Medicaid offices sue for dead people’s homes to cover health care costs without warning, critics say

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As Salvatore LoGrande fought most cancers and all of the ache that got here with it, his daughters promised to preserve him within the white, pitched roof home he labored so exhausting to purchase all these a long time in the past.

So, Sandy LoGrande thought it was a mistake when, a 12 months after her father’s loss of life, Massachusetts billed her $177,000 for her father’s Medicaid bills and threatened to sue for his residence if she didn’t pay up rapidly.

“The home was everything,” to her father mentioned LoGrande, 57.

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But the invoice and accompanying menace weren’t a mistake.

Rather, it was a part of a routine course of the federal authorities requires of each state: to recuperate cash from the belongings of dead individuals who, of their closing years, relied on Medicaid, the taxpayer-funded health insurance coverage for the poorest Americans.

An individual’s residence is often exempt from qualifying for Medicaid. But it’s topic to the property restoration course of for those that have been over 55 and used Medicaid to pay for long-term care reminiscent of nursing residence stays or in-home health care.

Imani Mfalme poses for a portrait outside her late mother's house

Imani Mfalme poses for a portrait outdoors her late mom’s home on March 7, 2024, in Knoxville, Tennessee. Mfalme’s mom suffered from Alzheimer’s and was positioned in long-term care. After her loss of life, the state is now attempting to lay declare to the property to pay for that care. (AP Photo/Caitie McMekin)

This month, a Democratic lawmaker proposed scuttling the “cruel” program altogether. Critics argue this system collects too little — roughly 1% — of the greater than $150 billion Medicaid spends yearly on long-term care. They additionally say many states fail to warn individuals who join for Medicaid that huge payments and claims to their property would possibly await their households as soon as they die.

LoGrande says that’s how she ended up in a two-year authorized battle with Massachusetts after her father died. Several years earlier than he died in 2016, she had turned to a neighborhood nonprofit for recommendation on caring for her aged father. The group urged she signal him up for Medicaid. She even remembers asking about the home, however was assured the state would solely search the home if it despatched her father to a nursing residence.

“He never would have signed on with anything that would put his home in jeopardy,” she mentioned.

For years, her father bought an annual renewal discover from the state’s Medicaid workplace. She says it wasn’t till after his loss of life, when the state’s demand for $177,000 arrived, that she noticed the primary invoice for his care, which included a short stint within the hospital for ache from most cancers, medicines and hospice.

“That’s what ripped my guts out,” LoGrande mentioned. “It was dishonest.”

The state settled with the LoGrandes in 2019 and launched its declare on the home.

State insurance policies round this restoration course of fluctuate broadly, in accordance to a 2021 report from the Medicaid and CHIP Payment and Access Commission, which makes coverage suggestions to Congress.

Some states will put a lien — a authorized proper — on a house whereas others don’t. Meanwhile, some Medicaid offices strive to recoup all medical costs from sufferers, like physician visits or prescriptions, whereas others simply pursue the costs for long-term care. Alaska and Arizona pursued simply dozens of properties lately whereas different states go after 1000’s of homes, totaling tons of of hundreds of thousands of {dollars}.

New York and Ohio topped the nation for such collections, recovering greater than $100 million mixed in a single 12 months, a Dayton Daily News investigation discovered.

An investigation into the Kansas program, launched Tuesday by the Health and Human Services inspector basic, discovered that program was price efficient — yielding $37 million whereas solely spending $5 million to recuperate the cash, however the state did not all the time gather the cash from estates that have been eligible.

Last month, a basis for one of many business’s largest health insurance coverage giants known as on Massachusetts to overhaul its course of, which incorporates gathering reimbursement for most Medicaid costs, past the federal authorities’s minimal requirement to recuperate long-term care bills. The Blue Cross Blue Shield Foundation of Massachusetts really useful the state Legislature go a legislation that might prohibit these further collections.

Estate restoration “has the potential to perpetuate wealth disparities and intergenerational poverty,” mentioned Katherine Howitt, a Medicaid coverage director with the inspiration.

In Tennessee, which recovered greater than $38.2 million from greater than 8,100 estates final 12 months, Imani Mfalme discovered herself in an identical predicament after her mom’s loss of life in 2021.

As her mom’s early-onset Alzheimer’s worsened, Mfalme continued to care for her. But in 2015, when Mfalme was identified with breast most cancers and wanted a double mastectomy, she began taking a look at different choices. She hosted a gathering in her mom’s residence with the native Medicaid workplace. The consultant advised her to drain her mom’s financial institution accounts – cash Mfalme poured into assisted dwelling facility funds for her mother – so her mom would qualify for this system.

She recollects being considerably offended throughout the assembly after the consultant requested her 3 times: “This is your mother’s home?” The consultant, Mfalme mentioned, made no point out that she might be pressured to promote the home to settle her mom’s invoice with Medicaid as soon as she died.

Now, Tennessee’s Medicaid workplace says she owes $225,000 and the state is looking for a courtroom order that might require Mfalme to promote the home to pay up.

Mfalme, now 42, mentioned she needs to pay what she will, however the home is a selected ache level. Her mom, a Black lady, bought her dream residence in Knoxville after she received a landmark discrimination lawsuit in opposition to her former employer, Boeing, for paying her lower than her male coworkers.

“She fought hard for equal pay and equal rights. Just to see that ripped away just because she was sick and I was sick, it’s just absolutely devastating,” Mfalme mentioned of her mom.

TennCare, Tennessee’s Medicaid workplace, mentioned in an electronic mail to The Associated Press that it could not touch upon particular circumstances.

The Medicaid and CHIP Payment and Access Commission’s report really useful that Congress reverse the 1993 legislation that required states to recuperate cash from estates, as a substitute making it non-compulsory.

Earlier this month, Democratic Rep. Jan Schakowsky of Illinois reintroduced laws that might finish the federal authorities’s mandate. Schakowsky believes the rule is a dropping proposition for households, who hand over their homes, and taxpayers, who do not see huge returns from the restoration efforts.

“It is one of the most cruel, ineffective programs that we see,” Schakowsky advised the AP. “This is a program that doesn’t work for anybody.”

In a gridlocked Congress, the place some Republicans are clamoring to trim Medicaid entitlements, the invoice is unlikely to garner the bipartisan assist wanted to change into legislation.

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There’s a minimum of one one that acknowledges the rule is not working: the person who engineered it.

Many folks do not know concerning the decades-old mandate, which was supposed to encourage folks to save for long-term care — or danger dropping the fairness from their residence, defined Stephen Moses, who now works for the conservative Paragon Health Institute.

“The plan here was to ensure that people who need long-term care can get it but that you plan ahead to be able to pay privately so you don’t end up on the public health care program,” Moses mentioned.

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