Medicaid's fund recovery practice is facing scrutiny as more families are forced to sell their homes after their loved one dies, The New York Times reported March 16.
In 1993, Congress mandated that when Medicaid beneficiaries older than 55 use long-term care services, states must try to recover the expenses from the beneficiaries' estates after their death. Most states allow those beneficiaries to retain assets worth only $2,000, and although homes are exempt, many families still sell them to pay back Medicaid.
"It is the only public benefit program from the United States of America that requires states to seek to get money back," Illinois Rep. Jan Schakowsky told the Times. She reintroduced a bill called the Stop Unfair Medicaid Recoveries Act to end the practice altogether.
Her staff calculated that 17,000 families in Illinois lost homes to Medicaid recovery since 2021. An independent agency found that states collected $733 million through estate recovery in fiscal 2019, which amounts to about half a percent of Medicaid's long-term-care expenditure. Only eight states collect more than 1 percent of expenditures.
Some states are reducing the financial hit to low-income families, which reportedly is the demographic hit hardest by the policy.
Massachusetts, Georgia, South Carolina and Illinois, for instance, will not pursue recovery against estates valued below $25,000. Other states provide applicants with a fuller explanation of the consequences of signing up for Medicaid.