Surprise! Medicaid isn't free - it's a poorly advertised predatory loan

Headshot image of Robert Laurie
Published by: Robert Laurie on Tuesday December 17th, 2013

You've got to read the fine print in 'Obama's signature law'

UPDATE: Since people are coming here after Herman discussed this on his show.  I have no problem with the state recouping the cost of Medicaid welfare. If you're on Medicaid because you're a lifelong deadbeat,or an honest person who just temporarily needs assistance, that's one thing.

The problem here is that the ACA is taking away insurance plans that people could afford, and simultaneously offering replacements that are more expensive. At the same time, it's expanding the definition of "low-income" by removing asset tests. If you can't afford the new, high price, unsubsidized premiums you are forced into Medicaid since, because of the individual mandate, you MUST be covered.

So, the feds have created a situation where you can lose the coverage  you could afford, can't afford the replacement plans, and are forced into Medicaid which will allow the state to come after your assets when you die.  That's simply unacceptable.

It's called "estate recovery" and although it's been around for 20 years, most Americans have never heard of it.  Sadly, this arcane bit of Medicaid fine print is about to become much more familiar. Basically, what it says is this: 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.

In the past it didn't affect too many people, because "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, reagrdless of your income. 

However, that was before the President signed his "signature legislation." Now, the requirements for Medicaid have been simplified to allow more low income non-elderly people onto the rolls. As a result, folks 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 138% 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.

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.

This week, the Seattle Times told the story of Sofia Prins and Gary Balhorn, a Washington couple who had to dodge a bullet they found in ObamaCare's Medicaid fine print.

As fine print is wont to do, it had buried itself in a long form — Balhorn’s application for free health insurance through the expanded state Medicaid program. As the paperwork lay on the dining-room table in Port Townsend, Prins began reading.

She was shocked: If you’re 55 or over, Medicaid can come back after you’re dead and bill your estate for ordinary health-care expenses.

The way Prins saw it, that meant health insurance via Medicaid is hardly “free” for Washington residents 55 or older. It’s a loan, one whose payback requirements aren’t well advertised. And it penalizes people who, despite having a low income, have managed to keep a home or some savings they hope to pass to heirs, Prins said.

What this means is that, 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.

As for Sofia Prins and Gary Balhorn, they were actually forced to marry in order to bump their combined income up to the level that qualifies for a subsidy.

Prins, an artist, and Balhorn, a retired fisherman-turned-tango instructor, separately qualified for health insurance through Medicaid based on their sole incomes.

But if they were married, they calculated, they could “just squeak by” with enough income to qualify for a subsidized health plan — and avoid any encumbrance on the home they hope to leave to Prins’ two sons.

“We’re happy to be getting married,” Prins said last week. “Unfortunately not everyone has such an elegant solution to the problem.”

Considering that liberals spent the last decade screaming about "evil banks" offering "predatory loans," it's amazing that their favorite President has just implemented a healthcare scheme that buries an expansion of estate recovery in its fine print.  

OK, fine. It's not amazing. It's par for the course.

What is amazing is that even the far left loons at the Daily Kos recognize that this is a huge problem:

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. 

Leave it to Democrats to force people into a rejiggered, broader, definition of "low income" only to prey upon the newly-enrolled people they claim they're trying to "help."

Be sure to "like" Robert Laurie over on Facebook and follow him on Twitter. You'll be glad you did.