Medicaid as a tax on the ‘estates’ of the poor

Washington Times ^ | 11 March 2013 | Jane M. Orient

[Lorianne]

Assets become targets of the states ___ Most people think they’re exempt from the estate tax (often called the “death tax”) because they don’t have $2 million. A lot of people with low incomes do have some assets, however, and if they have used any Medicaid benefits, their heirs may be in for a shock.

Depending on state law, the state may have the right to everything, up to the cost of Medicaid benefits received — house, car, bank accounts, tools, annuities, piano, furniture, everything — and not just 50 percent of it.

This situation is not exactly new. The Omnibus Reconciliation Act of 1993 requires states to pursue Medicaid asset recovery from persons who receive benefits at age 55 or older. At first, this applied mainly to nursing home benefits, but at state option, it could now include any items or services provided under Medicaid.

There are some limits on what the state can take, as in the case of hardship or to protect surviving spouses, but the law is extremely complex. “The only certainty is controversy,” writes lawyer David L. McGuffey, a member of a Georgia law firm specializing in estate law, in a 77-page document.

“Estate recovery tends to reach individuals of very modest means and has a chilling effect on low-income people seeking benefits to which they are entitled,” he notes. To enroll in Medicaid, people have had to sign a disclosure form explaining this requirement, and some decide to forgo the benefit.

A plaintiff who represented himself described estate recovery as “nothing more than a vast, unlawful conspiracy to deprive the plaintiff, an American who is black, of his property, his dignity and his constitutional rights, simply because they could.” (Drake v. Miller)

[E. Pluribus Unum]

They'll find some other way to drag you in.

Ubama will just make up another law.

[Patriot Babe]

Same here I have family but I rarely speak or visit them or visa versa. I do have some things, but I hope before the Good Lord calls me home that I am able to distribute to the people I want to give to. This may be strange but I’m closer to my former coworkers than I am to my family, so I may want to leave them something as a thank you for helping me during difficult times. That situation you mentioned I am fully aware of that with my grandmother and I hate that. Never bothered to visit the relative but just waiting for them to drop dead to collect their treasure. UGH!!

[jy8z]

To enroll in Medicaid, people have had to sign a disclosure form explaining this requirement, and some decide to forgo the benefit.

So if a person forgoes the benefit and still needs medical care, will they still receive it? If they do, who pays?

[Lorianne]

The problem is people are going to get sucked into Medicaid without realizing they are jeopardizing their assets. The government is basically placing a lien on their assets.

And you don’t even have to use the Medicaid services to have that lien placed. Just by being signed up their is a capitalization charge right off the bat (some say it is around $40,000). You may not even know you are ‘enrolled’ in Medicaid.

Many people who are not wealthy but have managed to assemble a few meager assets (say, have paid off a very low cost home worth say $50,000) cannot now sell that home or pass it on to their heirs. These are people who may be on the borderline of not having enough money to purchase a health insurance plan (maybe they lost a job later in life, or became disabled later in life) so they get tossed into a Medicaid pool in order to meet the Obamacare requirement that they have ‘health insurance’.

[Lorianne]

Obamacare is expanding the eligibility requirements for Medicaid to include people with assets (but low income). Previously you weren’t eligible for Medicaid if you had assets over (I think) around $3,000. And even then you weren’t eligible if you were between the ages of 21-64.

Now they have enlarged the pool of people to basically everyone under age 64, with or without assets. The only test is income.

So, let’s say someone worked their entire life, managed to gather up some meager assets, say a low cost home, a car, etc. Then, when they are in their 50’s they lose their better paying job and cannot ever get a good paying job again. Their income is low, but the assets they worked hard to acquire all their life is all they have to live on and fall back on to support themselves until eligible for SS and Medicare.

Then they are tossed into the Medicaid pool and suddenly their assets (which took them a lifetime to acquire) are fair game for the Federal government to take.

I see this affecting mostly lower income (but not poor) people. People who always worked and paid their own way, paid their bills, acquired a few assets along the way. Not rich by any means but barely getting by but independent of the government ... until now.

[Lorianne]

No one knows for sure, but they will probably be automatically enrolled in Medicaid if they show up at the emergency room.

[Mears]

Why shouldn’t the taxpayers be reimbursed for expenses they have incurred for the care of someone else?

It’s been that way for some time.

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[E. Pluribus Unum]

Because you are forced to go on Medicaid. You have no choice.

[Mears]

“Because you are forced to go on Medicaid. You have no choice.”

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Maybe I’m missing something here—who is forced to go on Medicaid? By whom are they forced?
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[E. Pluribus Unum]

If an Exchange determines you are eligible for Medicaid, you have no other choice.

[Mears]

You can avoid Medicaid-—pay your own way and protect your estate.

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“If you are allowed to opt out because you don’t want Medicaid, you will have to pay a penalty for being uninsured unless you can afford to purchase insurance in the open market. ...” (from the link).

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[E. Pluribus Unum]

“If you are allowed to opt out because you don’t want Medicaid, you will have to pay a penalty for being uninsured unless you can afford to purchase insurance in the open market. ...”

Good luck purchasing insurance on the open market. You won't be allowed to purchase a catastrophic policy. You have to purchase a policy that covers things that you could not possibly ever need.

The only way Obamacare works is if the people who have assets and income pay exorbitant rates to cover the people who will get it for free.

[Mears]

” The only way Obamacare works is if the people who have assets and income pay exorbitant rates to cover the people who will get it for free.”

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I realize that.

The OP was on Medicaid recipients’ heirs finding out that the estate can be taken to pay back what has been spent on the Medicaid recipient. It has been that way for years.

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[listenhillary]

Enforcement by states varies widely.

I hear Michigan half halfheartedly goes after them, Iowa is aggressive, Illinois aggressive, NJ aggressive. Look back period is five years (currently).

Not legal in all states. Some use Life Estate Deeds
http://www.nolo.com/legal-encyclopedia/lady-bird-deeds.html

[listenhillary]

I see a problem. From the article. It seems your estate is billed because they have set up systems in case you need care.

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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.”

[PA Engineer]

So the government (taxpayer) covers the bills for the persons health care. That person dies with assets, and the government gets reimbursement. I don’t see the problem. Note this doesn’t apply to spouses, only other “heirs” to the estate.

I've seen this posted a couple of times now. It has been this way for decades in one form or another. Families would claim poverty to get their love ones into nursing homes under Medicaid. They would structure (hide) their assets in one form or another. The spouse has always been exempt from the sale forfeiture.

Really strange that many expect others to pay for their family member's (parents) nursing home care.

Am I missing something? How is this different from before? I don't see the problem either. This is why many parents sign their homes and assets over to a trust or trusted child while healthy years before onset of required medicaid expenses. That is if they already do not have nursing home insurance or other assets to cover the costs.

[E. Pluribus Unum]

The difference is now you will be forced onto it.

I'd rather have no insurance then bow to these %#%$$s, but they will increase the fines to the point where it's cheaper to obey.