People with low income in the United States are in danger of being forced onto Medicaid under ObamaCare. If your income is low enough and you’re uninsured (and you live in a state that expanded Medicaid), you may not have any other choice.
But Medicaid provides free health care so what’s the problem? If you’re 55 or older, health care received under Medicaid may be nothing more than deferred debt that will be paid from your estate. And if you’re assigned to a managed care organization, your state may recover all Medicaid benefits paid on your behalf, even if you never use any services.
As an example, starting 9/1/2013, California contracted with Partnership HealthPlan to manage all Medi-Cal (California’s Medicaid program) beneficiaries in the small northern counties and the Partnership HealthPlan Member Handbook states: “The State of California must seek repayment of Medi-Cal benefits from the estate of a deceased Medi-Cal beneficiary for services received on or after the beneficiary’s 55th birthday. For Medi-Cal beneficiaries enrolled (either voluntarily or mandatorily) in a managed care organization, the State must seek recovery of the total premium/capitation payments for the period of time they were enrolled in the managed care organization. Additionally, any other payments made for services provided by non-managed care providers will also be recovered from the estate.”
If you’re going to die with nothing, this may not bother you. But if you’ve been frugal and lived below your meager means to amass a few assets despite an income at or below 138% of the federal poverty level, you’re going to be penalized for doing so, especially if you’ve also been responsible about your health and don’t need medical care. (Well, I guess technically it’s your heirs that will be penalized.)
How the new estate recovery rules will play out across the nation, I don’t know, but where I live here in California, it’s pretty clear what’s going to happen. To find out whether this is an issue for you, just do an online search for ‘Medicaid estate recovery’ and your state to see what you can expect – but be sure to dig deep. States have recovered for long-term care costs for years but now may recover for everything.
The bottom line is that if you’re already 55 years old and get signed up for Medicaid, or if you turn 55 after signing up for Medicaid, you may be inadvertently agreeing to estate recovery for all monies spent on your behalf through the Medicaid program. And if you end up as a member of a managed care organization, your indebtedness to your state may accrue each month whether or not you use any Medicaid services. So before applying for your mandatory ObamaCare, do a little research to see if your income forces you onto Medicaid and what exactly that will mean for you long term.
NOTE: I am not against estate recovery to reimburse for an individual’s legitimate health care expenses paid for with government dollars. What I am against is people being forced into a program they don’t want that accrues indebtedness every month whether they use it or not.
Crystal Marie lives by the philosophy that needing less rather than earning more is the key to happiness and financial serenity, which allowed her to “retire” from formal employment in health education at the age of 44. She can be found making the most of the second half on her blog, The Best 50 Years.