After people on Medicaid die, some states aggressively seek repayment from their estates

[RandySF]

PERRY, Iowa — Fran Ruhl’s family received a startling letter from the Iowa Department of Human Services four weeks after she died in January 2022.

“Dear FAMILY OF FRANCES RUHL,” the letter began. “We have been informed of the death of the above person, and we wish to express our sincere condolences.”

The letter got right to the point: Iowa’s Medicaid program had spent $226,611.35 for Ruhl’s health care, and the government was entitled to recoup that money from her estate, including nearly any assets she owned or had a share in. If a spouse or disabled child survived Ruhl, the collection could be delayed until after their death, but the money would still be owed.
The notice said the family had 30 days to respond.

“I said, ‘What is this letter for? What is this?’” said Ruhl’s daughter, Jen Coghlan.

It seemed bogus, but it was real. Federal law requires all states to have “estate recovery programs,” which seek reimbursements for spending under Medicaid, the joint federal and state health insurance program for people with low incomes or disabilities. The recovery efforts collect more than $700 million a year, according to a 2021 report from the Medicaid and CHIP Payment and Access Commission, or MACPAC, an agency that advises Congress.



https://www.newsfromthestates.com/article/after-people-medicaid-die-some-states-aggressively-seek-repayment-their-estates

[Coventina]

1. In other words, the government is only loaning you help?

Who the fuck is responsible for this?

[former9thward]

9. LBJ and Clinton administrations

In 1965 the original Medicaid law allowed states to go after estates for reimbursement of services. In 1993 the law was changed to mandate the states to go after estates for reimbursement of services.

[Marthe48]

2. This has been in the fine print for many years

most states didn't enforce it. Several years ago, wv started to notify survivors for repayment. Families expecting to get any assets from the deceased are sadly disappointed.

[jimfields33]

3. She did use the service. I think most sell the house to pay off.

Also I believe they recoup what the persons assets amount to and typically not over that limit.

[PSPS]

4. The letter may have been startling, but this is the way Medicaid is supposed to work.

Medicaid is a means-tested program. It is intended specifically for the impoverished. While the recipient is receiving Medicaid benefits, they have to routinely document their impoverishment -- commonly referred to as the "spend-down." When they die, there's not supposed to be any "estate" to speak of. If they owned (i.e., had material equity in) a house or was sitting on a pile of cash assets, they never should have been collecting Medicaid in the first place and the reimbursement is totally justified.

[Mr.Bill]

5. I would imagine most people on Medicaid

don't have much of an "estate".

[former9thward]

10. Not really.

let's say you own a home and have some savings. Your estate may be worth over $200,000 with average home prices. If you have to go on kidney dialysis that is very expensive. There are a variety of Medicare/Medicaid programs for this but they have reimbursement mandates. So they would go after your house and other financial assets when you die.

[RKP5637]

6. We live in a very very sick country. n/t

[former9thward]

7. The estate owes the money -- not the family.

If the person who died had no significant money or property the letter is meaningless. If a person does have significant assets there are legal ways to get around this. If a family member is going to go on Medicaid (including something like Kidney dialysis) I suggest going to a competent estate attorney for advice --ideally before they use Medicaid services.

[BlueManiac]

8. This is why

many older people put their money and assets in trust. Think you have to do it 5 years before they start getting help from the state.

The rich people do it to make sure the money stays in the family and stick the government with granny's hospital bills.

[DURHAM D]

12. It used to be 3 year look back.

Maybe it has changed.

[DURHAM D]

11. I know a couple of law firms that specialize in helping people

"bankrupt" a senoir so they can get them on Medicaid and into assisted living.

My neighbor is living in his father's home rent free and when he dies the rest home will get it. As I type he has been in assisted living about 8 years. That is about $900,000.00 worth of free services. The house is worth less than $200K and he is not taking good care of it.

Also, estate management means giving the family land/farm/assets to their kids three years before they seek Medicaid care given that the look-back is limited to three years.

[hippywife]

15. It's 5 years.

https://www.medicaidplanningassistance.org/medicaid-look-back-period/

The Look-Back Period begins the date of one’s Medicaid application for long-term care. Generally speaking, the “look back” is 60-months (5 years).

[walkingman]

13. The other side of the story.....Medicaid, like every other well-intended program

is abused by a lot of people. I totally support Medicaid for people that really need it.

In Texas, for example, there are a lot of ranchers who own hundreds acres of property, lots of cattle, and still qualify for Medicaid because livestock and real property which is part of a business or property used in the applicant’s trade ARE NOT COUNTED IN DETERMINING FINANCIAL ELIGIBILITY. The same goes for using a trust to shelter assets.

IMO, those assets should be eligible for "estate recovery".

If we had a universal healthcare system then this and many other issues would go away. But those making our laws like to pick the winners and losers so I doubt it will ever happen.

[Goodheart]

14. I see nothing wrong with that.

That's the way Medicaid is supposed to work. Typically, the Medicaid recipient receives far more in benefits than the value of his/her estate.

[Meowmee]

16. Same as the

Hospice and longterm care places, they make you sign away all of your assets to them. It is a huge billion dollar scam industry. You need to give all of your assets away in a trust before you ever get to this point and purchse ltc ins if you can.

[Maeve]

17. My mom is in assisted care and a lawyer suggested a trust fund

The idea is to make sure the government pays and my brother and I inherit. Sorry....I'm a good liberal and will let her pay her way; she has enough for many years and good insurance for medical care. Why should the rest of you pay so I can get richer when she dies?

[Tomconroy]

18. Medicaid is a significant issue for people who go into nursing homes. There is

An entire legal industry dedicated to trying to preserve the assets of someone who needs care in a nursing home. The rules vary substantially from state to state.

[Yavin4]

19. We should just have Single Payer and be done with all of this.

Pay for it with a combo of payroll taxes, sales taxes, and a wealth tax.

[sarisataka]

20. Which is how it is supposed to work

Medicaid is for those who truly cannot afford care. If you have assets you are supposed to pay for your care.

[Hortensis]

21. Yes. And if they're still paying home mortgages, their lenders

require the mortgages be paid off out of their estates, or if they have to , foreclose on the loans.

That's the way Medicaid is -- where/when it's available the program pays for care for people of all ages who don't have other means of paying for it, and recipients who can are supposed to eventually reimburse the outlay. This is understood by the recipients from the beginning.

Generally, anyone 65 or older, or with special conditions, qualifies for Medicare. No repayment.