In a piece published yesterday, Consumer Reports advises readers in 10 states to contact their legislatures and work for changes in the estate recovery laws:
Tell these 10 states: Don't let Medicaid take my house after I dieThis represents a substantial shift from their previous dismissive attitude. Thanks are due to all those who have worked to get recognition for this issue from Consumer Reports and every other entity who ought to be concerned about it - we are making progress.
Federal government doesn't like the idea but can't stop it
Published: February 28, 2014 04:00 PM
Thanks to the new health care law, millions more people now qualify for free health care under an expansion of the Medicaid program. Unfortunately, some of those people may end up having their homes seized by their state goverment after they die. Specifically, that risk applies to new Medicaid recipients 55 and older who live in 10 states: California, Colorado, Iowa, Massachusetts, Nevada, New Jersey, New York, North Dakota, Ohio, and Rhode Island.
To go back through the history of the Consumer Reports position, let's start here:
How do I estimate income if it varies from year to year?(my bold) That sounded pretty definitive, didn't it? And also, in many cases, incorrect. I wrote the author, Nancy Metcalf, at the time, to suggest that this was not doing a good job of informing the public about a very large financial issue affecting consumers, but heard nothing back from her. I know I have not been alone in doing this - there are spome good rants going on over at Naked Capitalism. Those reference the next stage in the evolution:
Advice for the self-employed
Published: October 22, 2013 03:30 PM
Q. I’m self-employed but my income varies wildly. I usually won’t know until midyear whether it’s going to be $20,000 or $100,000 or somewhere in between. What income should I put down when shopping on the health insurance marketplace for my family of four? If it’s too low, will I have to pay the subsidy back? What if I take Medicaid and end up making too much to qualify for it?
Say you estimate your 2014 income is going to be $50,000, which would qualify you for a premium tax credit based on your family size. If after a few months you’re running ahead of or behind that pace, you should go back to your marketplace and revise your income projection. The marketplace will adjust your subsidy accordingly. You can do this as often as you need to.
In addition, if you have a bad stretch with hardly anything coming in, you can claim Medicaid benefits for that period. “Medicaid isn’t based on future income, it’s based on your current income month to month,” said Karen Pollitz, a health insurance expert at Kaiser. If your income pops back up, you can exit Medicaid and get back onto a marketplace plan. And no matter what your income ends up being at the end of the year, you won’t have to repay your Medicaid benefits.
Will Medicaid take my house when I die?This article goes on to assert with no tangible basis whatever that states are "unlikely" to follow through on estate recovery, but that if you are worried, a consultation with an elderlaw attorney should get you all fixed up.
In theory, it could. But it seems unlikely, and you should enroll anyway.
Published: January 27, 2014 12:30 PM
Q. If I enroll in the new expanded Medicaid program, when I die and try to leave something to my kids, can the government attach those assets to repay the benefits I received?
A. When I first started getting questions like this a few weeks back, I figured it was just another Obamacare urban legend like many others I’ve heard.
It isn’t, although at this point the possibility of the government snatching your house out from under your heirs is more theoretical than real and should not stop you from enrolling in Medicaid if your income qualifies you for it.
Well, pesky agitators that we are, some of us were not satisfied with this stance either. That brings us back to yesterday's article:
If you live in one of the 10 states and think this is a terrible idea, as we do, let your elected state officials know about it. But if you are eligible for Medicaid, don't even think of turning it down for this reason. Going without health insurance is an even more terrible idea. Granted, you can enroll in Medicaid at any time (whereas you can only purchase regular insurance during open enrollment). But without health coverage, you’ll be missing out on important preventive and routine care.So, Ms. Metcalf still wants everyone to sign on to this terrible deal, but at least she recommends that we work to change it. The advice at the end looks deeply suspect to me: I am not an elderlaw attorney, but I would be surprised if it turns out to be as simple as represented above: what about the lookbacks Medicaid applies? And we haven't even gotten started with the filial support laws, but that's a topic for another time.
The one encouraging thing about the government’s guidance: if you’re getting expanded Medicaid, the state government can’t put a lien on your house while you're still alive, as it can for people whose nursing home bills are being paid by Medicaid. That means that once you’re off Medicaid and onto Medicare, and live in a state that’s still determined to take your house, you can get around it by signing it over to your children before you die.
For now - keep up the pressure, folks. This issue is finally getting some attention, and that's the only way better decisions will be made about it. And thanks to all my correspondents - keep those (virtual) cards and letters coming in!
This diary is part of a series. My previous diaries on this subject start here: Medicaid Estate Recovery + ACA: Unintended Consequences?