After criticism from two Democratic US senators, the Social Security Administration announced this week it is suspending a program that seized thousands of individual federal income tax refunds to recover Social Security overpayments from years before. The agency said the program will be reviewed after critics complained that citizens were being forced to make restitution on overpayments sometimes made decades in the past when they were children and the payments mistakenly were sent to their parents or guardians.
At least for now the suspension of such collections is good news for hundreds of thousands of citizens who would otherwise have to pony up. Meanwhile, however, no one seems to be equally worked up at all about a decades-old program that effectively forces low-income people to repay the cost of their public health care.
Let's look for example at Wisconsin, whose lawmakers have evidenced no discontent or unease regarding the state's long-running Estate Recovery Program, even while they passed a law that effectively ended inheritance taxes on other, wealthier state residents.
Under the Estate Recovery Program, Wisconsin state government gave itself authority to recover government medical assistance payments for care received while a low-income resident received Medicaid assistance (in Wisconsin called BadgerCare). The recovery might, for example involve reimbursement for the cost of living in a nursing home. The recovery program also allows the state to seek repayment of some noninstitutional medical assistance benefits for recipients past age 55.
To recover the money, the state uses two methods. First, it can collect through the estate of a recipient or in some cases the estate of the recipient's spouse. Estates include all assets owned by a person upon death. Second, the state can place liens on the homes of such recipients.
Follow me on past the fold for more, including how this kind of recovery is completely inconsistent with the silence of Republicans, who are otherwise quite vocal about "death" taxes.
On its web site, the Wisconsin Department of Health Services explains that the recovery program was enacted by the US Congress and the state Legislature to collect from the assets of those who received benefits from Medicaid. Recovery, says the agency, is made "when a member and the member’s dependents no longer need those assets." Oh, really? Interesting, given that -- according to Republicans -- wealthy people in this country always need all of their considerable assets.
States other than Wisconsin have similar programs, all of which were authorized by the federal Omnibus Budget Reconciliation Act of 1993. That act was designed to deal with rising federal deficits and made a number of cuts in social service programs.
It's true: If you're reasonably well off, many lawmakers -- mostly Republican -- have for decades pushed the idea that your heirs should not be taxed whatsoever on their inheritance. But if you're low-income and have had to enroll in Medicaid for your health coverage, many of those same lawmakers think it's perfectly fine to go after your assets when you die, or in some cases maybe even before. If that weren't bad enough, Rep. Paul Ryan (R-Wisconsin), chair of the House Budget Committee, continues proposing Medicaid "reforms" that would cut the program in half if not kill it.
The short history lesson that follows should sound familiar to those who have observed GOP obstructionism since 2008 and the national economic meltdown that led to rising federal deficits. The GOP of the 1990s similarly complained about deficits but no Republicans in either house voted for the Omnibus Act, which narrowly passed both houses and was signed by President Clinton. Their objection: It dared to fix serious deficits not just by making spending cuts but also by raising some taxes -- just like the more recent budget-repair efforts of the Obama administration.
The only serious GOP alternative to the Omnibus Act came from Rep. John Kasich of Ohio, now governor of that state. His amendment would have reduced the federal deficit by cutting $355 billion in spending, with $129 billion of that coming from social programs like Medicaid, while also eliminating all the act's tax increases. The final Omnibus Act did raise taxes and cut social program by $42 billion. And, as advertised, for better or worse, the act produced a sizable federal surplus, all with Democratic votes. However, the act enabled Wisconsin's Recovery Act and all similar laws in other states, a Faustian bargain that kept enough conservative Democrats in the fold on the overall package.
Since then, Republicans have been politically vocal arguing against what they term the "death tax" on inheritances, which is really just a tax, like any other. They have made no such noise about Medicaid payment recovery. Apparently, the so-called death tax is a totally bad thing -- unless, that is, it's a special kind of death tax imposed on low-income Americans so poor they received Medicaid at some point.
So if you're a well-to-do person and you die, Wisconsin and other states won't tax your estate. But if you're a working low-income person or even officially below the poverty line, and you were at any point enrolled in Medicaid in its various state guises, Wisconsin and other states will upon your death try to recover certain medical reimbursements paid to you by that program, and will do so by going after proceeds from your estate or by taking out a lien on your house. Your heirs will just have to get in line.
Of course, maybe the GOP's apparently paradoxical view is driven by semantics. After all, one case involves a tax! While the other only involves a "fee recovery." But both involve death, assets and heirs, so let's dispense with that difference without a distinction.
Furthermore, while Republicans may be able to claim they never voted for Medicaid payment recovery from the estates of low-income Americans, they cannot claim they ever campaigned against it or introduced a measure to stop it, either. After all, they 1.) dislike Medicaid and continue to seek ways of killing it off, and 2.) they are perfectly capable of being loud-mouthed, which makes their silence on this matter speak volumes.
The good news is that this situation allows us to dispense with the lie that Medicaid is some kind of entitlement. Obviously not, unless you mean to say that the government has entitled itself to give you something but then later take it back.
Wed Apr 16, 2014 at 11:24 AM PT: Just for the sake of context, I recommend this article over at the Washington Post. Excerpt below:
http://www.washingtonpost.com/...
> Since the mid-1990s, the biggest increases in spending [on social safety net programs] have gone to those who were middle class or hovering around the poverty line. Meanwhile, Americans in deep poverty — that is, with household earnings of less than 50 percent of the official poverty line — saw no change in their benefits in the decade leading up to the housing bubble. In fact, if you strip out Medicare and Medicaid, federal social spending on those in extreme poverty fell between 1993 and 2004.