Today's overblown Obamacare fear: Will Medicaid take my house? [but writer says it does happen]

Los Angeles Times ^ | February 12, 2014 | Michael Hiltzik

[grundle]

One thing the ACA didn't change was Medicaid's estate recovery rule. Under a law enacted in 1993, states are required to seek recovery from the estates of deceased enrollees for the costs of long-term care, such as nursing-home care. The recovery rule applied to those who received that care when they were 55 and older, or who were permanently institutionalized at any age.

Medicaid eligibility for the expanded programs is based on income alone, which means there might be some new members with low incomes but sizable illiquid estates, such as homes worth hundreds of thousands of dollars.

The prospect of asset seizures raises people's hackles, especially since under the Affordable Care Act, those earning less than 138% of the poverty level may be offered no choice for subsidized health insurance except Medicaid.

On the whole, the estate recovery program hasn't been a big moneymaker for government at any level. Since 1993, California has collected $978.5 million

[grundle]

In the past 20 years, the state of California has seized $978.5 million worth of assets from the estates of mediaid recipients.

Obamacare requires everyone in the U.S. whose income is less than 138% of the poverty level to enroll in medicaid. Given what happened in California, Obamacare could result in tens of billions of dollars worth of private assets being seized by the government.

[MichaelCorleone]

And you can bet Grandpa Warrenn will be right there to snatch up the property. Crony capitalism is a wonderful thing!

[goldstategop]

Unless you have assets to pay for your own health care, the asset recovery rule doesn’t apply. If you have next to nothing, there is nothing for the government to confiscate. And we don’t leave people to fend for themselves in this country. If you’re enrolled in Medicaid, you don’t need to worry about it - and the government seldom bothers because the costs of recovering negligible assets are exceeded by the lifetime medical costs of the Medicaid beneficiary. It shouldn’t deter people from enrolling in the program.

[maine-iac7]

they certainly DO come after even the most humble of homes - the gov’t does not engage in common sense or decency - and least of all, morality

[Lorianne]

The problem now is that you may not get a choice whether to enroll in the program.

Also, it is specifically designed to go after only that age cohort that has the time to build up any assets, even if it is only a very modestly priced home that is paid off.

Obviously if you have no assets at all it is not a problem. But for people with some assets (house, retirement account, vehicles, etc.) it could be a problem. It may not seem like a lot to a middle income person, but for a person who was low wage their whole lives but they managed to save to scape together a few meager assets, it could be a bit deal. It may make a difference for their children or grandchildren who could possibly have been lifted up to the next rung of the income ladder, say if property was able to pay for college tuition or to start small family business.

[pepsionice]

I can vouch on that....as long as you only have a limited amount of property and assets....nothing ever happens. However, from a couple of experiences I’ve viewed, it can get into a shocker. If you own a successful farm for example, with the property and equipment worth over a million and you get into serious Mediaid usage/cost....then they suddenly get interested. Same deal for some older person who saved all their life and is standing there with three-quarters of a million in bonds or CDs. The key feature is that Medicaid will cover you nicely.....as long as you live a very marginal or limited lifestyle. Don’t be overly successful in life....or else spend it all by the time you get on Medicaid.

[Intolerant in NJ]

The prospect of asset seizures raises people's hackles,,,once worked in a nursing home with a woman who had had a fairly long stay there and had been forced to spend down her assets to pay for her care until she was eligible for Medicaid. Since she was widowed, she was eventually required by the system to sell her house to continue to pay until Medicaid would start to pick up the bill - gradually her condition improved to the point where she could have lived outside the home - but of course by then her home was gone and she had no place to go which she could afford given her now impoverished status - I lost track of her about that time, but her prospects seem to be to continue to live in the home on Medicaid funding thanks to the situation Medicaid had brought about......

[hinckley buzzard]

States differ but in general, and for sure in Ohio, if you have a farm and a million dollars of capital and equipment, you cannot be on Medicaid-- pure and simple.

It gets complicated but basically, to qualify for current Medicaid in Ohio you cannot have more than $1500 in assets. If you are entering long term care and have a spouse, she/he can reside in a residence, but when he/she leaves, the state gets to auction it off and recoup as much of the proceeds as necessary to cover expenses. The proceeds almost never cover expenses, (nursing home care typically costs north of 6-7000 per month) but that doesn't mean it isn't an important source of recovery for the state. They can and will go after anything you have including life insurance.

[hinckley buzzard]

Ohio has a program in which Medicaid will pay for Assisted Living, in lieu of long term care. It cuts the cost by probably two thirds. It takes a designated program though because assisted living is not considered a health care facility per se.

[informavoracious]

So they use historical figures of recoupment from when you had to be destitute to get Medicaid/Medi-Cal to show that the government hardly takes anything. Except they’ve now changed the rules so you can have unlimited assets if you meet the income requirements. And limited your options.

[Intolerant in NJ]

Ohio has a program in which Medicaid will pay for Assisted Living, in lieu of long term care...it all becomes very convoluted - I was in the hospital for a spinal infection a few years ago and required a followup period of six weeks of IV anitbiotics, about an hour of treatment a day, plus a nursing consultation once a week. My primary insurer Medicare would pay for this only if I went as an inpatient to a skilled nursing facility for the full six weeks. Fortunately my secondary coverage agreed to pay for the antibiotics and nursing and pharmacy supervision as needed at home. My daughter, wife and I became pretty skilled in IV administration, and the care ended up costing probably about a tenth of what it would have had the Medicare regulations had their way....

[cherry]

I thought being on Medicaid basically meant you had no money....no assets....

[ronnie raygun]

Funny thing? if we took all the money they piss away in other countries we could take care of the sick and elderly with no problem as well as paying our fighting men and women a descent salary.

[dennisw]

ping

[garandgal]

Well, you would be wrong, as it depends on the State.

I recently wrote an estimate of value for a family WEDDING RING of all things (very negligible value..less than $1000).
Medicaid wanted to force it to be sold; no idea how that turned out...but what a bunch of disgusting ghouls.

We have seen all kinds, values, etc. of assets forced to sale due to this. Our State strongly enforces the “look-back” period; so if assets are transferred to other family members (going back for many years) they will be coming for them.

Perhaps you do not understand. There are many “new” people suddenly qualifying for Medicaid...a large number of them likely have assets. What do you think this grand scheme is all about? It is not as simple as a “single payer” system; they want to consolidate assets...that is what this has ALWAYS been about.

This will get very ugly, as I can about guarantee that they are NOT making it clear that this will happen when people are “forced” into Medicaid.

[maine yankee]

I have a friend here in Maine who is going to lose his home this week to the state.

His mother became ill ad was advised by state employees to enroll in medicaid. She died about 6 months later. Her husband died within a month.

Their son was given the house after their death, but the state showed up at probate to claim the house for the debt incured by the mother.

And the state is going to win in probate this week in probate court.

[bert]

The word used is seizure. In practice, don’t people exchange real estate assets for living quarters in long term care facilities to facilitate the change ?

There is a very real problem of huge expense involved with extended care or long term care that is paid with the sale of residential assets. Even with the sale or title lien, there is the problem of outliving the value.

I have been closely associated with the problems of old (really old) ladies and extended care for themselves and in some cases husbands.Although there are numerous possible cash streams to pay for the care, the house is often the primary asset to be drawn down .

My neighbors of 45 years recently moved into an extended care facility. She is spry but her husband is in bad shape. The extended care facility or perhaps a bank, took title to the house and it was auctioned. On reflection, this procedure may have been the new Obamacare rules at work. The auction sale might not have produced the maximum return but it quickly resolved the issue.

The bottom line is that there is no really good universal solution for those of us who are getting old and face the transition from living as we have for decades to smaller quarters that come with some variety of medical care.

[SunTzuWu]

Bookmark.

[Lorianne]

I agree. The new Medicaid expansion seems to be specifically engineered to take the assets of those most likely to have gathered some (people over 55).

Many so-called “low income” people have nevertheless managed to purchase a home and pay it off. Maybe it’s not worth much, but it would help out the next generation to get to the next rung just above low income (perhaps the home is sold to pay for a grandchild’s college, or to start a new small family business). Just because someone is low income, they should not be forced onto Medicaid.

[Lorianne]

Here is a good comment from the LA Times site:

Ukenuke at 3:08 AM February 13, 2014

If you own a house and have a bank account but low income, you’d be an IDIOT to accept Medicaid and put 100% of your assets at risk.

There’s nothing overblown about this. In California, the law REQUIRES Estate Recovery, and the exclusions for spouses and children under 21 are TEMPORARY, expiring when the spouse dies and the child turns 21.

The promise that hardship waivers are treat “liberally” is a joke. You’d be a MORON to trust the state PR flak with your life savings.

This is a wealth-destroyer for middle-class families who wanted to leave something to their grandkids. And again, if you’re over 55 and you work only part time, you may have NO CHOICE but to accept Medicaid, putting 100% of your assets at risk, even if you want to pay for insurance.

There’s no weaseling out of this issue until a law is passed repealing estate recovery. If you’re middle-class, and have some assets but low income, find a way to inflate your income to avoid Medicaid. (Maybe have a friend “pay you” something, then “pay him” back, and take the hit on your income taxes, which should be minimal at Medicaid threshold.) NOBODY WAS EVER PROSECUTED FOR OVERSTATING THEIR INCOME ON A TAX RETURN.