Oregon Waives the Medicaid Death Tax

The federal government requires states to recover medical costs from the estates of Medicaid recipients who die after the age of 55. The Act Formerly Known as Obamacare expands Medicaid eligibility so dramatically that many Americans could now forfeit everything they own without even realizing it. When Oregon discovered this problem,  the Oregon Health Authority swiftly attempted to reassure its citizens:

For any coverage that starts October 1, 2013 or later, members of OHP [the Oregon Health Plan] who are not receiving long-term care services will not be subject to estate recovery. This policy change affects all current and future enrollees on OHP. 

Federal law requires all 50 states to attempt to recover the costs of long-term care and related Medicaid services, but the states have considerable leeway as to how they go about the task. Apparently, nobody considered exactly what would happen in states that chose to Medicaid to cover citizens with low incomes but significant assets. 

Oregon is the first state to officially address the "if you like your house you can keep your house" problem, but it won't be the last. Every state that has expanded Medicaid coverage will have to examine its own statutes, regulations, policies and procedures to make sure that citizens don't sign away their homes when they sign up for Medicaid.