Med­i­caid es­tate-re­cov­ery pro­grams may ham­per en­roll­ment ef­forts

Modern Healthcare - - NEWS - By Vir­gil Dick­son

Writ­ing in the Wash­ing­ton Times, Dr. Jane Ori­ent, ex­ec­u­tive di­rec­tor of the As­so­ci­a­tion of Amer­i­can Physi­cians and Surgeons, called the re­cov­ery pro­vi­sion “a cash cow for states to milk the poor and the mid­dle class.”

Both Oba­macare sup­port­ers and crit­ics are warn­ing that a long­stand­ing federal law al­low­ing states to re­cover Med­i­caid pay­ments from the es­tates of de­ceased ben­e­fi­cia­ries may dis­cour­age lower-in­come Amer­i­cans from en­rolling in the ex­panded Med­i­caid pro­gram.

Since 1993, federal law has re­quired states to re­cover Med­i­caid pay­ments for nurs­ing home, long-term care and home- and com­mu­nity-based ser­vices from the es­tates of de­ceased Med­i­caid re­cip­i­ents who started re­ceiv­ing such ben­e­fits at age 55 or older. But the law also gave states the op­tion to re­cover other types of Med­i­caid costs, in­clud­ing med­i­cal ser­vices. Some states, such as Cal­i­for­nia, have taken that op­tion and have col­lected for med­i­cal costs as well as long-term-care costs.

Now it’s un­clear whether the more than two dozen states that have ex­panded Med­i­caid will go af­ter the es­tate as­sets of low-in­come res­i­dents who en­roll in the ex­panded pro­gram, which un­der the Pa­tient Pro­tec­tion and Af­ford­able Care Act makes Med­i­caid cov­er­age avail­able to adults with in­comes up to 138% of the federal poverty level with no as­set test. Ac­cord­ing to a Con­sumer Re­ports ar­ti­cle, 10 Med­i­caid ex­pan­sion states plan to go af­ter as­sets, 11 do not, and the in­ten­tions of four states plus the District of Columbia are not yet known.

Some con­ser­va­tive groups op­posed to Oba­macare have is­sued warn­ings to people about sign­ing up for Med­i­caid. Writ­ing in the Wash­ing­ton Times, Dr. Jane Ori­ent, ex­ec­u­tive di­rec­tor of the As­so­ci­a­tion of Amer­i­can Physi­cians and Surgeons, called the re­cov­ery pro­vi­sion “a cash cow for states to milk the poor and the mid­dle class.”

Fac­ing a pub­lic outcry, Ore­gon and Wash­ing­ton have changed their poli­cies to go af­ter only the es­tate as­sets of people who re­ceived Med­i­caid pay-- ments for long-term-care sup­ports and ser­vices. “It was prov­ing to be a bar­rier for people to sign up for cov­er­age … and we be­lieved that it was more im­por­tant that people get cov­er­age,” Judy Mohr Peter­son, head of the Ore­gon Med­i­caid pro­gram, told Ore­gon Pub­lic Broad­cast­ing in Jan­uary.

To ad­dress these con­cerns, the CMS is­sued a let­ter to state Med­i­caid di­rec­tors on Feb. 23 stat­ing that the “CMS in­tends to thor­oughly ex­plore op­tions and to use any avail­able au­thor­i­ties to elim­i­nate re­cov­ery of Med­i­caid ben­e­fits con­sist­ing of items or ser­vices other than long-term care and re­lated ser­vices.” The let­ter urged states not to pur­sue es­tate re­cov­er­ies against Amer­i­cans who sign up for ex­panded Med­i­caid un­der the ACA.

Health­care providers and ad­vo­cacy groups that are en­cour­ag­ing unin­sured, lower-in­come in­di­vid­u­als and fam­i­lies to sign up for the ex­panded Med­i­caid pro­gram are ner­vous about the es­tate-re­cov­ery is­sue. Me­dia re­ports have quoted Med­i­caid-el­i­gi­ble people who chose not to en­roll say­ing they feared hav­ing their home or other as­sets seized af­ter they die.

Health sys­tem lead­ers al­ready are con­cerned about manda­tory pre­mium con­tri­bu­tions in Repub­li­can-led states such as Michi­gan damp­en­ing Med­i­caid en­roll­ment. Bob Riney, pres­i­dent of Henry Ford Health Sys­tem in Detroit, said the state’s al­ter­na­tive Med­i­caid ex­pan­sion model, called Healthy Michi­gan, “has fea­tures that re­quire fi­nan­cial con­tri­bu­tion from en­rollees, so adding es­tate re­cov­ery would only be an un­nec­es­sary bar­rier to get­ting people en­rolled and could de­feat the whole pur­pose.” AARP, the se­nior ad­vo­cacy group, “hopes con­sumers won’t be de­terred from tak­ing ad­van­tage of health cov­er­age made avail­able through Med­i­caid ex­pan­sion,” said Elaine Ryan, vice pres­i­dent of state ad­vo­cacy and strat­egy in­te­gra­tion at the or­ga­ni­za­tion’s govern­ment af­fairs group. “That said, we want to make sure con­sumers do their home­work and un­der­stand the laws as they ap­ply to their per­sonal sit­u­a­tion in their state.”

The Med­i­caid es­tate-re­cov­ery pro­gram “is def­i­nitely a dis­in­cen­tive in Cal­i­for­nia for those who are aged 55-64 to en­roll be­cause Cal­i­for­nia has taken an ex­pan­sive ap­proach to re­cov­ery,” said Pa­tri­cia McGinnis, ex­ec­u­tive di­rec­tor of Cal­i­for­nia Ad­vo­cates for Nurs­ing Home Re­form.

The rea­son Med­i­caid es­tate re­cov­ery is a worry un­der ex­panded Med­i­caid is that many new ben­e­fi­cia­ries may have a home or other as­sets. Prior to the Af­ford­able Care Act, Med­i­caid el­i­gi­bil­ity was de­ter­mined both by in­come and as­set tests; people with more than a bare min­i­mum of as­sets could not le­git­i­mately qual­ify. Un­der Oba­macare, el­i­gi­bil­ity for Med­i­caid health ben­e­fits is de­ter­mined only by an in­come test, with­out re­gard to as­sets. Thus, people who may have ac­cu­mu­lated a home and other as­sets now may qual­ify for Med­i­caid if their in­come has de­clined for some rea­son.

States are not al­lowed to go af­ter the as­sets of a de­ceased ben­e­fi­ciary if there is a liv­ing spouse, mi­nor chil­dren or sur­viv­ing de­pen­dents with dis­abil­i­ties. Fam­i­lies have the op­tion to ap­ply for hard­ship ex­emp­tions to avoid be­ing sub­ject to the re­coup­ment.

Wash­ing­ton state, which changed its pol­icy to rule out es­tate re­cov­ery for ser­vices re­ceived un­der Med­i­caid med­i­cal cov­er­age, does not ex­pect to lose much money from mak­ing the change, said Man­ning Pel­landa, as­sis­tant di­rec­tor of the Wash­ing­ton State Health Care Author­ity. The state for the most part went af­ter only costs re­lated to longterm care be­cause of the le­gal costs of pur­su­ing es­tate re­cov­ery, he said.

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