When Medicaid Comes After the Family Home

The letter got here from the state division of human providers in July 2021. It expressed condolences for the lack of the recipient’s mom, who had died a couple of weeks earlier at 88.

Then it defined that the deceased had incurred a Medicaid debt of greater than $77,000 and offered directions on repay the cash. “I was stunned,” mentioned the girl’s 62-year-old daughter.

At first, she thought the letter may be some type of rip-off. It wasn’t.

She requested to not be recognized, as a result of the case is unresolved and she or he doesn’t wish to jeopardize her possibilities of getting the invoice lowered. The New York Times has reviewed documentation substantiating her account.

The daughter moved into the household’s Midwestern dwelling years earlier, when her widowed mom, who had vascular dementia, started to want help.

Her mom was effectively insured, with Medicare, a personal supplemental “Medigap” coverage and long-term care insurance coverage. The solely motive she enrolled in Medicaid was that she had signed up for a state program that allowed her daughter to obtain modest funds for caregiving.

But that triggered extra month-to-month fees by a Medicaid managed care group, and now the state needs that cash again.

The follow dates to 1993, when Congress mandated that when Medicaid beneficiaries over age 55 have used long-term providers, reminiscent of nursing houses or dwelling care, states should attempt to get well these bills from the beneficiaries’ estates after their deaths.

“Medicaid requires beneficiaries to spend down almost all their assets” to qualify for advantages, defined Eric Carlson, a directing lawyer at Justice in Aging.

Most states permit these eligible for Medicaid to retain belongings price solely $2,000. But if a beneficiary owns a house, it may be exempt.

Still, if Medicaid has paid for long-term care and there’s cash available after loss of life, state businesses will come for the belongings.

“If there’s going to be tens of thousands of dollars available for recovery, in most cases, it’s the house,” Mr. Carlson mentioned. Surviving relations could should promote the home to repay Medicaid, because the Midwestern daughter could also be compelled to do, or the state could seize the property.

Medicaid “is the only public benefit program from the United States of America that requires states to seek to get money back,” mentioned Representative Jan Schakowsky, Democrat of Illinois. This month she reintroduced a invoice, the Stop Unfair Medicaid Recoveries Act, to finish the follow.

Her employees has calculated that 17,000 households in Illinois alone have misplaced houses to Medicaid restoration since 2021. Comparable nationwide figures aren’t out there, however an unbiased company that advises the federal authorities and states on Medicaid points reported in 2021 that states collected $733 million by property restoration within the fiscal 12 months of 2019.

That quantities to solely about one half of a p.c of Medicaid’s long-term-care expenditures, in keeping with the company, MACPAC, the Medicaid and CHIP Payment and Access Commission. Only eight states collected greater than 1 p.c of expenditures.

“This is a really harmful and cruel program,” Ms. Schakowsky mentioned. “And it’s not working. The cost of actually trying to get the money could exceed any money that would be returned.”

When Congress established the mandate, proponents argued that property restoration would get monetary savings and promote equity, since some higher-income seniors employed attorneys to assist protect their belongings in order that Medicaid would pay their nursing dwelling payments.

But for essentially the most half, the states pursue claims towards low-income households, lots of them Black and Hispanic. Critics argue that the coverage perpetuates poverty. The common wealth of deceased Medicaid recipients over age 65 is lower than $45,000, the MACPAC report famous, and the typical dwelling fairness is $27,364.

“For a lot of these people, the home is a product of a lifetime’s worth of working and scrimping,” Mr. Carlson mentioned. “It could be a foundation for their children and grandchildren. That’s pulled away from the family under these claims. It imposes recovery against the families and communities least able to pay it.”

(A surviving partner or minor or disabled baby can proceed to reside in the home after a Medicaid beneficiary dies, however after the survivors die, or after a baby turns 21, property restoration can proceed.)

Every state gives hardship waivers that scale back claims, however “the process tends to be difficult or futile,” Mr. Carlson mentioned. “Depending on the state, the request is almost always unsuccessful.”

“I don’t think estate recovery was a policy created primarily to impact low-income families, but that’s the impact it’s having,” mentioned Natalie Kean, one other directing lawyer at Justice in Aging.

Estate restoration may also have an effect on middle-class households, nevertheless. Many flip to Medicaid as a result of, given the price of nursing houses (the median value final 12 months was $8,669 a month), “your savings can disappear in a hurry,” Mr. Carlson mentioned.

Brian Snell, an elder legislation lawyer in Marblehead, Mass., represents a household whose 93-year-old mom, who had dementia, died in 2022 at her rental in North Andover. Her daughter had reduce on her hours as a beautician to take care of her at dwelling, wanting to maintain her out of a nursing dwelling as a result of “that was her mother’s wish,” Mr. Snell mentioned.

When the mom certified for MassWell being, the state Medicaid program, it enrolled her in a state dwelling care program that offered dwelling well being aides (although solely sporadically, as a result of the pandemic made staff and businesses hesitant to enter houses).

After her loss of life, MassWell being sought to get well $292,000 for the price of dwelling care and this system premiums. Because two of her kids have been low-income, together with the caregiving daughter, a state waiver would permit these two to obtain $50,000 every from the sale of the mom’s rental. But greater than half of the $335,000 gross sales value will go to the state and federal governments.

The prospect of such clawbacks prevents some low-income older adults from receiving obligatory care, even when they’re eligible.

“It’s not uncommon for people to simply decline to apply for Medicaid services once they learn about the recovery program,” mentioned Matthew Portwood, an consumption supervisor on the Atlanta Regional Commission, which serves because the native company on growing older, in an e mail. “Our counselors encounter this almost daily.”

Some states are working to scale back the monetary hit on low-income households. Massachusetts, Georgia, South Carolina and Illinois, as an illustration, won’t pursue restoration towards estates valued under $25,000. Some states now present candidates with fuller explanations of the implications of signing up.

California permits hardship waivers for a “homestead of modest value,” outlined as a market worth of as much as half the typical value of houses within the county. MACPAC really useful amending federal legislation to permit states to make restoration non-compulsory.

Representative Schakowsky’s invoice goes past that to ban Medicaid property restoration altogether. “It’s just a terrible idea,” she mentioned.

Her invoice faces an uphill battle within the Republican-controlled House — all its 13 co-sponsors to this point are Democrats — and it went nowhere when she launched it final session. But the congresswoman stays optimistic: People in crimson states want long-term care, too.

Back within the Midwest, the daughter who was billed $77,000 nonetheless hopes to stay within the two-story home the place she grew up, the place her mom lived for greater than 60 years and the place “there’s a memory in every corner.” Now she is on the lookout for a lawyer. “I have to fight this,” she mentioned.