New Medicaid Recipients May be Surprised by Estate Recovery Program

Wednesday, 18 Dec 2013 10:54 AM

By Drew MacKenzie

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Millions of Americans 55 and older who have enrolled for Medicaid benefits under the Affordable Care Act could have their estates billed for healthcare costs after their death.

The Department of Health and Human Services' Estate Recovery Program, which has been around for years, mandates that states are required to seek reimbursement of payments for nursing homes and long-term care facilities, as well as related hospital and prescription drug services.

But the Medicaid program will be greatly expanded under Obamacare, meaning that more people could end up being vulnerable under the estate recovery program.

According to The Seattle Times, Washington and other states, which now have the option of seeking reimbursements for virtually all Medicaid services, are coming under fire from recipients who are urging a change in state law to limit the services for which Medicaid can bill their estates.

Gov. Jay Inslee's office and the state's Medicaid authority, called Apple Health, are now planning to introduce an emergency measure to limit estate recovery to long-term care, such as nursing homes, and related medical expenses.

The state estimates that 223,000 adults, who earn less than $15,856 a year, will seek health insurance under its expanded Medicaid program over the next three years.

The move to change the estate recovery law in Washington comes just weeks after Oregon passed a new rule that the state will only demand payback for long-term care and not regular health benefits.

There has been one couple, however, who have found a way to get around the estate recovery law under Medicaid — marriage.

Sofia Prins and Gary Balhorn, both 62, each qualified for health insurance through Medicaid based on their incomes. But they recently discovered that if they got married and pooled their incomes they would just qualify for a subsidized health plan under Obamacare.

“We’re happy to be getting married,” Prins, who plans to leave her home to her two sons, told the Seattle Times. “Unfortunately not everyone has such an elegant solution to the problem.”

But there are other ways as well to circumvent the recovery program. According to the website, states can't recover costs from the spouse of a deceased enrollee or their children under the age of 21, blind or disabled at any age. Recovery efforts can also be waived if trying to collect causes undue hardship on families.

Still, Dr. Jane Orient, executive director of the conservative Association of American Physicians and Surgeons, told The Washington Times back in March that the recovery provision is “a cash cow for states to milk the poor and the middle class.”

She added about the expansion of Medicaid: "People will think this is wonderful, this is free insurance. They don’t realize it’s really a loan, and is secured by any property they have.”

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