Chapo Trap House - 717 Teaser - Medicaid Estate Seizure

Episode Date: March 27, 2023

Libby Watson explains how many states are able to seize the estates of Medicaid users after their deaths. Subscribe today for access to the full episode and all premium episodes! www.patreon.com/chapotraphouse

You wrote a piece for Defector a couple weeks back that I wanted to talk about of another nightmare phenomenon in the U.S. healthcare system that I was not aware of, that basically is that's like, if you own a home and take advantage of Medicaid ever, they can repossess, they can like basically foreclose on your home after you're dead. Yeah. Is that basically what's going on here? Kind of, yeah. It's a little complicated because, you know, I think obviously it's one of those things that's very complicated by design and it varies a lot by state. So in some states, if you are over the age of 55 and you use Medicaid at all for like healthcare stuff,

you know, going to the doctor, going to the hospital, anything, they can quote unquote recover the cost of that from your estate after you die. In most states, it's just the cost of long-term care. So like nursing homes or having a nurse come to your house or whatever. But yes, in many states, it is also just any medical costs. And the way it works is basically when you sign up for Medicaid over that age, you sign a form saying, you know, I accept that the state can recover the cost of my treatment or nursing or whatever from my estate after I die. Most people who are on Medicaid are very poor because it's a program for the poor and to qualify for long-term care Medicaid, you have to be really, really, really poor.

And so for most people, if they have anything left in their estate, the only thing that's likely to be in their estate is their house because that doesn't count towards the like assets that you can have to be on Medicaid. So basically, it means that like, if you have anything to leave to your children when you die and you have Medicaid, the state can put a lien on your house or, you know, basically what they call and recover, you know, what they say is the cost of your treatment from your estate after you die. And what is the current cutoff for like the income level which you can qualify for Medicaid? Well, so, you know, this is another thing where like in states that have an expanded Medicaid,

there is, there is no income point low enough where you can qualify just on the basis of being poor. So in like Texas, for example, you can be earning $1 a year and you still don't qualify for Medicaid just for earning $1 a year. But in most states, it's like 100. So who would qualify for Medicaid in Texas? Well, exactly. I mean, you know, people who are disabled, people who, if you're a parent of a child, not a dog, but a child, you can qualify for Medicaid on the basis of that. But you have to, it's like an insultingly low amount. It's like, you know, $120 a month or something. And yeah, in most states, like the, it's not just that the income level is very low. It's like 138% of the poverty level or something, which is like, you

know, $15,000 or something like that. It's that the amount of money you're allowed to have in bank accounts and stuff has to be extremely low as well. So you're basically left with two choices. Do I, do I spend all my money on medical care until I have nothing left and then I can get Medicaid or I don't know, like have my kids look after me or whatever? You know, if you have any little bit of money in savings or whatever, then it becomes really hard. And like, you know, the heartbreaking thing in your piece is the children of, you know, like, like when a parent dies, then like, obviously, like a pleasant fact about death is like discovering, you know, the debts that maybe a loved one had incurred that are now passed on to you. But like, you know,

discovering that like their house is now gone too, or that the state can recover these Medicaid costs by repossessing their home. Right. Yes. It's, it's evil. I mean, isn't this just sort of like part and parcel of the many ways in which like these like intentionally vague and punitive hurdles are introduced into like social benefit programs in this country to sort of punish you for taking advantage of them? Yeah, definitely. I think an important piece of history here is that Medicaid estate recovery, it is, first of all, it's mandatory states have to have an estate recovery program. They have some leeway on how much they, like how aggressive they are about recovery, but they, every state has to have one. And that has been the case since 1993. This was

a Bill Clinton era, you know, part of that whole welfare reform, you know, like welfare queen's world of policies. And you're absolutely right. It's, I think it's meant to be twofold. It is meant to punish people who do use the programs and scare people off, scare people off using them, which has the benefit of saving some money. But like, where does this idea come from that like, okay, Medicaid such that it exists or still is allowed to exist in the states that, you know, will allow you to avail yourself of its services? Like, I mean, this is a government program that's like, we spent our taxes on this, but like, where does this idea come from that we'd like the state needs to like recoup the costs of the money they pay in Medicaid? Yeah, I mean, it's strange because,

you know, advocates will often point out other government benefits and programs don't work this way where it essentially functions as a loan. But you know, it does, it does kind of crop up, you know, throughout the system. I remember when, when I got married, and we applied for my green card, my husband had to sign a form saying that if I ever used Medicaid or any other means tested benefits that he would be liable to pay the state back for the cost of it. So it's definitely something that like pops up occasionally. But it's, it is unusual that Medicaid is the only one, you know, you don't have to pay back food stamps or whatever. Although, you know, if you, there are cases where people have to pay back like disability benefits, if they were found to be erroneously

paid or unemployment or whatever, there are cases like that. But yeah, it is, it is very strange that they kind of honed in on Medicaid. And the way that like, the thing you have to understand about Medicaid estate recovery is that it doesn't even get the states a lot of money. Like I think it would be, you know, maybe more not understandable, but explicable, I guess, if states were recovering a lot of the money that they were spending on Medicaid. But it's like half a percent of all of the long term care spending of Medicaid. Like this is not getting back very much money because people are on Medicaid are fucking poor, and they don't have big houses that you can take from, you know, that's generally the way it works.