Iowa one of just 10 states to invoke provision of new health law allowing taxation of estates (edited)

[TBoneTX 45,568]

For discussion: What's your reaction to this? Do you consider it to be reasonable or fair? Might it violate the 14th Amendment in terms of "equal protection"? Other observations?
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http://www.press-citizen.com/article/20140317/NEWS01/140317005/Iowa-one-just-10-states-invoke-provision-new-health-law-allowing-taxation-estates?nclick_check=1

Written by Tony Leys, Des Moines Register
Mar. 17, 2014 9:39 AM

Janet Sharp received a jolt in the mail this month, thanks to the way Iowa is implementing an obscure part of the Affordable Care Act.

The letter from state human-services officials warned that after she dies, the government could bill her estate for what it spends on her new health-insurance coverage under the federal law. That means her two children might not inherit all the proceeds from her modest Pella house, which is her only significant asset.

Sharp, 63, lives on less than $1,150 per month in a widow’s benefit from Social Security. She was glad to obtain health insurance coverage earlier this year under Iowa’s version of an expanded Medicaid program, but she didn’t expect this twist.

“You’re kind of between a rock and a hard place,” she said.

The letters were sent to nearly 14,000 Iowans. Several things about the situation strike Sharp as unfair. For example, such letters were only sent to Iowans with very low incomes. That’s because people who make a bit more than Sharp does have been steered into a different version of government-financed health insurance, which does not include what officials call an “estate recovery program.”

Also, the estate-recovery rule generally applies to people who are older than 54, though many younger adults are among the 78,000 Iowans who have enrolled in the type of insurance program that Sharp joined.

“Why are they singling out 55- to 65-year-old people?” she said. “It doesn’t make any sense.”

According to Consumer Reports magazine, Iowa is one of 10 states invoking the estate-recovery policy for people on expanded Medicaid programs.

Emma Sandoe, a spokeswoman for the federal agency overseeing the Affordable Care Act, said states are not required to use the estate-recovery policy as broadly as Iowa is using it. She said federal officials are working to remove the policy from plans related to the Affordable Care Act, because they fear its presence will discourage Americans from enrolling.

But Amy Lorentzen McCoy, a spokeswoman for the Iowa Department of Human Services, said her agency is just continuing a policy it applied to people who were on IowaCare. That program, which expired last year, used Medicaid money to provide limited health care benefits to poor Iowa adults.

McCoy said the estate-recovery policy is a fair way to help pay for care.

“This prudent approach sustains the program financially, allowing it to continue ensuring that Iowa’s most vulnerable citizens have access to critical healthcare services,” she wrote in an email to the Register.

A national expert recommended that Iowans ask state officials to change the policy, however.

“They could do that today. They could check the box and say, ‘We’re not going to apply this to the new Medicaid population except for nursing home services,’ ” said Judy Solomon, a vice president of the Center on Budget and Policy Priorities, a private advocacy group.

Even officials who purportedly understand the byzantine regulations of the Affordable Care Act have difficulty explaining why some people are subject to the estate-recovery measure and others are not.

A boiled-down explanation:

In general, working-age Iowa adults who make less than about $16,000 per year for a single person qualify for coverage under the state’s version of an expanded Medicaid program. Sharp falls into this category. She used to have coverage from IowaCare, the defunct program that had limited benefits. (She says she kept all of her IowaCare paperwork, and none of it mentions the estate-recovery rule.)

State officials recently enrolled Sharp in a new program, called the Marketplace Choice Plan, which uses Affordable Care Act money to pay the premiums for policies from private insurance carriers. That program and one for even poorer Iowans, called the Health and Wellness Plan, are part of Iowa’s expanded Medicaid program.

Many other Americans with higher incomes are obtaining health insurance from a different part of the Affordable Care Act. They are signing up for private policies being sold on the federal government’s online health-insurance marketplace. People with modest incomes qualify for substantial federal subsidies toward those plans, but the money is not funneled through Medicaid, so they aren’t subject to the estate-recovery rule.

If Sharp made $17,000 per year, she could obtain a heavily subsidized health-insurance plan, with a $400 annual limit on out-of-pocket costs, for just $56 per month, according to the federal insurance website. If she qualified for that plan, she would not run the risk of having the government seize her house after she dies.

But people making less than $16,000 are not offered a choice. They may only enroll in the Medicaid-financed plans. Sharp said that if given the option, she “absolutely” would choose the $56-per-month plan over the one financed with Medicaid money.

“I had planned to contribute to it,” she said of the premiums.

The estate-recovery rule, implemented in 1994, was designed to prevent senior citizens from arranging their finances so they appeared poor enough to have Medicaid pay for their nursing-home care. Sharp said she agrees with that idea in principle, but she doesn’t think it should apply to people in her situation.

Also, she said, officials did not clearly notify people beforehand that the government might try to recoup the costs under the new Affordable Care Act plans. Sharp said the recent letter was confusing, and she bets many people who received it missed the significance.

“They might have just thrown it in the garbage,” she said. Their heirs could pay the price.

McCoy, the Iowa human-services spokeswoman, said the estate-recovery policy has brought more than $220 million back into the Medicaid program since 1994. The policy is not invoked if a Medicaid participant leaves behind a surviving spouse or a disabled child, she said. Hardship exceptions also are available.

“All repayments are based on the estate’s ability to repay,” she said. “If there are no assets in the estate, which happens in the majority of cases, there is no collection.”

The rule is mainly used in cases where Medicaid recipients racked up big bills for nursing home stays or similar care. Such bills average about $48,000 per year, McCoy said. But she said anything the government pays for Sharp’s new insurance could be subject to the rule.

Solomon, the national expert, said it probably would be difficult for officials to collect money from estates of people now enrolling in Medicaid expansion programs, such as the Iowa Health and Wellness or Marketplace Choice plans. People who applied for the traditional Medicaid program had to list assets, including their houses, she said. When those participants die, program administrators can check records to get a sense of whether they left behind significant assets.

But people joining the new, expanded Medicaid programs aren’t asked to list assets, so officials would have to start from scratch when determining which cases to pursue. That would be an expensive, time-consuming process, and probably would not be worth the trouble unless the person had run up huge nursing-home bills, Solomon said.

Sharp has read that Oregon and Washington decided to stop invoking the estate-recovery rule for Medicaid expansion applicants. She hopes Iowa will follow suit.

She’s worried that even if she doesn’t file medical claims on her new insurance plan, the government will charge her estate for the cost of her premiums. Her intent is for her children to inherit her house someday.

“I’ve held onto my house for 33 years, through all sorts of things,” she said. “It’s all I have, really.”
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[Mr. Big Dog 10,747]

Mixed bag. I can see both sides of the story. In the end, this is just one more reason why there should be a simple and straightforward single payer healthcare system.

[TBoneTX 45,568]

Might be. I'm most immediately disturbed by the seeming penalizing of one subset of citizens.

[luckytxn 2,264]

No. Forced commerce was what our wise leaders said was better for us. Give it a chance.

Mixed bag. I can see both sides of the story. In the end, this is just one more reason why there should be a simple and straightforward single payer healthcare system.

[Penny Lane 8,159]

Obama with a 0 instead of an O. That's clever.

[Mr. Big Dog 10,747]

And I thought the quoted article's headline is what must be quoted in the thread title. Doesn't seem to apply to moderators, eh?

[LibCampFireClub 635]

The zero and hero keys occupy the same territory on the keyboard. The legacy of his signature legislation will determine the best pick.

[Penny Lane 8,159]

What's the hero key?

And I thought the quoted article's headline is what must be quoted in the thread title. Doesn't seem to apply to moderators, eh?

Imagine that.

[LibCampFireClub 635]

What's the hero key?

That's the rub. The function key is disabled when the name does not appear on the hero list.

[Trumplestiltskin 5,791]

Mixed bag. I can see both sides of the story. In the end, this is just one more reason why there should be a simple and straightforward single payer healthcare system.

Yep, but you know what people on here are like. Whatever Obama does, even indirectly, seems to evoke hysterical shrieks about communism in government. I sincerely believe some of these people have trouble leaving the house every morning as the slightest shock must necessitate an emergency change of underwear.

What the USA needed was a total overhaul of the system and transparent methods of funding, ideally through the tax system. People can still opt for supplementary insurance, as they do in much of the rest of the developed world. Many people in the USA are so suspicious of government you wonder why they bother to vote in the first place.

[Penny Lane 8,159]

Basically, Obama should always be doing something other than what he is actually doing. Nobody can tell you what, but they just know what he is doing is wrong.

[JohnR! 5,495]

Obama with a 0 instead of an O. That's clever.

And I thought the quoted article's headline is what must be quoted in the thread title. Doesn't seem to apply to moderators, eh?

The correct title is:

'Iowa one of just 10 states to invoke provision of new health law allowing taxation of estates'

However the 'headline' rule seems not to apply across the board. That must be how diplomatic immunity feels...

[Penny Lane 8,159]

Reported.

[Mr. Big Dog 10,747]

Reported.

Useless. I've done that some time ago. Rules do not apply to moderators.

[Penny Lane 8,159]

Useless. I've done that some time ago. Rules do not apply to moderators.

Then I will keep reporting.