Almost daily, we hear more bad from this new law coerced upon America, known as the Affordable Care Act. Long ago I called it the Cyanide Bill…seems I wasn’t too far off the mark.
Written into the Medicaid law – you know, the “fine-print” part of Obama’s Law no one ever reads? – is the “Estate Recovery” law. Sure, I know this is nothing new, it’s been around for a couple of decades. It virtually flew under the conscientiousness of the general public, as it affected relatively few. Basically, the original law, Pre-ObamaCare, stated If you’re over 55 and are on Medicaid, when you die the state can seize your assets in an effort to repay the cost of your care and “asset tests” were included in the Medicaid enrollment requirements. The bar varied significantly from state to state, but the gist of it was that if your assets rose above a certain level you were disqualified, regardless of your income.
Post-ObamaCare, now the requirements for Medicaid have been simplified to allow more low income non-elderly people onto the rolls. As a result, people with low incomes, but substantive assets, are suddenly finding themselves trapped in a situation where they have no choice but to sign up for Medicaid. In the 26 states that have opted to implement the Medicaid expansion, asset tests have been eliminated and eligibility is based on income alone. If you earn less than 133% of the federal poverty level, you’ll probably qualify. If you do, you’re no longer able to receive subsidies that help pay for the other plans on the exchange.
Joy Johnson Wilson, Health Policy Director for the National Conference of State Legislatures, summarizes Medicaid and CHIP provisions in the new law and compares them to current law; “In particular, on page 8 Wilson notes that the ACA “[r]equires states to use a net income standard (no asset or resource test, no income disregards) to determine [Medicaid] eligibility.”
Yep, you read that right, bye-bye asset test. Hello simple income test. The new federal income eligibility threshold will be 133% of the federal poverty level (effective 1/1/14).
The only alternative is to purchase a full price, un-subsidized, plan. Since ObamaCare is driving premiums and deductibles up, more people are being thrust into Medicaid and they’re shocked to find out that after they die, their states can come after the assets they’d been planning to leave to their children. If you earn enough to qualify for a government-subsidized plan, the feds will help you pay for your coverage. However, if you’re income doesn’t qualify, but you own a house and have some money in the bank, you’re on your own. You’ll have to leverage those assets against a sneaky loan for the full amount of your care from age 55 on.
Even the left-leaning DailyKos admits how bad this law is: http://www.dailykos.com/story/2013/10/21/1249471/-Estate-Recovery-It-s-Worse-Than-You-Thought
“Those who enroll in Medicaid through the ACA Medicaid Expansion will find that there is no limit on the assets they can have, as long as their income is low enough to qualify.
Unfortunately, there is also no limit to the amount that can be billed against the Medicaid recipient’s assets by the state. And Estate Recovery seeks a 100% payback of whatever each state determines are expenses they want to recover for. In other words, if you are 55-64, and depending on what state you are in and what services you use, Medicaid may not be an insurance program: it is a loan.
While it seems a lot of people are under the impression that Estate Recovery is only for long term care, this is not the case in many states.”
What will the New America look like in 2016?
* Further reading –