Fine print: State can seize your assets to pay for care after you’re forced into Medicaid by Obamacare
POSTED AT 9:41 PM ON DECEMBER 16, 2013 BY
MARY KATHARINE HAM
My, this is an unpleasant consequence of
Obamacare. I’m not going to call it unintended because in its current form, it
potentially earns a bunch of money for states, so I’m pretty sure that’s
intentional. What I think is unintentional is anyone noticing this is what
they’re up to.
But the Seattle Times noticed:
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
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
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.
So, here’s the deal. There used to be a
provision whereby the state could recuperate funds spent on a Medicaid patient
post-55 years old from whatever assets he owned. 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, and sounds pretty
shady if it’s not boldly advertised as the terms for Medicaid enrollment, which
is most definitely is not.
Before the Affordable Care Act’s Medicaid
expansion, there weren’t that many people in Medicaid who had much in the way
of assets for seizing. But now that Medicaid enrollment requirements have been
relaxed, more people with assets but low income are joining the program or
being forced into it. For instance, a couple in their 50s who, say, retired
early after losing jobs in the bad economy may have assets but show a very low
income. Under Obamacare, if their income is low enough to qualify for Medicaid,
they must enroll in Medicaid unless they want to buy totally unsubsidized
coverage in the now-inflated individual market. As teh Times notes, this is no
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
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.
The couple in the Times story was able to
marry, combine their incomes, and get out of the Medicaid trap. Others will not
be so lucky, and may not even read the fine print:
Prins, an artist, and Balhorn, a retired
fisherman-turned-tango instructor, separately qualified for health insurance
through Medicaid based on their sole incomes.
But if they were married, they calculated,
they could “just squeak by” with enough income to qualify for a subsidized
health plan — and avoid any encumbrance on the home they hope to leave to
Prins’ two sons.
For no one else in the world is it a-okay
to give low-income people a loan that might endanger their family’s assets and
not even clearly inform them they’re getting a loan.
This Daily Kos diarist has a nice write-up
(I know) on the toll this could take on lower and middle-class people looking
for relief and getting what amounts to a surprise predatory loan instead:
We haven’t had lots of people younger than
65 on Medicaid, because in most states simply earning less than the Federal
Poverty Level did not qualify one for Medicaid.
And we haven’t had many people with lots
of assets on Medicaid, because in most places you have to have less than around
$2400 to your name before Medicaid will cover you. You can keep your house and
your car, but Medicaid reserves the right to put liens on them and take them
when you die.
But now we have the Affordable Care Act,
and its expectation that everyone in the lower tier of income will end up in
the Medicaid system. To accomplish this, they have dropped the asset test. So
now we will have lots of people ages 55-64, who have assets but not a lot of
income right now, for whatever reason, on Medicaid.
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…
How will this play out? No one knows, as
far as I can tell. But it is easy to see how this could become a real problem.
If someone is low income and goes on Medicaid, will Medicaid put a lien on
their house? If they need to sell their house and move, will they then lose all
their equity in paying off the lien? Will people get hit with bills and liens
for many thousands of dollars, even if they were healthy and hardly ever went
to the doctor?
The fact that this is being treated with
seriousness at Kos is an indication of how large a liability it could be for
this government program. Washington is scrambling to change the law. No doubt
other states will start looking at their implementation of this part of
Obamacare. But there will be people caught unaware that their houses
effectively belong to the government because the government forced them into
Medicaid coverage. You’re welcome!