Fine Print: Obamacare Includes A Medicaid Death Tax

Barack Obama

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?

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Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

  • Neiman

    Good Lord! :(

    • Lianne

      no kidding!

  • kevindf

    Government mercenaries never rest; they always pick the bones clean!

  • Thresherman

    For how many years after they passed it, are we going to keep finding things that are in it?

    • Onslaught1066

      You will never live that long.

  • ellinas1

    Nothing is free. Someone has to pay for it.

    • http://sayanythingblog.com Rob

      Exactly right.

      Welcome to the conservative movement.

      • Matthew Hawkins

        Than why are you against this collection?
        What it does is make sure the person who is ill isn’t effected by health care costs in their life.

        • http://sayanythingblog.com Rob

          Because it’s hidden. Because it’s devious. And because id hides health care costs from people in their life.

          • ellinas1

            It is not hidden. It has been like that for many many years.
            Ignorance is a bliss for many. But it is not an excuse.

            Because some people are surprised that they have to pay something for their upkeep and care does not make it hidden.

        • http://Sayanythingblog.com The Whistler

          So if they are charging the sick people why are we who aren’t on Medicaid paying so much to add coverage?

          • ellinas1

            Because medical care as delivered in the good old USA costs a bundle.
            Anybody that’s somebody has their hand in the kitty bank.

      • ellinas1

        Paying for something is a conservative “thing”?
        You are misinformed. Do not delude your self with crazy notions.

        • two_amber_lamps

          Do not delude your self with crazy notions.

          Practice what thou preacheth Comrade….

    • Toes

      And lately it’s been China.

      • ellinas1

        Lately? Surely you are jesting.

        • Toes

          Lately meaning roughly the last decade.

          • ellinas1

            Where did the USA borrow money from during the last 3 decades?

          • Toes

            My guess would be Japan. China didn’t start buying seriously until about 1992. It appears they overtook Japan in about 2004.

          • ellinas1

            Very good.
            Now it’s time for US to stop borrowing, and start paying whatever it takes to pay our debts and run our government.
            No more borrowing.

  • WOOF

    MediCARE does the same thing.

    “Medicare has a right to be reimbursed for the medical treatment or long-term care they pay for.
    If a person has assets to cover those costs, then they are required to do so. – See more at:
    http://www.heraldbanner.com/opinion/x960121241/Medical-expenses-may-result-in-seized-property#sthash.rcFZit6O.dpuf

    • tony_o2

      If a private insurer was collecting premiums and then seizing assets to “pay” the promised benefits, would you be ok with that?

      Why are people required to pay medicare taxes all their lives if they are just going to have to pay their own expenses when they need care?

      • Toes

        So people like Collin Peterson can become millionaires once they reach Congress!

    • henrycat

      Medicaid has so much fraud with more coming, because of the ACA, that it seems like it would only be right for those who used the system to reimburse those who paid for their care…..
      It wouldn’t be a bad idea to consider all programs such as SNAP and EBT in the same category for reimbursement. That may help curb some of the abuse………

      • WOOF

        Medicaid fraud is cabals of buisnessmen and doctors billing for care not delivered

        • henrycat

          It been discovered, many times, where this is true… There are many unscrupulous professionals that will take advantage of the unsupervised and ignored system and not much has been done about it or to stop it until someone or group calls them on it…
          Otherwise….. the CMS has forced some Doctors to revise their charges upward when a clerk in a basement somewhere, working for CMS decides that a certain procedure is worth only so much…. CMS statements to Medicare patients will show that the Doctor charged “X” amount only to have it adjusted to, for example 45% of “X, ” which will reflect on the the Doctor’s balance sheet as appropriate for his services…. That’s where the free market system, without Government interference would stand out…. Competition……Get Government out of the Health Care or any other enterprise and the free market will decide who survives….. not the inept, inefficient Government….

      • ray

        belibe dat bro

  • Guest

    But I thought EVERYTHING belongs to the government. They create the environment for the development of wealth through infrastructure and a legal framework. We should be thankful any time they let us keep anything.

    • Onslaught1066

      We should be thankful any time they let us keep loan us anything.

      There, fixed that for you.

  • RCND

    And the opposite may be true as well. One way to avoid the Medicare / Medicaid death penalty is for the spouses to divorce with the one most likely to live longer being granted all assets by the other in the settlement. I would not be surprised if we see a spike in that activity as this disaster called ACA continues to dish out these little surprises.

  • Geoff Bosse

    “Remember that all through history, there have been tyrants and murderers, and for a time, they seem invincible. But in the end, they always fall. Always.”

  • Geoff Bosse

    Is it wrong of me to not want to live past 55? My family would be way better off! Why must it be so difficult to plan for death?

  • Onslaught1066

    Death panel, death tax, death, death, death!

  • Neiman

    Sadly, people, most people, cannot fight the government and once they seize property, the family will play hell getting any of it back. At least there will be no need for any inheritance taxes, the government inherits it all. We are but vassals of the state, they offer us cradle to grave protections, a no fault socialist society; but they price is our liberty, our children and our property, all of it – it all belongs to the State.

  • creeper

    “In fact, so far most of the Obamacare enrollments have actually been enrollments in Obamacare.”

    ??? Rob, you might want to edit this one.

  • Toes

    What happens when they turn 65 and become eligible for Medicare?

    • henrycat

      Nothing…… If you are below that certain level of income or do not have assets, you stay on Medicaid…

  • Lynn Bergman

    I’m supposed to feel sorry for folks who get a zero interest loan in the form of medicaid and also feel sorry for their greedy relatives that get less from the estate when the loan is repaid after death?
    Am I understanding this correctly?

  • Toes

    Good, I hope they all carry through with it.

  • ray

    just deed your property and assets to who ever you want before you die and they cant collect what you dont own

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