State Medicaid Targets Deceased’s Estates for Health Cost Recovery
TL/DR –
The US government requires states to recover money from the assets of deceased Medicaid patients who relied on the taxpayer-funded health insurance. However, a Democratic lawmaker recently proposed disbanding this program, arguing that it collects only around 1% of the more than $150 billion Medicaid spends annually on long-term care. The criticism is also based on the failure of many states to warn people who sign up for Medicaid about potentially large bills and property claims that may burden their families after their death.
Salvatore LoGrande’s Family Faces $177,000 Medicaid Bill After His Death
When Salvatore LoGrande was battling cancer, his daughters vowed to preserve his hard-earned home. However, within a year of his demise, his daughter, Sandy LoGrande, received a $177,000 bill from Massachusetts for her deceased father’s Medicaid expenses. She also faced the threat of losing their family home if the amount was not paid in time.
These actions are part of the estate recovery process that each state is mandated to follow by the federal government. The initiative aims to recover funds from the assets of deceased individuals who relied on Medicaid – taxpayer-funded health insurance for the nation’s poorest. This process applies to those over 55 who used Medicaid for long-term care, such as nursing home stays or in-home health care.
A Democratic Lawmaker Calls for the End to the “Cruel” Program
This month, a Democratic lawmaker proposed ending this “cruel” program, citing that it recovers merely 1% of the more than $150 billion Medicaid spends on long-term care annually. Critics also claim that many states fail to warn Medicaid recipients that their families could face significant bills and property claims after their demise.
The LoGrande family found themselves in a two-year legal battle with Massachusetts post their father’s death. Sandy LoGrande recalled that she was assured by a local nonprofit that the state would only claim the house if her father was sent to a nursing home. However, after his passing, the state demanded $177,000 for his care, pushing the family into a legal tussle that ended with the state releasing its claim on the house in 2019.
Varying State Policies and Proposed Changes
The Medicaid estate recovery process varies widely among states according to a 2021 report by the Medicaid and CHIP Payment and Access Commission. Some states impose a legal claim on a home, while others attempt to recover all medical costs, including doctor visits and prescriptions. An investigation by the Health and Human Services inspector general found that while some programs were cost-effective, states often failed to collect from eligible estates.
The Blue Cross Blue Shield Foundation of Massachusetts recently called for an overhaul of the process, suggesting that the state legislature pass a law prohibiting further collections. They argue that estate recovery perpetuates wealth disparities and intergenerational poverty. Similarly, Democratic Rep. Jan Schakowsky of Illinois reintroduced legislation to cease the federal government’s mandate.
The estate recovery program has faced criticism for being ineffective and cruel, posing significant loss for families and taxpayers, who do not benefit significantly from the recovery efforts. While the bill has been suggested, it may face challenges garnering bipartisan support in a divided Congress.
The Man Behind the Mandate Calls for Reform
Stephen Moses, the architect of the mandate, now admits that the rule is not functioning as intended. Originally, the mandate was designed to encourage individuals to save for their long-term care, but now it faces the need for significant reform.
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