By Lambert Strether of Corrente. An earlier version published at Corrente.
Summarizing the Medicaid clawback issue, Paul Craig Roberts has a new post that explains what can happen to your estate if you’re over 55 and ObamaCare forces you into Medicaid because your income is under 138% of the Federal poverty level:
In violation of moral philosopher John Rawls’ second principle of justice [q.v.], some of the poorest Americans will pay the highest cost of health care as they, and they alone, are subject to having the family home and any other assets they might possess confiscated by the state in order to reimburse Obamacare for the cost of their medical expenses….
OBRA 1993 requires all states that receive Medicaid funding to seek recovery from the estates of deceased Medicaid patients for medical services received in a nursing home or other long-term care institution, home- and community-based services and related hospital and prescription drug services regardless of age. It also allows, at state option, recovery for all services used in the Medicaid state plan at age 55 or older. At minimum, states must pursue recovery from the probate estate which includes property that passes to heirs under state probate law, but states can expand the definition of estate to allow recovery from property that bypasses probate. …
[A] , and with the expansion of Medicaid states will be in dire need of money, particularly in the current economy [especially when the Feds no longer pick up the full Medicaid tab in 2017].
Obamacare revises Medicaid regulations in order to make more Americans eligible for Medicaid. Revised regulations include an increase in age and income limitations, and the asset test no longer applies. Prior to these revisions, applicants were not eligible for Medicaid if they had more than a specific dollar amount in assets. But, under Obamacare, those who likely own a home or have savings set aside–for example, early retirees or people who have lost their jobs and, as a result, are in a low income bracket–will find themselves in Medicaid, and their assets will be looted by the government when they die for medical services used at age 55 and up. …
[B] of Obamacare. The House Ways & Means Committee and The House Energy & Commerce Committee share jurisdiction over health care, including Medicare and Medicaid, and both worked extensively on Obamacare. So, don’t bother thinking that the members of these committees didn’t know that estate recovery would impact millions of Americans who would be tossed into Medicaid. The asset test was dropped and the age limit was increased explicitly in order to expand Medicaid. Yet, did We the People hear any concern about estate recovery? Certainly not in the many floor speeches given by Democrats as well as Republicans or from the media.
Obama stated during his 2008 presidential campaign that transparency would be the leverage needed to ensure that people stay involved in the national health care reform process. The expansion of Medicaid was part of the process. [C] Did they tell you the government subsidy for a private plan at an exchange is a loan, that must be repaid if your income increases? Transparency was highly selective. The bait was shown but not the hook.
(I’ve bracketed and lettered [A], [B], and [C] three points I want to refer back to later.) So, it looks like the issue of Medicaid clawback is starting to get some traction, since there’s pushback.
Today’s overblown Obamacare fear: Will Medicaid take my house?
The prospect of asset seizures raises people’s hackles [way to trivialize there, dude!*], especially since under the Affordable Care Act, those earning less than 138% of the poverty level for subsidized health insurance except Medicaid. (Again, that’s in states that have expanded Medicaid.)
“May be offered” is not true. ObamaCare apologists consistently present Medicaid as a choice; it isn’t. If you fall below the poverty line, you get tossed in the Medicaid bucket, case closed. Although Hiltzik lists some exceptions to asset seizure, this seems to be his key line of defense:
Family members can also file for hardship waivers.
Medicaid officials say that most [which?] states are sensitive to the political ramifications of being seen [by whom?] as grasping after the assets of low-income families, so waiver requests tend to be [what does that mean?] treated pretty liberally [which means?].
Which doesn’t mean that the waiver rules are clear:
State Medicaid officials have been asking the federal government to clarify the recovery rules for their new enrollees for weeks, Salo says. The Dept. of Health and Human Services has promised to provide them, but hasn’t done so yet. The hope, Salo says, is for broader discretion to decide when to dun, and when not to dun.
So, to summarize, the putatively liberal Hiltzik believes that:
1) It’s OK to force poor 55+ people into a program
2) that can seize their estate
3) even though the estates of people who are not poor and 55+ are not subject to seizure, but
4) the seizures won’t really happen
5) at least not a whole lot
6) because that would look bad politically, and
7) there will in any case be waivers, even if
8) waivers will be granted on a case-by-case basis,
9) using rules that aren’t really clear,
10) and are subject to discretion.
What could go wrong? Forget Hiltzil throws poor people under the bus with points #1 – #3; we’re used to getting the big “Fuck you!” from Democrats anyhow; look at the food stamp cuts and the unemployment #FAIL. And forget the “Trust us! There will be waivers!” of #7 – #10; I mean, just because poor 55+ people have to go through a time-consuming and degrading process doesn’t necessarily imply there will be bad outcomes, right?
Just look at #6, and consider the realpolitik: First, Democrats planned Medicaid clawback (point [B], above); it was baked into ObamaCare, from the start, by its drafters. The realpolitik decisions have already been made! Second, Democrats had to know that states need money (point [A], above), they really need money; ObamaCare was passed in 2009, when the economy was even worse than it is now. State budget requirements will trump a news cycle or two of bad optics every so often about the no-good kids of some old codger losing the only hope of inheritance they ever had. Finally, does Hiltzik really believe the political class is going to rally to the defense of poor 55+ people when a good “progressive” like himself throws them under the bus? And, oh yeah: The onus is on the
consumer citizen to file for the waiver! Wouldn’t it make more sense to change policy at the national level?
Will Medicaid take my house when I die?
In theory, it could. But it seems unlikely, and you should enroll anyway.
There is no “anyway” for which Metcalf will not recommend that “you should enroll.”
But the fact remains that unless they come to their senses (or the federal government tells them to stop), of the 25 states plus the District of Columbia that are expanding Medicaid to cover all low-income households, at least 10 [California, Colorado, Iowa, Massachusetts, Nevada, New Jersey, New York, North Dakota, Ohio, and Rhode Island] are planning to try to get their money back when beneficiaries die. I know this [NC readers have known this since at least June 3, 2013] because I’ve spent the last couple of weeks chasing down information from those states and have heard back from all but three of them. …
What’s happening in those 10 states is beyond unfair, because younger Medicaid beneficiaries will face no such threat, and neither will people who get tax credits to lower the cost of premiums for private coverage they’ve purchased through their state’s Health Insurance Marketplace. …
All true, and now Metcalf’s bottom line:
My evidence comes from the state of Washington, which had been advising its newly enrolled Medicaid recipients that if they were 55 or older, the state “may recover from your estate assets you own at the time of death.” That is, until the Seattle Times wrote articles about it and people started refusing to sign up for Medicaid. The state Medicaid agency issued an emergency rule rescinding the policy at warp speed.
But even if your state doesn’t change its mind, there will probably be ways to protect your heirs, according to Morris Klein, a Maryland lawyer who serves on the public policy steering committee of the National Academy of Elder Law Attorneys. Since each state runs estate recovery slightly differently, you should consult an elder law attorney.
Yeah, like a 55+ on Medicaid — probably disemployed, and certainly poor — has the loose cash lying around to consult a lawyer. And, just like Hiltzik, Metcalf puts the onus on the
consumer citizen? What’s wrong with these people?
But I really want to focus on that one line: “I have serious doubts that states will really follow through on this once the public figures out what’s going on.” Never mind the question of how a Senior Project Editor for Health at Consumer Reports gets to play political pundit; is she likely to be right? Quite possibly not.
First, and leaving aside the two points made above — [A] the states have every financial incentive not to change, and [B] both Metcalf and Hiltzik assume poor 55+ people have more political clout than they do, and that “progressive” Lady Bountifuls will come to their assistance — as far as I know, Oregon and, to be fair, Washington, and Wisconsin, are the only states to have revised their rules (Wisconsin’s repealing only “some of the worst” provisions). But how about some states with population? California? Certainly not, or the LA Times’s Hiltzik would have mentioned them. New York? Medicaid clawback is definitely in place.
Second, the AARP doesn’t agree with Metcalf.** They’re playing wait and see:
Elaine Ryan, AARP’s vice president of state advocacy and strategy integration, says the senior group is not lobbying for state changes to the Medicaid Estate Recovery Programs — at least not yet. “This is all so new and we’re still trying to unpack how the different states apply the recovery rules,” she said. “We’re still looking at what makes sense.”
Whatever that means. (Heck, since AARP is now in the insurance business, maybe they’ll sell insurance to poor 55+ people on Medicaid clawbacks!)
Third, the Feds don’t agree with Metcalf, because they still haven’t issued any regulations:
Advocates are pressing the Obama administration to specify that new Medicaid recipients nationally should not be subject to asset recovery.
Aaron Albright, a spokesman for the Centers for Medicare and Medicaid Services, said, “We recognize [the] importance of this issue and will provide states with additional guidance in this area .”
(That was January 23, so “soon” doesn’t mean in days or weeks.)
Finally, and as usual with ObamaCare, we have no good data:
Experts say there are no good, recent national data on how asset recovery is applied, with states differing drastically and working on a case-by-case basis.
Which Metcalf, oddly, or not, is not researching. You’d think as long as she had the Medicaid office on the phone….
So, basically, unless you live in Oregon or Washington, losing your house to Medicaid estate clawback is a crapshoot (unless you live in New York, in which case you’ve certainly lost, unless the Feds come through). And despite Hiltzik and Metcalf’s blithe assurance, the political class hasn’t come through with what looks like a no-brainer that would help poor 55+ people. Not the AARP, not CMS, not the biggest states, and certainly not Congress.
Like Hiltzik, Metcalf claims the political process is going to mitigate Medicaid clawback, and just like Hiltzik, she does everything in her power to minimize the problem (and their editors do everything they can, through their insulting headlines, to marginalize those who advocate for those drawing attention to it).
At this point, we’re used to the crap ObamaCare apologists shovel out. But Metcalf’s behavior is particularly reprehensible. Let’s look at Consumer Reports’ Mission Statement which, presumably, a Consumer Reports Project Editor like Metcalf is supposed to adhere to:
Consumer Reports is a national nonprofit organization with one and only one mission: to wherever they may need it. We , call out and help consumers such as insurance, credit cards, and phone and cable companies. We are strictly nonpartisan and we don’t take money or ads from industry.*** You may know us best through our iconic publication, Consumer Reports magazine.
Let’s try to defuse the situation by imaginging that we aren’t dealing with ObamaCare, but dealing with (another defective) product: The Ford Pinto. Let’s compare what CR says its mission is to what Metcalf recommends:
|Consumer Reports Mission||Metcalf’s Recommendation|
|Take the side of consumers:||Buy
|Unfair business practices:||Buy
|Navigate complicated services:||Buy
“Iconic” “Consuumer Reports,” my sweet Aunt Fanny. These people are so in the tank, and so evidently have no personal worries about any of this.
NOTE * Off topic, but note that the concern for passing on one’s estate to one’s children — which is why this issue is getting traction — gives the lie to the Boomer hate peddled by the Peterson crowd.
NOTE ** Here’s AARP’s assurance:
“I would inquire about the application of [Medicaid asset recovery], but I wouldn’t succumb to the fear of rules you don’t understand as a reason you wouldn’t become covered under Medicaid,” [Elaine Ryan, a vice president at AARP] said.
Sure, I’d totally bet the house on rules I don’t understand (or understood all to well). Wouldn’t you? What could go wrong?
NOTE *** Out of curiosity, how about foundations? Non-profits?