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» The Ornery American Forum » General Comments » Estate Recovery in the era of ObamaCare

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Author Topic: Estate Recovery in the era of ObamaCare
G3
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OK, here's the deal. From the medicad.gov website:
quote:
For individuals age 55 or older, states are required to seek recovery of payments from the individual's estate for nursing facility services, home and community-based services, and related hospital and prescription drug services.
No option, states must do this estate recovery. So, a low-income individual in nursing home care after age 55 might pass away and his kids would find out the family home or car of whatever he had to his name had to be bought back from the state if they wanted it. It’s called estate recovery. Everybody got that?

Here's where the fun starts. Under Obamacare, if your income is low enough to qualify for Medicaid, you must enroll in Medicaid unless you want to buy totally unsubsidized coverage in the now-inflated individual market. The NYT tells us about the inflation:
quote:
For someone age 55 to 64 at the Medicaid-income level — below $15,856 a year — it’s quite a jump from free Medicaid health insurance to an unsubsidized individual plan. Premiums in King County for an age 60 non-tobacco user for the most modest plan run from $451 to $859 per month.
Before ObamaCare's Medicaid expansion, there weren't that many people in Medicaid who had much in the way of assets for seizing so not that big a deal (you had to have something like $2500 or less in assets to qualify for Medicaid - that asset requirement has been dropped) but now people will be forced into Medicaid unless they have a very good retirement package going for them. And once they turn 55 and begin to need care, they're basically working off a loan against all their assets. How's that going to work out for you? From the day you turn 55 on, you will be racking up a potentially very hefty bill that will consume your entire savings and all assets when you die. Nice.
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LetterRip
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G3,

I'm not sure what you think is wrong here - it appears you might be misundestanding what is going on. The recovery is not for all services rendered. Ie if someone is under medicaid and gets a hip replacement - then the full price paid by medicaid would not be 'recovered'.

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G3
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If the very clear mandate from Medicaid itself remains confusing, let see what others say. Seattle Times report:
quote:
If you’re 55 or over, Medicaid can come back after you’re dead and bill your estate for ordinary health-care expenses.
Let's go far, far left ... Daily Kos:
quote:
The kicker of it is, if you make the right amount to qualify for a subsidized health insurance plan, your costs are going to be shared and subsidized by the government. But if you go on Medicaid, you owe the entire amount that Medicaid spends on you from the day you turn 55…
Do you still not see what is wrong here?
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JoshuaD
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quote:
G3: If the very clear mandate from Medicaid itself remains confusing
This isn't new. Medicaid has been a set of byzantine laws since at least the 90's.

My office does Medicaid Administration and sometimes Medicaid Planning. The rules are convoluted, nnonsensical, and subject to interpretation at three levels of government.

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G3
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quote:
Originally posted by JoshuaD:
quote:
G3: If the very clear mandate from Medicaid itself remains confusing
This isn't new. Medicaid has been a set of byzantine laws since at least the 90's.
It is not my point that estate recovery is new. It's been going on for, I assume, as long as Medicaid has been around. I'm not saying that estate recovery is a new scheme.

What is new is the removal of the asset requirement and then a new program that leads (i.e. forces) many into the program. It would be quite easy for a retiree to have limited income yet also own significant assets. For example, a retiree that has not mortgage and a paid off car. Now that this retiree is forced into a Medicaid plan, he's essentially being forced to take a loan against his care that will be collected upon his death.

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LetterRip
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Anyone who you haven't paid your bills to can bill your estate. This is no different than your estate owing back taxes, or your estate having outstanding loans, etc.

I suspect that the new scenario - being allowed to enter medicaid before your estate is completely exhausted is vastly preferable to most elderly than the previous state of affairs - have to spend almost your entire estate before being eligible.

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LetterRip
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G3,

hmm looks like I was wrong. Digging into it more.

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LetterRip
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For those interested here is the Daily Kos article - seems fairly reasonably written. Interesting comments as well.

http://www.dailykos.com/story/2013/10/17/1248425/-Medicaid-Estate-Recovery-ACA-Unintended-Consequences

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LetterRip
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This does look as 'awful' as it is made out to be.

The obvious fix, mentioned in the dailykos comments - is make the estate responsible for just the cost of whatever a silver subsidized plan would be. This seems far more fair than the estate liable for the full cost of care.

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G3
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There's only a need for a "fix" if that was actually a unintended consequence. Do you really believe this is unintended? How could it be? They explicitly removed the asset limit, they knew it was there and what it meant. I don't believe this was unintended in any way. ObamaCare, at it's heart, is a wealth transfer scheme. This is a wealth transfer mechanism that was built into the scheme. Nothing to fix here.
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Greg Davidson
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But why would a website like DailyKos filled with what are alleged to be rapid partisans identify an actual policy concern and make suggestions on how to address?

Doesn't that ruin the "liberals are crazy" meme? By the way, go over to RedState.com and look for a specific criticism of a Republican policy and recommendations for corrective actions, and all you will hear are crickets.

Why is that?

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G3
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Oh wow, you're right. This can only mean the policy is great for America and retirees. Wish I'd thought of it but then we would have been deprived of such a masterful insight so brilliantly delivered.
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Pyrtolin
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quote:
Originally posted by G3:
There's only a need for a "fix" if that was actually a unintended consequence. Do you really believe this is unintended? How could it be? They explicitly removed the asset limit, they knew it was there and what it meant. I don't believe this was unintended in any way. ObamaCare, at it's heart, is a wealth transfer scheme. This is a wealth transfer mechanism that was built into the scheme. Nothing to fix here.

The asset limit was removed because it was already an absurdly broken part of the system. You're glossing over the fact that the change you're pointing is from having to liquidate all of your assets up front and then actively avoid improving your condition to get care to now only potentially losing some portion of them after the fact. Sure it's still bad and broken, but it's a little less broken than the inane behavior that the the asset limit caused- at least now you have a better chance of only briefly dipping below the line, but you also have longer span of time over which to pass some portion of those assets on before recovery becomes an issue at all.

The Estate Recovery requirement is a vestige of giving in to pressure to leave the retirement age far higher than it should be out of false fears that letting people retire at 55 if it suited them would leave a too small labor pool; the best fix is to simply eliminate it, since it's only a little less counterproductive than the asset limit was.

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RedVW on a Laptop
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LR

It's a back end funding mechanism for the ACA. The funds cut from Medicare/caid these past couple years will be recovered by the states that set up exchanges because they will now be footing the difference when the fed drops it to 90%. In the states that did not expand the programs and set up their exchanges they will still get 100% of each dollar but they will be forced to go after client estates after client death by law.

Since pretty much everyone winds up on Medicare or caid at end of life, and most people rack up $250,000 in uncovered medical costs in the last 18 months of life it means most people will be exposed to the recovery process.

Inheritance will soon be something only the ultra rich can afford to pass on.

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cherrypoptart
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Another article on this:

http://finance.yahoo.com/news/obamacare-shotgun-wedding-marry-lose-091500078.html

"Prins and Balhorn are hardly alone in Washington. Adults between the ages of 50-64 account for 18 percent of the enrollments in the state’s Apple Health Medicaid program, and the seizure regulations apply in their cases for those 55 and older. The state exchange uses only income levels to means-test Washington applicants for the program, which means most of them will have no idea that their assets are at risk until it’s too late.

“People will think this is wonderful, this is free insurance,” Dr. Jane Orient, executive director of the Association of American Physicians and Surgeons, said in an interview. “They don’t realize it’s really a loan, and is secured by any property they have.”

That’s one of the problems of Obamacare itself – the perception that it’s a free lunch. Even those who do qualify for subsidies get that only through the collection of a myriad of taxes imposed by Obamacare. Those taxes apply to employers, insurers, and medical-device manufacturers, which drive up the costs for consumers and workers in indirect ways. It’s a shell game--not a reform that actually drives costs down. Instead Obamacare only masks price increases through dishonest opacity."

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Seneca
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Great article cherry, thanks for posting it.
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cherrypoptart
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My pleasure. And I disagree somewhat with the writer of this article and instead concur with earlier posters that this is not an unintended consequence.
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Seneca
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Yes, I agree with you, it was obviously intended.
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Wayward Son
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quote:
Under Obamacare, if your income is low enough to qualify for Medicaid, you must enroll in Medicaid unless you want to buy totally unsubsidized coverage in the now-inflated individual market.
Here's what I don't understand: how is this different from pre-Obamacare? [Confused]

Two years ago, if your income was low enough for Medicaid and you were over 55, you had only three choices: enroll in Medicaid, enroll in extremely expensive individual market (if you could find one to take you), or go without insurance.

Now, with Obamacare, you can only enroll in Medicaid, enroll in extremely expensive individual market, or go without insurance.

Nothing has changed.

And what exactly is the difference between enrolling in Medicaid or not having insurance? If you're on Medicaid, the State will go after your assets after you die to pay for your coverage. If you don't have insurance, the medical establishments (hospitals, pharmacies, nursing homes, etc.) will require you to liquidate your assets to pay for your coverage, and refuse service when you can no longer pay.

Or you could enroll in expensive coverage that may drain your assets faster, and cut you off when you run out of assets. [Frown]

The thing with Medicaid is that you're covered for life, whether or not you run out of assets.

Yes, it's a lousy situation. But when you get older, medical expenses can soar, especially if you need assisted living. Premimums must reflect that increase, or else insurance companies will go bankrupt. The money needs to come from somewhere. Requiring a person to pay for their own care from their own assets seems to me to be the fairest way in our current system.

If you can think of a better system, great, let's see if we can implement it. But don't blame Obamacare for being as bad as our current system.

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JoshuaD
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quote:
Two years ago, if your income was low enough for Medicaid and you were over 55, you had only three choices: enroll in Medicaid, enroll in extremely expensive individual market (if you could find one to take you), or go without insurance.
I think you're conflating medicaid and medicare.

Medicaid is a poverty program which (primarily) pays for the nursing home costs for an individual who has under $1000 in his name and doesn't have the means to continue to pay his nursing home costs. The rules are byzantine and only a small portion of the population ends up needing this service.

Medicare is like a health insurance plan.

I'm not familiar with how the ACA modified either of the above statements.

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Wayward Son
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quote:
Medicaid is a poverty program which (primarily) pays for the nursing home costs for an individual who has under $1000 in his name and doesn't have the means to continue to pay his nursing home costs. The rules are byzantine and only a small portion of the population ends up needing this service.

Medicare is like a health insurance plan.

I don't think it is that different (although I could be wrong--I'm certainly not fluent in all the details of either program).

However, about ten years back, we had to put my mom into a nursing home, and Medicare would not cover that expense until her assets were reduced to some insignificant amount. Admittedly, they did not require us to sell her some immediately, but they would have put a lein against it after she passed away.

So at least as far as nursing home care is concerned, Medicaid and Medicare act the same, in my experience. [Frown]

(Perhaps it was that Medicare simply did not cover nursing home care, and she would have had to have gone on Medicaid to get that care. Either way, same result.)

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G3
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quote:
Originally posted by Wayward Son:
Nothing has changed.

Nothing has changed? How can you come up with "nothing has changed" after the massive overhaul of the health insurance industry?

Big changes for medicaid: You're forced to enroll in it whether you want to or not. Oh, and the removal of the asset limit, that's a change. Nothing has changed... seriously.

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Wayward Son
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You're right, G3. I lied.

Nothing important has changed. Nothing significant. Nothing that matters.

quote:
You're forced to enroll in it whether you want to or not.
Really? And what happens if you don't enroll? They throw you in jail? Take your first born? Put you up again the wall and shoot you?

Oh, that's right, they increase you taxes. [Eek!]

So you have the choice of enrolling in Medicaid, getting subsidized care, and having part of it taken out of your estate, or not enrolling in Medicaid, getting your own care, and taking the cost out of your estate. Or enrolling in expensive private insurance as always.

One way you have to pay after you've passed away. The other way is you have to pay now.

Again, what is the big difference?

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yossarian22c
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Well you could enroll in medicaid, have your taxes not go up and refuse all medical care. So nothing has changed except that you now get to choose if you want to receive care before selling everything you own instead of being forced to sell everything you own to receive care. So things have changed, people get more choices now.
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Seneca
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I think we all know why this was changed with the ACA, and it wasn't an accident. The expansion of medicaid is gigantic and unsustainable. No doubt it was thought that this might actually help make it work.
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