Today’s Obamacare Trap: Dunning the Estates of Medicaid Patients

We hear a lot about how Medicaid is free — but it may not be as free as you think. And Obamacare seems set to leave more grieving survivors with a nasty surprise.

The Seattle Times found buried in that state’s Medicaid rules a provision that mandates “estate recovery”  — allowing the  government to dun the estates of some deceased Medicaid recipients. And by federal law North Carolina and every state must (under various circumstances) do so.

Washington state had just expanded its Medicaid program, as North Carolina is being urged to do. Washington resident Sofia Prins, 62, was stunned to look over all the regulations and discover:

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 ….

That’s right, it’s kind of a balloon loan, and not a good one. Washington residents could get into Medicaid, which all too often provides mediocre care, if they can find a doctor who will take them — and then the government will plunder their estates when they pass on.

As, as this proviso is buried in the typical mountain of red tape, most patients don’t know about it. As pundit Mary Katharine Ham writes:

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.

To give credit where credit is due, the Daily Kos notes:

So here’s the deal: since 1993 there has been a federal law requiring states to recover at least some of the costs of Medicaid-covered medical care for anyone 55 years old and up,  from the estates of those covered. …. States enforce this law, with their own laws and policies added in ….

The Kos writer adds that, under the Affordable Care Act, if you apply for Obamacare, and your fnances indicate you are eligible for Medicaid — you will automatically be enrolled in Medicaid. Remember, under federal law, your estate could be hit up for Medicaid costs. Plus … “if you go on Medicaid, you owe the entire amount that Medicaid spends on you from the day you turn 55.”

This includes not only doctor bills, but also a so-called “capitation charge,” a sum paid to the organization that runs the program.

Could that happen in North Carolina? Here’s what the NC Medicaid regulations say:

The estates of Medicaid recipients may be subject to estate recovery if the recipient applied or re-applied on or after October 1, 1994, and

1. Is under age 55 and an inpatient in a nursing facility, intermediate care facility for the mental retarded, or other medical institution, and cannot reasonably be discharged to return home, or

2. Is 55 years of age or older and is living in medical facility and receiving medical care services, or home and community-based services, or Personal Care Services (PCS).

Update as of Dec. 19: DHHS says that NC limits estate recovery to the amount required by federal law:

• It applies for: Medical care services paid for by the North Carolina Medicaid Program on behalf of the recipient: If the recipient of any age is receiving medical care services as an inpatient in a nursing facility, intermediate care facility for the mentally retarded, or other medical institution, and cannot reasonably be expected to be discharged to return home; or if the recipient is 55 years of age or older and is receiving one or more of the following medical care services:

1. Nursing facility services.
2. Home and community-based services.
3. Hospital care.

3a.  Prescription drugs.

1. Personal care services.

So let’s say you are one of the fortunate few who can actually sign up for Obamacare. But if your income is low, you may be automatically be slotted in Medicaid. I would guess it would be common for people to at some time receive some of the services listed in the law.  And after age 55, everything Medicare spends on you could be billed to your children or loved ones when you pass on.

At least, that’s how I understand it. I am seeking more information on this subject.

For the moment, this trap looks like one more reason to avoid Medicaid. Liberals are aghast that NC hasn’t roped more people into the program. I’d imagine, however, the above problem is just one of the many hazards scattered through Medicaid and Obamacare. We should stay clear of these programs until better opportunities are offered.