People enrolled in Medicaid through MNsure discover their assets are subject to estate claims

The Duluth News Tribune published an in-depth article on how some people who enrolled in Medicaid through MNsure are making a shocking discovery: The state has placed a claim on their estate for the cost of their Medicaid benefits.

One couple racked up more than $30,000 in estate claims before discovering it.  They immediately canceled their Medicaid benefits, along with the other two households reported on in the story.

Estate claims to recover the cost of Medicaid—also called medical assistance—are not at all new in Minnesota.  They’ve been part of the program ever since it began in 1967.  State law points out quite clearly that “it is the policy of this state that individuals … use their own assets to pay their share of the total cost of care” in the Medicaid program.

Prior to 1993, Minnesota had been voluntarily recovering money from estates on people older than 65 who received Medicaid services.  The federal government made estate recovery mandatory in 1993 on people older than 55 who received long-term care Medicaid services and continued giving states the option to recover the costs of all Medicaid services.  Like many states, Minnesota opted to recover the cost of all services.

With this history in mind, officials with the Minnesota Department of Human Services (DHS) claim there’s nothing new here.

But, as the Duluth News makes clear, Obamacare did include brand new provisions that paved the way for people with substantial assets to qualify for Medicaid.  Before Obamacare, Minnesota offered three public health care programs to adults with asset limits ranging from $1,000 to $20,000.  Obamacare eliminated these asset limits and based eligibility solely on a household’s modified adjusted gross income.

In American Experiment’s latest news alert, Tom Steward reports on how the elimination of this asset test has resulted in millionaires qualifying for Medicaid, MinnesotaCare and tax subsidies.  And it’s all legal.

In addition to doing away with the asset test, Obamacare also expands Medicaid to people with higher income levels, mandates insurance coverage, and creates insurance exchanges to enroll people in Medicaid.  These policies all work together to encourage people with substantial assets to sign up for Medicaid and unwittingly impose a claim on their estate. 

Allowing people to enroll in Medicaid through MNsure alongside private insurance coverage blurs the distinction between Medicaid and private coverage options.  People understandably expect Medicaid to function like private coverage and not impose additional financial obligations. 

DHS says people enrolling need to check a box indicating they understand the terms of estate recovery, but none of the people the Duluth News interviewed recall ever being presented with this information when they enrolled. 

The fact is, virtually no one ever reads disclosure statements.  If the state is going to continue this practice, then they need to alert people in flashing neon lights.

But the best fix is to reinstate asset tests for any adult receiving Medicaid or MinnesotaCare.  It’s wasteful and patently unfair to subsidize health care for people who own substantial assets.  

The state may have the flexibility to reinstate an asset test for MinnesotaCare, but, unfortunately, Obamacare does not give states any flexibility to reinstate an asset test for Medicaid.