Medicaid estate recovery is front and center these days. The reasons why are just as important as the rule itself. What does it mean for Medicaid recipients and what can they do to protect themselves are the questions everyone is asking. This week, we explore what this clause in Medicaid agreements really means.
This particular Medicaid element is back in the news for the same reasons anything else associated with the American healthcare sector hits the evening news: politics. There have been ongoing arguments and discussions for more than two years on whether the president’s healthcare overhaul is first, legal and second, effective. Recently, we’ve seen debates on the impact the Affordable Care Act will have on Medicaid as a whole and whether it will blend seamlessly or face an overhaul after the president’s out of office.
Now, though, accusations are flying between the two parties as the Republicans remind their constituents that Medicaid can and will recoup its losses after the recipient has passed away. Those efforts, they say, can include placing a lien on homes and bank accounts. Supporters insist that while Medicaid does reserve that right, it rarely ends up going that far. They say this is little more than a political scare tactic being used to dissuade new applications from those most in need.
On the state level, Medicaid insists it must recover benefits if it is to remain solvent. For individuals age 55 or older, states are directed to recover payments from the estate for services such as nursing facility services, community-based services, drug costs and some hospital stays. Those recoveries go directly to the federal government. At that point, states may then attempt to recover some of their own losses with what’s left, provided it’s not part of any Medicare cost-sharing that was paid through the Medicare Savings Program beneficiaries.
If, however, a Medicaid recipient passes away and leaves behind a spouse, a child or family members who are blind or otherwise disabled, no government body can seek reimbursement. Most states don’t pursue recipients because it’s both time consuming and expensive. In fact, there are just ten states that will actively seek out reimbursements.
Meanwhile, it seems as though Medicaid may be rewriting its compliance guidelines. The Center for Medicare and Medicaid Services (CMS) says that it’s reviewing the process and will be issuing updated guidance soon. That should help clarify how states should handle estate recovery for the expansion population. Either way, this will likely result in new procedures, not to mention the new tracking efforts that will have to be designed.
As all of this unfolds, there are some people who aren’t applying for Medicaid coverage, even if they qualify, because they’re concerned about their estate and what it will look like after the state gets finished recouping losses. A qualified estate planning attorney can guide you through the process and explore options that will help you protect your assets. Give us a call today to learn more.