States targeting homes of late Medicaid patients
Some seek to reverse federal law requiring them to try to recover costs from estates of those who’ve died.
WASHINGTON — As Salvatore LoGrande fought cancer and all the pain that came with it, his daughters promised to keep him in the white, pitched-roof house he worked so hard to buy many decades ago.
So Sandy LoGrande thought it was a mistake when, a year after her father’s death, Massachusetts billed her $177,000 for his Medicaid expenses and threatened to sue for his home if she didn’t pay up quickly.
“The home was everything” to her father, said LoGrande, 57.
But the bill and accompanying threat weren’t a mistake. Rather, they were part of a routine process the federal government requires of every state: that they seek to recover costs from the assets of dead people who, in their final years, had relied on Medicaid, the taxpayerfunded health insurance for needy Americans.
A person’s home is typically exempt from consideration to qualify for Medicaid. But it is subject to the estate recovery process for those who were over 55 and used Medicaid for long-term care such as nursing home stays or in-home healthcare.
This month, a Democratic lawmaker proposed scuttling the collection program, calling it “cruel.” Critics argue the program collects too little — roughly 1% — of the more than $150 billion Medicaid spends yearly on long-term care. They also say many states fail to warn people who sign up for Medicaid that big bills and claims to their property might await family members who survive them.
LoGrande says that’s how she ended up in a twoyear legal battle with Massachusetts. Several years before her father died in 2016, she had turned to a local nonprofit for advice on caring for him.
The group suggested she sign him up for Medicaid. She remembers asking about the house, but was assured that the state would seek the house only if her father were sent to a nursing home.
For years, her father got an annual renewal notice from the state’s Medicaid office. She says it wasn’t until after his death, when the state’s demand for $177,000 arrived, that she saw the first bill for his care.
“That’s what ripped my guts out,” LoGrande said. “It was dishonest.”
The state settled with the LoGrandes in 2019 and released its claim on the house.
State policies around this recovery process vary widely, according to a 2021 report from the Medicaid and CHIP Payment and Access Commission, which makes policy recommendations to Congress.
Some states will put a lien — a legal claim — on a home, while others don’t. Some Medicaid offices try to recoup all medical costs, including for doctor visits and prescriptions, while others just pursue costs for longterm care. Alaska and Arizona pursued just dozens of properties in recent years, while other states go after thousands of homes, totaling hundreds of millions of dollars.
New York and Ohio topped the country for such collections, recovering more than $100 million combined in a single year, a Dayton Daily News investigation found.
In Tennessee, which recovered more than $38.2 million from more than 8,100 estates last year, Imani Mfalme found herself in a similar predicament after her mother’s death in 2021.
As her mother’s early-onset Alzheimer’s worsened, Mfalme continued to care for her. But in 2015, Mfalme was diagnosed with breast cancer and needed a double mastectomy, so she started looking at other options.
A local Medicaid representative told her to drain her mother’s bank accounts — money Mfalme used to pay for an assisted-living facility — so her mother would qualify for the program.
The representative, said Mfalme, never mentioned that she could be forced to sell her mother’s house to settle the bill with Medicaid once she died.
Now, Tennessee’s Medicaid office says she owes $225,000. The state is seeking a court order requiring Mfalme to sell the house to pay up.
Mfalme, now 42, said she wants to pay what she can, but the house is a particular pain point.
Her mother, a Black woman, purchased her dream home in Knoxville after she won a landmark discrimination lawsuit against her former employer, Boeing, for paying her less than her male co-workers.
“She fought hard for equal pay and equal rights. Just to see that ripped away just because she was sick and I was sick — it’s just absolutely devastating,” Mfalme said.
TennCare, Tennessee’s Medicaid office, said in an email to the Associated Press that it would not comment on specific cases.
The Medicaid and CHIP Payment and Access Commission has recommended that Congress reverse the 1993 law that requires states to recover money from estates, instead making it optional.
Earlier this month, Rep. Jan Schakowsky (D-Ill.) reintroduced legislation that would end the federal government’s mandate. Schakowsky believes the rule is a losing proposition both for families, who lose their homes, and for taxpayers, who don’t see big returns from the recovery efforts.
“It is one of the most cruel, ineffective programs that we see,” Schakowsky told AP. “This is a program that doesn’t work for anybody.”
But in a gridlocked Congress where some Republicans are clamoring to trim Medicaid entitlements, the bill is unlikely to garner the bipartisan support needed to become law.