The Obamacare Hail Mary That Could Save The Senate For Democrats

[ProSense]

11. That was

"The cost of your Expanded Medicaid is deducted from your estate ...The cost of your Expanded Medicaid is deducted from your estate ... leaving your loved ones with nothing. That's good?"

...a feature of Medicaid before Obamacare, and it doesn't apply to everyone. It's interesting that the program is now being attacked because it has been expanded for the first time since it was implemented.

<...>

From very early in the Medicaid program’s history, however, there has been a concern that people who could otherwise afford to pay for at least some long-term care services would voluntarily impoverish themselves, transferring assets to their children or to others to make themselves eligible for Medicaid. Congress and the states have therefore adopted laws and regulations to limit asset transfers by Medicaid recipients. These prohibitions were initially evaded through the use of trusts and other financial devices, resulting in the enactment of additional laws to bar these evasions.

<...>

The Affordable Care Act creates a new category of Medicaid recipients — adults with incomes under 133 percent of the poverty level. It also changes income and asset eligibility rules for parents, children, and pregnant women, who were already eligible for Medicaid. Eligibility for these categories of recipients is now calculated based on “modified adjusted gross income,” or MAGI. There are no asset requirements for persons who become eligible for Medicaid under MAGI rules. The question thus arises as to how existing rules regarding asset transfers, liens, estate recoveries, and post-eligibility income apply to persons eligible for Medicaid based on MAGI.... Although the federal and state law governing Medicaid liens and estate recoveries are primarily concerned with recipients who receive high-cost long-term care services, federal law that existed prior to the ACA allows states to recover from the estates of any Medicaid recipient age 55 or over for the cost of any Medicaid services, and a number of states have existing laws that would allow such recoveries. ACA opponents have been spreading the word that if people age 55 or over sign up for expansion Medicaid, the government will recover from their estate when they die. The Memorandum attempts to address these concerns.

<...>

Medicaid rules prohibit Medicaid coverage of LTSS for persons who have equity in a home that exceeds a certain value, which for 2014 is set at $543,000 (or, at a state’s option, at $814,000). Although, again, there are no asset restrictions on MAGI eligibility, the home equity requirement applies to eligibility for LTSS services, not for Medicaid, and thus applies to MAGI-eligible individuals who receive LTSS services.

Individuals who receive institutional and home and community-based LTSS services as traditional categorically- or medically-needy Medicaid recipients must generally spend all of their income on LTSS, except for a small personal needs allowance and funds necessary to maintain their spouse or family in the community, with Medicaid paying for the additional cost of the services. These post-eligibility treatment of income (PETI) rules do not explicitly apply to MAGI-eligible individuals. CMS recognizes, however, that it is inequitable to apply these rules to other Medicaid recipients but not MAGI individuals. It is contemplating rulemaking, therefore, to extend these rules to MAGI eligible individuals...most of the rules that apply to traditional Medicaid recipients with respect to LTSS (except for lien requirements) are likely to apply to MAGI-eligible individuals who receive LTSS. CMS intends, however, to take steps to avoid applying estate-recovery rules to MAGI-eligible individuals who do not receive LTSS to keep this from becoming a barrier to Medicaid expansion eligibility.

http://healthaffairs.org/blog/2014/02/24/implementing-health-reform-medicaid-asset-rules-and-the-affordable-care-act/