My Medicaid Nightmare

Did you ever have that dream where you are screaming as loud as you can and no sound comes out? Medicaid's "estate recovery" rule has me screaming, but my super-partisan audience isn't listening.

The "estate recovery" rule says that states must recover the costs of long-term care and related Medicaid expenses from the estates of Medicaid recipients who die after the age of 55. This rule has been on the books for twenty years, and elder law attorneys specialize in helping older Americans pass on their assets to their children and grandchildren so that nobody has to lose the family farm or corner store because they get old and sick.

The problem is that half the states have expanded Medicaid without thinking about how this rule is going to affect their citizens. Before the changes to healthcare, Medicaid was hard to get onto and people had years to prepare. Now, anybody with income below 138% of the federal poverty line is eligible with no limits on the assets they may own. Many of the family farms in my county belong to people who are not eligible for federal subsidies because their incomes are too low. That means they are signing up for Medicaid without understanding the implications.

My nightmare is that partisan Republicans treat this as "merely" another monstrous failure of the new law, while partisan Democrats don't want to deal with it. The gridlock in Washington leaves families at risk, but since this particular time-bomb won't blow up for years, nobody cares. By the time the Washington Post tells how one family lost the farm they had tilled for six generations, tens of thousands of family farms will have become the collateral for billions of dollars worth of medical expenses they can never pay.

I hereby invite Americans of every political persuasion to help address this problem. If you are a true-blue Democrat who celebrates the Patient Protection and Affordable Care Act, please join me in protecting these patients. If you are a red-hot Republican who despises Obamacare, please help me warn the people most affected. If you don't belong to either party, this isn't political--it's neighbors helping neighbors get ready for an "unexpected human-caused event."

What can you do to help? Click two hyperlinks and send one email. Use this link to find an elder law attorney in your state, click that link to find their contact information, and paste this into an email:

How does Medicaid's estate recovery rule apply to expanded Medicaid under the Affordable Care Act? See:http://healthshareadvocates.com/2013/12/help.html

With help from elder law attorneys across America, we can get the word out in time to save the family farm.

Iowa and the Medicaid Trap

Washington and Oregon have noted the "Medicaid Trap," which threatens sole proprietorships and family farms in states which have expanded Medicaid. I had hoped that Iowa, Arkansas, and Utah might dodge this bullet because those three states are trying to provide actual insurance for low income citizens rather than enroll them in Medicaid as such. I contacted the Iowa Department of Human Services to find out more.

Unfortunately, the news goes from bad to worse. First, Iowa's low-income citizen remain subject to Medicaid's estate recovery rule. Congress required every state to recover the costs of "long-term care and related Medicaid expenses" from the estates of Medicaid recipients who died after the age of 55, and Iowa's novel approach to providing coverage to low-income citizens does not get around that.

Unfortunately, Iowa recovers all medical expenses, not just "long term care" and expenses directly attributed to such care. According to a personal email I just received from DHS,

Estate recovery applies to those persons who receive assistance funded by Medicaid who are 55 years of age or older. Iowa law does not limit the recovery of Medicaid expenditures to long-term care and related Medicaid expenses, as Iowa applies this program equitably to all Medicaid members who meet the requirements of federal law.

What this means is that many family farms across Iowa are now threatened by any medical event. If Iowans had been given more time get ready, the new law might not affect them much, but federal law imposes a five-year "look back" rule to keep Medicaid recipients from hiding their assets. That means Grampa and Nana can't just deed the farm over to the next generation--they have to stay out of the hospital for five years if they want to keep the farm in the family.

Here's one silver lining for Iowa farmers. Iowa Senator Charles Grassley asked Senator Max Baucus to make sure that several well-established Christian healthcare sharing ministries could continue to operate, and 26 USC 5000A(d)(2)(b) expressly recognizes their right to exist. Samaritan Ministries, Christian Healthcare Ministries, and Medi-Share all help non-smoking, church-going Christians pay their bills by sharing medical costs among their members--and the cost of a monthly "share" is surprisingly low.

The next generation of Iowa farmers may choose to help Mom and Dad sign up for healthshare for the next five years. That way they may be able to pay their medical bills and keep the family farm!

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. 

If You Like Your House, You Can Keep Your House

President Obama recently help up a sign that said, "Get Covered: Because Nobody Should Go Broke Just Because They Get Sick." He wouldn't be smiling if he read DailyKos.

On October 17, Beverly Woods asked a disturbing question on the DailyKos.com website. What happens to the assets of people who now meet the expanded criteria for Medicaid?  Medicaid was designed to ensure healthcare for the truly destitute, and existing state and federal laws, regulations, policies, and procedures are based on the assumption that people on Medicaid have essentially no disposable assets. The Act Formerly Known as Obamacare changes that.

In "Medicaid Estate Recovery+ACA: Unintended Consequences," Ms. Woods explains the problem:

We haven't had lots of people younger than 65 on Medicaid, because in most states simply earning less than the Federal Poverty Level did not qualify one for Medicaid.

And we haven't had many people with lots of assets on Medicaid, because in most places you have to have less than around $2400 to your name before Medicaid will cover you. You can keep your house and your car, but Medicaid reserves the right to put liens on them and take them when you die.

But now we have the Affordable Care Act, and its expectation that everyone in the lower tier of income will end up in the Medicaid system. To accomplish this, they have dropped  the asset test. So now we will have lots of people ages 55-64, who have assets but not a lot of income right now, for whatever reason, on Medicaid.

The kicker of it is, if you make the right amount to qualify for a subsidized health insurance plan, your costs are going to be shared and subsidized by the government. But if you go on Medicaid, you owe the entire amount that Medicaid spends on you from the day you turn 55.

As she ended her October 17 entry, Ms. Woods noted, "The fact that practically no one is talking about this makes me uneasy." Four days later, she was back, with "Estate Recovery: It's Worse Than You Thought." The bottom line: Medicaid is not insurance, it's a loan.

If you buy insurance, you pay a certain amount each month to protect yourself from bills too big to pay. If you don't have insurance but wind up in the hospital, you are stuck with the bills. If you can't pay them off before you die, your heirs are stuck. The executor of your will (if you have one) must sell off your assets (if you have any) to pay off your bills before anybody gets anything from your estate. Medicaid does not insure Americans against medical expenses--it loans them the money to pay expenses, and takes it all back when they die.

You could call it a "death tax," if that term hadn't been taken. Next year, Americans who die with more than five million dollars in assets will pay 40% in taxes. Americans who die on Medicaid will pay 100% of their Medicaid expenses before their heirs get one penny.

Family farm? Gone. Mom and Pop shop? Gone. Nana's house, with her snow-white picket fence around her prize-winning garden? Gone, gone, gone.

Is there a way around this problem? There is not supposed to be, for long-term care expenses. The system is designed to loan money to people who have no assets, and to recover as much government money as possible from people who do have assets. Lots of people have tried to hide their assets from the government, with limited success. In particular, parents may not deed their houses over to their children to evade their debts--if they do, and incur medical expenses any time during the next 60 months, the children will be required to pay Medicaid back.

Federal law requires states to recover the costs of long-term care and related Medicaid expenses, but left it up the states to implement that recovery. No state legislation was written with today's situation in mind, and every state that has expanded Medicaid must now review its laws and policies to protect seniors from unintended consequences. Oregon has taken the first step to assure its citizens that it only intends to collect money for "long-term care" and not for ordinary medical expenses.

The problem with Oregon's response to date is that "long-term care" does not just mean "putting granny in the nursing home." Any Medicaid patient who is in a hospital for three days becomes eligible for "long term care" in a "skilled nursing facility," and "long term care" is any stay over 30 days. Thus, a bad case of pneumonia could send a 60-year-old into the hospital, on to "skilled nursing," and into "long-term care."

The Act Formerly Known as Obamacare has just turned into a full-employment act for attorneys who specialize in "elder law" in the states that have expanded Medicaid. Citizens of limited means who are over 49 should run, not walk, to an expert who can help them shield their homes from the unintended consequences of this law.

Healthcare D-Day or Dunkirk

Reading over my last few posts, one would think I hated our President. I apologize for giving that impression. I don't. I donated money to his primary campaign, wept at the thought of Martin Luther King, Jr's dream come true, and receive his daily emails. He and I went to law school together (for one brief year--we never met). I pray for him as sincerely as I have ever prayed for any president, and that's a lot.

But I have been pretty hard on him lately, for a reason. He turned something as big as D-Day into the Bay of Pigs. When General Eisenhower gave the orders to invade Europe, he wrote a speech to give if things went badly. President Obama didn't write that speech. He borrowed one from Sergeant Schultz:

"I was not informed directly that the website would not be working the way it was supposed to. I’m accused of a lot of things. I don’t think I’m stupid enough to go around saying this is going to be like shopping on Amazon or Travelocity a week before the website opens if I thought that it wasn’t going to work," Mr. Obama said during a press conference at the White House. "Clearly we, and I, did not have enough awareness about the problems with the website."

Two weeks before the new year, there is every reason to believe that the net result of all this will leave millions of previously insured Americans exposed to physical and financial ruin. Instead of D-Day, where the forces of freedom pushed tyranny back across a continent, we are re-enacting the Battle of Dunkirk, where the Allied armies lay trapped between Hitler's devils and the deep blue sea.

The soldiers trapped at Dunkirk were not saved by the invincible British Navy (because big ships couldn't get close enough to the beach), but by the astounding courage, ingenuity and sacrifice of ordinary Britons along the southern coast of England. If you don't know the story, I cannot do it justice here. Read "The Snow Goose," by Paul Gallico--a lovely little story that moves me to tears as I type.

There are millions of Americans "trapped on the beach" right now, and tens of millions more to come. As of this moment, there is no realistic hope that Republicans and Democrats will decide to paper over their differences to stop the suffering--the political war that got us into this situation is raging hotter than ever, and there is no reason to think it will be over before January, 2017, when a new President takes office. Between now and then, the best hope our suffering neighbors has will come from us.

That's why I'm promoting the Federal Health Union Act of 2014--a bill that does not replace or repeal the Act Formerly Known as Obamacare. It doesn't promise affordable care for all Americans--but it does offer affordable care for more Americans. It's a bill that lets neighbors help out neighbors until big business and big government can get their act together.

For more information on the FHUA, click here.  There's one man in Washington who could sponsor this bill and make it happen. If he agrees to take a look at it, I'll let you know. Until then, may God help those who can't help themselves tonight.

Obama's Science of Change

It wasn't supposed to be work like this. Obama "scientific approach" to change was glowingly featured in Time Magazine in 2009. (No access to Time's premium-content? Try "Obama's efforts to change us carry a clear political risk.") Here's his "science of change" in a nutshell:

1. make it clear, 
2. make it easy, 
3. make it popular, 
4. make it mandatory.

The "clear" part was,"If you like your plan, you can keep your plan. Period." As Albert Einstein famously noted, "Make everything as simple as possible, but no simpler." Obama is no Einstein--his oversimplification of the Act Formerly Known as Obamacare won him Politifact's "Lie of the Year."

The "easy" part was, "Just visit healthcare.gov, and there you can compare insurance plans, side by side, the same way you’d shop for a plane ticket on Kayak or a TV on Amazon." (Barack Obama, Oct. 1, 2013.) Six weeks later, the same man admitted that "what we're also discovering is that insurance is complicated to buy." (Barack Obama, Nov. 14, 2013.)

The "popular" part was taken for granted. The assumption that the Act Formerly Known as Obamacare would be popular was why it was formerly known as Obamacare. All Obama needed to do was hold up a sign that says, "Get Covered Because Nobody Should Go Broke Just Because They Get Sick."

But "Obama holding a sign" was a punchline just waiting for its joke. Within ten minutes, the Senate's most outspoken Obamacare opponent "cruz-ified" the President's tweet:


The "mandatory" part was written into the law--and then written out of it by the same Supreme Court Justice who declared Obamacare constitutional. Military service in Vietnam was mandatory, and burning a draft card could send a healthy young man to jail... or Canada. Health insurance, by contrast, is no more mandatory than a solar hot water heater, for the consumer.  The government can "nudge" you to buy the one or buy the other, and raise (or lower) your taxes according to your choice, but it cannot put you in jail or drive you to Canada if you don't buy insurance.

Whether you agree with Obama or not, he had a four-point plan to "nudge" Americans into his new system. And whether you agree with Obama or not, that plan has now failed on all four points.  This has big implications for all Americans, especially Democrats. While Republicans may embrace "the fierce urgency of shutting up" for now, too many of our neighbors are in real distress for us to wait for a new President to offer us something different in January, 2017.

That's why I think we need the  Federal Health Union Act of 2014, and need it now!

Not Enough Carrot, Not Enough Stick

The Washington Post editorial board has weighed in on the Act Previously Known as Obamacare. Today's editorial, "Two Problems That Could Undermine the Affordable Care Act," can be summed up in six words:

1. Not enough carrot
2. Not enough stick

The article begins with an admission that "enrollment is lagging."

To work well, the law’s new insurance marketplaces need millions to sign up and enough healthy people paying into the system to offset the medical costs of the sick. But this week the Department of Health and Human Services admitted that enrollment is lagging. 

Calling this enrollment "lagging" libels laggards everywhere. We still don't have meaningful numbers of people who have searched for a plan on HealthCare.gov, found a plan, selected that plan, and sent their full first month's premium into the provider. We do know that the numbers are so far short of the Administration's definition of "success" (seven million people by March 31st) that we're reduced to hoping they are somewhere above "epic fail" (less Americans insured on Jan. 1st than before the law kicked in, including Medicaid signups).

In early November, after the website's first disastrous month, our President went before the cameras to explain, "Now, this is like having a really good product in the store and the cash registers don't work and there aren't enough parking spots and nobody can get through the door." By early December, Secretary Sebelius testified to the  effect that the doors now work and the parking lot is  open. The administration official who is actually in charge of the website, Henry Chao, admitted that the "cash registers" aren't just "not working"--they haven't been built yet. That's why nobody is using the number of paid-up, covered customers (the only number that might actually measure "success"). That's why what the Post calls "lagging" enrollment merely refers to the number of people who have put a product in their cart--whether they have paid or not.

If the product was good but the price was bad, people might put it in their cart while they dug around the couch for extra change. If the product was bad but the alternatives were nonexistent, people might put it in their cart while they search for something else. But if the product was good and the price was good and the cash register (or good-enough-for-government-work equivalent) actually worked, we'd see enrollment catching up to at least the number of people who lost their policies--five million and more.

Enrollment is so far below that mark that the only people who actually do know the numbers are begging insurance companies to cover people who haven't paid (yet). This product just isn't selling.

So--there isn't enough carrot. Which brings us to the Post's second criticism--there's not enough stick, either.

The "stick" (Penalty? Tax? Mandate? Suggestion? Ask a lawyer, accountant, or mystic--the answer depends on the problem Obama is trying to solve today!) is $95 or 1% of income for every unininsured person. That's $95 for the "young invincibles," the bungee-jumping, keg-standing party animals who got a free ride on their parents' policy until they turned 26 and now have to choose between actually paying premiums ("I thought Obamacare was free?!") and paying $95. Is that enough of a "stick" to get them to sign up?

Not yet.

The Post may be exactly right in its diagnosis, but what is its prescription? More gain? More pain? Given the irreconcilable differences between Republicans and Democrats between now and the 2014 elections, America may be doomed to suffer the worst of both worlds. That's why I think the Federal Health Union Act of 2014 is worth pursuing. Maybe I can get the Post to endorse it!