Americans are set to start feeling the pain of Obamacare's estate recovery program as they open their mail to find they are facing enormous bills for the cost of their deceased parents' Medicaid healthcare costs.
Under the Affordable Healthcare Act, millions of new enrollees in the expanded Medicaid program are learning to their shock that they can have their assets seized when they die to pay off the cost of long-term care and nursing homes, as well as hospital expenses and prescription drugs, which they received after the age of 55.
Their children are left to foot the huge bills, or the so-called "death debt," which in many cases could mean selling off their late mother's or father's homes or other assets that the heirs to the estates believed they would be inheriting.
Former Republican presidential candidate and radio host Herman Cain has slammed the system
, saying that people are forced into in the healthcare insurance program for low-income earners even though they have assets, and then their estates are decimated by the Medicaid Estate Recovery Program (MERP) when they die.
"The problem here is that (Obamacare) is taking away insurance plans that people could afford, and simultaneously offering replacements that are more expensive," he said on his radio show. "At the same time, it's expanding the definition of 'low-income' by removing asset tests.
"If you can't afford the new, high price, unsubsidized premiums you are forced into Medicaid since, because of the individual mandate, you must be covered. So the feds have created a situation where you can lose the coverage you could afford, can't afford the replacement plans, and are forced into Medicaid which will allow the state to come after your assets when you die. That's simply unacceptable."
In Houston, Texas, for example, Cypress Creek Mirror columnist Toni King
earlier this month revealed a case where a woman named Sue had received a $43,200 bill for her late mother's long-term care at home over the final years of her life.
King writes that Sue "had no idea that Medicaid was running a tab" or she would have had her family take turns to look after her mother at home. Medicaid now wants its money back and is going after her mother's estate, namely her house, to pay off the debt.
"There is also no limit to the amount that can be billed against the Medicaid recipient's assets by the state," says Cain. "And estate recovery seeks a 100 percent payback of whatever each state determines are expenses they want to recover for. In other words, if you are 55-64, and depending on what state you are in and what services you use, Medicaid may not be an insurance program: it is a loan."
The estate recovery program was first passed in Congress in 1993 and was specifically aimed at seeking reimbursement of payments for nursing homes and long-term care facilities. But patients were not allowed to enroll in Medicaid if they had a certain amount of assets, such as owning their own homes.
Under President Barack Obama's signature healthcare reform law, Medicaid was expanded in the states taking part in the program to include anyone earning less than 138 percent of the poverty level, or $15,900 a year, regardless of whether they have assets or not.
Obamacare has also given all the states the option of going after all medical services, not just long-term care, paid for by Medicaid after the age of 55, with the result that many states are now planning to recover their money by putting liens of the homes of Medicaid patients who have recently died.
Yevgeniy Feyman, a fellow at the Manhattan Institute, said the intent of the program was to discourage people from using Medicaid as a free long-term health insurance plan while hiding their assets.
"People who can engage in asset planning are not going to be effected by it, but there is going to be a flood of new people and most are not going to be aware that their estates and heirs could be held liable for their healthcare costs," Feyman told Newsmax
The fear that the government could seize their homes and bank accounts after they have died is proving a deterrent to people who have been contemplating whether to sign up for Medicaid, says The Washington Post
"I was leaning toward not getting Medicaid, because there is somewhat of a stigma," Steve Olin, 60, of Eureka, Ill., told the newspaper. "Then, when I heard about the estate recovery, I was really sure."
Oregon's Medicaid, in fact, had noticed that people were "scared" about estate recovery time bombs and were not signing up for healthcare insurance, so the state introduced new regulations limiting asset reimbursement to long-term care only.
"We needed to take another look at health insurance coverage from the point of view of it not being a public benefit that’s voluntary," said Judy Mohr Peterson, Oregon’s Medicaid director, while adding that "if you’re receiving a public benefit and the state is trying to support you, you should give back if you are able.'"
Although Tom Gialanella, 56, of Bothell, WA., qualifies for Medicaid, he told Fox News that he didn't plan to sign up for the program because he's a home owner and has money in the bank.
Noting that ultimately Medicaid is not free
, he said, "It's supposed to be a safety net program. It's not supposed to be for someone who has assets who can pay the bill."
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