On March 6, 2024 Representative Jan Schakowsky reintroduced the “Stop Unfair Medicaid Recoveries Act.” That means if someone in your family who is age 55 and over and receives Medicaid long term care services, when they die their “estate” must pay back Medicaid every dollar. As some folks say “the government gets your home.”
It is a bill in Congress introduced in the House of Representatives by Representative Jan Schakowsky. She is from the Chicago area of Illinois. If passed and became law it would apply throughout the entire country. Its number is House bill 7573.
The Stop Unfair Medicaid Recoveries Act would end the practice of requiring the recipients who received Medicaid long term care services and supports when they were age 55 and over.
The current law requires payback for nursing facility services, home and community-based services, and related hospital and prescription drug services, or at the option of the State, any items or services under the State plan. See 42 USC 1396p(b)(1)(B).
In Michigan the payback process occurs through probate of the recipient’s “estate.” That means if you have anything that goes through probate, which is the legal process by which ownership is transferred to the new owners. The property that makes up the “probate estate” is subject to being sold and the money used to payback Medicaid. What goes through probate? Any “interest in property” solely owned by the recipient must go through probate. Jointly owned property does not go through probate. Example: Mary Smith is a widow, her husband predeceased her. They jointly owned their home, but now she is the sole owner. The house will need to go to probate to transfer ownership to the new owners. Without a Will providing otherwise her children will be the new owners. But, before they can take ownership the Medicaid bill must be paid back. Since the Medicaid bills are often in the tens and hundreds of thousands of dollars, that means the house is sold and money given to Medicaid – the government.
Some states have expanded estate recovery which means the state will claim against any property the recipient had an ownership interest at death. For example, that includes property jointly held with anybody (with the exception of spouses and dependent children). The most common target is the home and a car. Again, Michigan does not have this expanded Estate Recovery.
Do note that if the recipient had no property, then there is no estate recovery. An example would be a poor senior who lived in a low-income subsidized apartment and whose only possessions were the contents of the apartment.
The Michigan Medicaid programs included are: hospital; nursing home; Medicaid Waiver also known as HCBS services and MiChoice Waiver; PACE; and in-home help services including Home Help and Home Health. While a recipient is in these plans ALL payments Medicaid makes for hospital, ambulance, prescriptions, etc. are subject to payback and Medicaid Estate Recovery.
Some states have managed care Medicaid. In those states the recipient is subject to the “capitated rate” for payback. A case in California was reported where a fellow joined a Medicaid program, but for years did not need any services. When he died his estate was presented with a bill over $200,000.
Recipients in programs that help pay for Medicare, called QMBY & SLMBY, are NOT included in Medicaid Estate Recovery in any state.
Estate recovery will not apply if a recipient is so poor only have only personal possessions. This would be the case of a low-income senior who lives in an apartment and only owns possessions in the apartment. There is nothing for the state to collect from.
The government will Not demand relatives, including children make payment.
Almost nobody knows that a caregiver daughter or son who lives in the home and has kept a parent out of a nursing home for at least two years prior to the application for Medicaid, may be given the house. There will be no Medicaid Estate Recovery and Medicaid will not penalize the transfer. See an elder law attorney to learn your rights.
There are two mistaken assumptions in the question. The first correction is that Taxpayers pay the bill no matter what. If recipients have an “estate” that means they paid taxes during their life and while receiving benefits. They had to work to make money to buy their homes. If recipients are in their 70’s and they started working at age 18, then they have been Taxpayers for more than a half century. Finally, taxes are paid on the house until it is sold.
The second mistaken assumption is that money is saved for inheritance. If a recipient has a spouse at home, he or she is still facing expensive aging either in home, in a senior apartment or in an assisted living facility. The large majority of residents in “independent senior living” are folks over age 75 who cannot take care of a home. Rent is expensive.
In the case where the recipient is a widow or widower the fact is nursing homes can be a dangerous place both day and night for the recipient who has no family looking out for him or her. A family member who is the protective patient advocate must be available 24 hours around the clock. If the Medicaid recipient is living at home, Medicaid only pays for basic medical assistance. The recipient still needs additional daily support. This may be provided by private home care agencies at a charge of $30 per hour or more. Or, this valuable assistance may be provided by a family member without any lifetime compensation. Saving money for family is necessary for essential needs of the recipient.
Medicaid estate recovery is in effect an “estate tax.” Millionaires have a $13.2 Million dollar exemption from estate tax in 2024. Medicaid families have $0 exemption.
This article cannot be relied upon for anybody’s particular situation. If you have questions Get Legal Advice.
If you are a low-income person and have a question whether Medicaid Estate Recovery applies to you, GET LEGAL ADVICE. You can get free legal advice through a “legal aid” or legal services organization” for low-income folks.
Need a referral? Give us a call, (248) 356-3500, and we’ll refer you to a respected, ethical Elder Law Attorney who isn’t “in it for the money.”
March 17, 2024 by Jim Schuster
Many people fall for the glowing Medicare Advantage ads. They want “all of their benefits.” But there is a dark truth: Medicare Advantage works best for healthy seniors.
A report on the subject from NPR: Older Americans say they feel trapped in Medicare Advantage plans is an eye-opener. Note it IS possible to transfer back to traditional Medicare. But first, here’s the link to the NPR report: Go here.
So what can YOU do if your plan is unsatisfactory? You may have until March 31st of the year to switch to traditional Medicare. Note, that you might have difficulty in getting a Medicare – Medigap supplemental policy due to a preexisting condition. So, the advice is to check out your availability of an affordable Medigap policy before you switch to traditional Medicare. Here’s the low-down on how to do it and what to know: How and when can I switch from Medicare Advantage to traditional Medicare?, from KFF.
You should not need an attorney to complete this process, but if for any reason you do feel the need to talk to a good elder law attorney, give us a call (248) 356-3500, please leave a message and Dawn will get back to you and we’ll work out a good referral -anywhere in the country- for you.
Obvious first step? Go to Medicare.gov if you are just beginning your investigation:
https://www.medicare.gov/basics/get-started-with-medicare/using-medicare/helpful-tools
Want to talk to someone who is not a “salesman”? Call 1-800-MEDICARE (1-800-633-4227)
If you are a “young” healthy Medicare beneficiary, you likely would choose a Medicare Advantage plan with all the “free” extras. Here you will consider what doctors and hospitals are “in network” and what are out of network. If you are a “snow bird” then this question must be answered for both your summer home and your winter home coverage. You only get one plan.
If you have serious chronic medical conditions, consider traditional Medicare with Medigap coverage. Medigap plans run A through K and are standardized.
What if you develop a serious medical condition and the need for “prior authorization” by the insurance plan denies the treatment your doctor orders? And what if your co-pays and deductibles are getting seriously expensive? You want to consider traditional Medicare Medigap plan, but get ready for “attained age” and denial of coverage.
The most serious limit on your choice is denial of coverage. Some plans may deny you coverage, others will impose a six month period of non-coverage for your pre-existing medical condition. For a sample list of disqualifying conditions and more information see: https://www.kff.org/medicare/issue-brief/medigap-enrollment-and-consumer-protections-vary-across-states/.
For attained age cost information simply go to https://www.medicare.gov/basics/get-started-with-medicare/get-more-coverage/joining-a-plan
Go to choose a policy and you’re off and running. For example in Southeast Michigan where I am a Blue Cross Medigap Plan D for a person age 65 will cost $159 + plus the annual monthly Part B premium of $164.90 in 2024. For age 75 the cost is $264 + the annual Part B premium.
Choosing a prescription plan is simpler. There is no traditional Medicare plan, so simply enter your prescriptions, follow the instructions and make your choice. Whatever plan you may have you might lower your prescription costs with an add on such as GoodRx: https://www.goodrx.com/
Let us know if you found this article helpful. Call and leave a message at (248) 356-3500,
All the best,
Jim
What’s been going on? National advocacy. I am on the National Academy of Elder Law Attorneys Advocacy Committee. I’ve been watching for the reintroduction of the repeal of Medicaid Estate Recovery – I wrote about the Jan Schakowsky bill before. But, in spite of all the interest by advocacy groups, she did not reintroduce the bill, this session of Congress.
However another bill introduced by Ohio Senator Sherrod Brown the ” SSI Savings Penalty Elimination Act” has a chance at getting passed, even during this era of wars – Culture War, Middle East War, Ukraine Russia War. However as slow as Congress is, so are the “ships” of national advocacy associations, including NAELA. I’m hoping to get something going on the bill by NAELA. In other words, what we think of as very important does not get the light of day! Nonetheless, I will continue to work in these very important national issues that will benefit all my clients, and all persons who have an interest in our elders and elder law.
Here we are in April 2023 and we are still working at getting a bill in Congress to End Medicaid Estate Recovery. See my prior posts for more background. Here are the action points for any concerned family member who wants to save the family home.
Did you know about Medicaid’s Deal with the Devil? That is when they say “With Medicaid Waiver we can help you stay in YOUR home so you won’t have to go to a nursing home! But! We get your house when you die!”
So there’s the good news, YOU can make a difference. Go for it!
All the best,
Jim