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A recent article about Medicaid caught my eye. An adult child was caregiver to her elderly mother and lived in her house, having quit her job, given up making Social Security payments and pathways for promotion. Mom got services provided by Medicaid for awhile. She went into care eventually. Then she passed away.
Next up, adult caregiver gets a notice requesting $77k in repayment for mom's services which are expected to come out of the proceeds of selling the house the caregiver still lives in. It's called a Clawback.
There's a whole business built around homeowner's ability to set up trusts for family members so they don't lose the home, which must be arranged at least five years prior to a parent's demise. If you're "smart" enough and have money for an attorney and think you have at least five more years, you can protect that asset for your heirs.
The comments section held myriad opinions as to why this is fair/not fair. The people who said it was "fair" believe that if the deceased parent no longer needed their home, they should give it to the government for repayment. Those who said "not fair" felt it was an egregious effort by the government to steal wealth, built up over years, from the middle class. Lower-income and middle-class individuals were most affected by this.
I was open minded but concluded this - no other illness resulting in a death demands that a home must be sold to repay expenses. If you have brain cancer and linger for months in an intensive care unit, no repayment is required. Medicare covers a % of the cost and that's it.
With nursing homes costing upwards of ten grand per month, it amazes me that the claw-back is deemed fair and justified for dementia, which is not considered by Medicaid to be a disease, while any other illness requiring long-term rehab does not have a "death tax" based on what was spent.
My position is that Medicaid recovery is a fair and necessary. If anything, the recovery rules are a bit too lenient in limiting the lookback period which many use to shield their assets (and passing them off to family) while passing off the cost of their care to the public.
A lot of people, who otherwise do not see themselves as on the public dole, implicitly plan on Medicaid to own their cost of LTC. That's why the LTC insurance is very lightly subscribed, even by people who can afford it. If Medicaid recovery were more stringent and real - more people would make a different decisions.
My position is that Medicaid recovery is a fair and necessary. If anything, the recovery rules are a bit too lenient in limiting the lookback period which many use to shield their assets (and passing them off to family) while passing off the cost of their care to the public.
A lot of people, who otherwise do not see themselves as on the public dole, implicitly plan on Medicaid to own their cost of LTC. That's why the LTC insurance is very lightly subscribed, even by people who can afford it. If Medicaid recovery were more stringent and real - more people would make a different decisions.
I understand your POV. No other illness, however, requires a reimbursement which doesn't seem right.
How I see it is - the social security is running out of money. So, is Medicare. The politicians of a certain party see Medicaid as anathema. Regardless of the party, the US government is not collecting enough money to pay for everything that folks already are entitled to. Okay - so what else is new? The politicians are not fit to make the hard choices.
Now, let's go to individuals. Leaving aside those who need to be supported anyway, there are many who could - if they wanted to - pay for LTC insurance. Of course, not everyone would need it - so risk is pooled and the contributions can make it sustainable. But, most figure that Medicaid will step in if it were needed. The smarter ones with lawyers move their assets to children in advance of the lookback period so that the cost of their care is transferred to the USG.
And, we are surprised that their inequities everywhere.
I was open minded but concluded this - no other illness resulting in a death demands that a home must be sold to repay expenses. If you have brain cancer and linger for months in an intensive care unit, no repayment is required. Medicare covers a % of the cost and that's it.
Quote:
Originally Posted by ExNooYawk2
I understand your POV. No other illness, however, requires a reimbursement which doesn't seem right.
That's because your health insurance, i.e., Medicare, covers those expenses, but specifically doesn't include LTC expenses. And do you know why? Because when a law was passed that mandated that Medicare would cover those expenses, seniors at the time were so enraged at the thought of having to pay a supplemental premium to cover LTC expenses that they managed to get the new law repealed before it went into effect. They didn't want the government forcing them to pay a higher premium for a benefit they might never use, and wanted it kept the way it was, with those who needed such care having to pay for it themselves rather than have the government create another entitlement. And now that the chickens have come home to roost so to speak, and they have to pay for such services with the selling of their houses by their heirs, they don't think that is fair either.
Somehow, whenever this discussion arises anew, that little fact gets ignored. Since you said that you wanted to be open-minded about this subject, google the Medicare Catastrophic Care Act of 1988 and read about what led to its repeal in 1989. Then come back here and see if your opinion has changed.
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