Wall Street Journal Examines Asset-Recovery Programs for Medicaid Reimbursements
The Wall Street Journal on Friday examined how "many states are embracing" the method of recouping Medicaid costs for nursing home and other care by claiming the estates of beneficiaries after they die. According to Medstat, Medicaid spending totaled about $290 billion in 2004, $89 billion of which funded long-term care. As states seek to limit Medicaid cost growth amid growing pressure from the Bush administration and Congress, a number are turning to estate recovery. According to the Journal, the federal government has required states to have Medicaid asset-recovery programs since 1993, but until recently, many declined to follow the directive or followed it "half-heartedly." Now, however, states such as California, Ohio, West Virginia and Texas are "losing their reticence" and improving or launching asset-recovery programs.
Rules and amounts recovered vary widely by state, according to a study released Friday by the AARP Public Policy Institute. More than half of states waive asset-recovery requirements when they would deprive survivors of "necessities of life," although they define such necessities differently, the study says. Most states use the recovered funds solely for Medicaid, while others put the funding into their general funds, according to the Journal. The amount collected through asset-recovery programs varies from millions of dollars -- California collected nearly $54 million in fiscal year 2003 -- to thousands -- Louisiana collected $85,907 in FY 2003.
State and federal officials who support the asset-recovery programs say that Medicaid is intended to help low-income residents, and beneficiaries who leave behind "significant property" after they die should be obligated to use it to "lessen taxpayers' burden," the Journal reports. However, critics call the practice "the other death tax," saying it discriminates against elderly people with long debilitating illnesses that require nursing home stays (Lueck, Wall Street Journal, 6/24).