A fear that the government will seize their house after they die is causing some people to not sign up for expanded Medicaid...Read more
New Study Questions Benefit of Estate Recovery Programs
- July 2nd, 2005
In 1993, Congress passed a law requiring that states try to recover from the estates of deceased Medicaid recipients whatever benefits they paid for the recipient's care. In recent years, states have been stepping up their estate recovery efforts in an attempt to bolster distressed Medicaid budgets.
But a new study reveals that estate recovery programs have so far collected at most only pennies on the Medicaid long-term care dollar '“ and in most cases, less than a penny. The nationwide study of state Medicaid estate recovery practices by the American Bar Association's Commission on Law and Aging questions whether, given the small amount of money recouped, estate recovery is worth the human cost.
The study, conducted in 2004 and supported by AARP, found that estate recovery revenues as a percentage of state Medicaid long-term care expenses ranged from .01 percent (Louisiana) to 2.2 percent (Oregon), with only eight states above 1 percent. The average amount of Medicaid costs that states recovered per estate in 2003 was $8,116 nationwide and ranged from a low of $93 per estate in Louisiana to $25,139 in Hawaii.
In addition, investigators found that a number of states appear to be violating federal Medicaid law in trying to raise even these modest amounts.
The authors note that their survey focused on the dollars and cents impact of estate recovery, and did not seek to answer the human questions that arise in connection with estate recovery, such as whether it keeps people from applying for Medicaid benefits when they need them or impoverishes the spouses of nursing home residents. These, the authors maintain, are questions that must be answered.
"It is still an open question whether the costs justify the financial benefit to the states," they conclude.
To download the full report, "Medicaid Estate Recovery: A 2004 Survey of State Programs and Practices," or read a summary of it, click here.
The study was featured in a front-page article on estate recovery in the June 24 edition of The Wall Street Journal. To read the article reprinted in the Pittsburgh Post-Gazette, "Some Heirs Find A Costly Surprise: Medicaid Bill," click here.
For more on estate recovery, click here.
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