Estates could owe Medicaid

By Beth Duffy


For the sake of the 15 million individuals expected to accept their states’ forms of Medicaid expansion health care programs commencing this autumn — including a projected 150,000 Iowans — I hope they ask, “Hey, does this mean my estate is subject to Medicaid rules and therefore must reimburse the government for my health care benefits when I die?”

Of concern herein is the concept of expansion, which by definition is an enlargement — not a replacement — carrying with it rules of the nucleus. The Patient Protection and Affordable Care Act (aka Obamacare) “expands Medicaid coverage to millions of low-income Americans.”

Medicaid is a loan program whose benefits remain on record until the recipient’s death — at which time, benefits received, depending on the type of care and at what age, are subject to reimbursement to the government from the deceased’s estate. Rather than a traditional contract, debt is created statutorily upon receipt of medical assistance, according to Health Management System’s Iowa Medicaid Estate Recovery policy. Each state operates a Medicaid collection agency, mandated by the federal Budget Reconciliation Acts of 1993 and 1994, and recorded in Iowa as Estate Recovery — Iowa Code Section 249A.5(2).

However, it is plausible to think most Medicaid recipients do not realize “free medical care” benefits are considered financial “loans.” Will any aspect of Medicaid expansion likewise be considered a statutory loan to be repaid at time of death?

If a Medicaid recipient dies and is subject to repayment of benefits, only higher priority expenses of court costs and administration fees, most funeral and burial expense, federal debt and state taxes, and last-illness medical expense take precedence over the medical assistance debt. Inheritance comes last, and if heirs improperly acquire a presumed inheritance, they must repay it to Medicaid. The estate’s executor may be held personally liable, and interest begins accruing six months after the death. ...

I insinuate no legal advice or opinion toward Medicaid estate recovery. My concern is for the new Medicaid expansion, low-income participants — mandated to enroll in health care programs, yet unaware of Medicaid statutory-debt obligations.

Will Iowa’s new federally mandated program perpetuate Medicaid’s status of “statutory loan program” subject to debt-obligation and estate reimbursement? If so, Medicaid expansion could unintentionally create a tragic new cycle of poverty.

Beth Duffy is a former professor of graduate-level political and intercultural communication at University of Dubuque and currently an independent researcher. Comments:

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