting in political winds (with help from ALEC.)

What will it take to get the richest country in the world to provide health care to low income people without taking their assets? Stay tuned.

Previous diaries on this subject begin here: Medicaid Estate Recovery + ACA: Unintended Consequences?

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Comment Preferences

  •  Tip Jar (14+ / 0-)

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

    by beverlywoods on Mon Feb 24, 2014 at 07:44:04 PM PST

  •  Thank you, beverlywoods. I spent many days on (4+ / 0-)

    the phone last November and December trying to track down an answer to this.  No one seemed to know anything.  Really--quite a few of the folks on the other end of the phone had never heard of Estate Recovery.  Those who had heard of it had no new info about it and pretty much said to suck it up.  

    Good to hear that my state (Oregon) has loosened the rule about it.  I don't think it was intended to bankrupt the heirs of poor people.  I think the rule was originally designed to keep people with assets from squirreling them away to avoid paying for a nursing home.  

    Somebody told me that you had a boyfriend who looked a girlfriend that I had in February of last year.

    by koosah on Mon Feb 24, 2014 at 08:09:10 PM PST

    •  I often have that experience, (5+ / 0-)

      calling people and having them have no idea what estate recovery is, or why it's an issue.

      As to the intent of the original law, I think that's part of the way it was sold, but I'm not at all sure that was really what motivated it to start with. Looking at the ALEC connection, I think there were other motivations.

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

      by beverlywoods on Mon Feb 24, 2014 at 08:40:42 PM PST

      [ Parent ]

  •  Please keep up this important work (1+ / 0-)
    Recommended by:
    beverlywoods

    The long report you link seems like more of the mealy-mouthed pronouncements I've read in those few instances where this issue is even addressed.  

    It's reminiscent of the blowback I've received when I point out that the ACA caused my insurance to be cancelled: shut up, we know what's good for you, and whatever you get will be better than what you had before.  Except--it's not.

    My aunt is 55 and lost her job a few years ago.  Now she's faced with losing her house--which she owns free and clear--thanks to this latest of the many oversights of Obamacare.  What can I tell her?  It 'probably' won't happen?  Where can I show her something more certain in print?

    •  If you mean "lose her house" because of Obamacare (3+ / 0-)
      Recommended by:
      Nance, BPARTR, FG

      by definition SHE won't. This is ESTATE recovery, ie, the state MAY try to recover Medicaid costs from her estate after her death.
      If there's a spouse living in her house after her death, the state won't try to take it; ditto a dependent child - under certain circumstances.
      Right now no one knows what the new rules really mean. Currently, a lot of states only do estate recovery for nursing home expenses - which is the "LTSS" they're talking about above.
      I am a lawyer, and I do elder law, in Texas. Medicaid rules vary by state so ymmv.

  •  You have done a stellar job in bringing this (4+ / 0-)
    Recommended by:
    schumann, FG, beverlywoods, Orj ozeppi

    issue to the surface and it is being discussed more - as you mentioned, it is now known to be an impediment to enrollment for that 55-65 group of potential enrollees who have low income but who do have assets (like a house or savings) This is an ENTIRELY NEW Medicaid population that did not exist prior to the Obamacare Medicaid expansion because previously they had been excluded by the asset test.

    That is why so many even in positions of authority and responsibility have been so uninformed - it has never been an issue in the past and the issue is being brought to their attention by the people who would themselves be personally impacted.

    The single biggest piece of wrongly held beliefs is that estate recovery applies ONLY to long-term assisted care which both you and I and many others now know is not the case.

    I would think that it would be under the purview of HHS which I believe has oversight and regulatory responsibility for the ACA to simply issue a definitive statement/rule that the Medicaid expansion under the ACA does NOT ALLOW for any federal or state estate recovery other than for long-term assisted care for the 55-65 age group and then the entire issue would be resolved. If that is not possible, then perhaps specific legislation needs to be passed as an improvement and tweak to the ACA assuming we ever again have a Congress capable of fulfilling their duties and actually passing legislation as opposed to the long term stand-off and inertness we are subject to currently.

    “Human kindness has never weakened the stamina or softened the fiber of a free people. A nation does not have to be cruel to be tough.” FDR

    by Phoebe Loosinhouse on Tue Feb 25, 2014 at 06:00:24 AM PST

  •  Medicaid vs "long-term" (0+ / 0-)

    Maybe it is (somewhat) clarified by Oregon's statement via [pdf][n  ... that:

    What is happening?
    The Oregon Health Authority is changing the policy on estate recovery for the Oregon Health Plan benefit. [...]

    For any coverage that starts October 1, 2013 or later, members of OHP (Medicaid expansion) who are not receiving long-term care services will not be subject to estate recovery.

    Why this is happening?
    OHA is making this change because
    .

    ---------->the estate recovery program was not designed for health benefit programs such as OHP Plus. It was designed for long-term care services for people who need them due to age or disability.<----------

    .
    It allows for reimbursement of public dollars for long-term care services.
    These are services that go beyond
    medical care or hospitalization. Long-term care services can include care in a nursing home care, community-based care, such as a Foster Home or Assisted Living Facility, or full-time assistance with daily living in an individual’s own home. Long-term care is not a covered service under OHP Plus.

    What about estate recovery for long-term care services?
    OHA will continue to implement estate recovery for people receiving long-term care services and supports. These services are not available through a regular OHP application. If someone needs long-term care services, there needs to be a separate assessment process. [...]

    So... the (linked) Oregon Health Authority statement (above) ADMITS that the Estate Recovery Program was n0t originally designed or implemented for incidental medical care or hospitalization ... but, ONLY FOR long-term care services.  
    (Thus ... ANY "Estate Recovery" for ANY (incidental) medical care  --ever-- would n0t be consistent with the original 'intent' of an "Estate Recovery" program.  ~~~and should n0t be used/implemented for ANY 'ACA'/Medicaid incidental medical care.) (Anywhere...)

    ~A govt lobbied, campaigned and selected by corporation... is good for corporation. Bad for people.~ -8.88 -8.36

    by Orj ozeppi on Tue Feb 25, 2014 at 10:51:29 AM PST

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