NC Reader Smacks Down Consumer Reports on Medicaid Clawback Advice

It’s fun to see someone who got themselves in a hole keep digging deeper.

By way of background, we’ve run some posts highlighting how states can recover Medicaid costs from the estates of people who enroll who are over 55. The clawbacks for the 55 to 65 age group are actually worse than for the elderly who wind up on Medicaid, since states can include all care, while the clawbacks for the elderly are limited to long term care like nursing homes. This is a big deal since in the states that opted for Medicaid expansion, enrollment is automatic if your income is in or falls to 138% of the Federal poverty level.

This is a much bigger issue than it has been traditionally, because Obamacare ended the old Medicaid assets test. If you had more than $2000 in cash or savings, you could not enroll for Medicaid. But now, people who have decent or even high levels of savings but low income (thanks to ZIRP) could wind up enrolled, particularly because disclosure in many states is poor.*

Lambert took Obamacare shill Nancy Metcalf of Consumer Reports to task for dismissing this issue and no joke, claiming this problem would go away once “the public figures out what is going on.” Gee, millions of members of the public figured out that servicers were engaging in all sort of predatory behavior. Guess what? Public ire, bad press, lawsuits, Congressional hearings and new regulatory standards have done nothing to change their conduct. So why should mere public awareness have any impact?

Reader kareninca, who also subscribes to Consumer Reports, decided to tell Metcalf she was not impressed with her advice. Hoisted from comments:

So, I have emailed Metcalf. I am sure it will make no difference, but I did it. Here is a copy of the email:

Dear Ms. Metcalf,

I have been embarrassed for some years to subscribe to Consumer Reports, because its reviews are so heavily tilted towards products for the wealthiest. Americans who have a typical income get short, or no, shrift. However, your article on Medicaid clawbacks is actually shameful. Consumer Reports has now officially thrown the weakest members of society, under the bus, and shown a total contempt for the vast majority who cannot afford legal advice. It is hard to choose what part of your article is most ugly; this is certainly an option:

“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.”

I suppose that you think that along with obtaining costly legal advice, a 55 year old who is forced onto Medicaid (and not even given the option of purchasing insurance with the subsidies that the wealthier will get!) should also eat cake (from Whole Foods, no doubt).

If you would like to read a good description of just how nasty your article is, here you go: http://www.nakedcapitalism.com/2014/02/consumer-reports-shills-obamacare-pooh-poohs-medicaid-clawbacks-bizarre-assumption-theyll-waived.html#comment-1867479

Yesterday, kareninca gave an update:

More from Nancy Metcalf (of Consumer Reports), and my reply to her. She asserts that literally everyone eligible should sign onto Medicaid, asap:

I don’t care whether you think of Medicaid as a lien (which it isn’t in the states that aren’t doing expanded estate recovery) or insurance or simply a direct-pay government benefit, everyone who’s eligible should take it. Lack of immediate and easy access to medical care is simply bad for one’s health. It’s true that you could wait until you were seriously ill, but again using the example of colon cancer, without coverage it’s unlikely someone poor enough to be on Medicaid would get a colonoscopy, a screening test that is highly effective in preventing the development of invasive colon cancer.

I also don’t buy the argument that you shouldn’t take Medicaid because the government will stop paying for it at some point. I’ve heard from consumers who want to turn down premium subsidies for the same reason. Take it now, and if it goes away later, well, then you’re still better off than if you never had it at all.

Nancy

Dear Ms. Metcalf,

Your assert a truism: “lack of immediate and easy access to medical care is simply bad for one’s health” – and then infer from that, that everyone eligible should sign on to Medicaid. That is very poor reasoning, and leads you to give poor advice.

I am sure that you are familiar with the Oregon Medicaid study. Two years in, the only benefits for Medicaid lottery “winners” were financial and economic. None of their tangible, physical measurements of health improved. The people who “lost” the lottery were getting enough access to medical care, to give them equal physical health outcomes as the winners. So, to the extent that “immediate and easy access to medical care” is required, Medicaid and non-Medicaid recipients both got it in Oregon. It was not necessary to sign on to Medicaid to be in the same physical condition!

Where the Oregon Medicaid “winners” benefitted was financially (for now!) and psychologically. Whether their financial benefit will be long-term, is unclear; it will depend on clawback laws, and the situation of the individual. The same is true of their psychological benefits. They were real, but we do not know if they will outweigh the despondency that many people feel, when they realize that anything they own and accumulate, is not truly theirs, but will be clawed back. Also, the people in the Oregon study all wanted to be on Medicaid. We now have people who are being enrolled in it against their wishes – I cannot believe that that is psychologically beneficial for them.

You bring up colonoscopies, as an instance of costly medical tests that the person in your example might not decide to pay for. Are you not familiar with the Kaiser Foundation study, re mail in tests? (http://www.mercurynews.com/ci_23416589/kaiser-permanente-research-method-has-potential-transform-u) They are extremely cheap, and they work just as well. Instead of engaging in scare tactics (“If you don’t sign onto Medicaid ASAP you will get colon cancer and die!!!!” is a scare tactic), why don’t you give Consumer Reports readers useful information? I have health insurance that covers colonoscopies. But I plan to use annual mail-in tests instead, for my own convenience and to avoid wasting health care dollars. Also, even a colonoscopy is much, much, cheaper, if you self-pay, rather than letting the insurance company pay a grossly inflated price. Why not help the readers of Consumer Reports, with that sort of information? If the person in your example is rational, using a mail-in kit or having a frugal self-pay colonoscopy could work very well, and allow them to avoid being on Medicaid if they so desire, without detriment to their health.

You don’t seem to want people to make educated choices. You want to scare them into signing onto a big program, without having carefully analyzed the benefits and costs to themselves as individuals. This is very much a case where each individual needs to make an individual choice, based on his or her needs and assets and preferences and abilities, after getting useful information, but you don’t want that. Does Consumer Reports think that people are too stupid to make financial decisions? If your recommendations are those of the periodical, then apparently that is the case. Or maybe you just find it too difficult and tedious to help people determine whether their situation makes Medicaid a good or poor choice. Good lord, I have seen mind-bogglingly long and complex articles in CR, that help one determine which cable TV provider is best for whom. But for Medicaid, it’s “just sign on!”

You have made a public claim about what you think people should do (“just sign on!”). If you wish to demonstrate moral courage, and give good financial and medical advice, you should at least qualify your claim. If Consumer Reports is to be a credible publication, it needs to be one that is seen as providing useful, unbiased information that people can work with.

Karen XXXXX (last name removed for NC post)

p.s. I did not claim that the fact that the federal government may stop its generous funding of state Medicaid, was a reason for an individual to not sign on; it doesn’t cut one way or another. It is the case, however, that if/when the funding goes away, and the services go away, the liens will remain, encumbering the assets of those people who have signed on to Medicaid.
p.p.s. Of course Medicaid is not a lien in states that have not extended the program: that is why I wrote “Medicaid in this context”. If people can’t sign onto the program, there is no lien, and there are no clawbacks. That is really irrelevant; we are discussing the problem of estate stripping, and so only Medicaid-expansion states are relevant; bringing up non-extension states is a red herring.

Now some readers may say, “Aha, but colonoscopies are free under Obamacare!” Um, not exactly. The screening part is free, but if they snip any polyps, benign or not, you get charged for that as a therapeutic rather than preventive service. The US is also the only advanced economy where everyone over 50 is urged to get a colonscopy. In other countries, the test is recommended based on your risk factors, and age alone isn’t seen as a strong enough indicator.

But the bigger point for showing this example is that if you have the time and energy, it really is worth it to let various pundits and officials know when it’s clear they are hawking some sort of official party line and how what they have written discredits them. You may not always get the gratification of having them respond, but most writers read reactions to their articles, and in the case of a subscription-dependent publication like Consumer Reports, subscriber reactions are particularly important. And it also sharpens your argumentation skills for dealing with friends, family, and colleagues. We’re all chipping away at a bad orthodoxy, and continued probing will help find the fault lines.

____
*This is a simplified discussion; for more detail, see here and here.

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45 comments

  1. psychohistorian

    Thank you for this posting.

    I am one of those folks that is 65 and never have had a colonoscopy….because I don’t have the risk factors and pushed back on my Kaiser docs years ago. I do shit on a stick once a year and embarrass my friends when they moan about their last bowel flushing prep for that mostly unnecessary procedure.

    I also use to be a strong advocate and reader of Consumers Union that publishes Consumer Reports. In 1972 Consumers Union put out a $4 (622 page) paperback titled “Licit & Illicit Drugs”. Also in the book heading it says “The Consumers Union Report on Narcotics, Stimulants, Depressants, Inhalants, Hallucinogens & Marijuana – including Caffeine, Nicotine and Alcohol”. It list as the writers Edward M. Brecher and the Editors of Consumer Reports. To say it was comprehensive for its day would be an understatement. But since it did not resonate with TPTB, including the tobacco industry, Consumers Union was neutered into the milk toast POS that it is today.

    It certainly sounds like Ms Metcalf is continuing that toady position of the current Consumer Union,sad.

    I am glad to read real consumers pushing back on her lick spittle.

    1. TimR

      That book on “licit and illicit” drugs sounds interesting — apparently it took some unconventional views? Any nuggets of insight that stuck with you from it?

      1. psychohistorian

        I am certainly glad to see the whole book online so the younger generation can see more clearly how far down the rabbit hole our country has gone with regard to “drug” policy and the lives and money wasted along the way…..42 years ago……..

        You can find the whole book here (read chapter 69, Policy Issues and Recommendations): http://www.druglibrary.org/schaffer/Library/studies/cu/cumenu.htm

        I will just quote the last chapter:

        “Before long, the generation now in its teens and twenties will be in its thirties and forties. Judges, prosecutors, and even narcotics agents, along with legislators and teachers, will be drawn from the pot-smoking, acid dropping generation. When that time comes, they will find themselves confronting the same basic drug issues their elders confront today. How can the damage done by alcohol, nicotine, and other drugs be minimized? How can young children be protected from drug excesses? How can adolescents be helped to exercise prudence? How can nonchemical alternatives to the drug experience be developed and popularized? How can human life be enriched?

        We hope that when the next generation takes over, this Consumers Union Report will still remain useful–– as a guide to bow mankind has used and misused drugs in the past, and as a warning against repeating the errors society is making today.”

          1. psychohistorian

            The link you gave went off into tinfoil hat land for me, not that I don’t have one.

            That said we live under a class system of social organization that goes back centuries and continues to be propped by by unfettered inheritance…..and this never gets discussed by serious people.

  2. jgibbs

    Excellent work and nicely restrained, too. As for the idea that legal advice can help those in the 55-65 box, that really isn’t true either, CR. IMHO, the choice comes down to (a) buy the expensive insurance whatever your ‘income’, (b) remain uninsured and pay the fine and forego all the tests and watch over your own health (and pray if you are the type who think that helps), (c) sell your assets to your heirs in exchange for a private annuity of equivalent value (this has income tax consequences if your house has an impacted gain, and it may not work, since the value issue can always be attacked by the State in litigation against your heirs), (d) emigrate to a country with affordable medical care if you can find one that will take you, (e) take on a reverse mortgage that absorbs the value of your house, put the proceeds where your heir (but not the State) can find them, and extend a finger to you know who.

    I very much doubt those affected will succeed in finding a lawyer who can tell them any more than this.

    1. j gibbs

      Wrote this very early this morning. Reference above to a reverse mortgage should have been just to an ordinary mortgage. Reverse mortgages have a different use, although you could use one of these to get money for the premium on non-subsidized insurance and avoid the Medicaid trap that way.

      Personally, I don’t like reverse mortgages, which give a lender a serious interest in your non-survival.

  3. John Mc

    Well out Karen! I appreciate the energy it took to respond to this nonsense.

    Consumer Reports, Colonoscopies and Obamacare… the inkin-blinkin-just sign-on-&-nod meme.
    It is no mistake that major themes of this Medicaid clawback article highlight “probing of fault lines” of a supposedly neutral outlet masking a manipulative media, targeting the colons of the poor, and a program which asks you to forget the future and accept the short term benefits of now. It fits. I can hear George Carlin say in one of his stand up routines on HBO as I type this: “Its a big club, and you ain’t in it.”

    Sarcastically, I pull from the internal, absurd comedy centers of my brain and tell myself “Because when I make a financial decisions, I look for fear, potential loss of trans-generational wealth through clawbacks, and knowing that uncle sam has my back (side) firmly in its grasp. Thanks consumer reports! Using the whole fist doc? Moon River……

  4. kareninca

    Thank you for putting this up; I am blushing:)

    BTW, she did read the original post by Lambert; she said in an email to me that she read it because she is sent articles that cite her.

    1. diptherio

      Very nicely done, Karen.
      Now I wonder if she’ll have the cajones to respond to Lambert’s article, or this one, in public. I would guess not, although if she’s arguing in good faith she should be willing to engage in public debate on the topic (and be willing to have her mind changed if she turns out to be off-base).

      Good faith debate, however, is something most pundits like Metcalf do not understand. They seem to be of the opinion that choosing a position and then fighting for it tooth-and-nail–defending it against valid and invalid criticisms alike–is the height of public discourse. Any criticism at all is assumed to be invalid, since every pundit takes the position that their view is the only correct one, and that admitting otherwise would be an admission of defeat. This is one reason why our politics is so f—ed up (among many, admittedly).

    2. Andrew Watts

      This is a great example of how a little pushback can generate a response. How dare the little people forget their place!

      “BTW, she did read the original post by Lambert; she said in an email to me that she read it because she is sent articles that cite her.”

      Perhaps. People just cannot stop themselves from web searching their name these days. A google search of “Consumer Reports Nancy Metcalf” reveals this article on the second page. So whoever originally sent her the article could be a reader of Naked Capitalism or she could google herself every day.

      I always assume that when I talk about or insult a person online they (or somebody they know) will eventually see it.

  5. Doug Terpstra

    Colonoscopy is a fitting description for ObamneyCare itself, a reaming without anesthesia. Nicely done, CR.

  6. Jim in SC

    Yves: I think you mean ‘more than $2000’ in the first paragraph.

    It is unclear to me whether the state will bill estates for the cost of coverage under medicaid–insurance costs–or just for care given. In other words, would someone on medicaid be charged–or would their estate be charged–if they never got sick and never used any services? In the case of ACA subsidies, they would certainly be charged, so why not for cost of coverage under medicaid, too?

    1. kareninca

      Jim in SC –

      Per Beverly Wood’s 10/21/2013 article in Daily Kos (http://www.dailykos.com/story/2013/10/21/1249471/-Estate-Recovery-It-s-Worse-Than-You-Thought):

      “Dr. Jane M. Orient writes in Medicaid is a tax on the estates of the poor:
      In Arizona, where all Medicaid beneficiaries are enrolled in a managed-care plan, their estates could be repaying “benefits” even if the enrollee never actually received any goods or services. Information provided by the Arizona Health Care Cost Containment System (Arizona’s Medicaid program) explains that the program makes a monthly capitation payment of around $3,340 to “program contractors,” who arrange for services, if any. It warns, in bold print: “It is important to be aware that capitation payments can exceed the actual costs of services provided during the month.”

      Yes, you can be charged for “Medicaid premiums,” even if you receive no care. $3,340 dollars a MONTH!!!! For NOTHING!!!!!!!

  7. Jim A

    You know,if there WASN’T a clawback provision, people would be complaining that wealthy old folks who had low income due to ZIRP were living in nursing homes on the public dime while still being able to pass on sizeable inheritances to their children.

    1. Jim Haygood

      That’s the history of clawbacks. Facing costly nursing home care, seniors with assets would consult an attorney and devise a plan of gifts and trusts to reduce their assets below $2,000.

      Now low-income people in the 55-65 age cohort are being recruited into Medicaid in droves, via Healthcare.gov, with no disclosure and no legal advice.

      If Healthcare.gov were a private business, the Federal Trade Commission would shut them down for deceptive marketing. As usual, though, government programs exempt themselves from complying with the marketing standards that any honest business is obliged to follow.

      Now my advice for those who die
      Declare the pennies on your eyes
      ‘Cause I’m the taxman, yeah, I’m the taxman
      And you’re working for no one but me.

      — Beatles, Taxman

    2. j gibbs

      This stuff about medical care being unaffordable really kills me. Here we are, allocating trillions to a war lacking even an identifiable enemy, to domestic snooping and spying to uncover phantom terrorists, to an imperial presidency for which no imaginable expense is spared, etc., etc. If you dissolved the insurance companies and the government regulations limiting medical practice, and eliminated those odious for profit hospitals, and reined in legal shysterism in medical malpractice, there is no reason the entire population could not have its legitimate medical needs provided, and nobody would notice the expense, any more than anyone notices an untoward inflationary effect of the military boondoggles which have been proliferating to no purpose since 1946, and longer if you really think about it. You could also eliminate the income tax, which serves only to keep the workers poor, and more than half of the expense of the federal government, pretty much all of it which is not devoted to basic research. None of this is ever going to happen, of course, but as long as we’re trying to have an intelligent conversation about all this, why shouldn’t someone at least mention it?

      1. Susan the other

        It was a great letter. And I’m glad to learn about mail-in colon screening. I swear to god, prepping for a colonoscopy damn near killed me. That is the way our economy should be working, addressing the needs of society. But just as QE is life support to banksters, Obamacare is life support to Insurance and Pharma. Obamacare has almost nothing to do with the end users. The Insurance/Pharma combine will not survive without this huge subsidy because people can no longer be “consumers” of medical services. So Obamacare is the most disingenuous government program in history. Just like Obama’s TPP and TAFTA bullshit – Corporatism, without these domestic tax subsidies and/or penalties imposed by international tribunals, is dead in the water. It would probably be far better even for the Corporations if we had single payer – but forget that. Washington is totally paralyzed and all it can do with all the competing corporate interests is play sixes, always getting nowhere. I’m disgusted with the whole charade. It’s time for the corporations to admit they have no viable business model at all – just loop holes for tax subsidies.

      2. Ruthie

        Good analysis. And don’t forget how basic research has suffered under this system. There was a time when teaching hospitals which are mostly federal and state funded (which is why the bill was passed which forbade the turning away of the uninsured from emergency rooms), engaged in basic research, training the next generation of scientists and doctors. For the last thirty years or so, universities and researchers have gotten on the greed bandwagon, filing patents for anything they or their graduate students discover. It isn’t about knowledge anymore–its about getting rich. They make them all sign confidentiality agreements and if anything promising is discovered, they make money off the patents or enter into agreements with private pharmaceutical companies. This has stopped the flow of scientific information (which used to be published openly in journals), caused a jealous guarding of experiments (least potential competitiors learn something, i.e. other researchers). When people at public universities invent new drugs, new technologies, it ought to belong to all of the people, not go to the few who can exploit them for greater profits to accrue to the 1%. Also, people building on the information and work of others has lead to greater innovation in all fields. Our knowledge base is built on the backs of others. No one discovers anything in isolation. I used to work at a university in my younger days, and I watched this transition form generous open knowledge, to greed and jealous hoarding of knowledge. For an interesting take on the copyright law, google the documentary “Everything is a Remix.” It deals primarily with copyright law, but I think it could cover patent laws as well.

        Also, the FDA has worked to keep out any competition to the drug industries. If I want to import a drug from Canada at one-third the price here, it is illegal. All of this just protects the big drug companies. They want you to go to the doctor and pay him/her a big sum and keep repeating the visits in order to get something as simple as a skin cream with selenium in it. Let’s face it, when big government and big business work together, it is the very definition of fascism.

    3. jrs

      If you really want to target the wealthy and their inhertances that’s what inheretence taxes are for. Conclusion: the goal is not to target the wealthy.

  8. TimR

    I wonder what the health outcomes of the insured vs. the un-insured would look like all else being equal. Obviously the insured, in general, have many demographic factors in their favor to live longer healthier lives than the un-insured. But I wonder if the medical-pharmaceutical complex *itself* is a plus, neutral, or even negative.
    How many times does getting involved with doctors lead to worse health outcomes? Many times our medicine treats symptoms, leaving root causes unresolved. The treatment then creates new problems, as the body tries to “re-route” around the intervention. Or unnecessary invasive procedures are performed, and something that the body might have healed through rest or other means, becomes much more serious.
    It would be interesting to see longer term outcomes on that “Oregon Medicaid lottery” study. Two years with similar outcomes says something, but *possibly* in 10 or 20 there will be some better outcomes. Or who knows, maybe worse outcomes for the “winners”.

    1. j gibbs

      My own experience of ‘medical care’ during the 55-65 interval (over which I remained blissfully uninsured) didn’t particularly persuade me of the value offered by the doctors and hospitals I confronted with the mysterious symptoms which I presented. Indeed, I only recovered after simply ignoring the diagnosis and rejecting the proffered drugs. One thing I have learned: the internet is a fabulous source of freehand medical research for those with the courage to use it. I find myself reluctant to trust medical attention even now, when I have survived to Medicare eligibility. You really have to find the right practitioner. Too many of them practice so defensively as to subject a patient to treatments which are really unnecessary and in some cases positively dangerous or harmful. I guess the bottom line is that with health care like most other things an individual is largely on his own, and those flogging expertise are too often engaged in a racket to be blindly trusted. As with other things, it’s better to be lucky than good.

      1. Jody

        I too, find out that I’m healthier for having forsworn any interaction with allopathic medicine and especially dentisty. (fluoride and mercury ARE poisons, you know) I also have lived a more fulfilling life being intentionally uninsured since 2007. My mother was a pharmacist for 50 years and never took any of the stuff she dispensed. Whether that was just luck or some survival instinct, I’ll never know. She’s 86 and still going strong — the healthiest member of my immediate family.

      2. TimR

        I agree, if you have a burning need to find out about some medical issue, you can leap far ahead in knowledge and advice, by using the internet. You end up discovering “communities” of people sharing info about the problem, and pointing to the experts who are most helpful dealing with it. The medical system can be of help IMO, at least in diagnosing and giving their experienced feedback, and certain treatments; but they don’t really have time or inclination to share much info, and are bound to many very hidebound limited treatment options.

    2. Janie

      There was a study a few years ago that pertains. IIRC Blacks with heart problems who came to ER had less intensive (read “invasive”) follow-ups. The hypothosis was that such discrimination led to poorer outcomes. Imagine the researchers’ surprise when the reverse was shown.

  9. LillithMc

    Two examples of “claw-back” in CA from personal experience. One woman’s estate had a lien for $250,000 on the home that was paid upon sale following her death. Her children received very little from the sale of her house. They did not know their mother had used medicaid. The mother spoke little English. The other was a woman in her 50’s who needed two new hips. She put off surgery for years working cutting my hair and trying to save her home for her children. Finally she went to medicaid and was provided the surgery. Her lien was for the cost to the state that was less than from a private insurer. The lien will not be acted on until either she sells the home or dies. She now can continue working and earning money. This woman has never been able to afford health insurance. If the private market had been willing to give her two new hips, would they also have filed a lien on her home which is her only asset?

  10. washunate

    Great article Yves. Let’s just bookmark this post for every time some Democratic pundit shill talks about healthcare without addressing the basic market failures involved in US healthcare.

  11. edwin

    The US is also the only advanced economy where everyone over 50 is urged to get a colonscopy. In other countries, the test is recommended based on your risk factors, and age alone isn’t seen as a strong enough indicator.

    While it may be debatable whether Canada has an advanced economy, Canada does recommend universal colonscopy at age 50 and absent any risk factors, every 10 years thereafter.

    1. Yves Smith Post author

      That is not how this document reads:

      http://www.cmaj.ca/content/165/2/206.full

      It clearly recommends annual or biennial fecal occult blood testing. It says there is only “fair evidence” (as opposed to “good evidence” for the use of fecal occult blood testing) for colonoscopies for people over 50 of normal risk who are asymptomatic.

      Similarly, the section on colorectal screening under the Ontario Cancer Care guidelines makes not mention of colonoscopies, only fecal occult blood testing.

      https://www.cancercare.on.ca/pcs/screening/coloscreening/cccstandardsguidelines/

      The more detailed guideline indicates colonoscopies are in order ONLY if other symptoms or diagnoses give red flags.

      http://health.gov.on.ca/en/pro/programs/coloncancercheck/docs/ccc_refcard_20080606.pdf

  12. kareninca

    Ms. Metcalf’s responses made something very clear to me. It has long been apparent that a certain distinct subset of “liberals” (no, I am not a conservative) think that poor people are stupid, and need to be told what to do. Of course, as others have said before me, “poor people aren’t stupid, they are poor.” Well, surprise, surprise, Ms. Metcalf thinks that middle class people are stupid, too, and need to be told what to do. Couldn’t possibly make their own decisions. Rich people? Well, they can hire an estate lawyer.

    One thing that rarely comes up in articles – though it often comes up in comments! – is the impact the Medicaid “lien” will have on future earnings and savings. Take a person who is 55, and has no money, no assets at all, no job due to midlife layoff from a serious career, and has treatable cancer. Lots of folks in that position these days. Of course I would say that person should go on Medicaid; it beats dying. Medicaid spends 250k (a sum grossly inflated by our system) on the treatment. Then at age 56 that person is fully cured, and ready to work, and finds a job! A good job! Or has a chance to start a lucrative business. Now that s/he is well, and raring to go, s/he could work for another twenty years, and being a boomer (haha) would even enjoy it. But why should that person accumulate anything? That lien is lying in wait. Create a little nest egg, once you get your life together? Why bother? I’m guessing it will affect what people will do with their lives. It will certainly make them feel that on a major dimension, their life is utterly over.

    We have a family friend; a wonderful woman who is 50 years old who had a terrible childhood (horribly abused by her parents) who after years of housecleaning for a living (which is how my parents met her; funny she is blond and blue-eyed like my mom who is an English/Scottish Yankee; she is a French Canadian Yankee) has started a truly successful online business, despite no college degree. She is throwing herself into it – for her granddaughter. She wants to leave something to her granddaughter. It is her focus and joy in life; dog harnesses from Hungary, very high quality. Of course she has no health insurance; she has always managed small payments for what she has needed (even cervical cancer treatment). If in four years she gets forced on Medicaid, and a huge lien dropped on her, all her focus and joy and economic productivity will be torn from her. And this could happen, since “income” from a business like this is very intermittent and unreliable; enough for her small needs but if she had a period of sickness it could drop to zero, thus forcing her on Medicaid.

    You know why I think there is this age 55-65 gap, during which Medicaid can strip you? I have not seen this suggested elsewhere, though no doubt it’s occurred to many. Maybe even to the creators of the gap, hmmm. Because that is when boomers will be inheriting their parents’ estates, if any. Our now-healthy 56 year old’s mom can leave her a small home in the hopes that it will give her security. Medicaid will take that home, of course, when the 56 year old dies. Will the 56 year old even be allowed to sell that house, between now and then, and take the money and move on with her life? I think the answer is no; I think the lien will grab the house value.

    There was a pretty good essay on this issue back in October 2013 in the Daily Kos by someone named Beverly Woods (http://www.dailykos.com/story/2013/10/21/1249471/-Estate-Recovery-It-s-Worse-Than-You-Thought). Capitation rates for “Medicaid premiums” can be in the order of $3340 – monthly!!!! Even if no services are provided at all!!!! How fast would a modest estate go at that rate?

    In her very good update, Ms. Woods then cites a WaPo article (http://www.dailykos.com/story/2014/01/26/1272692/-WaPo-on-Estate-Recovery-Experts-agree-everything-is-fine). Per the WaPo article, the AARP Vice President Elaine Ryan says

    ““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,” she said.”

    Do you see a pattern here? AARP and CR don’t want you to inquire. Don’t trouble your pretty little head about those complicated rules. Just sign on the line. Oh – that’s right – you don’t have to sign on the line – you can be dumped onto Medicaid against your wishes.

    The Daily Kos post got very few responses, and most of them demonstrated great ignorance of the topic. If you put “Medicaid clawback” or “Medicaid estate recovery” into the Daily Kos’s search engine, you will get nothing. Funny, that.

    1. LillithMc

      One way to help those age 55 and over is expand medicare for them. That has almost passed several times and could again if enough people cared.

  13. jrs

    ““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,” she said.”

    So what’s the alternative to “succumbing to fear of rules you don’t understand”?
    1) succumb to hope and faith and trust of rules you DON’T UNDERSTAND. This is surrendering one’s own rationality and decision making capability and to what, will to believe? Such often doesn’t end well either.
    2) understand the rules. Fair enough, but what in an actual understanding of the rules would lead one to be confident one’s estate was safe? Where are those who say it isn’t wrong? Or if the law is so complex that a layman couldn’t possibly understand it then fine everyone needs an estate lawyer to make heads or tails of it, but that’s a problem in and of itself.

    1. kareninca

      It wasn’t really at all helpful, I’m afraid. It mainly seemed like an attempt to absolve Obamacare of blame for the new asset-stripping Medicaid provisions, by saying that Medicaid has always engaged in asset stripping. Well, the ACA has extended the list of potential victims, that’s for sure (partly by dumping the unwilling onto Medicaid), and states are taking this and running with it. This article would not give anyone any info re their particular state’s policy, or any practical suggestions re how to avoid the asset stripping.

    2. H. Alexander Ivey

      Ahh, the real reason why I read NC – watching the polite push-back when trolls and such appear. Thank you kareninca.

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