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ObamaCare Clusterfuck: If you're over 55 and forced into Medicaid, Medicaid is a collateral loan, and a death tax on your estate

From this -- alas anonymous -- analyst/informant to Paul Craig Roberts in Counterpunch:

[I]f an Exchange determines you are eligible for Medicaid, you have no other choice. Code for Exchanges specifies, “an applicant is not eligible for advance payment of the premium tax credit (a subsidized plan) or cost-sharing reductions to the extent that he or she is eligible for other minimum essential coverage, including coverage under Medicaid and CHIP.” Therefore, you will be tossed into Medicaid unless there are specific rules as to why you would not be eligible. If you are enrolled in a private plan through an Exchange and have been receiving a tax credit, and your income decreases making you eligible for Medicaid, in you go. If you are allowed to opt out because you don’t want Medicaid, you will have to pay a penalty for being uninsured unless you can afford to purchase insurance in the open market. ...

Furthermore, to increase enrollment in health coverage without requiring people to complete an application on their own, states are advised to automate enrollment whenever possible by using existing databases for social services programs such as SNAP (food stamps) to enroll people who appear eligible for Medicaid but are not currently enrolled. Therefore, you could find yourself auto-enrolled in Medicaid against your will if your state acts on this advice.

.... You won’t find the following info in the ACA. It’s in the Omnibus Reconciliation Act of 1993 (OBRA 1993) – a federal statute which applies to Medicaid, and, if you are enrolled in Medicaid, it will apply to you depending on your age.

a) OBRA 1993 requires all states that receive Medicaid funding to seek recovery from the estates of deceased individuals who used Medicaid benefits at age 55 or older. It allows recovery for any items or services under the state Medicaid plan going beyond nursing homes and other long-term care institutions. In fact, The Centers for Medicare & Medicaid Services (CMS) site says that states have the option of recovering payments for all Medicaid services provided. The Department of Health and Human Services (HHS) site says at state option, recovery can be pursued for any items covered by the Medicaid state plan.

b) The HHS site has an overview of the Medicaid estate recovery mandate which also says that at a minimum, states must pursue recoveries from the “probate estate,” which includes property that passes to the heirs under state probate law, but states can expand the definition of estate to allow recovery from property that bypasses probate. This means states can use procedures for direct recovery from bank accounts and other funds.

c) Some states use recovery for RX and hospital only as required by OBRA 1993; some recover for a few additional benefits and some recover for all benefits under the state plan. Recovery provides revenue for cash-strapped states and it’s a big business.

Your estate is what you own when you die – your home and what’s in it, other real estate you may own, your bank account, annuities and so on. And even if you have a will, your heirs are chopped liver. Low-income people often have only one major asset – the home in which they live and, in some cases, this has been the family home through several generations.

So what this boils down to is: if you are put into Medicaid – congratulations – you just got a mandated collateral loan if you use Medicaid benefits at age 55 or older! States keep a running tally.

Estate recovery can be exempted or deferred in certain situations after your death, but the regulations for this are limited and complicated with multitudes of conditions.

Sheesh. It's almost like poor elders are 3/5 of a person, or something. Even if you make it through to Medicare and manage to hang onto your house under Medicaid, you might not be able to pass it on to your kids! Or anything else, for that matter. Good news for the downwardly mobile, eh?

NOTE This is so awful I don't want to believe it. But see commenter sleepy at NC, WikiPedia, the Christian Science Monitor. And hey, guess what! Some states farm out the recoveries, and the collection agencies screw it up.

What's new is that ObamaCare forces you into Medicaid, and so forces you to put your estate at risk. But only if you're old and poor!

UPDATE Isn't this just the rankest posssible discrimination? Can this be Constitutional?

No votes yet


Alexa's picture
Submitted by Alexa on

is 'constitutional' to 'auto-enroll' folks into a program that can strip them of their assets, in order to recoup every penny that is spent on them.

Are their any attorneys in this community? I sure hope so.

This aspect has really bugged (and puzzled) me, since I saw this piece.

Thanks for bringing it up, Lambert! ;-)

Now, I'm signing off . . .

Gerard Pierce's picture
Submitted by Gerard Pierce on

If there is a lawyer in the house, it would be useful to know what kind of "rich folk"tricks could be used to protect a persons assets. The first thing that occurs to me is some kind of family trust that would hold title to the house and any other major assets.

There would naturally be a major attempt to prevent the use of this kind of trust, but the top 10% have enough mojo to prevent legislation that affects their own interests.

Alexa's picture
Submitted by Alexa on

Unfortunately, right now I can't take time to search through my bookmarks, but I'm thinking that I've seen a reference or two regarding eliminating loopholes that presently prevent 'the states' to immediately seize deceased Medicaid beneficiaries' real property (primary home, that is).

One regulation that they are wanting to overturn is one that applies to a beneficiaries' jointly-owned property with siblings.

As it stands, if siblings have joint interests in a real property, if one passes, and has gone into the Medicaid long-term care program, a jointly-owned property can be 'shielded,' if one of the siblings has resided in it for one year (I think that's the correct time frame).

The PtB want to close that loophole.

And they also want to prevent a Medicaid beneficiaries' 'adult child' (who presently is shielded from being evicted from a family home, if they reside in 'said home' for two years prior to the death of the Medicaid beneficiary) from being able to continue residing there.

Currently, the MERP folks have to wait to go after the adult child's estate until their death.

Hope I got this right. Will try to double-check later, when I've got a bit more time.

BTW, I'm figuring that it was an 'irrevocable' trust. They're great, but folks may want to remember:

Definition of 'Irrevocable Trust'

A trust that can't be modified or terminated without the permission of the beneficiary.

The grantor, having transferred assets into the trust, effectively removes all of his or her rights of ownership to the assets and the trust.

This is the opposite of a "revocable trust," which allows the grantor to modify the trust.

It would seem that it would have to take this type of trust, to keep property 'off-limits' to the MERP folks.

Maybe someone knows for sure . . .

At any rate, it appears that one should be sure that they're on VERY good terms with their beneficiary (-ies). ;-D

nihil obstet's picture
Submitted by nihil obstet on

Informal discussions of getting the government to pay for the Aged Parent's nursing home give the following advice. A couple of years prior to expecting the Aged P. to go into the nursing home, transfer all assets into Faithful Child's name, leaving Aged P. with a life tenancy, and enough money to pay several months in a good nursing home. Then, when it's time, put the Aged P. in the good nursing home, and run out of money in a few months. The govt. will take over payments, and never makes anyone move to a cheaper nursing home. The rabble, of course, can't afford the initial months' charges for the good nursing home, so they go to the cheaper ones from the start and your Aged P. gets the govt. to pay for the best care.

I should note that the people who engage in these conversations believe that the govt. supports moochers in high cotton, and that they themselves are just being smart in figuring out how to get in on the benefits. I have no idea the extent to which any of this works. It certainly reinforces my belief in a national health service.