States to Seize Estates to Payback Cost of Medicaid


Over twenty years ago, the estate recovery clause was added to Medicaid.  If you are 55 or over and receive Medicaid coverage, the state you live in can seize your estate when you die to recover the costs they paid out for your health care.

By and large, a large percentage of the people receiving Medicaid have been the low income sector and poverty sector.  Once they start receiving Medicaid, there is little if any incentive for them to try to work and get off the system.  In fact, it seems that government created the system in such a way as make it more lucrative to be poor and stay poor than to try to work and make something of one’s self.  In that light, why shouldn’t the state seek repayment of what they’ve paid out for someone’s laziness?

Under Obamacare, the estate recovery may hit millions more Americans.  Before Obama could pardon the millions that would have lost their healthcare, there were millions that already had lost their policies.  Many of these people cannot afford the new policies being offered to them through the Obamacare exchange programs.

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Thanks to Obamacare, the qualifications for Medicaid have been changed to allow more lower income people of all ages to apply.  Twenty-six states adopted the new Medicaid standards which means that more people will be applying and receiving Medicaid coverage than ever before.

With more people receiving Medicaid the system will quickly become drained of resources, which means that states need to find new ways to generate enough revenue to pay for them.  Enacting the estate recovery clause is one way that some states may be forced to turn.

It’s possible that if Sofia Prins of Port Townsend, Washington had not read the fine print for her fiancé’s, Gary Balhorn, Medicaid application. What she read shocked her as it said that if you’re 55 or older and receive Medicaid, the state can require your estate to pay back coverage after you die.  Prins realized that in the truest sense, Medicaid is not free insurance, rather it is a loan against a person’s estate.

The Seattle Times picked up their story and word started to spread.  In states like Washington, the lower Medicaid standards are allowing more Americans to qualify for Medicaid.  If they do, they are then not eligible for any of the federal subsidy for the purchase of healthcare.

So if you are 55 to 64 and receiving Medicaid, you had best warn your heirs that the state you live in may be coming for all or part of your estate to recover the cost of your free healthcare.  If they want to know why this is being enforced more now than in the past, remind them that Obama has always been about redistributing the wealth.  By that I meant he wants redistribute it from us to the government.  Therefore, you’re better off spending it all or giving to your family while you are still alive so there is no estate for them to seize.

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