The anonymous Obamacare expert, who provided us a year ago with the most complete account of Obamacare available, has returned with an explanation of estate recovery. Obamacare herds the poor into Medicaid which requires some enrollees to forfeit homes and other assets they might have to the state to cover the cost of their medical care. The research article below is meticulous and demonstrates that Obamacare was not enacted to serve the people.
Obamacare: The Final Payment
Raiding the assets of low-income and poor Americans
Since writing “Obamacare: Devils in the Details” posted on this site on February 3, 2013, I have investigated in detail other aspects of the insurance industry’s program to bring health care to Americans. In this article I explain estate recovery to which poorer Americans herded by Obamacare into Medicaid are subject. In violation of moral philosopher John Rawls’ second principle of justice, some of the poorest Americans will pay the highest cost of health care as they, and they alone, are subject to having the family home and any other assets they might possess confiscated by the state in order to reimburse Obamacare for the cost of their medical expenses. The compassionate rhetoric aside, Obamacare makes the poor pay the most.
Under what was deceptively named the Affordable Care Act (ACA), commonly known as Obamacare, which is unaffordable for the patient in more ways than one, beginning January 1, 2014, citizens without health insurance must pay a tax penalty to the Internal Revenue Service (IRS). Qualified individuals and families with incomes between 138 and 400 percent of the Federal Poverty Level (FPL) can shop for commercial insurance policies at a Health Insurance Marketplace (an exchange) and may be eligible for a subsidy from the government to help pay for a plan. Those with incomes at or below 138 percent of the Federal Poverty Level will be tossed into Medicaid unless there are specific reasons why they would not be eligible.
The Federal Poverty Level incomes for different family sizes for 2014 established by the Department of Health and Human Services can be found here: http://aspe.hhs.gov/poverty/14poverty.cfm To determine whether you will be put into Medicaid, find the Federal Poverty Level annual income that applies to your family size for 2014 from the HHS tables and multiply the amount by 1.38. If your annual income is not larger than this amount, into Medicaid you go. For example, to avoid being put into Medicaid by Obamacare, a single individual in the 48 states and D.C. needs an income that is more than 138 percent of $11,670 (more than $16,105). A family of four needs an income that is more than 138 percent of $23,850 (more than $32,913). Poverty level incomes in Alaska and Hawaii are higher due to the higher cost of living in those states.
You won’t find estate recovery 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.
OBRA 1993 requires all states that receive Medicaid funding to seek recovery from the estates of deceased Medicaid patients for medical services received in a nursing home or other long-term care institution, home- and community-based services and related hospital and prescription drug services regardless of age. It also allows, at state option, recovery for all services used in the Medicaid state plan at age 55 or older. At minimum, states must pursue recovery from the probate estate which includes property that passes to 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. The state keeps a running tally, and even if you have a will, your heirs are chopped liver. 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.
Your estate is what you own when you die–your home, other real estate in which you have a legal interest, personal property, bank accounts, annuities and so on. For cash-strapped states, recovery provides an income stream, and with the expansion of Medicaid states will be in dire need of money, particularly in the current economy.
You must first understand that if an exchange determines you are eligible for Medicaid, you have no other choice. Code for exchanges specifies that an applicant is not eligible for a subsidized plan to the extent that he or she is eligible for coverage under Medicaid. Therefore, when you apply, if you are found eligible, you will be tossed into Medicaid. You can also be auto-enrolled in Medicaid if you are presumed eligible through a database such as SNAP (food stamps). If you are enrolled in a subsidized private plan through an exchange and your circumstances change making you eligible for Medicaid, in you go.
Obamacare revises Medicaid regulations in order to make more Americans eligible for Medicaid. Revised regulations include an increase in age and income limitations, and the asset test no longer applies. Prior to these revisions, applicants were not eligible for Medicaid if they had more than a specific dollar amount in assets. But, under Obamacare, those who likely own a home or have savings set aside–for example, early retirees or people who have lost their jobs and, as a result, are in a low income bracket–will find themselves in Medicaid, and their assets will be looted by the government when they die for medical services used at age 55 and up.
Estate recovery can have a damaging impact on low-income and poor Americans. It is a pernicious death tax on those who have the least and are the most vulnerable. Often, the only asset they have is the family home and what’s in it, and, for some, this has been the family home for several generations. The threat of losing the home causes people to forego health care.
Home equity is part of a deceased Medicaid recipient’s estate and except under certain circumstances is subject to estate recovery. Surviving family members may either sell the home and use the proceeds to satisfy the Medicaid claim or, if they wish to keep the home in the family, they can satisfy the claim with their own personal funds. This Medicaid clawback not only confiscates family property but also robs people of their dignity as Medicaid allows only an amount it considers reasonable for services provided by a funeral home and burial costs. In some states, funeral homes are responsible for notifying Medicaid if there is excess money in a burial trust fund so it can also be pillaged.
Some might think it fair that those who are enrolled in Medicaid pay back the benefits they received. However, under a mandate that requires all Americans to be covered by health insurance or pay a tax penalty to the IRS, estate recovery is unconscionable since Obamacare offers no other viable option for this income-segment of the population. It also discriminates by age since only Medicaid enrollees who use benefits in the state plan at age 55 and up are subject to estate recovery, but those who use benefits at age 54 or less are home free unless they receive long-term care. Under federal law, discrimination is not permitted on the basis of age, but, obviously, the U.S. government turns a blind eye to to its own law. Perhaps, when states need more money due to the Obamacare expansion of Medicaid, and as the jobless economy continues causing more people to be eligible, age discrimination will be broadened to 45 and up.
You may be eligible for an exemption from having to pay a penalty for being uninsured if you meet specific requirements–for example, if you are in jail, if you have a sincerely-held religious belief that prevents you from seeking and obtaining medical care, if you are eligible for Medicaid under its expansion but live in a state that opted not to expand Medicaid, if you are a member of an Indian tribe, and several other situations. But there is no exemption for people who refuse to sign up for Obamacare because of the Medicaid estate recovery program.
Since the plans at the Obamacare exchanges are income-based, you may be put into Medicaid when you apply for insurance. Or, you may start off enrolled in a subsidized plan, confident that estate recovery won’t apply to you, but several months or a year later, due to a change in your circumstances, find you have been tossed into Medicaid. You can increase your income in order to avoid Medicaid, but it would have to remain over 138 percent of the Federal Poverty Level throughout the taxable year. If paying for insurance will deprive you of food or shelter, you can try filing for a hardship exemption, that is, if the government site is working smoothly, and if you can find the form. It is important to understand how this income-based scheme works so you can figure out how best to survive the many caveats of Obamacare. To learn more and what to watch out for, read my lesson on how Obamacare works.
Estate recovery was not an unintended consequence of Obamacare. The House Ways & Means Committee and The House Energy & Commerce Committee share jurisdiction over health care, including Medicare and Medicaid, and both worked extensively on Obamacare. So, don’t bother thinking that the members of these committees didn’t know that estate recovery would impact millions of Americans who would be tossed into Medicaid. The asset test was dropped and the age limit was increased explicitly in order to expand Medicaid. Yet, did We the People hear any concern about estate recovery? Certainly not in the many floor speeches given by Democrats as well as Republicans or from the media.
Obama stated during his 2008 presidential campaign that transparency would be the leverage needed to ensure that people stay involved in the national health care reform process. The expansion of Medicaid was part of the process. Did Obama or your representatives tell you that Medicaid, depending on your age, is a loan subject to deferred payment by your estate? Did they tell you the government subsidy for a private plan at an exchange is a loan, that must be repaid if your income increases? Transparency was highly selective. The bait was shown but not the hook.
Obama also often made the point that the public should receive the same level of coverage and care as members of Congress. Medicaid is hardly the same level of coverage and care, but, aside from that, tell us, Mr. Obama, because your health care is funded by taxpayers, will your estate be subject to recovery?
The fact that Obamacare did not revise existing federal statute–in other words, it retained estate recovery–most certainly undermines the compassionate rhetoric about helping low-income and poor Americans.
Official Response To Estate Recovery Inquiry
In October 2009 during the national health care reform debacle, eight public-spirited citizens, dismayed as they watched Obamacare morph into deception, signed and faxed a letter to 28 members of Congress, Democrats and Republicans alike, including chairs and ranking members of the various health care policy committees working on Obamacare. The letter addressed “Discrimination, Estate Recovery & Exploitation in National Mandated Health Insurance.” Other recipients included President Barack Obama; Kathleen Sebelius, Secretary of Health and Human Services; and Nancy Ann Deparle, Director of White House Office of Health Reform.
The letter pointed out that absence of choice for Medicaid-eligible citizens other than a costly penalty is discrimination based on economic status. It also stated that the Medicaid estate recovery program discriminates by age and against those who own a home and have other assets versus those who do not. The letter asked if OBRA 1993 had been amended so states would not be allowed to recover assets or place liens on property under national mandated health insurance, and, if there was no amendment, why not?
The citizens who sent the letter received no response from Congress or the Obama administration. The government that comprises ObamaNation, Inc. serves only its money masters.
Depending on their state of residency, Americans can sign up for Obamacare coverage with a federal or with a state exchange. The US Centers for Medicare and Medicaid Services (CMS) is the federal office that established the federal exchange at healthcare.gov at which residents of the 36 states that chose not to use a state exchange can sign up for Obamacare. (New Mexico and Idaho have state exchanges but are currently using the federal one.) Fourteen states and the District of Columbia submitted proposals, which were approved by CMS, to run their own exchanges.
In June 2013 a letter was sent to the Centers for Medicare & Medicaid Services by a well-informed citizen pointing out that the Medicaid Manual prepared by CMS to provide guidance for states contains procedural rules intended to ensure that individuals are informed about estate recovery before they complete the application process.
There are variations in the ways in which states implement estate recovery, depending upon their Medicaid program and state laws. However, Federal law requires all states to incorporate the following protections for Medicaid recipients into the design of their estate recovery program:
— The State should notify Medicaid recipients about the estate recovery program during their initial application for Medicaid eligibility and annual re-determination process.
— The State must notify affected survivors about the initiation of estate recovery and give them an opportunity to claim an exemption based on hardship.
— The State must establish procedures and criteria to waive recovery if it would cause undue hardship.
The letter went on to say that the final CMS Health Insurance Marketplace application (healthcare.gov) notifies applicants about Medicaid’s right to pursue and recover any money from other health insurance, legal settlements or other third parties but does not disclose estate recovery. Since estate recovery is one of the terms of the Medicaid contract, it is deceptive to omit disclosure of this practice. CMS was asked to provide the reasons for this omission.
CMS responded evasively to the concerned citizen’s question. CMS claimed that the Health Insurance Marketplace application at healthcare.gov does not disclose Medicaid’s right to claim against the estate, because CMS wanted to provide flexibility to state Medicaid agencies as to how each one notifies applicants about estate recovery. Some states have developed pamphlets to address common estate recovery questions or devote a portion of a general Medicaid pamphlet to the subject. Some states also post their state plans, perhaps with additional explanatory text, on their web sites.
Even if we take this claim at face value, it reflects a cavalier attitude. As health insurance is mandated with low-income earners and the very poor having no alternative to Medicaid, certainly those subject to estate recovery have a right to be notified in advance of being herded into this insurance plan.
It is well worth knowing about estate recovery before you sign up at an Obamacare exchange so you can make an informed choice as to whether or not you want to get trapped in this Byzantine sinkhole or steer clear, particularly if you think your income may relegate you to coverage under Medicaid now or in the future. Unfortunately, it appears that CMS as well as some of the state-based exchanges, such as Covered California, decided you don’t deserve to know about this particular term of the Medicaid contract when you apply and sign on the dotted line. So, as of this writing, there is no mention of estate recovery on the Obamacare application at healthcare.gov that services residents of the 36 states which use the federal exchange nor for Californians, residents of a state with a robust estate recovery program! Some states disclose estate recovery on their state exchange applications for Obamacare, and others do not.
Non-disclosure of estate recovery on an Obamacare application does not mean that the state in which you reside will not bill your estate for the cost of your medical treatment under Medicaid. It merely means that a conscious choice was made not to let you know that one consequence of signing up for Obamacare could be the loss of your home.
There are a few states that recover for long-term care only. It would be in your best interest to find out your state’s recovery policy so you know where you stand. You should also remain alert to changes.
Here is what you need to know:
When you complete the application at healthcare.gov, it is assumed that when you submit it, you are fully informed and agree to all terms. Submission of the application is akin to signing a contract. Your signature not only means you have provided true answers to all the questions under penalty of perjury, but also that you understand and agree to all the rules and conditions. However, by not disclosing estate recovery CMS expunged your right to make an informed decision. Therefore, you may not realize that your estate can become government property because Obamacare forces you into Medicaid if your income is less than the threshold for a subsidized premium.
When you sign a loan note at a bank, you are agreeing to the terms and conditions of the contract between you and the bank, and these are disclosed in the note. The banker doesn’t say to you, “Just sign here and we’ll let you know the terms later. You can pick up a pamphlet at our local office or request that one be mailed to you. Or, you can visit our website and see if you can find the page that tells you what you just signed yourself into. Thank you. We appreciate your business.”
Even if your circumstances change such that you are no longer eligible for Medicaid and you are shifted into a subsidized Obamacare plan, any Medicaid expenditures you incurred remain as claims on your estate.
According to the federal procedural rules, the state should notify Medicaid recipients about the estate recovery program during their initial application for Medicaid eligibility. Initial is the operative word. It does not mean after an individual has been put into Medicaid. Since healthcare.gov is the initial point of contact for applicants who reside in one of the 36 states using the federal exchange, there is no legitimate excuse for nondisclosure of estate recovery. Healthcare.gov is where the buck stops. The application should contain notification of estate recovery. The same is true for state-based exchanges that omitted this disclosure on their Obamacare applications.
Like terms of a contract, laws are supposed to be known. In Western civilization people are not supposed to be accountable to secret laws or to secret clauses in contracts that they sign. Clearly, if Western legal practice holds, estate recovery is impermissible due to the lack of notice. Only the corrupt architects of Obamacare believe that it is fair to confiscate the assets of an individual or a family without notification that the health care they receive can be charged to their estate.
Some state-based exchanges requested permission from CMS to add information to their application and chose to include disclosure of estate recovery. The Massachusetts Health Connector application not only includes disclosure of estate recovery, but also goes above and beyond, notifying applicants of liens. “To the extent permitted by law, MassHealth (Medicaid) may place a lien against any real estate owned by eligible persons or in which eligible persons have a legal interest. If MassHealth puts a lien against that property and it is sold, money from the sale of that property may be used to repay MassHealth for medical services provided.”
There are pre-death liens and post-death liens, and whether or not placement of a lien is disclosed on an Obamacare application, this practice is permitted in all states. For more on liens, you should consult an attorney–if you can afford one–or seek information online. It’s not pretty.
Renewal Of Coverage and Auto-enrollment
Note that Obamacare applications contain a section titled Renewal of Coverage in Future Years. An applicant can agree to allow an exchange to use income data, including information from tax returns to automatically renew eligibility for 1, 2, 3, 4 or 5 years, or applicants can check “Do not use information from tax returns to renew my coverage.” Exchanges have access to the federal data hub which keeps track of your income and other personal data. If you gave unfettered access to your data by choosing auto-renewal, they have all the information needed to determine whether you are still eligible for your subsidized policy or should be moved into Medicaid.
The letter sent to CMS in June 2013 also asked about estate recovery disclosure in cases where coverage is auto-renewed during the annual redetermination process, when people are shifted from a subsidized plan to Medicaid due to a decrease in income or other change in circumstance, and when people are auto-enrolled on the presumption that they are eligible according to a database such as SNAP (food stamps) or by a hospital or health care center. A similar letter was sent to the Massachusetts Office of Medicaid.
The federal procedural rules on estate recovery say the state should notify Medicaid recipients about the estate recovery program during the annual redetermination process, but according to the Massachusetts Office of Medicaid, you don’t need to be informed about estate recovery during the redetermination process because you presumably read about this on the original application you filled out and submitted.
If you submitted an application that did not disclose estate recovery, it cannot be presumed that you are aware of estate recovery, because notification was not on the application. Thus, the redetermination procedure is one more example of the failure to disclose.
If you are bumped into Medicaid from a subsidized plan due to a change in your circumstances, the Massachusetts Office of Medicaid believes that you don’t need to be informed about estate recovery because you presumably read about this however many years ago when you filled out the original application. You will simply be sent a notice that you are now in Medicaid, and the notice will refer you to the Medicaid Member Booklet for information on the rules. If you obtain and read the booklet, you can learn that you may be subject to estate recovery. But don’t expect to receive a Medicaid Member Booklet with your notice, because “It would be cost prohibitive to include a Member Booklet with every notice. Instead, every notice includes information on how to contact Customer Service with any questions, including to request a copy of the Member Booklet.”
Hope you know what questions to ask and that you do request a copy of the booklet immediately, pray that it arrives before you use any Medicaid services if you are age 55 to 64 and go over it with a fine tooth comb. If you don’t want to be in Medicaid, you can contact your state Medicaid agency to unenroll, but you’ll probably have to pay a penalty for being uninsured unless you can earn more money and get into a subsidized plan.
If you submitted an application that does not disclose estate recovery and you are bumped into Medicaid due to a change in your circumstances, you won’t know about this detrimental practice, but you can learn that your assets may be confiscated if you contact Customer Service and request a Member Booklet.
If you are auto-enrolled into Medicaid because you were presumed eligible through a SNAP (food stamp) database or by a hospital or health care center, you may still need to fill out a full application which may or may not disclose estate recovery.
Now let’s look at how the federal exchange at healthcare.gov will handle these situations.
The federal exchange will not be renewing coverage for Medicaid recipients. Your state Medicaid agency will handle your annual Medicaid eligibility redetermination (renewal). CMS responded to the citizen’s inquiry as follows: “State Medicaid agencies are developing their own renewal forms which may include a notice regarding estate recovery. CMS is in the process of finalizing a model renewal form to assist states, and we appreciate that you highlighted this requirement.”
Why did CMS need to be reminded about notification of estate recovery when the federal procedural rules that CMS is supposed to implement specify that notification is required?
You may receive a renewal form if your state Medicaid agency doesn’t employ the same “streamlined Obamacare procedures” that Massachusetts is using or if you did not choose auto-renewal. Your state Medicaid agency might come up with its own procedure for redetermination regardless of which option you checked on your original application. In any case, the renewal form might not include disclosure of estate recovery although your state Medicaid agency is familiar with the estate recovery notification requirement outlined in the federal procedural rules.
According to CMS, if you are bumped into Medicaid due to a change in your circumstances, your state Medicaid agency may notify you that you are now in Medicaid and “may include Medicaid-specific information as appropriate.”
If the state Medicaid agency sends a notice that you have been bumped into Medicaid, you might also receive Medicaid-specific information–or you might not. The notice will refer you to a pamphlet and provide you with a website address so you can learn that your heirs can be dispossessed in exchange for your being provided with minimal medical care.
If you are auto-enrolled because you were presumed eligible through a SNAP (food stamp) database or by a hospital or health care center, your state Medicaid agency will most likely send you a full application which might or might not disclose estate recovery.
Oregon fast-tracked residents into Medicaid in October 2013 by sending approximately 240,000 letters to those on food stamps. The Oregon Health Authority already had people’s information on file since they were participants in an income-based state program, and, thus, presumed eligible for Medicaid. The letter explained that all they had to do was let the Oregon Health Authority know they wanted to be enrolled in Medicaid by checking the “I-am-interested” box, provide some basic information on the enclosed one-page form and return it to the Authority in the enclosed stamped and addressed envelope. The Oregon Health Authority then worked on enrolling the 75,000 respondents and proceeded to send 177,000 reminder notices.
Did the one-page form contain notification of all rights and responsibilities including estate recovery?
State Policy Changes
Oregon and Washington disclosed estate recovery on their applications and experienced low sign-ups. People are reluctant to accept having their families dispossessed of what little they have. Officials in both states said that state policy would be changed in order to apply estate recovery only to Medicaid patients in long-term care, and Cover Oregon (the state exchange) decided to remove estate recovery disclosure from its application in order to avoid alarming applicants. The Seattle Times reported that Washington’s Health Care Authority has filed an emergency rule to amend Medicaid’s estate recovery policy.
There is no pretending that your information is private or that Obamacare is concerned with protecting your privacy. California’s state exchange, Covered California, provided insurance agents with names and contact information for tens of thousands of people who either logged onto Covered California’s website to check out plans or who had partially filled out an application but did not finish, and did not ask to be contacted. Exectutive Director, Peter Lee, excused this breach of privacy on the grounds that the exchange’s legal counsel approved it and the state wanted to offer more assistance to Californians.
The privacy statement in the application of Colorado’s exchange, Connect for Health Colorado, states: “You release Connect for Health Colorado and the Department of Health Care Policy and Financing from all liability for sharing this information with other agencies.” Some of the sharing agencies include the United States Customs and Immigration Services, Department of Homeland Security and financial institutions (banks, savings and loans, credit unions, etc.).
In the event that your data has been compromised, states must notify you, but the federal government is not required to do the same, and is, therefore, more likely to hide its security flaws and privacy breaches. According to the Washington Post, administration officials knew when the federal site was launched that the privacy of user data would be at risk. An internal Department of Health and Human Services (HHS) memo warned that sufficient testing of data security had not been performed.
Subsidized Premiums And Cost-sharing Reductions Are Also Subject To Recovery
CMS and many of the state-based exchanges also left out notification that the tax credit you receive for a subsidized plan and the reduction in cost-sharing and deductibles are advance loans and could leave you with an unexpected debt to the IRS. Most likely, the lack of this disclosure as well as estate recovery was intentional so people would not be deterred from signing up for health insurance. Thus, CMS and other exchanges unilaterally surrendered your right to know important rules that can adversely impact you and your family. Non-disclosure of all rules, rights and responsibilities is not a standard and acceptable business practice and could be deemed fraudulent in a court of law.
Connect for Health Colorado states your acceptance in the fine print on its application: “I understand that if I am eligible for the Advance Premium Tax Credit (APTC) and/or Reduced Co-pays and Deductibles these payments will be made directly to my selected insurance carrier(s). Acceptance of (APTC) and/or Reduced Co-pays and Deductibles may impact my coverage year tax liability. I will be given the option to apply all, some, or none of any APTC amount I may be eligible for to my monthly premium.”
Do you know what this means? It is notification that you may have to pay back part or all of your Obamacare health premium subsidy and reduced co-pays and deductibles if your income rises during the year.
The Advance Premium Tax Credit is the subsidized part of your Obamacare premium. The subsidy and cost-sharing reductions are based on an estimate of your total income for the year in which you apply for insurance at an exchange. If your income at the end of the year is higher than the estimate, you may have a tax liability for part or all of these two items because they were based on a lower income. To avoid this risk, you can choose to negotiate a smaller subsidy and pay more of your premium to reduce your exposure to possible tax liability for overpayment of the subsidy. Alternatively, you can refuse the tax credit, pay full freight and collect your tax credit based on your actual year-end income when you file your federal tax return. You can’t negotiate cost-sharing reductions, but, you can opt not to apply for these unless you don’t mind shouldering a possible payback.
For details see section 4:
For current payback amounts:
For payback of the entire subsidy:
Medicaid Managed Care Plans
Some states use private insurers to manage health care for their Medicaid population through Medicaid Managed Care Plans, and the Obamacare expansion of Medicaid is a huge money-maker for these private insurers as well as a huge cost booster for U.S. health care. For giants UnitedHealthcare and WellPoint, as well as for smaller publicly-traded companies such as Molina Healthcare, a Fortune 500, multi-state health care organization, an expanded customer base brings revenue growth. Medicaid Managed Care Plans are hoping to enroll the majority of the expanded Medicaid population.
“This is several hundreds of billions of dollars of new market opportunity for these plans over the next couple of years,” says Jason Gurda, managing director of healthcare with investment bank Leerink Swann in New York.”
Many states are choosing to move all or portions of their Medicaid populations to managed care plans. Thirty-five are expected to make changes to their managed care programs in 2014, up from 28 in 2013 and 20 in 2012. States jumping on the privatized-Medicaid bandwagon will mean more profit for corporations and less money allocated to patient care.
A Managed Care Plan is a system of health insurance which includes a network of contracted providers that are paid a fixed amount to provide health benefits to a defined population. Needless to say, this model relies on restriction and denial of care putting Medicaid patients at risk.
A Medicaid Managed Care Plan adds more charges subject to estate recovery for those who are tossed into Medicaid. The Medicaid Manual says that when an individual age 55 and older is enrolled either voluntarily or mandatorily in a managed care plan, the state must seek recovery from the individual’s estate for the premium payments. If the state plan recovers for all Medicaid services, the state must recover from the individual’s estate the total capitation rate for the period the beneficiary was enrolled in the managed care plan. If the state plan recovers for only some services covered under the state plan, the state must recover from the individual’s estate that portion of the capitation payment that is attributable to the recoverable services, based on the most appropriate actuarial analysis determined by the state.
The manual also states that when the individual enrolls or is enrolled in the managed care plan, the state must provide a separate notice to the individual that explains that the premium payments made to the managed care plan are included either in whole or in part in the claim against the estate.
States that use private insurers to manage their Medicaid population will most likely have capitation payments but might not have reinsurance or fee-for-service programs which can also be recovered from an estate. Therefore, it is prudent to find out what your state has and who is affected. Here are the fees that can be recovered from estates:
Capitation Payments–a fixed monthly fee paid by the state to the Medicaid Managed Care Plan for each month you are enrolled in one of these plans, regardless of whether or not you use any medical services. If you do seek care, capitation payments can exceed the actual costs of services provided during the month.
According to the Massachusetts EOHHS Privacy Office: The estimated average capitation payment for October 1, 2013 through December 31, 2013 was $449.59 per month– an average annual total of $5,395.08. In other words, a person from age 55 through, let’s say, 62, accumulates $43,160.64 on his or her tally against assets including the home. There goes a chunk of your estate even if you didn’t use any medical care.
Reinsurance Payments–An amount reimbursed to program contractors for certain contract service costs incurred by a Medicaid patient that are beyond a contractual dollar threshold. These payments are in addition to the monthly capitation payment.
Fee-for-Service Payments–A direct payment of some or all of a Medicaid member’s medical bills not covered by other available insurance.
According to the Massachusetts Office of Medicaid, with certain exceptions, persons who are eligible for the Obamacare Medicaid expansion (age 21 to 64) must enroll in one of the state’s Medicaid Managed Care Plans.
The hard sell is on for states to privatize Medicaid, and many who are forced into Medicaid by Obamacare will also be forced into managed care plans as is the case in Massachusetts. This represents yet another noose around the necks of low-income and poor people since the three payments described above are recoverable from estates.
Once the limited estates of poor and low-income Americans have been taken to reimburse Medicaid, the U.S. will be left with a permanently poorer and more desperate population and will be faced with higher Medicaid costs as there will no longer be any private property to confiscate.
Pursuant to the Deficit Reduction Act of 2005 (DRA) and clarified in the Tax Relief and Health Care Act of 2006, states were given greater authority to impose and increase premium and cost-sharing charges on certain Medicaid enrollees, but despite these charges their estates are still subject to recovery. Under Obamacare, the government has a right to recover reimbursement from estates of those with lower incomes who are enrolled in Medicaid. Yet, individuals with higher incomes who qualify for a subsidized plan are also paying premiums subsidized by the government but are not subject to estate recovery.
Is it fair to impose estate recovery on Medicaid enrollees but not on other subsidy recipients? Is it fair if recovery adheres to the basic requirements in federal statute, but, thereafter, is based on state policy which differs from state to state and, thus, is not applied equally across the nation to all Medicaid enrollees at age 55 and up? Is targeting a specific age group fair? Or legal?
Equal protection is in the Constitution, but ever since the Supreme Court surrendered in the 1930s to President Franklin D. Roosevelt’s New Deal legislation, equal protection has been curtailed in the economic arena. The Supreme Court, unwilling to face down a President asserting previously unknown executive power, accepted the violation of the 14th Amendment in economic legislation in order to avoid being packed with FDR yes-men.
Obamacare was not written for the benefit of the poor and uninsured. It was written for the profits of the insurance companies giving them millions of new customers subsidized by U.S. taxpayers. The business of America is business. Private insurance company CEOs receive multi-million dollar pay packages, while under Obamacare low-income earners and the poor have to give up their homes and other assets in order to receive medical care.
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Contributed by Paul Craig Roberts of Institute for Political Economy.
About Dr. Paul Craig Roberts
Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. Visit his web site at the Institute for Political Economy.
This article has been posted with permission from Dr. Paul Craig Roberts.
Copyright Paul Craig Roberts.