Medicaid Targets Dead Family Members’ Homes to Regain Health Care Costs

The federal government requires every state in the US to recover money for Medicaid. This law typically targets family members who have passed away and used Medicaid to help cover their health care costs in their final years. Although homes are usually free from being used to recover money for Medicaid, they are eligible to be used as collateral for patients who were on Medicaid when they were over the age of 55, or who used their coverage for long-term care like a nursing home or an aide. Many families are uninformed about the government’s ability to bill for care previously covered by Medicaid and use the deceased’s home as payment for coverage. They are shocked when they receive a high bill in the mail because of the health care costs.

Democratic lawmakers have recently proposed entirely eliminating program. Medicaid suing for ownership of patient’s homes only makes up a small percentage of the money Medicaid needs to recover, at about 1%. Many states also do not inform people about the potential of their property being claimed, and families sign up for Medicaid without knowing. There is also no set precedent for what Medicaid should be going after to regain. This varies from state to state; some pursue the costs of all medical procedures, such as prescription costs, while other states only want the costs accrued from a long-term care facility.

New York and Ohio were the top 2 states that collected the most in Medicaid. A program in Kansas that also collects money from estates via Medicaid found that not all of the estates fit the criteria to be claimed by Medicaid even though Kansas was recovering the money. Blue Cross Blue Shield has also recommended Massachusetts pass a law that prohibits the federal government from claiming family estates to regain Medicaid losses.

“Estate recovery has the potential to perpetuate wealth disparities and intergenerational poverty,” said Katherine Howitt, Medicaid policy director of Blue Cross Blue Shield foundation of Massachusetts.

The person who invented the rule also has admitted that the law does not work. Stephen Moses, who created the original law for Medicaid to claim estates as a part of the recovery process, has said that the plan does not align with what the law was originally created to do. Originally, this law encouraged the public to save for their own long-term care to avoid losing their home from Medicaid. However, this has been proven to not work as people who need Medicaid are now being punished for not privately saving when having a private savings fund was not a viable option for patients either.

Reference

Seitz A. State Medicaid offices target dead people’s homes to recoup their health care costs. Washington Post. Published March 17, 2024. Accessed March 18, 2024. https://www.washingtonpost.com/politics/2024/03/16/medicaid-estate-recovery-nursing-homes/6d094e94-e3d2-11ee-95aa-7384336086f3_story.html