Before Obamacare there was a Medicaid provision allowing the state to recuperate funds spent on a Medicaid patient over 55 years old from his/her estate. The end result of that policy, for those on Medicaid dying with assets, would see the government seizing the assets of an estate forcing family members to purchase back any items they’d want to keep.
It’s called estate recovery, and it’s not exactly advertised as one of the terms for Medicaid enrollment.
But pre-Obamacare there weren’t many people who were a) on Medicaid and b) had many assets of value for seizing. Things have changed, though, thanks to the Obamacare expansions of Medicaid that all but a few states agreed with despite the Supreme Court ruling that the expansions were entirely optional.
Now there are a lot more people, many of whom aren’t necessarily poor, qualifying for Medicaid. In fact, so far most of the Obamacare enrollments have actually been enrollments in Medicaid. And those people might be in for a shock when they find out that their Medicaid benefits are less benefit than a loan:
It wasn’t the moonlight, holiday-season euphoria or family pressure that made Sophia Prins and Gary Balhorn, both 62, suddenly decide to get married.
It was the fine print.
As fine print is wont to do, it had buried itself in a long form — Balhorn’s application for free health insurance through the expanded state Medicaid program. As the paperwork lay on the dining-room table in Port Townsend, Prins began reading.
She was shocked: If you’re 55 or over, Medicaid can come back after you’re dead and bill your estate for ordinary health-care expenses.
The way Prins saw it, that meant health insurance via Medicaid is hardly “free” for Washington residents 55 or older. It’s a loan, one whose payback requirements aren’t well advertised. And it penalizes people who, despite having a low income, have managed to keep a home or some savings they hope to pass to heirs, Prins said.
Keep in mind, people who qualify for Medicaid are sort of forced to accept Medicaid as they are not qualified for subsidies for a non-Medicaid insurance policy purchased through the exchange:
People cannot receive a tax credit to subsidize their purchase of a private health plan if their income qualifies them for Medicaid, said Bethany Frey, spokeswoman for the Washington Health Benefit Exchange.
But they could buy a health plan without a tax credit, she added.
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.
That’s what prompted the folks in the article linked above to marry. By combining their incomes they don’t qualify for Medicaid and do qualify for a subsidized insurance policy.
Washington is scrambling to change this part of their law, and no doubt other states will be taking a look at how they’ve implemented this part of Obamacare, but how many families are going find themselves in a situation where they thought they’d be getting some major asset from a loved one’s estate only to find out it really belongs to the government?