Medicaid Expansion is not Insurance; It's a Loan

In a December 15, 2013 blog article titled "If you Like your house, You can Keep your house," the brave new world of "Medicaid Expansion" gets murky: 

"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.

" 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."

In a related by Dr. Jane Orient, titled ORIENT: Medicaid as a Tax on the 'estates' of the Poor, Arizona is specifically referenced.  Dr. Orient practices internal medicine in Tucson, AZ, and is executive director of the Association of American Physicians and Surgeons. She states:

"In Arizona, where all Medicaid beneficiaries are enrolled in a managed-care plan, their estates could be repaying “benefits” even if the enrollee never actually received any goods or services. Information provided by the Arizona Health Care Cost Containment System (Arizona’s Medicaid program) explains that the program makes a monthly capitation payment of around $3,340 to “program contractors,” who arrange for services, if any. It warns, in bold print: “It is important to be aware that capitation payments can exceed the actual costs of services provided during the month.”

"For comparison, the privately paid cost for my father’s private room, decent meals and kind and competent 24-hour care in a comfortable group home was around $2,500 per month. Many people would probably pay less for services they need and choose than their estates would be charged for merely being a “covered life” in a program contractor’s inventory.

"Federal and state governments are desperate for revenue. Pollyanna herself would find it hard to believe that estate recovery will diminish rather than increase.

"Medicaid, supposed to be a program to help the poor, has become a cash cow for multibillion-dollar, managed-care companies, who milk federal and state taxpayers. Expanding Medicaid to persons with modest assets will enable estate recovery to become a cash cow for states to milk the poor and the middle class."

Here is the pdf from AHCCCS (Arizona Health Care Cost Containment System) that explains “capitation” fees paid to "program contractors."  

Here are the eligibility requirements for ALTCS (Arizona Long Term Care Services).  Please note that eligibility for ALTCS is fairly broad and includes “behavioral services.”  Also please note that the financial requirement is $2,130.00 per individual.  What if there are 6 people in the family?  Is there a "family limit"?   

See Also:

Estate Recovery:  It's Worse than You Thought 

Medicaid Estate Recovery + ACA:  Unintended Consequences